Best of the Week
Most Popular
1.Canada Real Estate Bubble - Harry_Dent
2.UK House Prices ‘On Brink’ Of Massive 40% Collapse - GoldCore
3.Best Cash ISA for Soaring Inflation, Kent Reliance Illustrates the Great ISA Rip Off - Nadeem_Walayat
4.Understanding true money, Pound Sterling must make another historic low, Euro and Gold outlook! - Marc_Horn
5.5 Maps That Explain The Modern Middle East - GEORGE FRIEDMAN
6.Gold Back With A Vengeance As Bitcoin Bubble Bursts - OilPrice_Com
7.Gold Summer Doldrums - Zeal_LLC
8.Crude Oil Trade & Nasdaq QQQ Update - Plunger
9.Gold And Silver – Why No Rally? Lies, Lies, And More Lies - Michael_Noonan
10.UK Election 2017 Disaster, Fake BrExit Chaos, Forecasting Lessons for Next Time - Nadeem_Walayat
Last 7 days
Students, It’s Time to Prepare Your Finances for the Years Ahead - 25th Jul 17
Stock Market and Gold Stocks Trend Forecast Update - 25th Jul 17
Saving Illinois: Getting More Bang for Its Bucks - 24th Jul 17
3 Stocks Sectors That Will Win in The Fed’s Great Balance-Sheet Unwind - 24th Jul 17
Activist Investors Are Taking Over Wall Street, Procter and Gamble Might Never Remain the Same - 24th Jul 17
Stock Market Still on Track - 24th Jul 17
Last Chance For US Dollar To Rally - 24th Jul 17
UK House Prices Momentum Crash Warns of 2017 Bear Market - Video - 22nd Jul 17
Crude Oil, Gold, ETFs & more: Pro-grade Market Forecasts - 22nd Jul 17
Warning: The Fed Is Preparing to Crash the Financial System Again - 21st Jul 17
Gold / Silver Shorts Extreme - 21st Jul 17
GBP/USD Bearish Factors - 21st Jul 17
Gold Hedges Against Currency Devaluation and Cost Of Fuel, Food, Beer and Housing - 21st Jul 17
Is It Worth Investing in Palladium? - 21st Jul 17
UK House Prices Momentum Crash Threatens Mini Bear Market 2017 - 21st Jul 17
The Fed May Show Trump No Love - 20th Jul 17
The 3 Best Asset Classes To Brace Your Portfolio For The Next Financial Crisis - 20th Jul 17
Gold Stocks and Bonds - Preparing for THE Bottom - 20th Jul 17
Millennials Can Punt On Bitcoin, Own Safe Haven Gold For Long Term - 20th Jul 17
Trump Has Found A Loophole To Rewrite Trade Agreements Without Anyone’s Permission - 20th Jul 17
Basic Materials and Commodities Analysis and Trend Forecasts - 20th Jul 17
Bitcoin PullBack Is Over (For Now): Cryptocurrencies Gain Nearly A 50% In Last 48 Hours - 19th Jul 17
AAPL's 6% June slide - When Prices Are Falling, TWO Numbers Matter Most - 19th Jul 17
Discover Why A Major American Revolution Is Brewing - 19th Jul 17
iGaming – Stock Prices - 19th Jul 17
The Socionomic Theory of Finance By Robert Prechter - Book Review - 18th Jul 17
Ethereum Versus Bitcoin – Which Cryptocurrency Will Win The War? - 18th Jul 17
Accepting a Society of Government Tyranny - 18th Jul 17
Gold Cheaper Than Buying Greek Villas in 2012 - 18th Jul 17
Why & How to Hedge the Growing Risks of Holding Stocks - 18th Jul 17
Relocation: Everything You Need to do for a Smooth Transition Abroad - 17th Jul 17
A Former Lehman Brothers Trader: It’s Time To Buy Brick And Mortar Retailers - 17th Jul 17
Bank Of England Warns “Bigger Systemic Risk” Now Than 2008 - 17th Jul 17
Bitcoin Price “Deja Vu” Corrective Sequence - 17th Jul 17
Charting New Low in Speculation in Gold and Silver Markets - 17th Jul 17
Bitcoin Crash - Is This The End of Cryptocurrencies? - 17th Jul 17
The Fed's Inflation Nightmare Scenario - 17th Jul 17
Billionaire Investors Backing A Marijuana Boom In 2017 - 17th Jul 17
Perfect Storm - This Fourth Turning has Over a Decade of Continuous Storms to Come - 17th Jul 17
Gold and Silver Biggest Opportunity Since Late 2015, Last Chance at These Prices - 17th Jul 17
Stock Market More to Go - 17th Jul 17
Emerging Markets & Basic Materials Stocks Breaking Out Together - 16th Jul 17
Stock Market SPX Uptrending Again After Microscopic Correction - 15th Jul 17

Market Oracle FREE Newsletter

Crude Oil, Gold, ETFs & more: Pro-grade Market Forecasts

Here’s Why This G20 Meeting Doesn’t Really Matter

Politics / Global Economy Jul 06, 2017 - 06:41 PM GMT

By: John_Mauldin

Politics

BY GEORGE FRIEDMAN : Anyone who has ever been to a meeting knows that meetings are often confounding, frustrating affairs. Most of them are designed simply to be held. The people who attend them are unlikely to agree on anything except maybe the date of the next one.

