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Blain: European Banks Are The Most Successful Ponzi Scheme Of All Time

Blain: European Banks Are The Most Successful Ponzi Scheme Of All Time

“Lenin was right. There is subtler, no surer means of overturning the existing basis of society than to debauch the currency.”

I must post this line from one of my favourite Financial sector commentaries – Duncan Farr of Jeffries who covers banks: “Here we are 5 weeks ahead of Brexit, and the top 2 performing banks in Europe are Lloyds followed by RBoS.” If you ever wanted a clearer hint the supposed Brexit crisis and imminent collapse of UK plc might just be a fictitious political construct, then there you are.  Its fascinating just how sanguine the markets have become about the divorce. Sterling is up and who cares?

I have often been told I worry about all the wrong things. According to BAML, (reported on BBerg), the biggest fear of European investors currently is a Worldwide Economic Slump, with 30% of respondents citing it as their primary worry. Yep. I can see why that would be an issue. Only 2% of European investors surveyed by BAML rank Brexit as their primary fear. It’s not even in the top 5! (For the record, my primary fear is a Global Liquidity Storm – the sudden and catastrophic drying up of liquidity following a shock..)

Politics and markets are intertwined, but… maybe no longer in the case of Brexit? It’s just become background noise – meaning it; doesn’t matter, or we’re overly complacent. UK politics has never looked so dire. Markets appear increasingly disinterested. A new UK political party, and unstated threats a whole slew of ministers are set to resign if we get/don’t get a Brexit deal. Rumours are a deal is already inked with Brussels. Rumours are the Tory Brexiteers will reject it – whatever it says. It Theresa May is capable of getting together a deal in parliament – then this would probably be a good time..

 …click on the above link to read the rest of the article…

Merkel Stands Against Trump’s Energy Dominance

Merkel Stands Against Trump’s Energy Dominance

Merkel Stands Against Trump’s Energy Dominance

German Chancellor Angela Merkel’s speech at the Munich Security Conference this weekend was met with resounding approval from the gathering. Throwing barbs back at US Vice President Mike Pence over a myriad of issues Merkel expressed Europe’s dissatisfaction with the Trump administration’s belligerence and lack of diplomacy.

And that’s putting it mildly.

Trump’s pressuring Germany over the Nordstream 2 pipeline, withdrawing from the JCPOA and increasing NATO funding all have a common theme which even for an EU-firster like Merkel is a non-starter.

Trump is trying to make Germany’s economy uncompetitive by raising the cost of imported energy.

This is obvious when we look at the US’s opposition to Nordstream 2. Trump has made no bones about his distaste for the pipeline because he’d rather Germany, his ally, buy beautiful, clean LNG from Cheniere in Louisiana rather than from dirty, nasty gas from Russia, his enemy.

The other two issues, however, are just as energy-focused for Trump, or at least, economically-focused. Let’s start with Iran.

The JCPOA was signed in 2015 when it looked like the Operation to Blow Apart Syria for Fun and Profit was on the verge of victory. Giving Iran a lifeline to begin selling oil on the open market again was Europe’s ‘get’ in that war.

Turkey would ‘get’ Idlib, Aleppo, Afrin and Manbij. The Saudis and Qataris would ‘get’ gas pipelines into Europe. Israel breaks up the Shia Crescent with the newly-independent Kurdish territory and ‘get’ a US/Israeli campaign to undermine Iran’s government while leaving a hotbed of terrorism to export around the region.

Elijah Magnier called this creating a ‘Syrian jungle.’ I just call it vile.

But it didn’t work because of Putin, Hezbollah and the IRGC with China playing silent partner.

 …click on the above link to read the rest of the article…

The US Corporate Debt Bomb, Europe’s Recession, and Systemic Risk in China

The US Corporate Debt Bomb, Europe’s Recession, and Systemic Risk in China

Yesterday’s note caught a lot of attention.

In it, we argued that investing in stocks today based on the Fed getting dovish is like buying stocks after the Bear Stearns deal: you’re buying based on a development that reveals the financial system is in serious trouble.

