Armstrong Economics Blog/Climate Re-Posted Apr 14, 2022 by Martin Armstrong
The supply chain issues across the world are continually worsening due to government mismanagement. It seems as if there are sinister intentions at play, as these new restrictions seem to be a deliberate attempt to destroy the global economy.
California’s far-left politicians only implement laws to hurt the people. The California Air Resources Board (CARB) recently revised its Air Resources Board Truck and Bus Regulation:
“The Air Resources Board (ARB) Truck and Bus Regulation requires diesel trucks and buses that operate in California to be upgraded to reduce emissions. By January 1, 2023, nearly all trucks and buses will need to have 2010 model year engines or equivalent. Compliance requirements are currently in effect.”
CARB continues to deny that removing 17% of the trucking fleet will impact the supply chain crisis. “There is simply no evidence to support any claim that the current supply chain issues have any connection to the state’s effort to clean up California’s trucks emissions,” a representative stated.
Trucking companies are pleading for this ruling to be repealed as they simply cannot afford new trucks. Small trucking companies will go under.
Peter Navarro, former manufacturing adviser to former President Donald Trump, called the situation “Woke microeconomics.” Reducing fossil fuels with no other alternative available seems appealing to the far-left. They do not realize that their save the environment plight cannot dismantle the industrial world without repercussions. Woke microeconomics will lead to our downfall.
The wholesale prices in Germany rose at a record pace in March. Compared to the same month the previous year, wholesale prices jumped by 22.6%, as the Federal Statistical Office announced on Tuesday in Wiesbaden. This is the highest increase since calculations ever began in 1962. In February, the rate was already high at 16.2%, which has been surpassed here in March. Month-on-month, wholesale prices rose 6.9%, which is yet another record increase.
Our models are pointing to serious trouble ahead for Germany and this poking Russia is all intended as a diversion from the collapse of the European economy that is underway. The negative interest rates since 2014 have wiped out the pension funds and proven that the central bank can no longer control the economy. Add to that, the braindead COVID restrictions which have dealt a serious blow through the heart of the supply chain, and we have a recipe for total economic disaster which is being reflected in the inflation rates which then leads to civil unrest.
I have stated many times, we have the WORST possible crop of world leaders I have ever witnessed in my lifetime. There is not a single character that I would be able to sit down and have an intelligent conversation with. Germany appointing Jenifer Morgan in charge of their environmental policies and the intent was to make her their Secretary of State is just astonishing. What is her role? Tell Putin to turn off his tanks because they create CO2?
These climate zealots have managed to destroy the world economy in just two years. Never in the history of humanity has there EVER been such stupidity from those in power. They should admire their heads in the mirror every day, for if history repeats, they will be dragged from their palaces and their heads might be adorning spikes with cheers of vindication.
It is well known that the first casualty of war is the truth, and nothing sorts out the lies more than troops crossing political borders. Hence, they also say that history is written by the victors. Ever since COVID, we have witnessed a rising trend of civil unrest politicians have been working hard to deliberately create war with Russia all cloaked in their real objective of controlling the planet. Ever since this intended war to poke the Russian Bear, there’s been an acceleration of every conflicting agenda on the world stage. This has crashed the world economy, ended Globalization, and divided the world into US v THEM with the only resolution being armed conflict. Our World Leaders need a war with Russia and then will turn on China as they think threatening China with sanctions will prevent them from joining Russia against the West. This will fail – China is not that stupid. Blaming the other guy is always the way to war. They need to demonize the enemy to inspire hatred that they use to manipulate war.
Posted originally on the conservative tree house on April 13, 2022 | Sundance
CNBC commissioned a poll by Hart research and associates, a friendly outfit for the left. Unfortunately, that means CNBC then needed to tell everyone what the results were [Full Poll pdf Here]. That task fell to CNBC’s Steve Liesman; an appropriate name given the task at hand.
