Bond EconomicsZoltan Pozsar is back with his stories about “Bretton Woods III” and the petro-yuan. (The original report is presumably for bank clients, but I found this summary by ER Valasco.) Although developing countries trading with China might take these developments seriously, from the perspective of the developed economies, how third parties arrange their affairs has limited domestic impact.I initially had a longer response, but once I looked it over, I decided it was too weak. I will instead offer a relatively brief response....
Currencies And Geopolitics
Brian Romanchuk
"the only plausible strategic import is energy " "Barring a loss of energy imports" um, yeah. Without energy, everything stops and it anchors the price of everything else. *If* US lng can adequately supply Europe, they might not have lost their energy imports but they raised their prices unnecessarily by joining in the US war on Russia.
ReplyDelete"The problem is that is less clear what the advantage are for countries in the Middle East to lock their exports to China, and not the highest bidder." China doesn't attach the same strings that the US run west does, not yet anyways.
"It is clear that Putin’s disastrous foreign policy decisions have pretty much guaranteed that Russian energy will mainly be flowing to China and India for some time."
A) It's been far from a "disastrous foreign policy decision", militarily Russia has fought off the combined resources of the entire west with a skeleton crew while the sanction war has backfired onto Europe (that the majority of the world didn't even join in on) and B) Russia's energy flowing eastward is part of a major geopolitical shift that's hard to understate. Pushing Russia and China together is possibly the biggest blunder the US has ever done.. The war in Ukraine itself is a minor affair, it's simply the catalyst for the geopolitical rearrangement underway. It'll be interesting to see if Russia can continue the momentum.
Romanchuk... sounds Ukrainian to me...
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