Global Economy and Geopolitics

Given the complex nature of how markets work, it is sometimes important to have good knowledge about global economy, geopolitics and its direct and indirect impact on markets.

Let us all use this thread to post and discuss important global economy and geopolitics related posts and information.

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According to a new global financial data from McKinsey & Co., initially reported by Bloomberg, China’s wealth launched to $120 trillion, from its previous $7 trillion in 2000 — an unspeakably colossal growth from its days before joining the World Trade Organization, which accelerated its rise to power.

The U.S., meanwhile, has experienced muted increases in property prices, but nearly doubled its net worth over the same period, to $90 trillion. China and the U.S. are the largest economies in the world, but the lion’s share of the world’s wealth is held by the richest 10% of households. And they’re only getting richer, according to the report.

Turkish Lira crashes 9% in last 5 days against US dollar and almost 18% in last month. That’s a significant move…

The fall is due to the country’s leaders stance on monetary policy and interest rates, “We will lift this scourge of interest rates from people’s backs. We certainly cannot allow our people to be crushed by interest rates,” he said

Do note that turkey’s inflation rate was near 20% :exploding_head: in October

“Our preferred DBeer metric continues to indicate extreme undervaluation in TRY and ex-MXN LatAm FX. We remain bearish on TRY despite real undervaluation however, as inflation pressures outpace nominal yields with the central bank set to cut rates again”, said a team of Deutsche Bank analysts led by Shreyas Gopal.

The Turkish lira has dropped 40% against the dollar this year and 30% against the euro, noted Fawad Razaqzada, market analyst at ThinkMarkets. In a note to clients, he cautioned investors to be wary of “contagion risks” from the slide in the lira, “particularly for currencies of oil-importing nations such as India where the Rupee has already been weakening.”

Excerpt from this article.

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Update : Turkish Lira is now at 12.5 against US Dollar. Making it a 30% depreciation in last month and nearly 20% depreciation in last one week. :exploding_head:

Update #2 : Crosses 13 now …crash of 15% intraday.

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US coal exports to China:
1st half 2019: 771,000 tons
1st half 2020: 531,000 tons
1st half 2021: 5.4 million tons

Source : Mike Forsythe’s Twitter handle

This may not mean much when we look at the overall scheme of things. US and China who are fighting to be the world super power yet they are still so dependant on each other.

This particular example kind of explains how complex geopolitics work and how intertwined global economy is. :slightly_smiling_face:

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Also shows US’s hypocrisy. They expect the world to reduce emissions(COP26) while increasing the coal output and benefiting from it.

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One Month —> Fast Forward ----> Massive Rise in markets along with —> Lira crashing more than 60% in a month to 16.5 levels followed by —> Stock Market Hitting Two Lower Circuits

Geopolitics :slight_smile:

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Energy Crisis reaches Kazakhstan as massive power outrages and protests emerging in the country due to a sharp and sudden increase in the fuel prices.

When it comes to geopolitics, things take time to build and once it explodes, the ripple effects starts.

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With inflation already at 39 year highs in USA, Any supply chain issues arising out of China due to the fresh covid wave in the country will mean more inflationary issues for US and rest of the world.

It is interesting to note that when the global central banks are planning to raise interest rates, China does the opposite, It cuts the rate for the first time after april 2020

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This is one of the massive geopolitical developments in many many years with Russia and its allies majorly on one side trying to take it on the NATO led by US with Ukraine being the focal point

Situation is slowly escalating and lot of interesting developments are taking place on this front. With Russia being super rich when it comes to energy resources, Europe has to balance out between their interests and challenges with current developments.

Many are saying this may potentially be the biggest escalation after Cold war. We have to definitely keep an eye as these events will have lot of impact on global economy.

It’s not looking good. This is very similar to Cuban missile crisis now. I hope no one goes crazy and start a war.

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Things are escalating pretty fast and so many countries are evacuating their embassies from Ukraine. Energy market has already started reacted violently to it with crude surging to levels not seen in last 7+ years.

These tensions generally don’t end abruptly and keep on stretching for months as it can witnessed from actions seen from last 1-2 months.

With US (NATO) and Russia facing each other mainly , it needs to be seen how European Union handles this sensitive situation. The implications are definitely going to be serious.

There may be an invasion and not a diplomatic resolution to the crisis looking at the way things are moving. Quite close to open a war in Europe

https://www.nasdaq.com/articles/precious-gold-prices-hit-8-month-high-as-russia-ukraine-tensions-mount

Gold prices have hit an eight-month high as the Russia-Ukraine tensions build.

From the source: Bullion is usually used as a hedge against geopolitical tensions, and with the tensions surrounding Ukraine, spot gold has risen about 5% since Jan.

The biggest geopolitical event after decades (even bigger than the crimea annexation in 2014) is here. There are way too many implications that’s gonna come with this announcement . Lets keep an eye on the space and share interesting insights here.

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I think the world will not risk a war with Russia. They will at best throw in sanctions and express there angst while Russia has its way.

We have reached the most decisive moment with Russia attacking eastern Ukraine and warning others not to interfere. Military exercise may not last long. But the consequences would be massive and can go on for months.

Energy markets are going to be red hot to say the least.

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Rise in crude price would hurt India. By the look of it the world would threaten, sanction Russia and passively support ukraine but may not venture militarily against Russia.

Already crossed $100 per barrel. The oil market may become more nervous here on.

Guess alot to still be prepared for.