Here's our summary of key economic events overnight with news the economic implications of sanctions after the Russian invasion of Ukraine are starting.
But first, remember today the RBNZ will review the OCR which currently sits at 0.75%. There will almost certainly be another increase, but will it be +0.25%? (the most likely), or +0.50% (to deal seriously with the 6%+ inflation currently hitting the economy?) There is a lot riding on this decision. All eyes will be on RBNZ at 2pm today (NZT).
In Russia "Defense of the Fatherland Day", commemorating the first mass draft into the Red Army in 1918. In Ukraine, it is "Defenders of Ukraine Day". Testosterone levels are high in Eastern Europe at present.
Russia's invasion of some renegade Ukraine provinces has triggered sanctions, which are likely to upend some key economic activity in Europe and have global implications for energy prices. The situation is likely to get worse as Russia is promoting some far-fetched historical land claims (actually not too dissimilar to China's "nine dashed line" claims). It now claims the whole Donbas region, most of which separatists don't control. Fortunately for Russia, they hold the presidency of the UN Security Council, so easily able to bat away any formal condemnation.
In the US, the February PMIs are expanding faster as their economy continues its good recovery despite inflation pressures. Activity in factories rose as did activity in their services sector, essentially putting the Omicron bump behind it. These rises were more than expected. The February expansion levels are settling in at levels better than pre-pandemic.
But factories in the Richmond Fed's mid-Atlantic state district don't seem to be as positive. However, service sector businesses are doing better there. Both are still expanding at good levels however.
Also holding at good levels in the Conference Board measure of national consumer sentiment, although this measure isn't back to pre-pandemic levels yet.
Not so good is that US based Abbott Labs is having action taken against it by the FDA over contaminated infant formula. The echoes are being felt in China.
There was a US Treasury tender for their 2 year bond this morning. It was well supported although not quite to the level of last time a month ago. But what was very noticeable was the rise in yield, up to 1.51% median, from 0.95% at the prior event. That is a significant movement.
In China, Beijing has approved the development of three large-sized coal mines with a total annual production capacity of 19 million tonnes. China is also planning more 'larger' tax cuts to support a flagging economy.
In Japan, it is a national holiday today (the Emperors Birthday).
In Germany, the closely-watch IFO business sentiment survey came in with an improved result - which you have to say is a surprise given the growing threats to the EU economy from the Ukraine-Russia situation. Germany has been unequivocal in applying sanctions on Russia over the invasion, dispelling thoughts that they might break ranks in Russia's favour.
Although we are becoming a bit of a broken record with this data, it continues to 'impress' and not necessarily in a good way. The lithium price has extended its rapid rise, up +36% in 30 days, and up by almost 6x in a year, now exceeding US$70,400/tonne (NZ$104,500/tonne). A mad 'gold-rush' is on to find supply. And this is despite some obvious downsides to lithium batteries - they can explode.
You should also note that the Ukraine tensions are driving up nickel prices, among others.
In NSW, there has been 8,752 new community cases reported yesterday, a big jump back to prior levels, now with 101,551 active locally-acquired cases, and another 14 daily deaths. There are now 1,293 in hospital there and holding. In Victoria they reported 6,786 more new infections yesterday. There are now 45,278 active cases in that state - and there were also 14 daily deaths there. Queensland is reporting 5,586 new cases and 5 more deaths. In South Australia, new cases have fallen to 1217 yesterday and X more deaths. The ACT has 583 new cases and no deaths, and Tasmania 820 new cases and no deaths. Overall in Australia, more than 24,000 new cases have been reported.
The UST 10yr yield opens today at 1.93% as Wall Street returns to work, unchanged. The UST 2-10 rate curve starts today much flatter at +40 bps. Their 1-5 curve is also flatter at +80 bps but their 30 day-10yr curve is little-changed at +191 bps. The Australian ten year bond is up +4 bps at 2.24%. The China Govt ten year bond is up +1 bp at 2.86%. But the New Zealand Govt ten year is lower, down -6 bps at 2.70%.
The return to work on Wall Street has the S&P500 down -0.6%. Overnight, European markets all fell a similar amount except London which was up +0.1%. Yesterday, Tokyo took a -1.7% tumble, Hong Kong a bigger -2.7% retreat, and Shanghai was down almost -1.0%. The ASX200 ended with a -1.0% loss and the NZX50 limited its loss to just -0.3%.
