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Italy Threatens To Stop EU Funding Unless Other States Accept Refugees

Europe’s refugee mess is back with a bang.

On Thursday, out of the blue, Italy’s Deputy Prime Minister Luigi Di Maio threatened to stop financial contributions to the European Union next year unless other states agreed to take in migrants being held on a coastguard ship in Sicily. The Italian’s ultimatum comes less two months after Europe triumphantly announced a “vaguely worded” deal  on how to resolve the continent’s migrant influx.

If tomorrow at the meeting of the European Commission nothing is decided on the redistribution of migrants and the Diciotti ship, I and the entire Five Star Movement are not willing to give 20 billion to the European Union,” Di Maio said in a video posted on his Facebook page.

He echoed statements by Interior Minister and Deputy Premier Matteo Salvini, who has refused to allow 177 migrants to leave the Italian coastguard ship Ubaldo Diciotti, which is docked in the Sicilian port of Catania. While Italian prosecutors opened an investigation into the detention of the migrants and 29 children were allowed to disembark, Salvini still won’t allow the rest of the people to come ashore and has attacked the EU for its “cowardly silence.”

Salvini described those aboard as “illegal immigrants,” and said they won’t be allowed to step foot on Italian soil. Instead, he insisted fellow European Union nations take in some of the asylum-seekers.

“Italy’s no longer Europe’s refugee camp,” he tweeted. “Upon my authorization, no one is disembarking from the Diciotti.”

Salvini, who is also interior minister, was defiant in the face of a criminal probe into possible kidnapping charges for forcing the migrants to remain on the vessel. The chief prosecutor from the Agrigento court, Luigi Patronaggio, on Wednesday boarded the Diciotti and said afterwards he had opened a probe against “unknown” persons for holding the migrants against their will.

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

Germany Calls For Global Payment System Independent Of The US

In a stunning vote of “no confidence” in the US monopoly over global payment infrastructure, Germany’s foreign minister Heiko Maas called for the creation of a new payments system independent of the US that would allow Brussels to be independent in its financial operations from Washington and as a means of rescuing the nuclear deal between Iran and the west.

Writing in the German daily Handelsblatt, Maas said “Europe should not allow the US to act over our heads and at our expense. For that reason it’s essential that we strengthen European autonomy by establishing payment channels that are independent of the US, creating a European Monetary Fund and building up an independent Swift system,” he wrote, cited by the FT.

Maas said it was vital for Europe to stick with the Iran deal. “Every day the agreement continues to exist is better than the highly explosive crisis that otherwise threatens the Middle East,” he said, with the unspoken message was even clearer: Europe no longer wants to be a vassal state to US monopoly over global payments, and will now aggressively pursue its own “Swift” network that is not subservient to Washington’s every whim.

German foreign minister Heiko Maas

Swift, a Belgium-based global payment network, enables financial institutions worldwide to send and receive information about financial transactions. The system’s management claims Swift is politically neutral and independent, although it has previously been used to block transactions and enforce US sanctions against various countries, most notably Iran.  In 2012, the Danish newspaper Berlingske wrote that US authorities managed to seize money being transferred from a Danish businessman to a German bank for a batch of US-sanctioned Cuban cigars. The transaction was made in US dollars, which allowed Washington to block it.

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

Fate Of Key Gas Pipeline In The Balance As Putin, Merkel Begin Meeting

“Russian influence will flow through that pipeline right into Europe, and that is what we are going to prevent,” an unnamed U.S. official told the Wall Street Journal just as Russian President Vladimir Putin and Chancellor Angela Merkel meet outside of Berlin on Saturday centered on the two countries moving forward with the controversial Russian-German Nord Stream 2 gas pipeline, but also involving issues from the Iran nuclear deal to ending the war in Syria.

Intense pressure from Washington is overshadowing the project, construction of which is already in advanced stages, as the WSJ citescurrent and former US officials who say sanctions are under discussion and could be mobilized in a mere matter of weeks.

