Vilify, Marginalize and Nullify

I am still on the road, so the contents of this blog will be brief. This passage is a continuation of the previous blog’s theme of defensive measures in times of turbulence and chaos. We talked about the paramount importance of a body armor of truth. Alexander Solzhenitsyn has elegantly explained that falsehood and violence always goes hand in hand. (Fig. 1).

When we are being viciously attacked by lies and accusations, sooner or later violence will arrive at our gates. It seems an adversary’s attack always come in 3 stages: vilify, marginalize and nullify.

(i) Vilify - speak or write about in an abusively disparaging manner. If the adversary’s attack is based on falsehood then you know the next stage will be even more damaging.

(ii) Marginalize - treated as insignificant or peripheral, be unfriended. Economic sanctions, isolation and encirclement tends to weaken one’s ability to defend.

(iii) Nullify - make of no use or value; cancel out, subdue or exterminate. The final step of destruction whether by colour revolution to foment a failed state or by armed invasion.

At the 14th China People’s Congress, Xi expressed no illusions about the foregoing first two steps taken by the Anglo American Empire against China. Step 3 would also be within sight, hence China will be migrating into a war economy footing. But before an actual kinetic war to begin, there are still defensive posture one can take to mitigate the effects of vilification and marginalization. In very broad terms, the defensive measure is “Righteousness” for “righteousness” is to become “blameless”. (Fig. 2)

 Righteousness must be acted out in “truth” meaning words and actions need to be in sync. In big contrast, the Nazi approach is “große Lüge” (Big Lie). (Fig. 3)

Yes, Adolf Hitler has a certain level of success in the beginning but without a “Mandate from Heaven’, the final outcome is certain doom. For us to be able to stand firm in times of turbulence and chaos, we must have discernment as to who is on the side of truth and who is “righteous”. However, it is much easier said than done because people’s standard not only varies but in fact in actual decline. If we stand back and take a harsh look at the Western societal values, my previous statement is not in exaggeration. Therefore if our standard of truth and righteousness is constrained by a few rules within consensus, consistency, coherence and pragmatism then I am sorry to say, your data universe will be too narrow to be fool proof.

Edmund Burke said “The only thing necessary for the triumph of evil is for good men to do nothing.” (Fig. 4).

The golden standard in the bible takes one step further. James 4:17 “Therefore, to him who knows to do good and does not do it, to him it is sin.” Some countries talk a good talk, others are doing good deeds without fanfare. Guess who has the “Mandate from Heaven”.

 This week, all eyes in the financial market were focused on Fed Chairman Powell’s congressional hearing. No sooner was the hawkish interest rate policy statement delivered, the Silicon Valley Bank (“SVB”) collapsed. The failure of SVB laid squarely at the inept of the Federal Reserve because SVB did not fail because of bad loan losses but losses on having invested in Federal and Agency long dated papers and got wiped out by the interest rate hike tsunami. There are numerous mid tier US banks in similar situations. For a Central Bank that could not detect the sub-prime fiasco, that kept on printing money and mistaken inflation as transitory and lately could not decipher fake January employment and retail sales as representative of a strong US economy, we all should take their decrees as contrarian indicators.

Fig. 5 shows US had been in Yield Curve inversion for 248 days, that the US banking system is now in trouble is a no-brainer.

Having a prolonged ultra low interest environment, the pension and insurance system is similarly in trouble. (Fig. 6, the mean YR10 yield is 6.05% and since July 2000, US has consistently underpaid a fair interest for its indebtedness through rate suppression and destabilization of other economies. In all probability as US Inc. weakens, a reversion to mean will happen.)

Compounding the fixed income market catastrophe is unrealistic stock market valuation, and unsustainable Federal and Municipal debt, a perfect financial storm has arrived. What separates chaos and a functioning society is as thin as the reassuring babble of clueless politicians and bureaucrats. What causes breakdowns are continuous broken promises. I apologize for the punch line, NATO countries will fail one by one because NATO is an acronym for “No Action Talk Only”. Next week if the Federal Reserve would not move fast to stabilize the financial markets, a contagion would likely develop with a severity much more intense than the Lehman event. As I write this passage, short sellers are lining up to attack the US banking sector. We expect hyperinflation through Central Bank currency debauchery will officially enter the fray at the opening bells on Monday. For student of biblical prophecy, this look like a clear sign for the third seal.

Revelation 6:5  When He opened the third seal, I heard the third living creature say, "Come and see." So I looked, and behold, a black horse, and he who sat on it had a pair of scales in his hand. 6  And I heard a voice in the midst of the four living creatures saying, "A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not harm the oil and the wine."