Last month in the middle of the surreal “Bidenomics” hype I published an article titled ‘Nothing Is Over: Inflation Is About To Come Back With A Vengeance.’ I outlined the misconceptions surrounding CPI and how it is not an accurate model for the effects of inflation. I also noted that the index had been manipulated downwards by Joe Biden as he flooded the market with oil from the strategic reserves. Because so many elements of the CPI are connected to energy, Biden had created an artificial drop in CPI using this strategy.
I argued that as the strategic reserves ran out and Biden lost his leverage, CPI would rise again and prices on a number of necessities would climb. This is happening now, with the biggest jump in CPI in 14 months and gas prices clawing back towards all-time highs.
Inflation is not going away anytime soon, but the bigger issue at hand is who benefits most from inflation and rising prices? The answer might be obvious to some but many people are oblivious to the root cause of inflationary dysfunction and often see it as a consequence of random economic chaos rather than a product of clever engineering. The truth is, banking oligarchs and political authorities revel in the inflationary tidal wave because it is a perfect opportunity to institute far reaching socialist controls over resources.
In most cases central bankers are the primary culprits behind the creation of an inflationary event, and the word “creation” best applies because it is nearly impossible for overt inflation to occur without them. While money supply is not the only factor when dealing with inflation (sorry purists, but there are indeed other causes), it is the most important. More money chasing less resources triggers supply-side instability and prices go up. Central banks have a number of excuses as to why they “need” to conjure up more dollars or pesos or pounds or marks, but there is no doubt that they know what the ultimate end result will be.
It’s happened too many times for them not to know…
These inflation events trigger a predictable set of dominoes in society as well as in economy and finance. Price spikes, diminished savings, rising poverty, rising crime, and rising interest rates – This is then followed in most cases by failed rate hikes, more inflation, then more hikes, diminishing foreign investment in debt, foreign currency dumps (causing more inflation), plunging consumer spending and job losses.
This same pattern has been witnessed from 1920s Weimar Germany to 1970s America to 1990s Yugoslavia to 2000s Argentina and Venezuela and beyond. But what happens next? In each case the trend leads first to price controls on producers and distributors, which ultimately fail. Then comes government rationing and the complete takeover of necessities including the food supply.
Think it can’t happen in the US? It already has. In 1971 Richard Nixon issued Executive Order 11615, (under the Economic Stabilization Act which was established in 1970); the order demanded a 90 day freeze on wages and prices in order to counter inflation. It was an exceedingly rare action outside of a world war and conveniently took place during the election cycle. Keep in mind, the real inflationary crisis had not happened yet, but the price controls gave markets a short term boost and gave Nixon an election win.
In 1973, controls returned during the Arab Oil Embargo. They failed and resulted in long term gas price inflation. Gerald Ford then called for American businesses to institute price controls under his “Whip Inflation Now” campaign; it was the subject of ridicule and was even made fun of by a young Joe Biden (who now falsely claims to have solved his own inflation problem with his useless Inflation Reduction Act).
Finally, Jimmy Carter introduced price and wage “guidelines” (controls) which rewarded businesses that raised prices below a set percentage. Any businesses that raised prices above the percentage and made a pre-tax profit above the previous two years would be penalized. In no case could a firm increase its dollar profit by more than 6.5 percent unless the excess was attributable to increased unit sales volume. This plan, of course, also failed to stop inflation.
Ultimately, the Fed had to jack rates up to around 20% in 1980-1981 to stop exponential inflation, which led to considerable business losses and high unemployment.
The problem is simple, price controls lead to lost profit incentive which leads to less production. Less production leads to less supply and less supply leads to rising prices. This is on top of the root cancer that is fiat money creation. Politicians will rarely if ever address the actual cause of an inflationary crisis: The government and the central banks. Instead, they try to blame free markets, “greedy” businesses and profit taking in times of distress.