Remember, the Fed didn’t become dovish for no reason… it because dovish because it sees systemic risk on the horizon.

Corporate America is perched atop a debt bomb of $10 trillion, of which roughly 1/3rd is junk… meaning unlikely to be paid back.

Rather than issuing debt to build factories or expand operations, these companies have been issuing debt to buy back shares, resulting in the system being MORE leveraged today than it was in 2007.

Over $700 billion of this debt comes due this year… at a time when 60% of US companies already have NEGATIVE cash flow.

Put another way, the debt is coming due at a time when most companies don’t have the money to pay it back.

Outside of the US, Europe is teetering on the brink of recession, with the latest industrial production numbers showing a year over year decline of 4.2%. This is the largest collapse since 2009, at the depth of the Great Financial Crisis.

Then there’s China, where despite claims to the contrary, the entire system is collapsing. The Central Bank of China just engaged in the largest liquidity pump of all time last month… meaning it spent MORE money propping up the system in January 2019 than it did at any point in 2008.

If things are fine in China, why is it doing this?

Again, structurally the global financial system is in SERIOUS trouble. Buying stocks today based on the idea that the Fed is not as hawkish as before is like buying stocks because of the Bear Stearns deal.

And deep down, the market knows it.

 …click on the above link to read the rest of the article…

Blain’s Morning Porridge – 11th February 2019

Blain’s Morning Porridge  – 11th February  2019

“A little bit of an altercation in the scrum, they’ll be laughing at that in Hawick.”

What a fascinating world we live in.

Amazon boss Jeff Bezos exposing himself, and exposes the National Inquirer for attempted blackmail. A young senator, Alexandria Ocasio-Cortez, snaring the headlines and proposing a preposterous New Green Deal – while further splitting the Democrats. Europe plunging back into recession. The UK no closer to a Brexit Deal (hang-on, that’s not a headline… that’s just… normal..) Deutsche Bank paying up to demonstrate it can borrow in markets. Santander facing a Euro 50 bln breach of promise lawsuit from Andreas Orcel (proving the Spanish banking adage: At Santander – you are either a Botin or a.. servant..) So much out there…

Are all these things linked? Yes – the world we live in determines the functionality of global markets. You might believe Washington Post owner Jeff Bezos was the victim of an Inquirer effort to “catch and kill” a story the paper has on Mr Trump’s activities in Moscow, or you might believe Deutsche Bank’s problems are part of a deeper malaise across European banking. Whatever… the news changes our perceptions. 

The trick is too separate the chaos of new flow from the tau of markets. Markets are linear functions of buy/sell – they are not necessarily about common sense. To illustrate: last week I wrote about Italy, pointing out just how hopelessly its ensnared and entrapped within the straight-jacket of the Euro, with little prospect of growth, employment or upside.

Yet Italian bonds are one of the top performing assets – AND WILL REMAIN SO – because the ECB can’t afford to let Italy go, and Europe sliding back into downturn pretty much ensures they’ll continue to bailout Italy and likely resurrect QE in some form – watch out for something like long-term repos.

 …click on the above link to read the rest of the article…

Washington plays Russian roulette with European lives by trashing INF Treaty

Washington plays Russian roulette with European lives by trashing INF Treaty

Washington plays Russian roulette with European lives by trashing INF Treaty

© Getty Images / Denver Post 

In a flash, the US has scrapped the 1987 Intermediate-Range Nuclear Forces (INF) Treaty, which safeguarded Europe and the world from a deadly US-Russia arms race. This is particularly bad news for Europeans.

Russia must be feeling a lot like the Native Indians these days with regards to treaties signed with the duplicitous Americans. For the second time in as many decades, the US has gone back on its word, removing another pillar from the global arms reduction architecture.

The Trump administration, in its infinite wisdom, announced on the weekend it would freeze US participation in the INF “for 180 days,” which, from a military perspective, must be interpreted to mean forever. In the spirit of reciprocity, Vladimir Putin, expressing regret that Russia “could not save” the Cold War treaty, said he would be forced to follow suit.

