Nouriel Roubini, a former advisor to the International Monetary Fund and member of President Clinton’s Council of Economic Advisors, was one of the few “mainstream” economists to predict the collapse of the housing bubble. Now Roubini is warning that the staggering amounts of debt held by individuals, businesses, and the government will soon lead to the “mother of all economic crises.”
Roubini properly blames the creation of a debt-based economy on the near-or-at-zero interest rate and quantitative easing policies pursued by the Federal Reserve and other central banks. The inevitable result of the zero-interest and quantitative easing policies is price inflation wreaking havoc on the American people.
The Fed has been trying to eliminate price inflation with a series of interest rate increases. So far, these rate increases have not significantly reduced price inflation. This is because rates remain at historic lows. Yet the rate increases have had negative economic effects, including a decline in the demand for new homes. Increasing interest rates make it impossible for many middle- and working-class Americans to afford a monthly mortgage payment for even a relatively inexpensive home.
The main reason the Fed cannot raise rates to anywhere near what they would be in a free market is the effect it would have on the federal government’s ability to manage its debt. According to the Congressional Budget Office (CBO), interest on the national debt is already on track to consume 40 percent of the federal budget by 2052 and will surpass defense spending by 2029! A small interest rate increase can raise yearly federal debt interest rate payments by many billions of dollars, increasing the amount of the federal budget devoted solely to servicing the debt.
The federal government’s fiscal picture is made worse by the fact that the Social Security “Trust Fund” will begin to run deficits by 2035 while the Medicare Trust Fund will run deficits by 2028. The looming bankruptcy of the two major entitlement programs, combined with the unwillingness of most in Congress to reduce either welfare or warfare spending, puts the Fed in a bind. If it raises rates to the levels needed to really combat price inflation, the increase in interest payments will impose hardships on individuals and businesses, as well as raise federal interest payments to unsustainable levels. This will cause a major economic crisis including a government default on its debt causing a rejection of the dollar’s world reserve currency status. Also, if the Fed continues to facilitate federal deficits by monetizing the debt, the result will be an economic crisis caused by a collapse in the dollar’s value and rejection of the dollar’s world reserve status.
The crisis will lead to social unrest and violence, as well as increased popularity of authoritarian movements on both the left and the right. This will lead to government crackdowns on civil liberties and increased government control of our economy. The only bright spot is this crisis will also fuel interest in the ideas of liberty and could even help bring about a return to limited, constitutional government, free markets, individual liberty, and a foreign policy of peaceful trade with all. Those of us who know the truth have two responsibilities. The first is to make the necessary plans to ensure our families can survive the forthcoming turmoil. The second is to do all we can to introduce as many people as possible to the ideas of liberty.
Kremlin Vows To Take Out Patriot Batteries If US Sends To Ukraine
Russia has responded Wednesday to the prior day report from Pentagon sources that the Biden administration is finalizing plans to send Patriot anti-air defense missiles to Ukraine, in what will constitute the longest range defense systems transferred from the West to date.
“The Kremlin said on Wednesday that U.S. Patriot missile defense systems would be a legitimate target for Russian strikes against Ukraine, should the United States authorize them to be delivered to support Kyiv,” Reuters reports.
The Russian military has long sought to target both Western arms depots inside Ukraine, as well as inbound shipments traversing the country, which is part of the reason why early on in the invasion it heavily targeted the national rail network.
Deputy chairman of the Security Council of Russia Dmitry Medvedev posted the following warning statement directed at the US to his Telegram account (machine translation):
“If, as Stoltenberg hinted, NATO supplies Kyiv fanatics with Patriot complexes along with NATO personnel, they will immediately become a legitimate target of our Armed Forces. I hope the Atlantean impotents understand this.”
As for potential delivery of Patriot systems, The Washington Post reports according to the latest, “The plan is not yet approved by President Biden orDefense Secretary Lloyd Austin, but itcould be soon, the officials said, speaking on the condition of anonymity to detail sensitive internal deliberations.”
An initial CNN report said approval could come as early as this week, but it could take a significant amount of time to train the Ukrainians on the sophisticated Patriots’ operation. Training would likely occur in Germany and could take months.
The Washington Post notes further that the “Patriot-launched missiles can fly to altitudes as high as 79,000 feet, with an operational range, depending on the type of munition used, from a dozen to 100 miles, for use against ballistic and cruise missiles, as well as aircraft. It was not clear what kind of munitions the Pentagon will propose supplying.”
Ukraine now gets US Patriot missiles that cost the US taxpayer $3 million per missile to shoot down $30,000 Russian drones. The Russians can fire 100 drones for each US Patriot missile. The Pentagon strategists call this ‘unbalancing Russia’. pic.twitter.com/33kHrTEYk1
Range largely depends on the specific missile munition used, and it’s possible the Pentagon could limit ranges – as it reportedly did with HIMARS recently shipped to Ukraine, in order to prevent its systems being used by the Ukrainians to strike inside of Russia.
