“Techno-Economic War”, Today, To Avoid The Real Thing In 2026
“Gonna blow it away, But I know they can play, 'Cause I remember.” (Baddiel, Skinner and Broudle)
Summary:
· CSIS loves “Speaker Pelosi’s Bottom”.
· Blue Horseshoe loves XOOF and ATAO.
· America and China are currently engaged in a “Techno-Economic War” to, allegedly, obviate the need for a real war in 2026.
· Mr. Market and the Federal Reserve haven’t enlisted in the “Techno-Economic War” effort, yet, because they are still both more worried about inflation today than a conflagration in 2026.
· BRK loves “Speaker Pelosi’s Bottom”.
· George Soros loves “Speaker Pelosi’s Bottom”.
· CIA loves “Speaker Pelosi’s Bottom”.
· Speaker Pelosi is a “Triad”-operative.
· VPOTUS loves “Speaker Pelosi’s Bottom”.
· PCPC hates “Speaker Pelosi’s Bottom”.
· Laziness, in lieu of vigilance, could allow Taiwan to join Hong Kong in the expanding “Trojan Horse” stud-farm stable, with others in the diaspora to follow.
· The US “Friend Shoring” valve has tightened from the global singularity to the global economy destructive “Death Star” level.
· Ifo hates “Speaker Pelosi’s Bottom” and inflation.
· Finance Minister Lindner hates inflation but loves Weimar more.
· The Cheka hates “Trust”.
· The recent Senate Passage of the Inflation Reduction Act is one more seminal step that confirms this author’s inflation cancellation by fiat thesis.
· Cancel Culture in the US is reverting some sectors of the economy back to their long-term secular disinflation and stagnation fundamentals.
· Cancel Culture does not apply to the Technology Sector and its Hypergrowth Phase fundamentals.
· The Masters of the Asset Class Universe love “Speaker Pelosi’s Bottom” and still love to wreck monetary policy.
· Monetary policy is, once again, becoming wreckable.
· This time around, the monetary policy wreckers are waiting for inflation to fall back to levels that will allow the wrecking to restart.
· Impatient for the monetary policy wrecking to begin, soon, the White House is busily trying to legislate the fiat cancellation of inflation that gets the ball rolling.
· MAPA is back in black and reborn to run against WUMAD.
Getting through 2026 on the way to 2052 ….
This author started this year with his eyes on 2052, and the two main protagonists, in the argument about what the future will look like then.
Recent developments, on the timeline, suggest that 2026 may, in fact, be more critical than 2052.
In fact, if 2026 goes badly, enough, there may be no 2052 worth talking about.
The fact that North America has been chosen to host the 2026 World Cup is, in this author’s opinion, of greater global significance than just football terms. This competition, after all, gets the most eyeballs of any international event.
To get to 2026, many still need to play their part.
CSIS loves “Speaker Pelosi’s Bottom” ….
The Pentagon has been playing the “Friend Shoring”, overlapping, yet discrete, Praetorian Guard role, of the Purple Team, in this latest round of the war game thanks to its distancing from Pelosi. This role was more than just cosplay, however.
(Source: the Author)
The last report suggested that Speaker Pelosi was playing an elaborate, yet necessary, mouse role, in the annual cat and mouse wargame in the Taiwan Strait. It was also suggested that somewhere in a bunker, the Purple Team, from the Pentagon, was drawing succinct inferences and conclusions from the game.
This year, Speaker Pelosi’s starring role was a noisily staged provocation to force China to escalate its response. By so responding, China has tipped its cards a little further about how a real military conflict could occur. Readers should understand that since the House of Congress is the one that votes for war, it is strategically necessary to engage the House in the war gaming process. Madam Speaker is, thus, engaged!
China has, apparently, taken the bait and changed its posturing to increasing overt aggression. Such posturing reveals, hitherto, unseen tactics. Such tactics can then be factored into American strategy and tactics. The problem with all this, however, is that a general escalation and commensurate mobilization has occurred, by default, on both sides. More steps closer toward war in 2026 have, thus, been taken. Between now, and then, therefore, one side needs to gain the significant “Techno-Economic War” initiative to persuade the other of the futility of war in 2026.
The Center for Strategic and International Studies (CSIS) has recently confirmed that the Purple Team was remotely engaged during the Gulf of Pelosi incident.
