The “Biden Bi-decennial Slam Dunk of the Millennium” And “Xi Jinping Thought COVID-Zero” Are Now Both Airborne
“My mentality was to go out and win at any cost.” (Michael Jordan)
Summary:
· 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.
· “COVID-Zero” is entering a multi-year rolling lockdown phase that will obstruct Chinese investment and trade flows.
· The “Biden Bi-decennial Slam Dunk of the Millennium” is enabled by the lethal potential of “COVID-Zero”.
· The Ukraine war is a wargame for the Taiwan war.
· The Crypto Crash paves the way for China’s Belt and Road to connect materially with South America’s Bays of Pigs.
· The Crypto Crash will soon be framed as the next disinflationary headwind requiring remedial economic stimulus action.
· The threat to global democracy from Russian military “subcontractors”, Russian energy and Chinese financing as casus belli for Macklem Doctrine makes its public appearance.
· The enforcement of compliance with “Xi Jinping Thought” is a direct assault on Western Capitalism.
· The new Australian Labour government moves the global price discovery by Cancel Culture process a notch closer to nationalization.
· Inflation Cancel Culture may soon cancel/nationalize “piracy” in shipping supply chains.
· “Speaker Pelosi’s Bottom” is firmly supported by Vinod Khosla.
· The Fed is in a hurry to catch up with America’s bi-decennial “Techno-Economic War” curve.
· Esther George’s sound monetary policy compass will be sorely missed when she retires.
· Neel “Ex Culpa” Kashkari has added alchemy to the Fed’s guidance toolbox.
· James Bullard attempts alchemy to conjure the Soft Landing.
· The Fed is trying to reprise Alan Greenspan’s 1994 vintage as it hurriedly plays catch up.
· Patriotic monetary policymaking may soon be framed as the creation of a stable disinflationary foundation on which the President can Slam Dunk.
· Make America Progressive Again (MAPA) is the new MAGA.
· 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”.
· One way, or another, the UKPM is dangling from the lowest (immigration) branch of the political survival tree.
“Squeaky Bum Time” before the “Slam Dunk” ….
It’s “Squeaky Bum Time” for Team Biden. He is being written off in the upcoming Midterms and beyond.
President Biden has, so far, failed to convincingly blame either President Putin or China, for America’s current economic problems. His attempt to deliver the solution, in the form of more supply-side stimulus is, thus, challenged. The facts have clearly changed. These facts signal that it is game over for the Biden administration.
Faced with defeat, President Biden will change the play rather than concede. This is what he does.
(Source: the Author)
He who jumps the highest, and remains airborne for the longest, by default, wins.
Enter the Jumping Dragon ….
· Xi Jinping COVID-Zeros in response to the Biden Slam Dunk.
· COVID-Zero represents a clean break between China and America.
(Source: the Author)
The last report explained how President Xi Jinping was “COVID-Zeroing” in response to President Biden’s “Slam Dunk”. This ritual dance is a clean break, between the two nations, leading to the creation of rival poles in the global polity. President Xi recently signaled that his next move would be a complete annexation of Hong Kong with the euphemism of “creating closer emotional ties” with the annexed. Vae victis.
However, China’s ambition does not stop with Hong Kong or even Taiwan.
A suspicious outbreak, followed by the full application of “COVID-Zero” protocols, in the Hong Kong territory, would effectively remove opposition, from the streets, thereby, enabling the annexation with greater ease. The recent easing of pandemic travel restrictions, in Hong Kong, almost guarantees this enabling spike. The reciprocal coincident tightening of restrictions, on the mainland, sets up the enabling dynamic.
· China’s “COVID-Zero” strategy may now be to mitigate bank runs rather than COVID-19 per se.
(Source: the Author)
There is already a strong suspicion that healthcare codes are being abused for social and political control, on the mainland, so it is logical to expect that they will be applied in the more liberal polity of Hong Kong. President Xi Jinping has only deepened suspicions, by trying to dissuade depositors from making bank withdrawals, with his insistence that he has cleared up corruption and fraud in the banking system.
As previously suggested, by this author, it has been recently discovered that “COVID-Zero Code Reds” are, routinely, deployed on the mainland to prevent bank runs, by worried depositors. This ubiquitous strategy is being deployed with, unnerving regularity, in response to a whole panoply of social, economic, and political issues. Consequently, questions will arise in the West as to the origin and purpose of the virus. Conclusive proof that COVID-19 is a weapon would be the “Slam Dunk of the Millennium”.
Portentous leaks, from White House 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.
The Trump interregnum is also, effectively, expunged from the national security strategy by default of the Russian narrative. History is, indeed, kind to those who write it.
(Source: the Author)
The US Ambassador to China has begun to frame the situation on the ground, presumably, in preparation for a new phase in bilateral relations between the USA and China. The US view is that China is entering a multi-year phase of rolling lockdowns which will hinder trade and investment flows.
