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Monday, October 31, 2022

The era of low interest rates is not over. And this is so obvious I don't even know why I have to write this... — Ari Andricopoulos

Private Sector Debt is the Problem. Much Higher Government Deficits are the Solution. Except in the Eurozone where Euro is the problem and no Euro the solution.

Notes on the Next Bust
The era of low interest rates is not over. And this is so obvious I don't even know why I have to write this...
Ari Andricopoulos




 

Bill Mitchell — Degrowth, deep adaptation, and skills shortages – Part 4

One of the ‘problems’ besetting the world at present, if the commentary in the mainstream press is anything to go by, is the existence of chronic skill shortages. Survey studies of the shifting demographics in Japan, for example, have produced ‘alarming’ results from a mainstream perspective. See for example, this OECD Report from 2021 – Changing skill needs in the Japanese labour market. I was at a meeting recently in Kyoto and it is clear that many firms in Japan are having trouble finding workers and many have even offered wage increases to lure workers to their companies. Further, many small and medium-size businesses are owned by persons who are over 70 years of age and that proportion is rising fast. The skill shortage scenario is tied in with the ageing society debate, where advanced nations are facing so-called demographic ‘time bombs’, with fewer people of working age left to produce for an increasing number of people who no longer work. The mainstream narrative paints these trends as major problems that have to be confronted by governments, and, typically, because of faulty understandings of the fiscal capacities of governments, propose deeply flawed solutions. I see these challenges in a very different light. Rather than construct the difficulties that firms might be facing attracting sufficient labour (the ‘skills shortages’ narrative), I prefer to see the situation as providing an indicator of the limits of economic activity or the space that nations have to implement a fairly immediate degrowth strategy. In the following two blog posts I will explain how this inversion of logic can become a crucial plank in the degrowth debate.…
Bill Mitchell – billy blog
Degrowth, deep adaptation, and skills shortages – Part 4
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Sunday, October 30, 2022

Powerball reaches $1B

 

If I were God, I would make it so NO …. ONE ….. and I mean NOOOOOOO… OOONNNNE…. would ever win the f-ing lottery … and then… ALL the f-ing munnie  … and I mean ALLLLLLL the f-ing munnie.,,, ended up in the f-ing lottery!!! 

😂😂😂😂 now THAT would be f-ing funny!

#goldenhemorrhoids  #fuckthemonetarists


https://whyevolutionistrue.com/2012/06/29/more-bible-lolz-gods-golden-hemorrhoids/





Friday, October 28, 2022

Putin: ‘The Situation Is, to a Certain Extent, Revolutionary’ — Pepe Escobar

The foundation for evolving multipolarity has in fact been presented

by the Russia-China strategic partnership only three weeks before imperially-ordered provocations forced Russia to launch the Special Military Operation (SMO).

In parallel, the financial lineaments of multipolarity had been proposed since at least July 2021, in a paper co-written by Professor Michael Hudson and Radhika Desai.
Michael Hudson is becoming a chief economic spokesperson for the emerging multipolar world.

Strategic Culture Foundation (sanctioned by the US Treasury Department)
Putin: ‘The Situation Is, to a Certain Extent, Revolutionary’
Pepe Escobar


This is my new thing...home coffee roasting.

I have a new hobby: coffee roasting. I am really into it. If you like coffee, there is nothing like the taste, effects and BENEFITS of a cup of coffee made from freshly roasted coffee beans.

Commercial coffee that you buy in your local supermarket or even in a gourmet food shop is dead. It lacks the flavor and health benefits (there are many: antioxidants, polyphenols, anticarcinogenic compounds, etc.) Whereas freshly roasted coffee is loaded with these things and much more.

Green coffee beans can stay fresh for a long time, but once roasted, the beans can get stale fast. I drink it 48 hours after I roasted. That time is needed to allow the beans to "de-gas" after roasting. (Releasing carbon dioxide and other gasses.)

I recently bought this home roaster. Here is a video of a batch of Vietnamese robusta I roasted up a few days ago.


 

Thursday, October 27, 2022

Everybody wants to hop on the BRICS Express — Pepe Escobar

The good news is that decolonization is in full swing. The bad news is that the West, which won't go quietly, is being forced into a corner.

The Cradle
Everybody wants to hop on the BRICS Express
Pepe Escobar

See also

RT (Russian state-sponsored media)
Putin calls for ‘dialogue on equal terms’ with the West

TASS (Russian state media)




‘Oil War’ Unleashed by Biden’s SPR Release Could Mean $300-a-Barrel Crude, Analyst Warns — Ilya Tuskanov

Saudi Energy Minister Prince Abdulaziz bin Salman talks some sense, and analyst Dr. Ahmed al-Ibrahim accuses the Biden Administration of politicizing energy by interfering with markets with an eye on the midterms.

Sputnik International (Russian state-sponsored media)
‘Oil War’ Unleashed by Biden’s SPR Release Could Mean $300-a-Barrel Crude, Analyst Warns
Ilya Tuskanov

Slouching Towards Reverse Colonialism — Yves Smith

Dissection of contemporary US-led neo-imperialism and neocolonialism as tools of neoliberalism as the basis for continued Western dominance in an era in which decolonization goes by the name "multipolarity."

Naked Capitalism
Slouching Towards Reverse Colonialism
Yves Smith

See also at NC

The Oil Industry’s Message to You
Thomas Neuburger.
Originally published at God’s Spies

The Next Era of Reform — Nie Riming

Lots of numbers. Basically, a call for more urbanization.

Sixth Tone (China)
The Next Era of Reform
Nie Riming

Tuesday, October 25, 2022

U.S. Accelerates Three-Tier Plan To Reduce Oil Prices — Simon Watkins

U.S. President Biden has three key strategies in place to lower oil prices.
  • The first and foremost strategy is the implementation of the NOPEC bill.
  • The second pillar of the plan is to release more crude from the U.S. SPR.
  • The third element of the plan to bring oil prices down is to be a concerted effort to encourage U.S. oil firms, shale or otherwise, to increase their production.
Oilprice

Monday, October 24, 2022

Russia Warns Europe: Natural Gas Price Cap Means Full Supply Cut-Off Simon Watkins.

The buyer's cartel bombs out of the gate. Europe, the UK and the US no longer have the clout. Getting used to it will be painful and may involve lashing out.

Oilprice
Russia [Gazprom] Warns Europe: Natural Gas Price Cap Means Full Supply Cut-Off
Simon Watkins.

Why would it make sense to pay more tax-credits to those holding tax-credits? — Clint Ballinger

Imagine a new democracy imposes taxes on itself; the tax-credit is then spent, taxed back, thus provisioning public goods in the process.

Not all spending is taxed back, thus the public has savings of tax-credits.

Why would it make sense to pay more tax-credits to those holding tax-credits?....
ClintBallinger.com
Clint Ballinger

The UK's debt crisis is going to be unique. And not in a good way. — Philip Pilkington

Boris Johnson has dropped out of the leadership race in Britain. Word on the street is that this means that Rishi Sunak has all but gotten the job. Sunak has long been the City of London’s candidate, having held a career in finance before he became an MP. He started as an analyst at Goldman Sachs and then moved into hedge funds. By all accounts, Sunak is a smart chap who understands markets.

Already the chatter has started that Sunak’s tenure is going to be less a government than a transitionary period where Britain enters into receivership. Sunak’s rule will therefore resemble many of the ‘technocratic’ governments that we have seen pop in and out of existence in the Eurozone since the debt crisis of 2011. Yet, Britain’s time in the debtor’s prison will look very different to what happened in Europe in key respects.…
The UK is running up against the limits of real resources, resulting in a falling standard of living.

