Biden’s debacle

The fiasco in Afghanistan is a grave blow to America’s standing

And much of the blame lies squarely with Joe Biden

If the propagandists of the Taliban had scripted the collapse of America’s 20-year mission to reshape Afghanistan, they could not have come up with more harrowing images. 

As insurgents swept into Kabul, desperate Afghans, terrified about what the victorious zealots might do, chased departing American cargo planes down the runway, trying to clamber into the landing gear and inevitably falling to their deaths. 

The American-backed government had surrendered without a fight—something that American officials were insisting would not happen only days before. 

Afghans were left in such a horrifying bind that clinging to the wheels of a hurtling aircraft seemed their best option.

America has spent $2trn in Afghanistan; more than 2,000 American lives have been lost, not to mention countless Afghan ones. 

And yet, even if Afghans are more prosperous now than when America invaded, Afghanistan is back to square one. 

The Taliban control more of the country than they did when they lost power, they are better armed, having seized the weapons America showered on the Afghan army, and they have now won the ultimate affirmation: defeating a superpower.

The insurgents have made a show of magnanimity, pledging that they will not take revenge on those who worked for the toppled government and insisting that they will respect women’s rights, within their interpretation of Islamic law. 

But that interpretation kept most girls out of school and most women confined to their homes when the group was last in power, in the 1990s. Brutal punishments—floggings, stonings, amputations—were common. 

The freedoms that urban Afghans took for granted over the past 20 years have just gone up in smoke. 

It is an appalling outcome for Afghanistan’s 39m people, and deeply damaging for America.

It is not surprising that America failed to turn Afghanistan into a democracy. 

Nation-building is difficult, and few imagined that it could become Switzerland. 

Nor was it unreasonable for Joe Biden, America’s president, to want to draw the conflict to a close. 

America has spent 20 years in a place of only modest strategic importance about which most American voters have long since ceased to care. 

The original reason for the invasion—to dismantle al-Qaeda’s main base of operations—was largely achieved, though that achievement could now be reversed.

The claim that America is showing itself to be a fickle ally by allowing the Afghan government to fall is also overblown, given the duration, scale and expense of the American deployment. 

The defunct regime in Kabul was not an ally in the way that Germany or Japan is. It was far weaker, more corrupt and completely dependent on America for its survival.

But none of that absolved America of the responsibility to withdraw in an orderly fashion. 

Mr Biden failed to show even a modicum of care for the welfare of ordinary Afghans. 

The irony is that America had a plan to do just that, which had been in the works for several years. 

It had hugely scaled down its garrison, from around 100,000 troops in 2011 to fewer than 10,000 by 2017, along with a similar number from other nato countries. 

They were not supposed to defeat the Taliban, but prevent the Afghan army’s collapse, largely through air power, and so force the Taliban to the negotiating table.

Apologists for Mr Biden argue that his predecessor, Donald Trump, had already scuppered this plan by trying to rush it to a conclusion before last year’s presidential election in America. 

It is true that Mr Trump was so desperate to strike a quick deal that he accepted preposterous terms, agreeing to end America’s deployment without even securing a ceasefire, let alone a clear plan to end the civil war. 

He had already reduced the American presence to little more than 2,000 soldiers by the time Mr Biden took office, and had promised to get the rest out by May 1st.

But Mr Biden did not have to stick to this agreement. 

In fact, he didn’t entirely, refusing to keep to the original timetable. 

The Taliban were clearly not holding up their end of the bargain, pressing their advantage on the battlefield instead of negotiating in good faith with the Afghan government. 

That could have been grounds to halt or reverse the American withdrawal. 

There was little political pressure within America to bring the war to a speedy conclusion. 

Yet Mr Biden was working to an arbitrary and flippant deadline of his own, seeking to end the war by the 20th anniversary of 9/11. 

Although the speed of the Afghan government’s implosion surprised most observers, including this newspaper, America’s soldiers and politicians were among the most naively optimistic, insisting that a total collapse was a vanishingly remote prospect. 

And when it became clear that the Afghan army was melting away, Mr Biden pressed on intransigently, despite the likely consequences.

