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Opening Salvos Thrown – What Are Putin’s Next Steps in Ukraine?

Opening Salvos Thrown – What Are Putin’s Next Steps in Ukraine?

Last week I wrote that Russian President Vladimir Putin rewrote the rules for the geopolitical game board. A week into his campaign to officially “demilitarize and de-Nazify Ukraine” it’s clear to me that Putin’s ambitions lie far beyond this stated goal.

He will, however, stick to that script until that part of the campaign is complete.

Today I want to start outlining where we go next and to do that we have to describe where we are.

Looking around the reports that are the most credible (and properly bracketing for any partisanship) we are staring at a complete, effective neutralization of the Ukrainian Armed Forces (UAF) to hold any of the ethnically-dominant areas of Ukraine.

In a post for my patrons on February 25th, responding to an excellent article by Alistair MacLeod I wrote the following:

MacLeodBoth sides probably do not know how fragile the Eurozone banking system is, with both the ECB and its national central bank shareholders already having liabilities greater than their assets. In other words, rising interest rates have broken the euro system and an economic and financial catastrophe on its eastern flank will probably trigger its collapse.

I’ve been banging my shoe on this table for 3 years now.  If the US/NATO respond with some kind of guerilla war here to hang Ukraine like an albatross around Putin’s neck, as we should expect, then Europe is in big trouble financially.

Because the financial war will keep escalating as Putin responds militarily.  Remember, he’s openly threatened the ‘decision makers’ here.  And no amount of mealy-mouthed CIA/MI6 disinformation will deter him from action anymore.

This is always what I meant by “spooks start civil wars, militaries end them.”  There is no more War for Ukraine.

I still believe that. This isn’t a war for Ukraine, it’s a war for the future of the entire world. Ukraine represents the hill both Davos and Russia have chosen to live or die on.

…click on the above link to read the rest of the article…

Davos is Making the Central Bank Case for Gold

Davos is Making the Central Bank Case for Gold

A few months ago I talked about the upcoming changes to the way adoption of Basel III’s new bank reserve rules would alter the gold market. In short my conclusion was similar to that of Alistair MacLeod’s and others, that Basel III should collapse the egregious manipulation of the gold market through the use of using futures and unallocated gold as bank reserves.

In May I wrote:

In effect, Basel III, if implemented in its current form, would change the gold market from a speculative one based on perceptions of the efficacy of monetary policy to control real interest rates to one that should force price discovery in an almost purely physical market. As I told my Patrons in May 16th’s Market Report video, physical gold will go from being the price taker to the price maker.   

I didn’t then nor do I think now that will happen immediately after Basel III goes into effect in the U.K. on January 1st. But I do think the recent weakness in gold has been an early sign of stress within the gold market brought on by the upcoming rules implementations.

And that has sent gold lower in recent weeks despite rising inflation and falling real interest rates. Of course this is because the markets have been overpricing the ‘transitory inflation’ argument put forth by the major central banks.

So, when Jerome Powell came out, in his first important statement post-reappointment announcement, and put a fork in ‘transitory’ inflation the markets were properly shocked. This happened on the heels of OmicronVID-9/11 dominating the headlines and also creating some overblown market reactions thanks to poorly-programmed headline trading algorithms.

…click on the above link to read the rest of the article…

Never Go Nuclear — The EU Goes After Hungary

Never Go Nuclear — The EU Goes After Hungary

If there is one thing people with power always do when confronted with intransigence it is they always go nuclear.

As a parent we’ve all been there.  That moment when your child calls your bluff on a particular thing you’ve been arguing over and you’re left with no other option than to go through with some terrible threat or back down.

Backing down is usually the right call, but the right course of action was to never get to that situation in the first place.

Because when you do go nuclear the damage from that is invariably far worse than whatever it was you were fighting about in the first place.  Because the nuclear option creates scars.  It builds layers of distrust which cannot be smoothed over with an apology later.

Well, now the EU has invoked their version of nuclear option against Hungary for refusing to accept migrants as part of the Soros/Merkel plan to import chaos and unrest into all corners of the European Union.

Hungarian President Viktor Orban has steadfastly refused to budge one inch on this issue.  He has politically gone after George Soros directly by passing a strong anti-NGO law that takes its structure from a similar one passed in Russia championed by President Vladimir Putin.

Orban’s refusal to accept one migrant is where the rubber of national sovereignty meets the road of globalism.  Orban knows exactly what he is doing.  And he knows the consequences of this course of action.

The EU’s response is a symptom of a much deeper problem that persists due to its fundamentally anti-democratic structure.  With the veneer of democracy here, calling for a vote to ratify a biased report on Hungary’s human rights abuses, 487 MEPs voted to pursue stripping Hungary of its voting rights within the EU, which is what the ultimate result of an Article 7 invocation would entail.

