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David Stockman on The Ukrainian Border War Folly
David Stockman on The Ukrainian Border War Folly
Someone should tell the European ruling elites to take a long jump off a short pier. Their endless whining about the Ruuskies and Putin is just plain pathetic because—
- It’s not justified—Russia bears no hallmarks of an expansionist imperial power.
- The Russia-Ukraine conflict is none of western Europe’s business—since its essentially a territorial and civil war within the borders of historic Russia.
- If EU officialdom is really concerned about the purported Russian threat why do they spend just a pittance of their GDP on defense?
Yet, here we have Ursula von der Leyen, president of the European Commission, former German defense minister and full-throated war-hawk, talking absolute nonsense:
“Russian President Vladimir Putin wants to see empires and autocracies back in Europe, European Commission President Ursula von der Leyen told the European Economic Congress in Katowice.
Speaking alongside Polish Prime Minister Donald Tusk, von der Leyen insisted that she stands for a European Union that is ready to do whatever it takes to protect Europe, and especially Ukraine.
“Putin’s war is about redrawing the map of Europe, but it is also a war on our Union and on the entire global rules-based system,” she said.”
Well, that’s rubbish if there ever was such. The only time the borders of Ukraine have been redrawn at the barrel of a gun is when Lenin, Stalin and Khrushchev did it between 1922 and 1954. That’s right, this bureaucratic half-wit wants to embroil the world in WWIII in order to enforce borders drawn by a trio if history’s most blood-thirsty tyrants.
As explained below, there never was a country even remotely resembling modern Ukraine until the Soviet communists decreed its existence…
…click on the above link to read the rest of the article…
Carbon Credits Are the Biggest Scam Since Indulgences—How You Can Avoid Being Fleeced
Carbon Credits Are the Biggest Scam Since Indulgences—How You Can Avoid Being Fleeced
In the Middle Ages, the Catholic Church convinced the commoners to buy indulgences to alleviate their sins. And they made a fortune in the process.
Similarly, today, our overlords—the mainstream media, central bankers, and their political allies—are working overtime to convince the commoners to pay for their alleged climate sins.
Enter carbon credits, government-issued permits that grant you the privilege to emit a certain amount of carbon dioxide.
Although advocates promote them as a way to “save the environment,” in reality, carbon credits are nothing more than a devious mechanism to tax, regulate, and control you.
It’s not a coincidence that the most philosophically and ethically bent people are promoting them.
For example, at a recent World Economic Forum (WEF) meeting in Davos, participants revealed and touted an “individual carbon footprint tracker.” It will track where people travel, how they travel, what they eat, and what they consume.
Carbon accounting is already creeping into many places, like Google Flights.
A federal carbon tax is already a reality in Trudeau’s Canada, and it’s causing the price of food and other goods and services to soar. But Canadians haven’t seen anything yet—the federal carbon tax will triple by 2030.
In short, there’s a growing push to implement the carbon credit scam worldwide. And that’s not a coincidence.
Remember, central banks only exist to harvest wealth from the populace through inflation and redirect it to the politically connected, an insidious practice known as seigniorage.
Fiat currency is the usual mechanism central banks use to perpetuate this fraud. They get most people to run on a hamster wheel most of their lives chasing after confetti money they create with no effort.
However, there is a limit to this process.
…click on the above link to read the rest of the article…
The End Of The Petrodollar
The End Of The Petrodollar
The Saudis, New Chapter in Energy Economics, De-dollarization, and the American-Made Pressure Cooker
“Oil is too important a commodity to be left in the hands of the Arabs.”
~ Henry Kissinger
Just last Sunday, one of the most significant economic deals of the century came to an end. The long-standing petrodollar agreement between Saudi Arabia and the United States officially expired on June 9th, 2024.
This system, which has been in place for 50 years, is now gone.
Despite what the mainstream media might have you believe, yes, it does point to a big change in global economics, and yes, it could seriously affect every American’s life.
So this week, I want to break down exactly what’s happening, why it’s happening, and how it will impact us and generations to come.
But first, let’s set the stage with some context, because it’s crucial…
"Rise" of the Dollar
You’ve probably heard the saying, “The one with the gold makes the rules,” right?
This was the position the U.S. was in after World War II.
The U.S. had won the war and boasted the world’s largest gold reserves. This allowed it to reshape the global monetary system around the dollar.
