A Tale of Two Cities

December 2, 2022 key news items this week:

1. A Tale of Two Cities: As we enter into the final month of 2022, I like to review and draw conclusions to some of the key events of recent past by looking at competing nations in their strife for world dominance or relevance. We will examine a few situations with a view to hopefully to understand their future trajectories.

(i) War on Covid 19(Washington and Beijing): After 3 years of the pandemic, on December 1, the Joint Prevention and Control Mechanism of China State’s Council held a press Conference and gave a review of the entire mechanism. (Fig. 1)

The purpose of any review is to provide a conclusion or establish a new direction. Very noticeably the Zero Covid Policy was not mentioned. China’s Joint Mechanism for Prevention and Control has a 3 prong objectives, effective prevention, economy to maintain stability and continued development in a safe environment. There were 3 take home points. The 3 data points are omicron turned very mild, no observable long term effect and when infected, young people should have no more than 3 days of fever. Future emphasis will be concentration on seniors protection by vaccination. Research data shows mortality rate is 2.32% with no injection. The rate drops to 0.36% on double jabs of Sinovac, and further drops to 0.14% on triple jabs and at that juncture mortality rate is similar to those of common flu. The fourth jab will reduce mortality to 0.11%. For those over 80, mortality rate is 14.7% with no vaccination, with 3 jabs of Sinovac, the rate drops to 1.58%, a fourth jab will see a drop to 0.87%. With 3 to 4 jabs, the mortality rate for seniors is already lower than the common flu. China targets to have 90% vaccination for 80 years old plus by January 2023 and when achieved, a lot of the social distancing measures will no longer be required.

Why is the Chinese review important? The answer is simple, China has proven to be the definitive authority by virtual of having the lowest infection and mortality per million population in the world. (Fig. 2, 3).

 

In context,The “alleged” first outbreak happened in China and only months later did US “reported” her first Covid case. US was also the first country to roll out Covid vaccines. Despite these time advantages, the end result of the war on Covid between Washington and Beijing is night and day. 30% of US population has been infected and 16% of those infected developed long Covid which impaired the victim’s livelihood and quality of living. Worst still, Senator Rand Paul accused DR Fauci of covertly funded the UN banded “Gainer Function” research, funded super viruses research in an unsecured lab that eventually leaked and 6 million people died.(Fig, 4)

(ii) Puppet War (Kiev and Taipei): After 9 months, Ukraine is on the verge of collapse as Russia had nullified most of its power generation capacity, electrical and rail infrastructure.(Fig. 5).

 A very graphic depiction is provided on the entire Ukraine “lights out” through satellite imagery. (Fig. 6)

In a candid appeal, the European Commission President confessed that 100,000 Ukrainian soldiers had been killed. (This statement was later retracted from the official release, because together with injuries, up to 50% of AFU would have been incapacitated) Fig; 7.

No wonder General Milley (Chairman US Joint Chief of Staff) advised Biden it is time to negotiate for peace, but Milley was met with stiff opposition from the Administration. It has been US’s intention to fight Russia till the last Ukrainian standing. Fig. 8

Nevertheless, the US pledged support for Ukraine’s defense, the new anti-air defense system would be available by November 28, 2025. (Fig. 9).

On the other hand, Russia struck a deal with Iran to manufacture Iranian drones in Russia with drones rolling off the assembly lines as early as 2023. (Slide 10)

I wonder what would a new satellite image of Ukraine would be like on November 28, 2025.

 As reported last week US had hijacked the most valuable asset of Taiwan, TSMC, to Arizona by 6 charter pane load of experts and engineers. In a pan Taiwan municipal election, the ruling Green Party lost big time and Taiwan President quits as Party Leader.(Fig. 11).

 Zelensky of Ukraine and Tsai of Taiwan are both products of US style of Democratic elections. Be careful of what you wish for.