Sadly, the pattern is repeating again today as it is now becoming clear to the public that central bank interest rate hikes are not having a significant effect and the public is still paying between 25%-50% more on the majority of goods they purchase compared to three years ago. As inflation grinds forward, multiple leftist governments are now openly discussing price controls.
Recently, Canada’s Justin Trudeau ordered top grocery chains in the country to cut prices while admonishing them for making higher profits, insinuating that they are the cause of inflation. In Canada, profit margins among grocers are actually flat due to rising costs. If one looks only at raw profits without taking into account inflation in producer costs as well as transportation, distribution and wages, then it might look like these companies are pulling in the cash. There is zero evidence to support this claim.
What Trudeau is doing is pretending to be stupid while engaging in a very clever strategy of scapegoating. It’s the government and the central bankers that are the foundational cause of inflation, but by blaming individual business sectors he sets the stage for government enforced price controls. When these fail and create a crisis in supply he will then introduce rationing, and once the government has conditioned the public to accept rationing the elites then control the entire population’s access to food and necessities.
Some people may say “Well that’s Canada, what about the US?” The same agenda is in progress in America, but is being pursued at a city and state level. For example, the socialist Mayor of Chicago, Brandon Johnson, just announced a plan for the city (using state and federal tax funds) to build government run grocery stores in “food deserts.” These are places where a combination of inflation and shoplifting has forced grocers to leave certain areas of the city.
The Chicago program would include price control measures and there’s ample opportunity for these institutions to use rationing in the future. Similar projects are also being considered in other cities across the country. In other words, leftist cities are scaring away businesses while planning to replace “essential services” with government run operations.
I wrote about the inevitability of government rationing after price controls last year in my article ‘The Stagflation Trap Will Lead To Universal Basic Income And Food Rationing.’ Rationing generally comes when price controls fail. It’s been a long time since the US has faced these kinds of conditions but we are likely to in the near future. This time around, I believe that if the establishment is given rationing power they will never let go again.
Rationing could also be used to lure the public into accepting Universal Basic Income (UBI) and Central Bank Digital Currencies (CBDCs). Government run food centers can easily restrict purchases of goods to a limited list of items, and also demand payment using specific methods (like digital currencies). In a short period of time, cash would be removed because retailers, pressured by government, will refuse to accept it.
It’s hard to say what the future will bring in terms of politics, given that the next presidential campaign is looking like a complete circus. Historically speaking, though, both Democrat and Republican presidents have tried price controls in the past. Public pressure must be applied (at the state level at minimum) to stop this from happening. As convenient as it might seem to blame producers and distributors, the real threat is coming from governments and banks. We cannot let the people who caused the crisis also benefit from it by giving them even more power.
* * *
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Did The Israeli-Palestinian Conflict Just Sink Ukraine As A Warhawk Darling?
Did The Israeli-Palestinian Conflict Just Sink Ukraine As A Warhawk Darling?
By most accounts from the front and according to the strategic…
By most accounts from the front and according to the strategic information currently on hand, the war in Ukraine is all but over and Russia has essentially won. Russia continues to occupy at least 20% of Ukrainian lands and has solidified its lines. As expected, Ukraine's much hyped counteroffensive was hot air and it is clear that their ability to field combat ready soldiers has been greatly diminished. Without an offensive capable military, Ukraine has nothing left except whatever mid range arms NATO gives them to harass Russian forces to minimal effect. All Putin has to do is bide his time until the money and weapons run out.
But even worse still for Zelensky and friends is the fact that the propaganda machine driving western sentiment and monetary support is quickly dying. Admissions of “war fatigue” among Americans and Europeans are beginning to surface and majority support for further funding has ended. Without a clear outline of what victory in Ukraine actually looks like, and with many in the west facing stagflationary crisis, enthusiasm has floundered. It should also be noted that the war in Ukraine never garnered any meaningful American support for the deployment of troops, and for good reason.
