CORONAVIRUS PANDEMIC: The End of the Exile is Here

The Coronavirus can no longer be ignored. It is a fast spreading and very deadly pandemic that has broken out of the 700 million person quarantine in China to have no begun spreading around the world. While the virus itself is scary enough most of the world’s pharmaceuticals are dependent on base ingredients found in China.

As the stock markets are beginning to crash as supply chains are being disrupted across the world.

So why is this connected to the end of the exile?

Exile is a corruption in the universal divine expression. In a sense, everything is in exile, because the universe lacks the divine harmony it was meant to have. This final stage of the exile comes when we are already back in our Land and yet we feel distanced from the Creator who has brought us back.

We have created vessels of sovereignty and yet have never used them in the Divine manner they are meant to be used. Instead the world and especially us have been redirected to a world of products, which are in of themselves the means of distraction that has pulled most of us towards the abyss of endless darkness.

Rebbe Nachman teaches that excess brings depression and as we know depression leads to exile. Where does this excess come from. It comes from the lust after money and as Rebbe Nachman teaches it is this uncontrollable desire for money which in today’s world really means products that has kept us as a world from reaching the final Redemption.

China is the engine of the West’s ability to mass produce endless products. Do we need them?

No. But we want them. We want and we want and we want.

Now the engine is being taken away and with it the last mirage of the Exile’s power over us. This will be painful. Many things will change, but the corona pandemic is the weapon that is knocking down the statue Daniel saw in his dream.

Tariffs, Tax Cuts and the FED – The US Strategy to Defeat China

China Petrodollar

The current trade war underscores China’s role as the number one geopolitical competitor to the U.S. The Trump administration, with the support of the Federal Reserve Bank (FED), has embarked on a plan to economically defeat China. Back in April, President Trump could not deny that in the midst of a trade war that ‘there won’t be a little pain’ but predicted the U.S. will ‘have a much stronger country when we are finished’. But, at a rally last week in Montana, President Trump confidently stated ‘The war was lost on trade many years ago… but now we’re gonna win it and because we have all the cards’. This was somewhat puzzling as China has been slowly devaluing the yuan over the past two months and has withheld implementing its biggest card (the sale of its U.S. treasury holdings).

Tariffs
Last year, the U.S. posted a $375.6 billion deficit in goods with China with a large segment due to computer and electronics imports. In addition, an often-overlooked cause of this trade deficit is the manner in which China acquired its technology. A recent internal investigation found Chinese theft of American intellectual property costing between $225 billion and $600 billion annually. American trade officials cited the Chinese government’s method for acquiring valuable trade secrets as motivation for additional tariffs. The NY Times outlined how China stole designs from Micron Technology to enable it to build a $5.7 billion microchip factory. President Trump has effectively stopped prior administration’s ‘sellout’ policy of allowing Chinese purchases of strategic U.S. assets. While the Chinese government currently owns approximately $1.18 trillion of U.S. treasuries, any chance to swap this debt to equity and effectively colonize the U.S. is virtually zero.

Tax Cuts
The Tax Cuts and Jobs Act of 2017 signed into law by President Trump last December has met optimistic expectations as revenues from federal income taxes were $76 billion higher in the first half of this year, compared with the first half of 2017. It may be why President Trump recently hinted at a second phase of tax cuts that would involve a further reduction in the U.S. corporate tax rate and more stimulus for the middle class. One of the consequences of this tax cut have been greater budget deficits. While undoubtedly a long-term concern, the short-term results have yielded great benefits.

The FED
Large budget deficits, a trade war with China are being coordinated with the policies of the Federal Reserve. As summarized by a report from Palisade Research:

  • The always-rapidly-growing U.S. deficit requires constant funding from foreigners. But with the Federal Reserve raising rates and unwinding their balance sheet through Quantitative Tightening (QT) – meaning they’re sucking money out of the banking system.
  • These two situations are creating the shortage abroad. The U.S. Treasury’s soaking up more dollars at a time when the Fed is sucking capital out of the economy.
  • Not to[o] mention the strengthening dollar and higher short-term yields are making it more difficult for foreigners to borrow in dollars. Especially at a time when Emerging Market’s are imploding.

Clearly, the Trump administration views China as a greater threat to US interests than the Federal Reserve Bank at this time. As a candidate, President Trump had harsh words for Wall Street such as ‘I know Wall Street. I know the people on Wall Street…. I’m not going to let Wall Street get away with murder. Wall Street has caused tremendous problems for us.’ and ‘I don’t care about the Wall Street guys… I’m not taking any of their money.’. He even tweeted about the importance of auditing the FED. To date, his administration has not matched his prior rhetoric as they openly sided with banks and waived punishment over prior crimes. While some would question any type of coordination with a central bank, the President obviously does not share any such rigid ideology to constrain him. Still, alliances can be transitory and there is nothing to preclude the Trump administration from shifting policy at a later date.

China’s Options
We learned a few weeks ago that in fact Russia sold off half of their U.S. treasury holdings in the month of April. This coincided with a spike of 35 basis points on 10-year treasury bond yields. Perhaps, this was a test in preparation for a larger future sell-off. A treasury sale by the Chinese government could potentially have a devastating impact on the U.S. economy. Note that seven out of nine previous yield curve inversions have preceded a recession.

While China has launched the heavily anticipated yuan oil futures contract, it has not been implemented by Saudi Arabia as of yet, thereby delaying the death of the petrodollar.

Conclusion
So, the immediate goal for the U.S. is to starve China of US dollars until it makes satisfactory concessions. There have been reports of China’s economy slowing. Historically, the initiation of trade wars is bad economic policy. However, this unconventional strategy may be the only way for the U.S. to economically defeat China.
If this plan does not work as well as the President thinks it will, it could spur more people to question the current system of debt and centralized banking. The answer to what replaces the current system is anyone’s guess.