This author has noted that the Biden administration is, currently, in the process of redrafting the country’s whole National Security Strategy plan, allegedly, in response of events in Ukraine. The author also notes that, recently, the White House has revealed that it will be asking Congress for $88 Billion in support of a new National Biodefense Strategy.
The conflation of Biodefense and National Security is not just policymaking semantics. It is strategic and bipartisan. Clearly, the allegedly discrete National Security and National Biodefense legislative chains are linked. Clearly, therefore, they are a “Slam Dunk” that requires a definable enemy with a definable threat. The “Slam Dunk of the Millennium” has its motive, means, and opportunity for launch.
Straight Outta Africa …
The last report noted the latest slippage in America’s position, relative to China, in Latin America. This news has been topped by the latest news that China has eclipsed America in the hearts, minds, and pockets of young Africans. Since Africa is one of, if not, the youngest continent on the planet, America has lost the future thereabouts.
America can now add Africa, to Latin America, in the list of its strategic territorial losses, as its Pivot to confront China globally starts to wobble. All that remains, is Asia.
· The American thirty-year narrative involves the funding and creation of a bipartisan consensus from the perceived Chinese threat via Latin America.
(Source: the Author)
The American response, in Latin America, has recently gained traction.
The Bay of Bitcoin Pigs gets slaughtered….
Part of the relative slippage, in Latin America, had involved the region’s embrace of Bitcoin with the reciprocal slackening of the grip of the US Dollar on economic activity.
· Russia re-enacts the Bay of Pigs in response to Biden’s Ukraine Slam Dunk.
(Source: the Author)
The recent bout of US Dollar strength, and Bitcoin demise, has coincided with a strategic refocusing of American geopolitical activity in the region. The Biden administration had excluded representatives from the governments of Cuba, Nicaragua, and Venezuela from the recently concluded Summit of the Americas in Los Angeles. Nicaragua had announced a Bay of Pigs-style Russian military build-up on its soil, on the eve of the summit. The corresponding/coincident Bitcoin Crash has had one of those curious confluences with these regional developments.
Evidently, some other regional dominoes are falling from the Bitcoin Crash. El Salvador has found it necessary to state that its fiscal position remains healthy after the crash. This country was the first, in the region, to try to wean itself off the US Dollar standard onto the Bitcoin Standard.
Pretty soon, the Crypto Crash will also be cited by policymakers, and central bankers, as the next global economic headwind that is sapping consumer aggregate demand. Some wags will also say that it is deflationary. And then, hey presto, we are all into another easing and stimulus cycle.
The combination of Russian military aggression, under a Chinese economic umbrella, is the signature of this signal. The hallmark of this signal can be found on the Ukraine conflict.
(Source: the Author)
Call it all coincidence, call it what you like. A financial crisis, related to the strong US Dollar/weak Bitcoin dynamic, is unfolding in the region, and beyond. The question, now, is whether China will step in to support the economies of the region, and beyond.
This question has, also, just been anticipated.
The Smoking Gun 2022 ….
If China was to step up, into the Latin American breach, the hallmark pattern of Russian military subcontracting, Russian energy resources, and Chinese financing, of the current global iteration, of the Communist International, would be confirmed. This hallmark has recently been nudged into the public domain, through the usual channels.
Although the source is dubiously Russian, there is also news out that Russia and China have created an Anti-G8 from nations who are not compliant with Ukraine sanctions.
This Anti-G8 thesis looks suspiciously like the BRICs plus, allegedly, Turkey, Mexico, Indonesia, and Iran. Mexico has too much at stake, with its American trade, and Iran needs a nuclear deal with the West, so this bloc may be hypothetical. There is, however, no smoke without a fire and the nations involved, except Russia and China, have nothing to gain from overtly supporting the Anti-G8. Indeed, they could threaten membership in order to extort concessions from the real G8.
The Russian narrative is, in fact, increasingly dissonant with Chinese versions of their relationship. With its Silk Road position of compromised, and conflicted, loyalties Kazakhstan is also distancing itself from its belligerent former Soviet brother.
Whilst Russia alleges mutual dialogue about military escalation, with Chinese support, in Ukraine, China alleges that peace and de-escalation are under discussion. Russian diplomat Maria Zakharova’s attempts to tie China, into an alleged “strategic partnership”, appear to have crossed the line, even though it may be true in practice.
If not an equal then what? Perhaps a tool. Perhaps a weapon. Most likely a combination of both. Most certainly a lab rat.
In vivo, the animated experimental President Putin has garnered levity, rather than gravitas, when he criticized the West, for doing exactly what he is doing, by clinging onto the past, at the empty annual St. Petersburg forum event.
Yin-Yang Split time ….