Often, boaters take the warning blow of a foghorn for granted and disregard it. However, all skippers seem to pay attention when they hear the scraping of their hull against a reef.
The yield curve is a financial foghorn of sorts. Currently, it is bellowing that something is drastically wrong. As evidenced by earnings growth estimates for 2023, financial skippers are going about their business as if a recession is unlikely.
Yield curve foghorns are often unheeded by investors as they blow well before danger is apparent. As such many investors are unprepared when problems arise.
Today, the 10-year/3-month UST yield curve is at its most negative level since 1982, as we share below.
The blast of the financial foghorn is deafening, but the financial waters and economic environment appear relatively calm.
Given the strong possibility that history repeats and the yield curve correctly portends danger, now is the time to examine how and when the yield curve will un-invert, or steepen, and what that might mean for asset prices.
In this article, we use the terms un-invert and steepen interchangeably to describe the yield curve rising from a negative value to a positive one.
The Market’s Foghorn
An inverted yield curve, whereby the yield of a shorter maturity bond is higher than a longer maturity bond, is an omen that something is wrong. Yield curves are often positively sloped. In free markets, investors should receive a higher yield for taking on the potential risks that grow with time. Since 1986, the 10yr/3m yield curve has been in a state of inversion less than 5% of the time.
The three graphs below show why an inverted yield curve is a foghorn worth following, even if the current environment doesn’t appear too worrisome.
Since 1986 every yield curve inversion has been followed by a recession. We only show the last four inversions, but be mindful that each of the previous eight inversions led to a recession. However, and this is a common theme in the following graphs, economic and financial hardship did not occur until after the curve steepened to a positive slope. It has taken anywhere from three to thirteen months and .53% to 2% steepening until a recession began.
The next graph shows stock market drawdowns follow a similar pattern. In all four inversions, the maximum drawdown in the market occurred after the curve started to steepen.
Lastly, and not surprisingly, stock earnings tend to fall appreciably after the yield curve troughs and regains its positive slope.
How Do Curves Un-invert?
Quickly and in a “V” shaped pattern, as the graphs above show.
The following graph compares the three un-inversions side by side to appreciate the speed and degree to which they normalize. The black vertical lines break the data into one-year increments. We leave out the 2019 example due to the unusual circumstances surrounding the pandemic and the massive fiscal and monetary responses.
Based on the three episodes, we should expect the curve to be positive by at least 1% and as much as 2.75% within one year of the maximum inversion. Within three years, a +3.5% slope is likely.
In the three cases, the large majority of the curve steepening was due to the short three-month rate plummeting. On average, the ten-year yield fell by 61 basis points, and the 3-month yield fell by 4.62%.
How Will the Curve Un-invert This Time?
Currently, Fed Fund futures forecast a terminal Fed Funds rate near 5%. Assuming that comes to fruition and the ten-year yield stays put, the yield curve will further invert to negative 1.50%.
This is where the analysis gets both problematic and concerning. What conditions might cause the yield curve to normalize?
The following scenarios help us consider the future shape of the curve.
Soft Landing
In this scenario, the economy slows or enters a very mild and short-lived recession. At the same time, the inflation rate falls rapidly.
Assuming this plays out, which we assign a low probability, we expect the Fed to keep rates at 5% or so until inflation is much closer to 2%. In the soft-landing scenario, the 3-month yield is likely to stick around 5%, and the curve might further invert as longer-term yields fall due to weak economic growth and lower inflation. The curve would steepen when the Fed is comfortable that they have slain inflation and can lower the Fed Funds rate. The steepening would be gradual in this scenario, not “V” shaped like the prior inversions.
Something Breaks
In this outcome, which we think is most likely, liquidity reductions and sharply deteriorating economic activity cause financial instability. Under such a scenario, something breaks. It may be a market, a significant financial institution, or even a foreign country. Whatever the cause, the Fed would lower rates aggressively to stop a Lehman-like contagion.
Such would likely entail ending QT and possibly starting QE to boost liquidity in the system. Short-term yields would plummet as the Fed lowers rates. Longer-term yields would initially fall as investors seek the safety of U.S. Treasuries.
Lower inflation, weak economic growth, and a flight to quality/safety argue for much lower rates. However, the monetary and fiscal response, if aggressive like in 2020, might stoke inflationary fears. We saw in the three prior inversions that long yields might decline moderately, but short-end yields could plummet to near 0%.
Fed Forces a Steeper Curve
An inverted yield curve poses problems for banks as it shrinks their net interest margins (NIM), which makes lending less profitable. To help boost their profitability and fortify their balance sheets, the Fed might want to steepen the curve by forcing long-term yields higher.
Per Michael Kao, there is about $2.7 to $3 trillion of floating-rate corporate debt outstanding and a similar amount of floating-rate mortgages. As rates reset higher for floating-rate borrowers, bankruptcies will rise. At the same time, banks are seeing increasing losses on corporate loans and debt, their margins are severely contracting. By steepening the yield curve via higher long-term rates, the Fed could improve bank margins which may help banks better weather a credit storm.
