Saturday, April 17, 2021

The Next Economic Crisis - Will Your Wealth Survive?

The greatest wealth transfer in history has already begun and the next crisis will only accelerate the process. As the printing presses continue cranking out more and more money, looking forward to a time when the markets pause or another economic crisis consumes the world is an issue we all should think about. How much wealth will escape the next large financial reset is very important because it will set the bar that determines the rate of inflation or deflation in coming years. If you believe we did not solve many of our financial problems after 2008 but merely masked them with a huge amount of newly printed money you are likely to embrace this concept.

The Shell Game Of Wealth Transfer
Much like a shell game where wealth is transferred about, in our modern society wealth is always on the move. Wealth and how things are valued is far from constant, it is fungible and constantly changing. While we may try to deny it, wealth is in a constant state of flux and constantly moving. Wealth comes in many forms, it can be held in the form of paper, promises, or as something more tangible and real such as property or goods. 
Some items such as a tool hold "utility value" and its value may be based on how much work it can perform or the revenue it can produce. Replacement cost, supply and demand, and factors such as whether something can spoil or might grow obsolete over time also help determine its value as a place wealth can be safely stored. The term, safely stored in this case also includes placing it out of the reach of governments' ability to tax it or make it illegal to own.
Defining wealth is one thing but it is important to actually delve into its nature to truly understand just how elusive it can be. Wealth is defined as the abundance of valuable resources or valuable material possessions. An individual, community, region, or country that possesses an abundance of such possessions or resources to the benefit of the common good is known as wealthy. This means it might be preferable to live as a poor person in a very rich and wealthy society versus a rich person in a poor and wretched place. This notion underlines the idea wealth is also relevant and measured by how it compares to that of others.

Don't Be Naive, They Do Not Care
Returning to the subject of various kinds of wealth, today Bitcoin and other crypto-currencies and other "digital assets" designed to work as a medium of exchange also fall into the category of wealth. They have joined pensions, annuities, and even investments in stocks and such as a store of wealth. Many assets fall into the area of paper promises that are often recorded somewhere far from sight or as a digital entry on a computer. These intangible stores of wealth based on faith have grown at a massive rate during the last several decades and were relatively minor players until recently. Currencies, also known as fiat money, are also just IOUs or paper promises. The idea of a currency free-society in my mind tends to break the bonds that link us to wealth but that is for another post.

In the past I have written several pieces about subjects such as, writing off the rising amount of bad debt, how debt is like a mirage moving into the distance, how bad debt is resolved, and how precarious the vessels where we store our wealth can be, however, the crux of this article centers around what will or might be left after stress or war pushes the global economy to the brink or into total collapse. A great deal will depend on how such an event unfolds, this means what kind or type of value and wealth is the first to vanish.

Be Skeptical, Be Cautious, Get Smart!
I will be the first to admit the answer is unknown, still in this "exercise of the mind," I am asking you to consider and think about such a scenario. The ugly truth is that there are many places your wealth could vanish into and multitudes of ways it could seep away. Remember, wealth zips across borders at the click of a button and just because you deposit it with a local institution does not mean it stays in your community. 
We witnessed how wealth could be "transferred away" decades ago during the savings and loan crisis when huge beautiful buildings were constructed in certain areas from wealth transferred in from other parts of the country. Needless to say when the dust settled the big winners were the areas with the new buildings and not those forced to pay for them when the loans used to build them went into default.

Today some market watchers claim that the stock market is being held at lofty levels while the smart money is rushing to the exits. Today tens of trillions of dollars are sitting in offshore banking accounts in places such as the Cayman Islands. Today government and businesses are borrowing hundreds of billions of dollars each year by issuing bonds some that will not return investor's money for decades. Today homes, apartments, and buildings are being built, some poorly constructed, with loans guaranteed more or less by the American people. Today America's national debt stands at over 28 trillion dollars and is rising. Today currencies such as the euro and yen are even more fundamentally flawed than the dollar. I could do this a bit longer but I suspect I've made the point.
We have all heard about how the Caymans have become a popular tax haven among the American elite and large multinational corporations. This is because there is no corporate or income tax on money earned outside of its territory. This has made the Caymans especially popular among hedge fund managers. I hate to blow a hole in the idea that you can safely tuck their money away in an offshore banking account, the reality is, we have no idea where all the money deposited in the Cayman Islands really is. Banks do not just sit on deposits and keep them safe, they loan them out.
We must never forget the world is full of crooks, evil politicians, greedy bankers, and that we have judicial systems that make true justice a rare commodity. Returning to the focus of this article, the thing that is important is what or how much wealth survives an economic crisis and in what form. That is because when that wealth comes out of hibernation it will soak up all the tangible assets on the planet. This will be the determining factor of whether we face inflation, deflation, or some crazy mix of the two. Remember it is the nature of those in charge to throw the masses under the bus when things go sideways. 
The average person is foolish and silly if they expect to be protected when the next financial crisis hits. Those counting on a stimulus check for survival will someday most likely find it will not buy them diddly-squat. The shelves will be empty or the value of what they receive will simply not be enough. The economic landscape we face following such an event will without a doubt be shaped and depend on what wealth survives and how much vanishes following a tsunami of defaults and /or a monetization of debt where government debt disappears and inflation takes its place. A word to the wise should be sufficient and cause any person prudent or interested in protecting their wealth to consider the many ways wealth can vanish and that it can without a doubt happen to you.
 (Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)

Sunday, April 11, 2021

Stimulus And Covid-19 Attitudes Reflect Poor Math Skills

For all the noise made over Covid-19, many people might be surprised to find out that it was not the leading cause of death in the U.S. in 2020. It came in third, behind heart disease and cancer, according to a new CDC study. COVID-19 was listed as the underlying cause of 345,323 deaths during 2020 and was the third leading underlying cause of death, after heart disease (690,882 deaths) and cancer (598,932) That is reality in a nutshell.