The new system, created at the Bretton Woods Conference in 1944, tied almost every nation’s currency to the U.S. dollar at a fixed rate. It also pegged the U.S. dollar to gold at a fixed rate of $35 an ounce.
This arrangement made the U.S. dollar the world’s premier reserve currency, effectively forcing other countries to hold dollars for trade or redeem them with the U.S. for gold.
But, by the late ’60s, splurging on welfare and the Vietnam War, along with printing money to cover the deficit, pumped tons more dollars into circulation compared to the gold reserves backing them.
…click on the above link to read the rest of the article…
When All Crimes Are Those Against the State
When All Crimes Are Those Against the State
“Do not encroach against others or their property.”
The above principle is a simple one, yet it’s the basis for all criminal law. In turn, criminal law is the basis for Common Law, the legal system for English-speaking peoples and much of the rest of the world.
The idea is a simple one: If party A aggresses against party B, party B is entitled under the law to restitution or compensation to be paid by party A to party B.
Well, that seems straightforward enough. But at some point along the way, two fundamental changes have been made that don’t reflect the original principle.
First, convicted offenders started to be ordered by the court to pay the court as punishment. Of course, the offense was not against the court, but the government of the day wanted to get in on the action. Surely, if a crime against a given party had been committed, the state was entitled to dip its beak, so to speak.
Over time, fines payable to the state became the norm. And for those who couldn’t pay the state, jail time.
Along the way, another extension to the concept came into use: victimless crimes. Increasingly, laws were passed by governments to make actions unlawful when there was no harm to an individual or his property.
To wit: Recently, the State of Michigan passed law HB4474, against “hate crime” – any perceived slight against another person, verbal or otherwise. The law recognizes such disparate slurs as those critical of gender identity, religion, race, sexual orientation, ethnicity, age, or even affiliation with a group. Incredibly, the law extends as far as the outlawing of unacceptable pronouns.
The punishment is imprisonment of up to two years, a fine of $5,000, or both.
…click on the above link to read the rest of the article…
David Stockman on the Continual Rise in the Cost of Living… And Why the Fed has No Shame
David Stockman on the Continual Rise in the Cost of Living… And Why the Fed has No Shame
Jay Powell did it again assuring the 1% that he has their back.
Markets recovered their poise over the last 24 hours, as investors were relieved after Fed Chair Powell stuck to his recent views on the economic outlook. In his remarks yesterday, he said that recent data didn’t “materially change the overall picture” and that on inflation “it is too soon to say whether the recent readings represent more than just a bump.” In addition, he reiterated that if “the economy evolves broadly as we expect, most FOMC participants see it as likely to be appropriate to begin lowering the policy rate at some point this year.” So that all helped to validate market pricing, which still expects 71 bps of rate cuts from the Fed by the December meeting.
Needless to say, the man has no shame. And that’s to say nothing of intellectual firepower. There is not even a smidgen of a case that rate cuts in the present context will help main street, and the Fed heads and their Wall Street megaphones don’t actually even try to make that argument.
Instead, they argue for rates cuts by default. If by some tortured version of the CPI (i.e. the “supercore” index, which eliminates 61% of the CPI items by weight) they can espy the in-coming inflation trend settling into a liberally defined vicinity of 2.00%, that’s purportedly good enough to end the money-printing pause that has been in place since March 2022. Thereafter, it’s back to business as usual, flooding the canyons of Wall Street with cheap credit and a new burst of financial asset inflation.
…click on the above link to read the rest of the article…
An Empire Self-Destructs
An Empire Self-Destructs
Empires are built through the creation or acquisition of wealth. The Roman Empire came about through the productivity of its people and its subsequent acquisition of wealth from those that it invaded. The Spanish Empire began with productivity and expanded through the use of its large armada of ships, looting the New World of its gold. The British Empire began through localized productivity and grew through its creation of colonies worldwide—colonies that it exploited, bringing the wealth back to England to make it the wealthiest country in the world.
In the Victorian Age, we Brits were proud to say, “There will always be an England,” and “The sun never sets on the British Empire.” So, where did we go wrong? Why are we no longer the world’s foremost empire? Why have we lost not only the majority of our colonies, but also the majority of our wealth?
Well, first, let’s take a peek back at the other aforementioned empires and see how they fared. Rome was arguably the greatest empire the world has ever seen. Industrious Romans organized large armies that went to other parts of the world, subjugating them and seizing the wealth that they had built up over generations. And as long as there were further conquerable lands just over the next hill, this approach was very effective. However, once Rome faced diminishing returns on new lands to conquer, it became evident that those lands it had conquered had to be maintained and defended, even though there was little further wealth that could be confiscated.