The publicly available, declassified, Purple-Team conclusions are that war could break out in 2026 and that a victory for America would come at great cost.
This author suggests that to mitigate the future economic cost, of victory, America should, presumably, spend more than the net present value of this 2026 estimated cost value. Spending more than this 2026 cost, upfront, by way of front-loading, may, in theory, deliver the conditions necessary for victory at a lower cost in the future. In practice, this may not be the case but the default, to worst-case scenario analysis, obliges America to assume that front-loading is optimal.
· The Minerals Security Partnership (MSP) is “Friend Shoring” in action and is Macklem Doctrinaire in principle.
· The Minerals Security Partnership (MSP) anticipates Biden’s G7 “Friend Shoring” Infrastructure Plan launch by about a week.
· “Speaker Pelosi’s Bottom” is firmly supported by the MSP and the Biden G7 “Slam Dunk” “Friend Shoring” G7 Infrastructure Plan.
· The MSP and the Biden G7 “Slam Dunk” “Friend Shoring” G7 Infrastructure Plan are Vinod Khosla’s “Techno-Economic War”.
(Source: the Author)
This author also notes that America has, already, embarked on spending more than the net present value, of the 2026 victory cost, and, also, mitigated this cost by starting the “Friend Shoring” process. The successful conclusion of the “Friend Shoring” process, by 2026, will mean that America has no strategically important industrial assets in China or within “easy” reach of China.
· Biden Yin is in conflict with Xi Jinping Yang.
· “COVID-Zero” is a strategic policy tool, which suggests that COVID-19 is a strategic weapon.
(Source: the Author)
America and China are, therefore, currently engaged in a “Techno-Economic War” to, allegedly, obviate the need for real war in 2026. Both teams appear to have signed up to these rules of engagement, but this author is less sure that China will adhere to them.
A World Cup final, of some sort, between America and China is, most likely, going to happen, either on land or at sea. In preparation for a not-football final, it’s already coming home to America in terms of “Friend Shoring” and “Techno-Economic War” spending.
This author notes, with interest, that the Purple Team’s dugout has recently framed the Chips and Science Act as the “watershed in US economic policy”. Speaker Pelosi is very much, in this frame, navigating the “watershed”.
Portentous leaks, from the White House, and trusted sources, have also let it be known that America’s whole national security strategy is currently being redrafted. In short, this redrafting is the incorporation of the Russian narrative into President Obama’s original Pivot toward China.
(Source: the Author)
The Purple Team has, seemingly, come a long way, in a very short space of time, since the announcement that the White House was rewriting the doctrine, and the manual, on national security, in order to factor in the new chapters involving China and Russia. Maybe the Purple Team was already well on the way to the new national security final draft and just needed a few live fire exercises to finesse it.
Evidently, Speaker Pelosi has been a key civilian in the compression, of mission time, to complete the new national security doctrine of “Techno-Economic War”. She has even had the opportunity to help game the new concept, recently, in a live firing exercise in the Taiwan Strait.
The new doctrine is already in place, in the US Army, in what is cheekily named the “Triad” concept. This concept may refer to the perceived ethnicity and M.O. of the perceived threats. It may also refer to the combined roles of (1) Army Space and Missile Defence Command (ASMDCOM), (2) Cyber Command (CYBERCOM), and (3) Special Operations Command (SOCOM) under one seamless aegis, that will, allegedly, have more “surface contact area” with the enemy. Seemingly, gone are the days of Clausewitz Doctrinaire aiming, at an enemy’s perceived center of gravity, in the new pervasive, and immersive, amorphous tripartite replacement.
For the doubters and the slow-witted, the recent CSIS panegyric to Pelosi, combined with the Gulf of Taiwan Incident, and the “Triad” story neatly illustrate the new seamless tripartite doctrine in action.
Doubters global macro investing, as a process, should revisit the subject matter of “Speaker Pelosi’s Bottom” and the price action, both therein and ensuing, with an open mind. Those who can’t may just decide to read on.
· “Speaker Pelosi’s Bottom” looks like a Global War Zone.
· “Speaker Pelosi’s Bottom” looks like a domestic soft economic landing zone.
· The Soft economic landing zone portends a domestic Hypergrowth Phase inflection point, for the US economy, that will be stronger than for its global competitors and trade partners.
(Source: the Author)
From this author’s perspective, the impending “Hypergrowth Phase” inflection point, that he has been observing, has just been tipped by the CSIS. This tip compares and contrasts with the center’s trash-talking about the Chinese economic model.
