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June 29, 2022

Open (Not Ukraine) Thread 2022-98

News & views (not related to Ukraine) ...

Posted by b on June 29, 2022 at 14:59 UTC | Permalink

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NC via BBVA says Turkey in hyperinflation

In May, Turkey’s official year-on-year consumer price index (CPI) surged to 73%, a 23-year high. This has happened as the value of the lira against the dollar, which itself is more or less continually losing value, has plunged by almost 25% so far this year, after losing 44% of its value in 2021. The currency is currently trading at 16.68 units to the dollar, compared to 7.44 in January 2021 and 3.78 at the start of 2018.

The more the lira collapses, the higher the rate of inflation surges. In recent years Turkey’s President Recep Erdogan has held almost total sway over the country’s economic and monetary policy institutions, even going so far as to appoint his son-in-law, Berat Albayrak, as Minister of Finance in July 2018, a position he resigned from in 2020. Since 2019 Erdogan has fired three central bank governors for hiking interest rates over-zealously. In January 2022, he fired the director of TUIK for announcing an inflation rate that was deemed too high.

At that time, the official inflation rate was 36.1%. Today, it is over double that (73%) while producer prices have risen to an eye-watering 132%. Yet according to ENAG, an independent group of researchers in Turkey, the real rate of consumer price inflation is actually more than double the official rate, at around 160%. This has put ENAG on collision course with TUIK, which recentñy sued ENAG, accusing it of seeking to tarnish the national institute’s reputation.

This is why I don't see Turkey changing its long term "fan dance" strategy between the US/Five Eyes/EU and Russia. Turkey wants Russian natural gas, wheat, fertilizers and tourists; Turkey wants US/EU cash.

Posted by: c1ue | Jul 1 2022 13:56 utc | 101

This is econo-wonky, but important

Some at Fed are cautious about Fed's inflation response

Ratner and Sim give credit to post-Keynesian economics, and especially to the famous Polish economist Michał Kalecki (1943, 1971), who was a contemporary of John Maynard Keynes and co-discoverer of the principle of effective demand, apart from advancing several of Keynes’ contributions. Indeed, Kalecki, along with such less well-known writers as Henri Aujac (1950), was the founder of the view that inflation is primarily an expression and the outcome of class conflict (or conflicting claims) over national output by the way firms price their products vis-à-vis workers’ wage setting.


it would appear to be somewhat in conflict with the above assessment of former US Fed Chair Janet Yellen in 2019 as well as with the research of these two US Fed economists, Ratner and Sim, who suggest that the slope of the Phillips Curve is actually relatively flat and it has remained so for decades, for reasons that have little to do directly with the Volcker shock of the early 1980s.


The important implication is that, as Yellen (2019) recognized, the flatness of the relation implies an immensely high sacrifice ratio if pursuing a Volcker-style strategy (as recommended by Stanbury and Summers 2020), since it would require excessively high unemployment to get the inflation rate down by even a very small increment.


evidence-based economics would suggest that the well-worn relation between unemployment and inflation does not actually exist, at least not in the form it is traditionally depicted by the mainstream. Since the 1980s, particularly during the disinflation era of the Great Moderation associated with falling unemployment and, even more so, when the US unemployment rate did fall significantly (as immediately after the Global Financial Crisis (GFC)), the inflation rate remained largely unresponsive and stayed close to the 2 percent inflation target even though the US civilian unemployment rate fluctuated a great deal from a double-digit level of 10 percent towards the end of 2009 to a low point of 3.5 percent just before the pandemic at the end 2019 and early 2020.

Apparently, for the mainstream, as it is now observable from recent central bank decisions to steer economies towards higher interest rates, what we have witnessed over the last four decades since the Volcker shock was some pure aberration.


The US Fed working paper on Kalecki’s economics, dated September 2021, but which appeared only recently, is a breath of fresh air. Ratner and Sim (2022) claim that the Phillips curve in the United States and the United Kingdom has been almost flat since the 1980s because of the significant erosion of the bargaining power of workers. This began during the Reagan and Thatcher years, and which was especially reflected in declining union density rates over the last four decades. Thus, the supposed triumph over inflation for roughly four decades, until the surge during this last year of Covid-19, cannot be fully attributed to the conduct of monetary policy by the US Fed and the Bank of England. The Fed working paper, therefore, casts serious doubt on the mainstream narrative, which posits that the policy of the late Fed Chairman Paul Volcker of large hikes in interest rates was responsible for taming the 1980s inflation. If the Volcker shock was actually not what caused the long-term change in the dynamics of the inflation rate since the 1980s, and until the current Covid-19 crisis, then what was the culprit that flattened the Phillips curve?

The main takeaway of their paper is clear: interest rate hikes could have helped but it was rather the class conflict — particularly the offensive against the working class — that stood behind the inflation debacle of the Great Moderation, which had long-term consequences.

Long and short of it: Volcker's "inflation taming" success and the ensuing "Great Moderation" of inflation may very well be due to factors outside of Federal Reserve interest rate actions.

In particular: by 1981 - oil prices were moderating, boomers were entering the work force, and labor's crushing under Reagan (and Volcker) cut demand by destroying wealth effect.

China's WTO accession with Clinton's help extended the labor suppression meme via outsourcing.

Posted by: c1ue | Jul 1 2022 14:03 utc | 102

It is increasingly clear Sri Lanka was f'ed even before the last couple of year's of disastrous policies

Sri Lanka inflation jumps above 50%

The IMF ended 10 days of in-person discussions with Sri Lankan authorities in Colombo on Thursday following the country's request for a possible bailout.

The CCPI has been setting new monthly highs since October, when year-on-year inflation stood at just 7.6 per cent. In May it reached 39.1 per cent.

The rupee has lost more than half its value against the US dollar this year.


