I’ll save the more erudite discourse for Peoplenomics tomorrow. Because those readers are more likely to find topics like Hysteresis in Financial Decision Making quite interesting.
The general ides, though, is that of lag-times as the Future rolls into view.
We are seeing this play out right now in Ukraine.
- The Ukrainians do X (cut off Russia-speaking area water, power)
- The Russians do Y (“This is bullshit, we’re invading…“)
- NATO does Z (“The hell, you say!”)
Rinse, repeat, GOSUB, and escalate.
Which now includes additional sub-routines (this is like coding the future, right?) such as:
- Since NATO did Z, Russia does A (Invasion, actual)
- Western Allies seeing this do B (“Bad Russia! Sanctions!”)
- Which drives Russia C (Pick up the phone and call China)
Which is roughly how we get into the headlines of this morning which include…(Think of this as data-logging the sub-routines here…)
- China has expressed some openness to providing military and financial aid to Russia, US cable suggests – CNN.
- Which is countered by Nato masses 30,000 troops & 50 warships for huge war games on Russia’s border risking Putin’s ‘roid rage’ wrath (the-sun.com). What could go wrong?
Meantime, let’s not lose sight of the fact that War is “finance by other means” to butcher von Clausewitz a bit.
Nationalism is back! The web is breaking up – Russian web, Chinese web, rest of world wide. And Russia has now pulled counter-sanctions out of the hat. Russian Prosecutors Warn Western Companies of Arrests, Asset Seizures – WSJ. Which might impact those financial imperialists at IBM, Mickey D’s, Proctor and Whozzit, and whoever else has been “rushin” to be Big Globalist Dogs.
The Fed’s Trash Pump Breaks
Maybe you haven’t been around 73-years yet. Maybe you missed those please the Geez projects like working on septic systems, hydro-jetting water wells, and pumping out flooded basements. But as they gavel in today – rate hike pronouncement tomorrow – they are facing the financial equivalent of an ugly septic pump problem:
“A trash pump is used to transfer a huge volume of water with soft and hard solids like sewage, sludge, sand, twigs, leaves, and mud.”
In finance, we substitute paper for water and “Pump and Dump” has been the game. Ever since this piece of shit market began to blow-over when Covid arrived in late 2019 and a scapegoat was seized on by the American Commisariat.
“We gonna jump down, turn around, pick a bail of profits,
Gonna jump down, turn around, pick a bail a day… (chorus, repeat)”
[With apologies for expropriating Lead Belly’s classic, but we’re all working for The Man now, so “Git out there and pick them profits!]
Except the Trash Pump is Broke
Well now… None of how this rolls should surprise anyone. Since in the Mazurok-Ure Correlation work (2001) we forecast a breakdown of fiat (paper) money when it became super-saturated with debt. Idealized about the 83.5 year mark. For Kondratieff wave students, 1.5 K-Waves. Which is maybe 5-Juglar’s each, so perhaps 8 J-waves?
My consigliere – is already worried about how this all falls apart. “IF Russia and China go with a partially gold and oil-backed currency, why would ANY nation accept American Paper?”
Um…yeah. That’s a problem. So we have to raise rates in order to at least pretend that we’re not playing with Monopoly money (but we are). Biden’s taking knee pads around to keep places like Saudi land from jumping the Dollar shark. One big playah like that and the Buck’s toast. Weimar, baby, here we come.
Mr. C’s point is simple: What happens to the U.S. when (*not if, anymore) the “strong dollar” goes through its “emperor has no clothes” moment? When China says “Been swell, and we’ve been buying your country out from under you, but we’re done now. We’re moving in…”
Russia is a major food exporter, you see. A quick look around the web reveals:
“In 2019, the top exporters of Wheat were Russia ($8.14B), United States ($6.94B), Canada ($5.97B), France ($4.54B), and Ukraine ($3.11B). In 2019, the top importers of Wheat were Egypt ($4.67B), Indonesia ($2.31B), Turkey ($2.15B), Italy ($1.69B), and Philippines ($1.63B).”
If you’re not following the Observatory of Economic Complexity, smart-up, buddy!
We can’t afford to lose Indonesia (for tech) and the Philippines (call centers, right?) but with the Used Ess Federal Debt at $30,171,347,673,677.13 (plus another 25%-35% more because this doesn’t include unbooked interest we’re locked into paying) who’s going to want our “paper?”
You can’t eat paper. West is due to rally today ahead of the Fed decision tomorrow – which will not make anyone happy. Hence a run-up today seems likely. More pump and dump, anyone?
Oh, my consigliere may have missed it, but in addition to (expansionist NATO/EU megalomania) the longstanding detente in Scandahovia may be in trouble as Complex—but Promising—Prospects as Finland and Sweden Mull NATO Membership | RAND. No big defense contracts in stability, now, are there?
Sure, sure, Anti-Fragile is a nifty concept. But as I told you shortly after Nassim Taleb’s book Anti-Fragile came out in 2012, it was a classic economics book missing the HUGE and OBVIOUS point.
