Middle East

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The Outlook For The Markets Is Deteriorating Fast

Countries all over the globe are suddenly failing
Friday, August 31, 2018, 7:57 PM

Executive Summary

  • The evidence that the dominant social narrative is breaking down
  • The Emerging Market spark may ignite a broad market conflagration
  • Financial market complacency is completely unprepared for such a risk
  • And escalating risk of conflict in the Middle East threatens to make the situation a whole lot worse

If you have not yet read The Whole System Is Rigged, available free to all readers, please click here to read it first.

An Emerging Nightmare

About the kindest thing I can say about the reckless $trillions the central banking cartel flooding the world with is that they gave us more time to get our preparations in order. I certainly hope you used that time wisely.

So what happens when every financial market around the globe has been dangerously inflated by massive money printing?

Those enormous flows that were virtuous on the way out will be vicious on the way back in. 

And don't forget: as a combined group, the big central banks are still expanding their balance sheets today.

Yet despite that, the weaker players on the board are beginning to flounder severely:

Every single country on that list that is the proud holder of US denominated debt is now facing serious difficulties.  Worse, the situation compounds itself as all of the debt holders have to sell their local currency in increasing amounts to buy the dollars with which they will pay off these debts. 

The more they sell, the weaker their local currency gets.  The weaker it gets the more they have to sell. It's this dynamic that then bleeds over into their local stock markets.  Companies being crushed by external dollar-denominated debts see their interest costs spike higher and higher.  Very rapidly this crushes their income stream, so their stocks fall in price.

The contagion is spreading, quite rapidly too.  It’s well beyond a single story that we can confine to the particulars of Turkey or Argentina.  It now involves India, for heaven’s sake!

Next up is the big kahuna – the debt crisis that results when the individuals and companies toss in the trowel and declare bankruptcy or simply stop paying off their loans or debts.  This is when the debt crisis starts.

The ramifications of all this are... » Read more

Podcast

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Art Berman: Like It Or Not, The Future Remains All About Oil

And competition for it is heating up
Tuesday, January 23, 2018, 1:19 PM

Art Berman, 40-year veteran in the petroleum production industry and respected geological consultant, returns to the podcast this week to talk about oil.

After the price of oil fell from its previous $100+/bbl highs to under $30/bbl in 2015, many declared dead the concerns raised by peak oil theorists. Headlines selling the "shale miracle" have sought to convince us that the US will one day eclipse Saudi Arabia in oil production. In short: cheap, plentiful oil is here to stay.

How likely is this?

Not at all, warns Berman. World demand for oil shows no signs of abating while the outlook for future production looks increasingly scant. And the competition among nations for this "master resource" will be much more intense in future decades than we've been used to. » Read more

Blog

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2017 Year In Review

Markets fiddle while Rome burns
Friday, December 22, 2017, 4:15 PM

Every year, friend-of-the-site David Collum writes a detailed "Year in Review" synopsis full of keen perspective and plenty of wit. This year's is no exception. As with past years, he has graciously selected PeakProsperity.com as the site where it will be published in full. It's quite longer than our usual posts, but worth the time to read in full. A downloadable pdf of the full article is available here, for those who prefer to do their power-reading offline. -- cheers, Adam

Introduction

“He is funnier than you are.”

~David Einhorn, Greenlight Capital, on Dave Barry’s Year in Review

Blog

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If The Saudi Arabia Situation Doesn't Worry You, You're Not Paying Attention

A key geopolitical axis is swiftly shifting
Friday, November 10, 2017, 7:57 PM

While turbulent during the best of times, gigantic waves of change are now sweeping across the Middle East. The magnitude is such that the impact on the global price of oil, as well as world markets, is likely to be enormous.

A dramatic geo-political realignment by Saudi Arabia is in full swing this month. It’s upending many decades of established strategic relationships among the world's superpowers and, in particular, is throwing the Middle East into turmoil. So much is currently in flux, especially in Saudi Arabia, that nearly anything can happen next. Which is precisely why this volatile situation should command our focused attention at this time. » Read more

Insider

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Murder And Mayhem In The Middle East

Why it matters to those living in the West
Monday, November 30, 2015, 9:03 PM

To understand what’s happening in Syria right now, you have to understand the tactics and motivations of the US and NATO -- the three parties sharing interwoven aims and goals in the Middle East/North African (MENA) region.

The main point here is that as resources become tight, the ruling powers can be expected to act in increasingly desperate ways. » Read more

Blog

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Making The World A More Dangerous Place

US foreign policy at work
Friday, November 6, 2015, 9:06 PM

Without any doubt, the Middle East has been a very long-simmering region of violent religious and tribal enmity.

In that regard, perhaps today is no different than 1,000 years ago. But given the importance of the remaining oil in the Middle East to the next 20 years of global economic health, the violence and chaos seen there recently is hugely important to the entire world. » Read more

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Iraq Breaks Down, Oil Surges

The context underlying the growing crisis
Monday, June 16, 2014, 12:58 PM

The situation in Iraq is serious, and is probably going to get worse before it gets better. The potential for this recent action to morph into a regional conflict is very high. That that means that oil could go a lot higher, and if it does, we can expect the odds of a global economic recession and an attendant financial crisis to go up considerably from here. » Read more