The Yin and the Yang in geopolitics are no longer grey. It is black and white. “Slam Dunk” meets “COVID-Zero”, as Biden Yin (or whatever it is these days) meets “Xi Jinping Thought (Yang)”. Both seek to deliver “Common Prosperity”, but in their own signature way. The two systems are mutually exclusive. Hence, there can be no compromise and/or co-existence. Destruction or unconditional surrender is the only conclusive outcome.
Whilst distracting, by advocating peace, in Ukraine, China prepares for war, by narrowing its aircraft carrier gap with the U.S. by one more.
Through the “COVID-Zero” strategy, “Xi Jinping Thought” is asserting its primacy, throughout the Chinese economy, under the general policy directive of “Common Prosperity”. The application of “Common Prosperity” asserts greater control in Xi Jinping’s hands. This control is being applied to defend against Biden’s “Slam Dunk”, and also to offensively compete with it globally.
Currently, after a review period, “Xi Jinping Thought” is going to be rigorously enforced by compliance teams, of Communist Party members, throughout the economy. Apparently, even though the President’s enforcement, to date, has been successful, there is still more in-house cleaning to do. This isn’t just narcissism, it’s strategic and structural megalomania on a level not seen since Mao Tse-Tung.
Going forward, all companies, operating in China, must have a compliance function that is governed internally and regulated externally by Communist Party officials. This is not just a regulatory business cost, it is a loss of commercial independence. It may be a destruction of shareholder value. It is certainly in breach of the majority of articles and memoranda, of incorporation, as they stand without board approval. Western companies cannot just comply through executive decisions, they need to change their whole corporate and ownership structures. Such a move would be an attack on the Capitalist system in the West.
In effect, all companies operating within China are being nationalized. International companies will be forced to comply or leave. If they comply, with Chinese domestic rules they will, then, have to do so across all their global operations. Global companies will, then, have to decide on whether to operate in Chinese-governed territories or territories within Western compliance protocols.
The global economy is now being divided.
The real message, in Russia’s sublime Anti-G8 message, and the Chinese nuanced modulation, is that the present and the future of the global economy are all about the USA and China. Everyone else is a bit player, in the supply chains of these two giant dipoles.
Russia is a supply chain node that has shown itself incapable of being able to grow, either organically or through conquest, back into a major pole in the global economy. There is no Multipolar World Order in practice, even though it exists in jargon. The multipoles are just nodes surrounding the big two dipoles. The real issue is how these two giant dipoles can co-exist without conflict. Currently, conflict is inevitable.
Evidently, the public is being prepared for a general escalation, of global hostilities, which will be framed as the causes of the world’s current economic maladies. After this framing, the Western supply-side fiscal stimulus solution will then be sold to the said public. This author calls the solution Macklem Doctrine.
· Incremental Ukrainian Anschluss, plus monetary policy tightening, equals global recession followed by Macklem Doctrine.
(Source: the Author)
Macklem Doctrine is a combined monetary and fiscal policy stimulus, aimed at unblocking supply chains and relocating them to locations where Western democracy prevails. This relocation has been called “Friend Shoring” by Secretary Yellen.
A cursory PESTLE analysis, of the current global environment, will show that now is as good a time as any for Macklem Doctrine.
“Our goal is not the victory of might, but the vindication of right- not peace at the expense of freedom, but both peace and freedom, here in this Hemisphere, and, we hope, around the world.”
(Source: JFK)
Hence, the time is coming for President Biden to sift through one of JFK’s better Cold War speeches and then “Slam Dunk” it.
President Biden appears to be limbering up for this global “Slam Dunk”. Whilst he limbers up, his teammates are, already, on-court applying the full press.
Q1 Stagflated by Oligopolists: The Empire Strikes Back in Q2 …
· The internally conflicted Eurozone will become a managed command economy for the duration of its structural transformation towards a Federal Republic.
(Source: the Author)
This author has predicted that, in response to the energy price shock, Eurozone nations will intervene in the market price discovery process in their real economies.
The ECB is probably the best example of this interventionist genotype. Even before the central bank has begun to raise interest rates it is already flashing its bazooka to suppress bond yields and collapse inter-nation credit spreads.
Germany’s precarious existence, as a net energy importer, currently switching suppliers, from Russia to others, has nurtured the government’s interventionist instincts.
German Economy Minister Robert Habeck will table market interventionist legislation under the cover of strong anti-trust laws. The German economy has seen rapacious Oligopolists consume much of the Covid fiscal support for the economy. Now, the economy is witnessing inflation mitigation support going the same way. Clearly, this will not sit well with the German taxpayer who is also the German voter.
Sadly, G7 policymakers do not wish to question the owners of existing supply chain companies about their business practices. Sadly, oligopoly is deemed to be synonymous with the free market in the G7 market places where the oligopolists prosper. Apologies and apologists rank scale economies, allegedly delivering lower consumer prices, higher than market pricing power in these market places.
