“The risk of catastrophe will be very high. The nation could erupt into insurrection or civil violence, crack up geographically, or succumb to authoritarian rule. If there is a war, it is likely to be one of maximum risk and effort – in other words, a total war. Every Fourth Turning has registered an upward ratchet in the technology of destruction, and in mankind’s willingness to use it.”
The core elements of this Fourth Turning continue to propel this Crisis: debt, civic decay, global disorder. Central bankers, politicians, and government bureaucrats have been able to fashion the illusion of recovery and return to normalcy, but their “solutions” are nothing more than smoke and mirrors exacerbating the next bloodier violent stage of this Fourth Turning. The emergencies will become increasingly dire, triggering unforeseen reactions and unintended consequences. The civic fabric of our society will be torn asunder.
This week brings a slew of central bank meetings: At the forefront will be the BOJ meeting on Tuesday where no changes to monetary policy are expected. However, we will be watching the commentary closely for hints to further monetary easing in the coming months. Goldman, and others, still expect the BOJ to provide additional stimulus in the second quarter of this year as the impact of the consumption tax hike on the economy becomes visible - it is that expectation that sent the USDJPY above 100 in late 2013 and any disappointment by the BOJ will certainly have an adverse impact on the all important Yen carry pair. In terms of the key data to watch this week, the themes of recent weeks remain the same: US activity data, with retail sales and the U. Michigan Consumer sentiment survey the main releases, European inflation trends (French and German HCPI data on Thursday and Friday, respectively), and finally external balances in EM. Within that group, the latest data points for trade and current account balances in India, Turkey and South Africa will receive the most attention.
When one studies history, all events seem to revolve around the applications and degenerations of war. Great feats of human understanding, realization and enlightenment barely register in the mental footnotes of the average person. War is what we remember, idealize and aggrandize, which is why war is the tool most often exploited by oligarchy to distract the masses while it centralizes power. With the exception of a few revolutions, most wars are instigated and controlled by financial elites, manipulating governments on both sides of the game to produce a preconceived result. Every major international crisis for the past century or more has ended with an even greater consolidation of world power into the hands of the few, and this is no accident.
- High Stakes Limit Bid to Cow Putin (WSJ)
- Russia says can't control Crimea troops ahead of U.S. talks (Reuters)
- Crimea Crisis Haunted by Ghosts of Bungled World War I Diplomacy (BBG)
- Putin’s Ukraine Gambit Hurts Economy as Allies Lose Billions (BBG)
- Germany Says It Provided Equipment and Training to Ukraine's Riot Police (WSJ)
- China signals focus on reforms and leaner, cleaner growth (Reuters)
- China Shares in Hong Kong Decline Amid Default Concern (BBG)
- Beijing Signals New Worry on Growth (WSJ)
Russia’s seizure of Crimea is the most naked example of peacetime aggression that Europe has witnessed since Nazi Germany invaded the Sudetenland in 1938. It may be fashionable to belittle the “lessons of Munich,” when Neville Chamberlain and Édouard Daladier appeased Hitler, deferring to his claims on Czechoslovakia. But if the West acquiesces to Crimea’s annexation – the second time Russian President Vladimir Putin has stolen territory from a sovereign state, following Russia’s seizure of Georgia’s Abkhazia and South Ossetia regions in 2008 – today’s democratic leaders will surely regret their inaction. When Chamberlain returned from Munich, Winston Churchill said, “You were given the choice between war and dishonor. You chose dishonor and you will have war.” Obama and other Western leaders face a similar choice. And if they choose dishonor, one can be certain that an undeterred Putin will eventually give them more war.
President Of China's Marine Institute For Security: "Glory Drenched In Blood Will Pave China’s Road To Revitalization"Submitted by Tyler Durden on 02/27/2014 23:02 -0400
"In 2013, China embarks on a new road after the conclusion of the Third Plenum of the 18th National Congress of the Chinese Communist Party. On December 26, China solemnly commemorated the 120th anniversary of the birth of Mao Zedong. On this same day, Japanese Prime Minister Shinzo Abe provoked China by visiting the Yaksukuni Shrine in Tokyo. In response, the Chinese Foreign Ministry spokesman quoted Mao Zedong’s “On Protracted War,” and implied that the final victory will belong to China. The new China is born in blood and fire, and is not only unafraid of war, but also courageous in welcoming reasonable and lawful conflict, because defending the country from aggression serves to further boost the development of the state’s power. The Chinese nation loves peace, but there is little doubt that glory drenched in blood will pave China’s road to revitalization. This is the glory that generations to come will treasure. Sound the alarms for war preparation, remold our firm convictions, wake up the fearless people, and revive our strategic industries—our country is moving forward and our future is bright!" - President Of China's Marine Institute For Security And Cooperation
There was a time when Vietnam was America's staunchest proxy war foe. This is not those times which explains why yesterday the president signed a landmark, controversial and not to mention hypocritical deal with Vietnam in which allows the U.S. to sell nuclear fuel and technology to its former foe, which will then be allowed to further enrich it. Why (because there is always a reason when the US does something so unexpected, and especially when nuclear power is involved)? Simple: as the Hill explains, the US "aims to help guarantee Vietnams' energy independence as China asserts a more prominent role in the region." Of course, the last time the US sought to prevent Vietnam's affiliation with a foreign superpower, the results were quite disastrous. One can only hope this time it's different.
