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mariacallous · 7 months ago

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As all journalists know fear sells better than sex. Readers want be terrified. And here in the UK, there appears to be every reason to frighten them.

A country that was overdependent on financial services has been in decline ever since the banking crash of 2008. Then, from 2010 on, the astonishing Conservative policy failures of austerity, Trussonomics and, above all, Brexit further weakened an enfeebled state.

I was a child in a happy family during the crisis of the 1970s. Like all happy children I just got on with my life. But even I picked up a little of the despair and hopelessness of the time. That feeling that there is no way out is with us again.

In 1979, Margaret Thatcher came to power, and with great brutality, set the UK on a new path as she inflicted landslide defeats on Labour.

Obviously, our current Conservative government is heading for a defeat, maybe a landslide defeat.

But there is little sense that Labour will transform the country. The far-left takeover from 2015-2019 traumatised it. As recently as 2021, everyone expected Boris Johnson to rule the UK for most of the 2020s.

Johnson’s contempt for the rules he insisted everyone else follow and the great Truss disaster are handing Labour victory. But the centre-left appears to be the beneficiary of scandal and right-wing madness, not an ideological sea change that might inspire it and sustain it in power

Desperate to drop its crank image, battered by the conservative media establishment, fashionable opinion holds that a wee, cowering and timorous Labour party will come into power without radical policies that equal the country’s needs.

Just this once, fashionable opinion may even be right

And yet, and I know I will regret this outbreak of commercially suicidal optimism, there are reasons to believe that the UK’s position is not quite as grim as it appears.

1) The economy may revive

Although no one has been as wrong recently as the economists and central bankers who predicted that inflation would be a transitory phenomenon, it is finally coming down. Falls in energy prices may even bring it to the 2 per cent target this month. Interest rates will eventually follow suit.

Lower interest rates mean lower government borrowing costs. They will reduce the extraordinary debt bill Labour in power will have to meet.

Chris Giles of the Financial Times calculated this week that lower government borrowing costs improve the public finances five years ahead by almost £15bn (about 0.5 per cent of national income) for every percentage point reduction.

Meanwhile the Conservatives have raised taxes so high (by UK standards) a Labour government may not need to risk unpopularity by raising them further. Under Conservative plans the tax burden has risen from 33.1 per cent of gross domestic product in 2019-20 to 36.5 per cent in 2024-25 with further rises planned, taking it to 37.1 per cent by 2028-29.

If the 1997-2010 Labour government is any guide, Labour will be reluctant in the extreme to play into its enemies’ hands by raising taxes

It may not need to if economic growth leads to the revenue growth that would take the UK out of the rolling crisis that has afflicted it since 2016.

I wouldn’t be doing my job if I did not add that there are some pretty large caveats to make.

Economists missed the post-covid inflation surge because they forgot about politics. Russia’s unprovoked invasion of Ukraine upended the European economy. An extension of the war in Ukraine or the Middle East, or, more terrifyingly, a US-China confrontation, or the return of Donald Trump could all derail a new government.

In any case the IMF predicts growth of 1.5 percent in 2025, which is nowhere near the 3 percent we need to fund the state.

And yet, with a bit of luck there is a fair chance that our fortunes may revive, albeit modestly.

2) Labour is not as scared as it looks

Near where I live in London is the Union Chapel, a vast neo-Gothic hall.

Will Hutton was there recently to launch his new book This Time No Mistakes: How to Remake Britian. I have interviewed Will for the podcast, which should be out in a couple of days. For now, I’ll just say his book is a classic combination of liberal and left thought, and makes the case for radical reform. Keir Starmer arrived on stage to the cheers of the crowd and endorsed Hutton’s findings.

The fashionable view is that Labour has abandoned difficult policies so as not to alienate frightened voters, and I can see why people think that way.

The grand plan for green job creation has been hacked back after fears the markets would not wear it. The majority of people in this country, and the overwhelming majority of people who vote for opposition parties, now recognise that Brexit was a disastrous error. Year in year out it drags the country down. And yet Starmer, who once argued for a second referendum, is terrified of mentioning the subject in case he upsets a minority in marginal seats.

There was a depressing little vignette a few days ago when the European Commission laid out proposals for open movement to millions of 18- to 30-year-olds from the EU and UK, allowing them to work, study and live in respective states for up to four years. Labour joined the Tories in rejecting the offer.

It would rather squash the aspirations of young people than lay itself open to the charge that it was taking us back towards EU membership.

Yet Rachel Reeves, Keir Starmer and David Lammy talk about the need for cooperation. “Success will rest on forming new bilateral and multilateral partnerships, and forging a closer relationship with our neighbours in the European Union,” Reeves said as she explained her economic programme.

