Robert Lighthizer was the U.S. Trade Representative (USTR) under the Trump administration.  Lighthizer was exceptionally strong in developing and structuring the America First trade policy that included the effective use of tariffs to get fair trade outcomes.

In this video Ambassador Lighthizer discusses the current trade policy of the Biden administration with former National Economic Council Chair Larry Kudlow.  The discussion centers around U.S-China trade policy, the phase-1 trade deal that was interrupted by the pandemic, and the future of the existing trade tariffs against Beijing that Biden is reportedly going to remove.  WATCH:

As noted by Lighthizer, if Biden drops the Chinese tariffs, it will only make the trade imbalance worse and push the U.S. deeper into the cycle of lost jobs and economic contraction.  He’s correct.

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It’s not exactly a confidence builder when the Director of the International Monetary Fund answers the question about forward priorities by saying, “Perhaps we need to pay attention to the law of unintended consequences.”  You had one job Kristalina, one job.

During an International Monetary Fund (IMF) spring debate and discussion segment, IMF Managing Director Kristalina Georgieva, outlined her perspective against the backdrop of massive inflation caused by the global financial institutions telling government to spend money and they will print it, during COVID.  [The video is prompted to 01:04:50] WATCH:

The discussion included EU Central Bank President Lagarde, US Fed Chair Powell, Indonesian Finance Minister Mulvani – when IMF Director Kristalina Georgieva admitted they channeled their COVID fear and emotions by unsustainably printing money without pausing to think through the consequences.

Now, the world is facing massive inflation, economic contraction, looming hunger, widespread famine and a pending global financial collapse.

Their response? “Whoops.”

Not to worry, they’ll have a little wine and chocolate and figure things out.  Swear.

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The Biden administration is desperate to get to June when they can start to cycle through the anniversary of the 2021 inflation spike beginning and start to see annual inflation comparisons level off.  The rate of inflation will drop once the statistical year-over-year comparisons reach the same moment in the prior year.  The fed will raise interest rates in May and then use the June inflation rate decline as a false talking point to highlight how their policy is working.  They wait for May, because they need to wait for the calendar, nothing else.  Inflation is measured as the percentage of change from the prior year.  By waiting until the inflation is measured against the first wave of rising prices, it will give the illusion of a decline in inflation.

That’s the unspoken background behind Janet Yellen’s statements to CNBC where she says, “We’ll have to put up with inflation a while longer.”  It’s all about kicking-the-can until the statistical comparisons lessen, nothing more.  WATCH:

When we reviewed the last inflation report at 8.5% we noted, “We will need to watch the service side closely now to see if consumers start to lessen travel, entertainment, and other service side expenses.”  We are starting to get the first signals of serious trouble on the service side now.

(USNews) – […] S&P Global said its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, fell to a reading of 55.1 this month from 57.7 in March. That reflected a moderation in activity in the vast services sector.

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Ukrainian President Volodymyr Zelenskyy told the International Monetary Fund today he needs $7 billion per month in global subsidy in order to supplement the economic losses currently being incurred.

(VIA CNN) – “Ukrainian President Volodymyr Zelensky said on Thursday that Ukraine needs $7 billion per month in financial assistance to make up for the economic losses from the war. 

In a virtual address to a World Bank forum, Zelenksy also said that it would take “hundreds of billions of dollars” to rebuild his country later. 

He said every country must be prepared to break all relations with Russia and that Moscow should “immediately” be excluded from all international financial institutions including the IMF and the World Bank.” (link)

Plus, “10% for the big guy”.

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There comes a time when ideology runs headfirst into the monolith of unwavering reality.  Today, during a press briefing as a part of the IMF World Bank Meetings [TRANSCRIPT HERE], Treasury Secretary Janet Yellen was forced to admit the sanctions against Russia have hurt the EU more than Vladimir Putin and the Russian economy.

Secretary Yellen was asked about the need for increased western government bans against Russian exports.

Yellen was faced with the discomfort of admitting the global market is still open to receiving Russian products, specifically oil and gas, and that banning the EU from receiving those products only drives the EU prices higher, which has already led to unsustainable inflation.

Key Segment:

…”Europe clearly needs to reduce its dependence on Russia with respect to energy. But we need to be careful when we think about a complete European ban on say oil imports. We want to harm Russia – that would clearly raise global oil prices would have a damaging impact on Europe and other parts of the world. And counterintuitively it could actually have very little negative impact on Russia because although Russia might export less, its price for its exports would go up.”

The EU is already experiencing massive energy price increases.  Yesterday, Germany announced manufacturing price increases of more than 30% following increased energy costs exceeding 80%.  The current western government sanctions against Russia are hitting the EU economy harder than they are hurting Russia as alternative customers (India, China) for Russian energy exports are still purchasing.

In essence, the EU has partly removed themselves as a customer, but the seller, Russia, is still selling; only now they are getting higher prices because the EU and U.S. are disrupting oil and energy production in an effort to chase their climate change goals.

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The German government released their version of the producer price index for inflation, and they are reporting 30.9% inflation for products leaving German factories.  [DETAILS HERE] That’s the highest rate of inflation since shortly after the second world war.

