Meta-Verse

 

October 21, 2022 key news items this week:

1. Meta-verse Politics: A meta-verse is a hypothetical 3D world using virtual reality and augmented reality built upon a platform of internet and social connections. Whilst its commercial application is still at rudimentary levels, the Meta-verse is very much in hyperdrive in western politics and high finance. Why do I say that? Ten years ago, Obama and Hilary instigated the Arab Spring using Saddam’s defunct Sunni military machine in Iraq turned ISIS to topple Syria’s Assad. The ultimate price was to connect Qatar’s natural gas to Europe through Syria thus weakened Russia’s energy influence in the Continent(Please see Energy War in the October 7, 2022 Blog). A second theater in this Meta-verse Construct was the continuing saga of the Stepan Bandera ‘s Nazi Maiden revolution in 2014 and forwarded to today’s annexation of Eastern & Southern Ukraine by Russia. The script was supposed to be acted out in a way that Russia should lose its naval bases in both Tartus(Syria) and Crimea(Ukraine), Assad and Putin deposed by civil war and the Russian Economy in ruins and possibly Balkanized. In truth, Hilary and Obama are long gone from the centre of power and President Biden will likely be clipped within the next 20 days. Another actor in this Meta-verse theatre, the United Kingdom also did not act as scripted. Boris Johnson became a lame duck on July 7^th 2022, 60 days later Johnson was replaced by Liz Truss, 18 days later a mini budget was delivered by Truss new cabinet, 4 days later UK had a $1 trillion margin call on her Pension system brought on from the nonsensical mini budget, 17 days later Truss’ Chancellor of the Exchequer took the fall and 6 days later Liz Truss was forced to resign. Yes, some new names will come up in the UK leadership, but the foolishness continues. What is the meaning of all these? We are talking about an Anglo American Empire which have been at the apex of global power for 300 years. We are talking about MI5, MI6, CIA, NSA plus over over 20 alphabet intelligence agencies, the biggest Pentagon budget, the mightiest military force, the right to eavesdrop with impunity on every politician and virtually most citizens on earth and yet disastrous results recurred one after another. I can only conclude this can only happened in Meta-verse, a make believe world far disassociated from reality. Have Americans and British eyes that cannot see, ears that cannot hear and hearts that cannot understand? John Heywood said “There are none so blind as those who will not see. (Fig. 1)

. “ Some of my more optimistic friends believe when AI is fully developed, the world should be a better place because technologies will lessen the impact of human follies. I have little knowledge of AI but am convinced AI can never program in the God factor because by definition, God is above all known physical laws. If only the principles of good character and good governance in the bible be observed, all of the above disasters would have been avoided.

 Daniel 2:20  Daniel answered and said: "Blessed be the name of God forever and ever, For wisdom and might are His. 21  And He changes the times and the seasons; He removes kings and raises up kings; He gives wisdom to the wise And knowledge to those who have understanding. 22  He reveals deep and secret things; He knows what is in the darkness, And light dwells with Him.   

 2. Meta-verse High Finance: Not to be outdone by politics in the Meta-verse is Western High Finance. The US Treasury this week published the August Treasury International Capital Flow Report. The salient features are as follow:

 (i) De-dollariztion Continued Main Stream Despite Apparent Rise in DXY:

(Fig. 2) shows between March to August, there was a global sell down of all US Treasuries of $204.6 billion comprising Central Banks and Sovereign Funds sell down of $261 billion with Private Sector Top Up of $56.4 billion. Private Sector top up were mainly in financial centers of BLICS(Belgium. Luxemborg, Ireland, Cayman and Switzerland), the UK and Bermuda and Bahamas. These countries do not generate meaningful trade surpluses and represents cosmetic window dressing for US using swap facilities provided by the Federal Reserve. Increase in US Treasuries most likely means Treasuries are employed as collateral for leveraged funds to short a basket of currencies and commodities in support for USD.

 (ii) Absence of Buyers for US Treasuries: Together with published data provided by the US Treasury and the Federal Reserve, the true finances of US Inc. Is found in (Fig. 3)

. In the previous week I explained US Treasuries sold by the Federal Reserve to Banks in an Overnight Reverse Repo Arrangement cannot be fairly off the books of the Fed when the Fed is committed to buy back within the next 24 hours. The same logic applies to banks holding these Treasuries as owners when ownership is contracted to change in the twinkling of an eye. With that proviso, the Federal Reserve has in effect monetized US government debt to the tune of $8.8 trillion since 2020 and at an ever increasing speed. (2020-$2.36T, 2021-$2.58T and 2022-$3.89T for only 8 months so far). Meanwhile, domestic US holders of Treasuries have emptied their storehouse of $4.98T of supposedly AAA credit rating papers. I argue that everyone who thinks USD is strong is in a Meta-verse connected to a platform programmed by a US Gamer. With smoke screens and mirrors, most failed to see the rotten derivative props holding the dollar up until a child shouts loud enough “where supposed is the new clothes for the Emperor”.(Fig. 4)

 (iii) Unplugged from the Matrix: Politically speaking, the world is divided into an Axis aligned with the Anglo American Empire and the Non-allied countries(Some commentators called these countries collectively “The Global South”). Economically speaking, the world is partitioned into zones of Energy Abundant, Energy Sufficient and Energy Deprivation. 8 months into the proxy war between the Anglo American Empire and Russia, an alternate indicator of relative strength of these regions can be found by the price chart on (Fig. 5).

