Geopolitics Propels Bitcoin to $10,000

Indian, American, Australian and Japanese ships are to join together in a military exercise as China’s Communist Party (CCP) finds itself more and more isolated.

Very peculiarly CCP seems to think this is all just a Trump problem, even though Merkel told the Chinese foreign minister they need to open their market.

The problem is primarily economics and specifically the rule of law regarding business. Western companies operating in China should be entitled to an independent judiciary so that CCP can’t just take them over for example or shut them down by diktat.

Then free speech in China is now clearly a global matter, and therefore if Google for example has to censor to appease the CCP, plenty would see it as just protectionism in disguise.

We’ve argued China and America need to sit on a European table and get a new treaty between the three superpowers so that there can be a rule of law basis for economic cooperation.

Without such proper foundation, China’s economy may well become more isolated and although they say it is America’s choice, it is the CCP that has made China the only country of note to ban crypto exchanges, something that made clear their protectionist and authoritarian approach to many.

Rising Turkey

Following a failed coup against Recept Erdogan in 2016, Turkey has become more and more a regional player and fairly successfully.

Following a wave of refugees from a razed Syria after the involvement of Vladimir Putin in the country in 2012, Turkey probably found itself without much choice but to end the war there.

They did do so, and now many refugees are returning back to Syria, but new ones have been making their way to Italy from Libya, with quite a few of them tragically lost at sea.

The continued civil war in Libya is yet another diplomatic failure on the part of the European Union which has effectively outsourced its border patrolling to Turkey.

That’s in practice, rhetorically France is seemingly not very happy about this new role from Turkey with it not quite clear why they wouldn’t want to divide responsibilities especially as Italy seems to be on the side of Turkey while France is kind of on the side of Russia with it all a very big mess because clearly Europe has no tables at all.

They took the Kosovo-Serbia matter for example and at least got them to talk now with the two meeting again in September, but the point of talking is obviously to get to some sort of signed paper which they hopefully will, not to go on and on even 12 years after Kosovo declared independence and more than 20 years after it defacto became independent.

The absence of Europe is also visible in this Greeko-Turkey matter which has been allowed to get to the point of these current tensions that of course can very easily be exploited by less friendly regional powers.

Turkey basically says it’s unfair that Greek’s claims to water resources comes all the way to an island that is just two kilometers from Turkey, but some 500km from Greek mainland.

Greeks say that was some international agreement, Turkey says they never ratified it, France sent some carrier, now America is sending one.

Merkel has spoken to both so as Germany has the European Presidency, hopefully they will find a table somewhere to divide the sea in a way that from an objective point of view is more agreeable to all.

Another sea that has been divided is the Caspian but Iran has not ratified it yet. That used to be shared 50/50 between Russia and Iran, but after the fall of the Soviet Union there are many other countries bordering that sea now, and so an agreement was reached to fairly divide it proportional to however much coastline they have.

Some Iranian politicians however apparently think this is some sort of sell-out with their president under criticism there as hardliners gain more political influence, but obviously you can’t have that sea 50/50 between Russia and Iran when there are so many other countries, with the agreement reached after 20 years of negotiation objectively looking very fair to all parties.

This all matters because Azerbaijan, which borders the Caspian Sea, is to begin providing gas and potentially oil to Europe with the stanis also potentially going through Azerbaijan and all the way to Europe.

So while few cared in 2008 about what happened there, now Europe has to pay attention and so when clashes broke out between Armenia and Azerbaijan, you would have expected Europe to say something.

Instead it was Turkey that acted and very quickly on the side of Azerbaijan, as did Russia which effectively seemingly ‘ordered’ truce.

What exactly happened there is not clear, but the Armenians and Azerbaijanis appear from the outside to be effectively one peoples, but different religions and so slightly different cultures.

There is a territorial dispute over a small bordering region that internationally has been given to Azerbaijan, but is occupied by Armenia. The clash however was in a proper border area and in a strategic town according to Azerbaijan that connects it to Georgia through roadways and pipelines.

So when clashes broke out plenty were worried about who was planning what, but it may be both countries just want to finalize the border dispute and so finally get peace.

Here too Turkey played an important role to stabilize the region, but again a European table would be helpful.

Overall and from a very high level view Turkey appears to be acting in a responsible way as far as Europe is concerned with the country seemingly very keen to court the best side of Europe.

It has its own interests however, naturally, but it doesn’t look like any of those interests clash with European interests with Erdogan for example saying if it was today’s Turkey in the 90s, there probably would have not been a Sarajevo.

The Turkish people also appear to be very keen to be perceived as europeans, and therefore generally seem very friendly.

Bitcoin Barometer?

A study recently found that bitcoin is a hedge against geopolitical risks with these recent tensions probably contributing to its rise as gold has reached all time high too.

Yet bitcoin has its own additional factors, so its not quite a direct measurer of geopolitical risks with tensions in the caucus for example seemingly abating, in Libya there may even be peace, although there was a blackout there on Saturday, and in regards to the Mediterranean, Turkey has not quite followed through with a recent statement they would drill in what Greece considers their territory even though it is two kilometers from Turkey.

All these however may be fairly small matters compared to the US-China tensions where there may be some realignment depending on whether China and US are willing to get to some European table.

So placing a lot of responsibility on Europe which does have a role to play and should play it because stability and security is a key priority upon which everything else depends.

These scuffles near its own borders for example are not great facilitators of economic prosperity, yet they all seem to be somewhat easy matters from an objective point of view if there is a will to find tables and actually sign papers instead of just talk shops.

While the tensions with China might be something else as fundamentally they have a different political system, yet the West and China have peacefully co-existed for decades, with the latter finding much prosperity from it, so it’s more really just how willing China is to accommodate the west and how willing they are to hear us.

Despite what Trump says and in some ways rightly, the country is still a developing country outside of the skyscraper cities with the rule of law somewhat weak, but they do have an effective civil service and although Pompeo says distrust but verify, they probably can be trusted to enforce agreements if they are willing to sign them, although of course that would still need to be verified.

So when it comes to China it seems it is more their choice. The west doesn’t appear to have any because we have all seen what happens there can affect the entire world.

Thus either they loosen up a bit and get a more advanced political system, or at least move towards it, or they lose business to other countries according to what America has been saying.

Where bitcoin is concerned tensions make it useful as a hedge while economic prosperity makes it useful as a speculative asset with much innovation going on especially in ethereum, so whichever way, it is good for bitcoin of course and thus presumably we’d all prefer the prosperity way.

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