This graphic describes provisional U.S. 2020 deaths and leading causes of death.
So Much For The Idea We Are All Going to Die From Covid

This data kinda puts into focus how warped we have become by the fear-mongering fostered upon us. it is difficult to argue with this data. It was lifted from the Provisional Mortality Data — United States, 2020 | MMWR report. 

Total deaths in America in 2020, according to the U.S. Centers for Disease Control and Prevention (CDC) came in at 2,913,144. Considering that there were 2,845,793 deaths in 2019 and 2,831,836 deaths in 2018, this is not surprising. If you ballpark America's population at 333 million, 1% of that number is 3.3 million people. While many people find it distressing, the fact is people die. Also, this curse tends to descend upon people that are older. One of my favorite lines comes from a great old gal I knew, when she was 98, she informed me she no longer bought green bananas. 

Leave it up to the media to spinning the increase in deaths as proof Covid has devastated our country, such an article appeared on ABC near the end of December. The article hyping the number was titled: "US deaths in 2020 top 3 million, by far most ever counted." ( It went on to say, 2020 will go down as the deadliest year in U.S. history, with deaths topping 3 million for the first time.

Stimulus and Covid-19 attitudes reflect declining math skills. The fact the light simply doesn't come on in the minds of the majority of people as to how far off course we have traveled is astounding. Much of this could be attributed to the dumbing down of America. Some people consider this a planned effort by the government and those in charge of our general well-being to make the masses more malleable.

The idea of "dumbing down," is the deliberate oversimplification of intellectual content in education, literature, and cinema, news, video games, and culture. Originated in 1933, the term "dumbing down" was movie-business slang, used by screenplay writers, the idea was to revising things to appeal to those of little education or intelligence". Dumbing-down varies according to the subject matter, but almost always results in the diminishment of critical thought. 

Stupid Much? Yes, It's Kinda Like This!

It could be argued that modern culture has gone off the rails. This is reflected in programs developed to entertain us. One example is the Beavis and Butt-Head Animated MTV series. It is about two teenage heavy-metal music fans who occasionally do idiotic things because they're bored. The problem we face is that it is not just children that while away the hours watching this garbage but bone idle adults also waste a great deal of their time engaged in the same activity rather than looking for more productive things to do. 

Circling back to the crux of this article, we should be viewing Covid-19 and the size of the stimulus packages through mathematics rather than a prism of emotion. When it comes to the pandemic the general dumbing down of America the nation's poor math skills comes front and center. Again, setting America's population at 333 million, 1% of that number is 3.3 million people. It should not come as shocking news that roughly one percent of the population dies each year from old age or disease. As for the cost of this poorly handled pandemic that has led to the devastation of America and caused the national debt to go explode, that is a whole other story. 

Using the same population figure as above, every billion dollars spent by the government represents an outlay of $3 for every man, woman, and child in America. This means each trillion dollars spent is equal to $3,000. To keep things simple let's just go with the six trillion figure, $3,000 times six show a huge $18,000 of new "stimulus" or debt has been created for each of us over the last year. Round this number up by two dollars and multiply it to represent a family of three and we are looking at a mind-blowing $54,000 per family. This is why incomes have risen to an all-time high while tens of millions of workers have sat at home during the lock-downs.  

While many of us argue that COVID-19 should not be called a major public health threat anymore and see it as having reached endemic status (like the seasonal flu), the fearmongers with an agenda continue to warn us of future death and chaos. The big threat now being a new variant of SARS-CoV-2 that is, allegedly, now “causing huge problems” in Europe. In a mid-March 2021 while appearing on MSNBC News, National Institutes of Health director Dr. Francis Collins expressed dismay at something that was beginning to happen across America by pointing at Florida, he said: 

“Oh my God, Florida, stay out of the bars with your masks off! What are you doing? This is exactly      the wrong thing to be doing unless you want to end up where Europe is.”

During the last year, we have lived in a world we could hardly have imagined when all this started. As expected, new variants of this virus are emerging and there will be many new strains in the future. In the same way, the seasonal flu changes and evolves from year to year history indicates as viruses mutate within a population over time, they tend to become more benign. Still, we could ask, why we let things unfold as they have or how this happened? Sadly, most of us know the answer.

While many so-called experts say follow the science, I say, follow the math. Using math as a tool we can shed some logic upon the rather chaotic situation we find ourselves in. It appears much of the world has been blinded by those seeking to implement a "Great Reset" of the global economy, our social structure, and our culture. Entering into this is the squelching of free speech and censorship. All this has gone full tilt and we are under a full-court press to halt any comeback on the part of rational human beings to exert real influence on our future.  

(Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)

Saturday, April 10, 2021

America's New Transportation Secretary Is A Turd

While it escaped the notice of many Americans, our new Transportation Secretary was recently caught on video pulling one of those stunts that prove politicians untrustworthy. Riding in an armored Suburban to an area close to his destination, a bike was then unloaded from the rear of the SUV by security staffers and mounted by Pete Buttigieg who continued on his way with the gas-guzzling SUV following behind. 