The irony doubles when you remember this was the same CNBC pundit who refused to accept the horrible economic data that began surfacing last fall. There was even a public broadcast where Liesman said the BLS statistics had to be wrong, because the results were so horrible. A few months later, and here he is explaining how the country now feels about Joe Biden. WATCH:
(CNBC) – […] The pessimism is clearly dragging on Americans’ opinions of President Joe Biden. In fact, nothing looks to be working in the Biden presidency from the public’s viewpoint.
The president’s approval rating sank to a new low of just 38%, with 53% disapproving. Biden’s -15% net approval rating is measurably worse than his -9% approval in the CNBC December survey. What’s more, his approval rating on the economy dropped for a fourth straight survey to just 35%, with 60% disapproving, putting the president a deep 25 points underwater. (article link)
Posted originally on the conservative tree house on April 13, 2022 | Sundance
Yesterday in Iowa, Joe Biden called the Russian military operation in Ukraine a “genocide,” which has a very specific set of legal definitions to it.
When asked if he had seen enough evidence to support that statement Biden responded:
“Yes, I called it genocide. It has become clearer and clearer that Putin is just trying to wipe out the idea of even being — being able to be Ukrainian. And the amount — the evidence is mounting. It’s different than it was last week. The — more evidence is coming out of the — literally, the horrible things that the Russians have done in Ukraine. And we’re going to only learn more and more about the devastation. And we’ll let the lawyers decide internationally whether or not it qualifies, but it sure seems that way to me.” (link)
Several ground reports from European journalists indicate the U.S. military is running all of the combat operations inside Ukraine. A French reporter said on Euro News, “I thought I was with the international brigades, and instead I was facing the Pentagon.” Now today, Joe Biden announces he is arbitrarily sending U.S. combat helicopters into the conflict.
(WHITE HOUSE) – I just spoke with President Zelenskyy and shared with him that my Administration is authorizing an additional $800 million in weapons, ammunition, and other security assistance to Ukraine.
The Ukrainian military has used the weapons we are providing to devastating effect. As Russia prepares to intensify its attack in the Donbas region, the United States will continue to provide Ukraine with the capabilities to defend itself.
This new package of assistance will contain many of the highly effective weapons systems we have already provided and new capabilities tailored to the wider assault we expect Russia to launch in eastern Ukraine. These new capabilities include artillery systems, artillery rounds, and armored personnel carriers. I have also approved the transfer of additional helicopters. In addition, we continue to facilitate the transfer of significant capabilities from our Allies and partners around the world. The steady supply of weapons the United States and its Allies and partners have provided to Ukraine has been critical in sustaining its fight against the Russian invasion. It has helped ensure that Putin failed in his initial war aims to conquer and control Ukraine. We cannot rest now. As I assured President Zelenskyy, the American people will continue to stand with the brave Ukrainian people in their fight for freedom. (link)
White House spokesperson Jen Psaki was asked about this escalation earlier today:
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The Biden administration is all-in for this Ukraine proxy war, taking all actions to highlight a zero-sum position.
Posted originally on the conservative three house on April 13, 2022 | Sundance
Fed Governor Christopher Waller appeared on CNBC to announce we have reached peak inflation, and things will moderate from here. All of these fed moves are political moves, not monetary policy-based moves. Here’s the thing they will never admit to the non-institutional investor.
The fed has been painfully slow to raise interest rates on purpose. They did not make a mistake. The reason for their delay is they needed to wait for the beginning of the first 2021 inflation wave to cycle through before they raised interest rates. It’s a game of mirrors that almost no one sees. WATCH:
The rate of inflation will drop once the statistical year-over-year comparisons reach the same moment in the prior year. The fed will raise interest rates in May and then use the June inflation rate decline as a false talking point to highlight how their policy is working. They wait for May, because they need to wait for the calendar, nothing else. Inflation is measured as the percentage of change from the prior year. By waiting until the inflation is measured against the first wave of rising prices, it will give the illusion of a decline in inflation.
So that’s why they waited. But here’s the worse part….
All of these U.S. Fed monetary policymakers are in full ideological alignment with the global and central bankers. They are all following the same Build Back Better agenda and policy instructions.
