”Excessive partiality for one foreign nation and excessive dislike of another can cause those whom they actuate to see danger only on one side and serve to veil and even second the arts of influence of another…”— George Washington’s Farewell Address, 1796
We don’t envy Vinay Reddy.
Mr Reddy’s current title is Director of White House Speechwriting.
Yeah, he’s the guy who writes the words you’re supposed to understand when Joe Biden speaks.
We have respect for writers. How could we not? Especially those who are attached to the news cycle 24/7… No sooner had Vinay penned his words on Friday, the world changed.
Reddy wanted Mr. Biden to say “Bidenomics is working!” The latest jobs report revealed 339,000 were created (even if nearly a third of them were created by the government). But that message only lasted for about 15 seconds in the newscycle.
Mr. Reddy also wanted the president to gloat over Republican chaos in the House. He wasn’t able to get more than a phrase out. We thought we heard the president mumble something about Republicans destroying our democracy.
Then Hamas invaded Israel. The terror group ruined any positive spins Reddy might have felt good about over the weekend. They ruined our fall foliage weekend in New Hampshire, too.
In a scene reminiscent of an ‘80s Mad Max film, the Palestinians sent paragliders over the wall to maim, rape, kill and take hostages at a peaceful music festival.
You can’t deny the horror.
It’s the main story on every TV news network and in every publication… but it’s what they’re not saying that we should be paying attention to, as well. As America pledges solidarity with one of our staunchest allies, sending aid, arms, and support to Israel, we’re forgetting the urgent crisis accelerating at home as a result.
The Strategic Petroleum Reserve (SPR).
Specifically, President Biden’s decision to drain it to its lowest level in decades in an effort to manipulate oil prices.
On Monday, the Brent crude index, the worldwide oil benchmark, and the U.S. WTI index both surged more than 4% as a result of the Middle East conflict.
Many analysts expect oil prices at home to skyrocket.
If the conflict spreads to Iran, which it almost certainly will given their direct connection to Hamas, up to 3% of global oil supply is at risk. That number jumps to 20% of global oil supply should the Strait of Hormuz enter the conflict.
Oil directly impacts the import of goods we rely on from all over the world.
And it’s not just oil.
We could soon witness “the end of cheap” altogether as America’s affordable quality of life spirals out of control.
For example, if you’ve never heard of Country Garden… brace yourself.
Everything we’ve read on Bloomberg, CNBC, CNN, Fox Business, The Wall Street Journal, or any other news source has not told the story like this. We think it could be the sharp point of a global economic crisis that will have a profound impact on your investments, your livelihood… even your physical security… Not unlike a Lehman moment.
That’s what they said about Evergrande, in 2021. The property developer, worth $300 billion dollars, couldn’t pay its suppliers, couldn’t finish contracted homes, defaulted on payments, and Chinese citizens were protesting in the streets, lining up in front of banks… wondering where their money went.
Sounds familiar, eh? That’s only the “tip of the spear.”
Enter Country Garden, a Chinese conglomerate worth another $187 billion in real estate assets. They just missed a $60 million dollar international payment… and claimed that it probably won’t be able to pay back any international creditors from now on…
Effectively defaulting for good.
“Hey Wiggin,” you might write in with incredulity. “Why should you care what happens to a real estate lender in China?”
It’s easy math. Over the past two decades of outsourcing China has risen to become the 2nd Largest economy of the world. They produce twice as much physical goods as the United States.
Today, what used to be said of America is now true of China: When China sneezes, the world will catch a cold.
Country Garden is the second domino to fall in what will be seen as the end of China’s phony real estate boom. Not unlike our own cold in 2008-09. The impact on the global economy will be devastating.
And will baffle millions of U.S. citizens in the months to come.
Don’t be fooled by the likes of NYT’s Paul Krugman, who said that the U.S. is insulated against anything happening with the Red Dragon.
The situation goes much deeper and is and will be far more damaging to the financial markets we depend on than the legacy media want to admit.
More to come,
The Wiggin Sessions
P.S. Be warned: Your money is at risk. The Great Bond Rout has been left out of the news cycle, too.
The U.S. government is up against the most challenging period in its history… just trying to finance itself.
Washington warned of two things in his farewell address: Foreign entanglements and excessive public debt. Today, this very day, we’re witnessing those two veracious chickens coming home to roost.
With the political turmoil in Washington, a new war in the Middle East and China falling apart all at once, you’ll want to tune in when we launch The Great American Shell Game tomorrow night at 8pm.