Tag: economics

The Cost of Taking Sides

Russia is far from the only country that has rejected Switzerland’s false assertion of neutrality:

The leaders of Brazil and South Africa will not attend a conference on Ukraine to be hosted by Switzerland next month, reports have said. The summit, scheduled for June 15-16 at the Burgenstock Resort near Lucerne, is expected to revolve around Ukrainian President Vladimir Zelensky’s proposed roadmap for ending the conflict with Russia. More than 160 countries have been invited to take part, including members of the G7, G20, BRICS, and the EU. Russia, however, has not been invited to the talks.

China is another major BRICS member which presumably will ignore the Swiss meeting, according to Yury Ushakov, who is assistant to the Russian president for international affairs.

BRICS leaders won’t attend Zelensky’s ‘peace conference’ , RUSSIA TODAY, 17 May 2024

The rejection of Swiss “neutrality” by the BRICSIA nations should have been, but was not, foreseen. And if this isn’t a clear warning to the short-sighted members of the Swiss parliament who have unnecessarily trashed centuries of global confidence and goodwill in a vain attempt to appease the wicked gods of Clown World, at least it should suffice make the gravity of the situation obvious to the Swiss people. It means that voting for the proposed referendum on permanent constitutional neutrality, economic and military, is absolutely necessary no matter what one’s political preferences might be, and no matter what fig leaves and word magic are offered in an attempt to convince the people to let the politicians continue to redefine the concept.

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Brave on Linux

I was unhappy with a cheap Chromebook that I bought to take on the road, so at the advice of a very well-travelled friend, I bought a 7-year-old used, but high-quality laptop for less than one-third the price of the Chromebook, then wiped the hard drive and installed Linux on it, specifically, Mint Cinnamon.

The installation was vastly easier than it was back when I was installing Red Hat 9, and I only ran into two minor issues in the process. Here are my notes on what was a surprisingly fast and easy installation.

  1. There is no need to remove the USB stick on the first reboot after installation. It’s not necessary. And if you do remove it, remove it BEFORE you start the reboot.
  2. Be sure to update the Update Manager before you install Brave using the commands shown below. If you don’t, you will get an error and it won’t install. You can use Copy and Paste for the strings, just remember that Ctrl-V will not work to paste inside the terminal, you have to select Edit/Paste from the pull-down menu.
  3. If you see a ~ at the end of a pasted text string, then you haven’t updated the Update Manager.
  4. Firefox, which comes installed with Cinnamon, has gotten intrusive to the point of unusability. I wouldn’t even consider using it now.

sudo apt install curl

sudo curl -fsSLo /usr/share/keyrings/brave-browser-archive-keyring.gpg https://brave-browser-apt-release.s3.brave.com/brave-browser-archive-keyring.gpg

echo “deb [signed-by=/usr/share/keyrings/brave-browser-archive-keyring.gpg] https://brave-browser-apt-release.s3.brave.com/ stable main”|sudo tee /etc/apt/sources.list.d/brave-browser-release.list

sudo apt update

sudo apt install brave-browser

Installing Brave on Linux (Debian-Ubuntu-Mint)

Computer technology has now reached the point of declining marginal utility for most users, and Windows is becoming ridiculously intrusive, so you can get some real bargains as long as you are willing to enter the tank zone and don’t have any esoteric software requirements.

UPDATE: I am reliably informed by the resident Linux community that Ctrl-Shift-V is the correct keyboard command to paste text strings in the Linux terminal.

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Way Too Little, Way Too Late

The Biden Adminstration puts tariffs on Chinese imports:

The US rolled out steep tariffs on Chinese products on Tuesday, quadrupling duties on electric vehicles (EVs) to over 100% and imposing new levies on computer chips, solar cells and lithium-ion batteries. The White House says the new measures are intended to “protect American workers and businesses.”

The tariffs will affect $18 billion of Chinese imported goods, including steel and aluminum, semiconductors, batteries, critical minerals, solar cells and cranes.

Biden administration officials claim the measures have come in response to years of “unfair trade practices” by China, including forced technology transfers, intellectual property violations, and cyberhacking of American businesses.

The time for tariffs is when a country still has industrial capacity, not after it has transitioned to a so-called “service economy”. Service economies don’t win wars, they service the soldiers of the victors.

And it’s not like this is going to help US electric vehicle manufacturers. No one wants to buy their products whether a Chinese alternative is available or not.

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Turkey Cuts Ties with Israel

The Gazacaust continues to have global ramifications:

The Turkish government has suspended all trade with Israel in response to the Gaza war, the Trade Ministry in Ankara said in a statement posted on social media on Thursday.

