Geopolitics and the global economy

For discussions on politics and current events.
Scimitar54
Senior Member
Posts: 1701
Joined: 13 Jul 2015, 05:10
United Kingdom

Re: Geopolitics and the global economy

Post by Scimitar54 »

Thus giving a great opportunity for any aspiring power (or powers) to fill the vacuum being created! :crazy:

User avatar
ArmChairCivvy
Senior Member
Posts: 16312
Joined: 05 May 2015, 21:34
United Kingdom

Re: Geopolitics and the global economy

Post by ArmChairCivvy »

That is exactly one of the consequences. And when it happens to be the plural for powers, it is a much stronger driver than any non-profileration initiatives
- like stopping Iran from having the bomb also meant stopping the Saudis
- in the above example, neither party has great internal stability; the lack of which could come so extreme that it is not beyond possibilities that an "Argentine Junta -like" action were to be resorted to by a leadership fearing that it is about to lose power... which external action then might escalate as far as sending the bombs flying
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

User avatar
ArmChairCivvy
Senior Member
Posts: 16312
Joined: 05 May 2015, 21:34
United Kingdom

Re: Geopolitics and the global economy

Post by ArmChairCivvy »

ArmChairCivvy wrote:bond markets, where all German government bonds - and the majority of those issued by the Dutch, Austrian and Finnish governments, are trading with a negative yield.
now even Warren Buffet only needs to promise folks to give them their money back, rather than pay anything for holding it. He of course buys existing assets with the money, when the primary function of capital markets is - should be - to aggregate and funnel funds into investment. Err, who is investing; That's the question
ArmChairCivvy wrote:oil - and gas - glut is building up.
Well, that was in Jan and a lot has changed since... just adding to the glut that was already there
- the plentiful (=cheap) spot market might seriously affect the LNG terminals + criss-crossing pipelines that are being built in those parts of Europe where all the pipelines used to run from the East, towards the West
- that would be a pity, but on the other hand the projects are multi-year and the financing even longer, so may be short-termism won't immediately take over

Incidentally, look at the two minima on this chart: https://www.macrotrends.net/2480/brent- ... aily-chart
- the first one caused so much pain to Russia's economy (esp. to the poorer citizens) that Putin came up with a the hat trick = look elsewhere
... so that 'elsewhere' was Crimea
- but when the oil price bounced back for only a very short period, two years later the military expansion/ modernisation drive finally saw brakes applied

And this time around? What tricks are left in the 'tool box'?
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

User avatar
ArmChairCivvy
Senior Member
Posts: 16312
Joined: 05 May 2015, 21:34
United Kingdom

Re: Geopolitics and the global economy

Post by ArmChairCivvy »

oilprice.com provides a partial answer to the above:
"It was the OPEC+ deal that has brought significant economic benefits to Russia, which saw its NWF [National Wealth Fund... which is the backstop for covering pensions deficits, too] double its financial reserves to US$124 billion in 2019, Kirill Dmitriev, chief executive at the Russian Direct Investment Fund (RDIF), said in January this year.

Some analysts argue that the oil price war will end up hurting Russia’s economy much more than Vladimir Putin would like it to. Others, such as Chris Weafer, founding partner at Macro-Advisory consultancy in Moscow, say that Russia has what it takes to win the oil price war with the Saudis.

“Moscow is unlikely to blink first, certainly not for another three to six months,” Weafer said, as quoted by AFP’s Anna Smolchenko."

And no wonder Mr. Trump wasted no time announcing the firm intention to bail out the US shale industry, in the light of comments from SEB bank's commodity analysis: " Russia has probably firmly decided that now is the time to pull away the rug from under the feet of the shale oil producers, so now is the time for the second shale oil reset.”
- the wonders of operating 'the' reserve currency: you can print an extra trillion, without anyone batting an eye lid

The Saudis are wargaming, too, according to http://www.energyintel.com/pages/eig_ar ... 80&NLID=31
"According to Saudi economists, the country's budget deficit could reach around 500 billion riyals ($133 billion) if oil stays at $30/bbl, versus previous assumptions of a 187 billion riyal deficit, based on an oil price of around $55/bbl.

