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As we had long forecast when politicians locked down civilization to fight the COVID War, it would destroy the lives and livelihoods of billions across the globe.
It has, and the facts are there for all who are not blind to see.
Again, on the economic side, equity markets and economies should have crashed but they were artificially propped up with countless trillions of government money backed by nothing and printed on nothing, plus record low interest rates to keep the government Ponzi scheme going.
Besides the mental, physical, and economic damage caused by the COVID War—which we have extensively detailed in The Trends Journal when it was launched by China in January 2020 on their Lunar New Year, “The Year of the Rat”—it also escalated the refugee crisis sweeping Europe and North America.
This is from yesterday’s New York Times article, “The Scion of a Banana Empire Leads in Ecuador’s Election.”
Besides talking about the crime wave sweeping the country and the newly elected president, they write, “Like much of the rest of Latin America, Ecuador was dealt a major financial blow by the coronavirus pandemic, and many workers struggle to make enough money to provide for their families. Only 34 percent of Ecuadoreans have adequate employment, according to government data.”
No, not “a financial blow by the coronavirus pandemic,” it was a draconian dictatorial blow from the political blowhards and their little arrogant bureaucratic “health officials” who destroyed their economy with lockdowns.
And to illustrate how low the common people who are not among the “elites” are downgraded as nothing more than plantation workers of Slavelandia, The Times says that “many workers struggle to make enough money to provide for their families.”
No, they are not human beings suffering because of the politicians who have destroyed their lives, they are nothing more than “workers” who can’t find enough work to “provide for their families,” so they have to escape their country.
In fact, the NYT even notes that “Ecuador was once a peaceful nation compared with its neighbors.”
But thanks to the politicians launching COVID War, not anymore.
Again, we note this because the damage of the COVID war is incalculable, and there will be no recovery. As we also note, barely is heard the discouraging word of our Office Building Bust trend that will bring down much of the banking system as a result of people working from home and landlords unable to pay off their massive commercial real estate loans as tenants abandon offices and vacancy rates keep rising.
From COVID War to Ukraine War
Putting more downward pressure on the plantation workers of Slavelandia, thanks to the sanctions the United States, NATO and their allies have placed on Russia since Moscow invaded Ukraine on 24 February 2022… many commodity prices skyrocketed.
While a gallon of regular gasoline is selling at $3.63 nationwide, down 5.8 percent from a month ago, according to AAA, it is because the summer driving season is over, thus supply is much higher than demand. The Wall Street Journal reports that “Contracts for November shipments of wholesale gasoline into New York Harbor have tumbled more than 23 percent since their 2023 high point on Aug. 11,” and “U.S. gasoline consumption in the third quarter dropped 60,000 barrels a day from last year, a 0.7 percent annual decline, and the International Energy Agency on Thursday reported ‘signs of demand destruction in the United States.’”
Thus, this not only indicates economic contraction, despite the “news” that prices are falling, gasoline prices are up some 30 percent from 2021. Thus, the more money going into oil and gas, the less consumers will spend in the retail and service sectors.
From COVID War, to Ukraine War, to Israel War
And while oil and natural gas prices spiked when the Ukraine War began in February 2022 and have fallen since, the Israel War, as we have been warning, risks driving prices up much higher.
Putting more inflationary pressures on consumers and industry, since last week when Hamas attacked Israel, Brent Crude spiked 7.5 percent and Europe’s TTF natural gas benchmark shot up some 40 percent.
TREND FORECAST: As we have warned with one of our Top Trends for 2023 that we published on 3 January 2023, Middle East Meltdown, the Israel War was heating up and we noted that there was rising probability that Iran would be involved. And if Iran goes to war with Israel and the United States, Brent Crude will spike to above $130 per barrel and it will crash equity markets and the global economy.
Get Ready
Making a bad oil and war situation worse, last week in an interview on NewsNation’s “The Hill,” U.S. Senator Lindsey Graham said the U.S. will attack Iranian oil infrastructure “If there is an escalation in this conflict, if hostages start getting killed, if Hezbollah in the north attacks Israel in strength, we should tell the Ayatollah we will destroy your oil refineries and your oil infrastructure,” and “We will put you out of business.”
