Tag Archives: ECB

Chaos, benefit or danger?

As an aspiring agent of chaos, I have always been in favour of chaos. There are two quotes from the movie The Dark knight (2008) that are important here. They seem meaningless, but they are not. Consider the events surrounding Brexit. The IMF, Wall Street, the ECB all desperate to scheme through fear mongering, and they are even at it today, all so eager to keep their status quo in place. So, the first quote is: “Y’know they’re schemers. Schemers trying to control their little worlds. I try to show the schemers how pathetic their attempts to control things really are“, that is only partially true. The evidence is all around us on how Wall Street is still largely in control. I am not giving you some conspiracy theory on how they did one or the other. The news as we read it in nearly every decent newspaper gives you that evidence and they call it ‘policy’. It is fun to make a second movie reference, especially as it also included Christian Bale. The movie the Big Short (2015) shows clearly the facts of the subprime mortgage issues that unfolded and became a reality. It was based on the book by Michael Lewis called The Big Short: Inside the Doomsday Machine. I was sceptic at first, not because of the actors involved. Yet the notion that it involved Steve Carell and Ryan Gosling made me a little wary. In the end, I saw a movie that showed a Steve Carell who shows us how brilliant he actually is, more than merely a really good comedian. Even as he had already worked together with his prospective son in law (a Crazy, Stupid, Love pun), as the narrator in part of the movie Ryan Gosling gives it that extra, that part that will make you remember the movie long after you have seen it. The movie ends up being not merely an entertainer, the movie becomes an educator almost to the degree that the book was. Together with Margin Call and Inside Job you get a real grasp of the economic wasteland that 2008 created.

This part is truly important, because when you consider those facts and the mere realisation that the US, EU and many other places still have no proper protective laws in place is just scary.

Part of this is seen in the McKinsey report on June 5th 2018 where we see: “That the effects of Pillar 2 add-ons and capital buffers should result in two widely different assessments, of €56 billion and €2.2 billion, is notable, highlighting the room for national discretion during implementation. In Sweden and Norway, for example, supervisors are reflecting higher risk weights for mortgage loans in Pillar 2 capital requirements. Some analysts are therefore expecting that these add-ons will be removed, given that they are already captured by an internal model floor for mortgages under Pillar 1“, the part ‘expecting that these add-ons will be removed‘ is the danger here. You see, Bloomberg reported in January 2018 (at https://www.bloomberg.com/news/articles/2018-01-25/banks-prepare-for-battle-as-europe-readies-rules-to-cut-risk), “banks are uncertain about how Pillar 2 capital requirements — demands set over and above legal minimums — will be imposed“, the statement is odd as they were already there in Basel 2, so why is there now ‘miscommunication’? (Perhaps ‘ignorance through intentional non-comprehension‘ might be a better term).

When we look at those two pillars we see:

First Pillar: Minimum Capital Requirement
The first pillar Minimum Capital Requirement is mainly for total risk including the credit risk, market risk as well as Operational Risk.

Second Pillar: Supervisory Review Process
The second pillar i.e. Supervisory Review Process is basically intended to ensure that the banks have adequate capital to support all the risks associated in their businesses.

You see, we have seen the game of CDO’s, derivatives in many forms, sometimes being ‘diplomatically’ called Bespoke Tranche Opportunities nowadays, the Big Short mentions it at the very end. Consider that this was a 2015 movie, and Bloomberg gives us last August: “Pacific Investment Management Co., Goldman Sachs Asset Management, Columbia Threadneedle and others are snatching up bonds tied to subprime mortgages and other home loans made before the housing crisis, while selling speculative-grade company debt. They say junk yields are too low for the risk investors are taking, and securities backed by mortgages — which have already gained as much as 6.9 percent this year according to Bank of America Corp. data — offer higher potential returns given the risk“, it implies that some could get rich by taking risk on junk. So when that collapses, considering Basel 3 pillar one and two, what are the chances that pillar one, the operational side does not include such events as it is not ‘operational‘ but based on non-operational settings? Where is the risk then? In addition, when we see that now, the banks are expected to ‘expecting that these add-ons will be removed‘ from consideration, how dangerous is the balance at that point? Did we not learn enough in the years 2008-2011? Why are we allowing these gambles leaving us with nothing twice over? Why are there no clear laws banning credit swaps and BTO’s? It might sound nice and soundbyte nice when the pope makes such a claim, yet it is still legally an option, so why was this not halted? The fact that the book and movie mention this gives rise to the fact that Wall Street knew for many years, yet they let it slide. So what happens when the people DEMAND from their president that the banks will no longer bailout banks involved in that? What happens when Wall Street faces the rage of the people and there is no continuance or replay of the Emergency Economic Stabilization Act of 2008? What happens when the people have had enough and in honour of the American Civil War (1861 to 1865) decide on the American Wall Street Clambake of (20xx) where 150 million Americans decide to lynch the 63,779 bankers on Wall Street in public, would that change a few noses to be more morally inclined (of those still alive that is)?

Agustin Carstens gives us a more diplomatic view in the Financial Times (at https://www.ft.com/content/720efbe2-75fa-11e8-a8c4-408cfba4327c) where we see “the future is not pre-ordained. The right policies can help. While the path ahead is a narrow one, it can be taken. We should seize the day to rebalance the policy mix and sustain the current expansion. That means regaining room for policy manoeuvre and reviving the flagging efforts to implement structural policies. Let’s use macroprudential tools to strengthen resilience where financial vulnerabilities are building up. Let’s ensure that public finances are on a sound footing“, yet he phrases it better, but as I stated in the beginning, I am an aspiring agent of chaos after all. This gets me to the second quote in the Dark Knight. It is applicable in two settings, the one we saw and the one we are about to see. The quote: “You know what I noticed? Nobody panics when things go according to plan. Even when the plan is horrifying. If tomorrow I told the press that, like, a gang-banger would get shot, or a truckload of soldiers will be blown up, nobody panics. Because it’s all part of the plan. But when I say that one little old mayor will die, well then everybody loses their minds!

This gets me to the situation where Israel made a choice to speak, but from where I am sitting, it seems like the wrong voice to raise and it is the setting of a dangerous strategy that could backfire in ways that we cannot perceive as yet.

You see, on Wednesday afternoon Netanyahu tweeted out a video praising the Iranian soccer team for its performance in the World Cup against Portugal with “The Iranian team just did the impossible. To the Iranian people I say: You showed courage on the playing field, and today you showed the same courage in the streets of Iran.

For soccer fans it was a remarkable day, most of them did not give Iran any chance of winning, not against Morocco, who has a team that can stand up to the likes of Spain, a nation devoted to soccer, so for Iran to win, that was a really big thing. Now consider the words ‘today you showed the same courage in the streets of Iran‘. This is a reference to the Iranian currency plunging to the depths of the Mariana trench, having a massive impact on the Iranian people. ABC gave us (at http://www.abc.net.au/news/2018-06-26/thousands-protest-in-iran-over-failing-economy/9909184) ‘Thousands protest in Iran over failing economy, forcing closure of Tehran’s Grand Bazaar‘, now we can acknowledge the event, yet from the lips of PM Benjamin Netanyahu, or in this one particular case ‘PM Be not a Yahoo‘ it seems to give notification that revolution needs to be on their mind. The problems is even as they currently have a lame duck in place (President Hassan Rouhani), who is merely accepted as the temporary voice of the Clerical and Military power in Iran. Such a revolution would merely empower the military and give rise to the Clerical side to end up supporting the military

Yet the setting in the frame whilst the nuclear negotiations are still going on, Iran is under pressure. The danger we are now exposed to is that the Iranian clerics and military will not place another ‘liberal’ minded person for another 4 years, so the danger of having some short minded version of former president Ahmadinejad on steroids as the next president of Iran is not out of the question. No one can tell whether the clerics and military have prepared the next one, but to get one in their years early tends to push chaos to a level of devastation and this is not the time to make this happen. So basically we see the feeding towards ‘then everybody loses their minds!‘ Could I be wrong?

Off course I can, yet the data and events seeping towards a more extreme new president was always coming, the acceleration in Saudi Arabia and the Iranian acts in Yemen clearly point that way. We see in some sources phrases like “Iranian Foreign Ministry spokesman Bahram Qasemi told a news conference that the ongoing offensive on Hodeidah has put the country on the brink of famine“, from my point of view, the Iranians achieved that last year with the aid of a tool like Hezbollah and pointing the Houthi rebels to cause maximum damage to the people of Yemen. So when we see: “The international organizations and the UN should make an effort to end the aggression against the oppressed Yemeni people“, the UN knows perfectly well that delivered missiles firing from Houthi positions into civilian targets in Saudi Arabia made that a non-option right of the bat. Yet, we must not forget that Foreign Ministry Spokesman Bahram Qassemi played his part very well, the main players are not new to this game and merely waiving their options away is not something the UN is willing to do, in that regard we all need time to get anything proper in place and Israel just changed that instance to some degree. Chaos in Tehran can unfold in ways that cannot be predicted because several players behind the scenes cannot be identified. Yes, the top two (Ali Khamenei and Qasem Soleimani) are known, yet their inner circle is not completely known and now we are in an upcoming impasse where we could be forced to wait until their moves are done, that whilst Iran is nowhere near on the ropes, so they have what might be seen as the field advantage for a little while and that is where chaos can go unbridled and cause actual long term damage.

There is enough evidence of that in Syria, Libya, Egypt and Yemen, none coming with short term solutions to get some actual productive. the Egyptian $500 million education reform bill is only two months old and took some time to get it all in the right shape. This is long term thinking, a true working strategy where the next generation will be more educated giving additional options for long term dialogues and giving a nation options to grow economically. Now consider that any prospective improvement is now optionally off the table for Iran until 2027. This gives a long term danger to sparks evolving in a very different form of chaos, one that no one can predict how it will unfold in the end. That is the game at present. Now consider such an event happening whilst Europe and the US go through another 2008 event, something that several predict and most seem to agree that it is pretty much unavoidable.

Almost like some used to say that the Great War (1914-1918) was the war to end all wars and we were treated to a very different reality in 1938. In that year we got the very first issue of Superman and Time magazine elected Adolf Hitler as ‘Man of the Year‘, do you remember how that ended, apparently all remaining 9 million Israeli’s definitely do!

