Hopefully someone can provide some light because I see some very dark macro economic things coming.

At the moment there is no light!

 

It is so difficult to determine heads nor tails regarding the Ukraine situation as the reporting has been no better than the virus or election results reporting. The global economy and the US dollar are all in deep doo doo.

 

Robert,

All this is not necessarily "bad news". It's always been this way. We're just caught up in one of these global restructuring events. "Imperialism" sand the other programs we learned about are just getting new labels.

I fremember after WW2 (remelber from studying; wasn't there) the Bermuda Accords and the 5 Freedoms gave the US control over most civil aviation of the western world. JFK's Camelot arrived.

Recall the Coal and Steel Community and then ther Common Market - the iner 6 and the outer 7 deals. The end result was the EU. The Brit's are smart to have gotten out.

I believe Odessa, Ukraine has the world's largest wheat port - snd Russia is the world's largest wheat exporter (Probably should be writing using psast tense. Who the Hades knows what's goig to happen ?!). I can guess Russian planners will use White SEa grain ports for wheat to China. Shrimp fried wheat can work, especially when hungary.

The private companies already insulated from the war events. Sometimes this means just leave the transactions and claim "force majoure" and the related. Acts of War govern many insurance policies. THe US recently approvd insurance for max war risk to US companies. It's not really insurance but rather government subsidy.

The BIG trade bloc is in Asia; the Regional Comprehensive Economic Partnership. It's a market of 2.2 billion people. It has a $ 26.2 TRillion of global output. This partnership covers 30% of the world's population. It's larger than the EU.

One thing missed by the US (US: not Chinese !) economic, world trade folks is that:

the US is a naval power. Our US land forces are still in decay for force projection (Pratt and Whitney acft engines get priority over everything). This Asian trade bloc is out of reach of the USN and the Brit's RN.

Those Americans involved in world trade and thr foundation blocks like finance, economics, ... typically have no military background and miss what China did. Unfortuntely, it's now worse since Trump left and Biden came along.
......

I am now in the mood for some shrimp fried rye and a non-greasy Mao Tai liquor made from sorgum. Unfortunately for me, can't have any of this less the rye but I do love this KATO diet !

 

Thanks for the input so far. The most positive are stagflation and recession and/or severe shortage and price hikes.

I feel a little better.

I'm just glad I stacked PM's deep when they were cheap (mostly).

I still can't get my mind away from China and the big "non west" countries and the power they have to change the monetary system. I've actually had dreams (some nightmares) about this. I need to step away from SB and the computer for a few days...

Robert,

Glad you're feeling better.

No - real - need for the nightmares - . It's always been like this from our nation's start and onward.

The US always had international relations with countries that eclipsed the US in power - social, economic and political (military fits in here).

I go through political life - with this early AM rambling focused on the US post the Vietnam War tragedy. I start ... my approach ... to viewing a potential problem of foreign relations / international relations, is with the initial formula that ~ 90% is controlled by US government approach to problems. It is the US that is the major problem for us Americans. Whether it's contemporary China or the former Soviet Union or the Germany of Bismark, ...... well, sometimes the US foreign policy establishment represented domestic US interests not in tandem with what was needed.

If you look at the initial Aeroflot fleet of aircraft, you could recognize the Folkers, the Ford tri-engine, ......

Today, there are US foreign policy efforts to activate the Joint Comprehensive Plan of Action deverloped by SecState John Kerry. This "plan" requires Iran to slow down nuclear weapons development (Did not say "stop"; D.C. can be that swampy [I am setting myself up for a fall and many posts here challenging this !]) in return for releasing US controlled foreign exchange of Iran's. Note that this money is to be spent on US aircraft, inter alia - amongst other things.

Return to my 90% formula.


Footnote" After SecState Kerry exhausted his inheritance, if he didn't marry the Pennsylvania Senator's widow with the Heinz fortune, Kerry would be working in Waffle House with the rest of us.

Rest up and don't worry about the Middle Kingdom.

Focus on the US.

 

here's one to watch, higher oil stokes inflation...

