Everything, Everywhere, All at Once

Week ended October 27, 2023, interesting news items to look at this week were:

1. Everything, Everywhere, All at Once: I took the title from a film where Michelle Yeoh won best actress in the Oscar in 2023. The movie depicted a beleaguered wife and mother fighting enemies in a multi parallel universe. (Fig. 1).

In real life, Joe Biden and the Anglo American Elites all perfectly fit in that character role. Former Defense Secretary Bob Gates described the current situation in the White House is one of overload. “"There's this gigantic funnel that sits over the table in the Situation Room. And all the problems in the world end up coming through that funnel to the same eight or 10 people. There's a limit to the bandwidth those eight or 10 people can have." (Fig. 2).

(i) The hubris of starting wars but don’t know how to finish: A Chinese study showed that from the end of World War II to 2001, among the 248 armed conflicts that occurred in 153 regions of the world, 201 were initiated by the United States. (Fig. 3).

For those who care to read the details, the link is attached.   https://english.news.cn/20220902/735703a45cfd458791179d4c0a80e727/c.html . If I update the figures above to the October 2023, then there would be 263 armed conflicts of which 207 were initiated by the United States up. No enemy could have so weakened the United States than the Americans themselves.

(ii) High Sounding but Hollow Initiatives that seldom bears fruits:War on Drugs, War on Terror, Arab Spring, Trans-Pacific Partnership, Make America Great Again, Build Back Better, Freedom of Navigation, Quad 4, India-Middle East-Europe Economic Corridor and on and on. Every few months there would be a new program, new budgets on borrowed money but we seldom see daylight or return on investments.

(iii) National Security trumps all other considerations but there is not enough money to finish a border security wall. Police departments are defunded. Laws on theft and robbery not enforced. Homeless tent enclaves that extend for miles. Rebellions within and rejection by 85% of Global Population against Hegemony and Neo Colonialism, yes, it is indeed Everything and Everywhere, All at Once.

2. No Boots on the Ground but bombs are dropped in Syria: (Fig. 4).

As usual, U.S. officials have blamed Iran for the attacks, even while conceding they don't have evidence that Iran ordered them. Whilst all eyes are focused on Gaza, Ukraine is quickly sidelined. A tell tale sign is Wapo’s CIA article to recriminate the many blunders of Kiev and being distanced by the Spy Master. (Fig. 5)

3. The Poison Chalice of High US Interest Rate Barrier Wall: As global dedollarization gathered pace, the hope of financial market punters for a Fed pivot fades. For the time being, the high interest rates has put a check against large funds flow out of the US. Figures released last week by the Treasury Department showed foreign portfolio investment in US hit a low in Sep 2022 of $22.7 trillion and rebounded to $25.9 trillion in August 2023. But still there was a reduction of $1.7 trillion (50% from Europe, 30% from Asia and 20% ROW) from beginning of 2022 to August 2023. (Fig. 6).

To meet such withdrawal obligations, US investments abroad have to be similarly liquidated within the corresponding period, by $1.38 trillion (47% from Europe, 25% from Asia and 28% from ROW) (Fig. 7).

The Net Investment Funds Flow is shown in (Fig. 8).

Whilst the turbulence is unpleasant, I need to post a red alert to the composition of the funds flow. Out of the $1.7 trillion pulled from the US, 71% was equity, 24% from Corporate and Agency Bonds and 5% from US Treasuries. Within the 5% reduction in Treasury holdings, there was a large swing away from long maturities in favour of short term bills. In one word, long term productive capital in US is in an exponential decay. Major derivatives dealers are now running for cover and expect 2024 to turn into a disaster of epic proportions with cascading loan defaults, bankruptcies and bank runs. This week a repeat of large deposit withdrawals as in March with the Silicon Valley Bank episode rekindled. (Fig. 9)

How then would Central Banks react when the dike breaks, run the printing press hot as if there is no tomorrow but for the time being they are keeping their gun powder dry. Everything, Everywhere, All at Once.

This week’s financial markets:

A. Stock Market: (Fig. 10): Dow closed at 32,417 for the week, a drop of 710 points or -2.1%, S&P 500 -2.61% and NASDAQ -2.70%..

The perennial problem of war and disappearing liquidity kept the stock market on the edge. Apple Inc. -1.52%, Nvidia -1.8%. JP Morgan -5.23%, Citibank -3.39%.

B. Debt Market: (Fig. 11): USGG10YR ended the week at 4.845%, a drop of 7 basis points.

 Bond prices dropped again mid week to push yield on YR10 to 4.998% before a large correction of the stock market provided some distractions to the bond sell off.

C. Commodities and Precious Metals: Trading results for the week: (Fig. 12) Bitcoin (+14.99%), Rubble (+1.60%), Uranium (+1.42%), Gold (+1.28%), JPY( +0.15%), Rmb (-0.02%), Eur (-0.30%), GBP (-0.30%), Silver (-1.15%), SPX500 (-2.61%), NASDAQ (-2.70%) and Oil (-3.75%),.

