Meet the New Reich, the Same As the Old Reich
and Economic World War
The Gladstone
Economic Newsletter
Volume 17, No. 8
June 2, 2022
Meet the New Reich, Same as the Old Reich
and Economic World War
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-
While I thought U.S. bureaucrats were totally clueless, but I was mistaken. Here is a plane registration done by the Canadian Government:
The US balance of trade is now officially hopeless (chart from the Asiatimes.com):
The only way to cure the US trade balance is by something on the order of an economic depression, currency collapse or both at the same time. Oh joy.
Part of the total plunge in the US trade balance is caused by US companies over-buying inventory during all the shipping logistics problems of the last 2.5 years. Zerohedge.com published the following chart:
Here is a simple chart with an important message:
Martin Armstrong provided the following analysis of what is coming down the economic road at us:
“The liquidity crisis this time is COMPLICATED. This time we do not have the traditional speculative boom which has produced inflation. This time we have shortages and there is NO WAY a central bank can prevent this type of inflation by raising interest rates. If anything, it will only propel the shortages so we have the ironic situation that economic decline is unfolding into 2023, but the shortages will get worse causing even higher inflation ahead.”
“Hence, capital is retreating out of confusion creating a period of low tide. But the standard impact is DEFLATION but that means demand is declining relative to supply. Now we have a decline in supply because of the regulations and war. Consequently, prices will rise even in a recession because it is a shortage of supply, not a decline in demand. It is this lack of understanding that is creating the liquidity crisis.”
I am questioning if we are going to have a situation whereby shortages will continue to drive the prices of food, energy, housing and interest rates up to the point that a huge portion of household discretionary spending is squeezed out. This can happen in an otherwise deflationary environment as asset prices get pummeled due to the shift in spending.
I have not written a newsletter in a while as I have otherwise occupied and the war in Ukraine has not seen large ground advances by either side. What is happening in the Ukraine is that the Russians have very successfully employed a strategy of grinding down the Ukrainian forces through artillery and other means. The Zelensky regime continues to not allow any retreat from positions in the Donbass, throwing almost completely untrained draftees/troops into the cauldrons of the Donbass, and in essence to lose their army. I have closely watched the flow of information from the Ukraine, and I believe the Ukrainian army is getting close to a very widespread collapse.
The Russians do not seem to have devoted many troops to the war in Ukraine. Thesaker.is published the following analysis of Russian forces in Ukraine as of April 29, 2022:
· “So far the Russian Army has used for its special military operation in #Ukraine:
· 12% of its soldiers (total includes trained draftees)
· 10% of its fighter jets
· 7% of its tanks
· 5% of its missiles
· 4% of its artillery”
The Russians are not running out of missiles, planes, helicopters and all the other supplies of war. Despite the huge supply of weapons to Ukraine from NATO, it appears a fairly low percentage of these are actually reaching the front lines. There are large numbers of news reports of the weapons supplies getting interdicted by Russian air and missile forces, including one report of $400 million of weapons being destroyed in one single attack. Ouch. The US is devoting about $53 billion of “support” for the Ukrainian Government. To put this figure in perspective, it could finish the border wall and totally cover huge social spending in the US on healthcare or infrastructure. A percentage of the weapons supplied by the US and NATO may end up being stolen and sold on the black market. Today featured a story where Javelin anti-tank missiles are being advertised for sale in Kiev starting at $30,000 each;
https://southfront.org/support-peace-in-ukraine-buy-javelin-online/
I estimate that somewhere between 30% and 60% of the recent $40 billion US military aid package to Ukraine will be stolen in one form another. I also suspect that a number of the leaders of the US and NATO countries are receiving their split of the funds supplied, in typical criminal fashion. Why do I say this? I was pondering why leaders such as Boris Johnson made it such a high priority to travel to Kiev for personal talks. I suspect that personal talks may have included the distribution of the loot from this operation. I also suspect part of the reason that western leaders have been so adamant and supportive of the Zelensky regime is that said leaders had large personal bank accounts at Ukrainian banks, safe from scrutiny by western governments. This certainly makes sense for the Biden crime family, from Hunter’s dealing with the Ukrainian oligarchs. The above is a theory only, but it does have certain logic to the reasoning.
Some western weapons are reaching the front lines. There has been video footage showing the destruction of a battery on US made M777 howitzers. Some Italian howitzers have also reached the front lines. What did the Zelensky government use the few Italian howitzers for? To bombard the civilian areas of the city of Donetsk, causing civilian deaths.
The war in Ukraine has shown the Russian armaments routinely destroy the NATO supplied arms. A lot of the weapons supplied from the west have actually been close to junk. The tanks supplied have been without reactive armor, which makes them incredibly vulnerable to Russian air and artillery attack. There have even been stories that military museums have been raided for M113 personal carriers and other Vietnam-era weapons. The thesaker.is published the following interview with a captured Ukie soldier:
“Vadim Zholko, a soldier of the Armed Forces of Ukraine: “Their Javelin and NLAW grenade launchers, which were very much advertised, showed themselves in practice as they really were. There were misfires. They usually shoot one out of four, ”said the prisoner. The fired projectiles explode at fifty meters before reaching the target, or do not work at all. “That is, there were many of those whose batteries were expired,” the prisoner of war shared his impression of what he saw. The man complained that the training at the training grounds was mainly theoretical – “they showed it in a fast way.” Why misfires regularly occur was not explained to recruits. The reason became clear during the fighting – most of the batches of weapons had an expired shelf life. Cheaper NLAW complexes also turned out to be far from perfect.”
Also from thesaker.is:
A French volunteer Adrien Boquet told in an interview:
“I am fully responsible for what I say. There on the spot I witnessed war crimes. I’ve seen a lot of war crimes. I am talking only about those that I saw myself on the spot, and only those that were committed by the Ukrainian military. But not the Russian military… I do not claim that the Russians did nothing… But I confirm the war crimes committed by the Ukrainian military.” he said.
“Azov fighters are everywhere. With neo-Nazi stripes. It shocks me that Europe supplies weapons to neo-Nazis. The symbols of the SS are embroidered everywhere on their uniforms. They not hide their views. They advertise them. I worked with these people and treated them. They openly say that they are ready to destroy blacks and Jews,” he added.”
“Butcha was staged. The bodies of the victims were moved from other places and deliberately placed in such a way as to produce a shocking shooting,” he stated.”
I tend to believe the Russian Ministry of Defense briefings, as they have been on the conservative side regarding claims. The following are a summary of Ukrainian losses from a Russian MOD briefing, per southfront.org, as of May 31, 2022:
“In total, 184 Ukrainian aircraft and 128 helicopters, 1,070 unmanned aerial vehicles, 325 anti-aircraft missile systems, 3,342 tanks and other armored combat vehicles, 454 multiple launch rocket systems, 1,738 field artillery and mortars, as well as 3,311 units of special military vehicles were destroyed during the operation.”
Yes, this is more aircraft and armor than the Ukrainians had at the start of the conflict, but the West has been successful in supplying Soviet era aircraft, helicopters and armor. Whatever gets shipped into Ukraine tends to end up destroyed in a short period of time. The Ukrainian army has been losing hundreds of soldiers killed each day, and has been doing so for months. The Ukraine professional army has been stuck in the Donbass and just chewed up by the Russians. The conscripts include Ukrainian men between 18 and 60 that went to the gasoline station at the wrong time and got grabbed by the Ukrainian authorities. These men are just being fed into the meatgrinder of the Donbass. I hate to be blunt and tasteless, but that is the only way to describe the situation.
On to graphics for this issue, from various sources:
and a williambanzai7 graphic:
