Steve Bull's Blog, page 1262
November 8, 2017
Lebanon – the next front in the Great Gas War.
The Great Gas War has already two distinct fronts: The now relatively quiet Northern Front in Ukraine and the Southern Front in Syria in which the Western empire has been losing. It looks to me that Lebanon is being targeted as the next front, where the West hopes its loses might be recouped.
Yesterday, November 6th, Reuters reported,
Saudi Arabia said on Monday that Lebanon had declared war against it because of attacks against the Kingdom by the Lebanese Shi‘ite group Hezbollah.
This comes after Israel, Saudi’s long time though largely un-offical best friend in the region, has been very publicly preparing to renew its own war with Lebanon – or more accurately with Hezbollah. As the American news journal Newsweek put it recently,
ISRAEL PREPARES FOR ANOTHER WAR WITH HEZBOLLAH AS IDF PRACTICES LEBANON INVASION.
Why now and why Lebanon? Well the rulers of Saudi, a Sunni dominated country, will tell us that it is because Hezbollah is a Shia terrorist organisation. “Hezbollah” literally means the “Party of Allah” or “Party of God”. Saudi Gulf affairs minister Thamer al-Sabhan yesterday pointedly referred to Hezbollah as, “the Lebanese Party of the Devil”. Saudi is not alone of course, Hezbollah has also been listed as a terrorist organisation by America, Israel, the Arab League, the UK and the EU. It is also, however, part of the popular government of Lebanon having seats in its parliament.
I suggest, however, a powerful reason that a new war with Hezbollah may be in the offing is because Lebanon is the next link in any gas pipeline that could potentially bring Iranian Gas to Europe. That was the reason the West decided to “liberate” the Syrian people and it will be why they decide to enforce the same salvation upon the people of Lebanon.
…click on the above link to read the rest of the article…
The Mainstream Media Is Talking About A Coming Middle East War That Could Involve Saudi Arabia, Iran, The U.S. And Israel
People better start waking up and paying attention to what is happening in the Middle East, because the situation is becoming quite serious. If things go badly, we could be facing a major regional war which would involve not only Saudi Arabia and Iran, but also potentially the United States and Israel. Yesterday, I quoted an article in the New York Times that warned that tensions between the Saudis and the Iranians were raising “the threat of a direct military clash between the two regional heavyweights”. And now Jake Novak of CNBC is saying that a “direct conflict between Saudi Arabia and Iran, as opposed to the proxy war they’re fighting in Yemen, looks inevitable.”
I put those last two words in bold so that there wouldn’t be any confusion. In fact, Novak is warning that the Saudis “are marching ever closer towards a wider regional war”. Novak understands the dynamics of the Middle East, and he realizes where things could be headed if cooler heads do not prevail.
Saudi Arabia and Iran have already been fighting proxy wars against one another in Syria and Iran for quite a while, but a direct military conflict between the two could literally be a nightmare scenario.
One of the primary characters in this ongoing drama is Saudi Arabia’s extremely hawkish crown prince Mohammed bin Salman. He hates Iran with a passion, and he has already said that he believes that a peace dialogue with Iran is impossible.
And over the past several days, events in Saudi Arabia and Lebanon have moved talk of war to the front burner…
…click on the above link to read the rest of the article…
Heading Toward Nuclear War: Why?
That’s what I hold quite likely in case the present US administration under Donald Trump’s formal leadership continues down the path its in-fighting militarist fractions seem to have chosen.
We’re in the worst, most dangerous situation since the Cuban Missile Crisis. Sitting down and hoping for the best is neither responsible nor viable or wise.
I can only hope that I will be proved wrong. That the present extremely dangerous tension-building will die down by some kind of unforeseen events or attention being directed elsewhere.
The world could quite well be drifting toward what Albert Einstein called ’unparalleled catastrophe’. It’s something we may – or may not – know more about when President Trump returns from his trip to Japan, South Korea, China, Vietnam (APEC where he also likely to meet Russian President Putin) and the Philippines.
