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The Scenarios Of The Collapse – “The World Is Utterly Unprepared”

Business

2019 has started more calmly after a very volatile year-end in the markets. Focus has been on the trade deal between China and the US and the words of the central bankers, most notably those of Jay Powell. However, this is all just a distraction, a side-show. The market volatility was only the first sign of an approaching global economic crisis, as we warned in December 2017.

As the recent PMI figures across the globe show, a global downturn has started and the world is utterly unprepared for it. The global imbalances that have been growing for years cannot lead to anything else than a global crisis . However, there are different paths the crisis could take.

Here, we present three scenarios that the global economy is likely to follow, when the global downturn morphs into something much more sinister.

We’ll start with the most likely scenario: Global Depression.

Scenario I: Global Depression

In a depression, everything that has been driven the economic expansion goes into reverse. Asset markets experience severe contraction (in excess of 50 percent), credit becomes restricted, corporations and households de-lever fiercely, and global trade flows stall (for more details see Q-review 2/2018). GDP falls dramatically, between 10 to 25 percent. Unemployment skyrockets. The standard means of stimulus by central banks and governments are exhausted without any notable improvement in the economic environment.

The implosion of the current asset bubble will start a relentless unwinding of leverage and risk in the global financial system. Because major central banks are still “all-in” with rates pinned at or near historic lows, and balance sheets bloated to extreme levels, their ability to respond will be highly restricted. Governments are also highly-indebted, and when interest rates rise, some sovereigns are likely to default, aggravating the global banking crisis, which will probably be in motion already. Combined with the zombified global business sector and a hard landing in China, these factors will lead the world economy into a depression. However, a possibility of something even more ominous is lurking in the background.

Scenario II: Systemic Meltdown

Systemic crisis would mean that the global financial melts down due to an existential deficit of trust between counterparties within the system. Before 2008, a systemic meltdown was mostly a theoretical construct. However, in mid-October in 2008, global leaders were faced with the possibility that banks would not open on Monday. The interbank markets had frozen, because no one knew the amount of the losses banks carried on their books. The global financial system was grinding to a halt. Politicians and central bankers saved the day by guaranteeing bank deposits and by providing capital and extraordinary guarantees to keep the important financial institutions standing and credit flowing.

Now the problem is that many of these measures are already in play and when the next crisis hits, the solvency of governments and central banks will also be in question. This creates a perilous situation because, for example, the shares of the global systemically important banks, G-SIBs, have been falling since the beginning of last year, which was also the time when the balance sheet normalization (QT) program of the Fed kicked into full gear. This is no coincidence and it implies that troubles are, once again, brewing in the banking sector.

Because a crash in the asset values would affect the collateral of banks and because global depression would lead to a massive increase in loan losses, the already-impaired banking sector could, again, face collapse. However, this time around, there is very little authorities can do to stem the panic. These factors make the systemic meltdown an ominously-likely scenario.

Systemic meltdown would mean that all banking actions, distribution of money, loans, swaps, banking services, etc., through the banking sector would stop. Credit cards would cease to function, ATMs would not give out money and loans could not be originated or rolled-over. Following the likely collapse of global trade, the world economy would also collapse. This would imply that the global GDP would experience a harrowing fall of 20 to 40 percent. Modern societies would cease to exist in their current form.

Scenario III: The fairy tale

Could this all be averted somehow? We’ve been pondering this for two years now, and our resounding answer is no. The leverage in the system usually results in a crash at some point, and asset bubbles very rarely deflate in a controlled manner. However, CBs can probably still postpone the inevitable, if they could re-start QE programs or find some other way to push artificial central bank liquidity into the financial markets.

To soften the eventual blow, and as an extremely desperate measure, central banks could, at least in theory, engage in a “QE-squared”. In it, major central banks would buy a hefty chunk of global risk assets, estimated to total $400 trillion. This would mean that the balance sheet of major CBs would need to expand at least five-fold from the current level of approximately $20 trillion. To cover the crippling losses to their collective balance sheets that these purchases would be likely to inflict, they would need to use their money-printing ability to paper them over.