As a result, America’s power to deter its enemies and reassure its friends has diminished. 

Its intelligence was flawed, its planning rigid, its leaders capricious and its concern for allies minimal. 

That is likely to embolden jihadists everywhere, who will take the Taliban’s victory as evidence that God is on their side. 

It will also encourage adventurism on the part of hostile governments such as Russia’s or China’s, and worry America’s friends. 

Mr Biden has defended the withdrawal by arguing that Afghanistan was a distraction from more pressing problems, such as America’s rivalry with China. 

But by leaving Afghanistan in such a chaotic fashion, Mr Biden will have made those other problems harder to deal with.

After the fall

The shambolic withdrawal does not reduce the obligation of America and its allies to ordinary Afghans, but increases it. 

They should use what leverage they still have to urge moderation on the Taliban, especially in their treatment of women. 

The displaced will need humanitarian aid. 

Western countries should also admit more Afghan refugees, the ranks of whom are likely to swell, and provide generous assistance to Afghanistan’s neighbours to look after those who remain in the region. 

The haste of European leaders to declare that they cannot take in many persecuted Afghans even as violent zealots seize control is almost as lamentable as America’s botched exit. 

It is too late to save Afghanistan, but there is still time to help its people.  

Central Banks Are Now in the Endgame

By Egon von Greyerz

The $2 quadrillion debt bubble will be the central bank endgame

Central bankers were handed the Midas curse half a century ago. 

Midas turned everything that he touched into gold– even his own food. 

Exactly 50 years ago (15 Aug, 1971) central bankers were handed a much worse curse by Nixon. 

But instead of turning everything into gold, their curse was to turn all real assets, including gold, into worthless paper, creating the perfect setup for this central bank endgame.

Nixon had of course not studied history. 

Because if he had, he would have understood that his lie was $100s of trillions worse than the Watergate lies:

“THE EFFECT OF TODAY’S ACTION will be to stabilise the dollar”


As the chart below shows the dollar has lost 98% in real terms (GOLD) since 1971. 

Just a one hour history lesson would have taught Nixon that no currency has ever survived in history since all  leaders without fail have done what Nixon did.

Reminds me of the line in Pete Seeger’s song “Where have all the flowers gone”:


The fall of the dollar after Nixon eliminated Bretton Woods. 

Well, they will never learn of course. History has taught the very few who are willing to listen that there is no exception.

Every single currency throughout history has been debased until it has reached ZERO as I outlined here.

It seems incomprehensible that presidents and central bankers have not learnt they will all play the role that their predecessors have, in destroying the nations currency.

With their arrogance, they are all obviously hoping that they can pass the baton on so that it won’t happen on their watch. 

And because most leaders have a relatively short reign in relation to the lifespan of a currency, they often escape even though guilty.

Nixon for example believed that he committed a good deed and stabilised the dollar. 

If he is looking down from above, he will now 50 years later, see that his actions have created a “mere” 98% fall so far.

So Nixon saved the dollar very briefly with the consequence of killing it forever! 

When will they ever learn?


The period after I was born at the end of WWII  was followed by a long chapter of law and order in the West. 

This was not just in society at large but there was also order and discipline as well as courtesy in schools and families.

Today in many countries there is no respect for teachers, parents or even the police. 

All eras go through cycles and the worst part of the cycle is what we are experiencing now.

Moral and ethical values are gone and crime is rampant. 

This is not new in history and regularly happens at the end of major eras or cycles. 

This happened for example at the end of the Roman Empire as Rome disintegrated economically and morally. 

Decadence was rampant then as it is today. 

So were debts and deficits.

The emperor Commodus started it all and was the ancient Nixon. 

Gallenius finished it off and was the Greek version of Biden.

So dissolution of values and principles are clearly a consequence of financial and economic  dysfunction.

The fact that the US for example has increased the federal debt every year since 1960 (with four minor exceptions) is a sign of chronic disease and total dysfunction.

If the US government for over 60 years has become increasingly more decadent, both economically and morally, how can we expect the people to behave differently?

