***** denotes well-worth reading in full at source (even if excerpted extensively here)
Economic and Market Fare:
Third Quarter 2024: The Rules of the Game
…A Single Globally Weighted Monetary Barometer
The situation in these individual regions can be consolidated into a global directional indicator of monetary thrust that provides a comprehensive view of the monetary situation across these regions (Chart 3). This indicator is the most restrictive in the past twenty-two years, meaning that these five central banks, collectively, have significantly increased the risk of severe disinflation and poor economic performance. The combined detrended real M growth for these five economic regions is weighted by its contribution to world GDP. China's M is only available since 1998 and as four-year moving averages were employed, the series could only start in 2002. But it is critical to the value of the series to include China, because it is 19% of the global economy. Each country's yearly GDP, as measured by the World Bank, is weighted by its relative contribution to global economic output. Over this twenty-two year span, the four-year moving average of detrended global M has fallen to a record low in the latest reading. Although a limited sample period, it contains one extremely relevant comparison point. The slowdown in M growth during the Great Financial Crisis pales in comparison to the current situation.
PIMCO Macro Signposts: Fed Cuts and Market Responses: History Lessons (via the BondBeat)
Since 17 September – the day before the Federal Reserve cut its policy rate by 50 basis points (bps) – the yield on the 10-year U.S. Treasury has climbed roughly 55 bps to 4.2%. This seemingly counterintuitive trend over the past several weeks has spurred questions around the extent to which the current Fed easing cycle will potentially deliver positive returns for bond investors, as has happened in past cycles.
While historical patterns are complex and not definitive, an analysis of previous Fed easing cycles suggests that bond market price action in the first month after the Fed begins cutting interest rates does not tend to be a good predictor of either 1) the broader macroeconomic outcome that ensues over the next year and beyond, or 2) the extent to which high quality bonds are able to deliver positive returns.
You just have to love the short-term overreactions of Mr. Market. Just two months ago we get a weak employment report and investors are panicked that the Fed is too tight. Then we get a strong employment report in September and investors are panicked that the Fed is too loose. In May the 10 year interest rate was as high as 4.75%. By September it was as low as 3.6%. Today it’s bounced back to 4.2%. And as rates tick higher in recent months there’s been a growing chorus about how “bond vigilantes” are going to teach the Fed a lesson. This has been especially loud coming from Stanley Druckenmiller, Paul Tudor Jones and Elon Musk. The basic narrative is that bond markets will teach the Fed and US government a lesson about reckless spending which will drive up interest rates and bankrupt the USA. .....................
Back to Druckenmiller and friends. This seems to be a pretty persistent thing with Druckenmiller. For example, I wrote nearly this exact same article 11 years ago in response to a WSJ op-ed in which Druckenmiller said the exact same thing. He said the USA was bankrupt and that the Fed was too loose. The 10 year yield was 2% at the time, the Fed was on 0% and rates would slowly drift lower until we got the Covid shock 8 years later. It was a dreadful prediction. I think the same exact thing is happening now. ...............
Tight Fed policy doesn’t always equate to tight liquidity
Europeans been spendin’ most their lives livin’ in the banksta’s paradise
European Union’s eventual collapse is a certainty - it has been for a very long time. It’s been rigged for demolition through its financial architecture which institutionalizes a system of governance that’s typical of all historical eras where moneylending oligarchies gained the control of the political system. The predictable result of all this is that European economies are floundering: their entrepreneurial dynamism and competitiveness is being systematically suffocated and slowly consumed by the parasitic leech hidden behind the EU bureaucratic institutions. For the ordinary people and businesses, this system is driving a steady, inexorable descent into poverty.
One of the main components of Europe’s pathological financial architecture is the European Stability Mechanism (ESM): Eurozone’s permanent bailout fund. ..............
This is truly a different kind of social contract. It effectively reverses one of the 19th century’s key political achievements: the transfer of fiscal sovereignty from unaccountable monarchical bureaucracies to democratically accountable parliaments. It thereby it nullifies any notion of democratic governance of the people, by the people and for the people.
This legislation is clearly of the bankers, by the bankers and for the bankers. ...........
