Tag: economics

Debt to Infinity and Beyond

I know you’re probably all just as surprised as I am to learn that the House Republicans cucked and caved on the debt ceiling. Neither Democrats nor Republicans are going to stop spending until the financial system collapses and forcibly prevents them.

US President Joe Biden and House Speaker Kevin McCarthy have reached a “tentative” agreement on raising the country’s debt ceiling.

But it’s worse than you’d think. The ceiling hasn’t been raised so much as eliminated. Because there are no limits to the retarded evil of Clown World.

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The Clowns Know Collapse is Nigh

Whether you read Clown World’s intellectuals, pay attention to the statements by its military leaders, or read the statements by its economic directors, the one thing that is very clear is that all of the leading clowns are highly aware of the probability that Clown World is going to collapse, most likely in a sudden and catastrophic manner. What’s fascinating is the way in which they have literally nothing to offer in response to the situation except bromides about “cooperation” and pathetic appeals to “working together” at a time when the rest of the world has all but openly declared war on the new liberal rules-based democratic world order, or whatever it is calling itself today.

The managing director of the International Monetary Fund (IMF) has warned that the world is on the edge of geo-economic fragmentation, which she believes could add more “cold water” to already anemic global growth. Speaking by video-link at the Brussels Economic Forum on Wednesday, Kristalina Georgieva called for cooperation at a time when growth across the globe is extremely weak by historical standards.

“After decades of increasing global integration, there is a growing risk that the world may split into rival economic blocs,” the IMF chief said. “And that’s a scenario that would be bad for everyone, including for people in Europe.”

She warned that growth prospects were increasingly bleak at a time when the global outlook is weak both in the near and medium term. The IMF projects growth to remain around 3% over the next five years, the lowest medium-term forecast in more than three decades.

“And yet, central bankers cannot take their eyes off the ball until stubborn inflation is firmly under control,” Georgieva pointed out. “The required monetary tightening is weighing on growth and exposing some financial vulnerabilities.”

Reviving multilateral cooperation is vital for long-term growth everywhere, according to the official, who warned that trade fragmentation could cost up to 7% to the global economy in the long term. That’s “roughly equivalent to the combined annual output of Germany and Japan,” she said, adding that some nations could see GDP losses of up to 12% if technological decoupling is added.

I expect that the economies of the occupied West are going to shrink considerably more than 12 percent. Remember, in the Great Depression, “industrial production in the United States declined 47 percent and real gross domestic product (GDP) fell 30 percent.” And this is a bigger, more permanent contraction that has been underway since 2008, so a peak-to-trough decline of around 50 percent would not be out of line.

The reality is that we will probably never know the true extent of the economic contraction in the USA, because a) the statistics are as fake and gay as everything else in Clown World and b) the USA is not going to survive as a unitary political entity so no one will be calculating the relevant statistics required for the comparison.

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Running Out of Rabbits

What can the Fed do in the face of the growing list of bank failures? Absolutely nothing, according to Karl Denninger.

How’s PacWest doing?

Oh, not so good. Let’s see…oh, looks sort of like an impending zero.

But wait — First Republic was it, right?

Sure it was.

There’s no real problem here, right? The TNX was down a full percent yesterday because….. the Fed will save it all, right?

No they won’t.

Not because they don’t want to.

They can’t this time.

Oh, you think not eh? How’s your homeowner’s insurance premium? Your car insurance? Your food bill? You know, all that stuff you have to buy? Yeah, you’re reading this and you’re probably middle class or better. You’re doing mostly ok. You’re on the right side of the bell curve, right?

Half the people are on the left, and they’re not ok. For them that 20% increase means they are taking payday loans to buy food, effectively and sometimes literally.

That ends the game folks.

If The Fed tries it we get government and social collapse.

The Federal Reserve has surprised us before with its resiliency. It has certainly kicked the can a lot further down the road than I’d anticipated it would be able to in 2008. But sooner or later, no matter how skilled the magician, the hat runs out of rabbits.

UPDATE: The short-term anecdotal evidence tends to support the hypothesis.

Two more US regional banks saw trading of their shares suspended on Thursday, amid the worst crisis to hit the country’s financial sector since 2008. Regulators halted trading in Los Angeles-based PacWest and Arizona’s Western Alliance after their share prices fell dramatically. PacWest Bancorp said late Wednesday it was in talks with potential partners and investors about strategic options after its shares dropped by as much as 60%.

