The New Political World We Enter

Switzerland and Japan go in different directions from the US and EU. [The Rude Awakening] March 27, 2023 [WEBSITE]( | [UNSUBSCRIBE]( The New Political World We Enter - As Switzerland saved herself from foreign control, the DOJ counters. - Japan gets a new Governor for their central bank… - …but not the one they expected. [“The Mainstream Media Is Lying To You!”]( The media would have you believe that the worst of the supply chain issues are over. But the opposite is true… Behind the scenes, things are getting much, much worse. Bob Biesterfeld, CEO of one of the biggest logistics firms in the world, warns “the pressures on global supply chains have not eased, and we don’t expect them to any time soon.” This is going to impact every American’s life in a potentially major way… And I’m urging everyone I can to prepare now. [To see the #1 move to make before this problem gets any worse, click here now.]( [Click Here To Learn More]( [Sean Ring] SEAN RING Happy Monday! I just got back from Brussels, a surprisingly great city. No one ever says, “Let’s take a vacation in Brussels.” And still, I wouldn’t recommend you hop the pond solely for Brussels. But if you’re planning a trip to Paris or Amsterdam, it’s definitely worth a day or two of your time. Parts of the city look like medieval villages, and parts look like the very definition of a regional capital. [SJN] The Grand Place in Brussels. But the one common thread that runs through all of Brussels is its cosmopolitanism. People from all over the world come here to learn, work, and play. On Saturday night, Aussie Trav and I were at an English bar (inevitably named Churchill’s) drinking with an Irish bartender, an Aussie bartender, an Irish EU official, a Turkish student, and a Finnish translator. It was a heck of a time. I had forgotten, for a moment, how much I loathe extra government layers and just enjoyed myself. And that’s the choice that faces all the world right now. Do you want more government? And if so, how much are you willing to pay for it? The Swiss clearly don’t want more government, much less be a part of the EU. Let me explain. [[CHART] Could Inflation Hit 20%+ In 2023?]( [Click here to learn more]( Take a close look at this scary chart pictured here… What you see is the money supply in America… And as you can see, the number of dollars in circulation has exploded in the last few years. In fact, more than 80% of all dollars to ever exist have been printed since just 2020 alone! Which is why some say inflation could soon explode even higher than it is now, to 20% or more. And if you’re at or near retirement age you must take action now to protect yourself… otherwise you risk losing everything. [Simply click here now to see how to survive America’s deadly inflation crisis](. [Click Here To Learn More]( The Swiss Retain Sovereignty, Pissing Off the Davos Crowd I’ve been watching this [fascinating video with The Duran and Tom Luongo](. I’m not through it yet, but I’ll watch the rest later today. Tom talked about something on the Additional Tier 1 (AT1) CoCo bonds that I missed. We know that if the Swiss government didn’t wipe them out completely, UBS would’ve been on the hook for about $17 billion. What I didn’t quite grasp is that those bonds would’ve been converted to equity first, and then UBS would’ve had a bunch of new shareholders to dilute their capital. Neither the Swiss government nor UBS wanted that, so they wiped out the bonds. Who were the biggest bondholders to get wiped out? - Invesco - $370m - PIMCO - $340m - BlackRock - $113m, but allegedly started to unwind that position long ago. David Tepper, of the hedge fund Appaloosa (and owner of the Carolina Panthers), made his fortune buying distressed debt. This time, it didn’t go so well. From marketwatch.com via [msn.com]( The U.S. hedge fund manager billionaire, who is known for buying up distressed debt, had bought an array of Credit Suisse’s senior and junior debt as the crisis hit the troubled Swiss lender, the report said. “Contracts are made to be honored,” Tepper said. Investors need to read the fine print, I’d say. Though litigious American investors are calling their lawyers, a court case would take a decade. And those debtholders would probably get nothing anyway. So Big Brother just stepped in, or so I thought: [pub] Luckily, I read further down (bolds mine): (Bloomberg) -- Credit Suisse Group AG and UBS Group AG are among banks under scrutiny in a US Justice Department probe into whether financial professionals helped Russian oligarchs evade sanctions, according to people familiar with the matter. The Swiss banks were included in a recent wave of subpoenas sent out by the US government, the people said. The information requests were sent before the crisis that engulfed Credit Suisse and resulted in UBS’s proposed takeover of its rival. Subpoenas also went to employees of some major US banks, two people with knowledge