Eric Peters - T&M

key letters

• oct 1, 2022

Overall: “Everything I am saying is important,” declared the dictator, his credibility fading, dangerously, his hopelessly corrupt nation failing. “And what I just said is no less so: you can't feed anyone with paper – you need food; and you can’t heat anyone’s home with these inflated capitalizations – you need energy,” continued Putin, claiming eastern Ukraine, doubling down. “The United States is practically pushing Europe toward deindustrialization in a bid to get its hands on the entire European market. These European elites understand everything – they do, but they prefer to serve the interests of others,” he said, showing his hand. Putin has few good cards to play of course. The nuclear card is most terrifying, suicidal too. So for now he’s focused on dividing his adversaries, exposing our greatest weaknesses, hypocrisies. We have plenty. The game we’re now playing involves the most fascinating interplay of macroeconomic forces and geopolitics in our lifetimes. Decades of deepening globalization and technological advance produced enormous prosperity that rewarded capital in an outsized way relative to Western labor. We mistook this for a permanent state of the world. But unsatisfied with an abundant present, our financiers pulled prosperity from the future by hyper financializing our economies. In the pursuit of maximum profit, we blindly abandoned redundancy, accepted fragility. We attempted to address climate change without investing in a credible bridge to a sustainable future. Each one of these developments are inextricably linked and have produced the vulnerabilities that Putin and our adversaries now seek to exploit. Britain’s pension system just cracked. The Bank of England vowed to do whatever it takes to save it from excessive leverage and poorly designed financial engineering. The central bank reverted to money-printing and bond-buying to stabilize a system made fragile by money-printing and bond buying. Nord Stream 1 and 2 pipelines were attacked, reminding every nation on the planet that key infrastructure assets built for peaceful times become liabilities in periods of war. The West is now awakening from decades of poor policy. The consequences will appear overwhelming at first. We’ll get through. But that long, painful process has only just begun.