Tag: economics

The Art of Never Learning

Belgium completely fails to learn from the Ukrainian example of what happens when one crosses a Russian red line:

Belgium will transfer €611 million (58.3 billion rubles) to Ukraine from income received from interest on frozen Russian assets. The information was confirmed by the head of the Belgian Ministry of Defense, Ludivine Dedonder (pictured), Belga News Agency reports. The total amount of frozen Russian assets in the EU is about €180 billion (17 trillion rubles), most of them are located in Belgium, the agency clarified.

No doubt the EU will try to hide behind the fact that they aren’t seizing the frozen capital, only the interest on the capital. This will not fool the Russians, and it’s safe to anticipate some sort of tit-for-tat will soon take place, if not escalation.

The Russians have to find this childish tomfoolery more than a little tedious by now.

DISCUSS ON SG

The End of Sports Illustrated

You would have thought that a business that relied upon sports, plus an occasional splash of beautiful women in bikinis, would be bullet-proof. And you’d be wrong:

Much of the staff of Sports Illustrated, and possibly all remaining writers and editors, received layoff notices Friday, which essentially could spell the end of a publication that for decades was the gold standard of sports journalism.

The union of the staff tweeted Friday that it would continue to fight for the publication of the magazine but that its future is now in the hands of the magazine’s owner, Authentic Brands Group.

ABG has owned the magazine since 2019 and sold the publishing rights to a company called the Arena Group. The Arena Group missed a recent payment for those publishing rights, prompting ABG to pull the publishing license and putting the future of Sports Illustrated in jeopardy.

“As a result of this license revocation, we will be laying off staff that work on the SI brand,” the note to staff read, adding that some employees would be terminated immediately, while others would work through the end of a 90-day notice period.

Sports Illustrated lays off most of its staff, threatening iconic brand’s future, WASHINGTON POST, 19 January 2024

Those sounds you hear in the distance are Fox executives celebrating their prescient purchase of Outkick the Coverage.

This is why we will never sell off any of our core projects. As we’ve seen with Football Outsiders and now Sports Illustrated, there is no faster way to ensure a debt-related implosion short of taking the entire payroll to Vegas and betting it on black.

DISCUSS ON SG

The Decline is Observable

It’s rapidly becoming readily apparent to everyone, not just me, Wang Hunin, Simplicius, and Andrei Martyanov, that the decline of the imperial United States is both a) inevitable and b) observable.

The best indicator of real GDP per capita is energy usage per capita, because everything about a comfortable modern lifestyle takes a lot of energy, energy comes into everything people do and consume. This was rising exponentially to 1972, when the rise suddenly halted. It then started fall, slowly. And suddenly it has now started to fall rather more quickly and dramatically. It looks like three trend regimes: Exponential growth starting in the seventeenth century, then stagnation and slow decline starting in 1972, and now it looks like the beginning of dramatic collapse, looks like the beginning of a sharp break in the trend of slow and gentle decline.

This reflects a regime ever more hostile to the men who made it great, to the faith that made it great, the culture that made it great, and race that made it great.

Notice that no matter what metric is used, 1972-1973 keeps appearing as the high water mark for the USA. That’s not an accident. 1972 was, from an economic, industrial, and demographic perspective, the moment of Peak America.

Everything since then has been nothing but decline disguised by the collapse of the Soviet Union.

DISCUSS ON SG

China Sanctions USA

It’s going to be interesting to see how the corpocracy changes its tune once it starts losing its access to the world’s largest market, as yesterday, the Chinese Foreign Ministry announced sanctions on five US defense companies:

Q: The US recently announced new arms sales to Taiwan and sanctioned Chinese businesses and individuals under various pretexts. China said it would take countermeasures. Could you tell us specifically what those measures are?

A: The US arms sales to China’s Taiwan region in blatant violation of the one-China principle and the stipulations of the three China-US joint communiqués, particularly the August 17 joint communiqué of 1982, and the illegal unilateral sanctions the US has imposed on Chinese companies and individuals under various false pretexts seriously harm China’s sovereignty and security interests, undermine the peace and stability across the Taiwan Strait, and violate the legitimate and lawful rights and interests of Chinese companies and individuals. China strongly deplores and firmly opposes this and has made solemn démarches to the US. 

