John Mauldin has a good piece explaining how debt, both private and sovereign, works. Debt is one of the pieces of economics of which my understanding is limited. I have a much more dynamic and vibrant understanding of currencies than I do debt, despite that the two interplay intricately.
This is a good piece for people who are not as familiar with economics.
The original article is here.
Wednesday, February 25, 2015
Saturday, February 14, 2015
Beware the Ides of March
As anyone who follows this blog knows that I am an avid reader of geopolitics and economics. I have been loathe to make predictions; but the closer we get to what I perceive as a geopolitical and economic nexus, the more true I believe my prediction is. I've drawn information from a very broad range of sources, personal, private, and official.
Those who know me personally know that I have said many times that I believe Russia will start an open war this year, in March, I believe. They have been preparing for this for a long time through various political and subterfuge means. Their ultimate goal is to fracture the European Union and NATO for the purpose of using underhanded means to pull previously Soviet states back into their geopolitical orbit, or failing that to at least elevate the oil prices enough to delay (or prevent) internal political collapse.
I believe that this larger war will (and in fact already has) begun in the Ukraine. The Russians have been flooding the separatists in the Donbas with men and materiel for warfare to help organize and train the Ukrainian separatists. So the stage is already set.
I expect that in March, Russia will officially declare war on Ukraine and invade. The purpose of this is twofold. First, they will be obliquely testing the resolve of the EU and NATO to uphold commitments made in the past, namely the 1994 Budapest Memorandum, in which Bill Clinton and NATO guaranteed Ukrainian national security in exchange for Ukraine giving up their nuclear weapons stockpiles leftover from the Soviet collapse. This agreement was also signed by Russia, who agreed not to invade Ukraine. Obviously they are not holding up their end of the bargain, and the Ukrainians suffer as a result. The piper will have to be paid though with regards to this agreement. America cannot afford to break anymore agreements without losing all credibility abroad, and ultimately, this is what Vladimir Putin is testing, American integrity and resolve. If we fail this test, not only do we lose any chance at making any kind of diplomatic deals with anyone, -- after all who can believe anything we say after we have reneged on so many agreements? -- but we also will be opening the door for Mr. Putin to begin invading and creating vassal states of any number of states bordering Russia, such as Estonia, Latvia, Belarus, and others.
So, I believe America will have to respond. I don't think we have a choice in this. How exactly we respond though is up for debate.
Given the reticence of the American public -- and rightfully so -- to deployment of American ground forces, I suspect that an agreement will be made, and perhaps already has been, to arm the Ukrainian national government with modern weapons from the U.S. or the E.U. The Ukrainians have plenty of manpower at this point in time, so arming them with modern weapons that are capable of defeating the modern weaponry that Russia is deploying with the separatists will at least stabilize the ground war in the Ukraine. However, if Russia declares war on the Ukraine, they will begin attacking the Ukrainian army with their air force, which is vastly superior to Ukraine's air forces. This development will dictate that the U.S. become involved directly with our air forces. Fortunately, our air force possesses a distinctive edge on Russia, and I expect that the U.S. could declare and enforce a no-fly zone over the Ukraine that will effectively shut down any Russian air support of the separatists in the Donbas. I believe this combination should be adequate to effectively win the war brewing in the Ukraine, and hopefully nip future Russian aggression in the bud before it becomes a more serious problem.
Several news and research outlets have posted articles about how the Ukrainian conflict could escalate into a nuclear war. While I will not completely dismiss the possibility, I like to think that mutually assured destruction still holds sway both in the U.S. and Russia. So, while I think that the possibility exists, I believe that it will not occur unless all other conventional means are exhausted.
Similarly, news and other outlets have reported on neo-Nazi death squads operating with the sanction of the Ukrainian government. These death squads, while alarming and disturbing, are largely inconsequential to the overarching conflict. They are little more than a foot note that will have to be dealt with once the broader conflict is stabilized. The core of the matter is American integrity and fulfilling agreements that we have made in the past. If we do not, then nothing else matters; not our high and blackened morals, nor our liberal culture, none of it matters if we do not maintain impeccable integrity on the world stage. The neo-Nazi death squads will have to be dealt with and brought to justice once the conflict in the region is stabilized and Ukrainian national integrity is re-established, but nothing can be done about them if we do not intervene.
So, long as the U.S. and E.U. support for the Ukrainian government remains focused on the task at hand and does not exceed it in any way -- for example placing cruise missiles in Ukraine would be counter-productive and an escalation of provocations -- then we should be able to veritably maintain a defensive posture in this war. We must be completely vigilant to prevent any Ukrainian soldiers from setting foot in Russian territory, likewise any American combat aircraft must be kept out of Russian airspace in order to preserve the defensive posture. We cannot give the Russian propagandists any ammunition whatsoever to work with. We must avoid even the appearance of aggression, insofar as we can while still upholding our agreements.
