Missiles Fly, Gold Jumps
- Bombs away: Gold reacts instantly
- The last time “Assad gassed his own people”… and why this time is different
- Awaiting Putin’s response “before the end of this month”
- The good, the bad and the Fed: The new job numbers and what they mean
- Japanese IT firm looks for “beer interns”
- Reader tweaks us (again) about the Trump Moneybomb: How will we reply?
For the last few years, it seemed as if no amount of “geopolitical tension” could move the price of gold.
But around 9:00 p.m. EDT last night, gold resumed its traditional role as a safe haven whenever the feces hit the fan blades, especially in the Middle East…
We’re certain there’s more where this came from — and very soon — for reasons we shall explore now…
Less than 100 days into his presidency, Donald Trump has fallen into a Deep State trap that Barack Obama managed to avoid for six years.
Not that Obama didn’t come perilously close. From the start of the Syrian civil war in 2011, aides like Hillary Clinton and Leon Panetta were gunning for regime change. “Assad must go!” was their mantra.
In the late summer of 2013, they nearly got their way — an episode worth revisiting, because it’s essential to understanding how we got to where we are this morning.
On Aug. 21, 2013, a sarin gas attack near the capital Damascus killed hundreds. The global elite immediately pinned the blame on the Assad regime. A year earlier, Obama had said if Assad were to use chemical weapons, that would cross a “red line for us.”
But war never came that time. What happened?
For one thing, the indications that Assad did it were shaky. The intrepid reporter Seymour Hersh, of My Lai and Abu Ghraib fame, uncovered compelling evidence that traced the sarin back to Turkish intelligence, which acted in concert with jihadis linked to al-Qaida. Both Turkey and al-Qaida stood to gain if Western powers toppled Assad.
But the truth mattered little to the global elites’ narrative. On Aug. 30, nine days after the attack, Secretary of State John Kerry declared, no fewer than 35 times, that “we know” the Assad regime was responsible.
It seemed certain that U.S. bombing, with no approval from Congress, would begin within hours… a notion that offended a certain real estate executive with a busy Twitter account:
Then a funny thing happened the next day, Aug. 31. Obama had had a long talk with Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff. Seems the military was suspicious about the quality of the intel… and leery about the endgame of Syrian regime change.
Obama strode before the cameras and said, “The chairman has indicated to me that our capacity to execute this mission is not time-sensitive: It will be effective tomorrow, next week or one month from now.”
Suddenly the urgency had fizzled. A few days later, Russian President Vladimir Putin pulled Obama’s chestnuts even further away from the flame — brokering a deal under which Assad surrendered all of the Syrian government’s chemical weapons.
Neoconservatives and liberal internationalists, both itching to take out Assad, had been foiled.
Fast-forward 3½ years. Same chemical attack scenario, same shaky intelligence, but a new president and a new outcome.
And Trump has once again scrambled political allegiances. He’s doing exactly what Deep State-approved politicians like Hillary Clinton and John McCain were imploring him to do. Meanwhile, some of his hard-core supporters are left slack-jawed…
Bonus points for even more irony: No congressional authorization.
Incredibly, the airstrikes come at a moment when ISIS — who up till now Trump said was the only adversary in that part of the world worth fighting — is on its last legs. Take out Assad and ISIS could get a new lease on life.
And regime change is the goal: On Wednesday, Secretary of State Rex Tillerson said Assad has “no role” in Syria’s future.
Now that the missiles are flying, the question is what comes next. What comes after Assad?
It’s a question for which Obama felt he never got a satisfactory answer… and probably explains his reluctance for regime change all those years. There are no budding George Washingtons over there — certainly none capable of fighting.
Or as Obama put it in 2014, “This idea that we could provide some light arms or even more sophisticated arms to what was essentially an opposition made up of former doctors, farmers, pharmacists and so forth… that was never in the cards.”
So Obama did his best to placate the Deep State and buy time till he could hand off the mess to the next president. He let the Pentagon arm up Syria’s ethnic Kurds. He let the CIA arm up some head-chopping jihadis, provided they’d sworn off allegiance to ISIS. (On occasion, the Pentagon’s Kurds and the CIA’s jihadis would end up fighting each other.) In May 2015, he let the Pentagon pass up a golden opportunity to bomb ISIS forces as they advanced on the city of Palmyra… because letting Palmyra fall to ISIS was a major blow for Assad’s army.
But that was before Russia stepped into the Syrian civil war militarily in September 2015… which makes the stakes far higher now.
Trump has now crossed one of Russia’s own “red lines” in the estimation of Gilbert Doctorow. Mr. Doctorow belongs to the American Committee for East-West Accord — a group of scholars and retired diplomats, formed in 2015, that’s trying its best to head off a new cold war between the United States and Russia. Or, God forbid, a hot one.
“Putin has a cool mind,” Doctorow writes, “and we may anticipate that the Russian response will come at a time of his choosing and in a manner that is appropriate to the seriousness of the U.S. offense. Look for this before the end of the month.”
