Hold the Narrative and Win the Game of Risk

The World has changed and changed utterly – although we may not realise it yet. We are likely on course for massive disruption, inflation, rising geopolitical crisis and uncertainty, and a high probability of stagflation. But – don’t tell anyone. Anyone for a choc-ice?

Dear reader

Because of Ukraine, I have been sending the recent porridges to all Morning Porridge Subscribers. You can receive it daily into your inbox if you subscribe for Silver Membership – a mere £10 per month to cover the Mailchimp service. Or you can pick up for free on the website. Normal service resumes next week.


Blain’s Morning Porridge 25 Feb 2022 – Hold the Narrative and Win the Game of Risk

“[The lie] must confine itself to a few points and repeat them over and over. Here, as so often in this world, persistence is the first and most important requirement for success.”

This Morning: The World has changed and changed utterly – although we may not realise it yet. We are likely on course for massive disruption, inflation, rising geopolitical crisis and uncertainty, and a high probability of stagflation. But – don’t tell anyone.

Anyone for a choc-ice?

The world changed yesterday. Markets did not.

Despite the first major war in Europe for nearly 80 years, we got a “buy the news” stock recovery. Oil prices spiked, and a general shunting of the Russian Invasion into the “oh, that’s unusual” bucket of the trading day. But the consequences will be massive.

Maybe stocks rose on buy-the-dip, or because markets expect Western Central Banks will keep monetary policy accommodative – putting off rate hikes – to ease concerns. Or maybe it was because Biden didn’t hit Russian energy with sanctions, or that European nations are loath to let him ditch Russia from Swift? Whatever – markets are coping, playing the immediate nuances of the news.

For the next 10-14 days – for that is how long it will likely take Russia to subjugate Ukraine – it will be wall to wall coverage. Already some fatigue with the streets of Kyiv is setting in. Our shock, horror and outrage will continue to be blunted – and by the time it’s over, other topics will be filling the screens.

Probably these other things will be surging inflation, soaring food prices, unimaginable energy bills, tensions in the Taiwan straights, and Europe bickering across every imaginable policy decision. For the next few years expect horror reports about brave Ukraine resistance fighters being massacred – or terrorists being dealt with if you watch Sputnik TV.

The reality is the world fundamentally changed yesterday:

There are the obvious issues; prolonged inflation for longer. We’re all aware that food prices will be impacted long-term. Russia is a major supplier of fertilisers, Ukraine is the number one sunflower seed producer, no 2 in Wheat and massive across agricultural commodities. (Some readers have already asked if it’s a “Ukrainian Chicken Farm moment” – the absolute top of the corporate cycle, named for the said poultry farm that launched a massively oversubscribed bond deal at an insane price, just days before SARs and Bird Flu caused it to shut with uninsured losses – but that is a story for another day…)

Energy is the other talking point – massive spikes in European Gas as we wonder where it’s going to come from. European nations are all eyeing each other – nervous the rest might cut a deal with the Kremlin to secure their own supplies.

It also confirms the critical effect of Geopolitics – and it confirms a massive tectonic shift has occurred as the world splits into new plates with their attendant conflict zones.

  • Putin is aware reproachment with the West will be a long-term play – and he won’t be counting on it happening soon. He’s pivoting (what a great word) to Asia – setting up Gas, Energy and Food deals with China.
  • China is happy to continue building its co-prosperity sphere in Asia. The more Russia and Europe can distract the US, the happier Xi will be.
  • The “West”, including our outposts in Japan and Oz will be wondering where they should stand.
  • The pundits expect Trump or a Trump Clone to lead the US into isolationism in 2025.
  • Europe will remain a tired, broke little grab-bag of ill-assorted nations pretending the like each other, at the end of very long supply chains dependent on what Russian Energy they can beg, borrow or steal.. (Steal in this context being breaking the climate change agenda to re-invest in Energy Security by opening coal, oil and gas facilities – prompting fury from climate activists who will accuse governments of stealing from future generations.)

