Negotiations dead, Final showdown building.

 NEW SANCTIONS PUSH, US ISOLATION 

US IRAN PREPARE FOR FINAL SHOWDOWN

 

Those on the ground in Russia covering the elections report that the sentiment is clear, no new negotiations are coming and they expect major escalation to end this conflict. While Ukraine is hitting targets in Russia via drone warfare, Russia is systematically degrading Ukraine's ability to sustain this conflict. While they have not yet taken out the road and railway bridges over the Dneiper river, which would cut off eastern Ukraine from their supplies, they are taking down bridges and rails in other places.  It is becoming increasingly difficult to supply food, fuel and other essentials. It is clear that Russia expects to eventually take Odessa and Karkiv. Russia has made it clear that any NATO troops in Ukraine will be war with NATO.

 

Iran is expecting a massive Israeli US attack before the end of the year.  There is reason to believe this will be a massive air campaign and also some sort of ground operation. The problem is that the US bases in the gulf are unusable and that leaves operating out of Israel and Jordan and possibly Saudi Arabia. It seems this ongoing Ansar Allah conflict in Yemen may be preparing for that. Bombers need to operate from a ground base. Both Israel and the US have been refraining from using their weapons, likely in an effort to stockpile limited munitions. Trump would like to wait until after the elections, but Iran may feel all out war against Israel and the US and its fleet may be in their interest to engage before then.

 

Yesterday Congress passed 100% sanctions on any country doing business with Russia. This is primarily targeting China and India. Trump has not signed or enforce this and it is unlikely he will. China has stated that it will not enforce any sanctions on anyone and India says that if enforced it will be the end of US/India relations. At the BRICS meeting last week members agreed that they will not enforce unilateral non UN sanctions. I expect US retailers will be informing the white house of the risks of actually enforcing these sanctions.

 

It does look like the rest of 2026 will have lots of pivotal and dramatic happenings. Whether there will be any final resolutions of anything is doubtful, but we can expect increased economic, military and political chaos. 

 

 

 

 

Will the gulf states survive the current crisis?

 FRAGILE FOUNDATIONS UNDER STRESS

THE OTHER CLOCK THAT IS TICKING

 

Currently we see that the lowly Houthis or Ansar Allah, inflicting serious losses on Saudi Arabia. Saudi Arabia for some unknown reason escalated the simmering disputes and now things have escalated to a dangerous level. This is putting Saudi Arabia in a new internal political and economic crisis.

 

The reality is all the gulf countries are in trouble, Bahrain, Kuwait, Oman, Qatar, UAE and Saudi Arabia have a combined population of 62 million. The politics is family dynasties in all these countries with of the 62 million, 32 million are foreign workers. This leaves around 30 million and much of this made up of royal family members and a host of diverse tribes.   The glue holding much of this together is money riches earned from oil wealth, something that has now been minimal for near 7 months. This is creating the biggest stress on the internal politics of these nations in the modern era.

 

While, so far, they have not suffered significant damage to their infrastructure as Iranian attacks have focused on US bases. This may eliminate the ability of the US to insure their internal stability.  Saudi Arabia is already suffering infrastructure damage from the ongoing Houthi action, effectively eliminating their oil revenue. US resources are stretched with its own crisis with Iran and the bleeding of resources in Ukraine.

 

Under stress, many of the old border disputes  arising from the lines drawn by the British Empire may arise not only in the gulf but into a far wider region. 

 

The Gulf countries, and many other countries are being forces to liquidate assets to keep their internal stability. The most liquid asset is Gold and then US treasuries. We have seen the US treasury attempt to intervene in the gulf and in Japan and South Korea but it may be  impossible to stop the bleeding. A bleeding that may prove to be fatal if not stopped quickly.

 

Then one must speculate is the dissolution of the gulf countries another intended consequence if one should desire to take control of the worlds oil resources. 

