Tag: economics

Bambi Sanctions Godzilla

The EU leaders are subjecting their economies to the same savage attrition that the Kiev regime is subjecting all the men of Ukraine. Only Kiev hasn’t been stupid enough to declare war on China as well as Russia.

Beijing rejects “illegal sanctions” and will defend the interests of its companies, the Chinese Foreign Ministry has said following a report that the EU could blacklist some of the country’s firms for allegedly helping Russia to evade the bloc’s restrictions.

The EU is planning to place restrictions on three Chinese businesses and one Indian company as part of its 13th round of sanctions on Russia over its conflict with Ukraine, the Financial Times reported on Monday.

Brussels believes the firms in question are helping Moscow to circumvent existing restrictions, especially through the supply of electronic components that can be repurposed for use in drones and other weapons systems. If the plan is approved by member states, it will see the EU sanction companies from mainland China and India – two of the bloc’s key trading partners – for the first time.

”We are aware of the relevant reports,” the Chinese Foreign Ministry said in a statement on Tuesday. “China firmly opposes illegal sanctions or ‘long-arm jurisdiction’ against China on the grounds of cooperation between China and Russia. Chinese and Russian companies carry out normal exchanges and cooperation and do not target third parties, nor should they be interfered with or influenced by third parties,” the ministry said.

Beijing “will take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises.”

This decision to sanction Chinese companies goes so far beyond stupid as to genuinely raise the question if the Europeans are intentionally destroying their own economies and industrial capabilities at the orders of Washington in order to prevent their companies from being able to compete with the USA once the Great Bifurcation is complete and the West no longer has the ability to trade with Asia, Africa, or Araby.

Every single one of the twelve rounds of Russian sanctions has not only failed, but made the Russian economy stronger. Given that the Chinese economy is much larger, not only than Russia, but also than the combined economies of the European Union, what are the chances that this expansive thirteenth round will be any less disastrous.

It’s never been more clear that the post-WWII occupation of Western Europe by the United States never ended, or that the dirty sixties hippies were essentially correct and the good old conservative Republicans were totally wrong. The USA truly is an empire imposed by military force, it was never an armed force of charitable do-gooders just trying to help everyone by spreading peace and democracy around the world.

In the meantime, the Chinese have just demonstrated what they think of Switzerland’s now-defunct neutrality.

Bloomberg: The Swiss government is going to hold a peace conference for the Ukraine-Russia war soon. Does China have any intention to attend that?

Wang Wenbin: China’s position on the Ukraine crisis is consistent and clear. We have played a constructive role in advocating an end to the fight and a political settlement of the crisis. We will continue to promote peace talks and work for a political settlement of the crisis in our own way.

Bloomberg: Did you say you will use this forum to promote the settlement or you said you’ll use any forum to promote the settlement of the crisis?

Wang Wenbin: We will continue to play a constructive role in promoting the political settlement of the crisis in our own way.

Translation: No, we will not attend, participate, or promote any attempt by a pro-NATO government to play arbiter. You’re not neutral, you took Ukraine’s side, and you’re not fooling anyone. Also, don’t even think about trying to sanction our companies or we will sanction you right back, and you need our market more than we need yours.

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The Third Economic Destruction of Germany

The combination of financially backing the EU, supporting NATO’s Russian sanctions, the primitive Green agenda, and the importation of millions of economically net-negative immigrants has finally overwhelmed what was once one of the world’s great economic engines:

One in three German manufacturers is considering moving production to other countries amid economic troubles, double the number recorded in 2022, Bild news outlet reported on Saturday, citing Siegfried Russwurm, the head of the Federation of German Industries (BDI).

According to the report, among the latest firms planning to relocate is household appliance manufacturer Miele, which plans to cut 2,000 jobs in Germany and move 700 positions to its site in Poland. Heating manufacturer Viessmann had already moved 3,000 jobs to Poland.

Volkswagen said last year that it would build a new battery factory in the US, and BASF announced plans to invest €10 billion in a petrochemicals plant in China amid job cuts at its headquarters in Germany. French steel pipe manufacturer Vallourec shut down production in Germany in September last year, while tiremaker Michelin and its US rival Goodyear said they would also close their German plants by the end of 2025.

