Global SITREP for Wednesday, 10 January 2024 – Forward Observer

Global SITREP for Wednesday, 10 January 2024

Good morning, and welcome to the Global Situation Report for Wednesday, 10 January 2024. 

  1. LANCI: 2024 MAY BE THE “YEAR OF THE RESET” FOR SILVER: Former Wall Street commodities futures trader Vince Lanci forecasted several developments that should impact global silver demand and prices this year.
  • “Most markets are overly romanticizing the Federal Reserve’s rate cuts… We’re probably going to get no rate cuts [until after July], and then one big rate cut of 3%, knowing how these guys manage their risk,” Lanci said.
  • 2024 will be the “year of three years” for silver, starting with January to July – when silver demand and prices should be stable or lower – August to October – as central banks cut rates and the BRICS prepare to incorporate silver into their global payments system – and November to year-end, which is when the market will understand what’s unfolding and silver prices should take off.

Why It Matters: According to Lanci, the BRICS have likely already decided to remonetize gold, and they could be on track to soon remonetize silver for their new global payments system. This year marks the first meeting of the expanded BRICS. This rising trade bloc could force the West to publicly acknowledge this year that precious metals are again remonetized. Also, silver could start to replace platinum and palladium in fuel cells, which means silver should have increased industrial and monetary demand in 2024, leading to higher prices. – H.B.    

  1. CHINA APPEALS TO TAIWAN’S INDUSTRIAL BUSINESS CLASS: Several Chinese ministries released a joint plan to economically integrate Taiwan and Fujian province.
  • Taiwan’s micro and small businesses are to be given a chance to explore business opportunities on the mainland.
  • Integrated circuits, lithium batteries, petrochemicals, digital economy, and many more industries are to be integrated into a singular Fujian-Taiwan cluster to compete on the global stage.
  • The plan is not dependent on reunification. Chinese media stresses that the ruling Democratic Progressive Party (DPP) has numerous sanctions that will prevent the plan from coming to fruition but never mentions reunification.

Why It Matters: China appears to be incentivizing the Taiwanese industrial class away from voting for the DPP this Friday. The DPP would break the status quo of cross-strait relations and immediately stop numerous large business opportunities promised from mainland China. Additionally, if the industrial class is effectively swayed but their will is not heard in the election, this seeds a powerful counter-elite to Taiwan’s government. – J.V.

  1. BLOOMBERG: TAIWAN WAR TO COST 10% GLOBAL GDP: Bloomberg Economics estimates an invasion of Taiwan will cost the world 10 trillion USD or 10% of the world’s GDP in the first year.
  • A blockade would cost “only” 5 trillion USD, according to their estimate. This is similar to their estimate of the cost of the Global Financial Crisis of 2008.
  • The U.S. would experience a 6.7% GDP loss.
  • 80% of Asian trade would cease.

Why It Matters: Bloomberg’s report has already been published in Taiwanese media and may have the unintended consequence of talking Taiwan and the U.S. out of action but not China. Pro-DPP Taiwanese media is stressing the worst-case scenario despite this report making the case for choosing a different ruling party on Friday. Additionally, the report repeatedly mentions that the worst-case scenario requires U.S. involvement. The implication here is that if the U.S. does not get involved, we can avoid the worst-case scenario. Meanwhile, China has always framed this as a matter of national security and integrity, never a monetary issue. They are unlikely to be deterred by this report because they need to reunify the Chinese nation and will see a massive boost to their economy if they can seize Taiwan intact. – J.V.

  1. CIVIL WAR ERUPTS IN ECUADOR: Ecuadorian President Daniel Noboa declared a “state of internal conflict” after a drug kingpin escaped from prison, an armed gang seized control of a TV news studio, and a prison riot ended up lynching several guards.
  • Ecuador is just south of Colombia and the Darien Gap.

Why It Matters: This is a developing situation. It does not seem involved with the Venezuela-Guayana-Brazil skirmish. American media already reports people wanting to “get far away” from Ecuador, so this will create “legitimate” refugees crossing up into Mexico and the U.S. – J.V.

THAT’S A WRAP: This does it for today’s edition. Thank you for reading. If you know folks who would also like to receive this email, would you please forward it to them? We appreciate you spreading the word. – M.S.

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