What happens when you cut off a bank’s NIM lifeblood and saddle it with loan losses at the same time? CREDIT CONTRACTION ACROSS ALL LENDING ACTIVITIES AND POSSIBLY EVEN BANK BANKRUPTCIES. – Michael Kao
Two More Warnings
We share two graphs to provide further credence to the roaring yield curve foghorn.
The first graph shows that the last eight times the Chicago PMI report was below 40, as it is now, a recession occurred. While the yield curve tends to precede the recession by months or even a year, this graph argues a recession may be on our doorstep.
The second graph from Jim Bianco shows the recession odds in 2023 are greater than at any time since 1970.
Summary
Bear markets do not end until recessions start. The yield curve, Chicago PMI, and other analyses argue it’s a matter of when but if a recession occurs. Based on what we have shared, those claiming the market has already bottomed better hope this time is different.
The financial foghorn is blowing. Historical odds greatly favor a recession, stock market drawdown, and a much lower Fed Funds rate.
As they warn in the HBO series Game of Thrones- “Winter is Coming,” the foghorn tells us so.
Tesla Continues Slow Bleed After Goldman Lowers Price Target
It doesn’t look like anyone can stop the recent selling in Tesla, and Goldman Sachs doesn’t seem interested in stopping that party. Ever since Elon Musk has been diverting his attention to Twitter, shares of Tesla have suffered. They are down about 10% in just the last 5 trading days and the company is trading near 52 week lows that are about 60% lower than the company’s 52 week high of $402.64.
Shares of the automaker are down again about 1% in the Wednesday morning pre-market session – following a plunge of about 15% over the last month – after the investment bank downgraded the name on “softer supply and demand” worries.
Goldman Sachs analyst Mark Delaney also cut his price target on the company by nearly 25%, slashing expectations on the company to $235 per share from $305 per share. The target still marks a 46% increase from current levels, Bloomberg noted in a Wednesday morning wrap up.
The same report said that Delaney says “his reduced estimates are consistent with the added incentives and price reductions for certain Tesla vehicles this quarter, reduced wait times and soft macro indicators”. We have noted many of these price plunges and factory slowdowns as they have played out over the last few months.
Despite this, Delaney still believes Tesla is “well-positioned for long-term growth”.
The signs of a slowdown in demand have been presenting themselves. We have written recently about Tesla shuttering production at its key Shanghai plant, responsible for a majority of the company’s overseas output. We noted days ago the company was planning on suspending production at the plant at the end of the year. Tesla, for the most part, has refuted that there are demand issues – but obviously the concern is starting to become real.
Model Y and Model 3 production lines are expected to be suspended in the last week of December, according to Bloomberg, citing people familiar with the matter. They said Model 3 production could resume in early January, though Model Y output disruptions could be prolonged. Another person said Model 3 production could be suspended again later in the month for the Chinese New Year. They added that this would allow for more upgrades and equipment maintenance to produce an enhanced version of the model.
In a separate report, Reuters cited two people with direct knowledge and an internal memo about the automaker’s plan to suspend Model Y production at the plant between Dec. 25 and Jan. 1. The two people said the suspension of the assembly line would result in a 30% reduction in Model Y production for the month. They added this type of production halt isn’t a common practice for the plant.
“The Shanghai factory, the most important manufacturing hub for Elon Musk’s electric vehicle company, kept normal operations during the last week of December last year,” Reuters said.
Earlier this week, Bloomberg said that slumping Chinese demand would result in the factory reducing production by 20% from full capacity. And almost immediately, a report from Shanghai Securities Journal called it “false information.”
Zero Covid, zero disease, zero suffering, zero death. Unrealistic goals? You bet – although many countries (particularly China) have seemingly adopted a “Zero Covid” stance and have made a rather destructive effort to eliminate any occurrence of Covid-19 from their citizenry – boarding people up in their apartments, attacking people trying to escape, all those fun things fascists like to do.
This effort to maintain a “Zero Covid” environment is yet another piece of the agenda intended to brainwash and thus control the populace. The powers that be know that, but most of the people they are controlling do not.
The people might think “Zero Covid” sounds like a good idea, but it is fantasy, and typically you can’t count too much on fantasy in a nitty-gritty real world.
Now, I’m not knocking fantasy. Sometimes it is just what we need to get through the day. But this isn’t our own personal fantasy, this is fantasy put upon us by an authority that has a nefarious agenda. It is a slight of hand card trick, it is an intentional deception—a deception premeditated to cause harm to some (most) and benefit others (a few).
What is the card trick regarding “Zero Covid?” Well, it is once again an effort to convince us that being human is a problem. Isn’t all that is going on in the world right now have the same intention?—the “Woke Culture,” the “Cancel Culture,” the “transgender/identity” issue? Need I list more examples?
It seems that whatever “power that be entity” that likes to dabble in human cognitive dissonance has been assigned the task of doing whatever possible to make humans confused, and thus dissatisfied, with their human-ness.