Mr. Market, and the Federal Reserve, have yet to fully enlist and play by the “Triad” rules of “Techno-Economic War”. Currently, both players are more hung up about inflation, than a conflagration in 2026, although the latest US CPI data may strongly challenge their convictions.
“Speaker Pelosi’s Bottom” is, thus, a fact rather than a curious artifact. It is also a place where you will find other investing legends who understand what it means when they see it.
BRK loves “Speaker Pelosi’s Bottom”, amongst other things….
Speaker Pelosi “loves” Microsoft and Apple call options. Madam Speaker’s recent eyebrow-raising leveraged bottom fishing has raised more than a few eyebrows.
(Source: the Author)
The legend, that is “Speaker Pelosi’s Bottom”, has been conjoined with the legend of one of America’s greatest investors, if not, the greatest.
The legendary Warren Buffett has reported that he was also, recently, getting stuck into “Speaker Pelosi’s Bottom”, so to speak. Buffett’s Berkshire Hathaway (BRK.A) was a net buyer of stocks in Q2 of this year. This should be compared to net selling, in Q2/2021, as inflation burned and the Fed fiddled.
· A Key Signals proprietary indicator signals that the FOMC is, once again, totally off with its timing, this time, on monetary policy tightening.
(Source: the Author)
Evidently, Buffett believed that the tightening of monetary policy through a combination of rampant inflation, and a late Fed arrival, was concurrent with an endogenous US economic slowdown. He also, seemingly, believed that Mr. Market overreacted and, thereby, revealed long-term value in stocks in Q2. Buffett’s buying resonates with the Key Signals “Weak-Weekly Early Warning Signal” which signaled that the Fed should have started easing in the first week of May 2022.
Buffett’s gravitation toward “Speaker Pelosi’s Bottom” is not an isolated case of infatuation.
Soros loves the FANGs in “Speaker Pelosi’s Bottom” ….
Whilst Warren Buffett, and his value investing style, is good to have as support for “Speaker Pelosi’s Bottom” the quantum of solace, for Madam Speaker’s Bottom, from George Soros, really does the heavy lifting.
In late June, Soros was, apparently, tapping “Madam Speaker’s Bottom”, as an entry point.
Given Soros’ repute as the doyen, of global macro investing, his renowned perspicacity, and assumed intelligence prowess the Key Signals indicator, that illuminated “Speaker Pelosi’s Bottom”, in the first week of May, was a tracer round for the incoming barrage of billions that then followed from the legends.
· A confluence of tipping points is pointing toward the next Hypergrowth Phase inflection point.
(Source: the Author)
The Hypergrowth Phase, of which this author speaks, would appear to be a rising probability in Soros’, and Buffet’s, list of estimative probabilities.
When Soros’ name is mentioned, the name of an intelligence agency swiftly follows, after, based on the stories of his infamous hand in the demise of the USSR. It’s hard not to imagine that these same hands are not having another flutter, in the demise of some nation, so to speak.
CIA loves “Speaker Pelosi’s Bottom” ….
The controversial subject matter of “Speaker Pelosi’s Bottom” is not exclusive to alleged insider dealing by policymakers and investing legends. There is also an intelligence angle on Madam Speaker’s Bottom.
The last report discussed the context surrounding Madam Speaker’s inflammatory Gulf of Taiwan Incident. In this context, Madam Speaker appeared to provoke criticism from the Pentagon and the White House. The response from the American intelligence community is, however, nuanced at best and disingenuous at worst.
Ex post facto, it has become known, in the public domain, that CIA Deputy Director Cohen places Madam Speaker’s recent jaunt into the context of agency priorities.
Madam Speaker’s Taiwan visit coincides with the deprioritizing, of the agency’s focus on Afghanistan, and the prioritizing of an almost exclusive focus on China. Focus on Afghanistan was recently concluded, on a fitting victory note, with the killing of Al Qaeda’s number 2. This event looks, suspiciously, like something that the “Triad” would do, and plausibly deny, if it existed at the time.
This fitting conclusion, presumably, justifies the agency's refocus and pivot toward China. Speaker Pelosi’s, presumably, coincident, escalation of hostilities, with China, presumably, also, supports the logic behind the agency’s strategic refocus. POTUS and the Pentagon can plausibly deny any role in the refocus because they are on the record for disagreeing with Pelosi about her planned visit to Taiwan.