See also

The Gower Initiative for Modern Money Studies

Bill Mitchell — A circular system of nonsense–conventional media reporting on the monetary system

There were two headlines on Australia’s national broadcaster, the ABC’s news site this morning that tell us that there has been little progress made in helping people better understand the way the monetary system operates and the capacities of the currency-issuing government within it. Both articles merely rehearsed the standard mainstream fictions, which makes them dangerous, in that they perpetuate the system that has held the world back from addressing its major challenges. By creating false ‘challenges’ and false ‘probabilities of crisis’, these stories delay action that is necessary to deal with the real problems of climate change, inequality, degradation of public infrastructure and services, the health crisis, etc
The other problem is that these ‘analysis’ columns pretend to be balanced with is a ruse to bestow legitimacy or authority on themselves. ‘Experts’, who are wheeled out to ratify the fiction, are just part of the Groupthink. It is a circular system of nonsense. Very disappointing....
Bill Mitchell – billy blog
A circular system of nonsense – conventional media reporting on the monetary system
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Misreading Xi and the rise of Li — Uwe Parpart

How Western analysts and leaders confuse their projections, here about China, with reality, hnece, fail to grasp what is actually happening. This violates Sun Tzu's first precept: know yourself and know your adversary. (Art of War, 3:18)

Uwe Parpart that Xi is not resurrecting Mao and moving away from Deng, in fact, just the opposite.
Ideologically blinded Western analysts and officials consistently miss the point. China’s state is the least ideological, most ruthlessly pragmatic entity in the world. To the extent its leaders succeed, they do so by achieving prosperity and security by whatever means necessary to meet their objectives.... 
Asia Times
Misreading Xi and the rise of Li
Uwe Parpart

Sunday, October 23, 2022

Universalise Public Services, Fund Job Guarantee, Provide Generous Income Support’ Sowmya Sivakumar interviews — Fadhel Kaboub

 In the second and last part of the interview, MMT economist Fadhel Kaboub explains why and how India should urgently work on an alternative framework of development that leaves no one behind.
News Click
Universalise Public Services, Fund Job Guarantee, Provide Generous Income Support’
Sowmya Sivakumar interviews Fadhel Kaboub

Saturday, October 22, 2022

A Short History — Robert Vienneau

Summary of economics since William Petty in a few paragraphs viewing marginalism as a boondoggle.

Thoughts On Economics
A Short History
Robert Vienneau

Chinese companies rush to fill empty niches in Russia — Union

This was pretty obvious. Vacuums get filled.

TASS (Russian state media)
Chinese companies rush to fill empty niches in Russia — [Russian-Asian] Union [of Industrialists and Entrepreneurs (RAUIE)]

How About a Nice Game of Chess? — Clint Ballinger

In modern states, demand for currency comes from the ongoing self-imposed liability for the currency. There is no need to pay savers in order for them to desire to hold the currency (interest on sovereign bonds issued for “deficit spending”). Any justification for doing so must rest on some other perceived benefit of paying savers....
ClintBallinger.com
How About a Nice Game of Chess?
Clint Ballinger

RT — EU wants to use 'frozen' Russian assets to finance Ukraine

Further undermining the trust that is foundational to the global economy as the sanctity of property is jettisoned. Freezing assets is one thing, and confiscating assets for use is entirely different matter.

RT (Russian state-sponsored media)
EU wants to use 'frozen' Russian assets to finance Ukraine

Europe is Being Subjugated to US Power — Wolfgang Streeck

The economic crisis in Britian, the war in Ukraine, and the disorder in the Eurozone are all intimately connected. Chris Bambery spoke to Wolfgang Streeck, an economic sociologist at the University of Cologne and a leading commentator on European capitalism, about the crisis in the EU and the implications for Scotland....
Conter
Europe is Being Subjugated to US Power
Wolfgang Streeck, emeritus director at the Max Planck Institute for the Study of Societies in Cologne

Debunking Net Zero, Carbon Offsets, Nature-Based Solutions, Climate Smart Agriculture, Bioeconomy… — Lynn Fries

Yves here. We’ve repeatedly challenged various brave green future schemes as rearranging deck chairs on the Titanic. Advanced and major emerging economies need to engage in radical conservation to have any hope of preventing the worst climate change and mass species dieoff outcomes. Instead we have a host of cleverly branded proposals that are at best hopium and at worst conventional energy producer devices to forestall change and most importantly, cutbacks.

This interview does the important service of identifying ten key greenwashing phrases and explaining why they would be regarded with prejudice....
No politician or political party could withstand the reaction of the electorate to imposing the kind of policy that is required if climate change is real and the threat that many climate scientists foresee unfolding unless action is taken to mitigate it. The point of avoiding it has apparently been passed.

Naked Capitalism
Debunking Net Zero, Carbon Offsets, Nature-Based Solutions, Climate Smart Agriculture, Bioeconomy…
Lynn Fries. Originally published at GPEnewsdocs

The US Government Sees Silicon Valley As Part Of Its Propaganda Machine — Caitlin Johnstone

Is the US government about to nix Elon Musk's Twitter purchase on national security grounds. That this is even being discussed is representative of the level of control the government, in this case, the executive branch acing unilaterally, can exert over the economy at a foundational level for political reasons. It also brings up legal questions about freedom of expression since the US is not technically at war with anyone, although in a sense it is at war economically with just about everyone.

Interesting article. Caitlin Johnstone is Australian living in Melbourne.

CaitlinJohnstone.com
The US Government Sees Silicon Valley As Part Of Its Propaganda Machine
Caitlin Johnstone

Russia’s homage to Nord Stream pipelines — M.K. Bhadrakumar

Turkish gas hub supplied by Russia to replace Nord Stream. The energy scene is hotting up.

India Punchline
Russia’s homage to Nord Stream pipelines
M.K. Bhadrakumar | retired diplomat with the Indian Foreign Service and former ambassador.

See also

EU foreign-policy chief Josep Borrell confessed the West’s neoliberal economic model was “based on cheap energy coming from Russia,” “access to the big China market,” and low-paid Chinese workers. Europe has now lost that, and is thus in crisis....
Anyone taking bets on how long the governments in Europe will la…

China supply chain cut would cost Japan 10% of GDP — Scott Foster

International trade is the foundation of the global economy. The global economy is the life-support system of the world system.

Asia Times
China supply chain cut would cost Japan 10% of GDP
Scott Foster

Friday, October 21, 2022

There’s a Whole Ideological Package That Goes With Raising Interest Rates: Fadhel Kaboub — Sowmya Sivakumar

Modern Monetary Theory (MMT) is an alternative economic framework that challenges the conservative neo-liberal narrative of ‘free trade’ and ‘competition’ which has held sway for many decades as the way to global prosperity. In simple terms, MMT makes us see that money is completely a creation of the State, and hence, a sovereign government does not need our money (either through taxes or borrowing) in the first place to strategically spend it, that is, without causing inflation. And that frees the ‘fiscal’ constraint to address the most pressing problems of our times: socio-economic inequality, exclusion and climate change.

