The bandwagon effect taking place in Greece looks set to deliver leftist Party Syriza a victory by 6-7% of the popular vote….but the ECB says the country is an ECB leper. The Slog tries to put things into a wider geopolitical context.
Well, now we know: Greece will be shut out of QE “for at least six months” because of “limits on how much debt the central bank buys from a single issuer”. It must be smashing being a central banker: everything you do is secret and/or the opposite of what the public are told – so you can lie your head off with glorious abandon. I spoke to a contact in Spain today, who had this to say:
“Spanish banks break those limits at least once a week, but the ECB moves the money around the whirlygig so that it never hits the tripwire. If he’d let the Greeks take part [in the easing programme] frankly nobody would’ve noticed it. It’s just more bullshit”.
As I predicted yesterday, most of the commentariat see the deadly Draghi’s (now revealed) ‘Suez Canal’ tactic against Greece as a negotiating ploy. And to reiterate, I don’t: Draghi and Merkel want to make Alexis Tsipras’s position untenable, but there is a difference between the two of them.
Merkel holds the view that Greece will come to heel. Draghi would rather they didn’t. But both believe that, by doing this, they can blame Grexit on Syriza if the new Government walks away from the table. It’s very much a win-win for the Blue Meanies…and typical Draghi dagger stuff.
Draghi must know what’s coming down the road here. If things turn wobbly with Brussels, the obvious place for Greece to turn is the Moscow-Beijing axis of alleged anti-Dollar. For Draghi, the response will be “even better – now we can nail them as closet-Commies”. Yes, yes – I know that’s insane, but then so is QE.
The thing with your Ms Geopolitics, however, is that she’s a very unpredictable mistress. Some of you may have noticed the western media trying to big up stories about Vladimir Putin’s position being ‘precarious’ of late. The stream of these stories is now a daily occurrence in the more untrustworthy US media outlets – a spectrum which, for me, starts with the New York Times and ends at the American Forces Network. Beyond that lies Texas. And we all know how the girls are in Texas.
My view remains that if you look at the numbers – and Vlad’s track record when it comes to chess – he is in a tricky position rather than a corner. Few were more adamant than The Slog in recent years that a global slowdown was on the way, and would hit the energy-exports over-dependent Russia harder than most. What I didn’t see coming of course was the unpicking of Ukraine….and the ‘sanctions’ that would follow…and then the oil-price manipulation. They’re really Stage 2 currency war weapons. Draghi is playing for the Dollar team, and he will do what he has to – and what he’s told. The game very soon is going to be strangling the Rublenimbi at birth….and that will weaken Putin’s position inside Russia.
But Russians like their leaders strong and smart. “When a Russian feels any foreign pressure, he will never give up his leader,” Deputy PM Shuvalov said at Davos today, “Never. We will survive any hardship in the country – eat less food, use less electricity”. A very funny social media flurry then followed in Moscow, pointing out all seven of the homes where Mr Shuvalov would be eating less and bearing the cold; but well-deserved satire aside, the bloke is right. As I’ve noted before, in the medium to longer term, much depends on whether China walks the walk on Antidollar. And in the short term, much depends on the weather. The areas of Eastern Europe beyond Russia are projected to get a seriously cold February…and Germany itself will see temperatures ‘well below normal’.
Of course, there are limits to what Salvador Dragula will do. He will do whatever it takes…up to but not quite including the right thing. The right thing (I think) is to have at the very least a duopoly of trading currencies for oil, gold and, if necessary, Weetos. Just don’t hold your breath waiting for Draghi to deliver it.