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  • The Cold Economic War [View article]
    Well, yes, I believe that the West would have no choice but defend Poland. Poland's territorial integrity is guaranteed both by the NATO and the EU. Putin knows that. But that again seems far-fetched.

    But why would Putin invade Poland or the Balkans (apart from Transniestra if you call that Balkans) in the first place? Has Putin ever invaded any region that didn't have tendencies towards segregation and very strong ties with Russia anyway? South Ossetians were actually quite happy when Russia drove the Georgian army out. Crimeans seemed happy as well when Russia invaded - their election results speak for themselves - even when one assumes a certain level of election fraud. The large proportion of Crimean soldiers that voluntarily left the Ukrainian army and joined "the enemy" also speaks for itself.

    This is not to say that the elections or invasions were in any way legitimate. This is also not to say that I am sympathetic with Putin's actions. I am not. I'm just saying that Putin does seem very selective with regard to the territories he invades and adapting your investing strategies to the "threat" of Russia trying to reclaim the entire former Soviet Union seems paranoid.

    Investors should consider (geo-)political risk, but not panic about it. "Economic cold war" is neither new nor mutually exclusive with globalization. The two have long gone hand-in-hand. Precisely because the large powers of the East and West have to compete for access to markets in a globalized world they support opposing sides in proxy conflicts like DRC, Sudan, Syria, Korea, Venezuela ... and Ukraine.

    I completely agree that Putin's expansionism can only be met with an economic response. But I do not believe that sanctions would be effective. If anything has ever influenced political decisions and at the same time benefited investors it was a international trade and economic cooperation.

    Investors might hope not for economic sanctions but for emotions on either side to calm down, so that East and West can do business again. History has shown again and again that over time this leads to a change in people's values from cultural identity/nationalism/r... towards consumption. Just imagine the investment climate once every last Asian is convinced that consumption and economic growth are the most important things in life (I guess we would call them "free" then)!
    Mar 26 07:26 AM | Likes Like |Link to Comment
  • The Cold Economic War [View article]
    Dear Mr. van Caloen (and some commentators),

    seriously? Hitler? As a German and an educated human being, I would appreciate a little more tactfulness, as well as a little more background knowledge, before making comparisons between Putin and Hitler. This is just dumb.

    Yes, Putin has ignored international law when invading Crimea and accepting an illegitimate election. I will not argue against that. So did the US when invading Iraq, so did the NATO when bombing Jugoslavia and pushing through Kosovo's independence, so did France when attacking Libya. Would we argue that the then-leaders of all those countries wanted to be the next Hitler?

    Does anyone here really believe that any economically strong country cares about the fate of small nations? Countries care about business, and they sometimes use military aggression to enforce business privileges and secure trade routes. That's what Putin just did in Crimea. That's what the West just did in Afghanistan and Iraq. There's really no difference, except the death toll is much lower this time.

    Speaking of appetite for more and more land, why not compare the NATO with Hitler? Does anyone here remember the 1990 agreement between western foreign secretaries (notably German Hans-Dietrich Genscher) and Mikhail Gorbachev that as a prerequisite for a German reunification there would be no eastward NATO enlargement? What has happened of that promise? Twelve Eastern European countries are already part of the NATO, with Georgia and Ukraine probably following soon. Which side is really aggressively expanding its territory and in doing so breaking international agreements here?

    The West has gained nothing by throwing around with sanctions. Nor by blindly accepting an illegitimate and partly fascist Ukrainian government (if you're looking for Hitler wannabes, look no further). And again the West doesn't see this as an opportunity to finally be honest about the West's own judicial mistakes and start talking with Russia on eye-level. In fact, I'm pretty sure that Russia and the West WILL soon start talking again, but not about politics but about business, because we simply enjoy doing that too much.

    Merkel as the new leader of the free world? That just makes me laugh! How exactly does she contribute to freedom?
    By distortion markets through subsidies for European agricultural overproduction and exports of European cereals and chicken in West Africa, which undermines the development of local industries and destroys local livelihoods?
    By ignoring that the NSA spies on German citizens?
    By isolating one fundamentalist regime (Iran) while selling tanks to another (Saudi Arabia)?
    By ignoring that her military allies in Egypt just sentenced more than 500 people to death without giving them a chance to properly defend themselves in court?

    Coming to the only potentially valuable piece that this article and the subsequent discussion contains: the potential economic ramifications of this crisis. I tend to have a slightly different opinion, though I'm probably less of an expert than many others here. In the short term, for sure, it will lead to a certain degree of economic isolation for Russia. And Russia has lost a member of the planned Eurasian Union to the West. That will definitely hurt Russia, but that had already happened as soon as the West decided to support a coup d'etat in Ukraine, long before Putin decided to mobilize troops.
    What about the medium to long-term? Russia will continue to sell gas to Europe. Russia will not have to pay transit fees to Ukraine anymore once the Southstream pipeline is ready, because now that Crimea is Russian the gas will run entirely through Russian waters before hitting Bulgaria (anyone long Gazprom?). Russia has secured some ground in a geo-strategically important region. Putin has made it slightly more clear than before that he's not a fan of a NATO enlargement. The world will continue to depend on Russia for issues like Iran and Syria, and in fact anything that may come up and that is supposed to pass the UN Security Council.

    Don't get me wrong, I appreciate if investors consider geopolitical developments in their investments. I generally appreciate this kind of articles. I also do not doubt that you are wise investors. But my suggestion to you: stick to topics that you're good at (investing). Leave discussions about Hitler and freedom to others.
    Mar 25 02:47 AM | 2 Likes Like |Link to Comment
  • Ukraine Is The Key To Putin's Eurasian Union [View article]
    Interesting you mention ecology.
    As a European I doubt whether Europeans are really too concerned about ecology per se. They may just be concerned about ecology at home. We avoid shale gas development within the EU, partly because we can get cheap gas from outside the EU (i.e., Russia!), no matter what ecological effects occur there. Our attitude towards shale gas may change once Russia raises prices ...
    Regarding your second statement: yes, we Europeans are more concerned about ecology in all areas. But that's because science already tells us now that we should be, we don't wait for the future to tell us ;)
    Mar 9 02:43 PM | 1 Like Like |Link to Comment
  • The Long Case for American Lorain [View article]
    Just wondering if anybody if invested in ALN. Why is there absolutely no recent coverage on Seeking Alpha? The stock seems undervalued!
    Oct 9 09:24 AM | Likes Like |Link to Comment
  • From Bust To Boom: Southeast Asia's Capital Markets Getting It Right This Time [View article]
    Great article, Paul! I appreciate you mentioning ESG issues, which are all too rarely considered in SA and the investment community as a whole.
    May 30 08:56 AM | Likes Like |Link to Comment