MARKET PERSPECTIVE

By J Mulraj

Sep 7- 14, 2023

Joe Biden makes a mess instead of solving problems

Some progressive middle eastern countries are trying to prepare their nations for a future where their main income source, oil, would not generate as much. UAE is aiming to be an international hub, positioned between a rising Asia and Europe. The Kingdom of Saudi Arabia (KSA) is building a new city, NEOM, which will rely on renewable energy, promoted as a modern special economic zone. NEOM derives it’s name from Ancient Greek word neo, which means new, suffixed by M, for Mustaqbal, an Arabic word for future. Israel would be a good partner in this preparation for the future, felt some Arab countries who signed up for the Abraham accords with Israel. UAE has already signed, KSA was about to. The main aims of the terrorist attack by Hamas are to seek to scuttle KSA signing, and to bring the Palestinian cause back to the centre stage.

Palestinian Hamas launched a horrific attack on Israel, breaching its security through coordinated attacks by air, sea and land, after firing some 5000 rockets to overwhelm Israel’s iron dome defense system. In what can be described a failure of Israel’s renowned intelligence gathering system, Mossad, Hamas managed to seize control of several towns, kill over 1200 Israelis (including the dastardly and barbaric act of beheading several children) and also kidnapped some 130 men, women and children, of various nationalities, including Americans. Hamas has threatened to kill the hostages, on camera, if Israel attacks Palestinians without warning.

Israel has now cleared its territories of all Hamas terrorists and has amassed an army of some 300,000 soldiers, perhaps planning a ground assault into Gaza, in addition to aerial bombardment. Till then, it has blockaded the Gaza Strip, due to which residents face an increasing shortage of food, water and electricity.

A ground assault by Israel will result in many civilian and military casualties, in door to door combat, because Gaza is one of the most densely populated areas in the world. The risk is of an expansion of the conflict. The Hezbollah is launching rocket attacks onto Golan Heights, from Syria, and should Iran get involved, it would be a highly dangerous situation, and the impact on stock markets would be significant.

The US has despatched two of its best aircraft carrier groups, in a show of solidarity with Israel. It seeks to convince Egypt to open a humanitarian corridor so that civilians can flee from Gaza.

President Biden’s actions seem to be the cause of many of the problems in the world, and of USA.

It is believed that the weapons used by Hamas came primarily from two sources, and were largely funded by Iran. One source were the abandoned weaponry, worth about $7 b., when Biden botched the exit from Afghanistan. Thirteen American servicemen were killed, due to poor planning by the US military, under Biden. This incompetent departure gave the impression that USA, under Biden, was a pushover.

The other probable source was weapons given by Biden to Ukraine to defend itself against Russia. Biden, while providing billions in armaments to Ukraine, (which has the reputation of being a very corrupt nation) did not have the common sense to appoint a weapons inspector. The weapons, handed over to Ukrainians in Poland, were partly diverted (sold) en route to Ukraine.

Worse still, the sanctions on oil production imposed under Trump’s presidency, weren’t enforced by Biden, allowing Iran to significantly boost its oil output, (sold to China) providing it billions to fund Hamas, Hezbollah, and others. Watch this video. Hamas, on its own, had not the financial capacity to buy and fire over 5,000 rockets, maintain secrecy from the world’s finest intelligence agency, and undertake simultaneous ground, sea and air (terrorists sitting atop flying motorized paragliders) operations. Moreover, Biden just signed a deal to hand over $6 b. of frozen funds in exchange for some American hostages, financially facilitating Iran’s activities.

One of Biden’s first acts on becoming President, was to end leases of Federal land for fracking, something that gave America its energy independence. This was with the laudable aim of protecting the environment. But, you know, the global oil demand is going to be met. A production cut by America, spurning fracking, will be made up by an increase elsewhere. By Middle East, Russia or other producers. And that production will spew greenhouse gases, and guess what? Gases will be spewed in the same world, Joe! It makes no sense to have a ‘no pee zone’ in a pool, Joe!

The loss of energy independence is what has allowed oil producers, several hostile to America, to dictate oil prices. Should the current crisis created by Hamas spread, the price of crude oil can shoot up significantly, leading the world to a bad global recession. India, which imports 84% of its oil requirement, will be hurt immensely.

Biden’s open border policy, allowing undocumented migrants to enter without verification, and disappear, is insane. Some sanctuary cities are even housing the illegal migrants in hotels and other centers, displacing and dis housing war veterans for the purpose! The opioid fentanyl, smuggled in by the migrants is killing Americans.

Another inexplicable development in America is the removal of Kevin McCarthy as Speaker of the House, by a bunch of hard line Republicans who sided with Democrats to oust him, because they felt McCarthy didn’t drive a hard bargain and get the Dems to agree to spending cuts before agreeing to a temporary bill to fund the Government for 45 days. The interesting question that no one has thought of asking is why the Dems agreed to oust McCarthy, knowing that the replacement would be a hard liner who’d drive a hard bargain, after 45 days.

The BSE Sensex closed the week at 66282, up 287 points over the week.

Given the situation between Palestine and Israel, global markets are remarkably steady. Either global investors don’t expect a worsening of the situation, or an escalation of the conflict, which would be good news for stock markets, or these investors have managed to meet the migrants and got hold of some fentanyl.

It does seem, though, that caution is warranted. Prudence, after all, is the better part of valor. Whether in, our out, of a stupor.

Picture Source:  https://newrepublic.com/article/158699/joe-biden-fdr-presidency-coronavirus-crisis-trump-prosecution:

Comments may be sent to jmulraj@asiaconverge.com