Here's our summary of key economic events overnight that affect New Zealand with news US Treasury yields have jumped, and to their highest level in nine months. Investors are coming to realise that Trump doesn't know what he is doing, and the inflation impacts from these mistakes will likely deliver a much more hawkish US Federal Reserve. We may all be in for rising benchmark interest rates.
And it won't help us that credit rating agencies are looking at these impacts and starting to consider downgrades. Risk premium rises will be on top of the benchmark rises.
Meanwhile, the IEA says the market disruptions from the US/Israeli "conflict has triggered the largest supply disruption in the history of the global oil market". They say we should all work from home, and if we drive, drive slowly.
American petrol prices are up a third in just four weeks. That signal from the world's largest economy will be sharply inflationary. By a different means, Trump is effectively imposing a giant carbon tax on everyone.
And what will flow from from that? Sharply higher inflation, and sharply lower global economic activity. That is the definition of stagflation. Everyone suffers because monetary policy needs higher interest rates to restrain the inflation side of the coin. And that undermines the global banking system because stagflation is the worst scenario for bank lending.
Meanwhile, Canadian retail sales rose in February by +0.9% from January to be +1.8% higher than year-ago levels.
But Canada's producer prices rose much less than expected in February. They were up +0.4% from January when a +1.1% rise was expected. For the tear they are up +5.4% however.
Taiwanese export orders are still growing fast but the February rise was only +24% and by the standards of the +60% January rise, this seems a let-down. Analysts has expected another very large rise and so were disappointed. But anyone else would have been over the moon with a +24% rise.
In China, foreign direct investment inflows fell -5.7% to ¥161 bln in February from a year ago, -22% lower than the same period in 2025, and its lowest for this period since 2020. There were some positive sectors in high-tech, but mostly this is a weakness Beijing won't appreciate.
And Chinese customs data shows why the silver price jumped earlier in the year. China bought up 700 tonnes of the metal in January and February to shore up its strategic reserves. But the buying seems to have eased or stopped, and we are seeing the price dive now.
And staying in China, despite the huge surge in car sales there, over half their car dealers say they are missed sales targets and many are now operating at a loss.
We should probably note that with the Australia-New Zealand "Closer Defence Relations" statement, there is growing expectations that the two countries will buy its replacement frigates from Japan.
The UST 10yr yield is now just on 4.39%, up +11 bps from yesterday at this time, up the same for the week. The key 2-10 yield curve is much steeper at +49 bps (+8 bps). Their 1-5 curve is slightly steeper at +17 bps (+1 bp) and the 3 mth-10yr curve is now at +69 bps (+9 bps). The China 10 year bond rate is up +1 bp at just under 1.83%. The Japanese 10 year bond yield is down -1 bp at 2.26%. The Australian 10 year bond yield starts today at 5.07%, up +5 bps from yesterday and its highest since 2011. It is up +8 bps for the week. And the NZ Government 10 year bond rate starts today up +5 bps at 4.76%, up +7 bps for the week. The Fitch downgrade probably won't help on Monday.
Wall Street has started Friday trade with the S&P500 down another -1.7%, down -2.7% for the week. Overnight, European markets were sharply lower again, between London's -1.4% and Frankfurt's -2.0%. Yesterday, Tokyo closed down -3.4% for a weekly dip of just -0.4%. Hong Kong ended its Friday session down -0.9%, and Shanghai fell -1.2%. Singapore ended down -0.4%. The ASX200 closed down -0.8% for a weekly retreat of -1.7%. The NZX50 closed on Friday down -0.5% to cap a weekly decline of -1.6%..
The Fear & Greed index has now moved further into the 'extreme fear' zone today.
The price of gold will start today down -US$14 from yesterday at US$4573/oz. That is down -$453 or almost -10% in a week. And that its its largest fall on more than 40 years. Silver is down another-US$1 at US$69.50/oz, a -14% weekly retreat.
American oil prices are up +US$3/bbl at just on US$98/bbl, while the international Brent price is now just over US$110.50/bbl. The Straits of Hormuz remain no-go areas for most with the situation still extremely unstable. The ships transiting are those approved by Iran, which holds all the cards at present.