 

 

 

Trump's Audacity of Mendacity

DAILY  TALES WORTHY OF THE GRUNDSAU LODGE

TALL TALES CONTEST EVERY DAY

 

Lately I am reminded of memories of the Grundsau lodge and their tall tales contests. While never participating, as I was neither Pennsylvania dutch or part of the local farming community, I heard stories about the contest. In our area the usual winner was a large gentlemen whose profession was hauling cattle and owned a tavern. He had a reputation of being able to tell the most outrageous and fantastic stories with an eloquence that was fantastic in itself. He was able to tell tales that resulted in gut wrenching laughter and provided entertainment that was never matched. It was all in good fun and helped lighten the mood and pass time in the winter months.

 

What reminded me of this was the daily onslaught of tall tales I hear, while some may find them funny and entertaining, it is serious business now and just embarrassing and dangerous.  

 

I do not believe the Iranians are calling and begging daily for a deal. In fact, I suspect that there has been little interaction at all. As I recall, there was a media event signing of an agreement in of all place "Versailles " 

 

I can't help but understand, that rather than fanatical psychopaths, the Iranians seem to be more measured, more methodical and have a real plan, something I now suspect is lacking here at home. 

 

I doubt the US has a large supply of expensive sophisticated precision weapons. 

 

I don't believe the risk to the general well being of the population is worth this present standoff, that is now entering an entirely unprecedented dangerous territory.

 

I no longer believe either Zelensky or Bibi will do as they are told. In fact, it is more the other way around.

 

Stop, it is enough, perception does become reality in political campaigns but not war. Reality will win out and it results in death destruction and general suffering.

 

I supported the idea of an end to foreign interventions and immoral  rationalizations of our foreign policy. What happened to the good instincts that seem to have been replaced by the same old unrestrained path to decline and destruction. 

 

It may be the last chance for real down to earth Oval office address, conveying the real situation, the truth, as ugly as it may be. I suspect that the American people will have more understanding that people in Washington give them credit. It may be the last chance to save any credibility with anyone.

 

 

 

 

 

 

Decision time for Trump?

 CAN TRUMP WAIT UNTIL AFTER THE MIDTERMS?

MAKE PEACE OR GROUND WAR

 

It seems a pivotal moment in the Iran war is going to me made sooner rather than later. With fuel prices now escalating by the day and false narratives no longer being effective, it is clear that doing nothing is not an option, a  critical decision will need to me made possibly in days.

 

The options are a fulfillment of the Memorandum of Understanding,  an air escalation to destroy Iranian infrastructure, that will inevitably lead to a response by Iran that will destroy oil infrastructure in the gulf for many months, if not years.  Or a ground operation to take control of the strait of Hormuz.

 

There are indications that some sort of ground operation is being considered. Recent videos have shown a miles long train in San Diego loaded with over 125 military vehicles and containers. These vehicles appeared to be humvees and trucks and fuel trucks all with trailers and many containers along with generators etc. It looked like a load of auxiliary equipment for possibly a forward base. 

 

It is also being reported that South Korea had agreed to furnish some sort of military force. 

 

The problem with a ground action is where can they assemble a force that will not come under attack.  The bases in the gulf have been made inoperable and most US forces have moved to Jordan and Israel leaving a thousand mile trek across Iraq for a ground force, likely a suicide mission.

 

The other option is Saudi Arabia and one has to wonder if the Saudi action against the Houthis was not a preparation for just that.  It may also be that the Houthis understood the same and is that still a viable option?

 

The gulf countries are talking with Iran and may be considering some sort of understanding leading to an agreement without the US.  

 

An objective calculation leaves a return to the MOU, the problem is with Israel being the road block to any settlement with Iran, short of destruction. Israel may have to decide to make a decision of its own.

 

Trump will need to make a decision soon as doing nothing is going to bring down the world economy, as will the wrong decision. The MOU is the only least bad option left.

 

 

 

 

 

Another Oil shoe drops in Yemen.

 HOUTHIS TAKE OVER ALL OF WESTERN YEMEN

SAUDI PIPELINE TO RED SEA CLOSED 

 

The tit for tat hostilities between the Houthis and Saudi Arabia has now erupted into something else all together. The Houthis have quickly taken over all of the western part of Yemen and with it the western shore of the Red sea, including the  islands in the sea and the Bab El Mandeb Strait. The Houthis were able to interfere with shipping in the strait before, when they were near 100 miles from the strait but now they are in control of this strategic waterway.

