As you know CTH takes a different approach at significant world events. We try to share the untold stories as they shake out, in real time, in granular details not noted by the MSM. We discuss the stuff on the way to the destination. That way when we arrive at a ‘way point’ we have a historic reference, a back-story, to comprehend consequential headlines when they happen.
You might remember on August 4th President Trump and French President Emmanuel had a phone call. The outline of the phone conversation is HERE, but there was no real reason for them to be chatting…. or was there?
Western media has paid virtually no attention to how Trump’s big picture economic policy enmeshes and bolsters his national security policy.
Quite literally, and I really want to emphasize this, Secretary Mnuchin (Treasury) and Secretary Ross (Commerce) are just as important as Secretary Mattis (Defense) and Secretary Tillerson (State).
Stop and think about that for a minute.
When President Trump went to Saudi Arabia for the Arab Security Summit the two most visibly active cabinet members were Mnuchin and Ross. When has a Treasury Secretary and Commerce Secretary ever had as much importance during world security events?
Think about it.
Who was Obama’s Commerce Secretary during Iran negotiations?
Everyone knew every prior administration’s Secretary of State and Defense; we always saw these two people used during international diplomacy and national security discussions.
But when was the last time the Commerce Secretary was part of the national security apparatus? Or the USTR (Robert Lighthizer now)?
See the point?
Everything President Trump does to ensure national security keeps the traditional application of diplomacy and defense, but necessarily overlays international economics over the entire dynamic. Defense and diplomacy are still important, but with Trump there’s a more laser focus on the economics of each situation.
Money makes the world go around…. and no-one applies this leverage like President Trump. Heck, no-one has ever even fathomed using economic leverage in ways that President Trump does. There’s not even a close second.
That new-paradigm, that very Trumpian approach, is what brought China and Russia to support Nikki Haley in the U.N. Security Council resolution against North Korea.
Economics, it’s always about the economics. There are trillions at stake in the geopolitical economic chess match. We’ve outlined at length how President Trump is in this economic and trade battle-space with China over North Korea; but we haven’t emphasized Russia enough and how Trump’s economic influence plays-out with Syria and Iran.
Reference – energy prices are the backbone of the Russian economy. Heck, exports of Oil and Gas to the EU was the leverage Putin used to back down everyone in the region over his Ukraine expansion.
It’s not like Russians are exporting cars, electronics or innovation that the world is clamoring for. Nor does Russia have creative enterprises based on technology. Like China, Russia just steals the innovative stuff they want. Ergo Help Wanted ads for hackers etc.
If you want dependable weapons or oil, well, Russia has you covered. If you want a luxury SUV or TV set… well, notsomuch. With all the new riches possible from state funds, the Oligarchs never quite got around to thinking about that long-term stuff; and there damned sure is no Edward Demming type person, economic architect, they can -or would- listen to.
Just look at their GDP which also measures their economic output minus their imports:
Without energy exports, Russia is in even worse shape. And, as a direct consequence, low energy prices for oil and gas mean their economy shrinks even further. The value of Russia’s primary export is directly tied to their ability to influence global events.
Back to Macron and Trump’s phone call last week.
Yesterday Reuters happened to note that Libya, getting more stable now, was cranking up their oil exports to the EU. Libya exports “heavy crude” used in Diesel Fuel and lots of EU powered stuff (“heavy crude oil” is different from “light sweet crude”). Oh yeah, and it happens that Trump and Macron were discussing Libya and Sahel region of Africa where France has energy development. Yeah, funny that.
NEW YORK (Reuters) – Oil prices slipped on Tuesday, pulling back from recent gains as exports from key OPEC producers rose and despite news of lower crude shipments from Saudi Arabia.
The oil market has been in consolidation mode after a sharp rally between mid-June and late July pushed U.S. crude futures above $50 a barrel for the first time in several weeks. The price slipped back below $50 and has traded around that number as world supply has been slow to draw down.
“It’s just unable to break above $50,” said Kyle Cooper, consultant for ION Energy in Houston. “It’s boring, but there’s a fundamental justification for prices being stuck between $45 and $55 without a significant geopolitical event.”
Benchmark Brent crude LCOc1 settled down 23 cents a barrel at $52.14 a barrel. U.S. light crude CLc1 ended down 22 cents at $49.17 a barrel.
Crude oil exports from the Organization of the Petroleum Exporting Countries hit a record in July, largely because of gains in Nigeria and Libya, two member countries exempt from the agreement to limit production through March 2018.
The recovery in Libya’s oil output and higher production in Nigeria have complicated OPEC’s efforts to curb supply. (read more)
… as Tigger would say “TTFN”.