Chaos can be good, it allows for true change. In this the quote: “It’s like knocking over an ant-hill. Every new generation gets stronger, the ant-hill gets redesigned, made better” is appropriate, yet the danger is that those ants have access to an arsenal of ‘solutions’ that can make a real dent ensuring long term chaos, that is why the Israeli push is not the beneficial push that the PM thought it could be, so tweeting that video was slightly too rash (for more than one reason). In that the earlier setting where we let the banks completely collapse might be the better options (if we had to choose between the two). In the second part, the Iranian debacle is also set on how China will react. Some are speculating that Iran wants to offer an oil solution if China is the saviour that they hope it will be. I cannot tell, I never looked at any data or papers giving real light to one path towards the other path. For china it might be an option, especially after the vitriolic actions against Huawei and ZTE, yet in the end that market is for now not large enough to cause truest concern, not whilst they have plenty of options to grow 5G in Europe with a population twice the size of the US and an overwhelming desire of the local populations in western Europe and Scandinavia to adopt it, there is enough for China to focus on, they might love to help out Iran, just to spite the US and to get under-priced oil, yet that is a separate play from what is on offer.

Scandinavia is also interesting as it allows Huawei to reach the bulk of Swedes through their three cities (Stockholm, Goteborg and Malmo). As Malmo is merely a bridge crossing away from Denmark’s capital Copenhagen a growth path for Huawei could show others soon thereafter what the rest is missing out on and with Swedish Telia on board, the setting for both Denmark and Norway becomes a reality. Even as the US is all up in arms, Reuters gave us merely 4 months ago on Huawei being “the company in prime position to lead the global race for next-generation 5G networks despite U.S. allegations it poses a security threat“. So even as we see newscasts like ‘Sprint, T-Mobile merger will generate 5G powerhouse, cut costs for users‘, that setting is definitely not a given. You see the chaos is not in getting the 5G, the chaos comes from 5G as governments and large telecom companies are nowhere near dealing with the setting that cyber threats can become. this is not merely phishing, scamming or abducting accounts, this is the realistic danger that for the first two years 5G facilitators become start points of all kinds of chaos though the facilitation of non-calibrated systems, architecture lacking equilibrium. the difference between ‘a holistic approach towards DDoS attacks and 5G networks, rather than relying on outdated defence tactics‘ (source: Wireless Week). Non-repudiation would have been a quality first step in that, in a time when too many are relying on authentication, we seem to forget that it remains relatively easy to get a ‘false positive’. Please do not take my word for that, merely visit 675 N Randolph St, Arlington, VA USA (address of DARPA) and ask Dr. Steven H. Walker if you can take a look at a massive archive of false positives that their previous research gave in all kinds of fields, it is an impressive read to get your fingers on and you’ll die of old age before you even get through 30% of the materials, even if you start as a teenager.

That was the ball game from the start. A mere setting of order versus chaos; a simple setting where order could have prevailed, if not for the economic setting of greed and speed over quality. In that 5G does not open up the super highway of data, it merely opened `15 highways next to the one we cannot even properly control now and we end getting 16 highways flooding us with false positives, chaos on a new level and not chaos of the good kind. It will be the wet dream of organised crime for close to a decade to come and the larger players remain is presented denial.

For that you merely have to search Google and use the search term “Telstra non-repudiation“, you get ‘Mobile Authenticator’, which states to be ‘Enhanced non-repudiation’. These two are not the same! Now, important that this is not anti-Telstra, the bulk of all systems on a global level have these issues. My issue in this particular case is “reduce the costs associated with robust user authentication for large populations of staff or customers accessing your online service” Non-repudiation is never cheaper (for now) and in the end the flaws are not obvious, yet they are there and it takes one sloppy moment to give access. Computer world gave us last year the article by Evan Schuman involved here is Steven Sprague is the CEO of Rivetz, this project that comes the from National Institute of Standards and Technology’s National Cybersecurity Center of Excellence (yes, it’s a mouth full) is giving us: ““Software code is easily altered, and memory can be copied,” he said. “The [whole] software process can be observed. You simply cannot hide a secret in the operating system. It’s time to finally do it correctly, with hardened keys within the device.”“. It is one step stronger, yet this is still not non-repudiation, where the setting is that you and only you could have done the deed. Some go for the ‘Dual biometrics may just be the authentication answer we need‘, yet that is still ways away and in the end on the mobile path not really a good solution. One player called Sensory is making positive headway, yet they are not there yet and time ran out close to two years ago to get something really good on the roadmap. So even as we see that authentication solutions are there, in the immediate setting where mobiles can now move billions, the game is now and has always been non-repudiation. At present we move over a billion dollars a day via mobiles and ecommerce, when we consider that this push is going to fivefold in the next decade, do you really think that authentication is going to get the job done securely and on time before the big bank download begins?

Is there a connection?

Consider Bank Melli Iran: $45.5 billion, Bank Mellat: $39.7 billion and Bank Saderat Iran: $39.3 billion. Merely three banks with a few billions. Now consider the following settings. In the first we get “While the standards of the Bahrain-based Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) are widely followed around the world, they are not enforced in Iran“, a mere setting of rules. Now we consider the resetting of Basel 3 pillars one and two, with the support from several financial sources giving us “The Central Bank of Iran has played a significant and effective role in implementing Basel II and III standards in the banking system“. Now we take those elements and add 5G, whilst non-repudiation is non-existent and some devious entrepreneurs help themselves to the $125 billion of cream. This fat cat, can we call them ‘organised cats’, could potentially use the 5G debacle to remain anonymous and sail away on their new yacht (by the way, if you guys pull that off, please remember my AU$20,000,000 consultancy fee through Riyadh, so I can use the legally available tax avoidance rules).

Do you still think I am joking?

We have heard all kinds of noise concerning security, so in addition to that, one source (Internet of business dot com) gives us “5G will enable IoT applications such as autonomous vehicles, healthcare solutions, and robotics. But the technology also poses a much larger security risk than the 2G, 3G, and 4G networks that came before it. Why is this?
Significantly, 5G represents an overhaul in the way that networks are run and managed. In contrast to the hardware-based networks of the past, the technology takes advantage of virtualisation and cloud systems, leaving it more vulnerable to breaches if not properly secured.
” There we see the connection, proclamation of proper security are at the foundation of it, whilst the systems are all about Authentication and not about clear non-repudiation, in an age where mobile hi-jacking is a reality of life, the authentications in place are often too easily avoided. In the time a person walks to the bathroom a highly jacked phone can now set up the vibe of 25 million transactions, all completed in 52 seconds, most likely at that point, the person going to the toilet barely sat down for the event to release, that’s what it took to set the Iranian coffers to ’empty’. Now, many will not react that it happens to Iran, yet the newly elected extremist will not let that slide; and what happens when it is not Iran, but another nation? What happens when we realise too late that our own banks are not up to scrap?

Only this month did we see: “Security breaches continue to be an ever-present threat for financial institutions. Defending against attacks and authenticating customers without creating undue friction is something financial institutions have not yet completely solved. Consumers seem to be willing to use more secure methods to access their accounts, but not necessarily give up on ease and speed of transacting“, and in addition ““Attacks haven’t died down,” said Will Lasala, director of security solutions at OneSpan, a cybersecurity firm. “The amount of loss is through the roof. Stopping losses and the need to analyze what’s happening in those transactions is important.”“. That was this month, whilst the FDIC (Federal Deposit Insurance Corporation) treated all willing to learn to “Internet connections establish a pathway for hackers and thieves to access and steal sensitive personal information, including the banking records that many customers store on their home computers. Phishing, pharming, spyware, malware, worms, nimdas, viruses, buffer overflows, and spam—all relatively recent entries to our vocabulary—have raised electronic/Internet banking risk levels to new highs, and financial institutions have had to increase security measures to address those risks“, that was in 2005, thirteen years ago. Welcome to the age of ‘if it costs too much, sit on the solution for now‘, you see, not much headway was made (clearly nowhere near enough) and in that result we are now on the edge of 5G where the speed and issues are driven upwards at least tenfold, so that is where non-repudiation was a solution, if only someone had gotten us there. It was a risk covered in my University IT classes in 2010, so it is not like there was no awareness, merely a path that was seen by too many decision makers as too unprofitable to consider.

Now we see chaos in its proper light. Chaos could have set the stage properly, if they only allowed the banks to collapse in 2008, yet that did not happen and some players are up to their ‘old’ tricks in a new jacket whilst the people are more likely than not having to pay for it all again.

 

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They are still lying to us

There is a piece that the Guardian gave us less than 12 hours ago. The title ‘Greece ‘turning a page’ as Eurozone agrees deal to end financial crisis‘ should worry you. You are getting played! The article (at https://www.theguardian.com/world/2018/jun/22/eurozone-greece-financial-crisis-deal) is giving a dangerous situation as it is downplayed on nearly every level. Now, to set the stage, we need to understand that government budgets are complex. No one is denying it. Yet, what is complex about: “Eurozone member states reached an agreement on the final elements of a plan to make its massive debt pile more manageable, ending an eight-year bailout programme“, can you tell me that? You see in the heart of this is ‘its massive debt pile more manageable‘, we all see that. Yet do we understand it?  €328 billion, the interest on that small sucker is well over €500 a second! The debt is around 180% of GDP, it was 178% last year. These are issues that matter, because it gives Greece no options. Then the Guardian gives us the bit that matters a lot more. You see, in part one we consider “The plan allows Greece to extend and defer repayments on part of its debt for another 10 years and gives Athens another €15bn (£13.2bn) in new credit. Tsakalotos said it marked “the end of the Greek crisis … I think Greece is turning a page.”“, so an option to get even MORE DEBT. When was that a good idea? Now consider that the interest on the current loan is €640 million a year, so how does raising the debt by 5% help? You see, we see the game played, because the next elections are 20 October 2019. This is the beginning of an election stunt and the Eurozone is happy to help only if the current government does what the Eurozone tells them to. How is that for an option?

