MARKET PERSPECTIVE

By J Mulraj

Dec 1-7, 2024

Will lead to disaster

The foolishness of  myopic world leaders would be funny were it not so dangerous. For, they are driving the world towards disaster. At the very least financial disaster. At worse, nuclear disaster. Let’s look at some leading nations, in terms of  GDP.

America is the world leader, by both, the size of its economy and by the foolishness of its leaders. Biden’s myopia in permitting the use by Ukraine of long range American ATACMS missiles to strike Russia, borders on insanity. For, in so permitting, he is risking WW3 with the prospect of it becoming a nuclear war. The new Russian intermediate missile called Oreshnik, recently test fired into Ukraine, in response to the ATACMS attack, is an intermediate ballistic missile, capable of reaching a speed of 10 mach. The Oreshnik can hit London, Paris and Germany in 20 minutes or less. Since no country has an interceptor missile with a speed of 10 mach, it can’t be stopped. If loaded with a nuclear payload, the consequences are too horrific to imagine.

And yet Biden continues provoking the Russian bear by suggesting that Ukraine be provided with nuclear weapons! If this isn’t the height of myopia, pray, what is?

Ukraine cannot possibly win the war and the effort of the combined West to prolong it, by continually supplying it with military and financial aid, is a malign way to slowly kill its youth. In essence, by doing so, the combined west, unwilling to send its young men to die in battle, has outsourced  deaths to Ukraine. This, by any definition, is a war crime. Even though Biden is a lame duck President, he has announced a $725 m. additional military assistance and has asked Congress for a further $24 b. in financial aid. The US does not have enough weapons to fight a war, should it get involved in one (plenty of potentials like Taiwan, Middle East and South China Sea) nor the industrial capacity to build inventory fast enough. Nor does the US, which is $35 trillion in debt, have the financial resources. So the assistance packages for Ukraine will not help it win, but will certainly cause America to lose.

This is extreme myopia!

On top of that Biden has given his son, Hunter, a full pardon for various offenses, including tax evasion and bribery by foreign Governments, in which the ‘big guy’ got a 10% share. This, essentially, sets a precedent by which the families of future Presidents can merrily take bribes, with a pardon to avoid accountability! Is this not a slalom towards national bankruptcy?

China is the #2 economy in the world. The Chinese Communist Party (CPC) earlier permitted its realty sector to grow without any fetters. Early investors made phenomenal returns, leading to a frenzy, and so to overcapacity. As a result today the sector has collapsed, with some 80 million vacant apartments. A waste of resources, both financial and materials extracted from Mother Earth, with environmental impact. Several foreign manufacturers have left China and relocated, not least because of vague anti-espionage laws, thus creating high youth unemployment. China continues with its untenable claim over the area within its arbitrarily created 11 dash line (earlier 9) which is virtually the whole South China Sea. Even though it has lost its appeal in an international court, it practices aggressive wolf warrior diplomacy. As a result of all these myopic and aggressive actions, it’s economic growth has slowed. In certain areas, though, it dominates, such as in EVs, where it can compete in western markets despite high tariffs on Chinese EVs.

Germany, the #3 economy, was hugely dependent on cheap Russian oil and gas for its economic success. Its leaders myopically opted to sanction supply of Russian oil/gas, and bought far more expensive natural gas to replace it. The end result was predictable – a collapse of its industry, including its vaunted auto industry. The auto industry, itself, is to share the blame, for not anticipating the technological disruption to its ICE (internal combustion energy) vehicles from EVs (electric vehicles). It’s major auto company, Volkswagen Wagon, is struggling, unable to compete with cheaper and better Chinese EVs. VW workers have gone on strike for higher wages, whilst the management seeks a 10% cut in wages to be able to face competition.

This is myopia that has made the strongest EU economy weak.

France is #7 economy by GDP. It has a major problem of underfunded pensions. In trying to address this, its Government of PM Michel Barnier has fallen, as the far right parties providing it support, insisted on pensions being adjusted to inflation. A foolish demand, given that the pension pool was already underfunded. This would need a cutting of existing benefits, and not an inflation linked benefit that increases the burden. Who will fund it?

So it is myopic for opposition leaders to turn a blind eye to the problem of public pension, and ask the Government to eat cake!

Syria is ranked 159th out of 167 in the Legatum Prosperity Index, not economically large at all, but is a geopolitical disaster waiting to happen. The civil war has recently flared up with rebels succeeding in capturing two large towns, ousting the forces of President Assad.

Baba Varga was a blind Bulgarian mystic who, like Nostradamus, has correctly predicted several world events. She had predicted that the fall of Syria will trigger WW3.

Though she was blind, she could see future events.

The lament is that global leaders of several countries, mentioned above, cannot see where their stupid actions are leading to, though not blind.

Their myopia and foolishness can trigger a global war, which is the biggest risk for investors.

Last week the BSE Sensex closed at 81,709.12 .

In other news, India has discovered a rare earth element, Tantalum, in the Sutlej basin. Tantalum is not corrosive against most acids, hence a useful metal for chemical reactions. It’s mainly used for electronic components.

Gas prices have shot up by 50% in Europe as a cold winter has increased energy demand for heating. Ukrainians face the prospect of a cold winter, without adequate heating after Ukraine’s energy infrastructure has been badly hit with Russian missiles.

RF Kennedy junior explains who really profits from the Ukraine war. The assistance provided by US is by way of loans, collateralized by land assets and mineral resources. Ukrainian land is extremely fertile. Companies like BlackRock, the world’s largest asset manager, will likely finance the reconstruction effort.

Net net, a country has been destroyed, between 60,000 to 100,000 men have died, its deeply in debt and will lose fertile land and mineral assets, and now has to pay for reconstruction after likely surrendering the land it has lost in the war!

Is this not myopia by Zelensky?

Sir Walter Scott got it right, in his poem Patriotism. This applies to all so called leaders who have failed their citizens and are endangering humanity:

Breathes there a man with soul so dead

Who ne’er to himself hath said

This is my own, my native land

….

Despite those titles, power and pelf

The wretch, concentrated all in self

Living, shall forfeit fair renown

And, doubly dying, shall go down

To the vile dust from whence he sprung

Unwept, unhonour’d and unsung.

Comments may be sent to Jmulraj@asiaconverge.com

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