Thursday , 29 June 2017


Germany Could Initiate the Collapse of the European Union Within Months – Here's Why

As many of you know, my primary forecast regarding Europe is that the EU will be broken up and/or collapse within the coming months. The reasons for this are financial, monetary and political in nature [with much of the latter dependant on what happens in Germany. Let me explain.] Words: 516

So says Graham Summers (www.gainspainscapital.com) in edited excerpts from his original article*.

Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has edited the article below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.
 

Summers goes on to say, in part:

Those financial, monetary and political reasons…are:

1) France is about to elect a hard core Socialist. This will greatly alter political dynamics in the EU and will weaken Germany’s push for austerity. [Read: D-Day is Coming: A Financial Crisis is Brewing in France – Here’s Why]

2) Spain’s stock market and banking system are on the verge of collapse. The markets are flashing major warning signs here both in terms of technical developments in the markets as well as Spanish sovereign bond market yields. [Read: Graham Summers: Spain Has Brought Europe to the Point of NO Return – Here’s Why]

3) The ECB’s interventions in the European banking system are now politically toxic (the markets punish those banks relying on the ECB for aid) as well as monetarily impotent (the positive effects of spending hundreds of billions of Euros are only lasting a month at most).

4) The US Federal Reserve’s Operation Twist 2 Program ends in June. Currently there are not new monetary programs planned at the Fed and it is unlikely they will launch anything before the U.S. Presidential election in November (unless forced to by a Crisis).

In simple terms, we have a confluence of negative factors hitting this month and the next. Now, nothing in the political or financial worlds is static and we could see any number of changes made to the above items (for instance, France’s soon to be President Francois Hollande might backtrack on some of his more aggressive socialist policies).

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Having said that, while individual changes to the above items might temporarily delay the collapse I’ve forecast, said collapse is coming and will hit before the year-end. [Read: Graham Summers: Collapse of Europe is Guaranteed! Here’s Why]

The reason for this is that we have reached the End Game for Central Bank intervention: the time during which Central Bank interventions either result in negative consequences that far outweigh their positive benefits (inflation/ increases in the cost of living vs. a rise in “good” asset prices such as stocks) or have negligible impacts….

The relationship between Germany and the ECB is deteriorating as the former finds its push for austerity counteracted by the latter’s monetary profligacy. Indeed, Germany is now facing its most dreaded consequence of the ECB’s money printing: the possibility of inflation (although it continues anchored around two percent and actually slowed in April), with German labor leaders urging May Day demonstrators to fight for big pay rises after a decade of restraint that had seen wages in crisis-hit southern Euro zone nations soar….

Conclusion

The core driving force in European policy-making is politics and Angela Merkel is facing re-election in 2013. If inflation is already becoming a political issue in Germany now Merkel is going to be highly incentivized to get it under control by appearing even more pro-austerity/ anti-monetization and, if things get truly ugly, she could even publicly threaten to pull out the Euro.

*http://gainspainscapital.com/?p=1714  (To access the articles please copy the URL and paste it into your browser.)

Editor’s Note: The above article may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

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“The real risk for the euro zone now is not Greece, but France,” says a top French finance boss. Nicolas Baverez, a commentator who foresaw the country’s looming debt problems in a bestselling book of 2003, agrees: “I’m convinced that France will be the centre of the next shock in the euro zone.” [below their views are substantiated with some alarming and disturbing facts about France;s financial situation and how their politicians are failing to address the brewing crisis.] Words:740

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european_union_flags_1

The European economic situation is explained very simply in the illustration below. Take a look.