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Slippery slope - >>> US secretly sent long-range missiles to Ukraine
BBC
4-25-24
https://www.msn.com/en-us/news/world/us-secretly-sent-long-range-missiles-to-ukraine/ar-AA1nBlTl?cvid=6b93c10a85934001d09ebb1984bad317&ei=58
Ukraine has begun defending territory with long-range ballistic missiles secretly provided by the United States, US officials have confirmed.
The weapons were part of a $300m ($240m) aid package that was approved by US President Joe Biden in March, and arrived this month.
They have already been used at least once to strike Russian targets in occupied Crimea, US media report.
It is not clear how many of the weapons have been sent to Ukraine.
The US had previously supplied Ukraine with a mid-range version of the Army Tactical Missile Systems (ATACMS) but had been reluctant to send anything more powerful, partly over concerns about compromising US military readiness.
However, Mr Biden is said to have secretly given the green light to send the long-range system - which can fire missiles distances of up to 300km (186 miles) - in February.
"I can confirm that the United States provided Ukraine with long-range ATACMS at the president's direct direction," State Department spokesman Vedant Patel said.
He added that the US "did not announce this at the onset in order to maintain operational security for Ukraine at their request".
The longer-range missiles were used for the first time last week to strike a Russian airfield in occupied Crimea, Reuters quoted an unnamed US official as saying.
And the new missiles were also used in an attack on Russian troops in the in the port city of Berdiansk overnight on Tuesday, the New York Times reported.
Kyiv has recently stepped up its calls for Western assistance as Russia makes steady gains in its invasion.
News of the weapons shipments comes after Mr Biden signed a new $61bn military aid package for Ukraine into law following months of congressional gridlock.
"Now we will do everything to make up for half a year spent in debates and doubts," Ukrainian President Volodymyr Zelensky said of the newly approved aid.
"What the Russian occupier was able to do during this time, what Putin is now planning, we must turn against him."
Mr Zelensky recently warned that a full-scale Russian offensive is expected in the coming weeks after Ukraine's loss of the city of Avdiivka during the winter.
Ukrainian officials have previously blamed recent delays in military aid from the US and other Western allies for the loss of lives and territory in the war.
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Another regional bank failure - Republic First Bank -
>>> Regulators close Philadelphia-based Republic First Bank, first US bank failure this year
Associated Press
4-26-24
https://www.msn.com/en-us/money/companies/regulators-close-philadelphia-based-republic-first-bank-first-us-bank-failure-this-year/ar-AA1nK8gv?cvid=8494263e32044cc8dd2049b02657979f&ei=23
WASHINGTON (AP) — Regulators have closed Republic First Bank, a regional lender operating in Pennsylvania, New Jersey and New York.
The Federal Deposit Insurance Corp. said Friday it had seized the Philadelphia-based bank, which did business as Republic Bank and had roughly $6 billion in assets and $4 billion in deposits as of Jan. 31.
Fulton Bank, which is based in Lancaster, Pennsylvania, agreed to assume substantially all of the failed bank's deposits and buy essentially all of its assets, the agency said.
Republic Bank’s 32 branches will reopen as branches of Fulton Bank as early as Saturday. Republic First Bank depositors can access their funds via checks or ATMs as early as Friday night, the FDIC said.
The bank's failure is expected to cost the deposit insurance fund $667 million.
The lender is the first FDIC-insured institution to fail in the U.S. this year. The last bank failure — Citizens Bank, based in Sac City, Iowa — was in November.
In a strong economy an average of only four or five banks close each year.
Rising interest rates and falling commercial real estate values, especially for office buildings grappling with surging vacancy rates following the pandemic, have heightened the financial risks for many regional and community banks. Outstanding loans backed by properties that have lost value make them a challenge to refinance.
Last month, an investor group including Steven Mnuchin, who served as U.S. Treasury secretary during the Trump administration, agreed to pump more than $1 billion to rescue New York Community Bancorp, which has been hammered by weakness in commercial real estate and growing pains resulting from its buyout of a distressed bank.
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Bigworld, Yes, the rest of the year looks unpredictable to say the least. Fwiw, I decided to switch the stock allocation away from the individual stock side, and will just use the S+P 500 exclusively. I figure this will allow for a 'fast exit' if needed.
Btw, on the political front, have you noticed that Jamie Dimon is suddenly all over the news? It appears they may be positioning him as an eventual replacement for Biden (?) Just a guess, but looks like something is up.
Beyond the usual Rep vrs Dem stuff, it's obvious there is a growing rift within the ruling elite factions, with the Neocon wing increasingly at odds with the traditional Trilaterals / Bilderberg side. The Neocon faction desperately want the 'US bombs Iran' scenario, since Iran is on the cusp of getting a nuclear weapon. Meanwhile the Trilaterals (Biden & Co) are adamantly opposed to 'US bombs Iran', and instead are focused on using the Ukraine war to wear down Russia.
So there is an 'internecine' struggle going on within these policy factions, and the outcome of the US election will determine which side wins. Therefore the possibility exists for some desperate measures by these factions in the months ahead. The Neocon side needs the Reps back in so the 'US bombs Iran' can happen, while the Trilateral / Bilderberg side wants Biden / Dems to remain in power. Since they (Trilaterals) have the ability to fix a close election, the Neocon side might have to resort to other means out of desperation. For them the bottom line is existential -- ie that Iran must not get nuclear weapons, and this overrides all other considerations.
Anyway, let's hope sanity prevails, and the most extreme scenarios don't happen. Having lived through the JFK / RFK / MLK period, we definitely don't want a repeat of 1963 / 1968.
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https://nypost.com/2024/04/26/us-news/george-soros-maoist-fund-columbias-anti-israel-tent-city/
George Soros. The dark money behind almost every plot to destroy the Country. The real life embodiment of the Anti-Christ. I hope he suffers a gruesome death as soon as possible. And his son Alex with him.
gfp; I am of the opinion that the Deep State will try to create as much upheaval this summer and into the fall leading up to the election as they can. You look at the college campus pro-Hamas protests. There is no way that has organically spread like a cancer. It is orchestrated, paid for, promoted and enabled by the Deep State using NGOs, dark money pools, and government operatives. They will either make thing so bad that the election is put in jeopardy, or they will steal the election AGAIN thereby triggering a civil war. Or they will resign themselves to Trump winning and once again use everything at their disposal to thwart his Presidency. More phony impeachments, more attacking his nominees, policies, etc. The trouble in a 50-50 country is that the Democrats stick together probably under threat of kiddie porn being found on their laptops. While the Republicans themselves are split 60-40. ^0% being conservative with some principles and 40% are gutless, self serving RINOs that would sooner vote with the Democrats than support Trump.
gfp: California is a beautiful place. It's too bad the liberals took it over and ruined it. The longer Democrats completely control Commiefornia the more unlivable it becomes.
>>> GDP: US economy grows at 1.6% annual pace in first quarter, falling short of estimates while inflation increases
Yahoo Finance
by Josh Schafer
Apr 25, 2024
https://finance.yahoo.com/news/gdp-us-economy-grows-at-16-annual-pace-in-first-quarter-falling-short-of-estimates-while-inflation-increases-123328820.html
The US economy grew at its slowest pace in nearly two years last quarter as inflation topped Wall Street estimates.
The Bureau of Economic Analysis's advance estimate of first quarter US gross domestic product (GDP) showed the economy grew at an annualized pace of 1.6% during the period, missing the 2.5% growth expected by economists surveyed by Bloomberg. The reading came in significantly lower than fourth quarter GDP, which was revised up to 3.4%.
