Archive for February, 2015

President Obama is asking for a three year Islamic State war resolution.

He says that it is just to have a more clear backing for a long ongoing campaign (funny on the news you read only about the defeats of Islamic State. Yes there are defeats, but there are also huge intakes of new recruits from the Western World and advances in Afghanistan and Yemen).

So the idea is more of the same, just a “regularisation of the position”.

If you go and read the Bill it is very open ended…it does not exclude boots on the ground nor the fact of limiting operation to Syria/Iraq.

In reality it is more a “carte blanche” to do whatever it takes to attack Islamic State (which by itself is a not well defined enemy) for the next three years.

Definition of Carte Blanche: unconditional authority to do whatever it takes to reach an objective

The internet is abuzz with the CNN slip up (you can find it on youtube) where the commentator said that Ukranian pro US troops where fighting Pro Russian rebels.

And that is the truth as I already said in May 2014.  There is at least a part of American funded Greystone mercenaries fighting at least some Hundred Wolves Cossacks Russian paramilitary fighting each other as in the Cold War.

The main issue here for the world, it is that President Obama seems to be in the process to authorize military equipment to be sent officially to Ukraine.

This fact – instead of scaring Russia, would precipitate the rise of the Cold War 2.

Already several Russian military analyst declared that this would be perceived as a direct US involvement in the Ukrainian war.

A few consequences would soon follow.

A potential Russian (rebel or not rebel) invasion before the US military could start to tilt the balance.

Russia will give advanced weaponry (now kindly negated) at least to China, Iran and Syria. As a lot of pain for Russia comes from the Saudi I would not be surprised if Russia would use the Houthi (Yemen pro Iran rebels that defeated the pro Saudi-US government) to create issues for the Saudi (which it would have the nice effect, for Russia, to increase the oil prices)

Recently President Putin is courting Greece, Egypt and Cyprus – all countries of geostrategic importance (plus several other in South America (Argentina, Brasil) and Asia (Vietnam, india, China).

Also the Arctic, with its resources, is already an untold (by the media) battleground between US, Russia, Norway and Canada – at least.

So we are really going back to the old Cold War.

European Union: battlelines 2015

Posted: February 9, 2015 in Uncategorized

There are essentially two battlelines forming in Europe at this moment.

On one side there is the Cold War reloaded where the US wants to give army to Ukraine government,  but it is opposed by Germany and specially France.

The Russian rebels are massing troops near Mariupol to create a bridge to Crimea, before the US decides to send armies to Ukraine

In the meantime Russia is courting Greece and Cyprus is offering military bases to Russia.

On the economic side, Greece and Germany have somewhat hardened each position.

Germany just say Nein!

Greece looked for allies (France, Italy), but found only nice words as no one is willing to upset Germany.

The Podemos (Spanish left party similar to the Greek Syriza) in a Sunday poll looks like having the edge in the end of year Spanish election.

Even Alan Greenspan, ex US Fed chairman, went to the mix in an interview declared he cannot see how Greece could stay in the EU (and he also thinks that the Euro cannot last much longer, unless there is stronger integration).

And the UK Treasury Chief Osborn, on Sunday,  admitted that the UK is preparing for the financial instability that an eventual Grexit could create.

The other day the BCE pulled away a refinancing facility for the Greek banks.

The move has been subtle, but practically raised the staked for both Greece and Germany.

Greece now does not have any more mean to finance itself after 28 February (well probably could last till 10 March). At that point it would really have no choice but print its own money and print New Dracma and leave the European Union, for real.

It raised also the stake for Germany. The stake of Germany is more political than economical. It raises the possibility that other countries leave the European Union (which is the free market  trade market that let Germany prosper).

Why they did this? Just to push the two parties to more conciliatory modes.

Yesterday meeting between Greek and Germany was a clear Nein from the Germans…but the real push is towards a three month agreed extension to come to a solution.

It will just buy some time.

ASX 200 breakout, thanks RBA

Posted: February 4, 2015 in Uncategorized

RBA cut the rates to 2.25% yesterday, and ASX200 responded with the final break of a long term resistance.

This implies a next target of 6,150.

A slight retracement is likely, but if 5,550 holds is fine.

But there are quite a few triangular patterns ending somewhere March/June (SP500, Volatility Index, Gold) – which will release a bout of volatility (this does not imply negative/positive….just a pattern will be broken…we do not know which way)

A crazy little thing called OIL

Posted: February 4, 2015 in Uncategorized

Wow…oil plummeted over 50% since October and recovered over 24% in 2 weeks.

What is happening? The glut of oil made shelving a lot of new projects – 352 oil rigs where idled just in the last 8 weeks – BP shelved USD20 billion on new investment.

A study of Goldman Sachs showed than USD1 trillion investments in oil are not profitable under USD70.

Also Shale Oil rigs have a fast decadence rate if not continually improved (the second year the shale oil flows decrease by 70%).

And you still need oil, not just for cars – but for everything (for your clothing to the kitchenware).

So this glut automatically creates a shortage for the future.

But also all this could be a fake as there 19x the normal volumes on oil future. That said oil cannot stay at this prices for long.

UPDATE: since the oil move have been initiated by the Saudis that dominate the oil market you have to examine what they want and if that has been achieved:

– Get rid of US shale gas. Not yet achieved – it is seriously endangered, but -due the hedging of positions – their mission has not yet been achieved.

-Get rid of the Assad regime. Russia and Iran are the ones that sell weapon to Syria and they did not back down – mission not yet achieved (if ever)

So, for now, the oil trade is still very dangerous

In the last weeks there has been an interesting debate between the likes of Bill Gates and Stephen Hawkins and others about the possibility of Artificial Intelligence becoming a real Terminator issue or not.

Someone is taking the “bad” Artificial Intelligence scenario quite seriously.

The German Federal Agency for Civil Education is financing a “Project-Exodus” classified military exercise, where over 80 graduate will simulate a real “Battlestar  Galactica” gaming scenario to develop guerrilla warfare, civil government and communication systems against a technologically superior opponent with cyborg characteristic.