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The Organization for Economic Co-operation and Development (OECD) released its quarterly report Tuesday and warned about increasing inflation risks for the next two years as the growth rate of the economic recovery has stalled.

“The economic impact of the Delta variant has so far been relatively mild in countries with high vaccination rates, but has lowered near-term momentum elsewhere and added to pressures on global supply chains and costs,” the Paris-based research body wrote, adding that “inflation has risen sharply in the United States, Canada, the United Kingdom, and some emerging-market economies, but remains relatively low in many other advanced economies, particularly in Europe and Asia.” 

The OECD expects price increases in 2021 and 2022 above its previously forecast for G20 countries. 

Laurence Boone, the OECD chief economist, said taming inflation would be a juggling act for policymakers. 

“The speed of the recovery has increased inflationary pressures, quickly pushing up prices to where we expected them to be before the pandemic,” the OECD said. “Policymakers in advanced economies should monitor these developments without delay.”

The OECD’s forecast expects G20 inflation at 3.7% in 2021 and 3.9% in 2022. It also expects US inflation pressures to subside next year but be well above 3%. 

“Inflation is expected to settle at a level above the average rates seen prior to the pandemic,” the OECD said. “This is welcome after many years of below-target inflation outcomes, but it also points to potential risks.” 

The revised outlook was released ahead of the Federal Reserve Chair Jerome Powell’s press conference today after the two-day meeting. Investors are eagerly awaiting the Fed’s decision to taper monetary policy. 

According to the OECD, global growth has lost momentum due to uneven economic growth – in return, this forced the research body to slash the global growth forecast for 2021 to 5.7% from 5.8%.

“Sizable uncertainty remains,” it said. “Faster progress in vaccine deployment or a sharper rundown of household savings would enhance demand and lower unemployment but also potentially push up near-term inflationary pressures.”

The question we have is if Powell’s “transitory” inflation narrative is falling apart at the seams, as US CEOs warned last week at the annual Morgan Stanley Laguna conference about “unprecedented” inflation becoming “structural.” 

DoubleLine Founder Jeffrey Gundlach told investors in a webcast last week that he doesn’t believe the history books will say inflation was transitory. 

The macro backdrop is starting to look like growth rates are decreasing, but inflation is either persistent or rising, an ominous sign of stagflation.

Authored by Julie Kelly via American Greatness (emphasis ours),

The incurable incompetence, corruption, and moral rot of the Federal Bureau of Investigation was on full display last week.

Within a 24-hour period, some of America’s toughest female athletes recounted to a Senate committee their painful tales of how the FBI ignored evidence that team doctor Larry Nassar was a sexual predator, and a powerful attorney who colluded with the FBI to concoct one of the most animating chapters of the Trump-Russia collusion fiction was indicted for lying to federal officials.

Overlap in the two cases is more than ironic, it’s illustrative: Michael Sussman, a lawyer for Perkins Coie, the law firm that was working on behalf of the Hillary Clinton campaign, met with the FBI’s general counsel in September 2016 to plant a false story about Donald Trump’s financial ties to a Russian bank. That same month, the Indianapolis Star broke the story of how Nassar, the longtime physician for the USA Gymnastics team, had sexually abused several female gymnasts. One victim filed a lawsuit after the FBI refused to investigate complaints made to at least two FBI field offices in 2015 and 2016.

But the FBI at that time was too preoccupied with protecting Hillary Clinton to deal with a monster who had systematically raped nearly 300 female American athletes. (As Lee Smith recently noted, the FBI “has been used for a quarter of a century as the place to clean up the Clintons’ dirt.”)

Months before the 2016 presidential election, the FBI, led by James Comey, used its unchecked authority to sabotage Donald Trump. Meanwhile, elite American athletes, including Olympic gold medalists, could not get the bureau’s attention while a sexual abuser continued his rampage. Local FBI agents passed the buck and allegedly falsified reports; one agent reportedly tried to shake down a USA Gymnastics official for a job with the organization.

