Putin Says US Decision to Print Money is Behind Soaring Food Prices

If we may borrow from Tyler Durden, with some edits, we often report on the deranged, confused, false ramlbings of a senile, nasty, corrupt old man illegitimately installed as “president” though merely a Sock Puppet, who is out of his depth in running the world’s biggest economy, the catastrophic results will soon be obvious to even his most die-hard fans.

Now, it’s time for his nemesis on the world scene, Vladimer Putin, to respond: http://en.kremlin.ru/events/president/transcripts/68571

Pavel Zarubin: Mr President, we have just followed your meeting with the head of Senegal who is also the current leader of the African Union. He expressed, and actually in the past week many countries have expressed concern not so much about the food crisis, but they are afraid of large-scale famine because world food prices are climbing and so are oil and gas prices, These issues are interrelated.

Naturally, the West blames Russia for this, too. What is the real situation at this point, how is it developing? And what do you think will happen in the food and energy markets?

President of Russia Vladimir Putin: Yes, indeed, we are seeing attempts to place the responsibility on Russia for developments in the global food market and the growing problems there. I must say that this is another attempt to pin the blame on someone else. But why?

First, the situation with the global food market did not become worse yesterday or even with the launch of Russia’s special military operation in Donbass, in Ukraine.

The situation took a downturn in February 2020 during the efforts to counter the coronavirus pandemic when the global economy was down and had to be revived.

The financial and economic authorities in the United States, of all things, found nothing better than to allocate large amounts of money to support the population and certain businesses and economic sectors.

We generally did almost the same thing, but I assure you that we were much more accurate, and the results are obvious: we did this selectively and got the desired results without affecting macroeconomic indicators, including excessive inflation growth.

The situation was quite different in the United States. The money supply in the United States grew by 5.9 trillion in less than two years, from February 2020 to the end of 2021 – unprecedented productivity of the money printing machines. The total cash supply grew by 38.6 percent.

Apparently, the US financial authorities believed the dollar was a global currency, and it would spread, as usual, as it did in previous years, would dissolve in the global economy, and the United States would not even feel it. But that did not happen, not this time. As a matter of fact, decent people – and there are such people in the United States – the Secretary of the Treasury recently said they had made a mistake. So, it was a mistake made by the US financial and economic authorities – it has nothing to do with Russia’s actions in Ukraine, it is totally unrelated.

And that was the first step – and a big one – towards the current unfavourable food market situation, because, in the first place, food prices immediately went up, they grew. This is the first reason.

The second reason was European countries’ short-sighted policies, and above all, the European Commission’s policy in regard to energy. We see what is going on there. Personally, I believe that many political players in the United States and Europe have been taking advantage of people’s natural concerns about the climate, climate change, and they began to promote this green agenda, including in the energy sector.

It all seems fine, except for the unqualified and groundless recommendations about what needs to be done in the energy sector. The capabilities of alternative types of energy are overestimated: solar, wind, any other types, hydrogen power – those are good prospects for the future, probably, but today, they cannot be produced in the required amount, with the required quality and at acceptable prices. And at the same time, they began to belittle the importance of conventional types of energy, including, and above all, hydrocarbons.

What was the result of this? Banks stopped issuing loans because they were under pressure. Insurance companies stopped insuring deals. Local authorities stopped allocating plots of land for expanding production and reduced the construction of special transport, including pipelines.

All this led to a shortage of investment in the world energy sector and price hikes as a result. The wind was not as strong as expected during the past year, winter dragged on, and prices instantly soared.

On top of all that, the Europeans did not listen to our persistent requests to preserve long-term contracts for the delivery of natural gas to European countries. They started to wind them down. Many are still valid, but they started winding them down. This had a negative effect on the European energy market: the prices went up. Russia has absolutely nothing to do with this.

But as soon as gas prices started going up, fertiliser prices followed suit because gas is used to produce some of these fertilisers. Everything is interconnected. As soon as fertiliser prices started growing, many businesses, including those in European countries, became unprofitable and started shutting down altogether. The amount of fertiliser in the world market took a dive, and prices soared dramatically, much to the surprise of many European politicians.

However, we warned them about this, and this is not linked to Russia’s military operation in Donbass in any way. This has nothing to do with it.

But when we launched our operation, our so-called European and American partners started taking steps that aggravated the situation in both the food sector and fertiliser production.

By the way, Russia accounts for 25 percent of the world fertiliser market. As for potash fertilisers, Alexander Lukashenko told me this – but we should double-check it, of course, although I think it is true – when it comes to potash fertilisers, Russia and Belarus account for 45 percent of the world market. This is a tremendous amount.

The crop yield depends on the quantity of fertiliser put into the soil. As soon as it became clear that our fertilisers would not be in the world market, prices instantly soared on both fertilisers and food products because if there are no fertilisers, it is impossible to produce the required amount of agricultural products.

One thing leads to another, and Russia has nothing to do with it. Our partners made a host of mistakes themselves, and now they are looking for someone to blame. Of course, Russia is the most suitable candidate in this respect.

Pavel Zarubin: Incidentally, it has just been reported that the wife of the head of our largest fertiliser companies has been included in the new European package of sanctions.

What will all this lead to in your opinion?

Vladimir Putin: This will make a bad situation worse.

The British and later the Americans – Anglo-Saxons – imposed sanctions on our fertilisers. Then, having realised what was happening, the Americans lifted their sanctions, but the Europeans did not. They are telling me themselves during contacts: yes, we must think about it, we must do something about it, but today they have just aggravated this situation.

This will make the situation in the world fertiliser market worse, and hence the crop prospects will be much more modest, and prices will keep going up – that is it. This is an absolutely myopic, erroneous, I would say, simply stupid policy that leads to a deadlock.