Meanwhile the UK has been ruled by Conservatives for so long our battered minds can underestimate how much the country will change when they are thrown out.

The new parliament will be filled with politicians who support renters, more home building and the EU. They will at least be interested in a land value tax and a universal basic income. Radical that ideas have been forbidden for years will soon seem normal.

3) The impetus for change

The last Labour government of 1997 to 2010 did not change economic fundamentals for what seemed at the time to be a very good reason.

When it came to power neo-liberalism worked. Indeed, is easy to forget now how successful the ideology appeared before the crash of 2008. Politicians like Gordon Brown and Tony Blair accepted much of what Margaret Thatcher had done because they thought they had no choice. Everyone knew, or thought they knew, that this was how you ran an economy.

None of that certainty pertains today. The Brexit nationalism that succeeded neo-liberalism has failed. Starmer and Reeves will not be like Blair and Brown: they will have no good reason to cling to discredited ideas.

That does not mean they won’t cling to them for fear of the Tory press or swing voters or because of their own intellectual failings. There is no guarantee that countries will turn themselves round. The UK could go the way of Argentina or Italy.

But the Labour leadership is made of serious politicians, and I keep asking myself why would serious politicians want to preside over decline? I can’t see why they would.

As I said, maybe I will regret writing this piece. But for the moment I think we can enjoy a rare moment of optimism.

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mybeautifulchristianjourney · 1 year ago

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Anxiety, Fear and Worry

by Gil Rugh

We live in a world full of people who are consumed by worry and fear. The news is full of things that could cause anxiety. Many people are obsessed with inflation and what will happen to their money. Worldly people invest their entire lives in these transitory things…

Jesus calls His followers to have a different focus. In Matthew 6:25 He said, “Do not be anxious for your life, as to what you shall eat, or what you shall drink; nor for your body, as to what you shall put on. Is not life more than food, and the body than clothing?”

While instructing us to “not be anxious,” Jesus revealed three truths that should immediately banish anxious thoughts.

God makes provision for us (Matt. 6:25-30)

God knows what we need (vv. 31, 32)

Each day has enough trouble of its own (vv. 33, 34)

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dhufflebee · 8 months ago

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I'm new! whose binotto? How long he was there? What he do to Char?

hi! welcome :) and thanks for the vote of confidence, i'm not sure i'm the best person for the job since i've really gotten back into f1 a couple years ago, but i'll do my best.

i suggest you also do a deep dive into @leqclerc's blog, starting with these 3 posts ( x - x - x ).

mattia binotto was, for better or for worse, a key figure in ferrari up until the end of 2022, when he was let go/fired. he had worked for ferrari as a PU engineer since the schumacher times (not sure about what year he started), and climbed the ranks until he became technical director. due to internal politics - a problem that affects ferrari seemingly endemically - and his own inflated ego, in 2019 he all but forced the scuderia to hand him the role of team principal alongside being TD... and that was an atrociously bad decision, but you know what they say about hindsight.

2019 was the first year for charles leclerc in the team (but let's not forget he had been signed by the previous tp/management) alongside seb vettel; the year wasn't particularly good as a whole, but the car was developed well and the team got 3 wins back to back after summer (including monza with charles, which is A Big Deal). only problem is, in the winter break it came out that ferrari had signed some sort of pact/agreement/whatever with the fia, because apparently the engine had been a bit too much focused on exploiting grey areas of the regulations - both engine and accord being directly linked to binotto in his double role.

so to "protect" this engine project (still to this day nobody knows much about it except that it wasn't outright and wholly illegal), binotto decided not to get penalties & fines like any other team would; instead ferrari was forced by the fia to develop a new, power-limited engine who completely crippled the team in 2020 (and also 2021). the car was horrible to drive, results would not come - seb's and most especially charles's efforts notwithstanding - and internal politics were still rampant. to add fuel to the fire, italian media started a smear campaign against seb, which resulted in him being let go in 2020. a media campaign that started mainly because of results, but binotto's absurd and backwards communication style didn't help, with his tendency to not support, lie to and baby his drivers in statements and team radios.

2021 was a transitory year, last of the regulations - car was slightly better but still bad, nobody was thinking about ferrari much given the wdc fight. only noteworthy thing (and again: hindsight) was that carlos sainz joined ferrari, a driver coveted and handpicked by binotto himself.