Many countries in the world have fared in a similar manner but because of the size of the US economy and the reserve currency status of the dollar, the consequences are considerably more significant.


The song “I am forever blowing bubbles” was written in 1918, not long after the creation of the Fed. 

Clearly the composer saw it coming:

“I’m forever blowing bubbles,

Pretty bubbles in the air,

They fly so high, nearly reach the sky,

Then like my dreams they fade and die.”

It will be no different with the current bubbles. 

They have already flown so high and reached the sky. 

Just look at central banks’ balance sheets which are now going exponential:

As the graph shows, since the Great Financial Crisis started in 2006, the balance sheets of the four biggest central banks have gone up 6X. 

Since the current crisis accelerated in 2019, the growth is now EXPLOSIVE!

But it is not just central banks blowing bubbles. 

Because the whole world has become a bubble:

It took 2000 years to reach $100 trillion global debt and most of that is accumulated since 1971. 

Then 50 years later global debt trebled to $300 trillion.

As you can see in the graph above, I am projecting $2 quadrillion or more in the next 4-9 years. 

Sounds massive and sensational but the math is simple. 

If we add unfunded liabilities of at least $200 trillion globally plus total derivatives of at least $1.5 quadrillion, that takes us to $2 quadrillion.

As the derivatives bubble explodes, or rather implodes, in the next few years as we hit the central bank endgame, all that money will be printed by central banks in a futile attempt to save the financial system.

The $2 quadrillion debt bubble will be the central bank endgame

August 15, 1971 was the beginning of the End for the current economic era and currency system.

The Great Financial Crisis in 2006 was the start of the End of the End.

In August 2019 when central banks panicked and stated they would do whatever it takes, the  final stage of End of the End started.

In the graph above I have indicated that this very final stage and endgame of our current monetary system will end between 2025 and 2030. 

The end of a major economic era is of course impossible to forecast.

Normally things take longer than we expect. 

But when the hyperinflationary central bank endgame starts (followed by a depressionary implosion), things normally happen very quickly. 

Hyperinflationary periods are typically 2-4 years.


We have invested seriously in physical gold since 2002. 

We had the years leading up to this century studied global risk and carefully researched the best way to protect against this risk. 

Our conclusion was the financial and currency system was unlikely to survive based on our risk analysis which also included understanding history.

We are not gold bugs but see owning physical gold as the best protection against  the consequences of another failed financial and currency system.

As we discussed in our MAMChat last week discussing the gold flash crash, the attempt to depress the gold price by dumping $4 billion of paper gold was just the final part of a normal correction.

Our interest in gold is purely for fundamental reasons but sometimes it is interesting to look at technical patterns.

The chart above shows that the corrective C-wave reached support at $1,680. 

That was probably the end of a minor correction and gold should soon start the move to the next target of $3,000. 

Rising above $1,900 will be confirmation of the resumed uptrend.

Gold is in a secular uptrend since 1999 and no action by central banks can stop the move to levels that are unthinkable today.

But investors should not focus on what price gold could reach but instead how far their assets (stocks, bonds, property) measured in dollars or euros can fall.  

In my view the falls will be much more than 50% and probably more than 90%.

Physical gold, securely vaulted in a safe jurisdiction such as Switzerland, has always been the best protection against a failed currency and financial system.

This time will not be different.

The Latest Lie from on-High: An “Independent Federal Reserve”

By Matthew Piepenburg

Earlier in July, U.S. President Biden came away from a meeting with Fed Chairman Jerome Powell and calmly announced that in addition to inflation being “short term,” we should fear not, as Biden also “made it clear to Chairman Powell that the Fed remains independent,” but “will act as needed.”


Where to even begin in unpacking the lighthouse of reality behind so much verbal fog?

When it comes to market analysis, no one wants to hear political opinions within finance reports, left or right.

We get this.

Thus, rather than run the risk of offending the left, right or center, I’ll be frank in confessing my foundational view that nearly all politico’s (and Fed Chairs) have been universally comical when it comes to math, history or blunt-speak.