Fadhel Kaboub, Associate Professor of Economics at Denison University, Ohio (US), and President of the Global Institute for Sustainable Prosperity, is a leading voice in the global MMT community and among a handful of economists who speaks of MMT’s relevance for emerging countries like India. In this first part of a two-part ilong-distance nterview with independent journalist Sowmya Sivakumar, he explains how MMT is slowly shifting the debate in the US, with important lessons for India and rest of the world. Edited excerpts:
News Click (India)
There’s a Whole Ideological Package That Goes With Raising Interest Rates: Fadhel Kaboub
Sowmya Sivakumar

Fadhel Kaboub is President of the Global Institute for Sustainable Prosperity and Associate Professor of economics at Denison University. He also held a number of research affiliations with the Levy Economics Institute, the John F. Kennedy School of Government at Harvard University, the Economic Research Forum, and the Center for Full Employment and Price Stability. Dr. Kaboub is an expert on Modern Monetary Theory (MMT), the Green New Deal, and the Job Guarantee. His work focuses on public policies to enhance monetary and economic sovereignty in the Global South, build resilience, and promote equitable and sustainable prosperity. He is a widely published author and his recent work has been presented at many prestigious institutions including the Harvard Kennedy School of Government, Harvard Law School, Cornell University, Columbia University, Duke University, Sorbonne University, and the National University of Singapore. His academic work has been published in the Journal of Economic Issues, Review of Keynesian Economics, Review of Radical Political Economics, Review of Social Economy, International Journal of Political Economy, Middle East Development Journal, and International Labour Review. Some of his recent media commentaries on MMT, climate change, employment, development, finance, and the Middle East economies have appeared in the New York Times, Financial Times, Bloomberg, Le Monde, The Guardian, La Croix, Al-Jazeera, France 24, Deutsche Welle, The Hill TV, Radio France Internationale, Asharq News, Al Hurra TV, CGTN Africa, National Public Radio, New Inquiry, BBC Mundo, Carta Maior, Diwan TV, Saudi Gazette, Express FM, Assabah News, Le Quotidien, and La Presse.

Dr. Kaboub earned his bachelor’s degree in economics from the University of Tunis – El Manar, and his Master’s and Ph.D. in economics from the University of Missouri-Kansas City. Before settling at Denison University in 2008, he taught at Simon’s Rock College of Bard (Massachusetts) and at Drew University (New Jersey) where he also directed the Wall Street Semester Program.

— Global Institute for Sustainable Prosperity 

Runs, Cascades, Squeezes, and Crises — Brian Romanchuk

Recent discussions about bank runs in economics has led me to the conclusion that economists want to lump practically all behaviour around default as a “run,” which is not helpful. In order to have a better grasp of the situation, we need to distinguish various possibilities — runs, cascades, squeezes, and good old fashioned financial crises.…
Some useful definitions.

Bond Economics
Runs, Cascades, Squeezes, and Crises
Brian Romanchuk

Fed transferring $4B per week

 

This another way to look at it… Fed is transferring more USD balances to non-govt than Treasury would if the Fed owned zero assets… 



Somewhat of a non Congress approved fiscal transfer…

where are these transfers going?  To IOR and RRP… IOR going to Depositories as additional accrued Capital and RRP interest going to USD savers in Money Market Mutual Funds…

Should increase from $4b to $6b per week within a couple of months…  🤑🧟‍♂️


Thursday, October 20, 2022

Energy Crisis Poses Existential Threat To Europe’s Industry — Tsvetana Paraskova

  • European industries are struggling to stay competitive amid soaring energy costs.
  • Surging natural gas and electricity costs have resulted in a jump in operational costs for all industries, from steelmaking and car manufacturing to textiles and clothing.
  • Europe’s industry associations cautiously welcome the various EU proposals, but urge Brussels to take further action
German industry is not competitive without inexpensive energy piped in from Russia based on longterm contracts rather than spot prices. LNG transported by ship is too expensive. So while Germany may be able to met its gas needs by bidding up the price of energy, this will not address the competitiveness issue. But even that is hypothetical, since the infrastructure for importing LNG is not yet in place and LNG is also restricted by the scarcity of vessels required to transport the desired quantities.

‘Peaceful modernization’: China’s offering to the Global South — Pepe Escobar

Xi Jinping just offered the Global South a stark alternative to decades of western diktats, war, and economic duress. 'Peaceful modernization' will establish sovereignty, economy, and independence for the world's struggling states...
The Cradle
‘Peaceful modernization’: China’s offering to the Global South
Pepe Escobar

Russia creates new geography of global trade — PM Mishustin

The world is bifurcating into the US-led system and others. This is simultaneously leading to a split in world trade including settlement, which is the foundation of the global economy. In this sense, multipolarity is already here and the question is whether the US can reverse it.

BTW, economic geography is a key aspect of economics. (It is Paul Krugman's side interest.) Economic geography is foundational to the world system.

The world system is primarily an information system, which in modern times deepened and broadened owing to advances in communication and transportation technology. The global financial system is chiefly an information system, for example, whereas world trade involves trafficking in real goods.

The global financial system is about become more complex with multipolarity, and world trade will likely contract during the transition period unless the US and its allies are able to counter the drive toward multipolarity. That is unlikely to happen without involving kinetic war. Ukraine and Taiwan are the focal points now.

Michael Roberts — China: Xi’s third term – part 3: chips, dual circulation and imperialism

Important! Decoupling seriously on.

Implications for global trade and world economy uncertain, i.e., has the US thought this through systematically. Judging by the sanctions "war" to date, probably not. Anyway, thinking through changes and likely consequences in a huge complex adaptive system like the world system  is difficult to impossible. All that can be said  at this point is that there will be surprises. This is a huge escalation. One thing can be said with assurance about the Biden administration — Biden and his people are high rollers, escalating existential confrontation with Russia and China simultaneously.

Michael Roberts Blog — blogging from a marxist economist
China: Xi’s third term – part 3: chips, dual circulation and imperialism
Michael Roberts

Fed directly offering new US government USD obligations

 

Seems to be some confusion out there so here you can see in this Government Money Market Mutual fund prospectus that the Fed has created a new govt obligation for USD savers to save in… 


They have $20b (fund’s largest holding) in a RRP with the FRBNY at the 3.05% RRP rate: 



This is going to go up towards 4% in two weeks then towards 5% in December… 🤑🧟‍♂️🤑🧟‍♂️

This RRP asset has been created as an alternative to a depository account at a system Depository Institution for USD savers because those institutions don’t have a high enough value of regulatory assets to allow these USD balances to be on deposit there…  due to the regulatory asset value reduction effects of the Fed’s own policy rate increases themselves…

Rube Goldberg arrangements but it’s still understandable…


Wednesday, October 19, 2022

Banks gouging super profits, yield curve inversion – nothing good is out there — Bill Mitchell

It’s Wednesday and we have some snippets that really just make way for the music feature. Today, I consider the recent inversion of the US yield curve, which is typically a sign that recession is around the corner. We also learn that while most people are being hit with rising prices and flat wages, the banks are recording record net interest income as a result of their non-competitive, cartel like behaviour. And we wonder how more silly can the Swedish central bank prize in economics become. And then, after all that, we have the music feature to rescue the day.…
Bill Mitchell – billy blog
Banks gouging super profits, yield curve inversion – nothing good is out there
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Tuesday, October 18, 2022

Politics & War

A post by Steve Waldman -- Peace as war by other means -- reminds me of a recent post by Big Serge: Politics By Other Means - Putin and Clausewitz.  I highly recommend that post in its entirety.  It is a tour de force, in my opinion.  Both the Waldman and Big Serge posts zoom out to look at the long term interests for the two sides in the current war.  Both recognize that “War is the mere continuation of politics by other means", as Clausewitz wrote.  

