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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Loretta Mester, the president and CEO of the Federal Reserve Bank of Cleveland, appears on CBS Face the Nation to discuss inflation, the economy and monetary policy.  Ms Mester is in a tough place, because she cannot admit the influence of federal monetary policy is far outmatched in the era where Joe Biden energy policy is limiting oil and gas development and creating massive inflation.

Mester does admit the supply chain crisis will extend well into 2023, but blows hopeful unicorn wishes by projecting that price inflation will temper by the end of this year.  From the perspective that 20 to 50% price increases on critical goods (housing, food, fuel, energy) are unsustainable in repeated cycles, she is correct; the rate of inflation will lower. However, that’s only because the baseline prices will have increased so high the rate of increase measure falls.  WATCH:

A $4 item that gains a $2 increase holds a 50% rate of inflation.  The next year that $6 item again has a $2 increase, but the rate of inflation drops to 33%.  The price increase is the same, but the rate of inflation drops.  That’s what is going to happen in the second half of this year.  FUBAR

The White House is doing this on purpose in order to chase their ideological dreams of sustainable energy and climate change.  Energy prices underline the entire economy, because oil and gas prices touch everything.  Insofar as they continue the war against coal, oil and gasoline, there’s nothing monetary policy can do to combat inflation.  The Fed must however, pretend not to know things.

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This is not some grand conspiracy, ‘out there‘ deep geopolitical possibility, or foreboding likelihood as an outcome of short-sighted western emotion.  No, this is just a predictable outcome from western created events that pushed specific countries to a natural conclusion based on their best interests.

You can debate the motives of the western leaders who structured the sanctions against Russia, and whether they knew the outcome would happen as a consequence of their effort, but the outcome was never really in doubt.  Personally, I believe this outcome is what the west intended. The people inside the World Economic Forum are not stupid – ideological, yes, but not stupid. They knew this would happen.

The finance ministers of the BRICS alliance (Brazil, Russia, India, China and South Africa) have decided to create their own financial mechanisms to continue trade between nations of similar disposition.  Once the internal issues inside the BRICS alliance are resolved, and once the mechanisms are created, then other nations will be able to decide to join or not.  The great global cleaving will commence.

(Reuters) – Russia, hit by Western sanctions, has called on the BRICS group of emerging economies to extend the use of national currencies and integrate payment systems, the finance ministry said on Saturday.

[…] On Friday, Finance Minister Anton Siluanov told a ministerial meeting with BRICS, which consists of Brazil, Russia, India, China and South Africa, that the global economic situation had worsened substantially due to the sanctions, the ministry’s statement said.

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The World Government Summit 2022 took place on March 29 and 30 in Dubai, hosting more than 4,000 individuals from 190 countries including senior government officials, heads of international organizations, and global “experts.”   The invited participants presented ideas and worldviews from within their various fields of specialty.

One presentation that needs to be highlighted was from Dr. Pippa Malmgren, an American economist who served as special advisor on Economic Policy to President George W. Bush.

Her father, Harald Malmgren, served as a senior aide to US Presidents John F. Kennedy, Lyndon B. Johnson, Richard Nixon, and Gerald Ford.   In this segment, Mrs. Malmgren says the quiet part out loud.  Yes, they are no longer hiding the construct; indeed, as you will hear they are saying quite openly what the future will look like.  WATCH (2 minutes):

[Full Source – 6 hours (internal segment at 18:30)]

Transcript – Dr. Malmgren: “What underpins a world order is always the financial system. I was very privileged. My father was an adviser to Nixon when they came off the gold standard in 71. And so, I was brought up with a kind of inside view of how very important the financial structure is to absolutely everything else.

And what we’re seeing in the world today, I think, is we are on the brink of a dramatic change where we are about to, and I’ll say this boldly, we’re about to abandon the traditional system of money and accounting and introduce a new one. And the new one. The new accounting is what we call blockchain.

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Something odd is happening in the background of the G7 energy ministers’ announcement earlier today.

Remember that moment {HERE} when Canada’s Deputy Prime Minister Chrystia Freeland seemed really uncomfortable and weird at the presser – just 36 hours before the Trudeau administration announced they were going to drop the Emergency Act banking sanctions against the truckers? {Go Deep}

Here is an encapsulation of what’s weird, and you don’t have to be an expert in geopolitics and international trade to see it:

The G7 countries (including the U.S.) announced today they were demanding that Russia accept payment for oil and gas in euros and dollars.  This is happening at the same time NATO is demanding (via sanctions) that Russia be blocked from accepting payments in euros and dollars.

Something is weird.  Keep in mind, the same nations in the G7 are the same nations in NATO with the exception of Japan (G7 only).

The only way this conflict could make any sense, is if the G7 energy ministers realize that forcing Russia to trade in non-euros and non-dollars will structurally undermine the G7 unilateral hold of global finance and energy policy.   In essence, the G7 see the non-sanction countries, particularly India and China, lining up to replace the petro-dollar, and that not only weakens their position financially, but it also weakens their climate change position.

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Behind the headline is a qualifier that most will miss. “We will urge the companies affected not to follow Putin’s demand.”  The problem for the G7 political leaders is that most of the transactions are between private companies.  The heads of the U.S, France, Germany, Italy, Japan, Canada and the U.K, can stake a position, but the ultimate decision around the transaction in the hands of the private company buyers.

Russia can set the terms.  Whether the G7 political leaders shout ‘breach of contract‘ is seemingly a moot point.  In the big picture, the politicians have already breached the terms of prior trade agreements with sanctions.  Russia can turn off the supply or demand payment in rubles as terms of sale.

