By Michael Every of Rabobank

Yesterday saw a major upside surprise in the US Empire PMI (+10 vs. -18 expectation), which seals a May 25bps Fed rate hike and opens the door to chatter of more.

Indeed, Fed-speak underlined the US economy is ‘doing just fine’ with rates at 5%. That’s the usual ‘small picture’ stuff of most market commentary.

However, ECB President Lagarde yesterday gave a very big picture speech (‘Central banks in a fragmenting world’) that dwelled on the usual subject matter found here.

Indeed, it was so significant that I am going to reprint almost all of it:

“The tectonic plates of geopolitics are shifting faster. We are witnessing a fragmentation… into competing blocs, with each bloc trying to pull as much of the rest of the world closer to its respective strategic interests and shared values… All this could have far-reaching implications across many domains of policymaking…[and] for central banks….

In the time after the Cold War, the world benefited from a remarkably favourable geopolitical environment. Under the hegemonic leadership of the US, rules-based international institutions flourished, and global trade expanded. This led to a deepening of global value chains and, as China joined the world economy, a massive increase in the global labour supply. As a result, global supply became more elastic to changes in domestic demand, leading to a long period of relatively low and stable inflation. That in turn underpinned a policy framework in which independent central banks could focus on stabilising inflation by steering demand without having to pay too much attention to supply-side disruptions. But that period of relative stability may now be giving way to one of lasting instability resulting in lower growth, higher costs and more uncertain trade partnerships. Instead of more elastic global supply, we could face the risk of repeated supply shocks.

Recent events have laid bare the extent to which critical supplies depend on stable global conditions… In response, governments are legislating to increase supply security, notably through the Inflation Reduction Act in the US and the strategic autonomy agenda in Europe. But that could, in turn, accelerate fragmentation as firms also adjust in anticipation. Indeed, in the wake of the Russian invasion of Ukraine, the share of global firms planning to regionalise their supply chain almost doubled –to around 45%– compared with a year earlier. This “new global map”… is likely to have first-order implications for central banks.

One recent study based on data since 1900 finds that geopolitical risks led to high inflation, lower economic activity and a fall in international trade… ECB analysis suggests similar outcomes may be expected for the future. If global value chains fragment along geopolitical lines, the increase in the global level of consumer prices could range between around 5% in the short run and roughly 1% in the long run.

These changes also suggest that a second shift in the central bank landscape is taking place: we may see the world becoming more multipolar… After 1945, the USD became firmly ensconced as the global reserve currency, and more recently, the euro has risen to second place. This had a range of –mostly beneficial– implications for central banks. For example, the ability of central banks to act as the “conductor of the international orchestra” as noted by Keynes…

But new trade patterns may have ramifications for payments and international currency reserves. In recent decades China has already increased over 130-fold its bilateral trade in goods with emerging markets and developing economies, with the country also becoming the world’s top exporter. And recent research indicates there is a significant correlation between a country’s trade with China and its holdings of CNY as reserves. New trade patterns may also lead to new alliances. One study finds that alliances can increase the share of a currency in the partner’s reserve holdings by roughly 30 percentage points. All this could create an opportunity for certain countries seeking to reduce their dependency on Western payment systems and currency frameworks…

Anecdotal evidence… suggests that some countries intend to increase their use of alternatives to major traditional currencies for invoicing international trade, such as CNY or INR. We are also seeing increased accumulation of gold as an alternative reserve asset, possibly driven by countries with closer geopolitical ties to China and Russia. There are also attempts to create alternatives to SWIFT… These developments do not point to any imminent loss of dominance for the USD or EUR… But they do suggest that international currency status should no longer be taken for granted.

We have clear examples of what not to do when faced with a sudden increase in volatility. In the 1970s, central banks… failed to provide an anchor of monetary stability and inflation expectations de-anchored – a mistake that should never be repeated for as long as central banks are independent and have clear price stability mandates. So, if faced with persistent supply shocks, independent central banks can and will go ahead with ensuring price stability. But this can be achieved at a lower cost if other policies are cooperative and help replenish supply capacity.

