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Olduvai III: Catacylsm
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Is Another Black Death on the Way?


Plagues from the east are nothing new. The Black Death and other epidemics arrived in Europe from China during the 1300’s, killing a large percentage of its population. Much of this pestilence came from rats that stowed away on merchant ships coming from the east. 

At the end of World War I, another pandemic, wrongly called the Spanish flu, killed an estimated 18 to 50 million people in Europe and North America. 

Seventeen years after the SARS virus killed some 800 people in China and Canada and terrified the entire world, a new plague threatens the West: the Wuhan Coronavirus. 

Officially named 2019-nCoV, the new virus has so far infected over 800 people in China. This latest plague erupted in the central Chinese city of Wuhan, population 11 million, which is located on the Yangtze River and is an important hub for national communications.

Like SARS, the Wuhan virus is believed to have come from a live animal market that specializes in exotic animals from the Himalayas or China’s remote mountain regions. Serving exotic animals at dinner parties is a big status symbol in China. Sometimes they are even served while still alive. Dog meat is a favorite in northern China.

SARS was believed to have come from civet cats. As a result, thousands of these creatures were brutally killed. But it was later determined the virus originated from bats, then spread to other captive animals. Bat soup is another Chinese delicacy.

Keeping large numbers of captive animals crammed together in cages with poor ventilation and no cleaning is an ideal vector for viral diseases. Each year, China consumes 730 million pigs. Fifty percent of China’s factory farmed pigs have so far contracted lethal swine flu. Rising living standards have boosted demand for pork.

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Europe Leads The World In Environmental Protection

Europe Leads The World In Environmental Protection

Earlier this week, the European Union unveiled their European Investment Plan aimed at shifting 1 trillion euros into making the economy more environmentally friendly over the next 10 years.

Statista’s Willem Rpoer reports that the investment plan is in line with European Commission president Ursula von der Leyen’s Green Deal, which looks to make the European continent carbon-neutral by 2050. Since taking office, Von der Leyen has made climate change her top priority.

European countries have typically been leaders in the fight against climate change, with many ranking lowest in carbon emissions globally and highest in environmental quality. The newest trillion-euro investment plan looks to solidify Europe as the global example for combating global warming as other continents like Asia and North America continue to produce high carbon emissions and lag behind in renewable energy sources.

n 2019, Yale University released their Environmental Performance Index (EPI) for all 180 countries in order to gauge which countries had the highest environmental quality and which had the lowest.

Infographic: Europe Leads the World in Environmental Protection | Statista

My Main Worry is Europe

My Main Worry is Europe

Can it get any better than this? That’s the question investors are asking themselves after an exceptional year. Despite a slowdown in the global economy and increasing trade tensions, almost every asset class is up for the past twelve months.

Mohamed El-Erian

Mohamed El-Erian is convinced that the world is nearing a tipping point. According to the internationally renowned economist who coined the term «New Normal», the faith of the global economy depends on a successful hand-off from monetary to fiscal policy and structural reforms. Otherwise, the world will sink into a mire of financial volatility and political collapse, he fears.

«As good as the ‹New Normal› was for the last ten years, I don’t think it will continue during the next ten years», says Mr. El-Erian in an extended interview with The Market.

In his view, Europe is getting much closer to a fateful junction. If the European economy hits stall speed, chances of a recession are increasing, Mr. El-Erian argues. Furthermore, he cautions that the U.S.-China deal will be a short-term truce since trade is no longer just about economics but also about national security.

Mr. El-Erian, investors are looking back at an amazing year with many turns and twists. What’s ahead for the financial markets in 2020?
There’s a tendency to what I call a «one issue market», meaning the market embraces a single issue and is influenced by that issue most of the time. For a long time, this issue used to be Central Banks, then it has evolved into trade. Trade will continue to be an important issue, even with the recent short-term truce. We have pressed the pause button on globalization. Now, the big question is if we press the play button again and continue to globalize as the market is assuming or if we step towards pressing the rewind button on globalization and deglobalize. That uncertainty is not going to go away. It’s going to be with us for the whole of 2020 because trade is no longer just about economics. It’s also about national security.

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

Changes are Coming in 2020

Changes are Coming in 2020 

QUESTION:  I have a question, you wrote :

“Those in Europe who have a position in cash, it may be better to have shares or a private sector bond or US Treasury. Given the policy in Europe of no bailouts, leaving cash sitting in your account could expose you to risk in the months ahead.”

