As a global investor, I have to take off my US hat and put on my logical, unemotional Spock hat. And as much as I love the values we claim we stand for, I’ve spent many years watching leaders in Europe and the US act deeply unserious. They ignore second- and third-order effects. They ignore long-term consequences. Their hubris is off the scale. The patriot in me is in agony. But it is what it is.
That matters as I think about your excellent article. The reason Europe isn't at the table? Because it isn't its own person—at least not yet. It acts as our sidekick, following our lead. It shouldn't, but it does. And as long as Europe behaves like Batman's Robin instead of its own person with its own goals, its global decline will continue. Does it have to be that way? No. Europe has incredible assets it could leverage. Once it wants to.
As for the US: this administration and the prior administration are doing their very best—inadvertently—to force China to build its own global financial infrastructure. The Chinese clearinghouse you mentioned is just the latest example. This is our own making—our obsession with sanctions. Sanction this, sanction that, sanction everything. You can't expect people to keep using your existing global financial system if you poison it like this.
That's a long-winded way of saying: Europe has problems, but so do we. And in an ironic twist, China—where I wouldn't want to live—is now smarter about second- and third-order, long-term thinking than we are. I'm not doom and gloom about the West. The future, after all, is what we make of it. But it starts by taking off your rose-colored glasses. And thoughtful, non-rose-colored articles like yours help us get there. Great article!
Thank you, always appreciate your thoughts! Europe is indeed stuck in a transatlanticist Robin-trap while Batman starts dividing Gotham with the Joker, who it turns out has legitimate interests after all. Who would've thought.
I think I might differ a bit on their prognostication on 2nd and 3d level effects. Their actions though investment and intelligence sites, etc in the western hemisphere elicited a response that they were ill prepared to deal with. Causing the Japanese, rok, and Philippines to shift to long range offensive weapons instead of defensive weapons was foolish. This is a Xi hubris issue, had he conformed to the Deng policy they would have owned the planet in 2040 or 50. Instead he pushed enough to unite the democrat and Republican Party, a modern miracle. And alienate the Europeans with his Russian statements. They have lost the planetary initiative for the future while still being big and powerful.
I'm starting to get the succinct sensation that the people of Europe are to be sacrificed by the political classes who are all lining up to enter the revolving door game of “Corporationstan”.
And whatever happens to the Euro-trash proles, be they white, brown, black skinned, and regardless of religious conviction, all of us will be served the justice demanded by the rest of the world as moral reparations for the colonialism, exploitation, racism, slavery, climate change…. and whatever else can be added to the list?… of our forefathers.
And it will look really neat and poetic… in hindsight. Almost like it was God's will, or “Hegelian historical unfolding” for secular peeps.
That RMB settlement system aside, it's still mind-boggling to see how energy infrastructure gets given away for pennies on the Dollar seemingly on "morale grounds arguing". Russia pulling the rug out from under Europe after being made the main sanctions target would be logical from their POV as well, if anything, why not re-sell them their precious energy with a markup - they seem to not want to get cheaper energy as long as it's not "Russian"?
If that takeover of Nordstream really happens I wonder how the media will report (frame) it -- if they even report about it at all in depth?
Settling energy and international trades in RMB (with collateral mechanics in place) is absolutely the smart move for China, and from their POV very long-term thinking - hence it was clearly missed by the abundance of EU short-term thinkers.
Excellent comment BSJ, nice work. The clearinghouses are definitely a major factor in the geo-economic fencing. On the Chinese minor stake in Euroclear, it doesn't give them any formal influence over policy. I checked the governance implications when I wrote my Sinodollar piece (https://dollarwatchtower.substack.com/p/sinodollars-strategically-using-the) last week. Belgium/EU regulatory authorities would inform the Board very late in the sanctions process. China would be aware, but not able to influence regulatory & national security decisions. But still, the Euroclear/Clearstream platform is far more attractive than FRBNY to China. Unilateral US risk is their greatest concern now.
Thank you! The governance limits are a valuable addition. Combined with the collateral eligibility push, the custody shift you describe is the architecture worth watching. Highly recommend readers check your Sinodollar piece out.
Well Europe wants a retirement home for the Boomers. Every Boomer policy is We Boomers are the Last Generation of the West so they’re eating or poisoning it all and leaving none for the following generations.
Perfect Justice that at the end their comfortable nest eggs are being depleted and outright raided.
As a global investor, I have to take off my US hat and put on my logical, unemotional Spock hat. And as much as I love the values we claim we stand for, I’ve spent many years watching leaders in Europe and the US act deeply unserious. They ignore second- and third-order effects. They ignore long-term consequences. Their hubris is off the scale. The patriot in me is in agony. But it is what it is.
