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Satchu's Rich Wrap-Up
 
 
Monday 27th of June 2022
 
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What’s behind the sharp drop in Bitcoin’s value? $BTC #Bitcoin @AJInsideStory
World Currencies

What’s behind the sharp drop in Bitcoin’s value? $BTC #Bitcoin @AJInsideStory 
Presenter: Sami Zeidan
Guests
Aly-Khan Satchu – Investor and CEO at Rich Management
Naeem Aslam – Chief market analyst at AvaTrade
Brian Lucey – Professor of international finance and commodities at Trinity Business School

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The Mosque of Cristo de la Luz, Toledo, Spain @BaytAlFann
Misc.

The Mosque of Cristo de la Luz, Toledo, Spain @BaytAlFann

It has remained nearly unchanged since its construction in 999 & is the only remaining former Moorish Mosque in the city. Originally named the Mezquita Bab-al-Mardum, it is located near the 14th century Puerta del Sol.

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When you have a large space to conquer, the curve is the natural solution..The curve I find in the mountains of my country, in the sinuousness of its rivers, in the waves of the ocean and on the body of the beloved woman. —Niemeyer @lacallada_
Misc.


When you have a large space to conquer, the curve is the natural solution..The curve I find in the mountains of my country, in the sinuousness of its rivers, in the waves of the ocean and on the body of the beloved woman. —Niemeyer @lacallada_


When you have a large space to conquer, the curve is the natural solution...I once wrote a poem about the curve. The curve I find in the mountains of my country, in the sinuousness of its rivers, in the waves of the ocean and on the body of the beloved woman. —Niemeyer

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Oscar Niemeyer...#Brasilia. Inaugural night of the city... Photo by Rene Burri. 1960
Misc.


Oscar Niemeyer...#Brasilia. Inaugural night of the city... Photo by Rene Burri. 1960 

Oscar Niemeyer "This was a liberating time," said Niemeyer of the design and construction of Brazil's new capital Brasilia in late 1950s. 


"It seemed like a new society was being born, with the traditional barriers cast aside. It didn't work." 

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The Insufferable Gaucho Author: Roberto Bolano
Misc.


Once I saw him watching fire-eaters on a street in Mexico City. I saw him from behind, and I didn’t say hello, but it was obviously Jim. The badly cut hair, the dirty white shirt and the stoop, as if he were still weighed down by his pack. Somehow his neck, his red neck, summoned up the image of a lynching in the country—a landscape in black and white, without billboards or gas station lights—the country as it is or ought to be: one expanse of idle land blurring into the next, brick-walled rooms or bunkers from which we have escaped, standing there, awaiting our return. Jim had his hands in his pockets. The fire-eater was waving his torch and laughing fiercely. His blackened face was ageless: he could have been thirty-five or fifteen. He wasn’t wearing a shirt and there was a vertical scar from his navel to his breastbone. Every so often he’d fill his mouth with flammable liquid and spit out a long snake of fire. The people in the street would watch him for a while, admire his skill, and continue on their way, except for Jim, who remained there on the edge of the sidewalk, stock-still, as if he expected something more from the fire-eater, a tenth signal (having deciphered the usual nine), or as if he’d seen in that discolored face the features of an old friend or of someone he’d killed.


I watched him for a good long while. I was eighteen or nineteen at the time and believed I was immortal. If I’d realized that I wasn’t, I would have turned around and walked away. After a while I got tired of looking at Jim’s back and the fire-eater’s grimaces. So I went over and called his name. Jim didn’t seem to hear me. When he turned around I noticed that his face was covered with sweat. He seemed to be feverish, and it took him a while to work out who I was; he greeted me with a nod and then turned back to the fire-eater. Standing beside him, I noticed he was crying. He probably had a fever as well. I also discovered something that surprised me less at the time than it does now, writing this: the fire-eater was performing exclusively for Jim, as if all the other passersby on that corner in Mexico City simply didn’t exist. Sometimes the flames came within a yard of where we were standing. What are you waiting for, I said, you want to get barbecued in the street? It was a stupid wisecrack, I said it without thinking, but then it hit me: that’s exactly what Jim’s waiting for. That year, I seem to remember, there was a song they kept playing in some of the funkier places with a refrain that went, Chingado, hechizado (FXXked up, spellbound). That was Jim: fXXked up and spellbound. Mexico’s spell had bound him and now he was looking his demons right in the face. Let’s get out of here, I said. I also asked him if he was high, or feeling ill. He shook his head. The fire-eater was staring at us. Then, with his cheeks puffed out like Aeolus, the god of the winds, he began to approach us. In a fraction of a second I realized that it wasn’t a gust of wind we’d be getting. Let’s go, I said, and yanked Jim away from the fatal edge of that sidewalk. We took ourselves off down the street toward Reforma, and after a while we went our separate ways. Jim didn’t say a word in all that time. I never saw him again.

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Sir John Curtice writes for Times: ‘Many opposition voters are now seemingly willing to vote for whichever candidate seems best able to defeat Conservatives'' @Steven_Swinford
Law & Politics


Sir John Curtice writes for Times: ‘Many opposition voters are now seemingly willing to vote for whichever candidate seems best able to defeat Conservatives'' @Steven_Swinford

‘If that continues winning the next general election could begin to look a lot more difficult’
Conclusions

Dear @krishgm The Tactical voting that was witnessed in these two bye~elections presages an apocalyptic outcome for the Tories & I don’t know how Boris finesses that.


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@ZelenskyyUa peculiar Glastonbury appearance @spectator Gus Carter
Law & Politics


Volodymyr Zelensky didn’t quite make it onto the Glastonbury line-up posters. Perhaps Michael Eavis, the owner of ever-so Worthy Farm, had last-minute difficulties with the Ukrainian President’s booking agent. No matter. 

An eight-foot-high image of President Zelensky’s face graced the Pyramid Stage on Friday, right before ageing indie rockers The Libertines belted out their two-decades-old bangers. 

‘Time for Heroes’, but not before festival-goers had enjoyed a brief set by Europe’s very own hero. 

You’d be forgiven for thinking the shtick’s getting a bit tired – but at least Pete Doherty can just about hold a tune.
‘Glastonbury is the greatest concentration of freedom these days,’ Zelensky told the festival. 

And what greater expression of freedom is there than tucking into over-priced Vietnamese street food while some besieged leader begs your government for more weapons? 

Perhaps Stoke Newington’s exiles in Somerset could pop over to the Kyiv tent, nestled somewhere between Water Aid and Greenpeace, and sponsor an NLAW? 

They barely managed the syllabically-strained rendition of ‘Oh, Volodymyr Zelensky’ (à la ‘Oh, Jeremy Corbyn’). But then perhaps he isn’t quite as popular with the Glasto crowd as the old Russophile Labour leader.
Are we going to see Zelensky, Paul McCartney-like, wheeled out to perform his greatest hits well into his eighties?
You can’t really blame Zelensky. He’s doing all he can to drum up support for his country. But there’s something incongruous about this virtual world tour. 

A couple of months ago, Vlod was beamed into Las Vegas for the Grammys so he could chivvy up support from pop stars and producers. A few hours later, he visited the site of the Bucha massacre.
It’s the PR-iness of the thing that feels strange. After all, propaganda is still propaganda, even if you happen to agree with it. 

But then Zelensky came to power as an actor, someone who had lampooned the office of the president so successfully that his countrymen thought he might actually do a good job of the gig. 

Now he’s been cast as a war-time leader, perhaps the greatest part any actor-politician could hope for. The invasion is, after all, even more blockbuster than Top Gun 2.
Perhaps that’s what Ukraine really needs: its own leading man to rally the troops. 

I doubt he’s down there in the bunker directing battalions and planning supply routes. 

Instead, he’s out there in ‘the battle for the airwaves’, a phrase loftily thrown about by those who think themselves insusceptible to agitprop. In the modern era, even conflicts need a hypeman.
It goes without saying that what’s happening in Ukraine is beyond grim. And from what I can see, Zelensky is doing a pretty good job of holding it together.

 But the strange thing about Ukraine is that we all seem to want a part of the story. No longer are world crises something to be watched from afar. 

The invasion has been subsumed into the ‘experience economy’. 

