CBS News reports:
‘Inflation around the U.S. reached a new 40-year high in February, with consumer prices jumping 7.9% from a year ago — the fastest annual rate since the Reagan administration.
‘Rising costs of energy, housing and food drove the increase, the Labor Department said on Thursday. The price of energy has surged 26% over the last year, sharply increasing the cost of gasoline, fuel oil and natural gas for home heating. Groceries were up 8.6% from a year ago, while clothing rose 6.6%.’
The US can stand a lot of things. Cheating politicians. Goofball wars. Incompetence. Money printing. Market rigging. Facebook. Can it stand US$10-a-gallon gasoline too?
Maybe. But only if it can blame it on someone else.
Our beat here is money, not politics. But everywhere we look, politics intrudes. And the purest expression of politics is war.
After 1989 and the collapse of the Soviet Union, the ‘liberal world order’ stood astride the world. Its globalised markets delivered cheap goods and services. Its financialised economies made the elites (who own stocks and bonds) richer and richer. Its technocrats, coming out of international business schools and top universities, turned the knobs while making sure the deplorables were kept away from the controls.
Francis Fukuyama described the triumph of the Western democratic model as the ‘End of History’ essay in 1992. Then, New York Times columnist Tom Friedman laid out this economic Valhalla in his 2005 book; The World Is Flat.
But lo…suddenly, the world is full of dangerous cliffs and treacherous canyons. In the three…now four…epic bamboozles of the 21st century — the War on Terror, the Billionaire Bailout, the COVID Panic, and now the Russia-Ukraine war — history sprang back to life.
Like it or not, the world is full of humans, and homo sapiens don’t lie flat for long. Instead, he is prone to volcanic eruptions, tectonic hallucinations, and Everest-like vanities.
We all want to feel superior, the heroes of our own stories. Individually, it is hard to feel superior to others. Whether we are stout or skinny…swift or slow…we go with what we’ve got. And if we are lucky, we have someone near and dear to us ready to remind us that we have a spot of mustard on our shirt.
But on a collective level…our bibs are spotless. And we join with others to flatter ourselves in remarkable ways. If the Ravens win the Super Bowl, every cripple and half-wit in Baltimore feels he has kicked the winning field goal. And if our boys kick butt in some godforsaken dogsh*t country, we all feel like locking and loading for the next mission.
And now cometh a new way to kick butt. Tom Friedman explains:
‘Putin has now figured that out — and said so explicitly on Saturday: The U.S.- and E.U.-led sanctions are “akin to a declaration of war.” (Vladimir, you haven’t felt the half of it yet.)
‘…because the world is now so wired, superempowered individuals, companies and social activist groups can pile on their own sanctions and boycotts, without any government orders, amplifying the isolation and economic strangulation of Russia beyond what nation-states are likely to do. These new actors — a kind of global ad hoc pro-Ukraine-resistance-solidarity-movement — are collectively canceling Putin and Russia. Rarely, if ever, has a country this big and powerful been politically canceled and economically crippled so fast.’
Friedman is a fan. He sees the world in childlike, Rams versus Bengals, good versus evil, terms. And for him, the ‘liberal world order’ is good:
‘…the free world has been aroused. America and liberal societies in general can often look and act dumb and divided — until they aren’t. Ask Adolf Hitler.’
Or ask Saddam Hussein. It doesn’t matter whether we are the aggressor or the defender…(Friedman backed the invasion of Iraq in 2003 too.) The point is, for Friedman, along with Entire Establishment Elite (EEE), the ‘liberal world order’ — is the home team. And the sanctions program — with all of its social media cluster bombs — is like a new Manhattan Project. Moscow is the new Hiroshima. Friedman:
‘Barron’s reported, but “the dollar-denominated secondary listings of Russian companies in London are still trading. The destruction of market value is astonishing.”…
‘On Thursday the rating agencies Fitch and Moody’s “downgraded Russia by six notches to ‘junk’ status, saying Western sanctions threw into doubt its ability to service debt and would weaken the economy,” Reuters reported.’
Yes…the radioactive fallout is killing Russia…or so Friedman believes:
‘Oh, and by the way, in this wired world, guess who owns a significant portion of Russia’s commercial airline fleet.
‘Roughly two-thirds of Russia’s commercial airliners were made by Boeing (334 jets) or Airbus (304), Reuters reported. A significant portion of those are owned by Irish leasing companies. The Dublin-based AerCap, the world’s biggest airplane-leasing company, owns “152 aircraft across Russia and Ukraine valued at almost $2.4 billion,” The Irish Times reported. In addition, the Dublin-based companies SMBC Aviation Capital and Avolon own 48 aircraft between them that are leased to Russian airlines…
‘On Saturday, Russia’s state airline Aeroflot, said that it would suspend all international flights because of “additional circumstances that prevent the performance of flights.” Domestic flights are sure to follow.’
Hooray! We’re winning.
He’s right, of course. A new kind of war is underway. A powerful new weapon has been brought out; the dollar and the US-dominated money system have been turned against the Russians. The press, social media, Hollywood, and Wall Street’s ESG (Environmental, Social, Governance) movement have all reported for duty, too.
For The Daily Reckoning Australia