Pavel Zarubin: But Russia is accused by high-ranking officials of preventing the grain that is actually there, in Ukrainian ports, from leaving.

Vladimir Putin: They are bluffing, and I will explain why.

First, there are some objective things, and I will mention them now. The world produces about 800 million tonnes of grain, wheat per year. Now we are being told that Ukraine is ready to export 20 million tonnes. So, 20 million tonnes out of 800 million tonnes amounts to 2.5 percent. But if we proceed from the fact that wheat accounts for merely 20 percent of all food products in the world – and this is the case, this is not our data, it comes from the UN – this means that these 20 million tonnes of Ukrainian wheat are just 0.5 percent, practically nothing. This is the first point.

The second. 20 million tonnes of Ukrainian wheat are potential exports. Today, the US official bodies also say that Ukraine could export six million tonnes of wheat. According to our Ministry of Agriculture, the figure is not six but about five million tonnes, but okay, let us assume it is six, plus it could export seven million tonnes of maize – this is the figure of our Ministry of Agriculture. We realise that this is not much.

In the current agricultural year of 2021–2022, we will export 37 million and, I believe, we will raise these exports to 50 million tonnes in 2022–2023. But this is apropos, by the way.

As for shipping out Ukrainian grain, we are not preventing this. There are several ways to export grain.

The first one. You can ship it out via the Ukraine-controlled ports, primarily in the Black Sea – Odessa and nearby ports. We did not mine the approaches to the port – Ukraine did this.

I have already said to all our colleagues many times – let them demine the ports and let the vessels loaded with grain leave. We will guarantee their peaceful passage to international waters without any problems. There are no problems at all. Go ahead.

They must clear the mines and raise the ships they sunk on purpose in the Black Sea to make it difficult to enter the ports to the south of Ukraine. We are ready to do this; we will not use the demining process to initiate an attack from the sea. I have already said this. This is the first point.

The second. There is another opportunity: the ports in the Sea of Azov – Berdyansk and Mariupol – are under our control, and we are ready to ensure a problem-free exit from these ports, including for exported Ukrainian grain. Go ahead, please.

We are already working on the demining process. We are completing this work – at one time, Ukrainian troops laid three layers of mines. This process is coming to an end. We will create the necessary logistics. This is not a problem; we will do this. This is the second point.

The third. It is possible to move grain from Ukraine via the Danube and through Romania.

Fourth. It is also possible through Hungary.

And fifth, it is also possible to do this via Poland. Yes, there are some technical problems because the tracks are of different gauges and the wheel bogies must be changed. But this only takes a few hours, that is all.

Finally, the easiest way is to transport grain via Belarus. This is the easiest and the cheapest way because from there it can be instantly shipped to the Baltic ports and further on to any place in the world.

But they would have to lift the sanctions from Belarus. This is not our problem though. At any rate, President of Belarus Alexander Lukashenko puts it like this: if someone wants to resolve the problem of exporting Ukrainian grain, if this problem exists at all, please use the simplest way – through Belarus. No one will stop you.

So, the problem of shipping grain out of Ukraine does not really exist.

Pavel Zarubin: How would the logistics work to ship it from the ports under our control? What would the conditions be?

Vladimir Putin: No conditions.

They are welcome. We will provide peaceful passage, guarantee safe approaches to these ports, and ensure the safe entry of foreign ships and passage through the Sea of Azov and the Black Sea in any direction.

By the way, several ships are stuck in Ukrainian ports at this point. These are foreign ships, dozens of them. They are simply locked up and their crews are still being held hostage.


Here’s Reuters summary:


“Spare Me The Bullshit About Constitutional Rights”

In case you’re still confused regarding which party is the greater enemy of the Constitution, and the rights it guarantees will not be infringed by the Federal Government.

We already heard the Sock Puppet “president” claim the Second Amendment is not absolute. Here’s another Democrat explain precisely what they think of American liberty.

Summit News: https://summit.news/2022/06/03/video-dem-rep-yells-spare-me-the-bullshit-about-constitutional-rights-during-gun-debate/

Democratic congressman David Cicilline told House Republicans they should “spare me the bullshit about Constitutional rights,” during a debate on gun control Thursday.

The Rhode Island representative refused to yield his time during the outburst, while discussing legislation related to “red flag” laws, that would allow the government and law enforcement to confiscate firearms from anyone deemed to be a danger to themselves or others.

Florida congressman Matt Gaetz attempted to insert an amendment to the legislation stating “Congress disfavors the enactment of laws that authorize a court to issue an extreme risk protection order, also known as Red Flag laws, in the States because such laws trample on an individual’s due process and Second Amendment rights.”

That prompted Cicilline to call the defense of Americans’ constitutional rights “bullshit”.

Cicilline proclaimed that those who are an “imminent danger to themselves and others, such as they might commit mass murder, have a constitutional right to access a firearm. And to deny them that right would, quote, ‘trample on an individual’s due process and second amendment rights.’”

“You know who didn’t have due process?” Cicilline continued. “You know who didn’t have their constitutional right to life respected? The kids at Parkland, and Sandy Hook, and Uvalde and Buffalo, and the list goes on and on.”

When Gaetz attempted to respond, Cicilline said “No I will not yield and I’m not going to yield for my entire five minutes, so don’t ask again.”


This tells you everything you need to know about the Democratic attitude to the Second Amendment and the Constitution generally.

The comments came on the same day Joe Biden announced an intention to bring about sweeping gun control measures, including a ban on “assault weapons” and “high capacity” magazines, as well as red flag laws, new laws on background checks and storage, and a vow to “repeal the immunity of gun manufacturers from liability.”

Biden claimed during his speech that he wasn’t taking away anyone’s rights.