The G-20 summit is no exception.

But that’s only because the people who attend it, the leaders of the countries with the world’s 20 largest economies, think of themselves as decision-makers when really they are hostages to history.


World leaders may not like Donald Trump. In fact, many do not. But since the US is still the world’s only superpower, they cannot avoid dealing with its president.

The US is linked to three major issues that will be addressed but probably not resolved at the G-20 summit.

The North Korea Issue

The first is the progression of North Korea’s nuclear weapons program (read more about North Korea’s strategy here), an issue the United States and China simply cannot ignore or fully resolve without at least talking to each other.

On July 4, Pyongyang tested a missile it claims was an intercontinental ballistic missile (ICBM). The North Koreans may be exaggerating, of course. The missile still needs guidance systems and a configured payload. But the United States can’t wait for North Korea to have a functional ICBM.

Here again, personalities matter less than imperatives.

The Trump administration had supposedly planned for an economic confrontation with China. But now that Washington needs Beijing to persuade North Korea to abandon its nuclear weapons program, the reckoning has been put off.

So far the talks have been futile, and it’s unclear if China even wants them to succeed (read more about China’s strategy here). If the US attacks North Korea, China could get what it wants—North Korea without a nuclear weapon—without lifting a finger. Not only that, it would have an opportunity to play peacekeeper against the US afterward.

In the meantime, Chinese President Xi Jinping will promise to try harder to disarm North Korea. It will strengthen his case if the US attacks while he is “negotiating.”

Washington probably sees the setup but can’t really get around it; it will simply remember this later. After the North Korea issue is resolved one way or the other, it will shift its attention back to Beijing. After all, the US can damage the Chinese economy far more than China can harm the American economy.

Russian Interference

The second issue is Russian interference in other countries (read more about Russia’s strategy here). It’s a hot-button issue that omits some obvious facts: Nations interfere with other nations all the time, and the Russians have a long history of agitation and propaganda.

Moscow has interfered in the domestic affairs of former Soviet states that lay west of Russia. Although quietly, Russia claims these are justifiable responses to the “color revolutions” of Eastern Europe in the 2000s, funded by US nongovernmental organizations.

In any case, the bigger issue for Russia is that its oil is cheap, and that cheap oil will continue to hurt the Russian economy. Nothing coming out of the meeting will change that.

No Longer “Friends” with Germany

The third issue is US-German relations (read more about the crisis of exporters that plagues Germany here). The party of Chancellor Angela Merkel no longer uses the word “friend” to describe the United States in its platform. But in fact, Merkel has blamed Trump for a rupture he has little to do with.

At issue are the national interests of both countries. Germany needs for the European Union to be economically healthy enough to buy the exports on which its economy depends. But the US, which has little stake in the EU, sees its disintegration as a European problem.

And so Washington has been working with countries like the United Kingdom and Eastern European states on a bilateral basis to contain Russia, rather than going through Brussels.

Germany also wants to be in NATO and the EU, but both organizations have a hard time instituting policies that benefit all their members, because none of their members have identical national interests.

And then there is Russia.

The last thing Germany wants to do, in light of its other problems, is confront Russia, but blocking Russia is central to US policy, and it needs Europe united in that regard.

The divergence between the United States and Germany has been growing since 2008, and there is little Trump could have done to change things.

What Leaders Do Rarely Matters

World leaders take their relationships with other world leaders very seriously. To them, their relationships with their peers define their national interest.

Though this line of thinking is misguided, it has its benefits, given Trump’s apparent unpopularity. Xi will blame Trump for disrupting a nearly successful peace process in North Korea.

Putin, in an effort to dispel rumors of collusion, will blame Trump for conspiracies against Russia. Merkel will blame him for disrupting US-German relations.

Trump’s personality, however, will no more define what happens at the G-20 summit than his healthcare views will define what emerges from Congress.

Grab George Friedman's Exclusive eBook, The World Explained in Maps

The World Explained in Maps reveals the panorama of geopolitical landscapes influencing today's governments and global financial systems. Don't miss this chance to prepare for the year ahead with the straight facts about every major country’s and region's current geopolitical climate. You won't find political rhetoric or media hype here.

The World Explained in Maps is an essential guide for every investor as 2017 takes shape. Get your copy now—free!

John Mauldin Archive

© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife