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EU foreign policy chief Josep Borrell says there are legal hurdles preventing such a move

Israeli Foreign Minister Israel Katz has called on allies to recognize Iran’s Islamic Revolutionary Guard Corps (IRGC) as a terrorist organization following the massive aerial attack on Israeli territory late on Saturday.

However, the EU’s foreign policy chief Josep Borrell says such a move by the bloc is not legally possible at present.

Iran launched several waves of missiles and kamikaze drones at Israel over the weekend. Tehran explained that the strikes were carried out in retaliation for a presumed Israeli airstrike that obliterated Iran’s consulate in Damascus, Syria on April 1, killing seven IRGC officers, including two generals.  

In a post on X (formerly Twitter) on Tuesday, Katz wrote that he had sent letters to 32 nations and had spoken to “dozens of foreign ministers and leading figures around the world, calling for sanctions to be imposed on the Iranian missile project and that the Islamic Revolutionary Guard Corps be declared a terrorist organization.”  

This would help “curb and weaken Iran,” the minister argued, insisting that Tehran “must be stopped now – before it is too late.” 

Alongside the military response to the firing of the missiles and the UAVs, I am leading a diplomatic offensive against Iran.

This morning I sent letters to 32
countries and spoke with dozens of foreign ministers and leading figures around the world calling for sanctions to be…

Meanwhile, in an interview with France’s Le Monde on Tuesday, Borrell said that, while “there have already been several discussions about putting the Revolutionary Guards on the list of terrorist organizations,” this is not a realistic scenario for the time being.

He explained that “for such a listing, a judicial authority in a member state must consider that the organization has committed a terrorist act” – something for which there are apparently no grounds at present.  

French President Emmanuel Macron has urged Israel not to retaliate against Iran militarily. In an interview with BFMTV and RMC radio, the president said the focus should instead be on further isolation of Tehran and more sanctions on the Islamic Republic.   

Tehran has been the subject of a wide range of international sanctions for decades over its missile and nuclear enrichment programs, with the West suspecting that the latter is aimed at producing nuclear weapons.  

Numerous media reports have alleged that the US government has also advised Israel against responding by force.  

Russia has expressed deep concern following the latest escalation between Israel and Iran, with Kremlin spokesman Dmitry Peskov stating on Monday that further escalation of tensions in the region “serves no one’s interests.” 

Moscow has also criticized the UN Security Council for failing to denounce the Israeli airstrike on the Iranian diplomatic premises in Syria earlier this month.

The stalling of American aid is a “disgrace,” the leader has claimed

Ukrainian President Vladimir Zelensky has accused US politicians of playing political games around the issue of aid for Kiev, claiming that they do not care how many people in his country are dying.

Zelensky’s comments come as US lawmakers prepare to vote on a controversial aid package for Ukraine that has been stalled in Congress for months due to a bitter dispute between Democrats and Republicans.

In an interview on Monday, Zelensky referred to comments made at the weekend by Republican House Speaker Mike Johnson. The US politician told Fox News that he planned to move forward with a vote on an aid bill for Israel this week, without specifying when a Ukraine package would be taken up, or whether it would be tied to funding for West Jerusalem.

“This is pure politics, and it’s a disgrace for the world and a disgrace for democracy,” Zelensky told PBS NewsHour. “Nobody cares how many people are dying in Ukraine every day. They only care about their approval ratings,” he added.

Johnson has since promised to advance the long-stalled Ukraine aid bill sought by President Joe Biden this week, multiple news outlets reported on Monday. Johnson reportedly told Republican colleagues at a closed-door meeting that he intends to allow the House to vote on a standalone bill in the coming days that would ensure additional military aid for Kiev. The House will also be expected to vote on separate bills providing more assistance to Israel and Taiwan.

House Republicans have previously refused to back the foreign aid bill unveiled by Biden in October, which includes $61 billion in assistance for Ukraine.

The legislation has been held up for months as the GOP tries to force the White House to crack down on the influx of illegal immigrants via the southern US border. Biden’s 2024 election rival, former President Donald Trump, previously urged Republicans to block the bill, arguing against unconditional aid for Ukraine.

The delay in approving more weapons for Ukraine has rattled Zelensky and other officials in Kiev, who are blaming mounting battlefield losses on shortages of foreign-supplied ammunition and air defenses.

In his interview with PBS, Zelensky reiterated that without the US support, Ukraine “will have no chance of winning” in its conflict with Russia.

