Good morning. Here’s your Early Warning for Monday, 14 June 2021.
TODAY’S BRIEFING:
- In Focus: BlackRock’s Landless Peasants
- Situational Awareness
- Far Left Activity Rollup & Outlook
- Upcoming Event Calendar
InFocus: BlackRock’s Landless Peasants
By now, you may have seen the latest uproar in the housing market: investment giant BlackRock and other large investment firms are buying up single family homes. In some instances, according to the Wall Street Journal, these giants are buying up entire communities of single family homes in anticipation of renting them to Millennials, many of whom prefer to rent rather than buy. There’s some truth there, given that Millennials are more prone to job hop and could be working in a new city or state later this year. Why buy?
The story reminded me of something I read recently in Jack Goldstone’s Revolution and Rebellion in the Early Modern World. Goldstone surveys state breakdown in several countries between 1600 and 1850. In one episode, Goldstone looks at 17th century England (Chapter 2).
The population of England more than doubled between 1500 and 1640. The landless peasant class grew from 11% of the population to 40% of the population by 1620. This was partially due to population growth — first born sons often inherited most or all of land holdings, leaving male siblings landless. During this time, landed gentry also evicted working peasants from the fields so their sheep could graze. Sir Thomas More observed that this was a time when “sheep ate man.”
Over the same time period, due to war spending and growing debt, the English fiscal situation grew so dire that the Crown had to sell off lands and possessions, take out loans, and depend on the patronage of a small aristocracy. Goldstone argues that population increase leads to state breakdown because larger populations lead to greater logistical load, greater stress on finite resources, food shortages, and higher prices/inflation. As a result of these factors, social cohesion eroded, spurring riots and revolts, intra-elite conflict among the landed gentry, and other forms of social unrest. By 1642, large swathes of the country had chosen sides in the English Civil War as two classes of elites fought for control of England.
The lead up to the English Civil War is an interesting analogy for what’s happening in the United States today. It’s not difficult to see some of the same trends at work. For instance, about 48% of Millennials own homes, the lowest rate of homeownership among all previous generations. 74% say that affordability puts homeownership beyond reach. Are roughly half of Millennials modern landless peasants?
Millennials have now lived through two financial crises — the 2008 crash in their formative economic years, and then the 2020-2021 pandemic shutdowns. As I wrote back in December 2018: During the next financial crisis, “Millennials and Generation Z are likely to experience a bottleneck in their formative economic years that will negatively impact their lifetime earnings, which will lower their lifetime savings and investments… That’s forming a long term trend likely to affect the social and political landscape for decades, although that warning is not quite as sharp as warnings of a Great Depression Redux or economic collapse.”
Ultimately, Goldstone blames the English Civil War on (1) “fiscal distress” of the English state, (2) “intraclass conflict” that pitted elites against each other, and (3) “the growth of popular disorders among the lower classes” which are described by another historian as “combustible.” Each of these factors is also exhibited in contemporary American society. In tomorrow’s InFocus, I’ll provide analysis of intra-elite conflict, which I believe is the most overlooked aspect of what’s happening in the U.S. today. – M.S.
SITUATIONAL AWARENESS
INFLATION: Bloomberg Economics’ latest forecast, built off a model from former Fed chair Ben Bernanke, shows that Consumer Price Index (CPI) inflation will end the year at 3.7%, but could range as high as 5%. The model challenges the Fed’s current “transitory” outlook on inflation. Keep in mind a few things. First, gas prices are likely to rise into next year. Second, a Bank of International Settlements study forecasts that ageing demographics will add about 3% inflation a year this decade. One of the impacts of the recession is that more Americans than expected are retiring, which will be inflationary according to BIS. And third, the Fed doesn’t expect to raise interest rates until 2024, and maybe later. If you’re not already, consider preparing for sustained inflation ahead. – M.S.
FOOD SUPPLY: Farmers and ranchers across the American West are facing water cutbacks due to ongoing drought conditions. For many farmers, a 10-25% reduction in irrigation water likely means laying fallow 10-25% of their arable land. Water shortages are expected to put upward pressure on food prices in the coming years, and could significantly impact hydroelectric power generation. – M.S.
