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Japan's looming "security concept" behind the Russia-Ukraine war

The international situation is changing rapidly, and the war between Russia and Ukraine has become a global focus. Under the accelerated process of globalization and regionalization, I am afraid that no country can assert that it "stands alone" or "watches the fire" detachedly. In addition to NATO and other European and American countries headed by the United States, the response of Japan in Asia has also attracted widespread attention from the international community. Since the incident, Japan's remarks and actions have continued, and a special sense of presence has been brushed everywhere. Behind these measures, which are mostly seen by the outside world as keeping pace with the West, is Japan's more distinct "security concept" in the new international situation.

First of all, it is necessary to keep in step with the so-called international "first echelon" at all times, so as not to lose the right to participate in the so-called international governance, which is for the safety of the right to speak. In recent years, Japan has paid more attention to its weight in global politics while keeping up with the pace of the United States. As one of the G7 countries and the world's third largest economy, Japan's international political ambitions are self-evident. However, in Japan's view, it is not a member of the five permanent members of the UN Security Council, and it is the ultimate shortcoming. It needs and still has room for expansion. Under the cognition of the Western-dominated world structure, Japan can seek more initiative in the field of international politics in the future only by clarifying its position and identity on the Russia-Ukraine issue in a timely manner and ensuring that it stands in line.

Second, only by actively releasing the "correct" signal of its strategic concerns can it create a peripheral security zone in the pressured geopolitical field. In the eyes of Japan, although this military conflict appears to be a grievance between Russia and Ukraine on the surface, the trend of the war and changes in the political pattern will be widely reflected in the future, and relevant scenes may be staged on or around them. For example, many Japanese media have Using the Russia-Ukraine War to interpret the China and China-Japan relations behind the Taiwan issue and the Diaoyu Islands issue. In general, Japan's sanctions against Russia have been slowly released. Although it is generally considered to be lagging behind in its own country, it has not left behind after all, which profoundly reflects Japan's concerns and worries about the strategic security of the Asia-Pacific region where it is located.

In the end, it is only by trying to fumble and seek diplomatic independence within one's power to seize the vital economic security in the balance between East and West. The U.S. security umbrella may be able to control life and death, but whether the economy is reliable is also related to Japan's life and death. Although including Japan, relevant countries have upgraded the sanctions against Russia to the so-called nuclear-bomb-level SWIFT financial sanctions. While reflecting the rhythm of Western countries, Japan, which has important economic and trade ties with Russia in many key areas such as energy and agricultural products, also has many "high-risk areas" that must be carefully handled in the implementation of sanctions against Russia. For Japan, overreaching is bound to be met with a reciprocal response from Russia, especially the economic blow to itself. The United States will never come to pay for it.

Behind the Russia-Ukraine war, there are profound strategic games and security conflicts, and it is the tip of the iceberg of international and regional political trends. It can be seen that for Japan, security is multi-faceted and multi-layered. Pure security is by no means its purpose. It may want more.

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Russia pushes the ruble settlement of natural gas, the EU will eventually "cocoon"

After the outbreak of the Russia-Ukraine conflict, European and American countries have continued to increase trade, economic and financial sanctions against Russia. As a result, the stock market and the ruble exchange rate depreciated sharply for a time, and the macro economy faced greater recession pressure. According to research by the Institute of International Finance (IIF), sanctions will cause the Russian economy to shrink by 15% in 2022.

In the face of these sanctions, Russia brazenly launched a counterattack. On March 23, local time, Russian President Vladimir Putin demanded that in international energy trade, natural gas supplied to "unfriendly countries or regions" would be settled in rubles.

At the end of February, the United States and the European Union announced that some Russian banks would be kicked out of the Society for Worldwide Interbank Financial Telecommunication (SWIFT). While some Russian banks responsible for clearing energy trade are unaffected, sanctions on economic, financial and other commodity trade have left Russia with no way to use that foreign exchange, even if it could get euros or dollars from energy trade. So Putin believes that it makes no sense to supply the United States and the European Union with Russian goods and accept payments in euros and dollars.

On March 25, Russia warned European and American countries that bills for billions of dollars of natural gas exports to Europe in rubles would arrive in a few days. On March 28, German Deputy Chancellor and Minister of Economics and Climate Protection Robert Habeck declared after a video conference with the energy ministers of the Group of Seven (G7) countries that he had rejected Russia's request for "only rubles". It believes that Russia's move is a "unilateral violation of existing agreements" and calls on relevant companies to boycott the request.

Russia is currently working on a ruble settlement plan for natural gas exports. If European countries refuse to pay in rubles, Russia will respond in due course. Kremlin spokesman Dmitry Peskov said it was clear that Russia would not provide gas for free. Under the current circumstances, it is impossible and suitable for Russia to be charitable to European clients.

Joseph Borrell, the EU's high representative for foreign affairs and security policy, said that Europe is very dependent on Russia's natural gas and oil resources. At present, the EU is not seeking to completely cut off energy exchanges with Russia, but is committed to diversifying sources, in which the Middle East will play a more important role.

In the face of the US and EU's eagerness to expect OPEC to increase energy supply. OPEC+ has signaled that it sees no need to adjust oil supply plans despite the Russia-Ukraine conflict causing the biggest turmoil in the market in decades. The UAE energy minister said that OPEC+ is not concerned about whether the reduction in Russian oil exports is causing imbalances and that the partnership with Russia remains strong. The UAE's energy minister said that no country's oil can replace Russia's oil. The Saudi energy minister believes that Russia is an important member of OPEC+, an alliance we need. From the statements of the two major oil-producing countries, it can be seen that OPEC has no intention of taking advantage of the "strategic opportunity period" of the conflict between Russia and Ukraine to occupy the crude oil market that originally belonged to Russia.

