In the US, the midterm elections have thrown up an interesting result. The Democrats have retained the Senate while the Republicans have won the House of Representatives. Governor Ron DeSantis has won a resounding second term. Candidates backed by Donald Trump have fared less well. The predicted red wave never materialized and many Trumpsters have been left high and dry.
Consequently, DeSantis is in pole position to lead the Republican Party. Trump has not thrown in the towel though. He still fancies a third tilt at the White House. The stage is set for a gunfight-like showdown.
Donors are now abandoning Trump and lining up behind DeSantis. Stephen Schwarzman, a private equity billionaire, has bet on DeSantis as well. Trump launched his presidential campaign early to stave off the young pretender to his throne. Yet that tactic is not working. For donors, DeSantis offers all that Trump does in terms of ideology and policy positions without the brashness or baggage of the combustible former president.
In the US and the rest of the world, the economy is in trouble. Interest rates are rising and stock markets are falling. Fear of recession stalks the land.
For years, central banks — in particular, the Federal Reserve — followed a policy of quantitative easing. De facto, they printed money and flushed liquidity into the economy. Furthermore, governments spent more than they earned, especially during COVID times. Loose monetary and fiscal policies were a toxic brew. When Russia invaded Ukraine on February 24, 2021, the global economy suffered a supply shock. Inflation skyrocketed. Central banks had no option but to raise interest rates. This means higher mortgage payments, more expensive debt and rising cost of living.
India-China Border Clash
Even as the global economy stutters, two big Asian powers are clashing. China is a global superpower next only to the US. The Middle Kingdom has emerged as the workshop of the world. Yet, under President Xi Jinping, China has been overly aggressive, particularly with its neighbors. Its zero-COVID policy failed spectacularly and sent the Chinese economy into a tailspin. China’s reputation as a reliable global supply chain partner has suffered a major hit, especially during the COVID pandemic.
India has emerged as an increasingly more reliable economic partner for the West. That is why many American companies are looking to invest in and import from India. Most recently, India has become the new home for assembling iPhones. Indian and US troops have also conducted joint exercises together in Uttarakhand, a state bordering Tibet.
India has also been building roads and infrastructure along its border with China. It is modernizing its military. There is also the issue about the succession to the Dalai Lama and the future of Tibetan Buddhism, issues we will discuss in our next podcast.
In short, tensions between India and China are on the rise. Recently, their troops clashed near Tawang. This is the only area of traditional Tibet outside Chinese hands. Reportedly, Chinese troops intended to take over Yangtse heights but Indian soldiers beat them off. As his zero-COVID policy has failed and the Chinese economy has tumbled, Xi has stoked the fires of aggressive nationalism. This has increased tensions with Taiwan and now with India too. [Matthew Knudson wrote the first draft of this introduction to the podcast.]
The views expressed in this article/audio are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.