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The Great Mutation – Behold The Dawning Of The Age Of Aquarius

The Great Mutation – Behold The Dawning Of The Age Of Aquarius

Authored by Pepe Escobar via The Epoch Times,

We are all in the gutter, but some of us are looking at the stars. – Oscar Wilde

Today all radio stations on Planet Earth should…

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The Great Mutation - Behold The Dawning Of The Age Of Aquarius

Authored by Pepe Escobar via The Epoch Times,

We are all in the gutter, but some of us are looking at the stars. – Oscar Wilde

Today all radio stations on Planet Earth should be playing this song. What the aptly named Fifth Dimension immortalized in their spring of 1969 psychedelic soul classic is now literally true: This is the dawning of the Age of Aquarius – the Grand Conjunction of Jupiter and Saturn on December 21st at ????° in Aquarius.

Aquarius starts just as some dodgy, self-important elites gear up to impose a Great Reset on most of the planet – following a very specific, reductionist and exclusionist political agenda. Yet the real deal is not the Reset; it’s the Mutation.

So we’re all into something much bigger than any neo-Orwellian scenario. To shed much needed light into what seems our current, interminable darkness, I posed selected questions to Vanessa Guazzelli, a respected astrologer, writer and speaker in astrology conferences worldwide, as well as a practicing psychoanalyst and psychologist.

Let astrology fertilize geopolitics. Let the sunshine in.

The astro-cartographic map of the Great Mutation

All that is solid mutates into air

PE: Arguably not many people around the world are aware that a Jupiter-Saturn conjunction this December 21st seems to represent the ultimate game-changer – defined by serious astrology scholars as the Great Mutation.

Could you please elaborate on what this Mutation really means, astrologically, as it seems to take place every 200 years? And bringing it back to everyday life and politics, are we permitted to infer geopolitical parallels from what the stars are telling us?

VG: By Great Mutation we refer to when the Jupiter-Saturn conjunctions change elements, which happens every 200 years as you mentioned. Jupiter and Saturn are in conjunction, astrologically, by ecliptic longitude, every 20 years, not that long a period. However, they keep on intersecting in signs of the same element for 200 years, with the possibility of another 40 years of transition, indicating a greater cycle.

Jupiter and Saturn are what we call social planets and are to be considered in regards to politics and geopolitics. When the Jupiter-Saturn conjunction starts to effectively happen in the next element, it marks the Great Mutation, denoting important socioeconomic and cultural changes. That’s what is happening now.

Vanessa Guazzelli.

We come from a two-century period of conjunctions in Earth signs. The emphasis has been on matter and the more tangible dimension of life – material boys and girls in a material world. As we now move on into the element of air, as they conjoin at 0º of Aquarius, a call for sublimation takes place.

All that is solid mutates into air. Things and procedures can be less material and more digital and, to some extent, virtual. But not only that. Shared ideas and ideals gain yet more importance. More then what we materially have, with whom and what for is what matters most. Collaboration and cooperation are, now more than ever, the winds which make the world go around.

This is indeed a highly significant astrological aspect and configuration happening on December 21, at 18h20 UTC. In parts of Asia and Oceania, it will be already past midnight, on December 22.

This is not only the Great Mutation but a Great Conjunction, when the two farthest visible planets conjoin not merely by longitude but also by latitude (ecliptic coordinates), by both right ascension and declination (equatorial coordinates). That means they are not just aligned in the same direction but really, really close to each other in the sky as seen from Earth, almost as if they were one and the same star.

Last time the two heavenly bodies have been that close was in 1623, but that was not a Great Mutation, just a regular conjunction in terms of ecliptic longitude. Astrologically, the fact that all these enhancements happen together at this time intensifies the significance of what this conjunction now indicates, how powerful a mutation it marks.

In everyday life, it also speaks of an increase in technological development, digitalization of things and procedures, including crypto-currencies and digital money as a sort of “sublimed” money, from matter to a lighter, less material “substance” which can quickly circulate through air.

At a more personal level, we tend to lose interest in social contexts which are not in tune with our ideas and ideals, and we’re pulled towards groups, associations and projects in the same wavelength as we are. It is not a time to merely rely on institutions to take care of people, but a time to discern for oneself and then connect with others with shared interests, ideals, purposes.