In response to these gravely wrong actions taken by the US and in accordance with China’s Anti-Foreign Sanctions Law, China has decided to sanction five US defense industry companies, namely BAE Systems Land and Armament, Alliant Techsystems Operation, AeroVironment, ViaSat and Data Link Solutions. The countermeasures consist of freezing the properties of those companies in China, including their movable and immovable property, and prohibiting organizations and individuals in China from transactions and cooperation with them.

I would like to stress that the Chinese government remains unwavering in our resolve to safeguard national sovereignty, security and territorial integrity and protect the lawful rights and interests of Chinese companies and citizens. We urge the United States to abide by the one-China principle and the three China-US joint communiqués, observe international law and the basic norms governing international relations, stop arming Taiwan, and stop targeting China with illegal unilateral sanctions. Otherwise there will be strong and resolute response from China.

This is clearly just a warning shot across the bow of the US corpocracy. Because if the Chinese really want to increase the pressure on the US government, they will sanction Apple, Disney, and other entertainment companies. The amount of lobbyists descending upon Washington DC in response would make D-Day look like a small commando raid.

DISCUSS ON SG

Sykes-Picot is Dead

The Sykes–Picot Agreement, officially known as the Asia Minor Agreement, was a secret agreement between the governments of the United Kingdom and France, with the assent of Russia, defining their proposed spheres of influence and control in the Middle East should the Triple Entente succeed in defeating the Ottoman Empire during World War I. The negotiation of the treaty occurred between November 1915 and March 1916. The agreement was concluded on 16 May 1916. The agreement effectively divided the Arab provinces of the Ottoman Empire outside the Arabian peninsula into areas of future British and French control or influence.

Pepe Escobar describes the geo-strategic significance of the Yemeni-imposed restrictions on Red Sea traffic and how they have proven vastly more effective than the G7 sanctions on Russia:

In chess, there always comes a time when a simple pawn is able to upset the whole chessboard, usually via a move in the back rank whose effect simply cannot be calculated.

Yes, a pawn can impose a seismic checkmate. That’s where we are, geopolitically, right now.

The cascading effects of a single move on the chessboard – Yemen’s Ansarallah stunning and carefully targeted blockade of the Red Sea – reach way beyond global shipping, supply chains, and The War of Economic Corridors. Not to mention the reduction of the much lauded US Navy force projection to irrelevancy.

Yemen’s resistance movement, Ansarallah, has made it very clear that any Israel-affiliated or Israel-destined vessel will be intercepted. While the west bristles at this, and imagines itself a target, the rest of the world fully understands that all other shipping is free to pass. Russian tankers – as well as Chinese, Iranian, and Global South ships – continue to move undisturbed across the Bab al-Mandeb (narrowest point: 33 km) and the Red Sea.

Only the Hegemon is disturbed by this challenge to its ‘rules-based order.’ It is outraged that western vessels delivering energy or goods to law-breaking Israel can be impeded, and that the supply chain has been severed and plunged into deep crisis. The pinpointed target is the Israeli economy, which is already bleeding heavily. A single Yemeni move proves to be more efficient than a torrent of imperial sanctions.

It is the tantalizing possibility of this single move turning into a paradigm shift – with no return – that is adding to the Hegemon’s apoplexy. Especially because imperial humiliation is deeply embedded in the paradigm shift.

Russian President Vladimir Putin, on the record, is now sending an unmistakeable message: Forget the Suez Canal. The way to go is the Northern Sea Route – which the Chinese, in the framework of the Russia-China strategic partnership, call the Arctic Silk Road.

For the dumbfounded Europeans, the Russians have detailed three options: First, sail 15,000 miles around the Cap of Good Hope. Second, use Russia’s cheaper and faster Northern Sea Route. Third, send the cargo via Russian Railways.

Rosatom, which oversees the Northern Sea Route, has emphasized that non-ice-class ships are now able to sail throughout summer and autumn, and year-round navigation will soon be possible with the help of a fleet of nuclear icebreakers.

All that as direct consequences of the single Yemeni move. What next? Yemen entering BRICS+ at the summit in Kazan in late 2024, under the Russian presidency?

The US-led Armada put together for Operation Genocide Protection, which collapsed even before birth, may have been set up to “warn Iran,” apart from giving Ansarallah a scare. Just as the Houthis, Tehran is hardly intimidated because, as West Asia analyst ace Alastair Crooke succinctly put it: “Sykes-Picot is dead.”

This is a quantum shift on the chessboard. It means West Asian powers will frame the new regional architecture from now on, not US Navy “projection.”