The conquered lands needed costly militaries and bureaucracies in place to keep them subjugated but were no longer paying for themselves…
…click on the above link to read the rest of the article…
David Stockman on Why Washington DC is the War Capital Of The World
David Stockman on Why Washington DC is the War Capital Of The World
Ultimately, there is no mystery as to why the Forever Wars go on endlessly. Or why at a time when Uncle Sam is hemorrhaging red ink a large bipartisan majority saw fit to authorize $95 billion of foreign aid boondoggles that do absolutely nothing for America’s homeland security.
To wit, Washington has morphed into a freak of world history—a planetary War Capital dominated by a panoptic complex of arms merchants, paladins of foreign intervention and adventure and Warfare State nomenklatura. Never before has there been assembled and concentrated under a single state authority a hegemonic force possessing such unprecedented levels of economic resources, advanced technology and military wherewithal.
Not surprisingly, the world’s War Capital is Orwellian to the core. Its endless pursuit of war is always and everywhere described as the promotion of peace. Its jackboot of global hegemony is gussied-up in the form of alliances and treaties ostensibly designed to promote a “rules-based order” and collective security for the benefit of mankind, not simply the proper goals of peace, liberty, safety and prosperity within America’s homeland.
Unfortunately, the whole intellectual foundation of the enterprise is false. The planet is not crawling with all-powerful would-be aggressors and empire-builders who must be stopped cold at their own borders, lest they devour the freedom of all their neighbors near and far.
Nor is the DNA of nations infected with incipient butchers and tyrants like Hitler and Stalin. They were one-time accidents of history and fully distinguishable from the standard run of everyday tinpots which actually do arise periodically. But the latter mainly disturb the equipoise of their immediate neighborhoods, not the peace of the planet.
…click on the above link to read the rest of the article…
Doug Casey on the Relentless Rise of Taxes, Regulations, and Inflation
Doug Casey on the Relentless Rise of Taxes, Regulations, and Inflation
International Man: Almost every government worldwide is moving to increase taxes and regulations on its citizens while at the same time engaging in ever-increasing currency debasement.
What do you think of this trend, and where is it going?
Doug Casey: Higher taxes, more money printing, and more regulations are long-standing trends. The cat first got out of the bag with the French Revolution and the triumph of the Jacobins, who wanted to collectivize French society. They almost succeeded. Not many years later, Karl Marx wrote The Communist Manifesto and Das Capital, letting another feral meme loose into society. The idea that the State was a good thing and should grow is now everywhere.
With the turn of the 20th century, roughly 120 years ago, governments all over the world created central banks and the income tax. They started small but have become behemoths, funding welfare and warfare. Both things are highly destructive. In the 19th century there was no welfare and very few wars, because wars are expensive. Governments were hard-pressed to extract adequate revenue from their populations for fighting.
Like all living creatures, the prime directive of the State is to survive and grow. But the State is unique. The State, as Mao said, comes out of the barrel of a gun. Since it’s based on coercion, it’s only natural that some form of socialism would be its preferred way to organize society. Currency inflation, income taxes, and debt have enabled governments to get completely out of control. The prognosis is not good.
International Man: There seems to be a coordinated effort to increase capital gains taxes.
For example, Canada just announced an increase in the capital gains tax from 50% to 67%. President Biden has proposed increasing the US capital gains tax to 44.6% and adding a tax on unrealized capital gains.
…click on the above link to read the rest of the article…
The All-Important Doorman
The All-Important Doorman
Picture this: A tribal leader from a distant country visits the US. He’s brought to a large apartment building in New York City. When he gets out of the car, he looks up at the great building and is quite impressed. A uniformed doorman exits the foyer and comes out on the sidewalk. The tribesman sees the gold braiding and brass buttons of his coat and immediately decides that this is a very important person. Again he looks up at the building and says to the doorman, “This is a very great home you have. You must be very important indeed.”
Of course, if we were present, we might chuckle at the tribesman’s naiveté. The owners of such a great building would never greet people at the entrance. They leave such trivial tasks to hired servants, whilst they run the real business without ever needing any direct contact with visitors as they enter the building. And, in addition, doormen come and go – they are, after all, disposable. The owners – those who control what happens in the building – retain their positions over the long term… and may remain anonymous, if they so choose.