Moscow, meanwhile, has repeatedly stated that no amount of foreign assistance will change the outcome of the fighting, and has accused the West of escalating the hostilities.

READ MORE: Zelensky signs draconian mobilization bill

On Tuesday, Zelensky signed a contentious mobilization proposal into law, giving his government more powers to enforce conscription and punish draft dodgers. It also obliges local authorities and the police to help the military in its mobilization efforts. The bill does not contain a clause allowing soldiers to return home after three years of service, which had been the policy before the current conflict began in February 2022.

Tehran’s retaliatory attack may not have caused much destruction, but it was far from a failure

On the night of April 14, Iran and its proxy forces launched a series of cruise missile and kamikaze drone strikes on Israeli territory. The attacks did not come as a surprise. Tehran had warned that it would respond to the Israeli airstrike on Iran’s consulate in Damascus, Syria, on April 1, which killed several high-ranking officers of the Islamic Revolutionary Guard Corps (IRGC), including two generals. The retaliatory strike was called Operation True Promise. 

There is still much debate on whether Iran’s retaliatory strike was successful. Most military experts agree that there was nothing unusual about Tehran’s actions, except that this was Iran’s first direct attack on Israel. From a technical point of view, the strategy was simple and correct: Iran first suppressed the enemy’s air defense systems with drones and then launched hypersonic missiles which the Israelis and Americans were not able to intercept. Incidentally, in light of this, Ukraine’s statements about shooting down Russian Kinzhal hypersonic missiles sound ridiculous.

Do not jump to conclusions 

Many experts were skeptical about Iran’s strike and hastened to say that the retaliation did not live up to expectations. Given the clip thinking of most commentators, this reaction is hardly surprising. Their reasoning resembles a Hollywood blockbuster stuffed with special effects, where the end of the world and its miraculous salvation fit into 90-120 minutes, with a love scene in the middle. In real life, things are different. As Sun Tzu wrote in ancient times, to fight 100 battles and win 100 battles is not the height of skill. The best way to win is not to fight at all. This is Iran’s strategy. Its strike against Israel was not so much a military response as a grandmaster’s move in a big chess game. And the game is not over yet. 

After the attack on the Iranian consulate in Syria’s capital, Tehran found itself in a tough situation. It had to respond in a way that would look convincing and would achieve specific military goals, but would not start World War III.

To achieve the first point, Iran had to carry out a direct strike without resorting exclusively to proxy forces – and that is indeed how it acted. Regarding the second point, even though most of the missiles and drones were indeed shot down, some managed to penetrate Israeli air space and hit military targets. The Chief of Staff of the Iranian Armed Forces, Mohammad Bagheri, said that the information center on the Israeli-Syrian border and Israel’s Nevatim air base were hit. And finally, as to the third point – war didn’t happen. This resembled the situation in 2020, when the Iranians hit US bases in Iraq in response to the assassination of General Soleimani.

However, it is still too early to speculate as to whether Iran’s attack was a success or not. The big question now is how Israel will respond. 

What Iran has accomplished

It’s important to emphasize that Iran’s operation carried more political than military weight. In this sense, it was carried out subtly and was a success. Obviously, the Iranians did not want to start a war which would involve the US, even though that is what Netanyahu wanted. In other words, Israel didn’t manage to provoke Iran. 

It is also obvious that the Islamic Republic possesses more powerful drones and missiles than those used in the attack on April 14. However, even the less advanced drones and missiles were able to penetrate Israeli air space and inflict economic damage, since Israel spent much more money on shooting down the missiles and drones than Iran spent on launching them. 

Tehran has once again demonstrated that Israel is not invulnerable, and it is possible to attack it. As for the degree of inflicted damage, which some commentators were unsatisfied with, it largely depends on the type of missiles and drones used in the attack – and Iran has a lot of military equipment. 

Finally, Iran’s main achievement is that it has managed to confuse Israel in the same way that it was confused after the October 7 Hamas attack. The country has to respond. But how? Should Israel strike Iranian proxy forces? This is possible, but Israel does it all the time without much result. Should it hit Iran directly? But that would start a war which no one is prepared for, including the US.

Conclusion

The ball is now in Israel’s court, and the country faces the same challenges that the Islamic Republic did after April 1. But will Israel be able to solve these challenges as efficiently? 

It is noteworthy that IRGC Commander-in-Chief, Hossein Salami, said that from now on, if Israel attacks the interests of Iran and Iranian citizens, Tehran will strike it again.

