Sunday, February 14, 2016

Threat Board February 2016

Triple Threat by Mr. Grin
In Looking for the Channels from June of 2015, we were trying to get a feel for where this onrushing flood of negative social mood would carve out the channels and build up the stories we'll tell ourselves about this unsettling era in which we live and hope to traverse.

Let's zero in on Syria, as it seems to have eclipsed the struggle in Ukraine as the hot spot most likely to generate an historical accident on the scale of the assassination of Archduke Ferdinand in Sarajevo. And while from a socionomic point of view the potential for a World War in the immediate future looks unlikely, things can spiral out of control quickly in these eras. Alan Hall covers this in a short video and link to an article here.

Replaying the Thirty Years War in Syria

As events in the Middle East barrel down the well-worn path to even more death and destruction, I continue to ask you to read news articles and consume news videos with a jaundiced eye and with your socionomics hat on.

At this point, any "real" reason behind the conflict in Syria has long be overtaken by events. Whether you subscribe to the Arab Spring in Syria thesis, or the attribute it to Sunni efforts to oust Assad and disrupt the "Shia Crescent", or that it was all about building a pipeline from Qatar to Europe - Russia's decision to prop up the Assad government in late 2015 has shifted the calculus significantly.

Today we find a situation where:

  • Russia is bombing "moderate" rebels in western Syria, shaping the events on the ground to restore the Assad government's primacy in the west of the country and secure the major urban areas (of which Aleppo is the key prize).
  • US policy is in flux, torn between the hawkishness of the McCain camp and a more "realist" point of view on whether further intervention will produce the results they hope for.
  • Turkey has become fixated on the growing strength of Kurdish elements in the Syira debacle, turning its guns on the Kurdish YPG - a group that has actively fought Daesh and has been strongly supported by the US coalition.
  • The Turkey-Russia dynamic continues to be tense. Russia has not only kept up significant air operations in Syria, but it has moved advanced anti-aircraft weapons in to Latakia and reportedly Russian Spetsnaz forces are active in Syria.
  • Saudi Arabia, already in a fight against Iranian proxies in Yemen and subject to attacks by Daesh internally, is readying itself to send forces to Turkey and engage the fight in Syria.
  • Jordan sits on the sidelines at the moment, but one can assume Daesh has its sights on the kingdom.
  • Israel will do what it wants, against who it wants. They are absolutely the joker in the deck. Should Jordan go up in flames, always remember there is a strong thesis in parts of the country that the Palestinian population should be forcibly relocated across the Jordan River. Should the region implode further, look for this "desperate times call for desperate measures" thesis to take hold in socionomically fertile soil.
And those are just a few snapshots of a region of vast importance to energy flows and geopolitics.

And as we strongly urged in our 2016 Socionomics Trendspotting article, you should be checking the Saudi stock market index at least weekly. Here's the current chart, five-year view for context:
SASEIDX Five Year View, Bloomberg, February 14, 2016
Looks like a steaming bowl of not-good, and also looks like a chart of a country set to double-down on sending troops out to fight their designated enemies.

The Keynesian Endgame Looks to go Full Retard

Pardon the indelicate, but accurate, phrase, but as Central Banks around the world go full retard with the implementation of negative interest rates and as they huff and puff and talk themselves into attempting to ban cash, what might that mean for those of us out in the real world?

The short answer is, I have no clue. NIRP policies would seem to be a bullet to the head to pension funds, but perhaps in the short term we could see the market head higher as money flees bonds. Or, perhaps NIRP might actually create a stronger incentive to save at first, until the Central Bankers really began to drop the hammer on relatively small deposits in terms of fees and negative-interest charges. If you are relying on a pension, or plan to in a decade or so, well, here is your pro tip of the day - it looks doubtful you'll see much of it when you need it.

As for banning cash, I again have no real clue how that might play out in the real world. The first shot across the bow will be banning large denomination notes, such as the 500 euro note, the 50 pound note and the 100 dollar bill. The same tired arguments used to ban private holding of gold back in the mid-20th century will be trotted out - only criminals need to hold these notes and we must fight those bad, bad people. 

After that, some societies might actually pull it off. Norway has talked seriously about it. And in a small, ethnically homogeneous society where the elites can get most everyone on board, it might work - until hackers step in and show just how vulnerable such systems can be. In a society such as the US could it happen? Maybe the $100 bill could get pole-axed, but past that, it will be much like efforts by the elites on the coasts to ban or strongly restrict firearms - they seem to have no real clue just how much resistance they would meet out in Flyover Country. But that may not stop them from trying.


We will leave you with this admonition - plan, but don't fear. Have a solid emergency plan in place. Think about how you would participate in a world where cash has been banned. What sort of barter arrangements would you be able to participate in? What skills can you offer? 

If war breaks out, what would that really mean for you? If a world war breaks out, what then? If nothing else, revisit our Nuclear Strike of the Month for August 2015 and apply that analysis to your region as applicable.

Keep your eyes open, believe little of the spin provided to you as fact, and enjoy the moment. We are still in an era of unprecedented peace and prosperity. Enjoy, prepare, then be part of the solution to a better world when the whole thing goes sideways.

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