Centripetal and Centrifugal Force

The week ended on December 28, 2024, interesting news items to look at this week are:

1. Centripetal and Centrifugal Force: As a dedicated student for life-long education myself, my most important lesson to my own children and other young men and women eager to gain wisdom were always this. The first is to strive and gain the highest vantage point of the environment, be they spiritual, relational, social, political or economic, preferably all of them. The second is to strive to have as clear a resolution as one can regarding any situation and that means to encompass as many data points (pixels) as one can afford in formulating the graphics. With 2024 coming to a close, what are we to make of events that transpired for preparation of more chaos to come. To some casual observers, the global picture is similar to a Grand Prix with multiple cars racing pass them in a circle, not knowing who is leading or lagging. The atmosphere is electrifying and one is mesmerized by the sight and sound yet can be totally confusing. In my humble opinion, a clear pattern has already developed for this 195 cars Grand Prix (193 nations that are members of UN and two non UN nations) with two irreversible forces at work that would cumulate to a crescendo in 2025. Let’s call these two forces a Centripetal and a Centrifugal Force. (Fig. 1).

The Global South is exercising the Centripetal Force and The Anglo American Empire is operating the Centrifugal Force. These forces are escalating and I expect will pull the existing global support structure apart sometimes in 2025.

(i) Known Soft Spots and Hot Spots: The Ukraine War and the Fall of Damascus are not Black Swarms but a reality drama as scripted by the Rand Corporation in April, 2019 in a report titled “Extending Russia - Competing from Advantageous Ground”. (Fig. 2).

By just reading the table of content, one can learn of the agenda involved including limiting Russian Oil and Gas, economic, monetary sanctions and peripheral Color Revolutions. For interested readers, the full text of the Report can be downloaded at https://www.rand.org/pubs/research_reports/RR3063.html. With respect to China, Rand’s finding in in a 2016 report titled “ War with China - Thinking Through the Unthinkable” was China is much more difficult for US to prevail: “A Sino-U.S. war would be so harmful that both sides should place a very high priority on avoiding one. While such prospects make premeditated war highly improbable, they also dictate effective individual and bilateral crisis management, as well as other measures to avoid misperceptions and mistakes……Should a confrontation or incident nonetheless lead to hostilities, it would be better if both sides had thought through how to limit the harm, not just how to win.” Hence despite persistent US nibbling at the periphery using Taiwan, Xinjiang, and the Philippians, there is anxiety within the Administration for dialogue, guardrails and “small yard high fence”. The full text of the Report can be downloaded at https://www.rand.org/content/dam/rand/pubs/research_reports/RR1100/RR1140/RAND_RR1140.pdf The sad results proven at the end of 2024 was that the so called Sino and Russian experts in the West are mostly ideologically driven and not data driven, their graphics lack sufficient pixels of their own capabilities and much less for their adversaries. This had limited the West’s achievement as cautioned in Sun Tze’s “Art of War” Chapter 3 paragraph 18 (Fig. 3).

The best illustration of my thesis is in outgoing US Commerce Secretary Remondo finally admission that “efforts to limit China’s access to advanced chips and related technologies, now says that export controls are merely “speed bumps” and that “trying to hold China back is a fool’s errand.” (Fig. 4).

(ii) Centrifugal Force manifested in Cannibalism: Blowing up Germany’s energy life line in the form of Nord Stream 2 Pipeline was just the beginning. Then came the coercion on Europe to buy expensive energy products across the Atlantic and more cash drain by upping individual European States military contribution to the US from 2% to 5% of GDP. All these programmed at a time of a collapsing of European industrial economy. (Fig. 5).

The latest is for US to take out Canada, Greenland and Panama. (Fig. 6).

One by one, the ruling elites in Japan, South Korea, France and Germany have fell victim, economically and politically, for following too closely the dictates of Washington. I am afraid there is no end to cannibalism when US is struggling for survival.