2022 was when it all came to a head. new regs were established and apparently ferrari had the best car of them all: the first races were quite the sweep with charles seemingly poised to become wdc with the way he was dominating. except, engine reliability was an issue (not disastrous but charles did lose some wins because of that) and worst of all, the team and the wdc campaign under binotto were handled in the most shitty and maliciously bad way you can imagine. important tidbit: in the beginning, carlos was struggling in the car while charles soared, and it's clear now that binotto hated that and worked like hell to favour the driver he chose. meaning the strategies were amateurish, with wins and podiums lost - usually by charles - due to absurd decisions from the pitwall (wrong tyre choices, driver's suggestions getting blatantly ignored, pit stop fumbles like in monaco, charles constantly getting sacrificed because "he could recover", etc). absolute worst of the worst, ferrari robbed charles at gunpoint in silverstone, a race he was comfortably leading and going to win, until they chose to not pit him and to leave him out on old tyres to be overtaken, handing carlos the victory and kicking charles off the poium entirely. to make matters even worse, binotto wagged his finger in charles's face telling him he had to stay put and enjoy (maybe you've seen pictures, it was the single most enarging moment in a wholly enraging weekend).

that race was really the beginning of the end. i cannot let you understand the amount of hate the scuderia got for that result, from fans (especially charles's) but also from media and other teams who were all absolutely baffled by the team's choice. because you see, at that point of the year charles was still way above carlos in points and was still fighting for the wdc - silverstone basically killed that. firstly because it had been a conscious choice to hand carlos his first career win (something the team had been trying to do for a while), and then because it was the most blatant consequence of a season that should have been vehemently focused around charles (much like 2023!max) and instead saw binotto saying there was absolutely no need to establish hierarchy between the drivers at any point in the season (ignoring the huge gap in points and talent), that the team wasn't actually doing that bad of a job after all, that they still could win (if only it wasn't for the pesky driver who can't be a strategist and mechanic as well... if you read between the lines). binotto and the team never took responsibility for anything, letting the brunt of the mistakes and the failed endeavor to be shouldered by charles, which also warped people's ideas of charles and carlos and the media narrative about them - something you can still clearly see the effect of, and probably always will.

after summer break minor regs changed and any wdc hope charles had slipped away. the car got worse AND was developed more towards carlos's preferences to be more stable and him more comfortable, so as a whole less fast (the same path that produced the 2023 car, a monstrosity that was still developed by binotto as a "last gift"). charles had to fight tooth and nail but became vicechampion at the end of the year - still no hierarchy established, still not a single race in which charles was helped or favoured during his solid wdc campaign. we don't exactly know what happened behind the scenes, but after more than one year we can extrapolate with a good amount of certainty that the situation was very bad, and that at some point there was a concrete risk of charles deciding to quit ferrari - at least if binotto stayed.

at the end of 2022 it was announced binotto would leave the team (meaning not only his undeserved and disastroudly managed tp role, but the admittedly more successful engineering side as well), and alongside him most of his loyal cohort left too, especially those people he'd promoted to high roles with mixed results. after a short while fred vasseur was chosen to be the new tp - a move probably done in part to assuage charles (who, no matter what people say, is still ferrari's greatest asset) but also to bring new life and a new managerial approach to the team. fred basically had to restructure everything, but most importantly he brought a new way of working and communicating inside the team and towards the outside, focusing on honesty and mistake correction - something charles keeps praising (and that still gives hints about how shit the atmosphere must have been under binotto).

all in all, binotto has been a terrible team principal, probably one of the worst in ferrari's history, who got meagre results yet managed to fumble great drivers, cars and engines, the team's reputation - and to nuke an apparently foolproof wdc campaign. impressive, really, if it hadn't been so painful to live through.

#answers #sorry if it's messy but this is the best i could do! still i suggest you go and explore other blogs and tags as well #ferrari #mattia binotto #f1 #motorsport #italian stuff

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starseedpatriot · 2 years ago

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Zuby Music delivering a banger list of media lies to his 1m Twitter followers…

What are the biggest media lies of the last few years?

-Covid-19 (all of it)

-Jan 6 'insurrection'

-'safe and effective' jab

-Jussie Smollett

-Bubba Wallace

-Covington hoax

-Kyle Rittenhouse story

-'Very fine people' hoax

-'drinking bleach'

-'horse dewormer'

-Russian collusion

-Ghost of Kyiv

-Hunter Biden laptop

-'Don't Say Gay' bill

-Twitter collapse post-Elon

-Nord Stream pipeline

-'Transitory' inflation

-Men can get pregnant

-BLM narrative

-'2 weeks to flatten the curve'

-Blaming Russia for missile that landed in Poland

This list is not exhaustive... Kinda crazy to see it laid out like this.

And people have the nerve to call ME a 'conspiracy theorist'. I didn't promote any of these.