The Waldman post suggests that we move from war back to non-violent politics.  Russia and Ukraine have legitimate differences which can't be papered over.  Since war is often lose-lose, it would make sense for the two countries to compete for hearts and minds in the political and economic arenas.  May the best country win, but not at the expense of tens of thousands of soldiers and innocent civilians.

Big Serge, on the other hand, sees that Russia has the laid the groundwork for victory in an existential battle with the West.  Russia has been losing politically for years or decades, and Russian leadership came to the conclusion that its very existence as an independent culture was at stake given the political trends and the positioning of the Western military.  The Russian leadership therefore consciously chose to go to war in Ukraine in order to turn the political tide.  The current war will be win-lose, and Russia will win in that their political objective of stopping Western encroachment will be achieved.

If Big Serge is right, and I think he is, then Russia would be foolish to enter into a negotiated ceasefire at the present time, as long as Ukraine remains militarized by NATO.  Better to press the military advantage and drive NATO out of Ukraine.  Politically, this will be an obvious loss for the West.  The West will have to recognize Russian sovereignty and respect its hegemonic influence in neighboring countries.  

So, in my opinion, Waldman's proposal would be good for the West but not for Russia.  Yet, there seems to be little chance that the West will negotiate in the near future (as documented extensively by Aaron Mate).  The West is unable and/or unwilling to see that negotiations such as Waldman proposes would be in its own best interests.  This points to deeper problems in Western societies.

War is indeed politics by other (violent) means.  The West is engaged in a proxy war.  Russia is engaged in an existential war.  As Big Serge puts it:

Putin and those around him conceived of the Russo-Ukrainian War in existential terms from the very beginning. It is unlikely, however, that most Russians understood this. Instead, they likely viewed the war the same way Americans viewed the wars in Iraq and Afghanistan - as justified military enterprises that were nevertheless merely a technocratic task for the professional military; hardly a matter of life and death for the nation…

What has happened in the months since February 24 is rather remarkable. The existential war for the Russian nation has been incarnated and made real for Russian citizens. Sanctions and anti-Russian propaganda - demonizing the entire nation as “orcs” - has rallied even initially skeptical Russians behind the war, and Putin’s approval rating has soared. A core western assumption, that Russians would turn on the government, has reversed. Videos showing the torture of Russian POWs by frothing Ukrainians, of Ukrainian soldiers calling Russian mothers to mockingly tell them their sons are dead, of Russian children killed by shelling in Donetsk, have served to validate Putin’s implicit claim that Ukraine is a demon possessed state that must be exorcised with high explosives. Amidst all of this - helpfully, from the perspective of Alexander Dugin and his neophytes - American pseudo-intellectual “Blue Checks” have publicly drooled over the prospect of “decolonizing and demilitarizing” Russia, which plainly entails the dismemberment of the Russian state and the partitioning of its territory. The government of Ukraine (in now deleted tweets) publicly claimed that Russians are prone to barbarism because they are a mongrel race with Asiatic blood mixing.

Simultaneously, Putin has moved towards - and ultimately achieved - his project of formal annexation of Ukraine’s old eastern rim. This has also legally transformed the war into an existential struggle. Further Ukrainian advances in the east are now, in the eyes of the Russian state, an assault on sovereign Russian territory and an attempt to destroy the integrity of the Russian state. Recent polling shows that a supermajority of Russians support defending these new territories at any cost.

All domains now align. Putin and company conceived of this war from the beginning as an existential struggle for Russia, to eject an anti-Russian puppet state from its doorstep and defeat a hostile incursion into Russian civilizational space. Public opinion is now increasingly in agreement with this (surveys show that Russian distrust of NATO and “western values” have skyrocketed), and the legal framework post-annexation recognizes this as well. The ideological, political, and legal domains are now united in the view that Russia is fighting for its very existence in Ukraine…

All that remains is the implementation of this consensus in the material world of fist and boot, bullet and shell, blood and iron.

The deeper problem in Western society is that we do not understand what we are up against and why.  We have been blinded by propaganda and even valiant attempts to light the way such as this by Steve Waldman may be seen as outrageous (although there are many disclaimers here blaming Russia as being solely at fault).  We the people of the West need to expand our horizons, in my opinion.  The future for our children's children's children depends on us coming to terms with political reality.  We need to end the hot war in Ukraine and the new Cold War by recognizing the limits to the projection of our military power, and by embraciing and strengthening international institutions with the potential to solve conflicts peacefullly and limit arms races.

Bannon & Summers both not on “team transitory”

 

MAGA-GOP just using Biden/Summers own analysis against Democrats every day…







Monday, October 17, 2022

Picking an Economic Fight With China is Unwise — Philip Pilkington

Expect the consequences to be grim

Mistaken assumptions and failure to think things through have consequences, not to mention ignoring the structure and function of the world system.

Macrocosm
Picking an Economic Fight With China is Unwise
Philip Pilkington

China To Stop Reselling LNG To Europe — Charles Kennedy

  • Chinese state-owned energy giants have been recently told by authorities to stop reselling liquefied natural gas.
  • In recent months, Chinese LNG importers have been selling their excess inventories to Europe.
  • Europe’s LNG supply could dwindle just ahead of the winter heating season.
The National Development and Reform Commission (NDRC), China’s top planning body, has told the country’s state-held LNG importers, including Sinopec, PetroChina, and CNOOC, that they should stop reselling LNG cargoes and keep them to ensure Chinese gas supply this winter, sources familiar with the development told Bloomberg on Monday....
Oilprice
China To Stop Reselling LNG To Europe
Charles Kennedy

The Business of America Is War — W.J. Astore

MICIMATT (Military-Industrial-Congressional-Intelligence-Media-Academia-Think-Tank complex h/t Ray McGovern, former CIA official)

Bracing Views
The Business of America Is War
W.J.  Astore, Lieutenant Colonel (USAF ret.), taught at the Air Force Academy, the Naval Postgraduate School, and currently at the Pennsylvania College of Technology

See also

Nothing new to see here. As Lt. Col. Astore says, it's been going on since Napoleon. What has increased is the scale.

War Is a Racket (1935) by Gen. Smedley D. Butler,

The Markets Made Me Do It! — Brian Romanchuk

Of course, this is a variant of the “bond/currency vigilantes” stories that neoliberals love, and so features prominently in market discourse.

The reaction in the bond market should have been predictable by the Chancellor. In the current environment, looser fiscal policy is going to be met with higher policy rates. The trickier part of the situation was the fragility of the liquidity situation of U.K. pension funds — which the Treasury should have been aware of, since they have an entire team dedicated to meeting investors to gauge demand along the yield curve.

Returning to the MMT wrangling, since none of this should surprise anybody, it tells us nothing about MMT. However, I want to push back against the “financial markets constrained the government” narrative.

The MMT argument is that inflation constrains fiscal policy, and that is what happened. Under current institutional arrangements, the central bank reaction function is to hike rates as inflation rises (modulo the growth outlook). The Truss government should have been aware of the potential of such a reaction, and so this is just telling us what happens when amateurs run fiscal policy.

Saying that anything else is the constraint runs into problems.

Even scarier is when amateurs run foreign policy and military policy.  In this regard, Liz Truss doesn't even qualify as an amateur. Regarding fiscal policy, she is dangerous to Brits. Regarding foreign and military policy, she is a danger to the world. However, the reality appears to be that with respect to foreign and military policy, politicians are simply tools of the Deep State and oligarchy in the UK.