This is an important statement. Essentially, the attack carried out by Iran on April 14 was not just a retaliatory strike, but established a new order. Iran demonstrated that it is ready to resort to new means of influence in a situation where words are not sufficient. It attacked Israel directly not in order to start a war, but to demonstrate what could happen if all other methods of pressure on Israel fail. 

A new option has been put forward. Israel may be deprived of its most important advantage – absolute impunity, which until recently had been guaranteed by the US.

Kiev’s refusal to acquiesce has seen tensions rise between Ukraine and its top backer, the paper claims, citing anonymous US officials

The US has on multiple occasions asked Ukraine to stop targeting Russian oil refineries with its drones, the Washington Post claims, citing anonymous American officials. Kiev has reportedly ignored those requests, thus straining relations with its top foreign provider of military assistance, the newspaper reports.

Since January, Ukraine has launched a series of long-range attacks on Russian energy facilities, including oil depots and refineries, using kamikaze drones. Russian Defense Minister Sergey Shoigu has argued that the strikes have been meant to impress Kiev’s Western backers amid a lack of progress on the front line.

The Washington Post reported on Monday that US Vice President Kamala Harris had met privately with Ukrainian President Vladimir Zelensky on the sidelines of the Munich Security Conference in February, telling him to refrain from targeting Russian oil refineries. President Joe Biden’s administration reportedly believes that such attacks would raise global energy prices and provoke massive Russian retaliation.

According to the media outlet, the Ukrainian head of state “brushed off the recommendation.” Despite the US becoming more and more insistent over the following weeks, Kiev doubled down on its strategy.

As a rift widens between Washington and Kiev over the latter’s tactics, Ukrainian officials are becoming exasperated at the US’ inability to provide its partner with additional weaponry. This is due to the fact that Republicans in Congress have, for months, been blocking President Joe Biden’s foreign aid package, that envisages, among other things, $60 billion for Ukraine.

The newspaper, citing US Senator Tom Cotton, suggested that Biden’s main concern is keeping gasoline prices from rising domestically ahead of the November US presidential election.

Appearing on Ukrainian TV on Sunday, the country’s Foreign Minister Dmitry Kuleba made it clear that Kiev would consider Washington’s appeals if the US boosted its defense aid for Ukraine.

Last Wednesday, Celeste Wallander, the US Assistant Secretary of Defense for International Security Affairs, told lawmakers that the “strikes that we have seen against Russian energy sources have not significantly altered Russia’s ability to prosecute the war.” She added that the “Russians have been able to rapidly repair the facilities that were struck.”

A day prior, US Secretary of Defense Lloyd Austin told a Senate panel that “those attacks could have a knock-on effect in terms of the global energy situation.”

Last Thursday, Russian President Vladimir Putin said that Ukraine’s recent tactics have forced Russia to respond by targeting Kiev’s energy and oil facilities. He explained that these strikes have helped degrade the Ukrainian defense industry’s capabilities.

Moscow has described the Ukraine conflict as a US-led proxy war against Russia, with Washington willing to fight “to the last Ukrainian.”

In part, it states that women are ceasing to practice Catholicism the way more so than men in Italy. I am not sure this can be blamed on the liturgy, but on progressive Catholicism’s bowing to secular secularism and promoting an anthropology of marriage and Holy Orders at odds with Catholic identity. Women are told that one day they can be bishops, priests and deacons and that the LGBTQ+++ ideology will triumph over traditional Catholic morality. 

We know in liberal Protestantism which approves of all these things, especially in the inverted image of Catholicism found in the Anglican Communion, that approving of all of this has not stopped the bleeding numbers leaving that communion but increased it. They have no identity as a Christian communion any longer compared to more traditional and orthodox forms of Protestantism.

But the study also blames the revision of the Mass and the loss of Catholic liturgical identity. I found this part rather fascinating:

Exploring the possible causes of such a catastrophic abandonment of Catholicism in a land which lies at the heart of the Church, the Roman professor surmised that among the likely causes are the liturgical abuses and upheavals to which the Church in Italy has been subjected. He particularly pointed to the “progressive spectacularization of Vatican liturgies that has occurred over the past three pontificates” in Rome, as well as the liturgical innovations with which Italian clergy have scandalized faithful Catholics.  

