World Champion Title Fight (Deterrence and Defiance)

The week ended on April 20, 2024. Interesting news items to look at this week are:

World Champion Title Fight (Deterrence and Defiance): This week, the world sat and watched  a “Political Theatrics” between Iran and Israel and breathed a sigh of relief . Here I am referring to the retaliation drone and missile strike by Iran and a counter attack by Israel in response. Naturally both sides claimed their own successful military mission but an unbiased analysis showed Iran has effectively delivered a strong and clear message across both to Israel and its Anglo American backers.  The response from Israel was sadly a juvenile display of defiance.

(i) Most sophisticated Air Defense System: Israel boast the most sophisticated air defense system in the world even ahead of US and NATO. It is a multi-layered system that cater to different altitude and distances (Fig. 1).

Against this system, Iran’s first gave a 72 hours notice of the impending retaliation strike, then sent a first crop of 185 slow and low flying drones that takes 3.5 hours from Iran to reach Israel with a simultaneous release of video footage of its launch. Then 110 ballistics missiles and again with a simultaneous release of video footage from launch as if to tell Israel and the Anglo Americans saying, “Ready or not, here I come”. Then finally 36 cruise missiles but without further video broadcast. In aid to Israel’s Air Defense System, Israel’s backers also deployed NATO’s complete array of Air Defense equipment encompassing early warning radars and surveillance satellites to detect sorties going to Israel. There were also x-band radar to differentiate decoys from missiles. Then there were interceptors from ground, sea and air plus interceptors that specifically locked onto warheads to isolate them from decoys and to destroy the warheads. (Fig. 2)

Yet despite all the Western arsenal and technology, Iran was able to strike every target it aimed to hit through a cleverly devised plan. The targets were sites where Israel planned, controlled and launched the attack of Iran’s Consulate in Damascus on April 1^{st, .} These were all legitimate targets under Article 51 of the Treaty of Versailles after US vetoed a UN Security Council resolution to condemn Israel’s strike in Syria.  .

(ii)  A Shocking Iranian Message: Iran’s retaliation against Israel was not designed to kill and destroy but launched as a demonstration that Iran was capable to pierce through the most sophisticated Western Air Defence System (“ADS”). The methodology was simple yet clever, a drone swam to trigger the Israeli ADS and at the same time allowing Iran to identify the location of Israeli radar stations and interceptors. Iranian ballistic missiles were deployed to allow the ADS to track and locked in its trajectory but the missiles would subsequently burst open with multiple bomb-lets designed o excite multiple Israeli interceptor response and thereby overwhelm the interceptors to exhaustion. Then another crop of Iranian ballistic missiles with detachable and maneuverable  warheads to strike at the identified Israeli interceptor launchers and radars. Finally a few Iranian cruise missiles to strike at intended targets by which time almost unopposed. In fact, an Israeli media report refuted IDF’s claim of a 99% successful interception and reduced the effectiveness to 84%.  (Fig. 3)

Both Israel and Pentagon were shocked at Iran’s success as after spending US$1.3 billion in the ADS blocking moves, Iran’s $68 million strike still proved to be effective. (Fig. 4).

Blinken immediately called for a G7 Foreign Minister meeting in Italy to co-ordinate a proper response. (Fig. 5)

 

(iii) Israel’s Quad-copter Response: When news broke of an Israeli counter attack against Iran, the financial market went into a panic spin. Oil and gold spiked and Dow futures dropped 450 points. The financial markets quickly recovered as later news revealed the Israeli response was a nothing burger. (Fig. 6).

The interesting part of all these was the US media was banging drums and gongs about a massive Israeli counter offense but outside the Western controlled media, journalists just routinely reported what happened.

I considered what transpired was a good outcome because for the first time, some common sense begin to return to the political arena that restrain and tolerance of the Global South does not equate to weakness. A continuous challenge of a sovereign nation’s red line eventually would invite a slap on the wrist not necessarily to the Zionist’s liking. In this context, technology and human ingenuity was the big equalizer. Tons of borrowed money spent on weapons for profits can prove to be a strategic flaw when compare with a few penny spent wisely on weapons for purpose.

Upon a review of my notes, I posted the following cartoon in my October 2021 Blog (Fig. 7).

Nothing much has changed except those bad fruits the Anglo American Hegemon has cultivated nearly all come into maturity. I pray that green shoots of peace and rationality would flourish and that eyes and hearts may once again be opened, otherwise, the intoxication may irreversibly result in some deadly collision.

Financial Market performance for the first 3 weeks of Q2 2024 as follows:

A. Stock Market:  Dow Jones Industrial Average dropped 1,821 points or -4.5%. (Fig. 8).

As previously mentioned, the liquidity driven US Stock Market has been badly squeezed by a diversion of funds to bail out the insatiable US Fiscal Deficit. At the end of Q1, the Magnificent 7 Tech darlings has already been trimmed to just 4 AI sisters and in just 3 weeks of Q2, the much hyped AI wonder stocks are all crashing back to earth. Nvidia down -15.7% (Fig. 9),

and layoffs were announced for Amazon’s brightest division - Cloud Computing (Fig. 10).

The so called robust US economy were proved to be just contrived federal government election hot air.

B. Debt Market: Yield on USGGYR10 jumped from 4.206% to 4.623%  or an increase of 41.7 basis points for the first 3 weeks of Q2, 2024. (Fig. 11).

This is equivalent to a drop of 3% of the “zero risk” asset in just 3 weeks. Together with a drop of stock prices, a perfectly modeled US portfolio has just shown a loss of 3.9% within the first 3 weeks of Q2. Arguments began to appear that US interest rates have not yet peaked but it appears that the Wall Street still pinned their hopes on a Fed that will eventually bring out the punch bowl and happy days will reappear. YR2 lagged behind Fed Funds rate and that is a sign the bulls are refusing to go away. (Fig. 12).

I suppose USD should still bump along until Zombie Japan is long gone. From the Reverse Repo balances, a credit event is still expected to arrive sometimes in May. (Fig. 13)

 

C. Commodities and Precious Metals: Trading results for first 3 weeks of Q2, 2024 (Fig. 14) as follows: 

Silver (+15.33%), Gold (+7.72%), CNY (-0.17%), Oil (-0.21%), Russian Ruble (-0.48%), Uranium (-0.77%), Eur (-1.24%), GBP (-2.04%), JPY (-2.09), DJI (-4.51%), S&P500 (-5.13%), NASDAQ (-6.16%), Bitcoin (-9.18%). The debt death loop is having an effect on all fiat currencies and its related currency linked assets. As the power projections of US continued to wane from the many misadventures, the purchasing power of USD and valuation of USD denominated stocks will drop further until equilibrium is achieved.

Isaiah 13:17  "Behold, I will stir up the Medes against them, Who will not regard silver; And as for gold, they will not delight in it. 18  Also their bows will dash the young men to pieces, And they will have no pity on the fruit of the womb; Their eye will not spare children. 19  And Babylon, the glory of kingdoms, The beauty of the Chaldeans' pride, Will be as when God overthrew Sodom and Gomorrah.