Except for 93-year old Jimmy Carter offering to go to North Korea, we witness nobody taking any mediation initiative – not the UN’ S-G Guterres, not the EU, not European NATO countries, not BRICS, not single countries like Sweden, not… well, you name them.
It’s about denial, about heads deep down in the sand, people hoping for the best at the moment when humanity’s future is in the hands of a couple of leaders from whom they would probably not buy a used bicycle.
That this silence all around is a roaring fact, is about as tragic and dangerous as the situation itself.
What most people don’t recognise – mainly thanks to the Western mainstream media – is that this is an a-symmetric conflict, an extremely a-symmetric conflict at that. For instance, North Korea’s military expenditures compared with those it must see as its adversaries in case of war is about 1:100, China excluded.
Why is the present situation so dangerous?
Why are we facing, seriously and for the first time since the Cuban Missile Crisis, an increasing risk of nuclear war?
…click on the above link to read the rest of the article…
What Hayek Tells Us About the Link Between Ultra-Loose Monetary Policy and Political Instability
The European Central Bank will increase the overall volume of its bond purchase program to 2.550.000.000.000 euros by September 2018. The main refinancing rate will remain at zero. Mario Draghi has stressed that this policy shall continue until inflation picks up sustainably (which is unlikely to happen in the foreseeable future). The works of Friedrich August von Hayek (1931, 1944, 1976) help to explain why the tremendous monetary expansion is increasingly causing growing economic and political instability in Europe.
Hayek’s (1931) Production and Prices explains boom and bust with central bank mistakes. During the upswing, the central bank keeps the interest rate too low. Investment projects with comparatively low marginal efficiency are launched, financed by credit creation of the banking sector. Share prices hike, because profit opportunities of enterprises and banks increase, while deposit rates are low. Wages do not rise as long as idle capacities in the labor market exist. As soon as wages start to rise, enterprises lift prices and inflation picks up. When the central bank increases the interest rate to contain inflation, investment projects with low marginal efficiency have to be dismantled. The boom turns into bust. The central bank aggravates the recession by keeping the interest rate too high.
To understand the economic development of the industrialized countries since the mid 1980s Hayek (1931) is important, but two modifications have to be made (Schnabl 2016). In line with Hayek, central banks around the globe have tended to keep interest rates too low during upswings, thereby causing exuberant booms. In contrast to Hayek’s theory, they cut interest rates fast during crisis to avoid painful recessions. In addition, increasingly expansionary monetary policies became visible in rising asset rather than goods prices (see Figure). Therefore, interest rates could converge towards zero and central bank balance sheet could be inflated without inflation targeting central banks being forced to tighten monetary policy.
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700 Years Of Data Suggests The Reversal In Rates Will Be Rapid
Have we been lulled into a false sense of security about the future path of rates by ZIRP/NIRP policies? Central banks’ misguided efforts to engineer inflation have undoubtedly been woefully feeble, so far. As the Federal Reserve “valiantly” raises short rates, markets ignore its dot plot and yield curves continue to flatten. And thanks to Larry Summers, the term “secular stagnation” has entered the lexicon. While it sure doesn’t feel like it, could rates suddenly take off to the upside?
A guest post on the Bank of England’s staff blog, “Bank Underground”, answers the question with an unequivocal yes. Harvard University’s visiting scholar at the Bank, Paul Schmelzing, normally focuses on 20th century financial history. In his guest post (see here), he analyses real interest rates stretching back a further 600 years to 1311. Schmelzing describes his methodology as follows.
We trace the use of the dominant risk-free asset over time, starting with sovereign rates in the Italian city states in the 14th and 15th centuries, later switching to long-term rates in Spain, followed by the Province of Holland, since 1703 the UK, subsequently Germany, and finally the US.
Schmelzing calculates the 700-year average real rate at 4.78% and the average for the last two hundred years at 2.6%. As he notes “the current environment remains severely depressed”, no kidding. Looking back over seven centuries certainly provides plenty of context for our current situation, where rates have been trending downwards since the early 1980s. According to Schmelzing, we are in the ninth “real rate depression” since 1311 as shown in his chart below. We count more than nine, but let’s not be picky.