The next pack of non-truths is given by PM Alexis Tsipras with “The prime minister, Alexis Tsipras, told a meeting of MPs: “Greece is once again becoming a normal country, regaining its political and financial independence.”” I hope you understand that financial independence will not happen until 2045. The debt is that severe. The banks are not willing to be soft any longer, when the access to the markets are given it will merely take one screw up, one act of short sighted stupidity and people all over Europe will rally to demand the barring of Greece from the markets for decades. So when we are presented within: “The plan allows Greece to extend and defer repayments on part of its debt for another 10 years and gives Athens another €15bn (£13.2bn) in new credit“, you see this is what the beginning of slave labour looks like, a debt that cannot be repaid, a setting where €15 billion is merely a smoke screen and the coming years when you think your life is getting better, the truth is merely that your options are taken away. That is how you enter into slave labour. And the Eurozone will be nice and humane about it, they will not call it slave labour, they will call it new zero hour contracts and with the definition “Any individual on a zero hours contract who is a ‘worker’ will be entitled to at least the National Minimum Wage, paid annual leave, rest breaks and protection from discrimination” and the Greeks will realise too late that this government AFTER its election will set the stage where because of the high debts the National Minimum Wage would optionally have to be lowered by 20%, until the debts are better dealt with. So there you are sitting on a terrace having your last pita gyros with an Ouzo realising that you can no longer afford to do that, your income got cut by 20%. The opposing party reacted to the credit buffer with ‘Kostis Hatzidakis said it reflected the lack of faith international creditors had in Athens’ ability to successfully return to capital markets.‘ And in this Kostis is right, the international markets have zero faith in their return, they rely on a small thing called mathematics and the clarity there is that the scales are not in the favour of the Greeks. The financial market is hailing the success, especially those making money of every trade, and until the money is gone, some parties on Wall Street will love the Greek, give parties in their honour. The parties behind this were shown in the NY Times last week (at https://www.nytimes.com/2018/06/19/business/economy/greece-europe-bailout.html). Here we see “To play it safe, Greece won’t start selling bonds until well after it exits the bailout. Instead, the government, which is being advised by Paris-based Rothschild & Company, will pick a moment in the next two years when market conditions seem favourable. A cash buffer of up to €18 billion, funded by creditors, may help Greece secure the liquidity it needs in the meantime“, so now the credit makes a lot more sense, does it not? A credit to pay the bills until there is one more fish to cook for Wall Street ending the existence of Greece. Well, actually the Greek elected officials will do that all by themselves. Because it will be there choice (through whispers) that benefits could be gained through 10 year bonds giving 10 more years of relief. Yet those billions come at a cost, a 2% cost which goes to the traders, they will cash in millions at the expense of a few parties costing them mere thousands, after which they switch off their phones, walk away and it is no longer their problem. For them it was merely good business, the direct application of a mere fool and his money getting parted.

Yet, this is not the only part. In what I would regard to be a direct outright lie, we see the actions from Pierre Moscovici as we are treated to: “Greece had received €275bn in financial support from its international creditors over the past eight years and twice came perilously close to being kicked out of the Eurozone group, the EU commissioner, Pierre Moscovici, said, adding: “There have been enormous sacrifices. But at last Greece will be capable of moving on its own two feet.”“. This is what I personally see an outright lie! Let me explain why I think that this is as bad as such. The documentation gave us (I already published it before). It is a paper from 2009 from the ECB and I gave light to it in my article on July 1st 2015, yes, almost 3 years ago. The article was ‘Dress rehearsal (part 1)‘ (at https://lawlordtobe.com/2015/07/01/dress-rehearsal-part-1/), the original paper is there at the end. It is called ‘Withdrawal and expulsion from the EU and EMU some reflections‘, a paper written by Phoebus Athanassiou. Here we see “The idea that the treaties should explicitly provide for a possibility of expulsion was discussed in the 2001-2003 Intergovernmental Conference responsible for drafting the ill-fated Constitutional Treaty, but was abandoned“, on page 32 it gives the premise that greed driven politicians did not consider that expulsion should be an option. In addition, the EU observer gives us in 2011 ““Neither exit nor expulsion from the euro area is possible, according to the Lisbon treaty under which participation in the euro area is irrevocable,” he added, referring to the European Union’s rule-book.” and there is May 2012, where we get “The Mechanics of Eurozone Withdrawal, It has frequently been stated that the EU Treaties contain no legal framework for a withdrawal from the Eurozone.  This is true and, indeed, the Treaties make it clear that the process of monetary union was intended to be “irreversible” and “irrevocable”“. The last we got from Locke Lord LLP, a Texas Lawfirm. So I now need to revert to my original Dutch Diplomatic self stating: ‘Moscovici, you stupid fuck! There is 9 years of documentation from people better educated than me stating that kicking out of the Eurozone was not an option in any way. So get a fucking grip on your stupidity and amend it or resign your post, your choice!‘ (Sorry, I needed to get that off my chest, I feel a little better now).

The final straw for my ego is found in the Guardian quote “But it means the left-led government in Athens will have to stick to austerity measures and reforms, including high budget surpluses, for more than 40 years. Adherence will be monitored quarterly“, when we consider that my setting was without the ‘discount’, the proven setting that the debt will be a 3G debt, it will push hardship on three generations. A setting I was able to prove with an abacus is now finally recognised by those less fortunate as they were not able to get basic calculus done. I am happy for me being correct, but not for the hardship that the next generation of Greeks face, they never had any choice in the matter, merely have to clean up after grandpa’s bad political choices, to them it is massively unfair.

The final part if given with: “At almost 180% of GDP, Greece is burdened with the highest debt load in Europe. The €320bn debt mountain is widely recognised as the single biggest obstacle to economic recovery. The International Monetary Fund had resolutely refused to sign up to the country’s latest bailout unless Eurozone creditors agreed to a restructuring that would ultimately make the debt sustainable“, most will not recognise the miswording that is used here. With ‘widely recognised as the single biggest obstacle to economic recovery‘, which is actually ‘Greece has no options to recover from a debt that high, not ever‘. Which leads to ‘International Monetary Fund had resolutely refused to sign up to the country’s latest bailout‘ and ‘make the debt sustainable‘, which needs to be read as: ‘the IMF cannot allow the support of a debt that cannot be paid off, lower it!‘, yet when is the setting for sustainable made? Making it longer by setting the €328 billion in three stages of 26 years each? Who will sign up for that? How many forward pushing bond programs will it require and we understand that among the banks (read: financial institutions), they are willing to do that as long as it is set in 25% profit stages, giving light to the fact that the additional pressure beyond the debt is the Greek population paying an additional €78 billion in sustainable bonus. If you’re Greek, would you want your child to inherit a €75 billion invoice at birth? That was what I predicted three years ago and I have been proven correctly and I have been conservative, when you consider the cost of the bonds, the interest paid to the people buying the bonds as well as the impact of devaluation of a nation that cannot fund its infrastructure. It is a mess and when you consider Forbes on 28th Jan 2017, where we see: “The IMF projects Greek debt will reach 170 percent of GDP by 2020 and 164 percent of GDP by 2022 but will rise thereafter, reaching around 275 percent of GDP by 2060” (at https://www.forbes.com/sites/timworstall/2017/01/28/amazingly-yes-the-imf-is-still-saying-that-the-greek-debt-problem-is-not-yet-solved), we see that they were off last year by close to 10%, so the prospect for Greece is even worse than the IMF predicted (I admit a slight overbearing assumption at present).

To illustrate that, I will revert to a source that I cannot vouch for, yet they give (at https://www.thenation.com/article/goldmans-greek-gambit/) “As a result, about 2 percent of Greece’s debt magically disappeared from its national accounts. Christoforos Sardelis, then head of Greece’s Public Debt Management Agency, later described the deal to Bloomberg Business as “a very sexy story between two sinners.” For its services, Goldman received a whopping 600 million euros ($793 million), according to Spyros Papanicolaou, who took over from Sardelis in 2005“, a fee closing that surpassed half a billion euros.

So in the end, the news, the papers the quotes, it will be up to you to decide how Greece is given a fair go, yet they themselves have mostly only themselves to blame. You see, in all this, how many Greek politicians went to prison? How many got their assets taken from them? Or are we all agreeing that there was no legal option? Now wonder if the legal options exist at present, if not. Then this is the bed of hardship that the Greeks made for Greece.

So, are the Greeks still being lied to? If that is so who exactly is presenting their version of the ‘facts’ to the Greeks?

 

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The Iranian funds play

Today is all about Iran, the Washington Post and many others are giving the world the information that the previous president misled congress. Yet the Washington Post phrases it as ‘Obama administration misled Congress on possible Iranian access to U.S. financial system‘, they also mention that it is a Republican investigation. There are two issues, right off the bat, even before you read the article, the question becomes, where were the FBI and the CIA in this?

So when we get the first lines with “The Obama administration went out of its way in early 2016 to help Iran recoup previously sanctioned oil revenue stranded in an overseas account after the nuclear deal went into effect and actively misled Congress regarding those efforts, according to the results of a nearly two-year Republican investigation released early Wednesday“, we need to realise that the setting is wrong from the very start.

Before I go there, let’s follow the trail of crumbs that we get offered. next there is “Iran wanted to convert the money into U.S. dollars and then euros, but top U.S. officials had repeatedly promised Congress that Iran would never gain access to America’s financial system“, which is followed by “the Obama administration secretly issued a license to let Iran sidestep U.S. sanctions for the brief moment required to convert the funds through an American bank, an investigation by Senate Republicans released Wednesday showed. The plan failed when two U.S. banks refused to participate” and finally we get: “the revelation is re-igniting the bitter debate over the nuclear deal and whether former President Barack Obama was too eager to grant concessions to Tehran“. The full story (at https://www.washingtonpost.com/politics/federal_government/obama-era-license-aimed-to-let-iran-convert-money-in-dollars/2018/06/06/60be6d36-6971-11e8-a335-c4503d041eaf_story.html) gives us a lot more, but initially, we get ‘The plan failed‘. So this was seemingly (according to a previous Obama official) about the Iranian money held overseas. The issue seems seen with “No one involved seems certain whether Iran has yet received all of its $5.7 billion“, yet as I see it, that does not seem to be the case. When you think this through, $5.7 billion amounts to 11.2 million barrels based on the average oil price, this amounts to funds equal to 26 hours of oil production in Saudi Arabia, 26 hours! Now we are not debating whether Iran is allowed access to the funds, the fact that we see that this much oil (or so little in Saudi Arabia), whilst in Iranian production it amounts to 4 days of oil production is a Joke. Oil still goes to Asia, so all this fanfare for 4 days of oil production? This is about something else entirely, or it is about a very different amount of money. I let you mull that part over, so when we look at the second article (also Washington Post), we see in the article called ‘Secret Obama-era permit let Iran convert funds to dollars’ where we are ‘treated’ to “Iran had been promised access to its long-frozen overseas reserves, including $5.7 billion stuck in an Omani bank“, which we knew to some extent, yet the full economic value is not given, which is also an issue, you see that stuff makes interest, so at that point who gets that money? Is it locked in the Iranian account, or was it the balancing act to the seesaw that is going up and down on €11 trillion in essential European and American debt guarantees? The second article has pretty much what the first one had, but we also see (slightly more clearly) “And when questioned by lawmakers about the possibility of granting Iran any kind of access to the U.S. financial system, Obama-era officials never volunteered that the specific license for Bank Muscat in Oman had been issued two months earlier. According to the report, Iran is believed to have found other ways to access its money, possibly by exchanging it in smaller quantities through another currency“, this now gives us the part (when going back to the first article: “Lew, according to documents reproduced in the report, had been given Treasury talking points explaining the Omani conundrum, he chose not to mention it in a House hearing in late March“, this reference to former Treasury Secretary Jack Lew, where we wonder that if this is about the question, was the question correctly phrased, or perhaps the better setting is, was he breaking any laws not mentioning the ‘Omani Conundrum’?