The FBI’s political game-playing came with irreversible human cost. According to an analysis by the New York Times, at least 40 women and girls, including some of the youngest victims, were assaulted by Nassar between July 2015, the first contact with the FBI, and September 2016. Had the Star not published its exposé of Nassar that month, which finally prompted some action by the FBI, who knows how long his depraved predation would have continued?

“If they’re not going to protect me, I want to know, who are they trying to protect?” McKayla Maroney, a two-time Olympic medalist and one of Nassar’s most frequent victims, asked the Senate Judiciary Committee on September 15.

Maroney may or may not be surprised to learn the agency assigned with protecting the most vulnerable is actually in the business of protecting the most powerful.

Nasser Was Not an Outlier

FBI Director Christopher Wray, hired by President Trump in 2017, publicly apologized. The “fundamental errors” made in the Nassar case, Wray told the judiciary committee, would not happen again as long as he’s head of the agency. “I want to make sure the American people know that the reprehensible conduct . . . is not representative of the work that I see from our 37,000 folks every day.” The rank-and-file, Wray insisted, perform their jobs with “uncompromising integrity.”

But Wray is wrong to claim that the Nassar case is an outlier. From the top of the command chain down, the FBI has trashed its reputation through a series of scandals. It’s not just the alarming texts between spousal cheats Peter Strzok and Lisa Page; the ambush of Lt. General Michael Flynn in the White House; Comey’s use of the shady Steele dossier to set up Donald Trump; or Andrew McCabe’s lies to his own FBI investigators.

It’s not just the other set of “errors”—17 to be exact—found in the FBI’s four unlawful FISA applications on former Trump campaign adviser Carter Page. Or the official email doctored by a top FBI lawyer cited as evidence on one of the applications. Or the fact that no one in the agency has gone to jail for perpetrating one of the greatest frauds in history on the American people.

As seen in the alleged plot to kidnap Michigan Governor Gretchen Whitmer, lowlifes populate the FBI’s rank-and-file. Richard Trask, the special agent in charge of the investigation, was arrested in July for physically assaulting and choking his wife after attending a swinger’s party. Trask was fired this month; he faces numerous criminal charges. Prosecutors decided not to use Trask as a witness after his social media account revealed numerous anti-Trump posts, including calling the president a “piece of shit.”

Defense attorneys in the Whitmer case asked the judge to delay trial for 90 days as they investigate the conduct of at least a dozen other FBI agents involved in the conspiracy. The FBI gave one informant $24,000 and a new car for his services.

Wray brags that every FBI field office is participating in the Justice Department’s “unprecedented” investigation into the breach of the Capitol. But reports of how his agents have handled more than 600 arrests do little to support Wray’s assurances of professional “integrity.” Defendants have been subjected to pre-dawn raids conducted by dozens of armed agents using military-style vehicles. I spoke with the spouse of one defendant who told me agents interrogated her about what cable news channel she watched, her views on illegal immigrantion, and who she voted for in 2020.

The FBI raided the home of an Alaska couple then handcuffed and interrogated them in separate rooms for hours until investigators realized they had the wrong suspects. A 69-year-old man in New York City suffered a heart attack as FBI agents raided his apartment with a television news crew standing by; the man never was charged. FBI agents arrested a Florida man in front of his wife and young daughter, who asked why officers were “locking daddy’s hands.” Casey Cusick was charged only with misdemeanors for entering the Capitol on January 6.

Agents seized as evidence a Lego set of the Capitol building during the raid of Robert Morss, an Army ranger with three tours in Afghanistan. Far from nefarious intent, Morss had the Lego set to use with his students as a substitute high school history teacher. (He was fired after his arrest.)

And those are just a few stories.

No Accountability

Wray picked up where Comey left off, allowing his agency to be part of Democratic Party political spin. He recently issued a “threat assessment” on QAnon and disclosed that the FBI so far has arrested at least 20 “self-styled QAnon adherents” related to the Capitol breach investigation. Wray designated January 6 as an act of “domestic terror” and his agency regularly tweets out the faces of “most wanted” Trump supporters who were at the Capitol on January 6.

Infuriatingly, Wray fired only one agent involved in the Nassar fiasco—and the man was fired the week before the Senate hearing, six years after he first interviewed Maroney. “Someone perhaps more cynical than I would conclude it was this hearing here staring the FBI in the face that prompted that action,” Senator Richard Blumenthal (D-Conn.) said to Wray.