In preparation for a Spot Bitcoin ETF, Bitcoin was bid up and getting ready to stuff innocent investors with illusions of a quick profit. Of course the narrative is a different tone, portraying as a safe heaven for a failing fiat currency. Beyond the smoke screens and mirrors, Uranium and gold performed well and silver was shorted again to arrest a declining USD.

^{2Timothy 3:1}  But know this, that in the last days perilous times will come: ²  For men will be lovers of themselves, lovers of money, boasters, proud, blasphemers, disobedient to parents, unthankful, unholy, ³  unloving, unforgiving, slanderers, without self-control, brutal, despisers of good,⁴  traitors, headstrong, haughty, lovers of pleasure rather than lovers of God, ⁵  having a form of godliness but denying its power. And from such people turn away!

A Moment of Reflection before Reaction

Week ended October 20, 2023, interesting news items to look at this week were:

1. A Moment of Reflection before Reaction: According to Sun Tze’s “Art of War” 1:18-20 “ ¹⁸ All warfare is based on deception. ¹⁹. Hence, when able to attack, we must seem unable; when using our forces, we must seem inactive; when we are near, we must make the enemy believe we are far away; when far away, we must make him believe we are near. ²⁰. Hold out baits to entice the enemy. Feign disorder, and crush him.” (Fig. 1).

My frustration is all throughout the Hamas Israeli War there is little truth coming from governments on either side of the conflict. Hence our focus and sympathy should only be directed to innocent civilians that are caught in the middle.

(i) Sleeping with the Devil: The use of Arabs to fight and weaken other indigenous Arabs was a British invention famously deployed in WWI. Under Winston Churchill, T.E. Lawrence (Lawrence of Arabia) instigated Hussein Bin Ali to successfully rebel against the Turkish Ottoman Empire and thereby weakened the Central Powers. Sadly, after the successful operation, the British and the French had not kept their promises for Arab self determination but extended their respective Empire’s territorial control and influence. (Fig. 2).

After WWII, the Americans replaced the British and the French as the new master and old colonialism has gone out of favour. As a result, control over the Middle East turned from Administrative/Military to Economic/Monetary, from overt to covert. (Fig. 3)

The Pentagon and CIA’s joint “Operation Gladio” was set up after WWII to foment installation or disposal of country leaders dependant upon their willingness to bend the knee to the Anglo Americans. The Tsar of Iran, Saddam Hussein were all once pawns that were later discarded. Later on as it became inconvenient to deploy State Actors to do its dirty work, the Anglo Americans weaponized militant Arab Wahhabi and developed a data base of Mujahideen warriors. In Arabic the data base is called “القاعدة” or in English phonics “Al-Qaeda”. (Fig. 4)

By the time of Obama and Hilary Clinton, “Moderate Islams”, “Radical Islams”, “ISIS”, “ISIL” and “Daesh” were just names used interchangeably as circumstance dictates,e.g. the militias are Moderates when used to overthrow the Syria Assad Regime, the same group became radical when they fight against CIA assets like the Kurds. Likewise Hamas as a spin-off of the Muslim Brotherhood. Hamas received sponsorship from the West when they were useful as an instrument in the Arab Spring in 2012.(Fig. 5).

Arab Spring ended with the help of Russia and Assad in Syria did not go as Hilary intended. In Egypt, Muslim Brotherhood Ex President Morsi was removed by the Military and Fattah became President up to this very moment. This history marker is very important because neither Sunni Egyptians nor Shiite Iranians and Syrians were too friendly with Hamas for obvious reasons.

(ii) Hamas, Israel’s friend or foe: Fast forward to 2019, as the Jewish settlement continued to expand into Palestinian territories, pressures were mounting for a Two State Solution under UN Resolution 242, Netanyahu invoked again a destabilization ploy of splitting Palestine by factional rules between the West Bank and the Gaza Strip. Hamas was anointed to rule over Gaza. (Fig. 6).

So overtly, Hamas was a trouble maker but covertly Hamas was Israel’s rook in the grand chess board.

(iii) Not even a fox can get through the Gaza security barriers to Israel: Watch the interview with Paul Craig Roberts, former Assistant Secretary of the US Treasury to appreciate without IDF’s design, it is impossible for Hamas to launch a successful attack. (Video). 

From another source, a survivor of the hostage killings were interviewed and reported an eye witness account of what transpired during the kidnappings. The Hamas captors actually held the Israeli victims in the kibbutz (village) and asked them to call the local police to negotiate for their release but did not harm the victims. Only when the Israeli Special Forces arrived and exchanged fire and in the cross fire all the captors and hostages were killed. A Jewish Rabbi, Rabbi Chananya Weissman cross examined victims and Israeli soldiers analyzed the time lapsed between the first Hammas jailbreak to the appearance of IDF first responders took 7 hours. (Fig.7).

Weissman concluded the IDF gave a stand down order for 7 hours to enable the Hamas jailbreak and rampage. Shortly after, an emergency gag order was put in place by Israel Communications Minister to imprison citizens who spread information that may hurt national morale (even if such information were true) (Fig. 8)  

 

(iv) Blinken said Iran was not directly involved in the Hamas attack (Fig. 9),

yet US took the liberty of confiscating $6 billion of Iran’s funds. (Fig. 10).