Central banks earn seigniorage-revenue from all the money they create. This is the difference between the nominal value and the production costs of the money. Because production costs of digital entries are very close to zero, the seigniorage revenue CBs receive from each entry is close to 1-to-1. Still, this would mean that they would need to create new money in the range of tens of trillions of US dollars. By comparison, in 2017, the global nominal GDP of the world was approximately $75 trillion.

To distribute such incomprehensible sums of new money, central banks would need to give it directly to consumers and governments. Even in normal circumstances, the production side of the economy would be unlikely to be able to respond to such a massive increase in (artificially created) demand, and this time there would have been wide-spread corporate bankruptcies driven by global depression. A hyper-inflation would be likely to follow.

There’s also the alternative that CBs would make a complete U-turn and continue to backstop market losses. This would be the “way of Japan”, where the BoJ already owns over 40% of the sovereign bond universe. It would eventually mean the effective nationalization of capital markets which would continue to function in name only.

We have no historical experience with what the expropriation of modern capital markets would cause. However, it would be unlikely to be anything good as capital markets have been around for several centuries, and they are extremely important in allocating financial capital efficiently. If central banks take a permanent active role in the capital markets, it would lead to financial market socialism. It would be likely to bring similar horrors as regular socialism in the form of lost incentives (breaking down of the risk-reward relationship) and inflated asset values. It is unlikely that global central bankers would be willing, or that they would be allowed, to do so.

The endgame nears

The global balance sheet of central banks turned in August 2018 (see Figure1). This marks the start of global QT and thus the end of the most reckless monetary policy experiment in history.

Figure 1. The combined balance sheets of the Bank of Japan, European Central Bank and the Federal Reserve during 2018. Source: GnS Economics, BoJ, ECB, Fed

When this is combined with the slow-down in China, the engine of the world economy since 2008 (see Figure 2), we have finally entered the endgame of at the current business cycle. The desperate measures of central bankers and China enacted after the financial crisis have pushed the global debt and financial alchemy to never-seen heights. The global financial system has become rigged with leverage, moral hazard and regulatory failures to a point where a “purge” has become all-but-impossible to avoid. This is the end.

Figure 2. Gross capital formation in Australia, Canada, China, euro area, Japan, South Korea, the United Kingdom and the United States in constant (2010) US dollars. Sources: GnS Economics, World Bank

Fortunately, even depressions and systemic crises have the tendency to bottom-out and recover. This is driven by resiliency. Even when faced by cataclysmic economic shock, businesses and people try to move forward, and rebuild their lives. Societies just do not spiral into anarchy and mayhem, even if the system should break down.

Still, every company, household and government should start to make contingency plans. Something ‘biblical’ is approaching.

GNSEconomics.com



43 Comments on "The Scenarios Of The Collapse – “The World Is Utterly Unprepared”"

  1. roccman on Fri, 11th Jan 2019 1:36 pm 

    something “biblical” – like an ark and flood?

    google sky garden – City of London…then gander to Chaco Canyon New Mexico…

  2. Shortend on Fri, 11th Jan 2019 1:47 pm 

    https://nypost.com/2019/01/11/costco-sells-out-of-27-pound-mac-and-cheese-bucket-with-20-year-shelf-life/amp/
    Costco sells out of 27-pound mac-and-cheese bucket with 20-year shelf life

  3. I AM THE MOB on Fri, 11th Jan 2019 2:28 pm 

    Damn Charlie;

    https://imgur.com/a/Z0TSvEO

  4. makati1 on Fri, 11th Jan 2019 5:24 pm 

    A fairly honest article. The West, and their wannabees, which is who they are talking about, is in or a world of hurt. The collapse will affect the other 160 countries in various degrees but not as much.

    Yes, the reset will change everything global, but not so much local in most countries. If you live on <$2 per day, you are mostly self sufficient. That will not change much. If you rely on JIT delivery, credit cards and ATMs, you are cooked. Are YOU prepared?

  5. KenKat on Fri, 11th Jan 2019 5:39 pm 

    Good assessment of the likely scenarios. For anyone paying attention, we are currently headed to Scenario 1 and there does not appear to be anything on the horizon to avoid it. Its not a peak oil problem, it is more likely a peak USD for oil problem. Scenario 2 just as likely, is a total systemic credit lockup – could be started with a significant political crisis (like a yellow vest bank run, Brexit, White land confiscation, Impeachment….)