 The past week’s financial markets:

A. Stock Market: Dow gain 82.85 points for the week (+0.24%). (Fig. 12).

Right after a sharp rebound on the release of FOMC minutes last week, the market fizzled out as there was a triple whammy to talk down the Fed Pivot euphoria by Fed officials. (Fig. 13)

A day later, Powell did confirm a slow down could be as soon as December and the Stock Market took off again. (Fig. 14)

Friday came and with higher than expected November payroll, the powers that be tried to use the buoyant employment snapshot to infer caution on account of inflation with covert maneuvering on key indexes.(Fig. 15 and Green Framed Window).

This had not succeed. The frequency of these empty and often contradictory diatribes   indicates the Fed is now truly quadriplegic and only the mouth can move. The Q3 financial results of the Fed showed a loss of $1.25T and owns 48% of the entire outstanding USGGYR30. The Fed is operating in deep negative gearing. Will they or can they push more rate hikes and cause bond prices to fall further.

B. Debt Market: (Fig. 16): USGG10YR ended the week at 3.492% a drop of 10.9 basis points from the previous week. 

Our continued monitoring of Spread between USGGYR2 and Fed Funds Rate indicates the Fed is in no position to push for further rate hikes.(Fig. 17) 

UST Yield Curve continued to be seriously inverted, and in fact steepest inversion for the past 40 years. Rates on all duration had declined with one month rate down by 23 basis points whilst YR30 further down by 18 points.(Fig. 18)

C. FX Market (Fig. 19): for the week ended December 2, 2022, DXY opened at 104.506 and closed at 106.062 (Down -0.3%).

All major currencies improved against USD. Two weeks ago we reported currency war will be taking a breather and two months ago we reported DXY have peaked at the end of September, the evidence is now plain in sight. USD is set to weaken further with a slam towards end of December.

 D. Precious Metals & Crypto :(Fig. 20): Gold price opened at $1754.26, and closed the week at $1797.25, a gain of $42.99 (+2.45%).

The Central Bank for all Central Banks (BIS) has given a very clear signal that a reset for Reserve Asset shall take place. Those who naked short paper gold for USD will soon face judgement day and precisely for that reason BIS has closed its Gold Window and Gold Swaps. You reap what you sow and everyone on your own. We will see a progressive acceleration of this great unwind. In this regard, the resurrection of Silver will be a religious experience. For the week, Silver gained 8.6% and Bitcoin 3.3%. (Slide 21)

Job 4:8  Even as I have seen, Those who plow iniquity And sow trouble reap the same. 9  By the blast of God they perish, And by the breath of His anger they are consumed.  

The Mind Dies First

 November 25, 2022 key news items this week:

 1. The Mind Dies First: This week I saw a horrific picture of the war in Ukraine. I apologize first to allow this ugliness to appear below but I hope none of us should have any illusion about the devastation involved in armed conflict. (Fig. 1).

A friend of mine who once served in the public security arena told me “No matter how good is the propaganda, the realities hit hard when you see young men return in body bags”. The following is an excerpt of in an article titled “The Ukraine is committing suicide by cop”. The author of the article is a Dutch blogger. The excerpt was a reply to a previous email from a “Real Ukrainian”, by this, the Dutch author distinguished the person from the Ukronazis in power in Kiev. The email began,“I am also heartbroken with the evolution of the war to liberate the Ukraine from NATO: while I have no doubts about the outcome, I am horrified at the thought of what this does to the civilian population.  My sadness is even made deeper by the realization that to a large degree the people of the Ukraine did it to themselves.  Russia tried REALLY HARD to not have a war, then she tried REALLY HARD to save the civilians and the civilian infrastructure.  But the people under Nazi occupation believed all the propaganda coming out of the regime in Kiev and the West and now there will be hell to pay.  For 6 months these naive people thought the Ukraine was winning because they could not even fathom that Russia was only using about 10% of her forces and trying really hard to save as many Ukrainians.  But no, they were celebrating the murder of Dugina, the attack on the Crimean Bridge, the attacks on the ZNPP and now they are going to pay a horrible price for these delusions and, frankly, lack of decency/morality. As Douglas MacGregor said “the Russians are about to bring a sledge-hammer” to vaporize the NATO forces in the Ukraine. We did not want that. It was imposed on us.What else can I say? The Nazis will be crushed, but the costs of doing so will be needlessly high. Millions of refugees will be added to the millions who already fled. I feel utterly disgusted, sad and angry about this outcome”.