To all intents and purposes, the CIA has turned the “Triad” into the “Quartet” by becoming the invisible fourth member.
Madam Speaker has developed the demonstrable habit, and modus operandi, of standing out like the proverbial appendages, on a bull, in relation to American global policymaking. She, and her “signals”, have become quite hard to miss. One wonders if all this is just a coincidence. The recent actions of VPOTUS Harris, seemingly, indicate causality rather than coincidence in Madam Speaker’s signals.
VPOTUS loves “Speaker Pelosi’s Bottom” ….
VPOTUS has just fulsomely embraced the public/private partnership economic model that is the antithesis of the Chinese model. VPOTUS also appears to have confirmed the “Triad” affiliation of Speaker Pelosi.
Contrary to chauvinist, mainly Republican, beliefs VPOTUS ain’t a Powerpuff Girl. On the contrary, she is an Oakland Girl who packs a mighty punch. Some of this power comes from the kryptonite that comes with her position as Chair of the National Space Council.
The celestial power of VPOTUS was recently on show, at the Chabot Space and Science Center, in Oakland, where she mustered the ranks, of private/public resources, to create a hybrid militia force multiplier of the “Triad” cause.
The grandstanding, by VPOTUS, is the telemetry, which coordinates the very serious lethal intentions and capabilities that these Oakland Raiders bring to the “Techno-Economic War” franchise in California.
The grandstanding also confirms the launch of President Biden’s Sputnik.
The reaction, of the intended target, also confirms the launch.
PCPC hates “Speaker Pelosi’s Bottom” ….
Speaker Pelosi’s drawing of the American baseline, on Taiwan policy, has prompted the reciprocal publishing of a document of the full extent of China’s baseline. The dialectic, and conditions of victory, now devolve from which side can enforce its baseline terms onto the behavior of the other. China’s baseline extends to a military confrontation, to enforce its terms, if necessary.
The Chinese seem to think that the rest of the world was born yesterday and that China was born well before everyone else on this planet. Consequently, Chinese policymakers seek to woo the unsuspecting occidentals into believing that Taiwan is the next Hong Kong.
· Hong Kong may become a “Trojan Horse” in the global economy.
(Source: the Author)
Readers will know this author’s view on Hong Kong and the related Chinese diaspora.
· “COVID-Zero Kowtowing” Hong Kong is officially closed to the West.
(Source: the Author)
This new Chinese baseline is a chip off the old block. The strategy is to threaten the cost of an expensive war for Taiwan against the easier and, allegedly, the lower-cost option of letting the nation become the next Hong Kong. Hong Kong’s alleged Communism-Lite Laissez-Faire model is purported to be more acceptable than the loss of lives and funds over Taiwan.
· The behavior of the Chinese Diaspora should be observed carefully after the assassination of Shinzo Abe.
(Source: the Author)
This author would, once again, warn those seeking the easy option, of compromise in lieu of conflict that Hong Kong is a “Trojan Horse” from which to launch further assaults, within the global financial system, on the developed economies. If Hong Kong is the financial launch pad, of attack, then Taiwan could become the technological launch pad.
Where will all this “Trojan Horse” stud farming end, since there is a China Town in most of the civilized western polities?
By the logic of the “Techno-Economic War” dialectic thesis, it should end in Silicon Valley rather than in a China Town somewhere in the diaspora?
Currently, the arrows point in the general direction of the Valley as the end-point.
Unfortunately, for the global economy, ex-North America, the Valley resembles the “Death Star”.
Trade Wars, not Star Wars, is the new “Techno-Economic Wars” ….
· US “Friend Shoring” has a valve to prevent outward technology transfers.
(Source: the Author)
The author has already observed the “valve” in the US “Friend Shoring” process.
· The US “Friend Shoring” valve has tightened to the global singularity level.
(Source: the Author)
This valve was recently constricted to the global singularity level. At this singularity point, the US “Friend Shoring” process has become a threat to the economies of both global friends and foes alike.
At this point, the US economy is the putative “Death Star”, and wrecker of the global economy, as it sucks in capital and withholds technology from trade counterparties. The presence of this “Death Star” can be, clearly, discerned in the previously discussed VPOTUS's embrace of the dark side of the force in “Speaker Pelosi’s Bottom”. Commerzbank has that same “Bad Feeling”, specifically, about credit spreads, but cannot articulate the full galactic metaphorical context.