But what ails the FBI cannot be solved with a few firings. It cannot be solved with more congressional oversight or threats to cut federal funding. The moral rot that infects the agency from top to bottom renders the agency unsalvageable. 

“This conduct by these FBI agents . . . who are expected to protect the public is unacceptable, disgusting, and shameful,” Maggie Nichols, the gymnast who first reported Nassar’s crimes to the FBI, told the committee.

Her description, however, applies to the entire FBI—an institution with no shame, no remorse, and no accountability. There’s no fix for that.

*  *  *

About Julie Kelly

Julie Kelly is a political commentator and senior contributor to American Greatness. She is the author of Disloyal Opposition: How the NeverTrump Right Tried―And Failed―To Take Down the President.

Shortly before two Evergrande creditors confirmed to Bloomberg (under the guise of anonymity) that the Chinese developer-giant had missed bond payments due Monday, Hayman Capital founder Kyle Bass returned to CNBC for an interview Tuesday morning for a telephone discussion with CNBC’s Joe Kernen to discuss the toxic Chinese economy and its unsustainable debt pile.

Bass, one of the most vocal China hawks on Wall Street, has said it’s important to understand what, exactly, President Xi is looking for. According to Bass, China is “experiencing similar problems that we are in the US” when it comes to housing prices.

Xi has been managing a broad-based crackdown on the Chinese economy all summer. Now, it’s time to confront the issue

Now, China is entering this period of weakness with over $50 trillion worth of credit in their system, with their annual GDP at around $15 trillion.

Compared with China, the US had GDP of $17 trillion with another $12 trillion off-balance-sheet when Lehman collapsed. China is at 3.6x ahead of its “Lehman moment”, while the US was only about 1.7x.

What’s more, China is still a relative newcomer to the capital markets business, Bass said. China adopted a western-style financial system in 2001 after they joined the WTO.

Around the same time, Beijing’s population-control policies started to really bite, as China saw its birth rate dwindle.

There are now 1.3 births per woman in China and you need to be at 2.1 to actually just sustain your population, Bass said. So for many working-age Chinese males, population dynamics are at a critical level and the reason being is the Chinese men can’t afford houses so they’re all living with their parents and the fact that Evergrande went on a credit binge and built all of the housing and Chinese property took off because their central bank continued to print so much money. Now, it’s trying to rein in property prices and he’s trying to do it as quickly as possible because China’s on an unsustainable path lower.

“Right now,” Bass says, everyone who believes China’s going to grow at 6% a year ad infinitum “is just dead wrong,” but if we just divorce ourselves from any value judgments about China and think about the the future of the plan of the globe – if we always think about the Chinese consumer and we all at one point wanted to move forward in a symbiotic way where we sell things to China, and their consumers buy things from us.

It’s nice to think about, but this unfortunately just isn’t how China works. Investors must realize that they’re not investing  “in a real market.”

Bass added: “You still have an economy with a closed capital account they have one-way capital flows dollars in. Now, imagine if dollars start heading out.”

Watch most of the interview below:

By Peter Adams of Restaurant Dive,

Summary

• Subway recorded its highest August sales since 2013 on the tails of rolling out a brand refresh campaign, according to an announcement.

• The “Eat Fresh Refresh” initiative launched on July 13 represents the largest changes to Subway’s menu in company history with over 20 updates, as well as renewed commitments to digital technology. Total sales at U.S. restaurants were up 4% in August compared to 2019 figures, with Subway’s top-performing quartile — a group representing over 5,000 store locations — seeing transactions up 33% versus two years ago.

• The sandwich chain now expects to surpass its 2021 sales plan by more than $1 billion, a needed boost after standing as a laggard in the category. But Subway is still contending with headwinds, including recent tensions around its pick of brand ambassadors.