"With every drop of $5 in oil prices, the budget deficit increases by 50 billion riyals," said Mazen al-Sudari, head of research at Al-Rajhi Capital in Riyadh.

Last year, the budget deficit was 131 billion riyals and the expectation announced by the finance ministry in December was that the deficit would be around 187 billion riyals in 2020."
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

User avatar
ArmChairCivvy
Senior Member
Posts: 16312
Joined: 05 May 2015, 21:34
United Kingdom

Re: Geopolitics and the global economy

Post by ArmChairCivvy »

In a bull market, there is a saying that one should not confuse happening to be in it and being brainy.

Now the opposite is true (if there is "an opposite"):
- herd immunity might be a good thing
- but herd behaviour/ thinking in investments? Does anyone seriously believe that the rate of inflation in the next 30 years is going to average less than 1%? Yet the 30-year bond was less than 1% on March 9.

There’s a tremendous amount of interest rate risk.
- "Yeah, it’s huge." says (in an interview) the economist Campbell Harvey, who pioneered yield-curve based prediction tools in his dissertation at the University of Chicago in 1986.
- but then again, in the long run we are all dead
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

User avatar
ArmChairCivvy
Senior Member
Posts: 16312
Joined: 05 May 2015, 21:34
United Kingdom

Re: Geopolitics and the global economy

Post by ArmChairCivvy »

It comes as no surprise that in March Italy recorded the lowest inflation in Euro-area (0.1%) and Spain was the runner-up with 0.2%

The good news: what else could one expect when there is a hard stop to demand
The bad news: what could be the next stop after deflation? The ugly word 'stagflation' is rearing its head
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

User avatar
ArmChairCivvy
Senior Member
Posts: 16312
Joined: 05 May 2015, 21:34
United Kingdom

Re: Geopolitics and the global economy

Post by ArmChairCivvy »

If your sole revenue base is taxing oil & gas exports, well, here is a long list of countries about to go bust:
https://www.foreignaffairs.com/articles ... -%20112017
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

User avatar
ArmChairCivvy
Senior Member
Posts: 16312
Joined: 05 May 2015, 21:34
United Kingdom

Re: Geopolitics and the global economy

Post by ArmChairCivvy »

Reuters breaking views offers a glimpse to the aftermath of the public health -induced crisis:

"What might the world look like when the pandemic passes? For a start, supply chains are likely to become shorter and more robust. Cross-border manufacturing will take on a geopolitical aspect, as managers question whether production is located in trusted countries. Moves to repatriate manufacturing, especially in key areas such as healthcare, will receive a fresh impetus. The age of multinational oligopolies is coming to an end. Takeover authorities will pay less attention to consumer prices when considering mergers and more attention to other matters, such as competition and security. If China becomes the scapegoat for the pandemic, as is likely, it can no longer serve as the workshop of the world."
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

User avatar
ArmChairCivvy
Senior Member
Posts: 16312
Joined: 05 May 2015, 21:34
United Kingdom

Re: Geopolitics and the global economy

Post by ArmChairCivvy »

Carnegie.ru has an interesting piece about what comes with hi-tech, in this case to the Central Asian states:
"A large proportion of Chinese exports to Central Asia (more than 28 percent in 2018) are goods with a high added value: machines and equipment, electronics, and spare parts.

The authorities of the Central Asian nations make no secret of the fact that they are also interested in China’s experience of social credit systems, which reward citizens for good behavior, and punish them for misdemeanors, relying heavily on networks of surveillance cameras. During a state visit to China in April 2019, Uzbek President Shavkat Mirziyoyev visited Huawei’s R&D center in Beijing. Among the technology on show were such Safe City solutions. At an intergovernmental committee meeting in September that same year, China announced it would allocate $1 billion for the introduction of a Safe City system to Uzbekistan’s regions.