(iii) A Race against Time: At the heart of the competition between the old hegemon and the nouveau power bloc is who can rebuild faster. For the West it is to rebuild a supply chain by onshoring and friendshoring production away from China. For the Global South it is onshoring and friendshoring a payment platform away from USD. There is no doubt rebuilding a supply chain is far more complex than building an alternate payment platform. Let me illustrate this point using China’s export control of just 3 critical minerals, namely Antimony, Gallium and Germanium to US. A tally by Defence Analysts Govini shows USDOD will be scrambling to find substitutes for 30,463 different spare parts in 1075 different Weapons Systems. (Fig. 7)

because DOD and its defence contractors are dependent as to 87% of its supplies from China. The tell tale sign is Trump has seen fit to prepare for a plan B to formalize a Strategic Bitcoin Reserve. With only 207,000 Bitcoins at current market value of US$19.5 billion, why is US still shorting paper gold to suppress gold price when US supposed Gold Reserve stands at $685.48 billion at current prices. It is a long story but many educated fund managers believe the 261.5 million ounces of US Gold Reserve has long been leased out to prop up the strong dollar policy and most of what US hold is an IOU of gold on loan to Bullion Banks. Gold which cannot be retrieved through physical delivery. Elon Musk is not wrong when he said “US dollar will soon be worth ‘nothing’ without fast action” (Fig. 8)

(iv) BRICS New Expansion: Belarus, Bolivia, Indonesia, Kazakhstan, Cuba, Malaysia, Thailand, Uganda, and Uzbekistan will be joining BRICS to create a Bloc with a combined share of 41% of Global GDP. (Fig. 9).

This will further distance G7 with a share of 30%. This Centripetal Force will continue to grow because it is only natural for sovereign states to seek economic progress without the risk of being destabilized by foreign powers.

2. Interesting December 2024 Financial Market Charts: I will sign off here with a two interesting financial market charts:

(i) US Duration Treasury Yield Curve Inversion Ends on December 9 2024: A fail-safe Recession Leading Indicator is when an inverted yield curve normalize, reverting to a positive carry of duration over short term interest rates, a recession is guaranteed to follow within the next 3 to 6 months. (Fig. 10) shows as the Federal Reserve cuts the Fed Funds Rate, the Yield on Duration US Treasuries continued to climb and parity is achieved on December 9 2024.

What the market is saying the Federal Reserve is wrong, liquidity has dried up and smart money are bailing out of US Treasuries. Recession is imminent between the first and second quarter of 2025.

(ii) Market Driven or Fed Academics Led:  As far as historic record shows, the most accurate proxy for short term interest rate outlook is the interest rate on 2 Year Treasury Bill. (Fig. 11) shows a roller coastal ride of Federal Reserve blind dart interest rate throws  over a four year period and a final kowtow to market forces on December 26, 2024.

Why waste time to decipher and second guess Fed Speak when it is much easier to read a try and tested market signal.

The Year 2025 will be a watershed year. A global recession is all but guaranteed and truth and integrity is very much in short supply. All asset class representing a promise to pay will suffer. Supply disruption is a certainty and credit based commerce will shrink. The best investment advice I can give is an investment in oneself through skills upgrade, education and health rejuvenation. Be thankful for what you have and show love to people who cross your path. Last but not least get to know your Maker and pray to be carried to His vantage point.

Isaiah 26:20  Come, my people, enter your chambers, And shut your doors behind you; Hide yourself, as it were, for a little moment, Until the indignation is past. 21  For behold, the LORD comes out of His place To punish the inhabitants of the earth for their iniquity; The earth will also disclose her blood, And will no more cover her slain. 

The Fall of Damascus

The week ended on December 14, 2024, interesting news items to look at this week are:

1. The Fall of Damascus: 2024 will end with an enigma that few truly understands. How a “nation” with a standing army of 270,000 offered no resistance against a lightly armed known terrorists group of at best 30,000 militias. Dependent upon one’s political spectrum, there are jubilation of the power of the Zionists for a victory using hired guns to defeat a proxy of Iran and Russia.  There are recriminations against Turkey betraying Russia with the 2017 Astana Accord of and sponsored HTS to overrun the Assad regime. Only time will tell of what was the true reason why Bashar al-Assad gave up Syria but for the time being allow me to speculate possible consequence of this fall out.

(i) Greater Turkey and Greater Israel: Let’s start with known intentions of Erdogan and Natanyahu. (Fig. 1) is a map drawn from declared intentions of Erdogan and Natanyahu regarding territorial expansion of their respective countries.

