Tag: President Biden

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Biden Releases Reserves to Pump Oil Supply

Introduction

President Joe Biden recently announced the release of strategic oil reserves to alleviate the global lack of supply and ease soaring gas prices. In parallel with nations such as China, India, Japan, South Korea, and the United Kingdom, the US Department of Energy has decided to release 50 million barrels of oil from the “Strategic Petroleum Reserve” to assist in lowering energy prices and address the current pandemic-induced mismatch between oil demand and supply.

Context

Going back to basics, we can see how this move would help slow down rising gas prices for Americans: an increase in the supply of oil will put downward pressure on oil prices and cause an extension in the quantity demanded. The shortage of oil that is occurring due to economic recovery from the pandemic worldwide is risky for economic growth. Since oil is an input in numerous industrial activities, energy prices are a very important economic indicator. Oil prices directly affect the prices of goods made with petroleum products, and they indirectly affect the cost of things such as transportation, manufacturing, and heating. Thus, rising oil prices are generally indicative of rising inflation, and vice versa. 

Biden’s announcement comes after producers in OPEC (The Organization of the Petroleum Exporting Countries) resisted calls to increase their supply in order to help cool down the market and ease rising inflationary pressures. It is important to note that around 30 million of these barrels are in fact an exchange, where companies and traders will take the oil now and return it over a specific time frame in the future. This allows the Department of Energy to leverage its Strategic Petroleum Reserve, which includes over 600 million barrels stored in Texas and Louisiana, during future economic crises. An additional 18 million barrels will be “an acceleration of a previously authorized sale.”

Outlook to the future

The President has been under a spotlight pressuring him to provide Americans with economic relief to combat high gas prices and inflation. He has been blamed for the current economic state of the country, namely the record-high inflation levels. In addition to his decision to release the reserves, he has called on federal regulators to investigate whether oil and gas companies are engaging in”illegal conduct” (anti-consumer or anti-competitive behaviour) by profiting from skyrocketing energy prices during the pandemic. 

As inflation in the States remains exorbitantly high, we can only wait and see what impact Biden’s current plans will have on domestic consumers and how they impact the macroeconomy.

Sources

  1. https://www.whitehouse.gov/briefing-room/statements-releases/2021/11/23/president-biden-announces-release-from-the-strategic-petroleum-reserve-as-part-of-ongoing-efforts-to-lower-prices-and-address-lack-of-supply-around-the-world/
  2. https://www.cnbc.com/2021/11/29/biden-ready-to-release-more-oil-reserves-to-cool-price-amos-hochstein.html
  3. https://www.usatoday.com/story/news/politics/2021/11/23/gas-prices-biden-release-50-m-barrels-strategic-oil-reserve/8722649002/
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Weekly Summaries

15th of November – 22nd of November

Tensions at the Poland-Belarus border

Thousands of migrants were trapped at the border between Belarus and Poland for weeks. Poland, a member of the European Union, refused to open the border. Now, an increasing number of migrants have decided to seek asylum in Belarus instead. This could cause many problems for Belarus, a country that has few jobs and other opportunities. Towards the end of the week, Belarusian authorities then cleared the camps at the border and moved the migrants to a warehouse instead. The question of what will happen to the migrants now remains unanswered.

Other News

  • Sudan’s prime minister, Abdalla Hamdok, was reinstated on Sunday after being in house arrest for four weeks
  • A new Portuguese law is considered revolutionary in its efforts to regulate remote work conditions. The law effectively prevents employers from contacting their employees outside of working hours and from monitoring their work.
  • President Biden of the U.S. and President Xi of China met virtually in a three-hour long summit to keep “communication lines open”
  • Germany “suspended approval of the Nord Stream 2 pipeline,” according to the New York Times. The move cause gas prices in Europe to rapidly increase
  • An explosion in Kampala, the capital city of Uganda, killed at least three civilians. The explosion was later described as an “extremist attack” with three suicide bombers also dying. 
  • A self-portrait of Frida Kahlo sold for $34.9 million last week, setting a new record for the most expensive artwork by a Latin American artist at the auction Sotheby’s
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News

The G20 Summit in Rome, Italy

Who attended?

These past few days, the political leaders of the G20 member countries met in Rome to discuss a handful of issues. Some of the politicians who were present are: 

  • Alberto Fernandez (Argentina)
  • Scott Morrison (Australia)
  • Jair Bolsonaro (Brazil)
  • Justin Trudeau (Canada)
  • Xi Jinping (China)
  • Emmanuel Macron (France)
  • Angela Merkel (Germany)
  • Mario Draghi (Italy)
  • Narendra Modi (India)
  • Joko Widodo (Indonesia)
  • Manuel Lopez Obrador (Mexico)
  • Moon Jae-in (South Korea)
  • Vladimir Putin (Russia)
  • Salman bin Abdulaziz Al Saud (Saudi Arabia)
  • Cyril Ramaphosa (South Africa)
  • Recep Tayyip Erdogan (Turkey)
  • Boris Johnson (United Kingdom)
  • Joe Biden (United States)

Joining these political leaders was the President of the European Commission of the European Union, Ursula von der Leyen, and President of the Council of the European Union, Charles Michel. Antonio Guterres, general director of OMS, specifically discussed financial issues relating to the health of the world population.