That leaves Africa and South America up for play – the Chinese have learnt their debt lesson and will be loath to rely on further soft-power through lending. They may get… “outward bound”… As resources dip, populations rise, and climate change fries Africa the refugee crisis will further destabilise Europe.

I’m sorry if it sounds like a Game of Risk – but it’s beginning to look that way..

The major risk for markets is just how destabilising the Ukraine invasion becomes. Food and Energy insecurity, and all the other as-yet-still-unresolved issues like auto supply chains, chips and goods will remain disrupted, further fuelling inflation, and slowing growth.

If your warning signals are not flashing recession and inflation = Stagflation… then reset them. It looks a very high probability.

Meanwhile..  I suspect there is a fifth column at work.

Yesterday, I put out a snap reaction comment yesterday on the potential market consequences stemming from the West’s limited available responses to Putin. I said we needed a rethink on defence spending and NATO, and accused Putin of becoming little better than the fascists his country claims to despise.

A few hours later I a flood of emails from folk I’ve never heard of hit my email. All ex-US Servicemen, and all very similar to this:

In which branch of the British Armed Services did you serve? Or, are you just the typical Chickenhawk who wants other people / other people’s children to come home physically and / or mentally wrecked, or even worse, in a body bag? And all just to increase some bank’s quarterly earnings report. 


 Gregg Armstrong

former United States Marine

I’ve spotted similar comments on Zerohedge and other news sites. They are all very similar… and not terribly subtle.

The intention behind them is to Twist the Narrative and Change the Agenda – shift the focus from Russia’s hostile invasion of another nation, to make the Narrative about evil Capitalism and banks fighting to maintain their wealth. Gosh.. who might that suit? Herr Goebels would be delighted his lessons have been learnt so well. Suddenly I am the guilty banking aggressor rather than Russia murdering Ukrainian civilians? Really…

Propaganda used to be who holds the printing presses, the radio stations then the telly, and now – He Who Holds the Narrative Wins the Hearts and Minds.

Either the US Military has a problem and hasn’t explained to its troops what they fight for – or far more likely there is a false-flag fake-news operation underway to undermine anyone who criticises Russia’s actions.

Here in UK I am on the periphery of a Military Charity, Help for Heroes – some of you donated last year to a sponsored event I did. I’ve talked to British soldiers and sailors. They are all heroes. They may not like or understand why they went or what good they did in ‘Ghan or Iraq – but they understand their job:  Democracy, Freedom, Queen and Country and defending our very British right to a decent cup of tea. (Which really isn’t an option here in Dubai-ski..) If their grandfathers hadn’t done it 80 years ago – we’d be speaking German or Russian today.

Don’t fall for the fake-news and deflection.. .

Five things to wreck your weekend.

Bberg – Ukraine’s Crisis will not stay in Ukraine

FT – The Corporate Fallout from Russia’s Invasion of Ukraine

WSJ – SEC Probes Tesla Trades By Elon Musk and His Brother

Thunder – Roman Abramovich monitored for corruption

Garuriad – Kyiv furious as EU refuses to ban Russia from SWIFT

Out of time, off to the day job.. and have a great weekend.

Bill Blain

Strategist – Shard Capital


  1. I have to agree with former Marine Armstrong. The elites insist on expansion of organizations like NATO, at least in part to foster Armament sales and profits, and the Working Class pays the piper when things go bad. These elites sweep historical Russian concerns aside without a thought, while always paying lipservice to “Democracy.” The bankers are key members of this cabal, as you well know, and have rarely seen a war in the past 500 years they didn’t like. People are growing tired of the charade where elites profit, and ordinary people pay.

    • Yes. Davos and Lizardmen have never cared a jot for the common people.Everything is about making bankers richer.

      What absolute rot, tosh and nonsense.

