Geopolitical Update : Domestic pressures at key NATO allies are growing
By Christian Takushi, Macro Economist, Switzerland – 12 January 2023 (public release truncated)
We would like to update you on some domestic policy pressures that are exacting pressure on NATO allies in regards to their support for the war effort.
I am convinced that currently the consensus as a whole is not paying enough attention to the growing pressures that the USA, UK and Germany are facing domestically – pressures that are likely to affect their support for Ukraine in its war with Russia in the course of the next six to nine months. It is not necessarily an opposition to the war effort though, it is rather a mix of domestic pressures and lack of money. All key NATO states were already hopelessly over-indebted before even COVID appeared in 2020. Three years on, their fiscal finances are in a desolate state.
The pressures on these three NATO members had been building for months and, understandably, they had not been fully reported by our media. But the fact that the Republicans now control the US House of Representatives – and how that majority was reached – has added momentum to those pressures.
The process of the GOP seizing the House majority was mocked and laughed at by most of the media and even conservative political experts. Many laughed at the Republicans needing 15 rounds of voting to decide who will be the next Speaker of the House.
But I think consensus has extrapolated the chaos over the GOP control of the House into the expectation that not much will change. But this is a mistake. Things are already changing.
New reality in Washington
Not everybody seems to be fully aware that the new House Majority is advancing a kind of “pincer movement” to cut military spending. That may be just wishful thinking, but the GOP in the House has powerful tools at hand now.
Republicans now have a front seat in the «checks and balances» process, they set the legislative agenda and they control the committees that do the oversight of the US government and its institutions.
Thus, the GOP now controls the committees that oversee the US government finances, the Pentagon, national security, energy, transportation, the justice department (DOJ) etc.
The new GOP dominated committees have begun to work in earnest and the Democrats are not amused anymore. The interesting thing is, it seems markets are not paying attention yet.
The new House of Representatives has begun to ask uncomfortable questions like
– How can the USA reduce military spending in order to help reduce the deficit.
This report has been truncated here – If you want to read the full report, you can write to email@example.com
By Christian Takushi MA UZH, Independent Macro Economist and Geopolitical Strategist. Switzerland – 12 January 2023 (truncated public release)
Geopolitical and economic conditions need close monitoring, because they can change suddenly.
No part of this analysis should be taken or construed as an investment recommendation.
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