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Geopolitical Update : USA and Israel under siege

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By Christian Takushi, Independent Macro Economist & Geopolitical Strategist. 13 May 2021 (delayed public release 20 May 2021 – adjusted)

While the press is full of dramatic news updates by the hour about the escalation between Israel and Palestinian terror groups, we are not joining the drama nor the frenzy. This was to be expected.

For four months Western capitals refused to acknowledge the increased weapons shipments to terror groups and nations that surround Israel. Ankara and Teheran didn’t lose any time in the aftermath of the recent US elections to step up their expansion across the Middle East and Northern Africa. Western media also refused to report this bleak weaponisation  of a region full of simmering conflicts.

IDF Chief: Israel is now ready for war

In light of Western passivity it didn’t take long for both Russia and Israel to assess that a military conflict was inevitable. Russia decided to pull key troops out of harm’s way, allowing Iranian troops to quickly take over the military bases that Russia abandoned in Syria. Shia reinforcements were sent to Iraq and Syria, while rockets, missiles and other offensive assets were channelled through Iran and Turkey to both Lebanon and Gaza in particular. Israel for its part engaged in a massive military drill to prepare for a war on three to four fronts. The IDF Chief declared recently his troops were ready for combat. This is just the tip of the iceberg of what has been happening in the Middle East.

Rather then calling for restraint or helping intersect weapons shipments, the EU moved to threaten Jerusalem with War Crime Trials for its military commanders if civilian casualties were to be claimed in case Israel dares to use military force to defend herself. Knowing the eagerness of Hezbollah and Hamas to fire from civilian positions, the EU’s posture helped to embolden Ankara and Teheran. It had just that result.

As we have been reporting to you for a long time, a conflict in the Middle East is inevitable and Europe’s Supply Chain will collapse sooner rather than later. Sadly governments, investors and companies refuse to prepare for it.

All the above is part of the reason why we refuse to join the drama that Western media is peddling about this conflict. Coming late to report, Western media is rather superficial, biased and inspired not by the truth, but by ideology and a well-meaning pacifism. As we have pointed for over ten years, Europe’s pacifism leads invariably to war and abuse.

In Geopolitics it is like this: If you fail to continually monitor the developments that lead to important political or military action, your assessment will be flawed. That is exactly what investors are doing. If you have to catch up and make an analysis after something has happened, you will have to rely on the press and those shaping her consensus.

The USA and Israel are under simultaneous siege 

What few experts understand is that the rocket attacks on Israel and the cyber attacks on US infrastructure have been coordinated. Both the USA and Israel are under siege.

US military and security officials have been able to ascertain that the cyber attacks on US installations were “measured attacks”. The enemies of the United States are not taking full advantage of the many weaknesses in US infrastructure. The message is clear: This is just the beginning. If the USA dares to support Israel in the next Middle East crisis, the cyber attacks could literally ravage the US economy. The cyber attacks on the USA are aimed at making sure that Washington keeps Jerusalem from attacking Iran or at least that Israel has to go it all alone. The goal: Israel’s isolation.

President Biden under siege 

President Biden addresses Congress

The progressive party-wing is demanding that the White House condemns Israel and that the strategic military support is withdrawn. The US-Iran Deal should also be re-started without delay. But President Biden continues to surprise with a measured response. He is silent and ambiguous. President Biden’s cautious approach is infuriating the radical wing of his party.

On the one hand President Biden is offering a revival of the US-Iran Deal and money to Iran, on the other hand he is keeping a low-key support for Israeli-Arab containment of Iran.

President Biden wants to keep his options open. He is being criticised from all sides, but I think he is being politically wise. Jerusalem is facing the worst two years since the 6 Day War.

Market Impact

The current events are providing support for oil, gold, defence firms, cyber-security companies and volatility. We have been recommending these assets to investors from a geopolitical-strategic point of view.  We also have said that sooner or later food prices will jump and that forward-looking investors should have exposure to copper, cement and gold mining stocks. Most of all, investors should demonetise gradually.

Too many economists and strategists make the mistake to expect either deflation or inflation. Truth is investors and companies have to prepare for both. The monetary policy of aggressive money printing has created massive inflation in financial assets and deflation in the real economy.

Money Illusion

This is why central banks are working hard on a Monetary Reform and why they are the greatest promoters of crypto currencies. The growing demand for crypto assets has put a cap on gold prices. A genius strategy by key policy makers. A fast-rising gold price is the biggest enemy of the current financial system – Gold at USD 5’000 and higher would signal that paper money is worthless. Banks, pension funds and institutional investors have rescinded their oversight role over public finances.

Given the extent of deficit financing, 10 year government yields of leading Western economies should be priced at above 10% or higher. Governments have taken markets “hostage” since 2009 and fixed the yields at below 1%. Rather than calling for en exit or a monetary reform investors are simply basking in their great performance – with inherently worthless paper money though.

Middle East War at hand?

It is hard to predict a war, but one thing is certain. The West is terribly underestimating the true intentions of its Middle East allies. As a result it is enabling Israel’s adversaries and increasingly cutting down Israel’s ability to defend herself. Israel is edging closer to a point, where it will have no choice but to hit hard.  The next war will lay the ground for a much larger conflagration that is likely to see the use of nuclear or thermo-nuclear weapons. Europe will be the most affected economic bloc.

Last but not least. Based on my independent analysis I have ascertained with 90% certainty that thanks to the Obama-cash and technical help of the European Union and China, Teheran should be able to have her first two nuclear-tipped Advanced Mid Range Ballistic Missiles able to reach as far as Marseille, Geneva, Berlin and Stockholm before the end of 2021.

Knowing this can help us understand why Israel is prepared for war. The West has miscalculated.

By Christian Takushi MA UZH, Independent Macro Economist & Geopolitical Strategist. 13 May 2021 (delayed public release 20 May 2021 – adjusted)

Disclaimer: None of our comments should be interpreted or construed as an investment recommendation

A distinct broad approach to geopolitical research

(a) All nations & groups advance their geostrategic interests with all the means at their disposal

(b) A balance between Western linear-logical and Oriental circular-historical-religious thinking is crucial given the rise of Oriental powers

(c) As a geopolitical analyst with an economic mindset Takushi does research with little regard for political ideology and conspiracy theories

(d) Independent time series data aggregation & propriety risk models

(e) Takushi only releases a report when his analysis deviates from Consensus

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