Warning lights are blinking bright red everywhere

Just a few months ago it appeared that COVID and vaccine mandates were going to be the biggest issues for the November 2022 elections.
It now appears that this perspective will seem quaint.
Even if we don't get into a shooting war with Russia (which our news media is thirsting for), we appear to be destined for a brutal economic shock that will dominate over every other concern this fall. I wouldn't be surprised if the political campaigns have only two topics: Russia and the economy.

I'll start with the oldest, largest, and most painful problem for the working class - housing.

U.S. home prices rose by 18.8% in 2021, according to the Case-Shiller U.S. National home Price Index. Yet real residential fixed investment fell in the second and third quarter of 2021 and was essentially unchanged in the fourth quarter. Homebuilders are trying to build more homes, but the housing supply chain still hasn’t been able to increase production to match. On a seasonally-adjusted basis, completions of single-family homes have been unchanged since August 2018.

Rents in some cities went up 40% last year, and are rising at the fastest rate ever.
So housing is getting increasingly unaffordable at an accelerated rate, while the supply chain is preventing developers from building more. Just this item alone is enough to cause social unrest.
We can't build our way out of this, and we can't keep doing what we are doing. Yet our political leaders have no intention of making the reforms in the tax code that would alleviate the stress.

Food prices went up nearly 21% last year, and have reached an all-time record.


Poor people all over the planet were going hungry.
And then the REAL bad news hit.



Ukraine and Russia are both major exporters of basic foodstuffs, and the war has already hit crop production, driving up prices
Mr Beasley said it was putting more people at risk of starvation worldwide.

"Just when you think hell on earth can't get any worse, it does," he said.

Russia and Ukraine, once dubbed "the breadbasket of Europe", export about a quarter of the world's wheat and half of its sunflower products, like seeds and oil. Ukraine also sells a lot of corn globally.

Analysts have warned that war could impact the production of grains and even double global wheat prices.
Mr Beasley told BBC World Service's Business Daily programme that the number of people facing potential starvation worldwide had already risen from 80 million to 276 million in four years prior to Russia's invasion, due to what he calls a "perfect storm" of conflict, climate change and coronavirus.

To make matters worse, Ukraine’s government has banned the export of wheat, oats and other staples.
Egypt is banning the export of wheat, flour, lentils, and pasta.
Indonesia is banning the export of palm oil.

Serbia announced on Wednesday it will ban exports of wheat, corn, flour and cooking oil as of Thursday to counter price increases while Hungary banned all grain exports last week.

More food export bans are sure to come, followed by social unrest and war. Dreams of freedom generally won't get poor people out in the streets, but an empty belly always will.

A food crisis in 2007 and 2008 due to weather shocks and trade restrictions to the food market triggered riots in countries like Haiti, Bangladesh, and Mozambique.

Food scarcity also played a large role in the Arab Spring, a series of anti-government protests in the Middle East in the early 2010s after international food prices shot up, unemployment rose, and frustration with corrupt political systems peaked.

One of the driving forces behind the Arab Spring, experts say, was the high cost of food.

Keep in mind that food prices have already exceeded the 2007-2011 levels.
If that wasn't enough, the food price inflation could cause a currency crisis in poorer nations.

We can see from the chart below the Taiwanese dollar, Mexican peso, the Colombian peso, the ringgit, the rupiah and the yuan all look vulnerable among EM currencies given the rise in food prices. Turkey is literally off the chart with food adding an extra 8.5% points to CPI over the last six months, while Russia’s currency has already collapsed due to sanctions.
And as currencies weaken, the risk of an inflation spiral in EMs rises as the cost of imported goods climbs even more.


Inflation is running at 40-year highs and is more than likely to go much higher. That leaves whole generations in a financial environment that they are unfamiliar with. This includes traders on Wall Street, who will likely take a beating this year because it's likely that none of them know how to trade in a stagflationary environment. It also includes consumers (who probably have no real savings or pension anyway).


Even when you remove food and energy, the inflation rate is getting high.
Which brings me back to energy.
Gas prices are expected to hit all-time highs this week, and then keep going. Some are estimating that gas prices could rise another 50% from here.
And this was BEFORE the U.S. decided to ban Russian oil.


Some have speculated that the sanctions alone will hit the economy like the 2008 crash.
If you want to see a consistent trend in economic history, few can compare to oil and recessions.


Meanwhile, corporate profits are at all-time highs, while corporations plan to continue to hold down wages.

after-tax corporate profits actually reached record levels as a share of economic output, said the U.S. Commerce Department.
According to the Wall Street Journal, nearly two thirds of publicly traded companies had higher profit margins after the pandemic.
...As these large companies raise prices and the CPI shows a 7 percent increase, surveys from Salary.com and the Conference Board show that corporations are on average only planning to increase wages by 3 to 3.9 percent.

“Many companies we’ve spoken to have seen their overall payrolls barely budge at all,” Pollak said. “They’ve lost their most experienced, highest paid people and replaced them with a younger cohort,” due to pandemic-related retirements.


There is a virtual certainty that we'll be in a recession by November, while several poor nations will erupt into civil wars.
And that's not even the bad news. The bad news is the lesson that we are teaching the world.

Speaking on Bloomberg’s Odd Lots podcast, the global head of short-term interest rate strategy at Credit Suisse AG noted that wars tend to turn into major junctures for global currencies, and with Russia losing access to its foreign currency reserves, a message has been sent to all countries that they can’t count on these money stashes to actually be theirs in the event of tension. As such, it may make less and less sense for global reserve managers to hold dollars for safety, given that they could be taken away right when they’re most needed.

