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The following are a few of my reflections and predictions on the outcome of the 2022 midterm elections coming up I shared with my Twitter followers.

My prediction #1: Dems lose 2-4 net Senate seats: Arizona, Nevada, Georgia, New Hampshire. Repubs gain 8-12 US House seats at minimum. After election, Repubs policy turns to ‘austerity’, cutting social spending (slowing Ukraine wear spending but raising China war prepraration spending). PA Senate race 50-50. If Repubs win, Dems lose 3-5 seats.

Dem strategy = focus on women’s repro & voting rights & Jan. 6. Ignore inflation & blame high prices on world events (which Biden helped create). They hope to turn out base this way. But inflation & crime will keep independents from turning out or will vote Republican

I predict youth voter turnout also to be very low (along with independent voters). Think it may have something to do with Biden’s ‘too little, too late’ student debt relief? (still not implemented, stuck in bureaucratic wrangling & getting reduced every day)

Key for Democrats will be turnout, especially from suburbanites and independent voters. Polls show main issues for them is inflation and crime. Not good for Democrats. Pollsters say 44 Dem House seats are ‘tossups’; 20 Republican seats. Not good odds for Dems

Biden’s approval rating is down to 44%. When Obama’s hit 45% in 2010, Democrats lost the US House by 40 seats. Ditto Bill Clinton in 1994

Fact: only twice in past 100 yrs has the US House not shifted parties in midterm elections. In 2022 there’s the narrowest 5 seat Dem majority of all the past mid-election years. 2nd Fact: this time 81% voters in polls say issue is inflation and economy

Just released Reuters poll shows Biden approval rating now at just 40%. That 5%-6% less than both Obama (2010) and Clinton (1994) when Dems lost more than 40 House seats in each case.

Biden hypes his reducing US budget by > $1 trillion, but ignores how he did it: by early cutoff of Covid aid to households in his March 2021 Covid Relief Act. His proposal to raise $3T in corp-wealthy taxes over decade cut to $309B-mostly on corps with $1B revenue

Biden & Dems trying to ‘talk up’ his recent ‘Chips & Science Act’ ($280B slush fund to bribe semiconductor corps to relocate to US) and ‘Inflation Reduction Act’ ($518B that reduced inflation in name only and had virtually no effect on prices)

Biden publicly ‘threatens’ US oil corps for price gouging. Says he may ‘consider’ windfall profits tax. Just election talk. He hasn’t even discussed a meeting with his aides to begin considering it. No action after election. Repub Congress won’t even consider it

My prediction #2: Biden will go along with Repub. Congress 2023-24 cutting social program spending. Spins it saying he reduced their cuts. Inflation + recession in 2023. Biden doesn’t run again in 2024, saying he has a ‘health’ issue. Trump announces 2024 this week.

Biden’s release of oil from US Petroleum Reserve has proved totally ineffective. Why? US oil corps’ using refinery capacity as way to create bottleneck & keep supply short and prices high for gasoline; now diesel, home heating oil & natural gas + Oil corps exporting

Biden & Dems say inflation is global (supply side caused) & they aren’t responsible & can’t do anything about it. Not true. Biden sanctions primarily responsible for oil, energy, commodities inflation + he did nothing about corp price gouging + no tax on oil corps

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Listen to my two latest 15 min. radio interviews commenting on last week’s jobs numbers, the Fed’s latest rate hike & its global consequences, US GDP 3rd Qtr,, how the oil companies keep energy inflation rising, and the new forces coming online (productivity collapse & rising unit labor costs) ensuring inflation will remain high. Why Fed will keep raising rates, and why  other central banks will follow as their currencies collapse. A comment as well on US pentagon spending that is projected to exceed $1 trillion by 2027 (and total war spending already over $1 trillion now and going to $2T by 2030).

Go to:

https://drive.google.com/file/d/1RkuU-KmAfj1YlIteqeLpOxb0IZQzxzUt/view

https://drive.google.com/file/d/1A2IImfywQreb_vs76JaZEhRY9lYNcE54/view

In my October 31 Alternative Visions Radio Show I reflect on the current state of the war in Ukraine–military strategy, economic sanctions & geopolitical. Also initial comments on the just released preliminary US GDP numbers for July-Sept. 2022.