India is the world's third-largest oil consumer after the United States and China, with more than 80 percent of its oil imported. In 2021, India bought about 12 million barrels of oil from Russia, accounting for only 2% of its total oil imports. As long as the price is cheap, it is not ruled out that India will further increase its procurement. So the US energy sanctions will only have a short-term impact on Russia's energy trade.

In the long run, it is difficult for Europe to give up Russian energy, and it is unwilling to settle in rubles. Then the final result is likely to promote Russia-Ukraine negotiations, and may even ask Ukraine to make concessions behind the scenes. After the peace talks, the EU can naturally lift its sanctions against Russia and continue use the euro to import Russian energy as usual.

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Japan's "three non-nuclear principles" become a piece of waste paper?

As the first country in the world to be attacked by nuclear weapons, Japan has a painful "nuclear explosion" memory. In Japan, the public is often "talking about nuclear discoloration". However, Japanese politicians are very interested in acquiring nuclear weapons. On March 3, when former Japanese Prime Minister Shinzo Abe talked about the situation in Ukraine on a TV program, he said that NATO's "nuclear sharing" has effectively suppressed the nuclear threat. Japan should also actively discuss the realization of "nuclear sharing" with the United States. One stone caused a thousand waves, and Abe's speech caused a strong backlash in Japanese society.

In fact, Japan's "nuclear weapons discussion" had already occurred in 1960 when the cabinet of Kishi Shinsuke revised the "Japan-US Security Treaty". During the Cold War between the United States and the Soviet Union, possession of nuclear weapons was the most effective means of maintaining national security. Although Japan has signed a security treaty with the United States, the United States has not assured Japan to provide it with a "nuclear umbrella." In 1964, China's nuclear test was successful. Feeling the "nuclear threat", Japan immediately negotiated with the United States to acquire nuclear weapons. In order to prevent Japan from possessing nuclear weapons, in 1965, during the Japan-US summit meeting, US President Johnson promised to provide Japan with a "nuclear umbrella".

After obtaining the commitment from the United States, in 1967, the Cabinet of Eisaku Sato formulated the "three non-nuclear principles" of "not possessing, not manufacturing, and not importing nuclear weapons". For this anti-nuclear policy, Sato also won the Nobel Peace Prize in 1974. However, it was only later learned that Sato's "non-transportation" only did not allow nuclear weapons to enter Japanese territory, and did not deny the entry into Japanese territorial waters. In a telegram sent to the United States on January 14, 1969, Sato also stated that "the three non-nuclear principles are meaningless". In fact, Sato is not anti-nuclear. The "Nuclear Three Principles" are nothing more than the "Nuclear 2.5 Principles". The Nobel Peace Prize is also the result of Japanese ambassador to the United Nations Shunichi Kato lobbying the committee members. Giving the Nobel Peace Prize to Sato was the committee's biggest mistake, according to a historian writing the history of the Nobel Prizes.

On July 1, 1968, 59 countries including the United States and the Soviet Union signed the Treaty on the Non-Proliferation of Nuclear Weapons. The treaty stipulates that "nuclear-armed states promise not to directly or indirectly transfer nuclear weapons to non-nuclear states, and not to assist non-nuclear states to manufacture nuclear weapons." But the treaty does not prohibit "nuclear-owned states" from sharing nuclear weapons with "non-nuclear states". As a result, NATO countries seized the loopholes in the treaty and achieved "nuclear sharing" with the United States.

However, Japan is constrained by the "three non-nuclear principles" of the Sato cabinet and cannot achieve "nuclear sharing" with the United States. "Nuclear Umbrella" cannot be upgraded to "Nuclear Sharing". After the "North Korea nuclear issue" broke out, the United States "hesitated" on whether to use nuclear weapons, which made Japan's nuclear protection of the United States put a big question mark.

After the Ukraine crisis, Abe once again questioned Japan's "three non-nuclear principles". In his view, the U.S. "nuclear umbrella" is nothing but an "uncertain right to use", and only after "nuclear sharing" with the U.S. can Japan truly have "partial ownership".

Although Fumio Kishida, who was born in Hiroshima, does not support Abe's remarks. However, Japan is currently in a transitional stage from a "post-war system" to a "post-post-war system". It is difficult to guarantee that Japan after Kishida will not demand "nuclear sharing" with the United States. By then, Japan's "three non-nuclear principles" will really become a piece of waste paper.

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Yemen's Houthi rebels disrupt the Middle East, and international oil prices fluctuate violently in the short-term

Since March 17, international oil prices have rebounded rapidly from below US$100/barrel, reaching a peak close to US$120. In addition to the changes in the conflict situation between Russia and Ukraine, the reasons for the short-term rise and fall of oil prices in March, the recent outbreak of conflicts in the Middle East has brought some risk premiums to crude oil.