That's not controversial statement. A central banks currency reserves are supposed to be the most safe and secure financial instrument out there. If another country can simply "turn off" those reserves, then it isn't safe and secure. Simple as that.
So you can bet that every nation out there with the slightest ambition of independence is going to start diversifying their currency reserves. What we've just witnessed is the Beginning of the End of Dollar Hegemony.
The only surprise is that it was 100% self-inflicted.

The basic assumption of economic and diplomatic forecasting is that every country will act in its own self-interest. Such reasoning is of no help in today’s world. Observers across the political spectrum are using phrases like “shooting themselves in their own foot” to describe U.S. diplomatic confrontation with Russia and allies alike. But nobody thought that The American Empire would self-destruct this fast...
I thought that de-dollarization would be led by China and Russia moving to take control of their economies to avoid the kind of financial polarization that is imposing austerity on the United States.[2] But U.S. officials are forcing Russia, China and other nations not locked into the U.S. orbit to see the writing on the wall and overcome whatever hesitancy they had to de-dollarize.

I had expected that the end of the dollarized imperial economy would come about by other countries breaking away. But that is not what has happened. U.S. diplomats themselves have chosen to end international dollarization, while helping Russia build up its own means of self-reliant agricultural and industrial production. This global fracture process actually has been going on for some years, starting with the sanctions blocking America’s NATO allies and other economic satellites from trading with Russia. For Russia, these sanctions had the same effect that protective tariffs would have had.

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shaharazade's picture

Grocery prices are insane. Every time we buy food it goes up shockingly. We do not shop big box corporate stores like Kroger's. Well actually a Korean corp. bought our so called local chain called New Seasons. We can walk to this store have for years. Good thing no gas. We live in neighborhood in SE Portland OR, that bastion of liberal lefties. Lol. Ask me globalization did a number on us all globally. Thanks Bill and Hillary not to mention Obummer and the entrenched Demoratic corporate party. Fossils the lot of them. Oh I forgot the progressive's that manage to get elected and turn out to be useless sycophants who fold like cheap tents. No bread today. Oh well lots of organic carrots for twice the usual price. 'Strange Days Mama'

15 users have voted.

crowd springs into action with Biden's teleprompter taking the lead.


Biden issued a warning to his party about the possibility of Republicans taking control of Congress in the upcoming midterm elections during remarks to Democratic National Committee members on Thursday evening.

He encouraged Democrats to use the same work ethic, enthusiasm and energy they had in the 2020 election as they seek to keep control of the House and Senate, and to add seats.

“If we don’t do that, don’t do that, it’s going to be a sad, sad two years. Think about Republicans if they controlled the Congress these last two years,” the president said to members at their winter meeting in Washington, D.C.

He praised Democrats’ record and told them to use it when campaigning for the midterms.

The president listed Ukraine as an issue for Democrats to run on, touting the unity of NATO and the U.S. against Russia’s ongoing invasion into its neighboring country and saying that Russian President Vladimir Putin has "failed to divide Democrats and Republicans.”

He also noted the record-high price of gas and called it “Putin’s price hike,” rhetoric that the White House has been using to discuss gas prices since Biden announced a ban on Russian energy imports earlier this week.

He further argued that his administration is taking steps to lower prices for Americans, including prescription drug costs, while the country faces high inflation.

“At a time when food and gas prices are rising, if you can lower other major costs for families … you can help their standard of living,” he said.

That shows how completely out of touch Biden's handlers are.

11 users have voted.

medicated, and able to walk to school.

7 users have voted.

"We'll know our disinformation program is complete when everything the American public believes is false." ---- William Casey, CIA Director, 1981

TheOtherMaven's picture

@on the cusp

6 users have voted.

There is no justice. There can be no peace.

@TheOtherMaven @TheOtherMaven saying he subsidizes 12 yr old girls that are sniffable and feelable, but then, you and everyone else got it without me reminding you all that he really, really likes hanging around little girls...

6 users have voted.

"We'll know our disinformation program is complete when everything the American public believes is false." ---- William Casey, CIA Director, 1981

snoopydawg's picture

Jen says that Biden’s doing everything he can to bring gas prices down, but instead they have continued to go up. She blames Putin for high gas prices, but Doocy reminded her that they were going up before Russia invaded.

She’s gotta be rude.

Peter Guiitbugg or whatever his name is suggests that people who can’t afford to pay higher gas prices should just get an electric car. Sure Petro, people who can’t afford $5 gas should just buy a $60,000 car. Problem solved. Grrr…how out of touch is our government?

13 users have voted.

Which AIPAC/MIC/pharma/bank bought politician are you going to vote for? Don’t be surprised when nothing changes.

TheOtherMaven's picture


11 users have voted.

There is no justice. There can be no peace.

10 users have voted.
janis b's picture


and how completely out of touch those with the means and more are in relation to reality.

7 users have voted.

let me introduce you to Jimmy Carter. The last guy that more directly took on Russia (then the USSR) at the same time as OPEC flexed its muscle.

Catch it while you can Ukraine on Fire. It's being pulled from platforms and labeled Russian propaganda which it isn't, but we're not living in a fact-based political era.

7 users have voted.
usefewersyllables's picture

and the person in charge of watching them is having an epileptic seizure caused by all that infernal flashing (cf. the scientist Dr. Ruth Leavitt, played by Kate Reid in the movie version of Crichton's "The Andromeda Strain, 1969).

Couldn't find that clip on YouTube. Darn it- it is, after all, a pivotal point in the movie...

4 users have voted.

Twice bitten, permanently shy.