Subway is drawing a direct link between the “Eat Fresh Refresh” strategy and a sales boost in the summer period, including its highest weekly average unit volume transactions in eight years. The planned multiyear overhaul touches across the chain’s business, with a menu makeover consisting of 11 new and improved ingredients, six new or returning sandwiches and four revamped signature sandwiches. The brand at the same time is remodeling stores and introducing an updated visual identity, along with putting larger priority on digital capabilities that have become must-haves for restaurants during the pandemic, with adjustments to its ordering platform and the debut of a direct delivery service.

Changes on the operational side of the business are complemented by what the company has billed as a “never-ending” marketing campaign. Subway tapped a roster of celebrity athletes such as Serena Williams, Tom Brady, Steph Curry and Megan Rapinoe to promote the retooling to consumers. A series of TV ads titled “It’s Too Much for One Spokesperson” pokes fun at the scale of the campaign, with ambassadors stepping on each others’ lines.

The effort also encompasses hundreds of new pieces of digital and social creative, in-store and print elements. Subway’s marketing is overseen by Carrie Walsh, who was appointed CMO in 2019 after stints at Pizza Hut and PepsiCo.

Subway suggested that consumers have generally been receptive to the revamp. In a survey of 66,000 customers, 83% reported enjoying the menu updates, per the announcement.

“We are getting an extremely positive reaction from our guests regarding all that is new at Subway,” said David Liseno, a multiunit franchisee in Central New York State, in a press statement.

Some research has uncovered pushback against Subway’s spokespeople. An August survey by Piplsay revealed nearly half (45%) of U.S. consumers said Subway should drop Rapinoe, an outspoken member of the United States women’s national soccer team. Rapinoe generated outcry over her decision to kneel during the Tokyo Olympics as a protest against racism.

Google plans to purchase a Manhattan office building for $2.1 billion, the most expensive for any single US office building since the virus pandemic began, according to WSJ. 

The deal for the St. John’s Terminal building in the Hudson Square neighborhood of Manhattan comes as the tech giant already leases the building and plans to exercise the option to buy in the first quarter of 2022. 

The plans add to Google’s massive footprint in Manhattan. The company previously announced it would invest $250 million into the metro area to expand its headcount from 12,000 to 14,000 over the next few years.

“Our decision to exercise our option to purchase St. John’s Terminal further builds upon our existing plans to invest more than $250 million this year in our New York campus presence. It is also an important part of meeting our previously announced racial equity commitments, which include continuing to grow our workforce in diverse communities like New York,” Google said in a blog post. 

The site will be Google’s most prominent office outside of California, coming in at 1.7 million square feet. The deal is a positive sign for commercial real estate in the metro area, beaten down during the virus pandemic. Still, most of the company’s workforce remains remote and may not return to the office until January. 

Google also seems unphased by the real estate turmoil in China, where the possible default of the country’s largest property developer, Evergrande, could be imminent and ripple through property markets. 

Authored by Pat Buchanan,

In a diplomatic coup, Prime Minister Scott Morrison announced a deal last week with the U.K. and U.S. to have those Anglo-American allies help build a nuclear-powered submarine fleet for Australia.

A $66 billion French deal to provide Canberra with diesel electric-powered submarines, among the largest defense contracts Paris had ever negotiated, was blown off.

“A stab in the back!” said Foreign Minister Jean-Yves Le Drian, who had been kept in the dark on the secret talks.

“There has been duplicity, contempt and lies.” Le Drian compared President Joe Biden to former President Donald Trump.

President Emmanuel Macron recalled his ambassadors to both the U.S. and Australia. In two centuries of U.S.-French diplomatic relations, no such recall had ever occurred.

What does this Australia First submarine deal mean?

Canberra, which has sought to steer a middle course between its great customer China and its great ally America, is coming down on the side of the Americans in the rising great-power quarrel.

This “AUKUS” partnership, says Beijing, will “severely damage” peace and stability in the Indo-Pacific, and Beijing is demanding to know whether Australia regards China as a “partner or a threat.”

This new clash comes as China is using its military to speak for its claims to islands and islets hundreds of miles off its coast.

Several Chinese claims collide directly with the territorial claims of neighbors who are longtime U.S. treaty allies for whose territory we are committed to fight.

