by Greg Valliere, AGF Management Ltd.
Insights and Market Perspectives
BIDEN TURNS UP THE HEAT: The U.S. President and European allies are expected to agree later this week on new curbs on purchases of Russian natural gas. The Washington Post is reporting this morning that a deal is close on U.S. shipments of liquefied natural gas directly to European countries that had been dependent on Russian gas.
THIS IS SEEN AS A MAJOR INITIATIVE to wean Western Europe away from Russian energy; it will further cripple Moscow’s economy, which is plunging toward a very deep Depression.
BIDEN ALSO WILL ANNOUNCE NEW SANCTIONS against Russian oligarchs and politicians, and he will pledge more arms to Ukraine during what should be two days of steely consensus within NATO. Differences between the members were possible over energy, but this new Biden pledge on natural gas will make a difference. A natural gas agreement is expected tomorrow.
DRAMATICALLY HIGHER U.S. SHIPMENTS will face obstacles: a need to upgrade European infrastructure to receive the gas, and the likelihood that alternative energy isn’t advanced enough to make a major difference. Gas now sent to Asia may be diverted, which would prompt more coal use in countries like China.
THE SCRAMBLE FOR MORE FOSSIL FUELS is an obvious plus for the energy industry in the U.S. and Canada; a major impact will be the virtual abandonment of emissions standards everywhere. Environmental activists had high hopes as they left Glasgow last fall but the Green movement is now in tatters thanks to the war.
EVEN IF THERE’S NATO UNITY over energy later this week, an even bigger issue looms — whether to push President Volodymyr Zelensky to accept a deal that may not be totally popular in Ukraine. With Russian troops in disarray, Zelensky could get a deal by the end of this month that would leave parts of eastern Ukraine under
Russian control — a bitter pill for some of his followers.
HANGING OVER THE TALKS for the next few days will be Vladimir Putin’s reaction to even more sanctions. With many of his generals and the elites in Moscow increasingly defecting as morale collapses, the war criminal Putin could become even more erratic.
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A BLOW TO DONALD TRUMP: One of his most aggressive supporters, Rep. Mo Brooks of Alabama — who incited rioters on Jan. 6 — has turned against the ex-president. Brooks made a startling allegation earlier this week:
“President Trump has asked me to rescind the 2020 elections, immediately remove Joe Biden from the White House, immediately put President Trump back in the White House, and hold a new special election for the presidency,” Brooks alleged.
“As a lawyer, I’ve repeatedly advised President Trump that Jan. 6 was the final
election contest verdict and neither the U.S. Constitution nor the U.S. Code permit
what President Trump asks. Period.” Brooks is one of the first militant Trump
supporters to turn against him.
THIS DID NOT PLEASE TRUMP, who immediately rescinded his endorsement of Brooks in the Alabama Senate race this fall, with typical scathing personal attacks.
THE LIKELIHOOD THAT TRUMP is still seeking to overturn the election has exasperated more and more Republicans, who are looking forward to taking over the House this fall. They have no interest in re-litigating an election that Trump clearly lost.
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This post was first published at the AGF Perspectives Blog.
