Welcome we will be reviewing macro events from this past week from The Post I made at the beginning of this week on 9/25/22.
I have added a Definitions page which will include all of the terms and abbreviations that I use from now on and will be referred to on every post.
Substack has launched an iOS app for those of you using apple devices. I am an android peasant and can’t tell you if its good or not yet, but I will know soon. Substack has announced a waitlist for their android app, which they claim is nearly ready. I’ve signed up for the waitlist and the link is here in case you wish to do so.
Please feel free to skip around or ignore certain sections if it does not apply to you. The Table of Contents is made to preserve your time in this manner. You can always simply read the conclusion if you are in a hurry.
I was recently a guest on the Against The Mob Podcast where we discussed the changes in international forex invoicing over the past decade and how this impacts global commerce and currency value over time. Specifically in relation to the Petrodollar. If Section 1 and 2 of the post from 9/5 confused you or you want more detail, definitely give this one a listen.
Table of Contents
An Eye on Russia
Central Bank Speeches
ECB
Federal Reserve
BoJ
BoJ Meeting Minutes
GDP
US
UK
UK Pension Funds Almost Insolvent
Crypto Macro
Price Action
Conclusion
1. An Eye on Russia
Yesterday we covered the possibilities for whether or not the Nordstream explosions were sabotage or an accident. Considering the geo-political outcomes of the incident though it serves to further entrench Russia into committing to this conflict with the West through Ukraine as they now have much less bargaining power with the European bloc of NATO. But if we’re being honest, European countries as they are currently led are just vassal states for the US. Other than a few with leaders who are less amenable to being told what to do, like Hungary, Poland, Czechia, and now Italy after Georgia Meloni won the election this past Sunday; every other European country is content to do as the US tells them to for the time being.
With Russia even further entrenched in the conflict we had several events occur during the week that only further serve to draw the lines of the western and eastern economic spheres that are emerging.
On top of the destruction of the Nordstream pipelines, referendums were held in 4 provinces of Ukraine that Putin has invaded. Those referendums were on whether or not those provinces wished to join Russia or stay in Ukraine, all 4 voted upwards of 90% to join Russia. Of course, there are a million questions you can have about the validity of a referendum held in a warzone by soldiers literally going door to door to collect ballots, but those concerns don’t matter. The legitimacy of the elections don’t matter.
What happens now is that Russia and the West have a border disagreement that can’t be solved unless one side concedes, because Russia treats the referendums as legitimate, while the West does not. Russia has lost one of their major bargaining chips with Europe to reach a settlement, and so it’s likely both sides will be settling in to a much longer drawn out conflict.
You can begin to see the lines being drawn in this larger conflict.
The BRICS sphere is beginning to grow tired of the West, and our monetary dominance of their trade alongside a cultural colonialism. Whether Putin, Xi, or anyone else is a bad guy or not is irrelevant. They aren’t the only ones tired of being used in this way. Putin gave a speech this week about the conflict and it’s of note that he did not mention Ukraine a single time, instead his main focus was on America and our attempts to culturally and financially dominate other countries.
While his invasion of Ukraine is immoral, we have to be very careful that we aren’t alienating other countries by forcing them to buy our dollars just to trade, and forcing their banks and corporations to align with American cultural standards rather than their own just to participate in commerce. It’s no coincidence that many countries have similar complaints about the US and our export of woke capitalism.
Outside of western Europe, Japan, Canada, Australia, and New Zealand, our allies aren’t really our allies. The world is a lot smaller than we have led ourselves to believe. The arrogance we project will likely come back and bite us as we are more dependent on these countries than we believe. Not only for their exports, but also because they sell and buy things in dollars that they otherwise don’t have to. The recent elections in Italy and Sweden should be indications of this seed change. The fact that the largest economies outside of the western sphere are all more aligned with Putin than with us should be fairly telling about how unlikeable the west is on the global stage. But for the most part, the west just doesn’t see it yet, and that’s ultimately to our detriment as the collapse in global confidence could lead to a very drastic decrease in quality of life in the west.
But for now, disavow yourself of any belief that this conflict will end quickly and easily. It won’t. And it’s may possibly expand in the coming years to include Chinese border disputes, Indian border disputes, African borders disputes, and maybe even a complete collapse of the Central African Franc as the French treasury gets pushed out of countries that choose to align with the East. At some point this could come to escalate into numerous minor conflicts around the world. Azerbaijan and Armenia. Greece and Turkey. China and Taiwan. India and Pakistan. Russia and Ukraine. And all of this could be further exacerbated by domestic instability in a number of American, European, Africa, and Asian countries. We likely will see significant political shifts across the board. And all of this will occur during a time when many sovereign bond yields may begin skyrocketing as liquidity in the fiat sphere becomes tight and trust in government continues to fall. This will not be a quick decade, nor will it be easy, and the conflicts we encounter along the way will mirror this.
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