  6. Go Speed Racer on Fri, 11th Jan 2019 11:20 pm 

    If we set enough old tires and sofa cushions
    on fire, in our backyards, making enough black smoke, that can make the difference
    and avert the crisis.

  7. Theedrich on Sat, 12th Jan 2019 1:27 am 

    The End? No problem. Blame it on Trump, elect Dems.

    “The global financial system has become rigged with leverage, moral hazard and regulatory failures to a point where a ‘purge’ has become all-but-impossible to avoid.  This is the end.

    The article elaborates on the general principle pointed out by Joseph Tainter in his The Collapse of Complex Societies (1988):  massive social systems are brought down by blindly continuing the path of complexification.  The world economy has been kept afloat by tricks and fakery (e.g., QE, economic pretenses, political bloviation, drivel about past glories, shifting production to slave countries and importing serfs), ever more complex, until the Gordian Knot has become too tight and gnarled to undo.  The effort to “solve” increasing difficulties by repeating the growth formulæ of the past, then using self-delusion to proceed off the cliff, is coming to an end.

    However, there’s always the last resort:  war.

  8. Cloggie on Sat, 12th Jan 2019 3:36 am 

    Batteries or hydrogen?

    https://deepresource.wordpress.com/2019/01/12/future-driving-hydrogen-or-batteries/

    My guess: batteries for light-weight 2-3 wheel vehicles for the shorter distances like commuting/local traffic and hydrogen for larger vehicles like multi-person on-demand transporters, trucks, trains, ships, planes.

    However, there’s always the last resort: war.

    Yep, probably over Taiwan and/or South China Sea.

  9. Cloggie on Sat, 12th Jan 2019 4:14 am 

    Heat battery:

    https://deepresource.wordpress.com/

    British innovation: phase-change based heat storage.

  10. Davy on Sat, 12th Jan 2019 5:28 am 

    “Batteries or hydrogen?”

    Both are technology for an energy transformation that will help in our net energy decline. They are not transition vectors. Our global economy likely cannot afford the transition costs nor the ongoing lower economic performance of the lower energy density of batteries and hydrogen. These are vital for keeping us going as fossil fuels go into decline. Decline is more than fossil fuels, we have systematic decline that makes the job of batteries and hydrogen even more difficult. This is the problem here on this board, all the decline factors are not considered in these types of discussions. If we only had energy issues it is possible we might swim out of this. We also have human behavior and lifestyle issues that batteries and hydrogen will not solve.

  11. Davy on Sat, 12th Jan 2019 6:02 am 

    The energy transformation that batteries and hydrogen offer is further being enhanced by the explosion of data and its connectivity. This is very important going forward in efforts to implement smart grids with AI demand management for both the micro of households and industry but also the greater grid. It will offer increased management of intermittency of wind and solar taking some pressure off storage needs. Storage is a very expensive undertaking. Hydrogen is not the best energy vector for solar and wind either.

    The big issue going forward is stability of something so complicated as AI connectivity in the very dangerous world we live in. We would do well to continue to invest in those areas not automated and dependent on data connectivity. Electricity is complicated enough and when you add data dependent connectivity it becomes extremely vulnerable. We should keep some areas unconnected in low tech arrangements but this will likely be ignored by the pursuit of techno-profits the technoptimist are so obsessed with. Instead of changing behaviors by education and changed lifestyles we will skip that and AI it. This is the wrong idea of resilience. We need both high tech and low tech connected with adapted human behavior. Techno efficiency is dangerous because it application is narrowly applied. Strict and pure efficiency can be destructive to the greater good.

    Eventually our energy transformation must be behavior based. This will actually be the holy grail of the energy transformation. When we teach this very important topic in school to the young then we will be getting somewhere. I will be more confident in an energy transition if I see dramatic behavioral changes. We are talking dramatic in fact I would say draconian is the better word for it. I am not sure the global economy that robustly delivers all the gadgets and goods we are so proud of can stand draconian. I am not sure human nature that is often based on thrill seeking is up to the task either.

    “The Internet Of Things Data Explosion”
    https://tinyurl.com/y7y7gxzg

    “The Data Cometh Whether it’s for the consumer, enterprise or industrial, IoT devices by their very nature produce an enormous amount of data. As would be expected given the steep expected growth of the IoT market, the amount of data that will be generated by the Internet of Things will be truly enormous. According to IDC, the data generated from IoT devices is currently growing from 0.1 zettabytes in 2013 to 4.4 zettabytes in 2020:”

    “Conclusion By all accounts, the growth of IoT has been exponential. The market is expected to grow from a couple of hundred billion dollars to over a trillion dollars in under a decade. A category like smart speakers, which was a small niche a few years ago, is now a ubiquitous presence in homes across the world. And as companies invest in capital improvements, those assets are increasingly equipped with internet capability to monitoring, maintenance and optimization purposes. The Internet of Things revolution is here and it’s only getting bigger. And that means one enormous by-product from all these connected devices: data. The companies that create and deploy IoT devices will increasingly find themselves pondering not just how to use IoT devices but what to do with the data and how to secure it from threats.”

  12. twocats on Sat, 12th Jan 2019 7:17 am 

    exactly davy – this article addresses only economic factors, not really talking about net energy decline, environmental degradation, climate instability, and even some demographic issues

    “In 2011, the average person was just under 32, four years older than in 1950, when a mere 2.5 billion souls lived on Earth”

    https://www.economist.com/graphic-detail/2013/01/08/the-age-of-man

    only people like Nafeez Ahmed (and many others) are putting things together in a coherent, cohesive narrative of collapse.

    or we could just say “batteries” and hope invoking that magical word will dissolve the entire issue.

  13. Cloggie on Sat, 12th Jan 2019 7:31 am 

    Hydrogen production, too cheap to meter.

    https://deepresource.wordpress.com/2019/01/12/hydrogen-a-skeptic-view/

    I would love to hear comments from Antius about my conclusions about the (almost non-existing) cost of hydrogen production from renewable electricity:

    https://deepresource.wordpress.com/2019/01/12/hydrogen-a-skeptic-view/

    The real cost of a renewable energy base is renewable electricity production and storage and transport cost of hydrogen, NOT the production cost of hydrogen, that is now at 77% efficiency, with further potential to improve to deep into the nineties.

    If this is all true and I think it is, the renewable energy economy is going to win on price ALONE, so we don’t have to bicker about depletion, pollution and climate change and all that jazz.

    (although I am still in favor of dissing fossil fuel, we Europeans don’t have but our competitors USA, Russia, Australia, Middle East do have, so we can replace their fuel with ours. Oh God, I’m p*ssing in my pants for laughter at the thought!)

  14. Davy on Sat, 12th Jan 2019 7:35 am 

    ‘I would love to hear comments from Antius about my conclusions about the (almost non-existing) cost of hydrogen production from renewable electricity:”

    Bogus talk cloggster, the equipment has a cost and once over 50% penetration the cost go up dramatically to the whole system. Hydrogen is not a good energy vector and this has been proven over and over but you are so invested in hydrogen you ignore reality

  15. Cloggie on Sat, 12th Jan 2019 8:04 am 

    “the equipment has a cost”

    Now what part of 500 euro/kW at 3 years minimum operation or 500 euro for 26,320 kg hydrogen, which is the equivalent of 75,000 kg gasoline, you don’t understand?

    “once over 50% penetration the cost go up dramatically to the whole system”

    You got that from me and that is what I thought until 12:00 this afternoon local time. During the past hour I have become a renewable energy Cornucopian, provided of course dr Simon Bourne of ITM Power plc is correct with 500 euro/kW hydrogen production capacity by say 2025.

    This is one of the most significant renewable energy videos you can watch now and let the implications sink in:

    https://youtu.be/eku0GuSKiIc

  16. Cloggie on Sat, 12th Jan 2019 8:06 am 

    “Hydrogen is not a good energy vector and this has been proven over and over but you are so invested in hydrogen you ignore reality”

    Davy bluffing himself into energy consultancy.lol

    I have zero investment in hydrogen.

    Yet.