The air element is where we open space and make room for the Other, be it in respect for differences or to collaborate and cooperate towards shared interests and projects. Co-op’s, where every participant gets a fair, proportional share, in a joint enterprise, is surely a way to go.

Aquarius is opposite to the centralizing sign of Leo. Geopolitically, that is to say, it is not the time for a hegemonic single star to rule the world, but a time of many stars illuminating the entire sky. It is not a time for a single empire. There can be empires, if in plural. The strength of powerful nations now lies, more than ever, in the quality of their partnerships and alliances in mutual respect, as equals.

Any power which loses sight of that crucial key will see it, in the short or long run, backfire. Some are more powerful than others and some will be more prominent than others. Nonetheless, they are not alone. It is time for a multipolar world – now that is the Mandate of Heaven.

Regarding the Great Mutation’s astro-cartographic map, which shows the lines of planetary positions on the face of the Earth, it is interesting to notice that the IC lines of Jupiter and Saturn go through Beijing, indicating the relevance of China in the foundation of this 200-year cycle, for the IC is the root of an astrological chart.

On the other side of the globe, we see the MC lines of the two planets going through South America (Venezuela, Brazilian Amazon, Bolivia, Argentina), showing the value of the continent’s resources in this new cycle.

What the Davos crew is up to

PE: Our current, turbulent juncture seems to be pointing towards increased bio-security and what some serious systemic analysis defines as techno-feudalism. All this implies hyper-concentration of power – and not only power exercised by the geopolitical hegemon, the United States. Should we now expect a serious mutation of the world-system – as studied by Immanuel Wallerstein, in the sense of serious changes to our capitalist system?

Immanuel Wallerstein. Source: Wikimedia Commons

VG: Yes, we should. We are at the very turning point of the world-system. Along with the Great Mutation, another immensely significant aspect in the 2020s is the Saturn-Neptune conjunction, in February 2026, at 0º of Aries. This is precisely the first degree of the whole Zodiac, also called the Vernal Point – crucial in astrological interpretation.

Saturn and Neptune conjoin every 36 years, which is a relatively short historical cycle. However, as with the Great Mutation, the way it occurs and where in occurs in the Zodiac can lead us to broader historical perspectives and indicate more expressive historical moments.

If we go back up to 7,000 years ago, this conjunction has occurred at the Vernal Point only in 4361 B.C. and 1742 B.C. If we look up three thousand years ahead, the closest it gets to the Vernal Point is 3º of Aries in 3172. Quite rare. So this conjunction at the first degree of the Zodiac, 0º of Aries – the very beginning – is not that small a deal.

Neptune impregnates and conceives; Saturn refers to the concrete structure of reality; and 0º of Aries means new, springing up. Saturn-Neptune on 0º Aries means a new conception of reality.

Aspects between Saturn and Neptune, by historical observation, are associated with socialism and communism – these movements on Earth coincide with the transiting contacts between these two planets in the sky. It has already been proven in mundane astrology historically. Moreover, this does not just tell us about the past, for it is in fact just about to begin – upgrading and advancing, reconfiguring itself in yet new forms of socialism.

According to Wallerstein, during the structural crisis which characterizes the final period of a world-system, a bifurcation of the system can tilt to one of either directions, or to multiple systems. Before passing away last year, he did consider us to be right in the middle of the structural crisis of capitalism, which lasts 60 to 80 years.

I’d say at this moment we are past the mid-point. It could, initially, go towards multiple systems in two branches: on the one hand, the freshness of the Eastern winds inspiring socialism and multipolarity through the Belt and Road Initiative and the integration of Eurasia and its partners; on the other hand, the whirlwind of the collapsing empire and its Western allies as a terminator cyborg operated by the perverse 0.0001% who are so lifeless they cannot conceive other people’s right to exist.

When I first heard about it in June 2020, it astonished me how they set the “Great Reset” for January 2021, so close to the Great Mutation at the end of December 2020. I doubt this is a mere coincidence or “synchronicity.” J P Morgan is known to have affirmed that millionaires don’t need astrologers, but billionaires do.

Possibly aware of this great transition, the Davos crew seem to be actually trying to reset the system they already rule with their own settings and revive the dying system as a cyborg from hell.

