Ruble Round Trip

Call it morning driving through the sound of
In and out the valley
--Yes

After getting smoked on Western sanctions, the ruble has clawed all the way back to pre-invasion levels.

Lotta manipulation (both ways), so it's difficult to assess precisely what has driven recovery. That said, hard not to include these factors:

Russia's strong commodity position

Ineffectiveness of sanctions over time

Russian proclivity toward gold

One thing seems certain. Those engaging in financial system warfare vs Russia early on were not counting on a ruble round trip.

position in gold

Nazis and Russia Redux

"Everybody thinks they're gonna get a chance to punch some Nazi in the face at Normandy, but those days are over. They're long gone."
--Lt Chris Burnett (Behind Enemy Lines)

Interesting discussion of the brand of Nazism endemic to Ukraine. WWI divided many eastern European countries into small, non-viable entities. Western Ukraine became an imperial intersection for intolerant ideologies. 

The environment fostered the development of strong Ukraine nationalist groups that were further shaped by Nazi Germany during WWII. The Nazis were able to manipulate these groups toward Russian hate, thus creating a destabilizing force in the Ukrainian USSR during the war.

This anti-Russian mindset has persisted, making these groups attractive to Western interventionists interested in influencing politics in the region. The West has been manipulating Ukraine nationalist groups for some time to instigate regime change as well as violence against Russian-speaking citizens in eastern Ukraine. Subversive activity has picked up pace over the past several years, highlighted by the Maidan protests and government overthrow of 2014, and the civil war in eastern Ukraine since then.

What is important to note is that it has been the West, and the United States in particular, that has nurtured neo-Nazi factions of Ukraine.

The author notes that Western support of Nazi groups is not new. Alongside England, the United States government supported Hitler in the 1930s for balance of power reasons. Anglo America lent Hitler billions to build up Germany as a bulwark against Russia. 

History has since been rewritten to temper the enthusiasm that the Anglos held for Nazi Germany as a resource on the geopolitical chessboard.

So here we go again. The West is once more funding Nazi-groups, this time in Ukraine, for similar purposes of combating Russia. 

History is rhyming.

Stock to Flow Ratio

I don't know why
You treat me so bad
Think of all the things
We could have had
--Talking Heads

Nice point about stock to flow ratio differences between gold and other commodities. Stock to flow ratio is measured here by taking above ground inventory and dividing it by annual production.

Unlike most commodities, gold's stock to flow ratio is high. Nearly all gold mined over thousands of years still exists in its stand alone, elemental form. Because physical gold is durable and inert, it remains with us. On the other hand, annual gold production is relatively low, constituting only 1.5% or so of above ground stock. Consequently, gold's current stock to flow ratio is above 50.

Compare this to wheat. Above ground wheat stocks are rapidly consumed. Wheat put in storage is subject to decay. In order to meet demand, about 3x the amount of wheat inventory must be produced annually. Inventory turnover is high, resulting in wheat's low stock to flow ratio below 0.5.

Of course, the properties of gold that elevate its stock to flow ratio, e.g., durability, scarcity, etc, make it attractive from a monetary perspective. In fact, it seems to follow that commodities with high stock to flow ratios would constitute a nice short list of plausible monies.

The article stresses that stock to flow ratio helps explain pricing differences between gold and other commodities. Whereas the price of wheat is driven largely by supply/demand dynamics of its stock to flow ratio components, the price of gold is less subject to short term volatility. Above ground inventories are high compared to new supply and consumer demand.

Instead, gold price should be driven more by changes in institutional demand. The more institutions demand gold, the higher the price--regardless of inventory levels or annual production.

While institutions are often regarded as large financial entities such as money center or central banks, in a broader sense institutions represent societal rules and norms.

Stated another way, when it becomes more 'societally correct' to own gold, then price will go up.

Stated another way again, changes in institutional rules are likely to coincide with changes in price of high stock to flow ratio commodities such as gold.