Bond Economics
The Markets Made Me Do It!
Brian Romanchuk

The danger is from Chancellors who want to balance the books — Richard Murphy

It's great to be able to share a really good MMT thread from Twitter here, written by Andy Verity, who is a BBC economics correspondent: 
Tax Research UK
The danger is from Chancellors who want to balance the books
Richard Murphy | Professor of Practice in International Political Economy at City University, London; Director of Tax Research UK; non-executive director of Cambridge Econometrics, and a member of the Progressive Economy Forum

Sunday, October 16, 2022

Bill Mitchell — British currency gyrations are about weak government not fiscal deficits

The British government has descended into high farce. It is rather embarassing to watch adults behave in the way they have conducted themselves in the last longtime. I also note that the usual suspects are out in force claiming (spuriously) that the economic turmoil that has beset Britain demonstrates categorically that Modern Monetary Theory (MMT) is deeply flawed and the real world is now teaching us that we should be discarded into the dustbin of history – or rather disgrace. These characters, which include so-called progressives think that hard core fiscal rules, like the British Labour Party took into the last election would have saved the day for Britain. I guess they are now mates with the IMF, who in their latest fiscal monitor – Fiscal Monitor – overnight (published October 12, 2022) – called for fiscal restraint. Also, central bankers who met in Washington over the last few days decided they had become the elected and accountable government making gratuitous threats that if fiscal policy wasn’t turned to austerity, they would punish citizens with further interest rate hikes. It is actually hard to find anything of sense in the current economic debate. It is despairing really....
Interesting that MMT is now a topic of focus if not yet a household word.

Bill Mitchell – billy blog
British currency gyrations are about weak government not fiscal deficits
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

A big step towards 'ease of living': PM Modi opens 75 digital banking units — Nirendra Singh

The DBUs will help banks that are now looking to reduce their physical footprint with fewer brick-and-mortar branches, with a 'light' banking approach.
Business Standard (India)
A big step towards 'ease of living': PM Modi opens 75 digital banking units
Nirendra Singh

RT — Xi vows to elevate Chinese military to ‘world-class standards’

 Arms race in progress. China is ramping up. Previously, China had set the date for developing a world-class military at 2035. Presently, the target date is 2027.

RT — Question More (Russian state-sponsored media)
Xi vows to elevate Chinese military to ‘world-class standards’

The wasteland of British politics — M. K. Bhadrakumar

The financial oligarchy ("the City") and the Deep State.

The bill is coming due. Who is going to pay it?

India Punchline
The wasteland of British politics
MK. Bhadrakumar | retired diplomat with the Indian Foreign Service and former ambassador.

Saturday, October 15, 2022

No bueno


Fed rate increases crushing NPV of system regulatory capital:





They are doing the same thing they did in September 2008 ie putting their own Depositories and Dealers into violation of their own regulatory capital requirements…  credit system is again getting close to failure mode:





Treasury might have to intervene directly again:




It’s pretty simple … (A-L)/A =  0.07 to 0.08 or thereabouts…     all they have to do is keep it in that range...   8th grade algebra… they are too dumb...

So ok … looks like these Fed dummies are going to again put their own system into violation of their own regulations and deliver another financial disaster for we the people …. BUT…. that’s not what I’m most concerned about …. what is more troubling is then all the leftoid Art Degree morons are going to say “capitalism!” or  “vampire squid!” or wtf ….

Who is dumber?   THIS is the more important issue…



Friday, October 14, 2022

Economist Professor* Warren Mosler: "Sanctions against Russia make no sense: with free Gazprombank it's as if they weren't there" — Fabio Bonciani interviews Warren Mosler,

MMT.

Geopolitika.ru (sanctioned by the US Treasury Department)
Economist Professor* Warren Mosler: "Sanctions against Russia make no sense: with free Gazprombank it's as if they weren't there"
Fabio Bonciani interviews  Warren Mosler, an American economist and entrepreneur, formerly a hedge fund manager; an activity that allowed him to fully understand the functioning of modern monetary and accounting systems of Central Banks and a State, upto developing those concepts that have led him today to be considered the father originator of the most recent formulation of Modern Money Theory (MMT). He is co-founder of the Center for Full Employment and Price Stability, based at the University of Missouri Institute in Kansas City, through which he funds both university fellowships and research projects in economics at some of the most prestigious universities in the U.S., Europe, and Australia. In 2014 he joined the faculty of the University of Bergamo and in 2015 the University of Trento as a visiting professor

Modern Money Theory (MMT) actualizes the school of economic thought outlined by Abba Lerner, John M. Keynes, Hyman Minsky protagonist of the 20th Century, which underlies the construction of the welfare state and an economy that aims to achieve full employment in a context of widespread welfare.

Russia Suggests A Price Cap On U.S. LNG — Michael Kern

The U.S. should set a price cap on U.S. LNG going to Europe, as American gas is being delivered to Europe at prices four times higher than the price for domestic consumption, Russian Deputy Prime Minister Alexander Novak said in an interview with Russian state television.

“We would advise our US partners to set a certain cap price for the resources they are supplying to Europe. This only pushes Europe toward energy poverty,” said the Russian official who represents the country at the OPEC+ meetings.
Novak, commenting on the U.S.-proposed price cap on Russian oil, reaffirmed Russia’s stance that it would not deliver its oil to countries that will join the price cap, regardless of whether the cap is the recently aired $60 per barrel....

"Hey, guys, let's try this and see what happens." 

The Two Families of Global Reserve Proposals & Swap Lines — Clint Ballinger

The main plans that I discuss in these posts constitute two “families,” each with some antecedents and many subsequent related newer proposals. I think of them as Goudriaan/Graham/Hart-Kaldor-Tinbergen-type plans and Keynes/bancor/SDR-type plans....
The world appears to be moving toward a set of conditions in which scarcity of real resources dominate for a variety of reason not the least of which is natural limitations on the use of carbon-based fuels owing to pollution and climate change. In addition, there also appears to be widespread dissatisfaction with the monetary regime is known as Bretton Woods I and II. 

In addition to that, there is also a widespread perception that the US as the issuer of the primary global reserve currency abused its "privilège exorbitant," as French foreign minister Valéry Giscard d'Estaing famously. This criticism increased of late after the US "weaponized" the dollar in order to preserve and extend its global hegemony through the global economy using the dollar dependent o financial system. 

So the present discussion is taking place on this platform. 

In short, the floating rate system itself is under attack and will only last as long as US (Western) hegemony lasts. This is major geopolitical contention at present as decolonization takes hold more firmly.

Charles Kindleberger v. Bernanke — Lars P. Syll

Charles schools Ben.

Short. Definitely worth a read from the MMT POV.

Lars P. Syll’s Blog
Charles Kindleberger v. Bernanke
Lars P. Syll | Professor, Malmo University

MAGA breakdown of inflation report

 

GOP playing this perfectly:

Biden's Latest Inflation Report Is The Worst Economic Data Seen In Our Lifetimes:



401k' are now 101k's:




Too much munnie printing:


Election too soon for Dems to do anythng about it....





Thursday, October 13, 2022

Zero Hedge — "Horrible"... "Brutal"..."A Disaster For Democrats": A Shocked Wall Street Reacts To Today's CPI Nuclear Bomb

The Fed is likely to continue to raise rates if only to maintain its credibility, even though higher rates are price increases from the MMT POV, and the augmented interest payments constitute a fiscal increase.