Arriving at a meeting on a bicycle to give the impression you rode there because you care about the environment is not the same as accurately caring. This is the kind of disingenuous act that would have been vilified by mainstream media in the past but hardly registered a blip on the radar. One commenter on Twitter whose posting of the video quickly attracted more than a million views characterized this as "Pete Buttigieg's dog and pony show."

What Do Voters Need To Know ?
Pretending to save energy in the way he did should make all of us ponder why someone given the responsibility to guide future transportation policy merits our trust. Remember these policies geared at benefiting the environment are controversial and will come at great cost to taxpayers. Over the next few years, the Transportation Secretary will have great sway and influence over how several hundreds of billions of dollars are spent. This is a huge amount of money and how it is spent is critical to the countries future.  

Ironically the book authored by Buttigieg is titled; "TRUST: Americas Best Chance." The book by the 39-year- old Mayor was published on October 6, 2020. This underlines the hypocrisy and importance of knowing that America's new Transportation Secretary is a lying turd. The definition of turd is, a piece of fecal matter and to be labeled such is should be considered very offensive. In this case, being offensive is my intention. It confirms those of us that did not flock to support him during the Presidential primaries while the media was painting him as a fresh new face in the Democratic party were correct in our decision. 

Consider this karma, If good deeds contribute to good karma and happier rebirth while bad intent and bad deeds contribute to bad karma and bad rebirths as some people believe, I would not want to be that guy. I'm only showering him with the admonishment he deserves. The slamming and mocking of Buttigieg for what has been called his "phony Cabinet meeting bike stunt" is not enough. This is because he has been placed in a major position of power and with that should come some accountability. This position which includes overseeing more than 55,000 employees and pays a salary of $221,400 plus a lot of perks is no small thing.

Unbridled Ambition Is A Dangerous Thing
Buttigieg's pathetic propaganda effort merits our attention because it is a clear signal that what he says means may share little in common. On top of all this, we should remember his prior job experience and question just how qualified he is for the position he now holds. Like many political appointees is a bit light when it comes to job experience.  Unfortunately, the youthful qualities of being articulate and charming when combined with unbridled ambition is a dangerous and explosive combination.

But what of his background? It appears he finished college in 2007 at 25 and went on to run unsuccessfully as the Democratic nominee for Indiana state treasure in 2010. He then became Mayor of South Bend, Indiana from 2012-2020, part of that time he spent campaigning for the job of President. He also took a seven-month leave in 2014 during his mayoral term to deploy to Afghanistan. There, Buttigieg was part of a unit assigned to identify and disrupt terrorist finance networks. Part of his work included being an armed driver for his commander. 

Has He Been Projecting An Illusion?
From what my research revealed, Buttigieg's background is loaded with ambition and he leaps from opportunity to opportunity making the most of each by attaching himself to the "shiny parts" that give the impression he is totally dedicated and immersed in everything. Still, little of his short career screams or indicates he knows much about transportation or overseeing a huge operation like the United States Department of Transportation. In this role, he is part of Biden's Cabinet and serves as the principal advisor to the president of the United States on all matters relating to transportation. 

To put into context how a person at this level can affect policy, just the other day, Buttigieg told reporter April Ryan in an interview discussing President Joe Biden’s proposed $2 trillion plus infrastructure plan. He said, “There is racism physically built into some of our highways, and that’s why the jobs plan has specifically committed to reconnect some of the communities that were divided by these dollars,” the former South Bend, Indiana, mayor Buttigieg explained that several major highways in the United States negatively affect minority communities. 

His Kind Tend To Stay Around For Decades
If and when you get the time you can do a search on the incident that inspired this article knowing that before this stunt I had paid little attention to this clown that will most likely be around for decades to come. My point is Americans should remember that many of the policies activists claim are geared at benefiting the environment are controversial and will come at great cost to the taxpayer. 

Anyone who is talking about "Green Policies" that pulls the kind of hypercritical stunt our so-called Transportation Secretary just pulled should be asked to resign. For anyone silly enough to have bought a copy of his book, a refund is in order.


(Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)

Wednesday, April 7, 2021

Thoughts On The Latest Jobs Report And Productivity

The Jobs report published last Friday blew through expectations with payrolls booming. Indications are that 916,000 jobs were added in March. Non-farm payrolls show America has now added back nearly 14 million workers into the workforce. This constitutes about 62 percent, of the 22 million jobs lost in the spring of 2020 when COVID-19 and lock-downs shuttered businesses across the country. This has dropped the unemployment rate back to 6%. The goal of this article is to get people to think about productivity and how it relates to unemployment.

It Is Important Workers Be Productive
As noted so often the official unemployment rate of 6.0% is somewhat misleading. It does not count the people who want a job but gave up or all the people with part-time jobs that want a full-time job. It also ignores all the people who dropped off the rolls because their unemployment benefits ran out. To get a clearer picture of the unemployment rate many people look at what is known as the U-6 number which stands at 10.7%. Both numbers would be much higher if not for the millions of workers that have simply dropped out of the labor force for a slew of different reasons.

It will be interesting to see how many of  the remaining 8.4 million jobs lost come back considering many small businesses have closed forever. Obviously, last month’s $1.9 trillion stimulus bill and its potential to create demand has made many employers enthusiastic about better times ahead. While the stock market and other assets have soared with the constant infusion of stimulus from the Fed and Washington, the economy of Main Street has not fared as well.  