 

ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero

www.zerohedge.com

 

Palladium $3,052 per ounce. I think that’s an ATH.

Palladium tops $3,000/oz as supply fears grow, gold jumps over 1%

Palladium prices on Friday rose above $3,000 per ounce for the first time since May 2021 as concerns over supply shortages from top producer Russia mounted, and the war in Ukraine bolstered demand for safe-haven gold.

www.reuters.com

“Spot palladium jumped as much as 8.4% to $3,008.74 per ounce in the session and was up 7.6% at $2,985.54 by 02:30 p.m. ET (1930 GMT).

Russia accounts for 40% of global production of the auto-catalyst metal, which was headed for a 25% rise this week, its best performance since late March 2020.”

 

It is going to get much much worse.

Russian invasion threatens global food and fertilizer supplies

The nearly week-long Russian invasion of Ukraine is threatening to restrict already tight global supplies of grain and fertilizer as Black Sea distribution hubs and supply lines shut down amid the chaos and violence that is only expected to worsen as Russian aggression intensifies and Western...

www.agri-pulse.com

 

The us economy is likely headed for stagflation and recession. Buckle up.

 

Stagflation? I was thinking it may be out of control inflation.

 

In order of priority, I want:
1. The nukes to stay in their silos
2. The war not to expand into NATO countries

Other than that we can manage food shortages/substitutions, raw material challenges,
monetary and economic issues.

 

You ain't seen nothing yet. Price hikes and shortages will lead to shortages and price hikes. They will try and ration everything but in the end the gubernment will screw it up. same as it always does. The rich will get richer and the poor will get poorer.

 

We need to immediately drill and build necessary pipelines, as well as expedite windmills and solar panel construction. Do it all until we are energy dependent again. We also need to bring home manufacturing, especially critical manufacturing, and not be dependent on foreign sources.

 

Administration response: duhhhh...

 

Oil prices are key, our country's entire infrastructure runs on Oil, cheap Oil touches everything in our lives. Prolonged price shock will 'Nuke' our economy...

 

The oil companies and their distribution networks are just cashing in on the emergency, whether it's a hurricane, COVID or the idiot Russians invading an Eastern European backwater. Folks who drive those big gas guzzling SUV's and pickups should keep a little four banger in the garage for these kinds of occasions. Good thing is the temps in my area are hitting record highs and I've been riding a motorcycle for the last two weeks. Haven't even notice the gas prices. Higher prices mean that people will drive less, which will decrease demand and lower prices. It's all about profits. When demand decreases they'll have to lower prices to get people to buy more.
Keep your head and take control of your life.

 

Thanks for the input so far. The most positive are stagflation and recession and/or severe shortage and price hikes.

I feel a little better.

I'm just glad I stacked PM's deep when they were cheap (mostly).

I still can't get my mind away from China and the big "non west" countries and the power they have to change the monetary system. I've actually had dreams (some nightmares) about this. I need to step away from SB and the computer for a few days...

 

We've already seen increases in crude oil, fertilizer, wheat futures, coal, and other commodities... How bad can this get?

World wide hunger and starvation, resulting in chaos and toppled governments and nations. That's how bad it can get from the bolded items above.

 

The other aspect of the Ukraine situation is, Putin's invasion might be the real kickoff of the world "choosing sides" and this will translate into how they trade and the basis for their trade. I see the US dollar as the reserve currency in jeopardy.

I see the opposite. Even previous metals are barely going up much. The U.S. dollar is still where it's at.

 

Possibly stores will limit quantities at some point in the future, once the disruptions hid the supply chain.

 

Top off your preps now!

 

Clothes, don't forget about clothes, around 2% of clothing purchased in America is Made in the USA.
2%

 

Clothes, don't forget about clothes, around 2% of clothing purchased in America is Made in the USA.
2%

Second hand stores are an excellent resource for clothing

 

''Before proceeding, we should state clearly that what follows is not a critique of the Western response to the invasion but rather an assessment of the potential first- and second-order consequences of these historic moves, as well as speculation on where some of the harshest economic crises might manifest in the near future. While we join in the hope that these measures achieve their desired direct effect, there’s no denying these are truly unprecedented times.''