To Listen Go to: https://alternativevisions.podbean.com/e/alternative-visions-reflections-on-the-war-in-ukraine-us-gdp-global-economic-update/

SHOW ANNOUNCEMENT:

Dr. Rasmus provides an analysis of US economic trends as US GDP preliminary report shows US economy barely growing in third quarter 2022. What’s happening in Housing, Techs, Consumer spending, Business investment, net exports. Also, the destabilizing effects of current Fed rate hikes (another 75 basis pts coming next week) via the appreciation of the US dollar and corresponding collapse of foreign currencies, including the Euro, pound, yen and China Yuan. The longer term risk, beginning to emerge of dollar rise on global financial system. In the second half hour of the show Dr. Rasmus provides his reflections on the war in Ukraine: military, economic and political. Recent events and comments on US/NATO side and Russia that reveal further drift toward legitimizing and using tactical nuclear weapons. US-Russian meeting for the first time in 6 months by Austin-Shoigu and US moving advanced nukes into Europe and US 101st Airborne division on Romania-Ukraine border near Odessa. Rasmus critiques Russia’s initial ‘Special Military Operation’ strategy and why it failed; Ukraine’s summer mobilization and offensive’s results. Putin’s military miscalculations in March and August 2022, why now Russia is mobilizing for war, and why this winter its offensive will dramatically change the conflict. Show concludes with analysis why sanctions on Russia have not succeeded and how US/NATO are drifting toward a direct confrontation with Russia as it mobilizes. (Next week’s show: US Midterm Elections analysis & predictions)

Listen to my October 21, 2022 Alternative Visions radio show for a different perspective on the growing global economic and political crises.

TO LISTEN GO TO:

https://alternativevisions.podbean.com/e/alternative-visions-personalities-behind-the-crises/

Show Announcement

Today’s show takes a different emphasis than in the past by focusing on key personalities and their roles in the growing economic and political crises in the US and world. Dr. Rasmus discusses former UK prime minister, Liz Truss, who was just ousted by the UK’s bond vigilantes and finance capitalists. What did Liz do to get thrown under the bus? Rasmus shows her proposals, for which she was deposed, were not much different than Ronald Reagan’s in 1981-83. Rasmus explains why the UK’s current crisis is actually ‘Made in the USA’. Steve Bannon’s ‘slap on the hand’ court decision and its implications are next discussed. Thereafter Elon Musk’s flirting with a more neutral position in the Ukraine war and the shitstorm against him it’s released. Nouriel Roubini’s declaration we are already in World War 3, followed by Mohammed El-Erian’s raising of the bogeyman that maybe the Fed shouldn’t be so ‘independent’. Rasmus discusses the Fed fake issue of central bank independence, covered in detail in his 2017 book, ‘Central Bankers at the End of Their Ropes: Monetary Policy and the Coming Depression’. (Check out Dr. Rasmus blog, jackrasmus.com, this Sunday for his blogpost and proposals to democratize the Fed). The show comments further on the meeting between US and Russian defense ministers, Austin and Shoigu, Zelensky’s latest rants, Mario Draghi’s declaration of Europe now in recession, and concludes with soon to be Speaker of the House, Kevin McCarthy’s, public statements on likely Republican economic and war policies after the Nov. midterm elections. (Next week’s show will address the midterm election issues).

A couple of my radio interviews (10-18 min.) of this past week:

Oct. 19 Critical Hour Radio show:

Condition of global supply chains and factors (containers, insurance, price-gouging, commodities speculation, $ appreciation) driving supply side inflation; US $ at heart of global economic instability and driving global inflation; role of Fed in the process.

https://drive.google.com/file/d/15PnHLhgIzCFuefD1aNwzqJHFipOOVojZ/view

Oct. 21 Critical Hour Radio show

Latest on US deficit and why it’ll rise again in 2023 as recession whacks tax revenues and war spending rises further 2023. Why fiscal austerity (social programs) is on agenda again in ’23. Parallels with Obama and Clinton years. Europe’s economic crisis and the role of US sanctions, Fed rate hikes & US $ in exacerbating Europe’s crisis.

https://drive.google.com/file/d/1uCae7iiIntOvCY5qETmJEOsbm-rQ6UVu/view

The latest CPI inflation report is dissected and analyzed, showing US inflation is ‘hot’ and chronic. The report ensures another Fed 75 pts rate hike early November and likely another thereafter. Nonetheless Fed rate hikes will have only partial effect on US inflation, although the Fed’s unprecedented pace and size of interest rate hikes is already having unintended consequences: While it’s impact on US inflation is limited (most US inflation due to supply problems not excess demand), Fed rate hikes are driving global collapse of currencies, recession outside US, as well as pushing capitalist financial system into crisis (watch UK pension funds, EU Credit Suisse bank, and US bond markets’ liquidity crisis).