For example, if one has a trading account with a bank, is leaving cash in the bank’s trading account immune to potential seizure indicated in your comment?

Appreciate your clarification,


ANSWER: The risk in Europe is that there is no true rule of law. On the one hand, there is this policy of no bailouts for that would mean money could cross borders. Then there is the rising socialism which is turning into real hatred of the rich.

There is no definitive answer. Europe will do whatever it has to do when the time comes shy of doing the right thing. I have written before when Italy could not meet its debts on short-term paper, they simply decreed that your 90-day paper was now a 10-year paper.

Governments can do whatever they desire. We have no recourse against governments. No private company could act in such a manner. This is one primary reason why I believe governments should be prohibited from borrowing. People are fools for buying their paper and always expecting that this time will be different.

Song Hongbing’s “Currency Wars” – a review

Song Hongbing’s “Currency Wars” – a review 

A revolutionary book from China, where it became a bestseller and is hushed up in Europe for (un)known reasons

Did you know that the FED is actually a private bank and still has the right to issue dollars? Did you know that for over 200 years private bankers have been controlling inflation and deflation, causing crises and even determining world history? Or do you really believe that history is a chaotic process, a melting pot of coincidences, independent decisions by politicians, insane ideologies and carefully planned strategies? Consider the crises in South Korea (1997), Argentina (1998-2002), Greece (2009) and many others in modern world history. Who did the citizens of the affected countries blame for the crisis? Not only their government, but also the international bankers, for whom the governments of the countries affected by the crisis were only a springboard. Would you like to know how these bankers manage to be so powerful and control demand for money almost everywhere in the world and thus control societies? It’s not that complicated and you don’t have to know anything about the economy: just read “Currency Wars” by Song Hongbing. 

It is not a novelty (already published in 2006), but it throws a whole new light on the issues that are tricky today: Currency wars and financial crises. Everyone is asking today: will the yuan strengthen and the dollar weaken? What about the euro? Lagard’s election of the head of the ECB has buried the hope for a stronger euro that was associated with the candidacy of Weidmann – a well-known hawk in financial policies. If she continues to weaken the euro in this way, will interest rates in the euro zone slide so low that pensioners and savers will slowly but surely lose their money? Probably. It’s time for “shearing sheep” as Song Hongbing calls such moments in history (crises, expropriations, etc.). We, the people, are these sheep.

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

Liquidity Crisis & the Pending European Banking Crisis

Liquidity Crisis & the Pending European Banking Crisis 

A lot of people have been writing in about the liquidity crisis and the banks with exposure to Deutsche Bank. This is clearly the European Banking Crisis we have been warning about. Most European (and Swiss) banks are having to overpay 30-40bps over libor. Even A+ rated banks are having to pay this premium.

Keep in mind that the Lehman and Bear crisis took place in the REPO market. This is why the crisis is appearing in a market most never hear about or see in interest rates. Those in Europe who have a position in cash, it may be better to have shares or a private sector bond or US Treasury. Given the policy in Europe of no bailouts, leaving cash sitting in your account could expose you to risk in the months ahead.

In all honesty, if this explodes in Europe, no-one will be safe and it will be pot-luck who’s cash you will be holding when it hits the fan. The Fed will bailout the US banks, but it cannot get involved in bailing out the European banks. This is becoming a clash in public policy which all stems from the FAILUREto have consolidated the debts. That refusal to consolidate, the terms demanded by Germany, also precludes bailouts where the money would cross borders. They want to pretend this is one happy family, but they insist on separate accounts.

As one European banker put it in a private conversation, it is almost a calm collapse. As I have REPEATEDLY warned, we are facing scenarios that nobody has ever seen before. The interconnectivity runs so deep, this clash in public policies can result in a serious crisis emanating from Europe.

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

Europe: The cracks are beginning to showIs the EU experiment coming to an end? Europe considers its options

Europe: The cracks are beginning to showIs the EU experiment coming to an end? Europe considers its options


2014: The expansion of NATO in the late 20th and early 21st centuries had posed a serious strategic threat to Russia’s security. In 1999 the Czech Republic, Hungary and Poland joined NATO. In 2004 they were followed by the Baltics, Romania, Bulgaria, Slovakia and Slovenia; Albania and Croatia joined in 2009.

This influx was in addition to most of the western European states which had been members of NATO since the ‘Iron Curtain’ came down soon after hostilities had ceased in Europe in 1945. In all, 28 countries are now members of the alliance. Non-NATO members including, Sweden, Finland, were brought into line with EU/NATO policy after their accession to the Lisbon Treaty. Thus economically, politically and militarily the West had arrived at Russia’s western borders.