‘Wall Street Bubbles – always the same,’ 1901 cartoon by Keppler, depicts J.P. Morgan as a bull blowing soap bubbles for eager investors. Source: Wikimedia Commons

The nefarious potential of the Aquarian emphasis is the control of society through technology, be it techno-feudalism or, gods forbid, techno-slavery. On the brighter side of the Force, Aquarius is about a social project to sustain life and meet the needs of the people. Both dimensions or systems might co-exist on Earth for a while.

Western powers – not to mention the Masters of the Universe, as you say, who pull their strings – seem to have a long way to go before reaching a state of real and respectful cooperation. Perhaps more ancient civilizations found in the East have a deeper, more consistent root from which to draw the wisdom and maturity necessary in such challenging times for humanity.

Often remembered for the food and goods traded along the route, the Silk Roads involved in the past and involve nowadays the exchange of ideas. It is interesting to observe the strong Aquarian edge activated in China’s astrological progressions when the Belt and Road Initiative was first proposed by Xi Jinping in Astana, in 2013, and how it connected to the degree of the Great Mutation (progressed Venus and Jupiter conjunct AC at 1º Aquarius).

When some years before that Vladimir Putin gave his historical speech in Munich, proposing the Eurasian Integration, in February 2007, there was a Saturn-Neptune aspect – an opposition. When at the 70th UN Assembly, both Putin and Xi delivered long, strong and synchronized speeches affirming the multipolarity of the world, in 2015, there was also a Saturn-Neptune aspect – a square.

The next Saturn-Neptune aspect will be the conjunction, in February 2026, inaugurating a brand new cycle and we can expect it to be related to these previous movements, keeping in mind the cycle points towards multipolarity and new forms of socialism.

The Black Moon spell

PE: Could Covid-19, on a certain level, be interpreted as the – unpleasant – preamble towards a Great Mutation? After all the new social (un)reality represents a system upside down: near-total economic devastation, especially of small businesses; canceling of constitutional rights; governments practically ruling by decree, with no popular consultation; global corporations censoring any manner of informed dissent; whole societies practically under house arrest; most of the planet reduced to a sort of totalitarian theme park.

VG: Oh, Covid-19 – we could have a whole conversation just on the implications of it at so many dimensions, and how it can be, to some extent, astrologically tracked. It definitely can be interpreted as the unpleasant preamble, perhaps aiming to the Great Reset, one could ponder.

An unprecedented worldwide collective experience – and experiment. Nevertheless, serving to shake it all up, transforming our very perception of time, preparing for the conception of a new time. To all those paying attention, a call to be yet more alive, more vivid, against all odds.

A nearly black moon. Image: Getty/AFP

The very dichotomy which has been so emphasized between “either caring for life or caring for the economy” in and of itself shows how absurd a world it already was. How many people so easily got caught into separating one thing from the other, as if it was a means to resist the system and finally say no to the demands of capital accumulation. To eventually see, indeed, small businesses devastated, poverty increasing drastically, whilst billionaires concentrate wealth to yet more bizarre levels.

Something fundamental to consider is how it has affected the human body. The pandemic was declared with Black Moon (the lunar apogee) in Aries and that indicates the importance of being sharply present and responsive as Michael Jackson danced, Bruce Lee moved and Maria Zakharova responds.

In October, Black Moon, this astrological point representing the visceral and instinctive dimension of existence, moved into Taurus, highlighting the importance of being aware of how the life force in us is conditioned or channeled, shaping how we perceive our own existence. For instance, how the confinement of the body might – or might not – confine our psyche.

What are the psychological effects of the lack of touch or the physical experience of constantly having our mouths covered? How those situations affect our psyche is not irrelevant. Both René Descartes and Wilhelm Reich had Black Moon in Taurus. How are mind and body related? Are they a cartesian dichotomy or are they intertwined as bio-energetic unity moved by libido?

This is an important underlying issue in our collective until July 2021.

The fate of the American empire

PE: Astrology in History is full of fascinating stories about celestial interpretations opening the way to a crucial political or military move. For instance, right before the Mongol conquest of Baghdad in 1258, the Great Khan, Hulegu, asked the court astrologer about the prospects ahead. The astrologer, Husam al-Din, said that if he followed his generals and invaded Baghdad, the consequences would be ominous.