“Many of the nominally still highly institutionalized and centralized (‘liturgy-centered’) rituals may now have been transformed, in part or entirely, into ‘performance-centered rituals.’” Diotallevi wrote. “For Catholic liturgies, a push in this direction may also have come from the progressive spectacularization of Vatican liturgies that has occurred over the past three pontificates, from the substantial deregulation of increasingly large sectors of ‘Catholic’ liturgical offerings, as well as from many of the solutions adopted by clergy during the lockdowns that have recently taken place to counter the spread of COVID-19 pandemic.” 

The public liturgical abuses that Italy has seen in recent include a Mass sacrilegiously offered on a surf board, in the water, at the beach, with the priest bare-chested, an outrage that prompted local civil authorities to consider charging the priest with the crime of a public offense against religion. Another priest offered Mass at a park in a rainbow “pride” stole and a skin-tight cycling outfit, and joked when hosts were blown by the wind onto the ground after the consecration. 

My own experience with the Modern Mass and my own changing attitudes about it are somewhat summarized in the quote above. Music is horrible and there is no tradition of Catholic music as it constantly changes. Gregorian chant is rare in the Modern Mass. Contemporary sounds constantly changing are prevalent. Liturgies are sloppy and banal. Homilies long and dismal. 

But, where the liturgy is “done well” this means you have what is written above. The Mass is “spectacularized” with triumphal music, loud instrumentation, trumpets, tympani and cymbals. I have heard this for ordinations and weddings. It’s all veneer and no substance. 

I can compare that to a EF or OF Mass celebrated with only Gregorian Chant for the propers and parts of the Mass even if the core parts of the Mass are in the vernacular.  The Traditional chanted Mass is sober, filled with spirituality and devotion and not geared toward shallow entertainment and music used to excite hormones.   

The Traditional Latin Mass bespeaks of Catholic identity now lost in the Modern Mass. The Modern Mass is so Protestantized that many can’t tell the difference between a Catholic Mass, an Anglican or Lutheran liturgy. Catholics attending a Lutheran or Episcopal Liturgy would say that there are no differences. Most Catholics now receive Protestant communion when attending a Protestant liturgy/service. And they like their music better. 

And now some Catholic parishes are trying to imitate the music and style of worship of the Non-denominational churches. Praise and worship music which is fad oriented and constantly changing and like a rock concert or any other kind of concert is mimicked in the Catholic Mass. Anyone immersed in this nonsense in a Catholic Mass would feel at home in a non-denominational setting and more than likely to prefer the Protestant version of their service verses the “catholic” one. 

Everything that progressive Catholicism has touched has ended in disaster. Think of the once great women’s religious orders who through synodality dumbed down their life, community, habits and charisma and became a collation of individuals doing their own thing, living alone in apartments and no longer identifiable as religious sisters or nuns. 

That was done to religious life is now on steroids as it concerns the Church in general, synodality, that will accelerate the demise of the Church already declining in so much of Western Europe and Italy in particular. And yet this pope and his progressive cardinals and bishops gleefully go forward with their destructive policies never looking backwards to the evidence that progressivism is the cause for the decline and fall of this particular Roman Empire. 


The Great Dispossession Part 3

Paul Craig Roberts

In Part 1, I explained that the next financial crisis will be bailed out not with central bank money creation but with our stocks, bonds and bank balances.

In Part 2, I explained the multi-year quiet regulatory changes that dispossessed us of our property.

In Part 3, I explain David Rogers Webb’s conclusion that a massive financial crisis is pending in which our financial assets are the collateral underwriting the derivative and financial bubble and will result in the loss of our assets but leave us with our debts as happened to those whose banks failed in the 1930s.

Webb begins with the economic formula that the velocity of circulation of money times the money supply equals nominal Gross Domestic Product. V x MS = GDP.

The velocity of circulation is a measure of how many times a dollar is spent during a given period of time, e.g., quarterly, annually. A high velocity means people quickly spend the money that comes into their hands. A low velocity means people tend to hold on to money.

Velocity impacts the Federal Reserve’s ability to manage economic growth with money supply changes. If the velocity of money is falling, an expansionist monetary policy will not result in rising GDP. In such a situation, the Federal Reserve is said to be “pushing on a string.” Instead of pushing up GDP, money supply increases push up the values of financial assets and real estate resulting in financial and real estate bubbles.

