The week ended on July 13, 2024. Interesting news items to look at this week are:
Darkness Beyond Comprehension: I started this Blog initially as an exercise to allow myself to sit quietly over a Saturday morning to ponder what happened in major world events that may impact decisions regarding asset allocations for my family’s portfolio. As my peers are all in their retirement I thought sharing my understanding of economics and financial markets won’t be such a bad idea because amongst them are some very learned people who may point out my blind spots and biases. What I failed to appreciate are the records I kept were witnesses to an indictment of the depravity of a fallen world and the darkness at heart of some globalist leaders that are totally beyond comprehension of us common folks.
(i) The Hannibal Directive: On July 7, the Israeli newspaper Haaretz came out with competent evidential documentation that on October 7 2023, the Israeli Defense Force (“IDF”) ordered the Hannibal Directive and by that Israeli helicopter gunship had in fact killed many many Israeli citizens. (Fig. 1).
The Hannibal Directive is the name of a controversial procedure used by IDF to prevent the capture of Israeli soldiers by enemy forces. According to one version, it says that "the kidnapping must be stopped by all means, even at the price of striking and harming our own forces.
(ii) The apolitical medical science journey Lancet estimated that up to 186 000 or even more deaths could be attributable to the current conflict in Gaza. Using the 2022 Gaza Strip population estimate of 2,375,259, this would translate to 7·9% of the total population in the Gaza Strip. Even at that Natanyahu would not pause for a ceasefire to maintain his grip on power. (Fig. 2)
(iii) NATO Summit: In a rare moment of sanity, Zelensky admitted that it is more important not to loose people than territories. (Fig. 3).
Sadly the bunch of has been leaders at the NATO Summit would continue with their rhetoric of war expansion not only with Russia but intrusion into Asia with accusations of China sabre rattling. (Fig 4).
The North Atlantic security bloc this week declared China was a “decisive enabler” of Russia’s war against Ukraine and demanded Beijing halt shipments of “weapons components” and other technology critical to rebuilding Russia’s military. The ironic part of these senseless diatribe is that US DOD sourced 40% of its military chip requirement from China whereas China does not directly supply the Russian Armed Forces. (Fig. 5).
Either the NATO leaders do not know what they are talking about or were purposely deceiving their own countryman.
Financial market performance for the first two weeks in July:
A. Stock Market: As a veteran of the financial markets, I have witnessed too many times stocks with unique US technologies were priced to the stratosphere than crashed back into the commons. I postulated previously, US must find a substitute to replace petroleum no longer denominated solely in USD to maintain her Dollar Hegemony. US Chips and Tech stocks seemed to be an appropriate surrogate. First the Fanng stocks (Facebook, Amazon, Apple, Netflix, and Alphabet (GOOG), then the Magnificent 7 (Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA, and Tesla).When Tesla met its match with BYD, the fad was narrowed to the AI 4 sisters. It now appears the steam has also run out of the AI pump as well (Fig 6).
Goldman Sachs has just came out with a piece titled “Gen AI: Too Much Spend, too little benefit;” (Fig. 7)
as NVIDIAtumbles again as AI mania cools. (Fig. 8).
B. Debt Market: USGG10YR has drifted down to 4.186% as the US economy cooled despite still Hawkish rhetoric from Fed Chairman Powell. (Fig. 9).
Saudi Arabia threatened to sell off European debt if G-7 seized Russian assets: Report (Fig. 10).
Riyadh has been concerned about western efforts to seize the Kremlin's assets for months. In April, Politico reported that Saudi Arabia, along with China and Indonesia, was privately lobbying the EU against confiscation. But Saudi Arabia’s threat to unload the debt of European Union members would represent a serious show of force and willingness by the kingdom to leverage its economic heft to sway western policymakers. (Fig. 10).
The market also speculated that JCB lobbied against the Federal Reserve to narrow its spread against Japanese Government Bonds in a bid to rescue the falling Yen and the dumping of US Treasuries. Investors is expecting a Fed rate cut in September.
C. Currencies, Commodities and Precious Metals: (Fig. 11)
The Sina news medium reported that the customary tactic of gold price suppression by US Bullion Banks naked shorts to prop up the value of USD met its match when a Chinese Gold Fund bought long in the future markets against the Bullion Bank shorts then demand physical delivery. This totally caught the Bullion Banks flat footed by virtual of its size and deep pocket. It was reported that the Chinese Gold Fund Zhongcai may have profited as much as CNY 10 billion. It fits an old Chinese saying “上得山多終遇虎” (If you venture into the mountains too many times, you will eventually encounter a tiger). As at 9th July 2024, the 15 or so Bullion Banks are net short 647 tons of Gold on Comex (notional value of $55 billion) and 6,155 tons of Silver ($6.6 billion). It is a near impossibility for the Bullion Banks to cover their short position as available supply of gold are all bought by Central Banks of the Global South in preparation for the BRICS currency called “The Unit” and the mBridge settlement mechanism.
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.