      Nations like the UK and USA led the world because capitalism – although imperfect – raised the living standards of everyone, and these nations were prepared to defend their system – aka John Paul Jones (a Scot) “Give me Liberty or Death!”

      THis is especially true for the UK which became the pre-eminent global merchantile empire while defending itself against European powers determined to take it away and subjugate us: the French, The Spanish, briefly The Dutch (although that was more about which version of outward bound capitalism was better), the French, the French Again, and the Germans twice…
      America talks big on liberty and democracy, but has never faced a serious threat to invade and disect the nation – hence its innate isolationism and misunderstanding of its global role as the most successful free market economy of all time..

      If you seriously believe the West should roll over and will be a better and more prosperous workers paradise if we let Putin run riot over Ukraine, the Baltics, Poland and the rest.. you really do need to get your head examined.

      Russia never was a worker’s state – the last 100 years has been kelptocracy and absolutism. Are the workers as healthy, wealthy or provisioned as the west. Nope.

      You, sir, I suspect are a bot or a false flag actor..

      • Not a bot my friend… just a guy who has seen firsthand the damage unnecessary war does to working class people.
        I too think free-market capitalism is a boon for most, and support it wholeheartedly. Crony Capitalism is a different story.
        And no need for the invective…I posted only in the spirit of fair dissent, and discussion.

      • Bill,

        The attacks on bankers are not necessarily an attack on Capitalism. We can have capitalism with Goldman Sachs and their ilk; they mostly detract from economic growth & well-being.

        We need banks, but not “bankers”. The bankers are the ones at Davos, pushing the agenda that best makes them wealthier & more powerful. Such things are not what capitalism is or should be.

  2. I for one agree with you Mark. As I look back on 20 years of destruction in the Middle East, millions of lives lost and all of it on the backs of middle class Americans who sent their sons and daughters to be killed and maimed for what Eisenhower rightly called out as America’s true enemy, the Military Industrial Complex. Defense stocks are already up as the Chicken Hawks salivate at the prospects of more weapon systems being sold. We are sold the illusion of Democracy while liberal tyrants here won’t even allow peaceful protesters in their capital and send it their armed militias. The war machine perpetuates the propaganda of maintaining Democracy.

  3. I think calling him ‘sir’ is a bit over the top? Blaggard, rusky, propskyist (a new word meaning russian propaganda ist.)
    Or a load of more appropriate words that remain unprintable …

  4. The members of the US armed services are professional volunteers. They, more than most, understand the price of war and all of its horrors. The officers I’ve known have no desire to use force when other options are available.

    Once those other options are exhausted they will step into the breach, understanding that there are a few things worth fighting for. These men and women couldn’t give a hoot about bankers or profits. They do understand the value of self-determination.

    The people of Ukraine are being murdered by a despot. They deserve better than the pablum distributed by mister Jones and Marine Armstrong.

  5. Surely you don’t believe all that nonsense about supporting democracy and cherishing sovereignty. Afghanistan, Iraq, Libya, Syria… I seem to remember MI6 and the CIA conspiring to overthrow the democratic government of Iran a few decades ago.

    NATO expanded east. Putin complained but we didn’t listen. He attempted diplomacy but we refused any concessions. And now we cry out about what a monster he is.

  6. “the Chinese have learnt their debt lesson and will be loath to rely on further soft-power through lending.”

    You´re just ignoring what China is leading which ultimately are US treasuries, which really can never be redeemed. Getting 60-90% of face value back via Africa is therefore a great deal for the Chinese. This is why the US cannot compete in Africa and elsewhere with the BRI. China will eventually do a reverse default and convert its US treasuries into BRI loans in Yuan replacing the renegotiated BRI debt, while moving out of $.

