It is possibly one of the first times that the entire world is keeping their eyes on France and on its elections. The situation as seen in France has not happened since Charles de Gaulle. France in a state of massive changes, changes that are essential if it wants to have any options of shedding the massive debt it has and restructure the options of owning a stronger economy. The question becomes, who will be the enabler in that regard. The BBC shows us (at http://www.bbc.com/news/world-europe-39038685) how 5 charts will explain the elections. The first shows the growth of Front National, the party of Marine Le Pen. The quote “Opinion polls currently suggest Marine Le Pen would be defeated in the second round by Emmanuel Macron. Without the backing of a traditional political party, the former economy minister, who has never held an elected office, is standing as a centrist candidate” is in the central place here. She might be front runner now, but there is the real issue that Marine Le Pen is seen as too much of an extremist. Even as part of her strength is seen in the second chart where we see how unemployment rates have sky rocketed under President Hollande and that level of dissatisfaction has been an enabling factor for Marine Le Pen. The 4th chart is also a Le Pen indicator. As France has been hit multiple times, the people started to listen to the logic of Marine Le Pen and as such all drove straight towards the far right. That is the way of things. The 5th one is less of a positive influence, but it is an influence none the less. As the amount of asylums are given increase, the rejection of the social path of France will increase and that too works for Marine Le Pen. In all this, the consequence is equally a positive part for Macron. Emmanuel Macron is making strong headway and to many French, the preferred choice. Yet, Emmanuel Macron has never held office, which counts against him, as an economist he does have an edge, but that would only work if his policies had resulted in jobs, which was not the case. The reality, or better stated, the stronger reality is that for those under 25, 1 out of 4 does not have a job and that is where Marine Le Pen is getting a growing traction. No matter how the French here on how important social issues are, the reality of no work translates to hunger and uncertainty. In addition, Hollande has data in play that shows that the high point of his economy was a year ago and decline is already showing, this translates to even more people moving from the left towards the centre and the right side of the isle, all moving towards Macron and Le Pen. With the UK showing a growing economy whilst Brexit is starting is also pushing the people to listen to Marine Le Pen and that is the reality that will continue, yet will it translate to enough votes? There is the uncertainty and I predicted that it was a reality France was facing. A reality I have claimed for over 2 years now and so far I have been proven correct. However, this does not take Emmanuel Macron out of the race. There the reality is that anyone feeling too uncertain regarding the more right wing Marine Le Pen that voter might hesitate and decide on Macron instead, a choice that is logical yet untested and unproven. It is the unproven part that the French also realise, so Marine Le Pen stays in the race. The one factor that matters is Benoit Hamon. Now, he might not be the front runner and he will not amount to serious opposition of large numbers, but the one part that still matters is whether he can get enough votes to make the 50% impossible for Marine Le Pen, that is now the game that plays, the others are not able to do anything serious to that extent. It is now starting to be merely a race between Macron and Le Pen, Hamon would enable the situation that a second round would be essential, which now takes us to May and that opens the field again, in that regard, Marine Le Pen needs to be really clever on how she plays the game. In addition, she needs to be clever on how to oppose or diffuse any situation that the anti Le Pen press is pushing onto her.
The NY Times (at https://www.nytimes.com/2017/03/07/opinion/france-braces-for-the-now-possible-impossible.html) is now stating ‘France Braces for the Now-Possible Impossible‘, which only shows that they are either two years late to the party, or they just did not care before. Sylvie Kauffmann talks a good article, but she misses when she states “This is a French campaign like no other. All the political patterns established since 1958, when the present Constitution was adopted, have come apart. The National Front has been a fixture of national politics for 40 years, but never before has its presidential candidate been a consistent front-runner. Today, none of Ms. Le Pen’s opponents doubt that she will get to the second round; in fact, they are not even fighting her. They are fighting among themselves to win second place on April 23, to have a chance to beat her in the runoff“, she is not stating anything incorrect or wrong, it is the one additional fact that is important. This is also the first time in modern history that a current president is not seeking re-election, which she does mention on the side. The scandals we saw and the consecutive “François Fillon, a conservative former prime minister who is now the Republican candidate, has stopped campaigning” is another part of the sliding numbers to go in other directions, yet, will they go towards Marine Le Pen. A smaller influence is the Dutch elections. The Farage-Le Pen-Wilders triangle is pretty famous. Yet in all this the US is now an influence, because with every claim that President Trump is making, the people are confronted with a connection to each of these three and a reason why not to make the same mistake the US has made, with ludicrous claim after ludicrous claim, the Republican win is now hurting the right side vote in both France and the Netherlands, but will the shift be enough? Those matters are not known and are even less predictable.