Since small businesses employ over 54 million people in America and their importance in the economy should not be underestimated.

In April of 2020, I pointed out in an article that small businesses employ well over half of the nation's private workforce. As predicted, government employees and bureaucrats were taken care of, they continued to get paid but small business, the most productive part of the economy has had a knife to its throat. As a landlord and small business owner, I can tell you the programs structured in Washington to help small businesses was a big fail and what they allowed to happen after that almost criminal. Washington has become so attuned to dealing with lobbyists from mega-companies it has lost sight of the fact small is small, and when this comes to business, this means usually under twenty employees, not hundreds. 

Productivity Is Important
Now that the latest job report is out, here are a few thoughts on productivity, the workforce, and the economy. Covid-19 and the way it has been handled has taken a far greater toll on productivity than these numbers imply. It is difficult to think people donning a mask and busy washing their hands are anywhere as productive as those focused on work. Only a return to more normal practices can neutralize the damage to productivity government mandates have caused. 

The introduction of practices used to halt the spread of the virus including limiting contact during the transfer of goods and services has made it harder to efficiently go through the day. Government offices being closed, schools going to online teaching, increasing the space between tables in restaurants, and more, do little to add to efficiency. I contend, much of what statistically appeared as growth in productivity was merely a number generated by those reporting far fewer employees in the private sector still kicking out about the same number of sales as stimulus money buoyed the economy.

Workers Waste A Great Deal Of Time

While government is seldom efficient and has little incentive to be so, productivity is a factor all businesses strive to keep high. Also playing into the productivity picture is that going into the pandemic, due to the low employment rate, many companies were forced to carry extra employees on their staff never knowing when one leaving would create a huge hole in their company. A great deal is hidden within the employment statistics. Some of the biggest factors feeding into the job situation are the huge number of people leaving the workforce, the type of jobs that are now coming back, and even how jobs are counted. Believe it or not, if you don’t have a job and fail to look for one, you are not considered unemployed, but instead, you are considered to have dropped out of the labor force.

Many of the jobs now coming back are low-paying service jobs, this includes those in leisure and hospitality. Another thing we should consider is that many of those jobs reported as "coming back" never really totally left but rather carried on in the shadows. Another way to say this is many people carried on part of their daily work on the side or in what might be described as the "underground economy." In this case, work was being performed but not accurately reported. This is another reason we should not get overly excited by the news of "base" jobs returning, it was expected and is coming at a great cost and is the result of trillions of dollars being pumped into the system.

All in all, it is difficult to believe that workers are now more productive considering supply chain disruptions and a slew of other roadblocks that have appeared to disrupt our day. Even things like spending more time looking for replacement parts or people working from home has taken a toll and affected our productivity. An example of this is evident when trying to communicate, in the past calls that were often answered now dead-end into voicemail and the recipient never gets back to the caller.   

The fact is productivity is a strange animal and the way we choose to measure it has a great deal to do with the findings. Overall, these numbers are still very "messy." To retain a proper perspective we must factor into the employment numbers that in the household survey if you work as little as one hour a week, you are considered employed. It could be after all the money the government has thrown at workers sitting at home during the pandemic many of these people have grown accustomed to a life of leisure. It would be naive to think all workers will be rushing to return to work willingly and with great enthusiasm. 

How this all flows into an economy floating on a sea of recently promised money that has spiked consumer confidence and spending has yet to be determined. This money is expected to last at least through the summer. With workers wanting big increases in wages, expect to see prices being raised. How much small businesses and productivity will benefit from this spending is still in question. The bar has been moved, this is a far different kind of economy than we have witnessed in the past.  


(Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)

Sunday, April 4, 2021

Mutual Assured Destruction Leaves No Winners

Like many people, I do not find what is known as the concept of Mutual Assured Destruction, or MAD to be reassuring. Today, those most fearful seem to be those people that lived through the tumultuous 1960s and the cold war, to others this may come across as "business as usual." What the world would look like following a nuclear war is very murky, yet today it seems many people consider nuclear weapons as just another tool or option for us to use in our defense if we are attacked. The nuclear deterrent we currently hold is a hundred times larger than needed to stop anyone sane or rational from attacking America, and for anyone else, an arsenal of any size will be insufficient. This is written to help put the issue of nuclear weapons in perspective.

Mutual Assured Destruction Leaves No Winners

As a bit of a history buff, I found myself in deep discussion with a curious young lad of nine. While explaining to him how the airplane developed which included a rather important timetable, I noted that its development was pushed forward because planes could be used as a weapon in wartime. To my surprise, I found he expanded the conversation to include the nuclear bomb and this young lad had a general acceptance of its use. This could indicate people are losing some of the massive fear they had for the use of nuclear weapons. Fear was the "firewall" that kept these weapons from ever being used for many of us growing up during the cold war.                    

While we can only speculate as to what the world would look like following a nuclear war, it is disturbing to think using these weapons is acceptable. More troubling is that some people even view and justify using these weapons as a first strike option. The unintended consequences of bringing nuclear weapons into the world as a usable form of warfare is a dangerous escalation that no sane person wants, but by tweaking and modifying weapons, we are on that path. This acceptance of the "nuclear option" opens a Pandora's box blurring and erasing what many people have in the past seen as taboo. There have been dozens of nuclear false alarms, yet the president has a mere 10 minutes to decide whether to launch an attack when an incoming strike is reported. Something most people are unaware of is just how close on various occasions we have come to annihilation and the end of life as we know it. Below is the description of such an incident;

[In 1995] President Boris Yeltsin was informed that a nuclear missile was speeding towards the heart of Russia. Russian nuclear forces, already on a hair-trigger alert, were put on even higher alert, ready to launch at his command.