(Source: the Author)
Tax cuts on wholesale energy prices have not been passed on, by the Oligopolists in value chains. Hence, not only is the Federal Government in deficit but, it has no demand-driven economic stimulus to show for the fiscal sacrifice. Wealth has, effectively, been transferred from taxpayers, and consumers, to the Oligopolists. This situation is no longer politically tenable, so the German government will intervene from the political and moral high ground.
German Finance Minister Christian Lindner is unequivocal that there is no fiscal reserve available after resources have been expended on COVID, the Ukraine War, and energy inflation mitigation. The full constitutional force of the law can thus be expected to land on those who breach it. Oligopolists should take note.
Not Sole Mio ….
The Italian preferred course of intervention is to cap energy prices, rather than to tighten monetary policy to fight inflation. Italian policymakers are crafting a fiscal stimulus package of middle-class tax cuts, and energy price caps, to, allegedly, stimulate aggregate demand in a non-inflationary way. This prescription is predicated on the view that inflation is not demand-driven, by consumers, but, is rather supply-driven by energy exporters’ Oligopolist behavior.
Gas rationing is now widely expected across the Eurozone.
· Faced with populist protest, Eurozone policymakers transfer wealth, for votes, and simultaneously sell Federalism.
(Source: the Author)
Ultimately, the Eurozone’s policymakers may take a leaf out of Australia’s book. Energy price caps and other mitigation protocols have not worked, because the generating companies have gamed them, by withholding capped price supply. Gaming is what Oligopolies do and it is what they did globally throughout the pandemic. Readers old enough to remember ENRON will understand this.
This time, generators are refusing to switch on idled capacity because of price caps. The government is, thus, being held to ransom and has flexed its Chekist muscles. Consequently, the new Australian Labour government has suspended the spot energy market.
This author is reminded of his article on market price discovery and Cancel Culture. Labor governments have no qualms about canceling capitalism that has become abusive of its position in a crisis.
Bulls Make Money, Bears Make Money, Pigs Get Slaughtered …. Sheep May Safely Graze.
It would be apposite for the reader to re-read the Cancel Culture report. Nationalization is the ultimate destination on this road. Readers should not laugh at this prospect. This author would remind them that the COVID-19 pandemic has allowed governments to abrogate amazing powers to intervene and manage the levers of the economy.
During the pandemic, the market mechanism for the allocation of resources was suspended and workers were sent home to live off the State. Nobody murmured about their loss of liberty and their corresponding right to pursue personal economic interests. The author would also remind readers that the pandemic has not gone away and, therefore, neither have these amazing undemocratic powers. Populism has been around forever and it received a huge shot in the arm from the pandemic.
There is also a grudge held, by the majority, against the minority who prospered financially during the pandemic. Ultimately, wealth transfer may be more acceptable than confiscation, from the gilded minority, if the latter wish to keep their heads. If it is the government doing the confiscating, this all appears to be more civilized, and more equitable, than by an angry mob. It is also perfectly legal.
Populism is the cover for the angry mob, and the social welfare and tax regime does the distribution of the confiscated loot. This author speculates that those currently losing their crypto fortunes will be amongst the most militant, in the angry mob, demanding compensation through pecuniary natural justice. Throw social media into the mix and this becomes quite the political campaign.
America still remains a fertile ground for Oligopolism, masquerading as Capitalism, if the said Oligopolist can take the heat. It also helps an Oligopolist to have a good lawyer who understands how the Constitution protects the rights of private capital, in addition to the right to carry arms!
President Biden’s domestic game is also weak, giving more of the court to Oligopolist players and their lawyers.
There are other ballers coming off the bench for Team Biden. Some of them are real playaaz!
Greed is still good, and is still working, in the Land of the Free and the Home of the Brave….
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)
Speaker Pelosi is a player, of some renown. She is also a renowned Stock Operator. Recently, she bought calls at what the author described as “Speaker Pelosi’s Bottom”. The markets crapped out the following day. Surely, she isn’t so poorly informed?
On the other hand, Mme. Speaker’s apparent poor short-term market entry-timing could be viewed as a huge disclaimer of long-term insider knowledge. Sure enough, when the Fed hiked 75-Basis points, and the stock market rallied, “Speaker Pelosi’s Bottom” started to firm. It is certainly, firmly supported by the thesis being peddled, just down the road from Pelosi’s stately pile, by a good acquaintance of hers in Silicon Valley.
Silicon Valley is up for Biden’s “Slam Dunk of the Millennium”, according to legendary venture investor Vinod Khosla. He predicts that the US and China will soon be in a bi-decennial “Techno-Economic War”. This war will be based on a conflict of underlying values. Market values of American technology must, then, by definition, be boosted, to several multiples of their Chinese competitors, if America is to be the winner. American companies must also remain in private hands and be listed on stock exchanges by the same default victory conditions. “My Dad’s Market Cap is bigger than Your Dad’s Market Cap”, as they say. “Speaker Pelosi’s” firm bottom, and her option purchases, look well informed and firmly supported by Khosla’s thesis.