What is at this point a certainty is that in the end Marine Le Pen will be one of two parties that can be voted for, yet there is enough doubt to see that there will be a round in May, the matter will just be how will the people see this than and how far off is that 50%, because if the call is too close to that, the smallest fluctuation could change the game. Now with the 17% of Fillon in the air and the 15% of Hamon under discussion, there is the smallest chance that a slice of that will go towards Marine Le Pen actually that is certain, yet how much will go her way? If the split is even, there is now the largest chance that 23% will divide between Macron and Le Pen, setting Le Pen at 39%. I feel that Hamon will lose, but I very much doubt if he falls below 10% and that would be the best case scenario for Hamon, there is a chance that Hamon will get a few of the Fillon numbers, but I feel certain that he will lose traction within his own ranks. With 1 in 4 people under 25 not having a job, the alleged fake job that he gave his wife is not sitting well with a large part of the voters who were already looking at Le Pen and are now utterly unlikely to select anyone left of centre which works very nicely for Le Pen, but there is still a steady group that has no love for the right, so those votes will go somewhere else, or better stated these people will vote anyone but Le Pen, which could benefit Hamon to the smaller degree and Macron to a larger degree. so as those impacts are seen, there is now a serious chance that Le Pen would grow from 39% to 42%-46% and that is where the issue starts, she is now way too close to 50% and even as it is unlikely that she gets to that point passing 50%, it is not impossible and that is where the game changes by a lot, because if she gets there, she would potentially be in the strongest position to make a lot more radical changes. Like Trump, her examples would drive the Frexit start and that will be the start of the nightmare for both the US and Japan, the Euro collapsing will drive a market fear of unbridled proportions, one that cannot be countered by the players involved, which will have a disastrous effect on the global economy. CNBC has been giving voice to several dangers, which includes rate hikes (which is off the table the moment Frexit starts), Beijing is another factor, but if properly set would actually create stability and less uncertainty. It is the utterly unbelievable part that the Financial Tribune is giving us. They proclaimed that the global economy is expected to grow 3.5% in 2018, which sounds nice, but unrealistic. You see, the changes that are essential to growth are in the wrong corners as I personally see them. If Frexit starts than the contractions in Europe will start an escalating drop, making a global economy growth of 1.5%-2% decently unlikely. Frexit is the first cornerstone, the Brexit escalation that comes, or will drive the change is another part. These two will now push Italy and Germany in very different directions making the Euro no longer a feasible currency, especially as Mario Draghi was kind enough to spend a 13 figure number onto an economy that would not hike or set in motion to the degree that was essential. So as we see the quote “Its forecasts remained broadly unchanged from its November report, however, both the US and the eurozone saw minor downgrades“, we see it without the mention that this happened even as the UK economy went upwards. Market volatility is actually the smallest influence for now, but that will change before the end of the year. So as we see the dangers of a recession slam in either Q2 or Q3, we will see it with the realisation that the forecast given by the Financial tribune was not that realistic, just prophesising on sunny weather with a few small clouds whilst we see storms on Eastern and Southern shores, and there is no way to pierce the fog from the remaining directions, a dark fog that seems unable to have any sunshine. All that and two additional dangers remain unexplored. That is given not in who gets into power, but the danger that no matter who goes into power, the new players will be inexperienced in many ways; that too will stagnate any positive move from the economy. The only bright spot is that in Germany there are differences growing, especially as Alternativ fur Deutschland has started rounds of infighting, the final straw of anti-Europe will not be in any position to move into that direction, the question then becomes what will Italy do? Even as Merkel is facing a much stronger SPD, that election will not come until 4-5 months after France, which means that Frexit, if called for would also impact the German grounds of choice. In addition we see more waves of ‘Grexit’ news on the need for cutting Greece lose. Which is not an option in EEC laws, and I am surprised that the PRESS has not caught on yet (especially as they played that fake card twice already). All these elements are in play and they will together result in a global economic growth of less than 2%, especially if the European economy contracts a little too much and that is decently certain to happen.
A rollercoaster economy that is about to be started by the modern version of the Franks that make up the French population. In this the trend is as I see it no longer about some united fake region, it is about growing nationalism and national pride, because that will also grow an economy. We all forgot about that (me, myself and I included). You see, there might be open borders, there might be free travel, but as we forgot in which place we were we also forgot on what made that place great. The beers of Belgium, the cheeses and wines from France. Some might claim that this is not true, but it is and we lost sight of it. Because we only value that what requires effort, a reality we have always faced, we just forgot about it and the larger companies had a better time by offering us something mediocre and unhealthily cheap, something that fitted too many of us. I personally believe that this is most clearly seen in the gaming industry, which is why I recognised the flaw in myself early on.