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The Cult of Free is Over

It was always fake, gay, and propped up by free money handed out to the ticket-takers. And now that the free money flow has been shut off, the propped-up organizations are failing one after another.

The American-Canadian digital media and broadcasting company Vice is preparing to file for bankruptcy, New York Times has reported citing two people with knowledge of its operations.

This news of bankruptcy comes just days after after the well-regarded TV and online video outlet laid off staff and canceled its flagship program Vice News Tonight. Last week, Vice Media said it will cancel popular TV program “Vice News Tonight” as part of a broader restructuring that will result in job cuts across the digital media firm’s global news business, capping years of financial difficulties and top-executive departures.

Vice, which operates a cable channel of the same name and creates documentaries and other video content for its own outlets and others, was once valued at $5.7 billion. Investors included Walt Disney Co. and Fox Corp., although their equity may now be worthless, the Times said. Its largest debt holder is Fortress Investment Group, according to the newspaper.

This potential bankruptcy also comes at the time when several other media and technology firms have had to downsize in recent months due to a challenging economy and a weak advertising market.

This is why it is so important to support projects like Arkhaven, Castalia Library, and UATV with your subscriptions. And the strong foundation provided by the subscribers is why these projects not only survive, but continue to thrive, while their much larger competitors are collapsing.

The deplatforming and demonetization by various platforms actually did us a favor when viewed in retrospect, as it forced us to prepare for times such as these several years in advance. Sometimes, the silver lining proves more significant in the long-run than the black cloud.

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Not Alarmist, Avante Garde

An anon at AC’s site has begun to conclude that I might have known what I was talking about when I pointed out the satanic roots of the Enlightenment “freedoms”.

Freedom of speech is gone. Freedom of the press is gone. Freedom of religion is gone. I used to think Vox was an alarmist when he claimed those “freedoms” were actually anti-Christian tactics concocted by Satanic “Enlightenment” thinkers to destroy Christianity. Except it looks like he is right.

I wonder if 9/11 had multiple purposes. Maybe Iraq was a sideshow meant to distract us as they accomplished their true goals: the creation of Homeland Security, the Patriot Act, increased domestic surrlveillance, the ruining of air travel, and so on.

Once they got that in place, they began banning speech, first as hate crime, then as “disinformation,” now as “Putin propaganda.” No matter what you call it, freedom of speech is on its way out. Freedom of the press is based on freedom of speech and now reporting the wrong thing gets you thrown off media and potentially arrested. How about freedom of assembly or freedom of religion? On their way out. COVID showed the sham of both. The Oregon decision to forbid a Christian woman from adopting or fostering children, on account of her religion, and the closing of churches, but not BLM rallies, during COVID are data points on the destruction of those so called freedom.

So if you realize all this, and you are a Christian, then what would keep you from instituting mandatory Christianity? After all, if there is no freedom of religion, then what would you prefer, child raping, child sacrificing Satanists ruling this area; or the child protecting Christians who built the European and North American civilization that is quickly being destroyed before your eyes?

Putin has figured this out. Wang Hunin and Xi Xinping have figured this out. The Elightenment concepts of “democracy”, “human rights”, and “freedoms” that have been used to establish and expand the liberal world order are not only lies, they are collectively one gigantic satanic trap for a nation. They are a means of transforming a society of men seeking honor, glory, and righteousness into a society of weak, pleasure-seeking lotus-eaters.

Increasingly commercial societies would be more liberal both at home and abroad. Their citizens would seek prosperity and comfort and abandon the atavistic passions, the struggles for honor and glory, and the tribal hatreds that had produced conflict throughout history. The ancient Greeks believed that embedded in human nature was something called thumos, a spiritedness and ferocity in defense of clan, tribe, city, or state. In the Enlightenment view, however, commerce would tame and perhaps even eliminate thumos in people and in nations.

The Return of History and the End of Dreams, Robert Kagan

Individual freedom is not the sine qua non of human existence or human society. And contrary to the Enlightenment propagandists, neither individual wealth nor national economic growth are the supreme metric that merit government prioritization. To the contrary, they are temptations meant to sap the spirit and morals of the nation.

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Be Very Afraid

In fact, you might do well to be downright terrified. When it comes to economics news, it doesn’t get much more grim than this.