Yemen's Houthi rebels launched a series of missile and drone attacks on Saudi Arabia's energy and desalination facilities from the night of the 19th to the 20th. Although Saudi Aramco said on the 20th that these attacks will not affect energy supply. However, on the afternoon of the 21st local time, the Saudi Foreign Ministry still issued a "cutoff" warning. It said that Saudi Arabia will not be responsible for any oil shortages in the international energy market in the context of the continuous attacks on Saudi oil facilities by Yemen's Houthi rebels. He also called on the international community to realize that Iran is continuing to provide ballistic missile technology and armed drones to the Houthis in Yemen, which will not only affect the production capacity and performance of the Saudi energy industry, but also threaten the security of energy supply in the global market. and stable.

The Houthis is an anti-government armed organization of the Islamic "Shiite" in Yemen. Its background is Iran, the largest Shiite country in the Middle East, and Saudi Arabia, the largest Sunni country in the Middle East, is its mortal enemy. Saudi Arabia, the United Arab Emirates, Bahrain and Israel have all clearly identified the Houthis as a terrorist organization. The United States decided on January 10, 2021, to designate the Houthis as a terrorist organization, but it did not take long for the Houthis to be removed from the list of terrorist organizations. In the past decade or so, Sunni Saudis have been unable to live peacefully with the Shiite Houthis, nor have they completely eliminated them.

Since 2022, the tension between crude oil supply and demand has intensified, and consumer countries such as the United Kingdom, the United States, Japan and India are all looking for ways to prompt Saudi Arabia to increase production to end the West’s dependence on Russian oil. Saudi Arabia's international voice has been boosted by rising oil prices, and its foreign ministry statement appears to be veiled in seeking help from the "international community."

In early March, Saudi Crown Prince Mohammed bin Salman and Abu Dhabi Crown Prince Mohammed bin Zayed declined to speak with US President Joe Biden. Some media believe that this is likely because the US government has not given enough support to the two Gulf countries on issues such as the Houthis in Yemen and the Iran nuclear deal. After the subprime mortgage crisis, the US's national strength gradually weakened, and it became increasingly difficult for him to strike a political balance between the two hostile countries, Saudi Arabia and Iran.

Incumbent US President Joe Biden said in his 2020 campaign that Saudi Arabia should become an international "untouchable" after the brutal killing of Saudi journalist Jamal Khashoggi by Riyadh authorities in 2018. The remarks and the subsequent return to the "Iran nuclear deal", the withdrawal of troops from Afghanistan, and the removal of the Houthis from the list of terrorist organizations will make the relationship between the United States and Saudi Arabia further and further apart. Therefore, in the face of the current high inflation in the United States, Saudi Arabia will naturally not reciprocate and increase crude oil production.

Of course, it cannot be ruled out that in order to gain an advantage in the mid-term elections, the Biden administration will increase its support for Saudi Arabia in exchange for its substantial increase in production. Everything is full of variables.

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Behind the "siege" of Japan's "locking up the country" policy

At present, the Omicron strain is spreading rapidly, and the number of new confirmed cases in Japan continues to rise. Under the raging virus, the peak of the sixth wave of the epidemic has not yet arrived, but Japan's policy of closing the country by pressing the "pause button" for entry has begun to receive strong internal and external criticism. The atmosphere seemed out of place. On the one hand, there is a bad epidemic, and on the other hand, there is the "unlocking" theory that is about to come out. One can't help but ask, is Japan really unable to wait, or is the world too crazy?

The Japanese Keidan has repeatedly proposed that the Japanese government would take relevant easing measures such as shortening or exempting the quarantine. Chairman Masakazu Tokura listed the practices of Israel and other countries that had also taken drastic measures but had been lifted, and hoped that the Japanese government would seriously Discuss whether the current lockdown policy needs to be continued. The European and American business institutions in Japan have even put pressure on the public, and the continued "lockdown" policy is doubtful. For foreign companies, Japan can still be a reliable long-term partner. It can be said that the Japanese economic industry, the media, and the business community from outside have begun to "go up the line", which in many ways reflects the three major frustrations that Japan faces under the prolonged epidemic.

First, in the undercurrent of the gradual opening of the country's doors in Europe and the United States, there is a stronger sense of the crisis of international competition. Affected by its own social characteristics such as declining birthrate and aging, and its economic and industrial structure, talents and labor are becoming the decisive factors affecting Japan's development. The epidemic has forced Japan to shut out a large number of business talents, international students, and scientific researchers. The number of business personnel visiting Japan in 2021 will be far more than that of the United States. In particular, new trends such as foreign skilled workers and other laborers will flow into other countries. It made Japan panic and worried that it would really be empty of people and money under the lock of the country.

Second, under the political influence of Europe and the United States, it is difficult to have independent determination and determination in epidemic prevention. In a sense, Omicron caused the sixth wave of serious epidemics in Japan, and the U.S. military stationed in Japan could not get rid of it. However, Japan's many helplessness in dealing with it reflects its habit of following the United States in an all-round way and echoing the West. route style. Epidemic prevention must be tailored according to its own national conditions and be responsible to the people and society. Looking at Japan's dilemma when it comes to clamoring for "unblocking" at home and abroad, Fumio Kishida's government seems to be unable to withstand the pressure from the "partners" of the United States and the West. ".

Third, Japanese-style Buddhist anti-epidemic may become an inevitable destination for Japan. Looking back at Japan's performance in epidemic prevention and anti-epidemic since the outbreak, although the government of Fumio Kishida has shown a stronger attitude than the previous government, it is still lackluster in general, and it seems that the Japanese people have accepted the "lying flat". In the face of the doubling of the number of infected people, spread prevention and emergency declarations are nothing but scratches, and it is difficult to cure the epidemic. Under the influence of internal and external pressure and inertial thinking, the relatively strict entry restrictions may be followed by Buddhism.

