Authored by Paul Joseph Watson via Summit News,

During an event in Springfield, Virginia, Joe Biden joked about people thinking he was “stupid” before making yet another embarrassing verbal gaffe.

The president made the remarks while addressing the state of the economy.

“I uh, I said that, uh, when I was seeking the nomination I said, ‘Take a seat, everybody!’ and there wasn’t a single chair in the place,” joked the 80-year-old.

Joe Biden makes a joke about people thinking he’s stupid right before looking for Congressman “Doug” (Rep. Don Beyer). pic.twitter.com/T6Uw18J73S

— Townhall.com (@townhallcom) January 26, 2023

“They said, ‘That Biden really is stupid, he really doesn’t know a…” he added.

Biden then asked “where’s Doug?” in reference to Rep. Don Beyer, but had difficulty finding him (presumably because he’s not called Doug).

During the same speech, Biden then rather awkwardly proved once again why people have questioned his cognitive ability.

“No president added more to the debt in four years than my president,” Biden told the crowd at the Steamfitters Local 602 union hall.

“I-I misspoke. Twenty-five percent of our country’s entire debt,” he quickly corrected himself.

Biden is lost in the sauce:

“No president added more to the debt in four years than my president.”pic.twitter.com/KSQuI3q1Qb

— Citizen Free Press (@CitizenFreePres) January 26, 2023

Oh dear.

Last year, we highlighted the comments of former White House physician Ronny Jackson, who said that Joe Biden “won’t finish his term” because “his mind is too far gone.”

Speculation has been raging for a long time that prominent Democrats are trying to prevent Biden from running again in 2024.

During a discussion on his podcast earlier this month, Joe Rogan suggested the latest scandals surrounding Joe Biden indicated that top Democrats are “trying to get rid of him.”

Biden would be in his mid-80’s by the time he left the White House if he won again in 2024.

*  *  *

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Authored by Brandon Smith via Alt-Market.us,

The decline of a currency’s world reserve status is often a long process rife with denials. There are numerous economic “experts” out there that have been dismissing any and all warnings of dollar collapse for years. They just don’t get it, or they don’t want to get it. The idea that the US currency could ever be dethroned as the defacto global trade mechanism is impossible in their minds.

One of the key pillars keeping the dollar in place as the world reserve is its petro-status, and this factor is often held up as the reason why the Greenback cannot fail. The other argument is that the dollar is backed by the full force of the US military, and the US military is backed by the US Treasury and the Federal Reserve – In other words, the dollar is backed by…the dollar; it’s a very circular and naive position.

These sentiments are not only pervasive among mainstream economists, they are also all over the place within the alternative media. I suspect the main hang-up for liberty movement analysts is the notion that the globalist establishment would ever allow the dollar or the US economy to fail. Isn’t the dollar system their “golden goose”?

The answer is no, it is NOT their golden goose. The dollar is just another stepping stone towards their goal of a one-world economy and a one-world currency. They have killed the world reserve status of other currencies in the past, why wouldn’t they do the same to the dollar?

Globalist white papers and essays specifically outline the need for a diminished role for the US currency as well as a decline in the American economy in order to make way for Central Bank Digital Currencies (CBDCs) and a new global currency system controlled by the IMF. I warned about this years go, and my position has always been that the derailment of the dollar would likely start with the end of its petro status.

In 2017 I published an article titled ‘Saudi Coup Signals War And The New World Order Reset’. I noted at the time that the sudden power shift over to crown prince Mohammed Bin Salman indicated a change in Saudi Arabia’s relationship to the US. I stated that:

“To understand how drastic this coup has been, consider this — for decades Saudi Kings maintained political balance by doling out vital power positions to separate, carefully chosen successors. Positions such as Defense Minister, the Interior Ministry and the head of the National Guard. Today, Mohammed Bin Salman controls all three positions. Foreign policy, defense matters, oil and economic decisions and social changes are now all in the hands of one man.”

