The Mind Dies First

 November 25, 2022 key news items this week:

 1. The Mind Dies First: This week I saw a horrific picture of the war in Ukraine. I apologize first to allow this ugliness to appear below but I hope none of us should have any illusion about the devastation involved in armed conflict. (Fig. 1).

A friend of mine who once served in the public security arena told me “No matter how good is the propaganda, the realities hit hard when you see young men return in body bags”. The following is an excerpt of in an article titled “The Ukraine is committing suicide by cop”. The author of the article is a Dutch blogger. The excerpt was a reply to a previous email from a “Real Ukrainian”, by this, the Dutch author distinguished the person from the Ukronazis in power in Kiev. The email began,“I am also heartbroken with the evolution of the war to liberate the Ukraine from NATO: while I have no doubts about the outcome, I am horrified at the thought of what this does to the civilian population.  My sadness is even made deeper by the realization that to a large degree the people of the Ukraine did it to themselves.  Russia tried REALLY HARD to not have a war, then she tried REALLY HARD to save the civilians and the civilian infrastructure.  But the people under Nazi occupation believed all the propaganda coming out of the regime in Kiev and the West and now there will be hell to pay.  For 6 months these naive people thought the Ukraine was winning because they could not even fathom that Russia was only using about 10% of her forces and trying really hard to save as many Ukrainians.  But no, they were celebrating the murder of Dugina, the attack on the Crimean Bridge, the attacks on the ZNPP and now they are going to pay a horrible price for these delusions and, frankly, lack of decency/morality. As Douglas MacGregor said “the Russians are about to bring a sledge-hammer” to vaporize the NATO forces in the Ukraine. We did not want that. It was imposed on us.What else can I say? The Nazis will be crushed, but the costs of doing so will be needlessly high. Millions of refugees will be added to the millions who already fled. I feel utterly disgusted, sad and angry about this outcome”.

My take is when one allows oneself to be deceived through lack of vigilance to verify the spoken words to the actual deeds, the life forces within that person is gone already. When the mind dies, everything else follows.  

From a different perspective, Putin just had a face to face meeting with mothers of Russian troops (Fig. 2)

. At the meeting Putin said,“life is more complex and diverse” than what is shown in the media and on the internet, noting that “nothing can be trusted there at all,” because of the extraordinary amount of fakes, lies, and deceit. “Information is also a weapon, and informational attacks are one the most effective types of warfare.”

Herewith links to the two articles: http://thesaker.is/the-ukraine-is-committing-suicide-by-cop/ https://www.rt.com/russia/567178-putin-mothers-russian-servicemen/

2. The Puppet Master Strikes Again: Anwar Ibrahim just sworn in as Malaysian New Prime Minister. Exactly like Zelensky’s election campaign, Anwar Ibrahim promised big to Malaysia for an end to racial strife, an end to corruption and strengthening of democracy. (Fig. 3)

There is also no coincidence that behind Zelensky and Ibrahim are the same source of funding from the National Endowment of Democracy (CIA), and the Open Society(George Soros). I suppose after hijacking TSMC to Arizona and a temporary truce with China, Tsai Ing-wen used by date has arrived. There is a need for Biden to open another disruptive front in the region. The US puppet manufacturing process is now very much standardized, vilify the sitting government, create ethnic strife, entrap corrupt sitting politicians, big campaign promises to end everything that the local citizens abhor but double up and make everything worse once the puppet is installed. This model was perfected with Obama and is now distributed world wide. I hope I am wrong for the sake of my Malaysian relatives, friends and my Singaporean buddies.

^{II Corinthians 11:14}  And no wonder! For Satan himself transforms himself into an angel of light. ¹⁵  Therefore it is no great thing if his ministers also transform themselves into ministers of righteousness, whose end will be according to their works.

 The past week’s financial markets:

 A. Stock Market: Dow gain 601 points for the week (+1.78%). (Fig. 4).

As I said last week, the hawkish statement by Boston Fed President Susan Collins was NATO(No Action Talk Only). FOMC minutes released indicated while policymakers stressed their “strong commitment” to reducing inflation, support for a higher rate peak may have been less than universal. Keep the market guessing and focused on Fed Talk on interest rates and with the hidden hand keep the money printing press cranking hot. This week we also witnessed The People's Bank of China (PBOC) said the 0.25% cut of the reserve requirement ratio (RRR) to 7.8% will take place on December 5.  

 B. Debt Market: (Fig. 5): USGG10YR ended the week at 3.601% a drop of 13.5 basis points from the previous week. 

Judging from the spread between YR2 and Fed Funds, (Fig. 6), even a 50 basis point increase in December is a luxury neither the Fed nor the US can afford.

UST Yield Curve continued to be seriously inverted, with one month rate gone up by 23 basis points whilst YR30 down by 18 points. This is a mufti-decade record of yield inversion and indicates a continued fearful tightening of credit by banks and a recession is at the door. (Fig. 7)

C. FX Market (Fig. 8): for the week ended November 25, 2022, DXY opened at 106.416 and closed at 106.062 (Down -0.3%). Eur, Gbp and Jpy all made gains against USD, Rmb eased slightly on account of lowering RRR by 0.25%.

 D. Precious Metals & Crypto :(Fig. 9): Gold price opened at $1750.4, and closed the week at $1754.26, a gain of $3.86 (+0.22%).

CTA covered all their short positions with Bullion Banks and Producers provided the liquidity. Net Bullion Bank short position as at Nov 15 stood at 276 tonnes. For the week Silver and Bitcoin gained respectively 2.4% and 1.5%. (Fig. 10).

With the spectacular collapse of Crypto Platform FTX, owning hundreds of billions and over 1 million creditors, many people wondered why Sam Bankman-Fried isn’t in handcuff yet. Well. when you are the steward for the hidden treasure vault of the US Ruling Party, there is a lot of slack given. (Fig. 11)

 ^{Ezekiel 33:2}  "Son of man, speak to the children of your people, and say to them: 'When I bring the sword upon a land, and the people of the land take a man from their territory and make him their watchman, ³  when he sees the sword coming upon the land, if he blows the trumpet and warns the people, ⁴  then whoever hears the sound of the trumpet and does not take warning, if the sword comes and takes him away, his blood shall be on his own head. ⁵  He heard the sound of the trumpet, but did not take warning; his blood shall be upon himself. But he who takes warning will save his life. ⁶  But if the watchman sees the sword coming and does not blow the trumpet, and the people are not warned, and the sword comes and takes any person from among them, he is taken away in his iniquity; but his blood I will require at the watchman's hand.' 

Exhaustion

November 18, 2022 key news items this week:

1. Exhaustion: Last week we speculated some kind of a short term deal has been struck between the West and the East for a limited timeout with observable shifts in the financial markets. This week we are seeing further signs in that direction. Some of the markers are as follows:

 (i) Polish Missiles Incidents: A (two?) soviet era S300 anti-air missile(s?) hit Poland. Poland, Ukraine and UK immediately turned on their propaganda machine to incite war escalation. (Fig. 1).

Interestingly Biden immediately douse the fire and suggested the missile was more likely from Ukraine. One analyst questioned why the confusion between one or two missiles in the news release by Poland. The explosion on impact did not seemed too large and hence it could be a vintage Soviet S300 but Russia could have tested the West by sending a self destruct missile to entice a defense blocking missile by Ukraine with the pair crossing into Polish territory. Russia could then triggered her own missile to self destruct in mid-air leaving the trailing Ukraine missile to strike Poland. For the time being the facts are not knowable but an assumption of a timeout is reasonable whatever version one choose to buy.

 (ii) G20, APEC and ASEAN Meetings: Courteous meetings were seen between heads of states of China/US, China/Australia and China/Japan with further ministerial meetings to follow. However the instigators and lackeys in the form of British and Canadian Prime Ministers were given the harsh treatment. (Fig. 2)

 (iii) Weapons Out-of-Stock and must take a pause: Three separate news items of interests came out within the last 10 days. The first is from Josep Borrell (EU High Representative for Foreign Affairs and Security Policy). He said “The military stocks of most member states have been, I wouldn’t say exhausted, but depleted in high proportion, because we have been providing a lot of capacity to Ukraine” (Fig. 3).

The second news was from Der Spiegel of Germany “Self-propelled howitzers out of action(sent to Ukraine) due to lack of spare parts”. (Fig. 4)

Analysts who monitored US military aid sent to Ukraine.(Fig. 5)

commented that the Avenger air defense systems has been mothballed for decades and a contract for their refurbishment has not been awarded. The 21,000 155mm artillery rounds would only be sufficient for 4 days of combat based on average consumption. The analyst concluded each military assistance package gets smaller and more antiquated which suggests US is also scrapping the barrel for supplies.

(iv) US Runs Out of Places to Borrow : The September US Treasury International Capital Report (TIC) was released late in the week and shows global de-dollarization accelerated. In the month of September, there was a sell down of US$213 billion of Treasuries from the international community and cumulatively since the Ukraine conflict, total Sovereign sell down of Treasuries amounted to US$423.3 billion. (Fig. 6)

I have repeated warned strength of DXY was never a flight of capital to USD. It was simply derivatives at work. In fact when DXY peaked at the end of September, selling of Treasury were strongest. The appearance of an orderly US Credit market is all smoke screens and mirrors. Taking the raw data, the Federal Reserve may appeared to have tapered her Balance Sheet in 2022. (Fig. 7).

The reality is exactly the opposite. Every night, the Fed sold US$2 trillion Treasuries domestically with a contract to buy back the next morning (RRP Reverse Repo Program) . This is just window dressing to mask the huge dumping of US Government Bonds by bond holders.(Fig. 8).

The same applies internationally and Foreign Account RRP shot up to US$377 billion in November and accelerating. (Fig. 9).

Adjusted for this deceptive accounting, I have previously exposed the insider banking cronies have actually dumped and shorted their entire Treasury portfolio in August 2021. They sold quickly and in high prices but camouflaged by the continuous QE of the Federal Reserve. The truth is the Fed had never paused their QE program because the borrowing needs of the US Government far exceeded genuine investors appetite. (Fig. 10)

In fact, the accounting hocus pocus is getting tired and US needs to come clean and negotiate her way out.

The past week’s financial markets:

A. Stock Market: Dow went flat points for the week with just a 2 points change to the previous week (Fig. 11).

There were some carry over momentum from the previous week’s soft inflation number but mid week, Boston Fed President Susan Collins spooked the market by saying for the Dec rate hike 75 basis points is still on the table and Dow gave up all early week gains.(Fig. 12)

B. Debt Market: (Fig. 13):

USGG10YR ended the week at 3.829% a gain of 2 basis points from the previous week. Judging from the spread between YR2 and Fed Funds, (Fig. 14).

Boston Fed Talk looks it is just talk to dampen over enthusiastic market euphoria and likely to be just NATO (No Action Talk Only).UST Yield Curve continued to be seriously inverted indicating a continued tightening of credit and a recession is at the door. (Fig. 15)

C. FX Market (Fig.16): for the week ended November 18, 2022, DXY opened at 106.969 and closed at 106.416 (Up +0.5%). 

Currencies performance are mixed with CNY steady, GBP strengthened after the Polish missile incident and EUR and JPY weakened. Against the USD, oil(Brent and West Texas Intermediate) softened by 8~9% as the economy chills. Gold was steady and silver dips slightly. (Fig. 17)

 D. Precious Metals & Crypto :(Fig. 18) Gold price opened at $1771.2, and closed the week at $1750.4, price eased $20.8 (-1.17%). 

Over zealous leveraged funds continued to redeem their short position in gold whilst produced increased their forward sales. Bullion Banks also increased slightly their shorts. The most interesting development this week is the Bank for International Settlements (BIS) bought back 500 tons of gold. (Fig. 19)

Subsequent to the news, in a shocking development, the Bank for International Settlements has officially closed down its gold swaps.This means banks that have been practising fractional reserve banking with client’s gold will no longer be bailed out by BIS by offering currency deposits to BIS for gold in a swap transaction. Basel III rules will come into effect on January 1, 2023 and will restrict a bank holding client’s gold from matching their liability with a derivative contract at an Exchange but most match their liability with physical metals. According to BIS, some 10,662 tonnes of gold and 105,000 tonnes of silver swaps and Forward exists. It will be interesting to see how London and NY maneuver themselves when the noose is finally tightened. For the week, silver eased 3% whilst Bitcoin held its ground. (Fig. 20)

Revelation 3:17  Because you say, 'I am rich, have become wealthy, and have need of nothing'—and do not know that you are wretched, miserable, poor, blind, and naked. 18  I counsel you to buy from Me gold refined in the fire, that you may be rich; and white garments, that you may be clothed, that the shame of your nakedness may not be revealed; and anoint your eyes with eye salve, that you may see. 19  As many as I love, I rebuke and chasten. Therefore be zealous and repent. 20  Behold, I stand at the door and knock. If anyone hears My voice and opens the door, I will come in to him and dine with him, and he with Me.21  To him who overcomes I will grant to sit with Me on My throne, as I also overcame and sat down with My Father on His throne.  

Sun Tzu's Art of War

November 11, 2022 key news items this week:

 1. Sun Tzu’s Art of War: The famous words of Sun Tzu in Chapter 3 verse 6 said”Hence the saying: If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.” (Fig. 1)

As ordinary citizens, we all got caught in the cross fire of Great Powers, it is imperative all the more that we need to know the designs of the forces around us and our own strength and weaknesses.

 Hosea ^4:6  My people are destroyed for lack of knowledge.(Fig. 2)

 At this weekend, we highlight for your consideration some data points which may indicate the undercurrents of the shape of things to come.

 2. Imperfect and Incomplete Knowledge: Events over the past 4 years and in particular in 2022 showed neither the East nor the West are operating with less than optimum knowledge regarding their attacks and defenses against their adversaries. Probably for the West, their leaders showed a further lack of knowledge regarding themselves. Hence, the constant change in leadership, infighting and disunity. Ideologies and propaganda only goes so far before realities sets in and we now see leaders on both sides have to settle for something less than their desires. Realities, such as

 3. Ukraine War Logistics: After 8 months of fierce fighting both NATO and Russia found themselves consumed far more weapons and munitions than they had bargained for. NATO had exhausted their stockpile of howitzer rounds and had to sourced from South Korea, (Fig. 3)

whilst Russia had to economize by sourcing drones from Iran (Fig. 4).

Bearing in mind, we are talking about the number 1 and 2 in military strength in the world, after an eight months conventional peers war, they have to temporarily take a pause because there was a break in the supply chain. Against this background, it gives a new twist to the true purpose of Sullivan’s (US National Security Advisor) dialogue with Kremlin (Fig. 5)

and concurrent RAF’s retreat with Kherson City.(Fig. 6).

Whilst no one knows exactly what deal was struck, knowledgeable analysts Pepe Escobar speculated sort of deal seems to have been struck between Jake Sullivan and Patrushev. (Secretary of the Security Council of Russia). After the meeting with Sullivan, Patrushev then flew off immediately to Tehran for a strategic partnership business with Ali Shamkhani, Secretary of Iran’s Supreme National Security Council.

 4. The Art of the US/Russian Deal: Elements of the deal may include:

(i) Russia would keep Donbass but not advance towards Kharkov and Odessa. And NATO expansion would be definitely frozen.

(ii) The Russians will leave the Dnieper riverbank in a managed military retreat. That would not be possible without managed military-to-military negotiations.  

(iii) These back channel negotiations have been going on for weeks. The messenger is Saudi Arabia. The US aim, in the short term, would be towards a sort of Minsk 3 accord – with Istanbul/Riyadh attached.  

For interested readers, the thesis by Pepe Escobar can be found in https://thealtworld.substack.com/p/sun-tzu-walks-into-a-kherson-bar (Fig. 7)

 5. US Financial Attacks in Retreat: To test if Escobar’s thesis has any merit, I also examined closely what happened this week in the financial markets and certainly I found some collaborative evidence.

 (i) Federal Reserve to Pivot in December: After the announcement of the October CPI number, stocks, bonds, energy and precious metals all rose sharply and DXY dropped 3.94%. The market of course was not reacting in anticipation of a Fed Pivot. The market is signaling the Fed, time to stop. According to Jeffery Gundlach, the reigning Bond King, the Federal Reserve never had the ability to decree interest rate increases or falls, it simply follows the market movement. The Fed Funds rate always lags and follows the Two Year Treasury Rates. (Fig. 8)

and the Two Year Treasury Rate has plateaued.

 (ii) Spread between Two Year Treasury and Fed Funds Rate: Historically the Two Year Treasury Rate has an average spread of 50 basis points over Fed Funds Rate and this Friday that average spread hit the sweet spot. (Fig. 9)

Theoretically speaking the Fed has no reason to push further on interest rate increases.

We will have further discussions on the financial markets in the following sections but it looks the rivalry between the West and the East will temporarily take a pause, an armistice, as each side needs a breather to consolidate and regroup from exhaustion. I am, however, not optimistic of a long term peace but for the time being, we all can take a badly needed respite over the next few months.

 The past week’s financial markets:

 A. Stock Market: Dow rose 1,344,64 points for the week (+4.14%) (Fig. 10). 

Some ascribed the stock market performance to a softer October inflation of 7.7%, others acknowledge it was China easing up her Zero Covid Policy. Equally there were strong negatives like Crypto Exchange FTX filed for bankruptcies and Meta and Twitter massive laid offs. My pet theory is a temporary truce has been struck between the East and the West and we just witnessed movements by the insider first movers and a classic short squeeze. (Fig. 11).

 B. Debt Market: (Fig. 12): USGG10YR ended the week at 3.811% a significant drop of 35.2 basis points or -8.455% change from the previous week. 

On the US Treasury Yield Curve, there were declines of 17 to 41 basis points between 1 Year to 30 Years. (Fig.13). 

Despite the duration rate declines, the yield curve inversion actually got worse and an economic recession is unavoidable. We have witnessed the carnage of the Tech sector and Crypto across the board. Even with better performance with Energy and Arms Manufacturers sectors, Boeing cannot possibly do well without the Chinese Market. The upcoming Xi Biden talks at the G20 meeting will be watched very closely and I am sure there will be some horse trading. It is interesting that China warns US not to disclose details of the talks to Taiwan. (Fig. 14)

C. FX Market (Fig.15): for the week ended November 11, 2022, DXY opened at 110.788 and closed at 106.416 (Down -3.94%).

We noted even before announcement of a softer US October CPI, EUR, GBP and JPY were moving higher against USD as Sullivan negotiated with Patrushev. This was despite the market being spooked by the unexpected Powell speech last week. The soft October CPI was icing on the cake as if to herald a new chapter. As tension eases in Europe, Brent begins to drift down by as much as 6% until the October CPI released which knocked down the USD. Precious metal moved up in reaction to over 6% for the week. (Fig. 16).

My thesis of a peak of DXY at end of September and a cascade down once 110 is crossed has been vindicated.

D. Precious Metals & Crypto :(Fig. 17) Gold price opened at $1680.2, and closed the week at $1771.2, a gain of $91 (+5.42%).

A major move by the Bullion Banks to reduced their short position kicked off the rally early in the week, followed by hedged funds forced to reduce their naked shorts in gold and trimming their long USD position sealed the momentum for the week. Silver moved in tandem with gold but problems with FTX triggered a Crypto carnage and Bitcoin dropped over 20% (Fig. 18)

 Luke 14:31  Or what king, going to make war against another king, does not sit down first and consider whether he is able with ten thousand to meet him who comes against him with twenty thousand? 32  Or else, while the other is still a great way off, he sends a delegation and asks conditions of peace. 33  So likewise, whoever of you does not forsake all that he has cannot be My disciple.