Mainstream media has the misinformation game on lock. I can't compete. 🤣

https://twitter.com/zubymusic/status/1633595883156647936

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theculturedmarxist · 2 years ago

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By James Meadway who hosts the weekly economics podcast Macrodose and is director of the Progressive Economy Forum. Previously, he was economic adviser to the shadow chancellor, and chief economist at the New Economics Foundation. Originally published at OpenDemocracy.

The working assumption, for governments and central banks across the world, is that at some point soon everything will get back to ‘normal’ – our economies will return to either pre-pandemic or, sometimes, even pre-2008 crash levels.

These beliefs are reinforced by media economics commentary and across political parties.

But what if they’re wrong? The world’s largest asset manager, overseeing $10trn in assets across the globe, thinks we are, instead, entering a period of increased risk and uncertainty, defined by unavoidable recession and much higher inflation.

BlackRock – a well-connected, influential and hugely profitable pillar of global capitalism – made the predictions in its ‘2023 Global Investment Outlook’ report.

It states: “The Great Moderation, the four-decade period of largely stable activity and inflation, is behind us.”

Instead, BlackRock forecasts a new regime with a “brutal trade-off” – falling living standards for the many becoming profits for the few.

This reality, of a world undergoing fundamental transformations and disrupting our settled modes of existence, has so far barely entered the economic mainstream.

For BlackRock to break with this consensus might, potentially, be one of the first signs of a broader shift in how major institutions in the Western economies view the world.

Systemic chaos

Annual food inflation in the UK rose to 13.3% – an all-time high – last month, according to trade body the British Retail Consortium, ahead of the official government figures out later this month.

This situation – though slightly worse in the UK due to a flawed Brexit deal and the falling value of the pound (critical as a major food importer) – is common across the globe. Even as wholesale energy prices have dropped from their summer 2022 peak, the price of food everywhere is soaring. United Nations’ forecasts show a major risk of widespread famine in the Global South over the next year, with harvests continuing to underperform.

This global spike in prices over the past 18 months was initially described by the economic establishment as “transitory”. Then, as inflation continued remorselessly upwards, familiar explanations reappeared: notably, excessive worker power (but real wages in the Global North are still falling) and excessive printing of money through quantitative easing (but we’ve been running QE since 2009).

The economic profession as a whole, and institutions such as the major central banks, have typically written down the obvious evidence of global instability as temporary factors, rather than something more systemic.

This means we’re trapped with central banks that still think pushing up interest rates to induce a recession is a smart way to bring down inflation. We have governments committed to holding down wages and salaries while allowing profits to explode.

But BlackRock believes the world is now “shaped by supply that involves brutal trade-offs” – in other words, the world economy is less effective at supplying goods and services than it was.

The after-effects of the pandemic have caused supply chain problems, as we all know, but they also think an ageing population means fewer workers, pushing up the cost of labour; that “geopolitical tensions” will disrupt global supply chains; and that the shift to net-zero carbon emissions will involve “demand and supply mismatches”.

Put all this together, and BlackRock thinks inflation will come down to the 2% level we’ve been used to only if central banks are prepared to ‘crush’ their economies into a severe recession. Since that’s unlikely, inflation will stay much higher than we are used to – combined with a miserable recession over the next year or so.

Massive profits for the lucky few

But BlackRock’s predictions don’t cover everything.

Its report misses the longer-term effects of Covid – both in terms of the impact on healthcare and, as we’re currently seeing, continuing waves of infection. It also misses, critically, the wider ecological impacts of climate change, biodiversity loss and resource depletion.

It is possible to imagine a world where peace returns rapidly to Ukraine, and the subsequent disruptions to global food and fertiliser trade are reduced. It is not possible to imagine a world where climate change and ecological destruction are thrown into reverse – indeed, some of the effects felt today, notably, biodiversity loss, are irreversible.

This twofold combination has led ecologist Nicholas Beuret to describe a “climate supercycle” of food shortages and rising prices running well into the future. (A recent episode of my podcast ‘Macrodose’ examines the coming food shortages for UK farmers.)

And, finally, BlackRock misses the extreme profits that shortages over the last year have generated for a select few multinationals, such as those supplying oil and gas.

It’s the last part that’s critical. A more unstable world affects everyone, but it will affect everyone differently.

For most of us, on the wrong side of food price hikes and extreme weather, the future is not great. But for the lucky few, shortages have been turned, through price rises, into massive profits

#capitalism #blackrock #economics #climate change #late stage capitalism

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jeffhirsch · 1 year ago

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Open Season for Small Caps

A Soft CPI reading this morning and a nice pop in the Russell 2000 Small Cap Index today remind us that seasonally speaking, small caps are set up for their annual yearend rally into Q1, often referred to as the “January Effect,” where small caps outperform large caps in January.

