Guest Post: Investors Are "Whistling Past The Graveyard" Over Global Geopolitics

Tyler Durden's picture

Submitted by John Browne of Euro Pacific Capital,

When the former Soviet Union collapsed almost 25 years ago, most global strategic forecasters assumed that the U.S. would adapt pragmatically to her new status of sole world superpower. Instead she has pursued a variety of misguided nation-building adventures and has largely shrunk from her primary responsibility of neutralizing the ambitions of petty dictators around the world. From this perspective, America's multi-generational expenditures on military personnel and equipment has become more of a stealth economic stimulus program rather than an insurance policy for global stability. 

The massive failures of U.S. intervention in Vietnam, Iraq and Afghanistan have caused the Western Allies to fear the future deployment of troops. Instead they have resorted to preserving an impression of strength by pressing their agenda with minor nations like Serbia, Libya and Syria through a combination of endless diplomacy and relatively riskless air power. In doing so, they exposed not just a reduced military capability, but also far worse, a lack of will. This vital fact was not lost on America's potential enemies.

Sensing this weakness, President Vladimir Putin of Russia, who is likely the continent's most aggressive power player since the Second World War, felt free to redraw the map of Europe when political events in Ukraine did not go his way. On the economic front, the crisis has vividly illuminated the differing interests of the European Union (EU) and the U.S. According to Eurostat, the EU imported 212 billion euros ($293 billion USD) worth of goods from Russia in 2012, while the U.S. imported a mere $29 billion. Furthermore, eight of the EU member nations are in trade surplus with Russia and the adverse trade balances of the remaining nineteen EU nations are relatively small. The difference in relative costs between the U.S. and these European nations that would arise from isolating Russia with major sanctions, let alone military action, are clear.

Thus far the Western response to his power grab has been underwhelming in the extreme. The minor financial sanctions placed on Russian oligarchs tied to Putin's inner circle, and the few guided missile destroyers that have been deployed to the Black Sea will do little to change the trajectory of the Kremlin. It should then come as no surprise that Russian pressure on Ukraine did not stop with its fast motion annexation of Crimea, but has been steadily increasing in the last few weeks. In early April, cities throughout eastern Ukraine experienced the occupation of government buildings and police stations by 'unidentified' protestors, whom many suspect are Russian special forces in plain clothes. By mid-April, speculation was rife that Ukraine might be headed for civil war, providing an excuse for Russian intervention to 'keep the peace' and, like Hitler in the late 1930's, to protect his own countrymen living in a bordering nation.

In Iraq and Afghanistan, the U.S. and its NATO Allies squandered large quantities of blood and treasure in fruitless experiments to alter the political and sociological realities of the Muslim world. However, in the Ukraine, which yearned for western-style democracy, the West offered merely money and rations. In doing so, they eroded drastically the age-old force multiplier of international prestige.

President Putin appears set on a clear strategy to re-colonize Russia's old 'empire' by means of so-called salami tactics in which he takes small slices of territory too minor to spark a conflict. But the slices ultimately pile high enough to provide a satisfying meal. If Putin's victory in the Crimea is followed by success in the Ukraine, his next targets likely will be the so-called 'Baltics' of Estonia, Latvia and Lithuania. All of which are NATO countries possessing the guarantee of mutual defense from other NATO members including the U.S., UK, Canada and Germany. The potential for Putin to prove false this myth of guaranteed defense could usher the world into a world of much higher uncertainty. 

On the other side of the globe, China is building its military, exerting increasing influence and extending its territorial claims in the eastern Pacific. Worse still, China and Russia appear intent on destroying the U.S. dollar's privileged role as the international Reserve currency. Any major loss of this role could threaten severe declines for the U.S. dollar and spikes in U.S. interest rates. In short, a loss of U.S. dollar's Reserve status would create a sudden and massive strategic change in a world to which entire populations have grown accustomed since WWII.

Despite the considerable risks created by the situation in eastern Europe, most western stock, bond and property markets, fed on massive central bank fiat liquidity, continue to flirt with new highs. (See an explanation of this in our latest report Taxed by Debt) This strikes me as an exercise in whistling past the graveyard. In the short term, investors may continue to profit from risk-taking in financial markets. However, as recessionary forces mount, commodity prices can be expected to drop, even exerting some downward pressure on precious metals. In the longer term however, as realization that serious threats exist, including the possibility of armed conflict in continental Europe, precious metals once again may shine as a safe haven asset.

