Category: Geopolitical Risks

White House to brief full Senate as Trump calls North Korea ‘real threat to the world’

MarketWatch/Robert Schroeder/04-24-17

The Trump administration is preparing to brief all 100 senators this week on the situation in North Korea, as President Donald Trump calls the country a “real threat to the world” and confers with the leaders of China, Japan and Germany.

The unusual full-Senate briefing is scheduled for Wednesday, according to reports, and comes after Trump criticized North Korea’s “continued belligerence” in a phone call with President Xi Jinping of China on Sunday. In a separate call with German Chancellor Angela Merkel on Monday, Trump discussed “the urgent security challenge posed by North Korea,” the White House said.

The administration has expressed concern over Pyongyang’s missile tests and nuclear ambitions.

Posted in Geopolitical Risks |

China and Russia dispatch ships to shadow Donald Trump’s ‘armada’ as it approaches North Korean waters – Japanese media report

Telegraph/Neil Connor/04-17-17

China and Russia have dispatched spy vessels to shadow a US aircraft carrier group heading to North Korean waters, Japanese media said, amid rising tensions over Pyongyang’s nuclear ambitions.

Beijing sought Russian help in averting a crisis over North Korea last week, as concerns grow in China that Donald Trump is seeking to confront North Korea over its weapon’s program.

The US president sent a navy group led by the aircraft carrier Carl Vinson into the region, in what is being seen as a signal to Pyongyang.

Posted in Geopolitical Risks |

Pence: US era of strategic patience with North Korea over

BBC/04-17-17

US Vice-President Mike Pence has said his country’s “era of strategic patience” with North Korea is over.

Mr Pence first made the remarks at the demilitarised zone (DMZ), the area dividing the two Koreas, during a visit to South Korea to reaffirm ties.

His visit comes amid escalated tensions on the peninsula, with heated rhetoric from both North Korea and the US.

Posted in Geopolitical Risks |

US ready to launch pre-emptive strike on N. Korea if nuclear test is imminent

Korea Times/04-14-17

The United States is prepared to launch a pre-emptive strike on North Korea if it is certain that the communist nation is about to follow through with its sixth nuclear test, NBC News reported Thursday, citing multiple senior intelligence officials.

The unidentified officials were quoted as saying that the U.S. has positioned two destroyers capable of shooting Tomahawk cruise missiles in the region, one of them just 300 miles from the North Korean nuclear test site.

U.S. heavy bombers are also positioned in Guam to attack the North if necessary, and earlier this week, the Pentagon announced that the USS Carl Vinson aircraft carrier strike group was redirected to the area, the report said.

The U.S. strike could include missiles and bombs, cyber and special operations on the ground, it said.

Posted in Geopolitical Risks |

North Korea warns of nuclear strike if provoked; Trump ‘armada’ steams on

Reuters/Sue-Lin Wong & David Brunnstrom/04-11-17

North Korean state media warned on Tuesday of a nuclear attack on the United States at any sign of American aggression, as a U.S. Navy strike group steamed toward the western Pacific – a force U.S. President Donald Trump described as an “armada”.

Trump, who has urged China to do more to rein in its impoverished ally and neighbor, said in a tweet that North Korea was “looking for trouble” and the United States would “solve the problem” with or without Beijing’s help.

…”We are sending an armada. Very powerful,” Trump told Fox Business Network. “We have submarines. Very powerful. Far more powerful than the aircraft carrier. That I can tell you.”

Posted in Geopolitical Risks |

Korea crisis deepens as the US dispatches the Carl Vinson strike group to the region

NavyTimes/David B. Larter/04-09-17

The head of all U.S. forces in the Pacific canceled a planned carrier exercises and port visits in Australia and redirected the Carl Vinson carrier strike group to the waters off the Korean Peninsula as the U.S. weighs a series of limited options for dealing with an increasingly unbalanced and dangerous North Korean regime.

In a release Saturday afternoon, U.S. Pacific Command announced the cancellation and redeployment of Vinson. Announcing carrier movements in advance is rare, and generally done to send a clear message.

