Source: Operation Disclosure Official | By David Lifschultz, Contributing Writer

Submitted on April 10, 2024

IRAN THREATENS TO SHUT THE STRAIT OF HORMUZ TO CRASH THE WORLD FINANCIAL SYSTEM

Compliments of The Lifschultz Organization, Founded in 1899

Listen to 17:40 to 18:00:

Here in the last 24 hours from the time of the show Iran has threatened to close the Straits of Hormuz. This would shut down 30% of the world oil supply. I spoke to the Goldman Sachs derivative expert sometime back who said the rise of the oil price would be ten fold or today that is to about $900.00 a Brent barrel and collapse the entire world financial system. I note that Goldman Sachs will not say that today as they do not want to create a panic. I cover this below in the letter to the CEO of J. P. Morgan Chase Jamie Dimon in footnote one written a month ago.

Col. Douglas Macgregor: Is WWIII Here?

In the next link we quote General Barry McCaffrey that the US military cannot keep the Straits of Homuz open if the Iranians shut it down. 30% of the world supply of oil passes each day through the Straits of Hormuz.

The Straits of Hormuz as a Trigger to World Depression

“The United States does not have the military power to keep the Straits of Hormuz open and its carrier task forces must flee if they are within range of Russian and Chinese anti-ship missiles lining the coast of Iran which are the most advanced in the world.” General Barry McCaffrey, former Assistant to the Chairman, Joint Chiefs of Staff (JCS); and Director of Strategic Plans and Policy, Joint Chiefs of Staff, in a conversation with David Lifschultz at lunch at the Harvard Club.”

The famous Dr. Doom, Henry Kaufman, agreed sometime back and said to me privately “all the banking systems around the world would have to be nationalized at once to avoid the complete obliteration of the payment system” but this would not avert the greatest economic collapse in history. I may add it would comparable to the collapse of the Baron Louis von Rothschild's Kreditanstalt in Vienna in 1931 that brought down the German banking system. That led to a systemic change of the German Government. 

A word to the wise is sufficient.

Footnote one:

Letter to Jamie Dimon:

Mr. Jamie Dimon
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.

With best wishes.

David

618 TRILLION NOTIONAL DERIVATIVE VALUATION

I was called upon to handle the 1987 emergency stock market crash and my point man at the Fed was Ted Truman. I just noticed an article that Ted Truman just wrote in the Financial Times so he is alive and kicking in his eighties. We just ordered the major firms to reverse their cash settlement rigs.  Ted understood everything in a minute. He was the George Smiley at the Fed of the John Le Carre novels. What had happened was the major Wall Street firms were then experimenting with a new vehicle called cash settlement which they would use to move the market up by placing their cash settlement positions above the market that settled for cash before they moved the market up and below when they would move the market down. It took less money to move the indexes than they received from the cash settlement derivatives and settled their profits in cash. The swings became too large and went out of control on the downward swing.

The self-correcting mechanism of buying back the security to cover the short was eliminated.

We came in to order the players to place their positions above the market and drive it upwards coordinated with the Federal Reserve System which worked. The atmosphere was painted in the background by executives proclaiming they were buying their own stocks because the valuations were so cheap. A detailed explanation as to what happened is given in a link below entitled “Straits of Hormuz” under the subtitle “Stochastic Control Theory”.

The Straits of Hormuz as a Trigger to World Depression

I was also involved in ending the other grand manipulation of 2008 which forced the issuance of 27 trillion dollars in Federal Reserve Credit as they hesitated to follow my advice when in 1987 there are hardly a ripple. I was preoccupied in another emergency situation for the United States in 2008 but wrote out the rescue plan but they delayed its implementation for two months requiring 27 trillion dollars of new Federal Reserve Credit based on the delay when I came back to implement the plan. This could just as easily been rescued as in 1987. In matters such as this he who hesitates is lost.  

When love once pleas admission to our hearts

(In spite of all the virtue we can boast)

The woman that deliberates is lost.

If we wish to understand what this meant from 1913-1914 to 2008 about two trillion of Federal Reserve Credit had been created. When I came in we had to create 27 trillion dollars to save the situation all of which was subsequently paid back. But we never showed any Federal Reserve Credit having been above two trillion dollars in 2008 as that would have created a world crisis which you can see for yourself in the third link. Here are the links. Link one covers the 27 trillion dollar cover on top of the two trillion base for their mistake, and link two the Federal Reserve balance sheet for 2008 showing no relative increase in credit which report was false. 