All of bankers know the shift from ‘dirty energy’, coal, oil, natural gas, will create inflation. All of the bankers know there is no economic bridge within the plan to shift from oil to their unicorn dust. All of the bankers know that shutting down oil exploration as a matter of western unified policy will, as a factual matter, destroy the economic systems that rely on energy….. which is to say everything.
All of these bankers know the severity of the inflation crisis this energy shift creates. None of them do not know.
Everything they are doing is coordinated to assist the climate change agenda.
Posted originally on the conservative tree house on April 13, 2022 | Sundance
he “Producer Price Index” (PPI) is essentially the tracking of wholesale prices at three stages: Origination (commodity), Intermediate (processing), and then Final (to wholesale). Today, the Bureau of Labor and Statistics (BLS) released March price data [Available Here] showing a dramatic 11.2% increase year-over-year in Final Demand products at the wholesale level. This is the fifth consecutive month with the highest rate of inflation the PPI ever recorded.
The single month increase in wholesale prices of 2.3% was driven by inflation built into the supply chain at every level that shows up in the final wholesale price. Those price increases then get passed along to consumers along with the additional costs for warehousing, transportation and delivery. I modified Table-A (FINAL DEMAND) to take out some of the noise.
Wholesale prices of goods jumped 2.3 percent in March, and the wholesale price of food products jumped 2.4 percent. The total demand inflation compared to last year is 11.2 percent, the highest rate ever recorded since the PPI tracking was first started.
The total final demand monthly calculation (1.4%) is lower than the final demand goods (2.3%), because final demand services are offsetting. You may remember the discussion/analysis about prices beginning to stabilize after this month due to a contraction in demand for goods and services. I see support for that thesis within this data.
The three phases of wholesale product creation: (1) origination, (2) intermediate, and (3) final, cycle through the economic analysis in reverse chronological order. Roughly speaking, the flow of goods quantified is done in 30-day sequences. Final demand this month is comparing to final demand in March 2021. The intermediate demand goods this month will become final demand goods next month (April).
The rate of inflation behind this set of final demand goods is beginning to soften. See Table B, Intermediate goods. Again, modified to take out the noise:
While the yearly comparison for both processed and unprocessed intermedia goods is eye dropping, in the unprocessed intermediate demand goods, we are starting to see a lessening of monthly price increases.
In essence, prices have been rising so fast and for such an extended period of time, that we are now cycling through the rate of increase and starting to compare it to last year when the rate of increase was originally going high. As a consequence, the rate of price increase will likely lessen, even though the actual price may still keep climbing within the manufacturing process.
The price of raw materials, and the wholesale energy costs to process those materials into finished goods, are still rising. In addition to the consumer prices reported yesterday, this wholesale price data is showing the most recent increases (March) in fuel and transportation costs. For the next report these figures should now plateau.
♦ BOTTOM LINE – We have not yet reached PEAK INFLATION – However, the price increases from wholesalers to retailers are now at parity. The increased price of things coming into the supply chain are now at similar rates of increase when compared to the stuff on the shelves.
Inflation from field to fork is now fully matriculated and embedded in the total economy as a result of two massive price waves (July to October 2021 and November to March 2022). Those prices will never fall.
Highly consumable goods like food, fuel and energy will remain at approximately the price today for a period of around five months, then we will see the third wave kick in as the new higher harvest prices hit the processors in late summer.
The prices for non-essential durable goods, like cars, electronics, appliances etc. from this moment forth will now be determined by demand. Highly sought after goods will increase in price as more customers chase fewer products. However, ordinary or widely available durable goods will likely start to come down in price very soon as inventories climb because consumer spending has prioritized and dropped non essential goods from their shopping lists.
To put it more succinctly: The stuff we need will cost more. The stuff we don’t need will cost less.
