Geopolitical Compass #49
Two charts to put your stock market gains in perspective.
As went France, there goes the US?
Russia continues to ‘fail’ up.
Red Sea crisis on shipping starting to dawn on a wider audience.
Are stock market gains illusory?
Rule Britannia, Britannia rule the waves?
US taxpayers take on more debt, for others.
History doesn’t repeat, but it often rhymes. An excerpt from ‘Napolean - A Life’ by Paul B. Johnson:
And France, unlike Denmark, was tied to the chariot of its great power status - it referred to itself as “the Great Nation” and sought in the second half of the eighteenth century, almost as duty, to engage in vastly expensive and increasingly unsuccessful wars to maintain its historical position as Europe’s leading country. So the 1780s were a struggle against bankruptcy, leading to financial juggling, arbitrary impositions, court desperation, and finally to the calling of the Estates General in 1789, for the first time in nearly two centuries. After that, the process of change spun out of control.
Does this sound like the United States today?
Western media presstitutes spin keeps getting more ludicrous. First they told you the Russian economy would be crippled by Western sanctions. Next they told you the Russian military was weeks away from running out of munitions and taking chips from dishwashers (that was almost two years ago).
This week UK media want you to believe that actually, ending the war in Ukraine (with a whimper?) will be a victory over Russia and show Putin!
Is it any wonder alternative media is in the ascendance? People are clearly waking up to the fact that mainstream media is propaganda first and foremost. Later on when it is not as crucial they’ll let truth and real facts filter through, but never in the moment - that’s saved for state narrative alone.
In complete opposition from the above propaganda spin, Tucker Carlon presented the world this week with a two-hour-long, unedited interview with Vladimir Putin. While helpful to set the background to the conflict, you can skip the history lesson of the first half hour if desired.
While most of Putin’s talking points have been expressed before, this is the first time many in Western nations will have been given a chance to hear them without prejudicial interviewing, biased edited sound bites and his words being taken out of context.
The reality that the Red Sea crisis will last longer than the market has been pricing in is starting to make it’s way into the headlines.
“We’ve not seen the level of threat peak, to the contrary,” Maersk Chief Executive Officer Vincent Clerc said in a Bloomberg TV interview. “The amount or the range of weapons that are being used for these attacks is expanding and there is no clear line of sight to when and how the international community will be able to mobilize itself and guarantee safe passage for us.”
In order to be confident about sailing through again, there need to be signs of a period of stability Norden Chief Executive Officer Jan Rinbo said. Only when that is combined with a period of no attacks would it be viable for merchant shipping to think about returning, he added.
At the same time, dry weather means the Panama Canal — one of the world’s other vital maritime chokepoints — has reduced traffic due to low water levels. Alongside the Red Sea crisis, that’s causing vast numbers of ship diversions.
“That really is unprecedented,” Norden’s Rindbo said. “I’ve not in my 29 years in shipping seen anything like this.”
Stability is a long way off. More to the point, if even wider conflict breaks out, as a result of say….. oh I don’t know…. maybe the UK and Germany signing mutual security pacts with Ukraine:
Mutual security agreements and alliances are what directly caused what would have been regional conflicts into WWI and WWII. How quickly they forget, or perhaps that’s the point…they haven’t forgotten.
What effect will break out of wider conflict or even a new world war have on shipping rates?
Stock Market Returns
Over a long enough time horizon, stocks only go up. Sure, but relative to what? If you purchasing power is actually going backwards due to monetary debasement, is your wealth growing?
Let’s check in with the UK navy. The same one that has become a party to the new mutual security agreement with Ukraine.
The same UK navy that wants to have a run at Russia is withdrawing a ship for maintenance after being in battle with….. $25,000 Houthi drones.
The Type 45 warships were designed to accommodate the Mark 41 Vertical Launching System fitted in their bows, allowing them to fire cruise missiles.
However, the space has only ever been used as a gym for crew because the Navy did not procure the weapons due to a lack of funds.
It comes after The Telegraph revealed HMS Diamond cannot attack Houthi targets on land because it lacks the firepower, although the warship has had direct involvement in successfully destroying Houthi drones targeting shipping in the Red Sea using its anti-air Sea Viper missile system.
Ukrainians must be so relieved.