While the Pentagon may be already contemplating its next steps in the escalating conflict with Russia, which as the WSJ reported will likely involve supplying Ukraine with antitank missiles and other weaponry – a red line for the Kremlin not even the Obama administration dared to cross – there is minor matter of what to do with a suddenly furious Europe, which as we discussed previously, has vowed it would retaliate promptly after Trump signed the anti-Russia legislation into law, due to allegations it was just a veiled attempt at favoritism for US-based energy companies. And, sure enough, on Monday, the Germany economy minister said that tew penalties against Moscow proposed by US lawmakers violate international law and officials in Brussels should consider countermeasures. Speaking to Funke Mediengruppe newspaper, Brigitte Zypries said that “we consider this as being against international law, plain and simple.” She added that “of course we don’t want a trade war. But it is important the European Commission now looks into countermeasures.”
This post was published at Zero Hedge on Aug 1, 2017.
In Germany, Martin Schultz wants to give refugees the right to vote. So if he cannot win with Germans, he wants to give the right to vote to refugees to win by bribing them. The German politicians are now giving them apartments they are constructing that cost about 3 million each. The construction costs actually come out to about 1600 per square meter and since each apartment is about 470 square meters, the cost to build one apartment is more than 3 million. It is stunning that Merkel was so fearful of inflation that she would not yield to Greece and saw fit to impoverish the people to pay for the political corruption of their politicians. Yet building dwellings for refugees without language and job skills that cost 3 million each is some how not inflationary.
Dijsselbloem’s comments regarding the Southern Europe reflect the political bias – not the general public at large within Europe. There are different cultures throughout Europe. In some places people will not cross the street until a light changes even if there are no cars. Other parts are like New York, lights are optional. There are many cultural differences in general between north and south, but even more between members. Even in Germany there is a divide between north and south. The blame does NOT lie in cultural differences, corruption, or even easier spending in the south and excessive pensions as in Greece. The problem that has pushed Europe to the brink is: (1) this failed idea that ending European War can be achieved by federalizing Europe. That will not change the cultural differences. Even in the United States, there are cultural differences between the Bible Belt (anti-Abortion & anti-Gay Marriage) compared to California or New York. It is the Federalization of the United States and the attempt to impose one culture upon the whole every since the Great Depression that is causing tensions within the United States. The same is TRUE within Europe.
History shows how the United States has staged dozens of violent coups worldwide since the end of WWII. Here the CIA will simply install its own compliant puppet leader in order to better streamline US interests with those of the target nation. This practice was not only confined to nation states, however, as we can see with the out-going UN Secretary General. The whole basis of the UN charter was to avoid the kind of undeclared wars of aggression suffered at the hands of Nazi Germany. Back in October, 21WIRE’s Vanessa Beeleyexplained: ‘To compare Saudi Arabia’s belligerent actions in Yemen to Nazi Germany’s undeclared wars of aggression prior to WWII is no exaggeration. In fact, one could make the argument that this Saudi-US joint venture is much worse, and a far more dangerous precedent. Likewise, the failure of a corrupt UN (who effectively sold Saudi Arabia its seat on at the head of the UN Human Rights Council ), led by an impotent Secretary General in Ban-ki Moon, to censure Saudi Arabia for its flagrant violation of international law, the Nuremberg Principles and the entire Geneva Convention content and implied framework – leaves the UN in the exact same position as the League of Nations in 1938.’ Now that US puppet Ban-Ki Moon is finally on his way out, we can see the true scope of the corruption he’s presided over – and the irreparable damage he’s inflicted on this international institution…
Submitted by Juduth Bergmann via The Gatestone Institute, The arrogant claim to the moral high ground by European elites has no basis in reality. There is no respect for freedom and democracy on a continent where citizens, such as the politician Geert Wilders, are arrested and prosecuted by in a court of law for speaking their minds freely about topics that the authorities find it expedient not to debate in public. Freedom, respect for the rule of law, and people’s race, religion and gender have never been less respected and protected in Germany during the post-WWII era than under Merkel. German authorities have completely failed to protect women, Christians and others from the chaos unleashed by the mass, unvetted, immigration of mainly Muslim migrants from Africa and the Middle East. The rule of law is anything but “respected” in Germany. Not everyone is “panicking”. UK Foreign Secretary Boris Johnson, rejected the invitation and told his colleagues to end their “collective whinge-o-rama” about the U. S. election result. Critics of the U. S. election omitted, however, the runaway lawlessness, divisiveness and corruption that American voters declined to reinstate. “A world is collapsing before our eyes”, tweeted the French ambassador to the United States, Gerard Araud, as it became clear that Donald Trump had won the US presidential election. Although he later apparently deleted the tweet, the sentiment expressed in his tweet encapsulates the attitude of the majority of the European political establishment.