I cannot state without the full text and even if we agree that there is an issue, we now get back to the very core of the matter. If it involves US Banks and when we reconsider ‘the plan failed when two U.S. banks refused to participate‘, two out of exactly how many banks? That part is also not revealed here. So now we get to the part where it becomes either the US treasury AND the FBI who seemingly did not act here, the Omani Conundrum implies that the CIA turf was trodden on and the communications (in several levels) give us that the NSA ignored it. So what is going on? Did anything actually happen? Because that question is becomes valid when we reconsider ‘the plan failed‘. If that is true, then why is the Washington Post, one of the most revered newspapers in the USA not giving the correct light on this? In addition, the outstanding questions that we get from the mere substance given becomes an issue when we see the words of President Trump “this disastrous deal gave this [Iranian] regime — and it’s a regime of great terror — many billions of dollars, some of it in actual cash — a great embarrassment to me as a citizen and to all citizens of the United States,”. Yet how much money was actually released, through the deal and from 2015 onwards? None of that data is available through the articles. So what exactly is US congress playing with now, because this all looks like a really loud smokescreen, all emotion and no contributable facts on the matter. How many banks were part of it (and their names), which two banks refused (double plus points for them two) and in light of merely one $5.7 billion source we need to see the scope of the money, especially in light of the setting that Iran is even now shipping oil to Asia. Are those not valid questions? In all this, where were the FBI and CIA when this was going down and more importantly why is there no mention of their part in all this, or were they not part of any of it? That is equally an issue, because if there is evidence that they were in different states of activity and actionable requirements regarding Iran during the two presidencies, the people have an equal right to know, do they not? You see, in the larger scope that matters, because the Yemeni issue is covering two presidencies, so if (a very clear if) the CIA was less vigilant during the previous presidency, it might also explain a few things on how missiles are getting shipped from Iran to Yemen, if the manifest states 1013 barrels of oil for humanitarian aid, it might explain a little more than we bargained for. Now the last part was speculative and knowingly incorrect, yet the question remains valid. This was not some article from the enquirer, or the Canton Cherokee Tribune, it is the Washington Post. In many (global) cases that newspaper is seen as gospel right next to the Financial Times, so when two articles give us so many questions in all this, I need to wrap my head around the option that Martin Baron is either on vacation or perhaps down with the flu. The man who inspired Tom McCarthy to make Spotlight should have a better grasp on the entire Iranian fund issue and how it should be made visible in my Hummer opinion.

Because behind all this is not merely the oil, or the Iranian uranium enrichment plans. It in equal measure gives another light that we get from “The draft involved a general license, a blanket go-ahead that allows all transactions of a certain type, rather than a specific license like the one given to Oman’s Bank Muscat, which only covers specific transactions and institutions“, you see, if that is in play and when we remember the G30 bankers group, the one that got some limelight, for ONE DAY. After that all the media dropped the issues when the people were given the sight of Mario Draghi being a member of this insiders only club, a club that he had to give up and no one (except for me that is) followed up on that. All the media left it alone. So when we see that part from April 18th 2018, where Reuters and the Financial Times give us that he would remain a member, the ECB and others never acted on it and silently wait it to go away, now we see the Omani Conundrum issue and I have to wonder, as bankers will do trade with anyone, what licenses are out there that no one knows about, more important, whoever the owner of the funds are that they get to play with ahead of all other banks, with close to €3 trillion in extra printed money for the game of bonds, in all this, what else are we not seeing and as this optionally directly reflects on Iran’s and all the billions we are left unaware of, how is it that the Washington Post seems to not care (or rather stated, believingly unimportant issues that are therefor not investigated) are out there with two pages set to issues in a setting of ‘the plan failed‘ and ‘at the end of the day, nothing worked‘. Which makes me wonder if any transgression was committed and what it was all about. Time will tell whether we see more revelations tomorrow and more important if it leads to anything actionable, because that will be come the heart of the matter soon enough.

 

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Cheese Pizza with Oregano

I love Pizza, I hardly ever get it, merely because the people here tend to rely on Domino’s and Pizza Hut and neither tends to be a true pizza (as I personally see it). As I walked through Sydney over the last week, it dawned on me just the massive lack of actual decent Pizza places in Sydney. It is almost like they are no longer in a sustainable environment. People got used to the cheap solutions two chains bring and they call it Pizza. All the people in the neighbourhood accepted it as the real deal and now, we forgot what true awesome Pizza is like. Now, I am a little off the wall here. I love my Cheese Pizza, with the 5 cheeses and loads of Oregano on top. So when I think Pizza, I always think of the Bravo Trattoria Pizza’s at Crow’s Nest, they are my favourite! Yet, is it about pizza, or the place, or what Pizza actually is? You see, it does matter when we consider the Financial Review (at https://www.afr.com/personal-finance/italys-debt-barely-sustainable-ubs-chief-economist-20180601-h10uun), we see here what I said weeks ago and last week to some degree. When we see “Italy’s debt-to-GDP ratio of 130 per cent is “borderline sustainable”, the UBS top economist says. There is a level of the primary budget surplus which keeps debt stable, and above which you can begin to pay down your obligations, Kapteyn explains. For Italy this figure is a surplus of 1.3 per cent of GDP, versus the actual surplus of 2 per cent. It’s a skinny buffer of around 0.8 percentage points which at current debt levels “doesn’t inspire confidence”, Kapteyn says“. That is merely the tip of the iceberg. The issue is not that it is Italy, it matters more that it is one of the big four. UK, France, Germany and Italy are the large economic suppliers of a 27 nation bloc where they basically represent well over 50% of the EU economy, the fact that they all are in deep debt does not help and the fact that the UK is getting out, or is that ‘was trying to get out‘? So when we see add the issues of the UK and now we see how the Italian issues are growing and France is not far behind. A 27 nation failure due to the inability to set proper budgets, deal with debt levels and add to that a failed economy jump start that is now close to 3 trillion Euro printed with no real prospects to pay for any of it. That revelation is why Italy seems to be vacating the union. The action by President Sergio Mattarella by rejecting the Eurosceptic finance minister and put in his place Giovanni Tria a pro-EU professor. This is perhaps the first setting where we see that voting is no longer an issue for any government, the holier than thou setting of protecting the Euro and the EU against all odds, whilst those in the EU commissions are massively overpaid is setting the foundation of a dangerous mindset. The issue that the AFR is bringing to light is “markets are not pricing in the risk of an Italian exit, they are repricing the risk of a Italian default“. I always rated the Iexit (aka iLeave) setting very low, the two populist parties in charge was not that realistic in 2016 and when Marine Le Pen was ‘surpassed’ by a former investment funds manager we were all wondering what would come next and I thought it would lower the chances of the populists in Italy. And the news is not getting any better. We see that with “The European economy hit a wall over the final months of last year, with growth dropping from a quarterly growth rate of 0.7 per cent to more like 0.4 per cent. Economists are unclear of the reasons for the slowdown, but broadly believed the European economy would quickly rebound“, the issue I personally see is ‘broadly believed the European economy would quickly rebound‘, not the slowdown. You see there is no evidence that there is an actual quick rebound. There is every chance that there will be a rebound, but it will not be quick. The fact that these so called experts are all thumbs when it comes to their forecasting and with 0.3% unaccounted for, we can see that they are in the dark or playing the bad news cycle. I personally believe it to be the second one. And the Italian issues are increasing. Not merely the debt settings, it is a changed political landscape. Even as Paolo Savona was replaced by Giovanni Tria, there is still “Mr Di Maio will be vice-premier and minister for labour and economic development, including trade policy. Matteo Salvini, head of the League, will also be vice-premier and interior minister in charge of immigration“. This we got from the Financial Times (at https://www.ft.com/content/79cf905c-64a8-11e8-90c2-9563a0613e56). This duo is going to be a lot more important than even I initially thought. They now have a handle on labour economic development and immigration will see larger changes. There is no way to predict whether that is good or bad. If we listen to people like George Soros we are instantly rejecting liberalism, because it is easy to be a liberalist when you are a multi billionaire, yet he had no issues to short sell US$10 billion worth of Pound sterling, earning a billion in the process during the 1992 Black Wednesday UK currency crisis. He did nothing wrong, he played the system when he could and make a billion. Things like that never go away and he must regard the EU zone as a very profitable short sell opportunity, which makes whatever he is trying to do dangerous, so in that light all his settings for “Best for Britain pushes for second referendum on Theresa May’s deal with EU“, a cause he is backing is very dangerous. In this by pushing the UK away from Brexit, the pressure on Italy decreases. The dangers become that irresponsible spending in the big four can go on for several more years and there is no way to control the ECB and their puppet masters. Unelected people deciding on the descent of financial futures in 27 nations that is how I personally see it. You can agree or disagree, yet ask yourself when was the last time that any European got a decent explanation on who of how the 3 trillion euro spend was going to be dealt with? You see over a decade in an economic setting that is close to the late 90’s, whilst keeping strict austerity in play all over Europe. There is quite literally no way that this will happen, because politicians will adjust their policy towards any speculative proclaimer of ‘the European economy would quickly rebound‘ economists, whilst not prosecuting them when they get it wrong (merely because making any claim of expectation is not a crime, is it?). A setting that the people have no chance of winning, hell, they won’t ever be able to break even on this. This shows that Brexit will be a hard, but the better way to go. When billionaires start proclaiming how bad it is and how ‘we all’ can get a better deal that is when you become afraid for your life and that is what is at stake. And we see this in the Australian Financial Review with ““creeping into the market”, Kapteyn says – “a potentially dangerous one”. After the glory days of 2017 in which investors basked in a globally synchronised upswing, markets are now faced with the potential return of the two-speed world economy: the US vs the rest“, so when we get “America’s economy is growing around 3.5 per cent; some independent analysts estimate growth as fast as 4 per cent. Europe is “at best” growing by 2 per cent“, that shows the dangers, because as George Soros is getting the winnings, the other players do not, from my point of view it is a form of leeching, leeching Europe dry for the term of a generation or better. You see again it is a personal view, it is why Best for Britain is getting the support, it is about delaying Brexit at the very least for as long as possible, merely because it stops the game people like George Soros are likely to be playing and when that stops Europe can start bringing things about, hopefully for the better, especially as the ECB will be forced to print money for all kinds of dubious reasons, dubious because kick-starting the economy after you printed 3 trillion to try it twice is just ridiculous, that money has to be paid back at some point and everyone is in denial about the latter part.

