I’m worried and I think you should be too.
Mike Larson’s forecast of a Bloody Wednesday — when the Fed hikes interest rates for the first time in nearly a decade — is coming closer to reality, as foreshadowed by the recent rise in long-term interest rates and the decline in bond prices.
Meanwhile, Larry Edelson’s forecast of a rising war cycle — when civil strife, ethnic conflict and chaos spread around the world — is also coming true, as evidenced by the rise of the Islamic State and the decline into chaos of country after country.
What’s ironic — but also something we predicted unambiguously — is that it’s precisely these powerful forces that have helped drive the U.S. stock market higher …
- The expectation of higher yields in the U.S. has helped pull foreign money into the U.S. dollar. At the same time …
- The spreading fear overseas has done a lot of the pushing, and has driven foreign investors to shift massive sums of money to the most secure large country in the world — the U.S.
Is this a pair of sustainable trends that let you buy any stocks, lock them away and sleep nights with no worries? You wish!
Quite to the contrary, it mandates extreme high-quality selections, plenty of cash and constant vigilance.
Not convinced the world is truly swirling into a perfect storm? Then I would urge you to do three things:
First, be sure to review Mike Larson’s “Treasuries Tanking, Yields Surging.” In it, he shows you how the 10-year Treasury yield has just surged right up to a critical break-out level, and what this could mean going forward.
Second, don’t miss Larry Edelson’s “War Cycles Spread Globally,” focusing on the possible looming conflict between the first and second largest economies on the planet — the U.S. and China.
Sure enough, soon after we published his story, tensions were dialed up still further by news of the largest-in-history cyber-attack launched on the U.S. government, apparently from China.
Third, read on for my update on just three of the many global time bombs that could have an even greater impact on capital flows in the months ahead …
Time Bomb #1
The Palestinian-Israeli Conflict
This conflict first erupted with a civil war in 1947, escalated with a full-scale war in 1948 and, despite interludes of peace, has never ended even until this very day.
Jerusalem is at the core of the conflict, where the Toronto Star describes conditions on the ground:
Murders, stone throwing, arrest of Palestinian children, a bloody attack on Jewish worshippers in a synagogue. The golden city of Jerusalem is tarnished by escalating Israeli-Palestinian violence that has made parts of the city no-go areas for each side.
“The hatred is more intense and personalized and the city is more divided today than at any point since 1967,” says Daniel Seidemann, a Jerusalem lawyer and founder of Terrestrial Jerusalem, which maps, analyzes and tracks the temperature of the city he calls the “volcanic core” of Israeli-Palestinian and Arab-Israeli conflicts.
Jerusalem is both the epicenter — and a metaphor — of the broader Israeli conflict against extremist organizations and governments in Gaza, Lebanon and beyond.
All that can be done, says Seidemann, is to “keep that mortally ill patient called the two-state solution on life support. And to create mechanisms that will bring some measure of control over events in the interim. Nobody has easy answers.”
This is also the conflict that created the ideological fervor used by terrorist organizations globally … which later set the stage for the rise of al-Qaeda … and which has now led to the emergence of the Islamic State.
Time Bomb #2
A Third War in Afghanistan
The first major modern-day war in Afghanistan began when the Soviet army invaded in December of 1979, starting a nine-year conflict against multi-national insurgent groups called the Mujahideen (“Holy Warriors”).
The second Afghan war began with a U.S.-led NATO invasion in 2001 to dismantle al-Qaeda by denying it a safe base of operations — a “temporary, short-term action” that turned out to be the longest war in U.S. history. That mission supposedly ended last year with the withdrawal of most U.S. combat troops.
Now a third, even more dangerous war has begun immediately on the heels of the second. In fact, a new study by Brown University finds that, despite the death of 100,000 soldiers and civilians since 2001, the war is actually intensifying.
Just last week, nine employees of a Czech charitable organization, People In Need, were shot dead in a remote region of the country.
The Taliban is steadily regaining strength and threatening more territory.
The Islamic State is also making inroads into the country.
The United Nations reports that, in the first quarter of this year, the number of civilian casualties jumped 16%. And …
Most of the country is either falling into chaos or under Taliban control.
In fact, the government in Kabul is so desperate that Afghan President Mohammad Ghani is appealing for help from brutal, treacherous militias, which he himself had said were too dangerous to touch.
The end result is bound to be more chaos and, again, vast areas that can serve as training grounds for the world’s most extreme terrorist organizations, including the Islamic State.
Time Bomb #3
The Islamic State
You know the latest news about the Islamic State rampage — the fall of Ramadi near Baghdad in Iraq last month … the demise of Palmyra in Syria a few days later … and just in the last few days, the conquest of other strategic towns, border crossings, and more.
What you may not fully realize is just how entrenched and durable their stranglehold has become on vast territories and populations.
Just consider these stats, based on data from the United Nations and other sources …
- The Islamic State now has amassed and trained 45,000 jihadist and local fighters.
- The Islamic State has now engaged in direct fighting in five different nations.
- The Islamic State has beheaded, massacred, or otherwise caused the death of 140,000 civilians in Syria and 110,000 in Iraq.
- The Islamic State has total assets estimated at $2 billion and daily revenue of $2 million from oil alone, plus much more from other sources. And, perhaps most alarming of all …
- The Islamic State’s global affiliate network is now so large and growing so rapidly, it makes al-Qaeda’s former network look tiny and powerless by comparison.
These are just three of the major wars now erupting or about to erupt. Don’t let up your guard. Don’t underestimate their impact. And be sure to invest accordingly — extreme high quality, plenty of cash and constant vigilance.
Good luck and God bless!