The Gladstone
Economic Newsletter
Volume 17, No. 6
April 5, 2022
De-Dollarization
and De-Globalization.
DISCLAIMER: The following is not intended as investment advice, but is rather intended to promote your own analysis of markets and the economic climate. The author is not a registered investment professional. Any action taken as a result of this analysis carries a high degree of risk. This newsletter contains the personal opinion of the author.
Dear readers-
We keep hoping it will get better, but it never does…..
The release of 1 million barrels of oil per day from the strategic petroleum reserve is not going to achieve anything in the long run, except leave us with a depleted oil reserve for when a real emergency happens. By real emergency, I mean something on the order of the Persian Gulf being closed to all shipping. The SPR was not set up for when oil goes up to $110 a barrel. Further, never let the Biden Administration be confused by either facts or logic- the maximum that can be physically withdrawn from the SPR is only 500,000 barrels per day. Any higher level requires more withdrawal equipment, more pipelines, etc.
I was speaking to a neighbor today, and he pointed out that every policy of the Biden Administration since Biden took office appears to have been designed to destroy the country. If you examine the decisions from canceling the Keystone Pipeline on his first day of office, to opening the southern border, to the disastrous withdrawal from Afghanistan, to the current debacle in Ukraine, I cannot think of a single policy decision that had the best interest of the country.
The imposition of draconian (and frankly illegal) sanctions on Russia has lit the fuse of a massive devaluation of the US dollar. Russia has quickly innovated around the sanctions, and the Russian ruble has rebounded to the level where it was at the time of the invasion. The ruble went from 80 to the dollar on the eve of the invasion to 140 to dollar at the height of the sanction mania, and is now 83 to the dollar. The Russian stock market is recovering, and Russian equity prices are nowhere near the giveaway levels seen in western markets at the height of the sanction concerns.
Russia, China, Kazakhstan, Armenia and Kirgizstan should shortly announce the details of their new cross-border currency for trade. India and Russia and doing a rupee-ruble trade agreement. Russia announced a floor price for the purchase of gold in rubles, which I believe is a transition step to a gold based ruble. If the ruble does become a gold based currency, I readily see widespread adoption of it over time as a store of value. The world has learned that it cannot trust having holdings in US currency, or US assets. The Biden Administration has literally shot itself and the US in the foot.
With de-dollarization, a process of de-globalization has started. The massive logistics nightmare of container ships piled up waiting off of Long Beach has not gotten better, despite Pete Buttigieg and Joe Biden claiming otherwise. Instead of the ships all being anchored off of Long Beach, the ships have now been directed to anchor off of the Baja Peninsula of Mexico until they can move into the queue closer to Long Beach. The imposition of sanctions against Russia has added a terrific impetus for countries to move product sourcing onshore. The first set of sanctions in 2014 (which are still in place) forced Russia to create specialty food production companies, such as cheese makers, in Russia. In the long run, the 2014 sanctions actually strengthened Russia. The current sanctions will also strengthen Russia in the long run. One of the harshest sanctions was cutting Russia off from European and North American air traffic and from aircraft spare parts. It turns out that Russia has 800 aircraft leased from western lessors, which Russia has announced that it is going to keep. Russia has already claimed to have solved the Boeing and Airbus spare parts problem.
The western sanctions have split the world into two camps, and are resulting in the re-ordering of the world monetary system. The events of the last five weeks will be felt for many decades. I would hazard to say the results will be on the order of those felt after World War II and World War I.
The world received news overnight that Viktor Orban won an overwhelming victory in the Hungarian elections. Why is this so important? The US, UK and their other western allies pulled out all the stops to have him lose the election. Orban has always plotted a course for Hungary that has been best for the Hungarian people. This very much included staying neutral in the Ukraine conflict. The US and UK could not tolerate this, and demanded that Orban buckle to their will. When this did not happen, the US and UK organized the other six political parties in Hungary into an alliance to defeat Orban. A huge amount of effort and media manipulation went into this, and the world media was preparing to announce that “the evil Viktor Orban” had been defeated. Instead the Hungarian people voted for common sense and keeping their energy supplies from Russia. Orban’s victory was reinforced by the victory of the incumbent in Sebia on the same night. The US and its allies also very much tried to defeat the Serbian president, because he did not abandon the historic ties of Serbia to Russia. The US also tried a color revolution this week against Imran Khan of Pakistan, again because Khan had Pakistan stay neutral. Khan managed to maneuver around this coup attempt by declaring new elections within 90 days. The people of Pakistan will probably vote the same way as the Hungarians and the Serbians.
Let’s move on and discuss the concept of “cognitive dissonance.” This is not a concept on the tip of Americans’ tongues – by a long shot. However, it is very appropriate for the times we are in. Verywellmind.com defines cognitive dissonance as follows:
“The term cognitive dissonance is used to describe the mental discomfort that results from holding two conflicting beliefs, values, or attitudes. People tend to seek consistency in their attitudes and perceptions, so this conflict causes feelings of unease or discomfort.
