Tag Archives: Ver.di

A case of Molasses

We have seen the news, we see the new news and we are all wondering what the impact will be. I am of course talking about Mario Draghi and his ECB minions. MarketWatch is the most recent one with ‘All eyes on Mario Draghi as investors look for ECB to acknowledge risks to Eurozone economy‘ (at https://www.marketwatch.com/story/all-eyes-on-mario-draghi-as-investors-look-for-ecb-to-acknowledge-risks-to-eurozone-economy-2019-01-23). There are more sources and the total amount of sources is likely to increase over the next 10 hours. We have all heard it before, all the dangers and the gloominess, so when we see “it’s time for European Central Bank President Mario Draghi to acknowledge growing risks to the Eurozone economic outlook” people might ignore it all, which is not a good thing this time around. You see, at this point the ECB is at minus €3 trillion, France is at minus €2.2 trillion, Germany is at minus €2 trillion, Italy is at minus €2.3 trillion, Spain is at minus €1.2 trillion and the UK is at minus £2.1 trillion. All that debt, most governments have no further degrees of freedom to work with. And the media is not properly informing the people, for them it is all business as usual and it is not.

These are merely the larger players and I am hoping that the UK can get out of the EU before this collapses, because the moment it does the EU member states are in a world of hurt and will remain to be in that stage for close to 5 generations. That is the impact of debt and most players are all in denial as they need to gravy train to provide for them a little longer. When we consider surplus and deficit of GDP the message does not get any better. When considering the larger economies, the Netherlands, Sweden and Germany are in a surplus, the Netherlands merely at 0.42%, yet the rest are all in deficit as bad as -4.54% (Spain), France, Italy and the UK are at minus 2.44% or worse, the image is that bad and the UK has options to turn it around as it leaves the EU, it will still take a lot of work and optionally 2 generations, which is still better than 5 generations, but it will be a hard fight, anyone in denial of that element is merely utterly stupid.

Even in the surplus, the Netherlands and Sweden who are in a good place will need to be extra careful and tighten every belt possible, because one bad event will turn surplus to deficit quite quickly. In addition, the Netherlands is relying on the Rotterdam harbours to keep on working as good as they have been and thanks to Germany being at +0.76% they end up having options for now, but the difference between +0.76% and minus 0.56% is merely two strikes away and there German trade union Ver.di. is not too much useful for now, and it is not merely them, the mess is growing in Germany. It is as I personally see it the impact of long term Austerity. So as we see: “Workers are seeking a minimum hourly wage of €20“, which is close to 36% better than in Australia (in general), we are treated to the impact of the cost of living and even as a lot think that their bosses have it way too good (not entirely a wrong thought), what was positive could turn into a long term negative part too easily and the national and ECB debts will take a massive toll to the quality of life soon enough. Oh, and when the German situation worsens, which is likely to happen by Q3 2019, there will be the impact on the Netherlands too. Even the minimal impact of 0.3% would move the Dutch economy to a nil point; at that point they are one move away from recession and the monster that feeds it.

That has been the clear danger for the longest of time and the entire disaster called the bond buying scheme by Mario Draghi will impact Europeans for a very long time. You see, the bonds that do mature in 2020 will be a non-deniable impact and when the ECB and those connected to it fail to push forward those bonds and payment is due, the entire mess will really look like ‘a shit on the front door’. Good luck trying to get anything done at that point. This is the biggest part in my view of the UK getting out of the EU as fast as possible and France is no longer limited to Marine Le Pen going for Frexit, now we get the Gilets Jaunes’ manifesto where Frexit is the top demand, they are all catching on that the EU is the limiting factor in all this and so far we have seen and in most cases proven that only large corporations truly benefit from the EU in all this, the rest is merely window dressing and people in general and to a much larger degree have had enough.