Webb notes that falls in velocity are precursors of financial crises. A multi-year sharp fall in velocity preceded the stock market crash in 1929 and the Great Depression that gave birth to regulatory agencies. The 21st century is characterized by a long-term fall in velocity that has reached the lowest level on record, while stocks and real estate have been driven to unprecedented levels by years of zero interest rates. When this bubble pops, we will be dispossessed.

Will the bubble pop?

Yes. The Fed suddenly and rapidly moved from zero to 5% interest rates, a reversal of the policy that drove up prices of stocks and bonds. The Fed raises rates by reducing money supply growth, thus removing the factor supporting high stock prices and collapsing the value of bonds. This results in a lowering of the value of stocks and bonds serving as collateral for loans, which, of course, means the loans and the financial institution behind them are in trouble. Bonds have already taken a hit. The stock market is holding because participants believe the Fed is about to reverse its interest rate policy and lower rates.

Webb notes that the official data show that the velocity of money collapsed in the 21st century while the Fed introduced “quantitative easing.” He makes the correct point that when the velocity of money collapses, the Fed is pushing on a string. Instead of money creation fueling economic growth, it produces asset bubbles in real estate and financial instruments, which is what we have at the present time.

When after more than a decade of near zero interest rates, the Fed raises interest rates it collapses the values of financial portfolios and real estate and produces a financial crisis.

As the authorities have set in place a system that bails out secured creditors with our bank deposits, stocks, and bonds, we will have no money and no financial assets to sell for money. People with mortgaged homes and businesses will lose them, as they did in the 1930s, when they lost their money due to bank failures. People with car payments will lose their transportation. The way the system works is you lose your money but not your debts.

The secured creditors are the creditors of the troubled institutions. Ultimately, the secured creditors are the mega-banks defined as “privileged creditors.”

The collapse of financial asset values in 1929 resulted in the failure of 9,000 banks (https://www.encyclopedia.com/economics/encyclopedias-almanacs-transcripts-and-maps/banking-panics-1930-1933). Bank failure meant that you lost the money you had in the bank. It means the same thing today regardless of deposit insurance, because your deposits have been turned into collateral for creditors. Moreover, FDIC deposit insurance is a joke. The FDIC’s assets are in the billions. Bank deposits are in the trillions. The Dodd-Frank Act prioritized derivatives over bank depositors, so a bank account holder is in line behind derivative claims. Apparently, FDIC insurance claims will be issued in the form of issuance of stock in a failed bank.

It has all happened before, but not on the scale of what is pending.

Under the regulatory regime in place, financial collapse today means that money will be drained from the economy and be concentrated along with all wealth in a few hands. A modern-day economy cannot function without money and without companies that serve as distributors of food, goods, and services. Webb notes that it is a perfect opportunity for central banks to introduce Central Bank Digital Currency (CBDC) with which they have been experimenting.

The provision of CBDC to the population would provide a money supply and income to a population in total chaos and restore order to a grateful population. But it would also give total control to rulers. Webb quotes Augustin Carstens, general manager of the Bank for International Settlements who says that the key difference between present day currency and Central Bank Digital Currency is that with CBDC the central bank will know how each person uses their allotment of digital currency which gives the central bank absolute control over you via the capability to regulate your purchases, to turn off disapproved purchases, to discipline dissenters. You will be supplied with the means of life as long as you have a good social credit score, which means that you are a non-dissenter of official narratives.

Webb believes that this result is the intent of the regulatory changes and corresponds to the World Economic Forum’s agenda: “you will own nothing.” There is much in the regulatory documents that support Webb’s belief. For example, the Single Resolution Board’s 2022 Guidance for Banks to prepare for “solvent wind-down,” is an indication that an event is in the works. The Single Resolution Board’s Work Program 2023 states: “The year 2023 will be the last of a transitional period for the establishment of the main elements of the resolution framework in the Banking Union.” In other words, everything is in place.

Whether Webb is correct that the regulatory regime that has been put in place amounts to a deliberate restoration of feudalism under high tech management or whether the new rules are the unintended consequence of the rulers’ drive for security is not important. The relevant point is that the next financial crisis will dispossess us not only of our pensions and financial assets but also of our freedom and independence. If the past is a guide, the next financial crisis is close at hand.

If the mega-rich and the large financial intermediaries can be made aware of the situation, it is in their own self-interest to convince Congress to use its law-making power to unwind the regulatory system of dispossession that has been created. But the hour grows late.