The Next 3 Weeks in the Donbass Cauldron

Russian Federation forces have taken the residential areas of Sieverondonetsk as Ukrainian forces retreat into the industrial zone west-southwest of the city while the retreating units (presumably, the remmants of the 111th Territorial Defense Brigade) attempt to make a stand in Lisichansk on the high ground on the west bank of the Sversky Donets River a mile or two west.

The 111th Territorial has been significantly degraded reportedly up to 40%. It’s not a Tier 1 unit and seems to be cannon fodder for the Ukrainian government.

With the fall of the last Donetsk city in Ukrainian hands, it’s possible Russian forces will shift to the southwest to advance on Mykolaiv and on to Odessa.

But our view is Russia intends to finish the job on the main units of the Ukrainian Army — some 12,000 left out of an orginal 25,000 caught in the eastern cauldrons while moving on to Karamatorsk and Slavyansk.

Russian artillery is reportedly moving up to the AFU defenses holding the line in Raihorodok, and then on to Sloviansk where appears to the site of the AFU last stand.

Further to the east, the Russians appear to have the bridges across the Siversky Donest river under fire control. However, the principal line of attack will likely come in from the northwest behind the AFU position on the hills.

Severodonetsk Falling


It’s been reported for days now that only one bridge remained open leading to the west side of the river, so it’s unlikely that much, if any, heavy equipment could be evacuated. Indeed, the likelihood is of large numbers of surrendering Ukrainian troops.

Cue the wild accordion music and dancing Chechens:

Next up …

Putin understands that this is an existential struggle. No point even in a ceasefire in place, much less with withdrawal.

This seems like a good place to include a discussion of Russian tactics, courtesy of Will Schryver:

Brief Ukraine War Update

The Russians spent the previous month carving Ukrainian forces in the Donbas into relatively small, isolated concentrations of troops. Then they proceeded to savage them with massed artillery 24/7.

Now they are methodically advancing their mobile infantry into the shattered remnants under an umbrella of low-level close air support and drone-corrected precision artillery strikes.

Consequently, the demoralized Ukrainian soldiers are surrendering en masse.

Western mainstream media has, for three months now, fed its audience a never-ending clown car parade of utterly clueless “expert military analysts” who have spun fairy tales of super-hero Ukrainian “freedom fighters” and comically inept Russian conscripts.

That narrative is now souring as rapidly as the cream of the AFU in the Donbas.

No doubt much fighting remains – particularly in the Odessa region as Russia consolidates the entire Black Sea coast of Novorossiya. But the final outcome of this war is no longer in question.

After a sometimes uncertain start, the Russians have rapidly adapted their tactics and are now systematically routing Ukrainian forces across the entire front, including the ill-advised Ukrainian “counter-offensive” north of Kharkov, which is now being torn apart.

It is my considered opinion that, for many years to come, this war will be widely studied in war colleges around the world as a definitive example of expertly prosecuted 21st century urban warfare.

Perhaps most significantly, looking forward to potential NATO/Russia conflict, the Russian military has quickly evolved into a battle-hardened and surprisingly nimble and quick-to-adapt fighting force. The US has not faced such a force since WW2.

As for Slavoviansk, wher is the breakout from Lyman through the Sviati Hory forest.

On May 30, the Defence Staff of the Donetsk People’s Republic confirmed that the Armed Forces of the Russian Federation and the DPR People’s militia took control over the villages of Dibrova and Stary Caravan.

After the town of Krasny Liman came under the DPR control, Russian-led forces continued their advance to the west towards the city of Slavyansk, which is one of the main strongholds of the Armed Forces of Ukraine in the region. LINK

By now, DPR and Russian troops have approached the city of Raygorodok, which is located 12 kilometers from Slavyansk. The Ukrainian positions in the area have been shelled by the artillery.

Clashes continue on the northern bank of the Seversky Donets River, and Russian-led forces have are yet to cross the river. The bridge in the area was destroyed by the retreating AFU units more than a week ago.

Here are Spetznaz (Russian special forces) in mop-up outside Lyman

The Washington Post is Reading My Blog

This probably explains those strange calls on my phone.

Actually, more like reality catching up with the DC Uniparty’s “Pravda”.

There gets to be a point where the propaganda yields to reality.

Here’s ZH on the story: https://www.zerohedge.com/military/wapo-stunning-first-admits-catastrophic-conditions-collapsing-morale-ukraine-forces-front

In Stunning Shift, WaPo Admits Catastrophic-Conditions, Collapsing-Morale Of Ukraine Front-Line Forces

With Russia’s war in Ukraine now in its fourth month, mainstream media consumers have been treated to seemingly endless headlines and analysis of Russia’s extensive military losses. At the same time Ukrainian forces have tended to be lionized and their battlefield prowess romanticized, with essentially zero public information so far being given which details up-to-date Ukrainian force casualties, set-backs, and equipment losses.

But for the first time The Washington Post is out with a surprisingly dire and negative assessment of how US-backed and equipped Ukrainian forces are actually fairing. Gone is the rosy idealizing lens through which each and every encounter with the Russians is typically portrayed. WaPo correspondent and author of the new report Sudarsan Raghavan underscores of the true situation that “Ukrainian leaders project an image of military invulnerability against Russia. But commanders offer a more realistic portrait of the war, where outgunned volunteers describe being abandoned by their military brass and facing certain death at the front.”

As many careful and less idealistic observers suspected the whole time, a steady stream of both wartime propaganda and one-sided social media feeds where it seems the only tanks being blown up are Russian ones has served to present a very skewed portrayal of the battlefield to the Western public. While it’s perhaps easier to get sucked into this pro-Ukraine bias based on the innumerable so-called open source intelligence self-anointed ‘experts’ on Twitter, this is less so if one wades into Telegram, where a flood of uncensored videos from both sides gives a truer picture, as the fresh report seems to also suggest.