  7. The war we are watching had its seeds planted and nourished to grow from Clinton to Biden so really why the surprise?? NATO should have gone the way of the Warsaw pack with a large peace dividend after the USSR imploded. A unipolar world then but a choice was made by the only remaining empire to expand its power base with government changes, invasions ,sanctions ,misinformation all to service the elite and maintain control. Sick truly to watch Clinton, Bush Obama and Biden all come out against the war they made the blueprint for. Wish we could suit up everyone of them and send them to fight on the eastern front

  8. 10th US Army Special Forces Group -1968-1971. Worked with the CIA in rightwinged, Junta controlled Greece and post war West Germany. It was the patriotic thing to do. Actually, I was a young, 22 year old, German/French speaking, Scots/Irish, military bred, adventurer looking to establish my manhood. I didn’t know or care squat about politics but got to muck around with the SAS a little while I was there. But there is a long black crack on the Washington Mall with the name of 58,318 of my young compatriots, most under 19. Some of them, I knew. A review of the demographics on the wall are revealing.

    Since then, I have learned that while capitalism and democracy may be the lessor of evils, they create a cycle that is detrimental to the average young person. It goes like this. Capitalism creates wealth. Wealth buys governmental influence and propaganda using democracy by buying votes. The wealthy promote social discord in the name of goodness but in fact do it to keep the bottom sniping at the middle, keeping the middle occupied and oblivious to the antics of the very wealthy. Governments create fiat money (Constitution be damned) to finance desired outcomes for the wealthy and get wealthy themselves. That includes financing so-called social justice. The middle class gets hollowed out (happening in real time right now) and the fake money eventually falters and creates scarcity and social justice disruptions that create wars. The young (don’t call it the “infanty” for nothing) get shipped off to fight for the wealthy. And yes, the children of the wealthy don’t go to war, or at least to any post that puts them in danger. End of story.

    At 73, I’m modestly wealthy but too old to fight, but I have grandchildren who aren’t, so . . . you’re full of crap. America is now in a cycle of endless wars, thanks to the very wealthy. You are right in saying America is moving into an isolationist phase. We are only 5% of the worlds population. My guess is that we will most likely be focusing on the Western Hemisphere, but truth be told, we can feed, clothe and fend for ourselves, just fine. Not to say, we can’t create our own problems here at home. Good luck with the 90% of humanity in Europe, Asia and Africa. There is nothing in Ukraine that we cannot do without. To the extent that my countrymen have caused the current problem, I apologize. Not my doing. And Russia, a country that has fought along side us twice (WWII and the Civil War) and never against us directly, is no threat to America because of assured mutual destruction.

    Not to be a niggler but, it was Patric Henry who said “Give me liberty, or give me death.” John Paul Jones said “Give me a ship that will sail in harms way.” To be fair, they were both about dying for your country. If I didn’t have a soft spot in my heart for Marines, I would chalk the mistake up to you being a Brit and a Marine. Otherwise, your article is “spot on.”

  9. An unpopular opinion from someone living on the bottom end of Africa with little skin in the game. I had this debate with a friend tonight and if we feel like we must take sides, our Anglo-Saxon heritage dictates which way we must go.

    But the reality is that the other team just did what our team would normally do and there is little to nothing our team can do about it, hence the hysteria.

    For the west to claim the moral high ground, it needs to at least be close to, or out of the morass of endless war and that is a far-fetched goal to be sure.

    The destruction of Ukraine is a travesty, but until we stop accepting the destruction of any country by another, irrespective of the reason, we’re really just wallowing in the same muck…

  10. I actually think his attack is a sign of his own weakness. He’s been in power 22 years. People in Russia are tired of him. The economy is shit£. The ruble plunged 40% on news of invasion. On the surface it might look like a show of strength , I’m not so sure. Furthermore, he’s actually meeting some resistance. Once Russians start returning home in body bags, beware the wrath of the Russian mother. Many Russians don’t want this war. Putin may well be an expert in psy ops and he’s done a fantastic job of exploiting western cynicism with their leaders these last 20 years. This however is his only, and transient, victory. Because his actions are now starting to hopefully wake people up that RT ‘news stories ‘ are nothing but Russian state sponsored fake news, not genuine critical, unbiased enquiry. He has however mis read the hearts and minds of ordinary Ukrainians. For example, to suggest his his ‘de nazifying ‘ ukraine of their Jewish elected PM is nothing short of deluded. When your closest allies such as Hungary and even China are distancing themselves then what next? The danger is Putin now recognises the game may soon be up. What then ?