As Ed Cumming recently wrote in the Telegraph, Vlod has become the ultimate celeb accessory. Earlier this week he met with the Hollywood actor Ben Stiller, but even Zoolander couldn’t out-do Zelensky’s rendition of ‘blue steel’.
His gruff cajoling tone, his pectoral-enhancing military t-shirts, the stern straight-down-the-camera look. It’s extraordinarily good branding.

 And it’s been perfectly honed for us, the well-meaning western viewer. Look at him. The ultimate hero. And he needs our – my! – help.
Where does all this end? Insurgencies, on average, tend to last around a decade. 

Are we going to see Zelensky, Paul McCartney-like, wheeled out to perform his greatest hits well into his eighties? 

What jamboree will be complete without a quick guest appearance? 

An after dinner speech here, an awards ceremony there. Because it feels increasingly like we aren’t really listening. 

What matters is that we get our own little sliver of history, a quick Instagram story of Zelensky on the big screen to show that we #StillCare.

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US army war college quarterly 1997. The US officer charged with defining the future of warfare, wrote One of the defining bifurcations of the future will be the conflict between information masters and information victims
Law & Politics

US army war college quarterly 1997. The US officer charged with defining the future of warfare, wrote One of the defining bifurcations of the future will be the conflict between information masters and information victims
This information warfare will not be couched in the rationale of geopolitics, the author suggests, but will be “spawned” - like any Hollywood drama - out of raw emotions.
“Hatred, jealousy, and greed - emotions, rather than strategy - will set the terms of [information warfare] struggles”.

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G-7 leaders gather 26-28 June. Macron without majority; Scholz w/ambivalence; Draghi bloodied by Salvini; unpopular Biden; Johnson hanging on by a thread; Trudeau (not his Dad) & Kishida (who?) Unlikely newsworthy event @Halsrethink
Law & Politics


G-7 leaders gather 26-28 June. Macron without majority; Scholz w/ambivalence; Draghi bloodied by Salvini; unpopular Biden; Johnson hanging on by a thread; Trudeau (not his Dad) & Kishida (who?) Unlikely newsworthy event @Halsrethink

G-7 leaders gather 26-28 June. Macron without majority; Scholz w/ambivalence; Draghi bloodied by Salvini; unpopular Biden; Johnson hanging on by a thread; Trudeau (not his Dad) & Kishida (who?) to address Russia, oil and imminent global recession! Unlikely newsworthy event

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Russia earned $15.2 billion in gold exports in 2021 Gold is critical to Vladimir Putin's sanctions-busting strategy and the G7 ban on Russian gold, is a blow to the Russian economy @SamRamani2
Law & Politics


Russia earned $15.2 billion in gold exports in 2021 Gold is critical to Vladimir Putin's sanctions-busting strategy and the G7 ban on Russian gold, is a blow to the Russian economy @SamRamani2

Russia earned $15.2 billion in gold exports in 2021 Gold is critical to Vladimir Putin's sanctions-busting strategy and the G7 ban on Russian gold, which was implemented by the US, Britain, Canada and Japan, is a blow to the Russian economy

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Zugzwang Western self-destruction – a puzzle defying any unique causal explanation – continues.
Law & Politics


Zugzwang Western self-destruction – a puzzle defying any unique causal explanation – continues. 

Western self-destruction – a puzzle defying any unique causal explanation – continues. 

The examples where policy is pursued in apparent indifference to anything resembling rigorous reflection, has become so extreme as to provoke a former British military chief (and former head of NATO forces in Afghanistan), Lord Richards, to huff that the relationship between strategy and any synchronisation of ends has become hopelessly broken in the West.
The West pursues a “let’s see how it goes” ‘strategy’, or in other words, no real strategy at all, Richards contends

Many would say that a cult of unrelenting, untethered, positive spin, has asphyxiated mainstream critical faculties. 

How is it that the West, awash with ‘think-tanks’, invariably gets it so wrong? Why is it that facile memes and illusions, posing as geo-politics, get little or no challenge? 

Compliance to official and mainstream narratives is all. It is baffling to observe this becoming routine, without apparent cognizance of the risks which this entails.
The key epicentre to today’s spiking geo-political instability is the state of the western economy: 

So complacent have the authorities been – that inflation would never ruffle the waters of the reserve-currency-based U.S. economy – that cyclical recession was assumed to have been ‘eradicated’; it would never sully the consumer (electoral) sphere again, thanks to a money printing ‘vaccine’; and anyway, ballooning debt ‘does not matter’.

We now observe the consequences: Rampant inflation, and the West scrambling around the world looking for cheap alternatives that won’t ‘break the bank’. Alas, they are scant. What is the geo-political implication? In a word, extreme systemic fragility. 

Just to be clear, the accelerating inflationary crisis in Europe undermines the political positions of nearly every major politician across the euro-zone, as they will encounter real popular anger; as inflation eats away at the middle class; and high energy prices gut business profits.

It is ‘Game over’ really. It is all blame-game now. Russia will impose its own terms on Ukraine through placing military facts on the ground.

The strategic importance of this has yet to sink-in fully: It was, of course, the western leaders who made a big play of claiming that, absent the painful humiliation and military defeat of Putin, the liberal rules-based order was finished.

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May 29 Vanity of Vanities! All is vanity
Law & Politics


May 29 Vanity of Vanities! All is vanity


Layer on top of this a highly managed media construct which is essentially a Claque where alternative voices are deplatformed and we have an environment which was accurately described thus by @FukuyamaFrancis
The democratization of authority spurred by the digital revolution has flattened cognitive hierarchies along with other hierarchies, and political decision-making is now driven by often weaponized babble.
At a time when what is required is agile multi disciplinary thinking we have ''weaponized babble''
Less than two months ago The ''Leader of the Free World'' President Biden said his sanctions against Russia would “reduce the Ruble to rubble” and this has happened
The Architect of the Sanction warfare program said 
The @POTUS Official Who Pierced Putin’s “Sanction-Proof” Economy @NewYorker [4]
Singh said, “We’ve made him stare into an economic abyss. But he could choose to pull back.”
The markets are where these two systems touch—the supply of buckwheat, the joint energy ventures, the price of the ruble—and within this arena the sanctions were a demonstration that Washington still had levers to pull.
“You know, we can play chess, too,” Singh said. “It was important for us to show that the fortress could come crumbling down.”
The geoeconomic debacle is off the scale.  

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Germany warned that Russia’s moves to slash Europe’s natural gas supplies risked sparking a collapse in energy markets, drawing a parallel to the role of Lehman Brothers in triggering the financial crisis
Law & Politics


Germany warned that Russia’s moves to slash Europe’s natural gas supplies risked sparking a collapse in energy markets, drawing a parallel to the role of Lehman Brothers in triggering the financial crisis


“If this minus gets so big that they can’t carry it anymore, the whole market is in danger of collapsing at some point,” Habeck said in Berlin, “so a Lehman effect in the energy system.”

“It will be a rocky road that we have to travel as a country,” he said. “Even if we don’t feel it yet, we are in a gas crisis.”

“The curbing of gas supplies is an economic attack on us by Putin,” said Habeck. “It is obviously Putin’s strategy to try to fuel insecurity, drive up prices and divide us as a society. We will fight back against this.”

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PAUSE FOR THOUGHT: MONEY WITHOUT VALUE IN A RAPIDLY DISINTEGRATING WORLD Fabio Vighi
Law & Politics


PAUSE FOR THOUGHT: MONEY WITHOUT VALUE IN A RAPIDLY DISINTEGRATING WORLD Fabio Vighi 

The acceleration of the “emergency paradigm” since 2020 has a simple yet widely disavowed purpose: to conceal socioeconomic collapse. 

In today’s metaverse, things are the opposite of what they seem. Inaugurating Davos 2022, IMF director Kristalina Georgieva blamed the pandemic and Putin for the “confluence of calamities” that the world economy is now facing. 

No surprise there. Davos itself is not a conspiracy hub, but the mouthpiece of the elites’ increasingly panicky reactions to unmanageable systemic contradictions. 

The Davos crowd are now hiding behind lies like a bunch of nervous children. While they continue to tell us that the coming slump is the effect of global adversities that took the world by surprise (from Covid-19 to Putin-22), the opposite is true: the tanking economy is the cause of these “misfortunes”. 