Listen to my October 14 Alternative Visions Radio Show.

GO TO:

https://alternativevisions.podbean.com/e/alternative-visions-inflation-the-fed-us-and-global-consequences/

SHOW ANNOUNCEMENT

Dr. Rasmus discusses the CPI report released this past week and identifies the four sections responsible for the chronic inflation: food, energy, shelter and transport. Why the four will continue to keep inflation high over the winter. Why most of CPI is still supply side driven and not demand. Why Fed escalating rate hikes can address only Demand side causes of the inflation and therefore prices will remain in the 4-5% range despite the deeper recession coming 2023. Rasmus discusses why inflation in Europe is worse than the USA and how Fed rate hikes exacerbate inflation there and elsewhere in the rest of the world. The show concludes with discussion of some of the consequences of the Fed rate hikes (in USA and globally), including why rate hikes (Fed and UK) are contributing to growing financial instability in Britain—which is a case example of what may occur later elsewhere in Europe. Comparisons of the 2008 Lehman Brothers crash with the current emerging financial crisis in Britain.

Remember last fall 2021 when Fed said inflation ‘temporary’ and waited six months to do anything about it? Now, fall 2022, Fed pushing rates up fast, unconcerned about precipitating deeper US and global recession, global currency crisis, and possible financial crash (watch Credit Suisse bank as frontline candidate). Listen to my October 5, Alternative Visions radio show for the discussion, as well as my commentary on OPEC’s thumbing its nose at Biden and US/NATO silly ‘price cap’ on Russian oil and for latest developments in Ukraine war with Biden and Zelensky both talking up possibility of nuclear war.

TO LISTEN GO TO: https://alternativevisions.podbean.com/e/alternative-visions-global-capitalist-instability-rising/

SHOW ANNOUNCEMENT

Dr. Rasmus views consequences of Fed rate hikes continuing on US financial markets, global currencies crisis, and capitalist financial instability. How Fed rate hikes accelerate the dollar and in turn export US inflation to emerging and other advanced offshore economies. Why Fed’s plan is to keep raising rates and there is no ‘pivot’ that US stock markets want to see. Unlike in 2013, the Fed rate hikes will continue despite the negative effects on offshore capitalist economies. Rasmus then discusses the implications of the Saudi-OPEC crude oil production cuts, why the EU’s ‘price cap’ on oil will fail, and what’s possibly behind the recent sabotage of the two Nordstream pipelines. Financial fragility in the case of Euro bank, Credit Suisse, is discussed as is the weak spots in the global real and financial economy. Show concludes with some comments on latest military developments in Ukraine war plus the growing US/Ukraine media campaign (Biden, Zelensky, etc.) messaging the US should use its first strike nuclear doctrine on Russia before it does.

Ever wonder how the phrase ‘US exports its inflation and unemployment to other economies’ because the $US dollar is the global currency and lynchpin of the US economic empire?  Listen to my Oct 5 interview with Critical Hour radio show (15 min.) where I explain the process of US exporting its inflation & recession in simple terms.

GO TO: https://drive.google.com/file/d/18HrirjGvMf00mcSx8bhHbFA4DY8GmHBx/view

For a deeper understanding of why the economic-political crises in the UK, listen to my September 30, 2022 Alternative Visions radio show. Contradictions between war induced inflation, energy shortages, collapsing European currencies, and emerging recession in Europe are intensified in the case of Britain and a harbinger of things to come on the European continent.

TO LISTEN GO TO:

https://alternativevisions.podbean.com/e/alternative-visions-britain-s-economic-crisis-isolated-event-or-harbinger-of-things-to-come/

SHOW ANNOUNCEMENT:

Dr. Rasmus reviews the intensifying UK economic crisis that escalated this past week. Bond holders and investors provoked a crisis in Britain’s pension funds in response to the new Truss government’s proposals to cut taxes and enact price caps on the accelerating cost of energy for UK households and small businesses. Capitalist investors don’t want fiscal spending they fear will stimulate the economy and therefore demand and inflation, the latter now double digit and predicted to rise to 17%. They want higher interest rates from the UK bank of England to protect the value of their investments—from rising inflation as well as collapsing British currency, the pound, that has fallen 40%.Rasmus explains this represents growing contradictions between capitalist fiscal-monetary policies and splits within the UK capitalist class. The show further explains and critiques the EU’s latest proposals for sanctions on Russia by creating a G7/EU global oil price cartel, which is doomed to fail if it ever gets implemented. Latest events summarized also in Russia-Ukraine/NATO war.

