Guest Post: Migration Of The Black Swans

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Submitted by Giordano Bruno of Neithercorp Press

Migration Of The Black Swans

The phrase “Black Swan” is really making the rounds these last few
months. Uttering the term a year ago would have earned you a collection
of confused looks and a general attitude of disinterest. Now, people
behave as if they had learned about economic shockwave events and the
global domino effect when they were in kindergarten. The problem is
that when this kind of terminology hits the mainstream, in most cases it
comes prepackaged with dumbed down and diluted definitions which
promote an inadequate, cartoonish understanding of the circumstances.

To be sure, most Americans are well aware that the world’s political
and economic foundations are about as stable as fresh pudding under a
heat lamp. The problem is that they are now being conditioned by the
mainstream media to view the idea of collapse as “cinematic”; a kind of
live action fantasy in which we all get to play the part of the
audience, watching safely from the dark in our cushy theater seats with a
bag of overpriced popcorn, Dolby surround sound, and a hot date to keep
us company during the boring parts. Three years ago, even mentioning
the idea of a breakdown in society or a financial catastrophe beyond a
minor recession earned you the label of “doom monger”; a rather inept
and naïve attempt on the part of the MSM to silence any economic
analysis that stepped outside the establishment Keynesian framework.
Today, I turn around to look at a magazine stand at the airport and
right in front of me is Newsweek openly declaring “Apocalypse Now”!

Is the mainstream finally catching up to the alternative media? No.
The MSM is merely adopting pieces of our common language and twisting
them to fit a more globalist friendly viewpoint. Because our readership
is growing exponentially, and our traffic is skyrocketing while
corporatized news sources are floundering, the MSM is losing its ability
to obscure our fact based journalism with their over funded and highly
sterilized adaptation of reality. So instead, they attempt to co-opt
our particular vocabulary, and our news focus, while adding their own
subtle spin and sensationalism. When people not familiar with the
alternative media and the more in-depth information we provide talk
about a “Black Swan event”, a depression, hyperinflation, etc., their
concept of the implications of such disasters is far different than
ours. They are living in the Disney version of financial and social
Armageddon.

Of course, when the curtains raise, the previews are over, and the
show begins, none of us will be lounging comfortably outside these
calamities to simply watch. We will all be inexorably involved, whether
we like it or not. So, carry on with the media war we must. Educating
the masses on the ENTIRE story behind international events and their
consequences continues to stand as a top priority, until that final
straw caves the camel’s back and disseminating the truth becomes a
needless exercise in pointing out the horrifyingly obvious.

First, let’s examine the veiled reverberations of recent “Black Swan”
events, the wider view of the chain that ties them together, as well as
what we should expect in the near future in the wake of their
aftermath…

Fukushima Mon Amour

If I could choose only one tragedy to be categorized as a textbook
example of a Black Swan, it is the earthquake and subsequent tsunami off
the coast of northern Japan which led to the current and precarious
meltdown of the nuclear reactors at Fukushima. Now, the immediate
concerns of Western nations, especially citizens of the U.S., have
automatically turned to the threat of radioactive fallout traveling
across the Pacific. Unfortunately, radioactivity is the least of our
troubles in the face of Japanese nuclear core exposure. Again, Japan is
currently the number three economy in the world, and the effects of the
Fukushima incident have contributed to the possibility of a full
spectrum crisis.

First, we must always keep in mind that incidents in areas like Japan
or the Middle East are NOT the direct cause of global economic or
social turmoil; they are only trigger points for an avalanche that has
been building for the past three to four years. If Fukushima had
occurred in 2007, international markets would have easily absorbed the
blow, but today, economies everywhere have been so weakened by the
implosion of the banker created derivatives bubble and the inflationary
fiat measures of private organizations like the Federal Reserve that
they no longer have the capacity to shield themselves from unexpected
catastrophes. Big banks have been playing a massive game of Jenga with
the global economy, pulling one support after another until the whole
construct begins to sway and tremble. One gust of wind, one tremor, one
wrong move, and the whole thing comes crashing down. If you want to
place blame for the chaos we are about to see in the aftermath of
Fukushima, be sure to place it where it belongs; on the doorstep of
corporate monstrosities like the Fed, Goldman Sachs, JP Morgan, HSBC,
etc.

Second, Japan’s official debt to GDP ratio now stands at 225%, way
above the limit usually attributed to a country on the verge of complete
debt destruction. The cost of rebuilding the areas damaged by the
tsunami alone is estimated at around $300 billion. My primary concern
in light of Japanese instability, though, is the severe weakening of
their export markets. Japan is almost entirely reliant on its export
capacity to support its ailing economy, meaning they are dependent on
other countries to continually purchase their goods. However, in 2008,
Japanese exports were pummeled, and have not improved anywhere near
levels reached previous to the credit collapse, at least according to
initial numbers for 2010:

http://www.bloomberg.com/news/2010-11-24/japan-export-growth-slows-more-than-forecast-as-economy-loses-trade-boost.html