The Kiwi dollar is little-changed against the USD from yesterday, still just on 58.4 USc. A week ago it was 58.1 USc. Against the Aussie we are up +10 bps at 83 AUc. We are up +60 bps against the yen. Against the euro we are down -20 bps at 50.5 euro cents. That all means our TWI-5 starts today essentially little-changed at just on 62.1 but up +30 bps for the week.
The bitcoin price starts today at US$69,626 and up +0.2% from this time yesterday but down -3.3% from a week ago. Volatility over the past 24 hours has been modest at just on +/- 1.4%.
Daily exchange rates
Select chart tabs
The easiest place to stay up with event risk is by following our Economic Calendar here ».
73 Comments
"Iran holds all the cards"? I thought team Trump had a monopoly on card holding?
Everyone's got cards
Trump's playing snap
Irans playing Magic The Gathering
“Trump doesn’t know what he’s doing.” That rang a distant bell and after a bit of thinking I located it. One of the world’s greatest cynics H. L. Mencken passed in 1956 but also obviously displayed quite some precognizance when he said “ On some great and glorious day the plain folks of the land will reach their heart’s desire at last, and the White House will be adorned by a downright moron.”
What use are cards when Trump is playing four dimensional chess?
His gameboard looks a lot more like Hungry Hungry Hippos.
Post of the month!
Zachary,
I must assume your comment is deeply ironic. I doubt if trump can play Snap, never mind anything more complex. If you meant it to be taken seriously, i fear for your sanity.
When you watch a fly flit aimlessly around a room, do you marvel at how precisely it is able to plot that exact path?
I think attributing any high-level strategy to Trump is a similarly futile exercise.
Zachary,
I must assume your comment is deeply ironic. I doubt if trump can play Snap, never mind anything more complex. If you meant it to be taken seriously, i fear for your sanity.
These wars are making me feel a lot safer in a way:
- The US can’t beat Iran
- Russia can’t beat Ukraine
- Neither Russia nor Iran have managed to attack a western country
- The world has learnt (again) that there are no winners from wars.
Does that make you feel like it's the end?
Our other lesson is that the nature of war is changing as it always does. Particularly the economics. It's now becoming less about who's got the flashest toys, to who can produce cheap guided munitions in enough quantities to overwhelm defenses.
Those who have energy on tap, hold the cards.
And we are beginning the second-half - our side now plating into a steadily-increasing wind.
Don't blame Trump, DC. Try asking why Trump?
Because ridding the world of Maga, doesn't solve the dilemma. Not one jot.
Yes and no. Many MAGAs are evangelical conservatives and very comfortable financially. Ask them why they vote MAGA and it's the anti abortion, anti LGBQT thing, anti woke in general. Their concern is the erosion of christian "Values". The same sort of people exist everywhere, incl NZ.
Why Trump? There's no one answer to that question. Busy splitting firewood at the mo. I'll give it some more thought when it gets dark.
In times of crisis, feelings matter not, and pragmatism win out. Skills and resources will be of most value if this drags out. I've stockpiled 2 years' firewood (mainly as I had a bunch of hardwood on offer for free from farmers) and am still astonished daily how petrol seems to be increasing by 10c/L per day. Picked up a few bags of fert as well today for good measure as It will benefit my fruit trees regardless and best to get in before that gets spenny. Now to fix the 70's rotary hoe and plant out the garden
I'm going hard in the firewood also. Logged a plantation just over twelve months ago and chewing through the residue. Offered it to mates but no one turned up so far. Everyone my age seems to have heat pumps now. The big push in Timaru to rip out log burners probably has something to do with it? Cleaned up the air, but if the grid goes down?
Some of those bigger rings are getting hard to shift I must admit.