This past week the European Commission, the umbrella political organization for the European Union nations, issued its latest set of sanctions on Russia.

The most important of the measures was the announcement that the EU was establishing a price cap for purchases of Russian crude oil in global markets. In so doing, the EU in effect plans to become a cartel controlling the price of global oil.

Saudi Arabia and even OPEC in the past failed as a cartel to control the price of global crude by controlling its supply. Yet the EU believes it can become a cartel and control the price of oil even globally even without influence over global supply.

Under the plan, which still requires the approval of all EU economies, the EU will not buy Russian oil at global prices set by market supply and demand. Instead, it will buy Russian oil only at a price that is capped below that of the global market. Reportedly the participants in the Commission discussed a price per barrel of crude capped around $55-$60 a barrel. EU economies will purchase Russian crude only if it is sold to them at or below their ‘cap’.

The plan, if approved, will go into effect only this December 2022.
The idea of the west setting a price cap on Russian oil as a form of sanction originated with Janet Yellen, Secretary of the US Treasury, some months ago. It was an economically absurd proposition then, and remains no less so today. The price cap may not prove effective, but it does illustrate the ineffectiveness of sanctions to date on Russian oil and energy products (i.e. natural gas, uranium ore for Europe commercial nuclear facilities, etc.).

Global oil is traded (bought and sold) in the global market solely in US dollars. So too are other critical industrial commodities and many agricultural commodities. The main focus of US sanctions, including the price cap idea, is to deny the target country—in this case Russia—access to revenue in dollars from the sale of its oil.

Theoretically, the loss of dollars from lower priced oil sales means Russia won’t be able to purchase as much needed imports critical for its economy in general and its war effort in particular. The lack of dollars in turn further means, again theoretically, Russia would have to print more of its own currency, the Ruble, to make up for lack of dollars in its own economy. That might lead to inflation as excess money supply is created for the domestic Russian economy. In turn excess money supply creation in Russia might lead to devaluation to domestic inflation and devaluation of the Ruble.

US initial sanctions on Russian oil and energy to date have largely failed. Russia’s export revenue from sale of oil has actually risen since sanctions and war began last February. Russia has sold more oil to China, India, and at least half of the world economies that have been ignoring US/EU announced sanctions altogether.

The EU ‘price cap’ idea is supposedly going to what oil sanctions up to now, which have been full of loopholes and exemptions, have failed to do—i.e. reduce Russian revenue from oil sales and its accumulation of dollars from those sales.

It is important to note that the EU itself has all but ignored sanctions on Russian oil to date. Russia has continued to ship oil to Europe. And the EU hasn’t even bothered to enforce sanctions on Russian natural gas imports or uranium ore shipments. What reduction in oil and natural gas shipments to Europe that has occurred, has been mostly due to political actions not sanctions. Last spring the Nordstream2 pipeline was quickly closed and more recently sabotaged. So too was the Nordstream1 pipeline. Prior to sabotage, Nord1 gas flow to Europe was reduced in stages by Russia to about only 30% of capacity. It wasn’t sanctions but decision by Russia that reduced the gas exports. There are two remaining large gas pipelines from Russia to Europe still functioning. One crosses the Ukraine and another transverses Turkey and the Aegean Sea into the Balkans. Europe has not tried to reduce gas flow from these with sanctions, although it is likely politics will result in their reduction and shutdown as well eventually.

But to the extent Russian natural gas flow to Europe has been reduced, the causes have been political and have had nothing to do with sanctions. So sanctions on Russian energy exports to Europe have hardly been implemented, let alone been effective. The EU price cap idea is supposed to finally result in sanctions on Russian oil sales and revenue.

Sanctions on exports to Europe and US of Russian industrial commodities have also been rife with exemptions, loopholes and work arounds. In the US, for example, Russian nickel and palladium exports needed for catalytic converters in US autos and in steel production have been significantly exempted. The US some time ago implemented sanctions on Russian oil imports to the US. The amounts of Russian oil imports were quite small. In any event, the US—unlike Europe—has a glut of excess oil and natural gas.

Russia has been earning significant export revenues therefore from the sale of its oil, natural gas, as well as many industrial commodities, ever since the US/EU sanctions regime was first imposed last January 2022. The ‘price cap’ is but the latest desperate attempt by the US and EU to make the sanctions on Russian oil to Europe ‘work’. But it won’t work. Here’s why:

First, the price cap is not going to take effect until December (if at all even then since all the EU nations must agree). So why should Russia even bother selling any oil to Europe in the interim. In business contract matters, if one party notifies the other it is breaking its contract and is no longer going to buy from the seller, that seller can simply cancel its contracts early and not wait until December. Russia will likely therefore cut off its oil exports to Europe sooner rather than later, and just redirect the oil elsewhere to China, India or rest of the world. No need for sanctions of any kind in other words.