The Other Side
Yesterday, Iran’s foreign minister, Hossein Amir-Abdollahian warned of “The possibility of pre-emptive action by the resistance axis is expected in the coming hours,” and that “the resistance leaders” will not allow Israel “to do whatever it wants in Gaza.”
Saying the Israeli attack on Gaza would essentially risk an attack on Iran, he said, “If we don’t defend Gaza today, tomorrow we have to defend against these (phosphorus) bombs in the children’s hospital of our own country.”
And while there is some positive economic news in America, such as retail sales rising 0.7 percent in September, when adjusted for inflation, on a year-over-basis, sales rose just 0.1 percent.
Yet, not only has this pushed equity markets higher, it also improves the risk that the U.S. Feds will keep interest rates high and possibly hike them. As Yahoo Finance noted, Oxford Economics Michael Pearce said “The economy is entering Q4 with more momentum than we previously thought,” and “The risks to our forecast for a slight contraction in consumption in Q4 are firmly to the upside. The strength of the economy also means that Fed officials will leave the door open for additional rate hikes.”
TREND FORECAST: What is missing in the mainstream economic forecasts are the Ukraine War and the Israel War.
On the Ukraine War front, as Kyiv’s counteroffensive failed, which we had forecast it would, we now forecast they will do all they can to turn the tide of war in their favor by taking such actions as launching a major false flag event, attack a nuclear power plant, escalate attacks within Russia etc. As a result, this will spike oil, gas and other commodity prices and send a chill of economic fear across Europe and North America.
Making a bad situation worse, we see no end in sight for the Israel War. And should Iran and Hezbollah become actively involved, as we have forecast, oil prices will spike above $130 per barrel and equities and economies will crash.
Should these trends develop, U.S. and EU central banks will rapidly lower interest rates. And as we have forecast, the deeper U.S. interest rates fall, the deeper the U.S. dollar will fall and the higher gold prices will rise.
On the EU front, we maintain our forecast that regardless of what they do with interest rates, European economies will sink into Dragflation: declining economic growth and rising inflation. And both the Ukraine War and the Israeli War will make a bad economic situation much worse.
LAST WEEK: MIDEAST WAR DRIVES INVESTORS TO SAFE HAVENS
The new Middle East war sent investors scurrying to safety late last week, but the three major U.S. indexes still managed gains.
Investors packed into gold, treasury securities, and utility stocks, among other refuges late in the week. Share prices for tech companies and those offering discretionary products or services—casinos, cruise lines, and dating apps among them—suffered.
Friday’s markets began by moving higher on strong earnings reports from Citigroup, JPMorgan, and Wells Fargo. Also, a Fed official said in a statement that he sees no need for the central bank to raise interest rates again.
However, the rising markets were punctured by the University of Michigan’s October consumer sentiment survey, which showed Americans less optimistic about the economy’s future than analysts had thought they would be.
The Dow Jones Industrial Average still managed a 1.2-percent gain for the week. NASDAQ edged up 0.6 percent and the Standard & Poor’s 500 index rose 0.9 percent.
Yields on the 10-year treasury bond have been climbing relentlessly in recent sessions but declined at week’s end as investors shifted their focus. Bond yields fall as prices rise.
The 10-year treasury’s return dipped to 4.628 percent Friday after closing Thursday at 4.71 percent.
Gold futures rocketed up 3.1 percent Friday to close at $1,927.40, the strongest one-day gain since April 2020. The price gained 5.1 percent for the week, its best five-day run since March’s trio of bank failures.
The price of Brent crude oil for December delivery jumped 4 percent through the week to $90.89 at 5 p.m. U.S EDT on 13 October. West Texas Intermediate, which benchmarks U.S. domestic oil prices, gained 2.3 percent to $87.69. For more details, see “Oil Prices Pass $90 as Mideast War Escalates” in this issue.
Bitcoin slid 3 percent through the week as investors opted for safety. The coin traded at $26,786.70 at 5 p.m. U.S EDT on 13 October.
The London FTSE 100 added 1.4 percent over the week. The all-Europe Stoxx 600 grew by 0.9 percent.
Japan’s Nikkei 225 jumped 4.2 percent. The South Korean KOSPI, often seen as a bellwether for export markets, took on another 1.9 percent.
