QUESTION: Marty; I remember when the Chinese central bank said they were using capital flow analysis which is your model. You said China should buy US debt directly from the Treasury and not the NY bankers. They did that in a matter of weeks. So when they say they are on the right side of history, are they talking about your model forecasting they will replace the US as the financial capital of the world?
NH
ANSWER: You have to understand that Asians believe in cycles. They are part of their religion. Richard E. Nesbett wrote an interesting book entitled “The Geography of Thought, How Asians and Westerners Think Differently … and why.” He attributed his work to a Chinese student who said, “You know, the difference between you and me is that I think the world is a Circle, and you think it’s a line.” He goes on to quote him:
“The Chinese believe in constant change, but with things always moving back to some prior state. They pay attention to wide range of events; they search for relationships between things; and they think you can’t understand the part without understanding the whole. Westerners live in a simpler, more deterministic world; they focus on salient objects or people instead of the larger picture; and they think they can control events because they know the rules that govern the behavior of objects.”
In my 40 years of dealing with governments, I NEVER had to explain cyclical theory in Asia – only to American & European who do think always on a linear basis. They apply this to analysis like climate change. The temperature has risen say 5 degrees on years and they project that out and say we will all die in 7 years. NEVER does the West ever forecast cyclically – it is always linearly.
China understand cycles – we do not. They understand the rise and fall of empires, nations, and city states. They understand that Communism failed for it tried to defeat human nature. They see the future cyclically and that is what they are saying that they will be on the right side of history. They know the West is crumbing from within. The time that the US hands that title to China is upon the doorstep. The West has done nothing but try to force their ideas upon everyone abandoning freedom and they have introduced the cancelation culture. We have lost all the values that made America great. It is time for Europe and American to die the same way all empires die, by their own hand of suicide.
China being on the “right side of history” means they know the United States is declining and they will step into the void. They can “feel” it with or without my models.
Posted originally on the conservative tree house on March 25, 2022
The Federation of Indian Export Organizations (FIEO) announced today they are likely to have the financial mechanism for a Russia-India currency exchange and trade process in place within a week. Previously, India announced their decision to continue purchasing oil from Russia despite the western sanctions. Prime Minister Modi is a pragmatic, tactical and shrewd business-minded politician.
India is becoming a major player in the geopolitical world, as recognized by former President Trump during his Indo-Pacific trade partnership discussions. The population of India is over 1.4 billion people, and they are industrializing as a more democratic counterbalance to China. Prime Minister Modi has been a key political leader in generating economic alliances to the benefit of his nation, while maintaining a prudent stiff-arm toward the influence of major multinational corporations.
(Via CNBC) – India is expected to announce a payment arrangement that would allow trade with Russia to continue, the president of an Indian exporters’ association told CNBC’s “Street Signs” on Wednesday.
The so-called rupee-ruble trade mechanism could come as early as next week, according to A Sakthivel, president of the Federation of Indian Export Organisations (FIEO). The FIEO, a government-backed association representing over 200,000 exporters, oversees India’s export promotion councils.
India’s finance ministry and the Reserve Bank of India have not commented so far on the mechanism, which would let Indian exporters continue their business with Russia even after Western sanctions restricted international payment mechanisms. The arrangement would also allow India to buy Russian energy exports and other goods.
Sakthivel said the Indian government is working on a proposal to allow four to five nationalized Indian banks to be engaged in the trade, and there have been consultations between the central bank governor, the finance minister and banks. (more)
(Left to Right) – Xi Jinping (China), Vladimir Putin (Russia), Jair Bolsonaro (Brazil), Narendra Modi (India) and Cyril Ramaphosa (South Africa), the BRICS group.
REMINDER – Stand back and look at the biggest of the big pictures.
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.
These two groups are going to end up in competition with each other. It is as inevitable as sunrise, if you can see this cleaving I am talking about.
Now, think about the economic system of trade that exists between the Red and Green groups. There has to be a way for them to exchange value if they are going to purchase from and sell to each other.
Additionally, and this is *key*, the Red group is going to have a strong strategic advantage in production costs. The Red group is going to be using oil, coal and gas (fossil fuels), which are abundant, cheap and the infrastructure is already in place.
The Green group is going to be at a strong disadvantage, at least for a generation or two, as the costs associated with the production of goods and systems is going to be much more expensive to operate, as the transition into Build Back Better sustainable or renewable energy takes place.
In the macro view, stuff from the Red group is going to be cheap. The exact same stuff from the Green group is going to be more expensive.
If you are still with me, hopefully, you can see how this is all coming together.
♦ The western debt incurred during COVID-19 is a problem. However, this debt diminishes with inflation. A $20 trillion debt is not as big a problem when bread costs $100/loaf and people are earning $50,000 a month. The Green group is entering into this position. In this position, the BlackRock approach of physical ownership of real estate and physical stuff is way more important than holding money or dollars which will immediately lose value. Physical ownership of stuff is important.
♦ It is likely, based on the economic alignment, the Green group will be forced to assemble under one currency (set of financial valuations), and the Red group will then assemble under their own currency (set of financial valuations). My hunch is the western group (green) will use a digital currency.
Once both sets of currencies are established, then trade between the Red group and Green group can be determined based on a central valuation done by, say, The World Bank. In the Red group, a 20″ tire is worth 100 red bucks. In the Green group, a 20″ tire is worth 150 digital green bucks. Two vaults and two exchanges.
In order for all of this to come together, the population needs to be shifted in their perspective of money and material value. That takes us back to where this conversation started: “owning nothing and being happy” is akin to “prizing experiences over possessions.”
The Western (green) financial mega-system operators are going to own the physical assets, and the people will live under that ownership – a modern structure of serfdom so-to-speak. In the largest nations within the Red group, that social system (essentially) already exists – India is a prime example.
If we can get President Trump back into office, and then rally massive support around him, he will dismantle this handbasket they are determined to put us into. However, I see no one else who is even remotely up to this challenge. We need Trump!
Posted originally on the conservative tree house on March 15, 2022
The BRICS trade and economic partnership group is made up of Brazil, Russia, India, China and South Africa {GO DEEP}. The alliance was originated in part to explore alternatives to the dollar as a global trade currency. They discussed several options in their prior meetings long before Russia took action into Ukraine.
With western sanctions against Russia now in place, there are increasing reports that China and India have developed alternatives. This is one such example:
(Via LiveMint) – Russia, many of whose banks have been cut off from the Swift financial network, is exploring opening alternative payment channels with India, including linking Unified Payments Interface (UPI) with the Faster Payments System (FPS) of the Bank of Russia, to continue cross-border trade.
According to Dmitry A. Solodov, a spokesperson for the Russian embassy in New Delhi, his government has also asked Indian lenders to connect to the financial messaging system of the Bank of Russia to facilitate interbank transactions. In addition, the two sides are discussing accepting RuPay and MIR Cards within national payment infrastructures, Solodov said in an emailed statement.
“All these options are on the table and are being discussed by the two governments, the Reserve Bank of India and the Bank of Russia,” said a senior Indian government official, requesting anonymity. (read more)
Xi Jinping (China), Vladimir Putin (Russia), Jair Bolsonaro (Brazil), Narendra Modi (India) and Cyril Ramaphosa (South Africa), the BRICS group.
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