The Russian Art of War

Week ended March 30, 2024. interesting news items to look at this week were:

1. The Russian Art of War: This week’s heading is the title of a book written by Jacques Baud published in January 2024. (Fig. 1).

I have not read the book but have just listened to a 3 hours interview of the author and came away being reinforced on my belief that when the Anglo Americans tried to exert full spectrum dominance against China or instigated a proxy war against Russia, they had not actually worked out the effort and resources required for a victory. Worse still, the Anglo Americans have refused to revise their game plan even as defeat is staring right into their eyes. At the precipice of the Empire crumbling, as rats are jumping ship, tough talk and lies continued. It is so sad that a repeat of the Vietnam and Afghanistan style of retreat will happen in 2024 that would cause a total chaos for the world.

(i) UN Security Council Resolution against an Israeli Genocide of Palestinians:  As UNSC passed a resolution to demand an immediate cease fire by Israel in Gaza (Fig. 2),

White House National Security Council John Kirby says in a press briefing, “It’s a non-binding resolution, so there’s no impact at all on Israel’s ability to continue to go after Hamas,” (Fig. 3).

Such woolly thinking and defiance.  Just one day later, UN human rights expert report Israel committed genocide in Gaza. (Fig. 4)

(ii) Britain only has resources to fight Russia for two months: Britain could not fight Russia for more than two months, the Deputy Chief of Defence Staff has admitted. Lt Gen Sir Rob Magowan said the Armed Forces would have to manage the “operational risk” that came with not having the resources he would like in future wars. (Fig. 5).

Why start a proxy war against Russia and why Boris Johnson did not give peace a chance when he stopped the peace negotiation on April 9th, 2022. (Fig. 6).

(iii) Governing By Faked News: The White House Administration boast of a robust US economy is just toying with statistics. Employment figures from the Philadelphia Fed showed the labor market is far weaker than conventionally believed. In fact, no less than 800,000 payrolls are "missing" when one uses the far more accurate Quarterly Census of Employment and Wages data rather than the BLS' woefully inaccurate and politically mandated payrolls "data". (Fig. 7).

Ever wonder why the Fed is alternating by verbal suasion between hawkish and dovish interest rate statements, they need the stock market to stay optimistic but must maintain a high enough interest rate to fund $1 trillion Federal new debt every 100 days.  

I am just a consolidator of Western MSM published news but when cross referenced with historical and other data points, truth cannot simply be whitewashed by lies and propaganda.  

2. Chinese Art of Diplomacy: After the conclusion of the China Development Forum in Beijing, there was an unscheduled meeting of Xi and US Business CEOs. The invitation was not signed by President Xi but in anticipation, an absolute majority of CEO invitees extended their China stay to meet up with Xi. The interesting part of the last minute unscheduled invitation was it made a mockery of Western MSM narrative that China is desperate. The funnest part is even when Bloomberg posted an unbiased headline, the picture it showed was a lone President Xi looking towards heaven in a prayerful mood  - waiting. (Fig. 8).

So much for a negative campaign. (Fig. 9) is a photo line up of the attendees with a conspicuous absence of Tim Cook of Apple.

After Boeing, Cook should be doubly careful of relying too much on State sponsored export sales as a substitute for innovation and excellence in engineering. With Mi’s launch of a Porsche killer EV just 3 years from drawing board to market, Apple has a lot of soul searching after writing off $10 billion and 10 years effort on its failed EV endeavour. This should also be a rude awakening on how much lead time does Nvidia really possess before competition heats up on AI chips.