According to an economist at Johns Hopkins University, Steve Hanke, who tracks price increases in the world's troublespots, Sri Lanka's current inflation is 128 per cent, second only to Zimbabwe's 365 per cent.

Faced with an acute energy shortage, Sri Lanka is observing a shutdown of non-essential state institutions for two weeks, along with the closure of schools to reduce commuting.

The country's 22 million people have been enduring acute shortages of essentials - including food, fuel and medicines - for months.


Sri Lanka went to the IMF in April after the country defaulted on its US$51 billion external debt.

Note Sri Lanka's GDP is around $80B. If this debt was denominated in foreign currency - that's the trigger for the default.

Same as it ever was...

Posted by: c1ue | Jul 1 2022 14:07 utc | 103

[puts on fireman outfit]

Estimates of battery backup needed for Germany - 2018

And now comes along a guy named Roger Andrews, writing at the website Energy Matters on November 22, who takes this question to a new level of thoughtfulness and detail. His post is titled “The cost of wind & solar power: batteries included.”


Germany’s wind/solar production proves to be somewhat less seasonal, meaning that the annual storage peak comes out to around the same 25,000 GWh, even though the population of Germany is about double that of California. So Germany can get by with the same $5 trillion worth of batteries, which is only about 1.5 times its GDP, as opposed to double GDP for California.

A 2nd, German estimate of battery storage needed for 100% wind and solar PV

Today I will deal with another study of the subject, this one from German authors Oliver Ruhnau and Staffan Qvist, titled “Storage requirements in a 100% renewable electricity system: Extreme events and inter-annual variability.” The Ruhnau/Qvist study does not have a date other than “2021,” although it appears to have come out toward the end of that year.


Where Andrews and Gregory had calculated that about 30 days of storage would be required to back up a fully wind/solar system, R&Q come up with 24 days. However, to get to the 24 day result, R&Q require massive overbuilding of the wind/solar system, to the point where its nameplate “capacity” is about triple Germany’s peak electricity demand, and five times average demand. The result is a system where vast amounts of surplus electricity on sunny/windy days must be discarded or “curtailed.” However, R&Q say that their model is based on cost minimization, because building vast excess capacity and discarding electricity by the terawatt hour is actually cheaper than adding additional storage.


First there will be a vastly over-built system of wind and solar facilities:

On the supply side, almost 300 GW of variable renewable generators are installed: 92 GW solar PV, 94 GW onshore wind, and 98 GW offshore wind . . . . For solar PV and onshore wind power, this is nearly twice as much as the installed capacity in 2020; for offshore wind power, this means more than a tenfold increase.

For comparison, Germany’s current peak demand is in the range of 100 GW, and average demand is in the range of 60 GW.

Then there will be some 56 TWh of storage, equivalent as discussed to about 24 days of full electricity consumption for the entire country of Germany at near-peak usage levels.

To get a handle on how much that is, consider that a Tesla battery is in the range of about 100 KWh, and sells for about $13,500, or $135/KWh. So, if you were trying to cover the 56 TWh of storage with Tesla-type batteries, it would run you around 56,000,000,000 x $135, or about $7.56 trillion — which is about double the GDP of Germany.

So there you have it: 25 TWh if merely shifting excess from summer months to winter; 56 TWh if reducing cost due to ginormous battery storage cost.

Note that Germany curtailed 3 million MWh in 2016 = 3 TWh.

I don't have more recent data but it is a good question whether curtailment amounts have risen or fallen. On the one hand, Germany is suffering from an electricity shortfall due to high natural gas prices. On the other hand, one significant reason for the shortfall is 2021 and 2022 were lows in wind electricity production. And that's with ongoing increases in wind electricity generation installation.

Posted by: c1ue | Jul 1 2022 14:26 utc | 104

Greenhouse emissions rise to record, erasing drop during pandemic

Emissions of carbon dioxide and other greenhouse gases plunged 4.6 percent in 2020, as lockdowns in the first half of the year restricted global mobility and hampered economic activity. Many hoped that this would mark the beginning of a more permanent shift downwards in emissions.

The latest data, however, dashed those hopes. As the Chart of the Week shows, annual global greenhouse gas emissions rebounded 6.4 percent last year to a new record, eclipsing the pre-pandemic peak as global economic activity resumed.


While total emissions have climbed significantly above pre-pandemic levels, increases from transportation and households were more muted last year as the pandemic weighed on global mobility.

So the increases aren't even a return to BAU yet.

China 9 month Lockdowns, 1st world 3 month lockdowns = 4.6% decrease in 2020 but 2021 = 6.4% increase. This shows just how unrealistic "zero emissions" goals are.

And the above makes this even more amusing:

Its Time for a New Settlement

Former Siemens Gamesa insider says turbine manufacturers are in dire need of the bright future they were promised


In signing off from Siemens Gamesa after three years that might diplomatically be described as ‘eventful’, I wrote to colleagues that: “I suspect it will get worse before it gets better, but it will get better”.

One of the first responses I received was very instructive: “When I joined more than 15 years ago, I was told that I was joining the sector with the brightest and most promising future. The problem is that it is a future that seems never to come.”

It is fair to say that that sums up much of the prevailing mood in the wind turbine OEM sector right now with all the major western OEMs struggling to turn a profit. It is not unusual to hear senior industry figures raising the spectre of the fate of the European solar manufacturing industry, long ago lost to the east.

And here is the paradox of the wind energy industry in 2022: if net zero and other decarbonization targets are to be met, the industry should be on the cusp of a growth phase that would dwarf anything experienced so far.


The issues are well known. The industry’s relief at surviving Covid relatively unscathed and its optimism about a green recovery are long gone, replaced by a supply chain crisis and a damaging imbalance between supply and demand of projects.