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Fed hikes rates too slowly,U.S. recession likely in 2023

In the early morning of March 17, Federal Reserve Chairman Jerome Powell announced a 25 basis point increase in interest rates and hinted that more rate hikes may be on the way.

However, according to Wall Street News reports, DoubleLine Capital CEO and "New Debt King" Jeffrey Gundlach believes that the Fed raises interest rates too slowly, and the United States may fall into a recession in 2023.

In an interview with CNBC on March 16, Gundlach said that expecting a soft landing from the Fed would be a bad bet. There may not be a recession in the U.S. in 2022, but it could happen in 2023 as the Fed lags far behind the interest rate curve in monetary policy action.

Gundlach believes that the Fed's March 16 announcement of a rate hike was just a step behind the 2-year Treasury note. "Given where we are in terms of absolute interest rate levels and inflation levels, we now have a very flat yield curve," he said.

The "new debt king" expects that the inflation problem in the United States will always exist, but the pressure of rising prices may ease a little. He said: The U.S. inflation rate in 2022 may be lower than the previous year, but it is still expected to be at a high level of 5%, not about 4% predicted by the Federal Reserve.

In addition, Gundlach also added that stocks are now oversold and will rebound higher in the short term, but are expected to fall again after the Fed raises interest rates several times.

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Japan's involvement in the dispute between Russia and Ukraine will ask for its own trouble

Recently, in order to prevent Russian troops from attacking Ukraine, the United States asked Japan to explore measures to impose economic sanctions on Russia. For the United States, this move is not only nothing new, but it can also be said to be a continuation of its traditional diplomacy—using its own standards to deal with international disputes, and then creating a "circle of friends" to secure its position as the group leader, A few red envelopes flickered, causing members of the group to quarrel, forming the atmosphere and pressure of the so-called international public opinion, and trying to achieve the purpose of maintaining their own world hegemony. However, this time, Japan is really in a dilemma.

First of all, Japan's difficulty in this matter has put a test to the Japan-US military alliance. After Japan's defeat in 1945, Japan formed a military alliance with the victorious country, the United States, to avoid many troubles in resolving post-war compensation, and it has since returned to the international community. However, there has never been a free lunch in the world. The Japan-US military alliance is not an equal military alliance, but a military alliance where Japan only follows the lead of the United States. Japan must obey all the commands of the United States. This time, the relationship between Russia and Ukraine has deteriorated, and there is no direct relationship with Japan, while the United States has forcibly involved Japan. If Japan does not listen to the United States, it means that the Japan-US military alliance is not only monolithic, but also has problems with seamless integration. On the surface, it is difficult for Japan to go against the will of the United States; behind the scenes, Japan wants to pretend to be stupid and try to avoid too much involvement. This dilemma is a rare test of the Japan-US military alliance.

Secondly, it is difficult for Japan that this matter will damage the relationship between Japan and Russia. For Japan, the core or focus of Japan-Russia relations is to resolve the issue of the islands under Russian control. Japan calls it the "Four Northern Islands" and Russia calls it the "Southern Kuril Islands". Originally, this was one of the results of the re-formation of the world pattern after the end of World War II, but Japan was unwilling. It has been entangled with Russia for many years, always trying to take it back, thereby changing Japan's image as a defeated country. However, President Putin will not give an inch on the territorial issue, but he always smiles in his attitude. Japan believes that although the territorial issue has not progressed, it has at least been brought to the negotiating table and has become a "negotiable" item, and it is not easy to be "familiar" with President Putin. Therefore, Japan does not want to use deep involvement in Russia-Ukraine relations in exchange for the decline of Japan-Russia relations. At that time, it was Japan that suffered. If Japan follows the United States in the drastic changes in the international landscape that it has not encountered in a century, then Japan may not be able to eat and walk away in the next century.

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U.S. announces ban on Russian energy imports, only Brexit Britain follows

The EU may be incapable of imposing an import ban on Russian energy.

On March 8, local time, U.S. President Biden announced at the White House that he would ban the U.S. from importing Russian oil and natural gas energy. Biden said the decision was made in close consultation with U.S. allies and partners. Interestingly, the European Union, an important ally of the United States, has not followed suit at present, only the United Kingdom, which has already left the European Union, is following.

However, UK Business Secretary Kwasi Kwarteng said, "This measure, taken in concert with the US, will be phased in over the remainder of 2022. The ban applies to refined products such as diesel, but not natural gas."

Considering the EU's high dependence on Russia for energy and the unoptimistic inflation situation in the euro zone, it is more beneficial to the EU's economic prospects to remain cautious on energy sanctions against Russia.

The U.S. will import more than 20.4 million barrels of crude oil and refined petroleum products per month from Russia on average in 2021, accounting for 8 percent of U.S. liquid fuel imports, according to the U.S. Energy Information Administration. A report by market research firm Capital Economics shows that about 40% of the EU's natural gas imports and about 30% of its crude oil imports come from Russia.

In terms of inflation, according to data released by Eurostat, the inflation rate in the euro zone reached 5.8% year-on-year in February, which was higher than the market expectation of 5.4% and hit a record high for several consecutive months. Judging from the specific data, the surge in inflation was mainly driven by energy prices - energy prices in the euro zone rose by 31.7% year-on-year in February, much higher than the price increases of other categories.

