Thoughts on Coming Apart and the Coming Great Reset
Turning and turning in the widening gyre
The falcon cannot hear the falconer
Reviewing the Bidding
Thoughts and Theses
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No changes this week
In the early 1990s, I predicted a severe crisis in the US in the early 2000s - see My Journey for details of how those thoughts were developed, and a description of my predictions, essentially all of which have held up well. That crisis would result in a resetting of the country's financial system and financial institutions and therefore would profoundly affect all parts of the culture and all institutions, including government and military.
The crisis would be precipitated by debt, deficits, entitlements and demographics.
The purpose of this web site is to Contemplate Out Loud about ways in which current events are reinforcing or contradicting my predictions. And to create a continual update of thoughts for the future.
The Fed, Congress and the Executive Branch have now made that crisis inevitable and of a much higher order of magnitude than I anticipated.
The crisis should be played out over the remainder of this decade. There will be a new world with a new financial system and a new culture under construction at the end of the crisis.
The Fed has three alternative paths: inflation, austerity and default. For now, they have chosen inflation.
We are deep into a multi-year end game and to the point at which things will generally become worse, faster, although nothing will move in a straight line.
The Fed will likely continue on its current path until something breaks.
When the Fed signals the end of raising interest rates, we will likely enter a new era of currency devaluation and yield curve control.
Biden is significantly contributing to underinvestment in fossil fuels that will result in a multi-year, perhaps multi-decade, energy crisis. He is attempting to cross the green energy chasm in two steps. We will get to the point where even leftists will treasure every drop of oil and every lump of coal. I discuss this critically important issue, perhaps the most important issue we face today, in The Energy Crisis.
Biden made a major strategic error by confiscating Russian currency reserves.
The last stimulus payment, and arguably the one before that, were major errors, contributing significantly to inflation, shortages, extraordinary speculation and the increase in asset prices.
Inflation is peaking - for now (January 2023) - and it will remain at a high level. In the long run, because of debt levels, there is no practical alternative to continued, elevated inflations - which will probably rise and fall in waves. Stagflation is my bet for the foreseeable future.
There will be deflationary / disinflationary crosscurrents including demographics (retirement of Boomers, declining birth rates), and debt rationalizing and blowing up of debt, worldwide. Temporarily, we will have the interesting phenomenon of too much retail inventory as a result of overordering during supply chain issues and a slowing economy. Inflation is necessary; deflation /disinflation is the wild card.
The economy is weakening - recession is probable, and there is definite slowing down at a fairly rapid pace. Actually, there is a good possibility that a recession has already begun. However, recessionary pressures may recede for a quarter or so. The third and fourth quarters of 2022 are two of those quarters where the pressures are temporarily receding.
Housing is weakening.
Ukraine should lose the war. A combination of Russian incompetence and advanced weapons from the West, primarily the US, is resulting in at least short term advantage to Ukraine. It is not clear what Russia's next moves are. See Ukraine.
Russia may be winning the financial / energy war. Energy is so fundamentally important, and Russia has so much of it, while the US is burdened by extraordinary levels of debt, that Russia holds the better hand. The West's counter to that better hand is sanctions. Having said that, sanctions, particularly those leading to an inability for Russia to maintain their oil fields, will begin to create problems over time. These problems will be for Russia and for the whole world, because the world needs Russian oil. Very high stakes poker. See Ukraine.
Europe will have serious energy challenges this winter. Now that the Nordstream pipelines have been damaged, they do not have the alternative to reach accommodations with Russia. Nature has smiled on Europe for half a winter with mild weather. The bullet was dodged until next year.
Food disruptions over at least the next year, and probably for several years, primarily as a result of the Ukraine war, will be significant.
I outline my thoughts about how the next few years will unfold here.
Beth tells me, enough with the analysis, already. People want to know how you feel. I am not so sure about that, but if you are interested, I emote here.
