THE CRESCENT THREAT
Well, welcome to a new decade! What a start, no shortage of market moving news to distract the best laid holiday plans.
So far, Australia begins to count the cost of fire disasters as the Middle East (ME) looked like firing up and, this week, we’ve had, what seems like, the 12th US/China trade deal in three months.
The situation in the ME really did look like firing up after the assignation of one of Iran’s top generals by the US, until not a drop of coffee was spilt on a US uniform in “the retaliation”.
Must be that “all is truly well”.
Financial Markets are certainly back to normal.
Daily Bail outs by the US Fed in overnight “repo” markets, every day money printing and market support that we cannot call QE!
The best of all this is the daily NEW ALL TIME HIGHS in the US stock market.
To the point that the US stock market is now 185% of GDP, the long term average is 85%.
Mercifully, the Australian market has been dragged along to the tune of a respectful 5% for the FY year to date.
Before this mid East kerfuffle died down we had some notes to share, it would be a shame to waste them as we believe “the kerfuffle” could get going again anytime soon.
The Crescent Threat we speak of looks like this below. There are variations around widths in other maps but we get a kick out of where the arrow points, it makes a point.
A Shiite Crescent
The Straight of Hormuz carries some oil.
The US has some carrier groups.
Maybe the biggest problem the US has with Iran is they put their country too close to US bases.
From an investors point of view, an escalation in the ME would have quickened the pace of inflation and financial systemic risk coming down the pipe.
Certainly the price of gold suggested as much. Booming to USD1610 at one point last week before settling at a modest USD1554 today.
We’ll be expanding on inflation risk notes as rates tick up over this quarter.
In the meantime, enjoy the bubble.
Not going to end well.
Tesla share price $500, company worth 100billion, never to make a cent.
Beyond meat, beyond valuing……shorts get torched.
Buy all the things
