Out on the Helpless Weekend

SUBHEAD:  I hope you have a good weekend, and especially if you’re in Ukraine. Take care and take shelter.

By Raul Ilargi Meijer on 14 March 2014 for the Automatic Earth -

Image above: Satirical map of Europe in 1914. One hundred years ago Europe was about to enter World War I. It was all about the same part of the world kicking up sparks today. From (http://historiana.eu/collection/satirical-maps).

So what are we going to do over the weekend? For many of us it’ll be a lot of nerves and anguish over the rattling of sabres and armored personnel carriers by the Black Sea, and there’s not much we can do about it. Maybe a good time to take store of friends and loved ones, and spare a thought and prayer for all the Crimeans and Ukrainians who want nothing but what we want as well, peace and sunshine and a quiet weekend with their families.

It’s anywhere between hard and impossible to figure out what’s going on out there, but our western media sure are not telling us the truth and nothing but the truth. It’s a major propaganda bubble on all sides, and that leaves nothing but losers in its wake. It could still change the map of the world with no turning back, however, and have a lot of blood be shed in fields and city streets as it does.

For me personally, it’s an aberration that John Kerry gets to speak for not just the US, but the entire western world, because Kerry is one of Capitol Hill’s army of borderline psycho coneheads who represent interests, not people. The man’s a stooge. Which makes it all the more interesting to see Ron Paul state that Putin has the law on his side.

And it makes one wonder why that difference in view in Washington is not debated on the Hill before Kerry moves on to his next meeting to tell the Russians to put up or shut up. If for no other reason than a message like that sounds silly coming from him, and not a single Russian is fooled.

But in the meantime this hairdo in search of working neurons could cause a lot of pain for mothers and children who happen to live in the line of fire. And we can say one more time that we expected better from Obama, but that got to sound repetitive and silly a while ago, not to mention devoid of credibility.

If things go wrong, there’s no telling what the world’s economies will look like by Monday. There’s so much zombie capital keeping the system afloat today that a mass fear driven kneejerk into what is perceived as safety could wipe out more of it than entire nations are worth. Such a move back into reality would be good on some fronts, but who wants to see lives lost over it?

What has been lost a little in translation and hubris is that China has put its voice behind Russia, but there’s no way Kerry and Merkel haven’t picked up on that loud and clear. If they want to play cops and robbers and sanctions and boycotts, they may find they’re shooting their own feet in the crazy house or mirrors they’ve created.

And even if the Kiev unrest is toned down at the last minute, there may be so much economic uncertainty shaken loose over the past while that matters start to plummet out of hand anyway.

Most pundits keep on claiming that the Chinese government has it all under control, and it’s only trying to reform the system, and isn’t that a great thing, but I’m thinking first of all Beijing has never tried anything like it, and second given the size of shadow banking one really needs to wonder how much control they actually have.

From where I’m sitting what happens in China today could just as easily be part of an ordinary power struggle, and moreover one that unfolds while the country has some very serious problems that are unrelated to whatever reform is or is not intended to take place.

That 18.1% plunge in Chinese exports is still front and center in my mind when I read the news. That’s a very big number. And when their president and PM try to make it look as if they sort of meant for events to happen as they do, and say all they really care about is creating jobs, I simply don’t see how they’re going to do that with that sort of drop in exports, the one segment in their economy that keeps the whole thing going to begin with.

We’re 2 weeks and change away from Japan’s dreaded sales tax rise, and there is just no way those two weeks will not be filled with people taken cover and seeking shelter, be they investors or ordinary citizens. There’s too much risk for everyone but a few daring risk takers. And if the deflationary last twenty years have shown us anything, it’s that the average Japanese is not a great risk taker.

So the velocity of money can only go down, and no matter what I read about inflation in Japan, that is a surefire way to get quagmired even deeper in deflation, and Abe’s stimulus to compensate for the sales tax hike won’t change that (it’ll only make that tax hike look stupid, because net revenue will be ridiculously low).

How will longer will Shinzo Abe call the shots? Hard to gauge, if only because Japan doesn’t seem to have any other way to go anymore. Unless perhaps it goes for self-sufficiency in a big way, but that’s so not 21st century and globalization and having your politics dictated by the financial system that it’s going to take a big old battle to get there. In Japan like in so many other places. I hope you have a good weekend, and especially if you’re in Ukraine. Take care and take shelter.


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