That matters as I think about your excellent article. The reason Europe isn't at the table? Because it isn't its own person—at least not yet. It acts as our sidekick, following our lead. It shouldn't, but it does. And as long as Europe behaves like Batman's Robin instead of its own person with its own goals, its global decline will continue. Does it have to be that way? No. Europe has incredible assets it could leverage. Once it wants to.
As for the US: this administration and the prior administration are doing their very best—inadvertently—to force China to build its own global financial infrastructure. The Chinese clearinghouse you mentioned is just the latest example. This is our own making—our obsession with sanctions. Sanction this, sanction that, sanction everything. You can't expect people to keep using your existing global financial system if you poison it like this.
That's a long-winded way of saying: Europe has problems, but so do we. And in an ironic twist, China—where I wouldn't want to live—is now smarter about second- and third-order, long-term thinking than we are. I'm not doom and gloom about the West. The future, after all, is what we make of it. But it starts by taking off your rose-colored glasses. And thoughtful, non-rose-colored articles like yours help us get there. Great article!
Thank you, always appreciate your thoughts! Europe is indeed stuck in a transatlanticist Robin-trap while Batman starts dividing Gotham with the Joker, who it turns out has legitimate interests after all. Who would've thought.
Yes. Love your postings.
Thank you!
I think I might differ a bit on their prognostication on 2nd and 3d level effects. Their actions though investment and intelligence sites, etc in the western hemisphere elicited a response that they were ill prepared to deal with. Causing the Japanese, rok, and Philippines to shift to long range offensive weapons instead of defensive weapons was foolish. This is a Xi hubris issue, had he conformed to the Deng policy they would have owned the planet in 2040 or 50. Instead he pushed enough to unite the democrat and Republican Party, a modern miracle. And alienate the Europeans with his Russian statements. They have lost the planetary initiative for the future while still being big and powerful.
At least Fico seems to be on to what is going on.
Hardly surprising legacy media apparently didn't mention his remarks.
I'm starting to get the succinct sensation that the people of Europe are to be sacrificed by the political classes who are all lining up to enter the revolving door game of “Corporationstan”.
And whatever happens to the Euro-trash proles, be they white, brown, black skinned, and regardless of religious conviction, all of us will be served the justice demanded by the rest of the world as moral reparations for the colonialism, exploitation, racism, slavery, climate change…. and whatever else can be added to the list?… of our forefathers.
And it will look really neat and poetic… in hindsight. Almost like it was God's will, or “Hegelian historical unfolding” for secular peeps.
Not sure it will feel like that if it happens.
That RMB settlement system aside, it's still mind-boggling to see how energy infrastructure gets given away for pennies on the Dollar seemingly on "morale grounds arguing". Russia pulling the rug out from under Europe after being made the main sanctions target would be logical from their POV as well, if anything, why not re-sell them their precious energy with a markup - they seem to not want to get cheaper energy as long as it's not "Russian"?
If that takeover of Nordstream really happens I wonder how the media will report (frame) it -- if they even report about it at all in depth?
Settling energy and international trades in RMB (with collateral mechanics in place) is absolutely the smart move for China, and from their POV very long-term thinking - hence it was clearly missed by the abundance of EU short-term thinkers.
Agreed. Everyone is doing the smart thing here, except Europe.
Someone should tell Fico it isn't stupidity that's the problem, but Enshitification.
With the current crop of leaders both things might not be mutually exclusive.
Excellent comment BSJ, nice work. The clearinghouses are definitely a major factor in the geo-economic fencing. On the Chinese minor stake in Euroclear, it doesn't give them any formal influence over policy. I checked the governance implications when I wrote my Sinodollar piece (https://dollarwatchtower.substack.com/p/sinodollars-strategically-using-the) last week. Belgium/EU regulatory authorities would inform the Board very late in the sanctions process. China would be aware, but not able to influence regulatory & national security decisions. But still, the Euroclear/Clearstream platform is far more attractive than FRBNY to China. Unilateral US risk is their greatest concern now.
Thank you! The governance limits are a valuable addition. Combined with the collateral eligibility push, the custody shift you describe is the architecture worth watching. Highly recommend readers check your Sinodollar piece out.
Another great article on a topic I've am not aware of. Excellent job guy, keep doing what you are doing.
Thank you for reading! 🫡
I am left wondering how frozen those Russian assets really are?
We'll find out when Russia eventually comes to collect.
Well Europe wants a retirement home for the Boomers. Every Boomer policy is We Boomers are the Last Generation of the West so they’re eating or poisoning it all and leaving none for the following generations.
Perfect Justice that at the end their comfortable nest eggs are being depleted and outright raided.
Great article man, actually interesting which is rare to find
Subscribed, would love to have you along too🙂
Thanks!