The rise of MBS was backed by the Public Investment Fund (PIF), a fund comprised of trillions of dollars supplied by globalists within Carlyle Group (Bush family, etc.), Goldman Sachs, Blackstone and Blackrock. MBS garnered the favor of the globalists for one specific reason – He openly supported their “Vision For 2030”, a plan for the dismantling of “fossil fuel” based energy and the implementation of carbon controls. Yes, that’s right, the head of Saudi Arabia is backing the eventual end of oil based energy, and part of that includes the end of the dollar as the petro currency.  

In exchange for their cooperation, the Saudis are being given access to ESG-like funding as well as access to AI advancements and the so-called “digital economy.”  It sounds crazy, but there is much talk of AI developments to cure numerous health problems and extend lifespan.  With those kinds of promises, it’s not surprising that Saudi elites would be willing to dump the dollar and even oil.

In 2017 I noted that:

“I believe the next phase of the global economic reset will begin in part with the breaking of petrodollar dominance. An important element of my analysis on the strategic shift away from the petrodollar has been the symbiosis between the U.S. and Saudi Arabia. Saudi Arabia has been the single most important key to the dollar remaining as the petrocurrency from the very beginning.”

I believed that the threat to petro status would ultimately be spurred on by a proxy war between East and West:

“World economic war is the real name of the game here, as the globalists play puppeteers to East and West. It is a geopolitical crisis they will have created to engineer public support for a solution they predetermined.”

Back then I thought that such a proxy war would be initiated in the Middle East, possibly in Iran. However, it’s clear that Ukraine is the powderkeg the globalists have chosen, at least for now, with Taiwan being the next shoe to drop.

In the years since I made these predictions the relationship between Saudi Arabia, Russia and China has grown very close. Arms deals and energy deals are becoming a mainstay of trade and this has led to a quiet but steady distancing of the Saudis from the dollar. This past week, the dominoes were set in motion for dollar collapse when Saudi Arabia announced at Davos that they are now willing to trade oil in alternative currencies.

In response, Xi Jinping pledged to ramp up efforts to promote the use of the Chinese yuan in energy deals. This falls in line with another article I wrote in 2017 titled ‘The Economic End Game Continues,’ in which I described how conflict with Eastern nations (China and Russia) would be exploited to create a catalyst for the end of the dollar’s petro status.

The importance of the Saudi announcement cannot be overstated; this is the beginning of the end of the dollar. The dollar’s world reserve status is largely dependent on its petro-status. Without one, you cannot have the other. This is almost the exact same dynamic that led to the implosion of the British Sterling decades ago as the global petro currency which resulted in the rise of the dollar to take its place.

This time, though, it will not be a single foreign currency that takes on the role of world reserve, it will be a basket currency system controlled by the IMF called Special Drawing Rights, along with a single global digital currency that is yet to be named but is now under development.

The consequences of the loss of reserve status will be devastating to the US economy. It is the only glue holding our system together – The ability to defer inflation by exporting it overseas is a superpower only the US enjoys. The Fed can print money perpetually if it wants to in order to fund the government or prop up US markets, as long as foreign central banks and corporate banks are willing to absorb dollars as a tool for global trade. If the dollar is no longer the primary international trade mechanism, the trillions upon trillions of dollars the Fed has created from thin air over the years will all come flooding back to the US through various avenues, and hyperinflation (or hyperstagflation) will be the result.

This dynamic is already in play, as foreign holders of US debt and dollars have been dumping them at record pace since 2017. The process continues at a time when the Federal Reserve is cutting it’s balance sheet and raising interest rates, which means there is no longer a buyer of last resort.

This may be why multiple foreign central banks have renewed their purchases of gold reserves and are once again stockpiling precious metals. They seem to be well aware of what is about to happen to the dollar, while the American public is kept in the dark.

The effects of the decline of the dollar may not be immediately felt, or become obvious for another year or two. What will happen is consistent inflation on top of the high prices we are already dealing with. Meaning, the Federal Reserve will continue to hold interest rates higher and prices will barely budge or they may climb in spite of monetary tightening. Even in the face of a major recessionary contraction, which I predict will be triggered starting in April, prices will STILL remain higher.

All the while the mainstream media and government economists will say they have “no idea” why inflation is so persistent, and that “nobody could have seen this coming.” Some of us saw it coming, but only because we accept the reality that the dollar’s days are numbered.