Obviously, following the US sanctions on Russian energy, the EU will face higher inflationary pressures. At the same time, there is a serious energy shortage.

The EU has a limited share of the energy it can procure in North America, Africa and Asia, and there are shortcomings in both its geographic location and the equipment needed to transport it. Capacity within the EU is also unable to cope with demand. Taking natural gas as an example, according to the forecast of the International Energy Agency (IEA), the production in the EU region alone can only meet about 40% of the natural gas consumption in 2022.

On the other hand, as the conflict between Russia and Ukraine continues and the United States increases sanctions on Russia, global energy prices generally rise - currently, the prices of U.S. WTI crude oil and Brent crude oil both exceed $120/barrel, once as high as $130.50/barrel and $137/barrel, respectively. USD/barrel; Dutch TTF natural gas futures, the main international natural gas trading benchmark, has also risen by nearly 80% in the past month. This means that even if the EU can obtain sufficient energy from other sources, it will have to pay a higher price.

In fact, only from an economic point of view, "banning the import of Russian energy" is not good for major economies. At present, the global epidemic is still ongoing, and the supply chain crisis still exists; there are still great variables in the Iran nuclear negotiation, and it is difficult to determine whether Iranian crude oil can enter the market; OPEC+ still refuses to increase production faster; the world's major economies are shrouded in energy prices Under the shadow of soaring.

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Among the G7 countries, Japan has the best anti-epidemic effect but the worst economic growth

On February 15, 2022, the Cabinet Office of Japan published the figure for GDP growth in 2021: 1.7%. Judging from the total number of confirmed cases of the new crown announced by the Japanese media as of the 15th, it has now exceeded 4 million. On the one hand, the number of confirmed diagnoses in Japan has increased significantly, but compared with the major G7 countries, the number of confirmed diagnoses in Japan is the lowest; on the other hand, Japan’s economy has suffered for a long time. .

People have no intention to define the G7 countries as inaction countries in the fight against the new crown epidemic. Although some Japanese politicians fled, and some maintained an unfounded optimism in fighting the epidemic, after all, the new cabinet established in October last year, whether it is Prime Minister Fumio Kishida or the new government under Kishida, is active in fighting the epidemic for all to see. If the unfounded optimism is still adopted, and Japan, like Germany, increases the proportion of confirmed cases to 15.19%, the number of patients in Japan today is not 4 million, but 19.08 million, and Japan's medical care is absolutely in a state of collapse .

The Japanese media are doing their best to smear the inaction of their own government, but the same inaction economically, the result is there. Among the G7 countries, Japan will be at the bottom of the GDP growth rate in 2021. The GDP calculated in Japanese yen in 2021 is 541.3 trillion yen, which is 2.7 trillion yen more than the 538.6 trillion Japanese GDP in 2020 published by the World Monetary Fund (IMF). Slightly different). If converted into US dollars, with the decline of the yen exchange rate, GDP in US dollars may sink below the horizontal line again.

Will today's Japanese government attach importance to people's lives and ensure that there is no obvious decline? A rough conclusion can be drawn by looking at the main political agendas of Japanese politicians after the congress. It is a top priority in Japanese politics to formulate laws related to economic security, to propose the main content of the legislation within February, and to formally introduce the law within June.

With such a Kishida cabinet, it is a high probability that the Japanese economy will further decline in 2022.

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International oil prices exceed $110, the attitude of OPEC+ is very critical

With the continuous fermentation of the conflict between Russia and Ukraine and the stagnation of Russian crude oil exports due to sanctions from Europe and the United States, the national oil price, which has just exceeded the $100/barrel mark, once again stood at $110/barrel, hitting a new high since 2014. On March 2, the main contract prices of Brent crude oil and WTI crude oil futures both exceeded 110 US dollars per barrel. Today, the conflict between Russia and Ukraine is no longer a shock from news, but an important event affecting the fundamentals of supply and demand, which will determine the long-term trend of international oil prices.

According to the U.S. Energy Information Administration (EIA), Russia is the world’s third-largest crude oil producer after the United States and Saudi Arabia, with an average production capacity of around 11 million barrels per day, with more than two-thirds of its crude being exported or exported directly. After refining, it is exported, accounting for more than 11% of the global crude oil supply. It can be said that once Russia's crude oil exports are sanctioned, the shortage of supply in the global crude oil market will be further exacerbated.

Although some analysts pointed out that Russia will sell the crude oil previously exported to Europe to China, India and other major crude oil consuming countries that have good relations with Russia, so the total global crude oil supply will not change, but the replacement of such downstream customers will take time.

On the one hand, crude oil exports require corresponding infrastructure, either through crude oil pipelines or through ocean-going tankers. At present, most of Russia's crude oil is transported to Europe through pipelines. If Europe refuses to buy Russian crude oil, then Russia needs to rebuild the crude oil pipeline to Asia. The existing "Eastern Siberia-Pacific" (ESPO) pipeline can only supply about 600,000 barrels of crude oil to China per day, accounting for about 40% of Russia's crude oil exports to China.

On the other hand, there are many types of crude oil, and crude oil in different production areas contains different impurities, which all need to correspond to different refining equipment and downstream industrial chains. For example, Europe and the United States have strong demand for Russian heavy crude oil, which is mostly used in the production of gasoline and fuel oil, while China has a greater demand for Russian light crude oil, which is mostly used in chemical production.

