Welcome to the March 31st edition of Views from the Crowsnest.
Sadly, there is a dearth of positive global events to consider. While I’m an optimist by nature,
my responsibility as your author is to be as realistic as humanly possible.
I’m not concerned about temporary minor declines in client portfolios because our Portfolio
Managers are extremely skilled and have proven their competence through many previous
economic and event-driven market challenges. They’ve weathered recessions and oil price
shocks before, and they’re both stoic and nimble. As of closing on March 30 th , our Client
portfolios are down less than a third of weighted benchmarks, so we know that our Clients are
in very good hands.
We’ve had a very busy past few weeks, but I committed to publishing this newsletter on a
quarterly basis. I didn’t commit to a particular format, though, so what follows are my thoughts
in point form, as I lack the time and space to try and weave an elegant narrative. This might
read more like a stream of consciousness than a typical newsletter.
The War in the Persian Gulf
- For context to new readers, I am consistently and unapologetically ANTI-WAR. One attendee of our March 10th webinar suggested I have Trump Derangement Syndrome (TDS) because I criticized President Trump’s actions repeatedly. Politics is a team sport, which is to say deeply tribal. This leads many to turn a blind eye or gloss over the terrible things perpetrated by their tribe and its leaders. Can we please transcend this ancient brain-dead trap?
- I’ve been supportive of many of Trump’s policies because they were wise and effective, e.g. border security, keeping males out of female sports, sweeping personal and corporate tax cuts, and cutting red tape. I have and will continue to criticize his stupid decisions – like tariffs – with equal fervor. And with even greater energy and volume when his decisions lead to the needless death of thousands of innocent civilians in Iran, Israel, all of the Persian Gulf States, and the unnecessary deaths and permanent wounding of military personnel on all sides.
- I’ve followed both the mainstream and independent media in the lead-up to and throughout this war. I have strong opinions, but they are well researched and informed. The independent channels I follow have consistently and tirelessly warned about the insanity of this war, and have systematically dismantled every bogus narrative and talking point of Trump, Bessent, Pistol Pete Hegseth (cue the “Macho, Macho Man” music), Retired Generals Jack Keane and Keith Kellogg, the Little Old Lady from South Carolina (aka Lindsey Graham), the talentless Neocon drone Sean Hannity and every other shill bought and paid for by the Military Industrial Complex (MIC).
- Independent media have gotten everything correct, confirmed by sources on the ground and patriots working inside the MIC who want the world to know the truth. You’re free to disagree with me of course, but I have “the receipts” for everything in this newsletter.
- The outbreak of this unnecessary war is best described as a “spasm of hubris” on the part of Trump, Netanyahu and the evil Neocons in both their administrations. The Americans claim the war is on schedule and going according to plan, but objective observers laugh at these assertions. If there was really a “war plan” in advance, it was amateurish.
- For Iran this is an existential fight that they’ve spent decades preparing for. For Israel this is a war that conveniently prevents Netanyahu and his wife from being prosecuted for decades of corruption. If Bibi pushes too far, Israel’s very existence as a functional state is at high risk; plenty of irony there really. For Trump this is inexplicably stupid, unnecessary and dangerous on so many levels.
- I cannot help but wonder what kind of kompromat the evil Neocons have on Trump and other members of his Administration. Why else would he allow Israel to force the US into this conflict? Skeptics have nicknamed this war, “Operation Epstein Fury.” In the absence of good information rumors will abound, but this is unfolding like the Hollywood film, “Wag the Dog” starring Robert DeNiro, Dustin Hoffman and the late Anne Heche. It’s a tragically hilarious tale of how consent is deliberately manufactured.
- Totally separate from the blatant immorality of this war of aggression, it appears that zero thought was given to the achievability of “victory” on the part of Israel and the US. And the definition of “victory” changes as frequently as Trump changes his mind. My 21-month-old granddaughter can understand how dominoes topple each other, but apparently those in the Pentagon and others who whisper in Trump’s ear have never witnessed anything approaching a chain reaction…you know, cause and effect.