I had to put an ultra low emission fire in when I purchased my place due to council bylaws but have no qualm with it at all tbh as it leaves no embers when it burns out, and is much easier on the wood compared to old style fireplaces. Convenience with heat pumps is quick and easy but not that glorious radiant heat. I get free wood when it is on offer and show up. Many of my peers don't understand why I bother with the effort, logsplitter etc, until they come round in winter and can't believe how warm it is. Old habits die hard I suppose, as firewood was a staple part of my childhood growing up in a large 1800's character home, high ceilings, sarking only for insulation.
annual gold exports from New Zealand have now passed NZ$2B, up from just $470m four years ago.
It's surprising how little NZ receives in royalties though.
No real surprise. We get it in tax instead, haha, nah just kidding.
It's called "foreign investment " some people actually believe it's a good thing.
The people employed probably think it’s a good thing.
From what I can discern it looks like royalties come to about 10% of company profits. So, if the company makes 200M profit NZ gets 20M. Could be around about the figure for 2025. Mining is quite an expensive enterprise so there will be earnings from various taxes and employment in these places. The gold exports help with trade balances.
$20mil is chump change for permanantly wrecking a landscape!
A link discussing those Chinese silver purchases.
The following is from yesterdays article by Alasdair Macleod. As always dyodd.
Clearly, the current markdown in silver is paper vapour, meaningless in terms of its physical value. The same can be said of gold despite its increased marketability compared with silver. While bullion banks in the West play their paper games, such is the demand for physical gold in China that their banks are rationing customers, with daily allocations reportedly sold out within minutes. This is sucking gold out of other centres.
Chinese and Asian savers have a better grasp of the implications of the war on Iran than their western counterparts, since they are more reliant on energy from the Persian Gulf. Nowhere is this more economically destructive than for Japan which depends on the Gulf for 70% of her oil and 90% from the whole region. This explains why the Nikkie index has been the worst casualty of the war so far. But this is only the start of Japan’s problems, and therefore of all credit markets.
Lau Vegys of Doug Casey’s Crisis Investing (dougcasey@substack.com) points out that as a consequence of the 1973 oil crisis, Japan’s inflation rate rose 20% and panic buying emptied store shelves. He goes on to point out that the problem today is compounded by the dire state of Japan’s finances with debt to GDP of 255%.
Clearly, inflation of prices will be a major problem for Japan in the coming months. Not only will the Bank of Japan be forced to raise interest rates sharply if it is to prevent the yen collapsing. Equities will crash and bond yields soar. As the chart below illustrates, these bond yields are already the highest they have been for decades:
Current JGB yields are nowhere near discounting an inflation surge and they should be on their way to 10% or even more. Not only would that collapse the entire Japanese financial system and its currency, but Japan’s institutions are the world’s largest exporters of investment capital, and the yen is the basis of the carry trade into dollar debt — both of which are bound to cease and reverse.
Today, this is the obvious source of future global credit instability. And along with Japan, other G7 nations seeing their 10-year bond yields challenging new high ground are the UK, Germany, and France. We are entering falling-dominoes territory, where the only safety is to get out of all forms of credit including currencies and equity markets.
In conclusion, a global financial credit crises in being brought forward in time. Today’s markdowns in gold and silver are simply sucker-plays designed to deceive amateur investors who will come to regret being hoodwinked into selling by professional traders.
Very scary predictions.
It's surprising that the Gulf Arab States and Iraq have about 300 naval vessels combined yet only about 30 that are actually useful for escorting ships through the Strait of Hormuz. You would think, with their fairly large military budgets and the importance of the waterway, that this would have been a priority.
Not when you're ceeding much of your defense responsibilities to a third party. Because your resources help underwrite their currency.
It's a very interesting conundrum when you start getting the statistics from AI and thinking about it. On paper the Gulf Arab States outspend Iran by 10-15 times on their militaries. But, Iran relies on its size, population and fanaticism for defence allowing it to focus most of its budget on offensive capabilities. The Gulf States can do little to prevent random and continuous pinprick attacks. They can't do much by themselves to stop Iran from disrupting and blocking the Strait of Hormuz. This leaves the Gulf States and their customers vulnerable to standover tactics and extortion. This is why I suggested that a march on Tehran was a possible solution, as long as the Iranian people were happy with the return of the Shah. Other solutions, such as the destruction of key civil and economic infrastructure may work but would have an unacceptable human cost in this day and age.