  17. Cloggie on Sat, 12th Jan 2019 8:18 am 

    https://deepresource.wordpress.com/2017/12/11/high-temperature-electrolysis/

    German company Sunfire beats ITM 77% efficiency with 82% through electrolysis of saturated steam 40 kg/h @ 150°C and pressure: 3 bar(g). They think they can achieve efficiencies of over 100% renewable electricity input, by converting heat into hydrogen.

    https://www.sunfire.de/en/applications/hydrogen

  18. Davy on Sat, 12th Jan 2019 8:26 am 

    “Now what part of 500 euro/kW at 3 years minimum operation or 500 euro for 26,320 kg hydrogen, which is the equivalent of 75,000 kg gasoline, you don’t understand?”
    Total system cost clogster not the cherry picked unit cost.

    “once over 50% penetration the cost go up dramatically to the whole system” “You got that from me”
    No I didn’t I got that from my own research to combat your excessively sloppy reporting of renewable performance without consideration and unrealistic forecasting.

    “500 euro/kW hydrogen production capacity by say 2025.”
    Again you disregard the whole system cost of transforming the energy system. There are still large gaps in the feasibility of hydrogen related to safety and storage. Antius has covered these well and you just ignore them.

    Hydrogen and renewables are vital but quit the disrespect to scientific honesty that you perpetuate daily.

  19. Davy on Sat, 12th Jan 2019 8:27 am 

    “100% renewable electricity input, by converting heat into hydrogen.”

    LMFAO

  20. Cloggie on Sat, 12th Jan 2019 8:40 am 

    “LMFAO”

    LMFAO is not an argument.

    Hillbillies and science.
    /rolleyes

    https://www.sunfire.de/en/applications/hydrogen

    “The hydrogen output can be varied between 0 and 125 percent, offering additional flexibility in the decentralised generation of renewable hydrogen.”

  21. I AM THE MOB on Sat, 12th Jan 2019 9:05 am 

    Bibi of Israel is the leader of the world wide right wing populist movement! He even went to Brazil to the inauguration of their populist president..And Trump has bent over backwards for him..Its the left who oppose Israel..

    Clogg is just a lap dog for Israel..

  22. Cloggie on Sat, 12th Jan 2019 9:09 am 

    https://cleantechnica.com/2019/01/11/saudi-arabia-increases-solar-targets-to-20-gigawatts-by-2023-40-gigawatts-by-2030/

    “Saudi Arabia Increases Solar Targets To 20 Gigawatts By 2023 & 40 Gigawatts By 2030”

    Few countries are better positioned to produce cheap hydrogen than Saudi-Arabia.

    “Clogg is just a lap dog for Israel..”

    I can’t respond to that as I have to obeserve the holy Sabbath.

    Ssssssh

  23. Outcast_Searcher on Sat, 12th Jan 2019 10:26 am 

    Funny. In the real world, decade after decade, the “collapse” clowns who live to sell doom newsletters are always wrong.

    Their story is the fairy tale — especially the odds that when they claim THIS TIME must be it, is right.

    But after all, even clowns need to make a living.

  24. print baby print on Sat, 12th Jan 2019 11:12 am 

    Scenario 4
    Print one million dollar note and problem solved or hundred million whatever

  25. I AM THE MOB on Sat, 12th Jan 2019 12:56 pm 

    Clogg’s country is running out of natural gas..The only reason it was a prosperous country in the first place..Without it all they have are lego’s and tulips..LOL

    More than 80percent gone forever..And you can’t export wind..And you have to replace the turbines every 25 years..A false hope..

  26. I AM THE MOB on Sat, 12th Jan 2019 12:58 pm 

    Clogg

    Solar panels won’t work in tempertures above 85 degrees..and there is too much CO2 pollution blocking them..

    https://www.thetimes.co.uk/article/desert-sun-in-qatar-too-hot-for-solar-panels-to-work-h23kmktbp
    http://pratt.duke.edu/about/news/solar-pollution

  27. Cloggie on Sat, 12th Jan 2019 2:00 pm 

    He, just found a source that confirms my statement made earlier, namely hat producing hydrogen from electrolysis is virtually too cheap to meter:

    https://deepresource.wordpress.com/2019/01/12/hydrogen-from-electrolysis-now-cost-competitive/

    5 euro per MWh or half a cent per kWh.
    The 2017 article confirms an electrolyser efficiency of 80%, life cycle of 20 years.