Russwurm says that a growing number of companies have reported that their “patience with Germany is at an end.” According to him, the slowdown in economic growth and high rates of inflation, especially with regard to energy, have resulted in less investment, and Berlin lacks a strategy to turn the situation around. This in turn leads to a gradual decline in manufacturing, he said, and while existing production lines may continue to operate for a while, “new ones are no longer being built in Germany.”

Many companies point to the high energy prices, which soared after Germany lost access to Russian natural gas in 2022, as one of the major causes of their problems. This was exacerbated by Berlin’s decision to phase out nuclear energy and coal and switch to renewables, which, according to Russwurm, put manufacturers working in Germany at a significant disadvantage compared to other industrialized nations.

The German dirt is no more magic than the American variety. Generations of Turkish gastarbeitern combined with Merkel’s refugee wave means that manufacturers based in Germany are no more guaranteed actual German workers than if they just set their factories up in Turkey or in China.

The biggest lie that the neoliberal economists ever told was that immigration is good for the economy. While immigration can be good for the economy, such as when you’re replacing Native American nomads, African slaves, and Irish indentured servants with hard-working German immigrants, the 20th century movement of peoples has proven, beyond any shadow of a doubt, that replacing Northern Europeans with any other population is very, very bad for the economy in every sense of the term, including by the most basic GDP-per-capita metric.

To say that “immigration is good for GDP” is a literal tautology, because GDP increases with the addition of every single economic actor. Of course, it does with every dollar of debt too, and yet no one is dumb enough – a few professional neo-Keynesians aside – to claim that “debt is good for the economy”. But in both cases, the historical data proves – does not suggest, proves – that mass immigration is reliably very, very bad for an industrial economy.

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Free Trade is Economic Heroin

In all the many defenses of Free Trade going back to David Ricardo and his fatally-flawed concept of Comparative Advantage, and in all of the critiques going back to the 18th century mercantilists, one of the issues that no one either side of the economic issue ever seems to discuss is the inherent fragility of free trade and the way in which that fragility is imposed upon the economies of nations foolish enough to adopt a free trade policy.

I’ve already laid out, in statistically-significant detail, the proof of the total incompatibility of free trade with nationhood, in my Efficiency of Labor Mobility critique of free trade. But the scale and scope of that argument, combined with its requirement to have a basic grasp of neo-Keynesian economic theory, has proven to be well beyond the average individual and the average free trade economist alike. Lest you think I exaggerate, the total inability of the author of an introductory textbook on Austrian Economics to understand the critique, let alone formulate a response to it, really has to be read in order to be believed.

But the European Union’s successful attempt to force the Hungarian government to approve its economic aid package for Ukraine demonstrates another fundamental problem with free trade that even the average heroin addict is able to comprehend. It goes well beyond the obvious problem that many have previously observed with the regards to the way in which free trade can result in needing to buy weapons and raw materials from a trading partner with whom one is at war.

Several EU heads of state directly told Hungarian Prime Minister Viktor Orban that they would crash the Hungarian economy if he blocked a €50 billion ($54 billion) economic aid package for Ukraine, his adviser, Balazs Orban, has revealed.

EU leaders signed off on the mammoth four-year aid package earlier this month, after the Hungarian leader lifted his veto in exchange for some minor concessions from the bloc’s 26 other member states. These concessions included an annual debate on its implementation and a promise to review its impact on the EU budget after two years.

Before the package was approved, the Financial Times reported that the European Council had drawn up a plan to cut funding to Budapest and tank the Hungarian economy if Budapest maintained its veto. According to the Financial Times, the EU planned on pulling funding from Hungary, thereby hampering its ability to subsidize foreign direct investment and eventually crashing the value of the Hungarian forint.

EU leaders threatened to ‘politically rape’ us – Hungary, RUSSIA TODAY, 10 February 2024

In other words, since the Hungarian government foolishly permitted itself to become dependent upon the transfer of free money created ex nihilo by German banks, it now no longer has the ability to establish its own policies in the interest of the citizens of Hungary. Hungary might as well be a heroin addict attempting to defy the wishes of his heroin dealer.

This illustrates both the anti-democratic nature of free trade and usefully explains why Clown World is so hell-bent on imposing free trade policies everywhere from Azerbaijan to Zambia. Once Clown World can get a nation hooked on its destructive economic drug, it can literally dictate that nation’s policy. Only going clean, like Russia was inadvertently forced to do by the sanctions regime enforced by the West, can free an economy from the external chains and intrinsic fragility imposed by free trade.