The price of gold starts today at US$1903/oz and up +US$7 from this time yesterday.
And oil prices are up another +US$1 at just under US$92/bbl in the US, while the international Brent price is just under US$94.50/bbl.
The Kiwi dollar will open today up another +¼c at 67.5 USc. Against the Australian dollar we are up slightly at 93.4 AUc. Against the euro we are marginally firmer at 59.5 euro cents. That means our TWI-5 starts today at just on 71.9 with another daily gain.
The bitcoin price has fallen -2.9% since this time yesterday and now at US$37,823. From the start of 2022 that is now a -20% fall, so it is in a bear market phase now. Volatility over the past 24 hours has high at +/- 3.4%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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199 Comments
Lady Deborah Chambers QC writes in the Herald, to my mind the best explanation in two years of how NZ came to arrive in its present predicament. In the interest of public duty and for the benefit of all New Zealanders the Herald should make that open to read rather than a premium paid column.
"She also fails to appreciate that the protesters aren’t outside her window to make a point: they are there to end the mandates.
In that one distinction we see the difference between the protesters and the Prime Minister. Everything the Prime Minister does is to make a point -- and only to make a point. She promises to build 100,000 houses or to plant a billion trees or to end child poverty. The promise serves only to make a point: that she cares. That’s it. It is never her intention actually to build the houses or to plant the trees or to feed the kids.
She clearly doesn’t know how to. She doesn’t know how to swing a hammer or to wield the massive machinery of government to make houses. If she did know, she would have done so.
But for her it doesn’t matter. She shows she cares by making her promise. She makes her point. And that for her is enough."
https://www.bassettbrashandhide.com/post/the-protestors-have-won
As a comparison, I liken Jacindas attitude towards the protesters and telling them to leave, to Holly's having a go at Andrew at the dinnerparty. Of course Andrew is far from perfect but I see he got a lot of support from others. Holly's credibility on the other hand was flushed down the loo.
They have done so much in last years to bring the quality of my life and my fellow kiwis to a new low. The new houses being built are of reduced quality and they have approved mini slums to be build without any over sight. The leader of government says, yeah let's keep the house prices increasing and make then unaffordable for the average kiwi.
The price of basic food items is through the roof when we have some big farms and are awash with milking cows in this country. Still cheese is so expensive.
The price of petrol is $3 now but we do not want to support the industry in taranaki so we can get some home grown energy. But we are happy to import huge levels of coals.
Seriously what is happening to our country, can we still not see through this pump and show government. How can we get a snap election. Are there no better minds left in this country?
I'm not sure which energy industry in Taranaki you are talking about. There's the oil and gas industry which Ardern and Shaw shut down future exploration or FirstGas gas to hydrogen conversion. The latter does not need any funds from the govt. and the former needs a reversal of the "decree"
A few of the smaller sites may increase production a bit while the prices are high, but this just uses a bigger straw on the existing reserves. It is not finding new ones.
All the well sites in Taranaki (including offshore) are in terminal decline.
All the survey sites outside of Taranaki have not shown any viable reserves.
Correct, and the only possible justification that the PM could have made such a decree with no consultation of either the industry or her own caucus.
It didn't end the O&G industry in NZ, but raised massive concerns around government intervention as it proved the policies could literally change overnight with no notice. A lot of projects were scaled back, all future plans were cancelled, and the large operators began pulling out of NZ earlier than expected.
So rather than a planned, gradual exit, it was a rush for the doors.
I highly doubt any of the commentators here could do a better job. It is an incredibly complex and difficult situation to manage.
I think she's doing a great job under some of the worst conditions a PM has had to lead under in my lifetime. And she's still maintaining the majority in polls. That's a pretty incredible testament to her to be honest.
She has absolutely had the most difficult PM job in decades and with many things has done a commendable job. Unfortunately for her the general population remembers and judges on the negatives, of which there are also many and they continue to mount. Why anyone would want that job is beyond me.
yes its not like she inherited a massive structural deficit, an empty treasury and walked straight into a Global financial crisis followed by a massive set of earthquakes in our second largest city to make life easier ... oh wait
She walked into office with a large treasury surplus, extremely low debt, a booming economy and had nearly two and a half years of that situation with only a minor impact earthquake in a relatively unpopulated area, s terrorist attact which was only emotional and did not impact economically on jobs building poverty and did create even more support and unity -- during which time she spend large on lacky loony left consultants announced masses of stuff and delivered ZIP !