of the inquiries, said. The Justice Department inquiries are focused on identifying which bank employees dealt with sanctioned clients and how those clients were vetted over the past several years, according to one of the people. Those bankers and advisers may then be subject to further investigation to determine if they broke any laws. Ok, so these subpoenas were not sent in retaliation for the AT1 writedown. Be that as it may, with friends like America, who needs enemies? How much do you have to pay out in fines to the USG before you start asking if it’s worth doing business in America? It’s worth mentioning the Swiss didn’t consult the EU on this rescue package, either. Are teams starting to switch sides? The Bank of Japan’s Major Change Another fascinating nugget from Tom Luongo was the change over at the Bank of Japan. Haruhiko Kuroda was the Governor of the BoJ for the last decade. His term ended last week. Kuroda-san’s unorthodox methods of monetary policy were part of the greater central bank coordination between the Fed, the Bank of England, the European Central Bank, the Swiss National Bank, and the BoJ. Then-Deputy Governor Masayoshi Amamiya, a close aide of incumbent chief Haruhiko Kuroda, was most likely to succeed him this spring but turned the job down. I can’t overstate how rare it is in a country like Japan to turn down a job of that prestige. It’s unheard of. Apparently, Amamiya-san, who helped Governor Kuroda craft this (some would say, “insane”) monetary policy, said he wouldn’t be objective enough to stop it. The new man in charge, Kazuo Ueda, will probably reverse the last decade’s policies in Japan. Why would I be paying attention to this? Wrap Up I wrote this earlier in “[Got Rubles?]( (bolds mine): But the final nail in the coffin of USD dominance is the lack of trust. Those in DC who don’t know about commodities, logistics, and supply chains took a gamble they shouldn’t have. Now the entire world knows confiscation is one arbitrary decision away. Watch China, Russia, India, and Iran skirt the sanctions and build out a new monetary architecture. Total conjecture here, but I think when Japan finally realizes what’s happening, they’ll switch sides. That is when you know the world has really changed. I might be reaching here. But if the Bank of Japan is about to change the way it does business, it will have profound implications for central bank coordination. In fact, it could spell the end of central bank coordination. And that would be a great thing, indeed. Maybe things aren’t as bad as they seem. All the best, [Sean Ring] Sean Ring Editor, Rude Awakening In Case You Missed It… My Friend, You’re Right. Be Patient. [Sean Ring] SEAN RING Happy Friday! I’m writing this on Thursday afternoon in Asti. By the time you read this Friday morning, I will be landing in Brussels for some Belgian Trappist Ales with Aussie Trav. Before I do that, I wanted to write you about a few things. First, yesterday’s Rude was far too technical and probably put you to sleep. I apologize for that. But if you finished it, you know as much about AT1 and CoCos as most bankers. I’m serious! Most of them don’t have any idea what happened. To get it into three sentences, I’d say, “CS issued $17 billion in ‘principal write-down’ CoCos to strengthen its balance sheet. The Swiss government forced CS to write them down to zero, so UBS never has to repay those bonds. That made it much easier for UBS to take over CS.” That’s it. Second, we haven’t had our crash yet. You can see what’s coming down the road, yet it hasn’t materialized. It’s incredibly frustrating. I want you to know I share your frustration. But as Jim Rickards said, “The banks go first.” Not last. And going, they are. Silvergate, Silly Valley, Signature, Credit Suisse… It’s happening. The last thing to go is the stock market. It’s when retail investors finally capitulate. And we’re simply not there yet. Think about this. When the stock market finally crashed in 2008, Bear Stearns, Fannie and Freddie, Merrill Lynch, AIG, Lehman Brothers, and WaMu had all fallen. The real estate market had already fallen off a cliff. And while the Fed was cutting its Fed Funds rate, market rates were actually increasing! In short, there are a lot of other things that need to happen before our thesis plays out. But play out, it will. Just stay the course with me. Now, I’m going to turn to the mailbag. This time around, it’s juicy. Friday Mailbag The Iraq War Great article about Iraq on 3-21. Except for that bit that the war was about oil. US free access to Iraqi oil was never in question. Please refer me to your best source that the war was really about oil. I've been looking for such, but have never found. I am very happy to be corrected, if such exists. Thanks much. Robert L. Thanks for writing, Robert. Sure, there were other reasons as well. But I hold to oil being the main one. As for proof, I point to these quotes: “Of course, it’s about