The Washington Post report belatedly admits the avalanche of propaganda based in a pro-Kiev, pro-West narrative from the outset: “Videos of assaults on Russian tanks or positions are posted daily on social media. Artists are creating patriotic posters, billboards and T-shirts. The postal service even released stamps commemorating the sinking of a Russian warship in the Black Sea.”

The report then pivots to the reality of an undertrained, poorly commanded and equipped, rag-tag force of mostly volunteers in the East who find themselves increasingly surrounded by the numerically superior Russian military which has penetrated almost the entire Donbas region. “Ukraine, like Russia, has provided scant information about deaths, injuries or losses of military equipment. But after three months of war, this company of 120 men is down to 54 because of deaths, injuries and desertions,” the report reads as it follows one particular battalion.

The report’s sources speak out despite threat of being court-martialed amid a heavily controlled information flow:

“War breaks people down,” said Serhiy Haidai, head of the regional war administration in Luhansk province, acknowledging many volunteers were not properly trained because Ukrainian authorities did not expect Russia to invade. But he maintained that all soldiers are taken care of: “They have enough medical supplies and food. The only thing is there are people that aren’t ready to fight.”

The report references a video widely circulating online this week wherein a group the size of a platoon declares they simply can’t fight for lack of weaponry, ammunition, food and proper command support:

“We are being sent to certain death,” said a volunteer, reading from a prepared script, adding that a similar video was filmed by members of the 115th Brigade 1st Battalion. “We are not alone like this, we are many.”

Ukraine’s military rebutted the volunteers’ claims in their own video posted online, saying the “deserters” had everything they needed to fight: “They thought they came for a vacation,” one service member said. “That’s why they left their positions.”

In the wake of the video, the Ukrainian troops featured are being accused of ‘desertion’:

Additional videos have surfaced that are similar: units complain even of being left to fight in already impossible conditions with WWI and WWII-era rifles, which can do little up against Russia’s far superior firepower.

The stunning WaPo report further documents volunteer groups of men who were previously oil well technicians, salesmen, or other ordinary jobs like farmers being sent to front line positions in the south and east – even though they thought they were first bound to simple security posts in much less intense environs like Lviv. 

“We shot 30 bullets and then they said, ‘You can’t get more; too expensive,’” one volunteer described. And more: “When we were coming here, we were told that we were going to be in the third line on defense,” Lapko said. “Instead, we came to the zero line, the front line. We didn’t know where we were going.”

The situation has gotten more dire as even water is in short supply amid the most intense Russian push to surround Ukrainian positions in the Donbas to date:

And in recent weeks, he said, the situation has gotten much worse. When their supply chains were cut off for two days by the bombardment, the men were forced to make do with a potato a day.

They spend most days and nights in trenches dug into the forest on the edges of Toshkivka or inside the basements of abandoned houses. “They have no water, nothing there,” Lapko said. “Only water that I bring them every other day.”

Meanwhile the very noticeable shifting rhetoric issued from prominent officials and pundits of late has strongly suggested not all is well for Ukraine’s military…

The WaPo further includes the following devastating testimony and assessment:

“Many got shell shock. I don’t know how to count them,” Lapko said.

The casualties here are largely kept secret to protect morale among troops and the general public.

“On Ukrainian TV we see that there are no losses,” Lapko said. “There’s no truth.”

Many of the casualties suffered by the above referenced volunteer unit were due to lack of logistics available to transport the wounded to hospitals behind the front lines. The report emphasizes that the entirety of the catastrophic conditions of frontline forces has led to officers and enlisted increasingly refusing to follow orders from higher command.

With this fresh and unexpected Washington Post report, the mainstream seems to now belatedly be admitting what only weeks ago could get a person banned from Twitter…

“Lapko and his men have grown increasingly frustrated and disillusioned with their superiors. His request for the awards has not been approved,” the report finds. “His battalion commander demanded that he send 20 of his soldiers to another front line, which meant that he couldn’t rotate his men out from Toshkivka. He refused the order.”

The Foegen effect

A mechanism by which facemasks contribute to the COVID-19 case fatality rate

Paper: https://journals.lww.com/md-journal/Fulltext/2022/02180/The_Foegen_effect__A_mechanism_by_which_facemasks.60.aspx

National Pulse story: https://wordpress.com/post/econophysics2020.com/5198


Extensive evidence in the literature supports the mandatory use of facemasks to reduce the infection rate of severe acute respiratory syndrome coronavirus 2, which causes the coronavirus disease (COVID-19). However, the effect of mask use on the disease course remains controversial. This study aimed to determine whether mandatory mask use influenced the case fatality rate in Kansas, USA between August 1st and October 15th 2020.

This study applied secondary data on case updates, mask mandates, and demographic status related to Kansas State, USA. A parallelization analysis based on county-level data was conducted on these data. Results were controlled by performing multiple sensitivity analyses and a negative control.

A parallelization analysis based on county-level data showed that in Kansas, counties with mask mandate had significantly higher case fatality rates than counties without mask mandate, with a risk ratio of 1.85 (95% confidence interval [95% CI]: 1.51–2.10) for COVID-19-related deaths. Even after adjusting for the number of “protected persons,” that is, the number of persons who were not infected in the mask-mandated group compared to the no-mask group, the risk ratio remained significantly high at 1.52 (95% CI: 1.24–1.72). By analyzing the excess mortality in Kansas, this study determines that over 95% of this effect can solely be attributed to COVID-19.

These findings suggest that mask use might pose a yet unknown threat to the user instead of protecting them, making mask mandates a debatable epidemiologic intervention.