Because Siemens is all about the environment /sarc

Posted by: c1ue | Jul 1 2022 14:33 utc | 105

We don't get to provide ZH links here but below is a posting headline there

The Fed Is Quietly Handing Out $250 Million To A Handful Of Happy Recipients Every Single Day

This is one of the visible indicators that the financial structure is reaping what it sows. Too bad it is constructed so that the profits are privatized and the losses are placed on the back of the public......but as Obama says, "Is all legal.".

I don't know what stops the music but I think it will stop soon and then ????

Posted by: psychohistorian | Jul 1 2022 15:50 utc | 106

Prasova for OilPrice, yesterday: The UK’s National Grid is exploring the idea of paying companies in Britain to use less electricity next winter as part of measures to conserve gas and avoid blackouts, Bloomberg reported on Thursday, quoting a document it had seen.

National Grid has sent requests to some companies, asking them how much money they would be willing to accept in order to reduce their power consumption from the national power grid this coming winter, Bloomberg reports.

Possible payments could start from $121 (£100) per megawatt-hour (MWh) to $7,274 (£6,000) per MWh, according to the document seen by Bloomberg.

Natural gas accounts for more than one-third of the UK’s power generation. On Monday, for example, gas generated 47.2% of Great Britain’s electricity, more than wind whose share was at 24.1%, nuclear at 16.7%, solar 6.3%, biomass 2.8%, hydro 1.5%, and power imports 1.4%, National Grid ESO data showed.


HMG is definitely full of ideas. In good old times, in winter peasants were sitting in their crofts doing little except waiting for the spring and saving food until cows start giving milk, hens start to lay eggs and some new vegetables are ripe to eat. And save fuel by huddling together with cows and hens.

Posted by: Piotr Berman | Jul 1 2022 16:03 utc | 107

The Orinoco Tribune published THE article, by Gabriel Rockhill on "Cultural Marxism"
"...n order to avoid being the dupes of history, or of the parochialism of the Western academy, it is therefore important to re-contextualize the Institute for Social Research’s work in relationship to international class struggle. One of the most significant features of this context was the desperate attempt, on the part of the capitalist ruling class, its state managers and ideologues, to redefine the Left—in the words of cold warrior CIA agent Thomas Braden—as the “compatible,” meaning non-communist, Left.[2] As Braden and others involved have explained in detail, one important facet of this struggle consisted in the use of foundation money and Agency front groups like the Congress for Cultural Freedom (CCF) to promote anti-communism and lure Leftists into taking positions against actually existing socialism..."

Posted by: bevin | Jul 1 2022 16:38 utc | 108

Posted by: Jpc | Jun 30 2022 12:18 utc | 65

You think that's the best crap? BWAH!
Let me introduce you to tax inversion

Posted by: sln2002 | Jul 1 2022 18:24 utc | 109

Posted by: bevin | Jul 1 2022 16:38 utc | 110

Thanks. Good for future reference in my pointless arguments with algo-propagandized idiots on my fake social media accounts.

Posted by: Tom_Q_Collins | Jul 1 2022 18:39 utc | 110

Democrats proved themselves - Deep State Defenders

On January 21, 2021, the day after inauguration, Biden reversed the order. It was one of his first actions as president. No wonder, because, as The Hill reported, this executive order would have been “the biggest change to federal workforce protections in a century, converting many federal workers to ‘at will’ employment.”

What did Biden reverse?
One of the biggest deals you never heard - of Schedule F.

Trump threw a dagger at the heart of the Deep State, but then the election was stolen and immediately
Biden caught the dagger in mid flight., read this:

Posted by: librul | Jul 1 2022 18:40 utc | 111

"peak demand"
Posted by: c1ue | Jul 1 2022 14:26 utc | 106
S&P Platts Insight w/e 2 July is devestating.
• Volvo Cars to invest $1.25 bil to establish third European EV plant in Slovakia
• REFINERY NEWS: France's Fos-sur-Mer starts preparations for shutdown
• European price volatility puts PPA market under unprecedented strain: Pexapark

That's the good news. Here's the bad and ugly analysis of vdL "just transition" under Habeck management.
feat. GRAPHIC WARNING Germany in race against time to deploy new LNG import
(In case anyone missed it, the recap of DE hostile take-over of Gazprom Germania lines of businesses, re-branded Securing Energy for Europe(SEFE) adds

One positive that has emerged for Germany from the Gazprom Germania nationalization, however, is the transfer of the charter of three [EMPTY] LNG vessels to the German state.

If this debt was denominated in foreign currency - that's the trigger for the default.
Posted by: c1ue | Jul 1 2022 14:07 utc | 105

Of course it was. IMF is an imperial basket agent. All loans are USD- or EUR-denominated, and IMF term conditions of distribution for "developing country" borrowers are called "structural adjustment programming"; "advanced economies"--eg. UK, EU candidate--subjected by their CBs to nearly identical monetary policy are instead afflicted by "austerity measures" before, during, and after the Panic of '08.

Without recalling Argentina's temporary success in escaping the US bond vigilante-ligitigated, IMF debt-vortex, Sputnik gently interrogates a Colombo-based IMF veteran "analyst": "The Sri Lankan government has sought an IMF bailout 16 times between 1965 and 2016. How crucial is securing the IMF bailout for the Sri Lankan government this time around?" Who advises, the only solution to default is future defaults.

Vimanga: A key reason why Sri Lanka, again has reached the current crisis is because over time we have de-liberalized our economy. Therefore, real change can happen if we liberalize our economy, embrace free trade and allow the market economy to function. With regard to the IMF program. I am sure there is strong criticism regarding some of the reforms proposed. But in our case, these are reforms that ideally have should have happened. If these reforms such as getting rid of loss-making state-owned enterprises, strengthening oversight over public finances, monetary policy stability and an independent central bank to name a few were carried out the current crisis would have been less severe.
Implementing such market-friendly policies are the only means of achieving sustainable growth, however, Sri Lanka followed policies counter to this. Policies such as import substitution, price controls, excessive meddling with markets and restricting the price mechanism along with numerous other policies paved the path for the current crisis.
Therefore, the real answer is that the only way out of this crisis is for a complete reset of the economy supported by a strong pro-market liberalization agenda.