This post was published at Zero Hedge on Nov 15, 2016.
FRANKFURT – It’s absurd to ask Germany’s government to spend more to bolster eurozone growth, German Central Bank President Jens Weidmann said on Thursday, rejecting growing pressure on Berlin to loosen its purse strings. Speaking in the German capital, Mr. Weidmann said a fiscal stimulus program in Germany was unnecessary given the nation’s robust economy, and would have few positive effects for other countries anyway. Earlier this month, European Central Bank President Mario Draghi joined the chorus of voices that have criticized Germany for reining in its spending at a time of weak economic growth. ‘Countries that have fiscal space should use it,’ Mr. Draghi said at a news conference. ‘Germany has fiscal space.’
Too big to fail is about to get tested once again. Deutsche Bank – Germany’s largest, and in many ways the embodiment of the global financial system – as you may have heard, is in a spot of bother. The U. S. government is considering imposing a fine of around $14 billion on the bank for selling faulty mortgage-backed securities in the run up to the financial crisis. That’s on top of the fact that Deutsche and other European banks have been struggling with negative interest rates, which are squeezing profits. In all, Deutsche Bank’s DB 6.79% market cap has now shrunk to nearly its proposed fine, provoking fears that the bank might have to be helped out the German government, or be wiped out. So far, Germany’s Chancellor Angela Merkel has said that there will be no bailouts for Deutsche Bank. But while Germany says it won’t stop a Deutsche bank failure, how worried should the U. S., and investors, be about it? Ultimately, the new regulations put in place since 2008 to contain Too-Big-To-Fail banks should mean that there will be no direct impact on the average American. But here are a few reasons why you should still keep an eye on it. Too Big to Fail was always a bit of a misnomer. What really makes a bank a risk to the financial system as a whole is the degree to which it is interconnected with other institutions, i.e., its ability to spark chain reactions of non-payment if it should ever default. By this measure, Deutsche is frighteningly indispensable. It’s a counterparty to virtually every major bank in the world, in virtually all asset classes. This illustration from an IMF report in June gives you some idea. This is why I argued yesterday that the German government, which together with the European Central Bank is responsible for supervising Deutsche, would be highly unlikely to let it fail in a disorderly manner la Lehman Brothers.
On August 31, 2008, Germany’s Commerzbank announced that it was purchasing ailing rival Dresdner Bank from Allianz SE. As usual, however, the deal wasn’t described in those terms as nothing ever is so honest in public. Then-Allianz CEO Michael Diekmann said at the time of the announcement: As a strong bank, the new company can safeguard jobs in the long term. With a stake of nearly 30 percent Allianz will be the largest shareholder of the new bank and will gain access to a powerful distribution network for its insurance products. The move will also secure the further success of its bancassurance strategy. Just four months later, Commerzbank was becoming partially nationalized due to the ‘strong bank.’ By taking in 10 billion from SOFFIN, Germany’s bank bailout vehicle, at the outset of 2009 the merger could proceed. Without the ‘capital’, Commerzbank would have walked and left Dresdner (and Allianz) likely to be wholly nationalized (because failure is not an option anymore). As one ‘insider’ was quoted as saying, ‘the government just couldn’t afford to let this deal fail.’ For its part, Commerzbank spent years recovering from not just Dresdner but its own wholesale realities. The total rescue would total about 18 billion before it was all over, and that was a heavy burden on the bank. Thus, it wasn’t until November last year that the bank could finally pay a dividend again, a significant milestone on the firm’s road to recovery. The huge positive step by paying out the announced dividend earlier this year was not just a favorable impression on the bank’s fortunes but also those of Germany and its long road from ‘necessary’ nationalizations.
