Authored by Simon White, Bloomberg macro strategist,

The US retail sector will be an effective portfolio hedge for a recession.

We got a check in on how the consumer is doing on Friday with March’s retail sales data. Emblematic of the weakening economic backdrop, consumers’ retail spending is falling sharply from the surge it saw as pandemic restrictions were eased.

Leading data anticipate that this sharp fall will continue. In the short term, higher-frequency data, such as the weekly Redbook index, points to a weaker retail-sales print today.

Longer term – over the rest of this year and into next – discretionary spending will continue to suffer as essential costs, such as energy and mortgages, keep rising. The sharp fall in homebuyer affordability is a bad omen for retail sales.

Furthermore, even though the retail sector has worked inventories lower from the glut incurred after Covid, sales-to-inventory levels are barely back to pre-pandemic levels, while a recession would knock them lower again.

The US economy is beginning to look very recessionary, with some signs that one could already be here, or very close to starting.

That would, historically, lead to a further decline in equities. That may end up happening, but this is an odd cycle. At least one rare and reliable technical signal for the S&P recently triggered, telling us that price action is pointing to a constructive picture for stocks over the longer term.

Therefore shorting the overall index or even buying downside protection may not be the most efficient way to hedge for a recession.

However, retail is primed to be one of the most underperforming sectors in any recession.

Firstly, it is highly cyclical. Indeed, currently, it is the most cyclical of the GICS Level 2 sectors, based on variability of earnings. Cyclical stocks underperform in downturns.

Secondly, looking at past recessions, the retail sector has on average fallen by the most in the six months after a recession starts.

Retail has only slightly underperformed the index this year, but if the runes are correct and a recession is almost upon us, this underperformance will intensify.

The semis sector should also see significant underperformance in a recession, with the added benefit it has also outperformed more than most sectors this year.

Authored by Andrew Moran via The Epoch Times,

The U.S. money supply contracted for the third consecutive month, and is declining at the fastest pace since the Great Depression, new Federal Reserve data show.

In February, the M2 money supply – a benchmark for how much cash, bills, bank deposits, coins, and money market funds are circulating throughout the national economy – tumbled 2.24 percent from the same time a year ago, down from negative 1.7 percent in January. This represented the third straight month of a contracting money supply.

Early indicators point to another contraction in March, as the M2 money supply tumbled 3.13 percent year over year for the week ending March 6.

In total, the U.S. money supply stood at $21.099 trillion at the end of February.

Between 1929 and 1933, the money supply plummeted by 28 percent.

Despite the year-over-year percentage decline, the money supply remains nearly 38 percent above the pre-pandemic level.

The downward trend, which started in February 2021, resulted from the central bank reversing its pandemic-era liquidity injections, the Fed reducing the enormous balance sheet, and sliding bank deposits.

Across the globe, many economies are reporting slowing or contracting M1 money supply growth.

In the European Union, the M1 annual growth rate contracted by 2.7 percent in February, down from negative 0.8 percent in January. The United Kingdom’s M1 slowed to 1.55 percent in January. The M1 for Canada fell for three straight months to close out 2022, tumbling 3.57 percent in December.

Recession Confirmed?

So, does this point to a recession? Some economists warn that the collapse in money supply growth in the United States and other countries is a warning of an economic downturn.

“We have not seen money supply declines like this since the Great Depression,” said Mike Shedlock, an economist and registered investment advisor for SitkaPacific Capital Management.

“The contrarian position isn’t that a recession will come later, but rather that it’s already started.”

According to Steve Hanke, the professor of applied economics at Johns Hopkins University and a senior fellow at the Independent Institute, thinks “a U.S. recession is baked in the cake.”

“Due to the Fed’s monetary mismanagement, the M2 money supply is falling at its fastest rate since the 1930s,” he stated.

“The QUANTITY THEORY OF MONEY tells us that, w/ a 6-18 month lag after M2 drops, economic activity will slump.”

But others, like Fed Chair Jerome Powell, do not believe the money supply impacts the economy.