Should people born a certain biological (human) sex really be encouraged to mess with their humanness and alter it to “look like” a different sex? Sure, psychologically people can “feel” all sorts of “identities” and even act out on them, but why destroy the physical “human” part of ourselves as a result? Why be encouraged to insert microchips in our brains to make us smarter or more efficient than what nature intended us to be?
As a result of all of this fluidity to “alter” our nature, we become more and more comfortable with this idea that there is something wrong with how we came out of the box. We find our inability to live forever, or ward off all disease, or remove all physical danger from our lives, to be a defect—a manufacturer’s error. And then we go bonkers to compensate for our human problem.
I shouldn’t say we “become comfortable” with the idea of innate imperfection, because it is anything but comfortable, in fact, it is downright crazy making. Of course this doesn’t apply to all of us, but those that it does apply to are among us.
Where did this insane desire to alter our normal human “is-ness” come from? Well, we certainly have seen it from day one. Humans obviously have not evolved from their origin into creatures that integrate with the natural environment the way all other creatures have done. This is an age-old question, and nearly everything “human” has become part of that all-important question, from all the “good things” such as art, music, and other creativity from the heart, to all the bad things such as weaponry, pollution, and genetic engineering.
I find it difficult not to include any advancement in technology with the “bad things.” Any of the things we could say are “good” have only been effective in providing convenience, avoidance of hard work, and the extension of life, which are not necessarily noble accomplishments.
If hard pressed I would say hygiene, and the mitigation of suffering can definitely be included in the “good human advancements,” but advancements in hygiene, such as clean water, waste disposal, etc. is only needed after humans moved from a natural environment to a man-made one…any other suggestions?
Needless to say this argument can get complicated and dicey, possibly moving into the other argument, which suggests that we should never have moved out of caves—which obviously is not plausible nor necessarily desireable. Is there a way to be human without entering into the obsession to be “better than human?” Probably not, and possibly we have just reached the level of technology where becoming “better than human” moves us most definitely into a phase of transhuman ascendance.
But there is another element to factor in here—is our advancement a natural movement, or is it a coerced movement? Are we, as a whole, being manipulated into advancing too fast, or in a particular trajectory that will eventually destroy us? Maybe a little bit of both is at work here.
Obviously in cave days some overlord with the intention of destroying the masses with fire did not trigger the quest for fire—that desire more than likely came naturally. But can you say the same for the invention of the atomic bomb? Was it really for the good of mankind as a whole to destroy Imperial Japan, or was the incentive for creating such a horrific form of destruction have less humanitarian underpinnings?
We have reached a point in human development where it has been made clear that the development of the mRNA vaccine to treat another human engineered invention, the SARSCoV2 “virus,” does not have a humanitarian intention.
This all has clearly happened for the benefit of a few at the expense of many. And part of what has made this possible—the ease in implementation of these bioweapons in the complying bodies of those masses—is to convince people their “god given right” is to live forever and not face nature’s natural challenges.
If we follow the “rules of nature” and take care of ourselves naturally—eat healthy foods (which also is nearly impossible due to the pressures from above to do otherwise), exercise, fill the mind with less toxic thoughts, have meaning and purpose in our lives, didn’t pollute our environment, and never became possessed to consume everything in sight—then in my humble opinion very few diseases and “challenges of nature” would always be powerful enough to make us suffer intolerably, or to, as an end result, kill us—unless we have lived long enough or nature decided it was time to cull our species.
We all die. We all suffer. We seem to have mostly come to a conclusion that we can skirt the natural systems and rely on technology to erase all of life’s dangers and dispel with nature’s wisdom.
People have been brainwashed to believe that only man-made medication and medical intervention can cure us. Most people give no credit to the human immune system and its miraculous ability to confront nearly any pathogen and give it a run for its money. Of course part of the agenda is to create an environment so toxic and contrary to the natural way of things that we are indeed faced with more formidable pathogens for our immune systems to deal with. Again, it is a complicated issue.
But the Covid hoax, to be successful, had to be released on people who believed a limited belief: humans are not capable of withstanding a natural phenomenon (a virus). This is what the people were told, which was always an illusion, yet still created as a fantasy bogeyman, and that the only way to face it and dispel it was to rely on man-made preventions (masks, social distancing and lockdowns) and cures (bogus vaccines).
Couple this with our insane insistence that we continue moving toward transhumanism (which at this time is still primarily a fantasy) and are above pain, suffering, illness, and particularly death, and you have the formula for madness.
If we are human, and not machines, or dependent on the assistance of machines (nano or macro), then we are going to get sick. Plain and simple. It is nature’s way of doing things and has been since humans crawled out of the primordial muck. Get used to it.
EU Reaches Deal To Impose World’s First Carbon Border Tariff
The European Union’s path to decarbonization might soon include a carbon dioxide emissions tariff on imported goods from countries considered climate abusers, which will attempt to upend global trade towards a ‘greener’ future.