Covid was her saviour -- but in reality we are an island nation -- and many island nations - including tiny places with no resources like the cook islands and Samoa -- managed Covid just as well and in fact better -- the entire success story came down to one decision to shut the borders and wait and see - a great decision yes -- but since then our response has got progressively worse, and we are now a year behind the world in some areas - -such as using RAT testing -
she needs to go interview for her Un job ( at harvard) as soon as - before hte world discovers her PR and SPIN was exactly that -- hot air !
I think both governments have been lack-lustre. National adopted the 'flood the country with immigration' and 'inflate the property bubble'. I had a chuckle that you seem to view those short-term highs as being a 'booming economy'.
Both major parties need some time out of power.
Wow. What booming economy? More and more household debt and nominal GDP growth only through importing population? Lagging on productivity? Quit the pretense.
They did happen to inherit a health system on its knees from stagnant funding and inadequate increases despite the demands of an aging population - just in time for COVID: https://www.macrotrends.net/countries/NZL/new-zealand/healthcare-spendi…
And an economy built on a housing ponzi that was pushing people out the bottom of the market - where child poverty had conveniently been previously deemed one of the things "too hard to measure" and criteria for getting on emergency housing wait lists had been rather narrow.
We have a more realistic picture now of the consequences of our austerity approach to healthcare and our economy based on blowing up ever more housing debt. Underinvesting in critical infrastructure and services is a bad idea in politics as it is in business. Kicking the can down the road had its costs.
Labour's biggest problem is they've turned into National on keeping house prices up, accompanied by a Reserve Bank bold when they should be cautious and cautious when they should be bold.
Politicians are just humans with exactly the same flaws and issues as the rest of us.
To expect them to be anything other is to be constantly disappointed (as most of the commentators seem to be here), and is quite immature to be honest.
I'm grateful that this society functions anywhere as well as it does given how flawed humans are. That's due to the personalities with influence and the structures and processes set in place to protect us and ensure these imperfect and often inexperienced humans don't stuff it up too much when they get to power. As far as I am concerned the job she is doing is an example of exemplary performance.
Then they need to stop talking themselves up. Exemplary performance, if I promised to do half the things this government has and delivered them like they have in the real world, then I be out of a job really quickly. Example the Head of the Labs doing testing in NZ, was on the news saying the have no resources to cope with Ormicron testing they are under the pump, it be at least 5-7 day turnaround for testing large numbers, this comment was put to the PM, she denied that was the case. Real world v's her world, exemplary, I would say out of touch.
thats the heart of the matter --
there is plenty of PPE and Masks march and april -- but if you were a DHB or NGO health provider -- there was actually none available -- in fact yesterday i received the first lot of N95 masks through the MOH portal in two years !
There are no RAT tests to be had - everyone is competing for them - ( except we managed to successfully order 55 million the day after it hit the press
Everyone wants vaccines -- and we are not a priority - except we ignored calls from the suppliers for over a month who wanted to sell us some
I dont think people want to know exactly how many houses have been built - just that they are being built so we wont be counting Kiwibuild numbers anymore ...
the protesters are just a tiny minority - support for ending hte mandates at over 30% and growing -- COMPLIANCE is not agreement -- after 20 years as a nurse, doctor, police officer teachers -- people complied to feed their family -- not agreed
Double vaced -boosted - runa health company -- do not think there is any justification for the mandates now -- 95% double vacced -- do you really think that the mandate will increase this furtehr ? yesterday just 400 first doses - 970 2nd doses -- only personal experience of the virus will move those last few people not any mandate
When humans get together in a group, particularly political parties, a lot of dynamics change. Particularly when the party supersedes the individual and the goal is to get re-elected through a particular view that catches the voters attention. The rest of the issues are pretty much changed or implemented as the cabinet coterie decide, even against the input from their own caucus.
Do politicians get 15 years of intense training to do the job? Even a 3 year politics degree (which most of them don't have) is primarily about political philosophy, not the practicalities of controlling a caucus and moving within the walls of the beehive.
Again, what do you expect in the situation we find ourselves in?
