The fall of US Deterrence has been occurring slowly and now suddenly.
Russia invades Georgia in 20078 ad Ukraine in 2014.
President Obama ignores his ‘red line’ on chemical weapons in Syria.
China builds its own islands in the South Chia Sea. Chinese military aircraft increase incursions into Taiwan from 380 in 2020 to 1,700 in 2022.
President Biden cuts the defense budget three years in a row.
No surprise, we now have two fighting wars and have endorsed support for a third in Taiwan, come on, man!
Global social mood has turned negative In addition to two wars…
Russia jailed WSJ reporter Evan Gershkovich six months ago. Now they have detained Radio Free Europe’s Alsu Kurmasheva, both a Russian and American citizen. The Republican led House of Representatives voted their Speaker out and Jim Jordan just failed a third election attempt. China arrests a Japanese pharma executive on espionage charges.
Protests for both Hamas (Palestine) and Israel occur in NYC. Tm Cook tours China as IPhone 15 sales sag.
China’s Country Garden developer just missed a $15.4 million bond payment.
Positive mood causes people to invest enjoy inclusion. Negative mood results in distancing from investment and one another.
War is the ultimate negative mood and we have plenty of that with more about to break out.
As far as investing, the bond market turned bearish March, 2020. From about .5% then, the current yield on the Ten -Year Treasury has neared 5%. The Dow Industrials now trades under its 200-day moving average and is about to test ‘support’ at 32,750. Internally the stock markets are in bear territory. That usually requires a 20% drop. but seven stocks are keeping the belief alive that a bear market is not happening. Only 18% of the SPX and NASD stocks are above their 50-day moving average. Yet investors remain complacent.
The amazing thing is that Brent crude is not $100. B rent i $93.24 while WTIC is $89. Given the requirement of air freight supplying two wars, this suggests a world-wide economic decline.
Sorry Bernie and AOC, the Green Revolution is not happening. The International Energy Agency, IAE estimates the world needs another 49.7 million miles of transmission lines. That would circle the globe 2,00 times. China is now the world leader in mining aluminum and copper required to build such lines. This reality has not reached Joe Biden and John Kerry. Does Kerry still believe climate change is our number one problem?
The whole world translation the new Axis of China, Russia, and Iran are now emboldened by America’s dithering and refusal to become energy independent.