“When you and I studied economics a million years ago, M2 and monetary aggregates seemed to have a relationship to economic growth,” Powell told Sen. John Kennedy (R-La.) during his semiannual monetary policy report to Congress in 2021. “Right now … M2 … does not really have important implications. It is something we have to unlearn I guess.”

Federal Reserve Board chairman Jerome Powell speaks during an interview at the Renaissance Hotel in Washington, on Feb. 7, 2023. (Julia Nikhinson/Getty Images)

Meanwhile, many leading recession indicators have been flashing red again.

The six-month average of the Conference Board Leading Economic Index (LEI), which assesses credit, labor, and manufacturing, is negative 3.6 percent.

“While the rate of month-over-month declines in the LEI have moderated in recent months, the leading economic index still points to risk of recession in the U.S. economy,” said Justyna Zabinska-La Monica, the senior manager of business cycle indicators at the Conference Board, in a statement.

The widely watched spread between the two- and 10-year Treasury yields has been inverted since July 2022, trading at around negative 60 basis points as of April 11. This is considered the chief recession indicator, as it has called nearly all recessions since the Second World War.

The Fed’s preferred recession gauge – the three-month and 10-year yields – has also been inverted since the end of October 2022, trading at negative 167 basis points.

Typically, long-duration bonds yield better than short-term securities. However, the reverse occurs if the financial market maintains a weak outlook for the economy and a credit crunch in the banking system.

In addition, the Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers’ Index (PMI) fell to 46.3 in March. Nearly every time this metric has tumbled this low, the U.S. economy was in or on the cusp of a recession. However, times have changed since the manufacturing sector only represents about 11 percent of the national GDP today.

Eric Lascelles, the chief economist for RBC Global Asset Management, believes a recession risk “has gone up somewhat.”

“Whereas the risk of a U.S. recession over the coming year was at around 70 percent a few months ago, perhaps it is now up to an 80 percent chance,” he wrote in a note.

“A soft landing remains technically possible, but it is harder to achieve than before.”

Despite deteriorating economic metrics, Treasury Secretary Janet Yellen is confident the U.S. economy will avert a downturn.

“The U.S. economy is obviously performing exceptionally well with continued solid job creation, inflation gradually moving down, robust consumer spending,” she said at a press conference on Tuesday.

“So I’m not anticipating a downturn in the economy, although, of course, that remains a risk.”

This weekend Poland and Hungary both took the drastic step of banning Ukrainian grain and other food product imports after cheap goods have flooded both countries. 

The Polish prime minister’s office called the drastic action a necessary measure “to protect the Polish agricultural market against destabilization.” Hungarian Agriculture Minister István Nagy also announced a temporary ban on import of grain and oil seeds, along with other foods, which he said is needed “in the absence of meaningful EU measures.”

In the wake of Ukrainian ports being blocked for many months prior to the UN-brokered rain export deal, Ukrainian grain to Africa and the Middle East was largely halted.

While much of it flowed into neighboring Poland, the majority tended to remain stuck in the country, which severely impacted Polish farmers given collapsing prices that resulted.

The government of Ukraine immediately said it “regrets the decision of its Polish counterparts” following the weekend announcement. 

The European Union on Sunday blasted the Polish and Hungarian measures, per The New York Times:

The European Union has criticized bans by Poland and Hungary on imports of Ukrainian grain and other foods over the weekend, saying the unilateral moves were “unacceptable.”

The bloc, of which Poland and Hungary are member states, lifted tariffs on Ukrainian grain last year to help transport it to the rest of the world amid Russia’s invasion, but the exports have led to a glut of produce in Europe. As a result, farmers in Poland, Hungary and other nations have seen their incomes plummet.

Bulgaria is now also said to be mulling a similar measure. According to more from EU officials: 

A spokesperson for the European Commission, the European Union’s executive arm, said in an email on Sunday that such a trade policy was a matter of “E.U. exclusive competence,” meaning that only the bloc could adopt legally binding decisions.

The crisis could escalate, with the EU concerned over a continued domino effect of individual nations implementing their own policies, given Moscow has of late expressed doubts over its continuing participation in the UN grain deal which is monitored from Turkey, which is a mere weeks away from expiring.

Authored by Mike Shedlock via MishTalk.com,

We have gone from just in time manufacturing to just in case hoarding. Or have we?

If so, at what cost?

And what about China?

Is De-Globalization Happening? 

For all the talks of “de-coupling” or “de-globalization”, which I too thought was a distinct inflationary factor in my presentation last year, the concept remains so far well only a hypothesis. If anything trade deficits with China accelerated in both the EU and the U.S.. pic.twitter.com/RYmHoVCUbH

— Steve Hou (“CONSUME LESS!”) (@stevehouf) April 6, 2023

De-Globalization Transition?

„The question is whether we are in transition to a new world order: a trend towards disintegration and de-globalization with potentially serious political and economic consequences”, writes K. Regling, former ESM MD, in his latest article: https://t.co/GIUzqCtzz1 @OxResServ

— Juliana Dahl (@juliana_dahl) April 12, 2023

The Cost?

“If trust drove globalization, and globalization drove “The Great Moderation”, distrust will drive de-globalization, and de-globalization “The Great Reflation”…

What will be the economic consequences of mistrust?”

Zoltan Pozsar

— Ronnie Stoeferle (@RonStoeferle) April 5, 2023

The correct answer follows.

Three Stages of De-Globalization

Please consider the Three Stages of De-Globalization.

It is true that you cannot see de-globalization in the data, but there is a problem with this argument: today’s trade is the result of decisions taken a long time ago. Last year, German companies invested €11.5bn in China, the highest ever. Trade volumes with China are also near record levels. The WTO’s chief economist, Ralph Ossa, now warns that political decisions taken today will eventually be reflected in data on trade and investment.

He told FAZ that de-globalization takes place in three stages. Stage one is complete. It is a change in narrative. The second is protectionism, like the US inflation reduction act, and various measures now taken by all countries, the EU included, to subject trade and investment to geopolitical considerations. The third stage is an actual fall in trade and investment. That has not happened yet. But it is only a question of time.

Ossa put the cost of global de-fragmentation in terms of a fall in global national income at 5.4%. He puts the total opportunity cost at 8.6% of national income if one includes the gains that would have been possible through tariff reductions. There are similarities to the debate on the economic consequences of Brexit. Fragmentation has a cost. A single country can offset this cost, for example by switching the economic model. The world, as a whole, cannot do that. This is going to be a real loss in income due to negative network effects.

We see global fragmentation as the biggest of the foreseeable structural economic risks the world economy is facing right now. Ossa’s is the first numeric estimate we have seen of the total cost. We saw similar predictions ahead of Brexit. But there is one big difference. In the case of the UK, an electorate decided that it was ready to pay this cost. The world is now sleepwalking in a similar direction.

Stage Two

I discussed stage two, several times already. 

• November 30, 2022: The EU is Very Worried About Biden’s Inflation Reduction Act (IRA)

• December 6, 2022: Biden’s Climate Change War Picks Up Steam In More Ways Than One

• December 19, 2022: EU Imposes the World’s Largest Carbon Tax Scheme, Inflationary Madness Sets In

• January 16, 2023: “America First”, Biden and Trump Both Guilty of Sponsoring Inflation

Stage three is not that far off.

*  *  *

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With a general election looming in 2024, the subject of gender ideology has become controversial.

UK Prime Minister Rishi Sunak has emphasized his belief in biological sex, putting him in opposition to the leader of the Labour Party who has said that “99.9 percent of women do not have a penis” as Britain debates gender laws.

When asked earlier this week by right-leaning website, ConservativeHome, what percentage of women have a penis, Sunak agreed with the statement that “of course” 100 percent of women do not have a penis, reaffirming his view that “biological sex is vitally, fundamentally important to these questions.”

“We should always have compassion and understanding and tolerance for those who are thinking about changing their gender. Of course we should,” said Sunak.

As The Epoch Times’ Owen Evans reported earlier this week, according to a poll by Unherd, 38 percent agreed and 30 percent disagreed with the statement, “It is acceptable for adolescent children to make their own decisions about their gender identity.”

The poll also found that the subject “cuts across party lines and income groups,” while whole swathes of rural England are “deeply skeptical” and concentrated urban centres “feel very differently.”