China claims, for example, the Paracel and Spratly Islands and almost all of the rocks and reefs in the South China Sea, many of which are within territorial waters claimed by Vietnam, Malaysia, Singapore, Indonesia, Brunei, the Philippines and Taiwan.

China also claims Taiwan itself, 110 miles off its coast, as well as the nearby Senkaku Islands, which Japan controls and for which Tokyo appears to be preparing to fight. A Chinese-Japanese clash over the Senkakus, the Biden administration has said, will bring the U.S. in on the side of Japan.

In a recent CNN interview, Japan’s Defense Minister Nobuo Kishi said the Senkakus would be defended as Japanese national territory.

And Japan has been expanding its Self-Defense Forces, adding the latest U.S. F-35 fighters, converting warships into aircraft carriers, and building new destroyers, submarines and missiles.

Earlier this year, the Biden State Department said the U.S.-Japan security treaty covers the Senkakus and our Philippines security treaty covers Manila’s claims to Chinese-occupied islets in the South China Sea.

Message: If Manila chooses to fight to retrieve its islets from Chinese occupation and control, America will fight on Manila’s side.

Still, China has yet to back down from any of its claims.

It has sailed warships and planes to hassle U.S. and allied ships and planes in the South China and East China Seas and sent fleets of bombers and fighters into airspace on Taiwan’s side of the Taiwan Strait.

To prevent Taiwan’s independence, Beijing has said, it will fight.

Should fighting break out between China and the U.S. over these claims, the war would be about islands that are thousands of miles from our West Coast but within a few hundred miles of the China coast.

Other East Asian nations are also communicating their interests and intent through military demonstrations.

After claiming to have tested a new long-range cruise missile, North Korea last week tested two ballistic missiles. At that same time, South Korea was testing its own submarine-launched ballistic missile, becoming the first country without nuclear weapons to do so.

This past summer, there were reports that Pyongyang had restarted a reactor in its main nuclear complex at Yongbyon, suggesting that Kim Jong Un may be ramping up his nuclear weapons program.

And, regularly now, U.S. planes stationed in Alaska scramble to intercept Russian military aircraft. This year, the number of intercepts, 14, is on pace to set a record since the Cold War. In the most recent case, two Russian bombers and two fighters came within 30 miles of the Alaskan coast.

This summer, Russian naval vessels came within 34 miles of Hawaii.

Russian ships and planes off Alaska are perhaps responding to U.S. warships and planes in the Black Sea.

World War II began in Europe when the British, Sept. 3, 1939, declared war on Germany over its invasion of Poland to retrieve what Berlin claimed were its territories, including Danzig, taken from Germany at Versailles against the will of the people of Danzig and in violation of their right of self-determination.

If World War III breaks out between China and the U.S., it is likely to be over islands of Asia claimed by China, with the U.S. fighting not for its own territory but for the island territory of allies, probably islands in no way vital to the security of the United States.

Which is how world powers often end their days as world powers, fighting unnecessary wars on behalf of other nations.

The new book “Peril” written by well-known Washington Post journalists Bob Woodward and Robert Costa has for the first time revealed details of a confrontational follow-up exchange between Presidents Biden and Putin over Biden’s prior “killer” remarks.

The controversy stemmed from a Biden interview with ABC’s George Stephanopoulos within the opening months of his presidency last spring.

EXCLUSIVE: Pres. Biden told @GStephanopoulos that he agreed Russian President Vladimir Putin is a “killer” and will “pay a price” for interfering in U.S. elections. https://t.co/rIe2ms8sSv pic.twitter.com/VtAGCvF9hp

— Good Morning America (@GMA) March 17, 2021

Biden was talking getting “tough” on Russia as a way of supposedly distancing himself from Trump’s foreign policy, coming after years of the incessant drumbeat of the failed ‘Russiagate’ narrative.

Recall that Biden had agreed that Putin is a “killer” when asked by Stephanopoulos in the televised interview…

Asked whether he believes Mr Putin is a “killer” in the ABC interview, the president responded: “I do.”

“The price he’s going to pay, you’ll see shortly,” he said.

