crisis

The European Crisis of Philosophy is the Destruction of the European Union | Armstrong Economics

Posted on by johnbarleycorn12

The entire project of creating the Euro was a means to allow Northern Europe to effectively takeover Southern Europe and impose its philosophy in a totally one-sided arrangement. I have stated plenty of times that all the debts of member states should have been consolidated into the central Euro debt and thereafter each state would be on its own as is the case in the United States. But from the outset, this was like pretending to be one family, but you do not really want to associate with your drunken brother-in-law who is always asking for money. Oh yes, you have to pretend to be nice at funerals and weddings. But that is where family ends. The European Union is no different. The crisis brewing here is monumental and it will tear the European Union apart at the seams. There is this crisis that because the Euro was NEVER designed properly to begin with, Brussels is trying to enforce its demands upon every member state to maintain austerity regardless of the consequences domestically in each member state. When Southern European states joined the Euro, they had to convert all past debts from their local currency to the Euro. What happened was not only their national debts DOUBLED in real terms, but ALL PRIVATE debts also DOUBLED. Suddenly, banks that had lent Italian lira were now demanding to be paid in Euro which doubled in real value. Nonperforming loans skyrocketed and every politician blamed the bankers for their own misguided creation of the Euro. Now the crisis in philosophy is rising to the surface. The new Italian government wants to provide €1.5 billion to compensate savers for bank failures. Brussels is insisting that violates their bail-in rules and cannot be done. In the mean time, the new government intends to clean house in the Central Bank and remove all former officials stating that they have FAILED to properly supervise the entire banking crisis. Both Vice President Matteo Salvini and Vice Regent Luigi DiMaio have made it clear that they will not comply with those EU rules and leave the people bankrupt because of the failed banks. The EU has lost all direction and no longer sees itself as a body for the people, but to merely rule the people. They have lost sight of the purpose of government in this desperate attempt to save the Euro. At the EU Commission, there has to come a day when reality crashes down upon them. This is not the way democratic governments are supposed to function. They are shocked that there is a rising trend of separatism. It is now all about savings their jobs for if the Euro goes, so does their jobs. It is not about the people or Europe as a whole. It now saving the bureaucracy. The majority of the terms of the central bankers in Italy expire in May. We will be holding the World Economic Conference in Rome May 3rd & 4th so we will have a front row seat for the May Crisis engulfing Europe. We will be issuing a special report on the Europe Crisis and how to survive it for attendees.
— Read on www.armstrongeconomics.com/international-news/europes-current-economy/the-european-crisis-of-philosophy-is-the-destruction-of-the-european-union/

“Severe Collapse” of Home Prices Might Trigger a “Financial-Institution Crisis” in Australia: OECD Frets about the Banks | Wolf Street

Posted on by johnbarleycorn12

“Severe Collapse” of Home Prices Might Trigger a “Financial-Institution Crisis” in Australia: OECD Frets about the Banks | Wolf Street
— Read on wolfstreet.com/2018/12/10/severe-collapse-of-home-prices-might-trigger-a-financial-institution-crisis-in-australia-oecd-frets-about-the-banks/

The Crisis is Turkey | Armstrong Economics

Posted on by johnbarleycorn12

President Recep Tayyip Erdogan of Turkey is finding his dreams of an all-powerful resurrection of the Ottoman Empire are falling apart. Qatar has come to the aid of Turkey offering $15 billion in a loan, but keep in mind that the entire issue with Syria began with Qatar proposing a pipeline through Syria to compete with natural gas with Russia. Therefore, it is in Qatar’s best interest to keep Turkey trying to invade Syria. The price will be the pipeline, which we seriously doubt will ever take place. Erdogan has sent the Turkish economy into a downward spiral for some time. Its soaring inflation has exceeded 100% and rising debt-to-GDP of about 70% under President Recep Erdogan’s regime has been a growing problem. As central banks pumped money into the system over the past decade, nations like Turkey and other emerging market economies used the opportunity to raise more and more “cheap” debt to boost their productivity. Turkey has attracted capital from Europe seeking higher yields because of the negative interest rates policy of the ECB. Now we have a crisis in Turkey that is also the result of Draghi’s Quantitative Easing that drove capital to Turkey and FAILED to revived the European economy. Erdogan’s dream of restoring the Ottoman Empire is no joke. It has been European money seeking higher yield that kept him in power. It is curious how those who seek dictatorial power are the ones who dream of restoring the power of empires long since dead. Erdogan has wanted to recreate the Ottoman Empire just as the dream of the reestablishment of the old Roman Empire as was the desire behind Napoleon and Hitler. The days of Empire Building are long gone and Erdogan has been living in the past. His goal was to expand his country’s military operations in Syria and this, he hoped, would be the first step as with Hitler’s invasion of Poland. However, the lira collapse and the expensive dollar are conspiring against him. On the one hand, Erdogan is attracted to dealing with Russia who is on the opposite side of the game board with Qatar. Erdogan has the free markets moving against him and he is more likely to turn to Russia than the West to retain personal power. Nevertheless, he turned to Qatar because he was desperate for money to retain personal power. If he loses the support of his military, then they will side with the people and Erdogan’s head may end up on a spike. Yet, the financial markets are working against Erdogan and as the crisis continues, Turkey can hardly afford military adventures. Many rushed into Turkey and bought their bonds at 20%. Many Spanish banks had capital was invested in Turkish bonds to get the higher yield to the tune of on average 20%+. Based upon the phone calls, there are way too many institutions who invested into Turkey. They simply assumed that NO government defaults because the powers that be will always bail out the bondholders. This time the IMF is really powerless. They can make some noise and others will say the crisis is subsiding. However, this is just talking. There is nobody who can save Turkey at this point as long as Erdogan remains in power. Qatar will discover that Turkey is a bottomless pit. They will try to now ease the crisis with words because of the extensive foolishness of banks and pension funds who bought Turkey bonds to try to get yield. The fall in the Turkish lira has also benefited the Syrian Army, which launched an offensive on the last large mercenary fortress in Idlib. Turkey was actually against the offensive because it feared that it would fall to Syria and that is against Erdogan’s dreams of taking more territory. What is not really looked at internationally is the plain fact that Turkey does not have its own arms industry. Erdogan needs arms to be imported and as the lira crisis materialized, his Turkish operation Olive branch and shield of the Euphrates in Syria become rapidly too expensive. Back in January 2018, the Siyasi Haber newspaper reported that an estimated $400 million was being spent on Operation Olive Branch alone. Erdogan has spent over $1 billion so far in his attempt to conquer that region of Syria. Instead of building his economy and benefiting the people of Turkey, Erdogan has been more interested in resurrecting the Ottoman Empire. It has been his mismanagement of the economy and his hostile attitude even to Greece that is behind the Turkish Lira Crisis. August has been our target for the crisis and so far the computer has been correct on that score. However, volatility will remain high going into October and then we see it will return as the new year begins. Qatar coming to the rescue should help support the lira for now. Those who are wise had better sell their Turkish bonds and step oy of this trade. August should prove to be only a temporary low for the lira.
— Read on www.armstrongeconomics.com/international-news/turkey/the-crisis-is-turkey/