War Crimes

"It is an easy thing to condemn one man in the dark. It is easy to condemn the German people to speak of the basic flaw in the German character that allowed Hitler to rise to power and at the same time positively ignore the basic flaw of character that made the Russians sign pacts with him, Winston Churchill praise him, American industrialists profit by him. Ernst Janning said he is guilty. If he is, Ernst Janning's guilt is the world's guilt--no more, no less."
--Hans Rolfe (Judgment at Nuremberg)

Judge Nap discusses the legitimacy of war crimes and associated prosecution. War crimes are prosecuted by the victors. They control the judicial apparatus which is slanted in manners that insulates victors from prosecution.

Using the post WWII Nuremberg trials as an example, war criminals are generally alleged to have violated unwritten laws--laws which are conveniently concocted for the purpose at hand. This is illegal in the US and in many other countries.

War tribunals seek legitimacy by claiming that they can rightly prosecute war behavior that is so heinous and obvious that the broken laws need not be codified.

However, the only 'obvious' uncodified law is natural law. Natural law is grounded in the non-aggression principle. The non-aggression principle posits that all aggression is wrong and violates the natural rights of the victim. 

This means that only defensive behavior in war is just. People or countries can defend themselves from invaders, but by using only the violence necessary to neutralize the threat. Pre-emption, or counter offensives violate the non-aggression principle.

In reality, of course, few wars involve one side acting purely in self-defense. The original defender commonly turns around and mounts offensives against the original invader, thereby reverse the roles.

Viewed from this perspective, many war crimes are committed during armed conflict and are perpetrated by people on all sides--even by those not firing shots.

Obviously, that's not how war crime tribunals typically proceed. Instead, war crimes constitute what's in the eyes of the beholder.

Escalators in Chief

Stephen Falken: General, are you prepared to destroy the enemy?
General Beringer: You betcha.
Stephen Falken: Do you think they know that?
General Beringer: I believe we've made that clear enough.
Stephen Falken: Then don't!
--WarGames

As Glenn Greenwald writes, it remains clear that the US government is avoiding neutrality and diplomacy in favor of hostile escalation of the Ukraine conflict. 

I was personally dumbstruck a couple days ago when reading that the secretary of state has not been in direct contact with his Russian counterparts since the middle of February. It is impossible to justify such inaction by any state that desires peace.

Then, on a visit to Poland this weekend, the president poured more gasoline on the fire. While visiting US troops in the region, he told them that they would soon see firsthand how Ukraine was pushing back against Russian troops. Subsequently, in a Warsaw appearance, the president called Putin a 'butcher' and during formal televised remarks said, "For God's sake, this man cannot remain in power."

The White House has since been in damage control mode trying to put out the conflagration resulting from the sequence of the president's inflaming statements.

As Greenwald quotes a former Greek foreign minister:

"A U.S. President who, during an atrocious war, does not mean what he says on matters of War and Peace, and must be corrected by his hyperventilating staff, is a clear and present danger to all."

Yet, the actions of these people suggest that this is precisely what they want. Hostile words and actions that continue to escalate the situation. No leadership through neutrality and diplomacy.

The president and his minions are bumbling through roles of Escalators in Chief.

Unipolar Moment

We've always had time on our side
Now it's fading fast
--Orchestral Manoeuvres in the Dark

In foreign affairs, the 'unipolar moment' represents the period following the collapse of the Soviet Union, leaving the world with a single dominant power: the United States. Lacking no like-sized competitor, the US would proceed to rule the globe, pursuing policies in its own interest regardless of the consequences.

This unfettered run is coming to an end.

As the influence of China has been rising, the unipolar moment has been fading. The US now faces a formidable peer on the world stage. No longer can the US do whatever it wants in an unchecked manner. It now has to take into account what China will do in response.

The Ukraine conflict clearly demonstrates. The US has assumed no thoughtful leadership role in ending the war. Instead it has become merely another of a partisan anti-Russian collective that levies insults and sanctions.

Increasingly, it appears that China that is the adult in the room. China has remained neutral and appears unmoved by the shrill tirades and threats emanating from the West.

China's ambassador to the US offered an excellent example of his country's position in a recent interview. When asked by a commentator on Face the Nation why he wouldn't condemn Russia's invasion of Ukraine (condemnation, of course, representing a norm for shouting down behavior that  juvenile collectives dislike, the ambassador replied:

"Don't be naive. Condemnation does not solve the problem."

