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by Chris Martenson

Executive Summary

  • The US/Russia proxy war in Syria is fast escalating to dangerous levels
  • Much of the unrest today was imminently avoidable and sadly ignored
  • The US neo-con model is making more enemies both outside and inside America
  • The risks of full-blown war breaking out
  • What to do to prepare in advance

If you have not yet read Part 1: Making The World A More Dangerous Place available free to all readers, please click here to read it first.

Look, we’ve given these warnings before and unless you happen to live in one of the unfortunate countries that is being bombed or overtly or covertly supplied with the weapons of war by the west, they seem to not have amounted to much.

Such is the nature of reading tea leaves.  Instead of thinking of them as binary outcomes – things that either happened or didn’t happen – think of them as ‘probability fields.’  Like the chance of rolling a three with a 6-sided die vs. the chance of rolling a three with a 20-sided die.  The ‘probability field’ of the 6-sided die is a lot higher.

The probabilities and forces that push us closer to and further from war are ever changing and highly complex.  They shift with events and decisions, most of which we are unaware of because they are either not reported on or reported with heavy distortion of the truth.

So reading the tea leaves is the best we can do.

Our advice for any war breaking out anywhere in the Middle East, or especially between Russia (or China) and the West would be to have all of your preparations done a year before that moment.

Anything that disrupts global maritime trade, even for a very short while will rock the financial systems of the world.  Anything that calls into question the desire or ability of a country to repay its foreign debts (and wars are great excuses to stiff your creditors if they happen to be attacking you) will rock the financial world.

Heck, anything that…

How Things May Well Get Ugly Quickly
PREVIEW by Chris Martenson

Executive Summary

  • The US/Russia proxy war in Syria is fast escalating to dangerous levels
  • Much of the unrest today was imminently avoidable and sadly ignored
  • The US neo-con model is making more enemies both outside and inside America
  • The risks of full-blown war breaking out
  • What to do to prepare in advance

If you have not yet read Part 1: Making The World A More Dangerous Place available free to all readers, please click here to read it first.

Look, we’ve given these warnings before and unless you happen to live in one of the unfortunate countries that is being bombed or overtly or covertly supplied with the weapons of war by the west, they seem to not have amounted to much.

Such is the nature of reading tea leaves.  Instead of thinking of them as binary outcomes – things that either happened or didn’t happen – think of them as ‘probability fields.’  Like the chance of rolling a three with a 6-sided die vs. the chance of rolling a three with a 20-sided die.  The ‘probability field’ of the 6-sided die is a lot higher.

The probabilities and forces that push us closer to and further from war are ever changing and highly complex.  They shift with events and decisions, most of which we are unaware of because they are either not reported on or reported with heavy distortion of the truth.

So reading the tea leaves is the best we can do.

Our advice for any war breaking out anywhere in the Middle East, or especially between Russia (or China) and the West would be to have all of your preparations done a year before that moment.

Anything that disrupts global maritime trade, even for a very short while will rock the financial systems of the world.  Anything that calls into question the desire or ability of a country to repay its foreign debts (and wars are great excuses to stiff your creditors if they happen to be attacking you) will rock the financial world.

Heck, anything that…

by Chris Martenson

Executive Summary

  • There's much you can do to reduce your risk in advance of the arrival of a:
    • Trade war
    • Energy war
    • Financial war
    • Cyber war
    • Grid-down sabotage
    • Shooting war
    • Nuclear war
  • The steps you should prioritze the most right now

If you have not yet read Part 1: Is It Time To Prepare For War? available free to all readers, please click here to read it first.

As a preamble, I need to note that I do not enjoy or derive any satisfaction from writing about or spending time on figuring out how to dodge the worst impacts of human behavior.  War sits right at the top of my ‘This is stupid’  list, as war represents the idea that all other attempts at being smart or diplomatic have already failed.  I'm sorry that I have to spend time writing this report, and I am sorry that you have to spend time considering it.  With that said, I feel I have no choice, and somebody has to take on this task.  With a heavy heart…

If the West (meaning the US and Europe) decides to further goad Russia, war may be inevitable. Sooner or later, Russia will have to switch from 'response' mode to 'reaction' mode.  I’ve previous detailed the reasons for this in previous reports here, here and here.

As (sadly) expected, things have only escalated over the past year, not de-escalated. The West has a serious bone to pick with Russia, yet nobody can really explain what it is or why the conflict exists. (As an aside, I think it’s just bruised neo-con egos over Syria, but it really doesn’t matter what the explanation is at this point.) So, here we are in la-la land.

