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The Guardian Original article ›
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The India Pakistan issues have already evolved into India China issues. And the competition between the US and China has consequences for India, the European Union and the rest of the world. As the US seeks to regain its industrial base and reduce overconcentration of manufacturing in China, India is at the stage of a manufacturing effort that is similar to Japan's in the 1920's and 1970's and China's in the 1990's. It will take place over the next two decades. This is the crucial event for Asia that will see the emergence of not two but three nations in Asia- Japan, China and India as modern manufacturing nations.  The talk about military action popular in the media misrepresents the real issues which are economic and ignore the turning point in 2025 with the Ukraine war putting the European Union and Germany's position of concentration of production in China as untenable. For the US DJT represents a second effort to bring serious manufacturing back to the US and allies such as India. This will be the deciding change in Asia and the world by 2030, 2035 and 2040, as India will make the decisive change to a modern nation similar to the US and Europe. This will open up opportunities for 1.4 billion people in India and a related 300 million people in Indonesia. ...
Economist Original article ›
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Collapse of the easten european economies says the Economist would raise questions about the idea of a united Europe, the idea of the EU itself, and destabilize the euro - as countries in the EU like Ireland and Greece are in just as bad a shape. And in talk of enlargement of the EU will be doomed, and this is true of the western Balkans, TUrkey, and some countries int he former Soviet Union. Politically letting these countries derift could mean they fall for populists and nationalists of the bad type. And there is the serious economic consideration for banks in Austria, Italy and Sweden, which are heavily involved in lending to Eastern Europe. They could see catastrophic losses and put the banking systems of these countries at risk. Sweden has already chosen to help the Baltic Countries, and sees it has its political responsibility, and the whole Baltic region as its home, see link. The Economist suggests a differentiated approach depending on which group of countries in Eastern and Central Europe something that Angela Merkel of Germany also supports. For Ukraine the Economist says its best to let the IMF provide assistance. For the Baltic countries, plus Bulgaria, the Economist advocates an accelerated path to the euro, on the grounds that they are tiny and shouln't affect confidence in the euro. The Baltic countries have a population of 7 million. This approach is not supported by the European Commission or the European Central Bank. For the 4 larger countries, Poland, Czech Republic, Hungary, and Romania, the Economist says the priority should be to prevent further currency collapse, and to rescue the banks responsible for the foreign currency loans that are going bad, with the pain being shared between debtors and the banks, governments of lending and borrowing countries. Financial institutions like the ECB, the IMF, and the European Bank for Reconstruction and Developemnt, and the European Investment Bank should help support the rescue effort. ...
CNNMoney Original article ›
The Guardian Original article ›
LyrArc Article Gist
With voter turn out at 72% in Finland's election the National Coalition party headed by Petteri Orpo gets 20.8% of the vote, the far right nation first Finns party 20.1% and the SDP 19.9%. The NCP party will form a new government in coalition with one of the two other parties. The NCP supports Ukraine in its war with Russia and also its joining NATO. It advocates less spending on unemployment and housing benefits. The Finns party is for less non EU country immigration. Boosting the economy and creating new jobs is also part of the new government's program.

