Category: Geopolitical Risks

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


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


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.


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.


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.


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.”


Posted in Geopolitical Risks |

Russian Defence Ministry says suspects Turkey of preparing incursion in Syria

04-Feb (Reuters) – Russia has serious grounds to suspect Turkey of preparing for a military incursion in Syria, Russian Defence Ministry spokesman Igor Konashenkov said on Thursday.

“The Russian Defence Ministry registers a growing number of signs of hidden preparation of the Turkish Armed Forces for active actions on the territory of Syria,” he said in a statement.


PG View: Oil seems to like the possibility, pushing back above $33.

Posted in Geopolitical Risks |

Hillary Emails Reveal True Motive for Libya Intervention

06-Jan (Foreign Policy Journal) — The New Year’s Eve release of over 3,000 new Hillary Clinton emails from the State Department has CNN abuzz over gossipy text messages, the “who gets to ride with Hillary” selection process set up by her staff, and how a “cute” Hillary photo fared on Facebook.

But historians of the 2011 NATO war in Libya will be sure to notice a few of the truly explosive confirmations contained in the new emails: admissions of rebel war crimes, special ops trainers inside Libya from nearly the start of protests, Al Qaeda embedded in the U.S. backed opposition, Western nations jockeying for access to Libyan oil, the nefarious origins of the absurd Viagra mass rape claim, and concern over Gaddafi’s gold and silver reserves threatening European currency.

…Most astounding is the lengthy section delineating the huge threat that Gaddafi’s gold and silver reserves, estimated at “143 tons of gold, and a similar amount in silver,” posed to the French franc (CFA) circulating as a prime African currency. In place of the noble sounding “Responsibility to Protect” (R2P) doctrine fed to the public, there is this “confidential” explanation of what was really driving the war [emphasis mine]:

This gold was accumulated prior to the current rebellion and was intended to be used to establish a pan-African currency based on the Libyan golden Dinar. This plan was designed to provide the Francophone African Countries with an alternative to the French franc (CFA).

(Source Comment: According to knowledgeable individuals this quantity of gold and silver is valued at more than $7 billion. French intelligence officers discovered this plan shortly after the current rebellion began, and this was one of the factors that influenced President Nicolas Sarkozy’s decision to commit France to the attack on Libya.)

Though this internal email aims to summarize the motivating factors driving France’s (and by implication NATO’s) intervention in Libya, it is interesting to note that saving civilian lives is conspicuously absent from the briefing.

Instead, the great fear reported is that Libya might lead North Africa into a high degree of economic independence with a new pan-African currency.

French intelligence “discovered” a Libyan initiative to freely compete with European currency through a local alternative, and this had to be subverted through military aggression.


PG View: This is an astonishing revelation, providing a broader definition of the term “currency war”! It also reflects just how far some governments are prepared to go in order to prevent gold from encroaching on their fiat currency monopoly.

The CFA franc (in French: franc CFA [fʁɑ̃ seɛfɑ], or colloquially franc) is the name of two currencies used in Africa which are guaranteed by the French treasury. The two CFA franc currencies are the West African CFA franc and the Central African CFA franc. Although theoretically separate, the two CFA franc currencies are effectively interchangeable.

Both CFA Francs currently have a fixed exchange rate to the euro: 100 CFA francs = 1 former French (nouveau) franc = 0.152449 euro; or 1 euro = 655.957 CFA francs exactly. — Wikipedia


One cite from Wikipedia says the CFA “helps stabilize the national currencies of Franc Zone member-countries and greatly facilitates the flow of exports and imports between France and the member-countries.”

The 14 African countries that make up the Franc Zone have a combined GDP of US$166.6 bln (as of 2012). Apparently to some, that’s worth fighting for.

Posted in Currency Wars, Geopolitical Risks, Gold News, Gold Views |

Saudi-Iran standoff: War or a grand bargain?

06-Jan (Al Jazeera) — On the same day that Saudi Arabia announced the execution of 47 convicts on terrorism charges, including the prominent Shia religious leader Nimr al-Nimr, Riyadh unilaterally declared its withdrawal from the ceasefire agreement in Yemen.

While Saudi diplomats were quick to stress that Riyadh’s decision to break diplomatic ties with Iran will not affect efforts to negotiate peace in Syria and Yemen – where the two regional heavyweights support opposite sides – fears are growing that the Saudi-Iran rift may complicate efforts to reach a settlement in these regional hotspots.