Click to access wp_698.pdf

Recent balance sheet trends

Today we face another potential crisis of even greater magnitude as outlined below as our ability to control it is limited as the players are outside of our jurisdiction as noted in the next two quotes.  The solution requires an understanding of the great danger the international financial system is in and requires decisive action to forestall an Arabian and Russian cutoff of potentially 25 to 50 percent of the world oil supply that would irretrievably implode the international financial system.

Here are warnings:

Iraqi Prime Minister Mohammed Shia al-Sudani warning supplies of Middle East oil to international markets could be put off because of the Israel-Gaza War.

The other reason this is very significant is because if a larger war were to kick off, oil would become the primary geostrategic global lightning rod. That’s because Iran can wreak havoc on global markets, transits via the known chokepoints of the Persian Gulf, etc. This is underscored by the fact that the Iranian minister called for a total oil embargo on Israel during this meeting:

Iranian Foreign Minister: We call on a total oil and gas embargo by the Islamic countries against nations that support Israel

618 TRILLION DOLLAR NOTIONAL DERIVATIVE VALUATION

by David K. Lifschultz

Compliments of The Lifschultz Organization, Founded in 1899

There is the potential of Iran shutting down of the Straits of Hormuz and Russia shutting down in Russia and their former provinces about half the world's oil supply if we include the Straits of Hormuz discussed below. This would bring down the entire world economy which is sitting on a notional value of derivatives of 618 trillion dollars. They say notional as most are not in the money but if the economy collapses with an oil cutoff Goldman Sachs oil derivative experts say that the exposure will rise in the notional derivatives who become in the money obliterating the world financial system. We compare this risk to the world GDP of 96.5 trillion dollars.  

Warren Buffett's concern with derivatives is not their present value but the value in a crisis which is why he moved to eliminate derivatives in the Swiss insurance company that he bought some years back though it would take 50 years. A 618 trillion dollar derivative crash could be our Baron Louis de Rothschild bank's collapse in Vienna which was the Creditanstalt that triggered the collapse of the German economy in 1931 raising the unemployment to 50% if we include the itinerant workers that made the National Socialist revolution successful. 50% unemployment seems to be the key for the west today. The US system in 1933 weathered the 25% unemployment.  We are saying if the US and European unemployment rises to 50% their governmental systems will similarly collapse as in Germany in 1933. This is entirely possible as we sit just above the abyss as the Middle East nears Armageddon.

Here are current comments by the Bank for International Settlements founded by Hjalmar Horace Greeley Schacht. Dr. Schacht, who was nicknamed the old wizard, stopped the German hyperinflation creating a gold backed mark though there was no gold behind it following the verses of Goethe in his Faust:

I am fed up with this endless how and when, if there is no money let us make it then.

He was also behind ironically enough the creation of the Bank for International Settlements where once a month the central bankers meet in these times to chart the world financial system.

Here are the BIS comments:

The sharp increases in gross market values contrasted with the stability seen in the notional value of outstanding derivatives. These sagged by only $14 trillion to $618 trillion at end-2022 after a small rebound the previous period, continuing the sawtooth pattern evident since at least 2016 (Graph 1.B).

$2 Quadrillion Debt Precariously Resting On $2 Trillion Gold | GoldBroker.com

https://www.bis.org/publ/otc_hy2305.htm#graph1

The main point that I am making is that this crisis over Palestine can pull down the entire world system through a crash in the derivative market. My piece is included below from 1987 crash when I supervised the rescue in the stock markets stemming from a rig of the cash settlement positions by the major Wall Street firms. The deep state ordered the major rigging firms to reverse their positions to drive the market up by placing their cash settlement positions above the market. As everyone knows it worked. I used this study as a point of reference since the same principles still apply today. The derivative exposure today is worse than then. I go into the Straits of Hormuz vulnerability there too that could bring down the 618 trillion dollar derivative structure and a detailed military analysis based on my lunch at the Harvard Club with General Barry McAffrey who was the Director of Strategic Plans and Policy, Joint Chiefs of Staff which is still applicable today as to whether the US can keep the Straits of Hormuz open which they cannot.  See detailed study in next link of the form of manipulation and the military analysis.

The Straits of Hormuz as a Trigger to World Depression

Here we discuss Russia potentially blocking 23 million barrels of oil from Russia and its former eastern provinces. If we combine this with Iran shutting the Straits of Hormuz, this represents a shut off of about half the world's oil supply. Oil is the ultimate weapon. The next link is a reprint of my July 2, 2019 speech before the Peace Conference at the Russian Duma where I predicted the Ukraine War after Russia refused my 700 billion dollar offer to redirect their oil and natural gas to China as the US would not tolerate Europe being dependent on Russia for which reason the US started the Ukraine War.

David Lifschultz
THE LIFSCHULTZ ORGANIZATION
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