In short, the math, facts and warning signs rising by the hour (and outlined below) make it easy to be an equal-opportunity cynic when it comes to fiscal leadership or political “truth.”

So, let’s get back to Biden’s recent observations…

Deconstructing Biden-Speak

As for inflation being “short-term,” we’ve written ad nauseum about our stance on this fiction many times elsewhere.

But as for Biden’s declaration about the Fed being “independent,” let me wipe the coffee I just spilled on my shirt and speak plainly: That’s a lie.

First of all, if the Fed were as “independent” as Biden claims, then how can Biden be so certain they “will act as needed”?

Aren’t “independent” actors supposed to act as they, rather than the politicians, decide or “need”?

And if an otherwise unconstitutional Fed, which sits on Constitution Ave behind marble columns screaming of a governmental architectural façade were truly an independent “private bank,” then why does it call itself a “Federal” Reserve?

Furthermore, for any who have taken the time to read the actual (as well as sordid) history of the Fed’s not-so-immaculate conception (as uniquely outlined in Ed Griffin’s seminal work, 

The Creature from Jekyll Island), they already know that the Fed is as tied to the hip of Wall Street money and D.C. politics as an anchor is to a rotting ship.

Finally, and most importantly, if the Fed were truly “independent,” then why has it been buying the near entirety of Uncle Sam’s IOUs (Treasury bonds) for the last 18 months at negative real interest rates?

The independent Federal Reserve has been buying bonds at real negative rates. 

Biden: Very Dependent on the “Independent” Fed

Needless to say, Biden has publicly offered Jerome Powell “broad support” for another Fed term for one simple reason: The Biden Administration, like every administration since Eisenhower, wants a dependable rather than independent Federal reserve.

In other words, in a nation 1) whose manufacturing has been offshored, 2) whose workers are increasingly unemployed or on the dole, 3) whose feudalistic top 10% have disconnected entirely from the bottom 90%, and 4) whose entirely Fed-supported (and sky-rocketing) securities bubble is now the only reliable source of capital gains tax receipts allowing the U.S. to pay its interest expense on governmental debt… it’s actually quite easy to see that the Fed is anything but independent of D.C. politics.

To the contrary, the Fed is now, and has been evolving for years, as not only the lender of last resort for America, but the “solution” of last resort in pretending that a debt-soaked nation can survive off more debt.

Sadly, Thomas Jefferson, Andrew Jackson and many others had warned us long ago that such a toxic “solution” was nothing more than the undoing of our system, not its salvation.

“I sincerely believe that banking establishments [like a private central bank] are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale.”

— Thomas Jefferson

“A U.S. central bank would represent the prostitution of our government for the advancement of the few at the expense of the many.”

– Andrew Jackson

Following the Bread Crumbs to “What’s Next”

So, there you have it. A few little reminders from history, securities bubbles and tax receipts of what I think about Presidential truth in general or Biden’s “independent Federal Reserve” meme in particular.

But for those thinking about currencies and markets, let me get less political and even more blunt: The blatant dishonesty, desperation and open absurdity of such financial leadership makes it far easier for informed investors to behave and prepare for a future laid out to us by the so-called experts.

Let’s just follow the bread crumbs (i.e., data and math) and see where they always lead.

It’s no great mystery to political administrations addicted to Fed money that they will be asking for even more of it:

And it’s no great mystery that Federal deficits like this…

The Federal Deficit

… will be ignored by the Don Lemon-like “journalists” of the world throwing soft-ball questions to soft-brained politicos like Biden, all of whom promise more free money to the legitimately downtrodden masses like this…

…in order to get or stay elected.

But expanding the money supply at astronomical levels like this…

…doesn’t help those same Wall Street-ignored and increasingly angry masses for long, as the invisible tax of inflation eats away at the dollars they earn, collect or try to save at negative rates of return.

All the Signposts Point to Gold

As we have stated over and over, all financial roads and conversations in such a perverse debt and currency backdrop turn to gold, not because we are gold bugs, but simply because the writing is all over the walls (or charts above).

Stated more simply and more bluntly, taking on more debt paid for with more fake money results in one simple reality: The debasement of that money as a store of value.