Sales of existing homes are on track for the worst two-year period since the mid-1990s
History rhymes as gold breaks out from Brobdingnagian base
Gold is starting to come on the radar for more and more people (after rallying some 60% off the October 2022 low), with financial pundits, hedge fund billionaires, and even mainstream media starting to talk louder about the shiny metal.
But what’s gold got going for it anyway? And after rallying more than 30% YTD, has gold got anything left in the tank — are we too late?
- Central Bank Buying: around the world central banks have been buying up gold (diversifying reserves, managing risks), the last 2 years saw more gold purchased by central banks than the previous 5 years combined.
- Geopolitics (1): first, there are numerous geopolitical hotspots threatening to boil-over (Russia vs Ukraine/Europe, Iran vs Israel/US, North vs South Korea, etc); gold has gotten a clear boost from the geopolitical risk premium.
- Geopolitics (2): second, the 2022 Russian invasion + resulting sanctions proved to anyone who might ever find themselves on the wrong side of the USA that they ought to rethink reserves management and as such both boost and repatriate gold holdings to avoid sanctions risk.
- China: for China it’s a combination of the above factors, but also their property market is in a deep and drawn-out down-turn; this has seen retail investors turn to gold as stocks slumbered and monetary stimulus gets stepped up.
- Fed Pivot: the prospect of lower yields and a weaker dollar, potentially catalyzed by Fed easing further add to the case — easier monetary conditions and ample liquidity is generally good for gold.
- Fiscal Fears: whichever butt lands in the seat after the 5th of November, it’s clear that neither party wants to bother with fiscal sustainability, and if anything fiscal irresponsibility seems to be a bipartisan issue!
- Inflation Resurgence Risk: the bullish outlook for commodities (in my view), seeming resilient growth, and rush to rate cuts puts reacceleration and resurgence risk on the table into 2025.
- Sentiment vs Positioning: one the one hand, Consensus Inc. sentiment gauge shows widespread bullishness and CoT futures positioning reports show speculators are heavily net-long (both highlighting the strong momentum in gold prices), but paradoxically; ETF flows and positioning show retail appear to be lukewarm on gold (see bonus chart below).
- Technicals: perhaps the biggest part of the story is just plain old technicals (price tells us a lot of things), gold broke out from a major long-term basing process (aka Brobdingnagian base) — you always want to pay attention to this type of price action as it can foreshadow a long-term and significant trend change. For instance, check out the chart below and the example in the early/mid-2000’s.
So while real yields remain relatively high and the US dollar relatively resilient — and risk sentiment more broadly seems healthy as stocks punch on to new highs… i.e. all things that usually stand against gold, it sure does have a lot going for it.
The pessimistic slant is many of the factors highlighted above that benefit gold, are kind of bad… kinda potentially, like, really bad. In the words of Rick Rule, "I don't own gold because I think it might go through $2700. I own gold because I'm AFRAID it's gonna go to $9,000. Or $10,000."
AI Demand is Driving Skyrocketing US Investment in Computers, Data Centers, and Other Physical Infrastructure
Bubble Fare:
China Fare:
Quotes of the Week:
Max Euwe: “Strategy requires thought, tactics require observation.”
(not just) for the ESG crowd:
Let's play it out.
England just had its second-worst harvest on record. As far as I can tell, those records go back to the early 1800s. Wheat fell 21 percent. Barley fell 26 percent. Across the board, it was 15 percent. (The worst harvest happened in 1983.) Months of torrential rains wiped out crops. A new pattern has descended. The fall is too wet. The spring is too dry. The summer is too hot. That’s what a climate crisis does. It turns centuries of predictable weather patterns upside down. ..................
Just like many other countries, the U.S. is staving off collapse by depleting what’s left of the land’s resources. That includes pumping the Ogallala Aquifer dry. ...................
.............. The reality for the most polluting of all fossil fuels is record consumption and stronger-than-expected demand in the future. ...........
The International Energy Agency (IEA) shared some good news last week—clean energy is gaining ground, fossil fuel use is peaking, and carbon reductions look achievable.
But dig into the numbers, and a different picture emerges. The IEA’s forecast rests on shaky assumptions, wishful thinking, and contradictions that cast serious doubt on the credibility of its projections.