oil; we can’t really deny that,” said [General John Abizaid]( former head of U.S. Central Command and Military Operations in Iraq, in 2007. Former [Federal Reserve Chairman Alan Greenspan]( agreed, writing in his memoir, “I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.” Former [Senator and Defense Secretary Chuck Hagel]( said the same in 2007: “People say we’re not fighting for oil. Of course, we are.” The link above on General Abizaid is helpful. Additionally, I direct you to the Carter Doctrine: Let our position be absolutely clear: An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force. I wonder how that will hold up against China and Russia wooing Middle Eastern countries like Saudi Arabia and Iran. It’s an open question. Dear Sean, I really enjoy and appreciate "Rude." I'm writing in hopes that you will clarify a misconception that I may have regarding Dubya and WMDs. First, I know that a lot of folks are saying that Dubya lied about WMDs. He said that Saddam had, and used, WMDs. I agree with the statement that no WMDs were found. I say if Saddam hadn't used them all, then the remaining stuff was buried under any one or two of an infinite number of sand dunes. I recall seeing a video taken from a low-flying helicopter over Kurdish territory. This video showed hundreds, if not thousands, of dead bodies of Kurds. The narrative was that Saddam had used poison gas on them because they disagreed with him over something. Poison gas is a WMD. I also remember reports of Saddam firing SCUD missiles at Israel, trying to get them involved in the war. The news said that we defended Israel with "Patriot" missiles, shooting down the "Scuds." Scud missiles are WMDs. Sean, if you have time, please correct me if I'm wrong. Waiting for your reply… Best regards, Jack G, Viet Nam Vet. Thank you, Jack. Though I’m more libertarian than anything else, one of my great regrets is not serving. I just can’t get over how many useful skills my military friends have. (I’m sure you, like I, know many freedom fighters who fought for their country first!) So I pay special attention when I’m talking with a serviceman. I’m not going to correct you. Because technically, you’re correct. Poison gas is indeed classified as a WMD, as are Scud missiles. I’ll defend my position this way: if you asked the average American what a WMD is, they’d say something like… - ICBM - Atomic bomb - Daisy-cutter - A fast-spreading disease meant to kill all (Covid, anyone?) My point - and I don’t think it’s a trivial one - is that Americans overwhelmingly supported the war for a few reasons: righting the world after 9/11, ridding Iraq of perceived nuclear weapons, and doing those things quickly and cheaply. We were “liberators.” And truth be told, if the war lasted one year and cost that $50 billion Rumsfeld said it would, no one would be talking about it in anything other than glowing terms. But it cost - without even considering the oil premium American commuters directly paid - about $3 trillion over 20 years. So my Econo-BS meter is off the charts. Because if you’re going to prosecute a war over Scud missiles with [a maximum range of 700 km]( and poison gas - utterly horrific and abhorrent as it is - that dissipates over a battlefield, it better be quick and cheap. I’d say - and not flippantly - there are wmds and WMDs. But I take your point and completely understand if you disagree with my thinking. [Jim Rickards Issues Urgent Announcement To Readers]( [Click here to learn more]( >> A major stock market event will hit just days from now. Act right away or get left behind forever, legend warns. [Click here now for access](. [Click Here To Learn More]( My Charts I liked your analysis in "Energy Stocks are Good, But Are They Good Right Now?" (03/17/23). I notice, however, that the charts you refer to as showing 50- and 200-day moving averages appear to show 10- and 40-day simple moving averages. Your point is, nonetheless, well made. G.A. G.A., thank you for catching this. I should have explained it better on the day. If you’ve got a weekly chart, a 10-week MA is a 50-day MA (5 days in a trading week), and the 40-week MA is a 200-day MA. I will make sure I do this next time. Great spot! Wrap Up There were a couple of great questions without names attached to them, so I’ll address them next mailbag issue. Also, thank you for the fantastic support and info: Bruce W., George H., E. L. T., my man Beau Jon S., Joe E., Mike R. (yes, I need a record!), Kevin B., Douglas G., Joyce in cold Michigan, Arthur H., Richard H., Tom H., Sandy, Martin, Bruce P., and Gary from Fredericksburg. Gary, my parents live right down the road in Cibolo. We always get to Fredericksburg for a meal and a stroll when I visit them. It’s a lovely place! Have a wonderful weekend! All the best, [Sean Ring] Sean Ring Editor, Rude Awakening [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. 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