After all-night negotiations, EU governments and the European Parliament struck a deal on key parts of the “Carbon Border Adjustment Mechanism” (CBAM) that is set to be phased in by the second half of 2023. The new measure will be the first of its kind, imposing CO2 emissions taxes on imports such as cement, steel, aluminum fertilizers, electricity production, and hydrogen.
CBAM intends to protect Europe’s domestic manufacturing industry from competitors in countries that have yet to regulate carbon-dioxide emissions and will attempt to force countries to set prices on carbon — either through a tax or by a cap-and-trade system.
“CBAM will be a crucial pillar of European climate policies. It is one of the only mechanisms we have to incentivise our trading partners to decarbonize their manufacturing industry.” Mohammed Chahim, European Parliament’s lead negotiator on the law, said in a statement.
Currently, the EU provides free CO2 permits for domestic industries to safeguard them from foreign companies, but that will be phased out once the carbon border tariff kicks in next year.
Brussels said some countries could be exempted from the carbon border tariff if they have matching green policies to the EU. It was suggested that the US could sidestep the tax.
Pascal Canfin, chair of the EU Parliament’s environment committee, told reporters, “Of course, CBAM will have an impact on our trade partners because it’s designed to … It’s important that the EU leads on the connection between climate and trade policies.”
The preliminary agreement among the EU negotiators will need the endorsement of ministers and the entire parliament before enforcement.
The carbon border tariff is just another tax by the government under the guise of saving the planet from climate change. Has anyone told these politicians the climate has been changing for millions of years? Somehow the EU believes slashing emissions by 55% in the next seven years will save the world.
And the tariff will likely have criticism from countries, including China, one of Europe’s top trading partners…
Ukraine has ratcheted up its campaign against a branch of the Eastern Orthodox church with ties to Russia. On the order of President Volodymyr Zelensky, seven senior clerics from the Russian Orthodox church will have their assets seized and face bans on a range of economic and legal activities.
During his nightly video address on Sunday, the Ukrainian president said “by decision of the National Security and Defense Council of Ukraine, sanctions were applied against seven people,” adding that his administration is “doing everything to ensure that the aggressor state does not have a single string of Ukrainian society to pull.”
According to Reuters, the new penalties mean that the seven clerics will have “their assets seized and are subject to a ban on a range of economic and legal activities as well as a de facto travel ban.”
The vast majority of Ukrainians belong to the Eastern Orthodox Church, with many worshiping in parishes that take direction from the Moscow Patriarchate. On December 1, Zelensky announced that Kiev would attempt to expel all religious institutions with ties to Russia, arguing the move would make it “impossible for religious organizations affiliated with centers of influence in the Russian Federation to operate in Ukraine.”
The president went on the claim that the Russian Orthodox Church poses a threat to Ukrainian culture, saying “we will never allow anyone to build an empire inside the Ukrainian soul.”
He additionally denounced Ukrainians who continue to attend the allegedly Russia-controlled parishes as succumbing to “the temptation of evil.”
Kiev has conducted a series of raids on Russian Orthodox parishesand claims to have uncovered clerics attempting to subvert the Ukrainian government, though has provided little evidence to support its assertions.
Nonetheless, Kiev sanctioned 10 top clerics of the church last week, suggesting they threatened “the sovereignty and territorial integrity of Ukraine.”
In Zelensky’s “new and inclusive” Ukraine
🇺🇦Russian books & music by post-Soviet artists are banned
🇺🇦Print media must publish in Ukrainian & Ukrainian must be used in most aspects of life
🇺🇦Russian branch of the Orthodox Church is banned
🇺🇦Opposition media and parties are banned https://t.co/LZfDFEWBRW
NATO Chief: Relations With Russia “Destroyed” Even If Fighting Ends
NATO Secretary-General Jens Stoltenberg has offered his bluntest and most dire assessment to date of the state of Russia-West relations, saying in Monday remarks that even if the war were to end quickly, relations are beyond repair. He described that as far as NATO is concerned, relations have at this point been “destroyed”.
“Even if the fighting ends, we will not return to some kind of normal, friendly, relationship with Russia. Trust has been destroyed,” he said. “I think the war has had long-lasting consequences for the relationship with Russia.”
He had previewed this stark assessment by claiming that NATO sought to build positive relations with Russia immediately after the Cold War – despite that fact that the military alliance’s expansion to Russia’s doorstep began soon after the collapse of the Soviet Union, according to admissions from US diplomats.
But he also said there remained the possibility that Moscow could salvage some degree of the prior “trust” that had been shattered by the invasion:
“They [Russia] can do as many other European countries have done since the end of the Second World War, they can choose peace, choose cooperation, choose to trust their neighbors instead of always being so aggressive and threatening neighbors as Russia has done again and again against Georgia, against Ukraine,” Stoltenberg said.
Interestingly, on the same day as the NATO chief’s remarks, German Chancellor Olaf Scholz weighed in on relations with Russia and suggested they were not totally destroyed or altogether severed.
