I Am Sure It Is The CIA

Fundamentals: The European Central Bank says it is not using QE (printing money) to solve the Euro-crisis and it is only purchasing small amounts of Spanish and Italian debt. If it used QE to buy huge amounts of bad Euro debt, then the weak sisters in Europe would stop all free market restructuring and austerity programs and go back to sponging off Germany.

But the ECB is engaged in currency swaps with the central banks of America, Switzerland, Japan, and Canada. All these central banks are engaged in QE except Canada. They are printing their own currencies and buying Euros. So the ECB is effectively engaged in QE. And it using QE to flood European banks with super cheap loans. This creates the opportunity for the banks to open up a carry trade where they use low interest ECB loans to buy high yielding Italian and Spanish debt. Investors thought the European banks wouldn't have the nerve for such a risky carry trade. Today we learned they do have the nerve and this carry trade is in full swing. So the ECB is in a complicated Rube Goldberg sort of way using QE to buy Spanish and Italian debt. This is short term very good and long term very bad because reform efforts may now falter.

Meanwhile, in America, highly qualified unemployed workers have for quite some time had the ability to take unfilled low paying jobs. For the last four months they have been doing just that and we know this because low paying jobs are being filled but at the same time legions of unemployed workers are dropping out of the labor force. It is possible that once this low hanging fruit has been plucked the US labor market will falter again. Data that came out today indicate that this is indeed happening.

So the good news out of Europe and the bad news out of the US are warring with each other today for a wild ride.

Long War: The US 5th Fleet is moving one aircraft carrier battle group out of the Persian Gulf and moving two fresh battle groups in. This is an indication that it is preparing to deal with Iran's threat to close the Strait of Hormuz. As I've said before, Iran will lace the strait with mines, not attack the US Navy. I've researched the 5th Fleets operational doctrine for mine sweeping. It is more aggressive than I thought. Mine sweepers are very vulnerable to any sort of attack so the US Navy does not allow them to be attacked. Before the sweepers go into the strait, the 5th Fleet will take out all Iranian shore batteries and any Iranian surface ships or submarines that can possibly harm the mine sweepers.

The Navy will essentially go to war with Iran.

As the 5th Fleet prepares for war, the State Department is having a cow over the CIA's decision to assassinate an Iranian nuclear scientist at this delicate moment. It's almost as if the @#$% CIA wants America to go to war with Iran. Can you imagine an organization being so bellicose? Tsk. Tsk. Tsk. These assassinations have been going on for two years but for the first time ever America's diplomatic corp is saying (untruthfully) that the US has nothing to do with them.

How do we know it is the CIA, not Mossad? All the assassinations have been done in the same manner and are therefore done by the same organization. For various reason it can only be Mossad or the CIA. Two years ago one of the first assassin's body was recovered and a tattoo was found on his arm that had verses from an ancient Hebrew text that involved the ancient Persian Empire. So somebody then was trying to say the assassin was from Mossad. For this and other reasons I am sure it is the CIA.