Apparently, there is a “Nefarious” level, beyond singularity level, at which technology stops being transferred out from the “Death Star” altogether. In this environment, it is not difficult to see the US falling out with everybody whom it technologically starves. Reciprocal actions and trade wars will, hence, ensue. Maybe the Purple Team has foreseen this and factored it into the planning.
Fortunately, some trade partners have adopted the conscientious objecting stance of “Techno-Economic War” pacifists. This posturing will still allow them to be trade war aggressors though.
Ifo hates “Speaker Pelosi’s Bottom” ….
The Pentagon is not the only institution that is doing a bit of World Cup 2026 wargaming. Germany’s Ifo Institute is having a go, too, so to speak.
Germany is in the curious position of being a non-aggressor in the major conflicts of the Twenty-First Century. Even more curious is the fact that the industrial legacies, of the German national champions, that were so aggressive in the Twentieth Century competition, are now taking it on the chin for being pacifists. What went around has, apparently, come around.
First, there was Brexit. Second, there was COVID 19. Third, there was Ukraine. And now, there is a “Techno-Economic War” with China. That’s German Industry four - nil down, already, without any shots of its own on target.
The Ifo Institute’s wise men judge the collective losses to be as important as its two losses in the Twentieth Century aggressive competitions for economic resources that the nation unconditionally lost.
Unsurprisingly, however, and once again, Germany appears to be defaulting, albeit belatedly, and with some innate conscious resistance, to its stock Twentieth Century go-to economic policy response that has, always, led to the ensuing phases of aggression.
Finance Minister Lindner, like his antecedent Hjalmar Schacht, keeps drafting one budget, after another, to throw hypothecated tax revenues at the various sectors of the economy hardest hit by the four economic goals conceded. Real, rather than hypothecated, tax revenues are, however, disappearing faster than Lindner can throw them. Hence, there is no alternative to deficit financing. But not so fast Herr Lindner.
Germany has the unfortunate legacy, of prioritizing inflation-fighting, since its last two global defeats. The country will, therefore, be a slow adopter of the new-fangled gadget of Modern Monetary Theory (MMT), which became infamous in the Weimar Republic before the aggression began. German inertia is, in part, prompted by the rush of its Eurozone trade partners to embrace Weimar Republic status across the bloc.
China has had enough of money printing, for now, at least, and needs to conserve the finite monetary and economic resources to fight America. Consequently, Chinese policymakers are just confiscating wealth, by fiat, rather than letting inflation do the confiscating with fiat currency.
“Trust” me, I’m from the Cheka ….
· Xi Jinping’s “Sputnik Moment” is a Chekist response to perceptions that he is losing his grip.
· “COVID-Zero” has become the Cheka.
(Source: the Author)
The process of the transfer of ownership, and economic control, of the Chinese economy, which this author calls Chekist, has recently moved into the $ 3 Trillion Shadow Banking sector.
Allegedly, the Shadow Banking sector is a financial stability risk, hence, the scale of this risk must now be investigated, prior, to a proportionate reaction. Consequently, the Trust sector is under investigation, for financial stability reasons, however, confiscations are being made for, alleged, corruption reasons. The resultant outcome, is that assets are being transferred, from private hands to the State, in order to mitigate financial stability risk and political risk.
The confiscation of wealth, and erosion of political capital, by price inflation, have recently reached a turning point in North America.
Nothing, but No-flation, to see here ….
The latest inflation data, from the New York Fed Survey of Consumer Expectations (SCE), is a good context for the latest Fed guidance. Medium-term inflation expectations are reverting lower, but one-year expectations remain stubbornly high. Consequently, it would be prudent for the FOMC to continue to hike rates, but, perhaps, not as aggressively in terms of the increments and the duration of the hiking phase.
A 75-basis points hike would go a long way to re-anchoring expectations, but the FOMC must view this benefit against the risk to achieving its desired soft economic landing. The rapid slowdown of the house price data, in the survey, suggests that the economy could fall hard, under its own weight, without the extra weight of a large interest rate hike. It’s a tough one. Were the FOMC to go 75 again, this would be viewed as the last of this size.
The real issue is how much the latest good monthly CPI reading influences expectations going forward.
