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Tag: geopolitical tensions

  • Trump says the US has seized an oil tanker off the coast of Venezuela

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    President Donald Trump said Wednesday that the United States has seized an oil tanker off the coast of Venezuela as tensions mount with the government of President Nicolás Maduro.Using U.S. forces to take control of a merchant ship is incredibly unusual and marks the Trump administration’s latest push to increase pressure on Maduro, who has been charged with narcoterrorism in the United States. The U.S. has built up the largest military presence in the region in decades and launched a series of deadly strikes on alleged drug-smuggling boats in the Caribbean Sea and eastern Pacific Ocean. The campaign is facing growing scrutiny from Congress.“We’ve just seized a tanker on the coast of Venezuela, a large tanker, very large, largest one ever seized, actually,” Trump told reporters at the White House, later adding that “it was seized for a very good reason.”Trump did not offer additional details. When asked what would happen to the oil aboard the tanker, Trump said, “Well, we keep it, I guess.”The seizure was led by the U.S. Coast Guard and supported by the Navy, according to a U.S. official who was not authorized to comment publicly and spoke on the condition of anonymity. The official added that it was conducted under U.S. law enforcement authority.Storming the oil tankerThe Coast Guard members were taken to the oil tanker by helicopter from the aircraft carrier USS Gerald R. Ford, the official said. The Ford is in the Caribbean Sea after arriving last month in a major show of force, joining a fleet of other warships.Video posted to social media by Attorney General Pam Bondi shows people fast-roping from one of the helicopters involved in the operation as it hovers just feet from the deck.The Coast Guard members can be seen later in the video moving throughout the superstructure of the ship with their weapons drawn.Bondi wrote that “for multiple years, the oil tanker has been sanctioned by the United States due to its involvement in an illicit oil shipping network supporting foreign terrorist organizations.”Venezuela’s government said in a statement that the seizure “constitutes a blatant theft and an act of international piracy.”“Under these circumstances, the true reasons for the prolonged aggression against Venezuela have finally been revealed. … It has always been about our natural resources, our oil, our energy, the resources that belong exclusively to the Venezuelan people,” the statement said.Half of ship’s oil is tied to Cuban importerThe U.S. official identified the seized tanker as the Skipper.The ship departed Venezuela around Dec. 2 with about 2 million barrels of heavy crude, roughly half of it belonging to a Cuban state-run oil importer, according to documents from the state-owned company Petróleos de Venezuela S.A., commonly known as PDVSA, that were provided on the condition of anonymity because the person did not have permission to share them.The Skipper was previously known as the M/T Adisa, according to ship tracking data. The Adisa was sanctioned by the U.S. in 2022 over accusations of belonging to a sophisticated network of shadow tankers that smuggled crude oil on behalf of Iran’s Revolutionary Guard and Lebanon’s Hezbollah militant group.The network was reportedly run by a Switzerland-based Ukrainian oil trader, the U.S. Treasury Department said at the time.Hitting Venezuela’s sanctioned oil businessVenezuela has the world’s largest proven oil reserves and produces about 1 million barrels a day.PDVSA is the backbone of the country’s economy. Its reliance on intermediaries increased in 2020, when the first Trump administration expanded its maximum-pressure campaign on Venezuela with sanctions that threaten to lock out of the U.S. economy any individual or company that does business with Maduro’s government. Longtime allies Russia and Iran, both also sanctioned, have helped Venezuela skirt restrictions.The transactions usually involve a complex network of shadowy intermediaries. Many are shell companies, registered in jurisdictions known for secrecy. The buyers deploy so-called ghost tankers that hide their location and hand off their valuable cargoes in the middle of the ocean before they reach their final destination.Maduro did not address the seizure during a speech before a ruling-party organized demonstration in Caracas, Venezuela’s capital. But he told supporters that the country is “prepared to break the teeth of the North American empire if necessary.”Maduro has insisted the real purpose of the U.S. military operations is to force him from office.Democrat says the move is about ‘regime change’Sen. Chris Van Hollen, D-Md., a member of the Senate Foreign Relations Committee, said the U.S. seizing the oil tanker cast doubt on the administration’s stated reasons for the military buildup and boat strikes.“This shows that their whole cover story — that this is about interdicting drugs — is a big lie,” the senator said. “This is just one more piece of evidence that this is really about regime change — by force.”Vincent P. O’Hara, a naval historian and author of “The Greatest Naval War Ever Fought,” called the seizure “very unusual” and “provocative.” Noting that the action will probably deter other ships from the Venezuela coastline, he said, “If you have no maritime traffic or access to that, then you have no economy.”The seizure comes a day after the U.S. military flew a pair of fighter jets over the Gulf of Venezuela in what appeared to be the closest that warplanes had come to the South American country’s airspace. Trump has said land attacks are coming soon but has not offered more details.The Trump administration is facing increasing scrutiny from lawmakers over the boat strike campaign, which has killed at least 87 people in 22 known strikes since early September, including a follow-up strike that killed two survivors clinging to the wreckage of a boat after the first hit.Some legal experts and Democrats say that action may have violated the laws governing the use of deadly military force.Lawmakers are demanding to get unedited video from the strikes, but Defense Secretary Pete Hegseth told congressional leaders at a classified briefing Tuesday that he was still weighing whether to release it.The Coast Guard referred a request for comment about the tanker seizure to the White House.

