Monthly Archives: February 2014

After Ukraine, the West Makes Its Move for the Russian Periphery

February 26, 2014

The West wants to parlay the success of supporting Ukraine’s anti-government protesters into a broader, region-wide campaign. In fact, the United States has already started to court other key countries in Russia’s periphery.

Circling the Wagons

We have have made a conscious decision to circle the wagons. We see a high probability of

  1. a stock market correction of 30-50% if not an outright crash;
  2. a recession that will rival or surpass the 2007 recession which some argue has never ended;
  3. a world war with the US and western nations on one side and Russia and China on the other side either individually but more likely together, and Canada will do whatever the US wants in this situation;
  4. social revolution in many of the states currently in crisis including France, Spain, Italy, Eastern European countries, Latin American countries and Southeast Asia countries; North Korea will attack South Korea even if a larger Pacific conflict doesn’t erupt;
  5. there will be widespread social discord in countries that don’t experience revolution and the US in particular will use unprecedented suppression of its population, possibly ending the republic;
  6. the Sunni/Shiite divide will come to the brink of nuclear war as Iran builds the bomb and Saudi Arabia repatriates the nuclear weapons that it has paid Pakistan to develop for it;
  7. a global financial crisis of a size never seen before including multiple currency collapses and sovereign defaults;
  8. central banks and governments will be largely powerless to stop an economic collapse because they’ve spent all their ammunition already;
  9. and watch the drought in California produce massive food price inflation if the rains don’t come this year.

Some of these conditions are already underway in countries like Argentina, France, Greece, Spain, Ukraine, Venezuela, and most of the Mideast. We expect a major global event from this list to occur this year and certainly by next year. Since we are globally connected as never before, one event will trigger a cascade through others.

The Dogs that Did Not Bark (So far): The Significance of Israel’s Invasion of Syria’s Airspace

Here is Part 6 of the series, Zero-Sum Historiography: The Palestinian Assault upon History. Reprinted by permission of Paul and from The Bayview Review. See the links at the end for direct access to the rest of the series. This is an important series as Palestine and the myths and misunderstandings around it propagated by the mainstream media (MSM) and the Western intelligentsia (to use an oxymoron) are rampant.

Sometime on January 30, 2013, Israel invaded the sovereign airspace of Syria and destroyed a large target or targets. While Israeli officials are still slide-stepping confirmation of details and still only and hinting at responsibility, signals went out almost at once from highly-placed Israelis tending to confirm the official American account: that Israel had hit a convoy of trucks carrying SA-17 anti-aircraft missiles towards Lebanon. It seems also likely that Syria is right in claiming that a research facility in theDamascus suburb of Jamraya was struck at the same time.

Once More into the Breach: Prospects for Israel-Palestinian Peace

Here is a new essay by Paul Merkley, Once More into the Breach: Prospects for Israel-Palestinian Peace, reprinted by permission of Paul and from The Bayview Review. See the links at the end for direct access to the rest of Paul’s work.

In July, 2013, U.S. Secretary of State John Kerry announced an agreement between the Government of Israel and the Palestine Authority to “return to the peace table” The Secretary made the announcement from Amman, Jordan, following several hours “shuttling” among Jerusalem, Ramallah and Amman. As in all previous episodes of this long-playing drama, the Americans insisted that the Government of Israel “demonstrate its good faith” by undertaking to release up to two hundred prisoners then serving lengthy sentences in Israel’s prisons. Most of those released had been charged with murder, and most of these murders had caught public attention at the time because of their gruesome character, the conspicuous helplessness of their Israeli victims and the brazen pride with which the perpetrators had publicly dedicated these gifts to Allah.

Finite Time Singularities

John Hussman cited the work of Didier Sornette in his weekly letters of April 2013, Increasingly Immediate Impulses to Buy the Dip, and November 2013, A Textbook Pre-Crash Bubble. Sornette derived a log-periodic mathmatical function that approximates well the behavior of bubbles in a wide range of asset classes. The notable feature of the equations is a finite time singularity at which point the bubble collapses. This critical tome point Hussman has pegged as January 17, 2014.