But then Hulegu turned to a Shi’a astronomer, Tusi, a polymath. Tusi said the invasion would be a major success. That’s what happened – and Tusi was admitted into Hulegu’s inner circle. So the Mongols – who built the largest empire in history – were big fans of “celestial insurance.” Could “celestial insurance” in our times end up predicting the fate of another empire – the US?

VG: That’s true, there are so many fascinating stories. The end of the Byzantine Empire and conquest of Constantinople by Sultan Mehmet II of the Ottoman Empire was also marked by an astrological prediction of the Ottoman victory related to an eclipse.

The US Pluto return happens in 2022. That’s massive. It’s a cycle of approximately 247 years. Pluto has a sense of fate to it. The return of the lord of the underworld also speaks of the return of that which was repressed, hidden or rejected. It will have three exact hits throughout 2022, and the final and definitive of the next Pluto cycle has the planet of death and regeneration facing Black Moon Lilith in Cancer, in opposition. Karma is a bitch and hits home.

It is also a cycle related to power and power status. It won’t all be bad and some victorious moments will be there, but there is a change in the country’s position in the balance of powers in the world which is not so easy to digest. The power struggle will be intense, both externally and internally, with considerable risks of destructive manifestations. The best way to go through such a moment would be to purge – although it’s hard to believe “the swamp” can be so easily drained.

It is a call for a deep transformation, when all things under the rug and corpses out of the basement are to be dealt with. For the nation’s people it is a call for maturity (Saturn conjoins Moon), compassion and a more humanly receptive disposition (Neptune opposition), letting illusions dissolve and realizing the empire is losing its hegemony and status, but the nation will continue. What nation should it be for its people – as opposed to against other peoples?

This doesn’t mean the American Empire will fall by 2022, but it is collapsing and will undergo dramatic transformations in the coming decade.

A Dystopian Renaissance

PE: Amid so much gloom, looks like you are introducing a very hopeful concept: “Dystopian Renaissance”. That’s the exact opposite of what is being largely interpreted as our inevitable neo-Orwellian future. How would you characterize this Dystopian Renaissance – in terms of individual, collective, political and cultural struggle?

VG: The concept emerges precisely to elucidate the extreme complexity of our times. Well, the renaissance part seems very hopeful, doesn’t it? But, there’s the dystopian part to it too. It is not a utopian renaissance, as we well know. Perhaps in 200 years, when we reach the Great Mutation into water, the same element as the magnificent Italian Renaissance, humanity might be able to feel and better comprehend deeper dimensions of life. Why not aim for Utopia next? But whatsoever may be possible by then passes through right now.

It is now that, along with this special Great Mutation, a few significant astrological aspects point to a real change of the world-system. It takes this crucial moment in time and this period of air to elevate perspectives, to share ideas and ideals and understand how enriching it can be to build “a community with a shared future for mankind,” as Xi Jinping puts it.

A highly enhanced turning point, opening new horizons, offering the possibility of enriching exchanges in a multipolar world, and with a call for socialism like we haven’t known before.

Catalan Atlas, detail showing family Of Marco Polo 1254-1324 traveling by camel caravan, 1375, drawing by Spanish School. Source: Wikimedia

Let’s not forget this moment in time also resonates with the 13th century, when Venetian Marco Polo, traveling through the Silk Roads to Asia, brought back to Europe the freshness of the Eastern winds, with news from Kublai Khan’s Yuan Dynasty, including the “sublimation” of money into a lighter form, from coin to paper.

At that time, there was a stellium (a concentration of planets) in Capricorn just as we had in 2020, with the following Jupiter-Saturn conjunction in Aquarius (although not as a Great Mutation), and Pluto’s ingress into Aquarius as we will also have in 2023/2024. It is an absurdly dystopian context, but a turning point for a new conception of reality and the possibility for surprising new horizons.

A new world system is in the air

PE: Giorgio Agamben has referred to that famous Foucault intuition in Les Mots et les Choses, when Foucault writes that humankind may disappear like a figure drawn in the sand being erased by waves hitting the shore. The striking image may apply to our present, mutating condition, as we are about to enter a trans-human and even post-human era, dominated by artificial intelligence (AI) and genetic engineering.