So you drive to Tehran, getting shot up along the way
You undertake a bloody, block by block fight to take over the city, killing many civilians.
Irans command structure is decentralized already
You install the Shah, but no one outside of Tehran will listen to them
What next
The invasion force would be more of an expeditionary one, à la Boxer Rebellion . There wont be any bloody, block by block fighting. Its the only way the Iranian people will gain the confidence to rise up and assist with the overthrow of the IRGC. This objective will be clearly communicated. Tehran will be experiencing a full scale uprising by the time the expeditionary force arrives. It's a gamble that relies on the intel from the Iranian street that the IRGC has minimal real local support. Worst case scenario is another epic "1842 retreat from Kabul" combined with "Warsaw Uprising" type of situation except with A10 Warthogs. But, hey, I thought we were returning to the19th century model, no? This is actually the most humane strategy and history making. First step is for the Marine expeditionary force to secure a bridgehead at Bushehr.
Ah so the plan hinges on the population you've spent the last month bombing the crap out of coming over to your side.
What could go right.
They were welcomed with open arms in Iraq too
And Afghanistan
And Vietnam
Oh, wait...
This time we have a Shah. It'll be just in and out, home by Christmas at the latest.
The last Shah was a murderous scumbag who oppressed his subjects and "disappeared" a load of them with his secret police.
He was also a puppet of the west, installed after the previous (legitimately elected) leader was assassinated by the CIA so the West could still get easy assess to Iranian oil.
Or so I've read.
Zac. You need to read up on that murdering Shah. A puppet of the USA, so they could steal the oil.
Both overthrown by the people for good reason. No chance they will welcome the USA
The USA has a complex about being rejected and hold the grudge forever (note Cuba also)
A major reason for this war.
Grudge against Cuba? More a fundimentalist hate of communism. Any system where you can't sell your grandma if the price is high enough must be torn down.
Kind of like what Russia is doing in Ukraine actually?
You're so negative. Modern aerial bombardment has very few civilian casualties. I once spoke with a Yugoslav who was there during the Kosovo War who was amazed and very appreciative of the precision of the NATO bombing campaign. Extremely little collateral damage.
But they're targeting civilian infrastructure
I'll try and be a bit more upbeat about the escalating amount of international violence we're living through.
Tell that to the 180 school girls murdered in a double tap strike.
Hey, look on the upside, if it was WW2 carpet bombing, might have been 300 school girls. And a puppy called Kennith.
The Kurds in the North West region summarised it well enough in that they saw no possibility of an incursion until there was a significant decrease in the number of Republican Guard fortified positions and thereby getting access to quite a number of the munition stores. Air superiority would help to reduce armour and artillery response. Perhaps simultaneous attacks over land from the north and south may have some impact but there are 200,000 or so Iranian Guards indoctrinated, trained and versed in the land. Iraq collapsed twice but each under a large, concerted army. Libya and Syria collapsed because their armies were corrupt, ill disciplined and ill equipped. Doesn’t seem to be that the US has put much forethought in a land invasion and it’s hardly something that should be cobbled together at the last moment. Better option to declare the mission accomplished, withdraw with the proviso of return in like manner if it becomes necessary.
What if the IRGC start charging everyone for safe passage through the Strait of Hormuz? They could claim it is a war reparation toll. I reckon countries would pay up and history will record this conflict as not really a loss for Iran.
Don’t think any contract for anything with the IRG would be realistic or operable They are in charge now, a virtual military dictatorship and a law unto themselves and will on any one day, act as they might see fit. At this point nothing has significantly weakened their capacity to fight a land engagement. What unfortunately is not being given much consideration is the plight of the Iranian population. If shops were short on supply before then food and other essential provisions will be now under huge pressure and then there’s that water shortage afflicting Tehran. But none of that will likely worry the IRG much either.
Pirates! But if Iran still has the ability to choose what ship does and what ship doesn’t get attacked then that means they are not anywhere near depleted in terms of the relative offensive capability and control thereof.