    Article also states that hydrogen will in most cases only be a first step and that ammonia, or a hydro-carbon will be the next step.

  28. Cloggie on Sat, 12th Jan 2019 2:05 pm 

    “Solar panels won’t work in tempertures above 85 degrees..and there is too much CO2 pollution blocking them..”

    They can always eat their camels.
    Qatar is not very prominent on my radar.

  29. Free Speech Forum on Sat, 12th Jan 2019 6:57 pm 

    One thing worse than living in a police state is finding out that no one cares.

  30. makati1 on Sat, 12th Jan 2019 7:25 pm 

    Free Speech, you are talking about Americans aren’t you? ^_^

  31. Cloggie on Sat, 12th Jan 2019 11:31 pm 

    Britain first western country to collapse?

    https://www.dailymail.co.uk/news/article-6585357/Bercows-secret-kill-Brexit-plot-Tory-saboteur-No-10-warns-PM-fall-Wednesday.html

    “Revealed: Dominic Grieve secretly met John Bercow just HOURS before Speaker allowed his killer amendment as No 10 warns PM could be gone by WEDNESDAY”

    https://www.dailymail.co.uk/news/article-6585569/Labour-unseat-Theresa-Wednesday-warns-Downing-Street.html

    “Labour could unseat Theresa May ‘by Wednesday’ with no confidence vote as Tory MPs warn of ‘Armageddon’ if they don’t back her Brexit deal”

    May is the voice of reason and compromise, a compromise between Brexit and UK economic interests. If she is gone on Wednesday, Westminster could turn into chaos, with everybody and his uncle trying to grab power.

    It’s a pity that Britain doesn’t have a strong men tradition. And when one does pop up, he blows up the empire, because his private money interests trump national interests. Boris and Jeremy could even blow up the UK with their behavior.

    Sturgeon will love it, just the chaos she needs:

    https://www.telegraph.co.uk/politics/2019/01/07/nicola-sturgeon-promises-new-independence-referendum-timetable/

    One thing I learned from this drama is that I turned skeptical about the wisdom of referendums. What a mess they can cause.

    But the unfolding drama in the UK is only the beginning and will spread to France and the US and elsewhere in western Europe, like Germany and is the expression of a terminal split between leftist establishment and populism.

    Ironically, Russia seems to have the most stable government of the three compartments of the white world: Anglosphere, continental Europe and Russia. With some luck Poroshenko will be gone in March.

  32. Cloggie on Sun, 13th Jan 2019 5:48 am 

    Yellow vests movement getting leaders with a face:

    http://www.spiegel.de/politik/ausland/gelbwesten-in-frankreich-krankenpflegerin-ingrid-levavasseur-ist-der-star-der-bewegung-a-1247784.html

    Ingrid Levavasseur: 31, nurse, single mom, white.

    https://www.youtube.com/watch?v=6HWhe3ycIwc

    Protests yesterday were larger than last week, but this time no violence.

    Complaints: often people only eat one meal per day, have the heating off, can’t give children new cloths. Centrist politician Brigitte Lapeyronie wants to combine forces with Levavasseur and participate in the upcoming EU-elections as “Yellow French”, but Levavasseur is in doubt about that. First goal: toppling Macron.

  33. Davy on Sun, 13th Jan 2019 6:31 am 

    “First goal: toppling Macron.”

    What is hilarious cloggie is Macron was your Gaullist buddy for a long time. You apologized about his Rothschild upbringing from the begging. He was going to deliver your P in the PBM But now you want him toppled. Your nationalist Europe is not turning out like you planed is it. LOL

  34. Davy on Sun, 13th Jan 2019 6:38 am 

    “One thing I learned from this drama is that I turned skeptical about the wisdom of referendums. What a mess they can cause.”
    Referendums are safety values of the people to let off steam. You stop that and you get explosions just like we see in France now

    “But the unfolding drama in the UK is only the beginning and will spread to France and the US and elsewhere in western Europe, like Germany and is the expression of a terminal split between leftist establishment and populism.”
    Only you have this mistaken belief that the establishment will be toppled. The establishment will remain with your populism making inroads is the likely outcome. This world is too brittle for a toppling. You just don’t turn the Titanic around. This is not 1930’s like you think it is.

