by Brandon Smith
While the mainstream media and general public tend to assume that every new day is bringing us closer to a better future, many alternative analysts focus on the underlying weirdness of our world and all of the crisis factors that average people don’t want to think about. I have to say, in my view the “weirdness” has been escalating rather swiftly lately, and I don’t think that very many analysts, alternative or mainstream, appreciate the potential consequences.
The most important issue of course has always been the global economy. With nearly every sector of our system resting on massively inflated financial bubbles driven by central bank fiat printing and artificially low interest rates, there is only one question that really needs to be asked: How long before a geopolitical or economic shock event takes down the entire house of cards?
The mainstream philosophy seems to be that the economy is now impervious to such events. As the media now argues often, stock markets in particular do not appear to care whenever international threats present themselves. I would argue that this is because nothing substantial has actually happened quite yet. We have had a steady build-up of domestic and global political tensions, but the markets have so far been presented with a world that is comfortably predictable. It is a dangerous world with numerous potential pitfalls, but still predictable nonetheless.
And this is the very odd position we find ourselves in. A system which grows progressively more unstable year by year, and a society that has grown ignorantly used to it. To wake people up to the threats ahead would require a surprise, a slap to the face, something entirely unexpected. Here are a few developing powder kegs around the world that may present such a shock.
U.S. Debt Ceiling And The Government Shutdown Battle
I think a lot of people are missing some major points on the government shutdown situation. First, consider this — every new deal to keep the federal government funded offers a shorter stopgap than the last. The latest deal would only keep funding in place for three more weeks, then the same conflict over budget and spending initiatives happens all over again. It is not outlandish to expect that one day soon we will be faced with weekly or bi-weekly funding battles in D.C., while the greater problem of the U.S. debt ceiling is generally ignored.
You see, the “fight” within the federal government is not so much over whether or not more debt is a “bad thing.” In fact, both sides support more debt and bigger government. Instead, the fight is over the allocation of funds (debt) to certain projects and away from others. Who gets the money? And how can a government shutdown be used as leverage to gain the upper hand politically?
The thing is, this is all theater. There are no “sides” to the debate in Washington, and there is no battle. This is all designed to condition the American public into believing that the two parties are separate and opposed when they are in fact not. Beyond that, the shutdown battle also achieves a certain stress factor for the economy that many people are not aware of.
Among alternative analysts, cynicism runs rampant over a government shutdown. “Who cares?!” many of them will say, “Let it shut down!” But there are some concerns here, primarily the concern of full faith in U.S. debt issuance.
While I am all for the notion of the federal government going the way of the Dodo bird, I do not think many alternative analysts are considering the trade-off required when the system does in fact “reset.” For example, while the U.S. Treasury is supposed to remain functional during a government shutdown and certainly remains functional during stop gaps and debates over funding, this internal conflict though theatrical in nature can still produce a lack of faith in Treasury bonds and the dollar internationally. And frankly, faith is all that our economy has left to sustain itself.
If the funding battle continues with ever shorter stop gaps or with an extended period of government shutdown, there is a possibility that the largest foreign investors in U.S. debt and the dollar will begin dumping their holdings. When this is done, it will be done quietly and will be fully denied if questions arise. If China, for example, begins decoupling from U.S. debt, we will not find out until it is far too late. The Chinese would seek to be the first to dump their holding in order to avoid a vast international rush for the exits. They would want to be the first to sell, not the last.
Again, if the funding fight continues to become more aggressive and more absurd, eventually we will see a foreign dump of U.S. debt, and with it an unprecedented crisis. Whether or not this “needs” to happen is not what I am debating here, only that when it does happen, there will be consequences for us all, and being prepared for them is essential.
Syria Back On The Table
So, if you thought the Syrian situation could not get any weirder, the past week might have been a surprise.
The last major development was Vladimir Putin’s orders to pull a large percentage of standing Russian troops from the region, leaving the Assad government particularly vulnerable. This move did not surprise me in the least. In fact, I predicted that Russia would step aside in Syria in interviews last year. I also wrote about the possible problems this would cause in my article ‘A Review Of The Most Disturbing Events Of 2017’. One of these problems would be Putin leaving the door wide open for a foreign force to invade Syria, drawing in other nations like Iran or Lebanon into the fight and expanding the war tenfold.