What we are sold as external threats is in fact the ideological projection of the internal limit and ongoing decomposition of capitalist modernity. 

In systemic terms, emergency addiction keeps the comatose body of capitalism artificially alive. 

Thus, the enemy is no longer constructed to legitimise the expansion of Empire. Instead, it serves to conceal the bankruptcy of our debt-soaked economy.

Since the fall of the Berlin Wall, the deployment of capital’s full potential, also known as globalization, has gradually undermined capital’s own conditions of possibility. 

Eventually, the response to this implosive trajectory was the unleashing of global emergencies, which must be increasingly durable and supplemented by ever-larger injections of fear, chaos, and propaganda. 

We all remember how it all started at the turn of the millennium, with Al Qaeda, the “global war on terror”, and Colin Powell’s tiny vial of white powder. 

This released the Taliban, the Islamic State, Syria, the North Korean missile crisis, the trade war with China, Russiagate, and finally COVID-19 – in a crescendo of emotions. 

Now it appears that a new Cold War is in the making, perhaps the mother of all emergencies. 

The elementary reason for this course of events is that the closer the system gets to collapse, the more it requires exogenous crises to distract and manipulate populations, while deferring its downfall and laying the ground for its authoritarian changeover.

History tells us that when empires are about to fold, they ossify into oppressive regimes of crisis management. 

It is no coincidence that our age of serial emergencies began with the bursting of the “dot-com bubble” – the first global market crash. 

By the end of 2001 most tech-heavy companies had gone bust, and by October 2002 the Nasdaq index had fallen by 77%, exposing the structural frailty of a “new economy” powered by debt, creative finance, and the bleeding of the real economy. 

Since then, the simulation of growth via financial asset inflation has been shielded by the manufacturing of global threats, duly packaged and sold by corporate media. 

In truth, the rise of the “new economy” in the late 1990s was less about the internet than the creation of an immense apparatus for the simulation of prosperity, which was supposed to function without the mediation of mass labour. 

As such, it cleared the way for the neoliberal ideology of “jobless growth”– the illusion, enthusiastically embraced by the left, that a financial-bubble economy could ignite a new capitalist Eldorado. 

While this illusion has now blown up in our faces, nobody seems to have any desire to acknowledge it.

In fact, since Virus stepped in to raise the emergency bar even higher (before being paused and possibly recharged for future re-deployment) we are back to the same old financial shenanigans. 

While the West’s brand-new infection is called Russia – not least because of its proven historical record (USSR) – it is crucial to appreciate that the haste of enemy-making and fear-mongering is now desperate, based as it is on the aggressive denial of structural failure. 

Like Virus, the Ukrainian war screens us from the real horror of total social breakdown via debt & stock market crash. 

This perverse situation must be developed into its proper dialectical conclusion: the only way to put an end to the destructive succession of emergencies is to put an end to the self-destructive capitalist logic that feeds them.

After the folding of the last period of mass labour mobilisation – the post-war Fordist boom – capitalism entered its terminal crisis, where fictitious money is increasingly dissociated from labour-mediated value. 

Already in the 1980s, the irreversible erosion of capital’s labour-substance, triggered by the Third Industrial Revolution (microelectronics), gave rise to a transnational credit and speculative system that quickly penetrated all forms of money capital. 

This spectral monetary mass has continued to grow by self-fertilisation, to the extent that – as already pointed out, among others, by Robert Kurz –[i] only its artificial expansion enables the mobilisation of liquidity in the real world. 

Economic growth in the 1990s was fuelled by a “recycling mechanism”, whereby demand, purchasing power, and the production of goods and services were sustained by fake (speculative) money. 

The real economy was no longer grounded in labour incomes and revenues; rather, it was driven by price speculations on financial assets – heaps of fictitious money without value substance. 

This cycle of pseudo-accumulation, based on financial liquidity flowing back into production and consumption, is the defining phenomenon of our debt-driven, inflationary “emergency capitalism”. 

By necessity, ever-larger amounts of fictitious capital end up supporting production, so that a growing share of real accumulation participates in the speculative process.

The current grotesque overvaluation of all risk assets (stocks, bonds and property) suggests that the elites will continue to use their political playbook to buy more time and postpone the bursting of a debt bubble they began to inflate years before Covid and Putin became favourite scapegoats. 

The guardians of the capitalist Grail have planned for us a perennial state of fear in a desperate effort to delay the currency devaluation shock that has been brewing for decades. 

While they do so by increasingly cynical methods, they seem to be the only ones who at least realize that such a shock would bring the world system to its knees.

This is why the financial aristocracy are willing to do just about anything in their power to secure the prolongation of our moribund economic model. 

In doing so, they demonstrate a greater understanding of our condition than those who, in theory, should be better placed to assess it: the so-called post-Marxist intelligentsia together with the postmodern left in all its inconsequential iterations. 

Regrettably, the “useful idiots” on the left have long betrayed their fundamental mandate to critique political economy, and are thus directly implicated in the unfolding catastrophe.

The technocrats at the helm of the Titanic have more than a hunch that the vessel is accelerating towards the iceberg. 

Having run out of policy bullets (as in the recent “austerity vs stimulus” debate), they have opted to promote a continuous programme of fear and propaganda in a bid to manage the unmanageable. 

Crucially, they know what to most of us appears counterintuitive: that the breakdown of our obsolete mode of production can only be delayed through 

1) A steady stream of global emergencies, 

2) The controlled inflationary demolition of the increasingly unproductive real economy, and 

3) The authoritarian makeover of liberal democracy.

The sick theatre of the Ukrainian war, just like the wickedly hyped-up Covid affair, is therefore a consequence of the elites’ panicked awareness that collapse is now overdue. 

In fact, today’s managers of “crisis capitalism” know that a breakdown is necessary for a new money system to emerge. 

Crucially, they also recognise that the breakdown must happen as the planned demolition of the current model, which would allow them to retain and even strengthen their position of power within the impending neo-feudal capitalist normal. 

Food and energy rationing, mass immiseration, social credit, and monetary control via digital currency, have long been baked into the capitalist pie of the future

Arguably, this scenario is already part of our collective imagination, as we are being persuaded of its ineluctability due to force majeure.

Ukraine provides us with a literal image of the above mechanism. Behind their morality tales, our Western politicians, under pressure from their financial bosses, continue to sabotage diplomacy by sanctioning Russia and pumping tons of weapons into Ukraine, as well as billions in financial aid. 

Aside for the parallel convenience of shady arms and cash deals, the aim is to deliberately extend a conflict that turns thousands into cannon fodder while fanning the flames of a potential nuclear war. 

As with Covid, the fear paradigm is essential to beat us into psychological obedience. To add insult to injury, the EU continues to buy Russian gas and oil, which are essential to keep up the appearance of affluence. 

European leaders, in other words, want to have their cake and eat it: they take with one hand (sanctions), and give back with the other (even in Rubles) to secure energy and other commodities.

Nothing, then, prevents us from joining at least two dots. We have a free-falling economy whose predicament is barely concealed by its debt addiction and astronomical “everything bubbles”. 

And there is the voyeuristic spectacle of daily massacres, intentionally deprived of any meaningful sociohistorical context and fuelled by one-sided propaganda. 

Joining the dots means understanding that the purpose of the Ukrainian emergency is to keep the money printer switched on while blaming Putin for worldwide economic downturn. 

The war serves the opposite aim of what we are told: not to defend Ukraine but to prolong the conflict and nourish inflation in a bid to defuse cataclysmic risk in the debt market, which would spread like wildfire across the whole financial sector. 

Let us not forget that the stock market is a sort of derivative of the debt market, which therefore needs to be handled with extreme care. 

While the “assisted suicide” of the real economy via negative supply shocks exacerbates consumer price inflation, the latter provides temporary relief to the mega debt bubble, thus postponing the crash.

The primary concern of monetary policy in the recent past has been the stabilization of debt, which reduces the risk of an event that would nuke the economy and our societies with it. 

The ever-increasing debt pressure must be periodically alleviated, and price inflation helps. How?  By decompressing the bond market bubble, since inflation reduces the real value of debt. 

