investorpolitico

The US bond yields are rising.

Saudi and China are dumping US Treasuries at record pace (part of the yield back up story as the more sale the higher the yield).

China is dropping them to stimulate recovery and protect the Yuan (now Chinese Treasury holding are at 2012 level) and Saudi to finance its two wars (Syria and Yemen).

This conspire to accelerate inflation as all the banks (also in Australia) gets their liquidity from the US (so they have to pay more…so they will increase the interest rates charged).

Now also the Chinese prices at factory gates are increasing and China has been the big deflation exporter in the world for decades now.

The inflation shock can come faster and harder than expected.

Since in Victoria, Australia, it is the week that stop the nation (horse racing Melbourne Cup)…let’s talk about dark horse scenarios for the US election

The market favorite scenario we know is a Clinton win and current/similar situation in Congress. Mildly positive, but substantially already in the numbers.

The other classic scenario is a Trump win and current/similar situation in Congress. Negative for the market, but substantially known and mitigated by the fact that at the end Trump is a Republican and will have to follow the party. temporary market loss of 5% to 10% – probably mitigated by the fact could decide not to raise interest rates

The dark horse scenarios which the market is not prepared to is

Clinton sweeps to election and the entire Congress goes Democrats. Democrats had to do many concession to Sanders ( so they went more left in their policy) and the market will sell off brutally.

Clinton or Trump win – but the win is challenged in court by the other and the US government goes practically into paralysis (or a variant of this…Clinton wins and then the FBI really needs to impeach her due to the email contents.

No wonder that institutions are increasing cash!

The inflation data released, while low overall, picked up in the last Wednesday report with stronger “consumer lead” inflation (clothes, housing and an incredible +19% quarter on quarter for fruits and vegetables), while transport and “imported items” inflation is down.

While the RBA will maintain an easing bias…there is no rush to cut as the big risk in the RBA mind (deflation) eased off.

This tells you a few things

If you feel like the real inflation is higher….you are right. You buy much more “fruit and veggies” stuff than big item ticket like cars and TV.

As inflation boost the Australian yields (Government Treasuries) more foreign money get parked in Australia and the AUD will remain stronger for a while.

Yesterday around the world was quite a lame day, but in Australia the stock market took a hit.

The issue is that the inflation data practically wiped out the bets for next week potential rate cut. Technically speaking the chances went from 15% to 6%.

Moreover it signals the potential end of the easing cycle and rate rising cycles are much more difficult for shares.

My personal take is that at this point rate cut do very little apart inflating the already inflated real estate market.

If there are issues next year (most likely) we will likely see Australian Quantitative Easing.  

Ps. The 5400 support has been broken, next one 5200.

Like the ocean all the market went dead calm and institutions increased cash across the board as everyone learnt the “Brexit lesson”. Market is kind of trapped in a range to wait and see the US solutions…too many variables to make a sensate decision. 

But even from far above is dead calm. The ASX 200 was at these levels 3 years ago. A lot of risk for collecting just dividends, if you are index tracking.

The Presidential debate yesterday showed that Clinton is unfit for command.

She exposed that it takes 4 minutes for the US President to launch a nuclear strike and consult 10 person.

This is a precious information for any enemy of the US.   

Now for all her fear of Putin the Russians could station a Yasen Class nuclear strategic submarine at less than 4 minutes strike distance from Washington. 

Very smart indeed for an experienced officer. I do prefer an inexperienced one!

Yesterday Philippines announced the pivot to China and Russia.

In the new Cold War this is a terrible hit for the US, Australia and NATO.

Philippines strategically was one of the most important allies for the US and kind of the base for its superiority in the South China Seas.

Even if PM Duterte does not follow up and goes just in neutral…ot is a massive blow.

The new Cold War is shaping up as developed world versus emerging countries 

This is not an article pro or against i migration. It simply looking at immigration as a weapon of war.

The latest immense flow of immigrant has been created by the US with the various wars in Afghanistan, Iraq, Libya and, to a certain extent Syria.

There are different studies like the Belfer Center for Science and International Affairs at Harvard University that bears the name «Strategic Engineered Migration as a Weapon of War>> in 2008. It is a uni study, but the President of the Belfer Center was working for the (Bill) Clinton administration and close to the Pentagon.

Also Obama gave the go ahead to the “Nudge” program which uses behavioral science to study how to manipulate group of people.

Soros, the investment guru and friend of the Clinton, has been using its Open Society Foundations, is actively encouraging migration (Skynews found several booklets on the Lesbo Island in Greece with the name of “Migrant Handbook” of his foundation).

So there is a  clear pattern  and people of the elites committing resources to this new kind of war.

But why?

Well minority groups can be better manipulated, immigration creates great money making opportunities if you are in that business (Italian police carabinieri already arrested several politicians around it – and also found out that the immigration business is more lucrative than drugs).

Moreover, in several European countries citizenship is automatic after 5 years…so large masses of immigrants will be able to vote soon – for the party that allowed it.

Also, the mass immigration provide disruption in Europe and will not allow it to be powerful again (the Belfer Study has been committed at the peak of the financial crisis which was threatening to collapse the USA).

How it will end. Well unless a populist candidate takes over (like Le Pens or Brexit) – it will not.

But sometime destiny takes care of itself in a funny way. In several instances (Australia, North/South Italy etc) the waves of first immigrants, once settled, become the sternest adversaries of new waves of immigration and vote right – contrary to the expectations of the elites.

If you had any doubt about who you are going to elect, please don’t.

The head of Wikileaks Assange has leaked top secret docs for over 4 years – even really bad ones that could have led to the death of US soldiers and nothing happened aa he was protected by the Ecuadorian embassy. 

Now he is leaking docs about Clinton and suddenly Ecuador cut his internet access and does not answer call about what Assange is doing now.

Supposedly John Kerry, Secretary of State, called in to ask to stop Assange.

Queen Cersei Clinton hitlist.

Another bit of fog of war – last week several missile were apparently shot at 2 US Warships in Yemen waters and one of the US ships shot cruise missile to take out Houthi’s radar.

The Houthi said they never shot at US warships (well, they are not that stupid…so it makes sense)

Today Reuters reports that the Pentagon have altered the story saying that they are assessing the incident and they are not sure what happened.

So funny enough a warship with state of the art systems does  not know what happened? Quite funny indeed.

And by the way the cruise missiles that the US warship shot against Yemen (so a nation that never declared war to the US) were real. If it was not American (eg Russia) this would a terrible assault on a independent and innocent nation!

My best guess is that it was a Saudi false flag attack to involve the US in Yemen.

Again, it make sense – the US, after the airstrike that killed over 200 people and injured over 300 on a funeral (by the Saudis with US laser guided precision bond) – the US threatened the Saudi to review their support. So the Saudi want to hit a US warship so the US has to remain involved and go deeper.

When the US will learn who is the real enemy? Never – as there are too much money involved and most of their politicians (Clinton foundation received between $10 million and 25 million dollar from the Saudi Government – font New York Times (foundations are required to disclosed only ranges not specific amounts).

By the way USD 25 million would be 20% of the entire Clinton campaign, ops!