Mr Biden recalled meeting Mr Putin, during which he reportedly told him that he “doesn’t have a soul”: “I wasn’t being a wise guy.” “He looked back at me and said, ‘We understand each other’,” Mr Biden said.

Biden having called the head of state of a major global power a “killer” immediately drove world headlines, and was a featured talking point among pundits going into the tense Biden-Putin summit held in Geneva on June 16.

The Woodward and Costa book has divulged the contents of an April 13 phone call which came weeks after the March interview. That’s when Putin called the US president out on the matter:

“I’m upset you called me a killer,” Putin said to Biden…

Biden told Putin his comment, made in a March 16 interview with ABC News’ George Stephanopoulos, was “not something premeditated,” according to the book.

“I was asked a question. I gave an answer. It was an interview on a totally different topic,” Biden said, before he invited Putin to meet with him in person.

Prior to this newly revealed exchange, Putin had publicly responded to the insult in television remarks, saying…

“It takes one to know one,” Putin said in televised remarks, using a saying from his childhood.

“That’s not just a children’s saying and a joke. There’s a deep psychological meaning in this.”

“We always see in another person our own qualities and think that he is the same as us.”

Putin added that he wished Biden, 78, good health. “I’m saying this without irony, not as a joke.”

It’s unclear whether Putin was satisfied with Biden’s direct explanation in the April 13 phone call. Biden didn’t apologize, but seemed to back off the comments a little by blaming the unscripted interview question. 

The June summit was cordial and conciliatory between the two leaders, however it became clear that the press pool was looking to bait the leaders into condemning the other – which led to Biden himself venting in frustration and lashing out at an American reporter at one point in the aftermath.

In his first ever address to the United Nations General Assembly since taking office on Tuesday, Biden pledged that “We are not seeking the new Cold War, or the world divided into rigid blocks,” in what observers took to be a clear reference to China tensions. “The United States is ready to work with any nation that steps up, that pursues peaceful resolution to shared challenges, even if we have intense disagreement to shared challenges, because we will all suffer the consequences of our failures if we don’t come together to tackle COVID-19, climate change or threats like nuclear proliferation,” he said.

Is was a speech peppered with his ‘America is back’ message as a force for good on the world stage. He said the US intends to “lead on all of the greatest challenges of our time” while maintaining close relations with allies. Looming over everything, however, is a greater US confrontational posture with China. This prompted UN Secretary-General Antonio Guterres in his remarks to decry an increasingly divided world while making a plea for dialogue between Washington and Beijing.

“I fear our world is creeping towards two different sets of economic, trade, financial and technology rules, two divergent approaches in the development of artificial intelligence – and ultimately two different military and geopolitical strategies,” Guterres said upon his opening the annual UN General Assembly.

“This is a recipe for trouble. It would be far less predictable than the Cold War. To restore trust and inspire hope, we need cooperation,” he added. “We need dialogue. We need understanding.”

Hinting at divided approaches to geopolitical hotspots and ongoing humanitarian crises brought on by instability, coups and military interventions, he called for the restoration of trust and cooperation among nations:

“We are also seeing an explosion in seizures of power by force. Military coups are back. The lack of unity among the international community does not help,” Guterres said.

“Geopolitical divisions are undermining international cooperation and limiting the capacity of the Security Council to take the necessary decisions.”

On the issue of the continued crisis in Afghanistan, where China is poised to be a major investor in cooperation with the Taliban government after the US retreated from the theater, Biden in his speech said his decision to pull troops out and end the war signaled that the “era of relentless war is over”:

“US military power must be our tool of last resort, not our first, and should not be used as an answer to every problem we see around the world,” Biden said. “Bombs and bullets cannot defend against COVID-19 or its future variants.”

He pledged to devote US resources not to fighting “the wars of the past,” but to the challenges “that hold the keys to our collective futures.”

China’s President Xi Jinping will also address the UN assembly, but via video link. It’s expected that Xi will continue with his recent rhetoric emphasizing that the globe must reject “unilateralism pursued by certain countries.” 

For example last spring at an address before a major pan-Asia economic forum, Xi stressed that “International affairs should be handled by everyone through consultation.” He said, “Rules made by one or more countries should not be forced upon others.”