Of course, the danger is that the inflationary dynamic takes on a life of its own (hyperinflation)

The point, however, is that our lords are badly snookered: they do not have any other option except depressing the real economy while trying to extend the lifespan of the all-powerful yet dangerously volatile financial sector. 

What needs to be avoided at all cost is a debt-triggered event. In the current twisted environment, any artificial growth of the debt bubble needs a degree of deflationary relief, which today is guaranteed by war and rising CPI. 

This perverse logic becomes clear if we look, for instance, at US margin debt, which is borrowed capital used to operate on the stock market. 

Since October 2021, margin debt has dropped by 14.5%, while the Nasdaq has lost 17.6%. This is why Ukraine is collateral damage.


The sad truth is that “Putin’s war” (like the “war on Covid”) delays the popping of the “everything bubble”, which is why Ukraine is sacrificed to the altar of a protracted massacre for freedom & democracy. 

The real aim is not to help Ukrainians (nor, for that matter, to destroy Russia) but to exorcise the recurring nightmare of the “Lehman shock”, which today would plunge us into chaos, wiping out the thin veneer of monetary affluence that prevents us from staring into the abyss. 

The bottom line is that mouse-clicked instant liquidity is the only object that matters to the debt-based financial industry. 

And by deflating quotas of the debt bubble through the erosion of purchasing power and the compression of demand, the financial elites stealthily set themselves up for more Quantitative Easing programmes to further inundate the system with the cash it needs. 

New QEs, perhaps with a different name, could soon be announced, though they might require the nudge of a controlled accident, serious enough to guarantee immediate printing action. 

In this respect, the 2018 precedent should not be ignored. Back then, the pretence of Quantitative Tightening (reduction of the Fed’s balance sheet) only lasted a couple of months before being forced into a U-turn. 

And when the gamble was attempted again in the summer of 2019, the repo market crisis of mid-September reminded everyone of how essential the Central Bank liquidity bazooka is.

The bottom line is that if Central Bank monetary injections were to end, a rapid increase in key interest rates would threaten a market crash, with defaults across the globe. 

So, either everyone plays according to the script, or the whole show is cancelled, and the system with it. 

Today we are already seeing the effect of the Fed’s recent 0.5 rate hike on the US real estate market. 

Interest hikes have pushed up mortgage rates, which depresses the housing market. 

Yet, if homebuyer sentiment is at historical lows, homebuilder sentiment remains relatively high – which confirms that there is no longer any meaningful correlation between real economic conditions and asset price speculation; for ultimately it is the Federal Reserve that, by buying mortgage-backed securities by the cartload, inflates the real estate bubble when demand is falling. 

All this is what the monetary surface of extreme crisis management looks like. 

Yet, if we only scratch the surface, we encounter the fundamental cause of all the geopolitical and propaganda games that are being played: the irredeemable melting away of capital’s value substance.

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PAUSE FOR THOUGHT: MONEY WITHOUT VALUE IN A RAPIDLY DISINTEGRATING WORLD Fabio Vighi [continued]
World Of Finance



PAUSE FOR THOUGHT: MONEY WITHOUT VALUE IN A RAPIDLY DISINTEGRATING WORLD Fabio Vighi [continued]


The inflation genie that escaped the Covid bottle is now blamed on Putin, including its “apocalyptic” effect on the poor. 

However, it originates in the creation of immense amounts of “money without value” (i.e., money that is not “covered” by real accumulation) which by flowing into the real economy inevitably devalues the money medium itself. 

Commodity prices no longer grow in accordance with the market law of supply and demand. Rather, any increase in demand is paid for by money generated out of economic nothingness. 

While currency devaluation by loose monetary policy is now being exacerbated by negative supply shocks caused by Covid and the Ukrainian war, in truth it is a secular phenomenon rooted in the dissolution of capitalist value.

It is common for empires to suffer a slow and painful death, as they deny the cause of their implosion. 

The fall of the US-led capitalist world started over half a century ago, and has been delayed only by waves of fake prosperity fuelled by money (debt) creation, which have benefitted a small elite while burdening the masses with colossal debts and immiseration. 

Over the last 50 years, US Federal debt has experienced a 75-fold increase (from $400 billion to $30 trillion), while total US debt (private and public) has now passed the $90 trillion mark (53-fold increase). 

As most currencies have been linked to the dollar since WWII, their devaluation is also inevitable. 

For over half a century the US has been gradually destroying its hegemonic dollar and related currencies while initiating unprovoked “military operations” abroad. 

Any temporary illusion of prosperity was bought with war, debt, and printing fake money.

Today’s type of inflationary devaluation first emerged as a qualitatively new phenomenon in the 20th century. 

Since the start of industrialisation, the substantial character of currencies had been safeguarded by its precious metal pegging, which eventually took the form of the gold standard and the central bank systems based on it. 

The end of the gold standard (15 August 1971) marked the inception of the ultra-financialised economic model that, half a century later, is taking us closer and closer to the redde rationem, in the context of a colossal expansion of credit.

Capital’s global crisis now appears in the form of a new bout of stagflation (stagnant economy with rising inflation), which evokes memories of the 1970s. 

Current supply bottlenecks and price explosion of raw materials and energy is reminiscent of the oil price shock of 1973, when OPEC cut down on its output in response to the Yom Kippur War. 

These comparative external factors, however, must be linked to a common internal cause, which has to do with capitalism reaching the end of its internal expansionary potential. 

The stagflation of the 1970s marked the end of the post-war boom, which coincided with the Third Industrial Revolution and a violent fall of the rate of profit caused by exponential advance in the technological automation of production. 

The Keynesianism of the time failed because it reacted to economic contraction in its typical way, namely with stimulus programmes that only managed to boost inflation further.

 Accordingly, capitalism entered a new inflationary cycle. Neoliberalism provided a way out of this impasse. It smashed the unions in the 1980s, together with the price-wage correlation and the social-democratic illusion that the capitalist system could be sustained simply through a politics of wealth redistribution – as if capitalist wealth was an eternal and not a historical category, limited by the dialectic of money capital invested in value-productive labour.

In the early 1980s, inflation was fought through the “Volker shock”, i.e., by hiking interest rates (the cost of money) beyond or near the rate of inflation. 

This triggered recession in the capitalist centre and led the periphery of Empire (especially Latin America) into a severe debt crisis. But it saved capitalism from systemic collapse. 

At the same time, US financial markets rapidly expanded to become dominant, while goods production in the American rust belt declined. 

The United States evolved from the “workshop of the world” to the “financial centre of the world,” a transformation facilitated by the US dollar acting as the world’s reserve currency. 

Already in the 1970s, then, capitalism had started sinking under the weight of its internal contradiction. Marx called it the “moving contradiction”, by which he meant that wage labour is both the substance of capital and that which needs to be reduced in the competition war between individual enterprises. 

This contradiction, which is at heart of the anonymous capitalist drive for profit-making, turned openly self-destructive in the 1980s, when debt creation and growth simulation became endemic to make up for fading value production.

Since the 1980s, global debt has been rising much faster than world economic output. 

Global debt needs to be contextualised: it feeds the fundamental delusion that financial speculation anticipates future capital valorisation, which however must be moved further and further into the future as it is not matched by corresponding valorisation in the real economy. 

Today’s financial capitalism is the ultimate self-fulfilling prophecy, a mechanism based on the creation of ever-increasing amounts of insubstantial money to compensate for rapidly vanishing surplus-value. 

If the US enjoyed a period of relative growth in the 1990s, despite low wages and rising productivity, it was because consumption was increasingly sustained by credit.

While globalization provided an escape route for the exhausted Fordist mode of production, at the same time it tied itself to the ever-larger pyramids of debt and speculative excesses, making the system increasingly unstable. 

It is no surprise that the 1990s ended with the formation of the aforementioned first global bubble (the dot.com or Internet bubble). 

This was followed by the financial crash of 2008, the answer to which was the implementation of QE programmes, i.e. more of the same: monetary expansion through Central Bank buying up securities and other assets. 

Then, the capitalist contradiction reappeared in the form of the European sovereign debt crisis (2009-12) and as a potentially devastating liquidity trap in the Autumn of 2019 (US repo market crisis), which officially inaugurated the era of “emergency capitalism”. 