The cause of this trend is explained herein using the “Foegen effect” theory; that is, deep re-inhalation of hypercondensed droplets or pure virions caught in facemasks as droplets can worsen prognosis and might be linked to long-term effects of COVID-19 infection. While the “Foegen effect” is proven in vivo in an animal model, further research is needed to fully understand it.

National Pulse Story:

Mask mandates caused higher COVID-19 death rates, according to the bombshell claims made in a new medical journal report analyzing fatality rates across the state of Kansas.

The observational study – “The Foegen Effect: A Mechanism by Which Facemasks Contribute to the COVID-19 Case Fatality Rate” – was published in Medicine in February 2022, authored by German doctor Zacharias Fögen.

The paper analyzed “whether mandatory mask use influenced the case fatality rate in Kansas” during the time period of August 1st, 2020 to October 15th. Kansas was used for comparison because the state allowed each of its 105 counties to decide whether or not to implement mask mandates, with 81 counties deciding against the measure.

“The most important finding from this study is that contrary to the accepted thought that fewer people are dying because infection rates are reduced by masks, this was not the case,” summarized the paper.

“Results from this study strongly suggest that mask mandates actually caused about 1.5 times the number of deaths or ∼50% more deaths compared to no mask mandates.”

The study also posited a potential reason for the disparity in risk ratio (RR) for dying from COVID-19:

“A rationale for the increased RR by mandating masks is probably that virions that enter or those coughed out in droplets are retained in the facemask tissue, and after quick evaporation of the droplets, hypercondensed droplets or pure virions (virions not inside a droplet) are re-inhaled from a very short distance during inspiration.”

Dubbed the “Foegen effect,” the theory suggests that COVID-19 “virions spread (because of their smaller size) deeper into the respiratory tract.”

“They bypass the bronchi and are inhaled deep into the alveoli, where they can cause pneumonia instead of bronchitis, which would be typical of a virus infection.”

“These findings suggest that mask use might pose a yet unknown threat to the user instead of protecting them, making mask mandates a debatable epidemiologic intervention,” concludes the paper.

The study follows another recently published analysis of international data showing the same relationship between COVID-19 and masks.

The Consent of the Governed Is Slipping Away

Charles Hugh Smith: http://charleshughsmith.blogspot.com/2022/05/the-consent-of-governed-is-slipping-away.html

The realization that we’re not actually being represented at the federal level has eroded the consent of the governed for the national government.

The foundation of any government is the consent of the governed. Democracies and republics are founded on the consent of the governed earned via representational or direct democracy: those who have a say and a stake in the system will give their consent to the government, even if an opposing view is in the majority because their opinion is part of the governance structure.

Even totalitarian states ultimately depend on the consent of the governed, as repressive states that lose legitimacy cannot imprison or kill a majority of their populaces, or restore legitimacy via coercion once the populace has nothing left to lose and the organs of state oppression realize the regime is doomed.

It feels like the consent of the governed is slipping away in the U.S. The reason is so obvious we dare not acknowledge it or discuss it: those in power–elected and unelected–only give lip-service to “serving the public interest and common good.” Beneath this flimsy facade of PR, every action serves the interests of a wealthy, politically potent elite or the self-interests of those in power.

Commoners have no real say in governance. We are consenting to rule by self-interested elites under the guise of being represented by an elite who governs at the behest and expense of hyper-wealthy individuals, families, corporations, cartels and monopolies.

Consider the issue of legalizing cannabis. Poll after poll shows the majority of the American citizenry favor legalizing cannabis, yet our federal representatives and regulators insist on ignoring the public will, public interest and the common good by continuing to classify cannabis as a Schedule 1 drug, as addictive and dangerous as heroin and fentanyl.

This is patently false and absurd. Hundreds of thousands of American die from alcohol and opioids every year, while deaths attributed solely to cannabis use are near-zero. Yet the federal government and our elected representatives refuse to accept the reality that cannabis isn’t equivalent to fentanyl and other synthetic opioids which continue to kill thousands every year.

Why? It’s the money, honey, greasing their palms and paychecks. Big Pharma views cannabis as a competitor so it lavishes billions of dollars on campaigns, lobbying and shaping the media narrative to serve their agenda of maximizing profits by any means available.

The War on Drugs Gulag of private prisons, law enforcement and the judiciary also skim billions of dollars as a result of cannabis being Schedule 1 (i.e. just as deadly as fentanyl). These powerful elites would lose billions in funding if the will of the people actually counted for something.

The realization that we’re not actually being represented at the federal level has eroded the consent of the governed for the national government, and pushed the electorate to seek legitimate representation at the state and local level. In response, states are openly flouting federal statutes (for example, the Schedule 1 absurdity of federal cannabis regulations) and claiming sovereign rights on issues such as currency (declaring gold coins as legal tender in the state, etc.) and cryptocurrency.

We can anticipate a cross-migration as residents who disagree with the majority views in their state move to states where the majority-approved policies align with their own preferences. This cross-migration will strengthen existing majorities into super-majorities, further accelerating cross-migration as policies that were considered extreme are normalized within states.

Within states, this relocalization of the consent of the governed is trickling down to counties, which are increasingly under pressure from the citizenry to ignore (or leave unenforced) state mandates which the residents disagree with.

Capital also manifests the consent of the governed. Capital will migrate away from states where it’s treated poorly, science-based enterprises will migrate away from states which restrict or starve research and development and manufacturing will migrate to states with willing, educated workforces and attractive infrastructure and tax structures.

States and counties whose policies are detrimental to capital will become poorer as capital chooses to locate to places where it has a say in governance, just as individuals want to live in a place where they have a say.