  11. Bill, it didn’t have to be like this. As your other commentators point out, in whose interests was it to force NATO to Russia’s borders, put fascists in control of Ukraine and to drive Russia and China into ‘alliance’. It is what it is now and the removal of Russia from SWIFT will ultimately call into question the worth of fiat currencies and what the true value of oil/diesel is and how the everything we (modern civilisation) touch and see is dependent on it. Oil for gold will be the outcome. China, India and the UAE abstained in the Security Council’s vote – that’s a pointer.

  12. In my knowledge, the capitalism (even with all of its many flaws) has produced more innovation and wealth than any other system throughout all human history. I would even argue that the more capitalist a society is, the richer it is (or has been) and vice versa for state lead systems (think North Korea for example). Being born in former URSS and now living in democratic free European country, I do have a direct comparaison. It is especially hard to read the idea that Russia (Putin) complained about the NATO’s enlargment towards east but we did not listen and now we are bearing the consequences. Why on earth should somebody liberally minded ever consider the concerns of a dictatorial country nobody is or ever wanted to be part of? Most of world dysfunctional countries citisens would immediately leave for any free, liberal, capitalist society if they only could (russians included).

  13. Wow, reading the responses on a Sunday morning makes me realize how little history has been taught and how little has been learned.
    Nato is a defensive organization, not offensive, and Putin objects to it as he does not want Western influence close to home, nor does China. The fact that people are able to respond and discuss commentary here is because democracy is working, it doesn’t happen in Russia or China who have censored the Internet.
    But one thing that Capitalism has not done well is regulation. This war is about Oiligarchs, a deliberate misspelling, those who have been enabled by Blair’s granting of “golden’ residency status in the UK, and whose money was corruptly obtained. The world is awash in money laundered funds, and it is corrupting politics (trump), and undermining our institutions. It has to be stopped if we want to have an enduring democracy. And that is worth fighting for.

  14. “… starting to hopefully wake people up that RT ‘news stories ‘ are nothing but Russian state sponsored fake news, not genuine critical, unbiased enquiry.” Pray tell where do you get your answers for “genuine, critical, unbiased enquiry” from? State propaganda arms like CNN, BBC and 90% of ‘news’ media in this wreck of a world?

      • It’s a fair enough question, where do you get your news from? I’m asking because given what your day job is, I thought it would be prudent to understand a wider view?

        • No its not a fair question – its a loaded question.
          Your prejudice is obvious: “given what your day job is”.. “prudent to understand”.. “your wider view”.. Weasel lawyer phrases straight out any procedural TV show..

          Your intention is attack, question and invalidate any information I present. You have no intention to engage. Neither will you demonstrate why your own sources are pristine.

          I will say my market insights are based on real experience, and the information I glean from talking to fellow market practioners and recognised experts across economics and policy, citing economic releases, data and trade information, reputable new sources including major newspapers, periodicals and reports from leading banks and investment firms – you will simply respond that confirms my biases, and that your sources are unimpeachable.

          Its a pointless argument – and one I won’t waste further time on.

          The morning porridge is aimed at financial professionals across trading, investment, banking, regulation and treasury, as well as academics, politicians and the media. Non financial readers are very welcome, but it is not a debating shop for conspiracy theorists, beleivers in Lizard men and the great reset, other tin-foil hat wearers or purveryors of fake-news.

          Go believe what you want believe… We’ll focus on understanding the often unpalatable truth.

Comments are closed.