Zero Hedge
"Horrible"... "Brutal"..."A Disaster For Democrats": A Shocked Wall Street Reacts To Today's CPI Nuclear Bomb
Tyler Durden

Would an independent Scotland be facing a crisis like Liz Truss's mini-Budget? — Cameron Archibald

[Sam] Taylor claimed: "Financial markets will punish fiscal irresponsibility, and Scottish independence would be fiscally irresponsible on a vastly greater scale.”

Unfortunately for both Ferry and Taylor the logic of their arguments was already debunked by various economic experts, including Professor Bill Mitchell, Professor Stephanie Kelton, Nathan Tankus, and Brian Romanchuk. Let's break it down.…
The National (Scotland)
Would an independent Scotland be facing a crisis like Liz Truss's mini-Budget?
 Cameron Archibald, Modern Money Scotland

Initial Comments On Sissoko Paper: Money Markets — Brian Romanchuk

I ran across Carolyn Sissoko’s working paper “Financial dominance: why the ‘market maker of last resort’ is a bad idea and what to do about it” (link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4240857). Although I agree that non-bank finance (“market-based finance”) is going to be the source of financial instability under current institutional arrangements in the developed countries, I am not too sympathetic with her framing of the issues. Private sector balance sheets have been tilted towards non-bank finance as a result of institutional and demographic trends, and the traditional banking system has been de-risked courtesy of banks relying on tools provided by non-bank finance.

In this article, I just want to respond to the discussion of money market funds from a technical standpoint, and will not address what Sissoko presents as the major concerns — a movement away from market-based finance. Even if we grant the argument that there should be a movement away from market-based finance, we need to look at how that is supposed to be implemented.…

Bill Mitchell — Zero trading in 10-year Japanese government bonds signals Bank of Japan supremacy

On July 21, 2022, the Bank of Japan issued this – Statement on Monetary Policy – which outlined that it would continue to use its capacities to implement ‘Yield curve control’, whereby the “Bank will apply a negative interest rate of minus 0.1 percent to the Policy-Rate Balances in current accounts held by financial institutions at the Bank” and “will purchase a necessary amount of Japanese government bonds (JGBs) without setting an upper limit so that 10-year JGB yields will remain at around zero percent”. Further, the Statement noted that “the Bank will offer to purchase 10-year JGBs at 0.25 percent every business day through fixed-rate purchase operations, unless it is highly likely that no bids will be submitted”. The only dissenter on an 8 to 1 vote, wanted even more easing of monetary policy! The BOJ has been implementing its yield curve control since March 2021. In the light of global trends in central banking, the Bank of Japan’s decisions are a standout and show how a sophisticated understanding of the monetary economy coupled with a desire by the Government to improve the lives of ordinary citizens expose the fictions of mainstream economics, which dominates policy making elsewhere....
Bill Mitchell – billy blog
Zero trading in 10-year Japanese government bonds signals Bank of Japan supremacy
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Yellen confused too…

 

😂😂😂😂😂

Bubbe Janet too busy out climate nuttering to know what’s going on in her real job….






Wednesday, October 12, 2022

Clint Ballinger — Types & Motivations for Supranational Currencies

It is important to note that the proposals for a supranational currency have been made with various, disparate goals. Some are primarily interested in some aspect of commodities, others primarily or completely the supranational-currency aspect. These can overlap in several ways. The primary possibilities:...
ClintBallinger.com
Types & Motivations for Supranational Currencies
Clint Ballinger

Bill Mitchell — Bank of England announces end to propping up corporate greed – sort of!

It’s Wednesday and overnight there has been a Twitter storm, which like most of these Tweet Crazes, is about nothing at all and only serves to embarrass the Tweeters, not that they are aware of the humiliation. I refer to the statements made overnight by the Bank of England boss who reiterated press releases the day before in saying the Bank would not continue to prop up pension funds who had mismanaged their assets. The Twitterati seemingly didn’t really get the point. And while we are on central banking, the former IMF chief economist Olivier Blanchard was interviewed in the last few days (I won’t link to it) claiming in relation to the US economy that “the path to avoiding a recession is narrow because the economy is still overheating”. He then concluded that the Federal Reserve Bank “is no longer behind the curve but still has work to do to deal with stubborn underlying inflation pressures”. He thought the Federal Reserve’s funds rate (its policy rate) would go higher than 5 per cent. Planet Not Earth. To keep us on the straight and narrow after those contributions to public discourse, we end today with some piano music. Always a good idea to stay calm and reflective....
Bill Mitchell – billy blog
Bank of England announces end to propping up corporate greed – sort of!
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Two potentates meet up at St. Petersburg — MK. Bhadrakumar

Not just the energy markets but also the weapons market. If the US "weaponizes" weapons supply the gap can be filled by Russia, either directly or through joint production arrangements as is already the case with India. And Russian weapons come with no strings attached.

Key sentence in the post: Sheikh Mohammed and his Saudi kinsperson, Crown Prince and Prime Minister Mohammed bin Salman Al Saud had just handed down a strategic defeat to a superpower in the geopolitics of oil, as the world community witnessed disbelievingly and understood that the sun has set on the American Century in international politics.

India Punchline
Two potentates meet up at St. Petersburg
MK. Bhadrakumar | retired diplomat with the Indian Foreign Service and former ambassador.

See also

About more than energy, although energy is key—indeed, the foundation— in the operation of the global economy. Moon of Alabama explains the relationship of US domestic politics, geopolitics, the global economy, and Russia, the Russian economy in particular. It is all part of the world system.

Moon of Alabama
Misguided Foreign Policies Against Russia And Others Damage The U.S. And Its 'Allies'

See also

Will Germans grow a spine and toss the Scholz government?

AntiWar
Will the Germans Cave One More Time?
Ray McGovern, co-founder of Veteran Intelligence Professionals for Sanity, and retired 27-year career CIA whose tasks included preparing and briefing The President’s Daily Brief and leading the Soviet Foreign Policy Branch^

Tuesday, October 11, 2022

Think About Minsky for a Moment — Stephanie Kelton

Short summary with some links.

The Lens
Think About Minsky for a Moment
Stephanie Kelton | Professor of Public Policy and Economics at Stony Brook University, formerly Democrats' chief economist on the staff of the U.S. Senate Budget Committee, and an economic adviser to the 2016 presidential campaign of Senator Bernie Sanders

A perfect storm in US foreign policy — MK. Bhadrakumar

Oil.

India Punchline
A perfect storm in US foreign policy
MK. Bhadrakumar | retired diplomat with the Indian Foreign Service and former ambassador.

EZ Fiscal Increases

 

Germany +200B imminent:




France +100B imminent:





🤑🤑🤑🤑🤑🤑

Monday, October 10, 2022

Lars P. Syll — Methodological overconfidence

You can't get more mileage out of your model than the assumptions contain. It's called "scope."

Overconfidence or sleight of hand? The presumption is that professionals know better. But if they admit the scope, their influence would be limited.  This could also be accounted for by professionals acting unprofessionally owing to perceived advantages of doing so. So either way, perverse incentives seem to be in play.