These potential sanctions, ostensibly being discussed in response to US intelligence claims of Russian interference in the 2016 election,could target companies and financial firms involved in the massive pipeline’s construction.

This comes after comments from President Trump at the opening of a NATO summit in July made things uncomfortable for his German counterpart when he said that Germany is so dependent on Russia for energy that it’s essentially being “held captive” by Vladimir Putin and his government.

“Germany is captive of Russia because it is getting so much of its energy from Russia. They pay billions of dollars to Russia and we have to defend them against Russia,” Trump told NATO chief Jens Stoltenberg at a televised opening breakfast.

The pipeline has been opposed by multiple US administrations, who have long accuse the Kremlin of seeking to accrue political leverage over Europe given the latter’s already high dependence on Russian natural gas. The pipeline has been a frequent talking point and target of attacks by Trump, who has threatened to escalate the trade war against Germany going back months if it supported the construction of the pipeline.

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

The Baltic States Never Stop Their War Preparations Against Russia

The Baltic States Never Stop Their War Preparations Against Russia

The Baltic States Never Stop Their War Preparations Against Russia

The hue and cry over the possibility of a Russian attack on the Baltic states has grown all out of proportion. NATO is using its “Russian boogeyman” campaign to boost its military presence in the region. With Moscow accused of harboring evil plans, a robust military infrastructure is emerging in the immediate proximity of Russia’s borders. The US footprint is huge. Whatever Russia does (such as deploying its forces or conducting military exercises), it is presented by the Western media as a demonstration of hostile intent, while NATO’s highly provocative behavior is kept out of the spotlight. Any nation would be concerned over war preparations on its doorstep that are being conducted by an unfriendly alliance. Anyone who is impartial would confirm that Moscow’s concern is more than justified.

The US Defense Department’s 2019 fiscal budget became law on Aug. 13. It allocates $6.5 billion for the European Defense Initiative (EDI), $2 billion more than the previous fiscal budget, and nearly double the $3.4 billion the military received in fiscal 2017. The increase is evidence of the focus on building up a robust military force to threaten Russia. Infrastructure improvements in the Baltic states and Poland are a high priority.

According to the Lithuanian Defense Ministry, the updates to the Lithuanian armed forces’ Kazlų Rūda training ground, in the district of Marijampolė, to get it up to NATO standards, are almost complete. The facility will be used to train air crews and controllers. This is a joint project with the United States, funded through the European Reassurance Initiative. American B-52 strategic bombers have already dropped dummy munitions there. The firing range was part of the NATO Saber Strike exercise that was held in June. US National Guard soldiers are there to prepare Kazlų Rūda for another exercise.

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

From “Doom Loop” To Just “Doom”: Italian Debt Faces A “Huge Structural Shift”

At the start of July, we revealed that a familiar force had returned to Europe.

According to ECB data, during May when the market saw unprecedented Italian government bond turmoil, Italian bank holdings of domestic government bonds showed record buying over the month at €28.4bn, higher inflows than those seen during the European sovereign debt crisis of 2012. Visually, this is what the single biggest month of Italian bank purchases of BTPs in history looked like.

This vicious circle of Country X banks (in this case Italy) buying Country X bonds during times of stress – with the backstop of the ECB –has for years been Europe’s dreaded sovereign bank doom loop. And, as Italy clearly demonstrated, repeated and aggressive attempts by European regulators and policymakers to finally break the doom loop, most recently with the introduction of the 2014 BRRD directive, which sought which sought to remove the need for and possibility of bank bailouts, and instead ushered in bail ins, have been an abject failure.

It is also a major problem.

In a note published by Goldman on Wednesday, the bank’s Italy analyst Matteo Crimella writes that “regulatory and supervisory changes, together with the risk of a deterioration in banks’ capital ratios/ratings owing to weaknesses in the sovereign market could, all together, raise the bar for domestic banks to step in as buyers.

In other words, Italian lenders may no longer be as willing to snap up domestic government bonds during market stresses, something which Bloomberg calls “a potentially huge structural shift in demand in the euro area’s second-most indebted nation.”