My take is when one allows oneself to be deceived through lack of vigilance to verify the spoken words to the actual deeds, the life forces within that person is gone already. When the mind dies, everything else follows.  

From a different perspective, Putin just had a face to face meeting with mothers of Russian troops (Fig. 2)

. At the meeting Putin said,“life is more complex and diverse” than what is shown in the media and on the internet, noting that “nothing can be trusted there at all,” because of the extraordinary amount of fakes, lies, and deceit. “Information is also a weapon, and informational attacks are one the most effective types of warfare.”

Herewith links to the two articles: http://thesaker.is/the-ukraine-is-committing-suicide-by-cop/ https://www.rt.com/russia/567178-putin-mothers-russian-servicemen/

2. The Puppet Master Strikes Again: Anwar Ibrahim just sworn in as Malaysian New Prime Minister. Exactly like Zelensky’s election campaign, Anwar Ibrahim promised big to Malaysia for an end to racial strife, an end to corruption and strengthening of democracy. (Fig. 3)

There is also no coincidence that behind Zelensky and Ibrahim are the same source of funding from the National Endowment of Democracy (CIA), and the Open Society(George Soros). I suppose after hijacking TSMC to Arizona and a temporary truce with China, Tsai Ing-wen used by date has arrived. There is a need for Biden to open another disruptive front in the region. The US puppet manufacturing process is now very much standardized, vilify the sitting government, create ethnic strife, entrap corrupt sitting politicians, big campaign promises to end everything that the local citizens abhor but double up and make everything worse once the puppet is installed. This model was perfected with Obama and is now distributed world wide. I hope I am wrong for the sake of my Malaysian relatives, friends and my Singaporean buddies.

^{II Corinthians 11:14}  And no wonder! For Satan himself transforms himself into an angel of light. ¹⁵  Therefore it is no great thing if his ministers also transform themselves into ministers of righteousness, whose end will be according to their works.

 The past week’s financial markets:

 A. Stock Market: Dow gain 601 points for the week (+1.78%). (Fig. 4).

As I said last week, the hawkish statement by Boston Fed President Susan Collins was NATO(No Action Talk Only). FOMC minutes released indicated while policymakers stressed their “strong commitment” to reducing inflation, support for a higher rate peak may have been less than universal. Keep the market guessing and focused on Fed Talk on interest rates and with the hidden hand keep the money printing press cranking hot. This week we also witnessed The People's Bank of China (PBOC) said the 0.25% cut of the reserve requirement ratio (RRR) to 7.8% will take place on December 5.  

 B. Debt Market: (Fig. 5): USGG10YR ended the week at 3.601% a drop of 13.5 basis points from the previous week. 

Judging from the spread between YR2 and Fed Funds, (Fig. 6), even a 50 basis point increase in December is a luxury neither the Fed nor the US can afford.

UST Yield Curve continued to be seriously inverted, with one month rate gone up by 23 basis points whilst YR30 down by 18 points. This is a mufti-decade record of yield inversion and indicates a continued fearful tightening of credit by banks and a recession is at the door. (Fig. 7)

C. FX Market (Fig. 8): for the week ended November 25, 2022, DXY opened at 106.416 and closed at 106.062 (Down -0.3%). Eur, Gbp and Jpy all made gains against USD, Rmb eased slightly on account of lowering RRR by 0.25%.

 D. Precious Metals & Crypto :(Fig. 9): Gold price opened at $1750.4, and closed the week at $1754.26, a gain of $3.86 (+0.22%).