As the consent of the governed unravels, citizens may increasingly decide which statutes they’re going to obey and which ones they’ll ignore. Locales with strong community values will rely less on statutes and enforcement and more on social norms and community standards to maintain social order, while locales without any coherent community standards and shared values will have to rely on enforcement to avoid social disorder or meltdown.

Choose your community wisely. Thousands of pages of regulations won’t preserve the social order if the the consent of the governed and the social contract both unravel.

ESG Hits a Reality Wall

OilPrice.com: https://oilprice.com/Energy/Energy-General/ESG-Crusade-On-Backburner-As-World-Grapples-With-Energy-Crisis.html

The ESG investment momentum has run up against energy supply disruptions since the Russian invasion of Ukraine.  As shareholders at the biggest energy companies are asked to vote—again—on various climate resolutions, many investors continue to call for more transparent and detailed plans for how firms intend to align with the Paris Agreement goals. Others, such as the world’s top asset manager, BlackRock, expect to support fewer shareholder proposals this AGM season compared to 2021 as it finds that climate-related shareholder proposals have become unduly more prescriptive and micromanaging. 

Sure, large institutional investors are not abandoning the ESG trend or insistence that companies need to be prepared to change as the energy transition progresses. But some, including BlackRock, acknowledge the current energy market pressures and the need for investment in both traditional and renewable energy sources. 

Fund managers want companies to double down on the energy transition, which has become an even more urgent topic of conversation after the Russian war in Ukraine and Europe’s subsequent struggles to cut—and ultimately eliminate—its dependence on Russian fossil fuels. 

Yet, energy security and economic stability in the short term appear to override the longer-term drive to accelerate the transition toward green energy sources. 

Investors are also looking to shift their focus onto actual outcomes instead of on simplified ESG ratings that are based on policy statements. 

BlackRock: Investment In Both Traditional And Renewable Energy Needed  BlackRock said in early May that “many of the climate-related shareholder proposals coming to a vote in 2022 are more prescriptive or constraining on companies and may not promote long-term shareholder value.”

“Importantly, in the context of voting on shareholder proposals regarding climate-related risk, companies face particular challenges in the near term, given under-investment in both traditional and renewable energy, exacerbated by current geo-political tensions,” BlackRock Investment Stewardship (BIS) said. 

“This set of dynamics will — at least in the short- and medium-term — drive a need for companies that invest in both traditional and renewable sources of energy and we believe the companies that do that effectively will produce attractive returns for our clients.” 

That’s why BlackRock is likely to back proportionately fewer climate-related resolutions this proxy season than in 2021, as it does not consider them to be consistent with its clients’ long-term financial interests, the asset manager said. 

Doubling Down On Energy Transition 

Still, investors are not backing down on seeking active engagement with companies and demanding detailed, credible energy-transition plans. 

“The way out of the situation we currently find ourselves in is not to abandon the energy transition but to double down,” Nick Stansbury, head of climate solutions at the UK’s largest fund manager, Legal & General Investment Management (LGIM), told the Financial Times

Last month, LGIM said in its ‘Active Ownership’ report for 2021 that “We believe voting against a company is a powerful tool to express our views and concerns on key thematic issues such as climate change and diversity, as part of our ‘engagement with consequences’ approach.” 

LGIM welcomed in its report “positive steps” taken by ExxonMobil to commit to net-zero emissions for operated assets by 2050, as well as BP’s strengthened climate targets announced in February 2022.  

“We engaged with BP’s senior executives on six occasions in 2021 as they develop their climate transition strategy to ensure alignment with Paris goals. Following constructive engagements with the company, we were pleased to learn about the recent strengthening of BP’s climate targets, announced in a press release on 8 February 2022, together with the commitment to become a net-zero company by 2050 – an ambition we expect to be shared across the oil and gas sector as we aim to progress towards a low-carbon economy.”  

Change Of Focus   

Investors are also increasingly looking to affect change in the companies they are invested in, rather than just picking firms with the best ESG scores on paper. 

“What do ESG scores tell us about anything?” Ben Caldecott, director of the UK Centre for Greening Finance and Investment, told FT. “They are mainly measuring processes and policies — if a company has a policy in place against deforestation it will get a good score, even if it is deforesting.”

Others are shifting focus to the industries that use the energy produced by oil and gas companies. For example, the Church of England Pensions Board said earlier this month that after co-leading the investor process to establish the first Net Zero Standard for the oil and gas sector, it is shifting focus this year to industry sectors.  

“This will see the Board step down from leading engagement with Shell and begin co-leading engagement with Europe’s largest car manufacturers, BMW, Mercedes-Benz, Renault, and Volkswagen,” the board said.

“If the demand for energy doesn’t change, those companies that are supplying it won’t change. We have developed an exacting global net zero standard for the oil and gas sector, which companies that wish to retain their social license can implement. Ultimately those same companies’ ability to deliver on their targets will largely be shaped by a change in demand for oil and gas from sectors like autos, aviation and shipping” said Adam Matthews, Chief Responsible Investment Officer at the Church of England Pensions Board.   

However, with energy security concerns front and center and governments prioritizing energy supply in the biggest energy market shock in decades, demand for oil and gas is set to rise in the short term, while chronic underinvestment would plague supply in the medium term. 

From Currency Resets to Limiting Infinite Growth

Tom Luongo on the New-New Normal: https://tomluongo.me/2022/05/19/from-currency-resets-to-limiting-infinite-growth/

A couple of weeks ago, RT ran a story purporting to explain the mystery behind the rise in exchange rate of the Russian ruble. It touched on a concept I’ve talked about vis a vis Russia for years: the disparity between nominal GDP which yields a number roughly the size of Canada and Purchasing Power Parity (PPP) GDP which puts Russia on par with Germany.

While everything quoted here I feel is worth considering seriously, that GDP disparity that is what is important.