That carries an ineffable corollary: those eleven US aircraft carrier task forces, for all practical purposes, are essentially worthless.

How Yemen changed everything, PEPE ESCOBAR, 28 December 2023

I find this move by the Yemenis, presumably made in coordination with China, Russia, and several of the Arab nations, to be utterly fascinating, and more importantly, indicative of how far ahead of Clown World the BRICS strategists appear to be thinking. While I was certain that the impotence of the US Navy was a) going to be demonstrated before 2030 and b) that demonstration would have a significant effect on the way in which the nations regarded Clown World going forward, I assumed that it would be necessary for someone to sink a carrier or three in order to demonstrate that impotence.

But this is a much more elegant approach, as the observable reluctance of the US Navy to risk any direct engagement with what is, on the international scale, a sixth-rate power, demonstrates that impotence even more clearly than the loss of an entire carrier task force in the South China Sea could. After all, only Russia possesses the striking power of the Chinese military, but most of the nations in the world have resources that exceed that of Yemen; even the military capabilities of Croatia and The Democratic Republic of the Congo are rated ahead of Yemen in the 2023 Global Firepower rankings.

It’s one thing for Russia to prove that the Empire can’t push it around, it’s another thing for the nation ranked 74th in the world to do so.

If it is not yet clear to everyone that the US empire is in rapid decline, we can be confident that it is entirely apparent to everyone whose opinion matters.

UPDATE: Meanwhile, the US government continues to demonstrate that it has not yet learned anything from the consequences of its recent attempts to poke the bear.

The United States has called for working groups from the Group of Seven (G7) countries to explore ways to confiscate hundreds of billions of dollars in frozen Russian assets, the Financial Times reported this week. The United States, backed by the UK, Japan and Canada, has proposed setting up preparatory work for expropriating over $300 billion in Russian foreign exchange reserves that were immobilized by Western nations after the start of the Ukraine conflict.

The EU, where most of the assets are blocked, is more wary of a direct confiscation, fearing possible retaliation from Moscow if the money is taken. Currently, €210 billion ($230 billion) of Russia’s reserves are held in the bloc’s financial institutions, with €191 billion in Belgium, €19 billion in France, and €7.8 billion in non-member Switzerland.

Stealing Russian assets is not the greatest plan in the world when Russia is going to be in a position to simply march some of its 1.5 million mobilized troops into some of those nations and take whatever it wants from whomever it wants within the next two years. Notice that the G7 countries which are within marching distance don’t appear to be quite as enthusiastic about offering Moscow yet another casus belli.

DISCUSS ON SG

Libertarians and Clown World

Argentina fails to reach escape velocity thanks to its new, self-styled-libertarian president:

Argentina has formally rejected an invitation to become a member of the BRICS group of nations, several news media outlets reported on Friday, citing an official letter they have seen which has been sent to the leaders of Russia, China, India, Brazil and South Africa. While President Javier Milei had previously voiced his opposition to joining the alliance before being elected, the move represents a complete U-turn from the policy of his predecessor, Alberto Fernandez.

Fernandez had accepted the invitation to join the five-nation group in August, holding that such a move would offer the Latin American nation a “new scenario” for its development. Milei, who won the presidency in November, said at that time that he would not “push for deals with communists because they don’t respect the basic parameters of free trade, freedom, and democracy.”

The South American nation is currently struggling with its worst economic crisis in decades. Inflation has surged 160% over the past year alone. The severely devalued peso forced the country to refinance its $44-billion debt to the IMF. Milei’s government is also facing massive

The last paragraph is the dead giveaway. When they say “free trade, freedom, and democracy” what they really mean is “debt, debt, and more debt”. Because the only real “freedom” provided by Clown World is the freedom to borrow as much money as one’s potential creditors will allow.

This is a hard thing for most libertarians to accept. But there is no tenet of libertarianism that isn’t generally in line with Clown World’s professed ideals, beginning with free trade and the free movement of peoples. It’s as hopelessly utopian and untenable as communism in the end.

DISCUSS ON SG

The Great Taking

A short book warns of the sinister, but desperate plan that underlies all of Clown World’s various projects, from the World Economic Forum and the Covid vaxxes to Global Warming, the invasion of Gaza, and Operation Prosperity Guardian.