This inconsistency between what people believe and how they behave motivates people to engage in actions that will help minimize feelings of discomfort. People attempt to relieve this tension in different ways, such as by rejecting, explaining away, or avoiding new information.”
I have now had five different readers give me significant pushback to my writings on the war in Ukraine. The latest correspondence I have received is from someone I have a lot of respect for, but at the same time this is a good example of the discomfort felt when facts are presented that run counter to a widely held belief (Russia is evil incarnate, Ukraine is a poor, helpless country that has suffered massive aggression) that is constantly reinforced by the massive propaganda operation present in the western world. As a means of explanation, the person who wrote this suffered very large losses in Russia on a business venture in the early days after the fall of the communist regime. Please take my comments on Russians in general as a bit of salve for the person’s feelings and experiences:
“Having worked in Russia over 2 decades, I found your political assessments so far off the mark that a response was a waste of time. Do not consider silence as acceptance of your views. I find Reuters to be accurate.”
The Reuters story was the accepted western narrative on the “Bucha massacre.”
My response is as follows:
“I have attempted to do business in Russia, too. The Russians are absolute bastards to deal with, especially those raised under the Soviet regime. However, the Ukrainians are even worse to deal with!!!!!
I really do my research.
Regarding the Bucha Massacre, the Russians pulled out four days before the video of the corpses. The Ukrainian National Guard sent in SWAT type armored cars after the Russians withdrew. Their video shows no corpses on the streets. The Ukies then shelled Bucha, and a Ukrainian Nationalist unit went in. The Ukie Nationalists videoed themselves, and one soldier asks if they can shoot anyone with a white armband (Russian sympathizers). He is told yes.
1. The corpses are not four days old. They are fresher than that.
2. They are all face down. Not natural, but posed.
3. There is little or no blood on the street. Probably shot elsewhere.
4. In one of the video clips, the news vehicle is following a jeep-like Ukie military vehicle. The video, shot from inside the cab of the journalist vehicle, shows a rear view mirror on the right side of the vehicle after they pass a corpse. The corpse miraculously starts to get up off the ground after the vehicle passes.
Yes, people are dead (for the most part). I come down on the side the Russians did not do this. It is probably a false flag. The world got suckered like this before in 2014, when the Ukies shot down the Malaysian Airlines plane with almost 300 people on it, and blamed the Russians. The Dutch "inquiry" blamed the Russians. A western "inquiry" on Bucha will blame the Russians. We are being fed a false narrative.
The Russians are bastards, but in this case, they are actually trying to follow the rules of war. The Ukie Nazi units are actively filming the shooting of Russian POWs. There are three videos so far. Stupid, but they are proud of their handiwork. Russians are bad, Nazis are worse.
If you want to learn, take the time and watch Youtube videos by Alex Christofouras, Gonzalo Lira, and Alexander Mercouris. Two are Americans (one in Athens, one hiding in Kharkov), Mercouris is British. Gonzalo Lira did an hour long video dissecting the making of false Ukie propaganda videos.”
The Russians have asked to be allowed to present evidence regarding Bucha to the United Nations Security Council. The UK refused to allow them to present this yesterday, and instead has allowed Zelensky to make a presentation. Here is the best summary of the evidence that is actually available, from a senior Russian diplomat (released after I wrote my response above):
https://russiaun.ru/en/news/pressconf_040422
Why I am so adamant about presenting the results of my research on both the causes of the war in Ukraine and what is actually happening there? I really want THE BLOODSHED AND DESTRUCTION TO STOP. THE WESTERN POPULACE IS SLEEPWALKING INTO WORLD WAR III led by the most extensive and sanctioned propaganda campaign I have ever seen. The current psychological warfare/propaganda campaign is far larger and much more sophisticated than that led by the Yellow Press that had the US declare war on an innocent Spain in 1898, or that of the “weapons of mass destruction” hoax that led to the second invasion of Iraq. Ditto the Gulf of Tonkin incident that led to the US war in Vietnam. The world has seen so much death and destruction caused by wars that did not need to occur. The Ukraine War was easily preventable and would have been easy to stop, once started. It should start to be clear to people that Zelensky is a total western puppet, and draws on his extensive acting skills at every press conference or video presentation.
The other reason why I am adamant on continuing to publish my analyses is that I have never been afraid to speak truth to power. For twenty years I had powerful groups deny that there was a problem with the Sunnyside Mine Pool in Silverton, Colorado. These parties continued to attempt to discredit my views and marginalize me even after the disastrous Gold King Mine incident in 2015 resulted in the “orange river seen around the world.” The company that owned the Sunnyside Mine has now paid $68 million to settle the lawsuits regarding the Gold King. The whole Gold King episode was easily preventable, and I had presented a solution as early as 2002.
I am also looking at the wholesale economic destruction as a result of the sanctions imposed upon Russia. Unfortunately, most of the economic damages are being inflicted upon Europe and the other western countries that are imposing the sanctions. When people are cold, homeless and hungry, they will be asking “Why?” without a clue about how they got there.
On to the graphics for this week: