MARKET PERSPECTIVE

By J Mulraj

Feb 10-16, 2024

Propaganda, Illusions, and Shaping the Narrative

The most noteworthy event of last week was an unedited version of an interview of Russian President Vladimir Putin by well known American journalist Tucker Carlson. Putin went into past history, going back thousands of years, explaining the relationships between Russia and Ukraine, (which was once a part of Russia but created as a separate country, inexplicably so, by Stalin) and the common bonds, and language, they share. His motive for invading Ukraine was to ensure that it didn’t become a part of NATO, which would have allowed NATO missiles to be placed in Ukraine, posing an existential threat to Russia. (Those who recall history will realize this was the same sequence of events that caused the Cuban missile crisis. Then, as now, America’s President Kennedy did not heed Russian President Khrushchev’s concern of an existential threat caused when the US placed missiles in Turkey, a member of NATO, which could reach Moscow before it could effectively respond. It was only when Khrushchev placed Russian missiles in Cuba, US’s backyard, creating the Cuban missile crisis, that both sides withdrew their missiles. The world came within a hair’s breadth of nuclear Armageddon. Why can we not learn from history?)

When asked by Tucker who he thought was responsible for blowing up the Nordstream Pipeline, Putin said it was the CIA, on the logic that only USA had both the desire and, importantly, the ability, to do so. When asked by Tucker why he had not brought their findings before the world, Putin confessed that no one could win a propaganda war against USA, as it has control over Western media.

So nations are increasingly relying on propaganda to shape the narrative in the minds of citizens. Readers have to listen to both sides, and to various commentaries, and determine which narrative sounds, to them, as more credible. And which are red herrings, meant to deceive them.

The lyrics of the famous song ‘Nights in White Satin’, describing the moon as the

             cold hearted orb that rules the night,

             Removes the colours from our sight,

             Red is gray, and yellow, white,

             But we decide which is right,

             And which is an illusion.

 The collective west was annoyed at Tucker, not merely for interviewing Putin, but for giving him a platform to air his views, which has been viewed by, perhaps, over 200 million people across various platforms. Viewers would have noticed the obvious difference between Putin and Biden in knowledge of history, clarity of thought and expression, and recall of events.

So there are two narratives of the ongoing conflict in Ukraine. The Russian narrative talks of existential threat to it if Ukraine joins NATO, and that, when Gorbachev agreed to a break up of the old Soviet Union, President Raegan had promised him that NATO would not expand eastwards, though they later did. The narrative of the collective West is that Ukraine is free to decide whether to join NATO or not, and that Putin is hungry to re establish the old Soviet empire. The narrative in western media is so shaped. But does it appeal to logic? Russia’s land area is 17 million sq km, over 70% more than USA’s 9.8 m. But it’s population of 144 m is a little over 40% of USA’s. Will it be able to protect a larger land area with more borders?

Red is gray, and yellow, white, but we decide which is right…. 

There are lots of other examples of differing narratives, and various illusions.

One of these is the discussions over climate change, which has shaped geostrategic and investment policy. One of President Biden’s first acts was to cancel the Keystone pipeline project and ban further leasing of Federal land for fracking to produce shale oil. The reason was to protect the environment. This single act converted USA from being a net exporter of oil to a net importer. It caused Biden to go pleading to Saudi Arabia to produce more oil in order to bring down petrol prices before a mid term election. Saudi Crown Prince, Mohammed Bin Salman, whom Biden had called a pariah, did not oblige. Unsurprisingly. The geostrategic consequences of the decision also manifested itself in the ineffectiveness of sanctions to deter Russia. Russia found willing buyers for its oil/gas in China, India and others, even as European manufacturers and economies suffered.

In investments, bankers introduced ESG (Environment, Social and Corporate Governance norms, denying funding to those, including oil companies, that didn’t conform to the norms. Naturally, supply of crude oil was affected, without new discoveries, and its price rose. Oil company stocks, in fact, performed well.

But now there’s a different narrative on climate change. This is because the EU, which controls the national policies of me member states, has increased regulations on farmers, imposed stricter green policies and allowed imports of cheaper Ukranian grain which European farmers can’t compete with due to rising input costs of energy, fertilizer and transport. French farmers protested the most, and President Macron pled  with the EU to water down regulations, which it did. Farmers are warning western Governments that the net zero norms will spike food inflation .

Watch this video, , which claims that the tide has turned on climate change.

Red is gray, and yellow, white, but we decide which is right, and which is an illusion.

 So, there are different narratives on various crucial issues affecting investors, and getting the opposing viewpoints before coming to a conclusion, is important.

 Last week the BSE Sensex closed at 72426, up 836 points over the week.

A  piece of good news last week was that the Emir of Qatar pardoned 8 Indian sailors who had (wrongly) been accused of espionage, and sentenced to death. India is a large, and dependable, buyer of Qatari gas, the export of which has enriched the country. According to US Energy Information Administration, India’s consumption of gas is expected to triple by 2050,  from 7.0 billion cubic feet per day, to 23.2 cfd.

Russia, and India, go to the polls in May, and USA in November. Results for the first two are more or less decided but the third is crucial for the safety of the world. Biden’s forgetfulness and weakness are becoming a worrying threat, and it is to be seen whether he will emerge as a front runner.

Interesting times ahead.

Picture Source: https://realityteam.org/cards/red-herring/

Comments may be sent to jmulraj@asiaconverge.com