The Great Taking puts forth a warning that a virtually unknown entity called “The Depository Trust & Clearing Corporation” (DTCC) is effectively the “owner” of all the publicly traded companies in the world, and in fact all debt-based assets of any kind:

“It is about the taking of collateral (all of it), the end game of the current globally synchronous debt accumulation super cycle. This scheme is being executed by long-planned, intelligent design, the audacity and scope of which is difficult for the mind to encompass.

Included are all financial assets and bank deposits, all stocks and bonds; and hence, all underlying property of all public corporations, including all inventories, plant and equipment; land, mineral deposits, inventions and intellectual property. Privately owned personal and real property financed with any amount of debt will likewise be taken, as will the assets of privately owned businesses which have been financed with debt.”

Over the course of the book, the author describes a 50-year process by which ownership of shares in public companies, and all debt collateral has been “dematerialized”.

In the olden days, you invested in a company – they gave you physical share certificates – and you were now part owner of the company. This is still how many value investors including me think of stock ownership.

We’re not invested in all of these companies in The Bitcoin Capitalist Portfolio simply because we’re trying to time the oscillations in the price movements. We think of ourselves as partial owners of these businesses.

Michael Saylor, Brian Armstrong, Mike Novogratz, Frank Holmes, Jamie Leverton et al, aren’t just celebrity CEOs in this space (Bitcoin)… they’re our partners. Granted, we’re the minority partners, silent ones, betting the jockeys and just along for the ride; but we don’t think of these positions as just stock charts and price gyrations – we think of them as businesses in which we are part owners.

At least I do.

According to The Great Taking, author David Rogers Webb, this is not true. We don’t own small pieces of these companies, we own claims on those pieces, because – over the course of decades, through the exigencies of ever-increasing trading volumes, combined with the machinations behind the scenes of diabolical manipulators – stock ownership has been supplanted by “security entitlements”.

Webb posits that when the debt super-cycle culminates in its ultimate blow up; the trap will be sprung, and actual ownership over all these companies and assets will be subsumed by the clearing houses. An infinitesimal cadre of elites will effectively own everything, and the masses of the world will be reduced to serfdom.

It’s not actually that difficult to postulate; I always considered it a patently obvious risk. This is precisely why I have always warned everyone to stay COMPLETELY out of debt. You can look it up. It’s been obvious since 2002 that there is far more debt, and claims of ownership to that debt, than there is of physical collateral for the debt, and that’s before we even take into account any of the conspiracy theories that HUMAN BEINGS or their lifetime economic potential are somehow being utilized as collateral for state currency debt.

As long ago as 2008, it was already estimated that there were $100 of debt claims on every actual $1 of collateral value. That figure is almost certainly higher today.

The global credit economy rests entirely upon the idea that the foundation of debts upon which it rests will never be called in. As Paul Samuelson wrote in what is quite literally the system’s textbook, Economics: An Introductory Analysis, “what difference does it make if Paul owes Peter or Peter owes Paul?”

Well, it makes a tremendous difference if everyone on the planet owes one person, or one small group of people, particularly if the ultimate holder of all debt in the world is an evil, sociopathic devil worshiper with an endless hatred of the human race.

Now, it’s not quite as bad as most of these dire economic conspiracy theorists make things out to be, because as we have been learning since 2015, the Lords of Debt are discovering the limits of money power, as are the nationalist resistance. There is a very good reason that first Iran, then China, and then Russia, all of whom were locked out of the Clown World economy, have gone from seeking to participate in the system to actively waging war against it.

The book’s author appears to have noticed the same thing:

“The “control system” has entered collapse. Their power has been based on deception. Their two great powers of deception, money and media, have been extremely energy-efficient means of control. But these powers are now in rampant collapse. This is why they have moved urgently to institute physical control measures. However, physical control is difficult, dangerous and energy-intensive. And so, they are risking all. They are risking being seen. Is this not a sign of desperation?“

I suspect that reason for the rise of BRICS and The Great Bifurcation of the global economy is that important and influential individuals in the relevant nations did the math and realized that debt is, at best, a good way to lose everything you own, and at worst, a form of legal slavery. Debt can take down even the largest, oldest companies literally overnight; imagine what it can do to entire nations that find themselves awash in it and vulnerable to physical foreclosures.

Anyhow, read the book, and then focus on what you can do to ensure that when the credit system crashes, either naturally of its own weight or as a result of economic warfare, you do not find yourself stripped of everything you need to survive. And don’t forget that money in the bank is not savings, but rather, debt that the bank owes to you, and which will not be repaid in the event of a bank failure.