The good thing about all this is that as national pride grows in all the nations, we will see a drastic improvement of appeal and quality, I believe that the smaller places will now have the option to grow and that will drive the economies. So as Carrefour and Auchan end up talking to a new group of suppliers, France will witness a shift in economy, not one that maximises the bonus of larger provider of goods, but enables deliveries from smaller players and they do not have the board sizes that some of the current players have, so it actually will end up driving the economy. It sounds crazy and weird, but I believe this path to be the first drive of growth.
That would benefit the economic numbers of France enormously and it will also push other nations into reinvestigating the options for growth. The Financial Times show part of this (at https://www.ft.com/content/6de52a3a-aca4-11e6-9cb3-bb8207902122), yet this growth is mainly due to other factors. John Ellis, retail & consumer partner at PwC, gives us an interesting point here: “Over the next few months, the way in which retailers deal with cost headwinds, particularly the impact of foreign exchange on product prices, will be crucial for consumers’ future spending patterns.”
He is correct in that way, however, I also believe that as people will seek more and more local solutions (read: deals) it will actually drive the local economies stronger in an upwards direction, and in that, I am predicting that the same will happen in France. The second part he is not giving us is that the individual currencies will allow national governments to float their currency ever so slightly to avoid massive negative impacts, something that was not an option under the Euro. So another tool will be handed to the French as they restore the imbalance that their economy has faced for well over a decade. I do not believe it will be the measure towards success, it merely avoids the chance of failure, which is also a driving force in any economy.
Now, feel free to completely disagree with me, which will always remain a valid view. Yet when we see the impact of positivity that segregation has and if Marine Le Pen cashes in on this, than we will see a second step in the European economy that will stop the Euro. As we end with that coin, did anyone tally how many European officials are no longer required? How much did they cost? A gravy train that was riding the slopes of Europe at the expense of taxpayers, whilst for the larger extent not having any positive national impact. We are talking of a group that exceeds 32500 people. So how much was that costing on a monthly basis? 751 MEP members were getting a monthly pre-tax salary of €8,484.05. That’s already 6.3 million a month, so how much for the other 31,750 employees? Let’s not forget that this is a monthly expense. So I reckon that the sweet reality is that there will be a positive impact on budgets. Now these costs are not going away immediately, but I think I am making a clear point that national costings will change.
France is about to start a wave of changes, or better stated, there is a real change that massive changes will commence, but in the end, we will have no certainties before the elections are over and until France makes a claim and voices the intent to exit the EEC, there is no certainty that there will be actual change, because the Euro could survive without the UK, but not if the economy contracts, in that case several options will go straight out the window for several European nations, especially those in the EEC. Mario Draghi has made sure of that. You see, when we accept Bloomberg view (at https://www.bloomberg.com/news/articles/2017-03-08/draghi-s-caution-on-inflation-signals-ecb-stimulus-stays-for-now), where we see “The rate remains stuck below 1 percent, but what’s worse is that the trend has consistently pointed down in the euro’s 18-year history, suggesting structural weaknesses may be at play” a weakness I mentioned (in a different way) in several earlier blogs, is now getting more and more to the forefront. Bloomberg also gives us “the measure that excludes volatile components such as food and energy” gives us that in a dangerously low setting volatile products will still have an impact. The additional “After policy makers’ preferred gauge of future price developments approached levels of below but close to 2 percent at the end of last year — signalling the ECB’s goal was in sight — it’s now on the wane once more” gives more and more strength to my prediction of economic contractions, which now also gives a view that any prediction of a global economic growth of 3.5% in 2018 is getting less and less realistic. so as we see positive forecasts from several sources, we need to be careful on who we will believe, because like several nations stated in earlier years, the forecast of today will soon be shown to be overly optimistic one quarter later, which is after the ‘predictors’ got some of the players to unwisely spend what they should not have been spending. A game that has been played for too long, it is the national push that gives for change and more important, it gives for a push by people who can be held accountable and can at that point be incarcerated, which tends to make certain forecasters a lot more cautious and it will give us an actual realistic economy to work with. It might not be great and in the beginning it will also not be good, but it will be mending and growing, which is what the people want and need. In that we have to voice with certainty that we do not give a fuck on what large corporations want or desire to get them their bonuses, we have had way too much of that for too long.
Lawrence van Rijn - Law Lord to be 