The biggest problem with the rosy headlines in World Energy Outlook 2024 is that coal use—the largest source of global carbon emissions—will decline by just 0.5% per year through 2030, and only 0.8% annually from 2030 to 2050.
It’s hard to believe that significant progress is being made in the transition to clean energy when coal consumption barely declines.
Adding to that disappointment, the IEA forecasts that oil consumption will increase by 0.75% annually and natural gas use will grow at 1.6% per year over the same period. .............
This disconnect highlights a fundamental problem—how can the economy expand with slower energy growth? GDP and energy consumption correlate almost perfectly so either the projections are wrong or the world economy is heading for a reality check. .............
Economic expansion requires more than just cleaner energy—it demands vast material inputs and energy yields that renewables, in their current form, struggle to provide. By focusing only on decarbonization, these projections overlook the deeper challenge: a growth-based system incompatible with planetary boundaries. Until the obsession with endless growth and consumption is confronted, energy forecasts, no matter how green they appear, will remain built on wishful thinking
‘A flinch from reality and possibility.’
........ The elections scheduled for 5 November prompt a rethink here at The Floutist.
Are our times unprecedented in that the United States now openly arms a genocide in Gaza, the expansion of terrorist Israel's war across West Asia, and the subversion of all international norms, institutions, and laws? Or do the two mainstream candidates, setting aside honorable fringe figures with no chance of victory, stand together as the worst, most unqualified—indeed, the most ridiculous—in American history? Or is this election the first in which those who insist on voting are offered an absurd paradox—the choice of no choice—in that they will support lawless conduct no matter which lever they pull when they draw the curtain? ............
Well, Kamala Harris has had her fun with all those “progressive” voters, in and at the edge of the Democratic Party, who were much taken—or taken in, better put—as the vice president played the empathy card in her many statements of concern for the fate of the Palestinians of Gaza. Let us be clear, to borrow one of Harris’s favorite locutions: If she wins on Nov. 5 and a Harris administration comes to be next Jan. 20, there will be no deviation whatsoever from the Biden regime’s limitless, unconditional support for Zionist Israel’s expanding campaigns of terror in West Asia.
.......................... Assiduously and cynically, Harris has cultivated delusory expectations at the left-hand end of the Democrats’ garden ever since party elites and donors imposed her as the 2024 candidate last spring.
I hope it's helpful for others
I’ve been dreading the prospect of explaining to people who I’ll be voting for in this upcoming election. There’s no quick way to explain it to people who have been living in a corporate media bubble.
So I made a video about it:
It tries to show normies how much the media lies, how the Democratic Party has changed, how they’ve become the party of censorship, war, and corruption, how the parties have essentially flipped, and how Kamala Harris is an empty suit puppet that’s been installed by establishment elites. .......
Geopolitical Fare:
................................ More and more people are seeing that the US government is much too evil to be allowed to rule the world.
More and more people are seeing that the state of Israel is much too evil to be allowed to continue to exist in its present iteration.
More and more people are seeing that the western press are propaganda services for the US power alliance and should never be trusted.
More and more people are seeing that the Democratic Party exists solely to protect the murderous and corrupt oligarchic status quo of the US empire and not to promote the interests of ordinary human beings.
More and more people are seeing that western liberalism is just a more photogenic version of fascism. ...............
................. It’s not until you’ve done a fair bit of research that you go, wait, okay no, we are actually quantifiably far more destructive than any other power structure on earth, by an extremely massive margin. We really are the bad guys. We really are the evil empire, and everyone slamming our side as murderous monsters are absolutely correct.
Whenever I say this I get westerners going “Oh yeah well I’d much rather live here then over there” or “Oh well if it’s so bad here then why don’t you go live over there?”, but the fact that they immediately start babbling about where they’d prefer to live is just a symptom of how sick and twisted this civilization is. They’re so cognitively and emotionally divorced from the violence and tyranny their government is inflicting upon the global south that they think the question of which countries are worse than others is a question of how pleasant it would be for them personally to live in. It’s like yes asshole, it’s very nice to be living in the imperial core that’s receiving the benefits of mass murder and imperialist extraction, and it’s less nice to live in the countries where the murder and extraction is happening. That’s the entire fucking point here.