Meanwhile, the "core" Personal Consumption Expenditures index, which excludes the volatile food and energy categories, grew by 3.7% in the first quarter, above estimates of 3.4% and significantly higher than 2% gain in the prior quarter.
The data's release comes as investors try to gauge when the Federal Reserve will start cutting interest rates and if the central bank can achieve a soft landing, where inflation comes down to its 2% target without a significant economic downturn.
“This report pours cold water on the misleading narratives of a reaccelerating economy," EY chief economist Gregory Daco wrote in a research note following the print. "As we enter the spring, the underlying growth mix continues to signal robust momentum, but demand growth is gently cooling leading to easing inflationary pressures.”
Economists pointed out that a large reason GDP for the first quarter came in softer than expected was weaker data in trade and exports, which together weighed on GDP growth for the quarter by about 1.2 percentage points.
"The deceleration in GDP growth will not worry the Fed as the details are better than the headline would suggest," Oxford Economics chief US economist Ryan Sweet said.
"The headline number really belies the underlying strength," Deutsche Bank senior US economist Brett Ryan told Yahoo Finance.
Ryan said the print doesn't cast further overall concern on a potential slowdown brewing in the US economy and believes areas like inventories and exports, which feed into GDP, will rebound next quarter.
He noted that the surprise rise in inflation was the "big story" from Thursday's data release, and markets seemed to agree.
The 10-year Treasury yield (^TNX) added nearly seven basis points to reach above 4.7% for the first time since early November 2023. All three major indexes shot lower after the release. In morning trading, the S&P 500 (^GSPC), Dow Jones Industrial Average (^DJI) and Nasdaq Composite (^IXIC) were all off more than 1%.
"The recent firmness in inflation will keep interest high for longer," Sweet wrote.
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Bigworld, It looks like Jamie Dimon may be right about the return of 1970s type stagflation. Rickards has also been predicting a recession later this year, combined with stubborn inflation.
Fwiw, I dropped the stock allocation down to 18% (from 28%), so will try to go with that. On the geopolitical front, while we managed to avoid the 'US bombs Iran' scenario (for now), the Ukraine situation appears even more dangerous than ever. Add in the upcoming election angst and uncertainty, and I figure it makes sense to limit the stock exposure.
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Ombow, Looks like LWLG may have broken key support over the last two days. The short position was already over 16%, per Yahoo Finance.
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Bigworld, Calif still has the best year-round weather in the country, which is a big plus as you enter the retirement years. Imagine a place where almost every day has perfect weather. Not having the cold winters and summer humidity would be enough for me. It might get boring, but I'll take it :o)
San Luis Obispo looks especially nice, and has been called 'the happiest place in America'. My dad went out there frequently (Vandenberg AFB), and loved the area. The politics, who cares really, although it has meant higher taxes, and real estate out there is expensive. But ---> no cold / snow and no sweltering summer humidity, and lots of tan beach babes :o)
GFP: Nice place there in Commie-fornia. But I could never live there. We have some rich friends who live in Santa Barbara. You can see the Pacific from their living room. Zillow says it's worth about $6 Million. They also have a house in Tahoe. Their main house in SB is spectacular. But it would not surprise me if they eventually sell both California places when they retire and moved to a more tax friendly (red) state.
Bigworld, With the stock market, it's hard to argue with its resilience over very long periods. But while it's rare for a really long drought, it does happen. One of the longest 'nowhere' periods for stocks was from 2000 --> 2013, where it took 13 years for the S+P 500 to finally get above its 2000 peak. During the period from 1966 - 1982 it took even longer --> 16 years for the DJIA to get back to its peak from 1966.
The approaching debt bomb crisis represents something that hasn't happened before --> the US dollar losing its status as the world's main reserve currency. When the British pound lost its world's reserve status between WW1 and WW2, the US dollar was there to gradually take over that role. As the US dollar system begins teetering in earnest, some possible scenarios could include the new BRICS currency stepping in, and / or the SDR - Special Drawing Rights of the IMF taking a key role as the world's reserve currency.
The timeline is the big unknown, but I'm figuring things start to hit the fan as the US debt enters the $40-50 trillion range. Just a guess, but if so then investors would want to start reducing their bond allocations in a few years from now (2026-27), and move away from financial assets toward more hard assets. Fwiw, I figure we still have a couple years, but the debt reaching $40 tril will be the signal that the debt bomb is approaching the global 'confidence is lost' level for the US dollar.
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Bigworld, Your new place seems like a great choice, and the 3 acres allow for plenty of 'elbow room' :o) And being fairly rural will spare you the many urban problems, traffic, etc. Plus your real estate taxes are ultra low. N. Carolina does have a 4.75% income tax rate, but they don't tax Social Security benefits. Here in PA the income tax rate is a little less (3.07%), but we are one of only six states with an inheritance tax, so that's a bummer.
Real estate seems like the best way to keep up with inflation. There are expenses and maintenance hassles, but you have to live somewhere. Fwiw, I skipped the 'big house' stage and went right to a condo (for 32 years), but a house would have been a better investment. But the condo is still up 4-5 fold since 1992, so can't complain too much.
Check out the view from this place in San Luis Obispo Calif. Kind of pricey out there, but those warm sunny winters would be great for the retirement years -
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gfp: For now it looks like the Magnificent 7 have peaked and will return to earth. NVDA is actually in a bear market now, down over 20% from its peak. Tesla is faltering. The markets were expecting 6 rate cuts. They may not get a single one. Inflation is coming back, led by oil prices. And since Dementia Joe sold off our Strategic Oil Reserve to help with the mid term elections in 2022 we have no cushion to combat geopolitical displacement of oil production. Under the wrong Middle East outcome we could see oil surpass the previous highs near $150 a barrel.
With gold I see it as a reserve of purchasing power. Its apparent rise is really just the Dollar getting weaker. The DXY is not an accurate measure as it is the Dollar being compared to other currencies that are themselves being debased.
As the Treasury rolls over all our short term debt that was sold at ZIRP levels and now must pay out over 4% the Interest on our debt is going to balloon from $1 Trillion to about $1.5 Trillion per year. The treasury can't afford to pay it, so they will adopt Japan style Yield Curve Control mechanism to kick the can a few more years down the road. That's monetization, and the Dollar's value will plummet accordingly. So the current level of inflation might soon be viewed in hindsight as "the good old days". All fiat currencies eventually go to zero. Gold retains value.
gfp: The way I view one's primary residence is as a cost deferral vehicle. What I mean is that if you own your home or condo outright you free yourself from the burden of mortgage or rent payments, allowing your income to stretch farther. But for this scenario to work at its best that residence needs to be in a favorable location....and area where law enforcement is promoted and not handicapped by misguided liberal notions, where the taxpayer is factored into spending decisions by government thereby keeping real estate taxes low to moderate. In some high tax locations owning a residence there is a net negative. Places like New Jersey, Connecticut, Commiefornia, etc. I feel very good about our situation. Small acreage should I feel compelled to do more food production. Conservative county with ultra low taxes and where law enforcement is prioritized. Good neighbors with weapons they have grown up using since childhood. Close enough to necessities but outside any city limit with no public transportation options to get here. Our little subdivision of only 4 houses is on a one way private road that we can close off by parking one vehicle at the only entrance that would have drainage ditches on either side. M wife and I actually own the smallest house (3,000 sq ft) on he smallest lot (3.04 acres). Across our private road the owners are selling their 20 acre with about a 4500 sq ft mini mansion for about $1.5 million. The neighbors on the other side are finishing new construction of a 3800 sq ft house on a lot over 5 acres, and the neighbors at the end of the private road have about a 4,000 sq ft house with pool on at least 10 acres. They have horses and a barn to keep them in. That's it. Semi rural. This is our last stand. We will meet the nation's collapse on our own ground.