It is never a good thing when official sources either named or unnamed are quoted in the media as denying bailout discussions. For any bank such rumors and denials are harmful because, obviously, they are a reflection of common perception. Furthermore, most people know all-too-well the true nature of any denials, thus reinforcing only that much more the troubling perceptions in the first place. For Deutsche Bank to be the institution in question is altogether different. When Germany’s Commerzbank, for example, was forced to request a capital injection from the state’s bailout fund SOFFIN in November 2008 that was a sign of the times. It was just another bad sign in an ocean of them. Should Deutsche Bank even get connected to something like that is perhaps a sign of renewal of those times. Deutsche Bank is not Commerzbank; in many ways Deutsche is the last remaining remnant of what is left of the reigning wholesale, eurodollar system. Where other banks long ago saw this depression for what it was (all risk, no reward), DB was siding with central bankers and deploying ‘capital’into EM’s and junk bonds. The bank was reticent to reject its derivatives book, once a source of nearly all its power and strength. And it was dreams of reclaiming lost grandeur that drove the bank into its currently perilous state. When the firm first announced estimates for its coming loss in October last year, I wrote:
War: A Warning from the Past Although history does not exactly repeat itself, it does provide parallels and sometimes quite ominous ones. Such is the case with the current U. S. Presidential election and the one which occurred one hundred years earlier. *** The dominating question which hung over the 1916 campaign was whether the country would remain neutral in regard to the horrific slaughter which was taking place on the European battlefields in probably the greatest act of mass insanity ever recorded, World War I. President Wilson had maintained that the U. S. would continue a policy of strict neutrality. By all indications, the nation wanted no part of the war, with the President’s own party at his nomination delivering an emphatic ‘No’ to any foreign intervention. Although Wilson maintained a neutral policy through the election and briefly afterward, his advisors and Cabinet had been lobbying for war and continued to do so even more vehemently after the President’s re-election was secured. Nearly all of them, including Wilson himself, had deep financial, family, and political ties to J. P. Morgan. Wilson received considerable Morgan financial backing for his two presidential runs. The Morgan operatives within the Administration were pushing for war because the House of Morgan had ‘invested’ heavily in the ‘Allied’ cause and a defeat or a negotiated settlement with any favorable concessions to Germany would be a catastrophe for Morgan financial interests.
This post was published at Acting-Man on September 18, 2016.
German imports and exports unexpectedly shrunk in July, with a sharp export contraction causing a surprise narrowing in Germany’s trade balance. Federal Statistical Office data showed seasonally adjusted exports fell by 2.6% – analysts had expected about 0.3% growth – whereas imports fell by 0.7%, as against expectations for a 0.8% rise. On the year exports slumped by 10% and imports shriveled by 6.5%. The foreign trade balance shrunk to 19.4 billion ($21.9 billion) from 21.4 billion in June, as against expectations for a balance of 22 billion. The Federal Statistical Office said the pace of German exports to other EU countries fell by 7% in July, while imports from the region fell by 4.5%. The falls were slightly narrower for trade with other eurozone countries.
I have been warning that 2017 was the Year of Political Hell with four major referendums/elections that would undermine the confidence in government – BREXIT, US Presidential Elections, French Elections, and Germany Elections. These four events hold the potential to overturn the expectations of the future. Whatever the general public felt about government would flip. The key to a shift from Public confidence to Private lies within the scope of these four elections. This is what our computer has been forecasting – political instability on the rise. This is the age of anti-establishment (3rd party) rising globally. However, I have also warned that Social Security and Medicare go NEGATIVE next year in the United States, which of course mainstream media is not bothering to report for fear that would add fuel to the bonfire of political corruption. But what is also not explained by mainstream media, is that Obamacare is crumbling from within. The entire structural design of Obamacare was the perpetual Ponzi Scheme they used for Social Security.