The pandemic was used as a global shield for money printing and borrowing at unprecedented levels: under Covid, the Fed printed more fiat money in one year than in all combined QE programmes since 2008.

In recent times, we have also been treated to a neoliberal adaptation of Keynesian crisis management through the implementation of extremely low interest rates – the opposite of what was done in the 1970s. 

Over the past 40 years, after each turbulence interest rates were lowered further to allow fresh liquidity to flood financial markets. 

However, since 2008 even zero interest rates were no longer sufficient, which is why Central Banks have pulled Quantitative Easing out of their magician’s hat, literally turning into waste dumps for the financial markets. 

Throwing caution to the wind, they have inundated the economy with fake money using junk paper as collateral, without even bothering to go through the banking system. 

The downhill slide of the devaluation avalanche that began in autumn 2008 in now unstoppable. Somehow, the world still believes that Central Banks will solve a debt crisis by printing more money.

The Western economies’ final attempt to save their broken system is now failing miserably, as these economies continue to decay in a mixture of currency debasement, deficit, and history’s largest asset bubbles. 

The choice we are presented with is the same we have seen throughout the history of advanced industrial societies: inflation or deflation. 

Either money is devalued as a general equivalent (inflation), or the devaluation process affects capital directly, with production (factories and workers) suddenly becoming superfluous. 

Unlike in the past, however, both inflation and deflation today mean fiat money debasement with the added bonus of systemic breakdown.

As discussed above, the technocrats’ current preference is not to fight inflation but instead use it to inflate away portions of debt via negative real interest rates. 

This is equivalent to a transfer of wealth from the lower and middle classes to the custodians of the “everything bubble”, for the purchasing power of Main Street gets battered while part of the debt on Wall Street is deflated. 

Despite this cynical ploy, however, Central Banks continue to drink-drive towards the precipice. Whichever move they make, they lose. If they hike rates significantly and manage to reduce their balance sheet (Quantitative Tightening), the debt bubble will pop, with catastrophic consequences – a possibility anticipated by the rising Credit Default Swaps (CDS) index, i.e., insurance contracts against debt default. 

If, however, they turn to Quantitative Easing again, inflation will soar at an even faster pace. 

The choice is between a deflationary debt crisis and stagflation. Both are worse. Stabilising this scenario is virtually impossible.

In all likelihood, the debt & stock market crisis will continue to be delayed. The grand finale – a biblical crash beyond our wildest imagination, ignited by the explosion of the debt market hyper-bubble – is currently being postponed through the inflationary thumping of the real economy. 

This means that the “misery index” (combination of inflation and unemployment rate) will grow even further. 

Central Banks can tame inflation only in words: they know that any tightening of monetary policy is hostage to the opposite necessity to continue to monetise public and private debt, which means creating money out of nowhere. 

In a certain sense, then, we are heading back to the prehistory of capitalism, once again dealing with the problem of “money without value”. We have almost come full circle. 

However, the debasement of the money medium today presents itself as the catastrophe of the “work society”, the system of abstract labour mediated by the market. 

Current bio- and geopolitical violence (Virus, war, and other global emergencies to come) is an integral moment of this self-destructive trajectory; a deliberate attempt to manage implosion by authoritarian means. 

We only have one real choice: either we begin to emancipate from the commodity, value, and money forms, and thus from the capital form as such, or we will be dragged into a new dark age of violence and regression.

Vanity of Vanities! All is vanity
https://bit.ly/3mOhPDb

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FROM COVID-19 TO PUTIN-22: WHO NEEDS FRIENDS WITH ENEMIES LIKE THESE? Fabio Vighi
Law & Politics


FROM COVID-19 TO PUTIN-22: WHO NEEDS FRIENDS WITH ENEMIES LIKE THESE? Fabio Vighi 

Hyperreality

Like a textbook illustration of Hollywood continuity editing, the de-escalation of the war on Covid has transitioned seamlessly into the escalation of the Ukrainian war, with Vladimir Putin replacing Virus as public enemy number one. 

If the emergency changeover was predictable, the timing of the overlap seemed almost too smooth to be credible. 

Corporate media’s creative choreography, however, has secured a one-dimensional representation of Putin’s war, even adding special effects when needed: from video games like War Thunder, Arma 3 and Digital Combat Simulator, to clips of past disasters. 

In retrospect, the apocalyptic footage of people collapsing in Wuhan City in January 2020 now appears decidedly amateurish.

When Jean Baudrillard wrote that the ‘Gulf War did not take place’, he meant that its violence was overwritten as a media spectacle (simulacrum) that turned it into hyperreality: something so unequivocally and overwhelmingly real that it suspends any question, doubt, or disbelief regarding the intrinsic opacity of the referent

Covid and the Russian invasion are emphatic explosions of hyperreality

As such, they fall on us like a blanket that covers all reality in its complexity, replacing it with a pre-packaged model of false binary oppositions: healthy/sick, true/false, democratic/fascist, Good/Evil. 

How else could we explain the decision by Meta Platforms (Facebook and Instagram) to allow their users to call for violence against Russians (apparently a temporary change to their hate speech policy)? 

Or the suspension of a University course on Fyodor Dostoevsky because he was Russian? 

Or a private clinic’s refusal to treat Russians and Belarusians? 

Is it not clear that the pandemic and the Ukrainian affair mobilize the same war strategy?

There is no longer any connection between reality and its hyperreal caricature in the social metaverse. Putin’s war is the ideal continuation of the ‘war on Covid.’ 

The overarching aim is to obfuscate the real issue at stake, which consists of pulling mountains of cheap money into the debt-addicted economy. 

The emergency loop is the macroeconomic event of our time. Let us explore this claim further.

The Ukraine time-bomb

Two sets of questions are excluded from the hyperreal representation of ‘Putin’s war.’ 

First, the (obvious) geopolitical one: Ukraine was a ticking time-bomb ready to go off. NATO’s eastward expansion had culminated in the orchestration of the Ukrainian regime change of 2014, which, as US political scientist John Mearsheimer recently put it, “overthrew a pro-Russian leader and installed a pro-American leader” as part of a plan to “turn Ukraine into a western bulwark on Russia’s border.” 

In plain language, a coup (with repercussions like the Odessa massacre of May 2, 2014). If anyone needs confirmation, the Nuland-Pyatt leaked phone conversation of February 2014 will help: it shows the US State Department of the Obama administration planning the make-up of the new Ukrainian government just days before the Maidan square uprising that triggered the downfall of the Yanukovych government.

In recent years – while the self-proclaimed Donbas Republics and Roma minorities were under continuous attack by Ukraine’s ultranationalist militias (which caused thousands of victims) – US-led NATO had intensified its militarization of the country including working with Ukrainian neo-Nazis, whose role is far from marginal in a country whose parliament has decided to commemorate the birthday of Nazi collaborator Stepan Bandera as a national holiday. 

NATO acted in full knowledge that, for Russia, their deal with Ukraine would be equivalent to a declaration of war – as Putin stressed in his famous speech at the Munich Conference on Security Policy of February 11, 2007. 

NATO troops and military bases equipped with defensive anti-ballistic missiles (convertible into offensive nuclear weapons) have continued to be deployed in various regions of Eastern Europe. 

Here, then, comes the rhetorical question: if Russia had such artillery encircling the United States from, say, Cuba, Mexico, or Canada, would Joe Biden (or anyone else in his place) tolerate it? 

This is why the Ukrainian bomb, after decades of provocative moves, was ready to detonate.

Financial warfare

The second set of issues concerns the economic agenda, whose mode of appearance is that of financial warfare. 

Draconian sanctions by tough-talking Western leaders – mostly asset freezes and the exclusion of Russian banks from the SWIFT global payment system – are supposed to hurt Putin and his suddenly reprehensible ‘oligarchs’. 

However, it is far from certain whether this objective is achievable or even desirable. 

Can the US and the EU, whose major investment banks are exposed to Russian debt, really afford the financial game of chicken with Russia? 

And why would JP Morgan contradict the official narrative on the enemy’s economic implosion by recommending that its clients boost their positions in some of Russia’s corporate debt? 

De facto, the US megabank is betting on Russia’s speedy recovery.


Moreover, Russia is the world’s largest producer of almost all raw materials, and with current levels of rising inflation across the globe it seems nearly impossible, or suicidal, to do without its supplies. 