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On Tuesday, German Foreign Minister Annalena Baerbock ignited a firestorm of debate when she stated that Western allies are fighting a war against Russia – causing many to suggest that she essentially ‘declared war’ on Russia, and contradicting the official stance by saying the quiet part out loud.

“And therefore I’ve said already in the last days – yes, we have to do more to defend Ukraine. Yes, we have to do more also on tanks,” she during a Tuesday keynote address at the Parliamentary Assembly of the Council of Europe in Strasbourg, France – adding “But the most important and the crucial part is that we do it together and that we do not do the blame game in Europe, because we are fighting a war against Russia and not against each other.“

German foreign minister declares war on Russia pic.twitter.com/C4cAqnZXhD

— Michael Tracey (@mtracey) January 25, 2023

Baerbock’s comments played right into Russia’s position that they are in a proxy war with the West which was triggered by decades of NATO expansion to their doorstep, vs. the West’s position that they’re simply supporting Ukraine against an unprovoked invasion.

Of note, on Wednesday, Washington announced that it would send more than 30 M1 Abrams tanks to Kiev, while Berlin committed to a dozen Leopard II panzers, while encouraging Poland and other EU and NATO members to provide similar support. France, meanwhile, is “continuing our analysis” of the proposal to send tanks to Ukraine, after already promising several AMX-10 “light tanks” earlier this month.

NATO members France and Croatia have explicitly refuted Baerbock.

“We are not at war with Russia and none of our partners are,” said French ministry spokeswoman Anne-Claire Legendre on Thursday, per AFP. “The delivery of military equipment… does not constitute co-belligerence.”

Croatian President Zoran Milanovic called Baerbock’s comments “madness.”

“Now the German foreign minister says we must be united, because I quote, we are at war with Russia. I didn’t know that,” he said, adding “Maybe Germany is at war with Russia, but then, good luck, maybe this time it turns out better than 70-odd years ago.”

“If we are at war with Russia, then let’s see what we need to do. But we won’t ask Germany for its opinion,” Milanovic asserted. “Let them figure out who is the actual chancellor over there. I’ve been in politics for a long time, and our country has been through a lot, but I’ve never seen this kind of madness before,” he continued.

“Do you want us to enter the war?” he asked during a visit to the port city of Split, adding that Croatia “should in no way help” Ukraine militarily, Summit News reports.

Croatian President Zoran Milanovic: The German Foreign Minister said in English the day before yesterday in Strasbourg that we must be united because we are at war with Russia. I quote: “We are at war with Russia.” I did not know that. pic.twitter.com/dnQO1VllwQ

— Milopotamus (@Xifidion) January 27, 2023

Serbian foreign minister Ivica Dacic, meanwhile, commented on the US-EU sanctions against Russia, saying that the embargo on Moscow would harm Belgrade.

Dacic made the comments on Thursday from Ankara after meeting with his Turkish counterpart, Mevlut Cavusoglu.

Last week the European Parliament demanded that Belgrade enter into a “full alignment” with the bloc’s foreign and security policy, and join the embargo.

According to Dacic, Serbia has not joined out of “national and state interests, economic cooperation, as well as problems Serbia has with Kosovo,” referring to the NATO-backed breakaway province.

“It would be inappropriate for Serbia to sanction Russia now, and it would be harmful to our interests,” he said, adding “That doesn’t mean we won’t do everything to clearly say we don’t support the infringement of Ukraine’s territorial integrity and help as much as we can.”

Authored by Steve Watson via Summit News,

Senator Rand Paul warned Wednesday that over classification of information is being used to avoid oversight and institute cover ups, such as regarding the origins of COVID.

Appearing on Newsmax TV’s “Eric Bolling The Balance,” Paul explained “I think there’s an overclassification problem here. Everything’s classified. And in all likelihood, what we’ll find is this is not some sort of organized scheme to have the secrets to the nuclear weapon in [Biden’s] Corvette. I think it’s more likely than not that we’ve classified so many documents that it’s hard to find documents that are not classified.”

He continued, “The one problem with classifying so much is that there is, right now, to my knowledge, pretty good information out there in the intelligence community about the virus originating from the lab in China, and yet they classify it to try to prohibit people [like] me giving you the information that we already know that this came from a lab. And so this is a real problem.”