The earthquake and nuclear meltdown of 2011 have sealed Japan’s fate.
It could take ten, twenty, even thirty years for them to recuperate
from this setback. Manufacturing in the Asian nation has already
deteriorated at the fastest pace in nearly a decade:

http://www.bloomberg.com/news/2011-03-30/japan-manufacturing-shrinks-most-since-2009-in-first-sign-of-quake-impact.html

Japanese food exports are being shunned by international markets for
fear of radioactive contamination. Prime Minister Naoto Khan is now
pleading with the WTO to urge its members to avoid curbing imports of
Japanese goods, claiming that the government is on top of the Fukushima
situation:

http://www.reuters.com/article/2011/03/30/us-japan-quake-idUSTRE72A0SS20110330

This hardly appears to be the case though. Reports of radioactive
iodine 10,000 times safe levels in the water table below Fukushima have
surfaced; reports which the Tokyo Electric Power Company is now vaguely
stating “may be incorrect”:

http://www.bloomberg.com/news/2011-03-31/japan-reviewing-water-tests-showing-iodine-at-10-000-times-limit.html

The secrecy surrounding Japan’s nuclear meltdown is highly
disconcerting and reminiscent of the Chernobyl incident in 1986, which
the Soviet Union also refused to report honestly. Nearby cities were
completely uninformed as to the true danger of the meltdown, and the
international community was without a clue as to the extent of the
radiation until Sweden, nearly seven hundred miles away, discovered
radioactive particulates in its atmosphere. The problem with a
containment breach in a nuclear plant is that it releases a steady
stream of radioactive materials into the environment until the plant is
finally buried under tons of concrete, lead, boric acid, and sand, as
opposed to a nuclear weapon, which detonates, irradiating surrounding
particles, which then dissipate after around two weeks. Fukushima, if
left uncontained, could spew radioactivity for decades. The Japanese
government does not seem to be providing forthright information about
the real jeopardy involved.

Of course, if they were forthright, there would certainly be alarm
amongst the citizenry, but even more so, a flight of investment dollars
from Japanese industry and stocks. The only equity in Japan which seems
to be attracting investment is the Yen itself, which skyrocketed
against the U.S. dollar at the onset of the crisis:

http://www.rttnews.com/ArticleView.aspx?Id=1577203

The Yen has climbed steadily against the dollar since the early
1970’s, from 300 yen per dollar, to only 80 yen per dollar after
Fukushima. I find it interesting that now, during times of financial
uncertainty, global investors would rather pour their savings into the
currency of a country that is about to be radioactive, rather than put
their savings into the U.S. Greenback! What does that tell you about
the level of trust the world currently has in our currency?

Being that Japan is a dedicated export economy, the higher the Yen
goes, the more strenuous the exchange rate, and the less other countries
will buy from them. G7 nations have since attempted to artificially
knock down the rise of the Yen, but their efforts have yielded little
success. The Yen still stands at around 83 per dollar. Hardly an
improvement that will make Japanese exports more viable.

So, where is this all leading…? High speed deflationary depression
for Japan. But that’s not all! The ASEAN trading bloc, led by China
and fueled by the rising Yuan, has been pushing Japan to join the fold
for years. Japan has been less than receptive to the proposition for
numerous cultural, political, and financial reasons. But now, with the
complete downfall of the country underway, and their export capability
crumbling, Japan may go begging to join ASEAN. Already, ASEAN is
beginning to offer help in Japan’s rebuilding process:

http://ph.news.yahoo.com/asean-benefit-japan-reconstruction-20110329-054529-485.html

What does this mean for the U.S.? It means the Japanese will likely
begin a progressive dump of their vast reserves of U.S. Treasuries and
dollars, replacing them with Yuan bonds. Its means a severe devaluation
of the dollar in the near future along with the possible end to its
World Reserve Currency status. It means hyperinflation in America.
This is the true nature of a Black Swan event. It is not a single
incident, but a chain reaction that spreads like cancer through an
economic system, leading to broader misfortune than anyone dared
imagine.

Once Upon A Time In The Middle East

The effects of the revolutionary fervor in the land of OPEC are a bit
more obvious than those caused by Japan, at least, for the most part.
Crude oil is now climbing towards $107 per barrel at the publishing of
this piece. World markets are swinging wildly like a cheap carnival
ride. Political alliances (especially between the U.S. and its primary
oil suppliers) are becoming strained. The dollar’s peg to oil is now
under threat. But this is really no surprise. As we have discussed in
past articles, it is exactly what happened to the British Empire in the
early 1950’s when it attempted to strong arm Middle Eastern governments
and maintain the oil trade under the Pound Sterling. Eventually, the
British became embroiled in Arab conflicts and revolts they could not
possibly untangle, and their main debt holders (one of which was the
United States) threatened to dump British Treasuries and the pound
sterling as the world reserve currency. Sound familiar….?

So now that America is repeating the blunders of the British (most
likely by design), what can we expect from turmoil in the Middle East?

