"Turkey's interest in northern Syria and northern Iraq is not an abstraction triggered by a group of religious fanatics calling themselves the Islamic State; it is the bypass, intersection and reinforcement of multiple geopolitical wavelengths creating an invisible force behind Ankara to re-extend Turkey's formal and informal boundaries beyond Anatolia."
As goes the world, so goes America (according to 30 years of historical data), and so when world trade volumes drop over 2% (the biggest drop since 2009) in the last six months to the weakest since June 2014, the "US recession imminent" canary in the coalmine is drawing her last breath...
Greece’s and the European Union’s economic and political crisis will not be resolved through a new debt deal between the government in Athens and the European authorities. It will be merely one more stop-gag “solution” to a problem whose nature is endemic to the current ideology and politics of State-Power and collectivism. Its real solution requires something deeper and more comprehensive: a revival of the classical liberal ideal of individualism and the economics of free market capitalism. This, unfortunately, is not likely to occur any time soon.
"The European Central Bank has introduced secret credit lines to Bulgaria and Romania as part of a broader effort to convince foreign regulators not to pull the plug on the local subsidiaries of Greek banks," FT reports.
With Greece’s debt situation spiraling downwards, the European project is showing some cracks. The July 5 referendum could end up amounting to a mandate on whether or not Greece stays in the euro. In the meantime, the turmoil offers an opportunity for Russia to advance its interests... and with The Krlemlin reporting that Putin held discussions with Hollande today, it appears something is going on behind the scenes.
The ECB is moving to backstop Bulgaria's banking sector in an effort to get ahead of a Greek contagion."The ECB would provide access to its refinancing operations, offering euros to the banking system against eligible collateral," Bloomberg reports, citing unnamed sources.
America’s grand strategy, its long-term blueprint for advancing national interests and countering major adversaries, is in total disarray. Top officials lurch from crisis to crisis, improvising strategies as they go, but rarely pursuing a consistent set of policies. Some blame this indecisiveness on a lack of resolve at the White House, but the real reason lies deeper. It lurks in a disagreement among foreign policy elites over whether Russia or China constitutes America’s principal great-power adversary.
When Konstantin Kosachyov, the head of the Russian Federation Council's International Relations Committee, said the protests in Armenia against a 16.7 percent power price hike follow a color revolution scenario sponsored by Western powers, many commentators rushed to compare the crisis in Yerevan with the 2014 protests in Kyiv that toppled the pro-Russian president, Victor Yanukovych. However, the street protests in Armenia have more to do with the overall economic situation in the country than with proxy clashes between foreign countries.
"Millions of people in ex-Communist Bulgaria, Macedonia, Albania, Serbia and Romania have deposits in banks owned by Greek lenders, putting this corner of south-eastern Europe in the frontline if there is contagion from the Greek crisis."
Have you picked up on the new trope du jour? We are all encouraged to bask in our innocence as we lament the advent of a new Cold War. The thought has been in the wind for more than a year, of course, at least among some of us. But we witness a significant turn, and I hope this same some of us are paying attention. As of this week, leaders who know nothing about leading, thinkers who do not think and opinion-shaping poseurs such as Tom Friedman are confident enough in their case to sally forth with it: The Cold War returns, the Russians have restarted it and we must do the right thing - the right thing being to bring NATO troops and materiel up to Russia’s borders, pandering to the paranoia of the former Soviet satellites as if they alone have access to some truth not available to the rest of us.
The Fed's QE policies of recent years have, for all intents and purposes told the world that “the dollar is our currency and your problem.” And, in recent years, the dollar has been a genuine problem for a number of emerging countries. Following this traumatic event, and the change in the perception of US stability, China went around the world and invited the likes of Brazil, Indonesia, South Africa, Turkey and Korea to shift some of their China trade away from the dollar and into renminbi. China started doing this in 2011 and, as we see it, the renminbi’s attempt to become a trading currency is potentially one of the most important financial developments. Yet no-one seems to care.
“Any of these events would likely trigger asset price volatility [and] attempts by institutional investors to redeem illiquid corporate bonds in crisis circumstances would amplify volatility.”
"If they want to lecture us on democracy building, let them lecture students at some American university," Russia’s Commissioner for Human Rights, Democracy and the Rule of Law Konstantin Dolgov said Tuesday, regarding the collapse of a bilateral arrangement struck in 2009 between Moscow and Washington. Fortunately for Dolgov, it doesn't appear as though he, or any other Russian diplomats for that matter, will be forced to endure a "lecture" on democracy from the US anytime soon because as the positioning of 250 Bradleys and self-propelled howitzers, and associated armored brigade combat team equipment" in Eastern Europe makes clear, the time for dialogue of any kind has long since passed.
“I expect that we may have a similar encounter because we’re operating in this part of the world,” US Naval Commander Rich Jarrett tells Bloomberg, referencing the likelihood of a maritime confrontation between the US and China. Meanwhile, the Pentagon is concerned that Beijing is "closing the gap" when it comes to air and space technology.
There’s a specific sort of instability in the world today – a game theoretic instability – which means that it has an identifiable pattern and rhythm you can understand in order to improve your investment strategy. It’s the instability of the game of Chicken, and once you start looking for it, you will see it everywhere here in the Golden Age of the Central Banker. Greece vs. the Troika? Chicken. Western sanctions on Russia over the Ukraine? Chicken. OPEC vs. US energy producers? Chicken. ECB vs. the Swiss National Bank? Chicken. Fed monetary policy communications to markets? Chicken. Abenomics? Chicken. US policy towards China? Chicken. ISIS vs. the world? Chicken.