December 8, 2023
This and That, While Waiting For Godot
Not only is the universe stranger than we think. It is stranger than we can think. - Neils Bohr
Government is not reason, it is not eloquence – it is force. Like fire, it is a dangerous servant and fearful master. — George Washington
Whiteness prevents white people from connecting to humanity. - Ibram X. Kendi
Most of the harm in the world is done by good people, and not by accident, lapse, or omission. It is the result of their deliberate actions, long persevered in, which they hold to be motivated by high ideals toward virtuous ends. - Isabel Paterson
(Kit - this is a more formal way of saying that the road to hell is paved with good intentions. I am very frightened of the righteous, not necessarily using the word in the religious sense. That's why the world today is so dangerous - we are all righteous now.)
Presentation Of Information
I carefully consider every line that is posted to this site. The primary purpose is to contemplate my theses out loud, but I also include what I consider interesting bits of information and occasional attempts at humor. To assist those that only want the first category of information, I highlight the thoughts I believe are most important.
No change in outlook - I remain in the, recession soon, nasty inflation later, camp. But I do not think the outlook for the stock market is as dire as I did a couple of weeks ago.
I will do a deep dive around year-end.
In case you wonder where conspiracy theories come from -
The disappearance of videotapes of witness interviews conducted by the Democratic-led House Select Committee on the January 6 Attack has alarmed the chairman of the House panel that replaced it.
Rep. Barry Loudermilk (R-Ga.), who chairs the House Administration Oversight Subcommittee that is currently investigating security lapses connected to the Capitol riot and potential ramifications for upcoming criminal trials, is questioning the disappearance of the video evidence.
“All of the videotapes of all depositions are gone,” Mr. Loudermilk told the "Just the News, No Noise" television show Thursday night.
“We found out about this early in the investigation when I received a call from someone who was looking for some information off one of the videotapes, and we started searching, and we had none,” Mr. Loudermilk explained.
“I wrote a letter to Bennie Thompson asking for them. And he confirmed that they did not preserve those types. He didn't feel that they had to."
Elon Musk is showing videos of his Cyber Truck surviving gunshot attacks of various types. This is pretty weird, but has led to memes suggesting that it is the perfect vehicle for the South Side of Chicago.
I understand the feeling -
Have you noticed that everything that happens these days is historic?
Netflix Canada has announced a bold plan to make American movies and tv shows feel more familiar to Canadian audiences by editing out any scene where characters inexplicably wear their shoes indoors.
“There aren’t many cultural differences between America and English Canada, which is why American programming does so well here,” said Netflix Canada representative Tina Morton. “But if there is one thing all Canadians can agree on, it’s complete confusion over why the entire cast is wearing their disgusting shoes inside the goddamn house! Fortunately that won’t be a problem anymore.”
International tests for 15-year olds - The US sixth among the 81 countries in reading (from eighth in 2018), 10th in science (from 11th) and 26th in math (from 29th)
Jonathan Haidt and I are in agreement -
As a professor who favors free speech on campus, I can sympathize with the "nuanced" answers given by U. presidents yesterday, about whether calls to attack or wipe out Israel violate campus speech policies. What offends me is that since 2015, universities have been so quick to punish "microaggressions," including statements intended to be kind, if even one person from a favored group took offense. The presidents are now saying: "Jews are not a favored group, so offending or threatening Jews is not so bad. For Jews, it all depends on context." We might call this double standard "institutional anti-semitism." University presidents: If you're not going to punish students for calling for the elimination of Israel and Israelis, it's OK with me, but ONLY if you also immediately dismantle the speech policing apparatus and norms you created in 2015-2016.
It's still way out of hand, people -
Per CBP sources, there were more than 12,000 migrant encounters at the southern border yesterday, the highest single day total ever recorded. This includes 10,200+ Border Patrol apprehensions of illegal immigrants, amongst the highest daily totals for BP ever recorded.
Last Thursday was the "day that shall live in infamy," the anniversary of the bombing of Pearl Harbor. Anybody notice? Anybody care?
There is a moral to this story.