Is this why Europe’s phasing out of Russian gas has led to importing coal… from Russia? 

The media are predicting that sanctions will cause the collapse of the ruble, and thus the end of Putin’s reign. 

However, Putin has been stocking up on FX reserves (foreign currencies) and especially gold. If the Russian economy tanks, he could issue bonds and cover their value with stocks of oil, gold, and gas. 

In short, he seems to have more leverage than our media would have us believe. 

Kicking Russia out of the USD-denominated SWIFT system would also give Putin more incentives to look for other markets and currencies to trade in (especially China), which in turn would further undermine the USD and hence just about everything else. 

The much-feared de-dollarization of the economy could quickly become reality. Therefore, what if sanctions are a decoy?

The Gazprom elephant in the (heated) room

While busy ramping up restrictive measures sold to the public as heroic deeds, EU and US leaders have from the start been careful to avoid cutting off some of Russia’s financial heavyweights, such as Sberbank (whose sanctioning is now opposed by Germany) and especially Gazprombank – why? 

Sberbank is Russia’s largest lender and asset holder, so a complete embargo would imply substantial collateral damage to Western banks. 

The real elephant in the room, however, is Gazprombank, for it manages payments for Russian oil and gas that EU countries are dependent on, and are still buying. 

Only around a quarter of the Russian banking sector is currently under sanctions – is this really meant to stop Putin?

Wolfgang Munchau (ex Financial Times authority) summed up EU (and US) hypocrisy with disarming simplicity: 

“The EU is cheering on the Ukrainian side from a safe distance, watching from warm living rooms, heated by Russian gas.” Insofar as Russia is a key trading partner for Europe (almost half of European gas comes from Russia), but also for the US (importer of Russian oil), sanctions are unlikely to materialise in reality as they do in the news. If, then, the ‘sanctions bazooka’ turns out to be a water pistol, or a boomerang, we need to look for answers elsewhere.

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FROM COVID-19 TO PUTIN-22: WHO NEEDS FRIENDS WITH ENEMIES LIKE THESE? Fabio Vighi [continued]
Law & Politics


FROM COVID-19 TO PUTIN-22: WHO NEEDS FRIENDS WITH ENEMIES LIKE THESE? Fabio Vighi [continued]
The tangled web we weave

Let us consider the West’s decision to supply thousands of weapons to Ukraine just as the Russian and Ukrainian delegations were sitting at the table of the first round of negotiations in Gomel (Belarus). 

Russia was demanding, as it did from the start, the neutral status of Ukraine, its demilitarisation, and the autonomy of Crimea and the Donbas Republics. 

Sending military aid to Ukraine was hardly going to help a successful outcome of the negotiations – or, for that matter, of the conflict. 

What strategy, then, is NATO pursuing? Differently put: what script has President Zelensky been reading from? 

By rejecting Putin’s conditions, does Zelensky think he can repel the Russian army on his own? Or is he hoping that NATO will step in and start WWIII? 

In either case, he would be insane. As a comedian turned politician less than four years ago (after playing the Ukrainian President in a TV series) Zelensky seems perfect for the role. But here the plot thickens.

Like his predecessor Poroshenko, Zelensky could be in possession of potentially compromising information about the Russiagate travesty, or the Biden family’s Ukrainian connections – including Hunter sitting on the board of Ukrainian gas giant Burisma in 2014, immediately after the Maidan Square events. 

To add further complexity, neocon Victoria Nuland (now Undersecretary of State) has declared before US Senate that “Ukraine has biological research facilities”, confirming Russian and Chinese allegations until then ridiculed as ‘conspiracy theory’ by the usual cohort of self-appointed fact-checkers. 

Why did Nuland feel the irresistible urge to drop the bio-lab bomb, contradicting Jen Psaki’s angry rebuttal of the previous day? 

Why did Nuland warn that the Russians should be stopped from reaching these ‘facilities’? 

Was her duet with senator Marco Rubio meant to hide some embarrassing truth about US-funded ‘Biological Threat Reduction’ programs in Ukraine? 

With the WHO now getting involved too, only one thing is certain: we are back in the thick of Cold War intrigue. And the question to ask is always the same: cui prodest?

Emergency addiction

While the above subtext may be relevant to make sense of the unfolding human tragedy, my view is that, ultimately, the Ukrainian affair has ‘macroeconomics’ written all over it. 

The reason is one that financial analysts, rather than philosophers, are more likely to grasp: a protracted conflict legitimizes pulling further debt from the future, while blame for the coming economic tsunami is apportioned to the latest reincarnation of Dr Strangelove. 

Essentially, with his military offensive ‘Mad Vlad’ has allowed the Federal Reserve (and other major Central Banks) to postpone the day of reckoning for our ultra-financialised economic system. Because cheap debt invested in more debt is what keeps the Titanic from sinking.

Since the demand for financial assets is sustained by the demand for debt, global emergencies fulfil precisely the request for more borrowing: mountains of cheap cash are created out of thin air and deployed as financial leverage. 

The appetite for borrowing is now properly endemic, for it also affects the real economy, households, and, crucially, governments. 

This is why global emergencies are the main driver of artificial monetary expansion, which in turn represents the capitalist forward-escape route from the valorisation crisis (inability to generate socially sufficient amounts of surplus-value and therefore real wealth) that has plagued our mode of production since the Third Industrial Revolution, and the implosion of the Bretton Woods system in the 1970s.

For the above reason, it seems legitimate to argue that all geopolitical events either originate in or are heavily conditioned by what happens in the financial Olympus. 

The Putin-pandemic, then, is driven by the same ruse that drove the Covid-pandemic: it gives Central Banks a free license to prolong their monumental printing sprees, which boost the markets while putting the world economy under further pressure. This is the one-way street of contemporary capitalism.

The debt crisis time-bomb

We should always keep the big picture firmly in mind: since 2009, all major Central Banks have been on an unprecedented money-creation binge, of which there is no end in sight. 

Churning out cheap debt by the trillion works a compensatory mechanism for a free-falling global economy increasingly dependent on an ‘everything bubble’ of grotesque proportions (which, of course, eventually will burst). 

The Atlanta Fed has now cut expectations for US GDP growth in the first quarter of 2022 to 0.0%, officially inaugurating a new age of stagflation that sends us back to the 1970s – though with no leeway to repeat what was done then to avoid collapse. Only by placing them against this background can we understand what current emergencies are for.

At present, the Fed is getting what only a war could guarantee. That is to say, the ideal justification for putting the brakes on the planned increase in interest rates (the cost of borrowing money). Even a 50 basis-point rate hike is now looking unlikely for 2022. 

After all, a war tends to be beneficial for the stock market – particularly when it prevents rate hikes that would expose the manipulative ploy of structural Quantitative Easing (Central Bank asset purchase). 

In all likelihood, the more tense the situation in Ukraine becomes, the more the bond market will stabilise and yields fall (the bond market acting as the canary in the coal mine for a potential market crash). 

Moreover, the suspension of the EU’s Stability and Growth Pact, decided in 2020 due to Covid, might now be extended sine die. 

Thus, despite recent signals to the contrary, the Ukrainian conflict could easily allow the EU to kick the ‘public-debt-crisis can’ down the road a little further.

The bottom line is that our debt-soaked economies continue to need more rather than less QE, for the simple reason that their debt far outweighs their GDP. 

This is why the Ukrainian crisis time-bomb is an extension of the debt crisis time-bomb. 

What the latter requires is a perennial QE regime calibrated through a cyclical succession of global emergencies: pandemics, terrorist campaigns, nuclear threats, trade wars, military conflicts, or, why not, the landing of aliens. 

Chaos needs to be invoked at every given opportunity, and with it, ideally, the figure of a brutal, bloodthirsty enemy. 

Whether it takes place in the media or in reality, it is the emergency loop that matters, because it keeps the monetary tap open. 

Let us not forget that capital is a blind process that abhors stagnation: it must be in constant motion, even when motion means accruing ever-larger amounts of unsustainable debt, whichever way possible.

Controlled demolition

Soaring inflation – which is baked into the Ukrainian cake as it was with Covid – facilitates the controlled demolition of society through the erosion of purchasing power

Saving financial markets today means depressing real demand. And as the sole holder of the privilege to create dollars out of nowhere, the Federal Reserve is always at least one step ahead of the game. 