There is renewed controversy surrounding the issue following the Scottish government’s decision to seek a judicial review after UK ministers intervened to prevent the Gender Recognition Reform (Scotland) Bill, passed by MSPs in December, from gaining royal assent.

The Scottish bill—championed by then-First Minister and SNP leader Nicola Sturgeon—would have allowed anyone over the age of 16 to self-ID via a statutory declaration to obtain a new birth certificate, which changes the recording of their registered sex at birth to their chosen gender.

There would also be no requirement for an applicant to undergo surgery or hormone therapy, and the process to change sex on birth certificates would have been simplified.

‘Adverse Impact’

But the UK government blocked the bill in January, citing its “adverse impact” on UK-wide equalities protection.

Labour leader Sir Keir Starmer and deputy leader Angela Rayner at the launch of of Labour’s 2022 local election campaign at The Brown Cow, Burrs Country Park, Bury, Greater Manchester, England, on March 31, 2022. (Danny Lawson/PA)

After Starmer’s assertion in a Sunday Times interview in April that “99.9 percent of women” do not have a penis, the Labour leader faced criticism from his own party.

“For 99.9 percent of women, it is completely biological … and of course they haven’t got a penis,” said Starmer.

Rosie Duffield MP, who has been outspoken about women’s single-sex spaces and gender ideology and has criticised Scotland’s Gender Reform Bill wrote on Twitter:

“There’s no ‘somehow’ or ‘could’ about the rolling back of women’s rights. It’s already a reality, one that huge numbers of women are frightened and furious about. Sir Keir could take a look at the 2,500 livid comments under his Sunday Times piece.”

Sunak’s ‘science-based’ comments have been fiercely criticized by the human-rights group Liberty, which said that his comments are grounded in “transphobic assumptions” and were a means for politicians to use the lives of transgender people as a “pawn in the culture wars.”

Authored by Sam Faddis via AND Magazine,

Back during the days of the Soviet invasion of Afghanistan, we gave our allies, the mujaheddin, a whole bunch of man-portable ground-to-air missiles called Stingers. They used them to great effect against the Russians.

They also sold a bunch of them on the black market. We then spent a great deal of time wandering all over the world, making deals with black-market arms dealers and buying back our own missiles so they would not be used to shoot down commercial airliners by terrorist groups. Needless to say, we paid top dollar to get the missiles back.

This is the way the world works. If you pass out money and weapons to people around the world you don’t always know in advance the ramifications. You can guarantee, however, that along the way some folks with less than honorable intentions will line their own pockets.

Which brings us to Zelensky and Ukraine.

.@JoeBiden As you throw billions in money and military equipment into .@Ukraine our southern border remains open, Mexican cartels are running with impunity along the border making money from drugs, human & sex trafficking. What’s your % from the Ukraine? @MinnesotaMiners pic.twitter.com/bYwUTic7np

— Minnesota Miners (@MinnesotaMiners) March 12, 2023

Seymour Hersh is reporting that the Ukrainians have embezzled at least $400 million of the money given them by the United States. Zelensky was confronted with the evidence of the embezzlement by CIA Director Burns and reportedly responded by dismissing a handful of officials but taking no serious action.

Seymour Hersh: TRADING WITH THE ENEMY

The Ukraine government, headed by Volodymyr Zelensky, has been using American taxpayers’ funds to pay dearly for the vitally needed diesel fuel that is keeping the Ukrainian army on the move in its war with Russia. It is unknown how much the Zelensky government is paying per gallon for the fuel, but the Pentagon was paying as much as $400 per gallon to transport gasoline from a port in Pakistan, via truck or parachute, into Afghanistan during the decades-long American war there…

Read more

None of this should be particularly surprising. Putin may be a thug, but Ukraine is one of the world’s most corrupt nations, and it has been for a very long time.

A 2016 report by the watchdog group Transparency International found that between 38 percent to 42 percent of Ukrainian households said they paid bribes just to access basic public services. The only nation in Europe considered more corrupt than Ukraine is Russia.