    President Donald Trump said Wednesday that the United States has seized an oil tanker off the coast of Venezuela as tensions mount with the government of President Nicolás Maduro.

    Using U.S. forces to take control of a merchant ship is incredibly unusual and marks the Trump administration’s latest push to increase pressure on Maduro, who has been charged with narcoterrorism in the United States. The U.S. has built up the largest military presence in the region in decades and launched a series of deadly strikes on alleged drug-smuggling boats in the Caribbean Sea and eastern Pacific Ocean. The campaign is facing growing scrutiny from Congress.

    “We’ve just seized a tanker on the coast of Venezuela, a large tanker, very large, largest one ever seized, actually,” Trump told reporters at the White House, later adding that “it was seized for a very good reason.”

    Trump did not offer additional details. When asked what would happen to the oil aboard the tanker, Trump said, “Well, we keep it, I guess.”

    The seizure was led by the U.S. Coast Guard and supported by the Navy, according to a U.S. official who was not authorized to comment publicly and spoke on the condition of anonymity. The official added that it was conducted under U.S. law enforcement authority.

    Storming the oil tanker

    The Coast Guard members were taken to the oil tanker by helicopter from the aircraft carrier USS Gerald R. Ford, the official said. The Ford is in the Caribbean Sea after arriving last month in a major show of force, joining a fleet of other warships.

    Video posted to social media by Attorney General Pam Bondi shows people fast-roping from one of the helicopters involved in the operation as it hovers just feet from the deck.

    The Coast Guard members can be seen later in the video moving throughout the superstructure of the ship with their weapons drawn.

    Bondi wrote that “for multiple years, the oil tanker has been sanctioned by the United States due to its involvement in an illicit oil shipping network supporting foreign terrorist organizations.”

    Venezuela’s government said in a statement that the seizure “constitutes a blatant theft and an act of international piracy.”

    “Under these circumstances, the true reasons for the prolonged aggression against Venezuela have finally been revealed. … It has always been about our natural resources, our oil, our energy, the resources that belong exclusively to the Venezuelan people,” the statement said.

    Half of ship’s oil is tied to Cuban importer

    The U.S. official identified the seized tanker as the Skipper.

    The ship departed Venezuela around Dec. 2 with about 2 million barrels of heavy crude, roughly half of it belonging to a Cuban state-run oil importer, according to documents from the state-owned company Petróleos de Venezuela S.A., commonly known as PDVSA, that were provided on the condition of anonymity because the person did not have permission to share them.

    The Skipper was previously known as the M/T Adisa, according to ship tracking data. The Adisa was sanctioned by the U.S. in 2022 over accusations of belonging to a sophisticated network of shadow tankers that smuggled crude oil on behalf of Iran’s Revolutionary Guard and Lebanon’s Hezbollah militant group.

    The network was reportedly run by a Switzerland-based Ukrainian oil trader, the U.S. Treasury Department said at the time.

