Freedom Roulette

Freedom Roulette

When an empire passes its prime, it still steps up to the plate like a star slugger…but history serves up sucker pitches. Thrice this century, the American deciders have swung so hard they ended up on the ground.

Now, they take another swing.

The madness grew over the weekend. CNN reported that ‘The Russian Tea Room in New York City suffers as Ukraine invasion escalates’.

And here’s Business Insider:

A growing number of American veterans are preparing to join Ukrainians in their battle against Russian military forces, The New York Times reported.

Ukrainian President Volodymyr Zelensky has in recent days called for an “international legion” of volunteers, and many civilians from other countries, such as the United Kingdom, have heeded his call.

James, a medic who fought in Iraq and Afghanistan, told The Times that he couldn’t “stand by” and watch Russia’s assault on Ukraine.

Apparently, James couldn’t just stand by and watch the assault on Iraq either — he joined the attack. But here at the Letter, we always favour the underdog, the lost cause, and the diehard. So we wish him well. He may need it.

But when madness spreads, there is no use asking questions or making ironic comments. The worst are hot…full of indignation and righteousness. (James thinks he knows which side God is on.) The best keep their mouths shut.

It might be a year…or maybe 10 years…before the question marks come out again. Then, we will ask: ‘What was that all about?’

But for the moment, an ill wind blows, and the trash takes to the air. Business Insider again:

A restaurant in France seeks to clear its name after fielding confusion surrounding poutine, its signature dish — fries doused with cheese curds and gravy — and Russian President Vladimir Putin, the leader who announced an invasion into Ukraine just over a week ago.

La Maison de la Poutine, or The House of Poutine, tweeted on Friday that it received “calls of insults and even threats” over its namesake dish.

Recall the ‘weapons of mass destruction’ scam of 2003. Americans girded their loins for battle. Contrary opinions — including ours — were unwelcome.

France refused to join the war. So Americans dumped Bordeaux wine down the drain and ordered ‘freedom fries’ with dinner…one of our readers even suggested that the US Air Force — already conducting long-distance bombing raids — might want to drop a bomb on Paris, too. (We were living in Paris at the time, but we didn’t take it personally.)

It turned out; the French were right.

We believe the US empire hit its peak around 1999. Since then, it’s been one strikeout after another. US$8 trillion were lost fighting ‘terrorists’…then, after the Mortgage Finance Crisis, another US$10 trillion (measured by US debt increases) was spent making the rich richer than ever…followed by trillions more in stimmie cheques, non-repayable ‘loans’ and other jackass programs in the wake of the COVID virus.

Altogether, US government debt went from barely US$5 trillion in 1999 to US$30 trillion today. And the Fed’s negative interest rates encouraged borrowing in the rest of the society too — bringing the grand total of debt, public and private, added since 1999, to US$66 trillion.

But lo…now, a new panic. A new distraction. A new war. Another sucker pitch. The media stirs up the masses. The crowds in the cheap seats roar their approval. Diners switch back to French dressing from Russian dressing. And here we aim to do our part, too. We propose to change the name of the old familiar suicide sport to ‘Freedom Roulette’.

Meanwhile, the Pentagon is sending fighter jets. The Biden team is sending money. Yes, we’re ready to fight to the last drop of the Ukrainians’ blood!

The feds are also fighting with sanctions — aiming to hit the Russian public where it hurts, but most likely hitting our own feet. The sanctions did not aim specifically at Russian energy companies. But in the fog of war, supply lines come undone, and missions creep. A headline this morning tells us that the feds also want to cut off Russian oil sales to the US. And India Punchline adds this:

On the whole, the situation in the energy market is becoming very complicated, as western oil companies which had invested in Russia are forced to quit due to the sanctions. These include big players such as BP which has a 20-percent stake in Russian giant Rosneft, Shell with 27.5 percent stake in the Sakhalin-II LNG facility and a 50 percent stake in the Salym Petroleum Development, ExxonMobil (Sakhalin-1) and so on.

Apart from the impairment these companies will suffer running into tens of billions of dollars, their exit will also strain Russia’s ability to maintain such high production levels and continue to meet its commitments under the OPEC+ agreement. Now, the already-tight global market for crude — which saw Brent crude top $115 per barrel in early Thursday trading — can ill-afford these downstream hits from the sanctions against Russia. Evidently, crude prices still have nowhere to go but up from here. Expert opinion is that if oil price touches $125 per barrel, the US economy slides into recession.

The most long-lasting damage to the US will probably come from the holes it shoots in its own money. The dollar is now the Facebook and Instagram of international commerce. It is what everyone uses. But people don’t like being de-platformed from their money any better than they like being cancelled or censured by their favourite social media. They look for alternatives.

Most likely, the Russians will find workarounds. Then, the workarounds will compete with the US-dominated financial system and eventually maybe even replace it. And then, with even fewer people eager to finance the US’s excess spending, interest rates will go higher…the Fed will print more money, and prices will rise even further.

Chaos will spread.


Dan Denning Signature

Bill Bonner,
For The Daily Reckoning Australia