US Elections & World Order - Part 1
Macro D Guest Article
What are we facing?
The United States of America is, of course, still the mighty USA, and this means that if someone has the keys to the control room, this "Mr. Someone" sits firmly in Washington. But are we certain that there aren't elsewhere, including other powers, in the process of obtaining a copy of these keys?
What do I see?
I see a nation (the American one) that, over the last decades, has abused the privileges that were given to it as the arbiter of the fate of the world. Now, with the simultaneous presence of several places in the world where this figure of arbiter of last resort is no longer accepted, the number of geopolitical outbreaks is steadily increasing. The United States of America finds itself increasingly in the eye of the storm.
But then, why still believe in the ability of the United States to remain in command of the world?
Their military superiority has not been undermined, nor has their ability to extend it to every corner of the world.
Although questioned, the Dollar is still the reference currency in every hemisphere and is always the currency all central banks are happy to hold in their coffers.
The American ability to form alliances is unparalleled, and thanks to the “policy of compromise and protection,” the extension of their shadow is strengthened even indirectly.
Despite its proverbial ability to make the weight of its power felt outside its borders, today, it seems to me that the USA suffers from the inability to recognize itself within its borders as "the power that controls everything.” I think the will to power dear to Nietzsche [1] is missing among the American people.
Despite the stomach ache of the people “who don't dress in suits and ties,” in Washington, they know perfectly well that to continue to control the fate of the world, the USA needs the world to continue to perceive American power as intact. However, within its borders, the Americans themselves are starting to feel tired of the "solution clothing" that a large part of the world still attributes to them.
I sense that the average American would prefer to abandon the role of the saviour of any country and let the world move towards a new maturity and a new world order. This average American who is no longer part of a scared group today is the one who usually declares himself ready to embrace a strong choice as soon as the right opportunity presents itself.
Well, aren't we about to encounter this great opportunity? History teaches us that at the first electoral opportunity, those who feel within themselves the need to move on without ifs and buts don't think twice before turning their backs on the leader of the day. If this were the case, hard times lie ahead for the evergreen Biden.
Currently, I visualize this scenario in the USA.
An incurable and indefinite internal political-constitutional crisis
A qualitative worsening of foreign policy.
But why has the USA lost credibility as the ultimate guarantor of world stability?
Because in taking on the role of the guarantor, they could not resist taking on those foibles that transform the guarantor of a supranational interest into a guarantor who also, above all, guarantees the national interest.
An example:
By refusing to accept the jurisdiction of the International Criminal Court (but accepting the decision to indict Putin in 2022) or by openly boycotting its work – as happened with the Trump administration in 2020 – when they brutally sanctioned the ICC chief prosecutor, Fatou Bensouda, and they froze her bank accounts because she wanted to open an investigation into war crimes in Afghanistan which coincidentally would also involve some American soldiers.
Today, American foreign policy is at the mercy of the decision-maker on duty and no longer in the hands of a dignified and virtuous orderly thought capable of going beyond the distinctions inherent in being republican or being democratic.
Today's administration cancels the decisions of yesterday's administration with the consequence that the American handshake always has an expiration date, and after four years, it starts all over again.
These oscillations have repercussions on international relations where a visionary approach is needed that can go much deeper than a handful of years.
I wonder:
Can an administration incapable of exporting coherence export democracy? (I use an expression so dear to the Bush Doctrine here).
I have doubts about it. I cannot help but notice how changes in direction in American politics are now the order of the day and concern the most disparate sectors.
Two about-faces above all:
The different approaches maintained towards climate change and the Iranian nuclear negotiations. From Bush onwards, every President has carried forward his thesis without even considering the hypothesis that perhaps embracing and maintaining an already-built approach could be preferable to an approach built from scratch.
But why did I talk about foreign policy above all?
I did this because I believe that this is the time of "what appears"rather than the time of "what is".
If what seems more important than what it is, then the desire to improve one's image will be more important than the need to improve oneself.
I believe that in the United States of America, the intention to look outside one's own nation will prevail rather than the intention to look within one's nation.
This social framework (safeguarded to save appearances) will force the United States of America once again to wear Mister Wolff's [2] clothes, but I fear that in the next round, many will realize that those clothes are now too tight, ruined, torn, and no longer able to hide the cold sweats caused by the new thing that is advancing.
I'll get to the point: we are rapidly approaching Judgment Day.
Who will celebrate on November 5, 2024?
We're about to experience what could be the most inscrutable presidential election since the days of Abraham Lincoln.
So it's no wonder the CBOE Volatility Index (VIX), known as the market's "fear gauge," has climbed this year.
Below is the actual situation
And now, the potential situation
Investors will be nervous and confused over the next few months as Joe Biden and Donald Trump battle it out.
In the next piece, I will try to understand which direction, considering that the currently most popular word in the US is INFLATION; inflation will stay regardless of whether Biden or the revived Trump wins the November battle.
Will the different economic policies of the US presidential candidates (Biden and Trump) be able to influence inflation enough to push Powell in one direction rather than another?
American inflation rises and falls (at the moment, it seems to be in a rising phase), but what is certain is that the cash rate and inflation are still above the inflation target, and this creates a commercial upheaval that has its heart beating with a simple question:
How will the interest curve move in the near future?
[1] The will to power (German: der Wille zur Macht) is a concept in the philosophy of Friedrich Nietzsche. The will to power describes what Nietzsche believed to be the main driving force in humans.
[2] Winston Wolfe also better known as "The Wolf", is a major character in the 1994 crime and dark-comedy film Pulp Fiction. Mr. Wolf is a fixer. If you've got a problem, he's the guy that can solve it.
Glubb Pasha would submit that the US is in the last stage of empire and many of the cracks in the facade are indicia of that stage.