EU – The devided Union

New self-confidence of small EU states

The strongest european country Germany shows weakness as we discussed before. Mrs. Merkel prefers beeing in countries far away because she is still adored there. Not so in Germany. 43% of the germans want her to step down (german: Focus)

France and Germany used to lead the EU and the other member states followed. Money always helped, if a country rebelled. But times change and young leaders like Sebastian Kurz from Austria and the italian secretary of the interiour Matteo Salvini want to get involved in the decisions. The latest example for this is the rejection of Merkels and Macrons plan of a new european budget. 12 EU countries signed a letter against the plan. Their simple but entitled question is: “What problem does this new budget solve? – We see no sense in it.” (german Focus)

Greece.

Greece was officially released from the rescue program on Friday. The Euro almost had crashed and the country has been broke but over 270 billion euro saved her. (german: Badische Zeitung)

That sounds good as long as you don’t look behind the facade. Economic data have been forged over many years and no one believes them now. Unemployment is still over 20%. High taxes make it difficult for start-ups to establish. Since the European Central Bank will stop buying state bonds, new money will get more expensive. Greece is a risky financial investment and so they will have to pay higher interest rates. I hope that Greece will make it but chances are that the next crisis is aroud the corner.

Global trade war will test EU unity

What is the final answer to the US tariffs? Will they promote a new EU, that builds a wall against immigrants and protects itself by own protective tariffs? Or will the globalists win? There are different opinions within the EU that could split the continent even more.

Dangers and possibilities

It seems to me that many countries got strong leaders in the last years: Putin, Trump, Kim Jong Un, Kurz, Netanyahu, Macron and Erdogan for example.  No matter what will happen with Germany’s chancellor in the near future, Germany will be without a strong leader. No party is strong enough to form a strong government. The EU as a whole is estranged. This is like a vacuum that longs for fulfillment. It could be that people say: “We need a strong leader whatever it takes.” So let us watch mindfully at the political developments.

 

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Please prepare for the crisis

The signs for the next crisis multiply

Some people long for a crash and think that a “reset” could bring relief for our corrupt and suffering world. The chaos and the monetary devaluation would bring the proud world and  our disgusting bosses down and we would be free at last.

The truth is that nobody can prepare adiquatly for the things that are about to come. As a christian I say: find Jesus as long as there is still time. He is the strong fortress in the middle of a waving sea.

Some preparations could be helpful for everybody if the system breaks down:

  • stay in touch and help each other
  • reduce your dept as much as possible
  • have some food and water at home
  • stay away from the wild crowd
  • be informed and study various sources
  • care for your body (activity and good food)

You may ask why I expect a crisis – or better: a crash in the very near future

The FED and the European Central Bank tightened their monetary policy in the last week which is good. But people and nations always need more money to pay back their old depts. House and car sellers depend on the willingness of their customers to borrow money, otherwise nobody could afford their products.

The concrete signs are:

  • FED interest rates as high as 2008 (before the financial crisis) with more increase ahead
  • ECB will stop buying government bonds in december
  • groth of global dept , especially in the western hemosphere (Government dept)
  • Global growth is expected to edge down over the next two years according to the World Bank
  • global power relationships are changing
  • more weapons around the world
  • unpredictable world leaders
Many people like to believe that things won’t change, including me. It is a scary thing to face reality. On the other hand: You are ready to prepare if you know at least vaguely what’s coming.

From Sleep to Depression to Aggression

tiger-3264048 - KopieAfter – summet G7 – blues

Our chancellor Angela Merkel usually is like a high-quality teflon pan. You never see her angry, sad or passionate. Even terror attacs, substantial losses of votes or the European dept crises don’t touch her.

However this changed yesterday. Although there seems to be no anger about Donald Trump, you clearly feel that Angela Merkel is frustrated and depressed after the G7 summit in Canada (in german: Anne Will). What is depression? Right, it is suppressed anger. I guess there is a huge amount of anger. Remember the strengh of our car-lobby, remember Mercedes and BMW. Both are not pleased to live under the threat of tariffs on their products. Their voice is strong in our politics.

Mrs. Merkel is a diplomat and dares not to speak out openly against the US president.  But her position after Trump’s quote “disappointing, sobering and depressing withdrawal from the final summit agreement via twitter” shows her anger.

Anne Will: “Would you say that the times are definitely over when we could rely on the USA under Donald Trump?”

Angela Merkel: “I would not say ‘definetely’ …”

Last year after a Nato summit she said it the first time and repeated it yesterday in the interview:

Europe must become a strong pole as strong as China, Russia and the USA. Europe must become a global actor. There should be no arrangement between single countries within the EU with the various big poles of the world, that would ground down the EU.

