The day many of us thought would never arrive is finally at hand. It took fourteen years of continuous failure to bring about what was painfully obvious in 2008 - Globalization is over...
"Leading investors are coming to the same view. BlackRock chief Larry Fink writes in a new letter to shareholders that the Ukraine war "has put an end to the globalization" experienced in recent decades"
Let's see, global financial meltdown. Serial monetary bailouts. Near collapse in China. Brexit. Trump. A pandemic. These were all the warning signs it was all ending.
Unfortunately, this will not be a seamless transition. Not ONE job has been brought back from China, and yet these people are already screaming hyperinflation. Why? Because they are ALL now addicted to cheap junk at Walmart.
Sure, Trump acolytes hate China and want to re-gain economic independence, BUT they won't pay ONE DIME more for it. Meanwhile here we are with corporate profits at all time highs, which have nowhere to go but down under the paradigm of "deglobalization".
Which brings up the other massive addiction - artificially inflated wealth. That problem is about to get solved by the Fed's tightening rampage. And yet none of these people see it coming. They are all solely preoccupied by price inflation while BUYING asset inflation with both hands. Today's so-called "inflation" is painless compared to the deflationary collapse about to come.
Recipe for TOTAL disaster at the zero bound.
Throughout all of this chicanery, various politicians have received extreme opprobrium, whereas corporations have gotten a free pass. Why? Because today's so-called opponents of Globalization are corporate stooges. After all, they make no connection between economic dependence, "free trade", chasmic deficits, environmental decimation and the corporate beneficiaries of it all. They are easily fooled into blaming Mitch McConnell and Nancy Pelosi, not realizing they are merely interchangeable widgets. As is the corporate media that will cast blame high and low EXCEPT where it belongs:
"The level of profit that large corporations experienced in 2021 was unparalleled in American history, as consumers faced the worst price inflation the U.S. has seen in decades"
Records dating back to the late 1940s show that after-tax corporate profits in relation to gross domestic product are at all-time highs"
Wall Street still expects a higher net profit margin for the S&P 500 this year, and the next two after that"
Today's financial pundits are now complicit in the biggest con job in human history. As is anyone else who propagates this colossal lie. Meaning the entire overwhelmingly bullish cohort of investors.
The lesson NOT learned from Y2K and 2008 is that the Fed can't use stimulus to bailout gamblers from the collapse of an asset bubble caused by excessive stimulus. DUH. This should be extremely obvious, yet somehow third grade logic is now beyond the grasp of even our highest placed economists.
It's only fitting that Walmart made a new all time high this week, deja vu of 2008. Why? Because we now have "stagflation".
Do you know what stagflation meant in 1980 after Volcker pulled the plug on inflation? It meant deep asset burial in stocks, commodities, and real estate as inflationists went through the windshield.
For some reason, inflation alarmists DON'T remember that part of the story.
This time around, the Fed is double tightening at both ends of the yield curve at the same time - for the first time in history.
DOUBLE the stimulus reduction that caused crash in 2000 and in 2018.
AND in addition, stock market valuations are at all time highs, whereas in 1980, valuations were at decade lows.