“We need to allow less classification so the American people can understand more about what’s going on with their government,” Paul urged.

He added, “I go to classified hearings, and I haven’t actually been to a classified hearing where I actually thought I heard a secret, to tell you the truth.”

Paul further noted that when President Trump was found to have some documents, “the left-wing media acted as if oh, these are the Manhattan Project. This is the secrets to the nuclear weapon… Really, most of the stuff we see is not really that secret. But it’s all stamped that way.”

“The intelligence community does this so they have more power and we have less power,” the Senator continued, adding “I have long argued that Congress needs to know more and the American people need to know more about what the CIA does, what the FBI does. Because we can’t oversee them, we can’t have oversight and reform if we don’t know what they’re doing.”

“They avoid oversight by classifying things, and often there’s a policy decision like, for example, with COVID, we need to know if COVID came from a lab so we can prevent this from happening again. Some of this is being stymied by the intelligence agencies classifying things that need to be declassified,” Paul further asserted.

Watch:

Paul has previously labeled the subterfuge over the coronavirus lab leak as “the biggest coverup in the history of science,” and has vowed to continue to expose the origins of the pandemic and uncover a paper trail that he is positive will lead back to the Wuhan lab research funded by Anthony Fauci and the National Institutes of Health.

Video: Rand Paul Promises To ‘Find The Paper Trail’ For Lab Leak COVID Origin

*  *  *

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It’s a vote of confidence for crypto when the space needs it most…

Ed Tilly, Chief Executive Officer at Cboe Global Markets Inc., said this week he wants to list more token on the company’s crypto exchange in the wake of the FTX blowup and additional, ongoing blowups in the space.

Tilly said this week that established firms from the traditional world of finance are seeking “reliable counterparties” and that his company wants to “capitalize” on that demand, a report from Bloomberg said on Thursday.

Bitcoin, Bitcoin Cash, Ether, Litecoin and USD Coin already trade on Cboe Digital, the report says. 

In terms of an opportunistic business opportunity, the timing couldn’t be better for Cboe now that major exchange FTX has collapsed and is currently in the midst of bankruptcy proceedings. Cboe would likely have an opportunity not only to capture some of FTX’s business, but to help restore credibility to crypto in general. 

The Commodity Futures Trading Commission and Securities & Exchange Commission are now seeking to regulate crypto, the report says, would could add another much-needed layer of credibility to the space. 

Tilly commented: “We will be taking this slowly as the SEC and the CFTC debate jurisdictional oversight, but our goal is, of course, to offer more and more exposures than the current five tokens we do today.”

The report says that Cboe “is also planning to list margin futures on its CFTC-regulated entity, and is working to get approval from the regulator” to do so. The details of these contracts were described by Bloomberg: 

These contracts would be less capital intensive to trade and would require a broker as intermediary.  The bourse’s current Bitcoin and Ether futures require customers to outlay the full amount of the contract upfront. The margin model, used in the commodities markets, requires just a percentage of the total as collateral.

Authored by Caden Pearson via The Epoch Times,

Rep. Matt Gaetz (R-Fla.) introduced a resolution in the U.S. House of Representatives on Thursday calling for an investigation into Rep. Adam Schiff (D-Calif.) and proposed he be denied access to classified information.

The resolution (pdf), titled “Preventing Extreme Negligence with Classified Information Licenses Resolution,” or “PENCIL Resolution,” is an updated version of a similar resolution Gaetz introduced in 2019.

It calls for Schiff to be denied access to classified information and investigated by the House Ethics Committee. It also calls for his comments on the discredited allegations that Russia colluded with the Trump campaign in 2016 to be struck from the official record.

“Congressman Adam Schiff led the effort for years to weaponize lies from the Clinton campaign and a corrupt Department of Justice to smear President [Donald] Trump while destroying any trust the country had left in America’s intelligence agencies,” Gaetz said in a statement.

“Speaker McCarthy kept his promise to remove Rep. Schiff from the Intelligence Committee, and with the PENCIL Resolution, we will express the sense of Congress that he should be barred from accessing any classified information at all,” he continued. “He can no longer be trusted by his colleagues in Congress or the American people.”