It can be nice to live in the western world, but the western world is not nice. Ours is the most savage and thuggish civilization on this planet, and it’s not even close.
❖
The Democratic Party really does look ready to lose yet another easily winnable election by running yet another awful, murderous candidate with awful, murderous policies, and then once again blame their loss on everyone in America who is a better person than they are.
It’s the sense of powerlessness that gets to you. Watching all these people being slaughtered and tormented in Gaza and in Lebanon with the full support of your own government and its allies, but being unable to stop it. ..............
.......................... As long as westerners are being successfully psychologically manipulated at mass scale into consenting to the insane behavior of the western empire, we are completely powerless. They may as well have steel chains around each of our necks and mind control chips in each of our brains. There is nothing we can do to stop them from ethnically cleansing Gaza, waging nonstop wars, engaging in increasingly dangerous nuclear brinkmanship, or destroying the biosphere we depend on for survival.
If you consume news, especially, the western news, it's easy to lose hope entirely. Atrocity after atrocity, at this point they want us to see. As Colombian President Gustavo Pedro said, “The European Union, the United Kingdom and above all the United States—they all support dropping bombs on people because they want to teach a lesson to the entirety of humanity. They are telling us: look at our military power. What happens to Palestine can happen to any of you if you dare to make changes without our permission.”
So much evil, so much evil, so much evil, and they're getting away with it. The evil keeps happening and even accelerating. The ghetto that dared rebel is being exterminated, and now they're massacring Lebanese ................................
While the Empire may be winning the genocide, they are losing the war. The people they call terrorists are exclusively focused on military targets, and systematically dismantling the dismantlers. Hezbollah has systematically dismantled air defenses in the north and have gone from shelling border settlements to regularly hitting Jaffa (Haifa) and even Tel Aviv. This wasn't happening a year ago and now it is. Iran has systematically overmatched 'Israeli' air defenses and can now hit them wherever and whenever it wants. Meanwhile Yemen hits them from the south and Iraqis hit them from the east. The White Empire may still have white supremacy, but they've lost both naval and air supremacy, which are far more important. ...................
.................................. In many ways, the spectacular events of modern times are rather like Ferdinand’s assassination in 1914. They are less agents of change themselves, than indications that things have changed already, and events might turn out differently. Take the war in Ukraine, for example. Does it “change” anything? Arguably not, it’s easier to understand it as a marker of the degree to which things have already changed. Let me count the ways. The West can no longer ignore Russian demands and perceptions of its security interests. Russian military technology is generally very good, and in some cases has developed in areas the West has not itself pursued. The Russians have retained military service and the intellectual and technical capability to fight sustained high-intensity wars. They have also retained a large defence industry capable of surge production. For its part, the West has moved to small conventional forces, has largely been involved in small conflicts outside the NATO area, has allowed its defence industry to deteriorate, has tended towards small numbers of highly-expensive platforms, and has massively economised on logistics. Although there have been qualitative changes, largely favouring the Russians, this set of factors was as applicable five or seven years ago, and will remain applicable for the foreseeable future.
Thus, no-one should have been surprised about Russians sensitivities and demands, since they were telegraphed so clearly. No-one should have been surprised that the Russians made quick work of the NATO-trained Ukrainian forces, nor that subsequent forces, trained but this time also equipped by NATO, should have come to grief so quickly. Likewise, the outcome of any serious military clash between Russia and NATO is now easy to forecast and, for reasons, that I have discussed on numerous occasions, it is hard to see how this can be expected to change. More generally, Russia will be the dominant military power in Europe for the foreseeable future, and the West will have to find a way of dealing with that. .......................
The international system is conservative, in the sense that it carries a great deal of inertia. It will therefore continue to operate as it does now, until sufficient pressure is brought upon it to act differently. But that requires another option to be available, and to be supported or imposed with enough force, or the existing situation will continue. To talk about the decline of the West or of the United States is reasonable enough, so long as we understand that, for that decline to produce the kind of results that some people want and anticipate, some power or combination of powers must be able and willing to fill the vacuum created. ............................