What was discussed?

So, first and foremost I want to say my thoughts on the possible solutions that will be discussed in the hopes of resolving some of the world’s current Economics problems.

  1. The European Union will invest in the eco-transaction for social enterprises, which are present in nations like Germany and Netherlands, but not in Turkey or in the United States at the moment. Mario Draghi was noted as saying that the Turkish president did not consider the political circular economy. Therefore, there will be no equality in the sense of financial economics in the future, and as a result there will be more discrepancies in terms of environmental sensibility. 
  2. The markets will be more open to Artificial Intelligence. This is especially important as AI is now considered fundamental for new inventions and innovations. 
  3. The United States will invest more on the prototype of financial democracy. In general, it has been noticed that Biden’s government is more concerned with solving population problems than Trump’s government. 
  4. China will be the first world power nation. Compared with all other international markets, China is one of the best markets for social capital that Chinese companies can invest with and also for AI (Artificial Intelligence).

Conclusion

In general, I believe there will be considerable investments in innovation, but I also think there will be areas that will see more progress than others.

I believe the central areas will be capital growth, new health solutions and eco transactions, with a greater focus on the rights of employees. Meanwhile , I think that the semi-peripheral areas will be capital growth, new health solutions but also more consideration of people’s rights on goods and services and on working issues of industries. In my opinion, the periferica areas will be debts and stagflation. It is also possible that there will be problems about having credits as paying back debts may become difficult to do. However, also inflation and financial stagnation are likely to lead to many problems, meaning that no investments will be made into sustainable finance. 

Let’s hope there will be a graduating consideration of nations that are in critical situations, like Perù, Mexico, Spain, and many African countries.

Sources

  1. https://www.consilium.europa.eu/en/
  2. di Taranto, Giuseppe. “The History of Economics.” (2012)
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Weekly Summaries

25th of October – 31st of October

Coup in Sudan

Last Monday, the top generals of Sudan seized power from the government in a coup. The prime minister and other civilian leaders, which had previously shared power with the military under a tense agreement, were arrested. The military proceeded to impose a state of emergency, opening fire on protestors. President Biden condemned the coup and offered economic assistance worth $700 million in the hopes of aiding the protests for democracy.

G20 Summit in Glasgow

Presidents and Prime Ministers from around the world gathered in Glasgow, Scotland this past week for the 12-day long global warming conference hosted by the U.N. to discuss global climate policies. How successful the summit will be is very uncertain as many countries are currently more focused on battling COVID and getting their economies back on track after lockdown.

Other News

  • A very severe fuel shortage is pushing Haiti, a country already struggling, to the brink of collapse
  • Facebook changed its name to Meta as part of its rebranding scheme
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Analysis News

AUKUS: Why is it such a big deal?

Introduction

Before answering the question of why the AUKUS agreement is such a global issue, we must first understand its background and contents. Over the past couple of decades, ever since the end of the Cold War between the USSR and the USA, a new nation has been rapidly expanding its influence on the world. That nation is China. In response to China’s growing power, many alliances, notably the World War II-era “Five Eyes” alliance (consisting of the USA, UK, Australia, New Zealand & Canada), now seem to be overwhelmingly focused on Beijing. Announced on the 15th of September, 2021, the AUKUS agreement has become the newest addition to the long list of actions taken by the West to counter China.   

Motivations for AUKUS

AUKUS has been described by analysts as one of, if not the most significant security arrangement between the US, UK and Australia since World War II. According to the states involved in the agreement (USA, UK & Australia), the focus of AUKUS is to maintain “a free and open Indo-Pacific,” with the help of nuclear-powered submarines on patrol. The new security partnership will supply Australia with nuclear-powered submarine technology which will be provided by the USA and UK. While it may take over a decade for the Australian Navy to deploy the first submarine, the agreement represents the USA’s mission to form a stronger threat in Asia and the Indo-Pacific to offset China’s rapidly modernizing military. Even though Australia has tried to remain balanced concerning her ties with the USA and China, the recent barrage of disciplinary trade reprisals from Beijing has drastically shifted Australia’s stance on the matter.

