Will Lagarde and the ECB Survive this Inflection Point in Geopolitics?

• Will Lagarde and the ECB Survive this Inflection Point in Geopolitics?
  by Tom Luongo, https://tomluongo.me/
  Recently, ECB President Christine Lagarde shocked markets with surprisingly hawkish talk at her monetary policy press conference. Lagarde didn’t make any sudden moves in policy or anything.  The ECB has yet to end any of its bond-buying and internal debt-transfer alphabet soup projects, and won’t until Q3 at the earliest.
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  Markets were not prepared by her previously that she would set such a hawkish tone. Say what you want about FOMC communications policy, at least under Jerome Powell, they tell you what they are going to do and then do it. But Lagarde needed to do something dramatic because capital markets were moving quickly against her.
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  Traders stopped trying to disbelieve the illusion of Fed hawkishness and finally accepted what Powell was saying. For better or worse (and that debate was lively in this podcast I did with Peter Boockvar last week) the Fed will raise rates in March.
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  This isn’t an article about whether the Fed is making a policy error or not. This article isn’t even really about Christine Lagarde and the ECB. The actions of these two figures are downstream of the rapid changes occurring in the geopolitical landscape. Those changes forced Lagarde to jawbone the euro higher and stave off a collapse in credit spreads.
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  So bear with me as I link the new gas deal between Russia and China to the the splits within the Anglo/Euro political hierarchy. Because once I’m done I hope you’ll see the inflection point we now find ourselves in the geopolitical Great Powers game. So, back to Lagarde.
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  Central to Eurasia
  I’ve talked in recent weeks about what I think the real story is behind the US/UK push for war over the breakaway Ukrainian republics known as the Donbass.  In short, it is a manufactured crisis to engineer the independence of the European Union from the US/UK traditional forces which have pushed the world to its current state. Biden will get to look tough staring down the Russians with sanctions threats and the Germans will finally get their shiny, new natural gas pipeline which will solidify their political control over the EU.
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  read more.

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