Viewed retrospectively, however, this was the high point of NATO hegemony. The juggernaut seemed to be at the height of its power, but the turning points had already come with the brief Russo-Georgia war in 2008 and then Ukraine 2014/15 when Russia said nyet.


Colour revolutions financed by US Non-Governmental Organizations (NGOs) in the shape of the National Endowment for Democracy (NED), US-AID, and Human Rights Watch (HRW) were complementary to the EU/NATO expansion eastwards and had targeted both Georgia and Ukraine. Additionally, Soros’s Open Society and its many tentacles also took part in these operations.

The NED could not be called an NGO since it was funded directly by the US government which made it a “GO”. This was openly admitted later by Victoria Nuland – Under Secretary of State for Eurasian and East European Affairs, and Wife of leading neo-con warmonger Robert Kagan – during a talk which she gave at the Washington press club. (See the you tube). Ms Nuland also took the opportunity to inform the audience that the going rate for colour revolutions was US$5 billion.

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

Turkey Exposes Central Bank Incompetence

Turkey Exposes Central Bank Incompetence

Last year I asked whether Turkey would be “City Zero in Global Contagion.” That question was based on the crisis unfolding in the Turkish lira which materially threatened a number of major European banks, especially those in Italy.

This week highlighted something really interesting for me that, I think, sets in motion a similar thesis about Turkey but for much different reasons. The sovereign debt crisis will come about purely because of a failure of confidence in institutions.

Competence is the key to staying at the top of human dominance hierarchies, not force. Those built on competence tend to last and those built on force are, at best, meta-stable for a specific period of time.

The difference between what’s happening in Turkey with President Erdogan taking control of the Turkish central bank and the end of Mario Draghi’s term heading the ECB cuts to the heart of this issue of competence versus force.

The Draghi Put-on

Draghi has projected this aura of the ever-in-control competent manager of Europe’s finances while steadfastly holding to policy ideas which have done nothing but destroy capital formation within the Eurozone. 

His last statement and policy decision this week are emblematic of his inflexibility both intellectually and politically.  And it’s clear that he’s trapped at whatever negative-bound he’s got in his head, handing off a Europe on the verge of collapse to his sister-in-tyranny, Christine Lagarde.

Draghi just fired his “Cheap Money Bazooka” on his way out the door to kick the can down the road another few months.

He’s setting the stage for the full-blown monetization and collapse of the European banking system under his successor, former IMF chief Christine Lagarde. What hasn’t worked for Europe for the past 11 years was just introduced again as the only way to save the situation.

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

Iran Will Be a Full Nuclear Power By the End of 2020: No Return to the 2015 Agreement


French President Emmanuel Macron failed to promote successfully his Iranian initiative with the US administration despite the initial blessing of his US counterpart. This failure led Iran to make a third gradual withdrawal from its JCPOA nuclear deal commitment, raising two main issues. Iran has become a regional power to be reckoned with, so we can now scrap from reactions to its policies the words “submit,” or “bow to the international community”. Moreover, since Europe is apparently no longer in a position to fulfil its commitments, Iran will now be headed towards a total pull-out following further gradual withdrawal steps. Just before the US elections due in November 2020, Iran is expected to become a nuclear country with the full capability of producing uranium enriched to more than 20% uranium-235, weapons-usable and therefore in a position to manufacture dozens of nuclear bombs (for which uranium must be enriched to about 90%). However, this does not necessarily mean that this is Iran’s ultimate objective.

Industry data shows that half of the effort goes into enriching from 0.7% to 4%. If Iran reaches the level of 20%, the journey towards 90% is almost done. A few thousand centrifuges are needed to reach 20% enrichment while a few hundred are enough to cross from 20% to the 90% needed for a nuclear bomb. When Iran announces it is reaching a level which is considered critical by the west, there is the possibility that Israel might act militarily against Iran’s capability as it did in Iraq in 1981, in Syria in 2009, and in assassinating nuclear scientists. If this happens, the Middle East will be exposed to a mega earthquake whose outcome is unpredictable.

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

Climate change underlies Europe’s rapid warming

Climate change underlies Europe’s rapid warming

Moscow cools off during the 2010 heat wave in Russia. Image: By visergey, via Wikimedia Commons

From the edge of the Arctic to almost the Tropic of Cancer, Europe’s rapid warming is evidenced by hotter summers − and winters.