The inflation rate is being driven mostly by energy costs which are more than 80% higher than last year.   However, each nation’s overall inflation rate is also driven by the amount of central bank spending they used during the COVID economic lockdowns.  The more any govt spent on subsidies, the more money they printed, the more they devalued their money and subsequently, the higher their current rate of inflation.

Germany is the largest economy in the European Union.  This level of inflation within Germany has major ramifications.

First, with this level of energy inflation Germany cannot afford to stop purchasing Russian energy products.  There’s no way for Germany to join or increase western sanctions against oil and gas they need to stay sufficient.  Germany is dependent on Russian energy.

Second, with Germany’s economy this vulnerable; and with Germany being so dependent on Russian energy; Germany will have to distance itself further from any Ukraine assistance.   In the background of western voices already being upset with Germany for not providing more support for Ukraine, their economic vulnerability explains their unwillingness.   The U.S. proxy war against Russia does not benefit Germany, at all.

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Lots of people talk about an inflation driven recession.  Essentially, that’s a total economic contraction in the value of goods and services produced, sold and purchased, due to rising prices.   However, as CTH has been pointing out for more than six months, if you subtract the federal COVID infusion money from the overall economy, we have been in a contracting demand economy for almost nine months.

A negative GDP outcome is quite possible, perhaps likely, when the first quarter GDP figures are released on the last Friday of this month.  The most recent sales and economic data shows that U.S. consumers are prioritizing spending and high priced durable good sales are negative.

Now, Fannie Mae is delivering a rather stunning shift in their economic forecast.  In addition to projecting a recession for 2023, these revised home purchase figures are remarkable:

...”We have downgraded our total home sales forecast for 2022 to a decline of 7.4 percent (previously a 4.1 percent decline) followed by a decrease of 9.7 percent in 2023 (previously a 2.7 percent decline).” (link)

That is a very significant change in home sales forecast to the negative position.

We already have serious energy inflation to contend with and low wage growth.  We already know a third inflation wave on highly consumable goods is coming this summer, likely around 30% or more in food prices at the grocery store.

The professional forecasts are always tilted toward the positive for this administration, so this new statement by Fannie Mae should be considered accordingly.  Remember, Boy Scouts motto.

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This Sunday segment from CBS’s Margaret Brennan allows us to watch narrative engineering in real time.  During a segment outlining the reasons behind the major economic issues American’s are feeling, CBS notes everything except the reason the economy is struggling.  It really is quite a remarkable example of professional gaslighting.

Watch the segment, note the inflation crisis has been underway for more than 18 months, and notice how many justifications are made-up illusions. (1) A Texas-Mexico cargo checkpoint issue that started less than a week ago; (2) Trucker shortages; (3) Ukraine-Russia which started only 6 weeks ago; and (4) Pandemic lockdowns, now causing an excess in demand.  None of these issues are even close to the source of the issue.

The two major drivers of inflation are both Biden policy issues.  (1) Extreme federal government spending and the Fed purchasing debt. (2) The shutting down of U.S. energy development (pipelines closed or blocked, oil leases cancelled, permits pulled and refinery permits cancelled).  All of this is Joe Biden policy.

On the restaurant pricing side, and likely restaurants soon to close, I would note the CTH outline from a few days ago:

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This is layers of odd.  As many readers are aware, the prices of fertilizer have skyrocketed as supplies have been heavily impacted by increased energy costs and supply chain issues.  Many people have worried if a shortage of fertilizer may impact farm yields this year.

Against this backdrop CF Industries, one of the world’s largest manufacturers of hydrogen and nitrogen fertilizer, is warning its customers that Union Pacific Railway Lines is now restricting the amount of container tonnage they will permit.  [Press Release Here]

CF Industries Holdings, Inc. (NYSE: CF), a leading global manufacturer of hydrogen and nitrogen products, today informed customers it serves by Union Pacific rail lines that railroad-mandated shipping reductions would result in nitrogen fertilizer shipment delays during the spring application season and that it would be unable to accept new rail sales involving Union Pacific for the foreseeable future. The Company understands that it is one of only 30 companies to face these restrictions.

CF Industries ships to customers via Union Pacific rail lines primarily from its Donaldsonville Complex in Louisiana and its Port Neal Complex in Iowa. The rail lines serve key agricultural areas such as Iowa, Illinois, Kansas, Nebraska, Texas and California.

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One week from tomorrow the presidential election in France will be decided.  Polls put the race between Marine Le Pen and Emmanuel Macron in a statistical dead heat, and combined with the recent Hungary election outcome – that has many bureaucrats in the EU very twitchy.

No doubt this race would have major ramifications if Marine Le Pen could end up victorious.  Factually, the Western alliance military operation in Ukraine could fundamentally change.  A post-COVID shift toward increased nationalism in France and the European Union would be very problematic for the forward plans of the professional political class and corporate globalists.

ASSOCIATED PRESS – […] If Macron falters in France’s April 24 presidential runoff between the two, the far-right could be at the helm of the European Union, an abhorrent idea to most leaders in the bloc.

Experts say a win for Le Pen would have immense repercussions on the functioning of the EU. Not only would her coming to power damage the democratic values and commercial rules of the bloc, but it would also threaten the EU’s common front and sanctions in response to Russia’s war in Ukraine.

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