Posted in Geopolitical Risks |

After Xi Leaves U.S., Chinese Media Assail Strike on Syria

NYT/Jane Perlez/04-08-17

With President Xi Jinping safely out of the United States and no longer President Trump’s guest, China’s state-run media on Saturday was free to denounce the missile strike on Syria, which the American president told Mr. Xi about while they were finishing dinner.

Xinhua, the state news agency, on Saturday called the strike the act of a weakened politician who needed to flex his muscles. In an analysis, Xinhua also said Mr. Trump had ordered the strike to distance himself from Syria’s backers in Moscow, to overcome accusations that he was “pro-Russia.”

Posted in Geopolitical Risks |

Russian PM: Moscow, US on ‘the verge of a military clash’

TheHill/Mark Hensch/04-07-17

Russian Prime Minister Dmitry Medvedev on Friday condemned the U.S. missile strike in Syria, saying it puts Moscow and Washington “on the verge of a military clash.”

“This military action is a clear indication of the US President’s extreme dependency on the opinion of the Washington establishment, the one that the new president strongly criticized in his inauguration speech,” he wrote on Facebook.

Medvedev said the missile strike is “really sad for our now completely ruined relations” with the U.S. and “good news for terrorists.”

Posted in Geopolitical Risks |

Military nightmare scenario brewing in the East China Sea

CNBC/Clay Dillow/04-04-17

While the world watches mounting military tensions in the South China Sea, another, more ominous situation is brewing in the East China Sea that could be the trigger point for a major war between the superpowers. At the heart of tensions are eight uninhabited islands controlled by Japan that are close to important shipping lanes, rich fishing grounds and potential oil and gas reserves. China contests Japan’s claims and is escalating its military activity in Japan airspace. In response, Japan has been doubling its F-15 jet intercepts.

The situation increases the risk of an accidental confrontation — and could draw other countries, like the United States, into a conflict. It’s a topic President Trump will likely bring up with Chinese President Xi Jinping at his Mar-a-Lago estate this week.

Posted in Geopolitical Risks |

Gibraltar tensions bubble over into British war talk

FT/George Parker, Jim Brunsden and Ian Mount/04-02-17

Theresa May would go to war with Spain to defend Gibraltar, a former Conservative leader claimed on Sunday, as tensions escalated between London and Madrid over the future of Britain’s overseas territory.

Just days after the prime minister launched Brexit negotiations offering a spirit of “constructive, respectful and sincere co-operation”, senior Tories are furious at Madrid’s attempt to use exit talks to try to extend its influence over the Rock.

Meanwhile Madrid dealt a second blow to Mrs May in as many days after stating it would not veto an application by an independent Scotland to join the EU, despite its previously expressed concerns that a break-up of the UK might fuel Catalan separatism.

Posted in Geopolitical Risks |

Trump says US will act alone on North Korea if China fails to help

The Guardian/04-03-17

Donald Trump has issued China with an ultimatum that if it fails to put pressure on North Korea to disable its nuclear programme, then the US is prepared to take action against Pyongyang on its own.

“Well, if China is not going to solve North Korea, we will,” the president said in an interview with the Financial Times that has alarmed experts on the region.

Posted in Geopolitical Risks |

‘No turning back’ on Brexit as Article 50 triggered

BBC/03-29-17

Britain’s departure from the European Union is an “historic moment from which there can be no turning back”, Theresa May has told MPs.

The prime minister said it was a “unique opportunity” to “shape a brighter future” for the UK.

She was speaking after Britain’s EU ambassador formally triggered the two year countdown to the UK’s exit by handing over a letter in Brussels.

Posted in Geopolitical Risks, Politics |

Le Pen foes relish Dutch vote, but French election may be different

Reuters/Brian Love/03-16-17

Adversaries of Marine Le Pen expressed relief on Thursday after her ally Geert Wilders won fewer seats than expected in a Dutch election, but analysts warned against reading too much into the result ahead of France’s tight presidential race.

They said far-right leader Le Pen’s campaign in France is better planned and targeted than that of Wilders’ party, while a standoff between the Dutch and Turkish governments had given a “one-off” boost to incumbent Dutch prime minister Mark Rutte.

Centre-right Rutte’s decisive victory over anti-immigrant, eurosceptic Wilders delighted European Union leaders and others concerned about rising populism across the bloc in the wake of last year’s shock Brexit vote.

Posted in Geopolitical Risks |

The Dutch election might be over, but Europe’s headache isn’t

CNN/Pieter Cleppe/03-16-17

Just because Geert Wilders’ Party of Freedom failed to win as many votes as predicted in the Dutch elections, it doesn’t mean wider discontent in both the Netherlands and across Europe has disappeared.

We shouldn’t forget that during his campaign, Wilders didn’t even try to moderate himself — unlike Marine Le Pen, leader of the French National Front, for example. In February, Wilders called Moroccan immigrants “scum,” despite only two months earlier having been convicted of inciting discrimination against the very same group.

His style may have lost him the votes of people who thought he was too extreme. But it is possible that this was part of a deliberate strategy by Wilders to influence the policy discourse of the opposition. To a certain extent, he’s been successful at that.

Posted in Geopolitical Risks |

Japan plans to send largest warship to South China Sea, sources say

Reuters/Tim Kelly & Nobuhiro Kubo/03-13-17Watch movie online The Transporter Refueled (2015)

Japan plans to dispatch its largest warship on a three-month tour through the South China Sea beginning in May, three sources said, in its biggest show of naval force in the region since World War Two.

China claims almost all the disputed waters and its growing military presence has fueled concern in Japan and the West, with the United States holding regular air and naval patrols to ensure freedom of navigation.

Posted in Geopolitical Risks |

‘We do reasonable’ – so why are Dutch voters abandoning the centre ground?

The Guardian/Jon Henley/03-13-17

As many as 40% of voters are still undecided; as many as 15% will not make up their mind until voting day. But even if the PVV does finish top, Wilders is unlikely to enter government: no other major party will work with him.

The deeper story in the Netherlands is one of voters abandoning en masse the mainstream parties of centre right and centre left that have governed the country for the past half-century, and turning instead to an astonishing array of smaller, newer, anti-politics-as-usual parties from across the political spectrum.

Posted in Geopolitical Risks |

The isolation of Angela Merkel’s Germany

FT/Gideon Rachman/03-06-17

Angela Merkel has described the idea that she is now the de facto leader of the western world as “grotesque” and “absurd”. The German chancellor’s angst is understandable. Modern Germany has no desire to lead the west and is not powerful enough to bear that burden.

But unrealistic expectations are not the only reason for German anxiety. If Ms Merkel looks out from the glass box of the chancellor’s office in Berlin there is trouble on every horizon. To the east are the ever more authoritarian and Germanophobic governments of Poland and Hungary. And further east a hostile Russia. To the west, is the US of Donald Trump; to the north the UK of Brexit. And to the south lie Italy and Greece, two troubled countries that increasingly blame Germany for their economic woes.

Posted in Geopolitical Risks |

North Korea Missile Test Stirs Fears of Capability to Reach the U.S.

WSJ/Jonathan Cheng & Alastair Gale/03-06-17

North Korea’s firing of a burst of medium-range missiles suggests it is still pushing toward a promised launch this year of an intercontinental ballistic missile—one that could potentially hit the U.S. West Coast.

Posted in Geopolitical Risks |

Scotland to demand new referendum, No 10 fears

Times of London/Oliver Wright & Lindsay McIntosh/02-27-17

Theresa May is preparing for the Scottish government to call a second independence referendum to coincide with the triggering of Article 50 next month.

Senior government sources say there is serious concern that Nicola Sturgeon will use the start of the Brexit process to demand another vote on the future of the UK and that Whitehall is planning for that event.

Posted in Geopolitical Risks |

Trump adopts aggressive posture toward Iran after missile launch

Reuters/Steve Holland and Matt Spetalnick/02-02-17

The White House put Iran “on notice” on Wednesday for test-firing a ballistic missile and said it was reviewing how to respond, taking an aggressive posture toward Tehran that could raise tensions in the region.

While the exact implications of the U.S. threat were unclear, the new administration signaled that President Donald Trump intended to do more, possibly including imposing new sanctions, to curb what he sees as defiance of a nuclear deal negotiated in 2015 by then-President Barack Obama.

Posted in Geopolitical Risks |

EU chair labels Trump a ‘threat’ as Europeans debate U.S. ties

Reuters/David Randall/01=31-17

Donald Trump has joined Russia, China and radical Islam as a threat to the European Union, EU leaders were told on Tuesday by the man chairing a summit where they will debate relations with the United States.

…In vivid language that reflects deep concern in Europe at the new U.S. president’s support for Brexit, as well as his ban on refugees and people from several Muslim countries, Tusk called on Europeans to rally against eurosceptic nationalists at home and take “spectacular steps” to deepen the continent’s integration.

“…worrying declarations by the new American administration, all make our future highly unpredictable,” he said.

Posted in Europe, Geopolitical Risks |

Donald Trump Could Be Starting a New Cold War With China

Time/Charlie Campbell/01-24-17

In stump speeches through the American heartland, he accused China, with its export-driven economy, of stealing American jobs. He vowed to label Beijing a currency manipulator and to impose 45% tariffs on Chinese imports. But, even worse from Beijing’s point of view, he accepted, while President-elect, a phone call from Taiwan’s President Tsai Ing-wen. A U.S. leader had not had direct contact with his Taiwanese counterpart since Washington recognized the People’s Republic in 1979. In talking to Tsai, Trump broke with four decades of diplomatic protocol and challenged what Beijing deemed its “core interests.”

…Things have since escalated.

…China’s state media has responded forcefully to the suggestion [from Tillerson that the occupied islands are in international waters], warning that any such attempt would force a “devastating confrontation” and that both sides should “prepare for a military clash.”

PG View: In times of geopolitical uncertainty, people tend to turn to gold as a safe-haven.

Posted in Geopolitical Risks |

Brexit: Supreme Court says Parliament must give Article 50 go-ahead

BBC/01-24-17

Parliament must vote on whether the government can start the Brexit process, the Supreme Court has ruled.

The judgement means Theresa May cannot begin talks with the EU until MPs and peers give their backing – although this is expected to happen in time for the government’s 31 March deadline.

But the court ruled the Scottish Parliament and Welsh and Northern Ireland assemblies did not need a say.

Brexit Secretary David Davis promised a parliamentary bill “within days”.

PG View: While the ruling may impact the timeline, a hard-Brexit is still on.

Posted in Geopolitical Risks |

Brexit: UK to leave single market, says Theresa May


BBC/01-17-17

Theresa May has said the UK “cannot possibly” remain within the European single market, as staying in it would mean “not leaving the EU at all”.

But the prime minister promised to push for the “greatest possible” access to the single market following Brexit.

…And Mrs May promised an end to the UK’s “vast contributions” to the EU.

But Labour said there were “enormous dangers” in the prime minister’s plans.

PG View: Sterling rebounded, encouraged by Ms. May’s assurances that Britain was not turning inward and that Parliament would get to vote on any deal stuck with the EU.

Posted in Geopolitical Risks, Politics |

China’s leaders are about to test the promise that holds their country together

BusinessInsider/Linette Lopez/01-09-17

“In a closed-door meeting in December, Bloomberg reports, Chinese leaders came to the conclusion that piling on debt for short-term growth has become too dangerous. Now they will prioritize stability over growth and reform, and become more flexible about their target of 6.5% growth until 2020.

It seems they had little choice. Capital is leaving the country at a breathtaking rate. Last month, $82 billion left China despite tighter capital controls on individuals and corporations. That, combined with a strong dollar, is pushing the value of the yuan down to levels that are worrying leadership.”