    Hitting Venezuela’s sanctioned oil business

    Venezuela has the world’s largest proven oil reserves and produces about 1 million barrels a day.

    PDVSA is the backbone of the country’s economy. Its reliance on intermediaries increased in 2020, when the first Trump administration expanded its maximum-pressure campaign on Venezuela with sanctions that threaten to lock out of the U.S. economy any individual or company that does business with Maduro’s government. Longtime allies Russia and Iran, both also sanctioned, have helped Venezuela skirt restrictions.

    The transactions usually involve a complex network of shadowy intermediaries. Many are shell companies, registered in jurisdictions known for secrecy. The buyers deploy so-called ghost tankers that hide their location and hand off their valuable cargoes in the middle of the ocean before they reach their final destination.

    Maduro did not address the seizure during a speech before a ruling-party organized demonstration in Caracas, Venezuela’s capital. But he told supporters that the country is “prepared to break the teeth of the North American empire if necessary.”

    Maduro has insisted the real purpose of the U.S. military operations is to force him from office.

    Democrat says the move is about ‘regime change’

    Sen. Chris Van Hollen, D-Md., a member of the Senate Foreign Relations Committee, said the U.S. seizing the oil tanker cast doubt on the administration’s stated reasons for the military buildup and boat strikes.

    “This shows that their whole cover story — that this is about interdicting drugs — is a big lie,” the senator said. “This is just one more piece of evidence that this is really about regime change — by force.”

    Vincent P. O’Hara, a naval historian and author of “The Greatest Naval War Ever Fought,” called the seizure “very unusual” and “provocative.” Noting that the action will probably deter other ships from the Venezuela coastline, he said, “If you have no maritime traffic or access to that, then you have no economy.”

    The seizure comes a day after the U.S. military flew a pair of fighter jets over the Gulf of Venezuela in what appeared to be the closest that warplanes had come to the South American country’s airspace. Trump has said land attacks are coming soon but has not offered more details.

    The Trump administration is facing increasing scrutiny from lawmakers over the boat strike campaign, which has killed at least 87 people in 22 known strikes since early September, including a follow-up strike that killed two survivors clinging to the wreckage of a boat after the first hit.

    Some legal experts and Democrats say that action may have violated the laws governing the use of deadly military force.

    Lawmakers are demanding to get unedited video from the strikes, but Defense Secretary Pete Hegseth told congressional leaders at a classified briefing Tuesday that he was still weighing whether to release it.

    The Coast Guard referred a request for comment about the tanker seizure to the White House.

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  • EXCLUSIVE | Bridgewater Associates founder Ray Dalio speaks to Business Today: Key Highlights

    EXCLUSIVE | Bridgewater Associates founder Ray Dalio speaks to Business Today: Key Highlights

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    Ray Dalio, the founder of the world’s biggest hedge fund Bridgewater Associates, in an exclusive interview with Business Today has said that India should have the highest growth rate in the near future if various indicators and prevailing global factors are considered. Dalio said as India’s neutral stand on geopolitical tensions is a good thing.

    He said that the country was opening up to the global capital markets and if that continued, it would be good for the capital market in India, in terms of capital flows.

    Here are a few excerpts from his interview:

    • US Federal Reserve and central banks’ stand on interest rate hike

    RD: The inflation rate and the bond yield will have to be high enough to satisfy creditors. So that, bond holders can get higher returns that are above the inflation rate. That’s the current challenge for US Fed because debtors do not want to receive interest rates that are too high.

    I think we’re going to have an inflation rate that is probably in the vicinity of 5 per cent-ish. But it’s a very uncertain inflation rate because of all the shocks that we have around it.

    The real rate, in other words, the rate above inflation that the interest rate is now at is in the vicinity of 1.5 per cent, a little bit higher than that. So that would mean that they would be probably approaching a 6 per cent, risk-free rate. And the Federal Reserve will put the short-term rate up towards that level. That level of interest rate is very harmful, very damaging to the economy.