Fortunately, he only said “could mark”. He didn’t actually declare that the banking crisis had ended. So hope yet remains. It might only be that this is a sign of First Republic Bank’s survival.

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Enjoy Being Poor

The British people are told to shut up and accept their national impoverishment. But at least they’ll have the satisfaction of knowing their poverty was caused by choosing the wrong side and backing a certain loser:

British households and businesses need to accept that they are worse off and should stop asking for wage increases and pushing prices higher, the Bank of England’s chief economist, Huw Pill, said on Tuesday. According to Pill, “a series of inflationary shocks” generated by the pandemic, the conflict in Ukraine, and crop shortages have sent prices in the UK to a 40-year high. He claimed that in response to surging bills and other rising costs, workers and businesses are attempting to transfer the impact of inflation onto each other.

The neoliberal world order’s promised benefits to the nations of the West are failing at a remarkable rate. Remember, all of the nations of the West are suffering massive invasion and crime because importing foreigners was supposed to be good for their economies. Only it observably hasn’t been while the societal costs have been catastrophic. The end results have been the complete opposite of the shiny happy seculatopia that was promised.

And yet, there is an easy fix for most of the problems of Clown World, from the economy to the environment. And that is mass deportation on a scale that has seldom been seen before. It may be unthinkable at the moment, but it is inevitable because the alternative is chaos and violence that will ultimately produce the same results at a much higher price to everyone.

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Et tu, Argentina?

Argentina abandons the dollar in favor of the yuan for trade with China:

Argentina will aim to pay for the bulk of its monthly imports from China in yuan rather than US dollars, Economy Minister Sergio Massa announced on Wednesday. Buenos Aires and Beijing signed a currency swap agreement last year, aimed at stemming the outflow of foreign currency from Argentina’s central bank.

China is currently Argentina’s second largest trade partner after Brazil, and the second biggest destination for Argentinian exports. Argentina’s total imports from China was around $13.5bn in 2021, according to the United Nations database on international trade.

Massa said that Buenos Aires will pay the equivalent of $1 billion in yuan for Chinese goods and services this month, with $790 million of monthly imports paid for in yuan each month thereafter. The currency swap agreement, expanded and finalized earlier this year, also allows Argentinian exporters to make settlements in yuan or dollars, to help balance the flows of foreign currencies in the central bank.

Even the neoclown Robert Kagan warned of the potential consequences for the neoliberal world order if the USA were to abuse its privileged position, which it generally avoided doing between 1945 and 2020.

The success of the order, however, also depended on the United States abiding by some basic rules. Chief among these was that it not exploit the system it dominated to gain lasting economic advantages at the expense of the other powers in the order. Put simply, it could not use its military dominance to win the economic competition against fellow members of the order, nor could it treat the economic competition as a zero-sum game and insist on always winning.

The Jungle Grows Back, Robert Kagan, 2019

The decision to weaponize the dollar in lieu of challenging Russia directly in a military context may prove to be one of the more catastrophic errors in the history of empires. Astute historians such as Victor Davis Hanson have for some time been wondering exactly when, and where, the Imperial USA’s Syracuse moment of imperial overstretch would take place; in The Father of Us All, published in 2010, VDH argued that the Iraq War was not likely to be a serious candidate for the Moment.

Athens’s disastrous 415 B.C. expedition against Sicily, the largest democracy in the Greek world, may not prefigure our war in Iraq. (A hypothetical parallel to democratic Athens’s preemptive attack on the neutral, distant, far larger, and equally democratic Syracuse in the midst of an ongoing though dormant war with Sparta would be America’s dropping its struggle with al-Qaeda to invade India).

However, it increasingly appears that the attempt to control Russia using the leash of the dollar reserve system may have marked that long-anticipated Moment, as dropping its economic neutrality and putting pressure on the rest of the participants in the global economy in order to pressure Russia into withdrawing from Crimea and the Donbass, then doubling down on that mistake by financing the Kiev regime’s war appears to have been even more devastating to the neoliberal world order than an invasion of India.

UPDATE: The Global Times expresses China’s belief that de-dollarization is not merely desirable, but inevitable.

One of the most direct reasons behind the global de-dollarization trend is that the US has been increasingly weaponizing US dollar hegemony to impose economic sanctions as well as political repression. For instance, key Russia banks have been excluded from the SWIFT system, a service that facilitates global transactions among thousands of financial institutions.

