Tag Archives: USA

Video of the Week: From Russia With Love – Poll Regarding Crimean Self-Determination

I’ve been wanting to write new articles about issues including shale gas, bitcoin and the foreign exchange rigging scandal. However, events in Ukraine keep making the headlines around the world and thus I’m inclined to cover them.

In my latest post, I had discussed how the Ukranian government had fallen and how Viktor Yanukovych was nowhere to be found. Following those events, something unexpected occurred. On February 28th, armed gunmen wearing unmarked uniforms took over military and government installation throughout Crimea, the autonomous peninsula region of Ukraine. For those of you not familiar with Crimea’s location, this map should help clear things up.

64733-004-414C7B64

There are some important facts about Crimea that are necessary to know before we continue. Despite being a territory of Ukraine, Crimea is an autonomous region. It has its own parliament and its own laws to some extent. In fact, it was a part of Russia until 1954 when Soviet leader Nikita Khrushchev decided to kindly hand it over to Ukraine. Sevastapol, which is a city on the southwest coast of Crimea houses Russia’s Black Sea fleet and is crucial for Russia’s naval presence in the Mediterranean Sea. Finally, and most importantly, as the map below shows, majority of Crimea’s population mainly consists of Russian speakers or trace their ethnic roots to Russia. All these factors combined make Crimea a significant piece in Russian-Ukrainian relations.

map_ukraineethnic

To continue, on the very same day that armed gunmen appeared all over Crimea, Yanukovych resurfaced in Russia, claiming to still be the legitimate president of Ukraine. Complications continued when on March 1st, the Russian parliament gave the military the right to invade Russia. Following the parliament’s decision, thousands of Russian troops crossed into Crimea on the pretense that they were mobilizing to defend Crimean citizens of Russian decent. Many Ukrainian military bases were surrounded and the Ukrainian reserves were put on alert. The newly formed temporary Ukrainian government and many western leaders saw Russia’s aggressive actions as a violation of Ukraine’s territorial integrity.

Western leaders were quick to announce their discontent of Russia’s actions. US president Barack Obama sent a message to Putin by stating that “there would be costs for any military intervention in Ukraine”. Other western leaders concurred with Obama and announced that they would instill heavy economic sanctions on Russia in order to punish Putin and his government. British Prime minister decisively affirmed his determination by sending a tweet.

Proposed sanctions currently include travel bans and asset freezes on influential Russians. However, US and European leaders also announced that if Russia continues to escalate its military presence in Crimea, they could consider cancelling certain trade agreements with the Russian government. Sanctions may have not been put into place yet but investors gave Russia a slight pinch over the weekend following the start of the crisis. On Monday, March 3rd, the Russian ruble tumbled in value and the Moscow Stock Exchange (MICEX) fell by 11.2%. As the graph below shows, the MICEX neared its lowest point in a year on the 3rd of March.

 russia stocks

All these events have finally led to this week’s Video of the Week. On March 6th, Crimea’s pro-Russian government decided that they will move to become a part of the Russian Federation. To confirm their decision with their citizens , the Crimean government decided to hold a referendum on the 16th of March. This decision by the Crimean government brought further negative reactions by Western leaders. President Obama stated that the proposed referendum would violate international laws.

If the West does in fact move to place trade sanctions on Russia, this will not only severely hurt Russia, but it will also strike at the European economy as well. As I had stated in my earlier posts, Europe nations import a significant amount of natural gas from Russia. If European nations were to end energy trade deals, then they would deal a major blow to their energy supplies as well. Without natural gas from Russia, the Europeans would have to turn to other sources such as increased imports from the Middle East or an increased investment into national energy production which would take years to develop. This is one of the reasons why some European nations such as Germany are reluctant to implement trade sanctions. The map below depicts the major natural gas pipelines from Russia to Europe.

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There are two issues on which I want to express my own opinion. The first is the premises of Russia’s military intervention. Putin’s justification to intervene in Crimea is to supposedly protect Russian speakers in Crimea. This notion is extremely similar to the excuse Adolf Hitler used to invade Sudetenland (modern day Czech Republic and Slovakia) in 1938 in the lead up to the start of World War II. Back then, Hitler demanded control over the Sudetenland to protect the oppressed German minority of the region. However, as we all know, he had much bigger and much more violent plans. More importantly, the West’s concession of Sudetenland didn’t quench Hitler’s lust for conquest. With that in mind, I don’t believe that a country can claim the responsibility to protect a group of citizens in another country that have ethnic or linguistic ties to it; at least not to the extent that they see the justification to rely on force. If Russia can invade Crimea to protect Russian speakers in Ukraine, whats to stop Mexico from invading the United States in order to protect the rights of Mexicans in America or to stop Turkey from invading Northern Iraq in order to protect the local ethnic Turks. In the modern globalized world,  the age of ethnically homogeneous countries are coming to an end. National populations are becoming more and more diverse with each passing year and with North Korea forming an odd exception, national identities are rarely forged from a single ethnicity or a single language. Thus, Russia’s decision to mobilize its military in order to protect Russian speaking Crimeans seems to be an excuse taken out of the 20th century’s playbook to me.