What did surprise me, though, was the brazen launch of forces into the region by Turkey in particular. Erdogen has been pecking away at Kurdish tribes in Syria for quite some time, but his latest measures are something entirely new. Keep in mind that Turkey is still technically a NATO member and an ally of the U.S., despite Erdogen’s anti-NATO rhetoric and threats to leave the multi-nation defense pact. Also keep in mind that the U.S. government is giving monetary and weapons support to the Kurds. So, to clarify, a U.S. ally is ignoring the tense situation in Syria and the possibility of triggering a wider regional war to hunt and destroy another U.S. ally, all while Saudi Arabia, Iran, Israel, Lebanon, Russia, etc., hover on the periphery waiting to jump into the fray.
This is not a recipe for diplomatic discourse. This is a recipe for disaster. Will Syria lead to WWIII as some people suggest? Probably not in the way most of them imagine. War takes many forms, including sporadic region by region conflicts, as well as economic conflicts. Global nuclear war is unlikely considering such an event would virtually vaporize decades of investment by the elitist establishment in control grids around the world. But, constant regional combat and financial disasters? THAT is a strategy that benefits them greatly.
North Korea And The Olympic-Sized Target
First let me say that the very fact that South Korea and the Olympic committee feels compelled to continue the games in the region at a time of such heightened tensions is extremely odd to me. The notion may simply be that the games will “heal” divisions in the Korean peninsula. I am not so sure about that…
I recently wrote about the North Korean war scenario and the potential false flag event during the Olympics in my article ‘Olympic Games In South Korea – Perfect Opportunity For A False Flag Attack?’. I would add to my analysis another interesting development; the negative response by South Koreans to the North’s participation in the Olympic games.
I have continually had to remind people that a war in North Korea would be the most effective trigger event for economic downturn and global distraction, though some skeptics seem to think the situation is going nowhere. Yet, all the elements are now present, including an array of naval forces ready for kinetic response, the escalation of North Korea’s missile technology to include ICBMs capable of striking the U.S. mainland, the war rhetoric grows on both sides, with the Department of Defense being the most aggressive, and now even the South Korean citizenry seems to be shunning diplomacy as they burn photos of Kim Jong Un during Olympic processions and demand a stop to cooperation with the North during the games.
This is a rather sharp break from the mainstream narrative in the U.S., which has told us that South Koreans are seeking generally passive and diplomatic relations with the North, and that the US involvement is universally unwanted. That is to say, the desire for conflict is not limited to U.S. warhawks and North Korean “fanatics,” it is also a large portion of the South Korean population that appears to prefer less-than peaceful solutions.
Add to this the latest CIA claims that North Korea’s nuclear weapons technology will be a full threat to the U.S. in a matter of months, and the news that North Korea’s armies are confiscating food stores from the citizenry at a greater rate than usual, and anyone with any sense can see what is developing here. CIA director Mike Pompeo has asserted that the Trump Administration will act to prevent North Korea from developing an arsenal of ICBMs capable of striking the U.S.
I’ve said it before and I’ll say it again: This is going to end in war. There is no way around it.
The U.S. Dollar Continues Its Rapid Decline
I outlined this interesting development a couple weeks ago in my article ‘The Strange Case Of The Falling Dollar – And What It Means For Gold’, and so far it seems that the downward spiral of the dollar is continuing, now falling at a speed not seen since 2003.
This trend is very strange for a number of reasons – the most prominent being the fact that the dollar index is ignoring policy moves by the Federal Reserve to hike interest rates and reduce its balance sheet. Under normal economic conditions, this should trigger a dollar spike, not a dollar collapse. I predict that the Fed, under “new leadership” through Jerome Powell, will pursue highly aggressive fiscal tightening measures in 2018, including expanded interest rate hikes in the name of tempering the dollar’s decline.
If this takes place, the insane stock market bubble now in full steroid mode will feel a sudden swift kick to the nether regions. However, such a move may still not stop the dollar’s decline. This could be the first stage of the stagflationary crisis I and a few other alternative analysts have been warning about for years.
Growing Accustomed To The Weird
I think if you asked most people if they would have believed the developments of today were possible five to 10 years ago, they would say no. The danger is that when a society becomes too accustomed to instability and conflict, they become complacent in terms of their own security and their own freedoms. They might not even notice until it is too late that both necessities have been stolen away from them.
That great global slap in the face is coming, make no mistake, but the question is, can we prepare enough people for it in time to make a difference in the outcome? Reporting on these issues is often compared to “doom and gloom,” but really, it is an act of optimism. I and many other analysts are operating on the assumption that we can tip the balance by informing the public and creating a shield against calamity. Maybe this is a foolish assumption, maybe not. We shall see in due course.
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by Brandon Smith