Here come the Good Guys ….
Further confirmation of Khosla’s thesis was provided by the coincidental signing of the Minerals Security Partnership (MSP) by Canada, the United States, Australia, Finland, France, Germany, Japan, South Korea, Sweden, the United Kingdom, and the European Commission. This partnership will source the raw materials of the “Techno-Economic War” for the war efforts of the democratic nations involved.
This author notes two things about the MSP.
· Macklem Doctrine (GHOS Protocol) will roll out in global venues soon and run for three years if successful.
(Source: the Author)
Firstly, the MSP is the doyen of the “Friend-Shoring” process for developed economy supply chains. Secondly, although it may be sponsored by America, the MSP originates in Canada. Canada is the home of Tiff Macklem, the coordinator of the financial structure of the putative Western “Techno-Economic War” effort, and the spiritual home of the Macklem Doctrine.
If Khosla is correct, Taiwan is of greater significance than Ukraine. Indeed, for China, Ukraine is a wargame to observe the allied response to an attempted invasion of Taiwan.
The Senate Foreign Relations Committee, apparently, agrees with the author’s wargame thesis. In a significant show, of bipartisan strength, the committee now wishes to conflate military spending on Ukraine with military spending on Taiwan.
The situation is fluid and evolving, so POTUS is going with the flow.
Team Biden is allegedly in the process of repositioning his domestic economic policy to comply with his global policy. This confluence will then, hopefully, redress his failure to convincingly blame Russia for inflation and, thereby, a hop skip and jump away from blaming China for everything. This “Slam Dunk” will, then, presumably, kickstart his fiscal stimulus plan. It may also save his bacon, in the Midterms, and beyond.
Slam Dunk, Incoming!
This author has also noted the synchronous timing of a leak about President Biden’s global “Slam Dunk”. The coincident timing with the MSP signing, is, in fact, not a coincidence. It is a fanfare.
NSA Jake Sullivan has recently leaked that President Biden will launch his G7 global infrastructure plan, to counter China, very soon. This plan is the “Friend Shoring” this author envisages in Macklem Doctrine. The odds that Speaker Pelosi was aware of this are as short as the risk to her long position in call options.
If this “Hurricane” was to blow recessionary headwinds, that were then discounted into falling energy and commodity prices, Dimon’s laconic smile would, doubtless, broaden into an esoteric smirk.
(Source: the Author)
The odds that “Hurrikraine” (Jamie) Dimon was aware of the President’s G7 agenda, and upcoming Saudi trip, when he made his now-infamous “Hurricane” comment are, probably, slightly (but not by much) longer than Pelosi’s.
Where Biden’s global “Slam Dunk” is well-coordinated, his domestic “Slam Dunk” is spasmodic.
Lower the hoop, raise the bar ….
· Oligopolists are currently defeating Capitalism, possibly for the last time.
(Source: the Author)
President Biden has got the domestic message from the consumer/taxpayer. He has not yet capitalized upon this, politically, speaking with executive and/or legislative action. For now, he prefers to fire warning shots across the boughs of oil-producing companies, in the hope that they will ramp up production.
In truth, Biden is hog-tied because of his embrace of alternative energy. It would be hypocritical to overtly promote oil and gas production when one has embraced the Green New Deal. Some wiggle-room, to boost supply in order to support allies who are threatened by sanctioned Russian energy is about as far as he will go right now. Blaming Russia, US energy companies, and the Fed, for inflation, is the discretion that underlies Biden’s, apparent, capitalist valor.
The Department of Justice could, however, go further than firing warning shots were it to use the Federal ant-trust weapon.
Evidently, Biden has chosen a trusted ally to float a Populist solution, to the energy problem, rather than directly frame himself as a Socialist in the first instance. Senator Ron Wyden has proposed a windfall tax on the excess profits of oil companies. If this plays well with the electorate, Biden can then board the bandwagon. The Populist/Socialist bandwagon may also gain traction after the November elections, should they play out as hoped for.
From his objective position, on the moral high ground, the President surveys the battleground and takes the side of America rather than the two partisan domestic political factions involved. Russia is blamed, by him, for the dislocation in the petroleum products markets. The President, thus, leaves room for conciliation, consensus, and patriotism with Big Oil executives and the partisans. From this position, political capital, and leverage, can be accumulated for his “Slam Dunk”.
No doubt, POTUS could also stretch to some fiscal sweeteners, on the tax return side, for Big Oil companies who fall into line with the patriotic imperative. If the share prices of the companies can be immunized, from losses, then it’s a win-win.
There is even, apparent, room for faux reconciliation with China.
Keep your friends close and ….