Call bond-market veteran Bill Gross a ‘broken watch.’ He doesn’t care. His gripe about negative interest rates and a flood of debt, which he considers a risk, not a fix, for a global economy that’s still limping out of the financial crisis, is challenged daily by resilient demand for the bonds he’s bearish on. But even if being ‘right’ eventually is a hard sell right now, he’s not backing down, Gross said in his latest monthly commentary. ‘The problem with Cassandras, such as Gross and Jim Grant and Stanley Druckenmiller, among a host of others, is that we/they can be compared to a broken watch that is right twice a day but wrong for the other 1,438 minutes,’ Gross wrote. ‘But believe me: This watch is ticking because of high global debt and out-of-date monetary/fiscal policies that hurt rather than heal real economies.’ Germany, Switzerland, France, Spain and Japan are among countries that have negative yields on government-issued debt. Their hope is that cheap, even free, borrowing raises inflation and revives asset prices that can filter through economies; they argue extreme policies have been needed. Gross and others have argued that rates, including those at the Federal Reserve, at near zero or below won’t create sustainable economic growth and actually undermine capitalism.
Why The Eurozone Is A Financial Powder Keg ………. In short, Europe is a financial and political powder keg. The ECB is bluffing a $40 trillion debt market (including bank loans) and the Brussels apparatchiks are bluffing 340 million citizens. The only problem is that the true facts of life are so blindingly obvious that it’s only a matter of time before these bluffs are called. And then the furies will break loose. In the first place, the EU-19 is marching toward the fiscal wall and even Germany’s surpluses cannot hide the obvious. During the last six years, the collective debt-to-GDP ratio among the Eurozone nations has gone from 66% to 91% of GDP. The sheer drift of current policy momentum will take the ratio over the 100% mark long before the end of the decade.
The Greek government is calling for full disclosure of ALL household wealth. The Greeks are to disclose everything they own – cash worldwide, jewelry, real estate, paintings, and furniture. The Greek government is totally insane and intends to exploit its population simply to remain in the euro without the simplest shred of evidence that such a measure would even benefit the country. They are preparing to impose a compulsory levy to reduce debt owed to Brussels and Germany. This will send the Greek economy into a Fourth World order and destroy one of the most beautiful countries in Europe. There is zero chance of altering the future since the corruption of the Greek government – not the people – created this nightmare to begin with. Now the Greek population will have to pay for the fraud their government carried out with the aid of Goldman Sachs.
Up until a year ago, the shipping industry was ordering ships in droves. This year, orders of new vessels have fallen to a record low and companies can’t get rid of ships fast enough. About 1,000 ships that have the combined capacity to haul 52 million metric tons of cargo will be dragged onto beaches, cut into pieces and sold for scrap metal this year. That is second only to the record amount of capacity of 61 million so-called dead weight tons that were scrapped and recycled in 2012. The global economic slowdown is putting shipping through its most bruising period since the 2008 financial crisis. Companies including Maersk Line, a unit of Danish conglomerate A. P. Mller Maersk A/S, Germany’s Hapag-Lloyd AG and China Cosco Bulk Shipping Co. have 30% more capacity in the water than cargo. As the companies, mostly based in Europe and Asia, fight for bigger shares of the global market, freight rates have dropped so low they barely cover fuel costs. In the five years through 2015, owners ordered an average of 1,450 ships annually. This year orders through July fell to 293 vessels, or 11.6 million tons, according to U. K. marine data provider Vessels Value. ‘Given the tremendous overcapacity, it will take much more recycling and at least two to three years of no growth in capacity to see some balance between supply and demand,’ said Basil Karatzas, chief executive of New York-based Karatzas Marine Advisors Co.
KORSCHENBROICH, Germany – Two years ago, the European Central Bank cut interest rates below zero to encourage people such as Heike Hofmann, who sells fruits and vegetables in this small city, to spend more. Policy makers in Europe and Japan have turned to negative rates for the same reason – to stimulate their lackluster economies. Yet the results have left some economists scratching their heads. Instead of opening their wallets, many consumers and businesses are squirreling away more money. When Ms. Hofmann heard the ECB was knocking rates below zero in June 2014, she considered it ‘madness’ and promptly cut her spending, set aside more money and bought gold. ‘I now need to save more than before to have enough to retire,’ says Ms. Hofmann, 54 years old.
This post was published at David Stockmans Contra Corner By Georgi Kantchev, Christopher Whittle and Miho Inada, Wall Street Journal ‘ August 9, 2016.
KORSCHENBROICH, Germany – Two years ago, the European Central Bank cut interest rates below zero to encourage people such as Heike Hofmann, who sells fruits and vegetables in this small city, to spend more. Policy makers in Europe and Japan have turned to negative rates for the same reason – to stimulate their lackluster economies. Yet the results have left some economists scratching their heads. Instead of opening their wallets, many consumers and businesses are squirreling away more money. When Ms. Hofmann heard the ECB was knocking rates below zero in June 2014, she considered it ‘madness’ and promptly cut her spending, set aside more money and bought gold. ‘I now need to save more than before to have enough to retire,’ says Ms. Hofmann, 54 years old. Recent economic data show consumers are saving more in Germany and Japan, and in Denmark, Switzerland and Sweden, three non-eurozone countries with negative rates, savings are at their highest since 1995, the year the Organization for Economic Cooperation and Development started collecting data on those countries. Companies in Europe, the Middle East, Africa and Japan also are holding on to more cash. Economists point to a variety of other possible factors confounding central-bank policy: Low inflation has left consumers with more money to sock away; aging populations are naturally more inclined to save; central banks themselves may have failed to properly explain their actions.
Bloomberg’s Tom Keene (Monday, June 27, 2016): ‘If I take Paul Krugman and Alan Greenspan’s primal cry, ‘we want simple models.’ Is our solution now to think simple or is there a value to the complexity of globalization and the complexity of institutions? Which way should we turn now?’ Alan Greenspan ‘You want to have as simple a model as you can get that actually captures the complexity of the forces in play… The FRBUS (Federal Reserve Board US) model… that model works exceptionally well for the non-financial area… The financial model was awful. It captured nothing. It didn’t grasp what the issue is. And I tried to reproduce what I would do in ‘The Map and the Territory 2.0′… And I demonstrate what we have going – that we don’t measure correctly – are bubbles and their implications. Bubbles per se are not toxic. The 2000 bubble collapsed. We barely could see a change in economic activity. On October 19, 1987, the Dow Jones went down 23% in one day. You will not find the slightest indication of that collapse of that bubble in the GDP number – or in industrial production or anything else. So I think that you have to basically decide what is causing what. I think the major issue in the financial models has got to be to capture the bubble effect. Bubbles are essentially part of of the fact that human nature is not wholly rational. And you can see it in the data very clearly.’ As Mr. Greenspan spoke on Bloomberg Radio Monday morning, the UK’s FTSE 100 Index was trading just above 6,000. Europe’s STOXX 600 Banks Index was down 7.2% for the session at 120. Germany’s DAX index was quoted at 9,370. Also suffering post-Brexit effects, S&P500 futures were trading just above 2000. Bloomberg ran the headlines: ‘Greenspan: Brexit ‘Terrible Outcome in All Respects.” ‘Greenspan: Euro is Unstable Currency.’ The former Fed chairman was extraordinarily gloomy on the UK, Europe and the world. Markets that morning appeared wholly rational.
A significant crack has been unexpectedly opened in the wall of Europe’s disciplined obedience to the United States. I’m not only referring to the possible long-term consequences for U. S.-European relations in the wake of Britain’s decision to leave the European Union, but the unlikely blow against Washington’s information war on Moscow delivered by Germany’s foreign minister, Frank-Walter Steinmeier, who a week ago shockingly accused the North Atlantic Treaty Organization of ‘war-mongering’ against Russia. Since the Bush administration’s twisting of events in the 2008 Russia-Georgia war, which the E. U. blamed on Georgia, Western populations have been subjected to the steady message that Russia is a ‘threat’ to the West and is guilty of ‘aggression.’ This reached a peak with the false narrative of events in Ukraine, in which blatant evidence of the West’s complicity in a violent coups d’tat was omitted from corporate media accounts, while Russia’s assistance to eastern Ukrainians resisting thecoup has been framed as a Russian ‘invasion.’ The disinformation campaign has reached the depths of popular culture, including the EuroVision song contest and sports doping scandals, to ensure widespread popular support for U. S. hostile intentions against Russia. The Russian ‘aggression’ narrative, based largely on lies of omission, has prepared the way for the U. S. to install a missile-shield in Romania with offensive capabilities and to stage significant NATO war games with 31,000 troops on Russia’s borders. For the first time in 75 years, German troops retraced the steps of the Nazi invasion of the Soviet Union.