The consequences of an escalated conflict between Russia and the US/West could range from a very minor skirmish fought over some relatively meaningless items of trade, to an attack on financial markets, all the way to an all-out nuclear exchange.

The question becomes: What, if anything, can we do to prepare?

Lots, as it turns out.

No matter where…

How To Prepare For War
PREVIEW by Chris Martenson

Executive Summary

  • There's much you can do to reduce your risk in advance of the arrival of a:
    • Trade war
    • Energy war
    • Financial war
    • Cyber war
    • Grid-down sabotage
    • Shooting war
    • Nuclear war
  • The steps you should prioritze the most right now

If you have not yet read Part 1: Is It Time To Prepare For War? available free to all readers, please click here to read it first.

As a preamble, I need to note that I do not enjoy or derive any satisfaction from writing about or spending time on figuring out how to dodge the worst impacts of human behavior.  War sits right at the top of my ‘This is stupid’  list, as war represents the idea that all other attempts at being smart or diplomatic have already failed.  I'm sorry that I have to spend time writing this report, and I am sorry that you have to spend time considering it.  With that said, I feel I have no choice, and somebody has to take on this task.  With a heavy heart…

If the West (meaning the US and Europe) decides to further goad Russia, war may be inevitable. Sooner or later, Russia will have to switch from 'response' mode to 'reaction' mode.  I’ve previous detailed the reasons for this in previous reports here, here and here.

As (sadly) expected, things have only escalated over the past year, not de-escalated. The West has a serious bone to pick with Russia, yet nobody can really explain what it is or why the conflict exists. (As an aside, I think it’s just bruised neo-con egos over Syria, but it really doesn’t matter what the explanation is at this point.) So, here we are in la-la land.

The consequences of an escalated conflict between Russia and the US/West could range from a very minor skirmish fought over some relatively meaningless items of trade, to an attack on financial markets, all the way to an all-out nuclear exchange.

The question becomes: What, if anything, can we do to prepare?

Lots, as it turns out.

No matter where…

by charleshughsmith

Executive Summary

  • Why currency wars are heating up, and will get more intense from here
  • Why it’s critical to understand the influence that Triffin’s Paradox has on the situation
  • Why global crises will cause the dollar to strengthen further
  • What will happen next

If you have not yet read How Many More “Saves” Are Left in the Central Bank Bazookas? available free to all readers, please click here to read it first.

In Part 1, we reviewed the deterioration of the dominant narrative of the past six years—that central banks can move markets higher and generate growth more or less at will.  In shorthand: central bank omnipotence.

Three dynamics are undermining that narrative: diminishing returns on central bank monetary policies and public relations pronouncements; a collapse in oil prices that is destabilizing a key sector of the global economy, and the strengthening U.S. dollar, which is wreaking havoc on emerging-market currencies and economies.

If central banks really had such absolute control of the financial universe, would they let these three trends undermine their policies and power? The answer is clearly “no.”

There are a number of other factors undermining the “central banks are in control” narrative, but the field of battle where central banks are most likely to lose is foreign exchange (FX), for two fundamental reasons:

1.  The FX market dwarfs the central banks. The equivalent of the entire Federal Reserve balance sheet ($4.5 trillion) trades in the FX markets every few days.  Given the size of the market, central banks cannot manipulate the FX market via proxies or direct purchases for long. The only central-bank controlled factors that influence FX are interest rates paid on government bonds and money-printing. The first supports the currency, the second weakens it.

2.  The FX market is still an open market, influenced by government bond interest rates, trade deficits and surpluses, perceptions of risk and speculative bets. This mix is much more dynamic than the two levers controlled by central banks: setting interest rates targets and creating new money to buy bonds.

Let’s trace the primary dynamics of the FX market, which is currently being destabilized by the rising U.S. dollar…

What Will Happen Next For the US Dollar
PREVIEW by charleshughsmith

Executive Summary

  • Why currency wars are heating up, and will get more intense from here
  • Why it’s critical to understand the influence that Triffin’s Paradox has on the situation
  • Why global crises will cause the dollar to strengthen further
  • What will happen next

If you have not yet read How Many More “Saves” Are Left in the Central Bank Bazookas? available free to all readers, please click here to read it first.

In Part 1, we reviewed the deterioration of the dominant narrative of the past six years—that central banks can move markets higher and generate growth more or less at will.  In shorthand: central bank omnipotence.

Three dynamics are undermining that narrative: diminishing returns on central bank monetary policies and public relations pronouncements; a collapse in oil prices that is destabilizing a key sector of the global economy, and the strengthening U.S. dollar, which is wreaking havoc on emerging-market currencies and economies.