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

Debate Over Target2 Continues: Twilight of the Euro

The Target2 debate continues. Eurointelligence Promotes Still More Silliness.

Eurointelligence blasts Faz for inaccuracies while spreading a pile of its own through the mouth of Mark Schieritz who says (translated) Do not be afraid of the trillions bomb.

Schieritz says: “The claims and the liabilities are fictional quantities. They exist virtually, in the balance sheets of central banks, not in the real world.”

One can stop there knowing full knowledge that Schieritz’s article is complete nonsense.

In the real world, Target2 imbalances are a measure of capital flight and loans that cannot be paid back. Even if there once was adequate capital for loans made by Italian banks, that capital vanished long ago.

Now, Italian depositors are very fearful of bail-ins and have pulled there money out of Italian banks.

That is the “real world”. Real people have real fears, and they should. Anyone holding money in Italian banks is a fool. I gave the same warning about Greece well ahead of capital controls. I make the same case again now, regarding Italy.

New Eurointelligence Nonsense

Here are a couple of new clips from Eurointelligence to discuss.

Against Target2 Hysteria

Martin Hellwig joins the debate on Frankfurter Allgemeine’s Sunday edition with a rejoinder to earlier columns by Hans Werner Sinn (which we covered) and Thomas Mayer (which we didn’t) on the danger to the Bundesbank from its near-trillion-euro claims on the eurosystem, and on the danger to the eurosystem from its near-half-trillion claims on the Bank of Italy. Hellwig argues that Sinn confuses deliberately with the smoke and mirrors of double-entry book-keeping, and is whipping up an unjustified panic over Target2.

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

The Biggest Monetary Experiments In History: Part 2

The Biggest Monetary Experiments In History: Part 2

In part one we discussed the troubling issues in Europe (in case you missed it, you can read it here).

Today… Japan

The story of Japan is really a story that begins with globalisation.

According to the Oxford Dictionary, globalisation is described as:

“The process by which businesses or other organizations develop international influence or start operating on an international scale.”

It is, in a nutshell, international trade, and one of the things it’s done is add huge swathes of the global workforce to the world’s economy.

I bring up globalisation because of what it’s done to the global labour supply.

Realise this labour supply wasn’t Joe-middle-class-Sixpack with a Beemer, a two story house in the suburbs, and a white picket fence.

When most people think of  this workforce, they picture small brown people in shabby clothes toiling in sweatshops in China, India, Bangladesh, Vietnam, Cambodia, etc.

And by and large that’s it.

We’re not talking about Joe Sixpack. No, this was Amit in Bangladesh with 45 kids, working 29 hours a day, and paid the equivalent of a Happy Meal at Mackers.

And when we got such a massive disparity in costs, market forces went to work and did what market forces do.

The supply of goods produced exploded, and the cost of labour on a relative global basis fell.

I guess we could call this a labour supply shock, and what this did was it helped keep wages suppressed in developed markets while those in developing markets rose. This is how Amit raised his living standard so he can afford his 5th wife.

Now, the flip side of suppressed wages in the developed world was, of course, ever cheaper imported goods as the cost of those has plummeted. Declining real wages in the developed world have been cushioned by deflation in consumer goods.

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

Could Germany Fracture?

Could Germany Fracture?

All sorts of centralized organizations that appear rock-solid may well melt into air as the disintegrative dynamics gather momentum.

Rising political and social discord that is generally being attributed to “populism” may actually be the re-emergence of ancient geographic and cultural fault lines. An often-overlooked manifestation of this might be the nation-state of Germany, a possibility fleshed out by longtime correspondent Mark G.

It’s both convenient and expedient for politicos to blame “populism” for the fracturing of the status quo. Given the unsavory undertones of ethnic/religious bias of “populism,” this allows the media-savvy politico (and aren’t they all media-savvy?) to paint his/her opponents as racist via the code-word “populist.”

Labeling dissenters “populists” doesn’t explain or predict anything. In terms of economic classes, it’s more insightful to distinguish between the Protected Class (insiders and favored elites) who benefits enormously from the status quo and the Unprotected Class (outsiders, marginalized workers, those without privilege or access to cheap capital).