This is not even the first documented case of corruption involving funding for the ongoing conflict. Ukraine’s Security Service (SBU) reported recently that it had uncovered an embezzlement scheme in which money for food for the Ukrainian military was being siphoned off and ending up in the pockets of unscrupulous contractors. Per the SBU, officials from one ministry department made agreements with the heads of two commercial enterprises regarding the wholesale supply of food to locations where the military is deployed. Funds from the ministry’s budget were then transferred to the accounts of firms that “lacked a production base and technological equipment” to provide the relevant services.

“Instead of supplying the armed forces with the agreed quantities of food products, the participants in the fraudulent mechanism diverted the funds through a number of affiliated shadow companies,” the statement said.

NEW: Veteran reporter Seymour Hersh has uncovered a massive embezzlement of YOUR money, in Ukraine, which is funding BOTH sides of the war. READ: https://t.co/6x31ca0sSm

— The National Pulse (@TheNatPulse) April 13, 2023

The Special Inspector General for Afghan Reconstruction (SIGAR) based on its experience in Afghanistan has been warning of the potential for American money to be stolen in Ukraine for some time.

“There is an understandable desire amid a crisis to focus on getting money out the door and to worry about oversight later, but too often that creates more problems than it solves. Given the ongoing conflict and the unprecedented volume of weapons being transferred to Ukraine, the risk that some equipment ends up on the black market or in the wrong hands is likely unavoidable

“The rapid influx of weapons and equipment also presents risks: diversion to illicit markets, misuse amongst groups fighting in Ukraine, or their acquisition by Russia or other non-state actors. Russia has reportedly enlisted mercenaries from Libya, Syria, and Chechnya, which has raised concerns about U.S.-provided equipment finding its way to these countries.”

So, to recap.

• We have been shoveling billions of dollars of your money to the government of one of the most corrupt nations on the planet.

• We have ignored the lessons learned from doing the exact same thing for twenty years in Afghanistan.

• And, now, shockingly, it appears a great deal of the money we sent to those brave freedom fighters in Ukraine has ended up in the pockets of corrupt government officials.

Ukraine faces corruption investigation by Pentagon Inspector General over aid distribution https://t.co/3eoEwYXmfs

— Ian Miles Cheong (@stillgray) April 14, 2023

The Pentagon is now making noises about investigating and trying to find out what is going on. Good idea. Maybe before we send any more cash to Kyiv somebody ought to find out where all the money we sent already really went.

This weekend marked the most important holiday of the Orthodox Christian calendar: Easter, also called Pascha, is widely celebrated in Orthodox churches across Ukraine and Russia. 

Both countries on Sunday declared a “great Easter exchange” of prisoners, which included the Russian side releasing some 130 Ukrainian prisoners of war. It’s unclear how many Russians were freed in exchange, but it’s likely a similar or greater number.

130 Ukrainian soldiers were released from captivity and have returned to #Ukraine following a likely deal with #Russia on the occasion of Easter. pic.twitter.com/No0LigwHyO

— Michael A. Horowitz (@michaelh992) April 16, 2023

Reuters notes that “The exchange was the second large prisoner swap in the past week” after last Monday there was a swap with 106 Russian prisoners in exchange for 100 Ukrainians.

There have been semi-regular such exchanges along the front lines of the conflict, but which aren’t always widely reported.

Russia’s mercenary firm Wagner Group is believed to have held the majority of Ukrainian prisoners freed: 

“The lives of our people are the highest value for us,” Yermak said, adding that Kyiv’s goal was to bring back all remaining prisoners of war (POWs).

The prisoners appear to have been held by Russia’s powerful Wagner Group of mercenaries.

The group’s founder, Yevgeny Prigozhin, was shown telling the prisoners that they would be passed back to Ukrainian forces to mark Orthodox Easter in a video posted on Telegram by his press service.

“I hope you don’t fall back into our hands,” an armed Wagner soldier was heard telling the Ukrainian prisoners before they were ordered into a truck, some loading packs of water bottles.

In Ukrainian cities or regions engulfed by fighting, Easter service were limited:

Orthodox Easter celebrations in Ukraine were muted, with curfews barring the faithful from customary all-night services, celebrating the resurrection of Jesus in the Christian faith.