There are 2500 Marines on their way to the area....what do you think that number may be able to achieve?
The 2,500 Marines from the USS Tripoli could seize the main port and airport at Bushehr followed up by the 2,200 Marines with Boxer Amphibious Ready Group. Once a lodgement has been established, army brigades from Kuwait can be moved in.
They may, repeat may, seize the port....how long would they hold it? And then what, no back up to break out and do anything of purpose. He would be consigning 2500 servicemen to defeat/retreat and possibly death.
Don't think even the moron Trump could claim a win out of that one.
https://www.tiktok.com/@kiwi_nostalgia/video/7550611631408008455
'Strait of Hormuz will have to be policed by nations who use it - US does not', says Trumppublished at 10:22
10:22Breaking
We've had another update from US President Donald Trump on Truth Social.
"We are getting very close to meeting our objectives as we consider winding down our great Military efforts in the Middle East with respect to the Terrorist Regime of Iran," he says.
Turning to the Strait of Hormuz, Trump then says it "will have to be guarded and policed, as necessary, by other Nations who use it — The United States does not!"
"If asked, we will help these Countries in their Hormuz efforts, but it shouldn’t be necessary once Iran’s threat is eradicated.
"Importantly, it will be an easy Military Operation for them."
https://www.bbc.com/news/live/ce84073mr06t
So easy we have given up.....
The next step will be that if other nations refuse to support the US to secure Hormuz and the US does all of the heavy lifting, then they will restrict the supply of oil from that region to those nations who refuse to cooperate. Just as Iran is doing now.
(not saying this is right or wrong...just saying this is how Trump operates)
And do nations, who currently refuse to cooperate, believe they can source energy from other regions? How much more expensive will this be? Can their economies survive by refusing to cooperate with the US?
These are all the considerations one needs to contend with when geopolitical orders have a shake up and you refuse to cooperate with the dominant power of the time.
The status quo for 80 years was the US securing trade routes for a global economy. On the rather strong observation that if everyone can trade freely, everyone is better off.
Now, because of the US' inability to reign in its own spending over decades, it has a President that will ignore that. Instead, the story is it's the rest of the world that's the problem, and everyone has been getting a free ride at the US' expense.
Trump can hold the world to ransom, for a time. It has a powerful military, nuclear weapons, and a significant global footprint.
But he is also incinerating US soft power. America's word means nothing and it shows little loyalty. So the drive for independence from US influence is going to accelerate. Will the US be better off with the results? I feel all of us are going to be poorer.
Great post Pa1nter
Trump needs to observe the pottery barn rule. Trump ain’t gonna dictate who receives the GCC oil because he ain’t gonna open the strait militarily. He’s in check mate with only one asinine move.
Too true, Albert.
TOOFOO (The Orange Oaf From the Oval Office), together with his farcically incompetent admin, in this Hormuz gambit, has succeeded in creating the most monumental cluster-f%$k in the entire history of global geopolitics.
This is a tooth-and-nail fight for the US to retain its global hegemony, one that the US military and its economy are completely ill-prepared for.
Their neocolonial behaviour was financed by the 55-year-old petrodollar deal with the OPEC countries, with the largest energy and petrochemical by-product exporters being located in the Gulf region.
Essentially, this means that this Iranian debacle is a fight to save, not just the US's regional hegemony, but also its fiat currency, its global reserve status, and, as such, the economy itself.
It was already a losing battle anyway. All TOOFOO has done is to put the US ship into full speed ahead.
https://www.youtube.com/watch?v=RPS0BUko8d8
Quoted... Max Blumenthal's take at 9:20...
"But they are not able to suppress Iran's Shahed drones. Iran has launched the 54th wave of Operation True Promise IV, just yesterday, with ballistic missiles.
And so it's not working, and Iran is, I think, ready for a months-long conflict that could fully exhaust the US empire.
What they are demanding is the withdrawal of US bases from the region. That's what Donald Trump is fighting for now. He is not fighting for regime change. There is not going to be regime change.