The Russian leader emphasized, however, that Moscow would not deploy intermediate or smaller range weapons “until the same type of American weapons” were placed in Europe or elsewhere in the world.

This latest ratcheting up of tensions between Moscow and Washington was wholly avoidable – that is, if avoiding confrontation is a goal of the US. Clearly, it is not. The unpredictable hotheads now dictating foreign policy in the Trump administration, particularly National Security Advisor John Bolton, a veteran hawk who the Washington Post recently calleda “serial arms control killer,” have somehow concluded that playing a game of nuclear chicken on the European continent with Russia is the best way to resolve bilateral issues.

The White House appears to be incensed over Russia’s upgrade of a cruise missile, the ‘9M729’, which it claims exceeds the 500-km flight threshold set down by the treaty. The INF treaty specifically banned the development, deployment, and testing of ground-based missiles with a range between 500km and 5,500km (310-3,400 miles).

 …click on the above link to read the rest of the article…

NIRP, Cash Bans and Wealth Taxes Are Coming to the US

NIRP, Cash Bans and Wealth Taxes Are Coming to the US

If you’re looking for a template for what’s coming to the US during the next crisis, Europe is the place to start.

Europe has already imposed cash grabs via Negative Interest Rate Policy (NIRP). That’s where banks CHARGE you for the right to keep your money.

Europe is also where ATMs and banks have limited cash withdrawals, so people who try to avoid paying the interest caused by NIRP face obstacle after obstacle as they try to get their money out.

Europe is also where regulators seized over 50% of deposits over a certain amount in order to prop up a failing bank. It’s called a “Bail-In” but it was abject theft.

If you think these things aren’t coming to the US, you’re mistaken. As I detail out in my best-selling book The Everything Bubble: The Endgame For Central Bank Policy the political elite have already been looking into ways to implement ALL of these strategies.

And if you think this will only be targeted at the very wealthy, consider that the IMF has already proposed a 10% wealth tax on NET wealth for everyone.

Europe Launches SWIFT Alternative To Fund Iran In Collision Course With Trump

Europe Launches SWIFT Alternative To Fund Iran In Collision Course With Trump

In a move sure to unleash fury from the Trump administration, the European Union has announced it has set up a transactions channel with Iran to bypass US sanctions. The launch of INSTEX — or “Instrument in Support of Trade Exchanges” — by France, Germany, and the UK will allow non-dollar trade with Iran and is being described as facilitating humanitarian goods-related transactions only, including food, medicine and medical equipment.  

Long anticipated, Thursday’s EU announcement marks the most concrete action Europe has taken to thwart Washington sanctions after the US pullout of the 2015 nuclear deal last May, and after SWIFT caved to US pressure. Europe is hoping the mechanism will act as a legal means to preventing Tehran from quitting the JCPOA, which promised sanctions relief should the country halt nuclear weapons research and development. INSTEX is expected to receive the formal endorsement of all 28 EU members, which aims to encourage skittish pharmaceutical and agricultural companies to the table with Tehran after many stopped doing business in Iran for fear of US economic retribution. 

The Iranians welcomed the new mechanism: “It is a first step taken by the European side… We hope it will cover all goods and items,” Iranian Deputy FM Abbas Araqchi told state TV, referencing EU promises to stick to its end of the nuclear deal. 

INSTEX will reportedly be based in Paris and run by a supervisory board chaired by the UK and managed by a German banking expert, and has further been described in European media as “expandable,” which is likely to provoke a reaction from the United States, especially after Washington was able to pressure the Belgium-based SWIFT financial messaging service to cut off the access of Iranian banks.

…click on the above link to read the rest of the article…

The America Problem

The America Problem

Way back when the West was pressuring the apartheid government to commit suicide on behalf of its people, they did a remarkable thing. They sequestered their nuclear program, making sure the information and material would not fall into the hands of whatever came after apartheid. It was remarkable, because no other state has voluntarily abandoned its program for the good of the world. Governments just don’t do that, but the South Africans did and a huge potential problem down the line was averted.