Fed Governor Michelle Bowman is a throwback to the days when the Fed was single-minded about its dual mandate priority of the day. Even as the balance of risks tilts, towards recession, she remains resolute in her credible commitment to defeat inflation with similarly sized incremental interest rate hikes.
· Mary Daly’s Long Duration trade thesis/guidance puts the Chateau Greenspan ’94 Bull Flattening vintage on ice in “Speaker Pelosi’s Bottom”.
(Source: the Author)
San Francisco Fed president Mary Daly also remains single-minded. Her single-mindedness has, however, been interpreted, bullishly, as a commitment to a lower incremental step of rate hikes.
Mr. Market only saw, and heard, the word “victory”, from Daly, thereby, promptly discounting it. That’s, apparently, good enough for the dignified kind of bullish yield curve flattening trade to signal the incoming Soft Landing.
· Neel “Ex Culpa” Kashkari has lost his credibility.
(Source: the Author)
Minneapolis Fed president Neel “Ex Culpa” Kashkari is living up to his sobriquet and is still losing his credibility. Kashkari is now the biggest Hawk, in terms of rate rise expectations, at the Fed. He can justify this as prudence, in the face of elevated inflation expectations.
What Kashkari cannot, however, justify is his consistent failure to see inflation coming, or going, without fundamentally changing the way he approaches his own economic analysis and forecasting. His belated, and extreme, transitions, from Dove to Hawk, and vice versa, not only undermine himself but undermines the Fed too. He needs to move on, or move out of the Fed.
Chicago Fed president Charles Evans is in the enviable place of being a short-timer. He can, thus, say what he likes, without fear of embarrassment, or recriminations, if and when he is proven to be wrong. Consequently, Evans took the liberty of lowering the gradient of his expectations, for interest rates to rise, ultimately to 4%, in 2024, based on the latest good inflation numbers.
Richmond Fed president Thomas Barkin sounds like, he is willing to incur a deeper economic slowdown, in order to convincingly turn the corner on inflation. Taken at face value, therefore, he is willing to have a Hard Landing.
One should never totally take Fed speakers at face value, anymore, however, based on their incorrect transient/transitory inflation calls of 2021. If one couldn’t trust them then, why should one suddenly trust them now when the situation is even worse?
Kicking the Inflation Habit and the Oligopolist Inflation Pushers ….
· Disinflation price discovery by Cancel Culture is on the global commodity and capital markets agenda.
(Source: the Author)
This author’s long-held view, of the Federal Government’s response to inflation, is that inflation would be canceled.
· Global inflation may be in some part due to the oligopoly structure and predatory nature of global supply chain operators.
· Price Discovery Control is the G7 solution to the Oligopolists’ inflation threat to Macklem Doctrinaire Friend-Shoring.
(Source: the Author)
This inflation cancellation would come, through a combined legislative cancellation process of both the outright price discovery and the Oligopoly market structures where the discovery was occurring.
The recent Senate Passage of the Inflation Reduction Act is one more seminal step that confirms this author’s inflation cancellation by fiat thesis.
The Senate is now taking steps to intervene in the setting of prices for drugs.
· Inflation Cancel Culture may soon cancel/nationalize “piracy” in shipping supply chains.
(Source: the Author)
This is just the beginning of a long period of the rolling back of company pricing power. As a result, some, but not all companies, will slow down their capital investment, initially, in protest, and then to change their business models in line with the new fiat No-flation fundamentals. As a consequence, of this disinvestment, economic growth and potential future economic growth will be lowered. Secular disinflation and stagnation are being baked into the US economy again. Fed monetary policy will comply in due course.
· Chairman Powell confirms the thesis that monetary policy will be framed as creating a disinflationary base for the Biden “Slam Dunk”.
(Source: the Author)
In truth, the Fed is already there, in the disinvestment phase, because it has a new monetary policy framework aimed at mitigating secular disinflation and economic stagnation. Once the current dalliance with inflation fighting is over, the Fed can revert back to its new monetary policy framework.
· The “Just in Case” “Friend Shoring” business model is replacing the Oligopolists’ version of “Just In Time” inflation mining.
(Source: the Author)
The reader should note that not all sectors, of the US economy, are equal when it comes to inflation cancellation. Oligopolists who pick the lowest price-increasing fruit, of their business model decision tree, can expect to get canceled. Growth-oriented businesses, that swallow inflation, in the quest for customer growth, will be rewarded with fiscal policy tax breaks and monetary policy stimulus to sustain their disinflationary practices.
