MARKET PERSPECTIVE

By J Mulraj

July 6-12, 2024

Is the global polity brain dead?

The collective West, led by Biden, had, according to Putin,  prodded Russia to invade Ukraine, by encouraging Ukraine to seek membership of NATO. If allowed, NATO missiles could be positioned in Ukraine, too close for a missile fired at Moscow to be intercepted, and so posing an existential threat to Russia. It was a repeat of events that caused the Cuban missile crisis. At that time, too, the collective west, led by USA, ignored the warnings of Russian President Khrushchev, that the missiles posed an existential threat, but the warnings went unheeded. The world came close to nuclear Armageddon.

The reasons for ignoring Russians protests are unknown, and can be only guessed at. Perhaps the west wanted to weaken Russia militarily and economically, without risking their own soldiers. The west professes its love for democracy, a claim belied by the visible way in which democracy has been mutated in USA and the manner in which its institutions have been weaponized in the subversion of democracy.

Within two months of Russia entering Ukraine, a tentative peace agreement was reached between both sides. This was scuppered by British PM Boris Johnson, presumably with Biden’s support, leading to an extension of fighting by 2 years and the unnecessary deaths of perhaps a half million Ukrainians. What did Boris Johnson have to do with the war?

Big power actions are dictated by geostrategic interests; ‘protecting democracy’ becomes the fig leaf. America, for example, sided with Pakistan (under military leadership of Gen Yahya Khan and not a democracy) and blockaded India (the world’s largest democracy) which was trying to assist Bangladesh to become a democracy. So the notion that the collective west is assisting a democracy, Ukraine, rings a bit hollow.

The sad fact is that none of the world leaders are trying to encourage a negotiated end to the Ukraine war. In June they organised a conference in Switzerland, farcically, without Russia, and 80 countries issued a communique to respect Ukraine’s borders! The conference resembled a cuckoo’s nest, with a lot of chirping and cackle, but little substance – how can it have substance if one of two warring parties is not invited?

Well, one flew over the cuckoo’s nest! Hungarian Prime Minister Victor Orban met Putin in Moscow, seeking to have a negotiated end to a wasteful war. He was followed by Indian PM Narendra Modi, with the same purpose.

Guess what happened? The EU did not enjoy Orban’s initiative, and EU President Ursula Von Der Leyen (not to be mixed with Alice in Wonderland), threatened to remove Hungary from its rotating presidency of the EU Council, which it had assumed from July 1.

Such a threat, conveying disdain of elected leaders – Hungary is a democracy – by an unelected bureaucrat – Alice, sorry Ursula, isn’t elected – is farcical, especially when considering that Orban was seeking to negotiate an end to the war and thus salvage what remains of the Ukrainian democracy.

Is the global polity brain dead?

It certainly seems so. Despite drowning in its own debt, over $ 34 trillion, the US has passed 5 bills appropriating $175 b. aid to Ukraine. The EU has given large sums too. Unable to fill the black hole into which this money disappears, they decided to use seized Russian assets to give to Ukraine! This is manifestly illegal. So they decided to use the interest on seized Russian assets as aid to Ukraine, its enemy! That’s perhaps the height of cuckooism. Tough to fly over it!

Biden, though, is making a valiant attempt at out cuckooing that! At the NATO summit, he introduced the Ukrainian President as Putin! Though he quickly corrected himself, the gaffe was publicly televised. His party is seriously concerned and trying to search an alternative candidate for President.

As re the plan to gift Ukraine the earnings from seized Russian assets, MBS, leader of Saudi Arabia, has threatened the collective west against this. Should they proceed with giving seized Russian assets, or the returns on it, as aid to Ukraine, then Saudi Arabia, which has a huge sovereign wealth fund, SWF, will dump its holding of EU bonds in the market.  That would cause interest rates to shoot up, and EU economies to tank.

Last week the BSE Sensex closed at 80519, for a weekly gain of 523 points.

In welcome news US inflation in June fell to 3%. This could be either because Fed’s tight money policies are working, or because producers are lowering prices due to a fall in demand, which is worrisome. Either which ways, one can expect the US Fed to cut its interest rate in September. Will Fed Chair Powell cut, and display the wisdom and guidance of the Cheshire Cat in Alice in Wonderland, or would he continue to be the White Rabbit, with his obsession for time?

One hopes, with a wry smile, that he will take the feline turn.

Picture source: https://m.indiamart.com/proddetail/bird-nest-23838862973.html

Comments may be sent to Jmulraj@asiaconverge.com