The Gladstone
Economic Newsletter
Volume 19, No. 1
January 14, 2024
R.I.P. Gonzalo Lira
2024 - Blech!
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-
I wish I had something good to report to you at the beginning of 2024, but I have to confess I can’t think of anything. Even the Iceland volcano has not destroyed the world’s biggest tourist trap (the Blue Lagoon- never go there!), but the lava flows have instead gone to the town of Grindavik. Why do I hate the Blue Lagoon? It is over-hyped, vastly over-priced, it is not a natural hot spring but instead is the outfall from a geothermal power plant, and consists of Millenials standing around drinking liquor in the hot water while reading their cell phones inside water proof plastic pouches. Someone else pointed out to me that if the Millenials are standing around in chest high water drinking, there is something else they are doing too…… If ever a place deserved to be wiped out by lava, it is the Blue Lagoon.
This week we received the shocking but not totally unexpected news that Gonzalo Lira died in Ukrainian custody. Gonzalo Lira was a noted youtube commentator and journalist who reported from Kharkov until the Ukrainian secret police hauled him off. At the time, many of us thought the Ukrainians would kill him out of hand . Gonzalo was a US and Chilean citizen, and many around the world demanded accountability for his safety at the time. He briefly got out of prison before his trial on bail (after surviving torture and massive abuse); he knew the Ukrainians would kill him in custody after a conviction, and he made a run for the Hungarian border. Prior to being arrested at the border, he released three youtube videos documenting his run for his life, and said with certainty the Ukrainians would kill him in prison. The U.S. State Department and the Biden Administration refused to make a single telephone call to the Ukrainian authorities that would have gotten him released. Gonzalo died from double pneumonia and a large case of edema. The Ukrainian prison authorities refused him medical attention and just watched him die. This is the country the US is supporting with many billions of dollars in aid and support. Simply put, the Biden Administration let Gonzalo Lira be killed. This is the same administration that moved heaven and earth to get Brittney Griner released after she smuggled hashish oil into Russia. The Biden Administration is totally complicit in the death of Gonzalo Lira. R.I.P. Gonzalo Lira.
On to economics. I watch three economic cycle analysts: Martin Armstrong, Charles Nenner and Harry Dent. Greg Hunter’s usawatchdog.com just published a video interview with Charles Nenner, who was Goldman Sachs’ technical analyst for many years. Here is a short synopsis:
“Nenner says interest rates are not going down until summer. He likes gold longer term, but it has not bottomed yet. The stock market is in for at least a 30% fall in the next few months, and the country will fall into a deep recession after the halfway point in 2024. Yes, it could turn into the greatest depression ever because there is astronomical debt. Nenner thinks the wild card is a multifront war that has already started. Be warned as Nenner thinks it can spin out of control at any time. War gets much worse before it gets better. Nenner also is warning about a huge wave of terrorism coming to America with the wide-open southern border.”
I very much urge my readers to spend 45 minutes to watch the interview. Mr. Nenner is getting older, and I treasure what he releases to the public:
https://usawatchdog.com/trump-is-the-winter-coat-charles-nenner/
Harry Dent doesn’t have much good to say about 2024 either:
"Since 2009, this has been 100 percent artificial, unprecedented money printing and deficits: $27 trillion over 15 years, to be exact," economist Harry Dent told Fox Business on Dec. 19. "This is off the charts, 100 percent artificial, which means we're in a dangerous state.
"I think 2024 is going to be the biggest single crash year we'll see in our lifetime.
"We need to get back down to normal, and we need to send a message to central banks," he said. "This should be a lesson I don't think we'll ever revisit. I don't think we'll ever see a bubble for any of our lifetimes again."
"Things are not going to come back to normal in a few years. We may never see these levels again. And this crash is not going to be a correction," he said.
"It's going to be more in the '29 to '32 level. And anybody who sat through that would have shot their stockbroker," Mr. Dent said, making references to the stock market crash in 1929 that led to the Great Depression throughout the 1930s.
"If I'm right, it is going to be the biggest crash of our lifetime, most of it happening in 2024. You're going to see it start and be more obvious by May.
"So, if you just get out for six to 12 months and stuff stays at the highest valuation history, maybe you miss a little more gains if I'm wrong. If I'm right, you're going to save massive losses and be able to reinvest a year or year-and-a-half from now at unbelievably low prices and magnify your gains beyond compare."
Shifting gears again, Europe is rapidly de-industrializing. Mitsubishi UFG did the following chart of the major industrial shutdowns in Europe due to energy prices and restricted supplies:
The following two charts show that Olaf Scholz has done a masterful job of allowing the US and NATO to de-industrialize Germany:
In the meantime, the Russian industrial economy continues to bound ahead with the war demand. Machine tool production is the heart of any industrialized economy, and the huge increases in Russian weapons output has been facilitated by a huge leap in machine tool production. So much for the EU’s contention that Russia is having to take electronic chips from washing machines to enable production of missiles!
