Ah, the simple joys in life. Wilburine Ross interviewed by Lou Dobbs… Sip slowly.
The general status of angst created by ordinary swamp review has a tendency to wear down a soul. It’s at the times when we feel surrounded we should reflect upon how lucky we are to have the T’Rex’s and Wilburines on our team. We’ve already won, our opponents just haven’t noticed yet.
Federal Minister of Finance Wolfgang Schäuble of Germany is starting to show signs of rebellion against the elite in Brussels. With the event of BREXIT, the EU is more concerned about trying to punish Britain than they are in reflecting upon what is going so terribly wrong. They will throw their support behind Macron in France fearing that a Le Pen win may be the end of Brussels. Consequently, the EU Commission is trying to punish Britain, and is actually dividing Europe once again. There will be the EU membership, and then there will be the Eurozone within, limited to those countries who surrender their sovereignty to Brussels relinquishing their currency, but not their debt.
Schäuble is clearly attempting to save the Eurozone and make it operational at the same time to protect German exports within Europe. The driving force behind the Euro was to eliminate foreign exchange risk so German manufacturers could sell to all of Europe on a regular basis without currency fluctuation disturbing their sales.
Yet Schäuble is actually looking at reducing the power of the EU for reading between the lines, he has no confidence in the abilities of the EU Commission to manage Europe. Obviously, BREXIT is restructuring the EU only insofar as they seek to punish Britain rather than reform the problems that caused it. That means the Euro zone will be restructured as a block within the EU leaving the institutions, such as the ECB, applicable to the EU. The rules within the Eurozone are by no means clearly defined. This is how Markel opened the gates to refugees without ever going to a vote first in the EU. Thus, the unilateral decisions of Germany have then been applied to all of Europe without any democratic process whatsoever.
Schäuble is looking at the distinction between the EU and the Eurozone and thus reducing the power of the EU Commission to save the Eurozone – a second Europe within Europe, of which Britain was never a member. Schäuble attacked the ECB and Mario Draghi saying: “The ultralock money policy that exists in many regions is not helpful.” Schäuble said this opening on his trip to Washington. The ECB, Schäuble argues, is creating risks such as asset price bubbles with its negative interest rate policy. This is the clash of philosophies with Schäuble’s view on AUSTERITY.
Schäuble demanded a change of direction from Mario Draghi. He warned that Draghi was increasing the risk of creating a whole new crisis rather than lessening it. The Federal Reserve reverse course right after 2015.75 on the ECM that targeted October 1st, 2015 with the first rate hike in December 2015. Schäuble remarked that it “would not be a bad idea if the European Central Bank and other central banks followed” the course of the Fed. Schäuble has clashed with Draghi who still considers his stimulus quantitative easing policy of the ECB still necessary. Draghi said on this trip to Washington that a “very significant amount of monetary easing is still needed.”
Schäuble has also proposed that the basic structure of the Eurozone in the form of budgetary policy must be changed. Schäuble remains rightly concerned what happens when Draghi changes course and raises rates. Schäuble is deeply concerned that national debts will then explode with higher interest rates. For this reason, Schäuble wants the euro rescue umbrella ESM in the near future converted to a European Monetary Fund. Schäuble sees this as a European version of the International Monetary Fund (IMF). If a new aid program for a crisis country were to run without the IMF because the IMF has disagreed with the draconian measures imposed upon Greece. Schäuble wants to replace the IMF to impose austerity. Apparently, Schäuble has also convinced Chancellor Angela Merkel of this proposal since the IMF disagrees with the austerity ideas of Schäuble.
This new European Monetary Fund to replace the IMF, which is a member of the Troika, will then be given the task of budgetary monitoring of Eurozone countries. Therefore, we will have the EU, but a separate system within the EU for the Eurozone all based upon extending austerity. This is obviously a disempowerment of the EU Commission.
Greece is still an unsolved problem – and Schäuble also sees that Greece should exit the Eurozone. Schäuble also sees a better partnership with Russia and an emancipation from the USA. This was really based upon German manufacture having a new market to sell into given the rise of Donald Trump. Then Schäuble wanted a nuclear Europe to stand against America and Russia. Schäuble’s view is that the core of Europe is Germany, France, Belgium, Luxembourg and the Netherlands. It never included Britain. The Franco-German axis was to become the economic engine of the future. To Schäuble, the core is simply the Euro for that evens the playing field for Germany to sell products into Europe. He has embraced the Euro, but never accepting a federal debt for Europe. This is why he has never seen Italy, Spain or Greece as the core of the EU – just vassal states to sell products to.