''The most stunning move by the US and its allies was cutting off the Russian central bank’s access to most of its $630 billion of foreign reserves. Without access, one wonders if these funds are really “its” reserves at all? What is ownership without access? No matter how justified that move might seem today, there’s no escaping that this action will reverberate for years to come. In a blunt opinion piece in the Wall Street Journal titled “If Russian Currency Reserves Aren’t Really Money, the World Is in for a Shock,” reporter Jon Sindreu had this to say about how central banks everywhere must now view their reserves:
On The Cusp Of An Economic Singularity

A big bang is coming. Brace for impact.

 

Yup.

I'm not an economist. I've read the typical stuff on the fed reserve, gold standard, Bretton woods, etc. I think I understand macro economics.

What I can't grasp is what the article talks about concerning property. How can a bunch of people decide that someone else or a country should not have their property.

We were all outraged when Trudeau did it to the truckers and it's no different for a country's property and assets.

There's more to this than just an invasion of Ukraine and yes, I am bracing for impact.

 

How bad can this get?

Hopefully someone can provide some light because I see some very dark macro economic things coming.

My portfolio today is 70% gold, silver, cash and option puts.

Think great depression, but worse.

We have MAD, but on an economic level at this point.

 

Just a ray of sunshine and glass half full, aren't you?

Just kidding. I'm about the same right now....

I almost spit all over my computer..."Think Great Depression, but worse".

 

Just counting stocks and metals I'm about 55% gold and silver with a touch of platinum.
I really should have bought a lot more platinum a while ago. The stock portfolio was up 1.45% last week.
It's going to be interesting to see what happens when the world figures out what crypto really is. There's only so much gold and silver out there and where else will the "money" flow when everything truly comes apart?

 

Food for thought, Russia and China have been stockpiling gold for a very long time. I see a scenario occurring at some point in the next year where Russia stops it's aggression, and draws up some kind of peaceful compromise. Sanctions end, and with gold at all time highs Russia dumps a great deal of their holdings. We'll see, at this point I'm not sure there's such a thing as a safe harbor to park wealth.

 

I've been going through a bunch of old threads here and doing some other research..mainly about gold reserves and the M2 money supply.

The cliff notes version is that for the US gold reserves to "back" our currency, gold would have to be north of $80,000 per ounce (M2 at 21.84 trillion and 8200 tons of AU). The silver in reserve and what the mints have *AU & AG) would lower it a bit.

I know we will never go any sort of PM standard. We can't. it would devalue our currency. When we look at our GDP/debt ratio plus our unfunded liabilities, the USD is a losing horse.

Unfortunately other countries have a much better position in gold vs M2, debt and unfunded liabilities.

 

''The war in Ukraine will exacerbate the negative supply shocks that are already in place due to COVID-19. Worsening bottlenecks will combine with rising inflation to produce a contraction in global growth. Russia produces 12 percent of the world’s oil supply and exports 18 percent of the world’s wheat consumption. Ukraine accounts for 25 percent of global wheat production. Sanctions and war will serve to slow the economy further and send prices for these vital commodities even higher.
But the upcoming recession will be extraordinarily unique. Not only will it occur while inflation is at a multi-decade high, it will be the first U.S. economic contraction to take place while the Federal Reserve had its target interest rate at or near zero percent. For comparison, look at how much room the Fed had to reduce borrowing costs during previous economic contractions.''
A Recession Unlike Any Other

 

Ukraine has caused some problems by mostly has provided cover for inflation caused by current Biden policies and Fed actions since 2008. Most prices would be inflated without Ukraine.

 

Short lived cover, Biden is already panicking with 7.9% inflation ''officially'' and the impact of highly inflationary oil prices just starting to trickle in we are on the cusp of an economic downturn and the official position is it's Putins fault.
Well what are they doing to fix it?
That's what everyone's thinking.
Answer: Nothing