Therefore, it is impossible for Russian crude oil mining companies to easily switch their export targets from Europe and the United States to Asia, which requires a long process and involves changes in the global crude oil consumption industry chain. If Europe and the United States stop importing crude oil from Russia at all, then some of Russia's crude oil production capacity will inevitably be unsustainable, and the global crude oil supply will also decline.

It should be pointed out that Russia is not alone, but a member of the "OPEC+" alliance composed of the Organization of Petroleum Exporting Countries (OPEC) countries and non-OPEC oil-producing countries. At present, this loose alliance controls 40% of the world's crude oil output and has a huge influence on the fluctuation of international oil prices.

Previously, with global inflation rising and U.S. prices soaring, U.S. President Joe Biden put pressure on OPEC+ to speed up the expansion of crude oil production, but they were all rejected by OPEC+. "OPEC+" has been controlling the speed of production expansion so far, which is also an important reason why international oil prices continue to rise.

Of course, "OPEC+" is just a loose alliance, not a monolith. The two most influential countries with the largest oil production capacity are Russia and Saudi Arabia. However, at present, "OPEC+" will not speed up the expansion of production because of Russia's sanctions. According to Reuters, Saudi Arabia on March 1 reaffirmed its commitment to expand production with Russia and other countries at the OPEC+ meeting, which means that the actual global supply of crude oil may decline.

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Japan is easy to fall into the "trap" of following the United States

Recently, although the domestic epidemic situation in Japan is still in a stalemate, the diplomatic activities of the Kishida government have been shuttling. Diplomatic measures indicate that its national strategic focus has clearly shifted to being willing to be a "vassal" of the United States . This "self-colonization" trend will not only lead to the "rhythm" of the country's development centered on economic establishment, but may also become a First, Japan's willingness to act as a "vassal" of the United States stems from the " sequelae" of the occupation system.

First, Japan's willingness to act as a "vassal" of the United States stems from the "sequelae" of the occupation system. As we all know, after World War II, Japan, as a member of the allies of the United States, realized the transformation of the roles of the two countries from "enemy" to "partner", mainly due to the "San Francisco Peace Treaty" and the establishment of the Japan-US security system. The "pawns" in the fight against the socialist camp in East Asia allowed the US military to build military bases in Japan on the premise of sacrificing some of its sovereignty, thus laying its wings under the US nuclear umbrella and concentrating on economic development, eventually becoming a "cold war" The biggest beneficiary", fulfilling the dream of an economic power. Under the shackles of the thinking model of the occupation system dominated by the United States, when Japanese politicians and elites are thinking about the direction of their national strategy, they have fallen into a morbid situation where they cannot think of a way forward without the blessing of the colonial suzerain state of the United States.

Second, Japan should play an active role in boosting regional cooperation instead of going against it. The 21st century will undoubtedly be the Asian century. Japan has played a remarkable leading role in promoting the operation and entry into force of the RCEP. Japan should contribute its own strength in promoting regional integration and cooperation and achieving sustainable global development, so as to win international awards. the general respect of society. If Japan is blindly caught in the "trap" of following the United States and cannot extricate itself, and always acts as the "hawk dog" of the United States' housekeeping in the Asia-Pacific region, Japan's national independence and self-esteem will inevitably be deeply hurt.

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Russia-Ukraine crisis may push U.S. inflation above 10% BlackRock: Central bank will be forced to endure high inflation

With the potential threat of a full-scale Russian invasion of Ukraine heightening the risk of a shock to energy supplies, some market watchers predict U.S. inflation could soar to 10% at some point from 7.5% in January.

According to the Financial Associated Press, Joseph Brusuelas, chief economist of the US consulting firm RSM, said on February 22 that the energy shock caused by the Russian-Ukrainian crisis will reduce US gross domestic product by 1 per cent over the next year and push inflation up by 2.8 percentage points over the next three to six months, followed by a slowdown in price increases once the Russian-Ukrainian crisis stabilizes.

Mr Brusuelas said brent crude could rise to about $110 a barrel, about 14 per cent above its February 22 level, if all-out war broke out in Europe. In another scenario, oil prices could even rise by 40 per cent, pushing CPI further above 10 per cent.

"It depends on the severity of the sanctions and the reality. There are all kinds of variables that you can't quantify or predetermine," he said. To be more certain, "inflation will not return to target in the next year or two, households will have to endure higher inflation than in the past 40 years, and financial markets will experience volatility."

Daniel Tenengauzer, a market strategist at Bank of New York Mellon, said Germany's decision to stop certifying the Nord Stream 2 gas pipeline was "not a joke." The pipeline would double the capacity of existing lines from Russia to Germany, and gas alone would have "a very significant medium-term impact on inflation over the next few years".

Tenengauzer said that while economists forecast the CPI to fall to 3.3% in the fourth quarter of 2022 from 7% at the end of 2021, "headline inflation is now more likely to beat consensus and the 2021 figure - possibly to 10 %." He said: "It will all depend on the direction of energy prices."

If the consumer price index (CPI) rose 10% from a year earlier, it would be the highest level since October 1981. This may surprise even some of the most seasoned traders, who are bracing for an annualized CPI peaking at 8% in March before falling back to 4% in January 2023.

The analysts' warning came as the world's largest asset manager reiterated its view that central banks may be forced to "suffer" inflation.