- The long-term viability of the Gulf States is now seriously in question. Without oil and gas revenues, these monarchical countries cannot keep their servant classes alive and compliant. These countries are learning the hard way what former Secretary of State Henry Kissinger meant when he quipped, “It’s dangerous to be an enemy of the U.S. but it’s fatal to be its ally.”
- The arrogant American military establishment has greatly over-estimated its own operational capabilities, and grossly under-estimated the innovation, creativity, precision, and decades long preparation of Iran. Apparently, the Military Industrial Complex never took to heart the military maxim that, “Amateurs talk about tactics and strategy; professionals talk about logistics.”
- Did any of the military planners actually look at a map of the Persian Gulf including that little bottleneck known as the Strait of Hormuz? It’s that narrow little horseshoe-shaped passage through which roughly 20% of the world’s ship-bound oil, 25% of the global supply of LNG, and roughly 33% of the world’s Urea pass. From a military standpoint, it’s literally a shooting gallery. Was there any consideration given to the effects of its complete or selective closure? Apparently not.
- The much-vaunted US Navy with its 13 aircraft carriers is being exposed as the expensive relic warfare in 1945. Aircraft carriers today are the equivalent of cavalry horses in World War One. Missiles and inexpensive drones (air-borne and sub-surface) have rendered these behemoths useless as anything other than large expensive targets with roughly 5,000 sailors and aviators aboard, and whose missile defense systems have already been exhausted.
- These carriers and their entire strike force of destroyers, frigates and supply ships have been forced out of the Persian Gulf lest they be destroyed in minutes by modern precision Iranian missiles. Their aircraft have been rendered useless by their flight ranges and the total vulnerability of mid-air re-fueling tankers. Logistics yet again.
- The same can be said for the “legendary” Iron Dome in Israel, along with the David’s Sling, Raytheon’s vaunted Patriot system and the Theatre High Altitude Air Defense (THAAD) system. Iran depleted these marginally effective air defense systems that fire interceptor missiles costing between $1 and $4 million each by firing their 15-20 year old missiles and $20,000 drones into Israel and at U.S. military installations throughout the Persian Gulf. Hey Secretary Bessent, that’s what actual “jujitsu” looks like.
- And now the bombastic, self-contradicting and possibly demented Commander in Chief has ordered numerous elite military units into theater. What good will the 82nd Airborne, The Night Stalkers, Green Berets, Delta Force, Army Rangers and two Marine Expeditionary Units do? Trump and the Pentagon are sending these brave warriors to near-certain death if they’re ordered to embark on crazy missions with pointless and unachievable objectives.
- The talking heads on most channels (especially Fox News these days) seem to think this is a movie script akin to Oceans Eleven, wherein soldiers can parachute in, miraculously find the 408 kilos of 60% enriched uranium that Iran admits to having, break through all the layers of security that Iran surely has, and then then somehow take it out of the country without irradiating themselves. Pure fantasy but with real human lives at stake.
- More potential folly: sending the Marines to occupy Kharg Island in the upper Persian Gulf, through which 90% or Iran’s oil exports flow. What good will that do? Iran will simply turn off the taps. If the US destroys the oil facilities, then Iran will continue to retaliate and destroy the energy infrastructure of every country from Kuwait to Oman, with a special emphasis on Saudi Arabia of course. $USD 200 WTI doesn’t seem outrageous in that scenario.
- Trump seems to think that he can bully and “rope-a-dope” the Iranians. He thinks they’re stupid, backward and unprepared. Persia has been around for about 2,500 years and Iran has an incredibly well-educated population of roughly 92 million people who are determined to save their homeland. Iran is firmly in control of this conflict but the mainstream press in the West is blind to this reality. Pride cometh before the fall.
- Trump seems to think he’s re-establishing America’s dominance as the planet’s only military and economic superpower. What he’s actually doing is hastening the end of the American Empire. After all, you cannot have endless wars abroad and prosperity at home, period.
- This is also hastening the end of the EU and NATO, and deepening the ties among BRIICS nations. We know from Armstrong’s Socrates models that the Sovereign Debt Crisis will hit the EU and Japan first, which will in turn buoy the US Treasury market – the money that flees Europe and Japan has nowhere else to go but America. But thereafter, at some unknown point in the future, large holders and buyers of US Treasuries will accelerate their divestment and US Treasury Yields will spike and open “no bid.”