Lars P. Syll’s Blog
Methodological overconfidence
Lars P. Syll | Professor, Malmo University

Sunday, October 9, 2022

The broken US economy breeds inequality and insecurity. Here’s how to fix it — James K. Galbraith

The question is: what do we do now? We can adjust, and build a fair and secure middle-class society, free of poverty and of oligarchy alike, with tools that are broadly familiar.…
The Guardian (UK)
The broken US economy breeds inequality and insecurity. Here’s how to fix it
James K. Galbraith | Lloyd M. Bentsen Jr. Chair in Government/Business Relations and Professor of Government at the Lyndon B. Johnson School of Public Affairs, The University of Texas at Austin

Questions Related to International Trade & Currencies — Clint Ballinger

The currency of international trade has been on a lot of peoples’ minds in the last few years. The hierarchy of currencies literature, the related questions of reforming the international monetary and financial system (IMFS), the effects of US monetary policy on the rest of the world (ROW). Add to that the war in Ukraine and Chinese trade-related discussion on the role of the ruble, dollar, yuan, oil and natural gas, wheat etc. 
These issues can easily lead to rethinking about the bancor or the role of SDR as a possible solution to some of these issues....
Chartalism
Questions Related to International Trade & Currencies
Clint Ballinger

Humor from Alexander Lukashenko

 Some humor in the info war from Alexander Lukashenko, President of Belarus.

21st Century Wire

@21stCenturyWire

• Belarus president #Lukashenko's epic troll of Europe, getting fire wood ready for the winter.

https://twitter.com/21stCenturyWire/status/1570354229872566273

Saturday, October 8, 2022

OPEC’s body blow to Biden presidency — M. K. Bhadrakumar

Oil, geopolitics and the petrodollar.

"It's the energy, stupid." Economics run on energy.

This was entirely predictable as a result of the policy to address climate change through ESG. This resulted in less investment in non-renewable energy resources, which will still be needed in relative abundance through a transition that will take a relatively long time under the best of circumstances. 

Instead the world is facing the worst of circumstances, war and preparation for war. Militaries are notorious for the amount of carbon fuel they require for training, let alone actual operations.

As M. K. Bhadrakumar observes, this is really an economic war in which real resources are key rather than financial resources. An advantage of economic warfare is that it is non-violent. The problem with it is that it is a path to kinetic warfare as competition for scarce resources intensifies.

India Punchline
OPEC’s body blow to Biden presidency
MK. Bhadrakumar | retired diplomat with the Indian Foreign Service and former ambassador.

Degrowth, Decolonization and Modern Monetary Theory — Winne van Woerden and Chris van de Ploeg

MMT is getting noticed as the basis for a solution to the economic challenges of creating a sustainable future.

Resilience.org
Degrowth, Decolonization and Modern Monetary Theory
Winne van Woerden and Chris van de Ploeg

Friday, October 7, 2022

Taunting

 

It never works….

Raiders DB Robertson with awesome all pro quality game against the Broncos last week:




Nice week


3Q GDPNow revised up twice to 2.9% which is higher than annual growth ever achieved under 14 years of ZIRP:



T-Bill discounts now transferring over $3.5B per week with the Fed’s latest rate increase to 3.25% operative :


Going to be increased 23% to 4% in 3 weeks… 🤑🧟‍♂️🤑🧟‍♂️🤑🧟‍♂️🤑🧟‍♂️

Unemployment fell to 3.5% a multi year low:



And last but not least …. Good week in the equity markets:



Not too shabby….



(When) Will the Rate Hikes Break Something? — Stephanie Kelton

There’s a lot of concern that the Federal Reserve is going to keep raising interest rates until it forces something to “break.” I share that concern....
The Lens
(When) Will the Rate Hikes Break Something?
Stephanie Kelton | Professor of Public Policy and Economics at Stony Brook University, formerly Democrats' chief economist on the staff of the U.S. Senate Budget Committee, and an economic adviser to the 2016 presidential campaign of Senator Bernie Sanders

The Radical Plans To Counter High Oil Prices — Alex Kimani

  • President Joe Biden is now vowing to “consult with Congress” on ways to “reduce OPEC’s control over energy prices,”.
  • A change in U.S. anti-trust law could revoke immunity that has protected OPEC members against lawsuits.
  • The EU idea of forming a buyers cartel to counter high oil prices is getting more support.
Forgetting to remember Smoot-Hawley?

Oil Price
The Radical Plans To Counter High Oil Prices
Alex Kimani

RT — Elon Musk now offers his solution to Taiwan issue

Musk “reckons that conflict over Taiwan is inevitable,” FT editor Roula Khalaf wrote after the magnate took her to lunch in Texas. The question about China occasioned “the longest silence” of the interview, she noted.

While such a conflict will impact Tesla – the Shanghai factory accounts for 30-50% of its total electric car production – other companies like Apple will be “in very deep trouble,” according to Musk. The global economy will take at least a 30% hit, he estimates.

“My recommendation . . . would be to figure out a special administrative zone for Taiwan that is reasonably palatable, probably won’t make everyone happy. And it’s possible, and I think probably, in fact, that they could have an arrangement that’s more lenient than Hong Kong,” Musk told Khalaf....
That is apparently only in the event that China seizes Taiwan. If it leads to a hot war between China and its allies with the US and its allies, all bets are off regarding the global economy. There's no telling what that would bring in terms of destruction and disruption. Oh, and there is already a hot war in progress in Europe, and the Middle East is on the edge, too. Perfect storm.

RT (Russian state-sponsored media)
Elon Musk now offers his solution to Taiwan issue

Nord Stream 2 offers Germany a date with destiny — Pepe Escobar

Whatever the modus operandi of Pipeline Terror, incompetence was part of the package. No explosive charges were placed or detonated on Line B of NS2....
PressTV (Iranian state-owned news network)
Nord Stream 2 offers Germany a date with destiny
Pepe Escobar

See also
Однако к благоразумию наших врагов на Западе взывать бесполезно. И не нужно. Врагов надо заставить просить о пощаде в проигранном экономическом сражении. И завершать его их полной и безоговорочной капитуляцией.

Translation: It is useless to appeal to the common sense of our enemies in the West. It is also not necessary. The enemies must be forced (by us) to beg for mercy in the lost economic battle. And we need to complete this battle with their full unconditional capitulation.
Telegram
Dmitry Medvedev, deputy chairman of the Security Council of Russia and past president and prime minister of the Russian Federation.

Also

Sputnik International (Russian state-sponsored media)
Macron Suggests EU Launch Coordinated Op to Ensure Underwater Gas Pipeline Security

Why Deglobalization Makes US Inflation Worse — Dambisa Moyo

This article doesn't consider the US and China decoupling, which would greatly amplify the effects discussed in the article. 

Project Syndicate (free registration may be required)
Why Deglobalization Makes US Inflation Worse
Dambisa Moyo

The U.S. Is Preparing Its Response to the “Short-Sighted” Strategy of OPEC+ — Yves Smith

The US is having a hissy over the OPEC+ production cut. Not a good look.
Some congress-critters are actually suggesting that the US seize Saudi assets in the US.

Naked Capitalism
The U.S. Is Preparing Its Response to the “Short-Sighted” Strategy of OPEC+
Yves Smith

Lars P. Syll —On the validity of econometric inferences

Quotes.

This is essentially a recap of Keynes's criticism of Tinbergen's approach to econometrics. The basis of the issue is the assumption that the social sciences are sufficiently like the natural sciences to enable use of similar methodology. 

Keynes argued that this assumption is wrong. The subject matter of economics is historical and institutional, that is, variable, and in social systems, the data lacks the homogeneity of the natural sciences. See the blog post by Lars, Econometrics: The Keynes-Tinbergen controversy (8 Nov 2018).