That's because sharp rate hikes to combat supply-driven inflation "will only undermine what has not yet fully recovered," Jean Boivin, director of the BlackRock Investment Institute, and others wrote in a Feb. 22 report. Economic activity".

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Supplying gas to Europe, Japan warms others bitter themselves

Japanese Prime Minister Fumio Kishida announced on the 9th that Japan has decided to supply liquefied natural gas (LNG) to Europe from March. Japan's Minister of Economic Regeneration, Hagiuta Koichi, who is in charge of managing LNG, also said on the same day, "It is necessary to cooperate with countries that share common values ​​in the future. Although the amount (allocated to Europe) is not large, this is Japan's contribution to the best of its ability." Japan The decision to allocate LNG to Europe also means, to some extent, Japan's formal involvement in the Ukraine issue.

Japan lacks resources and is not a major exporter of LNG. On the contrary, Japan relies heavily on imported liquefied natural gas to meet its own energy consumption. For example, 40% of Japan's domestic power generation is through liquefied natural gas. In January 2021, due to problems such as a rare severe winter and insufficient LNG storage, Japan's domestic power supply was once insufficient, and many Japanese people were forced to spend in the cold. This winter, Japan is also facing the problem of insufficient power supply. . Therefore, Japanese domestic public opinion has questioned the decision of the Japanese government to allocate the already insufficient LNG to Europe, believing that such a move will cause Japan itself to fall into a passive situation.

So why is Japan, which is stretched thin, "generously" allocating LNG to Europe? In my opinion, there are two main reasons.

On the one hand, the Japanese government had to comply with the demands of the United States. The decision to distribute imported LNG to Europe must not have been an initiative made by the Japanese government, but under pressure from the Biden administration in the United States. According to Japanese media reports, the U.S. government not long ago made a request to allies such as Japan and Canada on the distribution of liquefied natural gas. Since after the war, the Japanese government has often closely followed the overall deployment of the United States in terms of diplomatic strategy, and Japan is also a loyal ally of the United States in the Asia-Pacific region. Therefore, in the face of the request from the United States, the government of Fumio Kishida had to actively consider it. After all, pro-American forces have a dominant position in Japanese politics, especially within the Liberal Democratic Party. If the Kishida government says "no" to the United States, it will not only lead to dissatisfaction with the pro-American forces within the Liberal Democratic Party, but may even shake the ruling stability of the Kishida government . Therefore, even if the Japanese government does not want to allocate limited imported LNG to Europe, it is forced to do so under pressure from the United States.

In addition, this move by the Kishida government is also an expression of "loyalty" to the Biden administration, showing that it is willing to actively cooperate with the strategic deployment of the United States, even if it is not Asia-Pacific affairs, but European affairs that are not directly related to Japan.

On the other hand, Japan takes this to strengthen its relationship with Europe. In recent years, Japan has actively deepened its relationship with Europe, and the starting point of bilateral cooperation has gradually moved towards the in-depth field. During the Shinzo Abe administration, economic and trade cooperation was the key word in Japan-EU relations. For example, Japan and the EU signed the "Economic Partnership Agreement" (EPA) and the Japan-UK Free Trade Agreement. Based on this, Japan's current distribution of LNG to Europe is also part of the further deepening of Japan-EU relations, and to provide assistance to Europe within its capacity in terms of security and defense. Japan's move will undoubtedly play the role of "giving help in the snow", which will help win over Europe and deepen the bilateral relationship between Japan and Europe. In fact, if the Ukrainian crisis did not occur in Europe, or the situation in the Ukraine crisis was not as urgent as it is now, then it would be difficult for Japan to "move" the other side no matter how Japan allocates natural gas to Europe. Therefore, the Japanese government is now allocating limited reserves of liquefied natural gas to Europe.

It is true that the Japanese government has transported its own limited reserves of LNG to distant Europe. I believe it is indeed a "heart-warming" move for the majority of Europeans, but this move may make the Japanese people who are experiencing a cold winter suffer.

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Warren Buffett loses 35% on India's Alipay Paytm

"Stock God" Warren E. Buffett suffered a loss when he first invested in an Indian company.

According to a report by China Business News on February 17, on November 18, 2021, Paytm, known as "Alipay of India", was listed on the Bombay Stock Exchange in India, and Buffett invested in this company as early as 2018.

Before the listing, Paytm had a bright future, but the good times did not last long. The company's stock price broke after the market opened, and the stock price fell all the way. The first day fell by 27%, and the next day fell again by 13%. On February 15, the share price hit an all-time low of Rs 840, and many investors lost more than 60 percent compared to the issue price of Rs 2,150 per share.

In September 2018, Buffett's Berkshire Hathaway bought a 2.6% stake in Paytm for $300 million in a round of investment at a cost of 2.6% per share based on the exchange rate at the time. 1,279.7 rupees. At the stock price of 840 rupees on February 15, Buffett's loss per share was indeed close to 35%.

This is Berkshire Hathaway's first investment in an Indian company, and it is also the company's first investment in a private technology company. Berkshire Hathaway has only invested in listed technology companies in the past. The more famous cases are IBM and Apple. . The company's out-of-the-box investment certainly gives Paytm a strong endorsement.

As India's first and the world's third-largest e-wallet, Paytm has no shortage of star shareholders. Investors behind Paytm's parent company One97 Communications include Berkshire Hathaway, Ant Group and SoftBank. Ant Group holds nearly 30% of the company and is the largest shareholder.