Posted originally on the conservative tree house April 13, 2022 | Sundance
Treasury Secretary Janet Yellen delivered a remarkable speech today outlining “the future of the international order,” in the aftermath of the global pandemic and the current conflict in Ukraine. Within the speech, Yellen outlines the priorities of the United States according to the current administration and the international financial mechanisms that she controls.
The speech is quite jaw-dropping when you consider the nature of her position, and the fact that she is an unelected bureaucrat within government.
As you read the speech {Transcript Here}, keep in mind she is not the President of the United States, or the commissioner of the New World Order, yet she presents herself as authorized to control the geopolitical constructs of the Biden administration. The hubris is astounding.
Secretary Yellen: outlines the goals and objectives of the international order, predicts a concerning global famine, warns against the cleaving of financial mechanisms for international trade as an outcome of the Ukraine conflict, threatens any nation who does not support the western political alliance and outlines the need for decarbonization of the global economy.
Yellen expresses all of these powers from the position of a U.S. Treasury Secretary – the equivalent of a government financial minister. Speech highlights with emphasis mine:
(Transcript) – […] “Russia’s horrific conduct has violated international law, including core tenets of the UN Charter—challenging countries to demonstrate where they stand with respect to the international order that has been built since World War II. Therefore, when I speak about a changed global outlook, I’m not just talking about growth forecasts. I’m also referring to our conception of international cooperation going forward.
I will focus my remarks today on the significance of international cooperation in this current environment and for our future.
[…] With Attorney General Garland, I convened a novel taskforce of law enforcement and finance ministry leaders from G7 and partner countries to advance our efforts. […] Rest assured, until Putin ends his heinous war of choice, the Biden Administration will work with our partners to push Russia further towards economic, financial, and strategic isolation.
[…] When Russia made the decision to invade Ukraine, it predestined an exit from the global financial system. Russian leaders knew that we would impose severe sanctions. […] We are now seeing higher commodity prices that have added to global inflationary pressures and are posing threats to energy and food security, trade flows, and external balances across many countries.
[…] The ultimate outcome for the global economy of course depends on the path of the war. Russia could end this unnecessary war and the near-term impact could be contained.
[…] While many countries have taken a unified stand against Russia’s actions and many companies have quickly and voluntarily severed business relationships with Russia, some countries and companies have not. Let me now say a few words to those countries who are currently sitting on the fence, perhaps seeing an opportunity to gain by preserving their relationship with Russia and backfilling the void left by others. Such motivations are short-sighted. The future of our international order, both for peaceful security and economic prosperity, is at stake.
[…] The Russian invasion of Ukraine has dramatically demonstrated the need for us to stand together to defend our international order and protect the peace and prosperity that it has conferred on advanced and developing countries alike. […] On some issues, like trade and competitiveness, this will involve bringing together partners that are committed to a set of core values and principles.
[…] we need to modernize the multilateral approach we have used to build trade integration.
[…] we should implement last year’s global tax deal. Some 137 countries—representing nearly 95 percent of the world’s GDP—have agreed to rewrite the international tax rules to impose a global minimum tax on corporate foreign earnings and to partially reallocate taxing rights from countries where companies are headquartered to those where they sell goods and services.
[…] the economic and financial response to the global financial crisis in 2008-2009 was too timid and short-lived. With inadequate global liquidity, the crisis caused lasting damage. In response to the pandemic, the IMF acted creatively to support poorer countries. […] Experts put the funding needs in the trillions, and we have so far been working in billions. The irony of the situation is that while the world has been awash in savings—so much so that real interest rates have been falling for several decades—we have not been able to find the capital needed for investments in education, healthcare, and infrastructure.
[…] We know we have not yet done enough in terms of mitigation, adaptation, green technology innovation and adoption, and funding for those efforts. […] We must redouble our efforts to decarbonize our economies, recognizing that countries will use a range of tools—including carbon pricing, regulation, and subsidies—to achieve needed emissions reductions. Because those approaches will have quite different consequences for the costs of production, we will see differing impacts on trade competitiveness. We will need to work together to avoid trade tensions and in time to coordinate and harmonize our approaches.