“Watch a man–say, a politician–being interviewed on television, and you are observing a demonstration of what both he and his interrogators learned in school: all questions have answers, and it is a good thing to give an answer even if there is none to give, even if you don’t understand the question, even if the question contains erroneous assumptions, even if you are ignorant of the facts required to answer. Have you ever heard a man being interviewed say, “I don’t have the faintest idea,” or “I don’t know enough even to guess,” or “I have been asked that question before, but all my answers to it seem to be wrong?” One does not “blame” men, especially if they are politicians, for providing instant answers to all questions. The public requires that they do, since the public has learned that instant answer giving is the most important sign of an educated man.”
– Neil Postman
No one can be an expert in everything, including politicians, excepting many "Interest" commenters of course. That is what consultants are for. You know, like chief science advisor etc? It's a politicians job to gather advice and decide a policy path. Something the expert advisor is not expert in.
I'm an engineer. Besides finally implementing some sorely needed long term asset management and infrastructure investment planning, I can almost guarantee you we would stuff everything else up.
It's those damn humans. They are just so unpredictable, they have feelings and want human rights and all that stuff. Not our strong suit as a profession.
Historians on the other hand...
Cullen was a historian - he had a Doctorate in it. It didn't help him that much!
But I have also read a Harvard study into who make the best CEOs of companies and engineers are it hands down. Accountants are the worst.
Congrats you'll probably do very well just on common sense.
I'll give him the Cullen fund. Kiwi Saver is almost the same thing but out of touch with the reality for most Kiwis. The very low debt ? By sheer unadulterated luck his government came to power in good times. There was no skill in it at all!
He also repeatedly lied to the public, was arrogant and privileged while point the finger at "rich pricks", and he denied the housing crisis and do SFA about most other things. Plastic elitist socialist, nothing more.
I personally wonder what anyone is meant to do with Omicron though. Seems like a cluster for every country. Having widespread natural immunity has cushioned the blow a bit for some countries (and seemingly not for others). Major problem for NZ is the significant and long term (like 20 years +) underfunding of our health system. We probably need to have some real talk about whether we can actually afford anything better. I suspect for a country based on exports of kiwifruit and butter we need to be realistic. We are first world only in name.
Omicron is going to do its Omicron thing and we just have to ride it out. At least we have most people vaccinated and a lot boosted (hopefully that includes everyone old and medically vulnerable). The only justifiable criticism is the shortage of RAT tests, I'm not sure if they could have been ordered earlier. They're not the most reliable anyway, I was reading about someone who was diligently RAT testing before visiting his mother who was undergoing chemo, the RAT was false negative and he gave her Covid.
We've got this - now where i that $100 Billion we borrowed off the kids and future immigrants?
"Two years have passed since the Covid pandemic began but New Zealand ICUs still aren’t ready
The inconvenient truth of the scarcity of ICU beds has been partially addressed by altering their definition"
https://www.theguardian.com/world/commentisfree/2022/feb/22/two-years-h…
i nearly posted that article just for you profile. Thought you'd like it.
the only problem is that it would actually take at least 5 years to increase ICU capacity because, as he points out, it's not the physical bed that's the problem, it's training the staff up to cover the beds. ICU nurses do a very specialist job.
I agree, we need to look at the reasons for testing. It is meant to a) show us the spread so we can contain/stop it or b) to act a confirmation so that the correct treatment can be applied.
Given we are no longer trying to contain. Then we only need to test for treatment, which means Testing should only be on fully symptomatic people requiring medical assistance.
None. The faster more of us get infected the better. At this point There is no other long term option.
But really we should all have some good faith in the vaccines and high immunisation rates, just take a look at current icu vs infection numbers.. The vac is clearly working.
The data says your highly unlikely to need any form of hospital treatment if infected. And that's assuming that you catch it after exposure.
When there are 20 people in icu and 2-3 people dying each day, that's when you should worry. But until then we should all be striving to get on with our lives.
Oh and planning for the next one. 100% do not forget!
They are shifting to RATs first in Auckland from today. So if you go today you will get a RAT first which will be quick and then subject to that result you will get a PCR.
The processing for PCRs is overloaded - there is a hard cap of 30K per day. They are prioritising so some take longer than others with reports of people waiting up to 7 days.
New variants are the most dangerous part of the pandemic, by the time they are identified and their mutation risk revealed, they are usually widespread across the globe due to the lack of inter-country quarantine. Thus for the next variant that could be vastly more deadly than Omicron (it could be in the wild already) New Zealand will be much less secure as our MIQ system is removed. I would much rather MIQ stayed, but with a purpose built isolated facility that could house many more people.
