. . . a Few Excerpts from His Latest Column
This man both SEES and doesn’t MINCE words. So, if you read this, it MAY HELP PRY OPEN EYES. Yours and those AROUND YOU.
_______________________________________________________________________________________________________
“Even many of those who correctly predicted an ‘unawesome’ year in 2022 are arguably not grasping what the ‘demand destruction’ implied in lower bond yields, lower stocks, and lower prices of *inelastic* commodities, really means.
“It surely means a deep, not a shallow recession; a surge in unemployment; an asset-price crash in asset-driven economies; and further humiliation of ‘experts’ and the ‘consensus view’ of how things should be done. Worse, it means being cold this winter, because one cannot afford to heat one’s home, and businesses closing because they cannot pass on higher energy costs. Worst of all it means hunger: a report shows one in four Britons are skipping meals due to inflation already. Now fire lots of them too to bring prices down, eh?”
_______________________________________________________________________________________________________
“You thought people were angry in 2016? You thought they were angry during ‘science-based’ Covid lockdowns and restrictions? You thought they were angry when *nobody* built *anything* back better anywhere afterwards? Or when they were censored on social media? Or when a major war started and upended things? Try making everyone –even billionaires!– much poorer all at once too, because that is what is happening.”
_______________________________________________________________________________________________________
“In markets, we don’t care about who actually makes things, because energy, food, goods, and services all just arrive by magic from somewhere, like home-cooked meals delivered to a teenager’s bedroom door, or a food delivery service to a trading floor busily bidding up the price of the staple commodities we all need to live because they can’t make a high enough return from government bond yields. All we have to do is to focus on how to keep people spending,… right?
“Wrong! We *all* need to be doing more of what China has been doing – to focus on the SUPPLY SIDE. Which, given their Marxist (for those who have read him, and understand the difference between ‘productive’ and ‘fictitious’ capital) and state-capitalist (for those who have read Hamilton) bent, is what they do best, and we do worst.”
_______________________________________________________________________________________________________
“Of course, Biden is trying to push a Green New Deal and so is the EU, which yesterday announced plans for a ‘massive’ increase in green energy to help end reliance on Russia. Welcome to the supply side of GDP!
“However, too late. It is just sinking in in Brussels (and the US) that solar panels –besides being very un-green to make– are made in China; which is where most rare earths are processed; and most of the mineral supply-chains for electric vehicles lead there, with existing supply sewn up. Today China is talking about maintaining its subsidies for EV production, which were to end this year: so, it maintains economies of scale AND physical supply chains, while Europe and the US are left with PowerPoint presentations and catchy phrases like ‘Green Transition’ and ‘Build Back Better’(?)”
_______________________________________________________________________________________________________
“Someone is going to have to spend a whole lot more, not less, and on a whole lot more supply, not demand –and in a whole new trading network– if they want to ensure that stocks, bond yields, and commodities don’t go down together as angry mobs rise up.”
_______________________________________________________________________________________________________
GET THE PICTURE?
In the immortal words of George W. Bush . . .
“THIS SUCKER’S GOING DOWN!”