Bigworld, It looks like the Middle East tensions could start subsiding, with both sides looking to back away from the precipice. Last night the S+P 500 futures tanked to near 4950, then recovered by morning, so I'm thinking that was most likely the near term bottom for the stock market. Time will tell, but I decided to move back up to 28% with the stock allocation, so will try to hold on to that for the recovery.
Fwiw, my strategy for this year is evolving into a Core / Flex approach, with 12% as the Core LT buy / hold, and the rest (~16%) as 'Flex', which can be traded depending upon market conditions. I'm hoping to not have to trade very much, but will take profits as they build up if it's clear the market will be tanking, as happened recently. This drop was pretty easy to see coming, and looks like the rest of the year could be choppy.
I figure there will be 5 main factors (below), with the geopolitical side hopefully fading in relative importance. It looks like Fed policy may no longer be a big plus for a while since they are moving away from their dovish narrative. So the economic / inflation numbers and corporate earnings will need to be decent. Meanwhile the election uncertainty will provide a queasy background vibe. Anyway, I'm hoping for an oversold bounce in the weeks ahead, and then probably a choppy market for the remaining year. Just a guess though..
- Fed Policy
- Corporate Earnings
- Economic / Inflation
- Geopolitical
- Election
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Bigworld, Another aspect to this Middle East situation is that it can potentially affect the upcoming election dynamics in a big way. If the 'US bombs Iran' scenario is in fact an absolute necessity for halting Iran's nuclear weapons program, and that program is now very close to its goal, then there could be a strong existential incentive within Netanyahu's extreme coalition to see the Rep Party return to power in the US. But since the main globalist factions want nothing to do with Trump again, this potentially sets up some hair raising internecine scenarios right out of 'The Day of the Jackal'. Let's hope not, but logic says there could be even more election related intrigue than usual.
Btw, speaking of that 'Day of the Jackal' novel / movie --> back in college (1973-75) in the dorm I met a student from France whose father was in a French prison for his supposed role in that military plot against de Gaulle. His dad was a French military officer (major or colonel I think), and ended up in the slammer. Anyway, people in the US tend to dismiss 'conspiracies', but in Europe they have been part of the fabric for centuries.
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Bigworld, Thanks. The McAlvany commentary makes a good case for not having too much in financial assets (stocks, bonds, cash), and for increasing the hard asset side (real estate, land, gold, silver, commodities, etc).
Upping the hard assets definitely seems like a good idea. Along those lines, it could make sense to start counting one's home / real estate as an 'investment class', and include it in the allocation mix. So maybe a 50-50% mix between financial and hard assets, and then as the debt bomb approaches, the hard asset side can be increased. Bonds seem like the most vulnerable class over the long haul. Since the debt bomb timeline may be longer than we think, I figure it makes sense to have all bases covered, but the hard asset side will become more important for long term wealth preservation.
In addition to the rapidly growing debt bomb (34 tril and rising fast), another factor in the demise of the dollar reserve system is BRICS expansion and their planned gold-linked BRICS currency. However it appears the timelines have been slipping, since Saudi Arabia and Argentina have backed out of joining BRICS (for now). It also appears the gold-linked BRICS currency has encountered headwinds from India, since they see it as favoring China too much.
Anyway, I figure we have a period of years before things unravel in earnest, but shifting more into hard assets seems like the logical path.
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gfp: Insiders are privy to more information than the average investor. And if they are selling 50:1 over buying there must be a lot of Insiders who see real trouble on the horizon. At one point Wall Street was predicting 6 interest rate cuts. Then it was 3 cuts. Now it looks doubtful that there will be any cuts. And I've read article suggesting the Fed will be forced into a Japan style Yield Curve Control to keep what the Treasury has to pay in interest on our unpayable debt from eating up 50% or more of the budget. Interest is already the largest line item in the Budget, and with the Treasury having to roll over Trillions at higher rates the interest expense will approach %1.6 Trillion by the end of the year. That's 1/3 of tax receipts. And that's only the carrying cost of all our debt.
gfp: Listen to this weeks McAlvany Weekly Commentary. Insider selling is 50:1 over Insider buying. That's not a good sign for equities going forward.:
https://mcalvany.com/executive-insiders-unloading-their-own-stocks/
Rickards - >>> AI, Gold and Nuclear War
BY JAMES RICKARDS
APRIL 16, 2024
https://dailyreckoning.com/ai-gold-and-nuclear-war/
AI, Gold and Nuclear War
So-called artificial intelligence (AI) is taking the world by storm. Meanwhile, gold has shot up like a rocket over the past couple of months.
In mid-February, gold was trading at $1,990. Two months later, gold is trading above $2,400 — a $410 gain in just two months.
So here’s a question:
Is there a connection between AI and gold? It seems like an odd question. But as it turns out, the answer is yes. And surprisingly, there has been for decades. It involves the Cold War between the U.S. and the Soviet Union.
In the early 1980s, the KGB was deeply concerned about the possibility of a nuclear first strike by the United States. At the time, Yuri Andropov was head of the KGB.
Andropov’s fear of a nuclear first strike by the U.S. was based in part on the 1980 election of Ronald Reagan and Reagan’s plan to install Pershing II intermediate-range missiles in Europe.
Those missiles could be armed with nuclear warheads and could strike the Soviet Union within minutes of being launched. This put Soviet nuclear forces on a hair-trigger alert. They adopted a “launch on warning” posture.
This means that as soon as credible evidence of a planned first strike was discovered, the Soviet Union would launch its own first strike to avoid destruction of its forces.
The irony was that the U.S. had no actual plans to launch a first strike, but the Soviet Union didn’t know that. Reagan’s speeches about the “evil empire” did nothing to calm Soviet concerns.
AI and Nuclear Readiness
In response, the Soviets developed a primitive (by today’s standards) AI system called VRYAN. That’s a Russian acronym for: sudden nuclear missile attack.
VRYAN took about 40,000 military, economic and political inputs and computed the relative strength of the Soviet Union compared with the United States expressed as a percentage output. The model used a value of 100% for equivalence of the USSR to the U.S.
The Soviet leadership was comfortable that the U.S. would not launch a nuclear first strike if the USSR could maintain a value of 60%, although they viewed 70% as providing a more comfortable margin.
A VRYAN output of 40% was considered the critical threshold at which the U.S. might feel it could launch a first strike with acceptable risk that the Soviets would not be able to mount a successful second strike.
VRYAN output values were in steady decline in the dangerous period from 1981–1984 (in 1984, the VRYAN output had declined to 45%).
The VRYAN AI system relied on by the KGB and the Soviet Politburo was an important factor in the Soviet decision in 1981 to vastly increase intelligence collections aimed at detecting U.S. preparations for a first strike.
Close Call
This intelligence collection effort was complicated to the point of extreme danger by the fact that the U.S. and NATO were conducting a war game in late 1983, code-named Able Archer 83. This war game was to practice a nuclear strike on the Soviet Union.
It turned out that the U.S. was rehearsing a nuclear first strike at the same exact time that the KGB was looking for evidence of a nuclear first strike. Able Archer 83 provided the KGB with more than enough reason to suspect the U.S. was indeed preparing for a first strike under cover of a war game.
VRYAN’s AI output on relative U.S. strength was compounded by massive U.S. intelligence failures regarding Soviet intentions. U.S. intelligence analysts assumed that the future would resemble the past, and that Soviet alerts were really propaganda designed to halt the U.S. deployment of Pershing II intermediate-range nuclear missiles in Europe.