THE FED: The Federal Reserve meets this week to discuss potential policy changes that include tapering asset purchases and raising interest rates. In an interview this morning, billionaire Paul Tudor Jones warned that inflation would likely persist and that the Fed’s policy changes could trigger a correction in stocks, and added to warnings that a wrong call here risks the Fed’s credibility among investors. “I think this Fed meeting could be the most important Fed meeting in Jay Powell’s career,” Jones said. I’ll have notes in this week’s Economic Early Warning report on Thursday. – M.S.
NATO: Following the G7 summit, NATO members meet today in Brussels and will continue addressing China. Despite persistent media focus on Russia, China is the number one strategic focus of the broader West. NATO is concerned with the economic coercion of African nations and expanded military cooperation between the Russians and China. Additional measures to address the growing Chinese presence in Africa are expected as US Defense officials express concern over port construction in Djibouti. “China does not share our values” NATO Secretary General Jens Stoltenberg said, although he stopped short of calling the communist nation an “enemy.”
AI NAVY: The Navy is expanding testing of AI-enabled autonomous vessels off the coast of California. The ships are designed to operate without constant human input, using sensors to compile data and complete navigation or logistics delivery tasks. The absence of underway crew would reduce manning requirements and, ideally, increase survivability in a conflict. Not much is known about the true purpose and capability of the vessels, however, as most other details remain classified.
DOWN UNDER: The US, Australia and others are conducting interoperability exercises in the Southern Pacific. Talisman Sabre is set to begin in July with reduced participation as Australia continues to implement strict pandemic control measures. The message to China from FVEYs participants, Japan and South Korea is one of unity and cohesion. The continued harassment of commercial vessels by state-backed Chinese flotillas will likely be a focus of the exercise.
HAZARDS WARNING
HURRICANE SEASON: The National Hurricane Center continues to monitor a number of systems in the Atlantic. Most pressing for this week is the system off the Bay of Campeche in Mexico as it makes its way north towards the Texas Gulf Coast.
LOW INTENSITY CONFLICT INTSUM
Far Left Activity Rollup & Outlook
Analyst Comment: Far Left activity remained moderate and violence was sporadic over the weekend. The direct actions planned by Antifa militants in Seattle, Washington and Portland, Oregon failed to materialize. Antifa militants were present at anti-law enforcement BLM demonstrations in Kansas City, Missouri and Los Angeles, California, but these events remained largely peaceful. Antifa groups in the Pacific Northwest are still likely suffering from shortages in manpower and resources following recent security breaches and arrests. They will likely concentrate limited resources for potential direct actions surrounding Juneteenth and the sentencing of Derek Chauvin later this month.
BLM activists are establishing no-go zones in New York City, New York and Minneapolis, Minnesota. Activists in New York continue to utilize Washington Square Park as a gathering point and point of resistance against the NYPD for ongoing “fire Artem” protests. In addition, they have begun to paint residents near the park as collaborators with law enforcement and demand they vacate their homes. Meanwhile, activists in Minneapolis are attempting to establish a no-go zone at the intersection where Winston Smith was killed in a police involved shooting recently. Far Left groups seek to establish areas like this to undermine the authority of the local government and evade surveillance or capture by law enforcement.
In addition, Far Left activists continue to organize Palestinian solidarity protests. “Block the Boat” organizers in Seattle, Washington are running alternating morning and evening shifts to block workers from reaching an Israeli Zim-operated ship harbored in the Port. They are vowing to maintain their presence and deny the ability of the ship to resume operations. – M.B.
PACIFIC
Seattle, Washington
Size: Approximately 100 on foot
Activity: Far Left activists with the Arab Resource & Organizing Center (AROC) organized a “Block the Boat” Palestinian solidarity protest. According to reports, the event remained peaceful.
Location: Port of Seattle, Terminal 18
Time: Saturday, 12JUN
Los Angeles, California
Size: Approximately 50 on foot, one support vehicle
Activity: Antifa militants and Black Lives Matter (BLM) activists organized an anti-law enforcement protest against the Los Angeles County Sheriff’s Department (LASD) to highlight “the many killings” of black people in the community. LASD had a significant presence during the protest and erected barricades prior to. LASD deputies deployed “pepperball” munitions against one individual for an unknown reason during the protest, but made no arrests.