In his latest letter of February 17, 2014, Topping Patterns and the Proper Cause for Optimism, he reviews the bubble hypothesis noting that (our added emphasis):

the “critical point” or “finite time singularity” is not a crash date, but the inflection point from self-reinforcing speculation to fragile instability. Didier Sornette observed this more than a decade ago in Why Stock Markets Crash. Our best estimate of that inflection point remains about January 13. It’s also worth remembering that the “catalysts” associated with sharp market losses have often been fully recognized only after the fact, if at all. As Sornette emphasized, “The collapse is fundamentally due to the unstable position; the instantaneous cause of the crash is secondary.”

Further in his letter he analyses the shape or structure of key market replacements and crashes. We checked the S&P and its current high occurred Jan. 15 at 1850.84. The current reflex rally is approaching this number. It will be interesting to see if it continues to produce a new high or fails and begins a bear market correction.

The importance of this hypothesis – and Hussman is careful to point out that it is only a hypothesis – is that if he is correct, we have a reliable tool for timing bubbles.

Tales from the Downside

SHortly after reading John’s letter we picked this up off of Zero Hedge: “From Self-Reinforcing Speculation To Fragile Instability”. It presents a number of data that are all moving down. In the process the author cites examples from John’s letter.

New Dimensions of U.S. Foreign Policy Toward Russia

Tuesday, February 11, 201411, 2014 – 04:13 Print Text Size

Stratfor

By George Friedman

The struggle for some of the most strategic territory in the world took an interesting twist this week. Last week we discussed what appeared to be a significant shift in German national strategy in which Berlin seemed to declare a new doctrine of increased assertiveness in the world — a shift that followed intense German interest in Ukraine. This week, U.S. Assistant Secretary of State Victoria Nuland, in a now-famous cell phone conversation, declared her strong contempt for the European Union and its weakness and counseled the U.S. ambassador to Ukraine to proceed quickly and without the Europeans to piece together a specific opposition coalition before the Russians saw what was happening and took action.

Another Dry Essay

Drought in the US is something we have been following for years. We have decided it’s time to capture the parameters of the subject. As with many articles we write, we use them for an ongoing chronology of a topic, something that could not have been easily done before the World Wide Web. The importance of this topic is that California feeds North America and California agriculture is based on irrigation. Anything that reduces agricultural output in California will send fresh produce prices skyrocketing. Food inflation then propagates through the economy as reduced expenditure everywhere else. This issue affects you directly.

Figure 1. Progression of the California drought, Jan. to May, 2014.

And the current situation:

Figure 2. Current California drought assessment (through Sept. 2014.)


Source: US Drought Monitor.

What follows is the chronology of articles with associated comment. We may at some point create a summary.

How the Geneva Accords Have Increased the Isolation of Israel

Here is a new essay by Paul Merkley, How the Geneva Accords Have Increased the Isolation of Israel, reprinted by permission of Paul and from The Bayview Review. See the links at the end for direct access to the rest of Paul’s work.

In a previous essay, “King Abdullah’s bombshell,” (November 13, 2013), I explored some implications of the rejection by King Abdullah of a seat for his Kingdom of Saudi Arabia on the United Nations Security Council (October 18, 2013.) Since then, the very thing that Abdullah had sought to prevent by this petulant action – getting up from the table, and tipping-over the game-board – has happened. Following breakneck negotiations at Geneva — “breakneck,” that is, as compared to a decade of chin-wagging under UN auspices – the United States, the UN, and major western powers have surrendered to Iran the right to retain a “nuclear enrichment” programme that makes sense only as a precursor to acquiring nuclear weapons. Under the same Accord they have wound down the economic sanctions that had  hitherto inhibited Iran’s progress along that same path.

Now I need to back up a few months in time and widen the lens of the geographic view-finder a few degrees in order take in a larger perspective than I considered when our focus was on Saudi Arabia and its diplomatic quandary. In this present essay I consider the effect of the Geneva Accords upon Israel, In an essay to follow, I shall consider how the Accords have affected Saudi Arabia and other regional players.

Health Care By Number

As Canadians know, Canada has the best healthcare system in the world. And the main reason why is because it is comprised of Canadians. Canadians are polite. Canadians have a sense of fairness bordering on the pathological. And Canadians are mostly socialists whether they remain in the closet or have come out. These are all qualities as we shall see that contribute to our excellent healthcare system.

Sam Collins – February 2014

  • Short-term:
    • bullish
  • Midterm:
    • weakness in later March
  • Long-term:
    • the long-term trend is bullish
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