No doubt these funds would be helpful to Israel’s much urgent needs of $10 billion as fighting continued. (Fig. 11)

(v) Airports in Damascus and Aleppo attacked by Israel: We reported in last week’s Blog on this incident. What is significant is Russia has in the past restrain Syria from allowing Iranian troops to stage an attack of Israel from the Golan Heights. With what happened, Putin has just announced all bets are off when Israel began an indiscriminate attack against civilians in Gaza. (Fig. 12)

(vi) Confusion and recrimination of the Gaza Hospital Bombing: The jury is still out as to who actually bombed the hospital or whether the number of casualties has been exaggerated for political purpose. All I know is there are 4 guilty parties who torpedoed a UN Security Council Resolution for immediate humanitarian cease fire (just 48 hours before the bombing). The guilty parties are US, UK, France and Japan. Their callousness and self interests lays bare before all humanity. (Fig. 13)

(vii) Lebanon’s Hezbollah, Yemen’s Houthi, Iraqi Militias and Shiite Militias from Iran have now all joined the fray. (Fig. 14).

Everyone is calling the bluff of US intimidation with just two aircraft carriers in the East Mediterranean. In the meantime, Biden is calling another $100 billion funding for various war fronts, including funds for Taiwan. (Fig. 15).

We truly live in a MAD MAD MAD MAD World.

2. OBOR Summit Meeting in Beijing: 130 repetitiveness comprising countries from 41 Asian, 27 European, 11 Oceanic and 22 Americas have joined the OBOR Initiatives. Some commentators described the Summit as a Lovefest with a common objective of accelerating a global dedollarization process. It appears that there was not a need to establish a new BRICS currency just individual countries in their bi-lateral or regional multi-lateral trades using their own currencies for settlement. China will be providing a block chain encryption platform to facilitate such trades. 

3. The Plot Thickens: Hamas Jailbreak and rampage happened at a time when Xi and Putin were engaged in the OBOR Summit in Beijing. This reminded me of the Maidan Revolution in Ukraine happened whilst Putin was at the Sochi Olympics in 2014. It just so happened that the Carrier Strike Group Ford would be in East Mediterranean and the Ukraine counter offensive has flopped. Could it be that the ultimate target of the US Carrier Group is not Tehran but Moscow. Putin is not taking chances and have immediately commanded his fleet of Mig 35 armed with hypersonic Kinzhal Missiles to patrol over the Black Sea. Kinzhal Missiles has a speed of Mach 9 to 12 and can destroy F16s in the Mediterranean just as the jet fighters begin to taking off. (Fig. 16).

A warning to Biden to not even think about a surprise attack on Russia. We are in perilous times.

This week’s financial markets:

A. Stock Market: (Fig. 17): Dow closed at 33,127 for the week, a drop of 543 points or -1.61%, S&P 500 -0.32% and NASDAQ -2.86%..

The market is spooked by the Hamas Israeli Conflict and saw a general decline in the equities market. The Administrative measures against China’s Huawei tech breakthrough was further sanctions which actually would hurt American business. Apple (-2.18%), Microsoft (-1.36%), Nvidia (-8.13%), Tesla (-15.24%), Intel (-3.35%).

B. Debt Market: (Fig. 18): USGG10YR ended the week at 4.914%, a rise of 29.7 basis points.

US Treasuries were no longer looked upon as a safe haven asset and the “risk free” 10 YR Treasury Note suffered a drop in prices of 1.94%. YR10 yield crossed 5% briefly on Thursday. Powell has turned dovish but honestly the dire fiscal and debt problems of US and the continued engagement in arms conflict has sidelined any verbal persuasion of the Federal Reserve. (Fig. 19). I have said for months, it was never a policy option for the Fed to fight inflation but high interest rates are used to force domestic investors to withdraw savings deposits in favour of Treasuries. This was meant to fill the gap of a lack of

international US bond demand. Liquidity in the US financial market is drying up even as we are writing up this week’s Blog. Looking at the rapid decline in the Fed’s ability to provide liquidity to money market through Reverse Repo Operations, liquidity in the US financial market will totally collapsed by mid March 2024. (Fig. 20).

To that extent, just like Ukraine, war will have to end as money dries up.

C. Commodities and Precious Metals: Trading results for the week: (Fig. 21) Bitcoin (+10.68%), Uranium (+8.20%), Silver (+3.04%), Gold (+2.74%), Oil (+1.98%), , Rubble (+1.94%), Eur (+0.77%), GBP (+0.22%), Rmb (-0.14%), JPY( -0.25%), SPX500 (-0.32%), NASDAQ (-2.86%).

Investment funds were seen directed to Energy and Precious Metals and Bitcoin rebounded sharply. The weakness in USD financial assets were very visible.

^{Matthew 7:16}  You will know them by their fruits. Do men gather grapes from thornbushes or figs from thistles? ¹⁷  Even so, every good tree bears good fruit, but a bad tree bears bad fruit. ¹⁸  A good tree cannot bear bad fruit, nor can a bad tree bear good fruit. ¹⁹  Every tree that does not bear good fruit is cut down and thrown into the fire. ²⁰  Therefore by their fruits you will know them.