MEANWHILE AFRICOM has dispatched wealth management agents to land-locked, "resource-rich", $27B-poor, faintly socialist Zimbabwe, to open "an office".

Posted by: sln2002 | Jul 1 2022 19:09 utc | 112

PS. "Gas contagion" has entered der raum, crowding out, ahem, credit.
Germany Mulls Uniper Bailout to Stem Russian-Gas Contagion, 29 June

Uniper, the largest buyer of Russian gas in Germany, said it’s discussing a possible increase in state-backed loans or even equity investments to secure liquidity. The crisis could also affect Finland, which controls Uniper’s parent Fortum Oyj. The utility said Uniper’s rescue requires a national effort “in Germany.”
Uniper operated a subsidiary, Unipro, in RU
German Economy Minister Robert Habeck has warned that a squeeze in Russian gas supplies risked creating deeper turmoil, likening the situation to the role of Lehman Brothers in triggering the financial crisis.

Energy suppliers are piling up losses by being forced to cover missing Russian volumes at high prices on the spot market. The shortfall is costing Uniper about 30 million euros ($31.3 million) a day, according to estimates from analysts at RBC and Citigroup.
If utilities like Uniper can’t deliver, there’s danger of spillover on local utilities and their customers, including consumers and businesses, Habeck warned after raising the country’s ["]gas risk["] level to the second-highest “alarm” phase last week. ... “Since Uniper can’t yet pass on these additional costs, this results in significant financial burdens,” the company said. The ability to pass along higher costs “would be a necessary and essential prerequisite for being able to issue a new earnings outlook with sufficient certainty,” it said.

Posted by: sln2002 | Jul 1 2022 19:34 utc | 113

Ben Norton has a good interview with Michael Hudson, which has been included over at The Saker and now with a transcript. Hudson connects many of the dots...

Hudson: ".....You (B. Norton) mentioned that while the Fed blames the inflation it on labor, that’s not President Biden’s view; Biden keeps calling it the Putin inflation. And of course, what he really means is that the sanctions that America has placed on Russia have created a shortage of oil, gas, energy, and food exports.

So really we’re in the Biden inflation. And the Biden inflation that America is experiencing is the result basically of America’s military policy, its foreign policy, and above all, the Democratic Party’s support of the oil industry, which is the most powerful sector in the United States and which is guiding most of the sanctions against Russia; and the national security state that bases America’s power on its ability to export oil, or control the oil trade of all the countries, and to export agricultural products.

So what we’re in the middle of right now isn’t simply a domestic issue of wage earners wanting higher salaries – which they’re not particularly getting; certainly the minimum wage has not been increased – but you have to put this in the context of the whole cold war that’s going on.

The whole US and NATO confrontation of Russia has been a godsend, as you and I have spoken before, for the oil industry and the farm exporters....."

Posted by: michaelj72 | Jul 1 2022 21:12 utc | 114

Posted by: sln2002 | Jul 1 2022 19:34 utc | 115

The more passionate the love was, the more acrimonious the divorce. There was a time, not long ago, when Uniper and Gazprom were the best couple ever. Now they are breaking the relationship with losses for both. I guess that Gazprom will plug a big portion of its wells, to reactivate once pipelines to China (and Indian subcontinent?) are completed. Bitter pill, but nothing compared to what Uniper suffers.

My speculative "conspiracy theory" is that Freeport LNG fire and prolonged outage that decreased NG prices so nicely in USA and increased, so calamitously, in Europe, should tame inflation in USA, doubling the chances of Democratic victory in November (2 x 0 = ...), and increasing the profits of the remaining liquifiers (any cross-ownership) necessitates "cut bono" question.

As Posted by: sln2002 | Jul 1 2022 19:34 utc | 115 showed, Germany could avoid loosing a huge bundle, have sound balance of current accounts and healthy budget and invest in green economy to its heart content. As they are at it, they could sign a contract with Rosatom to sell nuclear electricity from Kaliningrad, sparing German soil from NPPs. Instead, they do loose a huge bundle, pay support to Ukraine (the ultimate example of high maintenance girl friend), prepare huge armament program, is pestered for support from other former Gazprom customers etc. The cost of green transition is so dynamic that Germans should just grab it and move to the moon or distant stars (does this cost shoot to the moon, or beyond the confines of the solar system?).

Posted by: Piotr Berman | Jul 1 2022 21:13 utc | 115

Tucker Carlson cozies up to the (outgoing?) Bolsonaro regime using fake Sinophobia BS to justify it.

LOL, Brazil a "colony" to a country (China) that doesn't have colonies.

Posted by: Tom_Q_Collins | Jul 1 2022 21:26 utc | 116

Posted by: Tom_Q_Collins | Jul 1 2022 21:26 utc | 118

I learned today that colonization of Brazil by China, which will come soon, will pose a dire military threat to USA. Since this was written by Tucker Carlson himself, it is highly credible. The text showed no details, but the attached video explains this explosive threat adequately -- I did not check as I dislike lengthy videos.

So, where is the reassessment of policies in the somnolent Biden administration? Navy of USA and allies are deployed in South China Sea, while the real threat emerges in South Atlantic, with mere 3300 km from Boa Vista to Miami -- lazy to check, but it seems closer than from South China Sea. And what friendly country in the region would bolster the logistics of US Navy if this is a real threat -- and, as I explained, it is real. Suriname? Guyana? Trinidad and Tobago? What is State Department doing? I have a queasy feeling that we are doomed.

