The King of this World

The week ended on June 15, 2024. Interesting news items to look at this week are:

The King of this World: This week in politics earmarked many watershed moments that will cast a long shadow on things to come. In particular the question of who actually rules the world.

(i) European Parliamentary Election and G7 Meeting: The massive swing of votes to the left and right political spectrum against the existing ruling elites is an expression of dissatisfaction that European leaders did not take their countryman’s interests as a primary consideration. The UK Telegraph summarized the sentiment in a piece titled “Welcome to the most unpopular G7 summit ever”. The net approval rating of all G7 Leaders are negative and some very negative. (Fig. 1).

Macron immediately called a snap election in a gamble that the Paris Olympics would generate favorable results for the ruling regime. (Fig. 2).

Nothing can paper over the evil intentions behind the globalist agenda of the Ukrainian Color Revolution and subsequent conflicts over the past 10 years . No spin would white wash the apartheid Zionist Collectives and its crimes against humanity.

(ii) End of Petrol Dollar:  "Saudi Arabia's 50-year-old petrodollar agreement with the United States has expired, with no new agreement in place," BRICS News tweeted. "Saudi Arabia will now sell oil in multiple currencies, including the Chinese RMB, Euros, Yen, and Yuan, instead of exclusively in US dollars." (Fig. 3).

An alternative called “The Unit” is being planned and be tabled at the BRICS Summit at Kazan between October 22 to 24.

(iii) UN Security Council Resolution on Gaza Cease Fire : Finally after 247 days of genocide, the UN Security Council passed a binding resolution calling for ceasefire in Gaza. (Fig. 4).

What has been left out was a long term security arrangement for a two state resolution.

(iv) Putin Name Conditions for Ukraine Peace Talks: Ukraine must remove its troops from Russia’s new regions before any meaningful peace talks can begin, President Vladimir Putin has said. “Our side will order a ceasefire and start negotiations the minute Kiev declares that it is prepared to take this decision and starts actual withdrawal of troops from those regions, and also formally informs us that it no longer plans to join NATO,” the Russian leader pledged. (Fig. 5).

Zelensky has immediately rejected the proposal and continued with his two day Peace Summit in Switzerland without inviting Russia.

(v) US plans ‘Hellscape’ drone swarm in a Taiwan war: This month, The Washington Post reported that the US Indo-Pacific Command, led by Admiral Samuel Paparo, has announced a “Hellscape” strategy to use drone swarms to thwart any potential Chinese invasion of Taiwan. (Fig. 6).

The following are financial market performance for the first two weeks of June 2024.

A. Stock Market:  Dow Jones Industrial Average declined by 118 points to 38,589 or -0.3 %. (Fig. 7).

The market continued to be volatile as punters moved risk on or off according to outlook of inflation and Fed’s Pivot.

B. Debt Market: Yield on USGGYR10 dropped from 4.502% to 4.211% for the first two weeks of June (Fig. 8), a drop of 29 basis points as core inflation dropped from 3.61% to 3.42%.

The Fed remained unconvinced that interest rates can be lowered in the latest FOMC meeting.  

C. Commodities and Precious Metals: Trading results for first two weeks in June 2024 (Fig. 9) as follows: NASDAQ (+7.10 %), S&P500 (+3.84%), Oil (+1.04%), Russian Ruble (+0.92%), USD Index (+0.81%), Gold (+0.19%), JPY (-0.13%), CNY (-0.20%), GBP (-0.47%), Eur (-1.37%), Copper (-2.61%), Silver (-2.71%), Bitcoin (-2.74%), and Uranium (-7.02%).

The most notable event is the Eurozone cut in interest rate from 4% to 3.75%, the first time in 5 years. The weaponized US financial team took the opportunity to further jack up USD and pumped US Tech stocks higher, particularly Nvidia, Apple and Microsoft. There were minor profit taking in copper and silver but hedge funds still maintain large long positions in both.

II Corinthians 4:2  But we have renounced the hidden things of shame, not walking in craftiness nor handling the word of God deceitfully, but by manifestation of the truth commending ourselves to every man's conscience in the sight of God. 3  But even if our gospel is veiled, it is veiled to those who are perishing, 4  whose minds the god of this age has blinded, who do not believe, lest the light of the gospel of the glory of Christ, who is the image of God, should shine on them. 5  For we do not preach ourselves, but Christ Jesus the Lord, and ourselves your bondservants for Jesus' sake.6  For it is the God who commanded light to shine out of darkness, who has shone in our hearts to give the light of the knowledge of the glory of God in the face of Jesus Christ. 

Street Fighters Zangief vs Guile

The week ended on June 8, 2024. Interesting news items to look at this week are:

 Street Fighters Zangief  vs Guile: I took the theme of a classic video game Street Fighter as an anchor for this week’s Blog (Fig. 1).

In the video game Zangief (the Russian Red Cyclone) moveset is centered on grappling whilst Guile (the American GI) has the Sonic Boom and the Flash Kick. The real life battle in Ukraine is strikingly similar.

(i) Last week Biden gave Ukraine permission to strike Russia territory with American weapons: (Fig. 2).