French Presidential candidate Marine Le Pen says she is temporarily stepping down as head of her National Front party. She is still in the race, just attempting to distance herself a bit more from her party to broaden her appeal. The May 7 run-off between herself and Emmanuel Macron, will be interesting for it is a test of how strong the populist movement has become.
People who think “populist” is a particular philosophy are seriously wrong. It was a “populist” movement that put FDR in the White House in 1933. It also put into power Lenin, Hitler and Mao. “Populist” is effective the label applied to any movement Indeed, FDR actually did embrace many elements of fascism, which differs from communism insofar as it supported worker unions and the ownership of business run by the workers. The Populist movement was in fact Marxism during the late 19th century, which manifested into Communism, fascism, and socialism. All three were constructed upon a strong central power of government to different degrees.
“Populist Movements are not particularly a single right or left philosophy. The term is applied to effectively an anti-establishment movement against the status quo.
Le Pen said “Tonight, I am no longer the president of the National Front. I am the presidential candidate,” on French public television news. She hopes that by distancing herself from the party founded by her father in 1972, more people will reach out to her for real change in France. Le Pen hopes to tap into the Eurosceptic and protectionist voters in other parties. The underling trend is certainly anti-EU throughout all of Europe to varying degrees.
Macron is the favorite of Brussels and all the politicians nobody wants to vote for, so what does that really tell you? All the politicians are cheering only because they do not want any real change. They like everything as is – thank you very much they say off camera. But Macron is really out there in la la land. Those who think Trump says some crazy stuff, should turn and look at Macron. How about these!
“I’ve always accepted the vertical dimension, of transcendence, but, at the same time, it has to be utterly anchored in the immanent, in the material.”
Ok, not sure what that means at all. How about this one!
“We all have our roots. And because we all do, there are trees next to us, there are rivers, there are fish. There are brothers and sisters …”
Ok roots and trees go together. What about the rivers and fish? Brothers and sisters is family. Does everyone come from fish out of the river?
If he will be the new face of France, I would probably want to double short the Euro when the cycle changes.
How do you get congress to accept the NAFTA notification of intent letter? Why, you backstop the Canadian decision to undermine U.S. dairy farm exports by applying equity import tariffs and offsetting losses to U.S. manufacturers.
First stop, lumber mills. ie U.S. regional impacts, not coincidentally, represented by key Democrat constituents.
The congressional delegations from Washington State and Oregon happen to be mostly elected Democrats; and they happen to applaud the efforts; which means they are not able to criticize the approach. Hmm, it’s almost as if Wilburine and POTUS had a strategy or something. Nah, couldn’t be.
(Via CNN) These are the first tariffs imposed by President Trump, who during his election campaign threatened to use them on imports from both China and Mexico. The decision on Monday is bound to lead to a standoff and could stoke fears of a trade war between the US and Canada, two of the world’s largest trade powers.
Commerce Secretary Wilbur Ross said the tariffs, or taxes, announced Monday evening were being imposed after trade talks on dairy products fell through.
“It has been a bad week for US-Canada trade relations,” Ross said in a statement. Trump’s tariffs come as the US, Canada and Mexico prepare to renegotiate NAFTA, the free trade agreement among the three countries that came into being in 1994. Trump has directed almost all of his NAFTA criticism at Mexico, which makes this decision even more surprising.
When Canadian Prime Minister Justin Trudeau visited Trump in February, Trump said he only expected to be “tweaking” the US-Canada trade relationship.
The tariffs — also called duties — ranged from 3% to 24% on specifically five Canadian lumber companies. For all other Canadian lumber companies, there’s a nearly 20% duty imposed on exports to the US.
The five firms were: West Fraser Mills, Tolko Marketing and Sales, J.D. Irving, Canfor Corporation, and Resolute FP Canada. West Fraser Mills will pay the highest duty of 24%.
The duties were imposed to create a level playing field for American lumber companies.
U.S. lumber companies allege Canadian firms are provided with unfair subsidies by the Canadian government.