VHTO
Yet again Australia has all the luck? Yesterday they acquired 24,000 new cases and NZ only 2846. It's just not fair. Why do they always do better than us, and by such large numbers. What do we have to do to be as successful as the Aussies?
I mean we've got top coaches.... John Key, Stephen Joyce, Richard Prebble, Brian Tamaki, Helen Duplissee, Barry Soper. And not to forget supercoach Mike Hosking whom the NZ Herald funded.
And our supporters, The Protesters, are giving their all in Wellington....even better organized than England's Balmy Army and nobody has more passion than them; But Wellington always did draw the most passionate supporters...look at how they support the Phoenix soccer team.
NZ has always punched above its weight, but not here....The Aussies have truly outsmarted us and their high scoring margin reflects that.
I guess the saying that "Australia is the lucky country" is true.
There will almost certainly be another increase, but will it be +0.25%? (the most likely), or +0.50% (to deal seriously with the 6%+ inflation currently hitting the economy?) There is a lot riding on this decision. All eyes will be on RBNZ at 2pm today (NZT).
50bps, not only has inflation been on an upwards trajectory but it's also been above target for some time. Inflation is starting to become a political football and eyes will inevitably fall on RBNZ sooner or later.
Also the Russian sanctions will inevitably add to a diagnosis of "long inflation."
Lets assume its a 50bps raise and interest rate rise. Great, people save more and also spend more on mortgage repayments. This means inflation rate 'should' decrease right? How is this achieved though - less money spent in the economy. But aren't the cafes and the retail shops crying out for business? Do you want me to spend more or less? Message unclear sir.
What?
Prices rising = inflation. Tell the plebs that price rising is not inflation lol.
Money supply increase does not necessarily lead to inflation (price go up). If the velocity of money is low, then no price rise. You can give people all the money in the world but if they don't spend it then it means nothing.
hmm, if people know the same fridge that you need to buy gonna cost them 5% more in next couple of months and will likely run out of stock and cost 10% more by the end of the year, it doesn't matter how expensive it is right now, if people can afford it people will buy it. It's similar thing as FOMO in housing market. That's why inflation could start with supply chain disruption, but once it's in people's expectations and wages. It becomes harder to control.
That’s not actually the cycle that makes inflation hard to control. Wage increases embed inflation.
Price of goods and services go up => wages go up => price of goods and services go up.
Therefore interest rate increase is designed to choke off demand before the cycle can become embedded in wage expectations.
There's another cohort with not much money in the bank because it's invested in productive assets. My share portfolio is an order of magnitude larger than my bank balance - enough cash for an emergency fund but I don't want too much of my portfolio guaranteed to lose ~4% per year.
Go to Queenstown or Auckland CBD and tell me their economy is operating above capacity. Every day there are articles screaming that they need business.
NZ economy is housing, so in an attempt to cool it (haha) they will further ruin what the economy should be about.
It is all a bit strange.
But CPI inflation isn't equally felt across all sectors of the economy.
It's perfectly possible that cafés and restaurants might be empty and unable to raise prices but car dealerships and hardware stores might be struggling to meet demand with prices blowing out.
There is no other way to control inflation generated as a result of a stupidly reckless, un-necessary ultra-loose monetary policy that inflated money supply beyond any sensical level. You can send a thank you letter to Orr and his muppets at the RBNZ for this brilliant result. Now the bill has arrived and we have to pay the price for their mistakes.
The fallacy of the UN is exposed: "Fortunately for Russia, they hold the presidency of the UN Security Council, so easily able to bat away any formal condemnation."
I don't know the rules of the UN but perhaps the whole of the UN could vote to suspend the Security Council, and then reconstitute it without the veto rights of the five?
It has failed the world so many times in its short history already. If democracy is the ideal, then the model should reflect this, not give a small number the ability to run rough shod over the rest without consequence.
We tend to focus on when the UN fails because that's what makes the headlines. But I would suggest it's successes are far higher than it's failures, when it comes to a whole series of things that we never read about because they never become issues, because the UN exists. If you are only talking about security (the UN is much bigger than ONLY security of course), then there's a whole stack of current blue hat deployments which we don't read about in the press, which have real "on the ground" stabilising effects. Then if you add in all of the economic, general standards, shared development, human rights, environmental etc etc arms of the UN, you start to see that it's actually the best thing we could have as a bunch of disparate countries with different ideas. Sure, sometimes they are toothless, but we have seen the world a couple of times when we either don't have such a forum (pre WWI) or the forum breaks down (post League of Nations) and the resulting consequences - World Wars.