Posted by: Piotr Berman | Jul 1 2022 23:51 utc | 117

Climate freaks. Energy comes from a wall socket and food from supermarket shelves.
"In their infinite wisdom, the government of the Netherlands wants to impose new climate goals of reducing nitrogen output by 2030, which will force farmers out of business.

The Netherlands had even appointed a new Minister for Nature and Nitrogen! The minister, Christianne van der Wal has practically said that some farmers will have to give up their farms."

Posted by: Peter AU1 | Jul 2 2022 2:00 utc | 118

@113 librul | Jul 1 2022 18:40 utc

Very interesting piece, thank you.

Posted by: Grieved | Jul 2 2022 3:00 utc | 119

ZH has a posting up with the following title

BIS To Allow Member Banks To Hold 1% Of Their Reserves In Bitcoin

I want to point out the bias in the article and the quote below

The “solution” that the BIS, IMF and other groups offer to currency devaluation is usually a basket system – A mechanism that locks multiple currencies into a single framework and homogenizes their values. The IMF has been talking about doing this with paper currencies for many years using their Special Drawing Rights (SDR) basket. It would not be surprising if they announced a similar plan for the large number of cryptocurrencies on the market also. That is to say, they will claim that the best way to stabilize the buying power of cryptocurrencies like Bitcoin will be to collect all the major coins under a single umbrella along with CBDCs, and the bankers will no doubt control that umbrella.

The basket system they refer to has no intrinsic value items in it, only fiat US dollars and fiat cryptocurrencies. It seems odd that this article would completely ignore what is going on with Russia/ China et al. eh?

Posted by: psychohistorian | Jul 2 2022 6:29 utc | 120

Posted by: librul | Jul 1 2022 18:40 utc | 113

The amount of campaigning done here for gringo politicians has become disgusting.

Posted by: Arganthonios | Jul 2 2022 10:26 utc | 121

MK Bhadrakumar gave his view on the Snake Island transfer, linking it to ‘wheat wars’ (note: he writes wheat precisely, not grain.)

A couple paragraphs especially caught my attention partly because it mentions Canada:

“Indeed, Russia, which accounts for accounted for 16% of global wheat exports, and Ukraine, which accounted for 10%, are not the only key global exporters of wheat — for instance, the US and Canada, which export 26 and 25 million tons of wheat, respectively (or around 25% of global exports) and other major western producers France (19 million tons) and Germany (9.2 million tons) accounting for another 12% of global exports are unwilling to share their grain with those in need, prioritising their own food security in the recent years.

Of course, these rich western countries have their own difficulties related to energy prices, production costs and inflation. They would want to keep their raw materials to shield their economies from further inflation spikes. Simply put, in the event of currency instability, or indeed any form of economic or political instability, it is always more prudent to have raw materials than cash: it does not depreciate as quickly as currency.”

So… if one wanted to make these countries ‘share the resource wealth’, one would need them to provide grain by donation which could then be confiscated and hoarded while currency depreciates?? I’m curious about the statistics he’s using, I’m not sure about them entirely, but it excludes Australia, China… and India. I think he is trying to make a point.

Speaking of trying to make a point, those who do not follow b’s Twitter account would have missed this little gem:

I’m not European, but wow is that offensive - and is that not a direct unveiled threat at Biden and Elensky at the end? (But it can’t be it’s a cartoon.)

Wandering around the WWW yesterday, I stumbled across this: from the US Embassy in Tajikistan, dated Feb. 5, 2020 - strategy for Central Asia

Those who don’t follow Andrei Martyanov’s blog would have missed his recent comment on the International North-South corridor

Posted by: Bruised Northerner | Jul 2 2022 11:46 utc | 122

I just opened the CBC News webpage and it’s arrangement of articles is too intriguing not to share. (If it’s happening here, chances are it’s happening in your country too)

Headline, banner article (this one I’ll link to)—

“Canadian, American officials optimistic on democracy despite ‘concerning cocktail’ of threats”

Then “Fish still missing, traditions extinct 30 years after N.L. cod moratorium”
Which is followed by “Transphobia is gaining ground in the US Gender-diverse people in Canada worry it could happen here”
And then “Biologist finds behemoth tree in North Vancouver nearly as wide as a Boeing 747 airplane cabin”
Then “& Juliet shows how Canadian musicals can succeed without Broadway ‘brand name’ “

Are we re-negotiating NAFTA - CUSMA - USMCA or something??

Posted by: Bruised Northerner | Jul 2 2022 12:09 utc | 123

@Tom_Q_Collins #118
I agree, Tucker Carlson has jumped the shark on this one.
While it is 100% true that China has greatly expanded its reach into Central and South America - including Brazil - it does not equally follow that Bolsonaro is some kind of hero standing up to China.
The election of Bolsanaro was absolutely the result of a long, widely supported among the oligarch class, and US intervention included series of actions.

But, as I noted in previous posts regarding "Car Wash" - the main effect of this campaign is to insert Bolsanaro in just as the worst parts of the commodity cycle downturn hit Brazil...and to return Lula back as the supercycle kicks in.

Posted by: c1ue | Jul 2 2022 14:29 utc | 124

Amid a sea of agitprop on this site, a lone star shines

The West's self defeating sanctions

It has become clear in the wake of the invasion of Ukraine that this is about far more than Ukraine. The Chinese response to the invasion has been to increase its economic ties with Russia. The same has been true of countries like Brazil and India. It looks like the BRICs countries are using the invasion as a pretext for re-polarising the world order. From now on, the old American-led unipolar world is no more. Instead, we will be in a world of competing great powers.


The key plank in our sanctions policy is our attempt to wage trade war on Russia. The concept is simple enough: we want to stop sending our goods to Russia, and we also want to stop buying Russian goods. This plan rests on the implicit assumption that Russia needs us more than we need Russia. The promises made for this sanctions policy were quite grand. During a speech in Warsaw in late-March 2022, President Joe Biden said:

The Russian economy was ranked eleventh biggest economy in the world before this invasion. It will soon not even rank among the top twenty.