The Hang Seng index in Hong Kong rose 1.2 percent. The Chinese mainland’s CSI Composite ticked up less than 0.1 percent, while the tech-heavy SSE Composite slipped 0.3 percent.
YESTERDAY: DOW UP AS ISRAEL WAR RAGES
The Dow Jones Industrial Average was up 314.25, or 0.93 percent, to 33,984.54 and the S&P 500 gained 45.85, or 1.06 percent, to 4,373.63. The tech-heavy Nasdaq was also up 160.75, or 1.20 percent, to 13,567.98.
Investors were watching for the latest updates out of Israel while also weighing the Federal Reserve’s future moves to tame inflation. Major companies will also be announcing their earnings, which will offer a window into how the economy is performing.
U.S. Treasury Secretary Yellen told Sky News yesterday that higher interest rates will likely persist, but said the overall economy is in a good place.
The Empire State Manufacturing Survey general business-conditions index, a leading indicator for the state, fell seven points to -4.6 in October, which means a decline in the sector.
The New York Fed said the survey found 24 percent of respondents reported that conditions had improved, while 29 percent said that conditions had worsened, CNY Business Journal reported.
Elsewhere, the FTSE was up 0.5 percent and the Stoxx 600 was up 0.23 percent. In Asia, Japan’s Nikkei 225 was down 2.0 percent to 31,659.03 and Hong Kong’s Hang Seng was down 1.0 percent to 17,640.36. South Korea’s KOSPI Composite was down 0.8 percent to 2,436.24. China’s Shanghai Composite was down 0.5 percent to 3,073.81 and the Shenzhen Component fell 1.42 percent.
TRENDPOST: Gerald Celente has long said: When all else fails, they take you to war…and it’s failing. If Iran gets involved in a war with Israel, the world will go nuclear and we will all die. Israel cannot stand up to Iran, Hezbollah, and Hamas in a conventional war, and there are already analysts telling cable news programs that Israel will go nuke if its back is against the wall. An escalation in the Middle East would be disastrous for the world and stock markets wouldn’t matter because there would be nothing left.
OIL: Brent crude was down 80 cents a barrel to $90.09 and West Texas Intermediate was down 72 cents, or 0.83 percent, to $85.63 a barrel.
The oil market had a bumpy day yesterday amid concerns about the Israel war and the risks of an expanding war in the Middle East. Analysts at ANZ Research said in a note to investors that they expect oil prices to hit $100 a barrel in the short term “because of the growing risk of regional escalation,” CNN reported.
TRENDPOST: Oil prices remain our wildcard because of the tense rhetoric coming out of Iran, while Israel continues to bomb Gaza. Iranian President Ebrahim Raisi spoke with Russian President Vladimir Putin on Monday and said there is a “possibility of expanding the scope of war and conflict to other fronts.”
GOLD: Spot gold was down 0.64 percent to $1,919.27 and U.S. gold futures were 0.4 percent lower to $1,934.30.
Gold suffered from a strengthening U.S. dollar, which makes the precious metal less attractive for foreign investments. The feeling on the street was that the Israel war was easing, thus keeping those looking for a safe haven at bay.
U.S. Treasury yields also jumped to their highest mark in more than a week, which makes the non-yielding precious metal lose a little of its luster.
TRENDPOST: Gold is the ultimate safe-haven asset and the war in Israel could drag the entire Middle East into conflict, which would send gold skyrocketing. But besides war, gold buyers will be listening to Jay Powell, the Fed head, who is expected to signal the central bank’s next move later this week. The general feeling is that the Fed will take its foot off the gas but keep rates high.
BITCOIN: The world’s most popular cryptocurrency was trading up $1,383.50, or 5.09 percent, to $28,569.60 as of 4:20 p.m. ET yesterday.
The main driver for the crypto was the rumor that a bitcoin exchange-traded fund could be approved in the coming months. We have noted that a crypto ETF would give confidence to the community and could send bitcoin skyrocketing.
A source told CNBC that the Securities and Exchange Commission will not appeal a recent court ruling that found it was wrong to reject an application from Grayscale Investments to create a spot bitcoin ETF. The report said the decision “likely paves the way for the agency to review Grayscale’s application.”