Yet this is still about Italy, not the UK. You see, Italians want what is best for Italy and I am fine with that, I believe in a healthy sense of national pride. Yet with “Italy’s debt-to-GDP ratio of 130 per cent is ‘borderline sustainable’” they are facing an ugly truth, Italy needs to face 5-15 years of Austerity, yet with the ECB trying to economically equalise Europe, at the cost of the big four, so it amounts to Italy trying on top of an economy for 60 million Italians, whilst they are weighted with invoices for close to 250 million Europeans who can’t be bothered to get their house in order. it amounts to giving an addicted gambler $500 whilst they are only allowed to use $10 for gambling, you tell me how long it takes for things to go really wrong, and that is pretty much a given on this situation. It was seen in the Netherlands 2012 and 2013, and now we see, when we look at the Dutch government statements with in September 2017 we see “The economy will grow by 3.3% in 2017 and a projected 2.5% in 2018“, we see the EU commission giving the Netherlands a ‘mere’ 3.2% last month for that same timespan. Now the 0.1% is actually pretty good, but it is still dangerous when it is a 0.1% in Italy, the issue is seen when we see that the Netherlands has a 65% debt level against Italy at 130% of GDP, and the Dutch are actually in a much better position, so the 0.1% is no actual pain level. Portugal, Spain, Greece, Belgium and Italy all have debt levels well over 100% of GDP, several other nations are somewhere between 60% and 80% of GDP, whilst France is at 99.8%. It is the debt levels that are excellent for banks and not so good for the people. You see, when the big four are required to pay €254 billion in interest each year and that is just the large 4, how do you think that this gets paid for? A decade of inability to set a proper budget and all this is before we consider the €3,000 billion that the ECB printed for what they call Quantative Easing. That is what Italy needs to get away from and at 135% they have the hardest job of all. So when you see that all that money goes all to the banks, short sold loans that they never had the money for to pay for can you see just how dangerous the George Soros setting is in all this? It all impacts Italy to some degree. These are not merely the facts; there is also presentation, representation and misrepresentation. The issue is in the Australian Review, it is the view of Arend Kapteyn. Yet where is he at when he gives us “We are only now at the beginning to find out how responsible or irresponsible [the new coalition government] are going to be on the fiscal side“, you see, the setting then becomes what is irresponsible? Being not pro Eurozone, being forced to default whilst the alternatives are just too unacceptable for the Italian people? So is he the pro greed setting, or the pro solution setting, because with such debt levels we can almost unanimously accept that these two choices are mutually exclusive. The most interesting political part is that Enzo Moavero Milanesi is now Minister of Foreign Affairs. I would have thought that the populists wanted that part for themselves, the fact that this post is now with an Italian independent is an interesting choice, if the populists can work with this setting and use it to maximise their economy by setting new option and opportunities, Italy gets an optional path where minimised immigration and maximised economy could have a setting where the Italian unemployment rates could fall to a number below 10% over the next 24 months (highly speculative on my side). If they pull that off, the entire euro sceptic setting could grow a lot faster than would have been possible with Paolo Savona in the mix.

No matter how you slice the Pizza, the factual and actual quality Italian dish is under massive amounts of pressure on several sides and any Italian thinking that their life will get better in the short run is just gobbling down a [Unnamed Franchise] Pizza, bland food that look like a UFO and tastes not as great. The fact is that like Germany did earlier this decade, Italy will know 5-10 years of hardship, yet when persevered Italy could have an actual growing economy for a much longer time, something to look forward to (if you are Italian). Can this government pull it off? That is hard to say because it has been shown that the actions of the ECB are close to non-stoppable and that will still impacts the bottom line. It is good for America and George Soros in the short term, yet after that they will not care and Europe will not be going anywhere ever soon. That danger is just ignored all over the place. Just 2 days ago the Financial Times also gave us “There are still two weeks to go before Riga, but naming an end date for QE right now would be like the ECB shooting itself in the Italian boot,” said Carsten Brzeski, economist at ING-DiBa. “The Italian situation has tilted the balance towards the doves [and] clearly calls for the ECB to keep its options open and even to make clear that they will extend QE at least until December” (at https://www.ft.com/content/dd6b5d70-6413-11e8-90c2-9563a0613e56), which is already an extension of well over a year. so when we see “The ECB has pledged to reinvest an average of €15bn a month over the first four months of next year, using the proceeds of government bonds bought under QE that have now matured” in that same article, we need to consider ‘bonds that have now matured‘, so that danger is seen in the Spanish setting where we see from some sources: “Spain will have refinancing requirements that exceed €300 billion per annum before 2022. In 2018, 41.2 billion euro, in 2019, 82.4, in 2020 83.9 and in 2021 58.5 billion euro, with 60.4 billion maturing in 2022“, so this fiscal year Spain will be required to find €41 billion, or increase taxes or cut services, and it will be twice that amount next year around, so how exactly is Spain in a setting to get the economy back whilst the debts are rising beyond normal control? Italy faces “84 billion euro maturities in 2018, 161 billion in 2019, 164 billion in 2020 and 172.5 billion euro in 2021” do the Italian people know that they are in such deep and hot waters? I wonder, and when they get confronted with that part of the bad news cycle, what will the previous and opposition then proclaim? I wonder if we will see true honest coverage on that blame game. I will order a decent Pizza to watch that unfold, because there are merely the two larger players in the EU-debt zone bloc confronted with the hardships that will hit them hard. Pushing these debts forward is just not a workable solution, not when the debt exceeded 130% of GDP, if you doubt my words, just talk to the average Greek in Athens and ask him how his quality of life is nowadays.

So as you wanted that your slice of life included a slice of pizza, consider the 99% in Italy who soon face the reality that they are no longer able to afford that for a long time to come.

 

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It’s a kind of Euro

In Italy things are off the walls, now we see ‘New elections loom in Italy‘ (at https://www.theguardian.com/world/2018/may/27/italys-pm-designate-giuseppe-conte-fails-to-form-populist-government), where it again is about currency, this time it is Italy that as an issue with ‘country’s Eurozone future‘. In this the escalation is “the shock resignation of the country’s populist prime minister-in waiting, Giuseppe Conte, after Italy’s president refused to accept Conte’s controversial choice for finance minister“, there is a setting that is given, I have written about the folly of the EU, or better stated, the folly it became. I have been in favour of Brexit for a few reasons, yet here, in Italy the setting is not the same. “Sergio Mattarella, the Italian president who was installed by a previous pro-EU government, refused to accept the nomination for finance minister of Paolo Savona, an 81-year-old former industry minister who has called Italy’s entry into the euro a “historic mistake”“, now beside the fact that an 81 year old has no business getting elected into office for a number of reasons, the issue of anti-Euro Paolo Savona have been known for a long time. So as pro-EU Sergio Mattarella decides to refuse anyone who is anti-EU in office, we need to think critical. Is he allowed to do that? There is of course a situation where that could backfire, yet we all need to realise that Sergio Mattarella is an expert on parliamentary procedure, highly educated and highly intelligent with decades of government experience, so if he sets his mind to it, it will not happen. Basically he can delay anti-EU waves for 8 months until after the next presidential elections. If he is not re-elected, the game changes. The EU has 8 months to satisfy the hearts and minds of the Italian people, because at present those options do not look great. The fact that the populist choices are all steering towards non-EU settings is a nightmare for Brussels. They were able to calm the storm in France, but Italy was at the tail end of all the elections, we always knew that, I even pointed it out 2 years ago that this was an option. I did mention that it was an unlikely one; the escalating part is not merely the fact that this populist setting is anti-EU; it is actually much stronger anti Germany, which is a bigger issue. Whether there is an EU or not, the European nations need to find a way to work together. Having the 2 larger players in a group of 4 large players is not really a setting that works for Europe. Even if most people tend to set Italy in a stage of Pizza, Pasta and Piffle, Italy has shown to be a global player and a large one. It has its social issues and the bank and loan debts of Italy don’t help any, but Italy has had its moments throughout the ages and I feel certain that Italy is not done yet, so in that respect finding common ground with Italy is the better play to make.