LONDON, 5 September, 2019 − Europe’s rapid warming means the world’s hottest property could now be on the continent. It has seen the strongest intensification of heat waves anywhere in the world in the last 70 years. The hottest of hot summers are now 2.3°C hotter than they used to be.

And winter extremes of cold are dwindling. The number of extremely cold days has fallen twofold or even threefold, and the coldest days are now 3°C milder than they used to be, according to readings from 94% of the continent’s weather stations.

This, say Swiss scientists, adds up to “a climate change signal that cannot be explained by internal variability.”

That is, thanks to a steady increase in atmospheric greenhouse gases driven by ever-increasing use of fossil fuels, Europe is warming even faster than global climate models predict.

“In at least one region of the globe, global heating is already happening, and at a rate faster than predicted”

“Even at this regional scale over Europe we can see that these trends are much larger than what we would expect from natural variability,” said Ruth Lorenz, a researcher from the Swiss Federal Institute of Technology, also known as ETH Zurich. “That’s really a signal from climate change.”

She and colleagues report in the journal Geophysical Research Letters that they looked at observations and measurements from around 1,000 weather stations between 1950 and 2018 and then analysed the top 1% of the highest extremes of heat and humidity, and the top 1% of coldest days during the same timespan.

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Negative Interest Rates Are Extremely Toxic

Negative Interest Rates Are Extremely Toxic

Jim Bianco, President of Bianco Research, cautions against evermore unconventional monetary policy interventions. He fears that the global slowdown is going to get worse and he spots opportunities in long-term bonds and gold.

The global economy is on the brink: Europe is headed for recession, Japan as well and China’s growth rate is the slowest in almost thirty years. Only the economy in the United States seems to hold up. But for how long?

Mr. Bianco, the summer is basically over and we are heading into the final stretch of the year. What’s ahead for the financial markets in the coming months?
There are two issues at play: First, the trade and currency wars where the situation reminds me somewhat of «This Is Spinal Tap». It’s a cult satire movie from the eighties about a rock band and they coined the phrase «up to eleven» because that’s how high their amplifier went. So the expression «turning it up to eleven» refers to the act of taking something to an extreme. I’m saying this because I think Trump is “going to eleven” on trade: He’s going to turn it up so high that there is going to have to be a deal. That’s the way he wants to do this. He will just make it intolerable so everybody has to sit down and cut a deal.

What’s the other issue?
The inverted yield curve. The three-month/ten-year curve has been inverted since May and this is the market’s way of saying the Federal Funds Rate is too high and must come down. It is interesting how hard everyone is standing on their head to dismiss the yield curve and tell me why it’s different this time.

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

Suddenly, Western “Regime” Changes Keep Failing

Suddenly, Western “Regime” Changes Keep Failing

It used to be done regularly and it worked: The West identified a country as its enemy, unleashed its professional propaganda against it, then administered a series of sanctions, starving and murdering children, the elderly and other vulnerable groups. If the country did not collapse within months or just couple of years, the bombing would begin.

And the nation, totally shaken, in pain, and in disarray, would collapse like a house of cards, once the first NATO boots hit its ground.

Such scenarios were re-enacted, again and again, from Yugoslavia to Iraq.

But suddenly, something significant has happened. This horrific lawlessness, this chaos stopped; was deterred.

The West keeps using the same tactics, it tries to terrorize independent-minded countries, to frighten people into submission, to overthrow what it defines as ‘regimes’, but its power, its monstrously destructive power has all of a sudden become ineffective.

It hits, and the attacked nation shakes, screams, sheds blood, but keeps standing, keeps proudly erect.

What we are experiencing is a great moment in human history. Imperialism has not yet been defeated, but it is losing its global grip on power.

Now we have to clearly understand ‘Why?’, so we can continue our struggle, with even greater determination, with even greater effectiveness.

First of all, by now we know that the West cannot fight. It can spend trillions on ‘defense’, it can build nuclear bombs, ‘smart missiles’ and strategic warplanes. But it is too cowardly, too spoiled to risk the lives of its soldiers. 

It either kills remotely, or by using regional mercenaries. Whenever it becomes clear that the presence of its troops would be required, it backs up.

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

Why The Next ECB Stimulus Plan May Fail

Why The Next ECB Stimulus Plan May Fail

Why The Next ECB Stimulus Plan May Fail

In June 2014 I wrote an article called Draghi’s Plan does not fix Europe. In that article, I explained that the structural challenges of the eurozone -high government spending, excessive tax wedge, lack of technology leadership and demographics- were not going to be solved by a round of quantitative easing.

