by Sergey Markov

The law on the confiscation of Russian assets has been adopted by the US Congress. But this law does not make much difference for several reasons.
1. The law does not oblige the president to confiscate Russian assets. It only allows the president to confiscate them.
2. The general problem remains the same: if the United States actually confiscates Russian assets, then confidence in the dollar and American financial instruments will inevitably decrease in the world. And the United States would lose much more than the value of the confiscated assets.
3. Russian assets in the US amount to only 5 billion, whereas the EU has 210 billion. That is, only 2.5% of the blocked Russian assets are in the United States.
4. The main goal of the United States is not to confiscate Russian assets itself, but to force the EU to confiscate Russian assets in the EU. And the new law’s aim is to push the EU towards that.
5. But the EU is very much afraid of confiscating Russian assets. Afraid of Russian retaliatory confiscations. But the main thing is that it is afraid that after the theft of 200 billion dollars, confidence in financial instruments in the euro area will simply collapse. And the EU will lose trillions. And this will lead to a financial crisis. And the financial crisis will lead to an economic and political crisis.

by German Gorraiz Lopez

After Brexit, Germany’s hypothetical exit from the EU would provoke the liquidation of the Eurozone and lead to the gestation of a new European economic map with a return to national economic compartments.

The Doctrine of the “Debt Brake”

As Joel Kotkin points out in Forbes magazine, for decades “the countries of the North (Germany, Norway, Sweden, Denmark, Holland, Finland and the United Kingdom) have compensated for very low fertility rates and declining domestic demand by accepting immigrants and by creating highly productive export-oriented economies”. In line with this, Germany introduced in its Constitution in 2009 the doctrine of the ‘Schuldenbremse’ (debt brake) with the principal objective that “every generation should pay its expenses and not consume (in the form of debt) the taxes that their children will pay “.

Germany achieved successive economic surpluses in the last five years because the ECB’s zero or negative interest rates required less money to pay public debt and allowed Germany to accumulate reserves, which enabled them to address the social crisis of COVID-19 with a massive investment boost estimated at €20 billion to kick-start the economy. 

A traffic jam for the German locomotive

However, according to an analysis by the German Institute for Economic Research (DIW), at present Germany is burdened by the war in Ukraine and by the total cut off of the Russian gas supply, which has have already caused a contraction of about €100 billion (2.5% of GDP). This contraction cause collateral damage, pushing the economy into recession and raising the unemployment rate, combined with runaway inflation and the loss of trade surpluses.

Thus, according to euronews.com <http://euronews.com/> , the German locomotive lost steam in the fourth quarter of 2023 (negative growth of 0.3% of GDP) due to higher energy prices, reduced industrial production due to weak European demand, stagnating domestic consumption and the loss of competitiveness vis-à-vis the rest of the world — which has resulted in a severe decline of 1.2% in exports in 2023.

At the same time, ECB interest rates rose to 4.5%. That, combined with the rampant inflation of 5.9% in 2023, caused real wages to stagnate in Germany. Fiscal adjustments and cuts in agricultural subsidies have put the German countryside and the other trade unions on the warpath.

Charles Dumas (Lombard Street Research London) argues that “Returning to a cherished German mark would squeeze profits, increase productivity and raise consumers’ real incomes, because instead of lending savings surpluses to peripheral countries, Germans could enjoy better living standards in their country”.

Increase in social fracture

According to a recent EU report, 7.5 million Germans work in the low-income sector (mini-jobs), and according to the NGO Paritätischer Gesamtverband, 14% of the people in Germany (16.6% of the population) are at risk of poverty.

This, together with the high proportion of immigrants in Germany (almost 20%), will exacerbate xenophobic feelings in German society (especially among East Germans), due to the reduction in the labour supply, fierce competition for jobs, and the conversion of many outlying neighbourhoods into genuine ghettos of immigrants. Thus, a spectacular rise of ultra-right groups is foreseeable in the 2025 elections.

On the way to Dexit?

According to a survey conducted by TNS-Emnid for the weekly magazine Focus, 26% of Germans would consider supporting a party that wants to take Germany out of the euro. The rising star in the German political firmament, “Alternative for Germany” (AfD ), was initially formed by academics and businessmen but it has been radicalized. It has adopted clearly xenophobic postulates, such as the possible expulsion of millions of foreign citizens, and they are considering proposing a referendum on Germany’s exit from the Euro (Dexit).

This hypothetical exit of Germany from the Euro would mean the beginning of the end for the Eurozone and the formation of a new European economic map that will mean the return to the fixed economic compartments — and the triumph of the US in achieving the Balkanization of Europe.