 

At the same time the Iraqi militia has damaged the Saudi pipeline to the Red sea and it is now inoperable, cutting off the oil that has been bypassing the strait of Hormuz. It is reported that a major pumping station  has been destroyed that will take it off line for some time.

 

The Houthis were able to rout the Yemen and Saudi defenders of 3 major  bases and capture all the US equipment and supplies. Some fear they may actually target, Aden, the capital of Yemen, and then control the majority of the country.

 

This action essentially cuts off most of the oil being exported form the Persian gulf. This will have a dramatic effect on the cost of oil probably starting today. 

 

While Saudi Arabia has been bombing the Houthis, it has been ineffective and pleas for assistance from the US has not resulted in action.  The US may be reluctant to engage the Houthis as last years 30 day war resulted in a huge loss of drones and munitions without any result. All resources may be needed for future action against Iran.

 

This action is a major step in the ongoing oil and economic war that is underway.  It may now require some kind of immediate action rather than a waiting game until after the November elections.

 

 

 

Democrats, do I hear $6000.

 "VOTING YOUR POCKET BOOK" REACHES NEW LEVEL

DO YOU PREFER NEW BENEFITS OR CASH 

 

Donald Trump has offered $5000 to each adult if the Republicans win in November.  While buying votes has been the mainstay of "Democratic Socialism" for many decades, this is a first. While many may be outraged, I suspect some are considering a deal too good to refuse. For a household that is $10,000, a windfall for everyone, not just a few select groups.

 

While Trump says every adult American will get the check, watch out, it may disqualify those who  are not here legally and maybe only if you vote Republican. Trump has a way of moving the target, so it will require a lot of clarification.

 

I believe the Democrats are talking about 2 or 3 Trillion in new spending, so this is calculated a $1.3 Trillion. Cash in hand is often better than some thing that you may not live long enough to obtain, or if you qualify at all. 

 

Now, I also suspect that the first offer is never the best offer and if we can get a little competition going here we may be astounded at what we may reap in the end. After all, it is not Trump's money or the Democrat's money.

 

Ok, Democrats how about $5500 to get this game going.

 

 

 

 

 

Beware the economic tipping point.

 ONCE THE RECKONING BEGINS, IT MAY BE BEYOND CONTROL

OIL, INFLATION, BOND YIELDS SPELL TROUBLE

 

Yesterday we saw bond yields rise to 4.86 % on the ten year and 5.31 on the 30 year, this indicates a reluctance of investors to continue to finance the US debt. 

 

Oil prices are again near $100 and gas was $4.59, diesel well over $6. Heating oil will further reduce the ability of some to keep up. The war in the Gulf is expanding and escalating and the reserve supplies near exhaustion.

 

We can expect inflation to soar, no matter the indications released by the government. 

 

The underlying real problem, as in every economic decline, is massive overwhelming debt. Debt in government, particularly in the western world, corporate debt, private equity debt and household debt is at a level far higher than in 2008. The costs and inflation and proposed government spending and deficits will add to this mixture to create a very possible tipping point that once underway may be impossible to stop.

 

Bond yields are increasing because some believe the government cannot manage the debt and also because the gulf countries and others suffering from the oil crisis need to raise money by selling US debt.  One wonders how this can be reversed? The interest on the debt is going to skyrocket and financial shenanigans will not keep it under control.

 

Rising oil prices, especially diesel, will trigger possibly the biggest rise in inflation yet, especially in basic necessities. This will curtail current spending and inevitably lead to a domestic economic slowdown and possibly an inability to service domestic debt. A massive snowball effect that once started cannot be stopped until it is expended.

 

The US has had a policy of reversing every slowdown with massive injections of money into the system, 2008 almost became out of control but debt was never really liquidated. Can they actually find a way to inject massive amounts of cash into the system again, without exasperating every above problem?

 

Only a quick change of direct could possibly forestall this, and end to war and a resolve to control deficits. It looks like neither will happen. I suspect we are about to go for the ride of our lives.