Yet even prima facie this comparison was unusual. On a simple US dollar GDP measure, the Iranian economy was ranked the 29th largest in the world in 2012 — a far cry from Russia’s position as the 11th largest today. A closer examination shows that even this under-exaggerates Russia’s size. Economists do not typically use simple US dollar GDP measures to compare countries’ wealth due to the impact of inflation. A more standard metric is called “Purchasing Power Parity GDP” (PPP GDP) which corrects for inflation. On this basis, Russia does not have the eleventh largest economy in the world; it has the sixth largest, close in size to Germany and about 16 per cent larger than the economy of the United Kingdom. For comparison, Iran in 2012 scored eighteenth place on this metric. Thinking the sanctions on Russia would have the same impact as the Iranian sanctions was clearly delusional.

But even these sorts of comparisons — which should be possible for even someone with an undergraduate in economics — are misleading. This is because Russia’s economy is fundamentally different in terms of its structure than the economies it is compared to. Large Western economies have relatively small manufacturing and mining sectors and relatively large service sectors. Consider that the size of the mining sector relative to GDP in the United States and Europe are 2.6 per cent and 2.1 per cent respectively. By contrast, the size of the mining sector in China and Russia relative to GDP are 10.4 per cent and 13.7 per cent respectively. A similar pattern emerges if we look at the size of the manufacturing sectors in these countries. The United States’ manufacturing sector clocks in at 17.4 per cent of GDP while Europe’s is 25.3 per cent of GDP. Russia’s, by contrast, is 30 per cent of GDP while China’s is 36 per cent of GDP.


What we are showing here is that all GDP is not created equal. Some output in the economy is more important, more fundamental to how the economy functions than other output. Russia produces far more of this more important output than we do, making it a more critical economy than it appears on a simple GDP metric. How much more important? A simple metric might be to take the PPP GDP of Russia and Germany and adjust them for the size of their mining output. Such a comparison tells us that, on this basis, the Russian economy is 5.4 times (!) as important as Germany when it comes to producing our most basic needs.


Food prices are also rising. In the United Kingdom, for example, food prices are rising at 6.7 per cent a year. Some of this is because Russia produces this food directly. For example, Russia produces around 19 per cent of world wheat exports. But some of it is because Russia is a key producer of fertiliser products — more stuff that makes stuff. The latest figures show that Russia is the largest producer of fertiliser products on the planet, accounting for around a fifth of the total market.


As the global order is shaken to its core, Western citizens are seeing their high living standards start to evaporate before their eyes due to the irrational sanctions policies.


In late-March, President Biden tweeted that the Russian rouble had been “reduced to rubble”. Yet, at the time of writing in late-June, the rouble has risen in value against the US dollar by 46 per cent with respect to where it stood before the war. The rouble is now so strong that some Russian policymakers are discussing the possibility of intervening to drive down its price.

The reason for this is simple and well-known: the rouble is a petrocurrency. That means it rises and falls with the price of oil. Oil prices are high due to the sanctions, and these high prices are driving the rouble higher. The sanctions themselves are driving the price of oil upwards; this in turn is driving the rouble skyward.

Russia is becoming richer as we are becoming poorer.


But on 26 February 2022, the United States and its allies did something that was both highly unpredictable and downright insane: they announced that they were seizing Russia’s foreign currency reserves. The move surprised even Russia who, based on their accumulation of the assets in the first place, believed that the US dollar was as good as gold.

Currency reserves are held by countries as an insurance policy. Insurance policies need to be trustworthy. If you think that your insurer is going to run out of money when you approach them for a claim, the policy is useless. What the United States showed the rest of the world on 26 February is that they are unreliable insurers. They communicated clearly to everyone listening that US dollar reserves are only safe if you are undertaking foreign policies that are approved of by the United States.

The reaction was swift. On 20 April, one of America’s most reliable allies, Israel, announced that it was dumping some of its US dollar reserves in favour of Chinese yuan.


On the 14th of May, Yu Yongding, a former member of the Monetary Policy Committee of the Chinese Central Bank, stated in an online seminar that “geopolitical conflict between China and the United States poses a serious threat to the security of China’s overseas assets, especially its foreign exchange reserves” and that for this reason “China’s overseas asset-liability structure needs to be adjusted”. Translation: it is time for China to start liquidating its dollar holdings. [I posted the 8 ways Yu Yongding said could be used to fix this imbalance]


The consequences of the sanctions were obvious to any thinking economist or financial markets expert the moment they were announced. So, why did our policymakers adopt them? I have no inside information on this to share. But I do have a theory.

In the wake of the invasion, the media response was blistering. Social media ignited with anti-Russian sentiment. The mood was explosive. At the same time, our governments were claiming this showed our prowess when it came to information warfare. Our leaders mocked the Russians for being information war amateurs and said we were showing them how it was done.

No doubt, this information warfare operation was impressive. But as the days and weeks wore on, it became increasingly unclear who it was targeted at. At first, many assumed that it would be targeted at Russians. But it soon became clear that it was instead targeted domestically. It was an inward-looking information warfare operation, presumably designed to keep peoples’ fighting spirit afloat.

I cannot prove it, but I think the environment that this created may have led to the poor policy decisions. [The term is "getting high on your own supply"]

Posted by: c1ue | Jul 2 2022 14:40 utc | 125

Quite long but a (IMO) very good look at "Liberal Internationalists" vs. "Restrainers"

What Comes After The American Century

The principles of liberal internationalism were first articulated by Woodrow Wilson as World War I limped along in April 1917. The American military, the president told a joint session of Congress, was a force that could be used to make the world “safe for democracy.” (The United States would decide, of course, which countries counted as democracies.) Wilson’s doctrine was informed by two main ideas: first, the Progressive Era fantasy that modern technologies and techniques—especially those borrowed from the social sciences—could enable the rational management of foreign affairs, and second, the notion that “a partnership of democratic nations” was the surest way to establish “a steadfast concert for peace.” Wilson’s two Democratic successors, Franklin Delano Roosevelt and Harry S. Truman, institutionalized their forebear’s approach, and since the Forties, every president save Trump has embraced some form of liberal internationalism. Even George W. Bush put together a “coalition of the willing” to invade Iraq and insisted that his wars were being waged to spread democracy.