Now, the evidence of the European Union leads the ECB to hint at another stimulus plan. Gone is the triumphalism displayed by of the European Commission on August 2017 (read).  The “strong recovery” they credited to the “decisive action of the European Union” has all but disappeared. 

The slowdown in the eurozone is not similar to other economies. The ECB has slashed growth estimates consistently and currently expects a level of growth that is half of what they had projected eighteen months ago.

It is fascinating because many analysts tend to discuss the European slowdown as if the stimulus had been abandoned. Far from it. Let us remember that the European Central Bank repurchases all debt maturities in its balance sheet and that it has launched a  new liquidity injection (TLTRO) in March this year.

That is why it is appropriate to discuss the severity of the Eurozone slowdown in the context of the chain of fiscal and monetary stimuli that have been implemented. To understand the serious mistake of constantly stumbling on the same stone, we need to understand the size of the fiscal and monetary programs and their underwhelming results.

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

Will Europe Ever Shake Its Dependence On Russian Energy?

Will Europe Ever Shake Its Dependence On Russian Energy?


Much of the current discourse over Europe’s economic “independence” has revolved around its increasingly-tense relationship with the Trump administration over foreign policy issues such as trade and Iran. This focus has sidelined another important development, however: portions of the European energy industry—a major pillar of the single market—are increasingly coming into Russian and Chinese hands.

In spite of impending American sanctions and widespread opposition including from within the European bloc, Nord Stream 2—Gazprom’s $11 billion natural gas pipeline running underneath the Baltic Sea between Russia and Germany— is nearing completion. Meanwhile, China has gone after energy prizes all over the union. As just one noteworthy example, state-owned utility China Three Gorges— already the largest shareholder in Energias de Portugal— mounted a colossal $10.8 billion bid to take over the entire Portuguese grid.

The uptick in Moscow and Beijing’s investments in nearly every aspect of Europe’s energy industry—from fossil fuels to renewables and power generation to energy infrastructure—have drawn criticism from both within the EU and abroad. Particular concerns have been raised over European unity and unfair competition. If unaddressed, these geopolitical and commercial implications could drive a wedge between the U.S. and Europe while sowing serious divisions within the single European market.

Can Europe trust Russian gas?

Longstanding geopolitical conflicts and Cold War-era rhetoric have fueled the uneasiness around Russian energy investment in Europe. In May, U.S. Energy Secretary Rick Perryproposed a sanctions bill which would target companies, including a number of European firms, involved in the Nord Stream 2 project in an effort to stall construction on the controversial pipeline. Although Gazprom has obtained authorization from Russia, Finland, Sweden and Germany, it has encountered resistance from Denmark, which has yet to grant permission for the pipeline to pass through its territory.

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

Economic Storm Trump Will be Blamed For Because of Bad Advisers

Economic Storm Trump Will be Blamed For Because of Bad Advisers 

There is a very Dark Cloud hovering over the world economy and at the center of this cloud lies not just Europe, but Germany – the strongest economy holding up all of Europe. The German manufacturing sector is in freefall. Trump will be blamed calling this the result of his Trade War. It is probably too late to get him to even understand that his advisers are old-school and completely wrong with respect to trade. Their obsession with currency movements is what they taught back in school during the 1930s. My advice to China, let the yuan float and Trump will quickly see that China has been supporting its currency, not suppressing it.

Manufacturing indicators have deteriorated globally, yet in a very disproportionate manner. Trump will be blamed for this and his badgering the Fed to lower interest rates is also a fool’s game. Nobody looks at the elderly who were told to save for retirement and you will live off the interest. Their house values were undermined in the 2007-2009 New York Banker’s Mortgage-Backed scam that blew up the world economy from which we have been unable to fully recover. The younger generation cannot afford to buy a house as they are saddled with student loans thanks to the Clintons for degrees that are worthless as 65% cannot find jobs in what they have degrees for these days.

The insanity of those in power knows no boundary when it comes to stupidity around the world. All they have is interest rates and after more than 10 years of excessively low to negative interest rates failing to stimulate the economy in Europe, what do they do? They argue that all physical money must be eliminated because people are hoarding cash and thus defeat their lower interest rates policy.

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

Olduvai IV: Courage
In progress...

Olduvai II: Exodus
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