Kazakh President Kassym-Jomart Tokayev visited another Chinese tech company—Hikvision—during his two-day state visit to China in September 2019. Upon returning to Kazakhstan, the president pledged to learn from China’s experience in digitalizing data about its nationals. Just one month later, the capital was testing a new payment method on its buses—FacePay—using passengers’ biometric data.

Tajikistan also has its own Safe City system, installed by the Chinese company Huawei back in 2013. In 2019, it was announced that the system would be modernized. According to the Safe City center’s deputy head Furkat Shoimardonov, its AI-powered software will now help to find wanted persons more rapidly.

Kyrgyzstan tried to establish a Safe City system back in 2011. The first contractor looked set to be the Russian company Stilsoft, but the tender was canceled, the deal fell through, and lawsuits ensued. Later—in 2018—Huawei was prepared to assemble the system, but that agreement fell through as well. In the end, the tender was won by another Russian company, Vega.

Building on Vega’s equipment, the Kyrgyz government agreed with China National Electronics Import & Export Corporation (CEIEC) to install a program for identifying individuals or groups of people.

Another Chinese company, Shenzhen Sunwin Intelligent, is working on the second stage of Kyrgyzstan’s Safe City project, which entails the installation of new cameras both in the capital Bishkek and across the entire country."

the particular "publication [from which the quote has been extracted] is part of the Sino-Russian Entente project carried out with the support of the UK Foreign and Commonwealth Office."
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

User avatar
ArmChairCivvy
Senior Member
Posts: 16312
Joined: 05 May 2015, 21:34
United Kingdom

Re: Geopolitics and the global economy

Post by ArmChairCivvy »

Is it possible to play poker so that everyone loses? Looks like the Saudis and Russia just did that; them going head to head has taken something that would have happened anyway to extremis now. While oil is diving through twenty, the physical limits of storage are being tested. 7 times as much Saudi oil as per normal is now sailing towards the US (undisclosed deal with the Strategic Reserve?).
Trump orchestrates the US taking 3/4s of the cut demanded from Mexico; how? Well, the big lenders are setting up companies to hold foreclosed oil assets... I guess Uncle Sam will pay the interest while they are being held, and the healthiest players can then buy them back (later) with... new loans from the same banks
- or may be a better parallel would have been Russian roulette; just that the revolver is holding enough rounds for everyone
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

User avatar
ArmChairCivvy
Senior Member
Posts: 16312
Joined: 05 May 2015, 21:34
United Kingdom

Re: Geopolitics and the global economy

Post by ArmChairCivvy »

Who was it again who said that "now is the opportune time to hit the legs off from under the US shale producers"?
https://ichef.bbci.co.uk/news/624/cpspr ... 020-nc.png
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

User avatar
ArmChairCivvy
Senior Member
Posts: 16312
Joined: 05 May 2015, 21:34
United Kingdom

Re: Geopolitics and the global economy

Post by ArmChairCivvy »

Trump has been calling the same man a lot lately, but he is being a bit incoherent:
1. wants to fill up the SPR (a good idea); China is doing the same with crude
2. wants the Treasury to pay drillers, to continue producing (?)

Of course there is (3.) a nutty conspiracy theory:
The Treasury will pay the major banks, instead, so that they can rob the (smaller) oil companies of their assets, the Treasury then pays the interest - that otherwise would not get paid - and in the end, on the 'light from the end of the tunnel day' those assets will be sold to Trump's cronies... how can I copyright this :lol: 8-)
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

User avatar
ArmChairCivvy
Senior Member
Posts: 16312
Joined: 05 May 2015, 21:34
United Kingdom

Re: Geopolitics and the global economy

Post by ArmChairCivvy »

Read two excellent pieces on Sky News: Kate McCann's analysis of PM's speech, for starters
- motivational as for now; how much has been achieved in a short time (compared to what does not fit into speech length, so we'll pass over that part)
- gone is the talk about future and of a sharp "V" bounceback, the early Boris-Boosterism, and treading very carefully for things to get better, rather than worse. To make people realise that the crisis is far from 'over' yet.

