WWIII in 2012

Yada, yada, yada, yada, some of us will say. We've all heard the saber rattling rhetoric a thousand times before. Year after year the same dire warning that Iran will be attacked, and then nothing. Indeed, it seems that subject has cried wolf a thousand times that it is now so hoarse that no one can hear it anymore.

It's why IMO it's a "thief in the night" event that sets off WWIII. I don't know if the Mayans foresaw any of this or it's coincidental, but the leading economic mammoths of power have slowly propped up the global crisis for as long as possible and in so doing have probably given themselves great yields in profit and time to prepare. 2012 is coincidentally an election year, and the political machinations the US does during these theatrical plays provides the necessary catalyst for end game triggers. Deficit spending cannot continue to support our current GDP and delusional sense of vigor.

http://market-ticker.org/akcs-www?post=203352

Now, however, the fun begins.  See, the TNX moved up strongly -- the 10 year yield.  This in turn will force The Fed to sit on its bond holdings to maturity, lest they take a market loss (and given their thin capitalization that would bankrupt The Fed instantly!), which in turn ties Bernanke's hands to a large degree. 

I know many will argue that The Fed can always "print more", but that's not how it works.  This is a negative feedback situation and triggering a run out of the long end of the bond curve isn't so much a problem for The Fed as it is for the Federal Government's financing and deficit numbers. Take a look at the FVX (5yr Treasury Yield) and you see a materially-more-frightening thing.  Yields have backed up from 0.7% to 0.97%.  Sounds trivial.  It's not -- it's a huge move, close to 40% on yield since the end of January!

This matters because the Federal Government's deficit spending in February is what has been driving the "improving" economic numbers, just as it has been for the last three years.  This is a pincer move; while yields have to normalize if and when they start to move in this direction that move will also choke off federal deficit spending capacity.

The Depression featured this sort of attempt at "repression" by The Fed and government and it was unsuccessful.  It looked successful for a while, - where we are right now  -but eventually the math caught up with them and we slumped back into the morass.  Our "exit" was war; we blew up all of our industrial competitor's output capacity and by doing so rejiggered demand. That's a rather bleak way of looking at what was "death by all forms" for the common man, but from an economic perspective that's what happened.  But "war as a solution" since that time hasn't "worked" (and in fact can't) since small-ball wars run into the broken-window fallacy; you can't "win" by breaking windows as the economic damage from a war exceeds the benefit.  For war to be a "winning" strategy you have to literally flatten your economic competitors so that even with the economic damage you wind up with a net benefit.

Such a conflict in the modern era has a high risk of turning nuclear and then everyone loses. In the next few days the market is likely to trade on euphoria from the financial sector, but I don't buy it at all.  Repression destroyed net interest margin in gross earnings terms irrespective of the spread and makes earning a profit much more difficult.  Most of Europe is in recession now and that's a huge market.  The ECB has no room to maneuver and further QE by The Fed will declare that the so-called "recovery" is false.

Bernanke, Obama and Congress have swam into the jaws of the shark and now the trick is to try to get back out before the teeth clamp down on all of us.  The problem is that extrication in one area will produce undesirable moves in another.  If the Federal Government pulls back on deficit spending then the economy softens materially, unemployment goes back up and with a falling labor participation rate tax receipts collapse, adding to the problem.  If The Fed pulls liquidity then interest rates go up, the deficit goes up, Congress finds itself up against the debt ceiling again in short order and a pullback on deficit spending will become inevitable.  If The Fed engages in aggressive acts to try to prevent the yield curve from backing up on them then oil will likely skyrocket, gas prices will go through $5 and we all know what comes next.  Finally, the corner we've painted ourselves into has occurred into a cyclical profit cycle peak.

We have hidden the depression we're in with deficit spending. Many of you think that the fed can keep printing indefinitely with no repercussions. This is absolutely false. It eventually catches up, as it caught up to us after 1930. Obama See's it and all his economic hitman do as well. Hell, a lot of American's realize it too, except they seldom make the connection between GDP and government spending, they just realize the debt and deficit situation as rightfully dire. Most have no idea HOW dire.

I see the exit as WWIII. They'll attempt to reset the global economy with another war. It's just that we're in a new age of capability where we really do have the technology to wipe us off the planet with some key turns and buttons pressed. I don't think the 1%'ers want this, but I'm not sure if they can prevent it either. Resetting through war will be a far greater source of ma-cab debauchery than every previous war known throughout history.

And what if something else, something natural that cuts short our war? We've gone and done the deed as far as climate change is concerned, and the Arctic is melting faster than at any time in geological history. Methane is bubbling up from the melted sea holes as we speak. Seas are rapidly acidifying. And who can argue with this:

Deniers are just stubborn and incapable of seeing the flower blooming 2 months ahead of time for what it is. They are signs that humanity is facing a rapid shift in our way of life, a way of life that is shoving out every other lifeform and plant that made our world beautiful and full of life. Messing with this spherical vestibule of life floating around in space, our only one, is just crazy.

Now then, back to WWIII, and back to the blah-blah about attacking Iran.

http://www.zerohedge.com/news/russia-discloses-iran-ultimatum-cooperate-or-be-invaded-year-end

In what can only be seen as raising the rhetoric bar on the timing, scale, and seriousness of the Iran 'situation', Kommersant is reporting that "Tehran has one last chance" as US Secretary of State Clinton asks her Russian counterpart Sergei Lavrov to relay the message to Iranian leaders. If this 'last chance' is wasted an attack will happen in months as diplomats noted that the probability of an Israel/US attack on Iran is now a specific 'when' instead of an indefinite 'if'. The sentiment is best summarized by a quote from inside the meeting "The invasion will happen before year’s end. The Israelis are de facto blackmailing Obama. They’ve put him in this interesting position – either he supports the war or loses the support of the Jewish lobby".  Russian diplomats, as Russia Today points out, criticized the 'last chance' rhetoric as unprofessional suggesting "those tempted to use military force should restrain themselves - a war will not solve any problems, but create a million new ones."

A million new ones is what is needed to start the great reset. Obama has to act this year or he will be replaced by someone that will. With the weapons at the disposal of super powers, I'm sure everyone involved is more than a little fearful over what will happen if Iran is attacked. A nation tied to two super powers and the heart of Persia. But that fear has to be acted on or the US faces absolute and undeniable economic collapse in 2013 (see bonds and debt), and likely a foreign invasion. Yes, that's right, red dawn and all that jazz. That's what's at stake, and the 1%er's know this.

So friends.....this is the last year to store up what you think will help you stay alive during the great "reset."

Before 2013 arrives you will hear me say, "THIS IS IT."