Watch the full interview:

Catherine Austin Fitts (CAF), Publisher of The Solari Report, financial expert and former Assistant Secretary of Housing (Bush 41 Admin.), says the top story (out of 20 top stories) of 2023 was massive, documented pushback to tyranny and control by the evil Deep State globalists. 

Join Greg Hunter of USAWatchdog.com as he goes One-on-One with the Publisher of The Solari Report, Catherine Austin Fitts for 12.30.23.

How To Keep the Gold Price Down ? They Invented Crypto!

”They want to keep the gold prices low and when the price goes up, what do they do? They promote crypto!… “ and that sucks up the excess dollars and removes them from the gold market. Voila! 

Watch the story from minute 42:

via Moon of Alabama

Just a few month back I argued that the new economic protectionism the U.S. is pushing for will fire back:

Last week Secretary of the Treasury Janet L. Yellen gave a speech on the U.S.-China economic relationship. I called it a declaration of war.

Yesterday National Security Advisor Jake Sullivan held a speech on ‘Renewing American Economic Leadership’ which touched on some of the same themes as Yellen’s speech.

Sullivan argues that the U.S. must change course from opening markets and liberalization to targeted protectionism and subsidies for specific sectors. The main argument for it is ‘national security’ but the real aim seems to be the suppression of competition from others.
…
Sullivan’s whole speech is an argument against free markets and for protectionism and sector subsidies. It does away with the economic framework the U.S. had build after the end of the second world war. This is supposed to be replaced it with bilateral and block wise agreements that are to the advantage of the U.S., to the disadvantage of its agreement ‘partners’ and which exclude China and other ‘hostile’ economies.

The so called ‘decoupling’ or ‘de-risking’ from China is actually an attempt to isolate it. It creates a dynamic that will lead to import replacements in China.

This will lower exports to China from the U.S. and its allies. The whole scheme will thereby eventually work to China’s advantage.

Three years ago the U.S. prohibited domestic and foreign companies to stop the provision of 5G chips to Huawei. Thus a milestone of import replacement was revealed yesterday when Huawei announced a brand new 5G phone with Chinese made chips:

Huawei Mate 60 Pro has been silently launched in China. The successor to last year’s Huawei Mate 50 Pro, brings several major upgrades including satellite calling support and an LTPO AMOLED display. The handset sports a 6.82-inch AMOLED display with an adaptive refresh rate that ranges between 1Hz and 120Hz and a 300Hz touch sampling rate.

The U.S. pushed to stop supplies of 5G chips to Huawei. That led to a campaign to develop Chinese replacements. Huawei has also developed a graphic processor that is as fast as Nvidia’s A100 GPU which is used for high performance computing and AI development. The new 5G chip the phone is using has been confirmed as being genuine.

The $300 billion import of chips to China has shrunken as the country is fast in developing domestic replacements.

On the same day Russia increased its autonomy with the first flight of the new SJ-100 SuperJet which is based on the replacement of systems that previously came from foreign suppliers but are now produced domestically:

United Aircraft Corporation CEO Yury Slyusar also highlighted the broader implications of the project, declaring it a “testament to Russia’s technological self-sufficiency.” Slyusar added, “Our primary aim now is to obtain full Russian certification for the plane and initiate regular shipments to airlines.”

The launch of the plane and of Huawei’s new phone came on the same day U.S. Secretary of Commerce Gina Raimondo ended her visit to China. It was certainly meant as a point.

Today’s Global Times Editorial is rubbing it in:

Chinese companies will inevitably break through the blockade and move forward. This is the result of China’s overall development and close integration with global interests. In this era of globalization, the idea of kicking Chinese companies out of the industrial chain will only encounter increasing resistance because it goes against the law of development. The resurgence of Huawei smartphones after three years of forced silence is enough to prove that the US’ extreme suppression has failed. This also serves as a microcosm of the US-China tech war, reflecting the entire process and foreshadowing the final outcome. Recently, some American media outlets have been enthusiastic about hyping up things like Huawei is building a “secret” chip factory. Ultimately, these are all due to a failure to see or a refusal to believe in the general trend, and they hold on to outdated thinking that Chinese companies’ technology is all “stolen.” Essentially, it is Washington’s technological arrogance, and the US will definitely pay the price for this arrogance.

As China is training more engineers and researchers than the U.S. and Europe combined, it will eventually take the technological lead in many fields. Other countries will have to either become more specialized or close their markets to imports from China.

The later will in the longer run cause a less competitive environment that will come with higher costs and can only be sustained for a relatively short time.

via Sputnik International

The Russian economy exceeded $5 trillion in terms of purchasing power parity for the first time in late 2022, and stayed in fifth place in the world in this indicator, according to the World Bank

China became the world’s largest economy by PPP with $30 trillion, followed by the United States with $25.5 trillion. India closes the top three with $11.9 trillion, and Japan is in fourth place with $5.7 trillion.