Period. Full stop.

Toward this end, the one chart which can’t be overstated or repeated enough reminds us that gold can only trend further North for the simple reason that the fiat currencies in your wallet, bank account or 401K can only trend further South in a world awash in fiat currencies.

Again: Compared to a single milligram of gold, the major currencies are losing their war on value with each central bank mouse-click:

Choosing Between “Experts” or Facts?

In such a clear yet tragic setting, relying on the expertise or double-speak of the “experts” is an individual choice.

We get this too.

As for me, I am, after all, an evidence-based cynic.

Nevertheless, the examples of outright fraud and dishonesty from the lips of such leadership can’t be denied, brushed aside or debated, when the facts, quotes and numbers speak for themselves.

We’ve separately addressed this history of open charades masquerading as policies in the examples of Greenspan, Powell, and Yellen in particular.

Furthermore, we have been agnostic as to whether these policy makers served a left or right leaning administration for the simple reason that regardless of who is (or was) in the White House, the “independent Federal reserve” has been consistent in leaning our dying dollar, debt-soaked economy and artificially bloated markets further toward ruin with each passing day, mouse-click and misstatement.   

The data above is not political. It’s just data.

Our advice?

Follow the data’s signs, not Powell or Biden’s.

Climate change is a global threat demanding national solutions

The lofty hopes of the COP26 process will have meaning only if they connect with local politics

Philip Stephens

A firefighter passes a burning home as the Dixie Fire flares © Noah Berger/AP

There is climate politics, and there is national climate politics. 

What we are watching now is the international brand conducted at 20,000 feet — the global confabs of politicians, scientists and environmentalists ahead of the UN COP26 climate change conference to be held in Glasgow. 

Few pay much attention to what happens at ground level — the gritty local politics that will ultimately decide how much actually gets done to limit global warming.

An optimist would contend that the effort to decarbonise the world will turn out to be the moment when force of dire circumstance obliges humankind to rediscover enlightened self-interest. 

The US and China will segment their great power rivalry in the cause of saving the planet, the wealthy will subsidise poor nations in the drive to net zero and all will grow richer from the technological leaps that will accompany the “greening” of economies.

We can hope. 

An alternative path, however, ends in a fresh explosion of political populism as the burden of implementing all those ringing international commitments falls on those least able to afford them — on the anti-globalist left-behinds who backed Donald Trump for the White House, cheered Britain’s flight from the EU and might yet put the hard-right populist Marine Le Pen in France’s Elysée Palace.

To reframe the challenge: whatever agreements leaders reach when they gather at COP26, at some point these promises will have to be turned into national decisions that, in the world’s democracies at least, will require the consent of voters.

Governments will have to step down from the clouds. 

More than that, they will have to ensure that measures to slow the rise in temperatures do not come to be seen as just another elitist project.

The present disjunction between soaring rhetoric on the international stage and policy inaction at home could scarcely be more visible than in the UK. 

As host for November’s COP26 meeting, you might think Boris Johnson’s government would want to set some sort of an example. 

Sure enough, the prime minister has assembled platoons of promises, from banning polluting vehicles to heating the nation’s homes with wind and hydrogen. 

What unites the pledges are the time lag before they must be redeemed and the absence of accompanying route maps. 

Detailed commitments to produce practical initiatives, assessments of the economic costs and ideas for green financing mechanisms have fallen by the wayside. 

The independent Climate Change Committee puts it succinctly: “This defining year for the UK’s climate credentials has been marred by uncertainty and delay to a host of new climate strategies. 

Those that have emerged have too often missed the mark.”

The other day Allegra Stratton, Johnson’s climate spokesperson, sought to make amends. 

She came up with some “micro-measures” that would allow everyone to play a part in averting catastrophe. 

We should think twice, she said, about rinsing off plates before putting them in the dishwasher. 

As for any leftover bread, why not put it in the freezer rather than throw it away? 

This, in the wake of searing temperatures that have paralysed much of the west coast of America, unprecedented rainstorms in Europe, deadly floods in China and raging fires across the Siberian permafrost.

