This will send the US economy and world economy into collapse.
October 28 (King World News) – Gregory Mannarino, writing for the Trends Journal: Multiple major news organizations are now reporting that the United States and Israel have prepared plans for potentially massive new military operations against Iran AFTER THE NOVEMBER 3 US MIDTERM ELECTIONS.
American forces in the Middle East are positioned to execute major operations within 96 hours of receiving an order from Trump.
Preparations for renewed strikes, and new targets including portions of Iran’s energy industry.
EXPECT MAJOR FALLOUT.
NOT EVEN ONE functioning brain cell is even required to determine where the fallout will hit.
1. The consequences will bleed out into much higher inflation across the board.
2. It will also bleed out into Treasury yield premiums.
3. Credit/debt markets.
4. Further losses of household purchasing power.
5. Accelerate the already freefalling US economy.
NINE MONTHS OF WAR SO FAR… AND STILL NOT A SINGLE US OBJECTIVE FOR THE WAR HAS BEEN MET…
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LIONS… OIL AT $130? $150? HIGHER?
THAT IS NOT EVEN THE QUESTION WE SHOULD BE ASKING…
THE REAL QUESTION IS THIS.
FOR HOW LONG…
Brent crude finished Friday $116.72 per barrel. Currently, as I am writing this, prices have eased toward $115.
What can we learn from this?
MAJOR KEY POINT. It tells us that a substantial geopolitical risk premium is already embedded in the oil market.
Now consider what MORE WAR will bring.
IF INDEED THESE SO CALLED “MASSIVE” STRIKES ARE ORDERED AGAIN BY TRUMP WITH NOW 9 MONTHS OF WAR… (FOR WHICH EVERY OTHER “MASSIVE” STRIKE TRUMP HAS ORDERED THUS FAR HAS FAILED TO GET IRAN TO SURRENDER AS WE WERE TOLD WOULD HAPPEN WITHIN THE SPAN OF 4-5 WEEKS…)
I SEE AN IMMEDIATE MOVE OF CRUDE HITTING $130 A BARREL WITH FURTHER POTENTIAL TO HIT $150.
MOREOVER, THE LONGER ENERGY SUPPLIES REMAIN DISRUPTED, THE GREATER THE PRESSURE ON THE GLOBAL ECONOMY.
AS YOU ARE ALREADY WELL AWARE… AN EVEN BIGGER PROBLEM IS DIESEL FUEL.
MAJOR MAJOR MAJOR KEY POINT… DIESEL IS NOT JUST ANOTHER FUEL.
Diesel is an essential input into the function of the world economy. According to the EIA, the national average price for diesel $6.28 per gallon.
That compares with $3.62 JUST ONE YEAR AGO.
ANOTHER STRIKE WILL PUSH DIESEL COSTS MUCH HIGHER AND THE ECONOMIC DAMAGE WILL NOT STOP AT THE PUMP.
NOW THE NEXT BIG QUESTION IS THIS…
WHAT WILL HAPPEN TO TREASURY/DEBT MARKET YIELDS?
THIS IS WHERE THE SITUATION BECOMES EVEN MORE DANGEROUS FOR FINANCIAL MARKETS.
As I am writing this the US 10yr yield is hovering around 5%.
Renewed “MASSIVE,” (as its being described by the mainstream media), WILL affect Treasury yields through two opposing forces.
THE FIRST FORCE……………… FEAR.
THE SECOND FORCE……………. INFLATION AND RISK PREMIUMS.
MAJOR KEY POINTS. A sustained surge in energy costs,,, WILL WITH ABSOLUTE CERTAINTY… increase inflation expectations. (Insert your own DUH! Here_____________________).
HOW WILL THIS PLAY OUT?
Investors, WHO WILL FIRST SEEK SAFETY IN US TREASURIES CAUSING YIELDS TO DROP, will then demand additional compensation for holding longer term US debt. (Then yields will rise).
The inflation component ALONE of yields and rising risk premium will create upward pressure on long term borrowing costs.
AND I WILL GIVE YOU ONE GUESS AS TO WHO WILL STEP IN TO “BUY IT ALL,” FURTHER EXACERBATING CURRENCY DEVALUATION AND VAST DEBT EXPANSION…………….. THE FED/TREASURY COMPLEX.
Moreover… additional VAST debt expansion via increased military spending on more war.
THE RESULT?
THE US ECONOMY, AND THE WORLD ECONOMY, WILL FREEFALL FASTER…
FOR WALL STREET… THE RISK GOES FAR BEYOND ENERGY STOCKS.
Let’s now connect all of this into the freakshow stock market.
A major new military confrontation WILL WITH CERTAINTY cause a broad reassessment of risk.
Energy producers WILL benefit from higher oil prices.
But many other industries WILL face the opposite effect.
Airlines would confront higher fuel costs. Transportation and logistics businesses would face margin pressure. Retailers would experience reduced consumer spending. Industrial companies would confront higher input costs and weaker demand.
And technology companies, particularly those engaged in enormous AI infrastructure hyper-trade, would confront rising risk across the board at precisely the wrong time.
Why is that important?
ITS IMPORTANT BECAUSE THE AI HYPER-TRADE IS ALREADY UNDER RISING PRESSURE.
MAJOR KEY POINT. Wall Street has recently been “reassessing” the enormous borrowing and capital spending commitments supporting the AI hyper-trade and we have already covered this multiple times.
Now…. imagine those pressures becoming even more significant while energy prices surge and bond market volatility intensifies.
FURTHER FALLOUT.
THIS IS THE INTERCONNECTION BETWEEN FURTHER ENERGY SHOCK AND………………. A POTENTIAL CREDIT SHOCK EVENT.
THE MUCH MORE SERIOUS WARNING WOULD BE A SUSTAINED CREDIT SPREAD WIDENING (WHICH IS ALREADY HAPPENING IN REAL TIME), AND FURTHER DETERIORATING FINANCING CONDITIONS WHICH ALREADY BEING SEEN IN THE RISING PREMIUMS WITH CREDIT DEFAULT SWAPS.
EVEN MORE FALLOUT
Currently, The CONgressional Budget Office estimated approximately $38 billion in US military costs through August 1. (The actual numbers will be more than 3X that).
A subsequent Pentagon “ASSessment” put the total at approximately $43.6 billion through early September.
Moreover, the CBO estimates that continued operations could cost approximately $2 billion to $3 billion per month.
BOTH YOU AND I KNOW, an expansion of military operations WILL increase those spending predictions AND ASSESSMENTS BY EXPONENTS.
HERE IS THE BIG PICTURE.
THE ECONOMIC COST WILL NOT BE LIMITED TO THE PRICE OF A BARREL OF OIL.
IF YET ANOTHER “MAJOR” WAR ESCALATION OCCURS… (WHICH WILL OF COURSE ALSO END IN ABJECT FAILURE JUST AS EACH OF TRUMP’S OTHER MASSIVE STRIKES HAS)…
THE ECONOMIC DAMAGE TO OUR COUNTRY WILL BE ENORMOUS…
FINAL MAJOR KEY POINT… That above is exactly their goal. TO BRING AMERICA, AND THE AMERICAN MIDDLE CLASS TO THEIR KNEES AS TO ISSUE IN “THE NEW SYSTEM” WHICH TRUMP HAS ALREADY SIGNED INTO LAW LAST JULY… The Genius Act.
DESTROYED FROM WITHIN…
The Mother Of All Crises!
To listen to Alasdair Macleod discuss the mother of all crises as well as what to expect next from gold, silver, oil and more CLICK HERE OR ON THE IMAGE BELOW.
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