Small caps have been struggling for two years now, hurt by non-transitory high inflation, the most aggressive rate-hiking regime we’ve seen since the 1980s, geopolitical turmoil with war on two fronts, fallout from pandemic and post-pandemic economic and labor woes. And the Russell 2000 small cap index recently hit a new multi-year low at the end of October.

As we point out on pages 112 and 114 of the Stock Trader’s Almanac, most of the “January Effect’s” small cap outperformance takes place in the last half of December when tax-loss selling abates. Our annual November stock basket published last week for members contains some brand-new, undervalued, off-Wall-Street’s-radar small cap picks.

As you can see in the accompanying chart the R2K has been tracking the pattern quite well since July and it looks like the small fry are coming out of hibernation just in time for small cap stock hunting season. Small cap stocks are facing several obstacles mentioned above, but they rallied strongly off the October 27 low with the rest of the market.

As illustrated in the chart, small caps exhibit some chop from late-October through mid-December. Our small cap stock picks have historically done well as long as you honor the buy limits and stop losses. Last pre-election year in 2019 R2K had a nice rally from October to January before it was crushed by the pandemic.

#CPI #Small Caps #russell 2000 #Seasonality #Santa Claus Rally

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darkeagleruins · 7 months ago

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Remember when they said it would be a "Soft Landing?" ...

Remember when they said inflation was just "transitory"?

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ellocat-poemyourpainaway · 2 years ago

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And I Hope You Can Get Over It

I hate you for not loving me-

Said his mind to her silence.

I hate you for not wanting me-

Said his violence to her absence.

I hate you because I want you

And you don’t seem to realize,

My wanting is all the entitlement I need.

I hate you because I love you-

Your autonomy violates my contract.

I hate you he said

Into the echo of her unanswered text,

I hate that you don’t realize-you belonged to me the moment I decided we belong together.

“I loved you when you needed me”

She whispered against her freedom

I loved you like the wind on a hot day-

She sang into the light.

I am so alive

You are so mad-

We pick our states and change when times Inflate-

It’s transitory.

But my currency is a flat rate, I will

Always choose joy.

I loved you truly-

Love doesn’t take hostages.

I loved you freely-

Love doesn’t erode confidence

Or break confidences.

I loved from my heart,

you love from your ego-

That’s not love.

I hate you for thinking I’m a belonging.

#poem #love #possession

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mariacallous · 9 months ago

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We’re not out of the woods yet, though there’s good news in markets: Most economists are forecasting a soft landing in 2024. But a geopolitical hard landing could get in the way.

There are tools and processes to handle macroeconomic challenges. When inflation is too high, the Federal Reserve calibrates monetary policy and interest rates, often coordinating with peer institutions like the Bank of England and the European Central Bank. The results aren’t guaranteed or uniform—economists, investors, and policymakers debate policies and their consequences. However, if higher interest rates slow the economy and reduce inflation without causing a recession, we get a soft landing. That looks like the outcome we’ll ultimately achieve, with inflation down from its peak (though still above the 2 percent target), 353,000 new American jobs in January, and the International Monetary Fund revising its global growth forecast up to 3.1 percent.

The playbook in geopolitics is not as clear, and geopolitics has become a much more pessimistic field than the dismal science. There are wars in the Middle East and Europe, tensions in the Indo-Pacific, and deeper questions about what else the “end of the post-Cold War era” will bring. A geopolitical hard landing would entail multiple, connected, and expanding conflicts and crises that could overwhelm U.S.-led international system. The results could shift the balance of power and upend global markets.

What happens in geopolitics matters for global markets and for the way we live. Today’s geopolitical challenges aren’t transitory, they’re here to stay. They require timely interventions that consider realities of politics and resources, as well as factors like fear, honor, and interest, and the priorities and interests of sovereign nation-states. Too hawkish an approach can lead to overreach and blowback, while too much dovishness invites aggression and escalation. In fact, if the United States and its partners don’t get the trade-offs right in 2024, a geopolitical hard landing looks increasingly plausible.

Today, the world faces cascading conflicts of the type we haven’t seen in decades. After a chaotic withdrawal from Afghanistan in 2021, deterrence failed to prevent Russia’s full-scale invasion of Ukraine in 2022. In 2023, deterrence also failed to prevent Hamas’s terrorist attack on Israel and Iranian-backed regional proxy attacks across the Middle East. Could deterrence one day fail in the Indo-Pacific, the world’s most populous and dynamic region? Where will the cascades stop?