Agamben argues that Covid-19, global warming and, more radically, direct digital access to our psychic life – all these elements are destroying humanity. Would the Great Mutation install a different paradigm – and lead us away from post-humanity?

FG: The rapid development in technology will be something seriously complex to deal with. It will be amazing in many ways, but not all pretty, presenting undeniable challenges, some of which are already here and about to intensify.

What are the effects of technology and artificial intelligence in both our organic and our subjective bodies? Mind control with bidirectional devices, both collecting information and inducing commands is a work in progress.

Perverse levels of technological control of society are a serious concern as Pluto, aka Hades, lord of the underworld, will also transit in technological and futuristic Aquarius from 2023/24 on, up until 2043/44 – times of intense social transformation, when technological advancements will blow our minds and the very conception of science will change considerably, but with serious risks of trans-human and post-human madness.

We cannot disregard our organicity. We cannot disregard our subjectivity, either. Pluto is about transformation or domination – in other words, quoting a recent article of yours: “Here’s our future: hackers or slaves.”

We’ve got to go hacking not only in the objective sense – which surely becomes more and more a desirable skill – but in the subjective sense as well, finding lines of flight and keeping Eros alive, the life force in us vivid.

Considering we’re already here, living through dystopian times, we might as well make the best out of this undeniably epic adventure. Instead of succumbing to fear and isolation, overtaken by the doom and gloom, let’s not forget Wallerstein’s observation on destiny versus free will – a very cool take, by the way, which my experience as an astrologer observing collective and individual cycles very much confirms: Both exist.

During the stable period of a world-system, its normal life when its structure is functioning well, even if there are some fluctuations in it, it is very hard to change things in the system, it tends to stabilization. It’s destiny: you gotta put a whole lot of effort to get perhaps very little change trying to escape destiny.

But when the world-system has reached its final phase, it can no longer be rescued and there is a lot of instability. The crisis is not going away and the only possibility is change, in one way or another – it’s free will time. In the structural crisis, Wallerstein says we have more free will, our actions have a stronger impact and every little move counts to decide in which direction the change of the system will go.

In our personal lives at this turning point in time, as Foucault questions, we may also ask ourselves: As humans, are we an obstacle or obstruction? Are we a way of imprisoning life – or are we an opening, a line of flight?

In regard to Foucault’s words you and Agamben bring to light, please allow me to refer to the previous paragraph, just before that final one in Les Mots et les Choses, when he states that by “taking a relatively short chronological sample within a restricted geographical area – European culture since the sixteenth century – one can be certain that man is a recent invention within it.”

The “man” he is referring to as the effect of a change in the fundamental arrangements of knowledge a couple of centuries ago, with the newer arrangements perhaps about to end, is within European references. That is neither the beginning nor the end of man, nor its only interesting expression. With huge, deep appreciation for so much of European culture, perhaps one of the things coming to a necessary end is Eurocentrism.

Nonetheless, of course, it is deeply worrying how faces are being at the same time digitally traced by machines and hidden from other humans by masks – especially the effects of that in children. The current transition is not without epistemological effects and effects on how we conceive man, humans. But it’s not all said and done.

To counter the objectification of humans, it may be timely to draw from the Tupis’ conception of human beings: tu + pi , seated sound. A human being is a sound which has taken a seat, has taken place and vibrates. We gotta keep our bodies, faces and words vibrant. For the native South American Tupis, each human being is a new music, a new word vibrating and co-creating life with others and nature.

Albert Eckhout painting of a Tupi man. Source: Wikipedia

It seems that the deeper roots of aboriginal-indigenous wisdom still need to be more fully acknowledged and reintegrated in the Americas before the reinvention of the world in the West can take place.

Now winds blow from the East and from Eurasia, inspiring new forms of co-existence. But the controllers of capital, wealth and worldly power won’t give it up without a fight – or a few wars and a heavy load of social control via technology, capturing bodies and minds. What will it be – Great Reset or Great Mutation?

Is there a way out? Yes. And it seems to go along the New Silk Roads and the Eurasia Integration – literally to some important extent, but symbolically as well. The West can gain a lot from opening up to the Eastern winds, the news and the ideas they bring, stories of a community of shared future for mankind. A new world-system is in the air.