First quarter 2024 financial market performance as follows:

A. Stock Market: Performance of key global stock indexes as follows: 1. Japan Nikki (+20.66%), 2. German DEC-0.03% (+10.2%), 3. US S&P (+10.16%), 4. Russia MOEX (+8.89%), 5. France CAC (+8.78%), 6. US NASDAQ (+8.49%), 7. US DJI (+5.61%), 8. India BSE (+4.35%), 9. UK FTSE (+3.01%), 10. South Korean KOPSI (+2.85%), 11. China SSEI (+1.63%), 12. Singapore STI ( -0.03%), 13. Hong Kong HIS (-1.47%) and 14. Brazil IBOV (-3.7%). (Fig. 10)

Japan and India has been the major beneficiary of investment funds switching out of China and Hong Kong but still like to remain in Asia. In US, the hype and liquidity driven index by the Magnificent 7 performance in 2023 has lost its lustre because of competition from China and is now down to just 4 sisters with serious threat from Tik Tok overtaking Meta. Hence the coercion of disposal by US Congress of Tik Tok to wholly American owned. Now that Trump’s Truth Social has achieved a market cap of $8 billion (Fig. 11)

with only $3 million in revenue and operating losses of $49 million, highly profitable Tik Tok with $14.3 billion in revenue for 2023 would most likely be out of reach for most US investors. (Fig. 12)  

B. Debt Market: Yield on USGG10YR jumped from 3.866% at the end of 2023 to 4.206% at the end of Q1, 2024, an increase of 34 basis points. (Fig. 13).

This is equivalent to a bond price decline of 2.5%. With a typical equity/bond mix, an average US household portfolio gain would be 2.56% for Q1 2024 versus inflation for the period of 3.2%, hence still struggling to keep one’s head above water.

C. Commodities and Precious Metals: Trading results for Q1, 2024: (Fig. 14) Bitcoin (+66.15%), Oil (+12.86%), S&P 500 (+10.16%), NASDAQ (+8.49%), Gold (+8.28%), Silver (+5.01%), GBP (-0.83%), CNY (-1.71%), Eur (-2.25%), Uranium (-3.15%), Rubble (-3.36%) and JPY( -6.77%).

For Q1 2024, Bitcoin has put on a spectacular performance of 66% but I just like to remind readers that 1.93% of Bitcoin holders owns 92.85% of value of all Bitcoins, so orchestrating its value up and down on a very thinly ownership basis is as easy as a fourth tier penny stock. (Fig. 15).

The rise in price for Bitcoin this season came from its introduction of ETF on Spot Bitcoin. This playbook is just a repeat of the rise in crypto in May 2021, two months before the IPO of the Crypto Exchange Coinbase. In that round Bitcoin rose 80% to US$60,000 before crashing to below $20,000 just 15 months later. (Fig. 16).

All I can say is good luck to those who wants excitement on these pump and dump trades. As the old swindlers says “橋唔怕舊最緊要受” which can be translated as “old trick is just as good so long as buyers remains unaware”.   

Luke 14:28  For which of you, intending to build a tower, does not sit down first and count the cost, whether he has enough to finish it— 29  lest, after he has laid the foundation, and is not able to finish, all who see it begin to mock him, 30  saying, 'This man began to build and was not able to finish.'  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.

The Gambler

Week ended March 23, 2024. interesting news items to look at this week were:

1. The Gambler: In my September 9, 2023 Blog, I speculated that the Ukraine War should end on 8, August 2024. I would here like to take an interim assessment as whether the end of this proxy war against Russia is near or was I way off target and what data points have emerged since that time.

(i) Amateurs talk strategy; professionals talk logistics - This famous quote from General Omar Bradley during WWII rings as true today as 80 years ago. (Fig. 1)

Ukraine is now running empty on fighting men, weapons, munitions and air defense systems. The biggest failure of NATO is in having a bunch of generals who are but yes men that only gave answers their political bosses wanted to hear. Sadly, when politicians were deceived by their own propaganda spin and convinced of their virtual strength through inflated nominal GDP numbers and understand not the reality of a productive physical economy, the only certain outcome is failure. Why Russia can out produce by a factor of 3 the munitions of all the members of NATO combined is no secret. Such data points can be gleamed from open sources. The first ingredient is black powder which is used as an igniter and there is only one manufacturer in Louisiana in US. (Fig. 2).

The second important ingredient is nitrocellulose powder. China has a 70% world market share of the short fibre cotton required for nitrocellulose and has predominantly gone to supply Russia. Supplies to Europe stopped in 2023, when the Anglo Americans and the Europeans has not even figured out its importance in their war strategy. (Fig. 3).  