BERLIN (AP) — The Group of Seven major economies agreed Monday to reject Moscow’s demand to pay for Russian natural gas exports in rubles.

German energy minister Robert Habeck told reporters that “all G-7 ministers agreed completely that this (would be) a one-sided and clear breach of the existing contracts” for natural gas, which is used to heat homes, generate electricity and power industry.

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An enterprising journalist from Bolivia [Twitter Link] mapped the countries that support the sanctions against Russia (yellow) versus the countries that are not participating in the western sanctions against Russia (grey).  The image provides a visual reference to consider our previous discussions about the cleaving of the global economy between two overarching ideologies.

[Source Credit]

In my estimation this intentional global cleaving, using the opportunity created by the Ukraine crisis, is going to be the major story of this year.  This global splitting can be looked at in multiple ways, but the overarching story is the ramifications of two global trade relationships.

The western alliance (in the yellow above), has forced the world to reevaluate the dollar as the global trade currency, by denying Russia and their trade partners the ability to use the financial mechanisms under western control. To work around the sanctions, Russia is working on new financial systems to sell oil and farm products in non-dollar currencies.  There is also a possibility the petro-dollar, for the global trade of oil, might be dropped.

Russia is part of OPEC.  While many countries develop their own resources, OPEC sells the majority of oil the rest of the world consumes as the basis for their economic engine.  One way to look at the global cleaving is to look at the way energy is viewed.

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The 40-year deindustrialization of America, and the subsequent destruction of jobs and the U.S. middle class, did not happen accidentally. It happened as an intentional outcome of selfish multinational business interests chasing profit, combined with the willingness of congress to accept bribes -via lobbying payments- in order to facilitative corporate greed.

The only disruption in the collective economic manipulation was the forced intermission by the American middle class when Donald J. Trump was elected.

President Trump’s tariffs, countervailing duties and protectionist policies against transnational dumping of steel and aluminum into the U.S. marketplace, was a major impediment to the corporate agenda, and it quickly resulted in the biggest economic resurgence in U.S. history.

As a result, people started demanding Congress take a new approach toward Chinese transnational shipping schemes as Beijing attempted to manipulate markets and avoid the Trump-era policies.   A few in Congress assembled legislation that would prevent companies from evading tariffs by rerouting their products through another country (i.e. transnational shipping).  That legislation has triggered the multinational business groups who are now lobbying congress to remove it.

The business groups opposed to the anti-dumping legislation are the same familiar voices who decry tariffs.  The U.S. Chamber of Commerce, the National Retail Federation and the usual list of lobbying interests are all lining up once again to demand the U.S. remains a ‘service driven economy’, so they can continue their business models and exploit the U.S. market while profiting from cheap imported goods.

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We could all see this coming.  The Ukraine-Russia conflict creates the opportunity for the Build Back Better initiatives to get triggered.  None of this is happening organically.  All of this is opportunism based on a series of dominos purposefully triggered.  Three government solutions to rising oil prices surface simultaneously in an effort to exploit the crisis they created.

Keep in mind, this economic roadmap was strategically outlined in the World Economic Forum “Build Back Better” initiative, and that was built upon the economic ‘climate change‘ opportunity that COVID-19 created.  The U.S. version of BBB was called the Green New Deal.

First, Biden proposes to trigger a useful “Climate Change Emergency” (LINK).  Second, the International Energy Agency proposes a “Ten Point Plan” to change energy use in the modern society (LINK).  Third, comes AOC and Bernie Sanders with the “Executive Action Agenda” (LINK).

All of this is the fundamental change represented by western government in the agenda of ‘building back better’.

(IEA) In the face of the emerging global energy crisis triggered by Russia’s invasion of Ukraine, practical actions by governments and citizens in advanced economies and beyond can achieve significant reductions in oil demand in a matter of months, reducing the risk of a major supply crunch, according to new analysis released by the International Energy Agency today.

These efforts would reduce the price pain being felt by consumers around the world, lessen the economic damage, shrink Russia’s hydrocarbon revenues, and help move oil demand towards a more sustainable pathway.

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When they say the quiet part out loud, pay attention.

…”the war may fundamentally alter the global economic and geopolitical order should energy trade shift, supply chains reconfigure, payment networks fragment, and countries rethink reserve currency holdings.”  (LINK)

The International Monetary Fund (IMF) is a global financial mechanism located in Washington DC.  According to the U.S. Treasury Department, “The IMF is an organization of 189 member countries that works to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth.”  Put in succinct terms, the IMF is the financial control mechanism for western government.

When the IMF starts saying the Ukraine conflict “may” trigger a new world order of global economic and financial systems, we should pay attention, because behind those statements is a reality that no one has mentioned yet.

Think of it this way… If Russia was to just simply withdraw from Ukraine, do you think the western financial sanctions and multinational corporations would just reverse themselves?   Of course not.  What was never mentioned in the sanction package, pushed by NATO and western alliances, was the no retreat Rubicon they created.  Removing Russia from the SWIFT financial exchange was/is irreversible; so too are the global banking sanctions triggered by political will.

What does that mean?  It means from these moments forward something else, some other form of financial transaction process, is going to be needed for Russia and their allies to engage in commerce, banking and economic activity together.  Russia, China, Iran, Saudi Arabia, India, Brazil and other nations are now in a position of being forced to create another mechanism for trade and commerce.

The petro-dollar may factually be dropped as a part of this.  The issue is not ‘if’ it will happen, the issues are how and when they will happen.  Vladimir Putin was pushed into this position by the western financial response, and don’t think for a moment that China and Russia are unhappy about it.

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