He is fighting simply to maintain the US presence in the region and to open the Strait of Hormuz.
He is fighting a global economic catastrophe. The Europeans are not coming to his aid because of how he treated them with the tariffs.
He threatened them over Greenland. The Europeans have more mine-sweeping ships than the US. He needs them, and they are not coming to his rescue at this point.
And so we may be seeing the unravelling of Donald Trump in this war, and of the Trump admin, and we are only like a year into that admin.
HEDGES.. My fear is, Max, that Bibi will reach for the nukes."
...end quote...
That is what we all should fear, because there are highly resourced nutjob evangelical rapturists ensconced in both the US and Israeli war councils.
Regards
Col
CM - fully agree with that post
As has been noted by many and confirmed by events, aquiescing to Trumps demands provides no guarantees for future consideration....governments around the world have finally begun to understand this fact.
They have even abandoned the hope that things will greatly improve when he is gone.
Yes. An admission of defeat from the USA.
Meanwhile their biggest, newest and most powerful aircraft carrier,the Ford is in full reverse because of a 'fire' and laughably, blocked toilets.
Do I believe the 'fire' story?
Stagflation rising.
The Stagflation wave has been building for a while. Stupido printing and monetary policy have only delayed the coming wave crashing down. All this has done is increased the amplitude of what's coming.
Those seeing this coming have been researching how to take advantage of stagflation, and acted on that. They are ready with surfboards waxed and anything leveraged eliminated. Note that Buffet and Berry have large portions of their funds in cash, and thats.... a lot of cash.
Ever Orrful said not to speuvest. Surfs up...
We’ve avoided stagflation until now. First we had inflation but also reasonable growth, then lower inflation but low growth.
But now stagflation is looking very likely if fuel prices stay elevated. RBNZ may have to hike while the economy is only growing at 0.3%, last time they started hiking it was growing at 4.1%.
We didn't have growth.
Ever.
All we've ever had, is extraction and draw-down.
Upon that we chose to build a whole inter-related global collection of stuff - which doesn't operate beyond fossil energy.
What beggars belief, is the number of folk - some claiming engineering capability (presumable somehow related to things physical) - who fiercely cling to counting keystroke-issued proxy.
What's a dollar worth sans fossil energy deliveries?
D squat.
Sharply higher inflation, and sharply lower global economic activity. That is the definition of stagflation. Everyone suffers because monetary policy needs higher interest rates to restrain the inflation side of the coin.
Sorry but I cannot let his go unchallenged. Yes, if an economy is running too hot and demand for goods and services is high, higher interest rates are warranted. But this is NOT the case here, most economies are weak and barely growing, coming inflation is clearly driven by higher oil prices. No amount of rising interest rates is going to reduce the price of imported oil prices, hence inflation. All that higher interest rates would achieve, is to significantly worsen the economic pain by compounding higher cost of goods with higher cost of money. Let's use our brains, CENTRAL BANKS WON'T BE ABLE TO RAISE INTEREST RATES SIGNIFICANTLY AND IT WON'T DO A THING TO LOWER INFLATION !
Clearly the leveraged would want the RBNZ to let a sh#@storm of inflation to collapse over NZ, smashing everyone but rewarding their positions.
Alternatively it's a golden opportunity to correct NZ biggest inequity. An inequity that effects every person in NZ. Lift rates and drive the cost of housing down to manageable levels. And then peg it there with a max 3x earnings for spectown.
Election year. Will be fun to watch what unfolds.
The significant drops in Gold and Silver prices could possibly be attributed the Fed not cutting rates, and expectation of higher inflation and (wrongly) higher interest rates. If this is the main reason, then I believe it's not the right reason. Gold and Silver tend to suffer in higher interest rates environments as they don't produce any income, but what truely matters are REAL interest rates, meaning interest rates minus inflation. Real interest rates are dropping and they could well become negative in the coming months, as inflation rises and central banks cannot raise rates by much for fear of totally killing an already struggling economy.