In all this President Sergio Mattarella is not nearly done, we now know that Carlo Cottarelli is asked to set the stage to become the next Prime Minister for Italy. The Italian elections will not allow for an anti-EU government to proceed to leave the Euro, Sergio’s response was that: “he had rejected the candidate, 81-year-old Eurosceptic economist Paolo Savona, because he had threatened to pull Italy from the single currency “The uncertainty over our position has alarmed investors and savers both in Italy and abroad,” he said, adding: “Membership of the euro is a fundamental choice. If we want to discuss it, then we should do so in a serious fashion.”” (at http://news.trust.org//item/20180527234047-96z65/), so here we all are, the next one that wants to leave the Euro and now there is suddenly an upheaval, just like in France. Here the setting is different, because the Italian President is Pro-EU and he is doing what is legally allowed. We can go in many directions, but this was always going to be an unsettling situation. I knew that for 2 years, although at that stage Italy leaving the EU was really small at that stage. Europe has not been able to prosper its economy, it merely pumped 3 trillion euro into a situation that was never going to work and now that 750 million Europeans realise that they all need to pay 4,000 Euro just to stay where they are right now, that is angering more and more Europeans. the French were warned ahead, yet they decided to have faith in an investment banker above a member of Front Nationale, Italy was not waiting and is now in a stage of something close to civil unrest, which will not help anyone either. Yet the economic setting for Italy could take a much deeper dive and not in a good way. The bigger issue is not just that Carlo Cottarelli is a former International Monetary Fund director. It is that there are more and more issues shown that the dangers are rising, not stabilising or subsiding and that is where someone optionally told President Sergio Mattarella to stop this at all costs. Part of this was seen in April (at https://www.agoravox.fr/actualites/economie/article/a-quand-l-eclatement-de-la-203577). Now the article is in French, so there is that, but it comes down to: “Bridgewater, the largest hedge fund (investment fund – manages $ 160 billion of assets) of the world has put $ 22 billion against the euro area  : the positions down (“sellers”) of the fund prove it bet against many European (Airbus), German (Siemens, Deutsche Bank) French (Total, BNP Paribas) and Italian (Intesa Sanpaolo, Enel and Eni) companies, among others. The company is not known to tackle particular companies, but rather to bet on the health of the economy in general“. So there is a partial setting where the EU is now facing its own version that we saw in the cinema in 2015 with The Big Short. Now after we read the Intro, we need to see the real deal. It is seen with “Since 2011, € 4 billion has been injected into the euro zone (that is to say into commercial banks) by the European Central Bank (ECB), which represents more than a third of the region’s GDP. The majority of this currency is mainly in Germany and Luxembourg, which, you will agree, are not the most difficult of the area. More seriously, much of this liquidity has not financed the real economy through credit to individuals and businesses. Instead, the commercial banks have saved € 2,000bn of this fresh money on their account at the ECB until the end of 2017 (against € 300bn at the beginning of 2011) to “respect their liquidity ratio” (to have enough deposit in liquid currency crisis).As in the United States, quantitative easing allowed the central bank to bail out private banks by buying back their debts. In other words, the debts of the private sector are paid by the taxpayer without any return on investment. At the same time, François Villeroy de Galhau, governor of the Banque de France, called for less regulation and more bank mergers and acquisitions in the EU, using the US banking sector as a model.” Here we see in the article by Géopolitique Profonde that the setting of a dangerous situation is escalating, because we aren’t in it for a mere 4 billion, the Eurozone is in it for €3,000 billion. An amount that surpasses the economic value of several Euro block nations, which is almost impossible to keep with the UK moving away, if Italy does the same thing, the party ends right quick with no options and no way to keep the Euro stable or at its levels, it becomes a currency at a value that is merely half the value of the Yen, wiping out retirement funds, loan balances and credit scores overnight. The final part is seen with “The ECB also warns that the Eurozone risks squarely bursting into the next crisis if it is not strengthened. In other words, Member States have to reform their economies by then, create budget margins and integrate markets and services at the zone level to better absorb potential losses without using taxpayers. A fiscal instrument such as a euro zone budget controlled by a European finance minister, as defended by President Emmanuel Macron, would also help cope with a major economic shock that seems inevitable. Suffice to say that this is problematic given the lack of consensus on the subject and in particular a German reluctance. The European Central Bank has issued the idea late 2017, long planned by serious economists, to abolish the limit of € 100,000 guaranteed in case of rescue operation or bankruptcy bank (Facts & Document No. 443, 15/11 / 17-15 / 12/17 p.8 and 9)” (the original article has a lot more, so please read it!

It now also shows (read: implies) a second part not seen before, with ‘The European Central Bank has issued the idea late 2017, long planned by serious economists, to abolish the limit of € 100,000 guaranteed in case of rescue operation or bankruptcy bank‘, it implies that Emmanuel Macron must have been prepped on a much higher level and he did not merely come at the 11th hour, ‘the idea issued late 2017’ means that it was already in motion for consideration no later than 2016, so when Marine Le Pen was gaining and ended up as a finalist, the ECB must have really panicked, it implies that Emmanuel Macron was a contingency plan in case the entire mess went tits up and it basically did. Now they need to do it again under the eyes of scrutiny from anti-EU groups whilst Italy is in a mess that could double down on the dangers and risks that the EU is facing. That part is also a consideration when we see the quote by Hans-Werner Sinn who is currently the President of the Ifo Institute for Economic Research, gives us “I do not know if the euro will last in the long run, but its operating system is doomed“, yet that must give the EU people in Brussels the strength they need to actually fix their system (no, they won’t). The question becomes how far will the ECB go to keep the Eurozone ‘enabled’ whilst taking away the options from national political parties? that is the question that matters, because that is at play, even as Germany is now opposing reforms, mainly because Germany ended up in a good place after they enforced austerity when it would work and that worked, the Germans have Angela Merkel to thank for that, yet the other nations (like 24 of them), ignored all the signs and decided to listen to economic forecast people pretending to be native American Shamans, telling them that they can make it rain on command, a concept that did not really quite pan out did it? Now the reforms are pushed because there were stupid people ignoring the signs and not acting preventively when they could, now the Eurozone is willing to cater to two dozen demented economists, whilst pissing off the one economy that tighten the belt many years ago to avoid what is happening right now. You see, when the reform goes through Berlin gets confronted with a risk-sharing plan and ends up shouldering the largest proportion of such a machine, that mechanism will avoid the embarrassment of those two dozen Dumbo’s (aka: numnuts, or more academically stated ‘someone who regularly botches a job, event, or situation’), whilst those people are reselling their idea as ‘I have a way where you need not pay any taxes at all‘ to large corporations getting an annual 7 figure income for another 3-7 years. How is that acceptable or fair?

So we are about to see a different Euro, one losing value due to QE, due to Italian unrest and against banks that have pushed their margins in the way US banks have them, meaning that the next 2 years we will most likely see off the wall bonus levels for bankers surpassing those from Wall Street likely for the first time in history, at the end of that rainbow, those having money in Europe might not have that much left. I admit that this is pure speculation from my part, yet when you see the elements and the settings of the banks, how wrong do you think I will be in 2019-2020?

So when we go back to the Guardian article at the beginning and we take a look at two quotes, the first “As the European commission unveiled its economic advice to member states last week, the body’s finance commissioner, Pierre Moscovici, said he was hoping for “cooperation on the basis of dialogue, respect and mutual trust”“. I go with ‘What trust?‘ and in addition with ‘cooperation on the basis of dialogue merely implies that Pierre Moscovici is more likely not to answer question and bullshit his way around the issue‘ and as former French Minister of Economy he could do it, he saw Mark Zuckerberg get through a European meeting never answering any questions and he reckons he is at least as intelligent as Mark Zuckerberg. when we see “Cecilia Malmstöm, said “there are some things there that are worrying” about Italy’s incoming government“, she sees right, the current Italy is actually a lot less Euro minded than the setting was in 2016-2017, so there is a setting of decreased trust that was never properly dealt with, the EU commissions left that untended for too long and now they have an even larger issue to face. So that bright Svenska Flicka is seeing the issues rise on a nearly hourly basis and even as we see the play go nice for now, they will change. I think that in this Matteo Salvini played the game wrong, instead of altering an alternative for Paolo Savona and replace him after Sergio Mattarella is not re-elected, the game could have continued, now they are busting head to head where Matteo is nowhere near as experienced as Sergio is, so that is a fight he is unlikely to win, unless he drops Italy on a stage of civil unrest, which is not a good setting for either player.

We cannot tell what will happen next, but for the near future (June-September), it is unlikely to be a pretty setting, we will need to take another look at the Italian economic setting when the dust settles.

 

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Interaction

Today is part on what happened, what we see now and something from the past. It started yesterday when the Guardian (at https://www.theguardian.com/politics/2018/may/17/vote-leave-strategist-dominic-cummings-refuses-to-appear-before-mps) gave us “The chief strategist of the Vote Leave campaign has refused to appear in front of MPs, risking possible censure from the House of Commons but also raising questions about what more can be done when a witness ignores the will of parliament“. Apart from the folly of his action, there are other questions beneath the surface and they must be answered. Now, for the record, I have been in favour of Brexit! I have my reasons and I will introduce you to some of them. When I see “Dominic Cummings, who has been credited as the brains behind the successful Brexit campaign, told the select committee investigating fake news that he would not be willing to answer questions in public before the Electoral Commission finishes its ongoing investigation into his campaign” I do see a valid concern and even as I called it folly, which it partially remains, there is the setting that these MP’s need to come in front of the camera as well. I have serious questions from these MP’s and if they cannot answer them to MY satisfaction, they should be removed from office, it is THAT simple.

When I see that the leave groups have connections to Cambridge Analytica, I have questions as well. Even as we see “questions about the use of Facebook data during the EU referendum campaign“, we need to make certain that we are not caught on the rings of misinformation and that is happening on both sides of the isle in this case.

You see, to get to the core of it we need to look at the entire mess. Some are still willing to blame it all on Nigel Farage, but it goes deeper. He brought something to light, the issue is that we have had a massive amount of question marks before it started and that remains in the dark. The corrupt and the exploitative never want the limelight. The fact that Nigel brought to light issues on a larger scale needs to be commended. For the longer time, there had been an issue. Even as there was such a large level of positivity in 1975, by 2016 there was not much positivity left, the numbers show a degradation of the interest in being part of Europe. We see all those messages and news casts on how good things are, yet were they? Apart from the large corporations having benefits which did not go beyond the board of directors and senior sales staff having ‘training’ sessions in sunny places, the wheels of the system continued by the workers, by the support systems and the logistics who never saw anything in support return with the optional getting wasted evening on a Christmas party, that was the extent of the appreciation given. When we look at the issues from 2004 onwards we saw stagnation and until 2017 we saw no improved quality of life, whilst bills went up and incomes froze. In all this we see not an increase of living and future, merely a setting of getting by at best. That was never a good setting. So as we consider that the UK had EU costs. Some state “But the UK actually paid around £275 million a week in 2014 and paid around £250 million a week in 2016“, we also see (at https://fullfact.org/europe/our-eu-membership-fee-55-million/) a few additional numbers. The numbers look nice, but they leave us with all kinds of questions and the mistrust grows as we are not offered any clarity. It is largely seen with “the EU spent nearly £5 billion on the public sector“, would that not have happened if the UK was not part of the EU? We also see “Extra money not counted here, goes directly to the private sector“, is that perhaps merely commerce? When we see the ‘gravy trains‘ running in Europe on how some ‘elected’ officials make 10 times the average income, questions come to the surface and the EU has never given proper response that is one part that has been setting people off. It becomes even worse when we see ‘Different figures from different sources‘ with the part “The Treasury and ONS both publish figures on the subject, but they’re slightly different. The ONS also publishes other figures on contributions to EU institutions which don’t include all our payments or receipts, which complicates matters“, it is not the ‘complications’ it is the lack of clarity and transparency, transparency has been an issue for the longest time in the EU and the people have had enough. The UK has seen close to no benefit to the EU, only the large corporations have benefited, those who need to work internationally anyway, so 1,500 corporations have a benefit and 150,000 do not and that is a visible setting that the UK faced. Even as we see ‘open borders‘, the fact that well over 60% has not been able to afford vacations for many years see no benefit, the setting had become too surreal. In all this we also need to realise that setting that the ECB have given all involved, whilst everyone keeps quiet that the taxpayer gets the bill. Everyone is seeing this fabric of illusion call quantative easing. Mario Draghi as head of the ECB had instigated a setting TWICE on this spending a trillion the first time and almost double that the second time around, so when you spend €3,000,000,000,000 do you think there will not be any invoice? Do you think that this money is printed and forgotten? No, it impacts all within the Euro, as money loses value you must pay more, you must pay longer and there is nothing you can do on this. Non-elected official spend that much money and they are not held accountable to any extent. In what I personally call a setting of corruption, this Mario Draghi was in a group of exclusive bankers (G30 bankers) and there was a question on it ONCE! There was no response and the media merely let it go, the media that is all up in arms on the freedom of speech did NOTHING! They let it slip away, how can we ever agree to be part of such a setting?