But this doesn’t exhaust the sources of profound social discord. As historian Peter Turchin explained in his recent book Ages of Discord, historical eras are either integrative periods in which people find reasons to cooperate and join forces, or disintegrative periods in which reasons to split apart become dominant.

Clearly, the world-system of this era is entering a disintegrative phrase, and dismissing dissenters as “populists” solves nothing. For insight on how the disintegrative phase may manifest in Germany, let’s turn to Mark G.’s commentary:

Merkel faces own ‘German BREXIT’ Chancellor’s immigration crisis is ‘Threat to Europe’

The breakdown of the Bavarian CSU and German CDU center-right coalition (refounded post WWII by Konrad Adenauer) is historic. And it has definite regional implications. I think we could be watching the beginning moves not in a “German Brexit” but in the political collapse of the modern German state into multiple components. 

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

The European Intervention Initiative: a New Military Force Established in Europe

The European Intervention Initiative: a New Military Force Established in Europe

The European Intervention Initiative: a New Military Force Established in Europe

The predictions have come true about the emergence of a new defense group that will change the European security environment. On June 25, the defense chiefs from nine EU countries signed off on the creation of a new force called the European Intervention Initiative (EII), which is spearheaded by French President Emmanuel Macron. The new organization will have a common budget and a doctrine establishing its guidelines for acting and joint planning for contingencies in which NATO may not get involved. The group includes the UK, Germany, Denmark, the Netherlands, Belgium, Estonia, Spain, and Portugal. Italy may join soon. The initiative is not tied to the EU’s Common European Defense, which includes the PESCO agreement as well as NATO. Great Britain has always opposed the idea of creating a European defense alliance, fearing it would undermine transatlantic unity. Now it has done an about-face, as the rifts within the US grow deeper.

The new force is to be much more efficient than anything else the EU has to offer, with a streamlined decision-making process that will permit a quick reaction time. Its relatively small number of members will give it more flexibility in comparison with the EU or NATO. For instance, the EU’s four multinational military battle groups that were created as far back as 2007 have never been deployed.

Its main mission is to offer a rapid response to crises that could threaten European security. The operations are to be conducted independently from US control. The UK will remain a member of this European defense entity even after it leaves the EU next year. Denmark, which retains a special opt-out status and has not joined PESCO, is a signatory to the EII.

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

EU Globalists and Chinese Communists Team Up To Protect NWO

EU Globalists and Chinese Communists Team Up To Protect NWO

On Monday, European Union leaders announced that officials from the EU and China were coming together to strengthen and protect their international trade relations from Trump’s “America First” agenda.

Jyrki Katainen (shown, left), the vice-president of the EU’s ruling and unelected European Commission, said during an interview aired on CNBC Monday morning, “I feel really we are making progress…. Both China and the EU believes in multilateralism and a rules-based world order.”

Katainen’s “rules-based world order” is a soft-sounding label given by globalists to the new world order.

Katainen is no stranger to the globalist community of insiders, as he is one of them. In addition to serving as vice president of the EU Commission, Katainen previously served as the Minister of Finance and former Prime Minister of Finland. He also attended the 2007 and 2009 Bilderberg Meetings.

Katainen is also a member of Finland’s National Coalition Party, which shares the same international affiliation as the Republican Party of the United States — the International Democratic Union. A stalwart advocate of sovereignty-killing “free trade” agreements and strengthening regional and global governance regimes such as the EU and the United Nations, Katainen’s politics are akin to those of Republicans such as Henry Kissinger, John Kasich, Richard Nixon, and the Bush family.

And like many establishment and internationalist Republicans here in the United States, Finland and the EU’s Katainen also love investments from Communist China.

“I was very satisfied for the way the host Vice Premier Liu He organized the meeting. The main outcome, of putting everything in a nutshell, is that we decided in a couple weeks’ time, EU and China will exchange market access offers on investment agreement,” Katainen told CNBC, adding that it was “the first big step forward.”