For example, if fiscal and structural policies focus on removing supply constraints created by the new geopolitics –such as securing resilient supply chains or diversifying energy production– we could then see a virtuous circle of lower volatility, lower inflation, higher investment, and higher growth. But if fiscal policy instead focuses mainly on supporting incomes to offset cost pressures… that will tend to raise inflation, increase borrowing costs and lower investment in new supply… Insofar as geopolitics leads to a fragmentation of the global economy into competing blocs, this calls for greater policy cohesion…behind a strategic goal…

Achieving the right policy framework will not only determine how our economies fare at home, but also how they are viewed globally in a context of greater “system competition.”

…For Europe, long-delayed projects such as deepening and integrating our capital markets can no longer be viewed solely through the lens of domestic financial policy. To put it bluntly, we need to complete the European capital markets union. This will be pivotal in determining whether the euro remains among the leading global currencies or others take its place.

Central banks also have an important role to play here – even as protagonists. For example, the manner in which swap lines are used could influence the dynamics of major international currencies…. We have already seen the PBOC set up over 30 bilateral swap lines with other central banks to compensate for the lack of liquid financial markets in renminbi. How central banks navigate the digital era –such as innovating their payment systems and issuing digital currencies– will also be critical for which currencies ultimately rise and fall.

So, we need to be ready for the new reality that may well lie ahead. The time to think about how to respond to changing geopolitics is not when fragmentation is upon us, but before. Because, if I may paraphrase Ernest Hemingway, fragmentation can happen in two ways: gradually, and then suddenly. Central banks must provide for stability in an age that is anything but stable. And I have no doubt that central banks will measure up to the challenge.”

In short, *the ECB president* says we are seeing fragmentation into competing geopolitical blocs, which is structurally inflationary; rival FX architecture is emerging; trade invoicing and swap lines are key; Western fiscal policy must be expansionary on the supply side or into defense; monetary policy needs to work with it for “strategic goals”; central bank digital currency might be needed; and the bloc that does state capitalism/mercantilism best will win the “systemic competition.”

All of this was predicted here as far back as 2015-16, but ignored by markets focusing on what they thought mattered more – which was themselves. Now, En (La)Garde!

Authored by Mark Jeftovic via Bombthrower.com,

Backlash spotlights newspaper’s ecological hypocrisy .

What happens when America’s purported “paper of record” promulgates an unabashedly biased hit piece against Bitcoin’s so-called “climate impact”, replete with shoddy reporting, wrong data, logical fallacies and even doctored photographs?

The New York Times murders 60 million trees every year.

The public, fed up with being spoon-fed increasingly nonsensical propaganda under the guise of “news” turns the spotlight back on the outlet, highlighting the New York Times very real destruction of habitats, ecosystems and life giving, carbon reducing trees.

Via a piece on TheBtcTimes website, and through the @NYTimesUP twitter account, the #StopThePresses movement erupted over the weekend, drawing attention to several inconvenient truths about how the New York Times print edition gets made:

This is a paper mill.

But it’s more accurately described as a TREE SLAUGHTERHOUSE. @nytimes profits from the murder of trees, choosing to print a daily newspaper packed full of corporate advertisements and propaganda.

It’s time to #StopThePresses 🛑#NYTimesUp pic.twitter.com/hY50PqIact

— #StopThePresses (@NYTimesUp) April 17, 2023

27 tree slaughterhouses grind, pulp and purée approximately, 60 million trees each year. Trees absorb C02, so that’s 60 million less all natural carbon capturing beings, butchered annually,  just to be defiled with agitprop; read once, and then unceremoniously disposed after.

The public has had enough. Left unchecked, America’s newspaper industry could consume every tree on the planet by the year 2040.

Make your voice heard and tell your congressman that something needs to be done about this unrepentant, climate killing juggernaut.

*  *  *

Subscribe to The Bombthrower mailing list to get alerted when new articles come out, or follow me on Nostr or Twitter.

Via The Cradle,

According to a Reuters report, the US is ready to proceed with the F-16 aircraft sale to Turkey in the form of a smaller modernization package, a deal valued at $259 million.

The report indicated that US congressional figures disclosed that they gave their “informal” approval for the arms sale on Monday, which also includes avionics software enhancements and radars.