The fact that fighting continued after Bashar al-Assad fled Syria and HTS started a transition of power process means Turkey and Israel has designs beyond just a regime change. As a matter of public record, since 2001, US had intentions to take out 7 countries in the Middle East and North Africa, namely: Iraq, Syria, Lebanon, Libya, Somalia, Sudan and Iran. (See video of General Wesley Clark, former Supreme Allied Commander Europe US European Command). With a belief of Iran being weakened by the fall of Syria, the IDF (Israeli Defense Force) is getting ready to attack the nuclear facility of Iran. (Fig. 2).

My speculation is that everything that happened was a race against time before Russia mopped up and conclude the NATO Ukraine proxy war against Russia and before Trump take charge at the Oval Office. However when one strikes a hot iron in haste one could also burnt.

(a) By taking out 80% of Syrian Military Assets (Fig. 3) immediately after the HTS coup,

does Israel expect the 30,000 HTS militias to guard the land bridge from Iran to Lebanon and Hezbollah as well as the whole of Syria? Remember it was Israel that asked for ceasefire after suffering huge casualties of its elite Golani Brigade in Southern Lebanon against Hezbollah. (Fig. 4).

Hezbollah stood strong against the IDF in Southern Lebanon but was pressured to comprise by the Lebanese government after IDF’s bombing repeated raids on Beirut. Remember Iran has two well equipped brigades standing ready to move into Syria and well capable to protect its supply line to Hezbollah. (Fig. 5).

(b) Proxies of Two NATO Countries are fighting each other: (Fig. 6)

The 20% separatist Kurdish population in Turkey has always been regarded as a major security threat in Turkey. With a total Kurdish population approaching 50 million straddling between Turkey, Syria, Iraq and Iran. (Fig. 7).

The Kurds is the largest ethnic group in the world without its own state (Fig 8) and has been fighting for their self determination for over a century. (Fig. 8).

The sad state of the Kurdish people was a result of the divide and conquer tactic designed by the British and France after a breakup of the Ottoman Empire and carefully crafted territorial allotment and nation incubation after WWII. US has since armed and funded the Kurds as its proxy and battling ram against its surrounding countries should they defy US rule. With a power vacuum quickly developing in the region and Turkey’s ambition as a regional hegemony, I foresee chaos and  conflicts to continue as alliances are formed and broken by comparative benefits and conveniences.  

Has the fall of Damascus changed global and regional Geo-politics. Yes, it will accelerate and escalate the ongoing conflicts but not advantageous to any particular factions. More and more resources are drawn into war and healthy economic co-operation, progress and developments are pushed to the back seat. It is indeed a sad conclusion of 2024.

2. Year End Financial Market Round Up:  Year to December 14, 2024 financial markets performance as follows (Fig. 9)

: Bitcoin (+141.1%), Nasdaq (+29.27%), Silver (+28.42%), Gold (+28.39%), S&P500 (+26.86%), Dow (+16.20%), Uranium (+12.67%), Copper (+7.76%), USD Index (+5.54%), GBP (-0.90%), Rmb (-2.44%), Oil (-3.74%), Euro (-4.89%), AUD (-6.61%), Jpy (-8.2%) and Ruble (-14.52%).

With the usual caveat of Financial Year End window dressing, performance of various asset class indicates a continuing decline in purchasing power of fiat currencies with out-performance in Bitcoin, Precious Metals and Energy related metals. Vassals and Cronies of the Anglo American Empire suffered and US profited from arm and energy sales. China, India and South Africa did well but setback for Brazil and Russia. Price for USGG10YR fell 3.29% and USGG30YR fell 3.86%. I have said enough that the US private sector economy is in contraction as liquidity is being drained via fiscal dominance. Take heed to read the correct market signals and exercise extreme care to avoid momentum baits. Due to my own caution against MSM propaganda, my family asset portfolio tracks well with the main US indexes although I do not have investments in tech stocks or cryptos.

I will be taking a break in writing over the Christmas holidays and my wish for you all a joyful Christmas and a peaceful New Year.

Isaiah 17:1  The burden against Damascus. "Behold, Damascus will cease from being a city, And it will be a ruinous heap. 2  The cities of Aroer are forsaken; They will be for flocks Which lie down, and no one will make them afraid. 3  The fortress also will cease from Ephraim, The kingdom from Damascus, And the remnant of Syria; They will be as the glory of the children of Israel," Says the LORD of hosts. 4  "In that day it shall come to pass That the glory of Jacob will wane, And the fatness of his flesh grow lean.