It’s a grim prospect. It will, however, be good for gold.
[Ed. note: Jim Rickards sees another gold catalyst coming at the end of this month — and it has nothing to do with the drums of war. Check out this short video right here.]
While gold and oil popped in response to the bombing, stocks are treading water as the week winds down.
At last check the major U.S. indexes were all down, but barely — the Dow at 20,640. But Raytheon (RTN), the maker of the Tomahawk cruise missile, is up 1.6%. Perhaps traders were spellbound watching MSNBC’s coverage last night as Brian Williams gushed: “I am tempted to quote the great Leonard Cohen: ‘I am guided by the beauty of our weapons.’” (Yes, that really happened.)
Gold is holding steady at $1,264, its best showing all year. Treasuries are also benefiting from the safety trade — prices up, yields down. The 10-year yield has slipped to 2.32% — threatening a support level that’s held since last Thanksgiving.
Crude has rallied nearly 1%, now past the $52 level.
The Labor Department delivered a stinker of a jobs report this morning — not that it’ll deter the Federal Reserve from raising interest rates again in June.
The wonks at the Bureau of Labor Statistics could conjure only 98,000 new jobs for the month of March. That’s the weakest showing in 10 months — and way below the 150,000 needed just to keep up with population growth.
But as we often caution, one month does not a trend make. And 98,000 is comfortably above the 75,000 danger zone that Jim Rickards says would deter the Fed from its rate-increase plans.
The unemployment rate slipped to 4.5%, the lowest since mid-2007.
And check this out: Even the real-world unemployment rate from Shadow Government Statistics just hit a milestone — the lowest in five years. Of course, it’s still 22.5%.
As a reminder, that figure includes the unemployed in the official figures… plus all the part-timers who want a full-time gig… plus all the people who’ve given up looking for work, no matter how long ago.
In our quest to find a bit of levity amid the bleak news as the weekend approaches… the best we can come up with today is the “beer intern.”
No, it’s not an internship opportunity at a brewery. Rather it’s at a Japanese IT firm called Technomobile. And near as we can tell, it’s not really an internship in the American sense — but rather a two-day job tryout.
According to an account at RocketNews24 — and we’re taking their word at face value, because we can’t read Japanese — Technomobile is looking for prospects to tackle web development assignments coming up the weekend of April 22.
Beer will be available; according to the company the idea is to “help clear away tension by having a beer, and let interns experience the working atmosphere at Technomobile and see if they’re compatible with it.”
Prospects who can handle the work might be offered full-time jobs as programmers, infrastructure engineers or system engineers.
No word whether the company provides beer on a regular basis…
“So the rumor is Yellen is the Medley leaker,” says another reader email reacting to Wednesday’s episode of The 5. “Oh, my.
“Sessions should impanel a grand jury, but he won’t.”
The 5: Probably not.
“So I wrote in a week ago or so,” says a reader who wrote in a week ago or so, “and asked about what’s going on with the ‘Trump Tax Cut Money Bomb’ before April 15.
“There are currently nine days left (possibly less, depending on if this goes to print or not), and I’ve been trying to follow what’s happening as much as I can, and so far everyone seems to think that tax reform won’t even happen till August.
“However, Bloomberg had a guest in today and they were talking about temporary ‘tax relief,’ and it got me thinking about the Bush administration’s tax repatriation holiday. How long did they work on putting together that holiday (was Congress involved then, the Senate, etc.) or did the president/is the president able to sign an executive order to allow for this for one day?
“This is the only scenario I can think of that Trump’s got something in the barrel ready to go and will fire it off within the next week — mind you, I don’t know everything, so perhaps I have missed something.
“What sold me on this besides the potential gains was the fact that an editor’s job/reputation/money is on the line with this one. If it doesn’t go through, then I’ll use the free reports but will not renew.
“As always, keep up the good work — love The 5.”
The 5: That might be the most subtle “I dare you to print this” we’ve seen in our 10-year history. Well played, sir.
For the record, the tax repatriation holiday of the mid-2000s did require an act of Congress.
And now? “If the health care reform failure is any indication, tax reform or even just a tax holiday won’t come easy,” Louis Basenese wrote this morning at Wall Street Daily. “But it’ll come.
“And once it does, it promises to trigger one of the largest one-time wealth transfers in the history of capitalism.”
We’ll leave it at there for now… and go into more detail next week.
Have a good weekend,
The 5 Min. Forecast
P.S. For years — no, decades — Warren Buffett has slammed gold because it has no yield. There’s no income stream to be had.
Only there is an income stream to be had from gold — if you apply the right strategy. Some of our readers used it to pocket an instant $300 this week.
And if you want to try the system for yourself, there might even be a gold coin in it for you. Seriously… Check out this offer before it closes in three more days.
P.P.S. Please check back here Monday for an important announcement. If you’ve had it with “fake news” — whatever flavor it comes in — you won’t want to miss it.