- Hard to confirm this in the Western news media, but Darius Dale is saying that Kremlin spokesman Dimitri Peskov denies that peace negotiations are getting anywhere. Apparently, Pentagon’s John Kirby confirmed this.
https://www.youtube.com/watch?v=zvRIiR5Fijg&t=40s
- A new must read post from Peter Zeihan:
Once Odessa falls or is destroyed, that’s the utter end of Ukraine’s participation in global agriculture. And that will bring the war home to everyone, everywhere.
- For more on the importance of Odessa, see this Zeihan video. Russia has already captured Mauripol and Kherson and are pushing towards Myklolaiv and from there towards Odessa. Once they capture Odessa, they will be able to effectively shut down Ukrainian agriculture. From there, Russia is trying to get through to the border of Moldova, where there are Russian separatist forces in Transnistria.
From Institute for Study of War
- The main part of Zeihan’s post is on Russia’s financial situation:
Either Russia’s finances crash due to sanctions which deny Russia the hard currency in which nearly all of its debts are denominated, or the Russians choose not to pay on their government debt to stick it to their (primarily Western) creditors. Either way, total default lies before us. Probably in April, as April 15 is the end of the 30-day payment grace period on the first big batch of government debt.
-
This set up looks to me like Russia will choose not to pay their government debt because of the US’s “economic warfare.” And then Russia will try to force the economic hand of countries that are either neutral or tentatively against the liberal international order (NATO, UN, post-Bretton Woods international order). And there are plenty of countries that are remaining neutral.
-
Although I’m not the biggest fan of his, Arthur Hayes has been on a tear with a number of really great posts, including the one today. Here he says essentially the same thing as Luke Gromen and Zoltan Poszar, which is that the Fed closing the Russian foreign reserves window is a watershed moment that effectively ends the petrodollar/eurodollar world financial system.
-
The Zoltan Poszar piece (even more of a must-read) mentioned above draws the distinction between “inside money” (money that is a liability on someone else’s balance sheet, like foreign reserve) and “outside money” (money that is no one’s liability, e.g. gold, commodities, bitcoin) and positing a new Bretton Woods III era.
Now, on the question of who will backstop the current commodity crisis, Poszar says:
…someone, somehow must always provide a backstop – or as Perry Mehrling would say, an “outside spread” (the IMF in Southeast Asia in 1997 in exchange for Washington consensus-type structural reforms; the Fed backstopping the shadow banking system with a range of facilities in 2008 in exchange for Basel III; and the Fed backstopping RV funds with QE and the SRF in March 2020, in exchange for “we don’t yet know what,” but history says there will be a price). Which brings us back to today – the present – and shipping freight rates. If we are right, and if this is a “crisis of commodities” – a 2008 of sorts thematically, if not in terms of size or severity – who will provide the backstop? We see but only one entity: the PBoC!
-
Interview with Ash Bennington and Darius Dale on the FOMC meeting yesterday, where Fed raised interest rates 0.25%, as expected. When discussing China, Dale expects that China’s next move here is to put pressure on Taiwan, which makes sense. It’s not a direct antagonist to the Blob, but instead to Western values & ideals.