Türkiye has been one of Israel’s fiercest critics since the conflict with Hamas broke out in October. The suspension of all export and import operations has been introduced in response to the Jewish state’s “aggression against Palestine in violation of international law and human rights,” the statement read.

Ankara will strictly implement the new measures until Israel allows uninterrupted and sufficient flow of humanitarian aid into Gaza, the document added.

This is significant, because Turkey is not only a member of NATO, but it has historically been one of the more friendly nations in the Dar al-Islam to Israel. And while we can’t rule out the USA deciding to sanction Turkey, it’s further evidence that US diplomatic efforts are in a serious state of crisis.

Passing anti-speech laws and anti-boycott laws in US states isn’t going to matter much if the greater part of the planet refuses to economically engage with Israel.

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Trump Threatens De-dollarization Sanctions

Threatening the nations that are breaking away from Clown World’s financial control with more of what they seek is highly unlikely to prove successful:

Economic aides to former US President Donald Trump are looking for options to stop countries from shifting away from the US dollar as it faces a growing challenge from emerging markets, including BRICS nations, Bloomberg reported on Friday. The presumptive Republican nominee for the November presidential election and his team are discussing penalties against both allies and adversaries who seek to divert their trade from the greenback to other currencies. The options could include export controls, currency manipulation charges, and tariffs, the outlet said, citing people familiar with the matter.

The global trend toward using national currencies in trade instead of the dollar gained significant momentum after Russia was cut off from the Western financial system and had its foreign reserves frozen in 2022, as part of Ukraine-related sanctions. A bill with provisions authorizing the US to confiscate frozen Russian assets, which Biden signed on Wednesday, could further spur de-dollarization, financial experts have warned. The so-called REPO Act, which was incorporated in the $61 billion military aid package for Kiev, authorized the US president to seize Russian state assets held in American banks.

As quoted by Bloomberg, Trump warned on Thursday that with US President Joe Biden, “you’re going to lose the dollar as the standard. That’ll be like losing the biggest war we’ve ever lost.”

Any such action would so reliably produce the exact opposite of the consequences it purports to seek that it makes one strongly suspect Trump is working with the BRICSIA strategists to bring down Clown World. Imposing export controls, currency manipulation chargers, and tariffs on nations already actively avoiding use of the dollar is only going to exacerbate the speed at which they reduce their economic interactions with the international dollar economy.

Which, given the West’s reliance on Saudi oil, Chinese manufacturing, and Russian natural resources, will tend to also speed up the decline and fall of Clown World.

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And Here… We… Go

JP Morgan just lost all of the funds it was holding in its bank accounts in Russia:

A Russian court has ordered the seizure of funds in JPMorgan Chase accounts in Russia, court filings showed on Wednesday, in a lawsuit filed by state-owned bank VTB as it seeks to regain funds blocked abroad. JP Morgan Chase last week sued VTB in New York to halt its efforts to recover $439.5 million from an account that was blocked after Russia despatched its army to Ukraine in 2022 and VTB was hit with sanctions.

The Arbitration Court of St Petersburg and the Leningrad Region’s ruling was dated April 22.

The court said it had ordered the seizure of all funds in JP Morgan bank accounts in Russia, including correspondent accounts and those opened in the name of a subsidiary. The court said it had not seized securities and property held by JP Morgan funds, or the jpmorgan.ru domain. In a complaint filed in federal court in Manhattan earlier this month, JPMorgan described VTB’s attempt to recover the money in Russia as a “blatant breach” of its agreement to have disputes addressed in New York.

The largest U.S. bank said U.S. law prohibits it from releasing the $439.5 million, and VTB, Russia’s second-largest bank, will try to seize its assets abroad if it prevails in the Russia lawsuit. It said VTB’s prospects there were good, with Russian courts having granted at least six other Russian banks relief against U.S. and European banks that were required to comply with sanctions laws.

Neither Russia nor China care in the least what U.S. law prohibits anymore. The international system ended the moment sanctions were applied to Russia after the beginning of the special military operation and nothing is going to bring it back.

Pax Americana is over. Plan accordingly.

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The Empire’s Economic Death Spiral

Apparently the foreign elite ruling the imperial USA are under the impression that the only way out of its Ukrainian debacle is through. Unfortunately, this concept doesn’t work when the rapidly approaching object is not a cloud, but the ground:

The House passed a foreign aid package on Saturday as well as what’s called the REPO Act that will allow the Biden administration to confiscate billions of dollars’ worth of Russian assets sitting in U.S. banks and transfer them to Ukraine for reconstruction.