Perhaps the ever more frequent weather extremes will give even as indolent a leader as Johnson something of a jolt. 

The hope must be that, by the time they gather for COP26, other leaders will have realised that time is running out to “do something”. 

If they are looking for a starting point, they could read the European Commission’s latest climate strategy — the closest that rich countries have got so far to connecting the theory of decarbonisation with the measures that will be needed to make it happen.

The commission makes the vital point that the policies must be demonstrably fair as well as practical. 

It is easy enough for well-heeled urban elites to swap their gas-guzzling SUVs for electric models. 

For the great majority, the practical business of decarbonisation — ripping out fossil fuel heating systems, scrapping polluting vehicles and insulating homes and businesses — will be a struggle. 

For those towards the bottom — the ones that don’t have dishwashers and freezers — it will be impossible. 

Governments will have to pay.

We will not get anywhere without the targets for eliminating fossil fuels that will be under discussion at COP26. 

But we will not get beyond discussion unless governments set the strategies and mobilise the resources to make the targets viable. 

There is not much time. 

Look at the weather.

The New World Order, Courtesy of Rube Goldberg

by Jeff Thomas


In the 1930s, cartoonist Rube Goldberg became famous for designing machines that sought to fulfill a task, but did so in such a complex way as to be utterly ridiculous and, very possibly, unworkable.

Governments, of course, are Rube Goldbergs on steroids. They have a penchant for making any task absurdly complicated, expensive and, ultimately, dysfunctional.

Whilst this is the norm in any era, we’re presently living through a period that’s becoming overwhelmingly confusing worldwide. 

The governments of the First World countries are pushing a whole series of mismatched agendas all at the same time. 

They seek to present a uniform objective, but even they cannot manage much consistency of purpose. 

Although all of the First World countries (US, UK, EU, Canada, Australia, New Zealand, etc.) are fully on board, there’s no real match-up in their game plan, or even their statements as to what the end goals are meant to be.

There are several main themes: the purported evil of the Second World leaders and the need for First World aggression toward them, even though no one on the other side seems to want to engage. 

The reinvention of society in which basic truths are turned on their heads and replaced with new, often ridiculous "truths" that no one seems to fully understand, even when they’re rabidly promoting them.

And, of course, the COVID scare. 

COVID-19 was identified early on by a few observers as a lab-created variation on the seasonal flu that was consciously released in several countries at the same time as it was released in its "source" country. 

It was then hyped to be a killer disease that would create a pandemic. 

The virus itself is a threat to the cardiovascular system. 

The powers behind the scare insisted that the only acceptable treatment was a selection of mRNA vaccines.

The rollout of this effort has been bungled so badly that even its leading salesmen have found it necessary to continually change their stories as to the effectiveness and necessity of lockdowns, distancing, masking and the cancelling of freedoms.

But one constant has remained: No previous flu treatment was of any use and should absolutely not be considered, no matter how effective it had been for decades. 

Only a vaccine and, indeed, only an mRNA vaccine would do – the patents for which seemed to be held by the salesmen who were leading the vaccine charge in the media.

So, what’s really going on here? 

We’re looking at a host of patently absurd notions, each obsessively presented as being beyond question and told that, if we fail to accept all of them 100%, we’re a danger to society and need to be punished. 

We’re looking at what occurred in Germany in 1938, following the Nazis’ Kristallnacht… but on steroids.

For those of us who have been paying attention over the last decades, it’s been quite clear that the New World Order – an extension of the concepts of Mayer Rothschild in the eighteenth century and revitalized by the Rockefeller family a hundred years ago – has been in the works since that time and has recently approached fruition. 

Most of the pieces of the puzzle are in place and the primary goals appear to be on the horizon.

First, a collectivist form of rule is nearly complete. 

Collectivism consists of a gumbo of ingredients - socialism, communism, fascism and capitalism – with whatever recipe works for the particular population it is foisted upon. 

The actual recipe can be changed to fit whatever the tastes of the given country may be.

To soften up the people, ideals and beliefs must be done away with. 

