Geopolitical Compass #35
Geopolitical Compass #35
A potential opportunity emerging in the PGM sector if the narrative of EVs doesn't live up to expectations.
This Week:
Bitcoin reminds us of the weakness of fiat currencies “money by decree”
US preparation for a false flag in the Middle East
Opportunity in Platinum & PGM’s?
Wind failure
Bitcoin
Bitcoin is up $7,000 in 14 days while the world melts down.
The comparative draw downs in Bitcoin since the lows of this cycle are telling for what they reveal about different fiat currencies.
BTC in USD needs to rise 105% to hit a new all time high
BTC in CHF needs to rise 99% to hit new high
BTC in EUR needs to rise 82% to hit new high
BTC in GBP needs to rise 77% to hit new high
BTC in AUD needs to rise 68% to hit new high
BTC in JPY needs to rise 47% to hit new high
What is your unit of account? How far is your ice cube melting?
The numbers above illustrate the value loss of other fiat currencies relative to the US Dollar, which itself has been inflating away. USD; the best ingredient in a shit sandwich, but it doesn’t change what you’re eating.
Bitcoin is volatile in the short term, but in the long term will protect and grow your purchasing power in a world of manipulated government currencies, debased through money printing, a ‘hidden’ tax on everyone.
Scarcity has always been one of the key elements of long term wealth storage. Most people throughout millennia have turned to property for this purpose, a much smaller number turned to gold. With the exception of time - something not investable as a store of value - the invention of Bitcoin presents us with absolute scarcity for the first time in human history.
How much is immutable, decentralized, absolute scarcity worth? In a world where total economic value is likely approaching or surpassing $1 quadrillion and growing each year, I imagine it’s worth more than the current market cap of $0.7 trillion.
Middle East
There’s a lot of commentary about WWIII getting ready to start. Now I’m not saying that’s correct, but I have been very clear that is the direction Western governments are taking us through their actions or lack thereof.
As numerous chess pieces are put into place by which only a small ‘incident’ could trigger widespread repercussions, a questions you should likely ask yourself is; are you prepared for it heightened global conflict?
As we speak, the US has deployed two aircraft carrier strike groups to the Middle East region, with unconfirmed reports another two are on the way. If true, that’s four lots of these:
The U.S. has significantly increased its military presence in the Middle East in the nearly three weeks after Hamas launched attacks against Israel and took hundreds of hostages on Oct. 7. Among other things, the Pentagon has deployed two aircraft carrier strike groups as well as a range of fighter aircraft to the region.
The official reason for the new deployments is to deter Hamas’s allies, including Iran and Hezbollah, from launching attacks against Israel and sparking a wider regional war. That logic will be put to the test in the coming days if Israel follows through on its planned ground invasion of Gaza, which is sure to face sharp condemnation from throughout the Middle East.
Meanwhile, the Pentagon has accused Iranian-backed militias of carrying out a series of attacks against the roughly 3,400 U.S. forces that remain in Syria and Iraq; 24 U.S. personnel have been injured so far. In total, reports say there are currently about 35,000 U.S. troops throughout the region, though most are stationed at bases in the Gulf, far away from the fighting.
Got that, so the only reason to deploy not one but four (?) of these strike groups is to ‘deter’ Hezbollah and Iran from joining the fight. No action boys, just park yourself off the shore and do nothing. Catch some sun, enjoy the warm weather. Easy.
Let’s remind ourselves who Israel is fighting; Hamas, a force with no air power and looks like this:
Hezbollah also have no airforce.
So we can scratch those two off the excuse list - you don’t need carrier strike groups to deter an urban militia, hell there’s not much a fighter jet could do to engage them anyway other than blow up entire city blocks which Israel is proving entirely capable of doing with its own airforce.
So could it be the US is preparing for something a little bit bigger than ‘acting as a deterrent’ against the only force in the region it would need the above overinflated forces for - Iran?
Now Iran does have a military that you’ll need strike forces to launch an attack against:
Only one paragraph further on in the excerpt above it talks about US accusations that ‘Iranian-backed militia’ have been attacking US forces. The seeds are being planted.
How long before we see reports that the US fleet has been attacked by Iran, Gulf of Tonkin style?
United States forces were carrying out covert operations close to North Vietnamese territorial waters and North Vietnamese forces responded. The United States government falsely claimed that a second incident occurred on August 4, 1964, between North Vietnamese and United States ships in the waters of the Gulf of Tonkin. Originally, US military claims blamed North Vietnam for the confrontation and the ostensible, but in fact imaginary, incident on August 4. Later investigation revealed that the second attack never happened; the official American claim is that it was based mostly on erroneously interpreted communications intercepts. The National Security Agency, a subsidiary of the US Defense Department, deliberately skewed intelligence to create the impression that an attack had been carried out.
“Oh calm down, you’re just a crazy conspiracy theorist.”
Ok dude.
The big problem the time is the US is broke (more so than previously). More war will lead to incredible money printing, with prices of everything across the economy rocketing higher, not to mention shortages when supply lines are choked by war.
The second problem is, since the invention of hypersonic missiles - a technology the US has continued failing to replicate - warfare has permanently changed.
What necons in the US refuse to believe, is that the massive aircraft carrier above that today would cost around USD 15 billion to build, can now be taken out by just one of the USD 10 million missiles attached to this fighter jet:
Hell even if they manage to stop a few and you need to fire a salvo of ten missiles to hit the target, the asymmetry is astounding. Warfare has advanced in leaps and bounds, but the US establishment mindset and stubbornness has not. They believe the US always can and will prevail, despite evidence to the contrary in Iraq, Syria etc.
Is the US still powerful and able to blow up a lot of shit in Iran? Absolutely, but it will result in the sinking of the two (four?) aircraft carrier groups in the region.
Once the US gets a black eye like that, it’s all over - they can’t be seen to lose face, so won’t back down. In turn, Russia and China will not stand idly by and watch Iran destroyed the way the West attempted to do with Syria and succeeded in doing with Libya, Iraq, Afghanistan, and countless other nations over the last century.
Will saner heads prevail and will diplomats on the ground be able to de-escalate tensions so the above scenario won’t occur? The added problem in all this, the US no longer knows how to engage in diplomacy. Shouting down the other side, refusing to listen to their concerns and insisting ‘it’s our way or else’ is not diplomacy, nor a way to ease tension.
So I hope for an easing in tensions, but in the meantime, I’m long energy, shipping and Bitcoin.
Platinum
Among other uses, platinum and platinum group metals (PGM) are used in jewellery and also as a precious metal for wealth storage. But its primary use is in the automotive sector, used in car exhausts for catalytic converters to reduce or eliminate the harmful emissions of Internal Combustion Engines (ICE).
Here’s an interesting table that crossed my desk this week:
A potential supply deficit and that’s assuming the basket case that is South Africa can continue production at current levels with it’s failing infrastructure and work force issues.
So what happens if the WEF fairy tale we’re told of everyone moving to electric vehicles (no requirement for catalytic converters) doesn’t go according to plan?