We have given away the quality of life and we are letting this go, in that regard Nigel Farage was perfectly correct, we are better of outside of the EU. The moment we heard this we got a lot more than a few ruffled feathers. Banks started threatening to move away, the same screwed up individuals who bolstered massive profits in bonuses as our lives faded in 2009; they are all about the gravy train. Why should anyone support this?

Now we get a new setting, with Cambridge Analytica, people woke up! I warned many people for well over 4 years, but they were all about ‘the government should not spy on us, we have a right to privacy‘, those same individuals got played in Facebook, pressed on fear, pressed on choices and like lambs they went to the slaughter and no one ‘blahed’ like the sheep they were. Yet there is a setting that is now in the open. When we act on fake news, is that fraud? The news was not asking us to jump, the people at large merely did and now they are crying fowl (pun intended), the turkeys got the sauce and now realised that they were going to dinner, yet they were the meal, to the ones getting fed.

So now we go back to the first setting. We have two issues; the first is the investigation from the Electoral Commission. That investigation is still ongoing, so why exactly is the digital, culture, media and sport committee rolling over that event? When we see the quote “lawyers had told him to “keep my trap shut” until the Electoral Commission completes its investigation into Vote Leave this summer“, I tend to fall behind Dominic Cummings in all this. When we look at parliament and specifically the ‘Digital, Culture, Media and Sport Committee‘, I personally come with the blunt and direct question (and as politically incorrect as possible) with the question to the conservative members Damian Collins (Chair), Simon Hart, Julian Knight, Rebecca Pow and Giles Watling. In addition also to the Labour members Julie Elliott, Paul Farrelly, Ian C. Lucas, Christian Matheson, Jo Stevens as well as Brendan O’Hara from the SNP. My question would be: ‘Who the fuck do you think you are interfering with an investigation by the Electoral Commission?‘, I might get shut down that they have a perfect right, but in all this, the overlap, this does not add up well. This is about interfering, creating opportunity perhaps? We can all agree that there are issue, that there are coincidences, yet with the exception of the Scottish and Welsh member, they are all from Brexit constituencies, I think that this bad news is going to their heads, and serious questions need to be asked by the media regarding a committee that is what I call clear interfering with an electoral investigation. Is that not a valid question? Oh, and for the number, you can check that at http://www.bbc.com/news/politics/eu_referendum/results.

the other quote we need to consider is “It is the second time this week that a potential witness has turned down a formal summons to answer questions from MPs, after Facebook’s Mark Zuckerberg turned down a request from the same committee“, so why are they, trying to get Mark Zuckerberg in the ‘dock’? Do they need the limelight? What silly questions could they ask that the US senate could not come up with? Another quote from Dominic Cummings was “He said he had been willing to give evidence to the committee after this date, but the MPs’ decision to issue a formal summons via the media showed their priority was “grandstanding PR, not truth-seeking”” and I tend to agree with that.

When I look at two publications, the first being “The potential impact of Brexit on the creative industries, tourism and the digital single market“, I see issues, I seem them as personal issues, merely on what I have personally witnessed over the years that I have visited England. The first is “There is a phrase people like to use, “Locals selling to locals”. It does not matter whether it is the box office or the Royal Opera House or whether it is the distribution department of a television company selling finished programmes or formats, you need multilingual, multicultural teams to sell great British content around the world or to sell great British culture to tourists who come“, which might be true as a setting, yet in practicality? This is about local selling skills, how many grocers are hiring foreigners to sell a great cabbage? I also have an issue with Deirdre Wells, Chief Executive of UKinbound. She gives us that she employed; “70% EU nationals in their London office so they can communicate with the outbound operators in Germany, France and Italy and create those sorts of business deals in their own languages—that is still primarily how business is done. They need those language skills with skilled operations staff who can work with their clients overseas to be able to put these packages together“, which is interesting as most metropolitan Europeans speak English, in the Netherlands, Sweden, Denmark and Norway that language skill is way above average. Now, we can accept that language skills are important, yet when I see the footnote (16) and I look there, we see: “16 Q63“, I wonder what Q63 actually was, it goes a little further when we consider the issue given with item 31, where we see “Visit Britain emphasised the dearth (meaning lack of skill) of language skills available to tourism and hospitality businesses and compared the lack of skills affecting tourism with the IT skills required by the wider business community: In a 2013 survey of businesses by the Confederation of British Industry only 36% were satisfied with their employees’ language skills, compared with 93% who were satisfied or very satisfied with school and college leavers’ skills in the use of IT.“, here we see a reference to ‘IOB 027 p6‘ (at http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/culture-media-and-sport-committee/impact-of-brexit/written/42076.pdf), the paper gives a good view, yet it lacks a view of the Total EU compared to the rest of the world, when we see mention of “70% of respondents agreed that ‘the weak pound makes it a good time to visit Britain. This was highest in China (85%) and the US (78%)“, so if that is important, how large a slice of the cake do they represent? In light of that connection we need to see how important the EU slice is, if we are looking at a margin compared to the US and China, why are we bothering over the crumbs? At present we cannot tell, because it is missing, which tends to imply that the impact is not as large as expected, because I am (roughly) 89.4335% certain that if it was massive (compared to China and US) it would have been mentioned clearly and shown in some kind of Pecan Pie setting. [42076]

The second setting is seen in ‘Facebook written evidence‘ as published 26th April 2018 [attached]. Here we see in regards to This Is Your Digital LifeWhen an advertiser runs an ad campaign on Facebook one way they can target their ads is to use a list of email addresses (such as customers who signed up to their mailing list). AIQ used this method for many of their advertising campaigns during the Referendum. The data gathered through the TIYDL app did not include the email addresses of app installers or their friends“, which make the plot thicken, in addition we see “We also conducted an analysis of the audiences targeted by AIQ in its Referendum-related ads, on the one hand, and UK user data potentially collected by TIYDL, on the other hand, and found very little overlap (fewer than 4% of people were common to both data sets, which is the same overlap we would find with random chance)“, so at this point, I see no actual need to invite Dominic Cummings at all, or better stated, inviting him before the Electoral Commission finishes its report, it seems that certain members like the limelight a little too much. In addition we are treated to: “Our records show that AIQ spent approximately $2M USD on ads from pages that appear to be associated with the 2016 Referendum. We have provided details on the specific campaigns and related spending to the ICO and Electoral Commission. In the course of our ongoing review, we also found certain billing and administration connections between SCL/Cambridge Analytica and AIQ. We have shared that information with ICO for the purposes of their investigation“, it merely makes me wonder more on things being done twice at the same time, if there is validity to this, I cannot see it at present, at least not until the Electoral Commission is published. It makes perfect sense to scrutinise the findings to some degree, but to give two summaries at the same time overlapping one another is merely a way to diminish factuality and muddy transparency as I see it. Written-evidence-Facebook

In this, Yahoo had an interesting article last year at https://uk.finance.yahoo.com/news/brexit-remain-campaign-struggled-grasp-145100601.html), herer we see M&C Saatchi give us: “The downfall of the “Remain” campaign during Brexit was due to its inability to understand the electorate, according to the advertising chief enlisted to run the campaign. M&C Saatchi’s worldwide chief executive, Moray MacLennan told CNBC in the latest episode of Life Hacks Live, how M&C Saatchi’s unsuccessful Remain campaign struggled to grasp what the British people were really thinking about. “Everyone thought it was about leaving the European Union. I’m not sure it was. It wasn’t about that. It was about something else.”“, this is important as chair holder Damian Collins used to work for M&C Saatchi, so for the chair to take notice of his friends (if he has any), might not have been the worst idea. in that light, we see that there are issues that plague the British mind, yet the Remain Group never figured out what it was, which now gives light to all but to (Wales and Scotland) ended up with a ‘leaving’ constituency. It seems to be a mere example of a flaming frying pan, and no lid to stop the flames. In that, in light of the fact that M&C Saatchi tends to be terribly expensive, I wonder who funded that part of the deal, is that not a fair questions too?

As I see it, Hannah White, of the Institute for Government states it best when we see “Every time everyone observers the emperor has no clothes, in that parliament can’t force people to come, they lose a little bit of their authority“, which is an awesome revelation, so as we witness levels of interaction, whilst we are realising that the players should have known a lot better than what we are witnessing gives rise to other matters. What matters that they are why they are larger than you think remains a speculation to some degree and we all will have our own ideas on that. Yet without clear and accurate data it is merely speculation and we should not depend on speculation too much, should we?

Or perhaps when we consider ‘Dominic Cummings, who has been credited as the brains behind the successful Brexit campaign‘, we might, in light of the Moray MacLennan disclosure consider that Dominic Cummings comprehended the voters and Will Straw (the opposing team leader) did not, we need to realise that wars have been lost with a smaller disadvantage like that, so the Remain group might merely have themselves to blame for all this. If interaction is about communicating, we can deduce that not properly communicating was the cause, and in this the grandstanding by the Digital, Culture, Media and Sport Committee will not help any, will it?