House Speaker Kevin McCarthy officially rejected Schiff for a seat on the House Intelligence Committee on Jan. 24, having argued that Schiff “lied to the American public.”

The day before McCarthy denied Schiff a seat, Charles McGonigal, a former FBI agent who played a role in investigating Trump’s 2016 campaign advisers Carter Page and George Papadopoulos over the collusion allegations, was himself arrested for alleged ties to a Russian oligarch.

The U.S. Department of Justice announced on Jan. 23 that McGonigal had been charged with violating and conspiring to violate the International Emergency Economic Powers Act by laundering money on behalf of Oleg Deripaska, a sanctioned Russian billionaire.

Gaetz argued that McGonigal’s arrest “proved that the very people investigating President Trump for Russian collusion were themselves taking orders from Russian oligarchs.”

U.S. Rep. Adam Schiff (D-Calif.) listens during the third hearing by the Select Committee to Investigate the January 6th Attack on the U.S. Capitol in the Cannon House Office Building in Washington on June 16, 2022. (Anna Moneymaker/Getty Images)

PENCIL Resolution

Schiff served on the Intelligence Committee since January 2015, first as the ranking minority member when Republicans were last in the majority, then as chairman from January 2019 to Jan. 3, 2023, when Democrats were in the majority.

The Democrat was one of eight members, referred to by Gaetz as the “Gang of Eight,” who had access to critical and sensitive intelligence information that other members of Congress and the American people did not have clearance to access.

Gaetz’s resolution states that during his tenure, Schiff made false claims about collusion between Trump and Russia during the 2016 election, despite the principal conclusions of the Mueller Report determining that there was no criminal collusion.

In December 2017, Schiff said during an interview with CNN: “The Russians offered help, the campaign accepted help. The Russians gave help, and the president made full use of that help.” The resolution additionally notes that Schiff incorrectly claimed there was “clear evidence on the issue of collusion.”

Further, the resolution states that Schiff has been untrustworthy by advancing lies about Trump and that Schiff has attempted to cover his abuse of discretion with legislation.

In November 2020, Schiff’s office demanded Twitter remove “any and all content” by alleged harassers and spreaders of so-called misinformation about the committee’s staff. This included removing content created by State Department staffers that challenged the Russia collusion narrative. His office also called for the suspension of “many” accounts.

Ultimately, the resolution states that Schiff “can no longer be trusted by his colleagues in Congress or the American people.”

The Epoch Times contacted Schiff’s office for comment.

The headline from this morning’s income and spending data is The Fed’s favorite inflation indicator – Core PCE Deflator – printed pretty much in line with expectations (headline up 0.1% MoM was marginally hotter than expected). The year-over-year prints dropped to 5.0% and 4.4% respectively for headline and core – while both lower and trending down from the highs last year, these prints are still the highest since 1991…

Source: Bloomberg

Americans’ income was expected to rise 0.2% MoM and spending drop 0.1% MoM and while incomes met expectations, spending was weaker than expected (-0.2% MoM). That is the second straight month of spending declines…

Source: Bloomberg

On a year-over-year basis, spending growth continues to outpace income growth…

Source: Bloomberg

Notably, govt wages and salaries are growing faster than those of private workers for the first time since March 2020:

• Private workers wage growth Dec 4.4%, vs 5.1% in Nov

• Govt workers wage growth Dec 4.8%, vs 4.9% in Nov

All of which leaves the personal savings rate languishing near record lows (although it did improve from 2.9% to 3.4% – its highest since May 2022 – as credit card debt hits record highs)…

Source: Bloomberg

We note that the savings rate was revised significantly higher in the last two months… (as credit card debt has soared)…

How much of the savings rate increase is real vs excel spreadsheet adjustments is TBD, but this is good news for Powell: consumer starting to retrench and save more -> less inflation https://t.co/WkPzMKplHL

— zerohedge (@zerohedge) January 27, 2023

Does that really sound like the ‘strong consumer’ we keep being told about? It sounds like the consumer is finally hitting their limit on spending (but no slowdown in credit card spending) and is pulling back… not a good sign for GDP.

