Brandon Smith sees what's coming, and warns us

 

We've met Brandon Smith on several occasions in these pages.  He's a libertarian analyst with a solid grounding in economic reality, rather than pious theory.  His latest article warns of a "double whammy" that's poised to strike home in not just the US, but also the global economy.

Years back it was hard to say exactly when we would see the breaking point. Today, it is obvious that the moment has arrived, and not surprisingly the mainstream media is barely reporting on it.

The BRICS nations including Russia, China and India have been creeping away from the U.S. dollar in response to western sanctions over the invasion of Ukraine and the removal of Russia from the SWIFT system. This action is primarily focused on Russian oil and gas exports, as Russia now demands that anyone buying the vital commodities must do so in rubles instead of dollars (up to now, the de facto global petro-currency).

The mainstream media has completely ignored the implications of this tactic on the part of Russia; not only that, but they have buried any mention of the fact that the Russian central bank just backed the ruble with gold. This is why the ruble exploded back to life after currency markets reopened in the country. The western financial media assured themselves and the public that the Russian currency was stone dead, guaranteeing a cataclysmic depression in the world’s 11th largest economy. Instead, the recent spike in the ruble’s value has bewildered U.S. and E.U. economists, but it was easy to predict if you’ve been tracking Russian gold purchases for the past decade.

This means that the Russian economy is not about to fold anytime soon, and now the EU, which is reliant on Russian oil and gas exports for 40% of their energy needs, is about to face economic doom unless they submit to paying for energy in rubles (which they won’t) or find a replacement source for gas and oil (which is impossible). Furthermore, with Europe on the global market looking for alternative oil sources, a big chunk of the oil market will be rerouted.

What does this mean? Less oil and gas to fulfill the demand in other countries. In other words, prices are about to skyrocket higher yet again.

For now, Biden is trying to temper price spikes by releasing strategic petroleum reserves, but this is merely a stopgap. There’s nowhere near enough in U.S. reserves to offset the sheer volume of oil that Europe needs. Unless there is a dramatic change in the posture of Russia or the EU on oil for Rubles, I continue to predict that gas prices will rise to at least double what they are today across the U.S. It’s a simple matter of supply and demand.

Beyond the issue of higher oil prices, the Russian move to completely drop the dollar as the petrocurrency may be the initial domino in a chain that will lead to the end of the dollar’s global reserve status.

. . .

This does not mean the BRICS will not see some fiscal pain as a result of the economic war, but it’s important for the western public to understand this fact: WE are the real target of the conflict, NOT Russia. It is the U.S. and Europe that will be hurt most, with the dollar suffering the worst damage.

The public is being misled to think that there is no risk on our side of the global chess board when the exact opposite is true. Most of the risk is on our side.

The conflict with Russia and (for now, only potentially) China has completely overshadowed the second big story in economic news. That’s the Fed’s predictable move to raise interest rates, even though they’re doing so during a time of economic weakness.

. . .

Numbers for retail, home sales and manufacturing have been in decline along with GDP. At the same time, prices on necessities including food, energy and housing costs have continued to increase at a dizzying pace.

This is a textbook case of stagflationary collapse.

The timing of the Fed’s rate hikes could not be more perfect if they were trying to increase the damage of the crash ahead. We know for a fact the Fed is capable of such a cold-blooded act, because we’ve seen it before.

Anyone familiar with the Fed’s history can tell you this is exactly what they did in the early 1930s, which led to an even worse drop in U.S. markets and the prolonged and torturous deflationary event we now know as the Great Depression. Except this time, we will see elements of both inflation and deflation simultaneously.

. . .

I outline all of this not because I mean to frighten people with doom-and-gloom, but to inform you of reality. Time is very short for us to prepare.

In addition, I hope to shine a spotlight on the propaganda that is being spread within the mainstream media. These ongoing campaigns of lies and omissions of inconvenient truths are designed to mislead the public into thinking the coming crash is all about the East vs. West conflict. After all, that’s a much easier sell, isn’t it? The common refrain today is that “We have to suffer so we can overcome our barbaric foes overseas!”

But it’s a con. The truth is, this is a planned crisis that has been in the works for decades.

Make no mistake and mark my words, in a couple years you will be hearing all about a grand plan on the part of institutions like the IMF and the WEF to “save” the global economy using a new currency system that is nationally “neutral.” They will offer to peg all currencies to the SDR basket and likely a digital currency framework as long as each nation accepts that the globalists are in control of their economies by default.

There's more at the link.

Food for thought . . . and impetus for action, if further impetus were needed.  Prepare for hard times.

Peter