U.S. intelligence analysts were also guilty of what’s called mirror imaging: the belief that because you know your own intentions, your opponents must share your view. In this case, the U.S. assumed that because they had no intention to launch a first strike, the Soviets must have understood that intention and would therefore have no cause for concern.
In fact, the Soviets had the opposite view based in part on VRYAN AI output.
The world came extremely close to World War III and a nuclear holocaust as a result of this sequence of events and misperception of intentions. It was only when one U.S. general decided not to escalate in the face of Soviet first strike preparations that both sides deescalated, and the crisis eventually receded.
The information above wasn’t fully understood by either side at the time of the escalation. On the U.S. side, it wasn’t until the 1990 publication of a study entitled The Soviet War Scare by the President’s Foreign Intelligence Advisory Board (PFIAB) that something like the full story was revealed.
Nuclear War Threats: Good For Gold
This study was originally classified above TOP SECRET. (Most citizens assume that TOP SECRET is the highest level of classification. But there are secret access codes that limit circulation of certain documents even among those cleared with TOP SECRET access.
In the case of The Soviet War Scare, those restrictions had the code names UMBRA, GAMMA, ININTEL, NOFORN, NOCONTRACT, ORCON. I can’t discuss my own TOP SECRET clearances, but I can inform you that very few intelligence operatives would have been able to view the PFIAB report based on those restrictions.
So what does all this have to do with gold?
Buried inside The Soviet War Scare was this passage about the U.S. assessment of KGB collection requirements related to a potential nuclear war:
VRYAN Collection Requirements – Throughout the early 1980s, VRYAN requirements were the No. 1 (and urgent) collection priority for Soviet intelligence… They were tasked to collect:… monitoring of the flow of money and gold on Wall Street as well as the movement of high-grade jewelry, collections of rare paintings and similar items. (This was regarded as useful geostrategic information.) (Emphasis added)
And there it is! The U.S. assessed that the KGB tracked the movement of gold as a leading indicator of nuclear attack.
I didn’t find this completely surprising. From 2004–2010, I was co-director of a CIA effort called Project Prophesy that looked at capital markets activity as an early warning of an enemy attack.
Gold was one of the valuable assets that was on our list of items to track. The idea was that if a general or political leader had advance information about an attack, they’d convert their wealth to gold in safekeeping in order to financially survive the fallout.
The bottom line is that this intelligence reporting and AI system are not ancient history. Today, the world is closer to nuclear war than at any time since the Able Archer scare in 1983. Gold is once again on the move, having risen from $1,830 per ounce on Oct. 5, 2023, to over $2,400 today. That’s a 31% gain in six months.
Is this a coincidence? Hardly. A close correlation of huge gains in gold with serious threats of nuclear war is exactly what one should expect.
Unfortunately, those threats of nuclear war are not going away soon. One need only look at the Iranian attack on Israel this past weekend and the possibilities of further escalation.
There are also situations in Ukraine, Russia, NATO, Gaza, the Red Sea and the Suez Canal revealing that the world is a more dangerous place than it has been for decades.
That’s bad news for the world but good news for gold investors. The rally we’ve seen in the past six months is just getting started.
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Bigworld, In addition to RSI for the main stock indices, another indicator I'm using is the $VIX, since when its RSI approaches or reaches overbought (RSI of 70), this has consistently identified stock market bottoms (see below). The $VIX had an RSI reading over 70 yesterday, and is currently ~ 68, so this suggests that a near term bottom could be near.
I figure a lot will depend upon Israel's response to the Iranian bombing. Since the US has told Netanyahu pretty bluntly that the US will not support his retaliatory efforts, it seems doubtful that he'll do anything really big. Who knows, but I figure that after a few more days the financial markets will go back to concentrating more on corporate earnings. Anyway, I re-upped my stock allocation to 20%, so will go with that for now. I figure a conservative approach might be 12.5% as Core (LT buy/hold), and 7.5% as Flex, but still a 'work in progress'.
2022 - late Sept / early Oct
2023 - March
2023 - August
2023 - late Sept thru Oct
2024 - mid Feb
2024 - April
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Chart-wise, the main stock indices are nearing oversold, based on the RSI (under 30 is oversold) -
DJIA ------ 31
S+P 500 - 39
Nasdaq -- 42
Russell --- 37
Wall Street is waiting to see Israel's response to the Iranian bombing, but if nothing happens soon then the near term bottom in stocks might be in (?)
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Bigworld, Concerning that repo market news (previous post), the Fed will soon be easing back on the current QT policy, with the monthly QT being reduced from $60 bil to 30 bil (see below). So even if there are no % cuts until later in the year, the reduction of QT provides some added liquidity to the system.
But since the longer term Treasury auctions have not been going well, they are reportedly "shifting to financing America’s deficit mostly with short-term debt". Not being able to sell longer term bonds does sound ominous. With my own Treasury bond allocation, I only went out 2.5 years (to Dec 2026), in part because the US debt monster is growing so fast, and might conceivably reach 40 trillion by late 2026. Fwiw, I figure that is the debt level (40 trillion) where the growing debt bomb could really become a problem, so my tentative strategy is to have the bond allocation much reduced by 2027. I figure the major problems start as the US debt moves from 40 ---> 50 trillion. But what to use instead of bonds? Hard assets, real estate, commodities would be the logical place, as you have already done.
>>> “We’ve been losing liquidity as people and companies pull out money to pay taxes,” said Thomas Tzitzouris, head of fixed-income research at Strategas. “We’re in a bit of an air pocket that’s letting the bond market float more freely and yields rise.”
One line of support is likely to come from the Fed. Minutes from the Fed’s March meeting, released last week, showed that policymakers are looking to slow the pace of running down the central bank’s large holdings of bonds accumulated to prop up the economy. They would likely reduce the rate at which they let Treasurys mature to $30 billion a month, half of the current $60 billion pace.
Balance-sheet runoff, known as quantitative tightening, is meant to drain the banking system of reserves and increase the market’s share of the sovereign-debt pile. With the Fed paring back that program, and prepping to stop it sometime in the future, investors will have to absorb a smaller net share of Treasury securities. That could support bond prices and remove some upward pressure on yields. <<<
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=174235707
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>>> Fed's reverse repo facility plummets to lowest level in nearly three years
Reuters
Apr 15, 2024
By Michael S. Derby
https://finance.yahoo.com/news/feds-reverse-repo-facility-shrinks-174128320.html
NEW YORK (Reuters) - A key Federal Reserve facility that takes in cash from money market funds and others saw inflows drop sharply on Monday.
The U.S. central bank's reverse repo facility took in $327.1 billion, down $80.2 billion from Friday, marking the lowest level of inflows since the facility took in $293 billion on May 19, 2021.
The Fed's reverse repo facility exists to put a floor underneath short-term rates, taking in cash from eligible firms in loans collateralized with Treasuries held by the central bank. Inflows have been contracting for some time as the Fed withdraws liquidity from the financial system by allowing its holdings of bonds to shrink.
Monday is the deadline for most U.S. tax returns and a key settlement date for Treasury debt auctions, which can influence activity at the reverse repo facility. Scott Skyrm, executive vice president at money market trading firm Curvature Securities, says money is coming out of reverse repos to deal with financing the Treasury's debt issuance.