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

Deutsche Bank’s Troubles Raise Worries About the Future of the Euro Zone

The euro banking sector is huge: In April 2018, its total balance sheet amounted to 30.9 trillion euro, accounting for 268 per cent of gross domestic product (GDP) in the euro area. Unfortunately, however, many euro banks are in lousy shape. They suffer from low profitability and carry an estimated total bad loan exposure of around 759 billion euro, which accounts for roughly 30 per cent of their equity capital.

Share price developments suggest that investors have lost quite some confidence in the viability of euro banks’ businesses: While US bank stocks are up 24 per cent since the beginning of 2006, the index for euro-area bank stocks is still down by around 70 per cent. Perhaps most notably, ’Germany’s two largest banks, Deutsche Bank and Commerzbank, have lost 85 and 94 per cent, respectively, of their market capitalization.

polleit1_0_0.png

With a balance sheet of close to 1.5 trillion euro in March 2018, Deutsche Bank accounted for around 45 per cent of German GDP. In international comparison, this an enormous, downright frightening dimension. It is mostly the result of the bank still having an extensive (though not profitable) footprint in the international investment banking business. The bank has already started reducing its balance sheet, though.

polleit2_5.png

Beware of big banks — this is what we could learn from the latest financial and economic crises 2008/2009. Big banks have the potential to take an entire economy hostage: When they get into trouble, they can drag everything down with them, especially the innocent bystanders – taxpayers and, if and when the central banks decide to bail them out, those holding fiat money and fixed income securities denominated in fiat money.

Banking Risks

For this reason, it makes sense to remind ourselves of the fundamental risks of banking – namely liquidity riskand solvency risk –, for if and when these risks materialise, monetary policy-makers can be expected to resort to inflationary actions.

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

Europe Warns Of An Upcoming “Trade Apocalypse”

As European officials struggle to do everything they can to save the WTO, which appears headed for an all-but-certain demise thanks to President Trump’s aggressive trade policies, EU leaders have apparently circulated an “internal memo” drafted by the European Commission that accuses the US of deliberately instigating the collapse of the global trade order, and warns of an upcoming “trade apocalypse.” In short, if this document is any guide, the trade war is about to get worse – as if Trump’s threat to impose 20% tariffs on all cars coming into the US last week wasn’t bad enough.

EU

According to Bloomberg, the EU warned that the “rules-based system of international commerce” could revert to an trade environment where “the strong impose their will upon the weak,” the memo said.

Our world will go back “to a trading environment where rules are only enforced where convenient and where strength replaces rules as the basis for trade relations,” according to the memo.

The flirtations with a return to an environment of “mercantilist deals” have intensified as President Trump has been determined to narrow the trade deficit at any cost – even if the price is the collapse of the multilateral trade order.

Specifically, the memo, which was obtained by Bloomberg, spells out three complaints raised by the EU:

  • Gaps in the rulebook of global trade “leading to distortions, many of which associated with non-market policies and practices in major trading nations, that the WTO does not seem able to address adequately”
  • Aggressive unilateral actions by the US targeting allies and foes alike with punitive tariffs
  • The US’s decision to block appointments of members to the World Trade Organization’s Appellate Body that serves as the final arbiter in trade disputes.

The EU also complained about the US’s practice of blocking appointments to the appellate body that would help render a judgment in a WTO trade dispute.

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

The Biggest Monetary Experiments in History: Part 1

The Biggest Monetary Experiments in History: Part 1

… and all at the same time.

Last week was a humdinger. Three things happened:

One

Firstly, our pasta-eating friends, after having experienced firsthand a blizzard of accelerating violent crime… and watching their previously gentrified neighbourhoods reconfigured into ghettos resembling the Maghreb, decided enough was enough and said “non piu”.


Italy turns away two more boats loaded with ‘human cargo’ https://sc.mp/2lbiUF7  via @SCMP_News

Italy turns away two more boats loaded with ‘human cargo’

Minister says the country no longer wants to be any part of the business of ‘clandestine immigration’.

scmp.com


And who could blame them?