By Greg Miller of FreightWaves

The decision by MSC and Maersk — the world’s two largest container lines — to terminate the 2M vessel-sharing alliance was predictable. The bigger surprise will be what happens next.

Will both MSC and Maersk go it alone after 2M ends in January 2025? Will Maersk join another alliance or create a new one? How will this affect the remaining two global alliances: Ocean Alliance and THE Alliance? And how will it affect cargo shipper pricing?

According to Alphaliner, MSC has acquired 271 secondhand ships since August 2020, with capacity of just over 1 million twenty-foot equivalent units. MSC’s recent secondhand acquisitions exceed the entire capacity of HMM, the world’s eighth-largest carrier.

MSC has over 1.8 million TEUs of newbuild capacity on order, more than double the orderbook of any other carrier. Its orderbook capacity is higher than the existing tonnage of Hapag-Lloyd, the world’s fourth-largest shipping line.

“To me, it is obvious that MSC will go on its own,” Alphaliner shipping analyst and Europe editor Stefan Verberckmoes told American Shipper. “It will have enough resources to offer a worldwide network without any partners, which is what it was used to doing before it joined 2M in 2015.

“It is indeed no surprise [that 2M will end],” said Verberckmoes. “That was really a forced marriage, because at that time, economies of scale were very important, everybody wanted to have large vessels, and the only way to fill them was to cooperate. Now times are completely different. MSC is now able to fly on its own wings.”

Sea-Intelligence CEO Alan Murphy said in an interview with American Shipper: “If MSC was going to invest itself out of the alliance, it has done all the right things, through its secondhand purchases and newbuilding expansion.”

Questions on Maersk

In sharp contrast to MSC, Maersk has kept its fleet capacity flat over the past three years. It focused instead on being an end-to-end logistics integrator, seeking to earn more from long-term customers’ logistics spend.

“For Maersk, the question is completely different,” said Verberckmoes. “They have chosen another strategy and not focused on fleet expansion, so if they want to keep the same network they have now, they need to find a replacement. They will have to review their options.”

American Shipper asked Maersk whether it could provide the same level of service coverage and quality to its customers post-2M without a new alliance partner, and whether it was committed to finding an alliance replacement.

The company responded: “Maersk will continue to be active in vessel sharing agreements [VSAs]. We are already active in over 40 VSAs in other geographies and we remain open to more targeted VSAs than the broad scope of 2M after the agreement ends in 2025.”

For several reasons, Murphy believes it is unlikely that Maersk will replace MSC with a major carrier in a new alliance, or join an existing alliance. 

“What I think is more likely is that Maersk will do VSAs. You see how they’ve managed to integrate with Zim [NYSE: ZIM], which is not a 2M member, on the Asia-East Coast trade. They can also do slot charters with THE Alliance on some trades and slot charters with Ocean Alliance on others.

“Rather than formally being in an alliance, I think it’s more likely they will focus on the key markets where they can provide end-to-end services and then find [VSA and slot-charter] partners in the other markets.”

Strategies ‘completely at odds’

One difficulty Maersk faces in replacing MSC relates to a core problem with 2M itself. “The strategic focuses of the two shipping lines have been completely at odds with each other,” explained Murphy.

“Maersk has staked everything on being an end-to-end logistics integrator. If you’re focused on the customer experience and end-to-end logistics, ocean transport becomes just a cog in a big machine. That cog just needs to work. You don’t need to necessarily make money on it because you’re making money on end-to-end logistics.

“But MSC’s focus has seemingly been: We need to make money as a vessel operator. That might very well mean blanking [canceling] sailings at a much higher rate and not wasting money on schedule recovery. In some trades where MSC operates independently, it looks more like tramp [unscheduled] than liner service.

“These two strategies have led to friction within the alliance. I wouldn’t say anybody is wrong here. It’s just that they don’t seem to be a good match.”

Maersk is much more focused on the end-to-end integrator model than any other carrier. So, replacing MSC would present Maersk with the same friction yet again.

“Joining another alliance is very unlikely although not impossible,” said Murphy. “But it would just open Maersk up to all of the challenges it already had with MSC.”

Other hurdles to replacing MSC

Several analysts believe that the 2M divorce will ultimately lead to a broader reshuffling of alliances.