No one wants to jump headlong into WWIII.
With Ukraine becoming the ugly girl at the school dance, the attention of establishment warhawks (Neo-cons and Democrats) has swiftly shifted over to Israel, much to the dismay of Zelensky. The Ukrainian leader warned in an interview with a France 2 broadcaster:
"There is a risk that international attention will turn away from Ukraine, and that will have consequences...”
Zelensky has desperately tried to associate Ukraine with Israel as if the two nations are engaged in the same fight. He even went as far as to insinuate that Vladimir Putin was the mastermind behind the destabilization of the Middle East and insisted that NATO funding packages for Israel should be tied to funding packages for Ukraine.
Let's not forget how disjointed and strange a Ukraine/Israel association would be, given Ukraine's Nazi leanings. This is the same government that actually invited a real life Nazi SS officer to be applauded by Canada's parliament as a war hero just last month. The disconnect may be the reason why the Israelis rejected military aid to Ukraine for so long.
The Biden Administration is running with the multi-war package idea, asking Congress to approve additional funding for Ukraine, but attaching it to a plan which would include funding for Israel, Taiwan, and US border security. In other words, if conservatives want the border to be protected, they must agree to spend hundreds of billions of dollars on two ongoing war fronts as well as a third potential front with China.
It is highly unlikely according to officials on both sides of the aisle that this will succeed. But, when the establishment piles on a host of different projects into a single funding plan, it is usually because this allows them to enter into false negotiations. That is to say, there are certain projects they actually want and others they don't care about. They cut the funding programs they never intended to keep so that congress can feel like they gained something in the bargain. The question is, which war do they really want to fund, knowing they will not get congressional approval for both?
Israel is better placed to become the new warhawk darling, given the country garners more sentiment from US and European conservatives who are increasingly wary of Ukraine. The far-left support of Ukraine and their rabid anti-Russia propaganda has left many conservatives suspicious of the entire affair. Leftists are revealing a similar zealotry in favor of Palestinian intifada, which might convince people on the right to support Israel by default.
Right or wrong, it's easier to find Republicans that favor Israel simply on religious grounds than it is to find those that care about Ukraine, and this seems to be the key to the future of the establishment agenda – A conservative majority must be onboard for any new war endeavor to last. Ukraine's failures have proven that.
There may be an overestimation, however, in terms of how many conservatives are open to funding yet another foreign quagmire. Fears of Islamic extremism are justified, but not necessarily enough to compel Americans to ignore their own mounting problems at home. Selling them on a plan to commit US funds and even military forces to Israel might be more difficult than the establishment thinks.
Equifax fined more than £11m by the FCA
This action follows incidents going back to 2017, when, according to the FCA, the company’s parent, Equifax Inc. (EFX), was subject to one of the largest…
This action follows incidents going back to 2017, when, according to the FCA, the company’s parent, Equifax Inc. (EFX), was subject to one of the largest cybersecurity breaches in history. The findings showed that hackers accessed the personal data of approximately 13.8 million people in the UK during this breach.
Information such as names, dates of birth, phone numbers, login details, and partial credit card details were among the data accessed. The FCA maintains Equifax could have prevented this cyber attack if it treated its relationship with the US-based parent company as outsourcing.
Equifax did not discover the breach in UK consumer data safety until 6 weeks after Equifax Inc. became aware of the issue. The FCA said the company, which received notification only minutes before the parent company announced the incident, could not cope with the influx of queries and complaints. The regulator’s chief data, information and intelligence officer, Jessica Rusu, added:databreach
Cyber security and data protection are of growing importance to the security and stability of financial services. Firms not only have a technical responsibility to ensure resiliency, but also an ethical responsibility in the processing of consumer information. The Consumer Duty makes it clear that firms must raise their standards.
Are Cold War Treaties Beginning To Crumble?
Are Cold War Treaties Beginning To Crumble?