The second, and more important issue that I want to further discuss is Crimea’s right to self-determination, which is a fancy term for a region, or a country to determine its national identity or allegiance. The Crimean government announced that it wishes to be a part of Russia. But should it have the right to decide to which country it wants to belong to? I’m a fervent supporter of democratic rights and I know that Crimea is an autonomous region. However, Crimea is also still a part of Ukraine, and if Crimea is to join Russia or become independent, then all of Ukraine should have a say in the decision. Self determination seems rightful when you look at the issue from the side of those that are seeking it. However, not many may realize that in this case, if Crimea were to break away from Ukraine without the entire country’s consent, then Ukrainians would have their rights trampled on too. What sort of rights you may ask. The right to access, the right to utilize the public resources of that area and the right to do business are a few that come to my mind. Lets use the example of Catalonia, a region within Spain that also talks now and then about becoming an independent nation. The capital of Catalonia is Barcelona. Now imagine that I’m a Spaniard living in Madrid. As a Spanish citizen, I have the right to travel, live and move in Barcelona just like I would have those rights in Valencia. As a citizen of Spain, I should also have the right to utilize the resources of that region, whether it be public resources accumulated by the government or resources I might earn by setting up my own company there. If that region breaks off from Spain without the vote of all of the country’s citizens, then my rights would be violated. I’m sure that there are many regions within countries across the world where if a vote was held just in that region for secession, then it would pass. Catalonia, Quebec, the majority Kurdish populated regions of Turkey and Crimea are just a few that come into mind. Popular culture might make us symphatise with the struggle of these small regions. However, it is important to look at the issue on a national scale. That is why I’m against regional self determination without national consent.

Nevertheless, I’m an open minded person and I’m curious on what you might have to say about this issue. I’m sure that a lot of good arguments can be made in favor of self determination, such as the fact that many of the countries that exist today are a result of a struggle for self determination. Thus, for the first time, I’m creating a poll on my blog to see what you think. Should regions such as Crimea be able to secede or join another country or should it be up to the entire nation. I’m looking forward to hearing some interesting arguments that will challenge my opinions and perhaps sway me away from my current views.

Hopefully, the crisis in Ukraine comes to a peaceful end and I can write about other subjects. Until then, I’m looking forward to your views on my poll. As always, I’ll stay up to date on all matters regarding Ukraine. Stay tuned…

“The claims by President Putin and other Russians that they had to go into Crimea and maybe further into eastern Ukraine because they had to protect the Russian minorities, that is reminiscent of claims that were made back in the 1930s when Germany under the Nazis kept talking about how they had to protect German minorities in Poland and Czechoslovakia and elsewhere throughout Europe”
-Hillary Clinton

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Economy in Digits – 02/01/2014

In the past couple of weeks I didn’t see any significant economic indicators in the news. However, we got a lot of data over last week.

United States

Driven by the fastest consumer spending in the last three years and a rise in exports, US GDP increased by 3.2% year-over-year in the 4th quarter.The calculations also showed a 1.9% increase in GDP across all of 2013, compared to 2.8% the previous year. The 2013 figures showed that a significant decrease in government spending due to the shutdown in October had dragged GDP figures down when compared to last year. That was of course accompanied by the extreme cold temperatures in the winter which also hampered the economy. However, the numbers are still positive and despite the continuation of tapering by the FED, the US still remains the safest economic harbor right now. As we’ll discuss soon, Emerging Markets are not doing too well right now.

united-states-gdp-growthTurkey and India

Both the Turkish Central Bank and the Indian Central Bank resorted to drastic interest rate hikes. In Turkey, a corruption probe against government officials had led to the resignation of various cabinet ministers. The following levels saw the Turkish Lira lose significant value and brought the Turkish Lira/US Dollar spot rate to unprecedented levels. To stop the devaluation, the Turkish Central Bank sold parts of its foreign reserves but it was to no avail. Finally, the Central Bank had enough and they raised interest rates sharply. The benchmark interest rate was raised from 4.5% to 10% and the over night lending rate was hiked from 7.5% to 12%. Following the rate hike, the Turkish Lira gained 4% against the US dollar. However, the crisis is yet to be averted. Even though the Lira gained in value after the Central Bank’s decision, the sell off creeped in again. This decision is surely to slow Turkish economic growth and that could prove crucial to determining the outcome of the upcoming local elections in March.