He went so far as to suggest that economic relations could be restored after the war. “At the moment, the relations we have are being reduced, reduced, reduced,” he said according to Reuters. He qualified that “a Russia that ends the war” ought to be allowed a chance to resume economic ties.
But just last week, Russian President Vladimir Putin warned his country that the “special military operation” could be a “lengthy process.” He stressed that achieving all of Russia’s objectives could be a long-haul which he intends to see through.
Addressing Moscow’s stance, NATO Secretary-General Jens Stoltenberg had on Friday offered a bleak assessment, suggesting things could easily spiral out of control into a major direct confrontation among nuclear-armed powers. “If things go wrong, they can go horribly wrong,”he had told Norwegian broadcaster NRK. “It is a terrible war in Ukraine. It is also a war that can become a full-fledged war that spreads into a major war between NATO and Russia,” he said. “We are working on that every day to avoid that.”
The head of NATO expressed worry that the fighting in Ukraine could spin out of control and become a war between Russia and NATO, according to an interview released Friday. https://t.co/I9S9MouoB5
And yet it remains that there are no serious negotiations underway toward implementing a ceasefire, despite some European leaders like France’s Emmanuel Macron or even Scholz appearing to favor more robust diplomacy and engagement with Moscow to end the crisis. And of course, some have felt the energy supply crisis harder and more immediately than others – pressure which will only grow into the winter.
“Germany is Hamlet,” Gordon Craig once wrote. The great historian of that nation (1913–2005) was noted for pithy summations of this kind, insights that cast light into the innermost recesses of the German psyche, the what-makes-them-tick of its people.
Does Germany face westward to the Atlantic or eastward to the Eurasian landmass? From which tradition does it draw? Where lie its loyalties? These are questions geography; a rich, old culture; and a long, complicated history bequeathed to Germans. I do not think Craig meant to suggest this condition was burdensome. No, there was nothing to resolve. In its ambiguous state — in the West but not wholly of it, in the East but not wholly Eastern — Germany was most truly itself.
Germans lived this way, making no apologies, for a long time. They could allow the U.S. to station 200,000 troops on their soil — the figure at the Cold War’s end — while pursuing Willi Brandt’s Ostpolitik, the Federal Republic’s opening to the German Democratic Republic and by extension the whole of the East Bloc. It was Germany that invested with Gazprom, the Russian energy conglomerate, in the Nord Stream I and II pipelines even amid rising East–West tensions.
On the long drive into Moscow from Domodedovo International Airport, the broad thoroughfares are lined with German car dealers, German construction cranes, the factories of German companies. German businesses, along with many German citizens, were vociferous critics of the sanctions regime the U.S. imposed on Russia — and effectively on Europe, indeed — after the U.S.-choreographed coup in Kiev eight years ago set in motion the current crisis in Ukraine.
I read those two extraordinary interviews Angela Merkel granted Der Spiegel and Die Zeit last week against this history, this record, this ordained state of ambiguity. If there is one truth that may stand above all others in the former chancellor’s astonishing revelations of Berlin’s duplicity in its dealings with Moscow, it is that the Federal Republic has abandoned its inheritance — its natural state, indeed —and so the considerable responsibilities the past and geography awarded it.
East-West Alienation
It would be hard to overstate the significance of this turn for all of us. The global divide just got wider. Cold War II just got colder. The alienation of East and West is now down as a more or less permanent state of affairs. And the world just lost the one country capable of mitigating these dreadful circumstances by dint of its special, maybe singular position in the community of nations.
It is odd to consider the view of Prince Heinrich XIII, the German aristocrat just arrested for leading a plot to overthrow the Berlin government (a set of absurd allegations, I must mention right away, I do not for a minute take seriously absent credible evidence, and I do not expect we will ever see any). It seems the prince has long argued that Germany did not become a new nation after World War II but a wholly owned subsidiary of the U.S.
“We are not Germans. We are not in a real German state,” his alleged followers are quoted as saying in a (highly misleading) New York Times piece published Sunday. “We are just a branch of a GmBH,” this last meaning a limited liability company.
How strange to read this the same week that Merkel removed all doubt this is precisely the German condition — arguably since the early postwar years, certainly since Washington committed itself and its allies to its all-out, all-in campaign to bring NATO to Russia’s very doorstep and ultimately to subvert the Russian Federation.
And while I do not know much about the prince’s politics, how interesting to hear a German citizen object, in effect, that the Federal Republic has betrayed itself and its historical inheritance the very week its former chancellor told Germany’s leading newsmagazine and one of its leading dailies that the fruitful ambiguity of the nation’s past is gone now in favor of the manipulative, Russophobic dishonesty that lies at the heart of the proxy war the U.S. now wages against Russia in Ukraine.
As has been widely reported and excellently analyzed — except in the mainstream American press, where Merkel’s remarks last week go unmentioned — the former German leader described her cynical, treacherous betrayal of Moscow during negotiations of the two Minsk Protocols, the first signed in September 2014 and the second the following February.