Across Eurasia, the picture is not improving. Two years into a full-scale war defending themselves against Russia, Ukrainians now control more than 80 percent of their territory. But the situation on the ground remains fragile and political gridlock in Washington could result in a reversal of those gains—just recently, the Ukrainian-held town of Avdiivka fell to Russian advances. The Senate just passed by a vote of 70-29 a $95 billion aid package to Ukraine, Israel, and Taiwan—much of which would be spent in the United States restocking depleted weapons supplies—but the bill’s fate is uncertain in the House, and the United States has done its last drawdowns for Kyiv under existing authorities. And while the 27 members of the European Union agreed to a $54 billion package, they don’t have a robust industrial base and can’t produce enough artillery shells to meet their pledge of 1 million rounds by March. Meanwhile, Ukraine is rationing ammunition, and after Russia’s presidential election later this year—no surprises expected there—Vladimir Putin might be emboldened to order a larger mobilization.

Markets have largely priced in the current Russia-Ukraine war. But they may not have accounted for its long-term significance or what the war could mean for Europe. With Russia probing Finland and Estonia, German Defense Minister Boris Pistorius gave a sobering speech detailing what that could mean, saying that Germany needs to take into account that Moscow could “even attack a NATO country” in the next five to eight years.

In the Middle East, the conflicts after Hamas’s terrorist attacks on Israel on Oct. 7 represent the region’s greatest geopolitical test since the Global War on Terror. Israel continues operations to destroy Hamas while Iranian-backed proxies are escalating across at least six different theaters. The global economy and the U.S. Navy—which has been protecting international commerce since the days of the Barbary pirates—are under fire from the Houthis in Yemen. A full-scale regional war is likely not in the cards, although any escalation that brings the United States and Iran into direct confrontation could quickly change that. It’s not hard to see how it could happen, and if Iran—dominated by an 85-year-old Grand Ayatollah Ali Khamenei, the region’s longest-ruling leader—were to succeed in building a nuclear weapon, it could accelerate the chaos.

What has Washington, Wall Street, and global political and financial capitals around the world most worried, though, is the Indo-Pacific. For geopolitical reasons, China is pushing a “dual circulation” economic model and greater self-reliance at home, combined with economic embargoes against not only the United States but also countries such as Australia, Japan, Lithuania, and South Korea. At the same time, most of the tariffs that began under the Trump administration have continued under President Joe Biden, and U.S.-led restrictions have reduced semiconductor exports to China by billions of dollars. The focus on national security-sensitive supply-chain chokepoints in everything from microelectronics, to pharmaceuticals, to critical minerals and rare earths is adding friction to the global economy in ways that create risks and opportunities in other theaters.

The worst-case scenario—a military confrontation between China and neighbors such as Taiwan or the Philippines, backed by the United States—could lead to untold human losses and the greatest economic shock in generations. Bloomberg Economics recently estimated a cost of $10 trillion in the event of a war with the People’s Republic of China over Taiwan.

Historically, shocks like the 1973 Arab oil embargo and Russia’s war on Ukraine have disrupted but not upended global commerce. Today’s dynamic could be different, with acute and connected challenges across all three major regions of Eurasia, not to mention crises not in the headlines every day, such as a belligerent North Korea and contentious Venezuela-Guyana border.

The world as we have known it has assumed the leadership of a credible great power: the United States. Working with its allies and partners, the United States has built and supported the international security and economic architecture that benefits not only Americans but populations around the world. Another assumption was that no other country would have the intention and the capacity to reshape this U.S.-led international order. With challenges to U.S. leadership and a growing closeness amongst China, Iran, Russia, and even North Korea, neither assumption can be taken for granted.

The assumptions may have changed, but as with economics, nothing is inevitable in geopolitics. Last year, some forecasters said there was a 100 percent chance of a recession in 2023. They were wrong. However, soft landings don’t happen on their own—they require leadership across domains.

The war in Europe isn’t what it was a year ago. Ukraine’s 2023 counteroffensive didn’t succeed. Kyiv’s on the defensive, unlikely to take back significant territory in 2024. Russia is pushing forward and now spends 6 percent of its GDP on its military, up from 2.7 percent in 2021, and bolstered by munitions from Iran and North Korea. Meanwhile, as former Google CEO Eric Schmidt warned, Moscow has “caught up in the innovation contest” with Kyiv, domestically producing drones like the Orlan-10 and the Lancet. And after pivoting to Asian markets, Moscow has mitigated Western sanctions, while the IMF recently upped its forecast for Russia’s economic growth to 2.6 percent.