As I have previously shown, the Fed’s balance sheet had started ballooning in September 2019, when astronomical amounts of mouse-clicked electronic cash were pumped into the ailing financial sector to prop it up artificially. 

After two years of relentless fear-mongering, storytelling, and printing, however, the Covid narrative had grown stale, and increasingly contradictory – as evidenced by the Canadian truckers’ protests. 

While ‘Covid deaths’ and ‘cases’ are not exactly abating, economy suddenly needed a new horror story to exploit, a new blanket to drop on the world. 

This is particularly urgent now that financial conditions are at tightest levels since 2016; meaning that if the Fed were to take the foot off the monetary accelerator, the world would plunge into a full-blown recession in record time.

Wary of improvising a military response that would lead to Armageddon, NATO and the Western elites are now engaging in asymmetric warfare with Russia. 

This will hit above all defenseless populations as well as economies already afflicted by two years of pandemic-induced economic contraction. 

Gas bills and commodity prices will continue to soar. But is this not what the Great Reset requires, as the neoliberal ‘end of history’ fantasy turns sour? 

An energy & food crisis is upon us, which will justify further oppressive socioeconomic policies – including, if necessary, the rule of martial law as recently experimented in democratic Canada. 

Difficult as it may be, then, we ought to put the geopolitical chessboard on one side and focus on the economic cause. 

Political choices of this calibre are dictated by conditions affecting the economy as a totality of increasingly dysfunctional social relations. 

If Putin is crazy – as everyone seems to be mindlessly repeating these days – he is no doubt in good company. I am not referring to Joe Biden’s mental health, but to the financial managers of social wealth and their cognitive dissonance, which is what contemporary capitalism (the system) demands of them.

Dr. Strangelove, anyone?

What continues to be crucial for us is to realize that, given the unprecedented levels of financial doping, capitalist societies depend on a succession of global threats where, however, the line between simulated and real risk is getting thinner and thinner. 

As argued by Marx, to financial managers capital appears, essentially, as an object that has broken its tie with its substance:

“In interest-bearing capital, therefore, this automatic fetish is elaborated into its pure form, self-valorizing value, money breeding money, and in this form it no longer bears any marks of its origin. The social relation is consummated in the relationship of a thing, money, to itself. Instead of the actual transformation of money into capital, we have here only the form of this devoid of content.”[i]

Today, capital’s near-total dissociation from its origin (value-productive labour) makes its psychotic core increasingly visible. 

While the current use of emergencies is perverse in its nature, psychotic episodes could be just around the corner. 

And yet, by typecasting Putin as ‘Mad Vlad’, we miss the madness and truly criminal vocation of contemporary capitalism.

 Let us repeat the key point: an implosive socioeconomic system sustained by financial leverage of the current magnitude desperately requires a continuous stream of emergencies as well as a Bond villain to blame. 

In turn, the industrial production of emergencies requires credible actors on the global stage, together with an audience who is willing to be shocked by cynical media propaganda.

Selective humanitarianism and the financial iceberg

While it would be easy to dig into our media’s acquiescence vis-à-vis US-led/NATO’s murderous wars (‘operations’) of the recent past, the current rampage against ‘oligarchs’ like Roman Abramovich is equally telling. 

Why now and not earlier? And why are our Western ‘oligarchs’ called ‘entrepreneurs’? Equally misplaced are slogans against Nazi-Putin, since he is mediating between the two powers that matters the most in Russia: Gazprom and the army. 

So how different is Putin from powerful political leaders in ‘democratic’ countries? Of course, as Todd Smith recently put it, “Putin’s no hero, in case anyone was confused. He’s just another elite who got caught on the wrong side of a certain ‘financial’ situation.” 

But why do our ‘democratic leaders’ conduct business (e.g., arms deals) with ‘dictators’ around the world? Why are we not told to wear a Syrian or Palestinian flag in support of innocent lives lost daily to Israeli bombing and shelling? 

The unparalleled levels of today’s hypocrisy – mixed with entirely unsurprising racist indignation about bombing blonde & blue-eyed, civilised European people rather than ‘less civilised’ Iraqis or Afghanis – are symptomatic of the degenerative sickness affecting our ‘world.’

The sad truth is that if the financial elites need further reasons to inflate the markets with freshly minted cash, the conflict might even escalate. 

Nothing is to be ruled out when the aim is to prolong the lifespan of a terminally ill economic system. 

Here is a paradox that should make us think: on the day Vladimir Putin invaded Ukraine and was officially crowned the new Hitler, financial markets registered the biggest intraday rebound since March 2020, when anti-Covid QE programs were launched to save the world. 

Let us be honest: despite the crocodile tears of world leaders, their problem is not Ukraine’s freedom, but the iceberg of financial leverage about to hit the Titanic.

What next?

Therefore, expect a drawn-out geopolitical crisis that will justify, even demand, 

Central Bank action against much-touted tapering policies (reduction of asset purchasing) and rate hikes. 

Expect a tsunami of global inflation, further impoverishment, and mass migration (of cheap labour) – all of which will be blamed on Putin. 

Expect the return of pandemic threats supporting ongoing endeavours to globalise vaccine passports and the digitalization of life. 

Expect a new arms race aimed at boosting stagnant GDPs around the world. 

Expect, if required by the economic environment, more military damage inflicted on helpless populations caught in the middle of the capitalist charade. Expect ‘false flags’ and relentless disinformation campaigns.

The Russian invasion will be milked beyond belief, because the longer it lasts, the more cash will be drawn from the future and borrowed into existence – exactly what happened with Covid. 

If the pandemic served to conceal the structural crisis of capitalism by passing it off as a microbiological crisis, Putin’s war achieves the same purpose by military means. 

However, today’s dominant monetary policy is nothing but crisis management gone mad: a destructive type of denial that will only accelerate the implosive process of our mode of social reproduction. 

A different future cannot even be imagined, let alone built, without being aware of this.

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Think Only Good Thoughts @DoombergT
Law & Politics


Think Only Good Thoughts @DoombergT 

"Black and white creates a strange dreamscape that color never can." – Jack Antonoff

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Are we perhaps witnessing a regime change, from a low- to a high-inflation regime @BIS_org
World Of Finance


Are we perhaps witnessing a regime change, from a low- to a high-inflation regime @BIS_org 

Is the global economy flirting with stagflation? And are we seeing signs of an end to the post-World War II globalisation era? Meanwhile, the crypto universe is in turmoil, reminding us that there are important developments in the monetary system that we cannot neglect.

On the macro front, policy is facing daunting challenges. In some ways, they are not new; but in others, they are unique. As Mark Twain quipped, “History does not repeat itself, but it often rhymes.” 

The world economy experienced stagflation in the 1970s, following a shift away from a low-inflation regime. 

The new element is that, against the backdrop of historically low interest rates, debt levels – private and public – have never been as high. This is far from inconsequential. 

We may be reaching a tipping point, beyond which an inflationary psychology spreads and becomes entrenched. This would mean a major paradigm shift.

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A REGIME CHANGE IS UNDERWAY [in the markets]
World Of Finance


A REGIME CHANGE IS UNDERWAY [in the markets]


There is no training – classroom or otherwise.. that can prepare for trading the last third of a move, whether it's the end of a bull market or the end of a bear market. 

There's typically no logic to it; irrationality reigns supreme, and no class can teach what to do during that brief, volatile reign. Paul Tudor-Jones


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Currency Markets at a Glance WSJ
World Currencies


Currency Markets at a Glance WSJ

Euro 1.05655
Dollar Index 104.072
Japan Yen 134.8015
Swiss Franc 0.95730
Pound 1.228320 
Aussie 0.69335 
India Rupee 78.3009 
South Korea Won 1282.815 
Brazil Real 5.2429
Egypt Pound 18.758000 
South Africa Rand 15.817600 

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Zimbabwe Plans Triple-Digit Interest Rate Hike to Tame Inflation @BloombergAfrica
Africa


Zimbabwe Plans Triple-Digit Interest Rate Hike to Tame Inflation @BloombergAfrica 

Zimbabwe’s central bank plans to more than double the benchmark interest rate -- already the highest in the world -- to 190%, a member of its monetary policymaking committee said, as it seeks to put a brake on soaring inflation.

