ECONOMIC UPDATE: Middle East Meltdown Can Lead to Global Meltdown
We maintain our forecast for a major market correction this month
In one of our Top Trends for 2023, we warned of a Middle East Meltdown. Since that time, as we have reported extensively and now it is right in front of everyone’s eyes, the Middle East is melting down.
What does this have to do with the economy and the significance of our ECONOMIC UPDATE?
Everything!
If there are no serious movements for peace and the wars keep escalating, not only will the Middle East meltdown, but so, too, will much of the world. Indeed, when you add the Ukraine War, plus the decline of economies across the world as evidenced by the flood of migrants escaping nations where people lack basic living standards, and are being destroyed by government corruption, crime, and violence… the “bottom line” is a bit more than just corporate profits, treasury yields or interest rates.
As Gerald Celente warned when he had forecast the Middle East Meltdown, ‘When all else fails, they take you to war.’ As economies decline, we forecast Washington will ramp up its proxy War with Iran and do all it can to support Israeli actions against Tehran. With the current Israeli government in charge, that has been termed “Far Right” by the mainstream media, we forecast that military conflict will erupt between the U.S./Israel vs. Iran.
When this occurs, oil prices will hit new highs, inflation will sharply rise, economies will dive into depression… and WWIII will intensify and the Middle East Meltdown will swell into a Global Meltdown.
Avoiding our warning, with the United States sending an aircraft carrier strike group to the shores of Israel along with munitions to fight Hamas and Iran-backed Hezbollah, America’s new Joint Chiefs of Staff, General Charles Q. Brown, warned Iran “Not to get involved.”
Yesterday, Israel fired rockets into Lebanon killing Hezbollah soldiers and Hezbollah fired back with rocket attacks into Israel.
As a result, the Middle East Meltdown got hotter as Iraqi and Yemeni leaders said they would join the fight against Israel and team up with Iran if the U.S. directly intervenes with Israel in its fight against Hezbollah and Hamas.
Hadi Al-Amiri, leader of the Shi’ite Badr Organization in Iraq which is backed by Iran, said yesterday, “If they intervene, we would intervene…If the Americans intervened openly in this conflict…, we will consider all American targets legitimate… and we will not hesitate to target it.”
Numbers Game
Meanwhile, as we have been warning, the global economy is slowing down. And it is clearly in the numbers.
For months we have been reporting on the decline of global shipping of products and had forecast that the shipping costs which rocketed during the COVID war would crash.
Today, The Wall Street Journal reports that “Daily market prices to move cargo from Asia to the U.S. and Europe in September were down as much as 90 percent from early 2022, a bad sign for ship operators since voyages are often unprofitable at current rates.”
Not only a bad sign for “ship operators,” it’s a bad sign of the global economy.
Again, as we have forecast, there would be a summer surge of consumer spending in the Northern Hemisphere during the summer months in the service and hospitality sectors as people vacation but there would be continued weakness in manufacturing. which reflects the hard products sector.
And, by the numbers, those are the facts. Take a look at the “big” news last week of the higher-than-expected job report that boosted equities. Of the 336,000 jobs created in September, according to the U.S. Labor Department, nearly 100,000 were in the leisure and hospitality sector.
The next highest number was the 76,000 government jobs in a sector that just takes money from taxpayers and, of course, adds nothing to productivity. Other jobs that have no connection to true economic growth were the 41,000 added in health care and 25,000 in social assistance.
On the “production” side of “business,” just 17,000 and 11,000 were added in manufacturing and construction, respectively.
Meanwhile, as more low-paying jobs are added to the economy, America’s debt crisis continues to accelerate with the U.S. national debt spiking above $33.5 trillion last week. But this was downplayed by the mainstream media that just keeps pumping up the job numbers and Wall Street optimism.
TREND FORECAST: We maintain our forecast for a major market correction this month. And as for the equities moving higher as the Middle East Meltdown accelerates, there is a gang called the Plunge Protection Team (PPT) that artificially pumps up equities as they are plunging.
Considering what is going on in the Middle East and the peril of rising energy prices should war break out with Iran, plus the weak economic data that we detail in this are previous Trends Journals and the ongoing Ukraine War… we wonder if the PPT has already artificially kept the equities pumped higher.
If we go to war, our national debt will mushroom to 50 trillion or more.