CTA covered all their short positions with Bullion Banks and Producers provided the liquidity. Net Bullion Bank short position as at Nov 15 stood at 276 tonnes. For the week Silver and Bitcoin gained respectively 2.4% and 1.5%. (Fig. 10).

With the spectacular collapse of Crypto Platform FTX, owning hundreds of billions and over 1 million creditors, many people wondered why Sam Bankman-Fried isn’t in handcuff yet. Well. when you are the steward for the hidden treasure vault of the US Ruling Party, there is a lot of slack given. (Fig. 11)

 ^{Ezekiel 33:2}  "Son of man, speak to the children of your people, and say to them: 'When I bring the sword upon a land, and the people of the land take a man from their territory and make him their watchman, ³  when he sees the sword coming upon the land, if he blows the trumpet and warns the people, ⁴  then whoever hears the sound of the trumpet and does not take warning, if the sword comes and takes him away, his blood shall be on his own head. ⁵  He heard the sound of the trumpet, but did not take warning; his blood shall be upon himself. But he who takes warning will save his life. ⁶  But if the watchman sees the sword coming and does not blow the trumpet, and the people are not warned, and the sword comes and takes any person from among them, he is taken away in his iniquity; but his blood I will require at the watchman's hand.' 

Exhaustion

November 18, 2022 key news items this week:

1. Exhaustion: Last week we speculated some kind of a short term deal has been struck between the West and the East for a limited timeout with observable shifts in the financial markets. This week we are seeing further signs in that direction. Some of the markers are as follows:

 (i) Polish Missiles Incidents: A (two?) soviet era S300 anti-air missile(s?) hit Poland. Poland, Ukraine and UK immediately turned on their propaganda machine to incite war escalation. (Fig. 1).

Interestingly Biden immediately douse the fire and suggested the missile was more likely from Ukraine. One analyst questioned why the confusion between one or two missiles in the news release by Poland. The explosion on impact did not seemed too large and hence it could be a vintage Soviet S300 but Russia could have tested the West by sending a self destruct missile to entice a defense blocking missile by Ukraine with the pair crossing into Polish territory. Russia could then triggered her own missile to self destruct in mid-air leaving the trailing Ukraine missile to strike Poland. For the time being the facts are not knowable but an assumption of a timeout is reasonable whatever version one choose to buy.

 (ii) G20, APEC and ASEAN Meetings: Courteous meetings were seen between heads of states of China/US, China/Australia and China/Japan with further ministerial meetings to follow. However the instigators and lackeys in the form of British and Canadian Prime Ministers were given the harsh treatment. (Fig. 2)

 (iii) Weapons Out-of-Stock and must take a pause: Three separate news items of interests came out within the last 10 days. The first is from Josep Borrell (EU High Representative for Foreign Affairs and Security Policy). He said “The military stocks of most member states have been, I wouldn’t say exhausted, but depleted in high proportion, because we have been providing a lot of capacity to Ukraine” (Fig. 3).

The second news was from Der Spiegel of Germany “Self-propelled howitzers out of action(sent to Ukraine) due to lack of spare parts”. (Fig. 4)

Analysts who monitored US military aid sent to Ukraine.(Fig. 5)

commented that the Avenger air defense systems has been mothballed for decades and a contract for their refurbishment has not been awarded. The 21,000 155mm artillery rounds would only be sufficient for 4 days of combat based on average consumption. The analyst concluded each military assistance package gets smaller and more antiquated which suggests US is also scrapping the barrel for supplies.

(iv) US Runs Out of Places to Borrow : The September US Treasury International Capital Report (TIC) was released late in the week and shows global de-dollarization accelerated. In the month of September, there was a sell down of US$213 billion of Treasuries from the international community and cumulatively since the Ukraine conflict, total Sovereign sell down of Treasuries amounted to US$423.3 billion. (Fig. 6)

I have repeated warned strength of DXY was never a flight of capital to USD. It was simply derivatives at work. In fact when DXY peaked at the end of September, selling of Treasury were strongest. The appearance of an orderly US Credit market is all smoke screens and mirrors. Taking the raw data, the Federal Reserve may appeared to have tapered her Balance Sheet in 2022. (Fig. 7).