“By delivering urgently needed aid to Ukraine, the United States has reasserted itself as the leader of the free world and as a reliable partner to its allies,” said Rep. Ritchie Torres, D-N.Y. “The US has a singular obligation to help freedom fighters fight for their freedom, and nowhere more so than in Ukraine, whose self-defense against Putin’s aggression must prevail.”

The REPO Act, which would authorize Biden to confiscate the frozen Russian assets in U.S. banks and transfer them to a special fund for Ukraine, is part of the foreign aid package that was stalled for months in the House. More than $6 billion of the $300 billion in frozen Russian assets are sitting in U.S. banks. Most of the $300 billion are in Germany, France and Belgium.

On Wednesday, Speaker of the House Mike Johnson released the package which would include tens of billions of dollars in aid for Ukraine, Israel, and Taiwan.

McFaul, whose been lobbying for the REPO Act for months, clapped back at Caldwell’s assertion and said the use of Russian assets for Ukraine would send an important message to autocratic nations around the world. “There are those that say, ‘Well, this will hurt the dollar. It’s bad for our reputation.’ I have a pushback to that. I don’t want criminals investing in American Treasury bonds,” McFaul said.

Keep three things in mind here. First, Russia has a similar amount in European funds frozen that it will seize in return if the Russian funds are stolen, as well as considerably more foreign assets that can be easily nationalized. As with the previous sanctions, this act will strengthen the Russian economy at the expense of the European economies.

Second, China is already being sanctioned and is the second-largest holder of US Treasury bonds, at $800 billion. This is 40 percent lower than it was 11 years ago and is a 14-year low. This is one reason why the USA has been unable to export inflation the way it used to, and if China were to follow Russia’s lead in dumping the dollar entirely, US inflation would probably double from where it is today. Since the BRICSIA nations are already in the process of developing their own trading currency, this is a very high probability event within the next three years and will probably precede the opening of the Asian front.

And third, the central banks are, quite literally, criminal organizations, as are most of the large multinational corporations. If criminals weren’t investing in US Treasury bonds, no one would be. Furthermore, the seizure of foreign assets without full compensation would obviously be nothing less than theft by the U.S. Congress.

I suspect there may be some serious unintended consequences for the global banking system if the bill actually becomes a law and is translated into action. Because how can anyone possibly trust their financial assets to a banking system so easily suborned to a government’s whims?

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Order ab Chao

All of the economic crises since 1989, and the economic crises to come, are quite literally created in order to weaken the natural resistance to the structural globalization sought by Clown World. This is why we keep hearing about how defeat in Ukraine means not only defeat, but the end of the neoliberal world order.

From PRINCES OF THE YEN:

The Fed, the European Central Bank, and the Bank of Japan together set monetary policy for a zone that accounts for 80 percent of the world’s industrialized economic activity. Rarely, if ever, can so much power have been wielded by such a small number of institutions sitting outside the democratic process.

Until 1997, the macro-economic performance of Thailand, Korea, Indonesia, Malaysia, Singapore, and Taiwan was widely praised by commentators, academics, and policymakers alike… It is therefore relevant to find out whether the Asian crisis was really the result of the Asian system. A thorough study of its causes reveals that, quite to the contrary, it was the policies “recommended” by the U.S. Treasury, the IMF, and the local Asian central banks that resulted in the Asian crisis. While the Asian central banks previously had had no legal independence and few legal powers, after the Asian crisis almost all of them had become independent and unaccountable for their actions.

Climate change and the next economic crisis, which is now teed up nicely by the post-2008 expansion of unproductive credit, are supposed to justify the emergency measures that Clown World is advertising as its Great Reset. The Great Reset is nothing less than the plan to expand what was successfully accomplished in Europe, Japan, and the Four Tigers of Asia to the entire world.

That plan is what Russia and China are resisting so staunchly and so successfully. And that is also why the clowns are panicking as the defeat of Ukraine becomes increasingly undeniable, because their entire system depends upon everyone accepting economic assertions that are obviously and entirely false as well as inevitabilities of progress that are actually nothing more than blatant and baseless lies.

Both the Chinese and the Russian leadership have seen through the lies and rejected the corruption. It’s only a matter of time before the rest of the world does as well. Robert Anton Wilson, among others, warned us of this, but we were too caught up in the false intellectual divide of left vs right and liberal vs conservative to grasp the full extent of the implications.

