Like most market commentary, I focus on the former two (i.e., politics) and the latter, pointing out all the inconsistencies in the numbers on the screen that get markets so excited, whether that be US payrolls' birth/death model, CPI's hedonic regressions, or Chinese GDP's internally inconsistent expectations-beating 'magic'. However, yesterday we got a prime example of the Big Market Lie: talking only about statistics, as if nothing else more important is happening.

Monday's policy speech from ECB President Lagarde, was called "astounding" by a national-security expert, and my team said sounded like she has been reading our research: given the ECB staff do read it, that wasn't hyperbole. The second-most important central banker in the world behind Powell stated: we are seeing fragmentation into competing geopolitical blocs, which is structurally inflationary; rival FX architecture is emerging; trade invoicing and swap lines are key in that shift; Western fiscal policy must be expansionary on the supply side and into defence; monetary policy needs to act like it did in the 80s; yet it must also work with fiscal policy for "strategic goals" – and Lagarde added later in the day that once the 2% CPI target has been met, "discussions" can be had on changing it(!); central bank digital currency may be needed to deliver hypothecated fiscal spending and trade invoicing; in "systemic competition", the bloc that does state capitalism/mercantilism best will fare better; and central banks' role is at the heart of it. We are not talking 2% CPI, nor 2°C.

This has vast implications across every asset class, the economy, and the political economy. To have given this speech, Lagarde would have had to have cleared it with layers of stakeholders. It wasn't a mistake or slip. It was a deliberate, establishment-approved declaration: we face an open-ended global political-economy competition with policy drift in just one direction, not a rate-hiking cycle, or a pause, and certainly not a pivot.

And how did the market react? It didn't. How did the financial press covering every market cough, sneeze, and shill react? It didn't. There were very few headlines, almost no commentary, and no analysis. The focus was on relatively irrelevant statistics like Chinese GDP, or subscriber numbers. In short, we got an orchestrated ostrich-like policy of denial.