Russian President Vladimir Putin attended Easter services Saturday in Moscow’s Christ the Savior Cathedral. He crossed himself several times during the midnight service, known as the Divine Liturgy. When Patriarch Kirill announced, “Christ has risen,” Putin, along with other members of the congregation, replied, “Truly he is risen.”

As for Ukraine’s President Zelensky (who is Jewish), he issued an Easter address to the nation, given the majority of the country’s population identifies as Orthodox Christian. In the video address, he said Russia’s all-out war “cannot erase us”.

“Belief in it unites us all. Always, but especially today – on Easter, which has always been a family holiday for Ukrainians, a day of warmth, hope and great unity. The war could not erase us, our values, our traditions, our holidays, and the most important things they symbolize,” Zelensky said.

Authored by John Cody via Remix News,

Italy could see up to 50,000 migrants arriving a month if current trends hold…

Italy’s Prime Minister Giorgia Meloni has announced emergency measures to combat a surge in illegal immigration. (AP Photo/Geert Vanden Wijngaert)

Italy is responding to the number of illegal boat migrants quadrupling by declaring a nationwide state of emergency, with the government of Giorgia Meloni hoping it will help Italy cope with the growing immigration surge. However, experts are warning that if current trends hold, Italy could see up to 50,000 new arrivals a month in the summer months.

The new measures, which are initially limited to six months, are intended to free up additional resources and money to deal with the crisis. Over Easter alone, around 2,000 people landed in several boats on the Mediterranean island of Lampedusa.

In addition to emergency aid totaling €5 million, which will flow into the most affected regions of the country, the state of emergency will also see the construction of additional migrant shelters.

Migrants disembark from a ship in the Sicilian port of Catania, Wednesday, April 12, 2023. (AP Photo/Salvatore Cavalli)

So far this year, the Italian Interior Ministry has registered over 31,000 illegal entries by sea. In the same period last year, their number was 7,900. However, the real fear is that in the coming months with warmer weather, an unprecedented number of migrants could be arriving.

“Italy risks seeing something like 50,000 people arrive on its shores a month, i.e., just under 2,000 migrants a day. In March alone, landings exceeded 13,000 units and you don’t need a calculator to project this figure into the summer when sea conditions will be optimal for a greater number of days. If these figures are projected to the end of the year, Italy runs the risk of having over 250,000 migrants as of December 31,” writes Frances Gallici for Il Giornale newspaper.

Meloni is under pressure over immigration. Despite campaign pledges to reduce migrant flows, Italy has done little to tackle the crisis and has seen illegal immigration numbers rise dramatically. In fact, she has personally greeted migrants rescued from the sea in a photo op, leaving many conservatives questioning whether she has any appetite to tackle the issue. Her coalition partner, Matteo Salvini, is calling for stricter measures, such as the ones he instituted while serving as interior minister in 2019, which saw illegal immigration plummet.

Salvini, who now serves as deputy prime minister, is not keeping quiet about the issue either. From Udine, he underlined that Europe “has been chatting for years, but has never lifted a finger. It’s time to demonstrate that there is a union and solidarity is not only the responsibility of Italy, Spain, Greece or Malta, because we are unable to support a thousand arrivals a day economically, culturally and socially.”

Salvini’s League party has introduced 21 amendments to existing immigration laws that the party says will help speed up repatriations and serve as a deterrent to new arrivals.

A government statement regarding the emergency measures announces “new structures, suitable both for sheltering as well as for the processing and repatriation of migrants who don’t have the requisites to stay” in Italy. However, building new migrant shelters may improve congestion, but it is unlikely to reduce numbers overall.

According to the Italian Interior Ministry, the most common countries of origin for illegal immigrants are Ivory Coast (17 percent), Guinea (13 percent), Pakistan (11 percent), Egypt and Tunisia (8 percent each), Bangladesh (7 percent), Cameroon (5 percent) and Syria (4 percent). Another 22 percent are from other countries or have unclear status.

Authored by Pepe Escobar,

This is the tale of two pilgrims following the road that really matters in the young 21st century; one coming from NATOstan and another one from BRICS.

