Dead end

In the arena of geopolitics and public finance, Darren Winters points out that a predictable dead end now lies ahead. The trajectory of public debt growth is unsustainable, which has even been admitted by Fed Chair Powell. 

The debt clock ticks to a dead-end

Public debt levels are not infinite numbers. 

“It is rising by $1 trillion every three months, or every 100 or so days,” are the desperate words echoed by those knowledgeable of the debt crisis. 

Congressional Budget Office, Phillip Swagel was the latest to wave the debt crisis red flag. 

The US could suffer a similar market crisis as seen in the UK 18 months ago, during former Prime Minister Liz Truss’s brief stint leading Britain – which briefly sent yields soaring, sparked a run on the pound, led to an immediate restart of QE by the Bank of England and a bailout of various pension funds,” warned Swagel.

Indeed, the UK’s “unprecedented” fiscal trajectory resulted in the instant resignation of Truss. 

Even titan investor Black Rock CEO Fink, the world’s largest investment manager with an AUM of around 9.4 trillion USD warned that the debt crisis is “more urgent than ever,” 

The dead end of fiscal fantasy 

Dead End

An unrealistic fiscal trajectory leads to waning investor confidence in a nation’s sovereign bond, spiralling bond yields, and a sovereign bond default with the end game being a currency collapse hyperinflationary scenario.

The Graveyard of history is littered with former Empires that have collapsed under the weight of their debt, fighting unwinnable wars.   

The war in Europe has reached a dead end for NATO

NATO, the military alliance coalition of the wobbly knees is in an existential crisis. NATO has suffered a crushing defeat on its continent, as it has been unable to halt a Russian conquest of Ukraine.

More than a million dead Ukrainian soldiers, hundreds of billions of dollars added to the public deficit and a graveyard of Western tanks and weaponry is all NATO has to show for a showdown with Russia in a humiliating defeat.  

Forget Hollywood’s version of tanks in playful war games, here is the real deal of a Russian T-72 destroying US MI Abrams in a one-shot kill.

Last Summer’s Ukraine counter-offence was nothing short of a bloodbath for Ukrainian soldiers who were shredded by fully integrated satellite-guided Russian anti-personnel artillery. The game-changing German technology Leopard tanks were bagged in a turkey shoot by stealth-flying Russian Alligators. The Ukrainian war has depreciated the value of Western arms makers.         

A diplomatic compromise with Russia would have been wiser than a humiliating military defeat. 

Joining NATO could be akin to joining a suicide pact. Putin is now aligning with Africa. Imagine a million-plus Africans with Russian arms thrusting into Europe, a nightmare scenario for Europe and its leaders.  

Dead end, make peace

Russia has proven itself yet again to be a great military power. If Napoleon and Hitler could not conquer Russia, then why commit national suicide, Ukraine being the latest example? 

Now, at a dead end, rethinking foreign policy is much needed.

Darren Winters notes, intelligent diplomacy with Russia should be the goal. Warplanes and foot soldiers will lead Europe and the world into the abyss.

Moreover, capital flows from public to private assets will continue in times of dead-end policies. 

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