If not wholly comatose, Globalism is at least on its deathbed. Pundits and scholars agree that we live in a time when Globalism is becoming increasingly unpopular. The election of Donald Trump and, more recently, of Georgia Meloni in Italy are witness to the fact that many voters worldwide choose to put their own country's interest over that of a Global hegemony.
Almost daily, the press writes of the demise of Globalism. The New York Times recently attributed that decline to the decline in the economy; Forbes focused on the cultural differences as causing Globalism's decline, while Newsweek follows Larry Fink, CEO of Blackrock, in calling the Ukraine War the chief event leading to the end Globalism.
But while each of these instances has contributed to Globalism's decline, they all miss the salient fact that at the heart of each one of these circumstances: the economy, the cultural divide, and even the War in Ukraine, stands one man, the 46th President of the United States: Joseph Robinette Biden.
Like no other Chief Executive before him, Biden has reshaped this world, in many instances cutting long-standing relationships between the United States and important strategic partners.
The most recent case in point is Saudi Arabia. The United States has enjoyed a long-standing strategic relationship with the Saudis that has lasted for at least 70 or 80 years. For most of that time, the Saudis have been the swing oil producer for the US, providing additional fuel when American oil production did not meet our needs.
Unfortunately, the relationship with the Saudis is now over. After a series of imperious moves, Biden had first requested that the Saudis increase their production to lower US Inflation. A benefit for the US, with no help for the Saudis.
Next, when the Saudis were proposing to lower their daily oil production, Biden requested (demanded?) that they hold off on any announcement until after the US elections. Again, this benefits Biden and the US but does not benefit the Saudis.
Reports are that our relationship with Saudi Arabia is now moribund. And there are likely to be two results from these impetuous Presidential actions. The first will be the almost inevitable fall of the PetroDollar. The Saudis will likely move away from using or pricing their oil in Dollars. Prices in another currency will be one more step toward ending the Dollar as the world's reserve currency. Saudi Arabia is by far the most significant generator of PetroDollars.
The second likely effect is that Saudi Arabia appears to be moving to the newly evolving BRICKS nations. Headed by Russia, China, and India, Saudi Arabia and Iran will round out this new alliance and create an alternative to NATO and the European Union.
This last move is enough to put the final nail in the Globalist's coffin. And the credit for all this should rightfully be attributed to our President.
However, it has been Biden's actions toward Ukraine that have thoroughly decimated any hope for Globalism. The President has maintained that he has been 100% against the conflict between Russia and Ukraine. He is partisan in this dispute, with his allegiance solidly on the side of Zelenski's Ukraine and against Putin's Russia.
But every time he has lashed out against Russia, he has struck a blow against international cooperation and Globalism.
You'll recall that Biden's first move was to block Russia from using the SWIFT System, a system denominated in Dollars designed to facilitate international transactions. While the objective was to hurt Russian global sales, the result was that Russia transferred to the Chinese alternate service CIPS. They were taking billions of dollars worth of transactions away from Swift and giving it to CIPS. A tremendous revenue loss and another blow to the dollar reserve status.
Next, in another effort to harm Russia, Biden shut down the US importation of Russian oil. Russian imports accounted for roughly 10% of the US daily oil supply. The result? Inflation in the US accelerated, as our country had to fight in the international markets to replace the Russian oil lost. Gasoline prices in the US instantly became the number one driver of inflation.
The Financial Times this week reported that Russia's energy-based economy might emerge more robust than the US due to enhanced Russian oil sales. Russia sold more oil and gas to its new markets in India and China.
Not since the Cold War has anyone driven apart the nations of Europe, and the world, like Biden. The thought of a Global Community that includes Russia, China, and perhaps even India is now over. Thanks again to President Biden.
And the list goes on and on. The recent US boycott of Chinese Semi Conductors and the renewed launching by North Korea are but two more instances of how this President seems to alienate others.
We are witnessing a President and an Administration that always seem to assume an adversarial position when dealing with other countries. Everything doesn't have to be a fight. Yet that's just how it appears with President Biden.
For his supporters, President Biden must represent the most bitter irony. After all, the Democrats, and especially President Biden, have been this country's greatest advocates for Globalism. And yet it is President Biden who has done more than anyone in recent history to end Globalism.
Econ Briefs
Bond markets around the globe continue to see yield rise and prices decline, powered mainly by the Federal Reserves Board's monomaniacal fight against inflation. With one thing on its mind, the Fed steadfastly steers a course of higher and higher interest rates. This morning the 10-year US Treasury Bond topped 4.1%, the highest reading since 2008. This move by the Fed has also dragged other countries' sovereign debt to higher yields. Japan and Germany see their bonds trade at levels not seen in years. And France has just completed their latest auction in 3, and 5-year notes, with the yields climbing by nearly three-quarters percent. Big moves for government bonds.
Moreover, we should see those interest rates rise even further when the Fed meets in less than two weeks on November 2.
This weekend President Biden's student loan forgiveness program is scheduled to take effect. Millions of ex-college students are waiting to see if the federal government will take their loans back.
But at the 11th hour, the Wisconsin-based Brown County Tax Payers Association has petitioned the Supreme Court to delay that implementation pending the outcome of their lawsuit currently working its way through the courts.
Amy Coney Barrett is on deck to hear the arguments, which she should deliver today or tomorrow. Her ruling will make headlines. Stand by.
It's Thursday, the day of the week, for the latest reading on initial and continuing claims for unemployment. Initial claims are expected to be about the same as last week, 228K.
Then the morning's big news will be the September New Home sales. The Street expects a decline of about 100K in new home sales as the real estate market continues to have a tough go of it.