    “Ironically, Russia seems to have the most stable government of the three compartments of the white world”
    Russia is a mafia state stuck in one man corruption. What happens if Putin goes? I imagine the place will turn into a pent up free for all. Putin is a man who is mortal. Russia may be stable and strong but by no means immune to decline.

  35. Cloggie on Sun, 13th Jan 2019 7:19 am 

    What is hilarious cloggie is Macron was your Gaullist buddy for a long time. You apologized about his Rothschild upbringing from the begging. He was going to deliver your P in the PBM But now you want him toppled. Your nationalist Europe is not turning out like you planed is it. LOL

    I never said that Macron was a Gaullist. I saw him as an intermediary figure. He never invited the world, like Merkel did. The first thing he did was invite Putin with all egards in Versailles. And he didn’t demonize Trump. And he has said that he wants to include Russia into a European security architecture. Merkel would never do that.

    But, Macron is no Salvini and no Fillon:

    http://en.kremlin.ru/events/president/news/59317

    http://prod-upp-image-read.ft.com/034c8380-028f-11e7-aa5b-6bb07f5c8e12

    Macron joins Putin in Russia at forums (Merkel would not do that):

    https://www.memri.org/reports/st-petersburg-international-economic-forum-%E2%80%93-part-ii-putin-europe-depends-us-terms-security-

    He then stressed that France would nevertheless not turn its back on partnership with the U.S. Macron stated: “If so, as far as NATO is concerned, should we turn our backs on the U.S. in this partnership? No. Otherwise I would have lied.” However, Macron concluded, leaving a door open for Putin: “As for collective defense and security, indeed the European Union, France and Russia should try and build a new architecture that would allow us to move forward in an atmosphere of trust.”

    Those are exactly the sensible and responsible words you want to hear from a European leader.

    Regarding fake refugees: Macron wanted to set up asylum application centers in Africa, not in Europe, meaning that only 1% would make it to Europe. But African countries refused to cooperate.

    I am still mildly positive about Macron, but his days seem to be numbered. The danger now is that populism gets too strong.

    What you want to see happening (as a Europe-firster like me) is coalition governments, like currently in Austria, where conservative christian-democrats prevent populists from blowing up the EU and populist preventing christian-democrats from blowing up Austria.

  36. Cloggie on Sun, 13th Jan 2019 7:25 am 

    Russia is a mafia state stuck in one man corruption. What happens if Putin goes? I imagine the place will turn into a pent up free for all. Putin is a man who is mortal. Russia may be stable and strong but by no means immune to decline.

    Since 1991, America is the greatest mafia state of them all, causing wars everywhere and killing 3000 of its own citizens on 9/11 in order to create the pretext for invading the Middle East. Spare me your sanctimonious drivel.

  37. Davy on Sun, 13th Jan 2019 7:27 am 

    “Europe Likely in Recession Now: Germany, France, Italy Production Collapsed”
    https://tinyurl.com/yaegk7vv

    “Unexpectedly Horrid Numbers These are not only horrid numbers, they are unexpectedly and shockingly horrid numbers. Blame Game France will blame the “yellow vest movement” Germany will blame cars and diesel and water levels on the Rhine Italy will blame France and Germany But the numbers are what they are. On top of it, Brexit concerns are in play as are Trump tariffs and a slowdown in China. Add it all up and what do you get? R E C E S S I O N That’s what. Forget talk of a “technical recession” this will be the real deal. And weakness will spill over into the US.”

  38. Davy on Sun, 13th Jan 2019 7:32 am 

    “Since 1991, America is the greatest mafia state of them all, causing wars everywhere and killing 3000 of its own citizens on 9/11 in order to create the pretext for invading the Middle East. Spare me your sanctimonious drivel.”
    Come on clogged, The US is not a mafia state. The US is more an Oligarchy of corruption just like Euroland. Russia is mafia from top to bottom. Who knows that may be the best system going forward in this messy world. One bad aspect of a mafia culture is will Putin like figures be replicated. You need a very strong Don to hold a Mafia culture together.