…click on the above link to read the rest of the article…
November 7, 2017
The Next Crisis Will Reveal How Little Liquidity There Is
This is something I’ve been pondering for some time. I think the next crisis will reveal how little liquidity there is in the credit markets, especially in the high-yield, lower-rated space.
Dodd–Frank has greatly limited the ability of banks to provide market-making opportunities and credit markets, a function that has been in their wheelhouse for well over a century.
However, when the prices of massive amounts of high-yield bonds that have been stuffed into mutual funds and ETFs begin to fall, and the ETFs want to sell the underlying assets to generate liquidity, there will be no buyers except at extreme prices.
My friend Steve Blumenthal says we are coming up on one of the greatest buying opportunities in high-yield credit that he has ever seen. And he has 25 years of experience as a high-yield trader.
There have been three times when you had to shut your eyes, hold your breath, and buy because the high-yield prices had fallen to such extreme levels. That is going to happen again.
But it is going to unleash a great deal of volatility in every other market. As the saying goes, when you need money in a crisis, you sell what you can, not what you want to. And if you can’t sell your high-yield, you end up selling other assets (like equities), which puts strain on them.
But that is not just my view. Dr. Marko Kolanovic, a J.P. Morgan global quantitative and derivative strategy analyst, has written a short essay called “What Will the Next Crisis Look Like?” and it’s this week’s Outside the Box (subscribe to this free weekly publication here). He sees additional sources of weakness coming from other areas, too.
…click on the above link to read the rest of the article…
“False Flags” Are So Common that U.S. Officials Commonly Discuss Them
Despite the attempt to marginalize the concept, “false flags” are so common that U.S. officials frequentlyuse that phrase.
For example, Colonel Lawrence Wilkerson, former chief of staff to Colin Powell:
Former Director for Transnational Threats on the U.S. National Security Council, Roger Cressey:
Former CIA counterterrorism official Philip Mudd:
Lieutenant General Thomas McInerney, a high ranking Air Force official:
Former U.S. Ambassador to the United Nations (and Neocon warmonger) John Bolton:
The Washington Post notes that Secretary of Defense Donald Rumsfeld approved as an acceptable interrogation method
A technique known as “false flag,” or deceiving a detainee into believing he is being interrogated by someone from another country.
NBC News points out:
In another document taken from the NSA by Snowden and obtained by NBC News, a JTRIG official said the unit’s mission included computer network attacks, disruption, “Active Covert Internet Operations,” and “Covert Technical Operations.” Among the methods listed in the document were jamming phones, computers and email accounts and masquerading as an enemy in a “false flag” operation. The same document said GCHQ was increasing its emphasis on using cyber tools to attack adversaries.
Washington’s Blog asked high-level NSA official Bill Binney* if he had heard of the term “false flags” when he was with the NSA.
Binney responded:
Sure, they were under deception and manipulation programs. I was not involved in doing them; but, I did have to figure out some that the other side was doing. The other side called them “dezsinformatsiya” and Manipulatsiya.”
The Brits have been doing this for several hundred years and are quite good at it.
Washington’s Blog asked Philip Giraldi – a former counter-terrorism specialist and military intelligence officer with the CIA – the same question with regards to his experience with the CIA.
…click on the above link to read the rest of the article…
Direct Rule: the Latest Weapon for Crumbling Governments
Direct Rule: the Latest Weapon for Crumbling Government
The recent imposition of direct rule by the Spanish government on the autonomous region of Catalonia is having a ripple effect across Europe and around the world. Spain’s neo-fascist prime minister, Mariano Rajoy of the Popular Party – the ideological heirs of Caudillo Francisco Franco’s Falangist Movement – plunged a dagger into the cause of democracy in Catalonia by suspending the region’s pro-independence government and imprisoning eight members of the Catalonian “Generalitat” government.