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ABC News - >>> US to Israel: If you strike back at Iran, you'll do it alone <<<
https://www.yahoo.com/news/us-israel-strike-back-iran-162024611.html
Finally some sanity prevails. Next, Biden & Co need to ditch their ultra risky Ukraine strategy. Unlike Iran, Russia has 6000 nuclear weapons, including hypersonic missiles, and everything is on a hair trigger. A week ago the lunatic Zelensky bombed the Zaporizhzhia nuclear powerplant (!) Enough of the madness -- > return to Kissinger's détente strategy before we bumble into WW 3 -
>>> Russia test-launches an intercontinental ballistic missile <<<
https://abcnews.go.com/International/wireStory/russia-test-launches-intercontinental-ballistic-missile-109172270
>>> Attacks on Zaporizhzhia nuclear plant significantly increase accident risk, IAEA head says <<<
https://apnews.com/article/russia-ukraine-war-zaporizhzhia-nuclear-drone-a28710a691f3259b5dd6586787838b60
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Bigworld, Yes, the debt bomb is entering the later innings, but I figure the finance magicians can likely hold things together for a number of years. I figure the US debt hitting 40 trillion could be a key turning point, and then sometime prior to it reaching 50 trillion the debt / dollar crisis will arrive. But just a guess.
Fwiw, I used this morning's bounce to reduce the stock allocation a little more, down to 12.5%. So that should do it (hopefully). I sold off the liquid S+P 500 index portion, and kept the individual stocks and sector ETFs. 200 plus individual stocks are too cumbersome to sell, so the idea is to keep them (12.5%) as long term buy / hold. Anyway, that was the original plan, so I'll try to stick to it. I figure the cash proceeds will earn ~5% with no risk, and can be re-deployed later. Buying a 1X short ETF (SH) to hedge the remaining stock exposure is an option at some point, but I figure that earning 5% in cash is good enough. The permanent 12.5% in stocks will benefit as the stock market eventually recovers. Anyway, I figure it's best to have all bases covered, and never go to zero in any asset class.
Anyway, still a work in progress, but it turned out that 28% in stocks was clearly too high for an aging nervous nellie like me. Buffett and Bogle both said that the key is finding the right allocation you can live with (without insomnia or daily Tagamet). I thought the old rule of subtracting your age from 100 might work, but 31% in stocks is clearly too high on the 'Tagamet scale'.
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gfp: The underlying fundamentals of the economy are horrific. The only thing holding up the whole house of cards is that the Federal government is still able to pull future revenues into present era spending. The Federal government will spend about $3 Trillion this fiscal year ABOVE what they take in in taxes. Lots of those Dollars find their way to Wall Street one way or another. Hence we have a speculative bubble in almost all asset classes. At some point....next week, next month, next year....the debt bomb is going to explode and take our way of life down with it.
Ed Dowd is one of the elite number crunchers in the world. His analysis of the mortality and morbidity caused by the Codid vaccines is unparalleled:
https://www.zerohedge.com/political/lies-are-just-unreal-ed-dowd-rages-govts-media-continue-pretending-massive-health-crisis
Ombow, Looks like LWLG is teetering again at key support (descending triangle formation). It fell through 4, but chart-wise the actual support level is ~ 3.90, and this is the fifth time it has tested this key support in the last six months (plus an additional four times earlier in 2023). So it could soon be 'bombs away' time, but we'll see if it can hold again, or if some news flow might arrive to give it a saving bounce. The descending triangle is a classic bearish chart formation -
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Bigworld, Amazingly the stock market futures are currently up, so go figure. Possibly Fed / PPT activity, as happened around Oct 7. But the market had already sold off considerably, so perhaps there's a relief rally before the market weakens again (?)
I figure 28% was too much to have in stocks anyway, so will roll with 15% for now. There are plenty of reasons to be wary -
1) Geopolitical / war risks
2) Fed delaying % rates cuts due to persistent inflation
3) Growing election angst
4) Stock market has already runup big since Oct, so no sense watching those gains evaporate
5) Black swan events
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gfp; This should be an interesting week in the markets.
gfp: Just keep good positions in Energy and Precious metals for your stock allocation. Maybe a few good dividend payers. And short term Treasuries. I'm holding tight to my metals, my miners, and my energy plays. I want real stuff. The days of fiat are numbered.
gfp: Rinear thinks the big rise and abrupt fall on Friday were due to short term traders worried about the geopolitical events, especially between Iran and Israel. I expect a slow and steady climb from here, with back filling. If gold and silver are rallying with the DXY strong and the 10 year above 4.5% then the paradigm has changed. Inflation and geopolitical worries are driving the PM markets now. Central bank stockpiling puts a floor under the metals. At some point Comex will not be able to provide delivery for futures buyers who want deliver of the metal and not a roll over to more contracts. When that happens the incredible level of leverage in the metals will become apparent. It could get ugly for the money center banks that hold big naked short positions (probably at the behest of The Fed.)
Debt bomb - >>> America’s bonds are getting harder to sell
The Wall Street Journal
by Eric Wallerstein
Apr 14, 2024
https://finance.yahoo.com/news/america-bonds-getting-harder-sell-093000703.html
A series of weak auctions for U.S. Treasurys are stoking investors’ concerns that markets will struggle to absorb an incoming rush of government debt.
A selloff sparked by a hotter-than-expected inflation report intensified this past week after lackluster demand for a $39 billion sale of 10-year Treasurys. Investors also showed tepid interest in auctions for three-year and 30-year Treasurys.
Behind their caution lies a growing conviction that inflation isn’t fully tamed and that the Federal Reserve will leave interest rates at multidecade highs for months, if not years, to come. The 10-year yield—the benchmark for borrowing rates on everything from mortgages to corporate loans—finished the week around 4.5%, near its highest levels since touching 5% in October.
At the same time, the government is poised to sell another $386 billion or so of bonds in May—an onslaught that Wall Street expects to continue no matter who wins November’s presidential election. While few fear a failed auction—an unlikely scenario that analysts said could potentially trigger prolonged turmoil—some worry that a glut of Treasurys will rattle other parts of the markets, raise the cost of government borrowing and hurt the economy.
“There’s been a big shift in the market narrative. The CPI [consumer-price index] report changed everybody’s view of where Fed policy is headed,” said James St. Aubin, chief investment officer at Sierra Mutual Funds.
The government funds its operations by selling the world’s safest bonds to investors and dealers at regular auctions. And issuance of Treasurys has exploded since the pandemic began. In the first three months of 2024, the U.S. sold $7.2 trillion of debt, the largest quarterly total on record. That surpasses the second quarter of 2020, when the government was financing a wave of Covid-19 stimulus. It also builds on a record $23 trillion of Treasurys issued last year, which raised $2.4 trillion of cash, after accounting for maturing bonds.
The size of the sales has expanded along with the market for U.S. debt. After poor demand at a series of auctions late last year jarred investors, the Treasury Department eased concerns by shifting to financing America’s deficit mostly with short-term debt. That helped, in part, because the Fed simultaneously signaled a pivot to easier monetary policy: Hopes that interest-rate cuts would come soon helped reassure investors about the Treasury’s strategy.
Now, those hopes are dwindling, and the Treasury is expected to announce its third-quarter borrowing plans at the end of April. The nonpartisan Congressional Budget Office forecasts that the deficit will increase from 5.6% of U.S. gross domestic product to 6.1% in the next decade. Debt held by the public is set to expand from $28 trillion to $48 trillion in that time, up from $13 trillion 10 years ago.
Wall Street doesn’t expect the Treasury to raise auction sizes of longer-term notes and bonds until next year. But the government must also contend with refinancing a chunk of its bonds. A record $8.9 trillion of Treasurys, roughly a third of outstanding U.S. debt, is set to mature just in 2024, according to Apollo Global Management’s chief economist, Torsten Slok.