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The Return of National Economics

While the Chinese have lower per capita income than US citizens do, the lack of debt and their median household wealth combined with their lower degree of income inequality means that the Chinese economy is much more economically stable than its US counterpart.

I’ll post more about this next week, but one of the reasons Western macroeconomic metrics don’t work to analyze the Chinese economy is because the Chinese are observably following the principles described by Richard Werner in his excellent Princes of the Yen, which chronicles the way Japan successfully maintained its centralized wartime economy to develop its economy and literally buy a significant percentage of the global assets from 1945 through 1990.

That relentless period of economic advancement came to an end in 1998 with the final triumph of the private Bank of Japan, which served as Clown World’s proxy, over the Okurasho, Japan’s Ministry of Finance, and the subsequent shift to the same sort of financialized unproductive economy featuring private credit creation that has systematically weakened the West for the last century.

As part of its policy of unrestricted warfare, China has methodically applied the lessons of Japan’s post-WWII economy and maintained control of its own credit creation, thereby boosting its productive capacity to historically unprecedented levels and providing it with the monetary resources to buy up foreign assets everywhere from Angola to the USA. By publicly breaking with Clown World in 2015, and setting up BRICS as an alternative to the various Clown World institutions, China is offering the rest of the world an observably viable and historically superior economic model to the corrupt and deceptive one that was holding the elites of the various nations enthralled.

This is why Janet Yellen, the US Secretary of the Treasury, was in China this week begging the Chinese to “reduce their overcapacity”. And it’s not an accident that China has applied Japan’s historical policies of a) government credit creation to fund b) productive industrial exports while minimizing the use of credit to fund domestic consumption. This is a proven means of enhancing national power and prestige at the expense of global competitors.

The economic assumptions of the Smith-Keynesian era have gradually been proven over time to be entirely false. This is a difficult lesson for even economic iconoclasts like me to accept, but it is inarguable at this point. From David Ricardo to Paul Samuelson, from free trade to the rational actor, everything about neoclassical economics is intrinsically and observably incorrect, which is why those nations whose economic policies are based on traditional neoclassical economics will inevitably fall behind, both in terms of societal wealth and military power.

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Clown World Finds Out

It’s not as if Russia didn’t warn the clowns what the consequences of imposing sanctions would be.

In a significant escalation of its retaliatory measures against “unfriendly” states amid heightened geopolitical tensions, Russia has seized assets of the agricultural holdings company AgroTerra Group. The move, announced on April 8, 2024, has sent shockwaves through the agricultural sector and raised concerns over food security and international trade relations.

President Vladimir Putin’s decree places Dutch-registered firms AgroTerra Investments B.V. and AgroTerra Holdings B.V. under the “temporary management” of Rosimushchestvo, Russia’s federal property management agency. This action follows a series of similar asset seizures targeting Western companies, including multinational brewer Carlsberg and dairy giant Danone, which have sought to divest their Russian operations in response to the ongoing conflict in Ukraine.

AgroTerra, founded in 2008, is a major player in the agricultural industry, specializing in the production and supply of commodities such as soybeans, wheat and sugar beet. The company is recognized as one of the top 20 largest owners of agricultural land in Russia, with a cultivated area of approximately 265,000 hectares (654,829 acres).

The decree’s impact on AgroTerra’s operations remains uncertain. A spokesperson for the company stated, “As of now, the Company has not yet received any further details regarding the decree on the transfer of shares within the authorized capital of the AgroTerra Group to the temporary management of Rosimushchestvo.” Despite the lack of clarity, the company has assured that it is continuing its operations as usual, with a primary focus on the ongoing sowing campaign.

This seizure is part of a broader trend of Russia targeting foreign-owned assets in retaliation for sanctions and other measures taken against Russian companies abroad. In April 2023, Putin signed an executive order allowing Russia to take over real estate, securities, property rights and other assets from foreign companies with ties to “unfriendly countries.”

No doubt there will be serious ramifications. And there can be little doubt that Clown World will continue to fail to learn from its failures, and resort to even more huffing, puffing, and foolish gestures, before doubling down by trying to sanction countries like China and Saudi Arabia.

The seeds of failure are planted by past success. It’s very rare for anyone who has had any degree of success to grasp that what worked yesterday may not work tomorrow, because the situations are different.

In the meantime, the Russians have completely destroyed the last of Ukraine’s coal-fired electricity plants and Kharkov, the second-largest city in Ukraine, is being evacuated.

“Very soon, the only topic for any international meetings on Ukraine will be the unconditional surrender of the Kiev regime, I advise all of you to prepare for this.” – Russian Representative to the UN, Vasily Nebenzya

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