Having a forum for countries to meet in a rules based way, having an organisation that intervenes in world affairs to stop things getting out of hand etc is a massive boon for humanity. That's not to say we shouldn't reform the Security Council arrangement, but let's not throw the baby out with the bathwater.
Cool, just heading off at the pass any comments saying the entire UN was pointless.
Yeah, it's a real problem with the Security Council, the permanent members essentially have tacit permission to do anything they want because they have veto rights over any resolution. And it's based on who won a war over 70 years ago, so clearly out of date.
But what do you replace it with? I would suggest a system which looks like a democracy, but has a combination of voting rights based on a blended measure of:
- UN support (the more you support the UN, the higher your say in world affairs). This could be in human/cultural capital, not just monetary support
- Change in your countries human development index measures (the better you serve your people, the higher your say in world affairs)
- Education of your population (purposefully separate from the HDI as it is so important)
- Environmental support/sustainability
Note nothing to do with military prowess. No veto rights, with 2/3 majority required for military action.
I aren't any under illusion that this would be possible to reform it this way though. Because the current permanent security council members would veto any such suggestion (as it would essentially lose them power). Absolute power corrupts absolutely...
The UN wasn't pointless at the time it was formed.
However I would say presently it is entirely useless, in fact worse that useless. The veto rights and permanent make-up of the security council lead to perverse outcomes for most, if not all situations the UN involve themselves in.
I would suggest a formula for a combination on population size and standard of Government. This would require some formal standard of what a democracy really looks like (accountability to the people) be requirements for full membership and voting rights. No veto.
The Security Council is a problem. Small size means it can act quicker, but a full session will better reflect the world's views.
I agree about having no illusion to the possibility, but surely a full session of the UN (all member countries) can vote to disband the SC and scuttle the veto? (Does the veto cover the whole UN or just the SC?)
Sanctions why ? The USA lost the war in Afghanistan and still applies sanctions. Kids starve there. In Syria the USA has a failed adventure but still applies sanctions. Kids are starving there too.
You don't have to be a supporter of Russia or the Ukraine to see that the moves of the last few days might well end the conflicts within the "independent republics". 14,000 deaths in the last 10 years. Be good to see that stop.
So sanctions ? In a place remote from both the USA and us and might save a few lives.
Are you against people's right to self determination KH? Or just anti-American?
Once Putin has Ukraine where will he stop? What about the rights of the Ukrainians who don't want to be a vassal of Putin?
You sound like Neville Chamberlain, peace at any cost. But peace at any cost often imposes an extreme cost where you are deciding remotely that some lives are worth less than others. Is that the world you would gift your children?
Ukraine is a construct, an invention, like the doomed Yugoslavia, and it will meet the same fate. The people in western Ukraine historically are Catholic and look to Europe; the people in eastern Ukraine historically are Orthodox, looking to Russia, and for many their preferred language is Russian, not Ukrainian.
The West would have done well to heed Henry Kissinger's admonition eight years ago not to invite Ukraine into Nato, but to encourage it to be a bridge between west and east, with one foot in Europe, and the other in Russia.
https://www.washingtonpost.com/opinions/henry-kissinger-to-settle-the-u…
Russia itself is a construct! https://en.wikipedia.org/wiki/Ethnic_groups_in_Russia
My domino theory? What a joke. You undermine your arguments by attributing something to me that I haven't said. JFK didn't buy the domino theory in Vietnam either, he intended to pull out, but the MIC assassinated him. Ho Chi Minh only wanted security, not to expand. Post JFK the US involvement forced NV to bring the Soviets in to help (there was no way they'd let the Chinese in again!). The expansionist attitude was from Russia, and a stated goal of the 1956 World Communist Conference was world domination. That never got changed. Putin is from that mould.
Yes the US fiddled, but many millions more have died under communist rule than from the US playing politics. It is only the free western press, which the communists never allow, which give us more information about US adventurism than the communist efforts. Try expanding your research.
If Putin is not stopped here, what is to stop him from applying the same approach to Moldova, Slovakia, Hungary, Bulgaria, Serbia, Croatia and all the other former Soviet states. He is already close to having Erdogan in Turkey in his back pocket. Where will you draw the line in the sand?
