The United States versus Spilt Milk
The other day, it was the Indians — as in, from India — who were blocking exports of wheat.
Now, it’s the Biden team that is diddling the supply chain. It’s judged baby formula of such strategic importance that it’s rolled out the Defense Production Act to force US companies to make more of it.
No kidding. From AP:
‘President Joe Biden invoked the Defense Production Act to speed production of infant formula and authorized flights to import supply from overseas, as he faces mounting political pressure over a domestic shortage caused by the safety-related closure of the country’s largest formula manufacturing plant.’
Congress has gotten onto the baby formula case, too, authorising US$28 million to hire more people at the FDA!
Until yesterday, traditional methods — supply-and-demand, give-and-take, private initiative, and the profit motive — had kept up tolerably well with the demand for baby formula. But now, the feds have taken charge.
Oh my! How did we get along for so long without the foresight and diligence of the feds? Mothers must have had to nurse their children themselves. How barbaric!
Again, the Argentines have something to teach us. Here’s our sidekick, Joel Bowman, writing from Buenos Aires:
‘Here in Argentina, everyone knows that the moment the gov’t gets involved in a particular item at the store — usually through “precios cuidados” — that’s the item that’s about to become incredibly scarce.’
Yes, it’s another ‘teachable moment’. And here’s more:
You may wonder, what were Janet Yellen, Mitch McConnell, and Nancy Pelosi doing in Eastern Europe recently? Didn’t they know about the baby formula crisis back in the ‘homeland’?
To the slaughter
And that’s not the only crisis in the US. On Wall Street, for example, the slaughter of the little lambs continues. From Barron’s:
‘It was a day straight out of investors’ nightmares. The Dow Jones Industrial Average fell 1,164.52 points, or 3.6%, while the S&P 500 declined 4%, and the Nasdaq Composite dropped 4.7%. The S&P 500 and the Dow had their worst days since June 11, 2020, while just seven S&P 500 stocks finished higher on the day.’
Every rube and rascal with a Robinhood account seems to have the knife at his throat. The dip buyers…the technophiles…the crypto lovers — the big bad bear market is having a feast.
‘And the “stable” coins’, you ask?
‘You mean, as in a place where Christ was born…where they keep horses?’
‘No…as in a “money’ that was supposed to be solid…a crypto you could trust.’
‘Uh…not so stable after all.’
Stable coins…unstable coins…big tech…little tech…and every tech in between…all are getting whacked. This is a crisis of Biblical proportions. After all, the ARK is sinking…and the zombies, those creatures caught between Heaven and Hell, are dying. Goldman’s index of money-losing companies shows them going back into the crypt-o where they belong.
Consumer prices are rising almost all over the world. This week, the UK announced an inflation rate even higher than the US, at 9%. Sri Lanka is bracing for 40% price increases.
Global debt has risen to US$305 trillion. And the world’s central banks are squeezed between the irresistible force of falling asset prices and the immovable object of rising consumer prices.
If they try to do something about the market sell-offs, they’ll worsen inflation, leading to poverty and revolution. If they try to stifle inflation, asset prices will fall even more…leading to recession, joblessness, defaults, and bankruptcies.
Those are things that occupy the minds of the thinking public if there is such a thing. Polls show ‘inflation’ is its big concern. Nothing else even comes close.
But inflation is not such a big concern for the people who caused it. They can afford $6 gasoline and $7 lattes. What they’re worried about is the next election…in which voters are likely to be sick of them all.
They’re not too worried about baby formula either; they get their nourishment from the federal government’s ample dugs.
So there they were on the Eurasian steppes — liberal as well as conservative…the great and the good…representing both political parties, Congress, and the Biden Administration — on a bipartisan mission to promote war with Russia.
Mitch McConnell claims to represent ‘conservatives’ and says he favours designating Russia a ‘terrorist state’.
The ‘terrorist’ label has been handy ever since George Bush II used it to justify his crackpot War on Terror in 2001. Now, it’s being applied like Roundup to wither convenient enemies at home and abroad. It’s just a matter of time; we presume before short-sellers and hoarders of baby formula will be sprayed with the ‘terrorist’ epithet.
But for now, the Russians are terrorists. Here’s Mitch McConnell:
‘It is squarely in our national interest to help Ukraine achieve victory in this war…’
Really? How so?
How does the typical American benefit from giving Ukraine US$40 billion? Of course, he doesn’t.
So why do it? Is it just a way to pay off the Pentagon and its suppliers? Or is it a way to distract the voters from their investment losses…higher consumer prices…and the baby formula crisis?
Tune in tomorrow…
For The Daily Reckoning Australia