Despite setbacks, several factors still favor Ukraine even if the prospects of victory seem elusive at best. Without a single American in the fight, and at a cost of 5 percent of annual U.S. defense spending, U.S. intelligence now estimates that Moscow has lost as much as 90 percent of its 2022 invasion force. Ukraine is winning the battle of the Black Sea, and the grain corridor out of Odessa was open to over 33 million tons of grain and foodstuffs in the first six months of last year, two-thirds of which went to the developing world. Ukraine is targeting Russian-controlled infrastructure, including around Crimea. Kyiv is also expanding its defense industrial base, launching a Defense Industries Forum with 252 companies from 30 countries.

While Europe has been slow to bolster its own defense infrastructure, there’s momentum. European defense spending was up 6 percent in 2022, led by front-line democracies like Finland, Lithuania, Sweden, and Poland. Still, most of the NATO alliance’s members fail to meet their 2014 Wales Pledge to spend 2 percent of their GDP on defense, and even U.S. defense spending as a percent of GDP is projected to decline over the next 10 years, from 3.1 percent in 2023 to 2.8 percent in 2033. Ukraine cannot hold back a country 28 times its size, and with a population more than three times larger, without Western assistance. Likewise, European—let alone global—security can’t be sustained by diminishing deterrence capabilities.

In the Middle East, the main questions being asked today are about the “day after” in Gaza, or when and how the Houthi attacks in the Red Sea and Iranian-back proxy attacks in Iraq will stop. Tehran has created a new normal of instability and chaos and has little incentive to see a ceasefire hold. The Houthis—once a relatively obscure Shi’a proxy group in Yemen—are now the heroes of much of the Arab street.

Iran’s strategic advantage in the short term has been enhanced by a radically changed information environment, where the “social-mediafication” of war means there are more hours of footage uploaded across all the popular social media platforms than there are seconds of the war. The ramifications are unpredictable—after all, many of the al Qaeda terrorists behind 9/11 were radicalized by pre-algorithmic content they saw coming out of war in Bosnia in the 1990s. Today’s AI-powered algorithms supercharge the risk.

The return to the bad old days, made worse by hyper-targeted online radicalization, needn’t happen, however. The Abraham Accords are holding. The Sunni Gulf countries are focused on transformation projects like Saudi Arabia’s Vision 2030, as they work to ensure that their economic progress is impacted as little as possible by geopolitics. Despite what’s happening in the Red Sea, their engagement with the international business community is largely uninterrupted. The same is true with Qatar.

The two factors that would bring the region back from the brink are restored deterrence against Iran and integration between Israel and the Gulf States. That means recognizing that Iran and its “axis of resistance” are the cause of today’s chaos. It requires working with partners like the UAE and Saudi Arabia, which has relaunched defense talks with Washington and whose senior officials have said repeatedly that they are “absolutely” still interested in normalization with Israel.

The South China Sea and Taiwan Strait are dangerous but, thankfully, at peace. There was good news out of San Francisco from the November meeting between Chinese President Xi Jinping and Biden. China’s responses to Taiwan’s election on Jan. 13 were more restrained than many expected. Now, much depends on how Beijing reacts to William Lai’s inaugural statements when he becomes Taiwan’s president in May.

But while Taiwan occupies our strategic focus today, it’s not the only potential hot spot. China borders 14 countries, giving it more land neighbors than any other state. Beijing has territorial disputes with nearly every country with which it shares a border; each of those disputes presents risks.

Still, maintaining an acceptable peace in the Indo-Pacific is possible. China’s more aggressive posture has driven significant changes in Australia, India, Japan, the Philippines, and South Korea, leading to minilateral coalitions for stability. The Quad, AUKUS, summits with South Korea and Japan, and basing agreements with the Philippines are a few such examples of how these countries are tightening cooperation with each other, and with the United States, Japan has committed to a sea change in defense policy that could turn the Japanese military into the world’s third largest by 2027.

In all this, however, there’s a missing link: Washington doesn’t yet have a strategy for economic engagement in the region. While agreements like the Beijing-backed Regional Comprehensive Economic Partnership expand, the Biden administration’s Indo-Pacific Economic Framework (IPEF) is stalled, and IPEF—which the White House has described as “not a trade agreement”—is not a replacement for the Trans-Pacific Partnership. Washington’s economic policy should communicate that it is not a distant power but a reliable economic partner. As the NATO alliance nears its 75th anniversary, leaders need to be committed both rhetorically and in practice to sustaining peace and prosperity wherever it is challenged.

