Posted Aug 29, 2013 by Martin Armstrong
Obama is not finding it as easy to start a war as Dick Cheney via his patsy George Bush, Jr. Three letters were delivered from Congress to Obama. They informed him that he should not go to war with Syria before Congress returns. Obama tried to skirt that issue of not consulting Congress by just calling John A. Boehner so he could claim he consulted Congress. It is clear he is doing his best to circumvent the democratic process.
Obama had both France and Britain behind him because they desperately need war they belief to occupy the youth and to revitalize the economy as they think World War II did economically. The US will not get UN support for both China and Russia will veto the USA. There is no plan whatsoever going forward. Now Obama claims it would be just a strike to “punish” Syria not to remove the government. If the government falls, you will have another Iran and the entire region will become far more dangerous.
The Dow has rebounded and gold backed off into today so even though today may provide the reactions in these markets, it appears we may not elect any weekly numbers tomorrow. European stocks rallied followed by the US shares. The dollar rose against the safe haven yen though hard-hit currencies in India, Brazil and Indonesia bounced higher against the greenback as their central banks moved to stem capital outflows. It is interesting that the yen would become the safe haven showing how capital flees the conflict and that meant Europe and the USA.
Obama has been backing off claiming it will be just a limited military strike. However, he has put ships in harm’s-way and Syria does have the capability to sink one. It appears that Obama may be banking on Syria retaliating and he can then claim it is an act of war. Yet political divisions are emerging in Britain and the USA where many lawmakers seem intent to delay any imminent action, giving investors a reason to take a breather. People are playing Kerry’s comments how there was overwhelming evidence to invade Iraq and currently where he seems to just replace Iraq with Syria. Nothing that was uncontroverted evidence proved real with Iraq and the people who died fighting are the lucky ones compared to the soldiers who have to live the rest of their lives maimed all for Kerry’s bullshit. These people are excessively caviler with the lives of the people who they send to defend their made-up nonsense.
In the oil markets, the reduced likelihood of an immediate major supply disruption saw Brent crude drop below $115 a barrel, ending its strongest two-day gain since January 2012. U.S. oil dropped by $1.50 a barrel to a low of $108.60 following its near 4 percent gain over the past two days. Syria is not an oil producer so it is collateral damage that is interesting.
The MSCI world equity index, which tracks shares in 45 countries, was virtually flat by mid-morning in Europe; however, it lost two percent this week as the Syrian tension escalated. The expected reduction in the Federal Reserve’s stimulus policy has too many people thinking the economy will collapse. These concerns about the Fed’s next move that have dominated the markets and investors, came into focus when the U.S. economy accelerated more quickly than expected in the second quarter thanks to a surge in exports. This is bolstering the case for the Federal Reserve to wind down a major economic stimulus program. The Fed will cut back on the $85 billion a month it has been buying to boost economic activity, but this has been largely a nonissue since it has been stimulating banks not the economy.
On the Sovereign Debt Crisis front, an auction of new Italian debt showed investors remained concerned about the shaky coalition with the government borrowing costs over five years rising. The entire EuroZone Crisis is not finished and long-term confidence has been shaken, which is why they need a war in their minds.
World currency markets have stabilized, with the dollar rising against major developed world currencies, while the actions among some emerging market nations limited their losses against the greenback. In emerging markets, Brazil’s decision to raise its benchmark interest rate to a 16-month high of 9 percent on Wednesday helped stabilize the real. Indonesia saw the rupiah strengthened slightly after its central bank hiked its key lending rates as well. The Indian rupee rose as high as 66.85 per dollar, up sharply from a record low of 68.85 per dollar hit on Wednesday when its central bank moved to provide dollars directly to oil companies to give the currency some relief. Emerging market currencies in countries with high current account deficits such as India, Turkey and Brazil have plunged between 12 and 18 percent against the dollar this year. We are seeing the net capital outflows from these regions.
If these people could start a war and kill off the youth, then they can reduce the unemployment without reforming government or letting go of any power.