Ordinary people are dismissive of the World Economic Forum and its agenda of “you will own nothing and be happy,” but this is a mistake. The WEF was founded 53 years ago and has over the half century recruited many of the important people in business, finance, and politics. If you are not a WEF member and attendee at Davos, you are lower down on the totem pole. Social, political, and intellectual standing depends on membership. It is important to understand that The Great Reset means the re-institutionalization of feudalism.

Note that we are also being dispossessed of our food and farmers of the use of their land: “No Farmers No Food: Will You Eat The Bugs?” is an Epoch Original documentary exposing the hidden agenda behind global “Green Policies,” the untold stories of farmers forced out of business, the disruption this will have on our food supply, and why edible bugs are suddenly being pushed to the fore as a “Global Green Solution.”

EpochTV program “Facts Matter” host Roman Balmakov investigates the rapidly changing landscape of our global food source—the farming industry—through interviews with farmers in The Netherlands, Sri Lanka, and the United States. This is the next global crisis that is being ignored by the world’s media.

Economic “reflation” is becoming the next bullish narrative as equity valuation increases continue to outpace earnings gains, at least according to Gold Sachs and Tony Pasquariello.

“If GS is correct on the big calls, the macro backdrop is set to remain friendly: the US economy should continue to grow nicely above trend — picking up speed as the year moves along — with three adjustment rates cuts along the way.  to not obscure the moral of that story: the Fed is set to ease policy … into an upswing.  while Fedspeak this week had a somewhat hawkish bent, the house view for 2024 remains intact.”

Interest rates, gold, and commodity prices have increased in the past few months. Unsurprisingly, the bullish narrative to support that rise has gained traction. Interestingly, this “reflation” narrative tends to resurface by Wall Street whenever there is a need to explain the surge in commodity prices. Notably, the last time Wall Street focused on the reflation trade was in 2009, as noted by the WSJ:

“The most talked-about investing strategy these days isn’t stuffing money in a mattress, it’s the reflation trade — the bet that the world economy will rebound, driving up interest rates and commodities prices.”

While that “reflation trade” lasted for about two years, it quickly failed as economic growth returned to 2%-ish growth along with inflation and interest rates. As shown, oil and commodity prices have a very high correlation. The critical reason is that higher oil prices reduce economic demand. As consumption falls, so does the demand for commodities in general. Therefore, if commodity prices are to “reflate,” as shown, such will depend on more robust economic activity.

As such. The reflation trade hinges on a global resurgence of economic activity, usually associated with economies recovering from a recessionary period. However, the U.S. never experienced a recession. As discussed in “Deficit Spending,” despite numerous recessionary signals, like the inverted yield curve, manufacturing data, and leading economic indicators, the economy avoided recession due to massive governmental spending. To wit:

“One explanation for this has been the surge in Federal expenditures since the end of 2022 stemming from the Inflation Reduction and CHIPs Acts. The second reason is that GDP was so grossly elevated from the $5 Trillion in previous fiscal policies that the lag effect is taking longer than historical norms to resolve.”

While economists focus on the “reflation trade,” we must answer whether the support for more substantial economic growth exists. This is the sole determining factor in whether the “reflation trade” can continue.

Is Reflation Already Behind Us?

Interest rates and inflation have ticked up recently, driving investors into gold and commodities. However, the surge in precious metals and commodities is more of a function of speculative exuberance rather than an economic resurgence. As discussed in “Speculative Warnings,”

“In other words, the stock market frenzy to “buy anything that is going up” has spread from just a handful of stocks related to artificial intelligence to gold and digital currencies.“

Notably, the gold, commodities, and interest rate surge corresponded with more robust economic growth beginning in the third quarter of last year. That uptick in economic growth defied economists’ expectations of a recession. Such was because of the massive flood of monetary support from Government spending programs. However, that monetary impulse is now reversing.

As far as the “reflation trade” is concerned, as that monetary impulse recedes, so will economic growth, as shown. Even if the economy continues to grow at 2-2.5% annualized each quarter, the annual rate of change in growth will continue to slow.

Importantly, this assumes that the Government will keep “spending like drunken sailors” over that same period. However, if they don’t, the economic growth rate will slow even more quickly without increasing monetary spending.

It is important to remember that increasing debts and deficits do not elicit stronger long-term economic growth. As debt levels rise, economic growth rates will slow as money diverts from productive investment into debt service.

That reality should be unsurprising, as this is not the first time the Government has gone “all in” on a reflation trade. As noted above, following the Financial Crisis, the Government intervened with HAMP, HARP, TARP, and a host of other spending programs to “reflate” the economy.