Authored by RFE/RL Staff via OilPrice.com,
The CTBT, signed in 1996, aimed to reduce the threat…
The CTBT, signed in 1996, aimed to reduce the threat of nuclear war and the spread of radioactive material.
Despite the US not ratifying it, most signatories, including Russia and the US, have adhered to its terms.
Tensions and increased weapon development hint at Russia's potential decision to withdraw, further eroding international arms control frameworks.
The Anti-Ballistic Missile Treaty. The Intermediate-Range Nuclear Forces Treaty. The Treaty on Open Skies. New START.
For years, the pillars of international arms control have been crumbling: agreements signed by Washington, Moscow, and others during and after the Cold War aimed at reducing the threat of nuclear war, costly arms races, or overall military tensions.
The Comprehensive Nuclear-Test-Ban Treaty may be the next to go.
Signed in 1996, the treaty was a major step to preventing the spread of nuclear weapons technology and keeping a lid on the arsenals of the world's biggest nuclear powers. Along with earlier treaties, the agreement, known as the CTBT, also aimed to reduce the spread of radioactive material that was blasted into the atmosphere and the oceans during the frenzied days of the Cold War.
Here's the problem: The treaty never went into effect because a number of countries, including the United States, never ratified it.
Still, most signatories -- including Russia and the United States, whose arsenals are by far the biggest in the world -- have abided by the ban.
Now, however, Russia is making noises about backing out and "de-ratifying" the treaty.
Here's what you need to know about the CTBT and its potential unraveling:
How'd It Come About?
The United States and the Soviet Union, as well as Britain, conducted hundreds of nuclear tests between 1945, when the world's first atomic bomb was detonated in the U.S. state of New Mexico and 1961, when Soviet officials detonated the world's most powerful weapon, the Tsar Bomba. France joined the nuclear testing club in 1960; China, in 1964.
The fallout, literal and figurative, from the testing led to a partial ban on atmospheric, oceanic, and space tests in 1963; underground tests continued to be allowed.
In 1974, India tested its first nuclear device, further expanding the nuclear club. A 1980 test by China became the last atmospheric test by any country anywhere.
Moscow's final test -- underground -- occurred in October 1990 on the remote Arctic archipelago called Novaya Zemlya. Britain, the United States, France, and China all conducted their final tests in the years that followed, prior to 1996, mainly underground.
What's It Do?
The CTBT basically bans all tests that result in a fission chain reaction, essentially a nuclear explosion.
Signed in 1996, the treaty was sent out to 187 signatory countries for ratification, but it has never come into effect because of a group of holdout countries.
Russia signed and ratified the treaty in 2000. The United States signed, but the U.S. Senate refused to ratify, citing concerns about verifying other countries' compliance with the ban. Despite nonratification, the United States has complied with the moratorium. China signed but didn't ratify.
Neither India, nor Pakistan, nor North Korea -- all of which have conducted open nuclear tests since 1996 -- is a member.
The treaty does allow for states to conduct subcritical, or zero-yield tests. Those involve explosives and nuclear materials but do not result in a fission reaction, the reaction that gives atomic weapons their terrible power. Both the United States and Russia are known to have conducted such tests.
Despite not ratifying the treaty, the United States does provide $33 million annually in funding for a system set up to monitor possible nuclear tests, as well as the Vienna-based organization charged with overseeing it.
What's The Problem Now?
As relations between Washington and Moscow have worsened, major treaties between them have also frayed or collapsed entirely.
Washington unilaterally pulled out of the Anti-Ballistic Missile (ABM) treaty in 2002, angering Moscow. Washington for years accused Moscow of trying to cheat on the Intermediate-Range Nuclear Forces (INF) treaty until it effectively collapsed in 2019. In 2021, Russia withdrew from the Treaty on Open Skies, which allows countries to conduct surveillance flights over one another's territories in order to observe weapons and military sites.
Both countries have adhered to New START, which capped the number of warheads and "delivery vehicles" each could possess.