First, crude prices are going to continue expanding. Not so much due
to supply concerns (Libya, for instance, makes up only 2% of global oil
production), but because of the escalating distrust of the U.S. and its
interests in the region, leading to a likely decoupling of oil from the
greenback. The Obama Administration’s response to this growing danger
has been, interestingly, to focus not on the devaluation of the dollar,
but instead, to distract us with more nonsensical supply side theories.
The president (and I use that term loosely) has seen fit to present yet
another model for “green alternatives” which would supposedly diminish
Americas dependence on foreign oil supplies. Unfortunately, this plan’s
main drive is to cut oil importation to the U.S by one third over the
next ten years while we are at the very onset of an energy crisis. Keep
in mind that this plan does NOT include utilizing the extensive crude
oil reserves discovered in America’s northwest:

http://www.reuters.com/article/2011/03/30/us-obama-energy-idUSTRE72S3C820110330

http://www.usgs.gov/newsroom/article.asp?ID=1911&from=rss_home

Absolutely brilliant! Let’s cut our oil supply by a third while the
dollar is in the midst of losing its reserve status and Obama fumbles
about with biofuels that rely mainly on corn, a commodity which is also
exploding in cost due to dollar devaluation, and requires more energy to
refine than it eventually produces. Does anyone doubt anymore that
this government is deliberately sabotaging our economy?! Holy Frijoles!

China’s move over the past two years to purchase more oil from Russia
instead of the Middle East while dropping the dollar as a reserve
currency in bilateral trade now seems almost clairvoyant, doesn’t it?

As the destabilization of the Middle East spreads, the most volatile
situation is not even necessarily that of oil and the dollar, but that
of Syria. Due to its alliances and its tensions with Israel, Syria has
become the keystone of the Middle East. Any disruption in Syria could
lead to widespread war in the region, involving not just the U.S., but
also Russia. Protests have begun to rage in the country, just as in the
rest of the Arab nations, which has suddenly peaked the interest of the
publication ‘Foreign Policy’; the official magazine of the Council on
Foreign Relations, a well known globalist think tank. In a recent
article, they called the state of affairs in Syria the “Syrian Time
Bomb”:

http://www.foreignpolicy.com/articles/2011/03/28/the_syrian_timebomb?page=full

Foreign Policy covers the basics of the Syrian connection, but omits a
very important factor; the revamped Russian naval base on the coast of
Syria itself. I have written several articles over the past four years
covering the possibility of a Syrian chain reaction. Here is a quote
from one, published in June, 2010 to illustrate the potential for
calamity that could unfold if Syria is invaded or even politically
pressured by the U.S. or Israel:

This leads us to what may end up being the most important
news of last year besides the “Great Recession”; a defense pact signed
between Iran and Syria:

http://www.jpost.com/servlet/Satellite?cid=1260447419513&pagename=JPArticle%2FShowFull

So, what elements are we dealing with here? We have a
nuclear armed Israel itching to attack Iran. We have Iran engaged in a
defense pact with Syria against Israel. We have Syria with Russian navy
bases and weapons on its soil, and we have the U.S. rampaging through
the Middle East encroaching on the borders of Pakistan and Yemen,
essentially pissing off everyone. What we have is a Globalist made
recipe for disaster, using the same ingredients they have used for the
last several major wars.

http://neithercorp.us/npress/2010/01/will-globalists-trigger-yet-another-world-war/

There is little doubt, Syria is in the beginning stages of revolution at
this very moment. The government has responded with the same murderous
tactics that have been attributed to Gaddafi in Libya, including
shooting down protesters using snipers (meaning soldiers were not firing
in random panic, but deliberately picking targets and killing unarmed
citizens in cold blood):

http://www.washingtontimes.com/news/2011/mar/25/violence-erupts-around-syria-protesters-shot/#

Will the U.S. or the UN respond to Syrian upheaval as they have in
Libya? If they do, expect a powder keg reaction far more violent than
we have yet seen, and also expect Russia to begin taking a much greater
interest in the affairs of the Middle East. The hidden consequences of
the Black Swan strike again…

Swan Lake, Or Swan Dive?

The flow of events from one into the other, melding and changing like
the currents of a river, can become confusing, if not downright
terrifying. The underlying rush of economies and political tensions is
often obscured by disinformation, as well as the distracting nature of
simultaneous cataclysms. What is created in the torrent of this global
swell is a kind of ‘factory of fear’; a frenetic blast of winding
grinding machinery swirling around us with menacing gears made of panic
and dread. A step in the wrong direction, and we lose an arm or a leg.
Black Swan incidents are not the source of this pandemonium. In fact,
they sometimes shock the masses into clarity. They reveal the hidden
landmines strewn about our financial and social landscape. They cause
migrations of decline and surprisingly erratic reactions within a
system, but also expose the fallacies inherent in that system as well.
The key is to not allow fear to drive our response to the now
unmistakable problems we face.

Whether we stand in defense against one adversity, or a thousand at
once, is irrelevant. The bottom line is that we cannot lose focus, we
cannot fail, and we cannot stop. There is no other choice but to move
forward, and to prevail.

You can contact Giordano Bruno here: giordano@neithercorp.us