The reality is exactly the opposite. Every night, the Fed sold US$2 trillion Treasuries domestically with a contract to buy back the next morning (RRP Reverse Repo Program) . This is just window dressing to mask the huge dumping of US Government Bonds by bond holders.(Fig. 8).

The same applies internationally and Foreign Account RRP shot up to US$377 billion in November and accelerating. (Fig. 9).

Adjusted for this deceptive accounting, I have previously exposed the insider banking cronies have actually dumped and shorted their entire Treasury portfolio in August 2021. They sold quickly and in high prices but camouflaged by the continuous QE of the Federal Reserve. The truth is the Fed had never paused their QE program because the borrowing needs of the US Government far exceeded genuine investors appetite. (Fig. 10)

In fact, the accounting hocus pocus is getting tired and US needs to come clean and negotiate her way out.

The past week’s financial markets:

A. Stock Market: Dow went flat points for the week with just a 2 points change to the previous week (Fig. 11).

There were some carry over momentum from the previous week’s soft inflation number but mid week, Boston Fed President Susan Collins spooked the market by saying for the Dec rate hike 75 basis points is still on the table and Dow gave up all early week gains.(Fig. 12)

B. Debt Market: (Fig. 13):

USGG10YR ended the week at 3.829% a gain of 2 basis points from the previous week. Judging from the spread between YR2 and Fed Funds, (Fig. 14).

Boston Fed Talk looks it is just talk to dampen over enthusiastic market euphoria and likely to be just NATO (No Action Talk Only).UST Yield Curve continued to be seriously inverted indicating a continued tightening of credit and a recession is at the door. (Fig. 15)

C. FX Market (Fig.16): for the week ended November 18, 2022, DXY opened at 106.969 and closed at 106.416 (Up +0.5%). 

Currencies performance are mixed with CNY steady, GBP strengthened after the Polish missile incident and EUR and JPY weakened. Against the USD, oil(Brent and West Texas Intermediate) softened by 8~9% as the economy chills. Gold was steady and silver dips slightly. (Fig. 17)

 D. Precious Metals & Crypto :(Fig. 18) Gold price opened at $1771.2, and closed the week at $1750.4, price eased $20.8 (-1.17%). 

Over zealous leveraged funds continued to redeem their short position in gold whilst produced increased their forward sales. Bullion Banks also increased slightly their shorts. The most interesting development this week is the Bank for International Settlements (BIS) bought back 500 tons of gold. (Fig. 19)

Subsequent to the news, in a shocking development, the Bank for International Settlements has officially closed down its gold swaps.This means banks that have been practising fractional reserve banking with client’s gold will no longer be bailed out by BIS by offering currency deposits to BIS for gold in a swap transaction. Basel III rules will come into effect on January 1, 2023 and will restrict a bank holding client’s gold from matching their liability with a derivative contract at an Exchange but most match their liability with physical metals. According to BIS, some 10,662 tonnes of gold and 105,000 tonnes of silver swaps and Forward exists. It will be interesting to see how London and NY maneuver themselves when the noose is finally tightened. For the week, silver eased 3% whilst Bitcoin held its ground. (Fig. 20)

Revelation 3:17  Because you say, 'I am rich, have become wealthy, and have need of nothing'—and do not know that you are wretched, miserable, poor, blind, and naked. 18  I counsel you to buy from Me gold refined in the fire, that you may be rich; and white garments, that you may be clothed, that the shame of your nakedness may not be revealed; and anoint your eyes with eye salve, that you may see. 19  As many as I love, I rebuke and chasten. Therefore be zealous and repent. 20  Behold, I stand at the door and knock. If anyone hears My voice and opens the door, I will come in to him and dine with him, and he with Me.21  To him who overcomes I will grant to sit with Me on My throne, as I also overcame and sat down with My Father on His throne.