Zing. That's what a grown up says.

As the US behaves more like a child, China acts more mature on the world stage.

By definition, moments are brief. The unipolar moment, as it pertains to US hegemony, has come and gone.

Wrecking Ukraine

Time respects no person
What you lift up must fall
They're waiting outside
To claim my crumbling walls
--John Mellencamp

2015 lecture by Prof John Mersheimer of the Univ of Chicago that explains the West's primary role in the Urkraine situation. Could have been made yesterday.

The punchline, made at about 44 mins at the end of his formal remarks, is this:

"I actually think that what's going on here is that the West is leading Ukraine down the primrose path, and the end result is that Ukraine is going to get wrecked."

Indeed.

Mearsheimer spoke to a student group from Cambridge a week or so before the invasion. Seven years had done little to alter his view. He did note that after a lull from 2015-2020, the near-term factors driving Russia's acute response included Ukraine's government recent aggressive actions against Russian-speaking citizens in the east, and ramped up arming/training of Ukraine military by the US and other NATO associates.

Mearsheimer also opined that he didn't think Putin would invade because the costs of war and occupation did not justify the potential benefit. Besides, Russia appeared to be winning the strategic battle as, in his view, the country's concerns regarding NATO expansion et al were capturing Western attention.

Apparently Putin didn't share that view.

Nevertheless, Mearsheimer's prescription both then and now is the intuitive one. Make Ukraine a neutral state, including the guarantee of no NATO expansion. 

That would stop the wrecking of Ukraine.

No Coincidence

In violent times
You shouldn't have to sell your soul
In black and white
They really, really ought to know
--Tears for Fears

It seems increasingly apparent that there are several groups intent on triggering WWIII. They include progressives, neocons, and globalists. And, of course, the mainstream media. 

These factions are not mutually exclusive.

Interestingly enough, they are the same blocs that pushed for authoritarian CV19 policies.

This is no coincidence.

Winter is Over

Hang on to your hopes, my friend
That's an easy thing to say
But if your hopes should pass away
Simply pretend
That you can build them again
--The Bangles

Recall the White House's 'winter of death' warning for the unvaccinated?

Winter came and went. It's the vaccines themselves that are dying.

Harding's Path

Nick Carraway: You can't repeat the past.
Jay Gatsby: Can't repeat the past? Why, of course you can!
--The Great Gatsby

The dominant narrative about President Warren G. Harding was that he was a boob who ran a corrupt administration. To be sure, the Tea Pot Dome scandal happened on his watch, and, similar to Donald Trump, Harding may have been far too trusting of those working in his administration.

However, as this article points out, Harding achieved much during his term in office--a term that was cut short by his untimely, and somewhat suspicious, death in 1923.

A likeable sort who was elected by a landslide in 1920, President Harding was determined to lead Americans weary of war and Wilsonian progressivism into a peaceful age of prosperity. After quickly overcoming a post-war depression using a 'hands off' approach completely lost on modern administrations, Harding focused on perhaps the crown jewel of his legacy: foreign policy.

Harding clearly ended WWI for America. He withdrew troops from the German Rhineland, presided over agreements on war debt, and shunned the military-industrial complex's calls for arms buildup. He convened the Washington Disarmament Conference in late 1921 to ink international agreements on weapons limitations. Harding also withdrew US troops from Latin America and signed several treaties to ease tensions in Asia.

Completing work begun as a senator prior to his presidency, Harding killed his predecessor's League of Nations proposal. "America can be a party to no permanent military alliance," he said. "It can enter into no political commitments, nor assume any economic obligations which will subject our decisions to any other than our own authority."

Wise words which were, of course, subsequently ignored by bureaucrats following WWII.

Warren G. Harding reversed the dangerous internationalism of Woodrow Wilson and put the United States back on the path of neutrality and non-interventionism. America proceeded to roar down that passageway during the Twenties.

Harding's achievements provide a roadmap for how to get back onto that path today.