Let’s start with Le Petit Roi, Emmanuel Macron. Picture him with a plastic grin in his face strolling alongside Xi Jinping in Guangzhou. Following the – long and gentle – sound of classic “High Mountain and Flowing Water”, they enter the Baiyun Hall  to listen to it played by the 1000-year-old Guqin (a beautiful instrument). They taste the fragrance of 1000-year-old tea – and muse on the rise and fall of great powers in the new millennium.

And what does Xi tell Le Petit Roi? He explains that when you hear this eternal music played by this eternal instrument, you expect to be in the company of a bosom friend; you are in synch as much as the high mountain and the flowing water. That’s the deeper meaning of the ancient tale of musicians Yu Boya and Zhong Ziqi, 25 centuries ago in the Kingdom of Chu: bosom friendship. Only bosom friends can understand the music.

And with that, as Chinese scholars explained, Xi brought up the concept of Zhiyin. After Zhong Ziqi died, Yu Boya broke his Guqin: he thought that no one else could understand his music. Their story imprinted the term “Zhiyin”: someone who understands music, with the added meaning of close friends that can completely understand each other.

All bets are off on whether a narcissist puppet like Macron would ever be cultured enough to understand Xi’s subtle, sophisticated message: those that get it are true soul mates. Moreover, Macron was not dispatched to Beijing and Guangzhou by his masters to do soul mating, but to try to bend Xi towards NATO on Russia/Ukraine.

His body language is a dead giveaway – complete with crossing his arms demonstrating boredom. He may at first have been impervious to the notion that true friendship requires mutual understanding and appreciation.

But then something extraordinary happened. Xi’s message may have touched a key spot in the tortured inner depths of the narcissist Petit Roi. What if, in international relations, mutual understanding and appreciation is the key for nations to find common ground and work together towards common goals?

What a revolutionary notion; not exactly the Hegemon-imposed “rules-based international order”.

Are you a true Sovereign?

By inviting Le Petit Roi to China, and personally spending no less than 6 hours with his guest, Xi enacted millenniums-old diplomacy at its best. He reminded his guest of the turbulent history between France and the Anglo-Saxon powers; and he talked about sovereignty.

The key subtle sub-plot: “Europe” better think hard about being subservient to the Hegemon and minimize as best as possible the massive economic turbulence when Confrontation Day with the U.S. arrives. Implied is Beijing’s priority of breaking up growing U.S. attempts to encircle China.

So Xi treated France as a potential true Sovereign even under the EU; or somewhat splitting from EU dogma.

Of course another key message was implied under this Confucian invitation to epistemological growth. For those not willing to be friendly to China because of complex geopolitical layers, it will never be too late for Beijing to show the less “friendly” side of the Chinese state – if the situation arises.

Translation: if the West goes for Total Machiavelli, China will apply Total Sun Tzu. Even if Beijing would rather go for international relations under the aegis of Beauty, Goodness and Truth rather than “you’re with us or against us”, war of terror and sanctions dementia.

So did Petit Roi have a “road to Damascus” moment? The verdict is open. He literally freaked the Hegemon out with his outburst that Europe must resist pressure to become “America’s followers”. That’s pretty much in synch with the 51 points agreed upon by Beijing and Paris, with emphasis on “legitimate security concerns of all parties”.

The Americans got even more spooked when Macron asserted that Europe should become an independent “third superpower”. Le Petit Roi even advanced some baby steps in favor of de-dollarization (certainly under supervision of his financial masters) and not in favor of Forever Wars.

So the Americans, in panic, had to send German 5th column Annalena “360 Degrees” Bearbock in a hurry to Beijing to try to undo Le Petit Roi’s outbursts – and reaffirm the Washington Dictates Brussels official script. No one, anywhere, paid the slightest attention.

That came on top of the most glaring subplot of the whole tale: how European Commission dominatrix Ursula von der Leyen was treated by Beijing as worse than irrelevant. A Chinese scholar scathingly described her as “just the mouthpiece of a canine organization with no teeth. Even her bark sounds like whimpering from a terminally ill dog that is about to be euthanized.”

The “terminally ill dog” had to go through passport control and customs (“Anything to declare”?) No diplomatic status. No official invitation. No sovereignty. And no, you cannot take the special high-speed train alongside Macron to go to Guangzhou. So here’s another message – this one quite graphic: Don’t mess with the 3,000-old Middle Kingdom ethos.

