You see it every time you fill up your gas tank. It's the rising price of gasoline and all petroleum products.
Over the past year, oil and gas have risen three times more than any other component of the Consumer Price Index.
This is because I believe, the entire strategy is built upon deception. A deception that begins its very name.
Now, I'm speaking specifically of the Biden Administration's so-called oil and gas sanctions that have been imposed on Russia. Imposed as part of this administration's larger economic war against the Russian State and against their people.
In military terms, and yes this is at least a quasi-military action. What military strategists call the new Fourth Generation Warfare. In this new generation of war, all avenues to defeat one's enemy is fair game.
So, this administration instituted this strategy as a way to weaken Russia overall. And bring about their defeat in Ukraine.
President Biden has rolled out a whole series of “Sanctions” against Russia. Some against high-level government officials and their families, some against Russian financial institutions and banks, and some, of course, against the Russian Oil and Gas Industry.
And it's this latter group of so-called sanctions, that we want to pay special attention to. Because it is this action, that marks a historic departure from the way in which the west will deal with Russia henceforth.
A move, that frankly imperils the Western' Countries dominance.
Now, words have meaning. And never more so, than in diplomacy. As anyone who has ever worked for a government agency, or for that matter anyone who has been involved in marketing will tell you: What you name a given campaign will have a tremendous impact on its future success.
This Administration chooses to call its actions Sanctions.
What does that word really mean? Well, the origin of the word comes from ancient Church Law. Sanctions first meant a formal ecclesiastical decree. A pronouncement, by the church, that someone is out of line. That they have violated Church Law.
In other words, it's the Higher Authority telling its subject: you're out of order.
So who is the “higher authority?” Is it the United Nations? No, it was the United States that issued the “Sanctions.”
In diplomatic speak, the United States is telling Russia that the US is the Authority presiding over Russia. And it's here that deception begins.
But it goes beyond just that.
This Non-Sanction is unenforceable. In fact, it is an ill-conceived strategy bound to fail from the very beginning. To effectively sanction someone, you would need to control something that country wants or needs.
If our country produced critical equipment or machinery. And if withholding those products would imperil another country. Then a sanction withholding those items could be very effective.
But in the case of oil and gas, it is Russia that controls the supply. They also control much of the world's wheat and grains. And they were providing the US with about 10% of our oil and gas. Not the other way around.
From a practical point of view, Russia could impose effective sanctions on the US. But it doesn't work the other way.
No. What the US has done is impose an economic boycott of Russian Oil and Gas. And boycotts happen all the time. In fact, it's a favorite tool of the left.
There have been massive boycotts of a dozen or more Olympics. There is currently a boycott of Nike sporting Goods for the treatment of their Chinese workers. And there is an ongoing boycott of all things Donald Trump.
Sometimes boycotts are effective. But most often they're not. Last I checked the Olympics still take place. Nike still sells sneakers. And I saw Trump speaking over the weekend.
In short, what we have in the so-called Sanctions, is really an ill-conceived strategy. One that deceives us into believing that it's some that it's not. It's an authority that we really don't have.
Not a Sanction, merely a boycott. And unfortunately a boycott, that like many others is having the opposite effect from what was intended.
In the meantime, with this price of gas, it's going to cost me a “C-note” to fill up my truck!
In the big news of the morning. President Biden has invited Federal Chairman Jerome Powell to the Oval Office for a chat. It will be the first meeting for the two men, since Biden nominated Powell for another term as chairman, six months ago.
There can be little doubt that Biden is in hot water politically. With many, on both sides of the aisle calling for his scalp. The public views the economy as his number one failure.
So obviously that will be topic one in today's meeting. What's not so clear is will Biden be pushing the fed to loosen monetary conditions, and thereby promote more inflation?
Or to tighten monetary conditions, and inevitably lead to all the more economic slowdown?. It's a Hobson's Choice.
But in the end, it will, I fear, have a little overall effect on either the economy or the Biden Presidency.
And then the big international news. While you and I enjoyed the Memorial Day off, the European Union was busy expanding its boycott of Russian oil.
The EU will ban all seaborne Russian oil deliveries. This will cut off about a third of Russian deliveries to Europe.
And the result? Predictably oil is skyrocketing in price, with both Brent Crude and West Texas intermediate flirting at the $120/barrel level.
Overnight the European countries have been busy reporting on both inflation and their own GDP numbers.
Spain, France, and Italy reported their inflation little change from the month before. The headlines are German inflation hitting a multi-year high at just under 8% annual inflation.
Reporting their economic performance have been France, with GDP rising at 4 ½%, and Italy with their GDP rising at better than 6%.
In just a few minutes we will get the latest Case Shiller home price index. Followed by the latest reading in Consumer Confidence.
Currently, consumer confidence measures at a sky-high 107 on the index. I believe that we'll shortly see this measure begin to slide, as people begin to lose confidence in the economy.
In earnings today, a group of West Coast companies, reporting after markets close in New York.
Leading will be Salesforce dot com, then the old Hewlett Packard, now HP, and flight school CAE.
I hope you have a great day!