Shipping Madness, Monroe Doctrine 2.0, Food Prices, Blow to Modi and the Week in Review

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Shipping Madness, Monroe Doctrine 2.0, Food Prices, Blow to Modi and the Week in Review

Hey! Happy Friday. We’re still in need of some ratings, so please check out and rate our podcast. Because we love our listeners, coming at you quickly is an emergency episode with Marko Papic from the Clocktower Group on impeachment, the economic impact of the Democrats taking the Senate, and even a little bit of basketball analysis, so watch out for it. Also: please e-mail us if we can help you deal with geopolitical risk in 2021! If you’re not sure if we can help, e-mail us anyway. You might be surprised. Reply to this e-mail or send a note to Cheers.

Shipping madness. Global shipping rates continue to climb and Asian spot LNG prices have risen to all-time records.

What it means: Three separate issues are all converging to create a spike in global shipping rates: LNG shortages due to colder-than-expected temperatures in Europe and North Asia, greater-than-expected demand for products related to COVID-19 (furniture, toys, construction materials), and congestion at the Panama Canal, a key maritime shipping route. The effects will almost certainly be temporary…but the next few months could get interesting.


Monroe Doctrine 2.0. The U.S. International Development Finance Corporation (DFC) will help Ecuador repay ~$3.5 billion in outstanding Ecuadorian loans to China.

What it means: Shameless teaser for our 2021 forecast, details on where and how to read it coming next week. Imperialism 2.0 is one of the hot topics in that forthcoming forecast, and this is exactly what imperialism in the 21st century is going to look like.

From the Financial Times article that broke the story:

“Under the agreement, the DFC will team up with private-sector financial institutions to help create a special purchase vehicle that will buy oil and infrastructure assets in Ecuador. The sale of the assets will provide Quito with cash to pay off the debt to China earlier than previously agreed — $3.5bn will be outstanding after an upcoming repayment is made to Beijing — and also provide money to pump into various development projects.”

James Monroe would be proud.

Food prices. The U.S. Agriculture Department revised domestic soybean and corn production in 2020-2021 down 20 percent and 9 percent, respectively, on account of a reduced fall harvest.

What it means: We know, we’re a broken record, but the more the variables start piling up, the more nervous we get about global food prices in the short-to-medium term.

A big blow to Modi. India’s Supreme Court suspended implementation of three new controversial agricultural laws pending the formation of an independent committee of experts to investigate the situation on the ground further.

What it means: The Modi government does not have time to be fighting over past reforms. It needs to use its position to pass even more ambitious ones in the future. Remember, the agricultural laws are indeed a big deal…but if India is going to realize its geopolitical potential in the next decade, there’s plenty more that needs to be done, and that Delhi is facing significant obstacles in getting these agricultural reforms through is not a good sign.

Honorable mention

A Turkish man was hospitalized after almost drowning in an Orthodox cross-throwing ceremony.

“Residents of a southwestern Japan town have erected a giant straw scarecrow in the shape of a fierce-looking gorilla to encourage people to tough out the coronavirus pandemic.” Pour one out for Harambe.

The U.S. House of Representatives voted to impeach President Donald Trump for a second time.

The U.S. is blocking all cotton and tomato products produced in China’s Xinjiang province from entering the U.S.

North Korean leader Kim Jong-un announced plans to expand Pyongyang’s nuclear arsenal, to include tactical nuclear weapons, as well as a new five-year economic plan.

The U.S. put Cuba back on its late of state sponsors of terrorism.

Gazprom informed the Danish government it intends to renew construction of the last remaining sections of the Nord Stream 2 pipeline on January 15.

Ankara Mayor Mansur Yavaş warned that lack of rainfall could lead to water shortages this summer.

The latest attempt to restart negotiations between Ethiopia, Egypt, and Sudan over the Grand Ethiopian Renaissance Dam ended in failure.