… the West had defaulted on its obligations to Russia when it froze the assets of the country’s central bank. “This is the abolition (something like cancel culture) of the rules of international financial relations based on global total return swaps, redistribution of risk, guarantees of property rights and distribution of seigniorage.”

It was these rules that determined the old ruble exchange rate and the approaches to its establishment that we are accustomed to, the expert said, adding that those rules “no longer apply.”

Kopylov explained that the strengthening of the ruble is due to the fact that it is now based purely on exports and imports, and its value is determined by its purchasing power parity (PPP). The International Monetary Fund (IMF) estimated the Russian currency’s PPP at the end of 2021 at 29.127 rubles per one dollar. According to the Big Mac Index, that rate stood at 23.24 rubles to the dollar.

I have pointed out for years that all discussions of the Russian economy in terms of nominal GDP are bogus.  Nominal GDP is spending within the Russian economy converted through the RUB/USD exchange rate.

But that metric is irrelevant.  It doesn’t say anything about what that spending buys the average Russian.

GDP is a stupid metric.  It should be called GNS, Gross National Spending. It is a dumb way to measure the ‘output’ of a society.  It’s at best a very gross approximation but it is, again, just aggregated spending.

This is the fundamental fallacy of Keynesian demand-side economics and all theories about which economies are expanding or contracting based on spending are literally bogus.

But we have all been trained to believe in GDP as some all-powerful measure of growth and power.  It’s not anything of the sort.  When you have the ability to print money at will to bid up the cost of the goods purchased with that money, how is that telling you anything about the health of the country, the people… or frankly anything at all?

What it’s telling you is that spent money, but did you take that money from the pool of real savings and deploy it into sustainable economic projects? Or did you print the money out of thin air, issue debt that borrows against the future labor of the country’s citizens (or their kids…. or their grandkids) and pay someone to fulfill a ‘shovel-ready’ job of digging a hole and filling it back in?

GDP, in statistical terms, is NOT an independent variable because of this. It’s value is dependent completely on the people controlling the inputs to it.  Therefore, as data, it is worthless.  As a scientist, I would throw it out of any discussion because it can’t be controlled for.  

This is why the discrepancy between the ruble’s purchasing power internally is so much higher than its purchasing power externally.  Pre-war the ruble traded at 75 or so versus the dollar. But it’s PPP value was less than 30?  This means Russian GDP is at least (by this flawed metric) 2.5 higher than the nominal value. This is how the Russian economy in PPP terms is actually larger than Germany’s.

But even then, PPP GDP is still a terminally flawed metric as a measure of output. It gets us closer to fair comparisons between country’s but it still says nothing about the economic value of the things the country spent their money on.

The funny thing is Russia’s economy shouldn’t be larger than Germany’s in real terms, since most of Russia’s output is base commodities, which have the lowest value-added component of any good in a market.  The whole point of a sophisticated division of labor and economic system is to build up value through each stage in the production chain.

Cars, for example, should have more ‘value’ associated with them than the iron ore that went into making the frame.

This tells you how out of whack the world is in terms of the diversion of capital to unsustainable activity it actually is if a commodity producer is leading a manufacturing giant in wealth generation.  This is exactly why the currency shift from debt-based to commodity-based money is going to be so painful.

And why the debt issuers are willing to risk nuclear war over it occurring. To them this is the end state of their power.  

From Finite World to Infinite Growth

In a recent article on this blog, I did a quick and dirty takedown of the globalist talking point about infinite growth in a finite world.   That gaslighting was at the core of the conflict in the big story of the Marvel Cinematic Universe of films, which centered on Thanos coming to bring balance by destroying half of the life in the Universe.

Davos has gaslit two entire generations of westerners in the Malthusian talking point that you can’t have infinite growth in a finite world. All of their economic dogma is predicated on this.

It doesn’t matter that this talking point is predicated on an inane premise, truth is, after all treason, at this point in the economic and cultural cycle. But, to try and explain quickly for the slow-witted. GDP growth is not necessarily real growth. It’s just spending. It says nothing for the quality of the spending or whether, in real terms, the people spending the money are materially better off than they were at a previous point in time.

What isn’t measured by GDP is VALUE. Value is what we crave, the ability to plan further into the future, using our ingenuity to find better mousetraps to build and more efficient, and yes sustainable, ways of deploying scarce capital and time.

When you have a monetary system and regulatory regime designed to thwart that to stop growth then you have the world we live in today. That infinite growth is a subjective, not objective, measure…. not in GDP terms but in the ‘alleviation of human misery’ terms.

Davos absolutely doesn’t want this because a world where everyone gets maximal value for their time is a world without our need for them.

But in order for us to have a discussion about this, I need to lay out some base assumptions. First, that we have owners who agree with Julian Huxley that growth will lead to destruction of the planet, therefore we should not have any more meaningful growth.

Second, only those who are currently with power have the will, intelligence and expertise to guide us to this next phase of humanity’s existence.

In service of these controlling ideas:

  1. They have erected systems and barricades to real growth for decades in real terms, i.e. energy usage per unit ‘wealth’ … some call this EROEI = Energy Returned over Energy Invested.  
  2. They have stymied more efficient use of human capital by running us around in mazes which are dead ends — Light Water Nuclear Reactors vs. oil, replacing both with Solar, Wind, Electric Vehicles, etc.
  3. They foment wars to divert capital to useless weapons rather than applying it things which make our lives better, more predictable.  They specifically divert spending (GDP) to humans building systems which increase chaos and unpredictability rather than decrease it.
  4. They empower and expand bureaucracy to keep otherwise ‘useless people’ employed with meaningless jobs
  5. They have supported cultural degradation which undermined the nuclear family and local culture by promoting women into the workforce, divorcing them from their core strength as mothers and caregivers and putting them effectively on welfare, UBI.