The second one was from Sao Paolo graveyards - the scale of mass graves and the speed with which they are getting filled and covered. So from amongst the 'little flu' politicians one has been converted, one has had his arm twisted (balance of power and all that..) and only the Trump of Tropics is still rampantly on the loose

The developed world bounceback will surely happen, regardless of the dip being 2, 3 or even 4 times as bad as what followed from the Financial Crash. But whatabout the rest of the world - will economic migration reach such scale that the receiving countries risk becoming ungovernable? (I know, some on the forum might say 'shooting at the border' is the solution... but what else could/ must be done? To create some kind of stability and preserve security longer term)

First of all, Covid-induced debt must be resolved. In the developed world it needs growth and keeping the Growth Paradigm intact will need, not FDR's New Deal (2.0 has already been set in train), but a Green Deal.
- for that to happen the renewal of Transatlantic cohesion must happen, to negotiate a hard bargain with China (you know, a new coal-powered megastation a week... to beggar thy neighbour in trade terms)

So the "first of all" includes at least three discrete steps, which surely won't be taken purely sequentially, but for any of them to succeed, all will have to happen (matter of degree required can be debated)

What is it that comes "second" then?

Some sort of back stop arrangement for the developing countries, who may not be able to raise the required resources/ debt in the first place but certainly won't be able to pay it back. It may have been Burundi's president who said that a whole generations's worth of development will be lost, but say Brasil (that has been at the forefront of economies actually "emerging") is staring at the same thing in the face - some things just cannot be left unmanaged.
- what that backstop will be in its shape and forms need not be discussed here. The realisation that such a thing is not an option, but a must must settle in first.
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

User avatar
ArmChairCivvy
Senior Member
Posts: 16312
Joined: 05 May 2015, 21:34
United Kingdom

Re: Geopolitics and the global economy

Post by ArmChairCivvy »

What hasn't made it to news - yet - though it can be found upstream, is that there are 35 million barrels of Saudi oil currently waiting just off the coast of the U.S.

... a bit of a dilemma for Mr. Trump.
A. will he let the quantities enter the refineries and sink the shale producers (ok, not all, but many are on the brink), or
B. will he stop the offloading [I am not aware of the payment terms; who would take the hit from all that oil rotting onboard the tankers?] and sink a key ally in the ME, especially as the situation with Iran has not shown many signs of cooling off
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

User avatar
ArmChairCivvy
Senior Member
Posts: 16312
Joined: 05 May 2015, 21:34
United Kingdom

Re: Geopolitics and the global economy

Post by ArmChairCivvy »

Not easy in the other camp (though that is a misnomer, considering where China and Russia stand, in relative terms) either.

Putin's term looks long by now; and is starting to look longer still. Even though the next check point, 2024 is not far away. However, with nobody directing traffic [the UN starting to look like The League of Nations], various forms of rampant nationalism that used to present an opportunity to make Russian intervention "look good" are not going to be good for anybody, but rather: something fairly insignificant can blow up in a big way

On a VE day, parallels come to mind:
Land grab against a weakened adversary: Manchuria/ Crimea
Go and gas bomb, or otherwise terror bomb, an opponent with no counter: Abyssinia/ Syria
Next step: in lock-step, partition some buffer zone?

The latest Russian ' NEP' was even sorter lived than the one that was stopped in 1929: supporters of the market reforms launched in 2000 and stopped by 2005 seem to have been on the losing side among power elites in Russia, ever since
- the latest gvmnt may have been Putin's attempt to create more balance (with technocrat reformers given a go)
- however, with the double headwinds from oil takings and from Covid, it is difficult to see how those people could prove themselves in a way memorable to Russian voters

Will the voters be asked at all (or the edifice of democracy dismantled)? If Putin goes, for any reason, the most likely take-over will be by the embedded, reactionary and strictly national-ideologist group called the Protectors... so they would protect whatever will be left, to their own advantage (and no need to ask the wider populace)
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

User avatar
ArmChairCivvy
Senior Member
Posts: 16312
Joined: 05 May 2015, 21:34
United Kingdom

Re: Geopolitics and the global economy

Post by ArmChairCivvy »

Oh well...