Wall Street Journal Original article ›
Wall Street Journal Original article ›
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Major decline in oil prices in Oct. 2014 as prices drop to $81 per barrel and are forecast to reach $70. U.S. oil production increased by about 56% or 3.1 million barrels a day since 2004. U.S. demand for gas and fuel declined 8% compared to 2004. Initially instability and wars in the Middle East sustained high oil prices in 2012-2013. Yet with growing output from shale and other sources in N. America and slowing economies of Europe and China, the situation reached a point in 2014 where supply exceeds demand. This shift more than offsets any instability in trouble spots. The situation affects the U.S. consumer favorably with an estimate of $1 billion in savings for American consumers with every one cent drop in price at the gas pump, by one estimate from Deutsche Bank analysts. Typical American families gained an extra $50 a month from the decline June to October 2014, according to analysts at Gasbuddy.com. The declines are a boost for the slowing economies of Europe, Japan, China, S, Korea and India. China's imports for 2015 are estimated at 61% of oil consumption, using official estimates. In the current slowdown the lower prices offer relief. India which imports 75% of its energy benefits signficantly, as this helps lower inflation and reduces cost of fuel subsidies for state run companies. Russia is adversely affected by the declines as it depends on oil and gas exports for 50% of the nation's budget. Estimates by AFK Sistema economists show the Russian economy contracting in 2015 with oil at near $90 per barrel (Brent crude is at about $85, and WTI at $81 in early Oct. 2014). Russia's former Finance Minister Alexei Kudrin reflects opinion among Russian executives and politicians, when he told state television that Saudi Arabia may be pushing prices lower to target Russia's oil resource based economy and Mr. Putin, in an effort to broaden the effect of sanctions. (The Saudis have strongly protested the Putin intervention in Syria.) Venezuela has used $120 per barrel and Angola $98 for its budget, leading to a strong hit for the economy. ...
DW.COM Original article ›
LyrArc Article Gist
German perceptions of Mikhail Gorbachev are shown here in DW.com. He is revered in Germany because of Gorbachev's efforts to end Soviet rule in East German state called the GDR, leading to the fall of the Berlin Wall. Gorbachev supported German reunification but did not do this is in a way that ensured that ordinary Russians and citizens of the GDR could make the transition to democratic processes in a smooth way. He also failed to grasp that economic transition could be difficult and would require extensive aid and grants from the west, and that safeguards and protections for retired pensioners and vulnerable sections of society needed to be in place. The following is a reflection of the background in political government and economy of the events in Europe leading to the war in Ukraine.  As a result Gorbachev's instincts were right by first 1956 as a student, and then 1979 as government official about the need for democratic processes to realize the real potential of Russia, just as has happened in many countries that lacked these processes for change in government- Japan, Germany, South Korea, India, Brazil and many countries in Asia and Latin America. But not realizing that these countries made the transition with considerable American and British assistance. Even where there was no direct assistance indirectly the British setup the first limited Swaraj or free rule in India, with elections and elected assemblies in Indian states in the 1930's, following the pattern in Dominion states Australia and Canada. Mohandas Gandhi negotiated within these processes for rights of South African Indians and Colored people, gaining experience, including study of British law.  A son of poor farmers in the agricultural region of North Caucasus, in Stavropol, it is relevant today that his maternal grand parents were from Chernihiv in Ukraine. He came to power in 1980 after entering the Politburo that year. These were the waning years of Leonid Brezhnev, president of the Soviet Union who followed Nikita Khrushchev (1953- 1964). Khrushchev was from eastern Ukrainian region near Donetsk. Leonid Brezhnev was a protege of Krushchev since 1931, from Kamianske, Ukraine.   Gorbachev was influenced by Khrushchev's speech that denounced Stalin in 1956 in favor of a freer and more open society. Khrushchev, became first secretary of the Communist party in 1953 after the death of Stalin and set the pace of post war Soviet society from 1950 to 1964. He removed the fear of the dictatorship of the proleteriat working class, increasingly dictatorial under Lenin, and blatantly arbitrary under his successor to make Soviet Union a freer society.  Yet his tendency to make decisions on his own without consulting others, and the failure of agriculture in the Soviet Union including food shortages led to his replacement by his protege Brezhnev. Brezhnev's whole career was built under Krushchev in Ukraine, in the army in Ukraine, and as a political leader in the Soviet 18th Army that entered Prague in 1945 defeating the Nazis. Why is this relevant? Gorbachev was educated at Moscow State University when the Soviet Union was in the Sputnik era, and felt at the time that it could reach the 1950's standard of living in the US- very different from the earlier leaders. Yet he may have been too much of an optimist and not hands on in understanding the working of a modern economy as large as Russia and the interests of different groups of society that had to be be balanced and protected. His understanding of the US and of how the US and British economies had evolved was limited or nonexistent. The isolation of the Soviet period may have compounded this. The Russian state in the Soviet Union could not simply unwind the power of the state and its intervention and everything would come out right of its own accord.   Leonid Brezhnev, the Ukrainian Russian who succeeded Krushchev from 1964 to 1979 let the system of Soviet rule remain as it was, in the Great Stagnation, leading to lethargy, lack of innovation, and a weak economy with military expansion. Gorbachev tried to regenerate the system by opening it up, but failed to see that there was a risk that it could come apart quickly as it did in just 4 years after he became president in 1985. Only the centralized power of the state had kept the Russian state together from the Tsarist period through the Communist period. The risks of this Gorbachev failed to grasp. What if it happened too quickly without a safety net for the people who could not make the transition. What lawlessness and failure of the rule of law could happen. The US and Britain had evolved their democracies over centuries. Wars were fought in the US and Britain over rights and responsibilities of kings and parliaments. In the US Lincoln fought the civil war not just for emancipation but to ensure safeguards for free white men on the farms so that Labor did not get disabilities placed on them by Capital (entrenched forces of Capital of which the southern plantation economy was only one aspect.)  Japan and Germany were set up as democratic states through American power and constitutional frameworks with Marshall Plans or agreement to take in unlimited imports from Japan. This bad scenario happened in Russia because Gorbachev failed to set the conditions first and work patiently to achieve them including introducing limited  elections and parliamentary processes first in Russia.  Leaders such as Yeltsin who succeeded Gorbachev in 1989, winning the elections that followed, failed to provide a safety net for the vulnerable in the 1980's. Unemployment increased rapidly, life expectancy dropped in Russia, and the economy failed in the early years after 1980. A Marshall Plan like that offered to Germany could have helped but Gorbachev's failure may have been his failure to provide this transition by arranging for West Germany and the US to support a planned transition, a kind of Marshall Plan of Aid, and maintaining a gradual move to democracy as the country was given time to learn institutions of American and British parliamentary democracy. No such Marshall Plan was negotiated for a smooth transition over inevitable obstacles, no safeguards were put in place for illegal efforts to control the state by rogue elements and to seize assets of state companies, no efforts to first introduce limited elections and parliamentary processes for learning democratic process in Russia, and the people of Russia were left with a memory of the this period as a bad lawless period from 1989 to 2005.  Leading to the situation today under Putin of aspiring to the Soviet period as a kind of period that had offered Russia the world recognition it had lost. And this had happened even though the Russian economy had recovered and the standard of living had risen under Putin. Putin's career spanned the period as a Russian official in Dresden, Germany Democratic Republic or Soviet period East Germany to working in the St Petersburg City Council under Yeltsin. He personally witnessed the fall of the Berlin Wall and the fall of the German Democratic Republic from Dresden and Gorbachev's refusal to build a transition period for the changes so that it would not be traumatic for the GDR. Even after reunification these traumas remain in some segments of the older population in East Germany that saw themselves as neglected and support extreme right wing parties in eastern German states by 2020- considering the Soviet period as one in which their lives were less neglected.  After three terms as president Putin with his own traumas from that period in Dresden, and with a mother lost in the period after the Nazi invasion of Russia, a father who survived the Battle of Stalingrad, saw the period of lawless behaviour in the collapse of the Soviet Union as the"greatest geopolitical disaster of the century."  Putin and people around him made missteps and miscalculations launching a war in Ukraine, leading to the situation today- jeopardizing hard won gains for the Russian economy. By 2022 Russian standards of living had risen and the economy was in the best shape it had been in the modern period since the Industrial Revolution. Yet largely exposed because of the dependence on oil and gas during a period of climate change and focus on building future economies free of fossil fuels.  Putin in his own peculiar logic may have seen this as the only opportunity in 2022 before deliinking from fossil fuel reduced the importance of the Russian fuel dependent economy to make some territorial readjusments in Ukraine with a quick war taking Kviv. That turned into a massive miscalculation with the emergence of nationalist fervor in western Ukraine spreading to the whole country of 40 million people. In the future to 2030 with phasing out of the fossil fuel economy, Russia without the connections to the US and European Union's technology and resources it had during Putin's three terms, and facing strict sanctions from US and EU, faces a difficult future. This has cautionary lessons for all countries- the US that read too much into the fall of the Berlin wall and indulged in a losing proposition with free markets that damaged its infrastructure and manufacturing with shifts to China, China understanding of how it to was dependent on the world economy for its future development, India that had to navigate a difficult period and what lessons to draw for building a bigger economy, the EU realizing the failure of its policies of depending on Russia for energy and China for manufacturing with fragile supply chains,  and Russia that there were twists and turns and the need for safeguards and experience building democratic processes before these processes would work for the economy, its people and for Russia as a nation. ...
New York Times Original article ›
LyrArc Article Gist
Increasing regional tensions with a more assertive Japan and China. U.S. president Obama's so called "pivot to Asia," appears to have little impact. China has tended to look for its own security architecture in Asia that excludes the U.S. U.S. efforts to reduce tensions are being ignored by China in May-June 2014, as China asserts itself in waters that are in dispute with Vietnam. The lack of U.S. influence compares unfavorably with the situation that prevailed since 1900, when the U.S. had the most significant influence in Asian waters. It has more to do with a policy of withdrawal under the Obama administration than U.S. capabilities. The policy of withdrawal in the Middle East comes after much of the sacrifice had been made and the situation in Iraq changed, so that for a much smaller incremental effort the U.S. could have both lived up to its principles and ideals for democracy and freedom as well as win public opinion in the Arab countries of North Africa and the Middle East. This withdrawal in the Middle East has given Russia and China the wrong signal leading to more assertive stance in Europe and Asia, and creating uncertainty where little uncertainty existed about U.S. determination. Under whatever terms it is wrapped the policy of the Obama administration is one of withdrawal. It is dangerous because it will mean a more costly effort would be needed under a future administration to restore the situation which prevailed earlier- in which the U.S. has helped create a climate in which the entire region including China and Japan have prospered economically, without the region descending into a competition between Russia, China, Japan, South Korea and India. The Obama administration with its muddled policies has inadvertently created this situation....
Wall Street Journal Original article ›
Wall Street Journal Original article ›
LyrArc Article Gist
Breakdown of negotiations between Greece and EU finance ministers led by Dijisselbloem of the Netherlands on February 16, 2015. Dijisselbloem says the best way forward is for Greece to take a 6 month extension of the current program, because more time is needed to work out the details. Finance minister Varoufakis of Greece says Greece should not have to make cuts that are clearly recessionary. The bailout ends on Feb. 28. Without an agreement reached Greece loses access to 7.2 billion in funds from the EU, needed to make repayments due in March.
BBC News Original article ›
LyrArc Article Gist
Germany will give 16 state authorites 2.5 billion euros to support a6 euro monthly rail pass that can take you to anywhere in Germany for a month. About 7 million tickets have already been sold. Deutsche Bahn is operating at 80% of capacity at this time. Inflation is up 7.9% in Germany last month and this is a result of the war in Ukraine.