[…] Some may say that now is not the right time to think big. Indeed, we are in the middle of Russia’s war in Ukraine, alongside the lingering fight against a global pandemic and a long list of other initiatives underway. Yet, I see this as the right the time to work to address the gaps in our international financial system that we are witnessing in real time. […] we ought not wait for a new normal. We should begin to shape a better future today.” {Read Full Transcript}
Think carefully about what you just read, and then remember the previous warning:
[CTH March 23, 2022] A Build Back Better society, or “great reset”, is factually underway as triggered by the gateway of SARS-CoV-2 and the massive spending by western nations to subsidize the lockdowns, shut-downs, economic closures and forced unemployment.
Global inflation is being driven not only by the American spending spree, but also by the massive government spending programs of the EU, U.K, New Zealand, Australia, Canada and many western nations.
The bills for those subsidies and bailouts are due. The labor of the citizens is going to have to pay those bills, while simultaneously we deal with inflation and massive debt balances on all nations’ balance sheets.
Into this mix comes the very real possibility of a declining U.S. trade dollar, as a result of geopolitical conflict between the west and Russia, China, Iran and OPEC in the geography of Ukraine. The financial sanctions by NATO and western allies have factually created a rift in currency exchange valuations.
As the proverbial west hammers those sanctions even harder and more deliberately, what they are doing is creating a stronger and greater likelihood that the dollar will be removed as the global trade currency, and we will enter a phase where two sets of nations exist:
One set of nations will run their economy on oil, gas and fossil fuels. The other set of nations will be focused on running their economic engine on the premise of sustainability, or renewable energy.
The sanctions toward Russia actually help to drive this chasm even wider.
To me, this looks entirely purposeful – done by specific intent and design.
Two world groupings. One group, oil-based energy (traditional) – let’s label them the RED GROUP; and one group GREEN energy (the build back better plan). It is not accidental these two groups hold similar internal geopolitical views and perspectives.
♦ The important part to see is… there are going to be two sets of nations with two structurally different economies. A red group and a green group.
What Treasury Secretary Janet Yellen outlines in that speech is the geopolitics of this exact cleaving. Also worth noting, We The People represent the carbon she seeks to eliminate.
Shanghai went under a full lockdown at the end of March under China’s zero-COVID tolerance policy. When cases allegedly rose, China extended the lockdown indefinitely. Shanghai hosts the busiest container port in the world, and its inability to operate is contributing to the supply chain crisis in a profound way. A member of the EU Chamber of Commerce’s Shanghai Chapter estimated that volume was down by 40% during the first week that the ports were prohibited from operating. There is no set date for when the port will resume operation.
It is estimated that the lockdown currently imposed has imprisoned an alarming 25 million Chinese citizens in their homes, but the implications of shutting down the world’s largest shipping port amidst a supply crisis will send aftershocks throughout the global economy. To understand how crucial Shanghai’s port is to the global flow of goods, the Port of Shanghai hosts over quadruple the volume of the Port of Los Angeles (one of America’s largest shipping ports).
Those in the industry warned that this would cause problems. One of the largest international container companies, Maersk, said that Shanghai’s shutdown would cause a 30% rise in trucking costs alone.
Some businesses are operating the “closed loop” system where employees are basically unable to leave their place of work. Still, the port cannot operate with the current restrictions as there are simply not enough available workers. This is completely unsustainable. China is throwing gas on the rapidly burning supply chain and inflation crises with their current policies that will be felt across the world.
Posted originally on the conservative tree house on April 12, 2022 | Sundance
I want to be very careful here, because multiple people have sent me a version of this outline asking for opinion. Basically, is David Friedberg correct?
The discussion in this video surrounds farming as a construct of global caloric creation. Meaning, with all that is taking place in the farming system on a global scale, will there be dramatic food shortages? It is a complex issue. In the larger picture what Friedberg, a former scientist within the Monsanto organization, explains is accurate; however, I would inject some nuanced dissension as it relates to U.S. farm production specifically.
