India Farming, EU Rising, U.S. Seething and the Week in Review
Happy Friday, comrades. It’s been a rough week, but we’re still out here grinding. Check out our latest podcast on how food supply chains are being challenged by clicking here. If you missed our missive on “peace in the Middle East,” check it out here. Otherwise, remember to shower the people you love with love and to wear your masks. 2020 can’t keep us down.
The future of India depends on its farmers. Three bills pertaining to agricultural market reforms in India were passed by the upper house of India’s parliament, the Rajya Sabha, to widespread protests by the political opposition and with protests from farmers. The Indian government increased the Minimum Price Support (MSP) for 6 crops, including wheat. Farmers are worried that the reforms, which are meant to allow market forces rather than corruptible markets from setting prices, will mean reduced profits. Indian Prime Minister Narendra Modi has insisted this is not the case.
What it means: We went in-depth on this issue back in June; you can read our deeper thoughts here. Unsurprisingly there have been intense protests and backlash to the bills, in part because of the way the Indian government seemed to push them through the political process. Change is difficult, especially for those most affected, even if in the long-term a central government believes the change will create a better future. In truth, these bills are just the beginning and do not end MSP or eliminate mandis (government agricultural markets). Fear of change is driving these protests, and the Modi government is walking a tightrope between responding to that fear while also driving reforms it believes will make India a more self-sufficient and prosperous country.
Europe rising, part deux. The European Central Bank indicated that the EU should consider using its current recovery plan as a blueprint for creating “a permanent fiscal capacity at supranational level for macroeconomic stabilization in deep crises.” The European Commission issued a new overhaul to EU migration policy. The European Commission also announced updates to the EU Emission Trading System State aid Guidelines.
What it means: The European Union’s future was one of our top items last week because of eye-opening comments from French President Emmanuel Macron and European Commission President Ursula von der Leyen. This week, the future of Europe is on our radar again not because of the flowery language of its leaders but because of the ambitious steps being taken by Europe’s bureaucracy. The EU is charting a bold course forward on combatting climate change by putting the power of the EU behind switching to renewables. It is also seemingly unafraid of overhauling a migration policy that has divided Europe in the past and also arguably pushed support for Brexit over the top. The ECB is even openly considering ways to reform the EU’s fiscal and monetary structure to give more power to Brussels. There will no doubt be a backlash to all these and more, and plenty of political haggling to come, but as we have continually said, this is not your parent’s EU.
The U.S. seethes. Asked whether he would commit to a peaceful transferal of power, U.S. President Donald Trump replied, “We’re going to have to see what happens.” The U.S. Department of Justice labeled New York, Portland, and Seattle zones of “anarchy, destruction, and violence,” and threatened to withhold federal tax dollars from the cities if they did not follow directions from the DoJ to increase policing of these cities. U.S. President Donald Trump said at a campaign rally that he asked his advisers to consider manipulating the U.S. dollar’s exchange rate in order to attack the Chinese yuan. A Kentucky grand jury indicted one police offer with wanton endangerment in the killing of Breonna Taylor but did not fire charges against two other officers who fired shots, leading to protests in Louisville during which two police officers were shot. Ruth Bader Ginsburg is dead at 87.
What it means: Ruth Bader Ginsburg’s untimely death after a heroic battle with cancer will make a contentious election cycle even worse. President Trump’s continued insinuation that he will not freely give up his position even if he loses the election is a violation of everything the United States is supposed to stand for. The politicization of police brutality is dividing the nation and the federal government not only seems powerless to halt the cycle of violence but is actively fanning the flames in order to buttress President Trump’s “LAW AND ORDER” campaign slogan. A casual presidential reference to manipulating the U.S. dollar won’t change the underlying fundamentals that make the dollar a global reserve currency, but it is exactly the sort of uncertainty that will build over time and undermine the U.S. position in the world. The most powerful country in the world is in the midst of an identity crisis and its end is nowhere in sight. That uncertainty is as unnerving for the world as for us.
Intel and AMD received a license to continue selling some products to Huawei.
Brazil accused France of “protectionist interests” for continuing to block the progress of an EU-Mercosur trade deal.
The Loadstar reports that a container shortage in India is delaying Indian exports.
Turkey raised its benchmark interest rates by 2 percentage points.
Reuters reports that China is instituting Xinjiang-style policies in Tibet, pushing Tibetan rural laborers into military-style “training centers” and retraining them as factory workers and setting quotas for transferring Tibetan laborers to other parts of China.
California Governor Gavin Newsom issued an executive order that proposes to make passenger vehicle and truck sales in the state 100 percent zero-emission vehicles by 2035.
The General Office of the Central Committee of the Chinese Communist Party (CPC) released a new policy document entitled, “Opinion on Strengthening the United Front Work of the Private Economy in the New Era.”
Romania received its first shipment of Patriot missiles from the U.S.