Lula and “Zhiyin”

Top Chinese scholars were absolutely riveted by Xi applying diplomatic stratagems that had been so useful 25 centuries ago, now re-enacted on the road-to-multipolarity global stage.

Some are calling for a new “Strategies for the Warring States” rewritten for the 21st century. The massive round table set up by Chinese protocol with the “jungle” in the middle and Macron and von der Leyen positioned as if for a job interview was a monster hit on Weibo and We Chat. That led to endless discussions on how China is now finally able to “drive a wedge among the barbarians”.

Compared to all this hoopla, the tale of Brazilian President Lula coming to Shanghai and Beijing reads like a graphic illustration of Zhiyin.

Lula went for the jugular right from the start, during the inauguration of former President Dilma Rousseff  as the new president of the NDB, the BRICS bank.

In simple, direct language that anyone from Sahara to Siberia can understand, Lula said, “Every night I ask myself why should every country need to be tied to the dollar for trade? Why can’t we trade in our own currencies? And why don’t we have the commitment to innovate?”

Directly implied is the fact that the expanding BRICS+ should design and promote its own currency (the long, complex process has already started), on top of allowing trade in national currencies.

Lula’s powerful message was addressed to the whole Global South. A Brazilian example is China’s ICBC setting up a clearing house in Brazil allowing direct yuan-real exchange.

It’s no wonder that the CIA official rag, the Washington Post, foaming at the mouth, immediately issued the Deep State verdict: Lula is not obeying the “rules-based international order” diktat.

That means the Deep State will come after Lula and his government – all over again, and will go no holds barred to destabilize it. Because what Lula said is exactly what Saddam Hussein and Colonel Gadaffi said – and tried to implement – in the past.

So Lula will need all the help he can get. Enter, once again, “Zhiyin”.

This is how Xi officially welcomed Lula in Beijing. Very few people around the world, non-Chinese, understand that when someone of Xi’s stature tells you, right in front of you, that you are “an old friend of China”, this is it.

All doors are open. They trust you, embrace you, protect you, listen to you, help you in times of need and will always do their best to keep the friendship close to their hearts.

And that ends, for now, our tale of “bosom friends” taking the road to Beijing. The BRICS friend certainly understood all there is to know. As for the NATOstan Little King dreaming of becoming a true sovereign leader, the moment of truth is knocking at his door.

“Chemically distinct liquid shooting up from the seafloor” has been detected by researchers on a stretch of a 600-mile-long fault line in the Pacific Ocean, which is situated only 50 miles away from the Oregon coast, and could potentially trigger a catastrophic earthquake in the Pacific Northwest. 

“Pythia’s Oasis is a newly discovered seafloor seep on the Central Oregon segment of the Cascadia Subduction Zone, where focused venting emits highly altered fluids ~9°C above the background temperature. The seep fluid chemistry is unique for Cascadia and includes extreme enrichment of boron and lithium and depletion of chloride, potassium, and magnesium. We conclude that the fluids are sourced from pore water compaction and mineral dehydration reactions with minimum source temperatures of 150° to 250°C, placing the source at or near the plate boundary offshore Central Oregon,” researchers at the University of Washington wrote in a study. 

Researchers said the seep is nearly a mile below the surface of the ocean at the plate boundary and was first observed in 2015. They fear the leak could be a sign of future earthquake activity:

“The megathrust fault zone is like an air hockey table.

“If the fluid pressure is high, it’s like the air is turned on, meaning there’s less friction and the two plates can slip. If the fluid pressure is lower, the two plates will lock – that’s when stress can build up,” co-author Evan Solomon, a University of Washington associate professor of oceanography who studies seafloor geology, wrote. 

Video of an underwater drone surveying the seafloor seeps. 

The Cascadia Subduction Zone parrels several major West Coast cities, including Seattle and Portland, Oregon, as well as Northern California and Vancouver Island in Canada. And researchers fear the seismically quiet fault line could be awakened and “unleash a magnitude-9 earthquake in the Pacific Northwest.”