The reason this is worth thinking about is there are other unstable states, with lots of military technology. Pakistan is an obvious example. There is a better than even chance they have sold nuclear technology to other Muslim governments. They have most certainly been working with North Korea. Israel has nuclear weapons and they have advanced delivery systems. These are two countries that could fall into chaos or have their government overthrown. It’s not likely at the moment, but it is possible.

A bigger concern is America. There’s no getting around the fact that America is in bad shape in many important ways. The wizards in the Federal Reserve have been able to use creative ways to maintain the debt bubble, but everything comes to an end eventually. The demographic changes going on in the country are creating very serious fissures regionally, ethnically and economically. Just look at how aggressive and radical the political talk is these days. America looks very brittle right now.

If you are doing long term planning for the EU or a European government, you have to be looking at America and thinking about the Crisis of the Third Century. It’s not a perfect analogy, but it is a pretty good one. Like the Roman Empire, the American Empire is militaristic, the dominant military power and politically fragile. Like the Romans, America appears to be critically short of intellectual firepower in its ruling elite. Who knows, maybe Washington has a lead pipe problem, but it does have an IQ problem.

 …click on the above link to read the rest of the article…

Bailing Out Member States: The European (Dis)Union

Bailing Out Member States: The European (Dis)Union

Over the years, my good friends at Capitalist Exploits (I highly recommend subscribing) have put together a number of outstanding thought pieces on where they see things headed.

They recently came out with a great overview of where Europe is headed. The trends they highlight are both interesting and actionable for those willing to put the time into thinking through the consequences of the new “Strongmen of Europe.” The EU has now had a decade of economic crisis and is slowly moving from economic crisis towards a full-fledged political crisis which will be its ultimate undoing. There will naturally be many actionable trades along the way. Most important amongst these will be;

  • Increased inflation
  • Issues with energy security
  • Increased national sovereignty
  • Ultimate breakup of the EU

Having a roadmap, gives you the ability to stay a few steps ahead of events with your positioning. With that in mind, I suggest you read the roadmap from Capitalist Exploits. While I don’t agree with everything that they point out, it is those minor disagreements that make late night Skype calls so interesting…

What Lies In Store For 2019 –  Specific Focus: The European (dis)Union

There is so much going on that it can be hard to know where to look without throwing your hands up in the air and saying, “oh fuck it, I give up”. The problem is ignoring problems doesn’t make them go away, and if we get it wrong, we could end up seriously regretting decisions made today.

I’ll be honest with you, we’ve spent time reviewing much of what is taking place in the world at the moment. Not here with you, but with my team and often inside my wee head, hunched over my keyboard at 1AM after tossing and turning annoying my gorgeous wife and getting out of bed to look into something that’s bugging me and keeping me from sleep.

 …click on the above link to read the rest of the article…

Europe’s Debt Crisis: Challenges for the Left, Confronting the Creditors

Europe’s Debt Crisis: Challenges for the Left, Confronting the Creditors

Second part of the interview given to LVSL. Here, the first part:

The Doctrine of Odious Debt. Break the Taboo on Odious Debts and Their Repudiation

LVSL: If we look at the case of Greece in 2015, we see that there was a change of regime when Syriza and Alexis Tsipras came to power, with strong popular support. And yet in the end, Tsipras downplayed and ignored the work of the Truth Committee on Greece’s Public Debt, which you worked for. What are the political factors that interfered with this movement towards a possible repudiation of a portion of Greece’s debt? 

Eric Toussaint: Yes, it’s obviously extremely important to analyse the case of Greece. In fact it was simply a matter of Alexis Tsipras being unable to adopt a strategy that was appropriate to the actual context in which Greece found itself. If you look at the Thessaloniki Programme presented in September 2014, which is the platform on which he was elected in January 2015 (see the excerpts from the programme in my article), there was a whole series of very important commitments in it that included a radical reduction of the debt. There were measures that would have brought about radical changes concerning the brutal austerity measures that were being taken, the privatisations, and the way in which the Greek banks had been bailed out. As Prime Minister, Tsipras took an approach that was not at all consistent with his programme and with the commitments he had made.

