Thought for the day
"In all history there is no war which was not hatched by the
governments, the governments alone, independent of the interests of the people,
to whom war is always pernicious even when successful."
-
Leo Tolstoy (Russian,1828-1910)
Word for the day
Cataract
(n)
A great fall of
water over a precipice; a large waterfall.
(Source: Dictionary.com)
Teaser for the day
Could Swiss Franc challenge USD supremacy?
Interesting times
The Europe has long been known by the world community for its
strong and deep rooted idea of Nationalism. Though with the winding up of large
European empires globally, at macro level the idea of nationalism begin to fade
post WWII, popular groups advocating strong nation states have never really
been absent.
The protagonists who were marginalized with the formation of
European Union have found new vigor in financial crisis of 2008. These groups
have received material patronage in past 7yeras and have gained prominence.
The global strategy firm Startfor in a recent note
highlighted the re-emergence of the forces of nationalism in Europe. The note
reads:
"After decades of post-war supranationalism, the
Europeans are once again discussing their national identities. The French tried
to start a discussion in 2009, when then-President Nicolas Sarkozy launched a
public debate on "what it means to be French" — an exercise that
degenerated quickly into a discussion of the role of Muslims in the country.
The Pegida protests led to similar debates in Germany, a country that for
historical reasons feels extremely uncomfortable with the topic but also
considers generational change to be breaking old taboos. Pegida-inspired
demonstrations will take place in Austria in February, potentially leading to
controversy there as well. These debates will not go away in Europe and will
force the Europeans to deal with difficult questions that have remained dormant
for decades.
At the core of these problems is growing resistance to
globalization, understood as the free movement of goods, services and, most
important, people. From the Italian shoemaker who cannot compete with cheap
Chinese imports to the British factory worker who believes that Polish
immigrants are threatening his job, many Europeans believe globalization is a
menace to their way of life. The fact that the European Union was built on many
of the principles of globalization explains why the bloc is becoming
increasingly fragmented and why the promise of a "United States of
Europe" probably will never be achieved."
In this background SNB decision to detach Swiss Franc (CHF) from
common currency (EUR) is assumes even more significance.
Given that most of the dollar strength could just the other side
of deliberate currency weakness in Europe and Japan and currency declines in
commodity exporting countries, CHF could emerge as an important balancing
factor or even as a serious challenger to the supremacy of USD.
A stronger CHF could also mean review of short gold trade by
global commodity traders and hedge funds. The summer vacation travel plans of a
multitude of Indian tourists may also warrant some changes.
Of late the valuations of subsidiaries of global corporations
listed on Indian stock exchanges have crossed the wire to enter the bubble
territory. I shall wait to see how this misadventure terminates - (a) happy
ending: delisting at even crazier valuations; (b) sad ending: sudden crash; (c)
no ending: drag like HUL during the decade of 2000s.
Excerpts from "Europe
Rediscovers Nationalism are republished with
permission of Stratfor."