TODAY: DOW JONES UP SLIGHTLY AS TREASURIES JUMP ON STRONG RETAIL DATA
The Dow Jones Industrial Average was up 13.11, or 0.04 percent, to 33,997.65, and the S&P 500 was down 0.43, or 0.01 percent, to 4,373.20. The tech-heavy Nasdaq was down 34.24, or 0.25 percent, to 13,533.75.
Investors were watching the latest developments in Ukraine and considering the latest Treasury moves, which saw the 10-year Treasury yield hit 4.8 percent, which is a nearly two-week high, and the 2-year Treasury hit 5.18, which is a 17-year high.
The rates jumped based on the expectation that the Fed could increase interest rates based on new data that showed retail sales unexpectedly rose 0.7 percent in September, which was higher than the 0.3 percent Dow Jones estimate.
“If you’re the Fed and you are truly data dependent, how are you not going to raise rates?” Eric Winograd, senior economist for fixed income at AllianceBernstein, asked, according to the Financial Times.
London’s FTSE was up 44.58, or 0.58 percent, to 7,675.21, and the Stoxx 600 was up 0.44, or 0.10 percent, to 449.76. The Asian market was in the green. Japan’s Nikkei was up 381.26, or 1.20 percent, to 32,040.29 and South Korea’s Kospi was up 23.93, or 0.98 percent, to 2,460.17. Hong Kong’s Hang Seng was up 132.98, or 0.75 percent, to 17,773.34. In China, the Shanghai Composite was up 9.68, or 0.32 percent, to 3,083.50, and the Shenzhen Component was up 15.30, or 0.15 percent, to 9,940.22.
OIL: Brent crude futures closed the day up 68 cents to $90.33 a barrel. U.S. West Texas Intermediate crude was up 52 cents at $87.18.
TRENDPOST: The Street is watching to see how the Israel War will develop in the coming days, which will have a direct impact on oil prices. The recent drop in oil prices could be seen as a corrective move after a major jump last week after Hamas’s attack in Israel.
Iran has warned Israel against a ground invasion, and as of publication, Israeli forces have not conducted a widespread ground campaign in the coastal city. President Joe Biden will go to Israel and there is hope that he will be able to strike a balance between supporting Israel, while trying to calm the situation and not expand the war.
GOLD: Spot gold was up 0.1 percent at $1,921.86 an ounce by 4:19 p.m. ET, and U.S. gold futures increased 0.05 percent to $1,935.20, according to Reuters.
TRENDPOST: Word on The Street is that gold, which is up 4 percent for the month, will trade in the $1,900-an-ounce range if there is some kind of ceasefire announcement in the Israel-Hamas war. CNBC noted that Commerzbank sees gold hitting $2,100 an ounce by the end of 2024.
The Trends Journal has reported on how the BRICS alliance wants to create a gold-backed currency to compete with the fiat U.S. dollar with a commodity-based currency. These countries have been stockpiling billions in gold reserves, adding weight to the idea that a BRICS currency would be backed by the precious metal.
Russian President Vladimir Putin met with Chinese President Xi Jinping and both men were seen wearing the same gold lapel pins today, as noted by Peter Schiff. Putin was in China to talk about China’s Belt & Road Initiative.
TREND FORECAST: Should the Israel War escalate and the United States and Israel battle Iran, gold prices will spike several hundred dollars per ounce as it will be sought after as the world’s premier safe-haven asset.
On the gold downside, should the Israel War moderate and decline and/or the Federal Reserve raise interest rates, gold prices will fall.
We had forecast that gold would bottom at $1,850 per ounce. It drifted down a bit further but has sharply bounced back. We maintain our forecast that the $1,850 per ounce for gold is the bottom range.
BITCOIN: The world’s most popular crypto was trading down $27.10, or 0.10 percent, to $28,493.10 a coin.
More investors are looking into bitcoin as a store of value based on its scarcity. Some bankers have put bitcoin in the same category as gold to hedge against inflation and the looming death of the dollar.
TREND FORECAST: Gerald Celente has long warned that the U.S. dollar is only strong because of high interest rates. There’s more attention now on the U.S.’s $33.5 trillion debt load that we and Gregory Mannarino have been warning about.
Again, we have noted bitcoin’s strength since it has stayed in this current trading range for several months. Should it break above $30,000 per coin, we forecast it will continue to rise toward the $42,000 per coin range.
Its sharp downside is if it hits the $15,000 per coin range.