So if we accept that there is a great deal of inertia in the international system, that decline in one area does not inevitably means a compensating rise elsewhere, and that apparent “turning points” in history may only be superficial manifestations of deeper underlying trends, can we nonetheless say anything useful about the likely shape of the future? I would suggest three tentative projections that could be made. All of them relate to general trend only: I don’t do predictions because I don’t think they are useful.
The first concerns political reactions to the increasing distribution of power which is for the moment still unduly concentrated in the hands of the West and in institutions dating from the end of the Second World War. .........................
Sci Fare:
I often say that we are losing science. We are.
... Kevin McKernan has written an article outlining the link to cancer due to the presence of SV40 (in droves) in the modified RNA COVID-19 injectable products (Pfizer). You can read that here. .............................
........................ Now here’s the scary part that the preprint addresses. SV40 enhancer, the very same one found in the vials sequenced by Kevin McKernan, the very same one acknowledged to be present as ‘residual DNA fragment[s]’ by Health Canada (HC), the FDA and the European Medicines Agency (EMA), targets SHM machinery, specifically AID which of course, is responsible for initiating SHM. ........................
Other Fare:
Twentieth-century civilization has collapsed. It rested on an essential tenet of liberalism: the state-society, public-private distinction. The state-society distinction reached its apogee in the mid-twentieth century, when the triumph and challenges of the postwar moment clarified the importance of defending social freedom from state power, while ensuring that the public realm was not taken over by private interests. Over the last few decades, this distinction has been eroded and finally abandoned altogether. Like it or not, the West is now postliberal.
This is not the same “postliberalism” that we are accustomed to hearing about ................................................
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Whether the enemy is abroad or at home, whether they are al-Qaeda terrorists or domestic rioters, they are essentially the same, and must be confronted with the same security tools.
In February 2022, just before Russian tanks rolled into Ukraine, the Canadian government deployed the financial weapons of war against its own citizens. Canadians who had donated to the Truckers Convoy found themselves barred from accessing their bank accounts and savings. At least 76 bank accounts were frozen, assets totaling 3.2 million CAD. Many were aghast and placed the blame for “de-banking” on Canadian prime minister Justin Trudeau—guilty of a dictatorial misuse of the state of emergency, just like his father. But that is obsolete thinking. The measures the Canadian state invoked were successfully employed because they enjoyed the enthusiastic cooperation of Canadian banks. State and corporate goals had been fused together long before the 2022 Truckers Convoy. Like 9/11, Covid was an opportunity. It enabled states to perfect policies that they were experimenting with and which corporations were encouraging.
Actually existing postliberalism may have advanced furthest in Canada. ....................
Every man has an opinion on Elon Musk. I never really paid any attention to the guy, because I always realized electric vehicles are a dead end, so I was never really interested in figuring out whether he’s a scam artist or not. But with every year that passes, it becomes easier to recognize the man as a scam artist. You could line up every man on the planet by the moment he figured out the guy is a swindler. The further down the line your husband finds himself, the lower his IQ happens to be. .................
The fact that someone like Musk can become the richest man in the world on paper, just speaks volumes about the decay of our society. We have really reached the point where there are no corrective mechanisms left in place for fraud. Psychopaths now just have free roam in our society. ..............
That’s essentially what’s happening all around the world, at every level of society. We invest our money in companies that promise us the sky is the limit (Nvidia, Tesla). We vote for politicians who make promises they can’t deliver upon (Geert Wilders, Donald Trump). Psychopaths and grandiose narcissists are willing to make unrealistic promises. The realistic promises are promises we don’t like to hear. So we choose to give power to the psychopaths and grandiose narcissists. ..........
Welsh: ‘Extraordinary’ Corruption at RTX (formerly Raytheon)
A few weeks ago a friend of mine from Nicaragua visited. One aspect of American culture he admired was our lack of corruption.
“Oh dear, Marlon,” I replied. “We are a deeply corrupt nation. The difference between our two nations is that in Nicaragua you have both ‘corruption of the poor,’ such as bribes to police officers, bribes to health inspectors, home inspectors, low level bureaucrats and the like and ‘corruption of the rich’ which is usually institutionalized, a part of the legislative process, includes the corrupt purchase of large scale national rents collection, and is unambiguously unethical. Everyone, in Nicaragua, wets their beak, whereas only the rich and powerful in America participate.” ...................
Pics of the Week: