Syriza won over the weekend. They’re just two votes short of an outright majority in the Greek legislature, but that has not deterred them. They’ve formed an alliance with the right wing party called Independent Greeks to give them a majority. Picture a left wing and right wing party joining together. One of the few things they agree on is that austerity hasn’t worked, and Greece needs to renegotiate its agreements with the EU. At a minimum. And if the EU doesn’t agree – which they have said all along they would not – then Greece will likely vote to leave the EU and return to the drachma. Returning to the drachma means devaluing the currency and defaulting on their debts. Others have done it before and recovered. Some have been serial defaulters. Here we go again with the musical chairs!

On a slightly different front, the EU is currently engaging in QE, as we discussed in the last post. So QE, at the same time as a restive Greece rattles the German’s cage, must be really irritating the boys and girls from Deutschland. Oil price reductions won’t benefit Germany much, and in fact makes their push to solar and wind less cost-effective, compared to oil and gas prices. Germany is reeling, and ready to react. So everything is happening as predicted, and we’re just awaiting the spark. Oh – and combine this with the Swiss Central Bank unpegging the Swiss franc from the Euro. That effectively devalued that currency by 20% in one day. The EU is probably happy about that, in a way. Makes their exports cheaper. But those people that borrowed in Swiss francs now owe more than they did before – 20% more. Picture your mortgage payments increasing by 20%. Ouch.

In the meantime, back in the Middle East, things are getting really interesting between Congress here and Iran’s mullahs there. Congress is threatening additional sanctions if there’s no agreement by June. Iran’s mullahs – never happy with the idea of negotiating away their power base in the Middle East – are happy to see the talks collapse so they can go on spinning those centrifuges until uranium comes out. Then what? With the oil price drop hurting Iran as much as Russia, it’s hard to see that having an atomic weapon helps them very much. As we’ve discussed before, they can’t use it on their immediate enemies without killing themselves – to a large degree. So what’s the game here? When you’re a theocracy, you don’t have to make sense to anybody but the theocrat on the top. And it’s difficult to say what that old man wants. He’s tricky. On a slightly different front, John Boehner invited Bibi Netanyahu to speak to Congress in support of increasing sanctions against Iran. That’ll really cool things off, eh? Not only is it a slap at Obama, it’s a clear sign to the world that the U.S. government is woefully divided. Ouch x 2. So everything is happening as previously predicted, and we’re just awaiting the spark.

Then there’s Ukraine. Whatever peace accord existed before, it’s gone now. A bus was hit by a mortar (and regular arms fire, from the picture); men and materiél are flooding into eastern Ukraine from Russia and both sides are blaming each other. An unsettled, jingoistic Russia is a really dangerous place. The Russian finance minister went to Davos saying that Russia will never ‘give up Putin to the west’, meaning he will have support from the masses. Some pundits think the renewed fighting in eastern Ukraine is in reaction to Obama’s State of the Union speech, describing Russia’s economy as being ‘in tatters’. Maybe so, maybe not. But support from the masses is irrelevant in the oligarchy we call Russia – as it’s been throughout Russian history. This time, when the really rich guys get together, I predict that Putin will quietly be retired to his castle and someone else will take his place – someone interested in making peace with the west. But how long will that take, and how much damage will be done in the meantime? The finance minister says two years – I find it hard to believe they can last that long, with the price of oil at its current level of less than $50/barrel. And in the meantime, could Putin decide to push all his chips in the middle of the table, and attack a NATO country? Possibly. So everything is happening as recently predicted, and we’re just awaiting the spark.

Spark, spark, spark. Where will it ignite, and what will be the result? That is the question. This altogether feels like the 1930’s, leading up to WW II. So maybe these are the 2010’s, leading up to WW III. Frankly, I wouldn’t be surprised by that at all.

POSTSCRIPT: That last picture came from a Youtube video that says the Federal Reserve is to blame for all the disastrous wars and policy decisions made by America since the early 70’s. It is a classic case of connecting facts with faulty reasoning. I am confident that a world conflagration is in the offing if stupidity continues to be practiced in key parts of the world. But when it occurs, it certainly will not be as a function of anything Janet Yellen or Ben Bernanke or Paul Volcker decided to do when they ran the Fed. That’s Tea Party thinking, and it’s wrong. So don’t believe any of their baloney. Why? Because I said so. And because it’s just stupid. If you want to blame anybody – or trace any dastardly behavior back to any one individual – good luck. It just don’t work that way now. As I’ve written before, we have a severe shortage of really bad guys these days. No Hitlers, Stalins or Kaiser Bills to hold up and hate. But a picture of Janet Yellen as target practice? Oh puhlease. Nope. As alluded to above, a third world war will start with a spark. Like Gavrilo Prinzip ignited to start WW I. Like Hitler ignited when he couldn’t be happy with just Austria, Czechoslovakia and the Sudetenland. He just had to have Poland too. Like the Gulf of Tonkin incident. Like the attack on Ft. Sumter. Like Lexington and Concord. Which spark will do it this time? Time will tell…time will tell.