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Monthly Archives: March 2014

How to Fight a War

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This was the week that World War III was supposed to erupt across Europe if you listened to the most alarmist reaction to the Russian occupation of Crimea.  Ukraine mobilized their reserves and prepared for the worst while the whole world held its breath.  So far, however, nothing has happened.

That is, the missiles aren’t flying and the troops aren’t advancing.  There has been action, which is to say a lot more than a visit to Kiev by Secretary of State Kerry and some sternly worded European Union (EU) missives.  The money has clearly been bet that there won’t be a war and even more money has been put down on making sure it doesn’t happen.

Think of it like the currency war that is going around the globe right now.  This is the primary way that wars are fought now – with money.

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Ongoing Currency War

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While Syria and Ukraine have the world worried about war, a much cooler war continues across the world.  This is the one fought not with bullets or missiles, but instead with big wads of cash.  The currency war that has swept the globe since 2008 is continuing on many fronts, as we have discussed before.

It’s time for an update.  Who is winning the currency war?  Right now, the answer appears to be Japan, but China has more than a few tricks it is working on.  Europe remains a big loser and the US is pretty much holding even.

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Ukrainiana

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Ukraine heated up this weekend when Russian troops invaded Crimea and backed the unrecognized Prime Minister Sergey Aksyonov, who has declared the province is now independent from Ukraine.  The situation essentially pits all of Europe against Russia, with the Ukrainian people caught in the middle.  It feels like the way something like World War III might start for good reasons.

Russia cannot let Ukraine go over to the West for many reasons and has been playing every card in their deck.  This situation started on 21 November when Ukrainian President Yanukovych backed out of a deal to join a European Union “Eastern Partnership” under Russian pressure.  Russia then sent a $15B emergency loan to Ukraine, more or less paying Ukraine to be their friend.   The people of Ukraine rose in protest, eventually ousting Yanukovych and declaring an interim government with limited legitimacy.

There is a lot of background necessary to understand this from a Ukrainian, Russian, and European Union perspective.  Much of this is unfinished business from the breakup of the Soviet Union in 1991, but the tortured history goes back much further.

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