The Fed, by raising its rates and relinquishing its downward pressure on the US dollar, is about to kill off most of the emerging markets. That’s a whole lot of misery in one pen stroke. That’s a whole lot of millions of people who will see their dreams of better lives shattered, just as they were beginning to think they had a chance. It’s how the game is played. The weak must be sacrificed so the strong be stronger.
After the end of the cold war, the United States dominated world affairs for nearly twenty years. However, the situation of a unipolar world has changed since the financial crisis of 2008 to a now multipolar world that includes China, Russia, India, Brazil and South Africa. These powers are influencing and manipulating the conflict zones we have today to their advantage. By analysing and dissecting the issues concerning the major conflict zones on our world map, as well as illustrating the parties involved, this article will explain what political and strategic interests are at play and how the development in major hotspots shape the big picture. This will identify the geopolitical forces that affect the European continent and what future concerns and worries await us.
Our degenerate Central Bankers have tossed up yet another asset air-ball into the debt financed Bubblenomics Millennium. The only remaining question is why?
This has been an unusual year for the global economy, characterized by a series of unanticipated economic, geopolitical, and market shifts – and the final quarter is likely to be no different. How these shifts ultimately play out will have a major impact on the effectiveness of government policies – and much more. In the next few months, the buoyant optimism pervading financial markets may prove to be justified. Unfortunately, it is more likely that investors’ outlook is excessively rosy.
The long awaited moment finally arrived after Scots began voting at 7am BST on whether to break away from the U.K. and end the 307-year union, even as latest opinion polls show the campaign against independence maintaining a narrow lead over those favoring independence. And while the No's are said to have a slim lead into the vote, even if it is really the Undecideds whose vote will determine the final outcome, somewhat surprisingly, the Yes camp got an unexpected boost just hours before the polls opened when 27 year old tennis star, and Scot, Andy Murray declared his support for Scottish independence in an 11th hour intervention on Thursday morning, after years of keeping silent on the issue.
Russia could care less whether Ukraine signs meaningless accession agreements with Europe (as it just did) because at the end of the day, Ukraine needs Russia's gas (if only for the next 4-6 years until Hunter Biden develops Ukraine's shale deposits and the Qatar gas pipeline finally crosses Syria). Russia, however, is very angry when NATO gets ever closer to its borders, which it just did when earlier today, more than 1,000 troops from 15 NATO and non-NATO countries, including the US of course, are taking part in a military exercise in Ukraine.
If over the weekend we got some terrible economic news out of China, then overnight it was turn for a major disappointment in capital flows, when Chinese Foreign Direct Investment in August crashed by 14%, far below the 0.8% increase expected, attracting just $7.2 billion in FDI, and the lowest in four years. This once again sparked fears of a Chinese hard landing and sent the Shanghai Composite tumbling 1.82%, the biggest drop in six months. In addition to China, there was the German ZEW Survey, which while beating expectations of a 5.0 print, dropped from 8.6 to 6.9 in August, the lowest since 2012. In fact, the gauge has decreased every month since December when it reached a seven-year high. And while there is not much other news today ahead of the blitz assault of data later in the week, including the Fed tomorrow, the TLTRO announcement on Thursday and the Scottish referendum results and the BABA IPO on Friday, we are stunned futures aren't as usual, soaring.
As always, the bottom line is about leverage and bargaining power. It is here that, miraculously, things once again devolve back to, drumroll, oil, and the fact that an independent Scotland would keep 90% of the oil revenues! As we showed several days ago, Scotland's oil may be the single biggest wildcard in the entire Independence movement. It is this oil that as SocGen's Albert Edwards shows earlier this morning, is what gives Scotland all the leverage.
"The apparently long-term rupture of Russia's relations with the West offers an opportunity to the Chinese leadership to enhance its already close relationship with the Kremlin and thus turn the global geopolitical balance in its favor - not unlike former US president Richard Nixon and former secretary of state Henry Kissinger who reached out to Chairman Mao Zedong in 1972. The Russians, angry with Washington, are now more amenable to giving China wider access to their energy riches and their advanced military technology. The Western sanctions pushing Russia out of the international financial system are also making Moscow more ready and willing to back the Chinese yuan against the US dollar." - China Daily
As reported ealier this morning, here, courtesy of Bloomberg, are the nominees for the next European Commission under the presidency of Jean-Claude "If Serioues Then lie" Juncker, with one from each of the European Union’s 28 countries. Job assignments were announced today by the incoming president, Jean-Claude Juncker of Luxembourg. What do these appointments mean for the European Union? The attached flash analysis from Open Europe should answer most initial questions.
"Ukraine and Georgia's NATO aspirations not only touch a raw nerve in Russia, they engender serious concerns about the consequences for stability in the region. Not only does Russia perceive encirclement, and efforts to undermine Russia's influence in the region, but it also fears unpredictable and uncontrolled consequences which would seriously affect Russian security interests. Experts tell us that Russia is particularly worried that the strong divisions in Ukraine over NATO membership, with much of the ethnic-Russian community against membership, could lead to a major split, involving violence or at worst, civil war. In that eventuality, Russia would have to decide whether to intervene; a decision Russia does not want to have to face." - US Ambassador to Russia William Burns, February 2008
U.S and NATO Responsible for Ukraine Crisis … and West Has Agreed to Cover Up Details About Shoot Down of Malaysian Airlines Flight 17
Today, high inflation seems so remote that many analysts treat it as little more than a theoretical curiosity. They are wrong to do so. No matter how much central banks may wish to present the level of inflation as a mere technocratic decision, it is ultimately a social choice. And some of the very pressures that helped to contain inflation for the past two decades have been retreating. Modern central banking has worked wonders to bring down inflation. Ultimately, however, a central bank's anti-inflation policies can work only within the context of a macroeconomic and political framework that is consistent with price stability. Inflation may be dormant, but it is certainly not dead.
While NATO is contemplating its existential purpose in a world where the Cold War has suddenly come back with a vengeance, and the military alliance has found itself woefully unprepared to deal with a Russia which no longer accepts the supremacy of the west (appropriately enough NATO is doing this on a golf course) Russia is also strategizing, only instead of issuing "sharply-worded catchphrases" and hashtags, a Russian general has called for Russia to revamp its military doctrine, last updated in 2010, to clearly identify the U.S. and its NATO allies as Moscow's enemy number one. That in itself is not disturbing: we reported as much yesterday and is merely more rhetorical posturing. Where things, however, get very problematic is that the general demands that Russia spell out the conditions under which the country would launch a preemptive nuclear strike against the 28-member military alliance.
Some believe that actions today were jointly agreed to by the Fed and ECB to allow the stimulus baton to be passed from one major central bank to another. Could this be to help ease the risk-off fallout that is likely to ensue in anticipation of the first Fed hike? Maybe the price action in US equity markets today should serve as an early warning signal.