But what is extraordinary, and absolutely needs to be underlined in Tsipras’s case, is that a few days after he was elected in January 2015 and formed his government, before he had taken any measures whatsoever, on 4 February the ECB cut off the normal flow of cash to Greece’s banks (see this and this).

 …click on the above link to read the rest of the article…

Here’s How Europe’s Nationalist Parties View The EU

Europe’s most conservative parties – some of which are still relatively young, have been rapidly gaining support over the last several years as nationalists across the continent speak out in opposition to mass migration, high taxes and the open-border policies espoused by globalist leadership.

Ahead of the upcoming European Parliament elections in May, many have been wondering what the various nationalist parties think of the EU. Answering that question is Germany’s public international broadcaster, Deutsche Welle.

***

AfD (Germany) — 1 MEP

AfD leader Gauland has stopped short of demanding Germany leave the EU
Post-war Germany’s most successful far-right political party finally set out its position on the EU at a party conference on Sunday.

The new AfD European election manifesto says Germany should abandon the euro currency. That position that can be traced to the party’s euroskeptic origins in 2013, when the AfD was founded as a direct protest against Brussels’ plans to bail out Greece in the aftermath of the European financial crisis.

But despite a concerted effort from the party’s hardliners, the AfD has stopped short of demanding that Germany leave the EU altogether. “Whoever toys with the idea of a Dexit also needs to ask themselves if this is not a utopia and should we be more realistic,” party leader Alexander Gauland told delegates at the party conference in Riesa, Saxony.

That compromise means the AfD supports restricting the EU to economic cooperation and opposing a joint EU defense and foreign policy.

National Rally (France) — 15 MEPs

As one of the oldest far-right parties on this list, France’s National Rally (known as the National Front until last summer) has held a number of different positions in its past. A basically a pro-European party intially, the FN u-turned in the early 2000s, when leader Jean-Marie Le Pen called for France to leave the EU and re-introduce the franc.

…click on the above link to read the rest of the article…

Europe on the Brink of Collapse?

The Empire’s European castle of vassals is crumbling. Right in front of our eyes. But Nobody seems to see it. The European Union (EU), the conglomerate of vassals – Trump calls them irrelevant, and he doesn’t care what they think about him, they deserve to be collapsing. They, the ‘vassalic’ EU, a group of 28 countries, some 500 million people, with a combined economy of a projected 19 trillion US-dollar equivalent, about the same as the US, have submitted themselves to the dictate of Washington in just about every important aspect of life.

The EU has accepted on orders by Washington to sanction Russia, Venezuela, Iran – and a myriad of countries that have never done any harm to any of the 28 EU member states. The EU has accepted the humiliation of military impositions by NATO – threating Russia and China with ever more and ever more advancing military basis towards Moscow and Beijing, to the point that Brussels’ foreign policy is basically led by NATO.

It was clear from the very get-go that the US sanctions regime imposed on Russia and all the countries refusing to submit to the whims and rules of Washington, directly and via the EU, was hurting the EU economically far more than Russia. This is specifically true for some of the southern European countries, whose economy depended more on trading with Russia and Eurasia than it did for other EU countries.

The ‘sanctions’ disaster really hit the fan, when Trump unilaterally decided to abrogate the “Nuclear Deal” with Iran and reimpose heavy sanctions on Iran and on “everybody who would do business with Iran”. European hydrocarbon giants started losing business. That’s when Brussels, led by Germany started mumbling that they would not follow the US and – even – that they would back European corporations, mainly hydrocarbon giants, sticking to their contractual arrangements they had with Iran.

…click on the above link to read the rest of the article…

Integrity Initiative And Affiliates Behind Multiple Attacks On Disobedient Media

The influence of the group and its contacts stretches from news outlets in Europe to Washington DC insiders to Silicon Valley. Multiple reports published by Grayzone, the World Socialist Website and others map this infinite array of relationships, which we will not endeavor to outline in full here.

The revelation is not merely an embarrassment to some factions within the British intelligence community, but represents a glimpse into the inner workings of the propaganda machine that keeps the plutocratic class in control of the public.

John Pilger once wrote of Edward Bernays, the founder of modern propaganda: “Bernays’ influence extended far beyond advertising. His greatest success was his role in convincing the American public to join the slaughter of the First World War. The secret, he said, was “engineering the consent” of people in order to “control and regiment [them] according to our will without their knowing about it. He described this as “the true ruling power in our society” and called it an “invisible government.”

It is this same invisible controlling force that has been exposed at work in the anonymous hack of the Integrity Initiative.

Grayzone’s Mohamed Elmaazi and Max Blumenthal summarized the scandal, writing:  

…click on the above link to read the rest of the article…

As Germany and France Come Apart, So Too Will the EU

As Germany and France Come Apart, So Too Will the EU

If we follow the logic and evidence presented in these seven points, we are forced to conclude that the fractures in France, Germany and the EU are widening by the day.
When is a nation-state no longer a functional state? It’s an interesting question to ask of the European nation-states trapped in the devolving European Union. Longtime correspondent Mark G. recently posed seven indicators of dissolving national sovereignty; here’s his commentary:
“RE: The Ghosts of 1968 (February 14, 2018):
In France the “Ghosts of 1968” have become the Poltergeists of 2018. This looks like another real watershed in European and world history. Once again Parisian mobs have appeared and have collectively realized they now hold the real power. And their issues are all anti-EU (European Union) and anti-NWO. (New World Order)
I’m honing my German Collapse Scenario as more data flows in, as it is in ever-faster and larger quantities. ‘Germany’ will implode in parallel with the EU.
So-called ‘states’ with:
1. no effective military forces
2. no control of their own borders
3. no control of their currency and banks
4. a government with a ‘diverse’ population in which the majority either has no loyalty to Berlin (recent ‘refugee’ immigrants) or has dropped its loyalty (large parts of Bavaria and Baden-Wurttemberg), and which is also losing the allegiance of the many eastern European immigrants in Germany. These people are among the most energized opponents of the ‘refugee’ influx.
5. Fast rising anarchy and lawlessness by the recent ‘refugee’ immigrants, and which is well known to the population, as are the official orders to the police to minimize crime statistics reporting by not opening official cases.
and
6. A mass media believed by no one due to the bald lies it broadcasts 24/7 daily about numbers 1-5.
…will soon cease to exist. This is confirmed by:

…click on the above link to read the rest of the article…

Europe is Burning

Johannes Vermeer The soldier and the laughing girl 1657

There will be elections for the European Parliament on May 23-26 2019. They will likely change the face of Europe more than anything has done since the EU was founded. That is not some wild prediction. Many European countries have held elections since the last European elections in 2014, and just about all had outcomes that shook up domestic political ratios.

In most cases, countries went from traditional parties to newly founded ones. France erased the Socialists and center-right in 2017, and the final round of the presidential elections was between Marine Le Pen’s Front National and Emmanuel Macron’s brand-new En Marche. Macron won sort of by default, because France as a country would never have voted for Le Pen.

In Italy, M5S and Lega have taken over. In Germany, Merkel’s CDU/CSU coalition lost bigly though it remained the biggest party, but Angela lost her ‘socialist’ SPD partner which gave up so much it didn’t want to be in government anymore. In Spain, Mariano Rajoy’s center right lost enough to cede power to the Socialists who came up tops because they played a smart game, not because the Spanish wanted it to rule.

We don’t have to go through all 27/28 different countries to establish that there are almost tectonic shifts happening all over, away from traditional parties and towards whoever showed up without insanely extreme views. And if you think this move is now completed, you may want to think again.

It’s amusing to realize that the country with the biggest political shift, the UK, is the only one that still hangs on to its traditional parties, and seeks its protest voice in a different way, namely through Brexit. That is, Britain shows it can get no satisfaction from the EU, whereas in the other major EU nations the dissatisfaction is projected onto domestic parties.

 …click on the above link to read the rest of the article…

Olduvai IV: Courage
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