A clash of cultures. One that will one day be studied by scholars sipping their coffee, scratching their heads, frowning and scorning the insanity of it all.

The below video of migrants unhappy with the accommodations provided by the Italian state is nothing unusual. It is rather a daily occurrence, not only in Italy, but across various parts of Europe, Britain, and Scandinavia.

A strange way one would say to show gratitude to the Italians who rescued them from the ocean, fed them, clothed them, and provided them shelter.

That these daily events aren’t publicised by the MSM is a topic for another day, but increasingly it’s hard to hide this sort of thing from your own people. Italy, as we all know, is predominantly Catholic, certainly Christian. And so when Luigi strolls outside for an espresso at his local cafe and finds this in the streets:

… he wonders what the hell the politicians are thinking.

When future generations look back at the reasons why the European Union and one currency system collapsed, there will be many factors to consider.

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

Is “America First” Hurting Global Energy Relations?

Is “America First” Hurting Global Energy Relations?

USA

Throughout history the strong bond between the United States and Europe, arguably the world’s most important alliance, has been decisive within the international arena. Massive migration from the ‘old world’ to the ‘new’ during the past centuries has been the reason for sharing important norms and values such as democracy, liberalism, and international trade.

The election of President Donald Trump, however, has put doubt to this alliance, which was the strongest supporter of the rule-based international system of the present day. It has to be seen whether the election of this President is a temporary matter, or that the United states will continue, in some way or another, to choose a more unilateral path.

The bellicose language of President Trump and his opposition to agreements and existing matters of international affairs predating his election, have put him on a collision course with his partners in Europe. The unpredictability of the U.S. President was a reason for European leaders to give him the benefit of the doubt and start with debate instead of confrontation. However, as France’s President Macron’s short ‘bromance’ showed, Trump can hardly be influenced in matters of unambiguous election promises.

European leaders have confronted the U.S. president on several occasions on reasonable terms in order to overcome their differences in international politics. In the case of U.S. withdrawal from the Paris agreement on climate change and the unilateral departure from the JCPOA or the Iran Nuclear Deal showed Trump’s intractable belief for the ‘righteous’ path of the U.S. However, trade disputes hit the interests of European partners more directly and put the Atlantic partnership on a collision course. One country stands to benefit from current developments: Russia.

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

How the US, Under Obama, Created Europe’s Refugee Crisis

How the US, Under Obama, Created Europe’s Refugee Crisis

How the US, Under Obama, Created Europe’s Refugee Crisis

The current US President, Donald Trump, claimed on June 18th, that Germany’s leadership, and the leadership in other EU nations, caused the refugee-crisis that Europe is facing:

“The people of Germany are turning against their leadership as migration is rocking the already tenuous Berlin coalition. Crime in Germany is way up. Big mistake made all over Europe in allowing millions of people in who have so strongly and violently changed their culture!”

The US Government is clearly lying about this. The US Government itself caused this crisis that Europeans are struggling to deal with. Would the crisis even exist, at all, if the US had not invaded and tried to overthrow (and in some instances actually overthrown) the governments in Libya, Syria, and elsewhere — the places from which these refugees are escaping? The US Government, and a few of its allies in Europe (the ones who actually therefore really do share in some of the authentic blame for this crisis) caused this war and government-overthrow, etc., but Germany’s Government wasn’t among them, nor were many of the others in Europe. If the US Government had not led these invasions, probably not even France would have participated in any of them. The US Government, alone, is responsible for having caused these refugees. The US Government itself created this enormous burden to Europe, and yet refuses to accept these refugees that it itself had produced, by its having invaded and bombed to overthrow (among others) Libya’s Government, and then Syria’s Government, and by its aiding Al Qaeda in organizing and leading and arming, jihadists from all over the world to come to Syria to overthrow Syria’s Government and to replace it with one that would be selected by the US regime’s key Middle Eastern ally, the Saud family, who own Saudi Arabia, including its Government, and who are determined to take over Syria.

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

Olduvai II: Exodus
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