Investors are also watching how revenues from tax season boost America’s coffers in the coming weeks.
“We’ve been losing liquidity as people and companies pull out money to pay taxes,” said Thomas Tzitzouris, head of fixed-income research at Strategas. “We’re in a bit of an air pocket that’s letting the bond market float more freely and yields rise.”
One line of support is likely to come from the Fed. Minutes from the Fed’s March meeting, released last week, showed that policymakers are looking to slow the pace of running down the central bank’s large holdings of bonds accumulated to prop up the economy. They would likely reduce the rate at which they let Treasurys mature to $30 billion a month, half of the current $60 billion pace.
Balance-sheet runoff, known as quantitative tightening, is meant to drain the banking system of reserves and increase the market’s share of the sovereign-debt pile. With the Fed paring back that program, and prepping to stop it sometime in the future, investors will have to absorb a smaller net share of Treasury securities. That could support bond prices and remove some upward pressure on yields.
Another factor supporting Treasuries: Global investors have a lot of savings and few viable options to place them. The eurozone and Japan both run current-account surpluses, meaning they take in more money from trade than they spend on imports. Treasurys provide them a safe place to stash their cash and pick up more than 4% of yield. They also offer an easy way to invest dollar-denominated income from trading with America.
The euro and yen are both sinking relative to the dollar, in part because the Bank of Japan is still holding rates low and investors expect the European Central Bank to slash them soon. That could increase demand for U.S. debt, with Treasury yields remaining elevated relative to global alternatives.
That leaves many investors hopeful that as long as inflation continues to trend toward the Fed’s 2% target, Treasury yields will remain under 5%. But some worry the influx of new Treasurys will exacerbate already-volatile markets, particularly if inflation stays sticky. After the CPI report and weak auction Wednesday, the 10-year yield posted its biggest one-day rise since 2022, jumping nearly 0.20 percentage point.
“If we continue to see hot inflation prints, it’s going to keep a lot of people on the sidelines,” said Sierra’s St. Aubin.
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Bigworld, On the financial front, we'll see what happens next week. The stock market should tank to some extent, but we'll see if the PPT / Plunge Protection Team comes to the rescue. When the Middle East blew up last October, the Fed quickly did a dovish pivot to support the financial markets, and that could be repeated. But the war risks are broader now than in Oct, and the current market is higher and more vulnerable.
I figure the US dollar surge from last week could continue into next week, so that night mute further upside for gold / silver (?), but just a guess. The market has a way of doing what we don't expect, but at minimum I figure a pullback to 5000 for the S+P 500 seems likely. The market was in need of a pullback / consolidation anyway.
As I see it, the big question now is to what extent Netanyahu continues trying to gin up the 'US bombs Iran' scenario. The main goal is to disable the underground nuclear enrichment sites at Natanz (which are deep under a mountain), which will presumably require tactical nuclear bunker buster bombs, so that means the US will have to do it, unless Israel has acquired some of these for their arsenal. They've had hundreds of nuclear tipped ballistic missiles for decades, but probably only have conventional bunker busters. Netanyahu could decide to go it alone if the alternative is a nuclear armed Iran by this time next year. For him it's a huge existential problem, which makes the alternative of waiting impossible.
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So the plot thickens. Still early, but some possible scenarios that could force the US into direct action against Iran would include -
1) Netanyahu continues to deliberately escalate the tit-for-tat with Iran, hoping that some US assets are hit.
2) A false flag is staged against US assets in the region. But since current US leadership is so wary and reluctant, a false flag probably wouldn't work anyway.
3) Netanyahu waits until next year and hopes for a Rep administration full of neocons. The problem here is multi-fold --> a) by next year Netanyahu will likely be out of power, b) by next year Iran likely has a nuclear weapon, c) Biden may be re-elected
The biggest problem is - b) the inevitability of Iran getting nuclear weapons. We already have North Korea with nukes, so next will be Iran. With our extreme vulnerability to an orbital EMP attack (knocking out the power grid and microelectronics), the future looks precarious to say the least -
Nuclear EMP - https://en.wikipedia.org/wiki/Nuclear_electromagnetic_pulse
>>> Biden tells Netanyahu US will not participate in counter-strike against Iran
4-14-24
by MJ Lee and Kevin Liptak
CNN
https://www.msn.com/en-us/news/world/biden-tells-netanyahu-us-will-not-participate-in-counter-strike-against-iran/ar-BB1lB3l0?ocid=BingHp01&cvid=3cf388f67cf54cc896fb3bb8d6bd3e14&ei=11
President Joe Biden and senior members of his national security team, seeking to contain the risk of a wider regional war following a barrage of Iranian missiles and drones directed toward Israel, have told their counterparts the US will not participate in any offensive action against Iran, according to US officials familiar with the matter.
In a conversation with Prime Minister Benjamin Netanyahu late Saturday, Biden sought to frame Israel’s successful interception of the Iranian onslaught as a major victory — with the suggestion that further Israeli response was unnecessary.
Biden told the Israeli prime minister in his phone call that he should consider Saturday a win because Iran’s attacks had been largely unsuccessful and demonstrated Israel’s superior military capability, a senior administration official said.
John Kirby, the White House national security spokesman, said Sunday the ability to prevent widespread damage was a demonstration of Israel’s “military superiority” and proof that Iran was not the “military power that they claim to be.”
“This was an incredible success, really proving Israel’s military superiority and just as critically, their diplomatic superiority, that they have friends in the region, that they have around the world that are willing to help them,” Kirby told CNN’s Jake Tapper on “State of the Union.”
Defense Secretary Lloyd Austin asked his Israeli counterpart, Minister Yoav Gallant, to notify the US ahead of any potential response to the Iranian attack, according to another US official.
Even as American officials stressed to their counterparts that the final decision on how to respond to Iran is up to Israel, Biden has sought to prevent a wider escalation of the conflict.
On Sunday, he planned to convene a meeting of fellow Group of Seven leaders to discuss a “united diplomatic response” — with the emphasis on non-military actions that would limit the prospects of a wider war.
“I told him that Israel demonstrated a remarkable capacity to defend against and defeat even unprecedented attacks — sending a clear message to its foes that they cannot effectively threaten the security of Israel,” Biden said in a statement following his conversation with Netanyahu.
Whether Netanyahu takes Biden’s advice remains an open question. The Iranian reprisals came at a moment of deep tension between the men over the war in Gaza. Throughout that conflict, the limits of American influence on Israeli decision-making have been laid bare.
Iran’s decision to fire weapons from its own territory toward Israel significantly ratchets up the long-simmering enmity between the two countries. There will likely be political pressure from inside Israel for some type of response.
Kirby said the attack — the first launched from Iranian soil against Israel — did not necessarily have to constitute the start of a broader regional war.
“We don’t believe it is nor do we believe it has to be,” he told Tapper, noting that the US and Israel both had a good sense of what Iran was planning to do ahead of time.
Gallant warned Sunday that the confrontation with Iran is “not over yet.” The country’s response options are expected to be discussed in detail during a meeting of Israel’s war cabinet meeting.
The Commander of Iran’s Islamic Revolutionary Guard Corps, Hossein Salami, warned that Tehran would respond directly if Israel retaliates, saying a “new equation” had been created.
