Asset management, Central banking, Economics, Inflation, Market research, Market trends, Policy

US jobs: everything is awesome! Is it? Let’s take another look.

A few years back in an interview with Wall Street Journal’s “Heard on the Street” program , Elliott Management’s Paul Singer said that his greatest worry was the rise of inflation that could appear suddenly. He suggested that this could come about with small changes in perception of inflation risk. Specifically, “The first whiffs of either commodity inflation or wage inflation,” said Singer, “may cause a self-reinforcing set of market events … which may include a sharp fall in bond prices, … fall in stock prices, rapid increase in commodities…

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Commodity price, Commodity risk, Economics, Energy crisis, Hedging, Market research, Market trends, Oil market, Policy, Social development

The coming oil price shock: troubling news from Saudi Arabia

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Economics, Eurasia, History, Policy, Politics

1/6: How Russia decided to go from communism to capitalism in the 1990s

The foregoing article is an excerpt from the third chapter of my book, “Grand Deception,” which I wrote in response to Bill Browder’s bestseller, “Red Notice” but also as a retort to the relentless demonization campaign against Russia and its leadership in the West. Browder, an investor and hedge fund manager who made his fortune in the 1990s Russia, describes his fascinating experience during that time. However, he almost entirely glosses over the broader context within which events played out. Instead, he offers the same terse explanation he had regurgitated countless times in his various presentations and speeches, and it goes like this: after the collapse of the USSR, the government of Russia decided to go from communism to capitalism.[1] They thought that the best way to do this would be by giving everything away practically for free through various privatization schemes. Very rapidly, they transferred the nation’s economic resources into private hands.

But the unusual aspect of this transfer was that the private hands that received Russia’s wealth were not the same ones that had built it up since there were no restrictions on who could participate in the privatization program. As a result, the crown jewels of the nation’s productive resources ended up in the hands of a small group of oligarchs, most of whom covertly represented the interests of various western financiers. Continue reading

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Eurasia, History, Policy, Politics

Grand Deception: the 1990s raid on Russia

As the 2018 football World Cup in Russia draws to a close, many of her foreign visitors were surprised to encounter in Russia an affluent society and a friendly, welcoming host. This makes it difficult to appreciate that only a generation ago, Russia experienced a political, economic and social collapse of calamitous proportions. After the Soviet Union disintegrated in 1991, Russia embarked upon a transition from communism to capitalism. The so called “shock therapy” program, prescribed and guided by western experts resulted in the longest and one of the most severe economic depressions in the 20th century. Today, few people outside of the nations of former Soviet Union remember this dark episode. Fewer still understand it.

Even among the better informed intellectuals in the west, the failure of Russia’s shock therapy transition is largely misunderstood and often attributed to some sinister flaw in Russian society – a flaw which spawned corruption and criminality of staggering proportions. In this toxic environment, the sweet fruits of western democracy and capitalism simply could not grow in spite of the generous benevolence of Russia’s western friends and helpers. Continue reading

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History, Policy, Politics, Something completely different, Truth

Sandals

In 1893 Mahatma Gandhi went to South Africa, expecting to stay there for just a few months. He ended up staying 21 years as he took up the struggle to restore the dignity and rights to a subdued, disarmed, and enslaved Indian community.

During those years, his chief political opponent was General Jan Christian Smuts who, as the Colonial secretary and later the Secretary of the Interior was responsible for implementing some of the repressive laws against the Indians.

When Gandhi finally left South Africa in 1914, Smuts wrote, “The saint has left our shores, I hope forever.

Years later, an exasperated Winston Churchill asked Smuts – who had meanwhile served two terms as South Africa’s prime minister – why he had not killed Gandhi while he had the chance. Smuts replied, “How could I do this to a man who made sandals for me with his own hands when I imprisoned him.

In later years, remembering Gandhi Smuts wrote: “… I have worn these sandals for so many summers since then, even though I may feel that I am not worthy to stand in the shoes of so great a man.

I posted this story a few years ago in my blog, “The Jubilee.” It was related by Niloufer Bhagwat in her article, “The Political Relevance and Global Impact of Mahatma Gandhi.“ I believe it bears relevant lessons to today’s social and political struggles.

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Asset management, Economics, Inflation, Market research, Market trends, Policy, Stock market

Parabolic markets may signify onset of high inflation

Asset price inflation might signal debasement of the currency and acceleration of commodity price inflation

This time it may well be different… For several years now, numerous high-profile commentators and analysts have been forecasting an imminent stock market correction, or indeed a crash, evoking the events of 1929, 1987, 2000 or 2008. Of course, many are now predicting it is sure to happen in 2018. If not, perhaps in 2019 or maybe 2020? Who knows… But so far, not many analysts – if any, apart from yours truly – have considered the possibility that this rally might extend even higher from today’s dizzying heights. In an October 2016 post I suggested that this is exactly what was ahead. Continue reading

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Central banking, Economics, Eurasia, History, Policy, Politics, Social development

Deflationary gap and the West’s war addiction

In June of 2014, a group of American researchers published an article in the American Journal of Public Health, pointing out that, “Since the end of World War II, there have been 248 armed conflicts in 153 locations around the world. The United States launched 201 overseas military operations between the end of World War II and 2001, and since then, others, including Afghanistan and Iraq.” To be sure, each of these wars was duly explained and justified to the American public and for all those Americans who believe that their government would never deceive them, each war was defensible and fought for a good reason. Nonetheless, the fact that one nation initiated more than 80% of all wars in the last seventy years does require an explanation, which I submit below: Continue reading

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