- If I were an eligible US voter, I would have voted for Trump all three times because he was better than the alternative, in my opinion. I realize that’s a pretty low bar. In 2024 I would have voted for him for his explicit anti-war campaign stance. Trump has completely betrayed the millions of swing voters who cast their ballot for him for this reason. He has betrayed every one of them and has treated the US military like his toy, a cudgel to use in his bully-tactic negotiation style. “Orange Judas?”
- As I’m writing this on March 31st , there appears to be an offramp developing for the Trump Administration. Everyone is hoping for a ceasefire soon because any pause is a relief. Unfortunately, ceasefires never last very long, and the extent of damage to energy infrastructure on the Arabian Peninsula is not yet fully understood because of media blackouts and censorship. Gasoline and food costs were an outsized percentage of millions of Americans’ monthly budgets BEFORE February 28 th and it’s getting worse quickly. The economic effects of this conflict will be felt globally for months and possibly years.
The War in Ukraine
- This war of attrition grinds on with little attention from North American media.
- With competing wars, the Americans are focusing all their resources elsewhere. Zelensky continues to beg for attention, money and weapons but that grift seems to have run its course. Perhaps he will come to his senses soon and sign a peace deal before Russia moves to take the port city of Odessa? If Russia decides to do this, Ukraine will become a rump state. Will Zelensky escape unscathed, or will he be at the receiving end of “pitchforks and torches?”
- The EU folks remain focused on the war in Ukraine, and stubbornly refuse to give any rhetorical ground. It’s always easy to talk tough when your own family is shielded from combat roles. And they’re all fiddling while their home countries cascade into recession and totalitarian surveillance states. Orwell was an Oracle.
- There are ever-widening fissures in the EU and NATO facades, and the dissolution of these two Brussels-based bureaucracies grows closer at a quickening pace. If you’re planning to visit Europe, do it soon. Very soon.
The Home Front
- At time of writing, the Stay Free Alberta organization is claiming that they’ve met the threshold of nearly 178,000 verified signatures. We await confirmation. The timing is not accidental as April 1st (tomorrow) is the deadline for several Federal commitments to be firmed up under the Memorandum of Understanding (MOU) signed with Alberta last November. Premier Danielle Smith confirmed last week that one Federal commitment would not be met by April 1st , and today PM Mark Carney confirmed there are two such commitments that will not be met. My sense is that PM Carney is talking out of both sides of his mouth and believes he can please both sides. Unfortunately, one cannot ride two horses (or camels) at once.
- The Alberta Independence movement continues to gather support. Last I heard, 42% of eligible Alberta voters support Independence. The actions or inaction from the Federal Government seem to be driving support upwards. With other world events dominating the news cycle, this issue has been forced off the front pages. I still don’t get the sense that folks outside Alberta are taking this movement seriously. Will the October 19th Referendum in Alberta deliver a “Yes” vote? Only time will tell of course. One thing for certain is that the real campaign for and against Alberta Independence just started today. Get ready for scare tactics and appeals to voters’ emotions. My sense is that this is going to look and feel a lot like the nasty Presidential campaigns down south.
- Martin Armstrong confirmed at the Cornerstone Forum on Saturday March 28th that his Socrates models show the EU, the US and Canada all splitting by 2032. His interview and panel discussion were fairly short, so we’re looking forward to watching the video of his extended conversation with Michael Campbell in Vancouver this evening. Hopefully, there will be more insights shared on this important topic.
- In the meantime, the only factor that’s working in favor of Alberta’s fiscal situation is the steep increase in the price of oil. Western Canada Select jumped from $USD 52(ish) on February 27th to around $USD 83.00 as of today. Alberta needs to get its fiscal house in order so that we’re not dependent on “blood money” created by overseas wars to balance our provincial budget.
After three solid years 2023-25, some “giveback” in portfolio values is inevitable. Our Portfolio
Managers play excellent defense during volatility.
Patience and Discipline are accretive to your wealth, health and happiness so focus on these.
Cheers,
Andrew Henry Ruhland, CFP
Founder, Integrated Wealth Management Inc.