Let’s review what happened with interest rates, inflation, and gold and commodity trade.

Past May Be Prologue

As noted in 2009, following the “Financial Crisis” and recession, the Government and the Federal Reserve engaged in various monetary and fiscal supports to repair the economy. While the economy initially recovered from the recessionary lows, inflation, economic growth, and interest rates remained subdued despite ongoing interventions.

That is because debt and artificially low interest rates lead to malinvestment, which acts as a wealth transfer mechanism from the middle class to the wealthy. However, that activity erodes economic activity, leading to suppressed inflation and a surging wealth gap.

During that same period, commodities and precious metals rose initially as the “reflation expectation” was widespread. However, debt-driven realities quickly undermined that assessment and those investments languished relative to equities, as the flood of liquidity and low rates made equities far more attractive to investment.

While the relative performance of precious metals and commodities has picked up in recent months, this is more likely a function of “irrational exuberance” in the financial markets. As discussed previously, the surge in speculative investment activity is not uncommon to markets, and currently, many asset classes are becoming highly correlated.

However, while there is a compelling narrative around gold and precious metals from an investment perspective, those chasing that trade have had many years of terrible underperformance. While this time could be different, the “reflation narrative” will most likely fall prey to the realities of excessive debt, which will pressure Governments to cut rates once again.

If the past is potentially prologue, likely, the bullish narrative of “reflation” may once again find future disappointment. Such is particularly the case as the economics of debt and poor policy choices continue to erode the middle class further.

The post Reflation Trade Is The New Bullish Narrative appeared first on RIA.

We, the pro-life community, finally fell into this great chasm, one that was always right before our eyes. The obvious judicial decision by Alabama’s Supreme Court that frozen embryos are in fact children, and their accidental death warrants a wrongful death lawsuit to proceed, puts the light on this Grand Canyon among all those fighting to stop abortion but not exactly protect every life…

Source

A day before the agreement would have come into force, Kiev pulled out, sources told Reuters

Russia and Ukraine had almost reached a new Black Sea shipping deal in March after two months of negotiations, only for Kiev to abruptly walk away, Reuters reported on Monday, citing anonymous sources familiar with the matter.

The official agreement governing the freight route lapsed in July 2023, when Moscow declined to renew the original Türkiye- and UN-mediated Black Sea Grain Initiative. Russia said that the US and EU had not kept their part of the deal, blocking exports of Russian food and fertilizer.

The most recent talks were brokered by Türkiye at the prompting of the United Nations, and a tentative agreement to “to ensure the safety of merchant shipping in the Black Sea” was reached last month, according to Reuters’ sources.

They added that while Kiev did not formally sign, it agreed that President Recep Tayyip Erdogan could announce the deal a day before Turkiye’s March 31 local elections, with the pact to take effect immediately upon being made public.

“At the very last minute, Ukraine suddenly pulled out and the deal was scuttled.” 

According to the draft seen by Reuters, Ankara had mediated agreements between Moscow and Kiev “on ensuring free and safe navigation of merchant vessels in the Black Sea,” in compliance with maritime conventions.

The guarantees would not apply to “warships, civilian vessels carrying military goods,” except when agreed upon by all parties, the copy of the document stated.

Both Russia and Ukraine were to offer security guarantees to commercial vessels in the Black Sea, undertaking not to strike, seize or search them, provided they were unladen or had declared a non-military cargo, according to the draft agreement.

The reasons for Kiev pulling out are unclear, but President Vladimir Zelensky accused Russia of targeting grain export infrastructure during the original deal, thereby putting vulnerable countries at risk.

Speaking to reporters earlier this year, Russian Foreign Minister Sergey Lavrov denied that Moscow ever attacked Ukrainian ships in the Black Sea during the grain deal. One of the reasons Moscow did not return to the Black Sea Grain Initiative was Kiev’s misuse of the shipping passage during the agreement, he said.

“The Ukrainians used these free secure passages to launch their weapons in the form of naval drones,” damaging Russian ships and ports, Lavrov stated. He added under the old agreement, only 3% of the shipped Ukrainian grain went to countries on the UN World Food Programme's list of states in greatest need.

READ MORE: Egypt wants to host Russian wheat hub

Since then, Moscow has donated 200,000 tons of grain to six African nations, with the last shipments arriving in January of this year.