Taleb’s point that many “Things That Gain from Disorder” flies in the face of the Third Law of Thermodynamics. Which orders that “…the entropy of a system approaches a constant value as the temperature approaches absolute zero.” Which – in Ure’s Extensible Thinking modelspace – means the world blows up as we burn-out resources.
Which happens two ways: We can have a well-managed planet with modest population and live semi-sustainably while we figure out the hard problems of bending space-time manifolds to time travel and space-jump. OR we can screw ourselves silly *(promoted in at least two global religions as growth models) and burn Earth to a Mars-like cinder in no time. (Musk going to Mars is the ultimate extension of Reductionism – If he can’t find a food and water resource there, it’s a bad investment, unless you lock into the PGM (perpetual growth model of finance). Which he’s done extremely well at, I might add.
Musk is a genius engineer. But like the old programming joke (“To a C programmer, everything looks like a library call’) Musk’s vision collapses when the mushrooms bloom. Besides, ‘A Growing Number of Billionaires Is a Sign of Failure’ — Global Issues reports.
Moreover, Anti-Fragility misses the Ure Loop. We go through centuries of anti-fragile developing to get more food to build the ‘burbs, and here comes EMP and we’re right back at the beginning. See how Anti-fragility is a bounded solution set?
Meaning modern life only works until it’s unplugged. Then we’re all f**ked and fighting for scraps to live. Or worse.
Which now circles back to the US Fed which is trying to print through a Depression.
We spent more money than we have (on such genius-level scams as writing ourselves government rebate checks and agreeing that was not a fraud even though it puffed up the bubble even more). Even now, Pelosi and Schemer along with the other Fools on the Hill are hiding behind Covid, Zelensky, and (in short order) the Land War in Europe featuring the NSNWs which are now making the rounds in the press as I told you about on Christmas day. Go reread it if you’ve forgotten: UrbanSurvival 2022: War Year?
Sadly, we’re right more often than wrong.
The musical chairs music is sounding like a skipping record (mal-sampling CD if you’re under 40). The Fed’s trash pump is about to get a Russian clog (famine, starvation, or throw in with them).
Which leaves me trying to console my consigliere who’s asking “Why can’t the D.C. dumb-shits understand second-level effects?”
The answer is because they are the poster children for arrested development, and they can’t think beyond certain body parts. Which means they all have control files which Catherine Austin Fitts talks about now and then. So they WILL do what the high bidder on [name an issue] demands.
We now rejoin the train wreck in progress.
Actual Data: PPI Sucks!
Inflation? In the pipeline? Uh…
“The Producer Price Index for final demand increased 0.8 percent in February, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This rise followed advances of 1.2 percent in January and 0.4 percent in December 2021. (See table A.)
On an unadjusted basis, final demand prices moved up 10.0 percent for the 12 months ended in February.
In February, the advance in the index for final demand can be attributed to prices for final demand goods, which rose 2.4 percent. The index for final demand services was unchanged.
Prices for final demand less foods, energy, and trade services rose 0.2 percent in February following a 0.8-percent increase in January. For the 12 months ended in February, the index for final demand less foods, energy, and trade services moved up 6.6 percent.”
Part of the Fed box is if they raise 1/2 a point tomorrow, that insures a recession in Q3. If they don’t, they light the other fuse – the one that sends overseas food importers to bigger suppliers (like Russia) because who wants paper that’s not keeping up?
Actual Data: Empire State Data
Just out from the NY Fed:
“…the March 2022 Empire State Manufacturing Survey. The headline general business conditions index fell fifteen points to -11.8, its lowest level since May 2020. New orders and shipments declined modestly, while unfilled orders increased. Delivery times continued to lengthen substantially, and inventories expanded. Labor market indicators pointed to a modest increase in employment and a slightly longer average workweek.”
Yes, this is labor cost suckage chalked up to the Crack-Up Boom as U.S. Jobless Rate Fell In Most States In January, 10 At Record Low (bloombergquint.com).
While the U.S. Covid cases seem improving, we can’t help but wonder if China isn’t going to use the Covid outbreaks as a way to begin “soft sanctions” on the U.S.? China Covid spike worsens: Dongguan factory center locks down (cnbc.com) Given this, Singapore is passing on a lockdown for now, and the Island of Idiots (UK) loosens We are governed by fools, tools, and charlatans all around.
Life on the rocks: Cruise ship carrying thousands runs aground. Norwegian Escape. (I’ll have a Finlandia rocks, in sympathy today since Vikingfjord is hard to find here…)
News keeping you in the dark? Close The Blinds, Switch Off Lights Before Sleeping. Study Explains Why. Mean like its night or sumptin?
Not how to solve homelessness:
Israel-Iran nuke spat simmers: Iran nuclear deal: Revolutionary Guards claim to foil nuclear sabotage plot, talks on hold (smh.com.au)
But wait! Aren’t we all supposed to be dead by now? New IPCC report says climate change poses an extreme risk to billions of people. Ziss like, oh, you know…a rerun? What about mushroom risk?
Around the Ranch
And inch plus of rain overnight. No sign of Sahara dust here.
Highlight of the day will be the nitrous as a tooth chip gets fixed. Sometimes a memorable experience. Chip off the old block comes to roost.
Write when you get some,