The major barrier to Putin doing that is the difficulty of occupation. The smart money says he wouldn’t even try and invade western Ukraine because of the terrain and the level of opposition. He really wants to implement a political process that forces the anti-Russian Ukrainians (the majority especially with crimea and the rebel provinces removed) to share power with the pro Russian groups. This would allow a minority of pro Russians to keep Ukraine aligned with Russia and not the west.
It's not any domino theory, it's a distant understanding of human psychology and what and how the lust for power manifests itself. The only thing that limits some people is time and age. You're betting that he will stop because of geographical barriers. I'm suggesting, as other "smart money" is, he wants to re-create the Soviet Union. If that is the case he will not stop at the Ukraine because other states will then become the "threat". He has already threatened to use nukes, what will deter him? World condemnation? He already has that and doesn't care. No he has an agenda that will only expand as he progresses. He needs to be stopped before it gets off the ground!
Once Putin has Ukraine where will he stop?
Moscow has all grounds to presume that Ukraine’s membership in NATO is just a matter of time, the Russian leader noted. "I will explain, that the US strategic planning documents […] stipulate an option of the so-called preemptive strike on enemy’s missile systems. And we know who the main enemy for the US and NATO is. It is Russia. NATO documents officially, straightforwardly declare Russia as the main threat for Euro-Atlantic security. And Ukraine will serve as a foothold for such a strike," he said.
In December, Russia put forth an initiative of concluding legally binding documents on mutual security guarantees with the US and NATO. Moscow expected that NATO won’t expand eastward and won’t admit Ukraine into its ranks, as well as will introduce restrictions on the deployment of serious offensive weapons on its territory. As the Russian president emphasized, those proposals were essentially left without an answer and under these conditions Russia "has the full right to undertake retaliatory measures in order to ensure its own security." "This is precisely how we will proceed Link
Imagine the reverse..
Democratically elected govt in Mexico, is toppled in a coup, and a Russian backed president is installed.
Russia then signs Mexico into a full military alliance and starts to send Russian troops accross oceans to defend Mexican liberty.
Russia then complains when the USA reacts and calls any troop build up on the border US war mongering.
The hypocrisy is real.
It'd work to the US's advantage and stop the coyotes taking all the illegal immigrants across. Besides that that scenario doesn't work as a comparison, as the US has shown no indication of a desire to expand past the current borders. a military alliance would only be credible in the face of an existential threat, and that is most likely from the drug cartels, not the US. A strongman in the Mexican presidency might also deal to all the drug cartels once and for all. The US would still be a winner.
Germany has been unequivocal in applying sanctions on Russia over the invasion, dispelling thoughts that they might break ranks in Russia's favour.
Dmitry Medvedev @MedvedevRussiaE - 13:19 UTC · 22 Feb 2022
German Chancellor Olaf Scholz has issued an order to halt the process of certifying the Nord Stream 2 gas pipeline. Well. Welcome to the brave new world where Europeans are very soon going to pay €2.000 for 1.000 cubic meters of natural gas!
Will Russia retaliate and turn off Nord Stream 1 gas pipeline?
Wow this is huge 2 things happened in the last few hours.
1) Nord Stream 2 was halted
2) Putin just declared that the republics of Donetsk and Luhansk should encompass their whole regions. Basically the self declared republics of Donetsk and Luhansk only cover about of a third of the actual regions. Ukraine controls the other 2 thirds. Putin is saying these republics are entitled to the other 2 thirds. Russia has troups in the self declared republics to assist in taking back the other 2 thirds. This is huge. War is basically inevitable at this point.
I think you are right, once they try and take Muriopol everyone is going to go nuts. These regions have always been part of the plan since Maiden revolution. I don't think they have plans to take more than that, but even those small bits will be enough to freak everyone out.
Side note, Hunter Biden was on the board of Burisma Holdings, which has interest in the gas drilling in parts of Donbas currently in Ukrainian hands.
I disagree. I think they will take everything East of the Donbass. Possibly even some or all of the southern Black sea coast around Odessa. Nord Stream 2 has basically been cancelled which was the biggest sanction NATO could implement short of cutting Russia from SWIFT. At this point Russia has already paid the price of invading so to speak so might as well get as much as they can for this price.
Basically what I was saying too, they have recognised the existing established borders of the provinces but currently only half of those provinces are under Russian control. The line of contact is well within the borders of the newly declared republics and there will be a war to capture the rest.