Persistence Gwanyanya, from the bank’s MPC, said the intention was to achieve a positive real interest rate to discourage speculative borrowing that undermines the local currency. 

He spoke in a phone interview after official figures Saturday showed that annual inflation rose to 191.6% in June.
The plan for a record hike in interest rates is among measures the government is expected to announce during the weekend, he said. 

President Emmerson Mnangagwa has said his government will unveil steps to curb inflation and the surging price of basic commodities, without providing further details.
“At a time when banks were still adjusting their interest rates, they will be confronted with steep rates,” Gwanyanya said. 

On June 17, the central bank barred banks from lending at below the official rate, currently at 80%, with effect from July 1. 
The MPC held its latest meeting on Friday, according to a schedule posted on the central bank’s website. 
“We have decided to bite the bullet,” Gwanyanya said. “Stability will be achieved through an aggressive monetary policy interest rate hike.” 
To protect farming production, the key agriculture sector will be eligible for “a concessionary interest rate,” he said. 

The deposit rate will also be increased to ensure that banks compensate depositors for their savings.
The central bank’s inflation outlook has been revised upward to 160% by year-end from an initial forecast of between 25% and 35%. 

“It will definitely be above 100%, mostly reflective of the external shocks which we have experienced as an economy,” Gwanyanya said. The bank has cut its economic growth forecast to 3.5% from 5.5%.
Despite a surge in the cost of basic goods, policymakers don’t propose price controls on businesses.
“Our economy is market driven, we now know better,” he said. “That was tried way back and it didn’t work.”

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Nigeria’s Frontier Market Status at Risk Due to Dollar Shortage @markets
Africa


Nigeria’s Frontier Market Status at Risk Due to Dollar Shortage @markets 

Local unit weakens to new low on the parallel market in Lagos

MSCI worried about inability of firms to repatriate dollars
Nigeria is poised to lose its frontier market status because of persistent foreign-exchange shortages in Africa’s largest economy. 
MSCI Inc. is considering downgrading the MSCI Nigeria indexes to standalone markets status from frontier market, the New York-based company said in a statement. 
“There has been a continual and severe deterioration in the ability to repatriate funds from Nigeria,” Craig Feldman, global head of Index Management Research at MSCI, said in a statement. 

“Given the prolonged nature of the issues affecting the market’s accessibility, we have put forth the consultation to reclassify the MSCI Nigeria Indexes.” 

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9 DEC 19 :: Time to Big Up the Dosage of Quaaludes
Africa


9 DEC 19 ::  Time to Big Up the Dosage of Quaaludes

This week Moody’s Investor Services downgraded Nigeria to negative and we learnt that Foreign Investors are propping up the Naira to the tune of NGN5.8 trillion ($16 billion) via short-term certificates. 

Everyone knows how this story ends. When the music stops, everyone will dash for the Exit and the currency will collapse

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The naira weakened to 614 against the dollar Friday on the parallel market from 610 a week earlier, according to Abubakar Mohammed, a bureau de change operator that tracks the data in Lagos, the commercial capital.
Africa


The naira weakened to 614 against the dollar Friday on the parallel market from 610 a week earlier, according to Abubakar Mohammed, a bureau de change operator that tracks the data in Lagos, the commercial capital. 

That’s the lowest on record in the West African nation, where the central bank maintains a tightly controlled official exchange rate.

Africa’s biggest crude producer has been rationing dollars because of lower oil income that accounts for about 90% of foreign exchange earnings. 

The nation’s foreign-exchange reserves have dropped 4% this year to $38.8 billion, despite the government tapping the overseas bond market twice. 

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Meanwhile, 63% of projected 2022/23 ordinary revenues will be swallowed by debt repayments, a 21% increase. @Africa_Conf
Kenyan Economy


Meanwhile, 63% of projected 2022/23 ordinary revenues will be swallowed by debt repayments, a 21% increase. @Africa_Conf 
The budget has a $7.5 billion funding gap, which Yatani plans to cover with more borrowing, around 70% of which will come from domestic sources and 30% from abroad. 

Meanwhile, 63% of projected 2022/23 ordinary revenues will be swallowed by debt repayments, a 21% increase.
The interest rates will also mean more expensive debt. 

Earlier this month, Yatani abandoned plans to issue a new Eurobond and instead plans to secure $1bn in bank loans, citing higher interest rates.

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France's Amethis sells Kenyan retailer stake to Mauritius-based IBL @Reuters
Kenyan Economy


France's Amethis sells Kenyan retailer stake to Mauritius-based IBL @Reuters 

France's Amethis investment fund said on Friday it will sell its stake in Kenyan general retailer Naivas to Mauritius-based IBL Group 

Amethis bought a stake in Naivas for an undisclosed amount in 2020. A source with knowledge of the transaction had told Reuters the purchase amounted to 30% of the retailer at that time.
"This marks IBL Group's first investment as part of their expansion strategy in East Africa. This agreement is still subject to regulatory approvals," Amethis said in a statement.
The statement did not reveal details on the terms of the sale.
Naivas, which was founded three decades ago and has 84 stores across Kenya, became one of the top three retailers after the collapse of Nakumatt, a local supermarket chain that had dominated the sector.
Nakumatt's failure has also created an opening for other international retailers, including Carrefour franchisee Majid al Futtaim.
Amethis has a range of other investments in Africa's banking, manufacturing and logistics sectors.

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Tea prices plunge to six-month low at auction @BD_Africa
Kenyan Economy


The auction warned last week that the recent announcement by Pakistan-the top buyer of Kenyan tea, advising its citizens to cut the consumption of the beverage will have a negative impact on prices.

Eatta said should Pakistani buyers cut down on volumes, the prices at the weekly trading will decline significantly because of reduced demand.


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Global Equities Rout Hits Kenya’s Benchmark Harder Than Most @markets @herbling
N.S.E General


Global Equities Rout Hits Kenya’s Benchmark Harder Than Most @markets @herbling 

Nation’s stocks are worst performers globally after Sri Lanka

Election, economic growth, inflation concerns weigh on shares
There’s no place to hide for Kenya’s battered stock market amid the turmoil that’s weighed on equities globally this year.
The benchmark index of East Africa’s largest economy is down 29% this year, with only crisis-hit Sri Lanka posting a deeper decline among 92 primary gauges tracked by Bloomberg.

Slowing growth, rising inflation, and the approach toward a closely contested election are adding to worries for investors in the 63-member exchange. 

Stocks may have further to fall as central banks around the globe tighten monetary policy and the Kenyan shilling, already at a record low against the dollar, extends its record decline.
“It’s tough to call the bottom at this time,” said Silha Rasugu, a research analyst at EFG Hermes in Nairobi.

A 37% slump for the index’s biggest constituent, Safaricom Plc, hasn’t helped, with foreign investors especially exiting holdings of the the mobile-phone company which reported lower revenue and earnings last month, according to Hasnain Malik, an equities analyst at Tellimer.
Rising yields on Kenyan bonds offer better returns for local investors than the stock market, with inflation eroding corporate margins and earnings, said Ephantus Maina, senior research analyst at Nairobi-based Kestrel Capital.

To be sure, some investors think stock prices have fallen enough to reflect many of the concerns. 

Current levels present a “very attractive entry opportunity” for investors, said Lisa Kimathi, an analyst at Nairobi-based Standard Investment Bank.
But investors are unlikely to jump back into the fray given the uncertainty ahead of the presidential election set for Aug. 9. 

Opposition leader Raila Odinga, the front-runner on the ballot, spooked investors recently when he said he would restructure the nation’s debt. Yields on Kenya’s 2024 Eurobonds have soared 462 basis points this month to 15.34%.
It’s typical for share prices to decline ahead of Kenyan elections, said George Bodo, head of research at Genghis Capital in Nairobi, who expects shares to recover in the fourth quarter.

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@SafaricomPLC share data
N.S.E Equities - Commercial & Services


@SafaricomPLC share data

Price: 23.10

Market Capitalization: $7.8433b
EPS: 1.74
PE: 13.276

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by Aly Khan Satchu (www.rich.co.ke)
 
 
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June 2022
 
 
 
 
 
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