This is a major escalation and US has just crossed its own red line. The restrain by Putin has been criticized within Russia as the West misread Putin’s patience as weakness because the West only respond to actual force but not warnings. The veil between a hot war and a proxy war between two nuclear superpowers is wearing awfully thin.  Russia in response will supply long range missiles to adversaries of US, a move said reluctantly by Putin will have a destabilizing effect on global security. (Fig. 3).

On the battlefield, Ukraine is loosing one battalion a day in casualties which is unsustainable.  Fresh Ukrainian conscripts (bakers and carpenters) are fed to the front line with just 3 days of training. (Fig. 4).

It was reported that land mines were laid by AFU border guards at the Romanian border to deter men from fleeing the country to avoid conscription. (Fig. 5).  

The bear had indeed hug Ukraine and NATO tightly and progressively squeezing out the life force of the AFU and her Neo Nazi backers. What then is that hope by hitting targets within Russia that Russia would be threatened to seek peace at NATO’s advantage.  Summer is upon the Northern Hemisphere and whatever needs to be done will be

In the meantime, different factions within the US - Anti-Russian Hawks, Anti-Chinese Hawks, Pro-Israel Hawks, Anti-Shiite Hawks are each demanding their agenda stays at the top of the pile and the octogenarian at the White House have failed so far to maintain a proper balance and prioritize resources. Biden’s maneuvers for a re-election will result in dismemberment of the US. (Fig. 6)

 

I am still maintaining my thesis that the Ukrainian war would end in August 2024.

 

(ii) Biden says not ruling out use of U.S. forces to defend Taiwan (Fig. 7):

The problem is US lacks the logistics to sustain another war of attrition when China has such overwhelming geographical advantage. After decades of war, wars against insurgents in Afghanistan and the Middle East, Pentagon simply does not have the budget nor indeed a historical need to maintain logistical support for a peers war in neither Europe nor Asia. In a piece by the Daily Mail, military exercises in the Philippines with a view to fight China in Taiwan would fail because US does not have fast and stealthy boats to ferry US troops from the South China Seas to Taiwan. (Fig. 8).

Worst still the US Navy has shelved most of its Tender Ships (Supply and repair ships for bigger vassals) and a long war of attrition with China is doomed for failure. Two weeks ago, China flexed her muscle by completely encircled Taiwan in a single day when the newly elected President of Taiwan made yet another provocative secession rhetoric. (Fig. 9)

Proverbs 25:6  Do not exalt yourself in the presence of the king, And do not stand in the place of the great; 7  For it is better that he say to you, "Come up here," Than that you should be put lower in the presence of the prince, Whom your eyes have seen. 

Saturation & Precipitation

The week ended on June 1, 2024. Interesting news items to look at this week are:

1. Saturation & Precipitation: In chemistry, saturation is a natural state when  a solution has reached a point in which no more solute can be added. Addition of solute after this point would result in a solid precipitate or gas being released. Such a mixture is called a saturated solution. (Fig. 1)

In simple language, the environment simply won’t take the intrusion anymore. This phenomenon equally applies to economics, politics and financial markets. Sadly few politicians and planners are ahead of the curve as too often myopic officials take credit during an upswing and refuse telltale signs of looming dark clouds.

(i) Ukrainian and Gaza Wars:  The encroachment of NATO against former Soviet satellite states and the Apartheid Zionist settlement Policy against Palestinian Partitions have been around for decades. No matter how much propaganda is spin in the media, precipitation in the form of wars finally arrived in 2022 and 2023.  There are only two ways to prevent further precipitation, the first method is to cease addition of solute to the mixture. Russia is willing to negotiate when the predominant ethnic Russian oblasts of  Donetsk, Kherson, Luhansk and Zaporizhzhia are secured under the Russian Federation. (Fig. 2).

Equally Hamas would release all hostages in exchange for a permanent ceasefire, reconstruction and resettlement of displaced refugees. (Fig. 3).

The Biden Administration has rejected the former but conceded the later. A number of factors have forced US hands to resolve the Israeli genocide of Palestinians including but not limited to (a) ICJ and ICC verdict against Israel of genocide and crimes against humanity, (b) NATO members Ireland, Spain & Norway breaking away from other European countries to formally recognize an independent State of Palestine (Fig. 4),

(c) China and 22 Arab Countries (many are US allies) met in Beijing and push for a peaceful settlement (Fig. 5).

This is a severe downgrading of US influence in the Middle East. Finally and (d) the fearless Houthis claim of a Missile Strike against the US Carrier Dwight D. Eisenhower in the Red Sea. (Fig. 6).

Another chemical method to cease precipitation is to create a supersaturated solution. An aqueous solution can be rendered supersaturated by first dissolving the solute in water at an elevated temperature using enough to give a concentration just under its solubility at that temperature. After the last of the solute crystals have dissolved the solution is cooled.  In geopolitical terms, this means US/NATO need to burn up the heat of war in the Ukrainian theater to such a bloody level that both sides decide to call it quits simultaneously.  An example is the North/South Korean & US armistice. The Korean War was so bloody that there were 3 million casualties. The armistice that began in 1953 had continued until this day. (Fig. 7).