Berlin, Paris, the post-coup Kiev regime and Moscow were signatories to those accords. How well I recall the earnestness with which Russian President Vladimir Putin entered into the talks. How hopeful many of us were that, with Kiev having swiftly breached Minsk I, the second accord would produce what the Russian president sought — a lasting settlement that would leave Ukraine united and stabilize the security order on Russia’s southwestern border and Europe’s eastern flank.
Earlier this year Petro Poroshenko, Ukraine’s first post-coup president, shocked everybody when he stated publicly that Kiev never had any intention of honoring the commitments it made when it signed the Minsk Protocols: The talks in the Belarusian capital and all the promises were meant simply to buy time while Ukraine built fortifications in the eastern regions and trained and armed a military strong enough to wage a full-dress war of aggression against the Russian-tilted Donetsk and Lugansk regions.
There was never any interest in the federal structure envisioned in Minsk II. There was never any intention of granting the breakaway regions the measure of autonomy Ukraine’s history and its mixed languages, cultures and traditions called for. Committing to all that was a ruse intended to deceive Moscow and the Donbass republics while Ukraine rearmed and shelled the latter in anticipation of the war that broke out in February.
Shocking, O.K. But Poroshenko was a jumped-up candy magnate running the wildly irresponsible, rabidly Russophobic regime that had seized power in Kiev. So: Shocking but also in keeping with the conduct of a corrupt-up-to-the-eyebrows pack of nobodies with no notion or regard for statecraft or responsible governance.
It is another matter, to state the very obvious, for Merkel to say the very same things. The former chancellor was supposed to be leading the West’s diplomatic démarche along with François Hollande, France’s president at the time and plainly a junior partner to Europe’s most powerful political figure. By her own account, she was using diplomacy just as Kiev was, to scuttle the accord she pretended to sponsor.
The U.S., to remind readers, was not part of the Minsk talks. On the one hand, it stood squarely against any settlement with either Russia or the breakaway regions. On the other, there was no point inviting the U.S. to Minsk because its position was obvious and its presence would be counterproductive. Now that Merkel has spoken of these matters, the German position seems to have been that the West needed the accord nobody in the West wanted if time was to be bought for Ukraine’s rearming.
Merkel’s interviews with Der Spiegel and to Die Zeit, which are here and here, were in the way of sprawling retrospectives during which friendly correspondents pitched a series of softballs to a chancellor given to looking back. Minsk and the Ukraine conflict were two topics among many. The documents give the impression that Merkel spoke casually and unguardedly of them. The damning passages are brief but very clear.
Der Spiegel:
“She believes that… later during the Minsk talks, she was able to buy the time Ukraine needed to better fend off the Russian attack. She says it is now a strong, well-fortified country. Back then, she is certain, it would have been overrun by Putin’s troops.”
In Die Zeit, the second of the two interviews, Merkel described the Minsk talks as “an attempt to give Ukraine time… to become stronger,” later expressing satisfaction that this strategy — a straight-out abuse of the diplomatic process — has succeeded.
Merkel reveals the Minsk Agreement was a stalling tactic that allowed the West to militarize Ukraine as an anti-Russian proxy and fortify it for an inevitable war. I’m struggling to find any coverage or analysis of this remarkable confession in English language mainstream media. https://t.co/5oeSvcQinl
There are various interpretations of Merkel’s remarks. They are generally taken at face value, as an offhandedly delivered admission of her duplicity — and by extension the West’s — in her dealings with Russia on the Ukraine question. Moon of Alabama, a German publication, reads the interviews as Merkel’s attempt to protect her political reputation as Germany’s leadership circles succumb to the kind of Russophobia common in the U.S. but not, heretofore, in the Federal Republic.
I find both of these readings plausible. Either way, the important topic now before us is the damage Merkel did in 2014 and 2015 and the consequences of her comments last week.
Much has been written and said about the fatal blow that Merkel dealt to trust in diplomatic affairs, and I think “fatal” is our word. Ray McGovern was eloquent on this topic, bringing a lifetime’s professional experience to the question, during a long exchange with Glenn Diesen and Alexander Mercouris last week.
A measure of trust was essential between Washington and Moscow even during the Cold War’s most perilous passages. The Cuban Missile Crisis was resolved as it was because U.S. President John F. Kennedy and the Soviet premier, Nikita Khrushchev, were able sufficiently to trust one another. This trust no longer exists, as Putin and other Russian officials have made clear in responding to publication of the two German interviews.
Moscow and Beijing have said repeatedly since Joe Biden assumed office not quite two years ago that there is no trusting the Americans. The follow-on thought is that there is no point negotiating with them in a diplomatic context. For various Russian officials, from Putin on over and down, Merkel’s revelations seem grimly to have confirmed these conclusions.
It is a major turn that Moscow now includes the Europeans, and especially the Germans, in this assessment. Germany now tells the lies of which the American empire is made — a matter of anxiety and sadness all at once. If scorched-earth diplomacy is a fitting name for what the West has been up to in its dealings with Russia since 2014, as I think it is, the German bridge between West and East has been burnt.