In general, the world economy in terms of purchasing power parity grew by 11% – to $164.2 trillion, while 20 years ago it was a third as big: $54.1 trillion.

Russia confirms that it is launching a gold-backed BRICS currency. The topic will be on the agenda of the BRICS summit in South Africa in August. Many other countries have applied to join BRICS. De-dollarisation is accelerating.

Based on the most recent Fed Survey of Consumer Finances (SCF) –

https://www.federalreserve.gov/econres/scfindex.htm

the median household net worth was ~$122,000, and most of that was the equity in the household’s home. Median financial net worth (financial assets like stocks and bonds less liabilities like credit card and auto debt) was minimal.

A 2022 Fed Survey of Economic Well Being of households revealed that almost 40% of Americans would not be able to meet an unexpected expense of $400 from cash/savings on hand, and that figure goes up to ~60% if we make the expense $1,000.

https://www.federalreserve.gov/publications/2022-economic-well-being-of-us-households-in-2021-dealing-with-unexpected-expenses.htm

The majority of people in the US are literally living paycheck to paycheck – with a social safety net (including things like health insurance, cost of prescription medicine) that is much less generous than many part of developed Europe, or even Canada).

British five-year-olds who grew up in the era of austerity are shorter than their peers in other developed nations by as much as 7cm (2.76in), according to data from the Non-Communicable Diseases Risk Factor Collaboration published by The Times on Tuesday.

Since 1985, when British boys and girls both ranked 69 for average height at five years out of 200 listed countries, their ranking has plummeted dramatically – to 102 for boys and 96 for girls, putting them behind countries as diverse as Canada, Kyrgyzstan, and Cuba.

Comparing the numbers to data on 19-year-olds, Professor Tim Cole of University College London’s Great Ormond Street Institute of Child Health suggested to The Times that growing up in the 2010s “period of austerity” was what “clobbered the height of children in the UK.” The height of British five-year-olds peaked in 2011 at 112.8cm (44.4in) and has been falling ever since, the statistics show.

Because height is affected not just by quality and quantity of food but also stress, poverty, illness, and even sleep quality, Cole argued it is a uniquely “sensitive” indicator of living conditions. “It’s quite clear we are falling behind, relative to Europe,” he said.

“In modern Britain, the way we eat is one of the clearest markers of inequality,”former UK government food adviser Henry Dimbleby told The Times, pointing out that “children in the poorest areas of England are both fatter and significantly shorter than those in the richest areas at age ten to eleven.”

Family doctors in low-income areas have reported an “extraordinary” surge in the kind of nutritional-deficiency-borne diseases prevalent during Victorian times, Dimbleby explained. According to NHS data, 700 children are admitted to English hospitals every year with rickets, scurvy, or other forms of malnutrition, while nutrition charity The Food Foundation has found higher rates of type 2 diabetes and dental decay as well as obesity in poorer children.

A diet of cheap junk food has the peculiar quality that it can make you simultaneously overweight and undernourished.

It is not just European countries like the Netherlands and Lithuania which outperform Britain. According to the study, China and North Korea both raise taller five-year-olds than the UK. Even five-year-olds in Libya – born and raised after the NATO bombing campaign that helped to overthrow their government and turn the country into a failed state – are taller (boys) or as tall (girls) compared to their British counterparts.

Austerity has been linked to a host of socioeconomic problems in the UK, from soaring inequality to declining educational achievement. While supporters argue the program enacted in the wake of the 2008 financial crisis was necessary to rescue a floundering economy, critics have countered that the damage done outweighs any benefits.

Russian Prime Minister Mishustin’s visit to China has begun. It is more correct to call it an off-site meeting of the economic bloc of the Russian government together with the economic bloc of the Chinese government.

The goal is to hold all meetings of the joint groups and resolve all issues of how to trade around US and EU sanctions.

There are 42 Russian-Chinese working groups at the level of ministers and heads of departments. They are brought together in 5 Russian-Chinese supergroups under the leadership of vice-premiers.

All these groups will work for several days in Beijing.

And two prime ministers will supervise them and solve all the problems that the working groups cannot solve at their level.

That is, the result of the visit should be the development of relations between Russia and China at once through all ministries and departments in a synchronous breakthrough.
via

@logikamarkova

Largest money supply decline on record in the United States, suggesting a hard economic landing is likely

via – GRDector

Normalizing of rates will cause deflation. It is needed to stabilize the dollar, which for too long had a time value near zero. When the time value of your money is zero what is your money worth?