The tenets of Smart Power, and the advice of Don Corleone, resonate throughout President Biden’s posturing. An enemy of an enemy is his friend. On this occasion, inflation is his biggest enemy, hence, Russia is his enemy. Furthermore, since China can export deflation, it is Biden’s friend, temporarily at least. Consequently, another enemy, Donald Trump, and his inflation-boosting tariffs on Chinese goods are being rolled back.
China is, thus, the enemy that President Biden wishes to keep closer, for now. The President’s latest trip to Saudi Arabia, most likely, falls into the disinflationary enemy-embracing context too.
· The rising probability of a US economic hard landing is raising the probability of a patriotic monetary policymaking response from the Fed.
(Source: the Author)
Sadly, there will be no reconciliation with the Fed, just yet. But, hopefully, Chairman Powell and the President will agree to disagree and agree to blame President Putin for their mutual policymaking separation.
For now, the Fed is in Rear Echelon (RE) modus operandi. Unkind critics may say that Chairman Powell is, therefore, a “REMF”, but this does not do the full story justice.
In the rear, in reverse monetary policy gear ….
Having missed its inflation cue, in March 2021, the Fed then compounded its Rear Echelon misery by failing to be in a position to confront Xi Jinping’s initiative, to address the “disorderly expansion of capital”, in September 2021. At the time, James Bullard was, belatedly, forcing his FOMC colleagues to do something about the “Inflation Spike”.
This strategic failure now means that the Fed has its own “disorderly expansion of capital” problems, which preclude it from fully supporting the Commander in Chief’s mission to define “Common Prosperity”, in American terms, with the combined force of monetary and fiscal policy stimulus.
· Aggressive monetary policy tightening may be a vanity project, in pursuit of lost credible commitment, that will undermine the Macklem Doctrine Solution for the New World Order.
(Source: the Author)
The FOMC’s vigorous, and belated, acceleration to, allegedly, go beyond neutral could just, as easily, be seen as an urgency to catch up with the “Techno-Economic War” curve mobilization that it is, sadly, way behind.
· Only a 1990s Greenspan repeat will rebuild the Fed’s credibility.
(Source: the Author)
Early movers, like Speaker Pelosi, will now begin to discount the great monetary policy easing event of the patriotic reconciliation, between the FOMC and the White House, at each subsequent 50 to 75 basis point rate hike. This discounting may include President Biden or it may include a new President.
As the Fed sprints, to catch up with President Biden, Mr. Market will sprint ahead of them both in discounting the “Techno-Economic War Slam Dunk” stimulus.
The Fed is clearly aiming to repeat the success of Greenspan, in the 1990s, but Mr. Market is not yet feelin’ it.
If you can remember the 1990s then you, probably, were working for PIMCO (on and off the payroll) ….
PIMCO alumnus, before Minneapolis Fed president, Neel “Ex Culpa” Kashkari seems to be a sucker for punishment, these days. With his credibility in shreds, even by his own admission, he is now, off on one, trying to convince Mr. Market to reprise the 1990’s price discovery process in order to get the Fed off the hook.
· Neel “Ex Culpa” Kashkari has lost his credibility.
(Source: the Author)
Stretching his credibility, into the realms of fantasy, Kashkari recently tried to say that it is not a great leap, of the imagination, to believe that the US economy is like it was in the 1990s. This fantasy has to ignore the fact that inflation is higher, and the Fed has less credibility, nowadays.
Kashkari then seems to think that if he keeps saying 1994, enough times, by some strange power of the halo effect it will happen all over again. If one can believe in this magic, then Neel’s your father’s brother. Hopefully, the FOMC will not have to hike interest rates as many times as Kashkari says 1994, or civilization, as we know it, will be finished.
Kashkari is no longer a central banker, he is an alchemist.
The tightening cycle in 1994 might be a better benchmark because, as is true now, the FOMC at the time had a lot of credibility with the public, although inflation was not as high in 1994 as it is today. So it is not a perfect comparison either.
(Source: Neel Kashkari)
Were Kashkari to have said that credit conditions are tighter than in the 1990s, because of high bond yields and high inflation, then, he might have had more luck with his magic tricks. Following this line of reasoning, the combined headwind from the credit market and the real economy is enough to trigger a recession that will need an economic stimulus.
Basis the 1994 tightening cycle, Kashkari believes that the FOMC is, roughly, now, halfway there. Kashkari does not know how much more tightening is needed, but he senses that 50-Basis point rate hikes are the order of the day, now that the FOMC has announced its intentions and capabilities to defeat inflation. Thus, Kashkari is saying that the balance of risks is tilting towards recession rather than continued inflation.
Somewhere, over the rainbow, there is a Soft Landing ….
Keep Calm and Muddle Your Way Across the Rubicon, by way of the Missouri ….