The report added that US State Department spokesperson Ned Price said that “Turkiye is a longstanding and valued NATO ally… The Biden Administration supports Türkiye’s efforts to bring the avionics of its F-16 fleet up to standard.”

The spokesperson further elaborated that the upgrade would bolster connectivity between Turkey and NATO’s military systems and provide enhancements for safety protocols such as a ground collision avoidance system.

Once the sale is ratified, the package would mark the first military sale to Turkey that Congress has approved of in years.

This package is a separate deal from Turkey’s request in 2021 for $20 billion worth of Lockheed Martin F-16 fighters, including 80 modernization kits.

This comes a few weeks after Ankara approved Finland’s proposal to join the US-led military alliance NATO. Finland and Sweden have attempted to acquire membership since the start of Russia’s military operation in Ukraine; however, Turkey blocked the two Nordic states from joining NATO after the Turkish government accused Stockholm and Helsinki of harboring members of the Kurdish separatist groups in Iraq, such as the Kurdistan workers party (PKK), which Ankara holds responsible for the November 2022 Istanbul bombing. 

Turkey remains indecisive about Sweden’s proposal, given Ankara’s claim that Swedish officials have not taken the necessary measures to crack down internally on members of the PKK and allied Kurdish militia groups, many of whom continue to reside in Stockholm. Ankara has also criticized Sweden’s failure to extradite militants from the PKK as well as militants from the Gulen Movement back to Turkiye.

Earlier this year, a far-right Swedish politician burned several Qurans in front of the Turkish embassy in Stockholm, which resulted in the Turkish government further resolving to block Sweden’s NATO bid. The Swedish government’s refusal to stop recent Quran-burning protests has further inflamed tensions.

One might say that the timing could not be worse for the implementation of “net zero” climate goals given the already boiling economic instability across the western world.  Then again, maybe the timing is perfect for the people in power?

With stagflation still running rampant in the US and Europe the last thing anyone should be worried about is a less than 1°C rise in global temperatures in the past 100 years.  There is no concrete evidence of any significant climate crisis, and all the people who tell us a crisis is right around the corner do so while raking in billions in funding dollars from governments and think-tank institutions with a vested interest in reinforcing the hysteria.  In other words, there is no basis for exponential restrictions on “greenhouse gas” emissions.  The climate crisis claim is a sham. 

When the policies of the climate cult are examined with a clear head, it becomes obvious that saving the planet is not a primary concern.  Rather, the purpose of the agenda is to increase power to government bureaucracies on a level not seen since the feudal empires of centuries past.  Get ready for the return of the peasant lifestyle…

One factor that consistently arises in the fight over climate change mandates is the increasing need for energy clashing with deliberate cuts to the means of production.  Establishment elites want restricted energy access for the public, and they want people to pay more for each slice of the ever shrinking pie.  A perfect example of this dynamic is the widespread effort by such governments to shut down nuclear power plants, one of the cleanest forms of energy we have from the standpoint of carbon emissions.  

Germany, already in the midst of an energy shortfall due to the loss of natural gas supplies from Russia, has also just closed its last three operational nuclear power plants this past week, leaving the nation high and dry when it comes to easy accessible electricity.  Germany has some of the highest residential electricity prices in all of Europe and they are about to explode even more in the near term.

As energy prices rose last year as a result of the Ukraine conflict, certain members of German Chancellor Olaf Scholz’s government became hesitant to close the nuclear plants as planned on December 31, 2022. Scholz agreed to a one-time extension of the deadline but insisted on the final countdown taking place on April 15.

Alongside the closure of the nuclear plants, German multinational electric utility E.ON increased its prices by as much as 45% starting June 1.

“In parts of NRW (North Rhine-Westphalia), the new price is 49.44 cents gross per kilowatt hour, which means an adjustment of around 45 percent for an average consumption,” said a spokesman for Eon Energie in Germany.

Ironically, shortages last winter compelled the German government to increase coal fired power plant operations, yet they are still shutting down clean energy nuclear plants to make way for so-called renewables.  If climate change initiatives don’t seem to be making much sense these days, its because there is no logic behind them other than to create incremental chaos.  The confusion over conflicting green policies makes way for notoriously inefficient wind and solar power farms that cannot sustain the existing population, but it also allows for a global political power grab on an unprecedented scale.              