    “Spare me your sanctimonious drivel.”
    Translation: TOUCHE’ ON ME

  39. Davy on Sun, 13th Jan 2019 7:39 am 

    “Next eurozone crisis has begun and will lead to more money creation”
    https://tinyurl.com/yazmlmzz

    “Industrial output is in crashing. Retail sales have stagnated. Business confidence has dropped, and investment is heading south. A sharp slowdown might have been expected for Britain heading out of the European Union, America where the President is busily ripping up half a century worth of carefully constructed trade agreements, or China, which has been on a decade of wild, credit-fuelled growth. But the real slowdown is happening in the one place where few economists expected it. It is now painfully obvious that the eurozone is heading into a sharp recession. The numbers coming out of all its main economies, from Germany to France, Italy and Spain, are relentlessly bad. What does that mean? Far from winding up quantitative easing, the European Central Bank will be forced to step in with emergency measures to rescue a failing economy — but it may well prove too little, too late.”

    “The eurozone is now seeing a synchronised slowdown right across all its major economies. Germany looks certain to be in technical recession, defined as two consecutive quarters of shrinking output, and France and Italy will not be far behind. Spain, which had been growing faster than most of the continent, is slowing and so will the smaller economies. Add all that up, and it clear the whole continent is heading into a fresh downturn, even though employment and output have yet to recover their 2008 levels.”

    “In fact, there are two big weaknesses. First, led by Germany, the whole of Europe has allowed itself to become dangerously dependent on exports. The German trade surplus at more than 8 percent of GDP leaves that country brutally exposed to the cross-winds of global trade. But it not just Germany. In 2017, the surplus for the zone as a whole hit a massive E345 billion, up from E207 billion five years earlier. The whole continent is hooked on exports. Talk of trade wars, a slowdown in China, and a hit to the emerging markets all mean the European economy suffers first from any slowdown (Brexit is hardly helping either, with Germany’s surplus with the UK already narrowing and likely to fall further). An export-led model is great when the global economy is expanding – but can turn against you very quickly. Next, the euro remains a relentlessly deflationary currency that has ripped demand out of whole economies. With weakened banking systems, towering imbalances between the core and the periphery, puny wage growth, relentless austerity, and mass unemployment, it has proved itself over two decades incapable of generating any meaningful internal demand. Most countries can reflate their economies with consumer spending, easier credit, and a cheaper currency. The euro-zone can’t do any of that.”

  40. Cloggie on Sun, 13th Jan 2019 8:23 am 

    “First, led by Germany, the whole of Europe has allowed itself to become dangerously dependent on exports.”

    Sounds to me like: “Scrooge McDuck has dangerously exposed himself to a high income”.lol

    Yes, it is true, economic expansion seems to be slowing down. Economic history is the story of ups and downs.

    [big yawn]

    https://www.theguardian.com/business/2018/dec/19/is-predicting-eu-growth-of-19-being-over-optimistic

    “The European commission, the International Monetary Fund and the OECD predict that, on average, the EU’s economy will grow by 1.9% next year, a rate that is broadly consistent with the average of 2% expected for this year”

    The impending right-shift, WW3/CW2 and the dismantling of the US empire and subsequent geopolitical refactoring will leave little time to boost GDP in Europe.

    so what, the overthrow of the 1968-generation of multicult Washington c*ck-suckers and war is far more interesting than yet another Black Friday.

    It’s going to happen anyway, so you better like it.

    /SouthChinaSeaTaiwanIran

  41. Davy on Sun, 13th Jan 2019 8:44 am 

    “[big yawn]” out of clogged now instead of “golden decade” crowing of just a year ago

  42. Davy on Sun, 13th Jan 2019 8:45 am 

    “war is far more interesting than yet another Black Friday.”

    LOL, until it is on your Euroland streets as a civil war

  43. Cloggie on Sun, 13th Jan 2019 8:57 am 

    Overview Dutch progress renewable energy transition, especially wind:

    https://deepresource.wordpress.com/2019/01/13/dutch-wind-energy-installation-data/

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