Wars Between Great Powers

The week ended on June 29, 2024. Interesting news items to look at this week are:

Wars Between Great Powers: It is a sad week for the world that we will be closing the first six months of 2024 with an escalation by the Zionist/Colonial West and the Global South conflict into an inevitable WWIII.

(i) Deadly ATACMS attacks on Civilians in Sevastopol: On Sunday June 23^rd, 5 US supplied ATTACM missiles killed 5 people and injured 127 Russian civilians on a beach in Sevastopol, Crimea. (Fig. 1).

The attack has no military significance on the outcome of the Ukraine war but a direct affront of US against Russia to a full scale gloves off fight between the two military great powers. By the statement made by Sergey Lavrov, Russian FM, Russia has run out of patience by the West using Ukraine as a proxy to take down and fragment Russia. (Fig. 2).

The reaction we have seen so far included (a) a Russian fighter jet shot down a U.S. Global Hawk reconnaissance drone over the Black Sea. Both the Kremlin and the U.S. military told news outlets that they could not confirm whether the incident took place. No doubt US will turn cautious regarding the use of manned reconnaissance aircrafts over the Black Sea. (Fig. 3)

(b) By a mutual defense pact with North Korea, North Korean troops will be deployed in Ukraine. (Fig. 4).

and (c) US Military Contractors will now be overtly allowed to be deployed in Ukraine (this is a justification of what US has been doing covertly since the SMO which started two years ago. (Fig. 5).

(d) The US Secretary of Defense called his counterpart in Russia for the first time since 2023 as all of a sudden the 800 plus US military bases globally became vulnerable because of a realization that Russia’s response to US provocations turned unpredictable. (Fig. 6).

There should be no surprises for readers of this Blog for the current escalation as we have reported as early as March 2 that discussions amongst the Western elites about what we have just witnessed.

(ii) Israel preparing for full scale war with Hezbollah: In another escalation, Natanyahu is preparing for a full scale war with Hezbollah. (Fig. 7).

Israeli officials have repeatedly threatened to intensify attacks, saying they’re necessary to defeat Hezbollah and return 90,000 Israelis evacuated from their homes in the north since fighting started in early October. In anticipation of a hot war, Hezbollah will likely take out all airports in Israel plus those in Cyprus which Israel may use as a contingency plan should Israel starts a bombing raid against Lebanon. (Fig. 8).

(iii) China's Xi accused the US of trying to trick him into invading Taiwan, but said he won't take the bait (Fig. 9).

A Washington think tank, the Center for Strategic and International Studies (CSIS), warns there is a third way, one that will make it far harder for the United States and other like-minded democracies to counter: Quarantine. Using “gray zone” tactics – actions just below what might be considered acts of war – the China Coast Guard, its so-called maritime militia and various police and maritime safety agencies could initiate a full or partial quarantine of Taiwan, possibly cutting off access to its ports and stopping vital supplies like energy from reaching the island’s 23 million people, a newly released report from CSIS says. (Fig. 10)

(iv) A temporary pause in South China Sea: After the China Coast Guards incident with the Philippine SEAL Team, President Marcos conceded that he was not looking for war with China. (Fig. 11).

The way China used her Coastal Patrol to enforce border integrity was a wise move as China cannot be accused of a starting a war with the Phillippines. Although the Philippine SEAL Team were armed with lethal weapons, being monitored within the firing range of Chinese naval missile destroyers, neither the Philippines nor US dared to draw first blood . This allowed China Law Enforcement teams to encircle and disarn the intruders. It is likely the same modus operandi will be applied in the Taiwan Strait against renegade Taiwanese separatists.

Performance of financial markets for first half of 2024. (Fig. 12):

Bitcoin (+41.64%), Silver (+21.49%), Nasdaq (+16.48%), S&P 500 (+14.16%), Gold (+16.24%), Copper (+11.73%), Oil (+9.43%), USD Index (+4.56%), Dow (+3.74%), Russian Rubble (+3.51%), GBP (-0.71%), CNY (-2.2%), EUR (-3.17%), Uranium (-7.82%), JPY (-12.11%).  

The Dec 2023 Fed dot plot of 3 interest rate cuts in 2024 did not materialized in the first half of 2024. USGG10YR jumped from 3.866%  to a close of 4.392% or 52.6 basis points. (Fig. 13).

This level of interest rate should remain for the foreseeable future as an interest rate of 4% to 5% is required to maintain a continuous roll-over of US Treasuries. Significant risks remain with JPY as their ZIRP availed speculators an open season to short the Yen . JPY exchange rate declined in excess of 12% for the first half of 2024. As liquidity is drained by the Federal Government from the US banking system, the combined unrealized losses of the US banking system exceed  $517 billion. (Fig. 14.)  

Be prepared for an ugly correction in the financial markets in the second half of 2024.

Matthew 24:4  And Jesus answered and said to them: "Take heed that no one deceives you. 5  For many will come in My name, saying, 'I am the Christ,' and will deceive many. 6  And you will hear of wars and rumors of wars. See that you are not troubled; for all these things must come to pass, but the end is not yet. 7  For nation will rise against nation, and kingdom against kingdom. And there will be famines, pestilences, and earthquakes in various places. 8  All these are the beginning of sorrows. 9  "Then they will deliver you up to tribulation and kill you, and you will be hated by all nations for My name's sake. 10  And then many will be offended, will betray one another, and will hate one another. 11  Then many false prophets will rise up and deceive many. 12  And because lawlessness will abound, the love of many will grow cold. 13  But he who endures to the end shall be saved. 14  And this gospel of the kingdom will be preached in all the world as a witness to all the nations, and then the end will come.