The fate of the planet hung in the balance as hundreds of millions of people were going about their daily lives.
Russian policy called for a “launch on warning.” “Use them or lose them.”
Yeltsin wisely waited. And within those fateful moments, the Russians were able to declare a false alarm. An unimaginable nuclear disaster had barely been avoided.
Innovation In Arms Control: De-Alerting, America’s Defense Monitor, Center for Defense Information, December 26, 1999

It is no secret that at the dawn of the nuclear age, the United States hoped to maintain a monopoly on this new weapon, but the secrets and the technology for making nuclear weapons soon spread. Four years after the United States conducted its first nuclear test explosion in July 1945 and dropped atomic bombs on the cities of Hiroshima and Nagasaki in August 1945, the Soviet Union conducted its first nuclear test explosion. The United Kingdom (1952), France (1960), and China (1964) followed. In an effort to prevent the nuclear weapon ranks from expanding further, the United States and other countries negotiated the nuclear Nonproliferation Treaty (NPT) in 1968 and the Comprehensive Nuclear Test Ban Treaty (CTBT) in 1996.

Since the inception of the NPT, several states have abandoned nuclear weapons programs, but others have defied the treaty. India, Israel, and Pakistan never signed the treaty and now possess nuclear arsenals. Iraq initiated a secret nuclear program under Saddam Hussein before the 1991 Persian Gulf War. North Korea announced its withdrawal from the NPT in January 2003 and has tested nuclear devices since that time. The countries of Iran and Libya have pursued secret nuclear activities in violation of the treaty’s terms. Today the use of nuclear power is fairly widespread, but only nine countries have nuclear weapons and only a few others are suspected of pursuing them.
A Trillion Dollar System To Maintain

The topic of these weapons quickly feeds into questions of where they play into the future of mankind and thoughts of the devastation they might wreak if they are ever used in a war. It is very likely that at some point in time the tiger will be unleashed and the potential of a dreadful result is very high. A large part of the nuclear weapons debate revolves around how many weapons are enough. Another is the costly investment needed to fund existing weapons and the upgrading of America's nuclear triad. The nuclear triad refers to the nuclear weapons delivery of America's strategic nuclear arsenal. It consists of three components, traditionally strategic bombers, intercontinental ballistic missiles (ICBMs), and submarine-launched ballistic missiles (SLBMs).

Ground Based Strategic Deterrent (GBSD) is part of the Pentagon’s mammoth plan to replace all three legs of the nuclear triad. In addition to the roughly $100 billion price tag on the new crop of ICBMs, the U.S. military wants to replace its B-52 and B-2 bombers with Northrop’s new B-21 Raider (estimated cost: $100 billion). It is retiring its Ohio-class “boomer” subs with a new Columbia-class fleet (estimated cost: $128 billion), both of which are outfitted with the Northrop-powered Trident missiles. The cost of buying and operating these weapons is estimated at an eye-watering $1.7 trillion between now and 2046, according to the independent Arms Control Association. 

Cato Institute!s Chris Preble wrote years ago the Pentagon should look elsewhere within the nuclear arsenal for the money it needs. Eliminating two legs of the nuclear triad is his suggestion. Doing away with intercontinental ballistic missiles, or ICBMs and nuclear bombers would save American taxpayers around $20 billion a year that could be put toward replacing the Ohio-class sub. He also claims the sea leg of the nuclear triad by itself is a more powerful deterrent than that possessed by nearly any other nation in the world. After the insane spending recently unleashed by Washington, this may not sound like a great deal of money, but it is.

We Are Ready To Launch

While Russia retains a relatively large arsenal, no other country is capable of deploying more than a few hundred nuclear warheads. A single Ohio-class submarine can carry up to 192, this is enough for one submarine to bring the earth to its knees. Ploughshares Fund, a group dedicated to eliminating the dangers posed by nuclear weapons reports, nine countries in the world possess a total of 13,125 nuclear weapons. The United States and Russia account for 91 percent of them. Since their peak in the mid-1980’s, global arsenals have shrunk by over three-fourths. More countries have given up weapons and programs in the past 30 years than have tried to acquire them. The direction is positive, but when you are fleeing a forest fire it is not just direction but speed that matters.

An important matter is far too many nuclear weapons are actively deployed on missiles, bombers, and submarines, ready to launch at a moment's notice. It is rather ironic to ponder how much we have spent to create and now maintain this massive force of devastating potential that we hang over the heads of others, a force that could kill them many times over but also render the planet unlivable for generations for everyone. Call me silly, but I would feel a lot more comfortable if a lot of the weapons were dismantled and destroyed. 

Many Americans have become desensitized to human misery because of modern society's rather impersonal way of viewing anguish and death on a screen. Couple this with the hundreds of millions of people across the world playing violent video games and watching explosion after explosion in movies and it is little wonder fear of mass devastation has lessened. As noted earlier in this piece with so many nuclear weapons technical failures can and do occur, also systems can be hacked, we are at constant risk and human error exacerbates the problem. William J. Perry, Former Secretary of Defense, said in November 2015, “Far from continuing the nuclear disarmament that has been underway for the last two decades, we are starting a new nuclear arms race.” The possibility of things going "nuclear" is a situation we live with every day and it merits far more of our attention than it is given.

(Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)

Tuesday, March 30, 2021

Biden's Ukrainian "Putin Push" May Lead To World War III

NATO Has Slowly Expanded Towards Russia

Biden was in charge of much of the "Ukraine project" during Obama's time in office. In recent weeks President Biden has been saying some rather mean-spirited things about Russia's President Vladimir Putin. Now Russian state sources are alleging that Washington under the Biden administration is ramping up military aid to Ukraine. This comes after the media observed the Ocean Glory, a US cargo ship, began delivering 350 tonnes of military equipment, including tactical vehicles, at Ukraine's Odessa port. Ukraine's Dumskaya news agency said the American vessel carried at least 35 US military humvees for Ukrainian national forces. 

Adding Ukraine to NATO and the EU is a long-held dream of neocons like Victoria Nuland and neoliberals like Biden. This is also important to those supporting the World Economic Forum’s desire to expand the EU and encircle Russia. They feel such an action would disrupt any dreams of Eurasian integration which could resist their strategy to reshape the way the world is governed. Putin’s foreign policy, coupled with efforts to rebuild the Russian military, has been part of an effort by the former KGB officer to boost Russia's standing on the world stage. This has helped make him popular with his people even as Nato has slowly been expanding in the direction of Russia, but also makes him a thorn in the side of the NWO gang. 

Interestingly, this delivery of military equipment occurred near the time Ukrainian President Volodymyr Zelensky, was signing Decree No. 117/2021. The decree activates the Ukraine Army to recapture and re-unify with Ukraine, the autonomous region of Crimea, and the city of Sevastopol. The military has been instructed to use “hybrid warfare” to re-conquer these former parts of Ukraine. In short, this means Ukraine declared war on Russia, certainly something it would never consider without major backing. It must be noted, his actions are in total conflict with his promise to end the now nearly seven-year-long war in eastern Ukraine that played a central role in his election in 2019. This indicates, Zelensky has continued to subordinate his government’s policies to the US- and NATO-led war drive against Russia.

One Ukrainian blogger contends the censorship of the three opposition channels in Ukraine and the surprise inspection of Ukrainian army units in Donbas link all this together and signals a resumption of the Donbas conflict. He wrote on his Telegram channel, “Protecting his rear through censorship, Zelensky ordered to start an inspection of the AFU units in Donbas in order to establish their readiness to carry out the orders of the military command." He then went on to say, "Didn’t we warn you last year that the regime was preparing for a major war? All we had to do was wait for the green light from higher authorities.”

Upping tensions in the area is the fact the Kerch Strait Bridge, also known as the Crimean Bridge, is now a target and we will certainly see Russian moves to protect it. Comprised of a pair of Russian-constructed parallel bridges it spans the Strait of Kerch between the Taman Peninsula and the Kerch Peninsula of Crimea. The bridge complex provides for both road and rail traffic and has a length of 19 km. This makes it the longest bridge Russia has ever built. 

It is difficult not to tie this to the controversial Nord Stream 2 natural gas pipeline project which Viktor Zubkov, chairman of the board of directors of Russia's gas giant Gazprom, claims, will definitely be completed this year. He said on Friday, Biden's goal is to stop the pipeline and the U.S. is now targeting anyone helping the project's completion in any way. So far, around 90-92 percent of the work required for the project is complete. Earlier this year, Gazprom warned investors that the Nord Stream 2 project could be suspended or entirely discontinued due to extraordinary circumstances, including "political pressure."

War In Ukraine Is About Money, Energy, And Power!

As to what really motivates the desire to turn Ukraine into a giant-killing field, several possibilities exist but money and profit should not be ruled out. Foreign policy has often been used as a tool to advance national interest which is often dictated by economics. When it comes to the economy energy is often considered the blood from which all strength flows and in the case of Europe the Nord Stream 2 (NS2) pipeline which after completion will carry natural gas from Russia to Germany is a bone of contention. Years ago leaders from Poland, Latvia, and Lithuania signed an open letter to the parliaments of the EU warning them against the construction of NS2 and cautioned them of how it is not a commercial project but one designed to increase their energy reliance on Moscow.

At that time, Russia's Gazprom supplied the European Union and Turkey with a record 162 billion cubic meters of gas. Of that gas, 86 billion cubic meters flowed across Ukraine. Those opposed to the new pipeline make a strong case that "Gazprom" is not only a gas company but a platform for Russian coercion and another tool for Russia to pressure European countries. The U.S. State Department has even threatened European corporations they will likely face penalties if they participate in the construction of Russia's Nord Stream 2 gas pipeline, on the grounds that "the project undermines energy security in Europe."

Circling back to the conflict, years ago I wrote a piece that urged America to stay out of a war in Ukraine. It warned of the major advantage Putin held by having a huge well-armed army just across the Ukrainian border and that any army cobbled together to face him would most likely be unenthusiastic and politically troubled at best. At the time President Obama had pulled out all the stops to paint Putin with a brush dipped in all the bad colors. Every Sunday in interview after interview Washington experts were paraded across the screens of the talk shows that tell Americans what is happening in our nation's capital and every single one of them denounced Putin as a "thug and a bully."