Karl Marx was quite correct when he postulated that the removal of core beliefs was essential; that perceptions of truth be replaced with non-sensical "truths" and that the only faith be faith in the rulers.

Next, the constant threat of aggression from others is necessary. 

If no armed conflict exists, conflicts need to be invented. 

The people must live in fear of a perceived enemy.

The end product is a return to serfdom. 

The modern serf would have a flat screen TV and a smart phone, but his wealth would be lost to such a degree that he’d be unable to take charge of his own life. 

He must rely on his government to provide him with his needs on as short-term a basis as can be made workable. 

This makes him compliant.

Okay, so the New World Order concept has ben kicking around for a long time. 

It’s been the great pride of David Rockefeller, its senior proponent for the greater part of his life.

But why all the craziness? 

Why now? 

Why has this behemoth of disjointed concepts suddenly come together and why the rush to make it all happen at the same time? 

Why not phase it in, possibly over a decade or two?

Well, there’s a problem. 

The very concept of a New World Order, in which a very small number of people lord over millions of proles is, at its heart, a sociopathic one. 

A part of the pathology of sociopaths is to see the world see the world as a playland that exists for them alone. 

As they see it, if they die, the world has no further reason to exist.

But the principal movers of the New World Order are now getting very long in the tooth. 

They’ve spent their lives pursuing their individual versions of a New World Order, whilst putting up with the versions that their fellow conspirators envision. 

And, of course, being sociopathic, this dream cannot be achieved by those who come after them; it must be achieved whilst they are alive.

David Rockefeller is now 101. 

He endorses all facets of a New World Order, but his pet project is eugenics – the decimation of most of the people in the world – the "human weeds" as they’re described. 

He’s joined by Bill Gates Sr., now 94 and also in his last years. 

Understandably, they want results now, even if it’s premature in the programme.

Henry Kissinger, now 97, has spent his life believing that a New World Order is best achieved through diplomacy – positioning each of the world’s countries for maximum usefulness and cooperation. 

Close friend George Soros, now 90, believes that dominance is best achieved through chaos and destruction. 

Klaus Schwab, 83, has spent the last half-century pursuing the concept that the proles must be taught to give up their possessions in favour of the rulers’ largesse. 

Baron Rothschild, now 85, continues to follow his family’s long-held belief that the solution for dominance lies in the control of all the currency in the world – both its creation and its distribution.

What we’re looking at is a cabal of the most politically and economically powerful people and business entities in the world, with an overall agenda, but each with their own individual mini-agendas, each fighting to lead the charge. 

Predictably, this once-cohesive-sounding concept is beginning to resemble a Rube Goldberg creation.

Such a condition cannot last. 

However, whilst it’s in play, it will be a cock-up of mythical proportions and will assure that the next few years will be as devastating as they’ll be confusing. 

By the end of the decade it’s likely to be over, and the world will be forever changed. 

The trick will be to sidestep events as much as possible and make it to the other side. 

That will be no easy task.

Is the US Economy Running Out of Slack?

Given the unprecedented nature of the COVID-19 pandemic and its effects on labor markets, there is a spirited debate over whether the US economy is close to returning to its full potential. If it is, the US Federal Reserve is at risk of falling behind the curve.

Willem H. Buiter

NEW YORK – How much slack is there in the US economy? 

In economics, the “gap version” of Okun’s law holds that a one-percentage-point increase in the unemployment rate is associated with a two-point decline in the real (inflation-adjusted) GDP growth rate below its potential. 

The gap matters, because the closer the economy is to its potential, the more we should worry about inflation.

According to the Bureau of Labor Statistics (BLS), the US unemployment rate was 5.9% in June, compared to the pre-pandemic (February 2020) rate of 3.5%. 

If we take the latter figure as an estimate of the natural unemployment rate, we get an output gap of 4.8%. 

Assuming potential output grows at an annual rate of 2%, non-inflationary real GDP growth for the coming year would hit 6.8%. 

Since the US Federal Reserve expects 7% growth this year and 3.3% growth in 2022, that would suggest the US is still at least a couple of years away from the inflation threshold.

This guesstimate of the output gap can be criticized as either too low or too high. 