We find this simple concept easy enough to understand, and yet we chronically have difficulty in understanding that, in most countries, the president, or prime minister, is not by any means the man who makes the big decisions in the running of the country.
We assume that, because we were allowed to vote for our leader, he must actually be our leader. But, as Mark Twain has at times been credited as saying, “If voting made any difference, they wouldn’t let us do it.”
…click on the above link to read the rest of the article…
David Stockman on Why There is No Noticeable Benefit from the Fed’s Policies
David Stockman on Why There is No Noticeable Benefit from the Fed’s Policies
Here is the only noticeable “benefit” from the Fed’s pro-inflation policies since Greenspan’s arrival at the Eccles Building. To wit, these policies have pleasured the tippy top of the economic ladder with massive wealth gains owing to the relentless inflation of financial assets. During the 34 years since 1989, therefore, net worth has increased as follows:
Aggregate Net Worth Gain, Q4 1989 to Q3 2023
- Top 0.1% or 131,000 households (purple area): +$18.2 trillion or 11.4X.
- Top 1.0% or 1.34 million households (black area): +$40.0 trillion or 9.5X.
- Bottom 50% or 65.7 million households (blue area): +$3.7 trillion or 5.1X.
For want of doubt, the corresponding net worth gains on a per household basis are as follows:
Net Worth Gain Per Household, Q4 1989 to Q3 2023
- Top 0.1%: +$139 million each.
- Top 1.0%: + $30 million each.
- Bottom 50%: +$55,000 each.
- Ratio of Top 0.1% Versus Bottom 50%: 2,500X
Aggregate Net Worth By Economic Class, 1989 Q4 to 2023 Q3
Needless to say, the only cohort to experience net wealth gains roughly in line with nominal GDP growth during this 34-year period was the bottom 65.7 million households. Their 5.1X gain was only a tad larger than the 4.9X gain in nominal GDP during the period, which rose from $5.7 trillion to $27.6 trillion.
The veritable eruption of net worth at the tippy-top of the economic ladder at more than double the gain in GDP, therefore, should not be confused with superior virtue, greater investment prowess or any other meritorious factor.
To the contrary, it was an unearned windfall owing to massive, artificial asset price inflation. In rough terms, those Fed-fostered windfalls amount to about half the gain reported above or about $20 trillion for the top 1% and $9 trillion, or about $70 million per household, for the top 0.1%.
…click on the above link to read the rest of the article…
Welcome to the Warfare State
Welcome to the Warfare State
War is one of the few things that only the State can do. Indeed, as Randolph Bourne said, “War is the health of the State.” Let’s briefly discuss the nature of the State to see why World War 3 is on the way.
The State is like any other living entity: its prime directive is to survive and grow. Bear in mind that the State—the government—is not at all the same thing as the country or society, even though it claims to be. It’s not “We the People”; it’s a distinct entity with its own discrete interests. And that’s actually too mild an assertion. While individuals and companies prosper by providing goods and services to others through voluntary exchange, the State specializes in coercion.
There’s nothing voluntary about the State. Its main products have always been pogroms, persecutions, confiscations, taxation, inflation, censorship, harassment, repression—and war. The State is not your friend.
Mass murder and wholesale destruction are bad enough in themselves. But in wartime, the State enables them with new taxes, new debt, draconian controls, and new bureaucracies. These things linger long after the war is over.
Worse yet, the State does these things with the sanction of the victim; the typical citizen has been taught that almost anything is justified by “national security.” Anyone who would normally protest these depredations in peacetime soon learns to dummy-up when there’s a war for fear of being lynched for sympathizing with the invariably demonic enemy.
After the war—assuming a victory, of course—the State’s debt, taxes, regulations and general size never return to pre-war levels. They ratchet up to ever higher plateaus, requiring the State to do more of the same to justify its existence. Government programs, of whatever description, are almost never pulled out by their roots. At most, they’re trimmed, which has the same effect as pruning a plant, i.e., they’re encouraged to grow back bigger and stronger.
…click on the above link to read the rest of the article…
David Stockman on the $1.3 Trillion Elephant In The Room
David Stockman on the $1.3 Trillion Elephant In The Room
These people have to be stopped!