Authored by Joe Lauria via ConsortiumNews,com,

Leaked U.S. intelligence documents have exposed Western disinformation  about Ukraine winning the war. Now the heavy fighting moves to Washington…

Aerial view of the Washington battleground. (Mario Roberto Durán Ortiz/Wikimedia Commons)

A Washington Post headline last week was a bombshell for someone who has only been reading about the Ukraine war in The Washington Post and other Western media: “U.S. doubts Ukraine counteroffensive will yield big gains, leaked document says.”

The story admits that Western media audiences have been misled about the course of the war, that essentially what mainstream media has been reporting about Ukraine has been a pack of lies: namely that Ukraine is winning the war and is poised to launch an offensive that will lead to a final victory. 

Instead, the second paragraph of the piece makes clear the leaked documents show the long-planned Ukrainian offensive will fail miserably — “a marked departure from the Biden administration’s public statements about the vitality of Ukraine’s military.”  

In other words, U.S. officials have been lying about the state of the war to the public and to reporters who have faithfully reported their every word without a hint of skepticism.

The Post said, as if it’s a bad thing, that the leaks will likely “embolden critics who feel the United States and NATO should do more to push for a negotiated settlement to the conflict.”

That has begun to happen. Writing in the uber-Establishment Foreign Affairs, former State Department official Richard Haass and Charles Kupchan, a senior fellow at the Council on Foreign Relations, write that “it is difficult to feel sanguine about where the war is headed.”

In “The West Needs a New Strategy in Ukraine: A Plan for Getting From the Battlefield to the Negotiating Table,” they say:

“The best path forward is a sequenced two-pronged strategy aimed at first bolstering Ukraine’s military capability and then, when the fighting season winds down late this year, ushering Moscow and Kyiv from the battlefield to the negotiating table.”  

The article does not mention the leaks, though it was published after the disclosures made clear that the Ukrainian offensive, intended to  break through Russia’s land bridge to Crimea, would fail.

Filled with the usual talk about Ukraine having better “operational skill” than Russia, and that the war will end in a “stalemate,” the piece represents an emerging strategy in the West: namely that before negotiating, Ukraine needs to launch its offensive to gain back some territory, “imposing heavy losses on Russia, foreclosing Moscow’s military options, and increasing its willingness to contemplate a diplomatic settlement.”

But that is a tall order. Moscow would be unlikely to negotiate at the end of the Ukrainian offensive, particularly as the article admits the “Russian military’s numerical superiority” and that Ukraine is “facing growing constraints on both its own manpower and help from abroad.” 

Moscow was ready to cut a deal with Kiev one month after Russia’s intervention but the West, with its strategy of lengthening the war to weaken Russia, quashed it. Why would Moscow accept a deal now when Ukraine is at its weakest and Russia is poised to make significant gains on the battlefield?

The Foreign Affairs piece admits, “This diplomatic gambit may well fail. Even if Russia and Ukraine continue to take significant losses, one or both of them may prefer to keep fighting.”

“Come the end of this fighting season,” the article says, “the United States and Europe will also have good reason to abandon their stated policy of supporting Ukraine for ‘as long as it takes,’ as U.S. President Joe Biden has put it.”

And what comes next? “NATO allies would start a strategic dialogue with Russia on arms control and the broader European security architecture.”  

Incredibly this is what Russia was asking for before its February 2022 intervention and it was rebuffed by NATO and the U.S.  Now a Foreign Affairs article is recommending it.

Is there no better sign that Ukraine has lost this war?

Going Ahead With the Offensive Anyway

The strategy of Ukraine going ahead with an offensive it knows will achieve little is Kiev’s last gasp — unless delusional neocons continue to outmaneuver the realists in Washington.

Most importantly for the West, the failure of this last-gasp attempt would serve as a way for it to escape the disaster it has created for itself: namely, the backfiring of the economic war on Russia; the failure of the information war in the non-West and ultimately defeat on the battlefield in its proxy war.   

