By Gregory Mannarino,

Over the weekend U.S. debt got downgraded to negative, and with that, the U.S. carried out more airstrikes in Syria. (As we have covered and predicted would happen right here, the U.S. debt situation along with expanding war would, and will, get much worse even from here). 

The root cause of the current geopolitical situation is a lack of liquidity in the system; cash is drying up—and it’s drying up rapidly. Understanding that no other human endeavor creates a greater need for borrowed dollars than war, you can expect that much more war is coming.

Crude oil is the lifeblood of the system, and with every single Wall Street investment bank heavily invested in crude oil, you should expect that crude oil WILL get propped up. Expect that more U.S. airstrikes in the Middle East will cause crude oil, and energy prices overall, to move higher going forward—also expect that volatility in energy prices will continue.

Despite the rapidly deteriorating global economic situation. With war, expanding war, and ever soaring higher debt, I would expect that the Federal Reserve will continue to rig the debt market attempting to trick the market into believing that the debt market itself is stable—NOTHING COULD BE FARTHER FROM THE TRUTH. 

The global debt market is becoming increasingly unstable. With that, expanding war has a stabilizing effect on the debt market, in that it drives cash into the “perceived” safety of debt. The Federal Reserve, which is responsible for providing the funding for war in any amount, is itself also DIRECTLY responsible for war(s)—as they fund both sides. ALL Wars Are Banker Wars. Expanding war allows a central bank to fulfill its goal, and that is to become the Lender AND Buyer of last resort. 

The Federal Reserve should also be expected to push stock prices higher moving into the end of the year, as year-end stock price is how the upper management of the major corporations get their multimillion-dollar year-end bonuses, which are based solely on year-end stock price.

Today the Federal Reserve has the consumer by the throat and will continue to perpetuate the lie that it’s fighting inflation. (Temporary/transitory).

The Federal Reserve has already caused the consumer to take on dramatic increases in debt, with debt defaults skyrocketing across the board, and the Federal Reserve itself continues to inflate via this mechanism. The Federal Reserve has effectively cut off credit to U.S. small businesses which are shuttering at their fastest pace on record, this is deliberate, so to fulfill the corporate agenda of no competition. 

From an economic standpoint, every single leading economic indicator bar none is pointing towards a worsening situation—which also means more war. Expect that U.S. GDP, despite a much worsening economy, will increase rapidly—as “government” spending vastly increases. Funding for war(s) provided by the Federal Reserve will foster the illusion of a strong economy and expect that the mainstream media will use increasing GDP as propaganda.

Lack of liquidity in the system will force more war upon us, more needless spending, and much more human suffering. In the short run, this mechanism will likely push stocks higher until it doesn’t. The result will be a system which will eventually lock up, which is also the endgame, and the beginning of a new system—a system of more control over the people who will be forced to use it.

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