Conclusion: “We don’t want to be pulled over the barrel time and again. We act now.” (quote Merkel) – The EU will try to build a stronger economic and strategic unity. Relationships with China, Russia, Japan, Canada and India will intensify in order to compensate the loss of the USA.

Merkel will not stop her efforts to talk with Donald Trump and to try to find a common basis. But, she sais, if this doesn’t work, you have to go your own way.

There are always changes in history and we seem to be at a critical juncture.

See what will happen on thursday!

mt-fuji-2232246

There is not only a supervolcano in Italy (english: Reuters) but there is also a financial volcano there. For years the European Central Bank is buying risky government bonds from Spain, Italy and other member states. Until now these papers add up to

2.710.000.000.000 USD) !

This procedure was and is highly controversial. What once was meant to save the Euro from the collapse became a problem itself. Countries became used to the cheap money. Some important people say that on thursday the European Central Bank could announce the end of the program. That would bring huge problems for the liquidity of the poorer EU countries. (german: General-Anzeiger and Der Spiegel)

Update Tuesday: Capital Flight 

As the “Süddeutsche Zeitung” (in german) reports today, the Italiens transfer about 1.18 billion USD abroad EACH DAY since May.

Italiens don’t trust their new government and fear a severe bank crisis in the land. In 2013 we saw such a scenario in the Euro-country Cyprus with strict capital controls  and bank closures (german: Der Spiegel). Italy is much bigger than Greece and her financial breakdown would be devestating. The italian leaders know this also and try to calm down the people.

Crazy Friday

Yesterday’s news would normally spread over months. But when the coffee machine failes it is very likely that out of sympathy the washing machine strikes also.rock-chick-1600436

Deutsche Bank seriously injured

Our biggest bank suffers her lowest share prices ever. On friday they fell below 10 Euros for the first time in history.

Deutsche Bank changed only recently her chief executive officer (CEO).  The new man is Christian Sewing who already started to fire 10.000 employees according to german newspapers (in german: Die Zeit and Stuttgarter Zeitung).

These are bad news for Germany and could also affect other countries worldwide. Deutsche Bank has the honour of beeing the most dangerous bank in the world in terms of harm that she can do to international banks in the case of another financial crisis (german: Die Zeit).

Remember that the European dept crisis is anything but over. The European Central Bank only buyes bad government loans in order to keep our member countries liquid. Like the Baron Münchhausen we try to pull ourselves out of the swamp by our own hair. Of cause many countries do that. But that doesn’t make it better.

Spain fires Prime Minister

That should not affect us very much but is worth to be mentioned. The firered prime minister Rajoy was not very smart when a part of Spain, Catalonia, voted for their independence last year. He called the saparatists criminals and put some of their leaders in jail.

On friday he lost a no-confidence vote in Madrid and had to step down because of a big corruption scandal. The party of the new prime minister Pedro Sánchez has no majority in the parliament. To become prime minister he needed the votes of the separatists.  How will he handle the Catalonian question in the future? Can he prevent that Spain falls apart? He seems to have no real political goals except the power. (in german: Handelsblatt)

Premiere in Italy – 2 eurocritical parties take the lead

The country that sits on a third of europs lazy loans has a revolutionary new government since Friday. According to their program they want to increase the country’s spendings instead of reducing them. This is easy to understand since the economy is weak and a quater of the young people under 34 is unemployed. There have to be investments to make the economy grow.

In Brussels are strong concerns about this new kind of policy. Who will pay for the investment program? Will there be a new European dept crisis? What if Italy doesn’t follow Merkel’s “suggestions”? (sources in german: SPON and Euronews)

Tradewar Day 1 – 25% steel tariffs in place

Yes, that too happened on friday. US president Trump carried out his threat of imposing high steel and aluminium tariffs on his closest allies. Canada and the EU already announced that they will not accept this move and will impose their own tariffs on US products. (BBC)

Mistrust and tensions between the nations seem to rise. Simply watch this video of the canadian prime minister Trudeau and you can feel the confusion:

Tensions rise for sure. See what the german newspaper “Die Welt” reports:

30.000 more soldiers under Nato and German control

They will have hundreds of warplanes and warships to fight back “a possible russian attack”. The previous number of 20.000 soldiers will be more than doubled. A new NATO headquater will be built in Ulm, Germany. (in german: Die Welt and Süddeutsche Zeitung) I don’t like the thought. Do you know, that Germany arms the police with 17-tons-tanks? They are currently discussing the use of machine guns. (in german: Morgenpost) Where will this development lead us to?