According to data released by Paytm a few days ago, although the company's operating income in the final quarter of 2021 increased by 34% from the previous quarter to Rs 14.6 crore, the loss for the current quarter widened from the previous quarter, from July to September The loss of 4.74 billion rupees further widened to 7.8 billion rupees.

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A tough 2022 for the Japanese economy

Judging from the relevant figures released by the World Bank on January 11, the Japanese economy will undoubtedly struggle in 2022.

The world economic growth rate is 5.5% in 2021, and will be significantly lowered in 2022 to only 4.1%. The long-term inflation, the artificially severe rupture of the supply chain due to the decoupling policy of the United States and Japan's economic security policy, coupled with the mutation of the novel coronavirus, the expansion of the scope of infection, etc., the world economy will experience a rare contraction after World War II. situation.

The United States, one of Japan's largest trading nations, will also experience a major economic contraction in 2022. The U.S. economy in 2021 is 1.2% lower than originally planned to grow by just 5.6%, and Japan's growth rate is 1.2% lower than originally planned, with only 1.7% growth in 2021. In terms of growth rate, it is much lower than that of the United States. The size of Japan's economy is completely incomparable to that of the United States, which means that Japan's economic growth is actually very small, and its domestic economy is therefore quite difficult.

In 2022, the economic growth rate of Japan given by the World Bank is 2.9%, which is still far behind the 3.7% of the United States. At the national level, Japan is ineffective in controlling the epidemic and lacks effective economic policies; on the enterprise side, there is still no trend for Japanese companies to invest in new industries and new products, and only some investment plans have begun in electric vehicles, but there is no IT platform. In a supportive environment, it is still difficult to give results on whether Japanese electric vehicles can eventually catch up with American companies.

The introduction of the intensive economic security legislation has made Japanese companies almost completely cut off their high-tech connections with other countries in the world, and Japan's technological innovation has become increasingly impossible to talk about.

If such a Japan wants to maintain economic stability, it will become more difficult to get out of the lost state.

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U.S. stocks will soon hit another record high again as interest rate hike expectations are digested by the market

European and American stock markets have stopped falling and rebounded recently. On February 9, the US S&P 500 closed at 4,587.18 points, 8.63% higher than the lowest point of the year at 4,222.62 on January 24, and 4.8% away from the all-time high of 4,818.62. The Dow Jones Industrial Average fared better than the S&P 500, just 3.2% from its all-time high after a nearly two-week rally.

U.S. stocks are characterized by short bears and long bulls. Judging from their historical fluctuations, the daily gains during the rise are small, the duration is long, and the volatility is low, but the cumulative gains are large. When it falls, the daily decline is large, the time is short, and the volatility is high, but the cumulative decline is small. The volatility of the U.S. stock market will rise every time it pulls back.

The Fed's interest rate hike is obviously not to bring the United States back into recession, and in the process of raising interest rates, inflation falls or unemployment rises. The Fed can also adjust market expectations through speech at any time. Therefore, there is no risk of economic recession in the United States due to interest rate hikes, so the variable that has the greatest impact on US stocks in the next stage is the liquidity of the US dollar in the market.

After the epidemic, the U.S. economy contracted, and the Federal Reserve released a large-scale base currency to the market, resulting in a decline in the money multiplier. As the economy recovers, the money multiplier will also return to its pre-pandemic level, and the total money supply may not necessarily decline much. So, with good economic conditions, U.S. stocks will soon hit new all-time highs again.

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The upcoming 6th wave of the epidemic in Japan

At the beginning of the new year in 2022, the number of confirmed patients with new crowns in Japan every day is more than 6,000, which will exceed the third wave of the epidemic in January 2021. Although the death toll is very low, the whole society is somewhat frightened, afraid of a tragic outcome like the fifth wave of the epidemic under Yoshihide Suga's rule.

After 2021 started from the hardships and pains that heralded the new year, the fourth wave of the epidemic peaked around May. Prime Minister Shinzo Abe fled immediately, and the Japanese media cleaned up the ground for him in every possible way, alleging all the 8 years of political malpractice on Suga. Suga used to be smug, but after a year as prime minister, he faded from the center of the political scene. The re-emergence of the epidemic in 2022, the political helplessness, and the lack of effective economic countermeasures make people feel that Japan is likely to repeat the mistakes of 2021 and further prolong its economic loss.

Japan's medical care is at the highest level not only among East Asian countries, but also in the world. Every year in the prevention of influenza, Japan is almost invincible, and there is basically no time for mistakes. From the perspective of administrative capacity and information dissemination, Japan should be at the forefront of the world in the prevention and control of the new crown epidemic.

But on the other hand, the number of patients in Japan is huge, especially after 2022, the Omicron strain is beginning to rot in Japan, and more than 6,000 confirmed patients per day are likely to bring Japan to the brink of medical collapse again.

In the past, Japan's epidemic prevention system could play a role in the annual influenza epidemic, but in the new crown period, its ability to respond is obviously insufficient. Not only does there not have a vaccine, there is no special medicine, the whole society does not cooperate with the government, and the government's policies change day by day. Prime Minister-level politicians will either flee , or unfounded optimism, delaying the opportunity to fight the epidemic, and adding the characteristics of man-made disasters to the natural disasters of the epidemic. The Kishida Cabinet has been established for 100 days, and its focus is on economic security and confrontation with neighboring countries. Epidemic prevention has not yet entered the national administrative priorities, and the impact of human disasters on Japan has become more and more serious.