In the larger picture, much of the geopolitical balance of power that has been in place for much of the past 25 years will be tested on the banks of the Black Sea. Investors should take a few minutes from their daily technical chart analysis to consider these major developments.

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Vampyroteuthis infernalis's picture

Empires come to an end eventually. Are we coming to our end or will we be reborn under a new moniker after a period of chaos?

noob's picture

and then it begins all over again

NotApplicable's picture

Investors? What are those?

gmrpeabody's picture

Until the rule of law returns in America, I suspect her image in the eyes of the world will continue to decline. Don't hold your breath.

kill switch's picture

Until the rule of law returns in America, Let me help you,,,it will never return, we are headed for the hell of collapse..

gmrpeabody's picture

Kill switch...,

the name suits you.

fx's picture

An article full of crap that fails completely to identify even the causes of the Ukrainian crisis and the major geopolitical issues at stake - and yet suggests that "investors" should pay more attention to them.

Talk about an ignorant telling people they shouldn't be so - ignorant.

Bastiat's picture

You're right:  DHS didn't buy 2 billion rounds of ammo to enforce the rule of law -- they bought it to fight a civil war.

noob's picture

is demand for fascism drying up?

Omen IV's picture

This article is Crap - end to end - then i hit the link - Peter Schiff comes up - world class bullshit artist

same mime as NYT and Kerry  - - please stop - "Power Grab by the Russians"  please  then who is Nuland -

is she from Nulandistan or another Kenyan from DC?

BOPOH's picture

This article is propaganda made in US-DC

dow jones 20000's picture

Depends on a lot of variables. Primarily the international response to a rapidly degenerating America and how quickly some event or series of events forces North Americans can tear themselves away from their TV's and Big Macs and fight for their life and libertahhhhh.

Vampyroteuthis infernalis's picture

The only hope I can see is there are people like those on ZH making comments about the sad state of affairs. We might have to forego the masses. It is too late for the FSA and socialist/fascist types.

Element's picture



The only hope I can see is there are people like those on ZH making comments about the sad state of affairs.

No offense, but I'd say that's one the the most pathetic and ineffectual aspects of this whole topical shebang.

McMolotov's picture

It was never our primary responsibility, as the author suggests, to neutralize the ambitions of petty dictators around the world. When we ceased leading by example and chose instead to coerce other nations through force, we assumed the mantle of an empire and began an inevitable slide toward collapse. Nation-building was a logical outgrowth of the philosophy that we should be the world's police.

John Quincy Adams: America "goes not abroad in search of monsters to destroy."

Cynthia's picture

I suggest no more Olympics.

As with Georgia's invasion of South Ossetia with Israeli and USA approval during the 2008 Beijing summer Olympics, we now have Victoria Nuland's Neocon coup of neo-Fascists in Ukraine during the Sochi Olympics.

Clearly there is an unfortunate trend by the US to attempt to destroy countries during any Olympics -- using it as distraction.

The distraction must therefore be removed to promote world peace.

SmilinJoeFizzion's picture

Just load the front lines with bearded hipsters please

Dr. Destructo's picture

I'd rather see the likes of Bush, Obama, Biden, Cheney, etc. on the front lines than some obnoxious hipster; I'm cool with them because they aren't trying to get me killed on a daily basis -I take that kind of stuff personally even though it's just business.

RafterManFMJ's picture

...on the other hand, what if we gave a war and EVERYBODY came?

Dr. Destructo's picture

Just say "free food and beer" and you'll get all the bodies you need.

Invinciblehandaxe's picture

very shitty article bordering on western style propaganda


PacOps's picture

We do live in interesting times. I tend to note the events I can do absolutely nothing about and then keep stacking.

whartonone's picture

"massive failures in interventions" in Iraq?  Where have you been?  Post surge = success.  Post Obama = disaster.

Much the same in Vietnam - leave it to the left to screw it up politically.

Afghanistan I'll agree on.


Dr. Destructo's picture


Vietnam was a failure from day one when we decided to set up a false flag operation in the Gulf of Tonkin and every single war and conflict beyond that was a failure because of shitty foreign policies that were more about building a hegemony rather than stick to the policy that we were founded on: Leave everyone the fuck alone. If this was was truly about getting UBL and combatting terrorism we would of went to the source: The House of Saud. Terrorists have their uses too, as the politicians know, to keep us in line with their goals of hegemony building "fer freedum".

Edit: Actually, all of our wars were for shitty reasons come to think of it.

Leaping Lizard's picture

Technically, like Sandy Hook, you really can't call the "Tonkin Incident" a false flag since pretty much nothing happened and there were no Merikan's or paid mercenaries attacking US  naval ships.  It would be more correct to simply call it a hoax.

I_Am_'s picture

However, in the Ukraine, which yearned for western-style democracy,,..................bwahahahahahahah

chinoslims's picture

Setting up "western-style" democracy = the west taking over your banks, pipelines and resources.  Ask Iraq, Libya, and Afghanistan.  

J Pancreas's picture

Any ideas on which currency I should open an everbank account with? Thinking when the dollar does finally crap the bed the Norwegian krone or Swedish krona might be the safest bets.

if anyone knows of another option than everbank please share.

Winston Churchill's picture

Lost me at bank.
If its not in your hand...............

SharkBit's picture

Well said.  But now let's just get back to work and BTFD!  Party like the world could end tomorrow.

q99x2's picture

Everyone knows that the treasonous globalist in Western nations are going to get their asses kicked and thrown into prisons and that the parasitic too big to fail banks are going to be bankrupted, so the stock market is going up because freedom, democracy and the rule of law as well as free markets are going to be restored.

Monty Burns's picture

I'd like to think you're right but I'm not at all sure.  They've been getting away with it, well, forever.  And there's not a whiff of revolution in the air, even with all the banking collapses, bankster crimes, billionaire parasites gloating while the ordinary Joe's life circles the drain. 


I've always said that things will explode only when the EBTs stop working and the FSA starts heading for the suburbs.  That will force the middle class into action.

RafterManFMJ's picture

My dog has an account on the Facebook; it seems to be popular with the jobless and those whiling away their useless lives, amicably waiting for Death's sweet embrace.

I'm thinking of buying up to 10 shares in FB, confident in the devolution of Humanity.

ronron's picture

you just don,t have a currency collapse in the 21st centuty.

Kreditanstalt's picture

"In the larger picture, much of the geopolitical balance of power that has been in place for much of the past 25 years will be tested on the banks of the Black Sea. Investors should take a few minutes from their daily technical chart analysis to consider these major developments."

Why should they?  It's a CASINO - there are no clocks on the walls and you don't look out the windows anyway...(*)

(*)Until the first dividend cut.

AdvancingTime's picture

It is a big advantage to play in your own back yard!

blindman's picture

big fun.
Screamin' Jay Hawkins — Whistling Past The Graveyard
@"..Sensing this weakness, President Vladimir Putin of Russia, who is likely the continent's most aggressive power player since the Second World War, felt free to redraw the map of Europe when political events in Ukraine did not go his way. "
comment: author, get back to your crack pipe, the world has better things to do.

AdvancingTime's picture

What I'm seeing develop is an "almost surreal" feeling of indifference towards reality. Companies have already ushered saving from interest paid on debt into the earning column and a major reason inflation remains low is they are sitting on a hoard of cash this has lowered the velocity of money. We must remember the artificially low FED controlled interest rates are a massive one-off or onetime tailwind that is mainly behind us.  

When rates stop going lower or reverse the positive effect will ebb and become a major headwind. With massive government debt in many countries and the economy still weak this headwind has the potential to become devastating. The collision of MMT, social unrest over inequality, and other destabilizing factors have the potential to create the perfect storm. More on this subject in the article below.


No Quarter's picture

The Dark Ages lasted almost 700 years (or 500-ish if you consider the begining of the crusades as the official end of the chaos following the fall of the Roman Empire*). During that period, wars were constant and brutal..IF the US and the Western World can be considered "Empire", whats to say the next period after our decline and collapse won't be similar? Stack your Gold, plant your food and live as you may. Geopolitical balance and other contrivances are falsities manufactured to blind the masses from the wolf at the door.

socalbeach's picture

Article is B.S.  Should probably close my Euro Pacific Capital account.