The too-low camp argues that the official unemployment numbers – 9.5 million in June 2021, as against 5.7 million in February 2020 – underestimate the amount of slack in the labor market. 

The BLS reports that in June, “the number of persons not in the labor force who currently want a job was 6.4 million,” an increase of “1.4 million since February 2020.” 

After accounting for those additional 1.4 million, the unemployment rate rises to 6.8%, yielding an output gap of 6.6%.

Moreover, the number of people employed part-time for economic reasons has grown by 229,000 since February 2020. 

Treating this category as unemployed would boost the unemployment rate to 6.9%, and the output gap to 6.8%. 

The BLS also publishes an estimate of temporarily laid-off workers who should have been classified as unemployed but were misclassified as employed. 

Counting these would bring the June 2021 seasonally adjusted unemployment rate to 7.1%, implying an output gap of 7.2%.

But those in the too-high camp insist that there is little or no slack in the economy. 

They would object to all three of the preceding amendments to the unemployment rate. 

Why should someone who is not looking for work, or who is unavailable to work, be counted as part of the labor force? 

Part-timers should be counted as part-time unemployed. 

And even the BLS, they note, admits that its estimate of “employed” temporarily laid-off workers probably overstates the size of the misclassification error.

Moreover, they would contend that the natural rate is probably higher than 3.5%. 

The key number to consider is unfilled job vacancies. 

In May 2021, there were 9.2 million (5.7% of the labor force) “Total Nonfarm Job Openings,” which was almost the same as the official number of unemployed people (9.3 million). 

There also have been consistent reports from around the country of businesses struggling to find workers, suggesting that there is a massive mismatch between labor demand and supply. 

If the effective supply of labor is materially less than the notional supply, the natural rate of unemployment necessarily rises.

Such a massive labor mismatch is certainly plausible, given the effects of the COVID-19 pandemic. 

The nature of work changed dramatically as a result of lockdowns and other non-pharmaceutical interventions. 

In some cases, working from home is not nearly as productive as working in an office, factory, or other non-residential workplace.

Even with most official restrictions on employment-relevant activities lifted, concerns about contracting COVID-19 have curtailed the full return to pre-pandemic working arrangements. 

After all, childcare responsibilities continue to keep many workers (especially women) at home. 

Given limited daycare capacity, parental labor supply is bound to be impaired.

True, assuming the pandemic does not get out of control again, the start of the school year in the fall should bring a steady return to pre-crisis normalcy. 

But even then, some things will have changed permanently, which means that at least part of the labor mismatch may prove structural in nature. 

In particular, the rapid adoption of digital technologies – including a veritable information-tech and fintech explosion – is already part of the new normal.

Owing to these new capabilities, many jobs, both in manufacturing and in services, will have become redundant. 

In fact, there is good reason to believe that an automation field day is already underway. 

While the technological revolution prompted by the pandemic will undoubtedly create new jobs, it has necessarily tended toward labor-saving and labor-replacing innovations.

Because the pandemic-driven push toward automation is unprecedented, there is no reliable numerical estimate of its impact on labor markets. 

My best guess is that it could easily raise the natural unemployment rate by one or two percentage points, with an associated 2-4-point reduction in the output gap.

Finally, one must consider whether financial incentives have reduced the effective supply of labor. 

Beyond enhanced unemployment benefits that will expire in September 2021, there have also been various cash disbursements, including additional child benefits. 

These will have relaxed many workers’ budget constraints, allowing them to be pickier about employment. 

But that also means there could be a positive labor supply shock in September. 

Though reliable estimates of a “labor-return” effect are lacking, my best guess is that the natural unemployment rate will fall by 0.5 points, boosting the output gap by one point.

Discounting the three “higher-slack” amendments mentioned above, my tentative estimate of the output gap after September 2021 is between 1.8% and 3.8%, which implies room for non-inflationary growth of 3.8-5.8% for the coming year. 

But that room could be exhausted within a year, leaving the Federal Reserve at risk of falling behind the curve.

Willem H. Buiter is an adjunct professor of international and public affairs at Columbia University.