Jon Haidt: “Boys are in trouble. Many have withdrawn from the real world, where they could develop the skills needed to become competent, successful, and loving men. Instead, many have been lured into an ever more appealing virtual world in which desires for adventure and for sex can be satisfied, at least superficially, without doing anything that would prepare them for later success in work, love, and marriage.”
Anybody seen the word, Bidenomics, used in the last month or so? Anybody?
Hunter was indicted again on tax evasion charges.
This is presented as a public service announcement and warning -
A patient was brought into the magnet room with a concealed ferrous handgun. In the process of entering the bore, the handgun was attracted to the magnet and fired a single round.
"The patient received a gunshot wound in the right buttock area. The patient was examined by a physician at the site who described the entry and exit holes as very small and superficial, only penetrating subcutaneous tissue.
War, Energy and Food
It looks like the US is beginning the process of decommitting to Ukraine.
The Republicans started it, but there is a general fatigue in the absence of good news.
And, of course, everyone is attacking everyone else about Gaza, so there is not much bandwidth left.
I have been through the reasons I feel we should support a war in Ukraine.
However, we have to weigh carefully the impact of withdrawing.
Biden does not seem to be good at it.
And, it will leave Russia in a position to take whatever their next steps are.
And, it will weaken what little is left of our credibility in the rest of the world.
I read an article that predicted that, over time as the US weakened and imploded, Europe would move closer to Russia. I think that has some validity to it. Maybe not all of Europe, but probably France and Germany.
It's Not Easy Being Green
At COP28, the big climate change conference, the US has pledged $2 billion to a fund, which will likely not be approved by Congress - Biden will find a way.
Also, The US joined the Powering Past Coal Alliance by committing to close all its coal-fired power plants.
Coal is the dirtiest fossil fuel – about 40% of fossil fuel emissions – and its phase-out is essential to fighting the climate crisis. The US has the world’s third biggest fleet of coal-burning power stations. The deadline set by the US for ending coal appears to be 2035, five years after the 2030 date seen as compatible with keeping global heating below 1.5C.
Irony -Private jets in Munich on the way to Dubai global warming conference are literally frozen on the runway, which has turned into a glacier," said Ryan Maue, a meteorologist and former NOAA chief scientist
Hmmm. I don't particularly care, but interesting.
Yesterday Women's Affairs Minister @GolanMay revealed that Israel has repeatedly asked Michelle Obama to condemn Hamas's brutal, systematic gang rapes of hundreds of Israeli women on Oct. 7. Obama hasn't even bothered to respond.
Venezuela held a referendum Sunday on proposed statehood for the oil-rich region of Essequibo, currently governed by neighboring Guyana, with more than 95% reportedly voting to approve the proposed takeover.
At 61,600 square miles, Essequibo comprises two-thirds of Guyana’s territory and is home to 125,000 of its 800,000 citizens. An international arbitral tribunal awarded the area to Britain in 1899 when the latter controlled British Guiana, but Venezuela has never recognized the ruling. Its contestation took on new life after ExxonMobil discovered oil in Essequibo's offshore waters in 2015, leading to a case before the International Court of Justice at the Hague that remains unresolved.
Venezuela’s referendum asked its citizens five questions, including whether they agreed with creating a new state called Guayana Esequiba, granting its population Venezuelan citizenship and identity cards, and including the new state in the map of Venezuelan territory. While the ICJ urged Venezuela to refrain from “taking any action” on the proposals, it did not ban the holding of the referendum.
Global carbon dioxide emissions from fossil fuels are still rising. How much? They’re expected to increase by 1.1% this year, a new analysis said. That’s despite huge growth in renewable energy and soaring sales of electric vehicles.
In passing the legislation, Michigan became the fourth state controlled by Democrats to strip rural communities of their zoning authority and give it to bureaucrats in their respective state capitals. In doing so, it follows California, New York, and most recently, Illinois. In January, that state’s governor, Jay Pritzker, a Democrat, signed into law a measure that “prevents counties from enacting preemptive local ordinances that outright ban local wind and solar projects.”
Delete the bees.