The issues I warned about in 2015 are not merely coming true; the overbearing danger of the UK delaying Brexit could still bite to a much larger degree, so it was always clear that the break needed to be fast and even a no-deal Brexit was better than delay. This is seen in a few ways, when the others follow (France, Italy and optionally Germany) these larger players will unite in trade deals really fast making them the growing players soon thereafter, the rest will suddenly feel the pinch of all the smaller players filling their pockets and now realising that debt has to be paid for, at that point we will see an infrastructure collapse on a scale so large that it will cause nightmares to a large part of the populations in the 27 member states. Do you think that banks and wealthy people will sit still? No, they will run to EVERY profit shore possible, even if that means collapsing on their national grounds. If you think that this will not happen, think again, I merely listed the larger players, but they are all financially stretched and when the EU starts breaking down, we will all learn that the ECB is a paper tiger and the debt will get shoved into whatever nation is still part of it, collapsing the financial infrastructures tout suit.

As Germany is in a positive state, their departure is not to be expected, but that feeling changes when the UK is gone and that will trigger the French financial revolution (aka Frexit) soon thereafter. So when these two are gone, the entire mess of comparison to a barge, I made that comparison in May 2013 when I stated: “Consider a large (really large) barge, that barge was kept in place by 4 strong anchors, namely 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“, now that same barge is at risk of losing two if not more anchors, how much stability will remain? I can tell you right now that the impact will be huge and as the economies will take hit after hit; the wrong people will get to enrich themselves through the hardship of others, that is the consequence of a Wall Street state of mind too.

so when we see the entire political machine delaying and moving like molasses towards the undoing of infrastructure through inaction, we need to consider the damage that they are inflicting on the people and when they need to explain themselves on the news, how much consideration will you give the politician stating: ‘We thought that we were acting on the best interest of the people‘ as your quality of life goes into the basement for the next decade?

And still the people are getting lied to. From my personal point of view even the UN is involved at this point. That part is seen (at https://news.un.org/en/story/2019/01/1030902) where we are treated to ‘Global economy to see ‘steady’ growth of three per cent in 2019 despite risks, says UN’, the entire delusional statement, whilst we see the slowing in both Germany and France to a larger degree, Spain and Italy are already in the decline and whatever is gained is set against the debt of the largest four economies, that too impacts the economic growth as none of the nations has any financial options to create growth or set the stage for an increased infrastructure for years to come. So the 3% marker is what I personally would consider the delusional thought of a fictive inclined mind, even if whatever pressure would be applied to stop Brexit that predictive number is not realistic.

So when we see: “Among these looming dangers, accelerating trade tensions are already “having an impact” on global trade and employment, Mr. Harris told UN News. In addition, rising national debt is also crippling many countries’ ability to provide basic services, but this and other risks – such as those from climate change and waning support for international cooperation – could be avoided or minimized if countries worked together to do so, the UN’s top economist insisted. With mounting pressures in the areas of international trade, international development finance and tackling climate change, the report underscores that strengthening global cooperation is central to advancing sustainable development.

We see the delusion of United Nations Chief Economist Elliott Harris and his dangers of ‘accelerating trade tensions’, ‘rising national debt’ and ‘waning support for international cooperation’ are all set against ‘strengthening global cooperation’. So how is a person allowed to sit in the place he is? How can the additions and denial of massive factors are negated by the mere idea of ‘strengthening global cooperation’? The fact that the bulk of the EU nations cannot get their tax laws in order giving rise to properly tax the FAANG group and a few other players is evidence that the system is broken beyond believe and the entire mess of some magical +3% economy where the numbers deny the realistic notion of overwhelming nil status or actual recession makes the entire mess larger and I believe it is time to hold such reports up to scrutiny for prosecution of these elected officials who make more than 90% of the rest of a nation, there should be prosecution for those giving reports that are debatable to the largest of degrees. That will never happen of course, but in all this the media will give the fake positivism of 3% and in the end not hold these people to account after the fact.

The system is rigged to not leave the larger population with anything and that is soon becoming the actual driver to break the entire EU asunder. When that happens remember those who stated that the EU would become a better place and call them out in public, they will love that.

 

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