". Nord Stream 2 has basically been cancelled " - not exactly ; it had its certification process "suspended" , indefinitely.
The pipe is still there and will be used one day - count on it . The big question is when ( probably some time from now .. ) so some leverage remains still.
Swap spreads. Eurodollar futures. Flat curves galore. Those are the actual flood…of nothing has changed. All the money indications we have, consistent, historically validated, they aren’t figuring inflation; or even much of rate hikes. Like so many times since before Lehman, ask yourself why. Link
Given Orrs past responses and delays I wouldn't be surprised if he doesn't raise interest rates at all . He will likely cite omicron effect on business as deflationary and use as reason to not raise rates . Given that the war in Ukraine is now likely to heat up with it's subsequent effect on energy prices including fertilizer and pump prices it will have a inflationary effect on nz for all sectors.
After a few thousands were killed by Ukrainians during Maiden revolution, the Donbas asked for limited independence (Minks Accord), what they got was Ukrainian army taking over most of the state. Through Russian support they were able to hold a reduced border. Now they have declared full independence and with Russian support they aim to reclaim the initial borders.
Interestingly, one possible sanction against Russia is an expulsion from SWIFT. So a logical consequence of That is that Russia and China flip the switch on their very own financial interchange product, which (pure surmise) will have been in UAT for some time now.
Two or three wins from their POV:
- begins the dethronement of USD as the world reserve and premier trading currency
- Instantly forces trading partners into awkward duplication of interchange systems - how to pay for gas, for instance- or a outright choice between SWIFT and the RC version.
- Concentrates trading flows between the two behemoths, already large. Good luck with getting oil, gas, rare earths etc outside that bloc....
Eager EV manufacturer: please send me a Megaton of refined Li for my batteries.
RC Axis: Sure. Condition of supply contract is that you settle in CNY via our shiny new financial interchange system.
E: stuff that, I'll go elsewhere.
RC: OK but we Do hold a monopoly on this element. And we have just for you announced a new pricing structure, it's only 150% higher.
E: Where do I sign?
Wash, rinse, repeat for Gas to Germany etc.
Except that the world is scrambling to identify other sources. One News last night had an article on NZs Geothermal project looking at extracting Li from the waste water. Lots of it there, we just need to build the infrastructure to be able to extract the quantities. At $70k per ton should be too hard to fund.
Indeed. There has been a bit of noise in the last couple of years about an alternative Russian settlement system called SPFS, and a Chinese one called CIPS. Several Russian bakns have joined the CIPS. These have been in development since 2014 when the US first threatened yanking SWIFT for Russian behaviour a while back.
not quite that straightforward, it wasn't NATO, and Russia was also one of the parties to that agreement to guarantee the security of Ukraine.
1. The Russian Federation, the United Kingdom of Great Britain and Northern Ireland and the United States of America reaffirm their commitment to Ukraine, in accordance with the principles of the Final Act of the Conference on Security and Cooperation in Europe, to respect the independence and sovereignty and the existing borders of Ukraine.
2. The Russian Federation, the United Kingdom of Great Britain and Northern Ireland and the United States of America reaffirm their obligation to refrain from the threat or use of force against the territorial integrity or political independence of Ukraine, and that none of their weapons will ever be used against Ukraine except in self-defence or otherwise in accordance with the Charter of the United Nations.
https://en.wikipedia.org/wiki/Nuclear_weapons_and_Ukraine#Budapest_Memo…
The following video from the UNSC ambassador from Kenya is worth watching
Having just read Putin's justification speech on the Kremlin website, that Kenyan speech would make Putin apoplectic. For Putin, it is all about reclaiming empire. It's an amazing reactionary and backwards justification, quite scary and twisted. He want to be a czar on the warpath to lost glories.
I disagree with you on that. Sure certain models of petrol cars have had issues and certainly an older car increases the risk when a fuel line lets go. The reason we are seeing less EV fires is because EV's are still a tiny fraction of the market total. ICE cars let go when your driving them and EV can go at any time. Charging an EV in your garage is a definite risk, I will not even leave my smart battery charger on overnight unattended while charging a car battery that is disconnected from the car. EV's have not been around long enough to be considered "Old". You wouldn't expect your 8 year old ICE car to catch fire either. Lets come back in another 7 years to see what's gone up in flames.
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