I think gold and silver just got a bit stretched, probably on margin, I like gold a bit further down look at the weekly if it gets back to $4k USD worth adding a bit even more at 3k
https://goldprice.org/live-gold-price.html
I would add, Yvil, that the number the Fed/Treasury talks about, ie 2.4%, for the year ending January 2026, is a blend of laughable propaganda and flat-out BS.
Real inflation is literally multiples of that number because the CPI/inflation numbers are so manipulated.
Also, within an economy, there can be inflation and deflation at the same time. IOW, there can be severe inflation on the essential items that Mainstreet requires just to survive, and this can be accompanied by the dilution of the overall figure by non-essential and luxury items that can simultaneously decline in price.
Since the 1980's, the calculation of the CPI has been progressively manipulated multiple times, with the official explanation being... "These changes were made to improve accuracy and reflect consumer behaviour more effectively" - yeah, right.
This manipulation means that real interest rates have long been negative. It also tells us that the claimed GDP growth is a monumental porky as well. The US is already a technically stagflationary economy, mired in a debt trap that will implode the economy, but with the real numbers being manipulated to hide this impending trainwreck.
Trump himself is utterly illiterate in economics, and he surrounds himself with a mixture of sycophantic morons, billionaire insiders, and Wall Street conmen who are close enough to the money spigots that they can front-run their own policy decisions, subsequently cleaning up in yet another massive transfer of wealth from the working classes directly into the deep pockets of their billionaire club.
What better scapegoat to try to use than Iran? The US can try to blame them for their own financial hari kare by using the closure of the Hormuz Strait, as the root cause for the entire global economy being put at risk of a systemic financial meltdown. The very same country that has been demonised, regime changed, robbed, raped, and pillaged by successive Western empires for well over a century.
Up until now, the duopoly establishment has found ever more innovative ways to fudge the numbers to try to hide the fact that, since all currencies in the world became fiat after 1971, the entire experiment is simply a trainwreck waiting to happen.
All of these currencies have lost at least 98% of their purchasing power. It's panic mode right now as both the Ponzi and the insidious fiat currency debasement are being exposed.
Gold and silver, even in the artificial paper markets priced in these fiat monopoly tokens, highlight the debasement. Hence, the desperate attempt by the establishment to bash these prices down.
Of course, these prices are spot paper prices, not physical - if these were true organic supply and demand-driven markets, the extent of the currency debasement would be even more obvious and graphic.
China is still stacking and probably can't believe their luck that they have been handed another opportunity to build their physical PM reserves with this latest price hiccup.
It seems that a quiet deal has been struck where the US is sourcing some essential/rare earth minerals from China and paying with physical gold. This, at the same time, masks what would be even more disastrous monthly trade deficit figures if this physical gold was not being used as payment.
The short-term pullback in the spot gold price was already to be expected as this plays out. The market at large still views the US dollar as a safe default to hide when trouble is brewing, even when it is anything but safe, other than as very short-term dry-powder liquidity ready to deploy when the markets crash.
This flight into the US dollar as a default currency was counterintuitive when you consider that the 2008 GFC was caused by the extraordinarily reckless behaviour of the US govt, Wall Street criminals, and TBTF banks, which threatened the US economy as well as the entire global economy.
SUMMARY - Crises trigger demand for the most liquid and widely accepted assets, even when the crisis originated in that domestic domain.
Now we can add to the equation the growing global dedollarisation trend that resulted from the US weaponising its reserve currency position.
A steady stream of Republican and Democratic administrations had managed to keep the failing US economy on life support using a combination of barefaced lies, propaganda, and balance sheet chicanery to pull the wool over the eyes of Mainstreet, except that now the deafening sucking sound of the debt-trap vortex is becoming impossible to ignore, especially with Trump and his hangers-on, at the tiller.
Could the US govt try a blend of fiscal austerity involving massive budget cuts, in an attempt to at least curb the exploding twin deficits? Not if Trump is anywhere near the helm.
That said, and Trump aside, historically govts very rarely, or never, choose this option because they simply cannot broker it to their voters, who overwhelmingly think in the short term, i.e. with their back pockets, just as their representatives do. In a system where Congress has a two-year election cycle, and with the midterms later this year, this was never going to be a starter.