These are all the basic distractions which force us to waste most of our productive time running around on a hamster wheel of arbitrary obstacles in order to eke out some small measure of comfort.

The basic reason for Human Action, as defined by Mises, is to alleviate future uncertainty.  Man acts purposefully towards that end, otherwise he wouldn’t act or he would act differently.  

That said, we can have our rationality diverted to purposes which do not serve our better interests because of the perverse incentives placed in front of us through artificial barriers to capital formation.  

Therefore, if we were acting with purpose towards our most efficient and creative ends to a more predictable future, infinite GDP growth would be a no-brainer. This isn’t to say infinite GDP growth is infinite resource utilization.  

Because as you travel up the production chain to higher order goods, you produce more value relative to the input commodities… if you didn’t, then you wouldn’t do it. You would do something that did.

What’s more valuable a tree growing on your property or the lumber you turn it into and then use to build a shelter?

For an even more idiotic example, is there really $10,000 difference between a BMW 230i starting at $37.5k and a Ford Mustang in terms of raw input commodities, especially when, in the real world we’re talking more like $15,000?  No.  Both are roughly 3500 lbs of aluminum, steel, leather and plastic.

So, where’s the value difference?  In the materials?  Again, not really.  It’s in the intellectual property of the engineering, the final driving experience and the perception of value by the consumer.  

But in terms of them being a tool for potential wealth creation, the two care are, really fungible.  They can transport up to 3 people (realistically) and a little bit of cargo somewhere to do whatever it is that they do.

Is that reflected in the purchasing price of these cars?  No.  Not at all.  But, if we sell more BMW’s as a percentage of Mustangs sold, are we expected to impute a higher capability of sustaining wealth production because of higher overall spending as measured by GDP?

Sadly yes.

And that’s where the disconnect is.  

This is why, fundamentally, GDP is a poor measure of ‘growth.’  

That said, absent the diversion of capital to the unsustainable as practiced by Davos you can have constant ‘growth’ in value terms. It is better stated that ‘growth’ is the alleviation of human suffering and/or uncertainty, which is what value is.  

This is true because if we’re driving costs down to utilize natural resources ever more efficiently thanks to proper pricing of the money used to procure the input commodities, then we can move more of our spending out of base commodities into higher order goods with higher returns of perceived value.

Moreover, the Malthusian/Huxleyian argument presupposes somehow that the Universe isn’t governed by the Laws of Conservation. Iron isn’t destroyed when a car is trashed, we just store it in a junkyard. The same goes for landfills and plastic.

The problem we have today is that we act within a system which skims all the wealth created by our actions to the betterment of the people who produce nothing at all. All they produce is money and bad ideas, the former of which is based on your future labor and the latter sustained by it.

Then they dupe you into selling your future labor back to you at a vig while trying to take all the intellectual property rights for your innovation and skill. We call these people Venture Capitalists.

No wonder the Marxists see this system as exploitative. It is! But it’s also not the only way things can and/or should be organized. This isn’t a fault of capitalism and property but of our not properly pricing the cost of the State and all of its enforcement of our ‘rights.’

This is what leads to the concentration of power in the hands of rent-seeking douchebags and vandals.

Sustainable growth where all factors of production are properly priced up the value-adding chain is the first step. That will lead to the rewards being shared more equitably by all involved.

That model is not only possible, it’s the only system that is inevitable.

Davos decided if we were not controlled and forced onto low-margin hamster wheels we would strip-mine the planet and destroy it.  That’s why it needs to be controlled and real growth curtailed.  

What we have now is a system of maximal wastage of natural resources with minimal returns: cheap money begetting conspicuous consumption of resources while erecting barriers to new, competitive technologies at the expense of the producers of those input commodities.

Thanos in the Marvel films makes the same mistake Davos and Huxley made, deciding in their hubris and arrogance that because they couldn’t see a solution to a problem they’d defined, that solution did not exist. This justified their acquisition of power unlimited to re-make the world in their image.

The truly despicable nature of the Marvel films is that they spend so much time trying to make Thanos’ quest a noble one, a sympathetic one, rather than the rantings of a small-minded homunculus.

I wonder who ordered that rewrite of the script to Infinity War?

The Return of the Commodity King

This is why the ruble is so undervalued, up until recently commodities had been driven below their cost of production through the corruption of all of us into the land of cheap money. It is why now, with the changes coming to the monetary architecture of the world, the ruble’s real purchasing power will finally be expressed, forcing commodity inflation in real terms on those whose currencies are overvalued.

Gresham’s Law has never been wrong.

Overvalued money circulates to procure unearned goods in the real world.

Undervalued money is hoarded because savings is the pre-requisite of capital deployment.

We are at the end of the cycle where the pile of real wealth has built up for decades unable to express itself while the ultimate psy-op fuels the biggest Ponzi scheme in history.

When the confidence in the overvalued money (debt) falls, inflation rises rapidly as people demand goods and eschew money.  This will raise the prospect of the undervalued money (commodities) entering into circulation as its true value is finally expressed in the market.

At that point you will then see what the real growth rate of the world is.  Gary North used to say that prior to the early 1800’s the real rate at which wealth compounded was ~1% annually.  Then something changed and it doubled to 2% and that scared the bejeesus out of the elites because too many people were getting rich too quickly to need them to look out for their interests.  

Now you know why the Club of Rome began in the 1850’s [Ed: actually, the Club of Rome started in 1968], why central banking was so bitterly fought over here in the US then. It’s why Marx’s insane ideas were adopted by those with generational power.  It was to STOP our growth as a species, not keep it from destroying the planet, but their system of unearned privilege.