These fiscal and monetary policy rewards for the growth-oriented will manifest as hyperbolic growth for the companies involved.
· The Soft economic landing zone portends a domestic Hypergrowth Phase inflection point, for the US economy, that will be stronger than for its global competitors and trade partners.
(Source: the Author)
There is a Hypergrowth Phase thesis, consistent with this author’s view, in which the US technology sector is supported by policymaker rewards. There are also two strategic reasons for this support and reward model.
· The MSP and the Biden G7 “Slam Dunk” “Friend Shoring” G7 Infrastructure Plan are Vinod Khosla’s “Techno-Economic War”.
(Source: the Author)
The first reason, for strategic support of, and reward for, the technology sector is the “Friend Shoring” imperative to defeat China in a “Techno-Economic War”.
The second reason is to defeat inflation by enabling supply-side technological solutions. These technological solutions will defeat the Oligopolists’ price inflation. Unfortunately, they will also reduce returns to labor. Consequently, the Fed will need to revert back to its new monetary policy framework, in order to, calibrate looser monetary policy settings that mitigate this unfolding disinflationary environment.
As the Fed reverts, it is interesting to observe those whom this author calls the Masters of the Asset Class Universe, positioning themselves for the economic environment on the battlefield. This is more of a tweak, of their previous positioning for the Trump Interregnum, since the main enemy, China, remains the same. The tweak involves switching the role of Russia from friend to foe, whilst keeping China as the principal foe.
Caravaggio Code (IV) : The Biden Years
Back in 2019, the author discussed the alignment of business models, in the finance sector, with monetary policy in the form of the privatization of monetary policymaking. This is the American approach to MMT. Asset management mandates, of the Fed’s enormous, and disparate, balance sheet assets are farmed out to private asset managers. Pro-cyclical fiscal and monetary policy, in the form of MMT, is thus disguised and hidden off the Fed’s balance sheet. There is, hence, no obvious appearance of the monetary financing of fiscal deficits.
The illusion, and appearance, that MMT is an entirely private sector creation of credit is, thus, preserved alongside the illusion, and impression, that money is not being printed by the Fed.
As President Biden gears up, for “Techno-Economic War”, the Masters of the Asset Class Universe are being mandated to play their role in the public/private partnership, of financing the war effort, off Fed balance sheet, also known as MMT.
The next step is to embed a former Master of the Asset Class Universe into the milieu of the fiscal executive. The said embedded individual is BlackRock alumnus Eric Van Nostrand. He will advise on Russia and Ukraine policy, amongst other things.
This author notes that, as usual, the Pimco Masters will also have their slice of the cake, and eat it.
Pimco alumnus Neel “Ex Culpa” Kashkari rocks on, dissonantly, at the Fed; whilst the recently re-habilitated ex-Vice Chair Richard Clarida will rock back to Pimco.
Monetary policy is, once again, becoming wreckable. This time around, the wreckers are waiting for inflation to fall back to levels that will allow the wrecking to restart. Impatient that the wrecking should begin, soon, the White House is busily trying to legislate the fiat cancellation of inflation that gets the ball rolling.
· The American WUMAD cohort may prefer to resist than to be “Friend Shored”.
(Source: the Author)
The ultimate wrecking of monetary policy, by those who just can’t help helping themselves, may ultimately undermine Biden’s run into the final leg of his first Presidential cycle. The wreckers, and their wrecking, would militate and re-invigorate the White Unemployable male Armed and Dangerous (WUMAD) cohort that has become incensed by the threat of incarceration of their leaders. The last report discussed the rise of the WUMADs and their (lethal) threat to American democracy.
All is not yet wrecked, however.
The good news, for POTUS, is that his secret weapon, to disarm the WUMADs, is back in black, quite literally, rather than just re-born to run as suspected by this author. Lt. Governor Fetterman is, apparently, out of the hospital and rocking to AC/DC’s signature tune-noir. On hopes that he does not start riffing Highway to Hell any time soon.
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Thnx for the treat! But yeah Thnkx for spending the time to discuss this, I feel strongly about it and love reading more on this topic. If possible, as you become expertise, would you mind updating your blog with more details? It is highly helpful for me. Big thumb up for this blog post! <a href="https://godofsmallthing.com/inspirational-cricket-quotes/" >