In other aid the German government has given-

Cutting the fuel tax by 30 cents a litre for gasoline to keep prices below 2 euros.

Those in work will get a one time 300 euros energy rebate for energy costs in autumn.

A 100 euros child benefit bonus per child.

People on other welfare benefits will also receive 100 euros.

New York Times Original article ›
New York Times Original article ›
WSJ Original article ›
LyrArc Article Gist
Sweden now joins NATO after clearing it with Turkey and Hungary. Finland has already joined NATO. These 2 neutral nations had a strong defense and Finland has a long border with Russia. They dropped neutrality to join NATO after Russian invasion of Ukraine. Sweden's defense industry, technological innovation, and "Total Defense" based participation of everyone 16-65 years old makes it unique in Europe. A new Defense Innovation Initiative aims to integrate civilian and military technologies even more. Unusual for a small Baltic nation Sweden makes the advanced Saab Gripen jet fighter, sophisticated submarines, and jet trainer aircraft used by US Air Force. It has no border with Russia. It faces the Baltic and Russia also faces the Baltic near St Petersburg.

WSJ Original article ›
LyrArc Article Gist
The US housing market in 2022 with sharp increase in cash out refinancing and home equity financing. Total home equity increased 20% in the first quarter to $27.8 trillion, a record high, according to the Federal Reserve, the US central bank. About 60% of equity was withdrawn through cash out refinancing in 2021, according to mortgage data. Cash out refinancing simply adds the amount borrowed to the existing mortgage balance. The amount borrowed through such financing by homeowners adds to inflationary pressures with more cash borrowed on the house for home improvement projects, gardening projects, appliance spending and automobile purchases. The increase in the interest rates by the US Federal Reserve including the 0.75% increase in the rate announced on June 15 slows the amount of borrowing through cash out refinancing. The supply chain disruptions disrupted flow of goods at a time of high demand in 2021 following the lockdowns, and then the war in Ukraine added another layer of inflation from high gas prices. The combined effect with housing price pressures created the perfect storm in inflation the US is facing with the rest of the world. ...
New York Times Original article ›
The Hindu Original article ›
LyrArc Article Gist
India's plans to use its increasing production of wheat to fill the gap created by Ukraine and Russia not being able to meet the need of countries such as Turkey, Egypt, Arab countries, Africa and the Middle East. Stabilizing the price of wheat will be a great help for meeting the needs of people in these countries who are severely affected first by Covid and now by the increasing prices of essential supplies of wheat for their growing populations. Prudent agricultural policies and carefully meeting the needs of farmers should enable India to do this.

In this sense India could do what it has done with its vaccine supplies to countries in Africa and Asia- help meet essential needs during a health crisis and economic crisis for Asia and Africa.

Economist Original article ›
LyrArc Article Gist
A steady decline in the price of Brent crude from $115 to $92 in the period from June to October 2014. Slow or no economic growth in Europe, and declining growth in China was the main reason. A cut in oil price by Saudi Arabia in September with lack of coordination in OPEC to control supplies when prices are declining, and increasing supplies from the U.S., provided additional basis for price declines. This price decline comes as large energy companies invested heavily in mega-projects to bring more oil supplies when prices were up to $128 by mid-2012. Consulting company EY estimate is that there are 163 such mega projects worth $1.1 trillion underway, most behind schedule and over budget. The projects were based on oil prices being over $100. Oil field development costs are increasing rapidly. Douglas Westwood, a consulting firm, estimate is that productivity of upstream capital spending has fallen by a factor of 5 since 2000, declining by 5% a year, as oilfield equipment and services demand exceeds supply. Greater technological sophistication also adds to cost such as Shell's Nobel Bully platform for deep sea drilling. See link- Noble Bully. Oil majors are now cutting spending, and some planned big projects are on hold. About $300 billion in assets may be up for sale. Shell plans to cut spending by 20% in 2014, Exxon and Chevron 5-6%. Shale oil projects in America need about $57 to be profitable with an internal rate of return of 10%, by one estimate. Yet this is an average and does not reflect differing producer costs. This estimate does not reflect the high cost producers, some of whom need closer to $110....
New York Times Original article ›
Wall Street Journal Original article ›
New York Times Original article ›
LyrArc Article Gist
Krugman addresses the question about the collapsing ruble in December 2014- why the extent of the collapse reflected more than the drop in oil prices? He focusses on the nature of the Russian system under Putin which is based on crony capitalism. Russian businesses borrowed heavily in dollars but generate much of their revenue in rubles, as a result the situation has imploded with the inability of these businesses to make payments as the ruble declined by about 50%. Russia has not generated trade deficits. Capital flight, money taken out of the country by oligarchs, and the nature of the borrowing in foreign currency has led to a serious compounding of the crisis.
Economist Original article ›
LyrArc Article Gist
Expect more EU and ECB help for the struggling economies of Eastern Europe. The local banks and banks of western Europe that were involved in lending in Eastern European countries are in bad shape and pulling back from this lending. Ukraine is pulling out of a$16.4 billion bailout it agreed on with the IMF and Latvia's GDP is expected to fall by 12% this year. Countries in the EU like Poland and the Czech republic are more likely to get help from western countries. The Baltic countries have been bolstered by a Swedish guarantee covering Swedish banks that operate there.
Wall Street Journal Original article ›
BusinessWeek Original article ›
LyrArc Article Gist
Russian oil policy at work in towns like Kalyazin, 100 miles north of Moscow, and across Russia. Gasification program is being extended, plan is to increase coverage from 53% to 60% of the people in Russia in the 2005-2007 program. Increase prices to discourage wasteful use and promote energy saving technologies in cooperation with German companies so that more gas is available for export at higher world market prices, especially to the European market. Use profits to promote exploration and increase exports. Germany gets 45% of its gas from Russia and has built close relationships with Gazprom. See the article in BW, July 31, 2006, Jack Ewing, "The Lines that Bind" and references to German-Russian ties: 1) Gerhard Schroeder, former Chancellor, as managing director of the pipeline joint venture, the $5.7 billion North European Gas pipeline formed by partners Ruhrgas, BASF and Gazprom. Ruhrgas owns 6.4% of Gazprom, and its CEO Burckhard Bergmann sits on Gazprom's Board. 2) The survey by Berlin pollster Forsa shows that 75% of Germans support the pipeline project, 45% consider Gazprom a reliable energy supplier vs. the 26% who consider Saudi Arabia as dependable. 3) At an industrial fair in Hanover German business leaders supportive of Gazprom as follows. Klaus Mangold for Daimler management board member considers it " a totally normal market economic process" for Russia to have threatended to supply China with the same gas if European countries cultivate other sources of energy supply. Michael Gloss, German Minister of Economics and Technology, says its good thing to have a neighbor close to home as a supplier. Ruhrgas, Essen based, is a subsidiary of Dusseldorf company E.O.N., and Wintershall, Kassel based, is a subsidiary of BASF. Wintershall management Board member Rainer Seele, speaks of not just partnerships but friendships. 4) Interlocking ownership of assets between Gazprom and the German companies. Gazprom 35% ownership of the assets in the WinGas Joint Venture, Wintershall gets 35% of the equity and 25% of voting shares in the gas field that supports the pipeline. Ruhrgas traded assets in Hungary for 25% ownership of the same gas field. 5) The German relationship under Merkel changes little because she has no options, German suppliers have long term contracts with Gazprom. This article shows how the Russian policy is being shaped on the ground in small towwns like Kalyazin. The one on Gazprom about "The Lines that Bind," shows how the policy is to build relationships with German suppliers, interlocking ownership of assets, increasing the supplies to Germany from the current 45% to over 50 %. Using German investment in joint venture with Gazprom for exploration and development and building pipelines and securing long term contracts at higher prices. Note the reference in article "Can Gazprom Keep the Gas On?" by BW's Moscow Bureau Chief, Jason Bush, BW July 31, 2006- ironically the policy that caused a lot of controversy between Russia and Ukraine about Russian energy prices will actually provide Gazprom with more profits to put into exploration. Forecasts referred to by Bush show that it is expected to earn $20 billion on $62 billion in revenues. ...
Wall Street Journal Original article ›

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