 

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Milestones

We all hope to make certain milestones, some through fantasy, some through luck and some through anticipation. Your first threesome, the moment you joined the mile high club and for governments they have their own achievements, for example when they join the 100% debt club. So when we realise that Japan has well over 200% of GDP in debt, the US has passed the 100% marker and it joins those they looked down on for the longest of times. Italy, Iceland, Granada, Eritrea, Greece, Jamaica and Lebanon, all members of that 100% debt club, so when we see the Arabian Business (at http://www.arabianbusiness.com/politics-economics/395741-100-debt-club-set-to-get-new-member-from-oil-rich-gulf), treat us to the facts that Bahrain will soon join Libya and the Sudan as their debt exceeds their 100% GDP. We see more and more messages at present and even the IMF is setting a different atmosphere. We see part of that in equities.com. There we see “IMF (Page 10): Against a backdrop of mounting vulnerabilities, risky asset valuations appear overstretched, albeit to varying degrees across markets, ranging from global equities and credit markets, including leveraged loans, to rapidly expanding crypto assets.
MY TRANSLATION: In the last two major bubbles, the problems were mostly contained to dot-com stocks and housing. That is 100% not the case now. Almost every single asset on the planet – from stocks to bonds to loans and more – is wildly overpriced. There is zero room for error with prices at such dizzying heights
“. This is merely one setting; the field is expanding on a larger field and in all this, the nations that are passing the debt bar. France is set at 99%, so if they cannot contain the debt growth they will pass it this following financial year, leaving only Germany as one of the four large economies that is in a containable situation and there is where we get a partial ‘I told you so!‘ You see I wrote on part of this 5 years ago. (at https://lawlordtobe.com/2013/05/15/a-noun-of-non-profit/), I made a reference in regards to Brexit, but the setting of it all was a lot larger than merely Brexit. So as you get to contemplate “Consider a large (really large) barge, that barge was kept in place by 4 strong anchors. UK, France, Germany and Italy. Yes, we to do know that most are in shabby state, yet, overall these nations are large, stable and democratic (that matters). They keep the Barge EU afloat in a stable place on the whimsy stormy sea called economy. If the UK walks away, then we have a new situation. None of the other nations have the size and strength of the anchor required and the EU now becomes a less stable place where the barge shifts. This will have consequences, but at present, the actual damage cannot be easily foreseen. Any claim that there is no consequence and they predict no issues, remember this moment! The Barge (as is), will lose stability and the smaller members thinking they are on a big boat are now thrown left to right then left again as the storm rages on. The smaller nations will get damaged and in addition, the weaker ones (Cyprus and Greece) could still collapse, especially if the UK takes a non EU gander“, this was predominantly regarding Brexit. Yet the implications are larger as I stated. The UK is taking on Brexit and now we see that the German anchor it the only anchor giving some stability, the UK is taken away, Italy has lost its footing as it surpassed the 100% debt and now France is pushing that boundary as well. All because it was easier to play the popular fool than taking a hard stance on their debts, France is not alone, Italy and the UK are all there, the smaller ones have no options to give strength to the large 4 and as the UK figured out that going it alone is much better for the economy, we see a dangerous setting.

Even now, when we merely consider Spain in all this (not the smallest economy), we see (at https://www.southeusummit.com/europe/spain/spanish-economy-returns-grade/) that Standard & Poor’s is still playing (what I personally see) as ‘their little game’. Perhaps you remember ‘S&P reaches $1.5 billion deal with U.S., states over crisis-era ratings‘ (at https://www.reuters.com/article/us-s-p-settlement-idUSKBN0L71C120150203) the one quote (one of many) needs to be considered “S&P parent McGraw Hill Financial Inc MHFI.N said it will pay $687.5 million to the U.S. Department of Justice, and $687.5 million to 19 states and the District of Columbia, which had filed similar lawsuits over the ratings“. So when I see “S&P notes that Spain’s overall economic and budgetary performance has not been hampered by political tensions in Catalonia, as many had feared. The country’s GDP increased by 3.1% in 2017 and last week the Bank of Spain raised its economic forecast for this year to 2.7%, up from a December forecast of 2.4%“, you see, the numbers are not really in question, yet when we see the image below (source: Trading Economics).

When we realise that none of the EU nations has a grasp on their debts, in addition, the GDP for Spain went down whilst it is still below the numbers of 2016 and before, there is actually no reason to see the credit rating for Spain go up. I am personally speculating that the EU will be so much more hardship when France hits the 100% debt marker. It matters, because this will soon become the academic exercise that the question: ‘What is the difference between cooking the books and creating a false positive wave through inflated credit scores?‘ I actually do not have the answer here, but I guarantee you that the quality of life in Europe is not moving forward any day soon, not until some issues are seriously reconsidered. In addition, the US-China trade war isn’t helping anyone, not even the Europeans so that will also become a factor of debate soon enough. It partially relates to “We have revised upwards our GDP forecasts, with an intense rate of employment creation and an economic model based on the external competitiveness of our companies. With this scenario, we will achieve our objective for 20 million employed people by 2020“, the issue is that it is misrepresentation, you cannot rely on the unemployment figures and then state we will have 20 million employed, because on a population of 46 million, he might be implying that the unemployment numbers will skyrocket from 17.4% in 2017 to 56%, that would be crazy, yet that is what we are told, is it not? The best lies (read: miscommunications) are done through statistics, so that the feather matches the bird one would say. Still, back to my speculation, I believe that Spain is not the only nation in this setting; I think that some numbers in pretty much every EU nation are beefed, weighted and set to make Europe (or basically themselves in the European setting) look much better, so when the UK leaves they will not look as weak and feeble as they have actually become. It is a setting that is way too dangerous. There is no way that Mario Draghi is not part of this, so when we look at the Financial Times of last week we see ‘Mario Draghi acknowledges ‘moderation’ in Eurozone growth‘ (at https://www.ft.com/content/3e20b49e-4939-11e8-8ee8-cae73aab7ccb). So with “Analysts said that Mr Draghi’s guarded language suggested that the ECB may wait until July — a month later than previously expected — to provide the markets with updated “forward guidance” on its plans to phase out the crisis-era stimulus“. I am a little less optimistic in regards to the quotes, and when we see ““Better safe than sorry was the motto of the day,” said Dirk Schumacher, economist at Natixis“. I personally tend to see that as:

Better safe than sorry
It allows for another day without worry
As we pile the worries and woes
To a stack we can blame on crows
Those at the London Tower are best
Because when they leave the EU we can make them the jest
And when our barge is no longer secure
We move to Wall Street where we can endure

You might think that I am merely making light of all this. The issue is that people in Europe seem to ignore that over €2,000,000,000,000 was printed without the validation of treasuries or consent of the people whose funds got devaluated even further. Do you think that printing money has no cost? It is money that the EU never had, so why did you think it came without consequence?

This partially (and I mean partially) is seen in different ways when we look at an article from Reuters merely two weeks earlier (at https://uk.reuters.com/article/uk-ecb-policy-draghi/stock-volatility-no-big-factor-for-ecb-so-far-draghi-idUKKBN1HG1VR) ‘Stock volatility no big factor for ECB so far – Draghi‘, now I agree that volatility will come and go, so the ‘so far’ part is perfectly fine. When we see ““While we remain confident that inflation will converge towards our aim over the medium term, there are still uncertainties about the degree of slack in the economy,” Draghi said in the ECB’s annual report“, now I can agree with that. There will always be a certain amount of uncertainty, that is all good, no issues there, but it is set on a certain premise. When we see that Spain (the only visible one) suddenly in opposition of what I see as real has its credit score increased and as such we see the start of an optional bubble, when others do the same we see the forecast on unreal values, so we see the bubble is not set to the reality of the actuality, at that point, when a lot more start realising that some numbers do not make sense, the uncertainty grows and the closer the UK is to leaving the stronger that uncertainty becomes. At that point we see a run and a total collapse, when that happens, when the people realise that pensions before 78 is no longer optional, do you think that the people will remain calm? When they realise the impact of €2 trillion printed cash is impacting the 26 nations, how much value decline will they face? When that happens, how will people react in all this? Now we get to two elements, one is the mention in the Financial Times where we see: “But the weak economic data for the first quarter have triggered increasing speculation that the first interest rate rise will be delayed until later in 2019. A smaller number of analysts are expecting the bank to continue QE into the new year“, the second is that the entire stimulus was to set the economy right, which did not happen, now set that against inflated credit scores, inflated economies and the downturn that follows, that will happen, it can no longer be contained, merely delayed to some extent. When it does hit Europe would not have a penny left to balance against and it will leave the bulk of Europe destitute. There would be no defence against the next downturn and that is when disaster will truly strike. So as the story is pushing towards ‘protectionism’ and ‘patent values’, we should also consider that impact. Now, as a University graduated Master on Intellectual Property rights, I do comprehend some of the issues, yet I am not a patent attorney, so there are parts that I will ignore or not look at. Consider that a national economy is now more and more dependent on the national patents and the represented value that they hold. Now we get European Patents, the Unified Patent Court (UPC) allows for a simpler way to get it all registered and to some extent enforced. So it is a good thing overall, there was never too much fuss about that side, yet the one strong economy (Germany) is now setting the stage to oppose the UPC, we see this (at http://www.ippropatents.com/ippropatentsnews/europenewsarticle.php?article_id=5725), where we also see “Alternative für Deutschland (AFD) has called for the repeal of the convention on a Unified Patent Court (UPC). AFD “rejects the EU patent law reform”, according to the German Bundestag, which announced the motion on 7 March“, I believe that overall the UPC is a good thing, but there will always be small interests that are not perfect, no EU setting is 100% positive, yet overall, to get one filing for all EU nations, in light that even the UK agreed (and ratified) is a good thing. So when we see “It was based on three grounds, mainly how the UPC Agreement violates EU law, the majority requirements of basic law, and does not comply with the rule of law principle related to judicial impartiality. The complaint was scheduled to be heard in 2018 by the second Senate, appearing as the 11th item on its agenda. In Germany’s 2017 federal election, the AFD won 12.6 percent of the vote and received 94 seats, the first time it had won seats in the Bundestag“, there is an academic setting, yet with 12.6 of the council in hands of the AFD, a very Brexiting minded party, or is that Berlout or Deutchleave, we need to realise that the patent issue is a lot more biting in Germany and that cannot be ignored, as they give rise to uncertainties. So when we get back to the uncertainty there, as well as other uncertainties, and whilst we saw Mario Draghi accept that uncertainty results in stagnation, how much more stagnations are required for the next downturn, even a short term one, whilst the economic reserves have been already been drained.

Now we have a much larger setting, the EU was never about everyone agreeing on everything and the economic setting that requires that to happen at present is also making the dangers of waves that sinks the barge called EU. Now, that seems like an exaggeration, but when you realise that the German anchor is the only one giving stability, you can see the dangers the EU faces and more important, the dangers of no reserves and an utter lack to keep proper budgets in place, a setting now in more danger for the reasons that I gave supported by the economic views of many others. I believe some are downplaying the impact, yet when we realise that EVERY European Union government is downplaying the economic impact (as every nation always wants to look as good as possible, which is a PowerPoint setting of the human ago) we get a much more dangerous setting. We accept that the smaller nations have a negligible impact on the whole, but on a ship that can only remain truly stable with four anchors, losing three is a much bigger disaster than anyone realises, and that downplay will hurt all the players that are part of the EU, so when the downturn starts, we will see kneejerk movements from all the nations, all the big players and we can only speculate the fear mongering speculations that the IMF will treat the European audience to. I have no idea what form it will take, but when it happens I will take a deeper look. In a setting where every negative economic milestone could lay waste to whatever reserves its citizens wrongfully thought they had in the first place.

 

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