Restrainers, by contrast, understand that the American Century is over. They maintain that the expansive use of the U.S. military has benefited neither the United States nor the world, and that charting a positive course in the twenty-first century requires taking a root and branch approach to the principles that have guided U.S. foreign policy since World War II. Restrainers want to reduce the U.S. presence abroad, shrink the defense budget, restore Congress’s constitutional authority to declare war, and ensure that ordinary Americans actually have a say in what their country does abroad.

The origins of restraint can be traced to George Washington’s farewell address of September 1796, in which the president warned against “entang[ling] our peace and prosperity in the toils of European ambition, rivalship, interest, humor, or caprice.” Twenty-five years later, on July 4, 1821, the secretary of state, John Quincy Adams, likewise insisted that a defining characteristic of the United States was that it had “abstained from interference in the concerns of others. . . . She goes not abroad, in search of monsters to destroy.”


The fundamental disagreement between the two schools of thought is this: liberal internationalists believe that the United States can manage and predict foreign affairs. Restrainers do not. For those of us in the latter camp, the withering away of the American Century cannot be reversed; it can only be accommodated.


In 1992, the G7 countries—Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States—controlled 68 percent of global GDP[Note this closely corresponds to the Sanction Russia group now], and maintained sophisticated militaries, which, the Gulf War seemed to demonstrate, could achieve their objectives quickly, cheaply, and with minimal loss of Western life.

But this is no longer the case. By 2020, the G7’s GDP had dwindled to 31 percent of the global total, and is expected to fall to 29 percent by 2024. This trend will likely continue. And if the past thirty years of American war have demonstrated anything, it’s that sophisticated militaries do not always achieve their intended political objectives. The United States and its allies aren’t what they once were. Hegemony was an anomaly, an accident of history unlikely to be repeated, at least in the foreseeable future.

Posted by: c1ue | Jul 2 2022 14:54 utc | 126

Posted by: c1ue | Jul 2 2022 14:54 utc | 128

On the positive side, the New American Century survived 30+ years already, while 1000 year Reich survived 12, and Qin dynasty that united China and introduced empire, 15. Thus it is already a good result. Enough for bards to sing songs of the glorious past for centuries. Yet, so far, there is no closure, a glorious epoch needs a glorious doomed fight for a glorious cause.

Posted by: Piotr Berman | Jul 2 2022 15:32 utc | 127

@Piotr Berman #239

All a matter of point of view.

From my view: a nation which held 50% of the entire world's known gold reserves in 1945 - which actually mattered then; which united the most developed nations in the entire world in a hegemony against the Soviet Union but which is now underperforming in every single positive economic statistic of relevance despite having its great geopolitical rival economically surrender 30 years ago - doesn't feel like anything to sing about to me.

Nor is it like Rome going under waves of barbarians; the American Barbarians are all internal.

Posted by: c1ue | Jul 2 2022 15:59 utc | 128

There was a time when deporting dangerous radicals to face death sentences in allied powers' jurisdictions was not automatic in the UK. In fact the proceedings against Tan Malaka and Sung Man Cho in Hong Kong in 1933 led to their release. Subsequently both re-surfaced at the sharp ends of the Indonesian and Vietnamese revolutions.
In 1933 the UK and its colonies were very close to fascism but not so close as they are today.

"..In fact, as Hong Kong governor of the day, Sir William Peel, reported to London at the time of Ho Chi Minh’s final exit from the colony on January 25, 1933:

"I must draw your attention to the very unsatisfactory position which this case and similar one of Tan Malaka reveals. The police of this Colony have had in their hands two of the most dangerous of Moscow’s agents in the Far East but have been powerless to do anything beyond deporting them from Hong Kong to prevent them from continuing to work for subversion of European rule in the Far East..."

(Under British Law: Ho Chi Minh in Hong Kong (1931-33) Geoffrey Gunn
This article draws on material from Geoffrey Gunn’s Ho Chi Minh in Hong Kong: Anti-Colonial Networks, Extradition and the Rule of Law (Cambridge: Cambridge University Press, 2021).)

Why not subscribe to ?
It's free and every month there are fascinating articles on Japan and the Far East.

Its easy to forget the important role that the Soviet Union played in the 1930s in protecting revolutionary nationalists around the world.

Posted by: bevin | Jul 2 2022 16:06 utc | 129

c1ue and Piotr Berman,

I was doing my regular Friday reading (i.e., slacking off of work) and I found something very similar to what you're both talking about. I'm going to see if I can find it again...

In Federalist No. 10, James Madison argued that democracies “have ever been spectacles of turbulence and contention” and “incompatible with…the rights of property.” Democratic governments gave rise, Madison felt, to “factious leaders” who could “kindle a flame” amongst the dangerous masses for “improper and wicked projects” like “the printing of paper money,” “abolition of debts,” and “an equal division of property.”

“Extend the [geographic] sphere [of the U.S. republic],” Madison wrote, and it becomes “more difficult for all who feel it to discover their own strength and act in union with each other.”