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Well, it looks like Iran has sent drones toward Israel, so the next question is what they are targeting. Last week, the US military already started moving more ships into the region, so this could be the start of the big punch up with Iran -
>>> Iran launches dozens of drones at Israel as Mideast tensions soar: Live updates <<<
https://www.usatoday.com/story/news/world/israel-hamas/2024/04/13/israel-war-updates-iran-ship/73311944007/
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Bigworld, With the Middle East situation, we'll see if this cargo ship seizure is the extent of the Iranian 'reply' to Israel's recent bombing of their consulate in Syria. It seems like a measured response, and the Iranians obviously realize they are being set up. Apparently the Iranian leader is in his early 80s, and has been adept at avoiding direct war, and instead uses proxies. However, the Netanyahu gang may just keep raising the stakes until the US is forced into fighting Iran directly. Biden seems very reluctant, but Israel has a nuclear arsenal of its own, and the threat of that being used could force him into action.
Who knows, but as an investor I figure there's no sense having one's neck out too far these days, so I lowered the stock allocation again on Friday afternoon, down to 15% (from 28%). I'll try to hang with that, and can always add a 1X inverse hedge ETF (SH) if the market really starts to unravel. The stock market did great over the last 6 months, but the rest of the year looks murky at best.
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>>> Iranian commandos seize an Israeli-linked container ship near Strait of Hormuz
April 13, 2024
The Associated Press
https://www.npr.org/2024/04/13/1244583830/iran-seizes-container-ship-strait-of-hormuz-israel
DUBAI, United Arab Emirates — Commandos from Iran's paramilitary Revolutionary Guard rappelled down from a helicopter onto an Israeli-affiliated container ship near the Strait of Hormuz and seized the vessel Saturday, the latest in a series of attacks between the two countries.
The Middle East had braced for potential Iranian retaliation over a suspected Israeli strike earlier this month on an Iranian consular building in Syria that killed 12 people, including a senior Guard general who once commanded its expeditionary Quds Force there.
The Israeli war on Hamas in the Gaza Strip meanwhile is now 6 months old and is inflaming decades-old tensions across the whole region. With Iranian-backed forces like Hezbollah in Lebanon and Yemen's Houthi rebels also involved in the fighting, any new attack in the Mideast threatens to escalate that conflict into a wider regional war.
Iran's state-run IRNA said a special forces unit of the Guard's navy carried out the attack on the vessel, the Portuguese-flagged MSC Aries, a container ship associated with London-based Zodiac Maritime.
Biden returns to D.C. a day early to consult national security team on Iran-Israel row
Biden says Iran could soon attack Israel, and warns, 'Don't'
Zodiac Maritime is part of Israeli billionaire Eyal Ofer's Zodiac Group. Zodiac declined to comment and referred questions to MSC. Geneva-based MSC later acknowledged the seizure and said 25 crew had been aboard the vessel.
"We are working closely with the relevant authorities to ensure their wellbeing, and safe return of the vessel," MSC said.
An Indian government official, speaking on condition of anonymity as he was not authorized to brief to journalists, said 17 of the crew were Indians.
IRNA said the Guard would take the vessel into Iranian territorial waters.
Earlier, a Middle East defense official, who spoke on condition of anonymity to discuss intelligence matters, shared a video of the attack with The Associated Press. In it, the Iranian commandos are seen rappelling down onto a stack of containers sitting on the deck of the vessel.
A crew member on the ship can be heard saying: "Don't come out." He then tells his colleagues to go to the ship's bridge as more commandos come down on the deck. One commando can be seen kneeling above the others to provide them potential cover fire.
The video corresponded with known details of the MSC Aries. The helicopter used also appeared to be a Soviet-era Mil Mi-17 helicopter, which both the Guard and the Iranian-backed Houthis of Yemen have used in the past to conduct commando raids on ships.
The British military's United Kingdom Maritime Trade Operations described the vessel as being "seized by regional authorities" in the Gulf of Oman off the Emirati port city of Fujairah, without elaborating.
How Iran and Israel became archenemies
Israeli Foreign Minister Israel Katz called on nations to list the Guard as a terrorist organization.
Iran "is a criminal regime that supports Hamas' crimes and is now conducting a pirate operation in violation of international law," Katz said.
Iran since 2019 has engaged a series of ship seizures and attacks on vessels have been attributed to it amid ongoing tensions with the West over its rapidly advancing nuclear program.
Since November, Iran had dialed back its ship attacks as the Houthis targeted ships in the Gulf of Aden and the Red Sea. Houthi attacks have slowed in recent weeks as the Muslim holy fasting month of Ramadan ended and the rebels have faced months of U.S.-led airstrikes targeting them.
In previous seizures, Iran has offered initial explanations about its operations to make it seem like the attacks had nothing to do with the wider geopolitical tensions — though later acknowledging as much. In Saturday's attack, however, Iran tellingly offered no explanation for the seizure other than to say the MSC Aries had links to Israel.
Iran has been threatening to act after Israeli strike in Syria
For days, Iranian officials up to and including Supreme Leader Ayatollah Ali Khamenei have been threatening to "slap" Israel for the Syria strike. Western governments have issued warnings to their citizens in the region to be prepared for attacks.
However, Iran in the past largely has avoided directly attacking Israel, despite it carrying out the targeted killing of nuclear scientists and multiple sabotage campaigns against Iran's atomic sites. Iran has, however, targeted Israeli or Jewish-linked sites through proxy forces over the decades.
Earlier this week, Guard Gen. Ali Reza Tangsiri, who oversees Iran's naval forces, criticized the presence of Israelis in the region and in the United Arab Emirates. The UAE reached a diplomatic recognition deal with Israel in 2020, something that long has enraged Tehran.
"We know that bringing Zionists in this point is not merely for economic work," Tangsiri reportedly said. "Now, they are carrying out security and military jobs, indeed. This is a threat, and this should not happen."
The U.S., Israel's main backer, has stood by the country despite growing concerns over Israel's war on Gaza killing more than 33,600 Palestinians and wounding over 76,200 more. Israel's war began after Hamas' Oct. 7 attack on Israel that killed 1,200 people and saw some 250 others taken hostage.
On Friday, President Joe Biden warned Iran not to attack Israel and said he felt an Iranian attack on Israel likely would happen "sooner than later."
"We will help defend Israel, and Iran will not succeed," Biden added.
The Gulf of Oman is near the Strait of Hormuz, the narrow mouth of the Persian Gulf through which a fifth of all globally traded oil passes. Fujairah, on the United Arab Emirates' eastern coast, is a main port in the region for ships to take on new oil cargo, pick up supplies or trade out crew.
Since 2019, the waters off Fujairah have seen a series of explosions and hijackings. The U.S. Navy blamed Iran for limpet mine attacks on vessels that damaged tankers. The UAE meanwhile has sought to mend ties with Iran and issued a statement condemning the suspected Israeli attack in Syria.
Meanwhile, Lufthansa Group said on Saturday it had extended the suspension of its flights between Frankfurt and Tehran though Thursday and said that all of its planes would avoid Iranian airspace in that period. The German carrier also said that, until at least Tuesday, flights to and from Amman will be operated as "day flights" so crews can return to Frankfurt without spending a night in the Jordanian capital.
Dutch airline KLM said in a statement Saturday that it will no longer fly over Iran or Israel, but will continue flights to and from Tel Aviv, a destination not currently deemed risky. "Safety has the highest priority," KLM said.
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>>> Iranian attack on Israel expected ‘sooner rather than later’, says Joe Biden
President said US are ‘devoted to the defence of Israel’ as he urged Tehran to show restraint
The Guardian
by Peter Beaumont, Julian Borger and Patrick Wintour
Apr 12, 2024
https://www.theguardian.com/world/2024/apr/12/france-diplomats-families-iran-israel-travel-warnings
Joe Biden has said he expects an Iranian attack on Israel “sooner rather than later” and issued a last-ditch message to Tehran: “Don’t.”