Continuing on the theme of how bad 2024 is going to be, China appears to be falling into a black hole economically speaking. If you watch youtube channels on the Chinese economy, the tales of wholesale factory closings, mass layoffs and general economic pain are huge. Shenzhen and Dongguan were prime examples of China’s export manufacturing might, and now both cities are starting to resemble ghost towns. Granted, many youtube channels are oriented against China from a propaganda standpoint, but the massive number of retail store closures cannot be denied. Sections of Shanghai are now retail ghost towns. Grocery stores are going bankrupt and closing down in China. As a consequence, deflation in China is now turning into a large problem, both for China and the world. China has driven the world economy for the last twenty years. Chinese consumer good exports to the US fell 13% last year! This is unheard of, and signals that the entire global economy is more than faltering.
Charles Hugh Smith published the following two charts. The first one shows China has priced itself out of the world manufacturing market (as the US did in 1970s). The second chart shows China has massively inflated its money supply over the last decade, and is experiencing deflation despite this! The second chart does not offer much hope for the Chinese Yuan to dominate world currencies.
Shifting gears once again, many of the lesser informed people of the west have subscribed fully to the man made climate change/rising sea levels religion. I must admit that a few years ago, I was standing at the Boston waterfront at Columbus Park , and I was amazed at how high the tide was on the 19th century stonework (compared to when I was in college looking at the same spot). I then figured out that a huge portion of downtown Boston is built on poorly consolidated landfill, and with the advent of very large buildings having been built, the general area had experienced subsidence. Ditto the majority of the shorelines of Manhattan, Queens, San Francisco and other cities. No, we are not experiencing generally rising ocean levels:
Finally, I will close out this newsletter with a brief discussion of the massive Russian missile offensive that has been ongoing in Ukraine. In December, Ukraine attacked civilian areas of the Russian city of Belgorod (including the Christmas ice skating rink in the city center) with Czech made Vampire multiple launch rocket systems. This clearly violated a major Russian red line, and I believe that Russia had previously warned NATO that retaliatory strikes against NATO command centers in Ukraine would result if Russian civilian centers were attacked. Well, Russia has retaliated, and it took out several major NATO underground bunker command centers. According to askeptic.substack.com, the following were NATO casualties from one strike only:
“Telegram channels write about this with reference to data from the navigation portal FlightRadar24 and various “own sources”. According to these data, an American military transport aircraft C-130 Hercules is approaching the Polish airfield in Rzeszow.
And from Kharkov and Odessa, NATO troops injured today in Ukraine are being actively transported to Romanian hospitals for subsequent evacuation.
The following figures are given : 27 Poles, three British, 9 Czechs, 12 Lithuanians. In addition, tomorrow a separate aircraft will pick up the bodies of another 21 NATO officers who died.
https://twitter.com/Blackrussiantv/status/1743398332230230381”
Which brings us to “the curious case of Lloyd Austin’s absence.” When the story first broke that Lloyd Austin had been in Walter Reed Military Hospital for several days without notifying anyone, my “BS Meter” went off on full blast. No one has seen a picture of Lloyd Austin since January 1st. There has been no picture of a smiling Lloyd Austin in a hospital bed surrounded by flowers. My evil twin Skippy immediately thought “Did Lloyd Austin have sexual transition surgery?” when the story first broke.
Instead, the story may be more convoluted than that. Granted, I may end up with egg on my face if is there is a video of a beaming Lloyd Austin being wheel chaired out of Walter Reed in the next day or two, but Telegram had reports from an FSB officer that Lloyd Austin was caught in a missile strike on an underground command bunker in Kiev. Who knows at this point? It would make sense for the days that Lloyd Austin “failed to report his status” that it took that long to get a badly wounded Austin out of Ukraine and onto a plane in Poland bound for Walter Reed. If Lloyd Austin suddenly dies from a “post operative infection” or retires out of sight, there may be something o the rumors. Who knows? We certainly can’t trust the US government to actually tell the public what is going on.
I will finish with three quotes from moonofalabama.org blog comment section. You have to admire the snarkiness of the commentators!
“Perhaps Austin got too close to a real war and is currently having his ass grafted over a burned out face on the grounds that few will notice?”
“The second part of the operation is to transplant Austin’s prostate as a new brain for Genocide Joe Biden. It will raise Biden’s IQ by 20 points.”
“The first thing that crossed my mind when I heard rumor of Mr Austin's incapacitation was that he had a visit from Dr Kinzhal.”
To fish, your author knows about machine tools and broccoli: