Which is Worse, Uninformed or Misinformed

Week ended Feb 4, 2023, interesting news items to look at this week were:

 Which is Worse, Uninformed or Misinformed: The theme for this week’s report was inspired by Larry Johnson’s piece titled “Which is More Dangerous; Armoured Tanks or Think Tanks”. (Fig. 1).

Interestingly, this week I came across four essays more or less on the same concept. The first was billionaire resource investor Rick Rule’s lamentation on shortages in key natural resources that will define the next decade. The underlying problem of shortages lies in people’s preference to use votes with governments in favor of votes in the market place. Votes in the government results in coercion to conform to one side of an argument, bend natural order and nullify the self regulatory aspects of a market economy. By this, those in power need not listen, negotiate nor compromise for win win solutions. Of course, this problem did not manifest in just Green Energy vs Fossil Fuel but across many sectors of the economy, e.g. Facebook vs Tik Tok where a failure to compete became a national security issue, mandatory unproven vaccines that do more harm than good.

 Next there were two essays that caught my attention from US-based Russian military author Andrei Martyanov. One of his essay titled “Fake Science and War”. How people without scientific, engineering and specialists discipline ended up making decisions on the global economy,commerce and industry. Even proven wrong yet they stubbornly continued to inflict damage. Martyanov was referring to a particular group of people who studied Political Science, ended up in “Think Tanks” than Government. He even quoted Putin once challenged classifying political science as science. (Fig. 2).

Then finally the piece from Larry Johnson referred to in (Fig. 1), how Biden’s transition team comprised eight out of 23 team members from the pro-military think tank CSIS. Eventually CSIS’s SVP Kathleen Hicks, now serves as Deputy Secretary of Defense. Hicks has zero military training whatsoever. Some of the colossal errors made were:

 (i) Against the better judgement of Janet Yellen, the Federal Reserve and Wall Street, the National Security Team weaponized USD and SWIFT against Russia. The Russian economy did not collapse within months as expected (Fig. 3) but global de-dollarization went main stream from a trickle.

(ii) Not admitting previous mistakes and market skepticism, the National Security Team doubled up with Oil Price Cap aainst Russia and failed miserably again. (Fig. 4)

(iii) Another Political Pseudo Science expert is Victoria Nuland, Under Secretary of State for Political Affairs. Nuland was the architect for the 2014 Maiden Color Revolution. Though successful in overthrowing a Pro Russia government through funding the Ukrainonazis, NATO was defeated as Ukraine suffered the loss of Crimea, Donbass and Luhansk. By stealth, NATO and Ukraine faked the Minsk Accord to prepare for 8 years for an all out assault against the Russians. In the intervening years before Feb 24, 2022, Russia in anticipation, stepped up her military industries so much so that Russia now produces 800 tanks per annum. Quite the opposite,  UK closed her main tank factory in Leeds and can now provide only limited service to refurbish old tanks. The same goes for the US. No wonder UK Defence Secretary Ben Wallace admitted recently that the UK armed forces had been hollowed out and underfunded. (Fig. 5). Retired General Richard Barrons, who formerly headed the UK’s Joint Forces Command, said “The UK could deplete its ammunition stocks in mere hours should it be drawn into large-scale fighting”. 

Just who in their right mind would plan and provoke a militarily strong country to war without preparing the resources for war? Answer: Political Science students. This problem is not restricted to tanks because in terms of missiles, Russia produces missiles of every class in excess of all the NATO country combined, including the US.

In conclusion, according to Bloomberg “The Russian troops have exhausted the potential of the Armed Forces of Ukraine during the recent months of the special operation. In particular, the battles at Bakhmut had distracted Kyiv's chances to conduct counter-offensive operations in other directions. In plain English, Ukraine is damaged beyond repairs even with NATO's help and talk of counter-attack is pure spin. (Fig. 6).

In Zelensky’s own words It will be “too late” if Abrams arrives in August. (Fig. 7).

 Your adversary need not do you damage when you yourself allow a bunch of uninformed pseudo scientists to gain votes to high office through public misinformation and propaganda spin. All that is necessary is for your adversary to sit back and watch you self destruct.