*  *  *

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Tyler Durden Wed, 12/23/2020 - 21:00

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TikTok Ban Obscures Chinese Stock Gold Rush

No one wants to invest in China right now. The country’s stock market is teetering on the brink of collapse. And it is about to lose its biggest foothold…

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No one wants to invest in China right now.

The country’s stock market is teetering on the brink of collapse.

And it is about to lose its biggest foothold in America — TikTok.

Yet, beneath its crumbling economy, military weather balloons and blatant propaganda tools lie some epic opportunities…

…if you have the stomach and the knowledge.

Because as Jim Woods wrote in his newsletter last month:

“China has been so battered for so long, that there is a lot of deep value here for the ‘blood in the ‘’red’’ streets’ investors.”

And boy was he right.

However, this battle-tested veteran didn’t recommend buying individual Chinese stocks.

He was more interested in the exchange-traded funds (ETFs) like the CHIQ.

And here’s why…

Predictable Manipulation

China’s heavy-handed approach creates gaping economic inefficiencies.

When markets falter, President Xi calls on his “national team” to prop up prices.

$17 billion flowed into index-tracking funds in January as the Hang Sang fell over 13% while the CSI dropped over 7%.

Jim Woods saw this coming from a mile away.

In late February, he highlighted the Chinese ETF CHIQ in late February, which has rallied rather nicely since then.

This ETF focuses on the Chinese consumer, a recent passion project for the central government.

You see, around 2018, when President Xi decided to smother his own economy, notable shifts were already taking place.

The once burgeoning retail market had slowed markedly. Developers left cities abandoned, including weird copies of Paris (Tianducheng) and England.

Source: Shutterstock

So, Xi and co. shifted the focus to the consumer… which went terribly.

For starters, a lot of the consumer wealth was tied up in real estate.

Then you had a growing population of unemployed younger adults who didn’t have any money to spend.

Once the pandemic hit, everything collapsed.

That’s why it took China far longer to recover even a sliver of its former economy.

While it’s not the growth engine of the early 2000s, the old girl still has some life left in it.

As Jim pointed out, China’s consumer spending rebounded nicely in Q4 2023.

Source: National Bureau of Statistics of China

Combined with looser central bank policy, it was only a matter of time before Chinese stocks caught a lift.

The resurgence may be largely tied to China’s desire to travel. After all, its people have been cooped up longer than any other country.

But make no mistake, this doesn’t make China a long-term investment.

Beyond what most people understand about China’s politics, there’s a little-known fact about how they treat foreign investors.

Money in. Nothing out.

When we buy a stock, we’re taking partial ownership in that company. This entitles us to a portion of the profits (or assets).

That doesn’t happen with Chinese companies.

American depository receipts (ADRs) aren’t actual shares of a company. It’s a note that the intermediary ties to shares of the company they own overseas.

So, we can only own Chinese companies indirectly.

But there’s another key feature you probably weren’t aware of.

Many of the Chinese companies we, as Americans invest in, don’t pay dividends. In fact, a much smaller percentage of Chinese companies pay any dividends.

Alibaba is a perfect example.

Despite generating billions of dollars in cash every year, it doesn’t pay dividends.

What do its managers do with the money?

Other than squirreling away $80 billion on its balance sheets, they do share buybacks.

Plenty of investors will tell you that’s even better than dividends.

But you have no legal ownership rights in China. So, what is that ADR in reality?

We’d argue nothing but paper profits at best, and air at worst.

That’s why it’s flat-out dangerous to own shares of individual Chinese companies long-term.

Any one of them can be nationalized at any moment.

Chinese ETFs reduce that risk through diversification, similar to junk bond funds.

Short of an all-out ban, like between the United States and Russia, the majority of the ETF holdings should remain intact.

Opportunistic Investing

If China is so unstable, and capable of changing at a moment’s notice, how can investors uncover pockets of value?

As Jim showed with his ETF selection, you can have some sector or thematic idea so long as you have the data to support it.

China, like any large institution, isn’t going to change its broad economic policies overnight.

As long as you study the general movements of the government, you can steer clear of the catastrophic zones and towards the diamond caves.

Because when things look THIS bad, you know the opportunities are even juicier.

But rather than try to run this maze solo, take this opportunity to check out Jim Woods’ latest report on China.

