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Today’s show reviews G7 meeting and its decisions on new sanctions and de facto declaration of future war on Russia. US/NATO military buildup, provocations, and war costs for US. Larry Summers’ admits recession in US nearer than 2023, confirming Dr. Rasmus’s predictions of 2022 recession for past seven months. Review of sectors of weakening US real economy, as stock and bond markets plunge 1st half 2022. Show concludes with analysis of Biden’s failing inflation control initiatives to date and why stagflation USA has arrived.

Dr. Rasmus reviews the content and consequences of US/NATO imposed sanctions on Russia since the Ukraine war was launched in February. A brief history of US use of sanctions is followed by description of sanctions since February. The categories of sanctions: goods, financial, individuals. Why oil and gas sanctions have failed. The cost of sanctions to US/ Europe, and Russia. Countries involved. Relation between sanctions and accelerating inflation globally. Impacts on US economy, Europe’s, and emerging market economies worldwide. Biden’s tepid solutions to inflation and why they’re failing. What alternatives aren’t being discussed. Consequences of sanctions for restructuring of global capitalist economy and risks for US global economic empire.

 Dr. Rasmus picks up where last week’s show, continuing the discussion of the Anatomy of Inflation in the US and why inflation will continue chronically for months more. Why falling productivity, rising unit labor costs, inflationary expectations, further intensification of sanctions and war in Ukraine will all add to inflationary pressures. Biden’s various failed initiatives to dampen inflation, and rejected alternatives that could address inflation, are discussed. The show next considers today’s just released jobs report, and looks behind the numbers to show the jobs trend is slowing and hiring freezes appearing that will change the direction of this lagging indicator in coming months. Meanwhile wage gains are falling further behind prices and for most workers are much less than the official reported ‘average’ of 5.2% which is skewed by 18% gains for professionals and managers at the top end of the wage structure and for minimum wage hikes needed to attract workers to service jobs again at the low end. The show concludes with a preliminary discussion of the nature of War in general, and economic war in particular, today. (Next week’s show: ‘Russian Sanctions and their consequences’ for EU, US, and global economy’)

Dr. Rasmus dissects the various causes of inflation in the US over the past year, explaining it is mostly Supply side driven and not consumer Demand. Following last spring 2021 reopening of the US economy, some price increases followed due to more wage in come as workers went back to work. That was a moderately rise, however. The big escalation of inflation began last September due to global and US domestic Supply chain problems which was followed by price gouging by monopolistic US corporations many of which had no supply issues (ex: bakery-cereal and meat packing companies, oil companies, etc.). In 2021 Supply was responsible for at least 3/4s of the inflation. Overlaid on these forces in 2022 were three additional causes: first, commodity inflation due to Ukraine war and Biden sanctions depressing supply of oil, gas, industrial metals, certain agricultural goods; second, rising unit labor costs by US businesses due mostly to collapsing US productivity (worst since 1947) passed through to prices; third, emerging inflationary expectations (the latter a Demand factor). To address this anatomy of inflation, the Fed is raising interest rates at a record pace, addressing Demand but unable to address Supply causes. Recession will follow (as in 19981-82). Rasmus further explains how the US exports both its inflation and recession to emerging market economies via a currency crisis now underway. The show ends with a brief warning of potential financial asset price deflation emerging, with cryptocurrencies’ collapsing and raising potential for contagion across other asset classes.

The Federal Reserve’s decision this past to raise interest rates immediately by half percent—to be followed by further half percent hikes in June & July and still more increases the rest of the year—means Capitalist economic policy is now to precipitate a recession in order to deal with rising inflation. The question now is not whether, but when, recession comes in the US. Will it be before the end of this year, or early next. And how deep will it go? Dr. Rasmus describes the current Anatomy of Recession in the US: global and domestic supply chain problems that emerged last summer 2021 + monopolistic US corporations price gouging + commodities inflation due to US war sanctions on Russia this year + business productivity collapse leading to pass through of their rising labor costs + emerging inflationary expectations. All together ensure continued inflation in 2022. Rasmus discusses whether the Fed can address these mostly Supply side causes successfully. The US experience of 1981-82 recession is compared to 2022. Can Fed destruction of household-consumer Demand again today achieve inflation control? How deep a recession precipitated by Fed interest rates be required?  What’s happening in the stock markets with its wide 1000 point daily swings? Why a ‘soft landing’ of the US economy won’t occur, given the already 1st quarter contraction of the US GDP and concurrent slowdowns in China, Europe and emerging market economies as Fed rate hikes drive up the dollar and ‘export’ recessions abroad.