Already in February, French President Emmanuel Macron, who is also pushing this strategy, and German Chancellor Olaf Scholz, told Ukrainian President Volodymyr Zelenksy that the game was up.  This news was brought to us by the establishment Wall Street Journal. 

And then ten days later U.S. intelligence provided a story to The New York Times that a pro-Ukraine “group,” and possibly the Ukrainian government itself, was behind the destruction of the Nord Stream pipelines, a way of distancing the U.S. from Kiev as the exit ramp looms into sight. 

Why Did the MSM Publish the Leaks?

Why did the Times, the Post and other establishment outlets publish stories about these leaks if they severely undermined their own credibility? There are three possibilities.   

The first is simply competition.  The Times or the Post may have gotten word that their rival had their hands on the leaks and did not want to be beat. There is almost nothing worse for an editor or reporter (in the petty world of journalism) then having to “match” a competitors’ story.

The second reason has to do with keeping up appearances. These leaks were eventually to come out somewhere and may not have been easily ignored. What would it have looked like if the big papers didn’t have it first?

More importantly, corporate journalism needs to keep up the pretense that it is actually doing journalism, i.e. that it will publish material from time to time that makes their governments look bad, and in this case, even themselves. They have to convince the public that they haven’t entirely given up on adversarial journalism if they are to survive.  

It was the same when corporate outlets partnered with WikiLeaks in 2010 to publish leaks that exposed U.S. war crimes. But eventually the media turned on Assange and WikiLeaks, and fell into line with the state. 

Why the Media Went After the Leaker

And that it is indeed what has happened here. After splashy stories about the leaks, the Times and the Post, teaming with Western intelligence-backed Bellingcat, turned their attention to finding the leaker, in what Elizabeth Vos in an article today on Consortium News argues makes corporate media the anti-WikiLeaks.

Rather than protecting the source of leaks, vital to the public, they hunted down the alleged leaker, 21-year old Air National Guardsman Jack Texiera, who was arrested by military-clad F.B.I. agents outside his Massachusetts home. 

So what is the third reason why the major media published the leaks?

Very likely for the same reason they published the stories about Macron and Scholz telling Zelensky he’s lost the war, and that the Ukrainian government may have been responsible for the Nord Stream sabotage:  to lay the ground work for the U.S. and its allies to pull the plug on their Ukrainian adventure by finally admitting Ukraine is losing.

Towards that end, there is speculation that Texiera did not act alone with the motive of impressing his teenage followers on the Discord chat forum, as the press has reported. 

Former C.I.A. analyst Larry Johnson believes Texiera was set up, possibly by a senior officer.  Johnson thinks this because among the documents Texiera allegedly leaked was one from the Central Intelligence Agency Operations Center, where Johnson used to work.

“CIA Operations Center produces two daily reports — one in the morning and one in the afternoon. It is not a ‘Community’ product, i.e., it is not distributed to the other intelligence agencies. It is an internal CIA document (of course, it is available to the Director of National Intelligence), ” Johnson wrote on his website Son of the New American Revolution.

Texiera was not in the C.I.A. so there is no way he’d have access to an Operations Center document, Johnson wrote. So how did he get his hands on it?

The implication is that Texiera may have been a patsy for someone within the realist wing of the U.S. military or intelligence establishment who opposes the neocons’ obsession with continuing the war at all costs.  

The neocons are not going down without a fight. John Bolton, the former U.S. national security advisor and chief neocon, wrote a desperate piece in The Wall Street Journal last week, titled, “A New American Grand Strategy to Counter Russia and China.”  

Bolton gets it that the world is changing, and not in America’s favor. So his response is not to reverse failed U.S. policy, for the U.S. to become part of the rest of the world rather than trying to dominate it, but to double down like a riverboat gambler.  His solution: raise military spending to Reagan-era levels; resume underground nuclear bomb testing and taking “the North Atlantic Treaty Organization global, inviting Japan, Australia, Israel and others committed to NATO defense-spending targets to join.”

Bolton laughingly says the U.S. must “exclude” Moscow and Beijing from the Middle East, where both capitals are orchestrating the most dramatic diplomatic transformation in decades.

