CHARLES HUGH SMITH'S
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Extend & Pretend
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"SULTANS OF SWAP"
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Current Thesis Advisory:
"EXTEND & PRETEND"
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Published November 2009
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"PRESERVE & PROTECT"
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2014 THESIS: GLOBALIZATION TRAP
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Reading the right books?
We have analyzed & included
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OUR MACRO ANALYTIC
John Rubino's Just Released Book
Charles Hugh Smith's Latest Books
Our Macro Watch Partner
Richard Duncan Latest Books
F William Engdahl
OTHERS OF NOTE
LNG WARS: The Ukraine & Syrian Choke Points
The "Great Global Game"
THE FINANCIAL MARKETS - Macro Answers
Regarding our oil and gas trading, here is the central Macro Driver$ / Trigger$ / Bia$ issue we are grappling with at Trigger$:
From 2008 to 2013 we can see the market contracting, or winding / spiralling in on itself. This changed in 2013 when OIL started to expand. Previous resistance has now become support, however there is potential for the market to oscillate back down to the lows of 2008 as it “spirals out”. Andrew J. D Long MFTA (Master of Technical Analysis - IFTA), Publisher, Trigger$
We see a major inflection point coming near term at our Macro Trigger$ Zone "E" (see chart above and table right). After a three year consolidation the question is which way it will break? The answer lies in the MACRO Analysis.
MACRO SITUATIONAL ANALYSIS
STRATEGIC MAPS OF UNDERSTANDING
The Russia economy is critically dependent on oil and gas exports to the EU. The finaically strapped Ukraine is likewise dependent but as recipient of "transit tolls". Protracted disruptions could have devastating impacts to both countries and to the EU. The situtation is quickly spiralling out of control.
LNG DISTRIBUTION CHOKE POINTS
Ukraine pipeline disruptions will give a strategic boost to the Saudi's Trans-Syria solution, which has been at the root of the orchestrated Syrian escalation of tensions and social unrest.
Political corruption problems in Turkey however are not helping. To us the KGB are as active in Turkey as the CIA appears to be in the western Ukraine.
F WILLIAM ENGDAHL - The Global Energy GameWe spent a lot of time in Q4 with F William Engdahl exploring the region and the Geo-Political forces behind the scenes. William had just returned from Russia at the time and the following two Macro Analytic tapes lay out a number of the central issues getting no coverage in the western media. We encourage you to review William's and John Rubino's findings below.
JOHN RUBINO - CURRENCY WARS & THE FAILING PETRODOLLAR STRATEGY
ABSTRACTION PROCESS WE ARE PRESENTLY ANALYSING
The outcome will not be determined Militarily.
The resolution will be determined Financially.
- FINANCIAL AID
- DEBT RELIEF
- WESTERN BANKING ASSISTANCE
Bloomberg Businessweek concludes:
The geopolitical struggle comes down to money. Russia pledged $15 billion in loans to pull Ukraine into its nascent Eurasian Union, but after paying out $3 billion it has put further funds on hold. On Feb. 26, Secretary of State John Kerry said the U.S. was organizing a stopgap $1 billion loan guarantee—far short of the $35 billion in aid Ukraine is seeking. The Institute of International Finance, which represents big banks, estimates that with no change in policy Ukraine would need $30 billion in foreign assistance this year alone. The IIF predicts that the International Monetary Fund will insist as a condition for aid that Ukraine cut natural gas subsidies to consumers and industry, and allow its currency, the hryvnia, to fall further, shrinking the trade deficit. The problem: Those measures will be so unpopular that they will jeopardize any new government.
ENERGY PRICING PRESSURES DUE TO A WEAKENING RUBBLE
Weekening Russian Rubble has Significant Impact to Energy Pricing Going Forward.
Since the start of 2014 the Russian Ruble has been for sale, and BofA's Macneil Curry warns, that trend will persist. With desk chatter that Russia's 2nd largest state owned bank VTB setting USDRUB exchange rate to 39.45 (a huge shift relative to Friday's close on MICEX was 36.05), trendlines are in peril. Via BofAML's Macneil Curry,
Zero Hedge reports:
European and U.S. leaders have threatened sanctions against Russia, creating risks that economic growth will stall, demand for the country’s assets will dry up and a selloff in the currency will deepen. "There is a risk of international backlash against Russia at a time when the economy faces an increasing need for foreign capital inflows... This uncertainty risks a further escalation in domestic capital outflow."
The Banks have been battered...
- Sberbank, Russia’s biggest bank, drops 17%, loses most since 2008
- VTB, Russia’s second-bigest lender, tumbles 20%
- Bank St. Petersburg falls 16%
- Bank Vozrozhdenie declines 10%
- Nomos Bank slides 12%
MICEX is down 11% Monday March 3rd alone...
Ukraine market has been falling for some time:
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Gordon T Long
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Gordon T Long is not a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. Of course, he recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that you are encouraged to confirm the facts on your own before making important investment commitments.
© Copyright 2013 Gordon T Long. The information herein was obtained from sources which Mr. Long believes reliable, but he does not guarantee its accuracy. None of the information, advertisements, website links, or any opinions expressed constitutes a solicitation of the purchase or sale of any securities or commodities. Please note that Mr. Long may already have invested or may from time to time invest in securities that are recommended or otherwise covered on this website. Mr. Long does not intend to disclose the extent of any current holdings or future transactions with respect to any particular security. You should consider this possibility before investing in any security based upon statements and information contained in any report, post, comment or suggestions you receive from him.