“We are devoted to the defence of Israel. We will support Israel. We will help defend Israel and Iran will not succeed,” Biden told reporters on Friday.
Earlier the White House national security spokesperson John Kirby warned that the threat of a significant Iranian attack on Israel remains “viable” despite Washington-led efforts, including calls to Tehran from the UK and Germany, to deter a serious escalation in the conflict in the Middle East.
The White House comments came as several countries, including India, France, Poland and Russia, warned their citizens against travel to the region and Israel’s defence minister, Yoav Gallant, said his country was “prepared to defend [itself] on the ground and in the air, in close cooperation with our partners”.
Later CBS, quoting two unnamed US officials, reported that a substantial missile and drone attack could be launched as early as Friday evening, as a number of countries urgently warned their nationals of the risk of escalating violence in the region, and Israel’s prime minister, Benjamin Netanyahu, convened a security assessment.
Appearing to underline that report, Javad Karimi-Ghodousi, a member of the Iranian parliament’s national security and foreign policy commission, said: “After punishing the Zionist regime in the coming hours, this villain will understand that henceforth, wherever in the world it attempts to assassinate figures of the resistance front, it will again be punished with Iranian missiles.”
German airline Lufthansa said on Friday its planes would no longer use Iranian airspace and extended its suspension of flights to and from Tehran until Thursday.
Qantas has paused its non-stop flights from Perth to London because the 17-and-a-half-hour flight is possible only by using Iranian airspace.
Iran has threatened reprisals against Israel for a strike on the Iranian consulate in Syria on 1 April, in which seven members of the Revolutionary Guards including two generals were killed, sparking fears that an already volatile climate in the Middle East could quickly spiral further.
Tehran’s foreign minister, Hossein Amir-Abdollahian, said on Thursday that Iran felt it had no choice but to respond to the deadly attack on its diplomatic mission after the UN security council failed to take action.
Speaking to reporters, Kirby said the prospect of an Iranian attack on Israel was “still a viable threat” despite concerted efforts by Israel and the US in recent days to deter it.
“We are in constant communication with our Israeli counterparts about making sure that they can defend themselves against those kinds of attacks,” Kirby said. He confirmed that the head of US Central Command, Gen Erik Kurilla, was in Israel talking with defence officials about how Israel could be best prepared.
Israel has said it is strengthening air defences and has paused leave for combat units.
On Friday, France ordered the evacuation of diplomats’ families and warned nationals in several other countries, including Israel and Lebanon, and alerts were issued by Canada and Australia. The US also restricted travel within Israel for US diplomats and their families.
In its strong warning on Friday, the French foreign ministry advised citizens against travelling to Iran, Lebanon, Israel and the Palestinian territories and said French civil servants were banned from conducting any missions there.
The advisories followed a number of media reports that Israel was preparing for the prospect of an attack from Iran, possibly as soon as this weekend.
A US official told the Wall Street Journal that American intelligence reports indicated an Iranian retaliatory strike “possibly on Israeli soil” as opposed to against Israeli interests elsewhere, adding that the strike could come within 24 to 48 hours.
The same report, however, also reported an individual briefed by the Iranian leadership as saying no final decision had been taken by Tehran.
While analysts had initially speculated that Iran may not rush into a response, concern has grown in the last two days over the potential for direct conflict between Iran and Israel after years of proxy conflict between the two enemies.
More recently experts have suggested that Iran now feels it is required to act militarily to restore its balance of deterrence with Israel.
On Wednesday, Joe Biden said Iran was threatening a “significant attack” against Israel and that Washington would do all it could to protect Israel’s security.
The US president’s comments in turn followed a televised speech by Iran’s leader saying the attack in Damascus was equivalent to an attack on Iran itself. “When they attacked our consulate area, it was like they attacked our territory,” Ayatollah Ali Khamenei said. “The evil regime must be punished, and it will be punished.”
The Israeli military said it was fully prepared for any strike. Israel was “on alert and highly prepared for various scenarios, and we are constantly assessing the situation,” the Israel Defense Forces spokesperson, R Adm Daniel Hagari, said at a press conference. “We are ready for attack and defence using a variety of capabilities that the IDF has, and also ready with our strategic partners.”
According to reports in the Israeli media, the IDF believes that Iran or one of its proxies are most likely to attempt to strike a military target rather than civilian centres, although some sites such as the Kirya, Israel’s defence headquarters in Tel Aviv, are located in city centres next to shopping malls, offices and restaurants.
Concern over a significant escalation in the Middle East conflict, which has already drawn in Hezbollah in Lebanon, pro-Iranian groups in Iraq and Yemen’s Houthis, came as Israeli forces continued to fight Palestinian militants in the north and centre of the Gaza Strip.
Residents of al-Nusseirat refugee camp in central Gaza said dozens were dead or wounded after Israeli bombardment from air, land and sea that had followed a surprise ground assault on Thursday, and that houses and two mosques had been destroyed.
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Bigworld, Looks like gold finally hit some profit taking today, after reaching ~ 2450 intraday. Meanwhile the US dollar has also been surging over the last 3 days, so an unusual combination with both gold and the dollar climbing together. I figure some of the dollar strength is from the Fed delaying % rate cuts, plus dollar demand coming from people leaving the stock market.
Fwiw, I lowered my stock allocation from 28% to 20% today, but might still be on the high side. 15% could make more sense, but I'd first like to see if the S+P 500 holds at its 50 MA support. The DJIA and Russell both fell through their 50 MAs this week, but the Nasdaq is still above its 50 MA, and the S+P 500 is testing its today.
What worries me the most are the geopolitical landmines. It appears the various globalist factions may now be in agreement on an even more aggressive 'war brinksmanship' approach for dealing with Russia, Iran, etc. It's a lot safer to have these US/West foreign policy people at loggerheads with each other. Better to have relative gridlock to provide a check / balance on the lunacies of both sides, since these idiots could bumble us right into WW 3.
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gfp: Things appear slightly different this time. Gold and silver are rising even with interest rates climbing and the Dollar being relatively "strong". Some analysts attribute it to continued stockpiling by countries and Central Banks. All fiat currencies eventually fall to their intrinsic value....zero. Gold retains purchasing power over time. I know that there will be a monkey hammer take down of gold and silver at some point. But I think that will only create another buying opportunity. We are in a "Fourth Turning". Anything can happen. A crisis is brewing. Probably several different crises all at once. It's good to have gold and silver. And dividend paying energy plays. If wars break out energy prices will skyrocket.
Bye the way Rinear thinks the move in gold and silver is due to underlying problems below the surface in the bond markets. Well we are already in a Minsky Moment. Interest on the debt balloons to over $1.5 Trillion a year by year's end, becoming the highest line item in the Federal budget. And that's at current interest rates. If rates rise all bets are off. And yet we add about $3 Trillion a year to the debt making things worse.
gfp: When countries are as financially mismanaged as badly as the USA and Western Europe they leaders ill always look to widespread world wars to get into so as to focus the blame for their ineptitude and corruption elsewhere...on the "enemy". I just don't think they will be able to pull it off for two reasons. The collective "west" is broke. Insolvent. Any war would have to be financed with printed money. That's inflationary. The people are already suffering from inflation. If it doubles, triples or goes to hyperinflation then revolutions happen. Secondly there are not going to be enough willing participants to become cannon fodder for the bankers and political elites. A conscription Draft in the USA or Western Europe would fail miserably. The Deep State would have to nuke a city in America on the east coast to drum up enough hatred to get people invested in another useless war.
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