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Source: Operation Disclosure Official | By David Lifschultz, Contributing Writer
Submitted on August 6, 2024
DISORDER IN CURRENCY MARKETS SPARKED CRASH
Compliments of The Lifschultz Organization, Founded in 1899
The Japanese raising of interest rates were a setup for the Monday crash. These actions, of course, were ordered by what we will call international finance. Japan’s central bank is not independent nor is the US central bank. These are myths of the twentieth century. It can be easily rectified if it is so desired. Great fortunes are now being made. The Rothschild principle is to buy when there is blood in the streets. It is quite interesting that this was engineered at the height of the Middle East crisis.
The triggers for the selloff are clear enough and have been well covered in the financial media. Friday’s disappointing US jobs report ignited fears of a US recession. The once-hot but overly leveraged and overhyped AI trade has gone sour, which has led to a bloodbath for tech stocks.
Largely responsible for the latter development is the breaking of the massive dollar-yen carry trade – where investors were borrowing cheaply in yen and investing in higher-yielding US assets. This can be thought of roughly as a big interest-rate arbitrage: Borrow at low rates and lend (invest) at higher rates. But when the Bank of Japan raised rates on July 31 and, perhaps even more importantly, signaled more hikes to come, a massive capitulation in these carry-trade positions ensued. This has reverberated through markets and led to a lot of margin calls. And since investors often have to sell other assets to meet margin calls, it creates even more selling pressure.
What we find most interesting about the Middle East crisis is that there is no talk about the shutting down by Iran of the Straits of Hormuz that would cause the greatest financial crash in the history of the world. This is covered in my letter to my friend Jamie Dimon in footnote one. Iran can bring down the entire world economy without firing a shot. Why is this not covered by the world press in the middle of this crisis?
Footnote one:
Mr. Jamie Dimon
Chief Executive Officer
J. P. Morgan Chase
Dear Jamie:
Here is a summary of the problem the international banking system faces if the BRICS, Arabian and Russian producers cut off the oil that Washington has not addressed in the calculations of the dangers that we face which are not entirely of a military nature in the Middle East.
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With best wishes.
David
David Lifschultz
THE LIFSCHULTZ ORGANIZATION
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