I don't think this war is avoidable, but hopefully through quick and decisive action it can be lessened, and prevent future provocations by the Russians. Ultimately, I do not believe that the Russians want a long drawn out war in Eastern Europe. They only need enough war to restore the price of oil to a manageable level to achieve their primary goals, although exactly how Putin will spin this into a 'victory' for Russia remains to be seen. I imagine that it will be very interesting to see what story comes out of the propaganda machine in Russia after this conflict is over.
Those who know me personally know that I have said many times that I believe Russia will start an open war this year, in March, I believe. They have been preparing for this for a long time through various political and subterfuge means. Their ultimate goal is to fracture the European Union and NATO for the purpose of using underhanded means to pull previously Soviet states back into their geopolitical orbit, or failing that to at least elevate the oil prices enough to delay (or prevent) internal political collapse.
I believe that this larger war will (and in fact already has) begun in the Ukraine. The Russians have been flooding the separatists in the Donbas with men and materiel for warfare to help organize and train the Ukrainian separatists. So the stage is already set.
I expect that in March, Russia will officially declare war on Ukraine and invade. The purpose of this is twofold. First, they will be obliquely testing the resolve of the EU and NATO to uphold commitments made in the past, namely the 1994 Budapest Memorandum, in which Bill Clinton and NATO guaranteed Ukrainian national security in exchange for Ukraine giving up their nuclear weapons stockpiles leftover from the Soviet collapse. This agreement was also signed by Russia, who agreed not to invade Ukraine. Obviously they are not holding up their end of the bargain, and the Ukrainians suffer as a result. The piper will have to be paid though with regards to this agreement. America cannot afford to break anymore agreements without losing all credibility abroad, and ultimately, this is what Vladimir Putin is testing, American integrity and resolve. If we fail this test, not only do we lose any chance at making any kind of diplomatic deals with anyone, -- after all who can believe anything we say after we have reneged on so many agreements? -- but we also will be opening the door for Mr. Putin to begin invading and creating vassal states of any number of states bordering Russia, such as Estonia, Latvia, Belarus, and others.
So, I believe America will have to respond. I don't think we have a choice in this. How exactly we respond though is up for debate.
Given the reticence of the American public -- and rightfully so -- to deployment of American ground forces, I suspect that an agreement will be made, and perhaps already has been, to arm the Ukrainian national government with modern weapons from the U.S. or the E.U. The Ukrainians have plenty of manpower at this point in time, so arming them with modern weapons that are capable of defeating the modern weaponry that Russia is deploying with the separatists will at least stabilize the ground war in the Ukraine. However, if Russia declares war on the Ukraine, they will begin attacking the Ukrainian army with their air force, which is vastly superior to Ukraine's air forces. This development will dictate that the U.S. become involved directly with our air forces. Fortunately, our air force possesses a distinctive edge on Russia, and I expect that the U.S. could declare and enforce a no-fly zone over the Ukraine that will effectively shut down any Russian air support of the separatists in the Donbas. I believe this combination should be adequate to effectively win the war brewing in the Ukraine, and hopefully nip future Russian aggression in the bud before it becomes a more serious problem.
Several news and research outlets have posted articles about how the Ukrainian conflict could escalate into a nuclear war. While I will not completely dismiss the possibility, I like to think that mutually assured destruction still holds sway both in the U.S. and Russia. So, while I think that the possibility exists, I believe that it will not occur unless all other conventional means are exhausted.
Similarly, news and other outlets have reported on neo-Nazi death squads operating with the sanction of the Ukrainian government. These death squads, while alarming and disturbing, are largely inconsequential to the overarching conflict. They are little more than a foot note that will have to be dealt with once the broader conflict is stabilized. The core of the matter is American integrity and fulfilling agreements that we have made in the past. If we do not, then nothing else matters; not our high and blackened morals, nor our liberal culture, none of it matters if we do not maintain impeccable integrity on the world stage. The neo-Nazi death squads will have to be dealt with and brought to justice once the conflict in the region is stabilized and Ukrainian national integrity is re-established, but nothing can be done about them if we do not intervene.
So, long as the U.S. and E.U. support for the Ukrainian government remains focused on the task at hand and does not exceed it in any way -- for example placing cruise missiles in Ukraine would be counter-productive and an escalation of provocations -- then we should be able to veritably maintain a defensive posture in this war. We must be completely vigilant to prevent any Ukrainian soldiers from setting foot in Russian territory, likewise any American combat aircraft must be kept out of Russian airspace in order to preserve the defensive posture. We cannot give the Russian propagandists any ammunition whatsoever to work with. We must avoid even the appearance of aggression, insofar as we can while still upholding our agreements.
I don't think this war is avoidable, but hopefully through quick and decisive action it can be lessened, and prevent future provocations by the Russians. Ultimately, I do not believe that the Russians want a long drawn out war in Eastern Europe. They only need enough war to restore the price of oil to a manageable level to achieve their primary goals, although exactly how Putin will spin this into a 'victory' for Russia remains to be seen. I imagine that it will be very interesting to see what story comes out of the propaganda machine in Russia after this conflict is over.
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