These geoeconomic forces are of concern to publics around the world. They aren’t, however, the domain of the public sector alone. Many of the same market dynamics bringing us in for an economic soft landing can be assets in global affairs. Global companies cannot succeed in a world at war, and the United States and its allies and partners can’t keep the peace without the growth and innovation made possible by the private sector.

The two sectors where this dynamic is clearest are in energy and emerging technologies. Developing new and sustainable energy sources is one of the best geopolitical and economic moves possible, and it’s largely due to private sector-led innovations that the United States has been the world’s top crude oil producer since 2018 and top liquid natural gas exporter since last year. In the coming years, technologies such as generative artificial intelligence—where the United States is leading—will be wildcards and lifelines in geopolitics, and technology companies will become greater geopolitical stakeholders. Such domains are where democratic societies—with deep and open capital markets, the rule of law, and property rights—have advantages that are sources of legitimacy, stability, and growth.

Building on those advantages this year, when 60 percent of the world’s population is heading to the polls, is a necessity. Billions of people voting for their leaders is welcome news after years of democratic decline globally documented by organizations such as Freedom House. But the coming changes in governments around the world could also make the end of this year very different from its beginning.

In particular, the 2024 U.S. presidential contest may be the most consequential in decades, not to mention one of the most significant geopolitical issues for other countries. Foreign policy is rarely top of mind for voters, but the people’s choice may have even greater ramifications for global affairs than for the economy. Trade and industrial policies adopted by either administration may bolster some sectors at home but elicit pushback abroad, including from partners. New approaches to America’s role in the world can reassure friends or embolden adversaries. And every leader is preparing by hedging their bets for either a Biden or Trump outcome.

In 2023, we understood what an economic hard landing might mean and took timely, prudent actions to prevent it. In 2024, it’s time to recognize that a geopolitical hard landing is possible and for every sector of society to meet this moment with the seriousness it demands.

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abr · 2 years ago

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"Mild recession" is the new "transitory inflation"

via zerohedge

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darkmaga-returns · 5 days ago

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Top Bankster was asked if he would step down if asked by Donald Trump

Nov 08, 2024

Jerome Powell, the head bankster at the Federal Reserve most famous for calling inflation “transitory” for months before admitting any need for tighter monetary policy, told reporters Thursday that he will not step down if asked by President-elect Donald Trump.

“No,” he told reporters, before stating that his job is protected “under the law.”

The New York Times noted that Powell was Trump’s pick for the job in 2018 but the relationship was never smooth. The paper noted that Trump “has continued to criticize the Fed, leading to speculation that he could try again to fire Mr. Powell — or pressure him to resign.”

But the paper also noted that the Fed operates independently from the White House “which means that it sets interest rates without needing approval from the president or administration.”

(The Trends Journal has long noted that the Fed likes to keep the party in charge, in charge, which is why the magazine forecasted that the central bank would cut rates just in time for the presidential election, in hopes of artificially inflating the stocks and making voters more prone to vote for Kamala Harris.)

Powell announced another 25-basis-point rate cut to bring interest rates to a range of 4.5 to 4.75 percent.

Since 2021, food prices have shot up 22 percent and passenger vehicle insurance 47 percent, CNBC analyst Jeff Cox wrote in a 19 October essay. The median U.S. home price has soared 30 percent since 2019.

In short, prices and interest rates are still uncomfortably high for too many people.

Before the Ukraine War began, inflation rates hit a 40-year high.

The word on The Street at the time was that the Fed was going to raise interest rates 0.50 percent after a year of denying inflation was rising… claiming inflation was just “temporary” and then “transitory.”

In March 2022, Powell said the central bank would raise its key interest rate by only 0.25 percent. (The rate had been near zero since the start of the COVID War.)

The Fed’s insistence that soaring inflation was “transitory” was “one of the worst calls in decades,” Mohamed El-Erian, president of Queens College, Cambridge, and a senior advisor to Allianz, said in comments quoted by the Financial Times.

If the Fed had grasped the consequences of keeping interest rates low amid a cash-rich economy with too few goods available, it would have been able to recognize inflation’s dangers early on, he added.

TREND FORECAST: Totally omitted from the mainstream business media is the soaring price of gold. As Trends Journal subscribers well know, but blacklisted by the media, is our 2 January 2024 trend forecast that this year would be a Golden Year for gold. Since that forecast, as we go to press, gold prices have spiked some $700 per ounce. Among the reasons gold prices are rising is that there is a general consensus that inflation is here to stay and that the prices have sharply spiked as a result of nations pumping in countless trillions of dollars—backed by nothing and printed on nothing—to fight the COVID War have created an inflation cycle that will keep on rising.

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