The first four and a half minutes of the video are an accurate representation of the global state of farming, albeit with a little too much weight on the Ukraine-Russia aspect. There was a preexisting issue long before Russia entered the picture. The price of fertilizer was already skyrocketing, Russia-Ukraine has made that already looming issue, worse. WATCH First 04:30 minutes:
The problem described, about farmers deciding not to plant, is weighted more heavily in less developed countries where access to the financing for a future crop is not stable {AP Article Here}. For most of the developed world farming will continue; it is the end product where prices will reflect the additional costs of bringing a harvest to market. Bottom line, as the futures market is showing, crops will be more expensive.
There is going to be a problem in the same areas of the world where food stability and dependency is already an issue. Yes, the convergence of current farm challenges will make those areas more vulnerable. We do not know, to what extent.
The notation about a 90-day supply of food on a global basis (Northern Hemisphere) is slightly askew, as countries like the United States have a much deeper reserve and storage capacity. We discussed this last year {Go Deep}.
Essentially, in the U.S. we operate approximately one full harvest cycle ahead of demand. However, our problem is the COVID lockdowns in 2020 and 2021 disrupted the two food delivery systems by shutting down restaurants, cafeterias, hotels, hospitality venues, entertainment, school lunchrooms etc and limiting capacity for six months. The government intervention seriously messed up our food supply chain. {Go Deep}
In North America I do not foresee any major scarcity of total food availability, certainly not in the fresh food supply side. There may be shortages on specific segments within the processed and manufactured food supply chain, but those would be nuanced based on specific ingredient issues.
What we will see is continued increases in price and a demand for U.S. agricultural products to fill the voids in global markets that result from less developed nations needing the products our North American farming experts can deliver. There will be a higher demand for us to export food materials, and when combined with the already increased cost for the harvest, that means much higher prices still coming.
Our North American farmers are awesome in their ability to maximize yield, with the customary and appropriate qualifier that ultimately mother nature will determine success or failure. Our U.S. and Canadian farmers and ranchers are the best of the best. Their ability to feed our nation is a national and strategic advantage, unparalleled in any other region. They know how to do it, if the government will just get out of the way and let them work.
If it was a priority for the U.S. government to ensure U.S. food stability, they could spend a few billion by securing fertilizer and reasonably priced energy (diesel) for our farmers, simply to offset the upfront and increased production costs. Then, just turn North America loose, pray a little bit, and let them create as much product as possible for the overall market. Let the market demand determine the crop, and get government out of their business.
Farmers in the U.S, Mexico and Canada have the capacity to drive higher yields. Unfortunately, the politics of war, Wall Street – and the influence of the international banking system – takes a higher priority for DC than simple farming commonsense. Unfortunately, as we saw today, turning corn into gasoline additive just exemplifies the stupidity of the DC mindset.
On one hand, we have serious people concerned about global famine. On the other hand, we have a narcissistic occupant of the oval office, and a tribe of DC idiots worried about gasoline prices and the mid-term election. These issues do not have to be mutually exclusive, and there is a reasonable solution for both of them. However, all that reasonableness evaporates once the people behind a fraudulently elected DC politician walk in the room.
Will there be a dangerous level of food shortage globally? Yes
Will there be a dangerous level of food shortage in North America? No, but there may be some scarcity.
Will there be higher prices? Absolutely.
Unleash the farmers and unleash the energy experts and all of this maddening anxiety ends. Unfortunately, those actions are adverse to the Build Back Better agenda.
We are in an abusive relationship with our government.
People are leaving Facebook, Instagram, Twitter, and were moving to Parlar. Google and Apple removed the Parlar APP and then Amazon kicked then off of AWS. This is a complete purge going on of all conservatives. We are in the midst of nothing short of a real live Russian version of a revolution. Cheer up – you get to see what it was like to live history in a major confrontation between left and right. But make no mistake about it, the super-rich remains in power just behind the curtain. They own the press and social media while they use the virus to prevent people from gathering or organizing. It is their way or no way. Their motto: Resistance is Futile!
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