The gravity of these conclusions, the implications as we face forward, are immense for the West and non–West alike. A world replete with hostilities is one we all know. A world devoid of trust and talking will prove another matter. As we now see in the Ukraine context, there is no possibility for diplomacy, negotiation or dialogue of any kind without trust. We read daily of the result in those few publications reporting this war honestly.
If the elite get their way, our world will eventually look far more bizarre than any science fiction author ever imagined. If you haven’t figured it out by now, the elite are control freaks, and they are envisioning a future in which they are in control of all of our lives from birth to death. Instead of being born and raised the traditional way, humans will be mass produced in “birthing pods”. Those that are genetically superior will be permitted to live, while those that are genetically inferior will be “harvested” and any spare parts that are not of value for scientific research will be discarded. As children grow, education will be a top priority, but only material specifically approved by the elite will be permitted. In fact, “free thought” and “free speech” will be a thing of the past if the elite get total control. Everyone will think the same way, because no other alternative will be allowed. And anyone that shows signs of rebellion will quickly have their digital currency privileges revoked. I know that all of this may sound quite strange to many of you, but this is what our society will look like if the wildest hopes and dreams of the elite actually come to fruition.
This week, an incredibly creepy concept video that was created by a German molecular biologist named Hashem Al-Ghaili is making headlines all over the globe.
In this video, children are grown in a huge facility that contains hundreds of transparent “birthing pods”…
A new concept video takes viewers on tour through The EctoLife Artificial Womb Facility, where hundreds of fetuses sit in transparent pods that are temperature controlled and feature an umbilical cord to receive oxygen and nutrients.
If you have not seen the video yet, you can view it right here.
I have to admit, that is one of the creepiest things that I have seen in a long time.
We are being told that one of the big selling points of such a system would be the ability to create “designer babies” that are genetically superior to humans that are born the normal way…
“And if you want your baby to stand out and have a brighter future, our Elite Package offers you the opportunity to genetically engineer the embryo before implanting it into the artificial womb. Thanks to CRISPR-Cas 9 gene editing tool, you can edit any trait of your baby through a wide range of over 300 genes. By genetically engineering a set of genes, the Elite Package allows you to customize your baby’s eye color, hair color, skin tone, physical strength, height, and level of intelligence. It also allows you to fix any inherited genetic diseases that are part of your family history so that your baby and their offspring will live a healthy comfortable life free of genetic diseases.”
So what about the embryos that are genetically inferior or that are simply not wanted for one reason or another?
Well, they would either be used for other purposes or they would be discarded in the trash.
In addition to getting “perfect babies” every time, there would also no longer be any need for the pain of childbirth in such a system…
While the video is focused on improving birth rates, it also notes that the birthing farm is for women who fear pregnancy because of the pain and recovery needed after going into labor.
‘Say goodbye to the pain of childbirth and muscle contractions,’ the video narrator says.
Of course the elite would not want such “perfect children” to be ruined by “misinformation” as they grow older, and so everything that they would be exposed to would be strictly monitored and controlled.
Sadly, such a system of thought control has already been rapidly developing all around us.
We already knew that big tech companies were colluding with the government on a very deep level to suppress free speech, but the “Twitter Files” have demonstrated that things were actually far worse than any of us imagined.
Government officials systematically targeted specific individuals and specific viewpoints for censorship, and in many cases big tech companies were more than eager to do what they were being asked to do.
It is NOT okay for the government to suppress free speech as long as they can get private companies to do the dirty work for them.
Our most basic constitutional rights have been trampled on over and over again, and those that were involved need to be held accountable.
And if we don’t stand up now, they will just keep on doing it.
Because this is what the elite desperately want.
They want a future in which the flow of information is tightly controlled by them.
If you are a rebel that insists on putting out “misinformation”, the elite envision a system in which such miscreants are dealt with quickly and efficiently.
Today, the elite do not have direct control over our finances.
But in a future where cash is banned and we are all forced to use their digital currencies, that would all change.
Everything that we buy and sell would be tracked, and our “currency privileges” could be revoked at any time if our social credit scores drop too low.
Of course government-controlled digital currencies are not ready for widespread use yet, but they are coming.
The de facto head of His Majesty’s Treasury announced this week that the Bank of England has begun consultations on implementing a Central Bank Digital Currency (CBDC) that could usher in the globalist vision of a cashless society in which all transactions are traceable by the government.
Chancellor of the Exchequer Jeremy Hunt revealed that, as a part of his ‘Edinburgh Reforms’ of Britain’s financial services, the Bank of England will begin consultations on the design of a Central Bank Digital Currency (CBDC) which would act as a digital version of the pound sterling.
And the Federal Reserve is now testing a new “digital dollar” for the United States.
Do you think that it is just a coincidence that all of these digital currencies are being developed simultaneously?
The truth is that the elite are actively trying to create the dystopian version of the future that they envision for all of us.
Unfortunately, most people still do not understand what they are trying to do, and so it is imperative for all of us to try to wake up as many as we can while there is still time.
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It is finally here! Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.