China’s Reaction

What does China think of this agreement? Unsurprisingly, Beijing has consistently lashed out at what it calls a “Cold War mentality,” denouncing anti-China partnerships. Chinese officials have stated that the AUKUS agreement will cause an arms race in the Indo-Pacific. From the Chinese perspective, the agreement was not created for competitive purposes, but instead is a deliberate attempt to impede China’s development. Relations have become increasingly tense, even before AUKUS. President Joe Biden’s administration has continued to put effort into preventing China’s economy from pulling ahead. Furthermore, Beijing has sparred with the UK over Hong Kong and Canada over detained citizens while Europe has called China a “systemic rival”.

Reaction of other countries

China is not, however, the only nation that has been upset by AUKUS. France, and many other NATO member states, such as Germany, have denounced the agreement. France suffered the most, losing a $37 billion deal between France and Australia concerning diesel-powered submarines. Adding insult to injury, France – a very old ally of the West – found out about the new pact just a few hours before it was announced to the public. The Asia-Pacific is a key strategic and economic region for France as 1.65 million French citizens reside on islands including La Reunion, New Caledonia, and French Polynesia. The cancellation of a deal that would reinforce such a region is a great loss for France. The French Foreign Minister, Jean-Yves Le Drian described AUKUS as a “stab in the back”. As a response, France has recalled her ambassadors to Washington and Canberra for the time being.

Conclusion

All is not lost, however. In a joint statement, President Joe Biden of the USA and President Emmanuel Macron of France have agreed to work on creating “conditions for ensuring confidence and proposing concrete measures toward common objectives”. The two leaders have said they will meet in Europe towards the latter half of October to further mend the damaged diplomatic relations.

Sources

  1. BBC. “Aukus Pact: France and US Seek to Mend Rift.” BBC News, 23 Sept. 2021, http://www.bbc.com/news/world-europe-58659627.
  2. —. “UK, US and Australia Launch Pact to Counter China.” BBC News, 15 Sept. 2021, http://www.bbc.com/news/world-58564837.
  3. Chazan, Guy. “Aukus Security Pact Is ‘Insult to a Nato Partner’, Says Merkel’s Adviser.” Financial Times, 24 Sept. 2021, http://www.ft.com/content/dfc4f860-c178-4c2a-a46c-c5f4e5595b1a. Accessed 26 Sept. 2021.
  4. Prof. Nursin Atesoglu Guney. “ANALYSIS – Third Front of New Cold War Expanding in Asia-Pacific.” Www.aa.com.tr, 24 Sept. 2021, http://www.aa.com.tr/en/analysis/analysis-third-front-of-new-cold-war-expanding-in-asia-pacific/2373757. Accessed 26 Sept. 2021.
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Weekly Summaries

30th of August – 5th of September

U.S. Forces Left Afghanistan

The last U.S. forces left Afghanistan last Monday. Their departure ended a 20-year long occupation. The war in Afghanistan cost the U.S. over $2 trillion and left more than 170,000 people dead. Shortly before midnight, the last 5 American cargo jets left the Kabul airport, leaving behind many Afghans, including former members of the security forces. The Taliban and fighters celebrated the U.S. departure and gunfire could be heard across Kabul. A day later, President Biden once again defended the withdrawal, claiming that it was a choice “between leaving or escalating” the situation.

Other News

  • The return of a Napoleonic general, Gen. Charles Etienne Gudin, was supposed to improve relations between France and Russia, two countries that have long had difficult diplomatic relations. However, when the ceremony took place, the Presidents were not to be seen. 
  • The leader of Guinea’s special forces led a coup, announcing on state television that the constitution and government had been dissolved. Whether he will be successful is still uncertain.
  • Less than a year after he started office, Prime Minister Yoshihide Suga of Japan said that he would not seek re-election
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Weekly Summaries

23rd of August – 29th of August

Afghan refugees and an increasingly dramatic situation at the airport in Kabul

Thousands of people are still waiting at the airport in Kabul for a flight out of Afghanistan and the August 31st deadline to complete the Afghanistan operation is fast approaching. To make the situation even more urgent, Taliban leaders rejected President Biden’s suggestion to extend the deadline for the completion of the operation. Last Wednesday, President Biden then announced that the U.S. was “on track” for a military departure from Afghanistan on August 31st.

On Thursday, two suicide bombers outside of Kabul’s airport killed at least 13 U.S. troops and many Afghans, including children. The Islamic State has since claimed responsibility for the attack. President Biden vowed retaliation, saying “we will not forgive.”

This past week reports also surfaced which state that weeks before Kabul fell to the Taliban, tens of thousands of Afghans were already traveling across Iran, hoping to cross Turkey to reach Europe. However, President Erdogan of Turkey has claimed that Turkey will not be “able to shoulder the additional burden” as it has already taken in 5 million refugees. Last week alone, more than 1,400 Afghans who were in Turkey were rounded up and pushed back by the police in a single operation.