tlusd

On to India, another country that required a rate hike this past week. As I stated in an earlier post, India is struggling with high inflation and lackluster growth and just like Turkey, they will be having elections this year. However, the Indian Central Bank let everyone know that they are serious about battling inflation when they increased the repo rate by a quarter point to 8% and announced that they plan to reduce the inflation rate to 6% by 2016. As you can see from the graph below, the latest inflation figure in India is over 11%.

indiainflationGreat Britain

Another GDP figure came from Great Britain as GDP growth was announced to be 0.7% in the 4th quarter of 2013 and by 1.9% in 2013 overall.That figure might seem as slow as Shaq running down a basketball court however that is the fastest growing quarter that Great Britain has had since the 2008 economic crisis. The main force behind the growth was the services and the manufacturing sectors and evidences that slowly, eventually and oh so gradually, the British economy is picking itself up.

Historical Data Chart

EU

The Eurozone had been battling a rather unfamiliar problem, deflation, which is the opposite of inflation. To battle the deflation, the European Central Bank had decided to lower interest rates last month. However, we got new inflation figures from the Eurozone which don’t look so bright. Consumer price inflation across the Eurozone fell from 0.8% in December to 0.7% in January.. Even though the worst of the European debt crisis is behind us, deflation means that firms and individuals are more likely to hold off on spending money until the future, which could take a toll on growth. Even though I see it to be unlikely, European Central Bank officials stated that if matters get worse, they could resort to negative deposit rates for banks’ deposits at the European Central Bank.

Historical Data Chart

That was what made economic headlines this week. Stay tuned for more economic news in Economy in Digits in the following weeks.

“Economics is extremely useful as a form of employment for economists.”
-John Kenneth Galbraith

Video of the Week – US Government Looms Towards Shutdown

The inability of Democrats and Republicans to agree on anything is once again dragging the United States government towards a cliff. This time, the argument could lead the government to shut down indefinitely. Here we go again.

Typically, Congress is supposed to pass a budget for government agency operations. But, for many years, Congress has been so divided that instead of passing a budget, they could only pass a short term stop-gap funding measure called Continuous Resolution (CR). The current Continuous Resolution, which expires on September 30th, is in jeopardy of not making it through Congress. This is because Republicans in Congress are adamant that the only way they will approve the new Continuous Resolution is if Obamacare is defunded. The most fervent supporters of this measure are the Republican representatives that are backed by the Tea Party movement. Obamacare is the name that has been given to the Healthcare bill passed by Congress under President Obama’s first term. The first parts of the law will be enacted in October and the bill will be fully implemented in January 2014.

On the other hand, President Obama and the Democrats have stated that they will not agree to defund Obamacare. Thus, we’re slowly approaching September 30 and both sides are not caving in. The House of Representatives, where the Republicans are in majority, passed a bill that renews the CR but demands reducing funding to Obamacare and repeal a medical device tax. However, the Senate, where the Democrats are in majority, rejected this bill.

If September 30th passes without a deal between the two sides, the government will effectively shut down. A shut down won’t effect mandatory government payments such as Medicaid and Medicare, but it will put a vise on discretionary spending. That means that national parks and Smithsonian museums would close, pensions and

veterans’ benefits checks would be delayed, visa and passport applications would be delayed, and as many as 2.1 million public employees could temporarily be out of their jobs.  A brief government shutdown occurred in late 1995 and it cost the government more than $1 billion.

Government+Closed

The Video of the Week comes from Ted Cruz, a Republican Senator, who spoke on the Senate floor on Friday for roughly 21 hours in order to hold up delay voting on the bill approved by the House so as to make the Senate more desperate to accept it. In that 21 hours, Ted Cruz referenced Star Wars, tried to speak like Darth Vader, compared Obamacare to Nazi Germany, read Green Eggs and Ham by Dr. Seuss, talked about Whitecastle hamburgers. The most ironic part is that Green Eggs and Ham is a story about how people may not like things they haven’t tried but once they try it, they find out that they in fact like it. That may be the worst story to read to oppose Obamacare. The clip I’ve shared is just a short snippet of that speech. You can find longer versions on Yotube. So sit back and enjoy the hilarity that ensues.

It seems that as of yesterday, Republicans and Democrats agreed to a deal where Obamacare would be delayed for a year and in return, Republicans would allow the CR to pass. We’ll probably have to wait for the final hours of Monday to see what kind of deal is struck. As usual, we can expect the US Congress to never do their best, to try their softest, and to disregard the well being of the rest of the nation. Typical politics.

If you’re still concerned regarding this issue, you can take a look at this link from the Telegraph which answers most frequently asked questions about the impending government shutdown.

http://www.telegraph.co.uk/news/worldnews/barackobama/10341981/Why-might-the-US-government-shutdown.html

“immediately on hearing that phrase [rebellion against oppression] I wondered if at some point we were going to see a tall gentlemen in a mechanical breathing apparatus come forward and say in deep voice ‘Mike Lee, I am your father.'”
-Senator Ted Cruz

 

 

Video of the Week – John Kerry Accidentally Averts War

I know that reading paragraph after paragraph of writing can get tiring at times; no matter how interesting the writing might be. Thus, starting today and every following Friday, I will post the Video of the Week. This clip will have either the most interesting or most newsworthy video from the previous week’s events. Additionally, I’ll try to briefly explain the context of video  Without further adieu, here is the Video of the Week

I was going to write a post on whether the US should engage in a military strike on Syria. However, my collection of thoughts might have become outdated thanks to the clumsiness of John Kerry. Appearing in a press conference regarding Syria, John Kerry was asked by CBS reporter Margaret Brennan, if there was “anything at this point [Assad’s] government could do…to stop an attack”. John Kerry went off script and said that Assad could turn over his entire arsenal of chemical weapons to the international community.

At first, this weak response went unnoticed. However, Vladimir Putin, the president of Russia, decided to take up Kerry on his offer. Putin suggested that Russia could take the chemical weapons off Syria’s hands and the Syrian government seems to have agreed to this deal. Finally, President Obama has said that if the Syrian government complies, they will not launch a military strike on Syria. Crisis averted? Perhaps. We’ll have to wait and see what unfolds. Maybe we should take Obama’s Nobel Peace Prize and give it to Margaret Brennan.

“Why don’t you meet Osama bin Laden, invite him to Brussels or to the White House and engage him in talks, ask him what he wants and give it to him so he leaves you in peace”
-Vladimir Putin

Background on Syria – John Kerry is a Lizard

As you might know, the Obama administration is currently trying to seek approval from Congress in order to engage in a military strike on Syria. To give you the back story, the Syrian people first took to the streets during the Arab Spring of 2011 in protest of the dictatorial rule of Bashar Al-Assad. Since then, the situation in Syria has eventually avalanched into a full blown civil war. At first, Western nations were timid to intervene as Assad murdered his own people in droves. Additionally, two factors have made the situation even more complicated

1) The rebels, which were originally formed by moderate liberal citizens, have been infiltrated by radical Islamist groups.
2) Iran, China, and especially Russia are supporting the Assad regime. Since China and Russia are members of the UN National Security Council, they are vetoing any proposal to intervene in Syria.

At the beginning of the bloody conflict, President Obama had said that the use of chemical weapons by the Assad regime would be a “red line” for the United States. Over the past few months, there were instances where Assad was believed to have used chemical weapons but Obama did not act. Finally though, a few weeks ago, videos surfaced that seemed to prove that the Assad regime had in fact used chemical weapons against the rebels. Obama seems to have had enough and has decided to ask Congress for the approval to engage in a limited missile strike against the Assad regime. Many have argued whether a military strike on Syria is the right option. I will discuss that in another post. For now, I only wanted to give a brief back story.

I don’t want to involve too much humor in such a tragic story, but the events over the past few days have brought forward an interesting question. Is John Kerry a lizard? John Kerry is the US Secretary of State and a few days ago he was being questioned by the Senate Foreign Relations Committee regarding striking Syria. The event was televised on CNN. As I was watching the hearing, I noticed something strange about Kerry and it seems like the crew at The Young Turks picked it up too.

What the hell is up with John Kerry’s tongue? Most people would say that its some kind of tick, but I think there’s a very good chance that John Kerry is secretly a reptilian humanoid. After the hearing, I’m sure Kerry went home and had a good time with his son Gecko.

In his book The Biggest Secret, Jon Icke, a British writer, first came up with the conspiracy theory that the world’s leaders have been extraterrestrial reptilian humanoids ever since the beginning of human history. Looking back at how many times our political leaders have betrayed, deceived, and disappointed us, I would say that it is very likely that we’ve in fact been led not by humans, but by reptiles.

“I remain just one thing, and one thing only, and that is a clown. It places me on a far higher plane than any politician”
-Charlie Chaplin