BREXIT storm deepens, as parliamentary coup may be forming against May and Corbyn


16-01-19 11:32:00,

Authored by Alastair Crooke via The Strategic Culture Foundation:

The Middle East is metamorphosing. New fault-lines are emerging, yet Trump’s foreign policy ‘hawks’ still try to stage ‘old movies’ in a new ‘theatre’.

The ‘old movie’ is for the US to ‘stand up’ Sunni, Arab states, and lead them towards confronting ‘bad actor’ Iran. ‘Team Bolton’ is reverting back to the old 1996 Clean Break script – as if nothing has changed. State Department officials have been briefing that Secretary Pompeo’s address in Cairo on Thursday was “ slated to tell his audience (although he may not name the former president), that Obama misled the people of the Middle East about the true source of terrorism, including what contributed to the rise of the Islamic State. Pompeo will insist that Iran, a country Obama tried to engage, is the real terrorist culprit. The speech’s drafts also have Pompeo suggesting that Iran could learn from the Saudis about human rights, and the rule of law.”

Well, at least that speech should raise a chuckle around the region. In practice however, the regional fault-line has moved on: It is no longer so much Iran. GCC States have a new agenda, and are now far more concerned to contain Turkey, and to put a halt to Turkish influence spreading throughout the Levant. GCC states fear that President Erdogan, given the emotional and psychological wave of antipathy unleashed by the Khashoggi murder, may be mobilising newly re-energised Muslim Brotherhood, Gulf networks. The aim being to leverage present Gulf economic woes, and the general hollowing out of any broader GCC ‘vision’, in order to undercut the rigid Gulf ‘Arab system’ (tribal monarchy). The Brotherhood favours a soft Islamist reform of the Gulf monarchies – along lines, such as that once advocated by Jamal Khashoggi .

Turkey’s leadership in any case is convinced that it was the UAE (MbZ specifically) that was the author behind the Kurdish buffer being constructed, and mini-state ‘plot’ against Turkey – in conjunction with Israel and the US. Understandably, Gulf states now fear possible Turkish retribution for their weaponising of Kurdish aspirations in this way.

And Turkey is seen (by GCC States) as already working in close co-ordination with fellow Muslim Brotherhood patron and GCC member,

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Perfect Storm is Brewing in Georgia | New Eastern Outlook


27-12-18 02:47:00,


It takes little imagination to understand that a perfect storm must be brewing when a shift in US foreign policy and a contested presidential election in another country occur at the same time. Add to the mix a dispute over who will be accepted as the next ambassador to that country and you have a geopolitical “accident” waiting to happen.

John Bolton, the US National Security, or better said, “Insecurity Advisor” to Donald Trump visited Georgia in late October, having also made quick visits to Armenia and Azerbaijan. He admitted that the purpose of this visit was to understand the “very significant geographical role” the countries of the region have “in dealing with Iran, dealing with Russia and in dealing with Turkey.”

John Bolton’s language does not speak of diplomacy but of engagement, provocation and closing ranks. Diplomacy has never been his calling card. He is perhaps one of the most unsavory characters ever to serve in a diplomatic role, even in the history of the US, and his reputation so far precedes him that even Time Magazine has rumbled him.

The visit should be seen within the context of the recent Georgian presidential election runoff, which produced an outcome which was not the most conducive to US foreign policy, and also something of a shock as it potentially upsets the “greater scheme of things” concerning Iran, Russia and Turkey.

It also came in the midst of a quiet but public debate over who will be the next US Ambassador to Georgia, with the most likely candidate already having her own basket of dirty laundry. Foreign Policy, a US based magazine, has already published an article which claims that “Georgia will not accept the nomination of Bridget Brink, a career foreign service officer with extensive experience in Europe and two past tours in Georgia, because of her alleged predisposition toward former Georgian President Mikheil Saakashvili” and her warmongering tendencies.

The Georgian Ministry of Foreign Affairs says that the above mentioned article in Foreign Policy, which states that the Georgian government itself has rejected Brink’s nomination, is “far from reality.”But the history of US Ambassadors to Georgia, previously outlined in this journal,

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“Perfect Storm” – The (Ominous) Problem With Global Liquidity

“Perfect Storm” – The (Ominous) Problem With Global Liquidity

20-10-18 05:47:00,

Authored by Tuomas Malinen via,

Market liquidity is crucial for well-functioning capital markets. There has been a quite lot of talk about diminished market liquidity and the role of machines in it (see, e.g. Q-review 4/2017this and this). These are worrying developments.

However, while market liquidity is crucial for markets, global financial flows, i.e. liquidity, is also essential to the real economy and for global economic growth. The availability of credit on a global basis fuels investments and growth around the world.  Such financial flows fell by a massive 90 % during the 2008 crisis, which quickly translated into a global recession.  Investment and consumption collapsed almost everywhere, with the exception of China where a massive credit stimulus was enacted.

Since then, there has been an uneven recovery. Cross-border bank lending has never really recovered (see Q-review 1/2017), but the issuance of vast amounts of government and corporate debt has taken its place. This creates a serious risk for the global real economy if highly over-valued capital markets crash.

The metamorphosis of global liquidity

In its recent quarterly report, the Bank of International Settlements, or BIS, raises three crucial points for global liquidity:

  1. Global outside-US dollar denominated debt has risen to a record.

  2. The role of non-bank institutions on providing funding has increased.

  3. The composition of international credit has shifted from bank loans to debt securities.

Combined with the asset purchase programs of central banks (QE) these developments have far-reaching consequences for the global economy.

Currently, non-banking institutions and households outside the US hold over 11.5 trillion worth of dollar-denominated debt—a record. The “shadow banking” sector could conceivably hold the same amount. This means that all policies affecting global dollar liquidity, will have a large effect on the global economy.

The increased role of non-bank institutions in providing credit means that an increasing proportion of international finance comes from unregulated sources. Effectively, this means that these institutions, including money market funds, investments banks, etc., have unwittingly assumed even bigger risks in their lending practices than commercial banks.

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