Two pivots to Asia, by two different US Administrations
- done in two v different ways

Every (almost) single thread here on the need on new kit quoting the renewed threat fro Russia

Covid, potentially, turning the world even more upside-down than was the case with Great Power Competition creeping back

And no response, despite someone (starting this thread) having the good intention
... let it be, let it be [then?]
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

User avatar
ArmChairCivvy
Senior Member
Posts: 16312
Joined: 05 May 2015, 21:34
United Kingdom

Re: Geopolitics and the global economy

Post by ArmChairCivvy »

The (two) graphs in this
https://www.telegraph.co.uk/world-news/ ... =DM1512125
are better than the article itself
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

zanahoria
Member
Posts: 234
Joined: 30 Apr 2015, 22:21
United Kingdom

Re: Geopolitics and the global economy

Post by zanahoria »

Have never really looked at this thread, but just had a quick skim read and wanted to register my appreciation for ACC taking the time to post quite a bit of in-depth thought & analysis on what looks to have been at times quite a lonely furrow.

User avatar
ArmChairCivvy
Senior Member
Posts: 16312
Joined: 05 May 2015, 21:34
United Kingdom

Re: Geopolitics and the global economy

Post by ArmChairCivvy »

Fruitless labour? - I did give it up for a year and a half, just to see if the fruit would wither :lolno: on the wine
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

SW1
Senior Member
Posts: 5656
Joined: 27 Aug 2018, 19:12
United Kingdom

Re: Geopolitics and the global economy

Post by SW1 »

Supply Chains and there fragility are being highlighted more than in many years, as result of lock down and national resilience/protectionism due to the political factors of it It’s starting to lead to reshoring of goods and services, it’s will be messy but a long time coming.

User avatar
ArmChairCivvy
Senior Member
Posts: 16312
Joined: 05 May 2015, 21:34
United Kingdom

Re: Geopolitics and the global economy

Post by ArmChairCivvy »

SW1 wrote: reshoring of goods and services, it’s will be messy but a long time coming.
One could say that defence (UK not so much as on the average) is better placed than most sectors.

Near-shoring is not a bad alternative, either... assuming that the French let 'your stuff' thru the customs :roll:
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

User avatar
ArmChairCivvy
Senior Member
Posts: 16312
Joined: 05 May 2015, 21:34
United Kingdom

Re: Geopolitics and the global economy

Post by ArmChairCivvy »

Well, geopolitics are back, no? :clap:

Russia offering lifting the naval blockade for lifting of the sanctions against them.
- world-wide hunger, just bcz of one geriatric

He may also (rather: the next one in line; Medjedev?) see this kind of picture

which then puts the DAVOS comments of another 98-yr old (but who has not lost his facilites) in a better perspective than what the press has afforded to him
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

SW1
Senior Member
Posts: 5656
Joined: 27 Aug 2018, 19:12
United Kingdom

Re: Geopolitics and the global economy

Post by SW1 »

ArmChairCivvy wrote: 27 May 2022, 13:17 Well, geopolitics are back, no? :clap:

Russia offering lifting the naval blockade for lifting of the sanctions against them.
- world-wide hunger, just bcz of one geriatric

He may also (rather: the next one in line; Medjedev?) see this kind of picture

which then puts the DAVOS comments of another 98-yr old (but who has not lost his facilites) in a better perspective than what the press has afforded to him
I would suggest it may well be aimed at countries and opinions in the none western world who are less able to cope particularly in the Middle East and Asia who have largely sat on the fence.

User avatar
ArmChairCivvy
Senior Member
Posts: 16312
Joined: 05 May 2015, 21:34
United Kingdom

Re: Geopolitics and the global economy

Post by ArmChairCivvy »

A fair comment, but there will only be 'one truth'.

Of course, diplomacy :clap: is about making 'several such' merge in some obscure way.
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

SW1
Senior Member
Posts: 5656
Joined: 27 Aug 2018, 19:12
United Kingdom

Re: Geopolitics and the global economy

Post by SW1 »

Ruffle a few feather I would think


Post Reply