We are talking about the nation’s unhinged monetary politburo domiciled in the Eccles Building, of course. It is bad enough that their relentless inflation of financial assets has showered the 1% with untold trillions of windfall gains, but their ultimate crime is that they lured the nation’s elected politician into a veritable fiscal trance. Consequently, future generations will be lugging the service costs on insuperable public debts for years to come.
For more than two decades these foolish PhDs and monetary apparatchiks drove the entire Treasury yield curve to rock bottom, even as public debt erupted skyward. In this context, the single biggest chunk of the Treasury debt lies in the 90-day T-bill sector, but between December 2007 and June 2023 the inflation-adjusted yield on this workhorse debt security was negative 95% of the time.
That’s right. During that 187-month span, the interest rate exceeded the running (LTM) inflation rate during only nine months, as depicted by the purple area picking above the zero bound in the chart, and even then by just a tad. All the rest of the time, Uncle Sam was happily taxing the inflationary rise in nominal incomes, even as his debt service payments were dramatically lagging the 78% rise of CPI during that period.
Inflation-Adjusted Yield On 90-Day T-bills, 2007 to 2022
The above was the fiscal equivalent of Novocain. It enabled the elected politicians to merrily jig up and down Pennsylvania Avenue and stroll the K-Street corridors dispensing bountiful goodies left and right, while experiencing nary a moment of pain from the massive debt burden they were piling on the main street economy..
…click on the above link to read the rest of the article…
Falling From Grace
Falling From Grace
Years ago, Doug Casey mentioned in a correspondence to me, “Empires fall from grace with alarming speed.”
Every now and then, you receive a comment that, although it may have been stated casually, has a lasting effect, as it offers uncommon insight. For me, this was one of those and it’s one that I’ve kept handy at my desk since that time, as a reminder.
I’m from a British family, one that left the UK just as the British Empire was about to begin its decline. They expatriated to the “New World” to seek promise for the future.
As I’ve spent most of my life centred in a British colony – the Cayman Islands – I’ve had the opportunity to observe many British contract professionals who left the UK seeking advancement, which they almost invariably find in Cayman. Curiously, though, most returned to the UK after a contract or two, in the belief that the UK would bounce back from its decline, and they wanted to be on board when Britain “came back.”
This, of course, never happened. The US replaced the UK as the world’s foremost empire, and although the UK has had its ups and downs over the ensuing decades, it hasn’t returned to its former glory.
And it never will.
If we observe the empires of the world that have existed over the millennia, we see a consistent history of collapse without renewal. Whether we’re looking at the Roman Empire, the Ottoman Empire, the Spanish Empire, or any other that’s existed at one time, history is remarkably consistent: The decline and fall of any empire never reverses itself; nor does the empire return, once it’s fallen.
But of what importance is this to us today?
…click on the above link to read the rest of the article…
Here’s Why Magazine Covers Reveal the “Market Zeitgeist”… What Investors Should Do Instead..
Here’s Why Magazine Covers Reveal the “Market Zeitgeist”… What Investors Should Do Instead..
Too many times in the past have I seen covers like this… and a few years later it didn’t turn out too bullish!
We covered magazine covers before as a great way to gauge “market zeitgeist.” It will be a while before we see offshore oil and gas, coal, or uranium hailed as a worthwhile investment on these covers. And when it happens, that’s when you’ll know it might be a good time to offload our positions. In other words, there’s still a lot of upside available in the hated sectors we focus on here at Insider.
Offshore Juice
Coming back to the offshore oil and gas theme…
Oil Majors Set To Sanction $125 Billion Upstream Projects in 2024
International oil and gas majors and the Middle East’s national oil companies are expected to give the green light this year to up to 30 projects, worth a total investment of $125 billion and holding an estimated 14 billion barrels of oil equivalent (boe) of resources.
That’s the estimate in Wood Mackenzie’s latest analysis of upstream oil and gas projects expected to reach final investment decisions (FIDs) in 2024.
And who stands to gain by all this spend? Oil and gas service companies — still the world’s worst performing sector over the last 10 years and still down some 80% from the start of 2012.
Philadelphia Oil and Gas Equipment and Services Index relative to S&P 500 indexed
Australia: Lights Out or Diesel?
This is Hegelian dialectic (an interpretive method in which the contradiction between a proposition and its antithesis is resolved at a higher level of truth) at play in the land down under.
Let the lights go out (let our standard of living go backwards) or burn diesel (maintain our standard of living)? You guessed it…
…click on the above link to read the rest of the article…