New START's extension, by both Russia and the United States in early 2021, was a lone bright spot in the continuing erosion of arms control.
But the agreement expires in 2026 and cannot be extended. Unless a successor treaty can be agreed upon and ratified, there will be no limits on the countries' arsenals after that year. Tensions over Ukraine have kept the two sides from even sending inspectors to one another's countries, as stipulated for in New START.
Both countries have also moved to modernize and upgrade their arsenals. But in a sign of deepening distrust, the U.S. State Department suggested in a 2022 report that Russia had not adhered to the standard of "zero-yield" testing.
So Russia Wants To Pull Out Then?
For more than a decade, the Kremlin has increased spending not only on conventional weapons and force strength but also on modernizing and expanding its strategic arsenal.
In 2018, Putin boasted that Russia was developing new weapons like an unmanned, nuclear-capable, underwater torpedo, and a hypersonic "glide" missile. He also bragged of the development of a nuclear-powered cruise missile -- the Burevestnik, which has had major problems.
In recent years, researchers have been monitoring a surge of activity on the Novaya Zemlya archipelago: satellite imagery showing an uptick of construction at one or possibly two settlements that researchers had identified as sites for a possible test of a nuclear device or the trouble-plagued Burevestnik.
A top Russian nuclear researcher called for Russia to resume testing, and on October 5 Putin announced a successful test of the Burevestnik, though he provided no details.
Putin also opened to the door to Russia resuming nuclear testing, saying it could "de-ratify" the CTBT. A week later, on October 12, the speaker of the State Duma, the lower house of parliament, introduced legislation to withdraw ratification.
The prospect of Russia withdrawing prompted alarm bells, including from the CTBTO, the Vienna-based organization charged with monitoring compliance.
What Happens Next?
Even if "de-ratification" ends up happening, as is likely in the Kremlin-controlled parliament, that does not necessarily mean Russia will start blowing up uranium or plutonium again, on Novaya Zemlya or otherwise.
"I think that withdrawal of ratification is a strictly political step -- leveling status with the U.S.," said Nikolai Sokov, a former Russian Foreign Ministry official and arms control expert.
"I think the main motive is the perception that 'Russia tried too hard in the past and made too many concessions' and now 'We're not interested in arms control more than other countries.'"
Leonid Slutsky, head of the Duma's foreign affairs committee, emphasized that Russia would not be withdrawing its signature under the treaty or "withdrawing from the voluntary moratorium on nuclear testing."
"We are withdrawing the ratification, thus restoring legislative parity with the U.S. Congress," he told the newspaper Kommersant.
"It was especially important for [the CTBTO] to hear that revoking ratification does not mean that Russia intends to resume nuclear tests and implies that Russia will continue to fully participate in the work being done for the Treaty's entry into force," Mikhail Ulyanov, Russia's ambassador in Vienna, told the state news agency RIA Novosti.
Still, it's not a good sign, experts say -- all the more so, given the demise of other treaties.
Russia or any major nuclear power backing out of the CTBT "would be a huge blow to the [global nonproliferation] regime and would undoubtedly lead to a cascade of nuke testing by other states," Lynn Rusten, a former U.S. arms control negotiator, told RFE/RL.
There could also be other nonproliferation or arms control treaties that are at risk, since, according to Sokov, the Kremlin has initiated a review of all similar agreements.
One strong candidate for "de-ratification" or a downgrading of Russia's involvement, he said, is the 1992 Chemical Weapons Convention, which obligates members to destroy their stocks of chemical weapons.
Russia's compliance with that treaty has been in question since the near-fatal poisonings of former Russian intelligence agent Sergei Skripal in England in 2018 and opposition activist Aleksei Navalny in Siberia in 2020.
In both cases, Western scientists identified a powerful Soviet-era nerve agent and suggested that Russia had maintained a secret, undeclared chemical weapons program.
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