In it, he details the broad economic themes driving the Chinese government, and how to exploit them for gain.

Click here to explore Jim Woods’ report.

The post TikTok Ban Obscures Chinese Stock Gold Rush appeared first on Stock Investor.

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The Great Escape… of UK Unemployment Reporting

https://bondvigilantes.com/wp-content/uploads/2024/03/1-the-great-escape-of-uk-unemployment-reporting-1024×576.pngThe Bank of England Monetary Policy Committee…

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https://bondvigilantes.com/wp-content/uploads/2024/03/1-the-great-escape-of-uk-unemployment-reporting-1024x576.png

The Bank of England Monetary Policy Committee potentially has a problem: it requires data to make its labour market forecasts and assessments, but the unemployment statistics have become increasingly unreliable. This is because the Labour Force Survey participation rate (on which the unemployment figures are based) has fallen below 50% since 2018 and has been as low as 15% recently[1]. What is the solution to this difficult measurement problem? An answer can be found in the classic war film, The Great Escape.

In 1943, the Escape Committee of Stalag Luft III was tasked with digging a tunnel to freedom. Unfortunately, they had a problem. They needed to measure the distance between one of the prisoner’s huts and the forest beyond the prison perimeter, but they had no reliable tools to measure this critical variable. Fortunately they had two mathematicians within the group who came up with a method to gauge the distance to the forest so that the tunnel would be long enough to ensure escape without detection. The idea was to eyeball the distance using a 20 foot tree for scale (the tree was the one ‘accurate’ measurement around which they could work with). They got individual prisoners to gauge the distance from the hut to the tree and then averaged all of the estimates. The critical distance measure was therefore the average of a large sample size of guesstimates. Fortunately, it more or less worked. Happily, modern economists have an equivalent to rely on in the area of unemployment. Their version of the Stalag Luft III tree strategy is something called the Beveridge Curve.

The Beveridge Curve is simply an observed relationship between an economy’s unemployment rate and its job vacancy rate at the same point in time. An excellent exposition can be found in the Bond Vigilantes archive[2]. When you plot the two variables against one another over a given period, the data points disclose a curve. This curve shows us that when unemployment increases, job vacancies decrease and vice versa. I have plotted the current curve below using the available data from the Office for National Statistics (ONS)[3]. The bottom left quadrant of the graph (the blue dots) relate to the Covid-19 era and the top left quadrant (the purple dots) represent the last 2 years’ worth of data. The green dots represent the remaining data from July 2004 to June 2023.


Source: Office for National Statistics, Dataset JP9Z & UNEM


Source: Office for National Statistics, Dataset JP9Z & UNEM

From these charts and new data from the ONS, we can observe that in the UK, the level of unemployment is increasing and that the job vacancy rate is decreasing. At face value, this suggests that current Bank of England monetary policy is working and that the inflation rate is slowing as the economy cools. One could argue that we are on track for a reasonably soft landing. Nothing new so far.

Things become more interesting when we consider the Beveridge Curve in conjunction with the most recent job vacancy data. We are told that there are now 814,000 job vacancies as of the 31st December 2023[4]. Ordinarily, we would use the curve and clearly be able to extrapolate from the Job Vacancy data what our Unemployment figure might be. However, we also know that the current unemployment data is unreliable, which makes this harder. Using our model inclusive of data oddities, we could extrapolate that with 814,000 job vacancies, we might expect an unemployment rate of around 3.5%. Yet, we know that our unemployment figures are unreliable so the question therefore is, how big an increase in unemployment are we likely to see given what we know about job vacancies?

In order to estimate the magnitude of the rise in unemployment, we need to look further afield. If we study the levels of economic inactivity in the UK, we can observe that they have remained stationary at 22%[5] for the last decade. We can also see that the population of the UK has risen over the same period by around 5.91%[6]. Further, we know that the Labour Force Survey (LFS) samples 40,000 households per quarter to obtain its data, but of late has had a response rate of only 15% (6,000 households). Therefore a critical question for policy makers is what is happening with the 85%, the non-responders?