What’s perhaps more surprising – and potentially worrying for Washington – is how expensive and scarce offshore US dollars are becoming. As the US Federal Reserve’s aggressive interest rate hikes hit global financial systems, an increasing amount of foreign capital flowed back to the US, leading to a global US dollar shortage. The US’ interest rate hikes and the resulting shortage of US dollars serve as another important factor driving more countries to push for a quicker pace of de-dollarization.

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Debt-Cancellation in Ancient Greece

Jesus said debts should be forgiven. So did the ancient Greeks, as Rev. Matt points out.

One of the most consistent arguments made against the policy of society wide debt forgiveness is this: “You need a Christian or believing (in the sense of ancient Israelite) nation for it to work. It cannot work in a nation like ours because it is non-Christian, so either people will not go for it, or they will abuse it and it will not work.” Almost every time I have made a case for debt forgiveness somebody makes this argument. But it is a fallacious one, both historically and logically.

It is fallacious logically because there is nothing inherent to many pagan philosophies saying that debt cannot be forgiven. Forgiveness, liberty and debt cancellation were all concepts that existed before either Israel or Christianity had graced the face of the earth. Indeed, the most ancient usage of words that can be translated as “liberty” were pagan words referring to debt forgiveness.

It is fallacious historically, because we have countless examples throughout history of ancient societies practicing debt forgiveness. From the ancient Sumerians, Akkadians, and other Near Eastern societies, on through to Greek city states and the Roman public, we see that debt forgiveness was either practiced, debated, or offered in various contexts. In fact, many ancient pagan leaders saw it, correctly, as an effective means of shoring up popular support for their reign, and limiting the damage their nobles could do to both their reign and their society.

Many examples of debt forgiveness in pagan societies can be given, here is one from ancient Athens,

“Now later writers observe that the ancient Athenians used to cover up the ugliness of things with auspicious and kindly terms, giving them polite and endearing names. Thus they called harlots “companions”, taxes “contributions”, the garrison of a city its “guard”, and the prison a “chamber”. But Solon was the first, it would seem, to use this device, when he called his cancelling of debts a “disburdenment”. For the first of his public measures was an enactment that existing debts should be remitted, and that in future no one should lend money on the person of a borrower.”

Debt enforcement and the refusal to cancel fraudulent debts such as student loans is neither moral nor Christian. Precisely how is it “progress” for a modern society to be observably less moral and less forgiving than ancient pagan societies?

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Indonesia Leaves the Dollarzone

The largest Muslim nation in the world has abandoned the US trade dollar:

Indonesia is following the lead of the BRICS group in its policy of shifting away from the US dollar in trade and financial transactions, according to the country’s central bank.

Jakarta has introduced transactions in the local currency to settle cross-border trades, the portal SINDOnews has reported, citing Bank of Indonesia Governor Perry Warjiyo.

“Indonesia has initiated diversification of the use of currency in the form of LCT [local currency trading]. The direction is the same as the BRICS. In fact, Indonesia is more concrete,” Warjiyo said on Friday, addressing a press conference with the board of governors meeting.

Indonesia has already implemented the practice with a number of countries, such as Thailand, Malaysia, China, and Japan, he added. It also plans to sign a cooperation agreement with South Korea regarding local currency trading in early May.

Warjiyo’s statement comes as the BRICS economic bloc – comprising Brazil, Russia, India, China, and South Africa – claims to be working on establishing a joint payment network to cut reliance on the Western financial system, and on the dollar in particular.

In related news, India and Bangladesh have dropped the dollar for use in their bilateral trade.

India and Bangladesh are moving away from using the US dollar in bilateral trade, the Bangladesh-based news website The Business Standard reported this week. According to the report, the two countries have reached a deal that will see a part of trade transactions carried out in their respective domestic currencies, the rupee and the taka.

It’s fascinating to see that the imperial overstep by the United States was not an invasion like Syracuse or even the suppression of a potential military rival like the World Wars fought between England and Germany, but the weaponization of its financial hegemony.

I always expected de-dollarization to follow both a) an economic crisis and b) a major military defeat, but instead, it appears to have preceded both due to the very rational fears of countries observing how Russia was attacked economically via the global dollar system.

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