PG View: If China’s growth rate continues to slow, as Xi Jinping continues to consolidate political power, a backlash of some sort becomes increasingly likely. One might also wonder what steps President Xi might take to avoid any such backlash.

Posted in all posts, Geopolitical Risks |

Euro Tests Fresh 14-Year Low as Investors Measure Geopolitical Risks

TheStreet/Martin Baccardax/12-20-16

“The euro tested fresh 14-year lows against the U.S. dollar Tuesday as investors reacted to a trio of terrorist incidents around the region yesterday that have rattled confidence and raised questions about geopolitical risks in the months ahead.”

PG View: There’s a lot more going on in Europe than the recent attacks. The attempt to rescue Monte dei Paschi via a private deal looks to be falling apart. If that happens, the Italian government will have to step in to bailout the world’s oldest surviving bank and Italy’s 3rd largest lender. That will likely mean the bank’s creditors will likely experience considerable losses. The risks to the broader Italian, European and global banking systems are considerable. And that’s not to mention the current political turmoil in Italy that may at some point lead to a referendum on exiting the EU.

Posted in all posts, Europe, Geopolitical Risks, U.S. Dollar |

Britain, U.S. sending planes, troops to deter Russia in the east

26-Oct (Reuters) — Britain said on Wednesday it will send fighter jets to Romania next year and the United States promised troops, tanks and artillery to Poland in NATO’s biggest military build-up on Russia’s borders since the Cold War.

Germany, Canada and other NATO allies also pledged forces at a defense ministers meeting in Brussels on the same day two Russian warships armed with cruise missiles entered the Baltic Sea between Sweden and Denmark, underscoring East-West tensions.

[source]

PG View: Geopolitical tensions between NATO and Russia continue to escalate, which should provide further underpinning to the price of gold.

Posted in Geopolitical Risks |

Brussels explosions: Many dead in airport and metro terror attacks

22-Mar (BBC) — At least 26 people have been killed or seriously injured in terrorist attacks at Brussels international airport and a city metro station.

Twin blasts hit Zaventem airport at about 07:00 GMT, killing 11 and injuring 81, the health minister said.

Another explosion struck Maelbeek metro station an hour later. Brussels transport officials say 15 people were killed and 55 injured, 10 seriously.

Belgium has now raised its terrorism threat to its highest level.

[source]

Posted in Geopolitical Risks |

South Korea shifts to ‘uncompromising’ stance on North Korea

15-Feb (Deutsche Welle) — Addressing South Korea’s National Assembly on Tuesday, South Korean President Park Geun-hye has called for a new approach in her country’s relations with North Korea.

“It has become clear that we cannot break North Korea’s will to develop nuclear weapons through existing means and goodwill,” Park said it remarks carried on national television. “It’s time to find a fundamental solution for bringing practical change in North Korea and to show courage in putting that into action.”

…”[The South Korean government] will take stronger and more effective measures to make North Korea bitterly realize that it cannot survive with nuclear development and that it will only speed up regime collapse,” Park said.

Her comments echo the sentiment shared by the US and Japan, both South Korean allies. This week South Korean officials are scheduled to discuss the possibility of deploying a missile defense system with their American counterparts. South Korea would host such a system, which risks drawing the ire of Beijing.

[source]

Posted in Geopolitical Risks |

Tensions between Russia and Turkey reach new peak

15-Feb (FT) — Tension between Russia and Turkey has reached a new peak as the two countries step up military action in Syria in support of opposing sides, edging closer to direct confrontation in the country’s increasingly internationalised war.

The growing rift between the two countries — with each now attacking rebels the other supports — has alarmed Western diplomats amid fears Russia is seeking to undermine Nato by ramping up its clash with Ankara.

“It seems to us that just like in the Baltics, Russia wants to try and push at Nato’s ability to stand behind all its members,” said a Nato official. A senior European official said Russian President Vladimir Putin was seeking to destabilise Recep Tayyip Erdogan, his Turkish opposite number.

“Putin is furious with Turkey,” said the European official. “The situation is really incredibly serious.”

[source]

Posted in Geopolitical Risks |