Location: LASD office (1310 W Imperial Highway)
Time: Saturday, 12 JUN
MOUNTAIN
NSTR
CENTRAL
Minnesota, Minnsota
Size: Approximately 25 on foot, one support vehicle
Activity: BLM activists and multiple armed members of the New Black Panther Party (NBPP) marched in the street and vowed to defend predominantly black neighborhoods from “gun violence. They stopped at numerous points, made speeches, and repeatedly chanted, “black power.” According to reports, the event remained peaceful and there were no law enforcement present.
Location: Northern Minneapolis
Time: Saturday, 12 JUN
Minneapolis, Minnesota
Size: Approximately 40 on foot, 8 support vehicles
Activity: Black Lives Matter (BLM) activists protested the death of Winston Smith in the vicinity of where the police involved shooting occurred. They illegally blocked traffic and erected barricades in a four-way intersection in an apparent attempt to create a “no-go zone” reminiscent of the intersection dubbed “George Floyd Square.” According to the Minneapolis Police Department (MPD), a suspected intoxicated driver drove through the protest, injuring two and killing one. Activists extracted the driver from his vehicle and assaulted him until MPD officers arrived on scene. Antifa and BLM groups on social media announced shortly after that they will be doxxing the driver who they have labelled a “fascist.”
Location: W Lake Street & Girard Avenue S
Time: Sunday, 13 JUN
Kansas City, Missouri
Size: Approximately 20 on foot
Activity: BLM activists organized a “Justice for Malcolm Johnson” march. Activists claim that Malcolm was “executed” by Kansas City Police Department (KCPD) officers during a police involved shooting in March 2020. According to reports, the protest remained peaceful.
Location: downtown
Time: Sunday, 13 JUN
EAST
New York City, New York
Size: Approximately 65 on foot
Activity: BLM and Far Left activists protested outside of residential apartments in the vicinity of a local park. Activists clashed with New York City Police Department (NYPD) officers last week following mass curfew violations at the conclusion of a “fire Artem” protest. The organizers claim that local residents have been reporting late night park occupiers for criminal activity and filing noise complaints with the NYPD. The protest featured toy squeaker pigs that became popular among activists and Antifa militants during violent 2020 BLM riots and protesters demanded residents move out of the area. According to reports, the incident remained peaceful.
Location: Washington Square Park (Greenwich Village)
Time: Friday, 11 JUN
New York City, New York
Size: Approximately 100 on foot
Activity: BLM activists demanded the firing of NYPD officer Artem Prusayev and then occupied a local park again in violation of a curfew. Activists vandalized the Washington Square Arch with anti-law enforcement graffiti and verbally harassed NYPD officers. According to reports, one activist allegedly assaulted employees at a nearby restaurant and a man dressed as “The Joker” assaulted another person in the park during the protest.
Location: NYPD 10th Precinct, Washington Square Park(Greenwich Village)
Time: Saturday, 12 JUN
New York City, New York
Size: Approximately 3,000 on foot
Activity: BLM and Far Left activists organized a “black trans liberation” rally. They marched through the streets and featured various speakers, including the organizers of the 1969 Stone Wall Riots that are often hailed as the beginning of the gay pride movement.
Location: Brooklyn
Time: Sunday, 13 JUN
Washington, D.C.
Size: Approximately 75 on foot
Activity: BLM activists organized a “black women matter noise demo” outside of Nellie’s Sports Bar to protest the alleged assault of a black woman by security staff the night before. According to reports, she was pulled down a flight of stairs and out of the bar by her hair and limbs. Organizers claimed that one activist was “assaulted by a bystander” during the protest. Activists and Far Left groups such as the DC Youth Liberation Front (YLF) organized a march to protest outside the home of the bar owner where they encountered law enforcement. They marched back to the bar and continued to protest into the night. They are calling for ongoing protests to “shut down” the city and a boycott of the bar until the “racist white establishment” closes permanently.
Location: 900 U Street NW
Time: Sunday, 13 JUN
Upcoming Event Calendar
09-11 July: CPAC (Trump is a confirmed speaker) (Dallas, TX)
— END REPORT
M.S. indicates analyst commentary from Mike Shelby
M.B. indicates analyst commentary from Max Baer
D.M. indicates analyst commentary from Dustin Mascorro