Furthermore, this admin had already planned to raise the military spend from ~$900 billion to $1.5 trillion, and just in the last few days, the moronic Minister of War is going to Congress (the branch of Govt that didn't authorise this idiotic attack on Iran) with his hand out for another $200 billion. If approved, this increase would raise the publicly disclosed budget* from $900 billion to an obscene $1.7 trillion.
*(When you add in all the proxies and other three-letter agencies' expenses that are directly related to the US military, you can pencil in another $500 billion into the total. With these figures included, as they should be, the total at well over $2 trillion in US military spend, would outnumber all of the remainder of the countries' budgets on the planet... COMBINED.)
We need to ponder what the buyers and holders of USTs think about this situation now, especially with the Iran attack following closely on the heels of Venezuela's Maduro and his wife being kidnapped, especially given that every single one of the US's creditors has been either threatened, shaken down, or outright bludgeoned with the mafia-style tactics of the current administration.
Methinks this is not going to end well for anyone
Col
https://www.zerohedge.com/markets/crude-crisis-hawkish-fears-spark-bond…
buy at the bottom 2.5-3.5k ish
"Buy at the bottom"
Well, that's a pearl of wisdom ITG. I hope will will share with us when that bottom is live, not with the benefit of hindsight.
Stocks to tumble as Trump delivers 48-hour ultimatum to Iran
The Australian sharemarket faces another heavy sell-off after an ultimatum from US President Donald Trump to Iran escalated the conflict in the Middle East, threatened to push the oil price even higher and increased the chances of a US interest rate rise.
Trump, in a social media post from Florida over the weekend, warned that the US would “obliterate” Iranian power plants if the country did not fully open the Strait of Hormuz within 48 hours.
More than $280 billion has been erased from the ASX since US President Donald Trump waged war on Iran. AP
The comments made on Trump’s Truth Social media platform marked a dramatic escalation in the president’s rhetoric about the key waterway and came just a day after he said he was thinking about “winding down” the military operation in the Middle East.
The Strait of Hormuz, through which about 20 per cent of the world’s oil supply is shipped, has been effectively closed since the war kicked off late last month – a move that has sent oil prices soaring more than 50 per cent and raised fears of an acceleration in global inflation.
More than $280 billion has already been erased from the ASX since the first strikes on Iran just over three weeks ago, as bond traders started to rapidly price in the prospect of more rate increases in Australia to tackle the risk of runaway inflation.
BANZAI... place your bets NOW!...betting ends..............
-
US President Donald Trump has given Iran a 48-hour ultimatum to open the Strait of Hormuz before American forces "obliterate" their power plants.
-
Iran says if its fuel and energy infrastructure is attacked, all US energy infrastructure in the region will be targeted.
IMHO game theory could mean that the US and other arab countries COULD Support wiping iran OFF THE MAP HERE,
Imagine if they had nukes right now, do it now while the cost is lower?
Can't have 10,000 disappointed Marines.
I think IRAN have not have much boots on ground caliber ammo, to keen to divert funds to nukes
US learned from desert storm?
London now in reach of Iran’s missiles, Israel warns
Iran has developed intercontinental ballistic missiles capable of striking London, Israel has warned Sir Keir Starmer.
Iran attempted to attack the joint British-US Diego Garcia military base on the Chagos Islands with two missiles. One was intercepted by a US warship and the second failed in flight, UK Government sources confirmed on Saturday morning.
The attempted strike – launched from some 3800km away – marked the first confirmed use of long-range ballistic missiles by Tehran.
The Israeli Defence Forces (IDF) and Western military experts said it showed the regime now had weapons capable of hitting European capitals, as well as Britain.
On Saturday night, the IDF said the strike showed for the first time that Iran had weapons that could reach a distance of 4000km, posing an immediate threat “to dozens of countries in Europe, Asia and Africa”.
“We have been saying it: The Iranian terrorist regime poses a global threat. Now, with missiles that can reach London, Paris or Berlin,” it said.
– Daily Telegraph UK
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.