History suggests fatalities and casualties are highest in the closing months of any war. In the month of May, Russian MOD claimed AFU had lost 35,000 troops, that is the equivalent of one brigade per day, not even NATO could sustain that type of losses. (Fig. 8).

Yet US had just authorized Ukraine to use US weapons to hit targets within Russia. (Fig. 9).

This is a serious escalation because Ukraine had previously targeted Russian long range military radar installations, ones that track potential US nuclear strikes against Russia and allow Russia just 20 minutes lead time to respond to the threat. (Fig. 10).

Such existential threats against Russia would mean the war between NATO and Russia would turn extremely ugly. Could it be also that in anticipation of a bloody European theater, Biden wish to quickly wrap up the sad saga in Gaza and concentrate all military resources in Europe? Be warned my friends.

(ii) Saturation of USD Debt:  We have for the past few months reminded readers of a liquidity crunch in the US financial markets in May. YR2 Treasury auction results held at the end of May was ugly with Primary Dealers compelled to buy 16.6% of the issue. (Fig. 11).

I have repeatedly said in my Blog the true reason for The Fed to keep interest rates higher and longer was not fighting inflation.  In every aspect, supply of US Treasuries has fully saturated the global financial markets. Currently US GDP growth rate is 1.9%  but this growth rate came at the expense of a fiscal deficit of 6.3% of GDP. If we subtract the impact of the fiscal deficit, the US private sector actually shrunk by 4.4%. I have prepared a chart showing the 4 main buyers of US Treasuries between 2020 and 2024 (Fig. 12).

They are the Federal Reserve (Black), Social Security (Orange), Foreign Holders (Green) and US Domestic Buyers (Blue). With demand from Foreign Buyers and Social Security a flatline,  and the Fed cosmetically giving the printing press a pause, the burden of funding endless wars and welfare entitlements finally fell squarely on US citizens. Between January 2020 and March 2024, this burden increased from $8.5 trillion to $15.9 trillion and the trajectory is on an accelerated increase. Without further money printing by the Fed, the US Private Sector’s capacity to further absorb new Federal Issuance will be exhausted in July 2024. The arithmetic is simple, the US Treasury need to raise $1 trillion new debt every 100 days, that is $4 trillion per year. (Fig. 13).

US National savings rate is between 13% to 17% on GDP of $27 trillion. Unless households do not pay down their mortgage, car, student and consumer loans and Corporation do not pay dividends, make new investments or replenish depleted equipment and every cent goes to the Federal Government, then US Federal Government could barely scrape by.  Here is the catch 22 of the US hegemon, without activating the printing press, the US Govt will default but with printing, the USD will be junked. Ever wonder why the urgency to escalate into a conflict with the Global South into WWIII.  

The following are financial market performance for May 2024.

A. Stock Market:  Dow Jones Industrial Average rose by 870 points to a May close of 38,686 or +2.3 %. (Fig. 14).

Speculation of a Fed Pivot kept the market in gyration as euphoria turns to disappointment. News of Dell Computer AI server sales were sold at “near zero” margins dampened the AI driven sector all round. (Fig. 15)

B. Debt Market: Yield on USGGYR10 dropped from 4.69% to 4.502% for the Month (Fig. 16)

or an decline of 18 basis points helped by a cooling down of the economy as PMI showed significant weakness.

C. Commodities and Precious Metals: Trading results to mid Q2 2024 (Fig. 17)

as follows: Silver (+21.32%), Copper (+14.29%), Gold (+4.14%), Russian Ruble (+2.36%), GBP (+0.97%), Eur (+0.54%), NASDAQ (++0.34%), USD Index (+0.17%), CNY (-0.19%), S&P500 (-0.36%), Uranium (-1.96%), Bitcoin (-3.05%), JPY (--3.72%) and Oil (-6.77%). A note worthy mention here is price for silver and copper both had a spectacular rise in the month driven by a realization that demand for AI will have a profound impact on electricity demand. A search query on ChatGPT will consume 15 times more energy than a Google search query. (Fig. 18).

An even more profound impact is the demand for very precise and stable power supply. Chinese transformer manufacturers have received order increase by a 1000 fold and prompted speculators to pile in om cooper (for transformers) and silver (for photovoltaic cells). The forerunner of AI service provider in the US, Microsoft, could not wait for the long lag time for the development of legacy electricity infrastructure and is directly investing in Solar power generation. (Fig. 19).

I need to declare here I have an interests in silver bullion. China is the world’s leading provider of solar panels with an 80% world market share.

Matthew 6:19  "Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal; 20  but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. 21  For where your treasure is, there your heart will be also. 22  "The lamp of the body is the eye. If therefore your eye is good, your whole body will be full of light. 23  But if your eye is bad, your whole body will be full of darkness. If therefore the light that is in you is darkness, how great is that darkness! 24  "No one can serve two masters; for either he will hate the one and love the other, or else he will be loyal to the one and despise the other. You cannot serve God and mammon.