If central banks really had such absolute control of the financial universe, would they let these three trends undermine their policies and power? The answer is clearly “no.”

There are a number of other factors undermining the “central banks are in control” narrative, but the field of battle where central banks are most likely to lose is foreign exchange (FX), for two fundamental reasons:

1.  The FX market dwarfs the central banks. The equivalent of the entire Federal Reserve balance sheet ($4.5 trillion) trades in the FX markets every few days.  Given the size of the market, central banks cannot manipulate the FX market via proxies or direct purchases for long. The only central-bank controlled factors that influence FX are interest rates paid on government bonds and money-printing. The first supports the currency, the second weakens it.

2.  The FX market is still an open market, influenced by government bond interest rates, trade deficits and surpluses, perceptions of risk and speculative bets. This mix is much more dynamic than the two levers controlled by central banks: setting interest rates targets and creating new money to buy bonds.

Let’s trace the primary dynamics of the FX market, which is currently being destabilized by the rising U.S. dollar…

by Chris Martenson

Executive Summary

  • Ukraine's economic free fall
  • The real risk of Ukraine igniting the next world war
  • Why a lasting peace is unlikely
  • What you should do in preparation of escalating conflict between Russia and the West

If you have not yet read Part 1: The US' Suicidal Strategy On Ukraine, available free to all readers, please click here to read it first.

What's At Risk

Now we come to the hard part of this report, the part where we have to discuss what might happen next.  My analogy for this period of history is the year(s) before WW I.  Historians still cannot quite say what led up to the immense human disaster that we now call World War I, but enough failed diplomacy, bugled treaties, inept leadership, and inflexible political institutions were all grating against one another that a single assassination of a single archduke was a sufficient spark to set the whole pile ablaze.

Were those other failures not all stacked up like so much try tinder, a dozen archdukes could have been shot without anything more serious than a dozen solemn state funerals would have resulted. 

Similarly, today we have a conflict in Ukraine which nobody can exactly say what the US's compelling interests are with Ukraine because nobody really knows.  It's more a matter of principle, with that principle being the US gets to do what it wants, when it wants, and nobody is supposed to challenge that.

Putin said as much on Feb 7, 2015:

“There clearly is an attempt to restrain our development with different means,” he told trade union activists. “There is an attempt to perturb the existing world order… with one incontestable leader [Obama] who wants to remain as such thinking he is allowed everything while others are only allowed what he allows and only in his interests. This world order will never suit Russia.”

(Source)

Clearly Russia is no pushover country and has no interest in having dangerous coups and rising ultra-nationalism on its borders go unchecked, and this is why we are in such dangerous territory.  The US has not been up against a legitimate foe for such a long time, it may be like the school yard bully that fails to properly evaluate the new kids at school before picking a fight.

Russia is making its position known to the world.  It has been…

America Vs Russia: What’s At Risk
PREVIEW by Chris Martenson

Executive Summary

  • Ukraine's economic free fall
  • The real risk of Ukraine igniting the next world war
  • Why a lasting peace is unlikely
  • What you should do in preparation of escalating conflict between Russia and the West

If you have not yet read Part 1: The US' Suicidal Strategy On Ukraine, available free to all readers, please click here to read it first.

What's At Risk

Now we come to the hard part of this report, the part where we have to discuss what might happen next.  My analogy for this period of history is the year(s) before WW I.  Historians still cannot quite say what led up to the immense human disaster that we now call World War I, but enough failed diplomacy, bugled treaties, inept leadership, and inflexible political institutions were all grating against one another that a single assassination of a single archduke was a sufficient spark to set the whole pile ablaze.

Were those other failures not all stacked up like so much try tinder, a dozen archdukes could have been shot without anything more serious than a dozen solemn state funerals would have resulted. 

Similarly, today we have a conflict in Ukraine which nobody can exactly say what the US's compelling interests are with Ukraine because nobody really knows.  It's more a matter of principle, with that principle being the US gets to do what it wants, when it wants, and nobody is supposed to challenge that.

Putin said as much on Feb 7, 2015:

“There clearly is an attempt to restrain our development with different means,” he told trade union activists. “There is an attempt to perturb the existing world order… with one incontestable leader [Obama] who wants to remain as such thinking he is allowed everything while others are only allowed what he allows and only in his interests. This world order will never suit Russia.”

(Source)

Clearly Russia is no pushover country and has no interest in having dangerous coups and rising ultra-nationalism on its borders go unchecked, and this is why we are in such dangerous territory.  The US has not been up against a legitimate foe for such a long time, it may be like the school yard bully that fails to properly evaluate the new kids at school before picking a fight.

Russia is making its position known to the world.  It has been…

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