…click on the above link to read the rest of the article…

The Real Contagion Threat is Political

The Real Contagion Threat is Political 

The real danger to the current institutional order was just demonstrated in Sweden. While I’ve talked at length about the potential financial contagion stemming from the implosion of multiple emerging market currencies it is the growing political crisis in Europe that will shape our future.

Sweden is The Land where Socialism Works, or so I keep getting told by ignorant leftists who cling to the power fantasy that central planning is the only way to make the trains run on time.

Central planning does do that, but only to deliver people into the nightmare of social disorder brought on by the disruption of the natural flow of capital.

Venezuela, South Africa, Soviet Union, post WWII Britain … you get the idea.

But, the effects of the collectivist mindset are far more pernicious than those extreme examples.  And it is important we understand how little policies grow into big problems over time due to shaping people’s decisions through government edicts.

Corps Insanity

There is no better example for what I’m talking about than the U.S. Army Corps of Engineers.  A completely useless organization which sucks up billions in tax money to straighten rivers, build dams and alter the landscape to fit the needs of whoever paid Congress the most in lobbying money that year.

They engage in projects that cannot easily be done in the free market, nor should be done. But their activity creates downstream effects from their meddling which multiply over years and lead to problems which are orders of magnitude larger than they would have ever become naturally.

The Red Tides occurring off the Florida coast now are a political cudgel being swung at Governor Rick Scott to prevent him from moving up to U.S. Senator over his ‘environmental record.’  Now I’m no fan of Skeletor, as we call him down here, but these charges are simply grandstanding.

…click on the above link to read the rest of the article…

A League of Leagues of Their Own in Europe

A League of Leagues of Their Own in Europe

“There’s no crying in baseball!”
— A League of Their Own

The Great Realignment is coming to Europe next year.  All the writing is on the wall.

This summer saw German Chancellor Angela Merkel survive a leadership challenge by her coalition partner Horst Seehofer over her immigration policy.

She needs political wins to maintain her hold on power.  Standing firm against President Trump on the Nordstream 2 pipeline and having a cordial summit with Russian President Vladimir Putin is a good start.

Because most of Europe is tired of 1) Germany setting policy for the entire EU and 2) anti-Russian sanctions killing their trade.

But week-long protests in the Saxony town of Chemnitz over the stabbing of a local man are dogging her.  Germany’s polling numbers continue ebbing away from Merkel.

The more she is weakened the more emboldened her opposition becomes.

Cue Italian Deputy Prime Minister Matteo Salvini and Hungarian President Viktor Orban. They met to openly strategize over ending open migration into the EU.  On the surface Italy and Hungary seem at odds on this issue.

Italy wants its borders closed and its migrants distributed throughout Europe.

Hungary steadfastly refuses to take even one migrant.

This dichotomy is what the European media and politicians think will keep these two rising titans in conflict.

But, as Mike Shedlock pointed out recently at Townhall.com, these two men have bigger goals which they are in total agreement on — securing their borders to preserve their cultural and national identities.

That’s why Salvini is calling for “A League of Leagues” across Europe.  He will succeed.

This is the guy who successfully rebranded the secessionist Northern League into the MIGA party – Make Italy Great Again. 

Then he and Five Star Movement leader Luigi Di Maio navigated the Italian Swamp to form a government experts said couldn’t work, while simultaneously neutering establishment stalking horse Silvio Berlusconi.

…click on the above link to read the rest of the article…

Five Pillars of Debt Default

Five Pillars of Debt Default

Regular readers of Gold Goats ‘n Guns know that I’ve been handicapping a major sovereign debt default to begin here in 2018 or early 2019.  But, what do I mean by that?

How does a sovereign debt default come about?  And who will default?

There are a staggering number of factors that feed into this thesis but, for me, to keep it simple it comes down to five important trends coming to a head at the same time.

I call them the Five Pillars.

#1 Massive Foreign Corporate Debt

After ten years of ‘experimental monetary policy’ which drove borrowing costs in U.S dollars down to record lows, foreign companies still reeling from the after-effects of the 2008 financial crisis borrowed trillions of dollars to fund the global expansion of the past few years.

That debt pays investors in US dollars.

But, foreign companies tend to book revenue in their local currency.

A falling local currency makes dollar-denominated debt more expensive to pay off.

This leads to the next Pillar…

#2 Quantitative Tightening.

QT is simply the opposite of QE, Quantitative Easing.  QE expanded the stock of dollars.  QT is contracting it.  This is what is fueling a rising U.S. dollar.  This, in turn, is making it harder for foreign companies to keep up with their bond payments.

They are forced to sell, aggressively, their local currency and buy dollars in the open market.

This is why the Turkish Lira is in serious trouble, for example.

That puts pressure on the country’s sovereign bond market. Since a falling currency lowers the real rate of return on the bond.

Falling currency, falling bonds, Turkey will put on capital controls next.

This feeds into the next Pillar…

#3 Political Unrest in Europe and Emerging Markets

…click on the above link to read the rest of the article…

Olduvai IV: Courage
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Olduvai II: Exodus
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