Trump Puts the Screws on North Korea and Iran

News today that President Trump decided to pull out of his much vaunted summit with North Korean despot Kim Jong Un sent shockwaves around the world.  US markets dipped on the news.  Once Trump pulled out of the JCPOA (aka Iran nuclear agreement) this should not have been a surprise to anyone.  There has been overwhelming evidence for some time now that Iran and North Korea have been working together.  Iran was essentially helping North Korea financially with all the oil cash it began to receive in order for North Korea to test Iranian advances in their nuclear program.

Ultimately Trump understands that a true hardline approach is needed with these actors.  As China threatens Taiwan and Iran moves towards resuming nuclear development in order to reach full breakout, North Korea’s true intentions never matched their photo ops.



With Israel and Jordan increasingly cornered by Iran and Hezbollah, the Trump administration sees war on the horizon.  In a situation with war against Iran, having North Korea play games with diplomacy is downright dangerous.  The Trump administration has decided to take a hardline against North Korea and thus be ready for the coming hot war on the verge of breaking out.

In the months to come watch for Iran to make moves against Israel by way of Hezbollah, while it directly pushes against Saudi Arabia.  Kim Jong Un is now embarrassed. With China threathening Taiwan and Iran on the move, North Korea has nothing holding it back from going all in.




ISRAEL-INDIA ALLIANCE: Israeli Defense Contracts to India Continue to Soar

Despite India’s publicly cool reception over Washington’s embassy move to Jerusalem, the Modi government continues to build on its alliance with Israel by becoming the top Israeli arms and defense importer for 2017.

In general, there has been a very large increase of Israeli defense contracts to the Asia-Pacific region.  The Asia-Pacific region holds 58 percent of Israeli defense deals making it by far the largest region for Israeli defense contracts.  Israel’s top three customers, all from the region, include India, Vietnam, and Azerbaijan.

India leads with US$715 million worth of purchase, then Vietnam at US$142 million and Azerbaijan at US$137 million follows next.

According to the Jerusalem Post, Israel’s military exports rose by 41 percent in 2017, the third consecutive year of increased defense exports, which brought in nearly US$9.2 billion in contracts.



Last month, India ended its ban it had placed on Aerospace Industries and the Rafael Advanced Defence Systems Ltd both of Israel, which remained blacklisted since 2006 due to allegations of bribery.

India’s Central Bureau of Investigation (CBI) filed a lawsuit demanding the closure of the criminal investigation against the two companies, which led to US$2 billion deal between India and Israel’s Aerospace Industries. The lawsuit closure led to an agreement between the two nations under which the Israeli company would supply India with Barak 8 surface-to-air missiles.

India’s Concern About China and Pakistan Has Strengthened the Military Cooperation With Israel

Most India-Israel observers have always noted the warm cultural relations between the two ancient countries.  Yet, in today’s geopolitical upheavels along with Chinese economic expansion westward by way of the China-Pakistan Economic Corridor and Chinese military alliance with Pakistan, India’s military cooperation with Israel has taken a front seat to the growing trade and cultural ties.

With Pakistan arming itself with Chinese weapons and excacerbating tensions in Kashmir, India and Israel have now grown even closer.

While India may have skipped the US embassy dedication, it barely uttered a peep over Israel’s border defense against Hamas terrorists who posed as civilians.  Perhaps this is because, India too has begn to face a militant Pakistan prepared to utilize similar tactics against the only Hindu majority country in the world.




[Premium] Trump’s Tariff’s Will Force Israel to Choose Between India and China

With all the flack President Trump has received on his steel tariff’s from the MSM, most observers are missing the point of the decision. Trump understands that China and the USA are already engaged in economic warfare, with China winning.  The tariffs are designed to balance out China’s trade policy.

More important than the effects of the tariffs, the signal from the Trump administration is that China is essentially American enemy number one.  This has a tremendous effect across the world.  With alliances consolidating from the east to west, Trump is trying to nudge allies to make a decision.

Israel is not immune to this challenge.  Since the early 2000’s it has courted both India and China with tremendous success.  Of course India is seen as more important and has been raised to the level of a strategic ally, which places Israel in the middle of the Indo-Chinese rivalry.

Up until now, Israel has been able to stay neutral on issues of dispute between China and India, yet with the USA making China into enemy number one, Israel appears to be heading towards a crossroads.  Of course, the decision in many ways was helped along by China’s actions towards India and its support of Pakistan which is an enemy of India and adversary of Israel.  China’s disregard of civil rights, persecution of opposition dissent, and the now appointement of President Xi for life make Israel’s decision that much easier.

What About the Chinese Investment Potential

While its true Israel will have to do away with Chinese money, the investments China has made seem to be part of a larger strategy of control.  One just needs to ask Zambia on how their ability to have self determination has gone since the Chinese have taken over the copper and coal industry there.

Zambia Reports published the following a few days ago: “The Zambia Association of Timber and Forestry Based Industry has alleged that about 5,000 mukula laden containers from Zambia have been exported to China following the ban on the exportation of timber species in 2017.”

According to the report the government appears to be working with China to help illegally export the mukula.  Of course China loves to insist that it is positively investing in Zambia.

Israel has deftly avoided going down the same route as Zambia and although the lure of Chinese investments can be great, Jerusalem realized early on that dealing with China is like a drug that feels great in the beginning but can be deadly down the line.

Trump’s tariff decision has now begun to force the concretization of new alignments that have already been underway.  As the trade wars and potential direct conflicts between China and the USA heat up, look for even more increased partnerships between Israel and India and a dampening of Israel-Chinese relations.