    • Interest rates and inflation

    The world, the United States is going to spend a lot more money than it is taking in. In the United States, we will have a budget deficit, which is in the vicinity of 5 per cent of GDP. As is now planned, the Federal Reserve will also sell its bonds, and short-term debt to the tune of about 5 per cent of GDP. That’s 10 per cent of GDP. So that’s going to create a very tight set of circumstances.  

    At some point, we see that there’s not a demand for that, for various reasons. The real rates are not high enough, the bond market is going down, investors are losing money in it, and so on. And so, there’s a mismatch there. So that will shrink private credit. So those conditions create a bad set of conditions for growth.

    • Balancing growth and inflation

    We need money for poverty alleviation, building infrastructure, repairing Ukraine, spending money for climate change. The big difference between individuals and governments is the governments don’t have that constraint because they can print money. So, I think we have this trade-off. Whenever in history, you have a lot of debt and a lot of financial assets, it becomes very, very difficult for those to be balanced. And we’re now in a shift.  

    The prior decade, we had falling interest rates. Cash was very cheap, free, almost. And so, the whole investment landscape was very much built around that. Now we’re having this adjustment away from that. So central banks try to balance growth and inflation.  

    • How investors are managing with high interest rates

    I think that what you’re going to see is a classic sequence of events, where the interest rate rise is high enough that it is good for the creditor, but bad for the economy. And that when economic conditions become a bigger worry than inflation, you will see them come in and print more money and the value. So, I think it’s very important for investors over the long term, to not hold debt instruments. Over the short term, as long as those exist, then I would say neutral or slightly attractive.

    • Investment during high inflation, interest rates

    Whether whichever country you’re in, whichever currency you’re denominated in, look at the returns relative to inflation. Too many people look at just the level of returns, and they don’t pay enough attention to inflation. Generally, stay away from debt assets, debt denominated assets. Third, have a well-diversified portfolio. Diversification reduces risk without reducing expected returns, if you do it well.

    • Changing dynamics in global politics

    It is now Russia and China. And there are five kinds of wars. There is a trade war, a technology war, a geopolitical influence war, a capital and economic war, and a military war– five of those. We are in the first four of those. If we never go to a military war, we still having damage happening. Because we are still in an environment where globalisation, as we know it, is declining. Because right now in fears of those wars, there is the desire for self-sufficiency. It used to be that the world would come close to producing items and trading items, wherever it was most efficient. That is now changing.

    I think India has a great potential. India, I use indicators, we use indicators of the next 10 years growth rate. Some of the indicators are the cost of an educated person. In other words, what is the education level, but also how expensive are they? Barriers to trade and capital flows, level levels of corruption, many different indicators. And on balance, India should have the highest growth rate of any country. And it’s opening up to the global capital markets. If that continues, that’ll be efficient for the capital markets in India, and capital flows.

    India is largely taking a neutral position in these conflicts. It of course, needs to develop a very strong leading economy related to technology. It is not the two main competitors in technology development. Big technology platforms and all of that are still of course, the United States and China. And those are going to be cutting edge areas.

    India’s level of indebtedness, a number of indicators indicates that it should do very well over the next 10 years. But it’ll be important to have a modernisation, particularly of the capital markets, to bring in the efficiencies.

    • Tech stocks on NASDAQ (Facebook stocks are down by 40-50%)

    So, there was a bubble in tech stocks. Mostly, what’s happening is that a number of these have negative cash flows. That means they didn’t have earnings that will support those prices. And in many cases, they didn’t have earnings. And they relied on either borrowing money to make up the gap or raising venture capital or private equity money. And free money was basically free and plentiful. Money was basically the paradigm. And so, you’re now seeing those companies who have negative cash flows, being severely hurt. Because if the money doesn’t come in, then they’ll go broke, they’ll run out of money, they have to contract and so on. And we’re seeing that happen.

    If we look at climate change, or even the environment for pandemics, you know, that’s something that’s also worrying. The surprises for climate are not going to be on the upside, they’re going to be worse.

    Climate remediation is estimated to cost $9 trillion a year in order to reach goals which probably won’t be reached, and who’s going to pay for that money? That’s very expensive at this time. So, I think between now and 2024, it’ll become an increasingly difficult period, but there’ll be good inventions, and there’ll be good developments.

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