Arab Analysts, speaking to Al Jazeera, ruled out the possibility of a military showdown between the two countries but warned that the worsening relations between Saudi Arabia and Iran will most likely exacerbate Sunni-Shia tension in the region and most importantly complicate efforts to combat the Islamic State of Iraq and Syria (ISIL).

…The popular narrative that the diplomatic rift between the two states will negatively affect negotiations to end the Syrian conflict assumes that the negotiations had any possibility of success.

This is simply not the case, as there is no reason to believe that either country takes seriously negotiations as a mechanism to end the conflict.

…What the diplomatic rift does, then, is force both countries into openly hostile and confrontational positions that need to be reconciled before any serious negotiations can take place.


Posted in Geopolitical Risks |

North Korea says it successfully conducts hydrogen bomb test

06-Jan (CNN) — North Korea says it has successfully carried out a hydrogen bomb test, which if confirmed, will be a first for the reclusive regime and a significant advancement for its military ambitions.

A hydrogen bomb is more powerful than plutonium weapons, which is what North Korea used in its three previous underground nuclear tests.

“If there’s no invasion on our sovereignty we will not use nuclear weapon,” the North Korean state news agency said. “This H-bomb test brings us to a higher level of nuclear power.”


Posted in Geopolitical Risks |

As Saudi Arabia severs ties with Iran, questions loom in volatile region

04-Jan (CNN) — Following the execution of a prominent Shiite cleric in Saudi Arabia, Saudi and Iranian officials continue to trade barbs as relations between the two Middle Eastern powerhouses deteriorate.

…On Monday, Bahrain also announced it is severing diplomatic ties with Iran, citing Iran’s “blatant and dangerous interference” in Bahrain and other Arab countries.

The United Arab Emirates, meanwhile, announced it was “downgrading” its diplomatic relations with Iran. The UAE recalled its ambassador in Tehran and said it would also reduce the number of diplomats stationed in Iran, according to state news agency WAM.

The UAE “has taken this exceptional step in light of Iran’s ongoing interference in internal GCC and Arab affairs that has recently reached unprecedented levels,” a government statement said.

…”The diplomatic rupture between Saudi Arabia and Iran could easily spiral out of control,” said Fawaz Gerges, chair of contemporary Middle Eastern studies at the London School of Economics.

…”The situation is extremely volatile between the two most powerful states in the Gulf, Sunni-dominated Saudi Arabia and Shiite-dominated Iran. You have a war of words. You have war by proxies … This really could get very ugly and dangerous in the next few weeks and next few months,” Gerges said.


Posted in Geopolitical Risks |

U.S. to send Special Operations forces to Syria

30-Oct — (CNN) The United States is set to deploy U.S. troops on the ground in Syria for the first time to advise and assist rebel forces combating ISIS, multiple officials said.

The White House is expected to announce Friday that the U.S. will deploy a small number of U.S. Special Operations forces to Kurdish-controlled territory in northern Syria. The American troops will help local Kurdish and Arab forces fighting ISIS with logistics and are planning to bolster their efforts.

U.S. Special Ops have previously conducted secretive missions on the ground in Syria, but the deployment marks the first permanent presence of U.S. ground troops in Syria since the U.S. began leading an international effort last year to confront ISIS, the militant Islamist group which now controls broad swaths of territory in Iraq and Syria.


PG View: I was relieved to hear our troops are going to be assisting the “rebels” that Russia is presently bombing the snot out of, but rather the “rebels” that are getting shelled by our Turkish “allies”.

Russia is already warning that we can’t deploy troops to Syria because we haven’t been invited — as they have — by the al-Assad government.

What a mess.

Posted in Geopolitical Risks |

Nato ‘plotting to send 4,000 soldiers to Russian border’ as tension with Vladimir Putin increases

29-Oct (Mirror) — Thousands of soldiers could be sent to the Russian border by Nato as tensions with Vladimir Putin increase.

Bosses of the North Atlantic Treaty Organization are considering placing troops across Poland and three other Baltic states, according to sources quoted in the Wall Street Journal.

Tensions have been ramped up ever since Russia annexed Crimea from Ukraine last year.

The development has thrown Ukraine into a chaotic state of civil war.

Former US Ambassador to Ukraine Steven Pfifer said that reports of Nato considering sending soldiers is a sign that Russia is now viewed “not as the partner we’d hoped for over the past 20-odd years, but more as a potential adversary”.


PG View: Rising tensions with Russia and rising tensions with China as well. Operating in close proximity to these two pretty big dogs raises the geopolitical risk level considerably.

Posted in Geopolitical Risks |

Greece election: Alexis Tsipras hails ‘victory of the people’

21-Sep (BBC) — Greece’s Alexis Tsipras has said his left-wing Syriza party has a “clear mandate” after winning a second general election in less than nine months.

But he said Greeks faced a difficult road and recovery from financial crisis would only come through hard work.

Syriza won just over 35%, slightly down on its previous result and still short of an overall majority.

But it will renew its coalition with the nationalist Independent Greeks. Opposition New Democracy gained 28%.

Far-right Golden Dawn came in third with 7%, slightly up on January’s poll.

Syriza was first elected in January on an anti-austerity mandate, but was forced to accept tough conditions for Greece’s third international bailout.


PG View: And so further pension cuts and tax hikes may commence.

Posted in Geopolitical Risks |

North Korea orders troops on war footing after exchanging fire with South

21-Aug (BBC) — North Korean leader Kim Jong-un has ordered his frontline troops to be on a war footing, after an exchange of fire with the South across their heavily fortified border, state media report.

The KCNA report said Mr Kim declared a “semi-state of war” at an emergency meeting late Thursday.

It threatened action unless Seoul ends its anti-Pyongyang border broadcasts.

The North often uses fierce rhetoric when tensions rise and it has made similar declarations before.

The BBC’s South Korea correspondent Steve Evans says that although this ritual of aggression often sees such language escalate to the firing of ammunition, this time the rhetoric is fiercer and artillery shells are now in use.


Posted in Geopolitical Risks |

Russia says will retaliate if U.S. weapons stationed on its borders

15-Jun (Reuters) — A plan by Washington to station tanks and heavy weapons in NATO states on Russia’s border would be the most aggressive U.S. act since the Cold War, and Moscow would retaliate by beefing up its own forces, a Russian defense official said on Monday.

The United States is offering to store military equipment on allies’ territory in eastern Europe, a proposal aimed at reassuring governments worried that after the conflict in Ukraine, they could be the Kremlin’s next target.

Poland and the Baltic states, where officials say privately they have been frustrated the NATO alliance has not taken more decisive steps to deter Russia, welcomed the decision by Washington to take the lead.

But others in the region were more cautious, fearing their countries could be caught in the middle of a new arms race between Russia and the United States.


Posted in Geopolitical Risks |

Russia masses heavy firepower on border with Ukraine – witness

27-May (Reuters) — Russia’s army is massing troops and hundreds of pieces of weaponry including mobile rocket launchers, tanks and artillery at a makeshift base near the border with Ukraine, a Reuters reporter saw this week.

Many of the vehicles have number plates and identifying marks removed while many of the servicemen had taken insignia off their fatigues. As such, they match the appearance of some of the forces spotted in eastern Ukraine, which Kiev and its Western allies allege are covert Russian detachments.

The scene at the base on the Kuzminsky firing range, around 50 km (30 miles) from the border, offers some of the clearest evidence to date of what appeared to be a concerted Russian military build-up in the area.


Posted in Geopolitical Risks |

US-China war ‘inevitable’ unless Washington drops demands over South China Sea

26-May (Telegraph) — China has vowed to step up its presence in the South China Sea in a provocative new military white paper, amid warnings that a US-China war is “inevitable” unless Washington drops its objections to Beijing’s activities.

Chinese dredging vessels in the waters around Mischief Reef
In the new policy document published on Tuesday, China outlined its plans to shift from a defensive military posture to placing emphasis on offensive capabilities.

Claiming that it faces a “grave and complex array of security threats”, including challenges to its sovereignty over the South China Sea, the policy document released by the State Council says the military will step up its “open seas protection”.

…”If the United States’ bottom line is that China has to halt its activities, then a US-China war is inevitable in the South China Sea”, said the paper, which is often seen as a mouthpiece of the government in Beijing.


Posted in Geopolitical Risks |