To summarize: in an act of complete disregard for the official diplomatic song and dance, both Israel and the US are now providing military support to Iran, which in turn is providing military support to Syria, which is also getting military support from Russia. And now, just to make things more interesting, the same labyrinth of "military support" is about to be unleashed in the Ukraine, whose western half is just as likely getting arms and military equipment (not to mention funding)from the West under the table, while Russia, whose main Black Sea port is in the Ukraine's Crimean peninsula, is arming the Eastern part of the Ukraine.
What can possibly go wrong?
A dispassionate and analytic of the macro developments for the week ahead.
Renowned behavioral economist Dan Ariely explains why humans are biologically wired to make irrational decisions when money is involved. It's a case of our evolutionary wiring interfering with the decisions we face in a modern world very different from the one our ancestors adapted to. For instance, he explains how one of the easiest phenomena to create in a lab are valuation "bubbles". Our vestigial herding instinct encourages us to imitate the actions of those around us (e.g. bidding for a particular asset), which then strengthens that signal for others (leading to even higher bidding), resulting in behavior not justified by the underlying fundamentals of reality (asset prices destined to crash)... " I do think that we need a new generation of bankers. I think you cannot take the old generation of bankers and rehabilitate them. Recent history is not showing us that this is something we should hope for. But there is a real question of, How do we create a new generation of bankers that are going to think of themselves as the caretakers of society, rather than the rapists?"
- Anti-Euro Party’s Le Pen Gains Supporters, French Poll Shows (BBG)
- Carney Renews BOE Low-Rate Pledge to Fight Slack in Economy (BBG)
- Bank of England hints at 2015 rate rise (Reuters)
- ECB bond-buying intact and ready after court decision-Coeure (Reuters)
- Canada scraps millionaire visa scheme, dumps 46,000 Chinese applications (SCMP)
- Scrap this then? Vancouver facing an influx of 45,000 more rich Chinese (SCMP)
- China's January Exports Power Higher, Up 10.6% (WSJ) ... and nobody believes the number
- Emerging-Market Shakeout Putting Reserves Into Focus (BBG)
- Wall Street's most eligible banker Fleming waits for suitor (Reuters)
- Kazakh Devaluation Shows Currency War Stirring as Ruble Dips (BBG)
The most notable event in this traditionally quiet post-payrolls week is Janet Yellen's Humphrey Hawkins testimony before Congress set for mid-week. In terms of economic data releases, the US retail sales (Exp. 0.05%) is on Thursday and consumer sentiment survey is on Friday (consensus 80.5). We also have IP numbers from Euro Area countries and the US. Most recent external account statistics are released from Japan, China, India and Turkey. It is also interesting to track CPI data in Germany, Spain and India, given the ECB and RBI currently face diverging inflation challenges and may be forced into further action. Finally, we have Q4 GDP data from the Euro Area economies (Friday).
As the State of the Union address highlighted, both the Russia Federation and the United States have leaders that lean toward various degrees of autocratic government to achieve their agendas. President Putin rules with an iron fist and treats the legislative branch as an afterthought to use as needed but otherwise ignores. President Obama declares he will use executive action to get what he wants and quietly uses government agencies to intimidate and stifle his opposition in flagrant abuses of power. Putin has dismantled the Russian free press and imprisoned vocal opponents. The majority of the American press does Obama’s bidding for him while the administration puts movie makers in jail.
A few short months after Putin cornered the US state department into a disastrous foreign relations dead end with the false flag Syrian escalation which achieved none of the predetermined nat-gas-to-Europe pipeline ambitions, instead alieanting the US from both staunch allies Saudi Arabia and Israel, the Russian president has just managed to inflict yet more pain on US foreign policy this time by infuriating (even more) a core US ally in Europe - Angela Merkel. Just two days after the phone recording of Victoria Nuland emerged in which she not only made it explicitly clear it was the US who was the puppetmaster behind the Ukranian opposition with the traditional CIA tractics as was expected all along, but also explained just how the US freels toward the EU with the now infamous "Fuck the EU" comment, Angela Merkel called the obscene remark "absolutely unacceptable."
The United States’ rapport with the Russian Federation is one of the world’s most important bilateral relationships. Russia maintains a large nuclear arsenal and is a resurgent player in world affairs. Russia has considered Ukraine to be a vassal for the last five hundred years. Russian President Putin has routinely referred to Ukraine as a Russian state rather than a free and independent country. How would the United States react if Moscow was able to exert influence over Mexico and install a pro-Russian government? America needs to take off her rose colored glasses and look at the world with a Machiavellian view. We should decide to intervene in centuries old conflicts only when there are clear American security interests involved. Unfortunately for the idealistic leaders of American foreign policy, Ukraine does not meet this test. The Ukrainian people have shown an ability over the two decades to have a natural ability to take matters into their own hands and are quite capable of deciding this issue among themselves.