But Boltons saves his best laugh for Ukraine:

“After Ukraine wins its war with Russia, we must aim to split the Russia-China axis. Moscow’s defeat could unseat Mr. Putin’s regime. What comes next is a government of unknowable composition. New Russian leaders may or may not look to the West rather than Beijing, and might be so weak that the Russian Federation’s fragmentation, especially east of the Urals, isn’t inconceivable.”

Even if the ludicrous Bolton is dismissed, there’s still a major obstacle in the realists’ way: Biden’s re-election campaign. He says he’s going to announce soon. He’s already thrown his lot in with the neocons.

Is there any conceivable way that he could accept Ukraine losing this war, after all the blue and yellow flag-waving, without also losing the election? 

The Biden team’s aim was to bleed Russia. But it is Ukraine that is hemorrhaging. Will reality at last overcome delusion in Washington?

Authored by Rep. Mark Green via RealClear Wire,

Nineteen months ago, the last U.S. soldier was lifted out of Afghanistan, but hundreds of Americans were left behind in a country overrun by the Taliban and abandoned by President Biden. Yet in a recent press conference, Pentagon Spokesperson John Kirby had the audacity to state that he was proud of the withdrawal from Afghanistan. This followed the release of a report from the Biden administration that lays the blame for this withdrawal at the feet of President Trump, taking little to no responsibility. This is a sign of failed leadership. 

Authored by John Leake and Dr. Peter A. McCullough, MD via Courageous Discourse (emphasis ours),

Many readers of this Substack have doubtless wondered why their “health care providers”—i.e., doctors, repeatedly exhorted them to get the COVID-19 vaccines and boosters. In my extended social circle, I heard many reports of doctors being downright pushy about it—as though getting the COVID-19 vaccine was the single most pressing matter of medicine and health.

Even patients who’d recently recovered from COVID-19 were urged by their doctors to get the shots, as were patients who had bad reactions to the first injection.

For a long time, Dr. McCullough and I wondered if these doctors really were that brainwashed, or was there some other explanation for their zeal?

A few days ago, fellow Substack author, Tessa Lena (Tessa Fights Robots) published this document that was apparently circulated to doctors with patients insured by Anthem Blue Cross and Blue Shield Medicaid in the state of Kentucky.

The document raises a number of intriguing questions. I wonder: How many members might be registered in a given practice—that is, how many of those $125 bonuses per vaccinated member could a busy and efficient doctor with a good support staff receive?

Secondly, how many of these “COVID-19 Vaccine Provider Incentive Programs” were operating in the United States during 2021?

As we awakened souls try to figure out what’s going on in our bizarre world, it’s always useful to follow the money. It almost always leads to the explanation for any strange state of affairs that puzzles us.

Taiwan is set to purchase up to 400 land-launched Harpoon missiles in order to repel a future Chinese invasion, according to the president of the US-Taiwan Business Council Rupert Hammond-Chambers, speaking to Bloomberg.

While Harpoons have previously been purchased by Taiwan for deployment on warships, this marks a first time acquisition of the mobile, land-launched version.

Per Bloomberg, “The Pentagon announced the $1.7 billion contract with Boeing on April 7 but made no mention of Taiwan as the purchaser” at a moment of tense US-China relations due to ratcheting Chinese military drills around the self-ruled island. 

As the Monday report additionally reviews: 

The Harpoon contract has been cited by members of Congress including Representative Michael McCaul, chairman of the House Foreign Affairs Committee, as part of as much $19 billion in “backlogged US sales to Taiwan that they say need to accelerated. In addition to the Harpoon, the list includes the F-16 Block 70 fighter, the MK-48 torpedo, the M109A6 Paladin self-propelled howitzer and the Stinger missile.

Additionally the US-Taiwan Business Council has now confirmed the Harpoon is to be transferred. 

Meanwhile China’s military announced on the same day it is conducting “major military activity” in the Yellow Sea in waters off the coast of Shandong province.

While these drills were only scheduled for a few hours, they follow a series of major days-long encircling drills threatening Taiwan, which have been going off-and-on since earlier this month Taiwan’s President Tsai Ing-wen met with US House Speaker Kevin McCarthy at the Ronald Reagan Presidential Library in California’s Simi Valley, a meeting which Beijing warned strongly against.