Too bad Davy Crockett didn’t have an iPhone. He could have done some selfies, thereby forewarning several thousand contemporary Ukrainians about the trip to the slaughterhouse that is sure to follow from the insane urgings of their own clown-car president.
For crying out loud, Santa Ana’s men had a massive advantage in arms, but they still were old-fashioned single-shot muskets. But when it comes to taking on the high-tech lethality of the super-mechanized Russian Army, what are these fools thinking? Passing out wooden practice rifles, small arms and Molotov cocktails to one and all untrained civilians in Kiev– a city that was already crawling with criminals and thugs?
Still, our point is larger. If the MSM can’t see that Zelensky is a reckless stand-up comedian being deployed by Washington for purely propaganda purposes, then perhaps the rest of the Mainstream Narrative is an equally insipid fantasy, as well.
We are referring to the US economy, of course, and the supposition that as soon as the present intermission for Joe Biden’s “War Games” is over we can revert to an economic rebound and a steady slowing of inflation. But that is not to be because Washington has gone nuts playing armchair warriors with the supposedly more civilized instruments of economic sanctions.
Not so. They do not have the slightest inkling as to the second, third and fourth order effects of what they are unleashing—-even as new kinds and types of “sanctions” become more cockamamie by the hour. In effect, they have declared war all right, but on the unfathomably intricate global trading system,network of supply chains and financial infrastructure which was designed for a totally peaceful world. Full stop.
Stated different, what is being launched from Washington, Brussels, London and various other European capitals is a mindless war on the global economy—which means their own economies, which are deeply integrated with it, will bear a heavy brunt of the damage.
For instance, a beleaguered global transport executive just appeared on bubble vision explaining that a huge amount of Chinese goods destined for Europe ordinarily transits by rail through Russia. But now owners of those goods don’t want to get caught with their Russian pants down—so the are scrambling to re-route these goods by air and sea.
The effect already is a 3-5X increase in ocean rates, and that’s on top of the massive eruption that had previously occurred owing to the Covid-supply chain disorders. So a container of goods can now cost $40,000 to ship to Europe or 20X its pre-Covid 2019 level.
Never mind that all this havoc and these Joe Biden style War Games are unnecessary. The Russians have been making it clear for more than a decade that the encroachment of NATO on their doorstep has got to stop; and that became especially insistent after Washington sponsored a violent coup against Ukraine’s honestly elected pro-Russian President in February 2014 and thereby opened the door to NATO membership for Kiev.
Still, as recently as December 15, Russia laid out in explicit terms a plan to normalize the entire fraught strategic equation. To wit, they proposed:
- No NATO membership for Ukraine;
- The removal of two forward NATO anti-missile basis from their border areas;
- The rolling back of US and other western troop locations to the old (pre-1999) NATO states, rather than the new former Warsaw Pact nation’s which lie near and in some cases cheek-by-jowl with Russia’s borders.
Very simply, substantial agreement to these unobjectionable steps would have averted Putin’s invasion; obviated the need for the out-of-control global sanctions war now underway; and offered at least a slim prospect of relief from the inflationary tsunami now rolling over the American consumer.
In the latter respect, we learned a long time ago that inflation moves downstream from commodities, to the wholesale sector, to eventually the retail shelves at the supermarket and Walmart. So if you look at the current data for those three points of cascade there is little for the imagination to wrestle with.
The most recent reading for the global commodity index is up 60.3% on a Y/Y basis—a gain that even exceeds the 49.2% blow-off top in Q2 2008 that accompanied the rise of oil to $150 per barrel.
Moreover, this index covers the whole gamut of energy, minerals, foodstuffs and other raw materials that form the physical flow of the global economy. The idea that these current raging price gains are going to get silently absorbed in the maw of the downstream economy is just plain wishful thinking.
Y/Y Change In Global Commodity Index, 20004-2021
Moving one layer downstream to “processed goods for intermediate demand” we see an even more ominous picture. It turns out that the 24.2% Y/Y gain posted in January was way above the 16.7% increase posted during the July 2008 inflationary peak.
And even more astoundingly, it also far topped the 18.6% peak recorded in February 1980. In fact, since May 1948, there has been only one month with a higher Y/Y gain, and that was the utterly aberrant price explosion in October 1974 that accompanied the ending of Nixon’s disastrous experiment with wage and price controls
Y/Y Change in PPI For Processed Goods For Intermediate Demand, 1948-2022
It ought to be clear by now that we are in uncharted inflationary waters when in comes to the pipeline of global production. But for want of doubt, consider this: The 12.5% Y/Y gain in the PPI for final demand finished goods actually exceeded the 12.3% Y/Y gain posted in November 1980.
That is to say, Ronald Reagan won the 1980 election against all odds because the electorate had been overcome with a tsunami of double-digit inflation. Now the electorate is facing what promises to be worse by next November.
Y/Y Gain In PPI For Finished Goods Final Demand, 1980-2022
So here we are. The Tsunami is working its way downstream, and its progress is far from invisible. In fact, the 7.5% Y/Y gain in the CPI recorded in January was the highest reading in forty years, and even then only a tad below the 7.6% reading of February 1982.
Given the cascade now moving down the pipelines, of course, the very idea that we can avoid at least a temporary period of double-digit CPI inflation no longer seem plausible. It’s going to happen because its baked into the cake.
Y/Y Change In CPI, 1982-2022
In light of all of the above, you truly have to wonder what the buy-the-dippers who cavort on bubble vision daily are perchance smoking. For instance, this genius from UBS still insists that the global economy is growing above trend—even as the global financial system and trading arrangement are being subject to a sweepingly ferocious attack by Joe Biden and associates that makes Putin’s mere physical invasion of eastern Ukraine look like small potatoes by comparison.
Against a backdrop of heightened concerns about Ukraine, inflation, and interest rates, it is important to remember that global economic growth remains above trend and Covid-19-related restrictions are being lifted,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.
Indeed, when you hear something like the above, you almost have to think that Zelensky’s suicidal advice isn’t so bad after all.
More importantly, you need to call a spade a spade. Sleepy Joe is the captive puppet of a Washington foreign policy establishment that is drooling red in tooth and claw.
They are going to wreck something big time. But when it happens, it will be obvious that the nation’s inflationary disaster now being given a second charge of power is their Alamo.