It’s true that a lot of economic pessimists, including me, have missed out on tremendous opportunities over the last forty years. However, it is very healthy to live modestly and below one’s potential means, and the probabilities that the Clown World system is coming to an end have never been higher.

DISCUSS ON SG

They Know They Lost, Right?

It’s no wonder that NATO has been demolished in Ukraine with military leadership of this intellectual calibre and historical knowledge:

The Ukrainian government needs to look at what Germany did in WWII to stand a chance against Russia, according to Ben Hodges, former commander of US Army forces stationed in Europe. Hodges, who retired as a lieutenant-general in 2017, has long been an outspoken supporter of Ukraine. In an interview with the Australian YouTuber Perun, published over the weekend, he repeatedly cited examples from the Second World War to argue that Kiev can defeat Moscow on the battlefield. “They are gonna have to increase production of ammunition and weapons in Ukraine,” Hodges said. “Some of these things are already happening, but it is possible when you are at war to increase production, even with Russian missiles raining down on your cities.” “I mean, think about what Germany did in 1944. Aircraft production for the Luftwaffe peaked in 1944. That’s after more than two years of steady bombing by the Royal Air Force and the US Army Air Corps bombing the hell out of German cities. But yet German aircraft production increased. So I think Ukraine can do that with some improving efficiency. Some Western companies are already there helping,” he concluded.

On the one hand, he’s right. Germany did increase its aircraft production in 1944. And so did Japan, which not only increased its shipping tonnage produced in 1944, but even managed to build more aircraft in 1945 than it did in 1942.

  • 1942: 8,900
  • 1943: 16,700
  • 1944: 28,200
  • 1945: 11,100

On the other hand—–and I would argue this is the more salient point—–both Germany and Japan were not only defeated militarily, but were defeated so comprehensively that they were forced to surrender unconditionally and are still under military occupation nearly 80 years after their respective surrenders.

Forget the Kiev regime. Forget Ukraine. And forget NATO. Anyone who knows anything about military history recognizes that both of them are already finished, they simply haven’t stopped quivering yet. The USA is now facing global military defeat on every single front, even as it is prostrate before the biggest invasion in all of human history.

At this point there appears to be nothing that can stop the All Nations Alliance from defeating Clown World. And for those who would cite the US and Israeli nuclear arsenals as a possible emergency measure, I repeat: there is nothing. I didn’t understand it when I first read the book as a child, but in retrospect, Jeff Sutton was telling us what the programming was back in 1968.

DISCUSS ON SG

Paperbacks Unlimited

Just to put it on the record, here is where I think Amazon is headed over the next three years, and the effect its actions will have on the publishing industry over the next decade. I could well be wrong. I very much hope that I will be wrong, but as it stands, please note that I wasn’t pessimistic enough about the long-term effects of Kindle Unlimited when it was introduced in 2014.

2024: Audible Unlimited. Like Kindle Unlimited, but for audio. Authors get paid by the listened hour from a collective pot that is funded by Amazon’s additional $7.99 charge on top of the $11.99 paid by KU subscribers.

2025: Paperbacks Unlimited. Subscribers can pay $19.99 per month and receive any three KDP paperbacks of their choice. Authors are paid $0.99 per paperback shipped. A hardcover option will follow the next year, which will be available at a lower price point, but the subscriber will only receive one book per month, with the ability to pay more to get two or three. Hardcover compensation pays authors $2 per book shipped. It’s essentially the old book club model, writ very, very large.

The introduction of Virtua Voice makes the former viable. The purchase of print-on-demand facilities in the USA and the UK make the latter viable. And most of the bestselling KAP Unlimited authors will either be a) AI-assisted independents cranking out a new series book every month or b) fake authors created by Amazon.

If you’re an author or a publisher, you had better prepare accordingly. Because these programs are coming, and they will have the same effect on audiobook and print sales as KU has had on ebook revenues. I estimate that KAP Unlimited will have the potential to shrink total US consumer books sales from $17.4 billion to under $5 billion by 2035.

UPDATE: Apparently Audible Unlimited already exists, in the form of Audible Plus. What has changed is the ability of Amazon to inexpensively convert all of its KDP ebooks to Audible Plus audiobooks using Virtua Voice.

DISCUSS ON SG