The imposition of direct rule on Catalonia was a longtime goal of the Madrid regime for years. Catalonia sought the same autonomous powers afforded to Spain’s Basque region, most notably, the power of taxation. However, Castilians of Madrid and other “taker” regions that rely on Spain’s national budget for their benefits, have grown comfortable with the fact that Catalonia provides much of Spain’s budget. Catalonia’s wish to keep more of its tax money in the region and not have it distributed to “taker” regions of Spain, led the Rajoy regime and Spain’s Supreme Court to reject expanded autonomy powers for Catalonia. Catalonia’s independence referendum grew directly out of Madrid’s rejection of a negotiated agreement with the Barcelona government.
As the Madrid regime was hauling members of the Catalonian government before kangaroo courts in Madrid, the British government was moving to impose direct rule on autonomous Northern Ireland. The reason for London’s actions was officially stated as providing Northern Ireland with a Westminster-dictated budget. However, the move by London essentially stripped the Stormont Assembly in Belfast of all financial powers, a move that reversed the devolution of powers to Northern Ireland’s coalition government of the Protestant Democratic Unionist Party (DUP) and the mainly Catholic Sinn Fein party.
The reversal of devolution of powers in Northern Ireland and the de facto imposition of direct rule by London served as a backdrop to calls for more Northern Ireland sovereignty with Britain’s exit from the European Union.
…click on the above link to read the rest of the article…
THE U.S. STOCK MARKET: Highly Inflated Bubble To Super-Charged Tulip
Investors need to be concerned that the U.S. Stock Market is well beyond bubble territory as it has now entered into the final stage of a Super-Charged Tulip Mania. Not only are stock prices inflated well above anything we have ever seen before, but valuations are also reaching heights that are totally unsustainable. Unfortunately, these highly inflated share prices and insane valuations seem normal to investors who are suffering from brain damage as years of mainstream propaganda have turned the soft tissue in their skulls to mush.
Also, we are way beyond “Boiling Frogs” now. Yes, we passed that stage a while back. Today, the typical U.S. investor has been fried to death. Investors now resemble a super-crisp chicken-wing with very little meat on it but at least will offer, one hell of a crunch. Please realize I don’t mean to be harsh about my fellow investor. However, when I look around and see what 99% of the market is doing, it reminds me of a famous line from the movie Aliens. The star of the movie, after being found lost in deep space for many years, said the following in a meeting, “Did IQ’s drop sharply while I was away?”
We find out in the rest of the movie that the so-called Mainstream experts were totally wrong about their assessment of the situation. However, billions of dollars were still spent and many lives lost because high-level individuals infected with stupidity (in the Aliens Movie) still controlled the shots. No different than today.
Regardless, the U.S. Stock Market has entered into the last stage, which I call the Super-Charged Tulip Mania. In this stage, it wouldn’t matter if the North Koreans launched a nuclear missile and declared war on the rest of the world, the universe and all Aliens floating around in space.
…click on the above link to read the rest of the article…
Winter is Coming
Fall has finally arrived. It’s November, well past the time of year when we normally see freezing temperatures. This year was unusually warm, a phrase that is beginning to lose its meaning since most years now are usually warm. The leaves on the trees are finally turning color. The nights are going to be freezing this week. I look over the garden and see a few peppers I missed and remind myself to pick them before nightfall. I collected masses of dill that reseeded itself from spring plantings. I’ve learned that if I freeze the dill in tomato sauce I canned this summer the flavor in soup is the same as if it’s been picked fresh. Good to know these things if you like the taste of fresh dill in winter soup. I look over the garden and see bunches of herbs I need to pick before the frost or they will be lost to the freeze. I worry about wasting them, and then I smile, remembering that the plants will give me another crop next year. I’m still getting used to this experience of bounty from the perennials in the garden. I’m still conditioned to think of food and herbs as things I purchase from the store, not wanting to waste money by allowing them to go bad. Store bought food is so easily wasted. Gardens are more generous!
Most of my life I’ve been a person who worried about waste; don’t waste electricity, don’t waste your food, “There are starving children in China”. I wonder what was in the news in the 60’s when my mother used this phrase to make us feel guilty for not eating all the food on our plates. Were there stories of people starving in China? What happened, I wonder, to all the starving children?
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