We now know much more about systems than was known in the 1930 and 40's when this controversy began that was sparked by Keynes. The problem that the social sciences, including economics, face is modeling complex adaptive systems, which societies are. This means that not only are there known unknown owing to complexity but also unknown and likely unknowns that are not knowable in advance owing to emergence as a result of adaptation through learning from feedback.

This is a reason that heterodox approaches to economics reject the conventional approach based on formalism. For example, MMT is based on operational analysis of institutional arrangements, specifically the existing monetary system as a general case and the various national systems as specific cases.

Lars P. Syll’s Blog
On the validity of econometric inferences
Lars P. Syll | Professor, Malmo University


Thursday, October 6, 2022

Michael Hudson: A roadmap to escape the west’s stranglehold — Pepe Escobar

The geoeconomic pathway away from the neoliberal order is fraught with peril, but the rewards in establishing an alternative system are as promising as they are urgent,...
The Cradle
Michael Hudson: A roadmap to escape the west’s stranglehold
Pepe Escobar interviews Michael Hudson, President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City, and Guest Professor at Peking University
Crossposted at Michael Hudson's blog un the title "Escaping the Western Rentier."

OPEC+’s oil cuts signal a new world order — Philip Pilkington

The reality is that the decision to cut production is completely rational from the point-of-view of OPEC+. With interest rates rising quickly and growth slowing, Europe, which makes up around 19% of total oil consumption, is almost certainly facing down a serious recession next year. There is also a risk that the United States and Canada will fall into recession at the same time — these countries make up a further 27% of total consumption.

OPEC+ does not want to see history repeat itself. In the 2008 recession, European oil prices fell from just over $140 a barrel to just under $40 a barrel — a massive decline of over 71%. So, the likely reason that they are cutting production is to try to firm up the market in case there is economic turbulence ahead....

Decolonization

Once it starts, it can cascade quickly. Has the West overplayed its hand?

Unherd
OPEC+’s oil cuts signal a new world order
Philip Pilkington

See also

East Asia Forum
Gulf states go digital with China
Mordechai Chaziza

What $31 Trillion Looks Like Through the MMT Lens — Stephanie Kelton

Wealth (savings) in the form of US Treasury securities in the private sector that are default risk free in that they are liabilities of the US government, a currency sovereign capable of meeting its obligations in the currency it issues as monopoly supplier. But why issue these liabilities in the for place if they are not necessary operationally in the current floating rate monetary system? While there is a a rationale for a government issuing some securities based on the role they play in the financial system, a one-too-one correspondence to fiscal deficits is not needed. Moreover, it may not be warranted in terms of serving public purpose in the system. Understanding how the system operates institutionally clarifies this and suggests re-thinking current policy.

The Lens
What $31 Trillion Looks Like Through the MMT Lens
Stephanie Kelton | Professor of Public Policy and Economics at Stony Brook University, formerly Democrats' chief economist on the staff of the U.S. Senate Budget Committee, and an economic adviser to the 2016 presidential campaign of Senator Bernie Sanders

We Really Need to Talk Fertilizer — Michael Smith

Availability of real resources and inflation. Fertilizer shortage results in higher food prices. 

Angry Bear
We Really Need to Talk Fertilizer
Michael Smith

See also

Inflation results in increases in managed economies in areas where the market economy is insufficient, notably energy. Food is another candidate in that it is a vital resource. This is characteristic historically of wartime economies.

Project Syndicate
The State Is Taking Back Energy
Nick Butler

Also at PS

Germany’s Emerging War Economy
Dahlia Marin

Bill Mitchell — Two diametrically-opposed approaches to dealing with inflation–stupidity versus the Japanese way

Well things are going to get messier with the decision yesterday by the OPEC+ cartel to significantly reduce the oil supply and push up prices. On the one hand, when OPEC was first formed and pushed prices up, while there was significant disruption to oil-dependent nations, the substitution that followed (home oil heating abandoned, larger cars replaced by smaller cars, etc) was ultimately beneficial. So given that we need less cars on roads and less kms travelled by cars, one might consider the move to be fine. But given the way the central banks and treasury departments around the world are behaving at present, the short term impacts of the OPEC+ decision will be very damaging. How citizens endure whatever extra inflationary pressures that might emerge will depend on the fiscal and monetary policy responses. We have two diametrically opposed models: the one that most nations are following (hikes and austerity) versus the Japanese approach. I explain the difference below and predict that the latter will deliver much better outcomes for the people....
Bill Mitchell – billy blog
Two diametrically-opposed approaches to dealing with inflation – stupidity versus the Japanese way
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Fiscal flows explained

 

Here she actually exhibits a better introductory understanding of these flows than most Art Degree PhD economists and  Jurist Doctorates:




Doesn’t give herself enough credit and gives up too easily but she’s starting to exhibit a better understanding than the morons in charge we see out there everyday...

Wednesday, October 5, 2022

Moon of Alabama — EU Pushes For More Sanctions Which Will Come Back To Bite It

 Mostly about energy and the stupidity of imposing an oil price cap.

Moon of Alabama
EU Pushes For More Sanctions Which Will Come Back To Bite It

See also

Europe is coming apart at the seams. And it is only just beginning to get cold there.

The Cradle
Ukraine’s revenge on the West
M. K. Bhadrakumar | retired diplomat with the Indian Foreign Service and former ambassador

Bill Mitchell — RBA tom foolery continues while spending continues unabated

It’s Wednesday where I examine in short a few items that came to my attention in the last week and then retreat into the music segment. Yesterday, the Reserve Bank of Australia raised interest rates for the sixth time since May 2022. This time the increase was 0.25 per cent and the current cash rate target is 2.6 per cent. The below-expected increment has been hailed as the first central bank to ‘turn’. It tells me the RBA is now scared it has gone too far in its ridiculous show of power. It is also obvious that spending is not really responding yet to the RBA move which means that they have no real idea of what the impact of their shift in rates has been. That is the problem with relying on monetary policy as a counter-stabilising tool – it works (if at all) with long lags and by the time you see any impact it might be too late....
The countercyclical effect of interest rate increases is lagging as rate increases work through the economy, e.g., depress RE sales owing to increased carrying cost. In fact, there is evidence that interest rate rises dampen the economy through the housing channel.

But being a price increase that increases fiscal injection through interest payments on government securities, effect of the central bank raising the interest rate is immediate and procyclical. More interest income is injected into the economy. 

The full amount of this fiscal injection will not all go toward spending, but some will be committed to financial investment. Financial investment is a form of saving, and not to be confused with firm investment, which is a form of spending. But if market prices rise as a result, so will the "wealth effect," which has an inflationary bias. So there are contradictory aspects of central banks' raising interest rates. This is generally overlooked. 

According to the conventional thinking, interests rate increases lead to curtailed investment that results in cut backs in hiring and eventually layoffs. This reduces the wage pressure that is assumed as the cause of inflationary pressure. 

This is a from of "single-variable" thinking, which is illogical with respect to systems with more than one major causal factor. Modern economies are not simple systems, as Keynes observed. 

The interest rate is not a single independent variable that determines the price level at full employment, so that raising rates is entirely countercyclical. There are procyclical fiscal effects as well.

Bill Mitchell – billy blog
RBA tom foolery continues while spending continues unabated
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Biden/Summers risk free rate policy

 

Biden/Summers rate increase jihad is causing them to become increasingly isolated from:


The academe:



International community:



Wall Street:



And perhaps voters we’ll see on November 8th…