This is the difference between a Purpose Driven Supply Chain to a Profit Driven Supply Chain.

(ii) The Gaza War: We all remembered it was just one week before the Gaza War, Sullivan, US National Security Advisor,  rattled off a long list of positive developments in the Middle East, developments that were allowing the Biden administration to focus on other regions and other problems. A truce was holding in Yemen. Iranian attacks against U.S. forces had stopped. America’s presence in Iraq was “stable.” (Fig. 4).

Also one week into the Gaza War, Janet Yellen, US Secretary of the Treasury, told Sky News, US can ‘certainly afford’ wars on two fronts. (Fig. 5)

Back in summer of 2023, we all knew there were many potential hot spots and Gaza flared up. What we did not expect was the US Administration was staffed with officers that were below the intelligence of normal matured adults who simply pay attention to world events. This certainly is a data point to the end of Ukrainian War to Russian advantage.

Yesterday, China and Russia vetoed a UN Security Council resolution proposed by the US to urge a ceasefire in Gaza. (Fig. 6).

What MSM did not mention was the reason behind the veto. China and Russia simply told US to stop pussyfooting on urging but do the right thing just to make an official resolution for cease fire. China and Russia will not be an accomplice to the hypocrisy in issues of genocide.

(iii) The Weimar Triangle: There was a divergent interpretation of Macron, President of France, call to send troops into Ukraine. I tend to agree with those who believe Macron’s call was not truly intended to directly engage Russia in war but a pre-emptive approach to take the initiative for Europe’s self defense back into European hands. This approach is preferred than being hijacked by the Anglo Americans to prop up a declining empire at Europe’s expense. France, Germany and Poland all need a pretext to build up their defense capability away from the intelligent surveillance of the CIA. (Fig. 7)

What’s more, the remaining days of Biden or the possibility of a second Trump term would not be happy days for Europe or the Weimar Triangle. With Paris Olympics to start in the Summer, toying with sending 2000 soldiers into Ukraine is a ridiculously silly gesture. I give Macron more credit than assuming he would actually be pixxing into the wind. (Fig. 8) .

(iv) The Glide Bombs: As the Ukraine Proxy War migrate into its third year, Russia has come up with upgrades to its legacy Soviet era dumb bombs into a cheap modern precision and deadly weapon. Equipped with Unified Module for Gliding and Guidance (“UMPK”), the wing kit will transform a crude ‘dumb’ bomb into a weapon that is relatively cheap, accurate and useable from a standoff range. Those are all characteristics that spell trouble for Ukraine’s hard-pressed air defense forces as well as NATO.

The hubris of neocons calling Russia a “Gas Station masquerading as a country” proves at hind sight rather deadly. (Fig. 9)

In conclusion, I will play for you a song from Kenny Rogers called “The Gambler”.

We should all pay attention to the following lyrics:

You've got to know when to hold 'em 

Know when to fold 'em

Know when to walk away

And know when to run

You never count your money

When you're sittin' at the table

There'll be time enough for counting

When the dealin's done.

Every gambler knows

That the secret to survivin'

Is knowin' what to throw away

And knowin' what to keep

'Cause every hand's a winner

And every hand's a loser

And the best that you can hope for is to die

In your sleep.

Have a nice weekend.

Daniel 4:34  And at the end of the time I, Nebuchadnezzar, lifted my eyes to heaven, and my understanding returned to me; and I blessed the Most High and praised and honored Him who lives forever: For His dominion is an everlasting dominion, And His kingdom is from generation to generation. 35  All the inhabitants of the earth are reputed as nothing; He does according to His will in the army of heaven And among the inhabitants of the earth. No one can restrain His hand Or say to Him, "What have You done?" 36  At the same time my reason returned to me, and for the glory of my kingdom, my honor and splendor returned to me. My counselors and nobles resorted to me, I was restored to my kingdom, and excellent majesty was added to me. 37  Now I, Nebuchadnezzar, praise and extol and honor the King of heaven, all of whose works are truth, and His ways justice. And those who walk in pride He is able to put down.