Some Thoughts on Sleeping Russian Beauty

Yesterday, our institute held a seminar for Japanese retail investors in Tokyo. We really appreciate about 200 people got together and carefully listened to the lecture I gave on the current and future global macro. Furthermore, we’re pleased to welcome many of them joined the institute’s membership.

As I told during the seminar, the moment of the truth will come between 7/8th and 23/24th October due to dramatic changes in the Middle East. The trigger will be the on-going appeasement policy of the US vis‐à‐vis the Iranian. The USA aims at letting the Israelis to be jealous of it. Maybe, the word “jealousy” could be wrong. The Israelis (and the Saudis!) fear they would loose preferential treatment they have enjoyed since 1970’s in the ME. Now that the Iranian will come in, they will be have to go out. That’s an huge, existential problem for the people of the lost homeland and its only solution would be to hinder the Iranian from coming back to the international arena. The show set for such a decisive scene will be the forthcoming big conference on the Syrian peace allegedly to be held no October 23/24 in Geneva. The Israelis must do something before that, so that such a historical come-back won’t be realized. A simple covert action can’t be sufficient to prevent such a movement pushed by the USG from going forward. Only series of “preemptive attack” the Israeli PM Netanyahu mentioned recently are needed. The Saudis will surely join these military actions from the fear of possible uprising by the Shi’ites inside obviously linked to the Iranian Government. “The Great Middle East War” will break out.

What will occur then in the world? How should we prepare for that?? Some thoughts I may now show you are as follows:

-Even though the Israelis will trigger off all the things, they will be saved thanks to the help of the Pope Francis. They will be evacuated to Argentina, a newly promised land for the people of the lost homeland. Mme. President Kirchner is forced to decide either to accept the disastrous default of her government’s bonds or to let the Israelis in. The Pope Francis stands between them as a mediator or “internuncio of the world’s peace”.

-Rather the Saudis will be the victims. As soon as the war will break out, every possible thing will simultaneously happen to polarize the kingdom. Nobody knows whether the map of “the New Middle East “ or its New Yorker version will be realized. Anyway, the most important thing is the Kingdom will be dead and totally destroyed. That will evoke lots of changes in the whole region of the ME.

-The sudden fall of the Saudi Kingdom will lead to shortage of its oil export. In addition, the Iranian will close the straight of the Hormuz as all of us expect. The time of the “Oil Shock 3.0” will cause the “double dip” of the world economy.

-Who will be then the winner of the game? My answer is Russia. While the Russians will mediate between all the parties involved instead of the USG, which won’t have enough money and power to do so any more, the Russian will take advantage of the dramatic fall of oil export from the ME and declare they will enhance their oil supply for the sake of the stability of the world economy. The money will rush into the Russian border, at least in a short term.

-How about JPY? Oh, yes, the Japanese will surely have difficulties to combat the sudden appreciation of JPY. Of course, the Japanese stock market will sharply fall and everyone will say, “This is the end of the ABENOMICS.” I suppose Mr. Junichiro Koizumi, former Prime Minister, will make use of such a decisive momentum to reshape the Japanese political landscape by saying, “Why don’t we demolish the old-fashioned Liberal Democrats?”

-But don’t worry, your money will be saved if you have assets by Japanese Yen. The drastic appreciation of JPY means every investor will hold huge amount of JPY assets and will be forced someday in the near future to invest them in Japan, in which JPY is used and circulated. That will then trigger of the historical, Japanese bubble towards 2014, even though the Japanese inhabitants aren’t obviously aware of that.

Again, we will face the moment of the truth in mid-November. Meanwhile, why don’t we listen to the playing Russian beauties?

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