Expectations of three or even four hikes this year rise as growth worries persist
IMF urges more taxes to help pay interest that has hit levels not seen for 18 years
When she’s not thrifting, she’s making music and staying true to her roots.
If pressed to describe what I think the next several years will look like as concisely as possible, I’d simply provide the following quote, often misattributed to Lenin:
“There are decades where nothing happens; and there are weeks where decades happen.”
There will be many such weeks from now until 2025, with the end result an emergence of a multi-polar world that will permanently unseat the unipolar U.S. imperial paradigm.
Since World War 2, the U.S. has successfully sustained a position of global dominance unlike anything the world’s ever seen. Virtually each and every corner of the planet has been subject to inescapable and overwhelming American influence, both culturally and economically. This root of this power didn’t just emerge from GDP strength and the USD, but from Hollywood, popular music and tv shows. The impact of the U.S. empire on the planet over the past 70 years has been extraordinary but, like all things, it too shall pass. I believe this end will be realized by around 2025.
When I say this sort of stuff people think I’m calling for the end of the world. I suppose that’s what it may feel like to many, because a paradigm change of this magnitude will indeed have monumental global implications.
Yet the world will go on, it’ll just be very different place. That said, Americans should not see this as an apocalyptic thing. It’s not healthy or sustainable for one nation to dominate the planet in such a manner. Many of us like to think that a benevolent global empire led by philosopher kings is just fine, but the problem is this is utter fantasy. What happens in real life, to quote Lord Acton, is that “power corrupts and absolute power corrupts absolutely.”
This is precisely what’s happened in the U.S.
The country’s been looted and pillaged with rapacious fervor in recent decades while a unaccountable class of people I refer to as top-tier predators operate at will with total impunity. The man on the street’s thrown in jail for the smallest offense, while financiers who destroyed the global economy with fraud retire comfortably to their mansions. The U.S. empire no longer benefits the average American, but instead systematically funnels all the spoils to a smaller and smaller segment of the population. Most of the world already sees it, and the average U.S. citizen is starting to see it as well. This is not good for the establishment.
This is also why the U.S. status quo constantly lies to the public with its nonsense narrative that U.S. military action overseas is based on humanitarian concerns and a desire to spread democracy. Nothing could be further from the truth. In fact, all significant U.S. military action overseas is driven by money and power. Humanitarian concerns play zero role. Not even a small role, zero.
Caitlin Johnstone recently summarized what’s going with geopolitics perfectly with the following paragraph:
The mass media narrative factory tries to make it about chemical weapons, about election meddling, about poisoned ex-spies, about humanitarian issues, but it has only ever been about expanding the power and influence of the oligarchs and allied intelligence/defense agencies which run the western empire. All the hostilities that we are seeing are nothing other than an extremely powerful conglomeration of forces poking and prodding noncompliant governments to coerce them into compliance before global power restructures itself into a multipolar world.
The biggest problem for the U.S. establishment right now is people are no longer buying the narrative. They certainly aren’t buying it overseas, and even here in America, U.S. citizens are finally starting to see the “humanitarian bombings” for the shams they are. It’d be one thing if your average American was benefiting from U.S. empire, but they aren’t. Rather, the spoils are all going to a small handful of people from the top tier predator class, while life for tens of millions is characterized by dilapidated infrastructure, a completely broken healthcare system, continued unaccountable Wall Street looting, a decimation of of civil liberties, and an overall precarious economic existence that seems modeled off of the Hunger Games.
The only people who don’t see how dysfunctional the U.S. empire is are the people running it. The U.S. establishment, which consists of a diverse assortment of elites from Wall Street, American intelligence agencies, mass media, Congress, the Federal Reserve, the military-industrial complex, etc., disagree on many things, but one thing they agree on completely is the U.S. empire — that it should not only be preserved, but expanded. The major problem for them is this isn’t 1995 anymore, they just haven’t got the memo yet.
The U.S. establishment is either too busy making boatloads of money or playing keyboard warrior with other people’s lives to acknowledge what’s happening both here and abroad. A disconnected, greedy and unaccountable elite class filled with hubris and an insatiable hunger for power is a core ingredient in any imperial collapse, and this exists in America in droves at the moment. A reckoning is coming.
Today’s piece focused on how the U.S. empire is no longer working for the average American citizen. Part 2 will focus on why it’s not working for the rest of the world either.
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Despite closing on Broadway last September, theatergoers will soon have another chance to watch the original musical Bandstand.
Uber recently sold its Southeast Asian business to rival Grab. Uber will take a 27.5% stake in Grab and Uber CEO Dara Khosrowshahi will join Grab’s board. Many billed the retreat as another failing for Uber. But I see it as the mark of success of the Southeast Asian startup ecosystem.
Having blown through almost US$7 billion in the last few days to rescue the Hong Kong Dollar from breaking the weaker-end of its peg-band, the HKD is jumping (most in 3 months) following comments that HKMA doesn’t see “large-scale shorting” but more arbitrage activities.
In a press briefing, Hong Kong Monetary Authority Deputy Chief Executive Howard Lee said FX transactions are in line with expectations and sees no unusual HKD shorting activity. As Bloomberg notes, Lee said:
A lot of outflows are arbitrage activities, but probably of asset transfers.
HKD purchases operation is smooth and sound.
HKMA will carefully handle if unusual activity is seen.
HKD interbank rates are slowly increasing and HKMA expects this to continue.
Market confidence is strong on linked exchange system and the HKMA.
Exchange fund bills will be available for bank funding when needed.
And the local currency jumped most since Jan 17th…
As a reminder, Lee is the same gentlemen that warned Hong Kong citizens to “stay calm” as ATMs ran dry and the currency devalued.
While this 0.07% spike is cause for some celebration at the HKMA, we note that – just as we have seen in the last few days – the strength is being sold into already…
As while the LIBOR-HIBOR arb has improved (with cost of funds surging in Hong Kong), the spread of over 100bps remains a considerable draw for carry-traders…
As a reminder, this story is not over yet, as this is an arbitrage, where traders take advantage of differences in prices, selling a low-yielding product (the Hong Kong dollar) to buy a high-yielding product (the US dollar). In this case, the price difference is between the local borrowing cost known as the Hong Kong interbank offered rate (Hibor) and the US borrowing cost known as the Libor.
Simply put, traders are borrowing against the low Hibor, selling the Hong Kong dollar to buy the US currency for investments in high-yielding US assets. The difference between the two is widest since 2008.
As more traders pile on to the carry, more pressure is placed on the Hong Kong dollar, causing it to weaken further against the US currency… and The Fed’s plan to hike rates (as many as four times – which just hit a cycle high) will do nothing to help ease the situation – meaning any dollars sold in defense of the weaker HKD will be battling global carry trade flows driven by The Fed’s tightening.
Sweeping changes coming to the newly merged Alaska and Virgin America will largely wipe out the latter brand later this month.