Jack Burton's picture

Another Neocon Zionist member of the speculator class spews his mindless drivel. As if the Neocon movement needs more press space. He sounds like he is disappointed that the neocon dream of world conquest is going so badly. He also seems to know jackshit about history or reality. He forgets who funded and organized a coup in Kiev using violence to take over an elected government. Then he cries when the people of Crimea and East Ukraine refuse to accept dictatorship of the EU coup leaders. Calls Putin agressive for giving Crimeans the right to vote, to rejoin a nation they have been part of for centuries. Of couse the Zionist writer is crying over this, his NATO missile bases and Navy base in Sevastopol was just pulled out from under him by the people who live there refusing the offer of IMF loans and debt slavery to the Communist rulers in Brussels.

All in all the author is another fake zionist neocon liar. Warmongering all across the globe, and now his neocon plan just got shown the door by the half of Ukraine that refuses to submit to the coup leaders in Kiev, hand picked by the zionist Nuland and her Israeli team of puppet masters.

So sad that this crying necon cunt lost out on the hoped for big victory of NATO in Ukraine. IMF loans, debts and austerity. Ukaine will get nothing froma bankrupt communist EU and a bankrupt USA. A few billion in loans to pay for Russian gas imports. Ukraine's economy is in collaspe and the latest meeting of the Communist Party of the Soviet Republic of Brussels is going to print Euros and offer loans to Ukraine. The Nazi Right Sector is planning on holding on to power in Kiev, the East will fight them and the EU will slowly use death squads to reduce the Right Sector powers. Notice the NATO death squads have already killed three or four Right Sector leaders, military guys and one Right Sector propaganda agent.

Lets here more form the Neocons like this author, they are fun to listen to as they cry and piss all over themselves over their failed move east. Nothing to offer Ukraine but 40 euros a day to keep the right sector in vodka, bullets and cheap whores. NATO had big plans for it's new military bases in Crimea and on Russia's border, now the people of East Ukraine have fucked up NATO's party, so sad.

TheFourthStooge-ing's picture

Bravo, Jack Burton. Your commentary is superior to this article in every way.

Although they try, the neocon cockroaches can't scurry away from the light of the truth forever.

Jack Burton's picture

Some of the sources in Russian internet land are beginning to sense a imminent move by the Ukraine forces to attack the East Ukrainian protest movement. Not sure what this is based on, but some Russians who blog in english are saying the backgound noise on Russian and Ukrainian interent is high, lots of talk of a big move coming by the Coup Leaders in Kiev, sending in Right Sector gangs to do what the Ukrainian army seems unwilling to do. Only time will tell, but the current standoff is making the Kiev coup leaders and their army seem like powerless fools. Either they get on with the attack or nobody will take them seriously. The Gas Queen Yulia has been calling for Right Sector gangs to go east and settle the score. Unfortunately for Right Sector, the East has been arming itself and digging in. If fighting kicks off soon, it could turn very bloody very fast.

TheFourthStooge-ing's picture

A day of reckoning is coming for those in the Ukrainian military. They will be forced to demonstrate, explicitly, whom they serve: the Ukrainian people or the Kievan junta. I pray they make the right choice.

Element's picture


You seem disconcertingly hopeful. They'll not make 'right choices' mate, there's no right choice, all the choices are shitty, people are not choosing anything, they are just inheriting the shit-ness of the situation, no matter how much gold glitter and lipstick they put on it.

Each new 'revolution' for the people somewhere in the world (bought to you by Smuckers and UtopiaPimp4U) is another failed shambles to add to lists of vandalized demoralized places where all solutions and answers are fakes, with their faked images and their fakery conceptual baggage, being borrowed and carried over from earlier complete fakes of the already entirely abstract.

We live in the age of making nothing look like something, and something look like nothing, where even the calamities are for the most part totally fraudulent.

ANZAC day tomorrow, the bit where the State and TV tries to lie convincingly to everyone that senseless lost-battles and complete waste of millions in the service of despotic king and fascist cuntry are 'heroic' and honorable and where former generations made the 'right choices'. Fakery upon faked counterfeits heaped up over a towering geometrically impossible spire of trellised deceptions that knive to a bulwark of swirling untruths.

And it works every time too.

rsnoble's picture

Then again if it were ww3 money in the market vs. anywhere else isn't going to matter anyway.