Free trade is economic heroin for a nation. It might make things feel good for a while, but it’s very bad for your health and will eventually kill you if you don’t get off of it.

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Communism > Clown World

One of the most startling realizations of the 21st century has been the inescapable conclusion that communism, despite all of its atheism, murderous tendencies, economic shortcomings, and various other evils, is still much, much better for a nation than Clown World’s neoliberalism.

A map recently published by German poll aggregator Wahlkreisprognose shows that in the former East Germany Alternative für Deutschland (AfD) has a clear lead in almost the entire former German Democratic Republic while the western part is overwhelmingly dominated by the conservative CDU and its Bavarian sister party CSU.

In other words, the country is sharply divided along what was once formerly West Germany and East Germany (GDR).

In the map, the Institute has colored Germany’s Bundestag constituencies according to party preference. The black color represents the center-right Christian Democratic Union (CDU), the blue color the Alternative for Germany (AfD), the red color the Social Democratic Party of Germany (SPD), and the green color the Greens. The fainter the color, the smaller the lead of the party in the constituency, and the darker the color, the more dominant the party is.

The CDU dominates in western Germany outside the big cities, and the AfD in eastern Germany outside Berlin. The CDU and AfD are perfectly aligned with the former border between the former German Democratic Republic and the former West Germany.

This is not an argument for communism, but rather a condemnation of Clown World. North Korea is still Korean. China is still China. But the USA is no longer American, Great Britain is no longer British, the European nations are invaded and occupied by foreigners, and even the proud nations of Japan and South Korea are under direct assault.

Clown World delenda est.

By the way, the econoclowns lied about the “economic need for immigration” too. Immigration doesn’t help the economy at all. It is observably worse for an economy than losing a war and being nuked.

Mass immigration may cost Germany up to €19.2 trillion, and has already cost the country €5.8 trillion, according to a top German academic on public finances, Prof. Bernd Raffelhüschen, of the University of Albert Ludwig University of Freiburg. Often referred to as the “pension pope,” Prof. Raffelhüschen’s study blows a hole in the narrative promoted by pro-migration parties and business leaders, who claim that mass immigration will save Germany’s public finances and the job market.

Several top Dutch professors recently released a study detailing how migrants have cost the Netherlands a minimum of €400 billion since 1995, and the Netherlands has accepted far fewer migrants than Germany. In Norway, researchers found that only half of migrants are employed despite the state spending €6.6 billion on workforce integration projects over the course of 10 years.

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Trump’s Trade War 2.0

Contra economists from both the Democratic and Republican parties, a trade war in 2025 would be a very, very good thing for the US economy:

Former US President Donald Trump has told advisers he wants to impose a 60% tariff on all imports from China if he wins this year’s election, the Washington Post reported on Saturday, citing three unnamed people familiar with the plan. The measure would trigger major disruptions to the US and to economies around the world, which would far exceed the impact of the trade wars initiated by Trump during his first presidential term, economists from both the Democratic and Republican parties told the newspaper.

During his current presidential campaign, Trump has pledged to revoke China’s status as a “most favored nation” for trade. The designation is applied to almost all nations that do business with the US, and the White House can introduce any tariffs on imported goods from countries that do not have it. According to the GOP front-runner, tariffs on foreign goods raise vital revenue for the US budget, and current import levies are among the world’s lowest.

China ranks third in the list of US trading partners, behind Mexico and Canada. In November, Beijing accounted for 11.7% of total US foreign trade.

As I pointed out six years ago on Chinese state television, a trade war is very much to the advantage of the United States economy. The net effect of the Western sanctions regime on the Russian economy only serves to underline my original point: a trade war is, by definition, always beneficial to the trading party that has a negative trade balance. And the USA has a massive trade deficit vis-a-vis China. Unlike a naval war in the Pacific, an air war in the Middle East, or worse, a ground war in Europe, this is one war that the USA literally cannot lose.

The reason the Russian economy didn’t suffer from the trade war the West imposed upon it despite having a trade surplus is because the West is now actually the smaller of the two global markets by a significant margin, both in terms of population and purchasing power parity. What Russia lost in Western trade, it more than gained in trade with the BRICSIA countries. And from the defense manufacturers to fast food chains, Russia’s industries benefited massively from the protection from Western imports that was inadvertently provided by the sanctions regime.

As recent history has demonstrated, the Clown World economists are totally wrong, even by their own Samuelsonian metrics.

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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.

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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.

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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.

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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.

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