Other News

  • The IMF (International Monetary Fund) gave financial aid to poor countries worth US $650 billion to help them “pay down debt and withstand the costs of combating the coronavirus pandemic,” the New York Times reports
  • The highest point on Greenland’s ice sheet has never experienced rainfall that is until last week
  • To prevent Belarusian migrants from entering, Poland and Lithuania are planning to build fences along their shared borders with Belarus, according to the New York Times
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Weekly Summaries

16th of August – 22nd of August

Chaos at the airport in Kabul

Thousands of Afghans continue to try to flee the country, with some clinging on to departing planes and crowds at the airport trampling people to death. Britain and Canada have since announced that they will both take 20,000 Afghans each who had fled the country. Meanwhile, President Biden defended the “hard and messy” retreat from Afghanistan, claiming that he had to either follow through on the deal with the Taliban he inherited from President Trump or fight the Taliban, according to the New York Times.

Earthquake in Haiti

Haiti was already trying to cope with the aftermath of the 2010 earthquake and the murder of President Jovenel Moïse in July. Now, another earthquake has hit, the death toll of which has now increased to more than 2,200 people. The government also estimates that around 10,000 more people have been injured. Heavy rains have made rescue missions difficult and the people are turning to local churches for support.

Elections in Zambia

Hakainde Hichilema, the leader of Zambia’s main opposition party — the United Party for National Development — won the presidential elections, receiving 59.38% of the votes. His main opponent, Edgar Lungu, who was the previous President, received only 38.33% of the votes. It is only the third time in Zambia’s history that an opposition leader won the election.

Other News

  • Amazon has taken over Walmart’s position and become the world’s largest online retailer operating outside of China, according to the New York Times
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Weekly Summaries

26th of July – 1st of August

Chaos in Tunisia

The President of Tunisia, Kais Saeid, tried to seize power in what some call a coup. He announced that he would fire the prime minister and has already suspended Parliament. However, so far it seems that his success is very limited, although many Tunisians expressed their support. Tunisia has been a democracy since the Arab Spring revolutions.

Other News

  • A landslide in India killed 9 people, most of them tourists. Furthermore, monsoons on the western coast have also killed more than 164 people so far.
  • France has been witnessing many protests against the so-called “Covid Pass” policy
  • North Korea and South Korea have — after 14 months of silence — reopened diplomatic and military hotlines between the two countries
  • Flash floods in Afghanistan have killed at least 80 people, but the search for survivors still continues
  • President Biden announced that EU citizens will continue to be barred from entering the U.S., citing fears that the Delta variant would be spread, despite the fact that U.S. citizens are allowed to enter EU countries, as long as they are fully vaccinated
  • Forest fires in Turkey and wildfires in Greece have had devastating consequences for the people living in the surrounding areas

Are you up to date with the Olympics? Check here for the newest updates

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Weekly Summaries

14th of June – 21st of June

Elections in Israel

The former Prime Minister, Benjamin Netanyahu was “formally ousted” by Israel’s parliament last Sunday. The new coalition government was then approved by a single vote (60 to 59) and one abstention. Israel’s new Prime Minister Naftali Bennett, who is said to be further right than Netanyahu, will be replaced by the centrist leader Yair Lapid in two years. In total, the new coalition government is made up of eight parties — including an independent Arab party for the first time in Israeli history — who have little in common due to their wide distribution among the political spectrum. This could mean trouble for the new government in the future, although they have announced that as the new coalition government, they will focus more on domestic issues instead of issues that divide them to provide some stability. The first step that the new Israeli coalition took on Tuesday was to announce their plans to “repair Israeli ties with the US,” the New York Times reported. However, at the same time, the Israeli military bombed parts of the Gaza Strip in the early morning hours last Wednesday after incendiary balloons were sent by the Hamas into southern Israel. So far, there have been no reports of casualties.

The G7 Summit in Cornwall

The first-in-person summit since the pandemic first began concluded last week. The countries that attended were the US, Canada, France, Germany, Japan, Italy, and the UK. Although the G7 countries were not able to reach agreements on all topics they wanted to address, they have planned a range of new policy approaches. You can read more about the G7 summit on Cornwall here: https://econir-web.com/2021/06/20/the-g7-summit-in-cornwall/

Other News

  • Ebrahim Raisi has won the election in Iran, becoming the new President. However, voter turnout, especially among the younger generation, was very low.
  • During the NATO summit, President Biden “reaffirmed his commitment to the alliance,” according to the New York Times. The union has also taken a harder stance towards China and Russia, saying that China’s growing military power and influence around the world may “present challenges.”
  • President Biden met with President Putin in Geneva. The meeting was described as “positive” by President Biden and as “constructive” by President Putin, with outcomes such as an agreement to “open U.S.-Russia talks on cybersecurity and arms control” (the New York Times) being made.
  • Britain and Australia have made a free-trade agreement, which is Britain’s first major trading deal since it left the European Union last year.