Guest Post by David Stockman
It is only a matter of time before Kiev surrenders to the Russians, with or without their clown-car president signing the armistice. But that deal will be so onerous from Washington’s perspective that it will not mark the end of the sanctions war, but will be an excuse for its actual intensification and indefinite prolongation.
When that becomes the reality, however, inflationary hell will break out all over the place. And the Fed’s decades-long experiment in egregious, inflationary money-pumping will splatter ignominiously all over the Eccles Building (Fed headquarters).
It now appears that commodities markets have been so drastically roiled by the action to date that Washington’s war on the global trading and payments system is now open-ended and can theoretically go on for years.
That’s because the Russian-loathing, Putin-demonizing Dems now in charge of policy in Washington cannot even see straight when it comes to the real issues of the conflict.
There is absolutely nothing wrong with partitioning Ukraine and Crimea, nor with Putin’s proposed new security arrangement that would have NATO move its missile bases to the pre-1999 status quo and the re-garrisoning of US and Western military forces to the old NATO territories.
But these plausible solutions are so far removed from the war fevers now raging on the Potomac that there is no chance of Washington embracing a negotiated solution to the Ukrainian war. It will actually take a historic GOP sweep in the 2024 elections to clear the decks of Putin/Russian demonization, and even that would not make a difference if the blood-thirsty neocons and military hawks retained control of the GOP.
Meanwhile, just like that, the price of oil recently hit $130 per barrel.
Here’s the thing.
Double-digit inflation is now guaranteed and it will be long-lasting.
That’s because the Fed is occupied by what amounts to anti-Volckers. These group-think addicted Keynesian crackpots are clueless about the dire inflationary fires now raging and are still buying bonds (QE) and planning only tepid 25 basis point rate increases when actually hundreds of basis points of rate increases are needed ASAP.
Here is just one example. Nickel spot prices are up nearly 5X, and this is merely illustrative of the inflationary firestorm now gathering a head of steam.
Wheat prices have skyrocketed more than 60% recently as the war effectively shut off more than 30% of the world’s wheat supply, which ordinarily trades out of the Black Sea ports for Ukraine and Russian producers.
The commodity, in turn, is used in everything from bread to cookies and noodles. Accordingly, those soaring upstream costs will rapidly work their way down the processing pipeline until they arrive on the grocery shelves. When? Just in time for American consumers to be paying $6 per gallon to drive to Kroger’s to pick up an inflated-priced loaf of bread.
And there is far more to come.
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inflation and inflation-driven debt, followed by deflation.
I do wonder what it will take before guys like Stockman finally realize that there is no war with Russia, but rather that the enemy are the free people of the West.
In war it is always assumed that the opponents are armies and governments, but the losers are almost always the people. In this case it isn’t even concealed from view- like WWII- but open on display. The war- or whatever this regional conflict goes by- is simply a smokescreen to conceal the larger pincer movement of debased currency, rapid inflation, deliberate destruction of food chains, the reduction of free movement, the silencing of any form of dissent, etc.
Oh well.
Amen
Nothing new under the sun. This is EXACTLY what the US and others did to Japan. Backed them into a corner. Russia has more options though than Japan did. They are resource sufficient and have China, India, Turkey, Brazil, and others to cooperate with. The US is going to be torn apart with inept and stupid politicians who are being directed by who knows who. Those “who” have infiltrated the US and intend to crush us. It’s obvious as hell… Chip
We can cut them off at the pass (or their knees) if we throw all the Dems and RINOs out of office (every office) in 6 months (Nov22); send FJB and Pravda a your next pink slip message; then release political prisoners and hoists the J6 Show Trial Commissar’s heads on Pikes. I’m hoping France dumps Mungo in the Congo with all their illegals next week when it elects LePen, and Cuba recalls their Favorite Son (I wonder if Hoffa means anything to him).