This week financial markets results as follows:

 A. Stock Market: For the week ended Feb 4 2023 Dow dropped 52.07 points (-0.15%). (Fig. 8) .

FOMC came in mid week with a 25 basis points rate increase as market expected. The stock market staged a mild rally and USD drifted lower. A day later both BOE and ECB increased interest rate by 50 basis points and in a coordinated effort the powers that be used BLS employment numbers to push a rally of USD and hammered bonds, stocks, precious metals, oil and commodities down in a classic short squeeze of bearish Hedge Funds. There was margin calls galore across the board. (Fig. 9)

The funny thing is BLS reported that instead of the 188K expected number, in January the US created a laughably goalseeked 517K jobs (at a time when mass layoff news hit every 45 minutes), up twice from last month's upward revised 260K and the highest since July 2022!(the Covid rebound). 

It did not matter whether the labor stats were truthful, With Govt sponsored market actions, bearish Hedge Funds became the sacrificial lamb and were slaughtered. (Fig. 9).

This blood bath was meant for bears in the US Treasury Market, USD bears and speculative Bulls in precious metals. The Anglo American Empire must have been quite threatened by the global de-dollarization and finally resort to a false narrative of robust employment when there were massive laid-offs. The Fed financially cannot further raise interest rates but must continue with a narrative that they can combat inflation through rate hikes. Let’s see if the uninformed officials can spin this one through misinformation.  

 B. Debt Market: (Fig. 10): USGG10YR ended the week at 3.512% a gain of 1.2 basis points from the previous week.

Right after FOMC raised 25 basis points on Wednesday, USGG10YR actually dropped 16.9 basis points to a low of 3.338%. This is a slap on the face of the Fed and they need to react. Hence, Friday BLR crap stats and market orchestrations. As I reported in the previous week, the market gave a king sized middle finger in the face regarding Fed’s Open Mouth Policy of hawkish talk against a backdrop of recession. I explained to some friends before the FOMC meeting, the Fed can make decisions on the Fed Funds Rate but overall interest rates are dictated by the market and not the Fed. The3X 75 bass points increase, though steep in historical terms was not hawkish. The YR2 Notes rate have gone way ahead much earlier. (Fig. 11).

In this context, the Fed was just darn slow and ill-informed about the true nature of inflation. But honestly, how can the Fed admit gilt when inflation was caused by their unscrupulousness printing of currencies. Increase in Fed Funds rate in a recession environment would further widen the negative spread between the Fed 2YR Treasury Note Rate and the Fed Funds Rate. This is exactly what had happened. (Fig. 12).

The low point of 2YR Treasury Note Rate dropped to 4.059%. (20 basis points down from the previous week despite the Fed’s 25 basis point increase.). The Spread Chart on (Fig. 13) and specifically the data point on Feb 2 is a tell tale sign that whatever credibility the Fed may have is disappearing fast.

In the mean time, Fed weekly losses increased from $25.8 billion to $26.9 billion as at Feb 2023. (Fig. 14)

C. FX Market (Fig. 15): for the week ended Feb 4, 2023, DXY opened at 101.922 and closed at 102.992 (Up +1.07%). 

The rebound in DXY was principally through crony accounts in the British pound and the Yen Carry Trade. Rmb remained strong against USD. Whilst the rebound of DXY was just a front, the hidden agenda in the financial market raid was to bring down precious metals and oil through naked derivative paper shorts. At the NY close, being the final session of the current week’s trading, oil was knocked by 11%, Silver 6% and Gold 3.5%. (Fig. 16)

This is financial warfare against Russia and China. Fear not though, the Anglo American Empire does not control the physical market and when they sell whatever at depressed prices without an ability to deliver, eventually they will all comeback and haunt the short seller.

 D. Precious Metals & Crypto :(Fig. 17): Gold price opened at $1927.29, and closed the week at $1864.9 (-$62.39, -3.23%). 

From the trading pattern and Commex open interests, there were some weak longs in gold taken out in the down draft but as regards silver, the price drop was mainly a doubling down of short positions. It will be interesting to watch what will happen next week. World Gold Council reported this week Central Bank buying soars to 55 years high. (Fig. 18). 

Silver dropped by 5.3% for the week but Bitcoin actually gained by 1.3% as it was not a target of the attack.(Fig. 19)

 ^{1Corinthians 8:2}  And if anyone thinks that he knows anything, he knows nothing yet as he ought to know.