Through all the theatrics and ass-covering, currently underway at the Fed, the demeanour and guidance of Kansas City Fed president Esther George have been exemplary. When her colleagues were overshooting and broadly inclusive, George was suspicious. Now that they are aggressively Hawkish, she is cautious. She does not dissent, from their view, she simply wishes it to be executed in the way that does the least harm to the US economy.
(Source: the Author)
Kansas City Fed president Esther George is a sadly departing ray of sunshine, and sanity, in the current monetary policy storm.
George advocated caution when QE was going gangbusters and has been proved to be right. Now, she advocates consistency, in tightening, in explanation of her recent FOMC dissent, as her colleagues become increasingly erratic. Her strong monetary policymaking compass will be sorely missed when she retires, with distinction.
· James Bullard no longer has credibility.
(Source: the Author)
St Louis Fed president James Bullard may also have turned alchemist.
Initially, Bullard was having a good pandemic. He even came up with the name National Pandemic Adjustment Period, and the acronym (NPAP), for the economic shutdown response. His fortunes then flagged, as he failed to respond to the inflation, that he had helped create, until his late “Inflation Spike” call, and belated prescriptive tightening action in late 2021.
Bullard’s colleagues never really came to grips with the tightening, assuming that the inflation spike would dissipate in the wake of their guidance, rather than through their actions. Consequently, Bullard then jibbed about, calling for a 75 basis points hike, and then rescinded it almost as swiftly.
With his credibility in tatters, Bullard thinks that it can be restored, along with faith in the Fed, if there is a soft-landing. At the moment, he is hedging his bets by, not predicting a soft-landing but, just saying the words enough times so that, if it occurs, he can claim that he had predicted it.
REMF’s no more ….
New Multipolar World Order (NMWO) (II): “I love workin’ for Uncle Sam ….
· “Cold Amazon” Vice Chair Brainard reminds that Fed monetary policymaking will always put patriotism before the dual mandate.
(Source: the Author)
In fairness, to the Fed, Vice-Chair Lael Brainard and Governor Christopher Waller have struck up the “Techno-Economic War” cadence already. Without monetary policy ordnance, however, their plaintive patriotic mantras are impotent. The Fed needs to double-time it to neutral.
If one wishes to apply Kashkari’s Philosopher’s Stone, to conjure up patriotic monetary policy, one could even say that the Fed is doing the patriotic thing by creating a stable disinflationary base upon which a sustainable Biden global infrastructure plan can be built. When the reader has finished laughing, he should then await guidance and speeches which confirm this.
This author feels a new acronym, coming on, that portends a rally in “Techno-Economic War” stocks.
MAPA is the New MAGA ….
The Senate appears to be the place where the Democrat’s would-be secret Populist weapon is to be found. This weapon is pure Blue Collar and can, hence, stare down the Hill Billies, South of the Mason Dixon, who are causing so much trouble in the American broad church. Were Lieutenant Governor Fetterman to reach the Senate, in November, the political landscape would change. Fetterman is big and white. He is also not LGBTQ or any other of that diverse nomenclature that so offends Jim Crow and Bible Belt sensibilities.
Fetterman calls his mix of Populism/Socialism-Lite, “Progressive”. It has that catchy ring to it that broadcasters, and voters, can embrace, without being tarnished with any of the current partisan baggage, and abuse, which plagues the current political milieux. Americans love their brands, almost as much as they love to sell, after all. Thus “Make American Progressive Again” (MAPA) is the new MAGA.
Where his domestic game is currently weak, however, President Biden’s global game is strong. A global “Slam Dunk” is, therefore, more likely from which he may then attempt a domestic “Slam Dunk”.
Pirates of the Global Economy: On Stranger Oligopolic Tides ….
Previously, this author has noted that the supply chain raiders, Kuehne+Nagel and Maersk, should standby to receive a Federal Boarding party. Their CEOs may ultimately be forced to walk the plank.
The Maersk shipping line recently boasted of its ability to bake higher long-term inflation expectations, into the global economy, by raising long-term contract prices in the face of short-term declining volumes. Costs were up 21%, volumes were down 7%, but revenue was up 64% thanks to aggressive rent-seeking. Bravo! But there’s not exactly a lot of competition in this space, is there? Shooting fish in a barrel seems to be more like shooting fish in a shipping container in this case.
(Source: the Author)
POTUS is much happier attacking these metaphorical Pirate Oligopolists, it seems. His warning shot is the incendiary Ocean Shipping Reform Act. This is more than just a warning. It is Federal law and, therefore, impacts all who ship globally to the Federal shore. This dog definitely hunts and may bring sanctions and penalties. It will most certainly give momentum to the “Friend Shoring” process that seeks to relocate supply chain nodes, and operations, back from the lands of piracy to Federal shores.