Vespucci Maritime’s Lars Jensen — who has been predicting the demise of 2M for months —  said in an online post, “My view is that this is only the beginning of a reshaping of the alliance/VSA constellations, especially on the major east-west trades. In essence, this should be seen as the first domino of many to fall over the next one to two years.”

According to Verberckmoes, “In every alliance breakup, there is always an opening for new perspectives. We have seen in the past that every change in big alliance structures might trigger other changes.”

But Murphy pointed to multiple hurdles, beyond the issue of Maersk’s integrator strategy. 

In the case of 2M, Maersk and MSC were roughly equal-sized partners. Maersk would be the dominant partner of any alliance it joined. “You can bring in a Hyundai [HMM], because they’re tagging along, but to bring in an alliance partner that will now dominate the alliance would be very difficult,” he said.

There’s also the regulatory challenge. Chinese regulators barred the proposed P3 alliance among MSC, Maersk and CMA CGM, prior to the formation of 2M. “Can you disallow P3 but allow the Ocean Alliance plus Maersk? I can’t see that,” said Murphy.

Consultancy Drewry said in a research note on Wednesday, “Competition authorities will probably block any move [by Maersk] to join one of the other two alliances, which are contractually committed beyond the termination of 2M. Ocean Alliance runs to 2027 and THE Alliance to 2030.”

Another possibility is that Maersk could woo away a carrier in one of the two remaining alliances, such as France’s CMA CGM, and create a new alliance. “That’s not impossible, because CMA CGM and Maersk cooperated in the past, prior to P3. But there are a lot of challenges with siphoning off someone like CMA CGM,” said Murphy.

Cycle timing

Yet another complication is cycle timing. “You have to remember that alliances were the consequence of massive oversupply,” said Murphy. Carriers overordered large-size vessels and needed alliances to fill them effectively.

“Alliances come under pressure when things are going really well,” he continued. “There’s probably many a carrier that felt hemmed in and restricted by alliance obligations during the pandemic, because they couldn’t make tactical decisions on their own.

“Are things going to go well for shipping lines over the next two years? Probably not. In my opinion, we’re heading into a repeat of 2015-16, with massive oversupply and freight rates at or below cost. It’s going to be a bad two or three years.

“So, it makes no sense to leave an alliance now. But they’re not leaving an alliance now. They’re leaving in two years. It might make sense then. There is an expectation that at some point, [the market] will turn again. I assume that both shipping lines believe that when it does, they will be better positioned outside of an alliance.”

As for Maersk finding a new alliance home, the market outlook is highly uncertain, raising questions about whether other carriers would be willing to play the game of alliance “musical chairs” in the midst of a container shipping recession.

“I think the other alliance [partners] will be cautious about making any major changes now, heading into what is clearly a bear market,” said Murphy.

Bearish or bullish for rates?

Drewry outlined two scenarios in which the end of 2M could lead to lower shipping costs.

In one, an independent MSC faced with rapid fleet growth could “return to its old market-share/low-cost model, which could destabilize the market.”

In another, Drewry speculated that “a radical shake-up of the alliances” while “a remote possibility,” could “lead to carnage in the freight-rate market as new members court shippers over to their new teams.”

But Verberckmoes and Murphy do not see the alliance situation lowering shipping costs.

“I don’t think that alliances have had an impact on price,” said Verberckmoes. “If prices are declining, that means one or two carriers are going for market share, and I don’t think alliance changes have any effect on that. When it comes to rates, it is always the market that decides.”

According to Murphy, “A lot of customers hate alliances and believe them to be the source of all evil in the world. I think a lot of shippers will look at this [the 2M breakup] and think this is good for them.

“That depends on what they mean by ‘good.’ If they mean ‘cheap,’ probably not. In every simulation we’ve done where we look at how you could operate services more independently, with fewer VSAs and fewer alliances, the price goes up.”

He argued that alliances have led to reduced freight costs, in part because members of alliances must compete with each other on price while providing the same ocean service. “In an alliance, you lose all product differentiation on your liner product,” said Murphy. “You’re offering the exact same product — which was a massive driver of very low freight rates pre-pandemic.”