Bitcoin Unmoved on New AUKUS Geopolitics

America has stabbed France in the back according to the French foreign minister after Australia cancelled a $90 billion contract for French subs to get US-UK nuclear powered ones.

Let’s not overblow this, say the Americans. It’s just the loss of a lucrative contract, say cheeky Brits. France is humiliated, say the French while accusing USA of “duplicity, a major breach of trust and contempt.”

Australia says they should have known France was not doing a great job supplying those submarines anyway. France says Australia asked them to retrofit the nuclear powered subs into diesel, and now goes off to America for nuclear subs.

This is UK’s downpayment on global Britain, says Washington. They’re just USA’s vassal, says France.

This threatens the “coherence and unity of the west,” says the German ambassador to the United Kingdom.

Malaysia says this may spark a new arms race in the Indo-Pacific. New Zealand may go with Europe, say some commentators. France may give India nuclear powered subs, say some others. All this is cold war mentality, says China. Putin says nothing.

Bitcoin also says nothing. The crypto has maybe appreciated a bit from $47,000 to $48,000, but this geopolitics correlated asset is saying at least for now that nothing is quite happening.

That’s maybe because what may be happening is what the market might have expected to happen, not in regards to these specific details but in regards to the general potential direction of these three continents.

The Dance of Peacocks

America is back, back to its old way of doing what it wants in a with us or, maybe there isn’t a not with us this time but you’d think they’d like to split the world into the American empire and the Chinese empire, with rich and sophisticated Europe within the American empire of course.

Just like the old times, but Europe is not following, just like in 2003. This may be America’s attempt to let them know what the cost of not following might be. France has interests in the Indo-Pacific, they say, they have to follow basically.

This may backfire because France has not forgotten that other humiliation in 1956 when USA forced them and UK out of Suez canal, which their shareholders owned. At that point both France and UK learned there’s a bigger kid on the block. UK concluded they have to be their little buddy, while France decided they have to become a big kid too through a European Union.

That’s at least the standard explanation of the outcome of that crisis with the recent events somewhat mirroring it. Just as in Iraq, UK is cheering on USA. France though is getting that lecture about ‘freedom’ again with some British papers saying only the anglosphere can stand up for ‘freedom’ of course.

Germany also said something about western unity back then, but neither France nor Germany quite did anything except watch its neighborhood be ravaged by war which may have contributed to the economic stagnation both in the EU and in UK.

But this time the focus is quite far from Europe, which may well mean it gets to benefit like China did when it stayed out of all that 2003 stuff.

Germany has announced a policy of “the third way.” That can be summarized as Europe is not with America or with China, Europe is with Europe.

Neutrality some call it, which America perhaps doesn’t like at all, but they got over it in Iraq and they’ll get over it here too because America has a lot more to lose by antagonizing Europe, including the kicking out of its tech monopolies to replace them with European ones.

Europol could be doing a lot more, to have learned about this secret deal for example, which French intelligence may well have, although who knows.

It will now be forced to do a lot more. If China attacks Taiwan while Russia moves into the Baltics for example, America may well see the former as their problem and the latter as Europe’s problem.

So an EU army is inevitable you’d think, and that may translate to European nuclear subs as France learns from USA’s example.

Germany wants such an army as it’s the only way it can contribute. France too because it is too small on its own. Italy will certainly join. The Benelux. Austria obviously. Romania and Bulgaria as kind of… yeah we euro bros too. Greece definitely would join. The Baltics would have no option as they’re clearly more in Europe’s interest than America’s. The c&b boys up there would join. The Czechs may huff and puff, but what they gone do. Poland has to make itself clear, but who would care. Spain may in or out, but it’s both who would care and what choice is there if Germany, France, Italy, the Benelux, Austria and one would hope Sweden because their intelligence seems good, as well as Finland and Greece and others get to join.

The big problem then would be the Balkans. A European army you’d think would make NATO obsolete, although not necessarily and not instantly but a European army may largely replace it as it can secure its own interests in its own continent.

So can Turkey and countries like Albania and North Macedonia join the EU army while not necessarily being part of the EU? If not, would there be a NATO like EU-Turkey etc alliance? If not, would there be one with the Balkan countries? If not then Turkey or Russia would give it to them and that may cause problems for the whole continent, even existentially so as Balkan stuff tends to spread globally. So the Balkan NATO guys would probably be EU army or NATO like allies.

The other question is whether such an EU army would be purely defensive or whether it can act for continental interests? You’d expect them to say the former, but Czechs already say France would send them to Africa.

That would depend on whether it’s a replacement army or a supplemental army, something like 20% of each country’s soldiers go to the EU army.

Naturally it will start off as the latter, with big projects like subs or jets or maybe drones then under the EU army umbrella.

That would go some way towards continental independence, but arguably Europe can’t quite be independent without an independent policy towards Russia and Turkey in particular.

It may well be that even Europe itself is too small, with an alliance between EU-Russia-Turkey being ideal if it is to match the influence of America.

The big problem there where it concerns Russia is Putin himself. He has been a good boy really recently, quiet and all that. But there’s just too much baggage in some ways. The invasion of Ukraine has kind of made a restart very difficult as was seen at the EU summit. He has to go for Europe and Russia to integrate a bit more, but he has removed term limits so though he is getting old and been at the top for two decades, he might stay on which may not be to the benefit of Russia.

Still one has to play the cards dealt, and Europe has a complex, but potentially a winning board where securing its own oasis and prosperity within it is concerned.

Then other countries can have a choice too. Not just with US or with China, but also with Europe. That should serve the continent a lot better than during the Cold War when it was split in half, and it would serve its neighborhood a lot more as Europe has an interest in the security and prosperity of its neighborhood, while also serving the entire world because choice can only be good.

America therefore maybe has to get used to Europe saying no, while quite often saying yes, because what is in America’s interest can at times be to Europe’s detriment, its tech monopolies being one example.

China has to consider that while Europe is different from America, it isn’t completely different. To the contrary, it has plenty of similarities.

Yet some similarities are maybe confused. Both Europe and America have an interest in upholding human rights for example, and when Europe does so it’s not quite a ‘stick,’ but a representation of its own citizens whom are from across the globe.

Russia’s interest spans both China and Europe, but it is culturally European, as is Turkey largely speaking.

Europe’s interest spans both America and China, as well as its neighborhood including Africa and Arabia.

All this so creating a complex picture of interests and potentially alliances, which comes with the risk of the dance of alliances that occurred more than a century ago.

Maintaining independence and not being with either Germany or England may have been the best move at the time, just as Europe seems to be saying they’re not with America or with China, but with Europe.

Something expected maybe, with this US-EU spat thus perhaps not coming as a surprise, but just what that means in practice and how it will be navigated remains to be seen as for now it seems all the market has learned is a confirmation that Europe and America will go their own way in regards to China, with the new question now so being just what that will mean for EU-US relations, if anything.