That was an explicit statement of anti-democratic/anti-popular intent. So was the following argument given by Madison at the Constitutional Convention on behalf of an upper U.S. legislative assembly (the Senate) of elite property holders meant “to protect the minority of the opulent against the majority” and to thereby “secure the permanent interests of the country against innovation:”

“In framing a system which we wish to last for ages, we should not lose sight of the changes which ages will produce. An increase of population will of necessity increase the proportion of those who will labour under all the hardships of life, and secretly sigh for a more equal distribution of its blessings. These may in time outnumber those who are placed above the feelings of indigence. According to the equal laws of suffrage, the power will slide into the hands of the former. No agrarian attempts have yet been made in in this Country, but symptoms, of a leveling spirit, as we have understood, have sufficiently appeared in a certain quarters to give notice of the future danger. How is this danger to be guarded against on republican principles? How is the danger in all cases of interested coalitions to oppress the minority to be guarded against? Among other means by the establishment of a body in the government sufficiently respectable for its wisdom and virtue, to aid on such emergences, the preponderance of justice by throwing its weight into that scale. Such being the objects of the second branch in the proposed government, a considerable duration ought to be given to it.”

I'd agree with Piotr in that this (internal before it became outward reaching) system of the primacy of propertied elites and gangster-capitalism-through-and-buoyed-via-empire has lasted an inordinate amount of time. Two hundred and twenty five years is a world record for duration of an empire, in some part due to the long-held steadfast ridiculous and delusional American notion that the USA *isn't* an empire in anything approaching the 'classical' definition.

I'm clearly off on a little tangent here and will read the Harper's piece shortly. The above quote was taken from an article written by Paul Street pre-TDS (ca. 2015, although his particular brand of TDS is quite entertaining and accurate, IMO).

Posted by: Tom_Q_Collins | Jul 2 2022 19:46 utc | 130

snake | Jun 30 2022 16:16 utc | 75

Snake Thank you so much for the Mapping Project Link
certainly its time has come
I pray it catches on globally
Time to end the Cabal

Posted by: ld | Jul 2 2022 20:04 utc | 131

Is China a victim of USSA Space Race phobia?

Back in the USSA

China may be plotting moon takeover – NASA
Chinese astronauts are busy learning how to destroy other nations’ satellites, agency chief Bill Nelson claimed !

Is the USSA plotting another color revolution in Khazakstan?

Posted by: Bad Deal Motors On | Jul 2 2022 20:13 utc | 132

Come to Canada he spews
I care about your right to choose
it's your body your domain
here in Canada freedom reigns

But unacceptable Canadians
who espouse the same ideal
are trampled down by horses
and crushed beneath his heel

He pretends he has the power
he's just a davos clown
a face to blame in the end
when the shit goes down

Tho beaten robbed and jailed
the truth will be unveiled
United we will stand
and queen justine will fail

Posted by: ld | Jul 2 2022 22:30 utc | 133

Just a report that ZH that I skim regularly has had a video frame down on the lower right corner of the window for ages trying to get my eyeballs and occasionally it catches one. I don't track the changes to the spiel over time but want to report that they have had the same segment about China's economy going to hell because of Covid and pictures of this woman in a mask nodding off for over a month.

China, with a population of over 3 billion is reporting a Covid daily number of 75 while the US is reporting over 112 thousand daily currently. Just because a lie is repeated forever doesn't make it reality....the dog barked and the caravan moved on.

Posted by: psychohistorian | Jul 3 2022 2:49 utc | 134

Bloomberg reports: Argentina Economy Minister Guzman Resigns as Divisions Grow


Guzman, a 39-year-old economist who conducted research at Columbia University alongside Nobel Prize winner Joseph Stiglitz, lost support over the last months from the far-left wing of the coalition led by Vice President Cristina Fernandez de Kirchner. Lawmakers loyal to her in Congress voted against the IMF agreement he negotiated, even though the deal was approved with ample backing.


Odious debt is not mentioned in the article.

Posted by: too scents | Jul 3 2022 8:50 utc | 135

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Posted by: betffair exchange In | Jul 3 2022 11:08 utc | 136

Cleanup on aisle 138, please.

Posted by: Arganthonios | Jul 3 2022 11:20 utc | 137

Holy F**k!!
I just pulled up Strategic Culture again, first time in months.
It looks a bit different too.

Posted by: Bemildred | Jul 3 2022 11:37 utc | 138

.. Nobel Prize winner Joseph Stiglitz...
Posted by: too scents | Jul 3 2022 8:50 utc | 137

Stiglitz is NOT a Nobel Prize winner. There is NOT a Nobel Prize in economics.
It's more than a trivial distinction.
The prize he won is called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.
(Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel)

It's a bankers prize and it has a corrupt history behind it. The Nobel family was/is totally against the bank piggy-backing the Nobel
name onto their award. Not Nobel or noble
Somewhere I have a long account of how it came to be but it's misplaced and I will post it later if I find it.
Milton Friedman and Paul Krugman have won it too. What's that say?

The existence of this economic prize is only slightly less corrupt than the Nobel Peace Prize, which is one of the Nobel prizes but
has been co-opted by politics. Alfred Nobel gave the selection of that to Norway but even that didn't keep it pure. It's now a sad joke.

Posted by: waynorinorway | Jul 3 2022 13:11 utc | 139

The tribes of Libya enjoying their Democracy

Posted by: Tom_12 | Jul 3 2022 14:08 utc | 140

@karlof1 #16

I'm now interpreting Lavrov's use of the word terrorism to also mean the Outlaw US Empire since it's the #1 terrorist nation on the planet

He's referring to Afghanistan, I would assume, since he also mentions drug smuggling. It's pretty much an open secret that the CIA controlled (controls?) heroin trafficking from Afghanistan, and that most of the fighting past the initial invasion was a bloody turf battle between USA and other factions, with US troops guarding poppy fields and CIA hit squads taking out rival producers by flying in with choppers in the middle of the night and massacring entire compounds. It was pure gangsterism like 1920s prohibition, except carried out by a nation-state terrorizing an entire country and supplying +90% of the world's heroin.

Posted by: Kingsmeg | Jul 3 2022 15:53 utc | 141

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