This league table is ranked in descending order of strength as compared with USD.

Russian Ruble +26.48%; Mexican Peso +3.62%; Brazilian Real +2.85%; Brent Oil +1.84%; UAE Dirham +0%, USD +0%; Saudi Riyal -0.16%; WTI Oil -3.18%; Singapore Dollar -5.13%; Canadian Dollar -7.81%; Gold -9.04%; Indian Rupee -9.36; Rmb -12.2%; Euro -12.69%; Taiwan Dollar -13.37%; South African Rand -15.36%; Korean Won -16.18%; UK Pound -17.14%; Silver -17.4%, Japanese Yen -23.47%.

 In our current Meta-verse of Currencies and High Finances, I dare not call Fig. 5 honest or fair when we are still using USD as a yardstick. But Fig. 5 is useful because it chimes a different tune to the mantra of the dollar is strong because of the Fed’s rate hikes. The Global South is preparing a basket of 20 commodities earmarked to gold and eventually will pegged a nations currencies to key resources of that nation. Once Bretton Woods 2.0 is off the ground, we may gain a better understanding of true international finance. The road to liberation from the dollar hegemony is long and hard and there will be hot wars in between. Until then let the peace of Christ rule in your heart and let truth of God dwell with you richly in all wisdom.

3. Game of Thrones: For those of us who follows profiling of politicians, Queen’s Elizabeth’s death is a heavy blow to the House of Windsor. The new Chancellor of Exchequer, Jeremy Hunt, is in the camp of WEF(World Economic Forum). King Charles in the past also has a favourable disposition to WEF’s philosophy. (Fig. 6)

. Liz Truss capitulation represents a shift of House of Windsor priorities. I would not be surprised if Sunak (also of WEF school) becomes the first Indian to lead a British Parliament. With just over two weeks before the US Mid term election, the establishment power structure is likely to witness a redial. The British chameleon DNA is already working overtime to ensure its very survival.    

 The past week’s financial markets:

 A. Stock Market: Dow rose 1,447.73 points for the week (+4.89%) (Fig. 7). 

Last Friday Dow closed down with clear CTA shorting, this week opened again with a buzzing of a Fed pivot. Throughout the week, a Fed insider leak of pivot kept the rumor mill running and culminate to Friday news of Fed will reduce hike increment from the Dec FOMC. Naturally, part of the rise was CTA covering their shorts.

 B. Debt Market: (Fig. 8):

USGG10YR ended the week at 4.219% an increase of 19.7 basis points or +4.89% change from the previous week. UST Yield Curve again was uplifted across all maturity spectrum with steeper rises at both short and long end, particularly 1 month and YR30 saw increases of 25 and 34 basis points. YR 1,2,3,5 saw single digit points increase only. Experts feared the whole US Debt market is near breaking point. (Fig. 9)

As I stated last week and with this week’s Fed Balance Sheet and Reverse Repo analysis above, the Fed needs to finally shows its true colors.

 C. FX Market (Fig.10): for the week ended October 14, 2022, DXY opened at 113.298 and closed at 111.875 (Down -1.255%). 

With winds of change at the House of Windsor, both Eur & GBP strengthened against USD. Yen continued on a weak trend until BOJ intervened again when JPY crossed 151.5. Amongst the majors only Rmb further softens against USD. The prediction of DXY has peaked at the end of September still holds. A drop of DXY below 110 will trigger a cascading waterfall event. The manipulation by CTA on shorting everything to prop up USD is very evident in the commodities chart particularly silver as they scrambled to cover their short position. (Fig. 11)

D. Precious Metals & Crypto :(Fig. 12)Gold price opened at $1643.7, and closed the week at $1656.6, a gain of $12.9 (+0.78%).

Position at Comex up to 18^th Oct indicates Leverged Funds naked shorting caused price of gold and silver to fall precipitously the previous week and their short covering this week equally caused a rebound, particularly in the case of silver. Looking at the price of their entry and exit, it cannot be said there was profit motive behind their action. Silver rebounded by 6% this week. (Fig. 13)

Bitcoin was not an instrument behind CTA dollar support and short covering was absent on Friday’s action. Bitcoin marginally eased 0.07% this week.   

 Hag 1:2  "Thus speaks the LORD of hosts, saying: 'This people says, "The time has not come, the time that the LORD's house should be built." ' " 3  Then the word of the LORD came by Haggai the prophet, saying, 4  "Is it time for you yourselves to dwell in your paneled houses, and this temple to lie in ruins?" 5  Now therefore, thus says the LORD of hosts: "Consider your ways! 6  "You have sown much, and bring in little; You eat, but do not have enough; You drink, but you are not filled with drink; You clothe yourselves, but no one is warm; And he who earns wages, Earns wages to put into a bag with holes."7  Thus says the LORD of hosts: "Consider your ways! 8  Go up to the mountains and bring wood and build the temple, that I may take pleasure in it and be glorified," says the LORD. 9  "You looked for much, but indeed it came to little; and when you brought it home, I blew it away. Why?" says the LORD of hosts. "Because of My house that is in ruins, while every one of you runs to his own house. 10  Therefore the heavens above you withhold the dew, and the earth withholds its fruit. 11  For I called for a drought on the land and the mountains, on the grain and the new wine and the oil, on whatever the ground brings forth, on men and livestock, and on all the labor of your hands."