Given the small sample size, it is entirely possible that the LFS suffered survey bias that is being erroneously weighted away. In other words, the LFS compensates for the paucity of response data by accessing other regional population statistics as a legitimate part of their methodology. The problems of non-responders are being addressed in upcoming LFS releases but for the time being, the data is not as clear as it ought to be. With such a small sample size, it seems possible – indeed probable –  that unemployment levels are being underreported. This would explain why the current unemployment rate of 3.8%[7] is dramatically lower than the historic average of 6.7% (1971-2023). We see further evidence for this in the forecasts of the UK’s unemployment rate on Bloomberg which have been consistently above the actual levels for the last few published data points. So whilst the published headline figures might be looking reasonable, the underlying story looks like it could be hiding something more sinister.

Through it all, the Beveridge Curve remains a reasonable template. Job vacancies are definitely falling, so we should expect to see unemployment rising. Like the Stalag Luft III measurement solution, the Beveridge Curve offers a constructive way out of our present statistical dilemma. That being said, analogies can only be taken so far. Unfortunately for the inmates of Stalag Luft III, the calculation didn’t quite work and the tunnel came up short. No one actually made a Great Escape. What does this mean for UK unemployment data? Time may tell.

[1] The UK’s ‘official’ labour data is becoming a nonsense (harvard.edu)

[2] https://bondvigilantes.com/blog/2013/11/a-shifting-beveridge-curve-does-the-us-have-a-long-term-structural-unemployment-problem/

[3] Unemployment – Office for National Statistics (ons.gov.uk)

[4] https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/timeseries/jp9z/unem

[5] https://www.ethnicity-facts-figures.service.gov.uk/work-pay-and-benefits/unemployment-and-economic-inactivity/economic-inactivity/latest/#:~:text=data%20shows%20that%3A-,22%25%20of%20working%20age%20people%20in%20England%2C%20Scotland%20and%20Wales,for%20a%20job)%20in%202022

[6] https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/populationestimates/bulletins/annualmidyearpopulationestimates/mid2021

[7] https://www.ons.gov.uk/employmentandlabourmarket/peoplenotinwork/unemployment

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Germany Is Running Out Of Money And Debt Levels Are Exploding, Finance Minister Warns

Germany Is Running Out Of Money And Debt Levels Are Exploding, Finance Minister Warns

By John Cody of Remix News

German Finance Minister…

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Germany Is Running Out Of Money And Debt Levels Are Exploding, Finance Minister Warns

By John Cody of Remix News

German Finance Minister Christian Lindner is warning his own government that state finances are quickly growing out of hand, and the government needs to change course and implement austerity measures. However, the dispute over spending is only expected to escalate, with budget shortfalls causing open clashes among the three-way left-liberal coalition running the country.

With negotiations kicking off for the 2025 budget, much is at stake. However, the picture has been complicated after the country’s top court ruled that the government could not shift €60 billion in money earmarked for the coronavirus crisis to other areas of the budget, with the court noting that the move was unconstitutional.

Since then, the government has been in crisis mode, and sought to cut the budget in a number of areas, including against the country’s farmers. Those cuts already sparked mass protests, showcasing how delicate the situation remains for the government.

German Finance Minister Christian Lindner attends the cabinet meeting of the German government at the chancellery in Berlin, Germany. (AP Photo/Markus Schreiber)

Lindner, whose party has taken a beating in the polls, is desperate to create some distance from his coalition partners and save his party from electoral disaster. The finance minster says the financial picture facing Germany is dire, and that the budget shortfall will only grow in the coming years if measures are not taken to rein in spending.

“In an unfavorable scenario, the increasing financing deficits lead to an increase in debt in relation to economic output to around 345 percent in the long term,” reads the Sustainability Report released by his office. “In a favorable scenario, the rate will rise to around 140 percent of gross domestic product by 2070.”

Under EU law, Germany has limited its debt levels to 60 percent of economic output, which requires dramatic savings. A huge factor is Germany’s rapidly aging population, with a debt explosion on the horizon as more and more citizens head into retirement while tax revenues shrink and the social welfare system grows — in part due to the country’s exploding immigrant population.

Lindner’s partners, the Greens and Social Democrats (SPD), are loath to cut spending further, as this will harm their electoral chances. In fact, Labor Minister Hubertus Heil is pushing for a new pension package that will add billions to the country’s debt, which remarkably, Lindner also supports.

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Tyler Durden Mon, 03/18/2024 - 05:00

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