Ukrainian Soldiers Killed In An Unwinnable War

In that piece were accounts of reports from the front in Ukraine often buried or hidden from public view but they appeared to confirm that Ukrainian troops were being sent into a meat grinder. The drafted include men up to 60 years old with only a month of training before they reluctantly go off to the battlefield in eastern Ukraine. Putting more weapons into the hands of those unmotivated to fight for their corrupt state is merely adding fuel to this fire and doing more harm than good. Again, remember Ukraine is a financially failed state and while we can point to its potential, its massive oil and gas reserves by all rights should belong to the people and for their benefit. The IMF, however, points out that Kyiv needs billion in loans and grants just to stabilize its economy after more than twenty years of massive levels of corruption. This debt and the deep, deep hole Ukrainians have dug themselves into flows from a series of bad governments after Kyiv became independent of the Soviet Union.

Back then, the euro-zone faced a lot of problems without jumping into a proxy war against rebels in Ukraine. I use the term proxy because without the money and backing of outsiders things would most likely go quiet. The failed and bankrupt country of Ukraine would most likely break into two parts with the eastern half and its people who share strong ties with Russia aligning itself with that country and Kyiv, and the western-oriented portion of the country drifting towards stronger ties to the euro-zone. What is the big problem with such a solution? Apparently, a great deal for people like Biden in Washington that are pushing for intervention in Ukraine. 

To confuse the issue and muddy the waters great efforts have been made at high levels by those advocating military action to paint Russia as an aggressor. These forces aided by the media continue to link Russias move into the majority ethnic-Russian Crimea region as a violation of Ukraine's sovereign border. In this case, we should remember, the whole concept of sovereign borders is a little gem promoted by those in power, these borders are a creation of man and not visible to the birds flying above. This is an argument of convenience that masks deeper issues and the difference between "terrorist" and "freedom fighters" often depends on a person's point of view. In this case, it is clearly the new American-backed government in Kyiv that is pushing to bring the eastern part of Ukraine back into the fold.

What this boils down to is that American companies want to sell and supply Europe with Liquid Natural Gas (LNG) and seem willing to start a war to make it happen. Whether it is for profit or to minimize the threat of natural gas shipments to Europe being cut off and used as a key weapon in Russia’s political arsenal we cannot ignore the idea more is at play here than just doing the "right thing". Many people in the "Tin Foil Hat" community have gone so far as to indicate they feel that America and elements of the CIA were involved or had a part in the overthrow of the former corrupt Ukraine government and its replacement with another corrupt but more pro Europe regime. At the time even America's Vice President, Joe Biden, saw his son join the board of a private Ukrainian oil and natural gas company. One thing is clear, not only those involved in selling energy to Europe will profit from this but also the military-industrial complex stands to gain.

The odds of U.S. LNG significantly displacing Russian natural gas shipped by pipeline are slim. Piped gas sells at a large discount to LNG, which must be cooled to liquid form, shipped overseas, and turned back into its gaseous form. Poland recently received its first shipment of U.S. LNG. While LNG trade between the United States and Europe would help reduce the U.S. trade deficit it also stands to improve energy security among the European countries by giving them an alternative to Russian gas. Everyone must concede it is not a cure-all, Russia can easily cut prices and adjust terms to maintain its dominant position in the European gas market and European countries are likely to continue buying most of their gas from the lowest-cost supplier.

Bottom-line, Russia has traditionally been the major supplier of European gas. But it charges high prices, often in the form of long-term contracts linked to the price of oil. The overwhelming dependence on Russian gas leaves European countries from a national security standpoint vulnerable to a cutoff of crucial natural gas supplies. This would be devastating to their economies at any time but even more so in the depths of winter. For these reasons, it makes sense for Europe to consider alternative supplies and open its doors to U.S. LNG but due to Ukraine's history of corruption flooding the country with weapons and using the people of Ukraine as pawns in this high stakes game violates all standards of human decency.

Americans should also be aware that our current policy drives Russia towards the East and into the open arms of China. This creates even more problems long-term than it solves short-term and borders on the edge of insanity. The war in Ukraine has not developed organically but appears to be the product of meddling. Mercenaries and money from America appear to be backing and propping up Kyiv with America acting as the "champion" for this failed bankrupt country.  The best way for the West and Kyiv to prove they are on the right path is by letting the eastern part of the country seceded and then making Kyiv a center of economic and democratic success. 

I reiterate the stand taken in April 2018, the Ukraine war is about money, energy, and power! Since the latest ceasefire agreement in the war in Donbas was implemented in July 2020, it appears few if anyone is being killed. This indicates rocking the boat is a bad idea. We can only hope those hyping the recent events in Ukraine saying the decree signed by Zelensky will someday be looked back upon at the beginning of World War III are overly pessimistic, after all, when you place two major military powers face to face what could go wrong?


