I have been experiencing extremely insightful and useful dreams this week. Not for their entertainment value, but because they answer a lot of long-held ponders. Like “What is Life all about?”
While I work on distilling this down into a (small book-length) Peoplenomics report for tomorrow, there’s some real gold already starting to pan out. Namely, getting much better at looking for “first causes” of events in life. More on that tomorrow. But here’s the question of the day.
Who Owns These Wars?
We are all “visitors to Earth” and living in bone bags of animals. Got that, OK?
Now, animals kill one-another in the wild, so it’s not too illogical to see humans doing the same thing. But here’s the stumper: For What???
We know (more or less) that it isn’t for food. OK, sometimes it’s for territory, but again, why? So we can begin to line up the other feedstocks of ego.
- The power to tax.
- The power to skim off the labor of others.
- The power not-to-work, and so forth.
So when we look at North vs. South Korea, Taiwan-China, Iran-Israel, or Russia-Ukraine, a fair question to always hold in mind is “What’s pulling the levers here – and why? What are they after?” Food insecurity may figure into the North Korean equation, obviously, but for most of today’s major confrontations, nobody is invading because the pantry is empty.
It’s especially useful today because the Fed is meeting. And again, “central banks” are coordinating rates higher. But you don’t need a grand conspiracy for that – just a friendly card game when the ante changes and everyone has to ante-up.
Or, at least so goes the thinking right now. Like war, interest rates are their own “special” kind of munition. They blow up people’s lives, just as surely as an IED. One could argue the whole system of interest is a policy that should have been banned by an annex to the Geneva Conventions long ago.
But no such annex exists — and that’s because interest rates are a munition wielded by people who don’t need the food, but have an unquenchable thirst for power and control. Each sells their own “brand of freedom” while chasing the hidden agendas of power. And the path upward is always called “Growth.” Even when we plebes lose agency along the way.
At some point – though surely not this week, of course – some of these geniuses may sober up long enough to understand that mediation and negotiation – maybe even coupled with sharing – would be a solution to our problems. If we give up on Growth at All Costs, maybe the world would have a better future… hard telling.
And the media – which is all spoken for, with a few lone exceptions by self-funded researchers on the web – are not going to give it away, either.
Growth is the Holy Grail after all. Which would be fine, except it seems to be filled with blood all the time.
Oh Look! Growth Juice!
The Empire State Manufacturing story from the NY Fed:
“The headline general business conditions index fell thirteen points but remained positive at 7.6. New orders edged up while shipments declined slightly. Unfilled orders increased, and delivery times lengthened substantially. Supply availability continued to worsen. Employment increased at a solid pace and the average workweek rose considerably. The pace of input price and selling price increases accelerated from already elevated levels. Looking ahead, firms maintained an optimistic outlook for business activity.”
The stock market has sold off a bit, so will there be a “surprise rate hold” and then a huge market reaction? OR will the Fed play along and rubber-stamp the quarter-point hike markets are now pricing in?
The answer tomorrow after lunch. Bon appétit.
Getting Back to Grail-filling
[News Compressor: ON]
The overnight news flow is getting simpler, though not more comfortable. Energy, war, inflation and interest rates are beginning to behave less like separate stories and more like one connected system.
That makes Wednesday’s Fed decision the immediate hinge.
Focus: Oil Meets the Fed
The Gulf remains the center of gravity. Houthi attacks have put additional pressure on Saudi infrastructure while the East-West oil pipeline — Saudi Arabia’s principal way of bypassing the Strait of Hormuz — remains impaired.
That matters because Hormuz itself is already operating far below normal commercial traffic levels. Damage the bypass while the main road is compromised and suddenly “redundancy” isn’t very redundant. Oil is consequently back around the $107-$109 area. And diesel is becoming a serious financial lever worldwide.
But the important development overnight isn’t simply another move in crude. The oil shock is migrating into the financial system.
Treasury yields are rising. The dollar is strengthening. Stocks are under pressure. And expectations surrounding the Federal Reserve have shifted sharply enough that a rate hike Wednesday is now being seriously discussed.
There’s your transmission mechanism:
War > Oil > Inflation > Interest Rates > Markets.
If that chain holds together after the Fed meeting, we may be moving from a geopolitical event into a broader economic one.
Elsewhere on the Radar
Russia and Ukraine continue widening their economic war. Russia struck fuel and warehouse infrastructure around Kyiv while Ukraine attacked Russian industrial facilities and an oil refinery. The ground war may not be moving dramatically, but attacks on energy, manufacturing and logistics continue.
China delivered another mixed economic report. Industrial production rose 5.2 percent year-over-year, helped by technology and AI-related manufacturing, while consumption, investment and property remained weak.
That leaves China running what amounts to a two-engine economy with one engine coughing: factories can produce, but Chinese consumers aren’t buying enough. Which means they still need customers — including us — and maybe economic interdependence remains one of the better Taiwan security plans out there. Speaking of which…
Taiwan reported another round of Chinese aircraft and naval activity around the island. Nothing in this morning’s reporting suggests an imminent invasion, but China’s continuing military and mobilization preparations remain worth watching.
Qatar is meanwhile looking for multi-year U.S. LNG supplies after damage to its own facilities. That is an interesting tell because it suggests at least some participants are no longer treating the present energy disruption as a short-lived inconvenience.
Gold isn’t acting much like a crisis hedge, either. Rising interest rates and the stronger dollar have outweighed geopolitical fear, pushing bullion lower.
Home Front
The domestic disaster sweep found no new U.S. mass-casualty event large enough to displace the international stories. Empty “grail” there, for now.
Cleanup continues following severe Northeast flooding, with rescues and transportation disruptions reported but no major fatality signal in the initial reports.
The Atlantic hurricane basin also remains surprisingly quiet for mid-September. We are wondering if reader Hank, out on the Big Island, doesn’t have a big sign outside readable from space saying “HIT ME” — for reasons that should be obvious:
Like we used to say in mid-seventies rock-n-roll radio, “And the Hits just keep on coming!” Example for the children here. Also recommended: Disappearing One-hit Wonders.
Uh…oh-oh. Ure got off track…having a Mungo Jerry moment.
Over the Horizon
Moving right along, then… The next 24–36 hours should tell us considerably more. (Like it will matter?)
The critical question isn’t whether the Fed moves a quarter-point one way or another. It is whether the meeting reinforces or breaks the feedback loop now connecting Gulf warfare, $100-plus oil, inflation expectations, Treasury yields and the dollar.
Definitely on the ridgeline now, but what is that?
BlinkLab read: The pressure system is hardening.
And for Wednesday morning, the dashboard is wonderfully simple:
Hormuz. Oil. Bonds. Fed.
Something’s bound to break…
Around the Ranch: A Writing Storm
I had a weird dream on Sunday night.
It was one of those immersive lucid dreams that happens when the ontology is trying to communicate. And that literally became an overnight book.
OK – that’s strange enough and a 50-odd page mini-book flew off the fingers Monday.
But, then the next strange thing happened – I had another “explanatory dream” and today this one will be tied onto the first one because they tell a very cool, ancient story of human origins and destinations.
And it proposes a remarkable answer to the “What happens when we die” question. And in the book, AI helps us to get to where we’re going. It’s way cool.
Write when I get finished,
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