But the price cap sanctions idea involves not just the EU buying Russian oil. The price cap is really the US/EU foray into what’s called ‘secondary sanctions’. That is, sanctions on other economies around the world. Up to now, the US has been careful about enforcing sanctions or penalties on other countries that refuse to go along with sanctions to date—and there are many such examples of economies that have been refusing to participate in sanctions. After all, if the Europeans themselves have allowed various exemptions to oil, gas, and commodities exports from Russia, why should other countries abide by the sanctions?

And there’s another even better reason why China, India and so many other countries globally have continued to buy Russian oil: Russia reportedly is selling its oil at around a 30% discount from the global market price.

The global market price today is around $80-$85 a barrel, depending if it’s west Texas crude or Brent (Northsea) oil. So Russia’s 30% discount means it’s selling at around $50-$60 a barrel now. If the EU is talking about setting a price cap at $55, what’s the point? It would have to set a cap even lower than it’s been discussing. But EU won’t be getting any Russian oil after December if Russia decides to turn off what little is still flowing there, as it responds to the price cap threat. And if the EU is not getting any Russian oil but it’s demanding the rest of the world economies adhere to the price cap, who believes the rest of the world is going to take that seriously. EU has nothing to lose from a price cap; but the rest of the world does.

Regardless of any EU artificially set price cap on global oil, should China, India and other countries support the idea just because the US and EU say so. Should they cancel their long term oil contracts with Russia at 30% discount from global market prices because US and EU say so? Buyers of oil and energy in global markets want price stability and reliable delivery. Russian oil provides that stability. The idea of a price cap means potential instability. And who would trust an arbitrary price cap set by Europe and the US as a bureaucratic political directive?

The whole idea of a price cap as a form of sanction set by EU/US by directive is absurd. Few if any will follow. But such is the arrogance of western imperialism to think they still have the power to enact and enforce such a measure. Perhaps in decades past. But no longer.

But the EU and US think they have an ‘ace card’ up their sleeve that will enable them to impose a price cap on the rest of the world: most of the shipping insurance companies are based almost exclusively in the west. What the price cap may have in mind is if other countries don’t follow the cap, then the shipping insurers won’t insure the ships that carry the Russian oil. That would stop the shipment of Russian oil to those countries not following the price cap. The price cap thus is designed to function as a form of indirect ‘secondary sanction’ on countries that don’t go along with the oil sanctions.

Europe is not the real target of the price cap proposal. It will get its oil from the US which will provide much of what Europe needs, albeit at a higher price than the alternative Russian oil. There’s no price cap on US oil; just Russian in the EU proposal.

Stopping the flow of Russian oil to other countries by means of a price cap combined with shipping insurance denial will likely result in a shift toward alternative shipping not located in the west. That means a loss of profits for western oil shipping companies. This has not been lost on Greek, Cyprus and Malta shipping companies who spoke out at the recent EU meeting discussing price caps. They are opposed to the price cap idea for good reason.

To sum up: the idea that the EU can become a global price setting cartel in the world oil market is absurd. What OPEC couldn’t do on the supply side, Europe cannot do on the demand side. Cartels only work if all parties go along, and China, India and the rest of the world simply will ignore and not go along with Europe thinking they can set an arbitrary price of global crude below its market price.

The EU’s recent announcement of new sanctions went beyond just the ‘price cap’ idea. It also announced new sanctions on Russian imports to EU of steel, paper, machinery, appliances, chemicals, plastics and other items. But wait! Weren’t these already sanctioned? If there’s now need for further sanctions on imports of these Russian products, that means sanctions on industrial commodities to date were also full of exemptions and loopholes all along.

China, India, Brazil and other emerging market economies are distrustful of US/EU sanctions to date and justifiably so. That will be especially true of the arbitrary price cap on Russian oil idea. It will be viewed as not imposing much of a cost on Europe, but likely destabilizing world oil markets’ supply and price.

But perhaps they shouldn’t worry that much. The price cap idea is unworkable, probably won’t be supported by all the EU, and carries with it the smell of secondary sanctions by another name, as well as the stink of arrogant western imperialism.

Dr. Jack Rasmus