For their part, the Pirate Oligopolists appear to be as confident and rapacious as ever. They have disdainfully responded, to Biden’s warning shot, with a full broadside of their own. Gleefully rubbing their hands, the pirate ship captains, aka CEOs, predict that shipping congestion will last well into 2023. In the pirate vernacular, this means that they wish to constrain employment, and capacity, within their industry, below that of a global economy that is slowing down. It’s a Stagflation business school case study, that these CEOs have gamed out successfully before. Consequently, they recommend that the merchants and consumers, whom they plunder, should lock themselves into longer-term contracts and stop trading freight spot.
Readers should remember that it was the ratcheting up, of long-term freight contract prices, which was baking-in long-term inflation, under the Maersk rent-seeking plunder strategy. Readers should also remember that Australia has, recently, suspended the spot market for energy. Readers should also note that the global economy is slowing, thereby putting spot prices at risk. It is, therefore, logical to conclude that the pirates have divined threats and an opportunity, with their SWOT analysis, to boost future profits. All they think that is required is a flash of their sabers, and a quick broadside of communication, to steer the ships of their future profits into line. President Biden and other world leaders will differ, strongly.
The pirates now face stormy red oceans of Legislation, fines, price controls, market suspension, and even nationalization. The rent-seeking plunder of blue oceans is over.
It is inadvisable, to challenge the President of the United States, in an epoch of regime change. Piracy is no longer as rewarding as it used to be unless engaged in by elected policymakers, their fiscal agencies, and their central bankers. Neither will it be fun for the pirate ship captains when the Feds come calling at their homes and bank accounts.
UK Prime Minister Boris Johnson’s strategic misalignment with the New Multipolar World Order (NMWO) under construction, is finally getting the kind of editorial attention that can only mean one thing. This thing is regime change.
(Source: the Author)
The European policymakers’ position, and President Biden’s politically motivated Faux Capitalism, contrast strongly with that of the UK Government.
The UK economy is coupling to the kleptocratic unregulated side of submerging economies, which are in a downswing, and decoupling from increasingly regulated developed economies, which are driving the submerging market downswing, whilst, engineering their own upswing. The submerging economies are also Beggar Thy Neighbouring each other, and their G7 trade partners. What’s the betting that they don’t also Beggar Thy Neighbour their old imperial master?
(Source: the Author)
There has been more than a hint of grand larceny, and piracy, about UK economic policy, affectionately known as Sleaze, of late. This hint has, in practice, been more of a post-Brexit business model, as well as jobs for the boys and girls related to cabinet ministers.
When there is nothing to fear, but fear itself ….
· The UK will become an austere economy with an ungovernable polity.
(Source: the Author)
The UK PM, and his team, are learning about Keynesianism the hard way.
Pro-cyclical monetary and fiscal policy excess, which sustained inflation, is now in reverse. The bludgeoning of the public sector, especially the NHS, has triggered an immediate recession. It is moot whether the tax cuts, that this bludgeoning will allegedly finance, then unleash a significant demand-driven economic stimulus.
The fiscal austerity windfall, to finance hastily promised tax cuts, has already been swiftly eaten away, by high inflation, so the consumer’s animal spirits have, already, been crushed. The specter of the government pulling up the fiscal policy stimulus drawbridge will only crush the animal spirits further. The UK economy is in rudderless freefall. It may soon also be in leaderless freefall.
· The current UK government must appear to be tough on violent crime rather than as directly increasing violent crime with its economic policies.
(Source: the Author)
This author suggested, in the last report, that the PM would swing from the lowest branch, on the Useful Idiot tree, that is immigration. The branches, and the tree, from which to swing, and to extemporize, are now his.
Currently, the PM is swinging on the old Brexit branch at the Irish border. A new offshoot, from this old branch, leads to the UK’s immigrant concentration camps in Rwanda. As quickly as the EU, allegedly, dispatches immigrants across the Channel, they are loaded, like slaves, and despatched to the continent whence they originally came.
Britain, it would seem, has not lost its logistic skill, in transporting human cargo, despite all the current supply chain disruptions. If only the same logistic skill were applied at commercial airports, then, the economy and the PM would, perhaps, be in better shape. It seems likely, therefore, that, one way or another, the PM will find himself dangling with the other strange fruit on the immigration branch.
The PM’s strategy and tactics are clear. He intends to start fights, with anybody, and with everybody, about anything, and about everything, to detract and divert attention from his own failings. Destructive offense is his best defense. Those who choose to fight him, on these terms fail, automatically, by accepting his terms of combat. Those wishing to defeat him, are well-advised to focus on the individual rather than the fights that he starts. In view of the upcoming clashes, the oxymoron known as the PM’s ethics adviser has resigned.
Bulls make money, bears make money, pigs get slaughtered, sheep safely graze, and immigrants get tagged in Britain these days. This should, however, secure the Chav Vote, or so the PM and his tagging Home Secretary calculate.