Dr. Rasmus discusses the recent announcement of US GDP for first quarter 2022 which shows a contraction of the US real economy already underway. The Federal Reserve’s plan to accelerate interest rate hikes starting this month and every Fed meeting this year thereafter, ensures the recession drift will continue and likely accelerate as well.  The four components of US GDP—consumer spending, business investment, government spending and net exports (imports-exports) are reviewed as forces behind the GDP contraction. Rasmus discusses the supply side and corporate price gouging behind the current inflation, and how that is depressing consumer spending 70% of US economy + how slowing of economies in rest of world is depressing exports + how US shift to war spending at expense of social programs is further exacerbating the US economic contraction. As Covid impact has ebbed, the war in Ukraine further exacerbates supply drive inflation and in turn consumer demand. How big oil corps and other monopoly corporations in USA are gaming the inflation to generate super profits; what and why Biden administration is doing (and not doing). Rasmus further concludes the war in Ukraine will not be short but protracted, as US adopts a ‘Brezinski 2.0’ doctrine to debilitate Russia economically and militarily in Ukraine; why NATO will expand outside Europe; why the Ukraine war is an event similar to ‘Spain 1937’.

Dr. Rasmus provides an update of US sanctions on Russian gas, commodities, finance and products and assesses their impact. What are some of Russia responses?  Will the continuation of sanctions lead to an undermining of US global economic hegemony? Is that imminent or not? Show concludes with Dr. Rasmus observations of the war on the ground and some alternative analyses to US media propaganda. (Check out his latest article on his blog, http://jackrasmus.com ‘US Imperialism’s Proxy War against Russia in Ukraine’ (LA Progressive, March 27, 2022)

Dr. Rasmus discusses the past week historic Fed rate hike announcement and what it portends for both US and global economy, real growth and financial instability.  What’s driving the rate hikes, both supply and demand, short and long term. What’s likely impact on the US real economy (housing, autos, small business, etc.). Implications for global currencies’ instability and global economies.  Rasmus next discusses she latest of US sanctions on Russia. Are they working? Where and where not? What are Russia’s countermeasures? Are they working? What does it all mean for the major restructuring of the global economy and US imperial hegemony in the months and years immediately ahead.

Dr. Rasmus reviews the many recent financial sanctions and actions taken against Russia and discusses the impacts of each on Russia, as well as on the US and the global economy. The possible ‘blowbacks’ of sanctions to the global financial system are discussed. Various narratives explaining the origins and course of the war are also reviewed and Dr. Rasmus offers an alternative to the mainstream views, arguing all three parties to the conflict are responsible in part and each presents their own preferred view, none of which is totally accurate.  Extrapolating from the current experience of financial sanctions on Russia, the show concludes with commentary on how 21st century US imperialism is heavily dependent on financial actions to enforce empire.

What might be the economic impact of the war in Ukraine—On Russia, Europe, and the US as well? Dr. Rasmus discusses the immediate short term economic effects of the past two days of the War. Further consideration and discussion follows on the more intermediate and long term likely impacts in inflation, output, stagflation, financial asset markets, currency exchange rates, and global goods and money flows (exports-imports).  An analysis and prediction of the possible minimal effects of US and EU sanctions on Russia, including the suspension of the Russian-German Nordstream 2 natural gas pipeline.  Why Biden’s sanctions are full of holes. Why the US has exempted the SWIFT international payments system from the sanctions and why the economic fallout of the war and sanctions will hit Europe harder. What are the implications for global real economic recovery from Covid now underway: will the War thwart and dampen that recovery? The show concludes with comments on some of the fundamental changes in the global economy that the Ukraine war may generate.

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