 Republishing this article is permitted with reference to Bruce Wilds/AdvancingTime Blog

Monday, March 29, 2021

Japan's Economy Is Again Struggling

Japan. the world's third-largest economy is highly dependent on exports and the reality it is still struggling even after a great deal of America's stimulus money leaked into buying imported goods speaks volumes. While it feels a bit like ancient history, Japan's GDP contracted at an annualized rate of 28.8 percent in Q2 of 2020, the biggest decline on record. Even after bouncing back 21.4 percent quarter-on-quarter in Q3 and 12.7 percent in Q4 Japanese national accounts are still lagging behind mid-2019 levels. For all of 2020, spending by households with at least two people fell 5.3% due to the hit from the pandemic. It was down 6.5% for all households, the worst drop since comparable data became available in 2001.
All in all, this means the country is still playing catch up, partly because Japan also experienced two additional quarters of negative growth in Q1 of 2020 and Q4 of 2019. Adding to the problem is Japan’s household spending fell for the first time in three months in December, in a sign consumer sentiment was weakening even before the government called a state of emergency to control a new wave of the coronavirus. Lower demand for services such as travel tours also weighed, as the pandemic forced the cancellation of domestic tourism promotions. Last year, spending on accommodations fell 43.7%, while overseas and domestic tour travel expenditure slumped 85.8% and 61.9%, respectively.

Not only is Japan again struggling to stay out of recession, but it also faces a wall of debt that can only be addressed by printing more money and debasing its currency. This means they will be paying off their debt with worthless yen where possible and in many cases defaulting on the promises they have made. Japan currently has a debt/GDP ratio of about  240% which is the highest in the industrialized world. With the government financing almost 40 percent of its annual budget through debt it becomes easy to draw comparisons between Greece and Japan. 

Over the years Japan has been able to sidestep default due to the good fortune of sporting a huge trade surplus with America and forming tight economic ties with China during the years it was rapidly growing. Unfortunately, for Japan, the benefit of both those forces may be waning. China has moved up the manufacturing chain and no longer needs Japan as much as it did. This leaves Japan in the unenvious position of having to find new ways to move forward at a time when few friendly trends have surfaced to aid in its endeavor.

The Japanese economy has been no stranger to recessions even before the coronavirus outbreak. In fact, Japan experienced three mild recessions between the COVID-19 pandemic and the global financial crisis. The first was caused by the devastating earthquake and tsunami that rocked Japan in 2011. The other two and single negative growth quarters appeared to be just part of the long stagnation the Japanese economy has been in since its asset price bubble burst in the 1990s. 

In the aftermath of the crisis, Japan amassed a mountain of debt that it carries to this day. Japan's aging population and  shrinking consumer market have made it hard to revive the Japanese economy. The country’s continued reliance on exports and tendency to invest overseas rather than at home have become a big part of what Japan does. For years the now-former Prime Minister Shinzo Abe promised the country relief through his “Abenomics” economic revival program but it never did lift the country out of stagnation. The Abe administration significantly eased monetary policy and increased government spending, while simultaneously talking about needed structural reforms most of which always seemed to be pushed back or get delayed.

Japan's GDP Is Flat Since 1990 click to enlarge

Not all economists see more deficit spending as the answer to Japan's problems and argue that more spending will only hurt efforts such as the recent consumption tax hike to improve Japan's overall fiscal health. Japan holds the title of having the industrial world’s heaviest public debt burden. Its debt is more than twice the size of its $5 trillion economy.

The world's negative-yielding debt hit a record $17 trillion at the start of September, mostly as a result of most Japanese debt trading in negative territory as the Bank Of Japan continues to monetize the country's debt. All this also flows into Japan's stock market where, when we see Japanese shares rise we are now forced to wonder how much of it has to do with Kuroda and the BOJ pumping up Japan's stock market by buying more ETFs. It is difficult to argue that in effect, the BOJ buying stock is not nationalizing Japanese companies. 

The BOJ Owns Nearly 80% Of Japan's ETFs
All this has morphed into a program that seems akin to fraud based on doing "whatever it takes" to give the appearance their economy is moving forward. Following along the line of thought that while there is no way of avoiding the final collapse of a boom brought about by credit expansion years ago, Ludwig von Mises wrote; "The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." In short, the BOJ now has little choice but to go all-in which strips away any illusion all is well. In some ways, the actions of Japan's central bank could be considered nothing more than a new model of "stealth nationalization." This is a course filled with moral hazard.

What we see occurring in Japan stems from a far greater problem than simply slow growth. At some point, reality will set in and the yen will suffer as a result of Japanese policies. For many years Japan's relationship with China has bolstered the yen. The collapse of the yen would debunk the myth that major currencies in our modern world are immune to failure and release a slew of new problems across the world. While this has been expected for some time it most likely will not be the catalyst for global financial collapse since the yen constitutes around only 4% of the world's reserve currency, however, it would gravely wound fiat currencies and alter how they are viewed. 

Factoring into all of this, in September of 2020, Yoshihide Suga, became Japan’s new prime minister. Suga took over from 65-year-old Shinzo Abe, the country’s longest-serving prime minister, who resigned due to health reasons. On the domestic stage, Suga inherits a troubled agenda swamped by the coronavirus pandemic, he also has to deal with the disaster of the postponed Tokyo Olympics. As the leader of one of America’s closest allies he also has to navigate a tense geopolitical climate resulting from the rapidly deteriorating U.S.-China relations and the idea Japan wants the U.S. to deter China’s military aggression in Asia.”

Borrowing a huge part of a nation's economic output every year to prop up the status quo is akin to putting a Band-Aid over a wound, that in this case, is rapidly growing larger. In short, Japan's flawed prescription for future growth will never work. Many of the policies that have failed in Japan over the decades are now being played out across the world. Interestingly, over time, the "Japanification" of the world's economy may play out far worse for the global financial system than it did for Japan.


Republishing this article is permitted with reference to Bruce Wilds/AdvancingTime Blog