US and Canadian oil producer suffer the most from current oil price collapse

Oil price has collapsed and is not going to rebound quickly. But not all the oil-consumer countries benefit from low prices in the same way. And not all oil-producer countries suffer equally.

Oil prices change as the values of currencies do. Purchase or sale contracts for oil are usually long term ones, the price of oil in such contracts does not change very frequently. Fluctuating exchange rates of currencies are still enormously important for the economies. Oil for $40 per barrel does not mean that this barrel is also as cheap in all countries as consumers have to buy dollars in order to purchase a barrel. Or producers sell their barrels for dollars and then exchange these dollars for their own currency. The domestic price based on the exchange rate is not always stable. Continue reading →

Right-wing Parties are on the rise across Europe

Right-wing parties have always been part of the European political scene with the French National Front and the British National Party as well as United Kingdom Independent Party being most talked about. At the polls they may have had quite a large popular support, yet the election systems used in some European countries effectively blocked them from entering national parliaments although they gained a significant share of the vote (see graph for UKIP)¹. In some isolated cases when a nationalistically-oriented or a right-wing party won a significant number of parliament seats, it would be shunned by all the remaining parties, and thus rendered politically ineffective, as was the case with the Sweden Democrats².

wykres

Enter the refugees. The swelling numbers of migrants and especially the flood that has taken place over a couple of recent years has made Europeans reconsider their attitude to the phenomenon, and so they started supporting the parties, whose political platform called for stopping the migrant waves. Continue reading →

Turkey will pay the price for having a lack of patience

photo Eugene Sergeev

It was a political decision to down the Su-24, and it reflected more the growing impatience on the part of the Turks at the Russian military actions in Syria rather than an exasperation at the violation of Turkish airspace. The decision also showed Turkish shortsightedness and political immaturity. It was a blow to Russia, one that may lphoto Eugene Sergeevead to far-reaching international consequences. The long-term consequence for Turkey may be the loss of some of her territory to Kurds.

The course of events and their background

If each single violation of a country’s airspace were to lead to the outbreak of hostilities, we would long have had world war three that would have erupted in the region of the Baltic states where such incidents caused by Russian and NATO pilots are far from being rare. The long accepted practice is that in such cases the pilots of both sides try to make eye contact in order to identify the intruder beyond any doubt. Then the alien craft is escorted out of the country’s airspace. Continue reading →

Collapsing global trade a harbinger of the next crisis.

photo Oscity

A falling industrial demand, falling commodity prices, falling trade, falling sales. This is what we see now in China, Europe and even in the USA. What comes next? Falling employment, falling customers’ demand, falling economy. Global trade gives us clear signals that we cannot ignore.

A crisis is coming and these are the signs:

China: October imports fell 18.8 percent in comparison to the previous year¹. It is the beginning of the domino effect, with its coal and iron background.
Taiwan: October orders from China fell 10.6 percent in comparison to the previous year, from Japan 24 percent down. Taiwan’s export orders are seen as an indicator of a demand for high-tech gadgets and for Asia’s exports².
Japan: first decline in exports in October since August 2014 (2.1 percent in comparison to the previous year). Reasons: China’s slowdown, poor Asia’s demand, the yen not weak enough. Double-digit declines in auto parts and electronic components³.
Germany: a monthly drop in exports in August, due to declines in industrial production and the number of factory orders⁴.
UK: 40% of respondent-companies are below average in export orders. Reasons: China’s downturn and a strong sterling⁵.
Baltic Exchange’s main sea freight index fell below 500 for the first time. Baltic’s BDI Index (gauging the cost of shipping) reflects a slower coal and iron ore demand in China. 19-commodity Thomson Reuters/Core Commodity CRB Index reached 13-year lows⁶.
USA: quiet three busiest U.S. seaports during ‘peak shipping season’. Imports in Los Angeles, Long Beach and New York fell in both September and October for the first time in a decade⁷. Continue reading →

Russia blackmailing the Ukraine is coming to an end

Ukraine does not plan any additional purchases of gas from Russia by the end of this year. The reversed flow from the EU and the falling consumption have allowed gas storage tanks to be filled up to 53 percent, from about 46 percent last year, according to Gas Infrastructure Europe data. Russia is losing its blackmailing-tool on Ukraine.

Source: Ukrtransgaz statictics

Geopolitics escalates in Europe.

The political situation in Europe is escalating rapidly. Saturday and Sunday Brussels was placed on lockdown. In Crimea there was a total electricity blackout after the pylons providing electricity for the region had been blown up in Ukraine. Border controls all over Europe are being reinstated as the Schengen agreements are suspended.
As Europe is in turmoil and European politicians are paralyzed by terror, it is a matter of time before Moscow secures its access to Crimea.

Power’s out in Crimea.

Brzezinski, US top strategist, explained in 1997 that Ukraine is Russia’s bridge to Europe. Taking this bridge out will isolate Russia from Europe. Brzezinski also noticed that Muslims make up 20 to 30% of the Russian population. Arming the Mujaheddin and supporting the aspiration of Muslims could destabilize whole nations. The grand-master of the US hegemony never anticipated the current chaos in Europe. Continue reading →

Negative interest rates: beware of banks

Interest rates are not a simple thing, let alone negative interest rates! We are accustomed to positive rates – it is obvious that we have to pay interest on credit and that we are paid for a deposit. But times are changing. Now money supply is larger than demand, people save more than borrow, inflation is close to zero or below, so we are going to be forced to change our thinking. Or maybe not? Continue reading →