Canadian exports of softwood lumber to the U.S. were valued at $5.6 billion last year, according to the Commerce Department.
The Commerce Department said the duties are preliminary and a final determination will be made in September. The U.S. Lumber Coalition, which represents the industry, said the duties will likely take effect starting sometime next week. The Commerce Department wasn’t available to clarify. (read more)
REACTION: Senator Ron Wyden (Democrat-Oregon.), the ranking member of the Senate Finance Committee, applauded the Commerce Department’s decision.
“Unfairly traded softwood lumber from Canada has for decades hurt mill towns and American millworkers in Oregon and across the country,” Wyden said.
“Today’s announcement sends the message that help is on the way,” he said. (link)
QUESTION: The bounce in the Euro is a fool’s’ game?
ANSWER: Absolutely. The Euro is doomed because especially if Le Pen loses, Brussels will be relieved and proceed as usual. The same problems will merely exist and no reform will come forward to save the day. A good wind will blow over the European banking system. You are expecting politicians to admit they were wrong and surrender power in Brussels. NOT GOING TO HAPPEN. As Einstein said, you will NEVER solve the problem of the Euro with the same thinking process.
As weekly closing above the 10860 level in the Euro will imply the rally will press high to test the 112-114 level. Just look at the technical perspective on a monthly level. The Downtrend Line stands in May up at 12622. We are nowhere near reversing the trend in the Euro.
We have the French, British, and then German elections here in 2017. We do not expect total chaos before 2018. That seems to be the point of a major shift.
The latest polls show that most people who voted for Trump are satisfied. When the same questions have been asking about Hillary, the opposite response appears. The polls are actually showing that Trump would win a greater margin today than last year. This is interesting for it is confirming the collapse in government with Big Bang that began on October 1st, 2015.
Big Bang was the start of the collapse in confidence in government. This cycle should intensify starting in 2018 running head long into 2020. This is all good for the volatility in markets we see ahead. This is the same trend that produced BREXIT and just wiped out all mainstream parties in France.
QUESTION: Mr. Armstrong, I saved you article from November 25th last year where your computer forecast the collapse of mainstream politics. Macron was not even in the picture back then. Have you recalculated now that all the parties collapsed and it is Macron v Le Pen?
ANSWER: I am very familiar with France. I was supposed to debate Michel Sapin, the Finance Minister of France on national TV. He backed out.
As you can see in that article, the only way to approach this is to look at the philosophy rather than the party since we were showing that the parties would collapse as they have done. I concluded that article writing:
“Clearly, the socialists are finished. However, we are within this 10 year window between 2013 and 2023. This clearly shifts the favor toward a new power. Le Pen can win within this window. However, expect this to be also very divisive as in the United States.”
We could extrapolate and say all other party members will vote for Macron. However, that would just be a guess. The wildcard now is we know that Le Pen will get probably 30% for that is her hardcore base. The question becomes, what portion of the other parties will now vote for Le Pen. Keep in mind that the Euro will rally as fools think this will save the day if she loses. Such an event will only postpone the inevitable for the same thinking process will remain in place.
France, and the European “populist wave”, may be fixed for now, but geopolitical concerns remain as was made clear last night when during a phone call late on Sunday between Chinese President Xi Jinping and Donald Trump, the North Korean neighbor called for all sides to “exercise restraint” as Japan conducted exercises with a U.S. aircraft carrier strike group headed for Korean waters. China, which has repeatedly called for the de-nuclearization of the Korean peninsula, is “increasingly worried” the situation could spin out of control, leading to war and a chaotic collapse of North Korea, something we cautioned over two months ago.
Xi told Trump on the phone that China resolutely opposed any actions that ran counter to U.N. Security Council resolutions, the Chinese foreign ministry said quoted by Reuters. China “hopes that all relevant sides exercise restraint, and avoid doing anything to worsen the tense situation on the peninsula”, the ministry said in a statement, paraphrasing Xi. The nuclear issue could only be resolved quickly with all relevant countries pulling in the same direction, and China was willing to work with all parties, including the United States, to ensure peace, Xi said.
A potential risk catalyst is just hours away: North Korea prepares to celebrate the 85th anniversary of the foundation of its Korean People’s Army on Tuesday. It has marked similar events in the past with nuclear tests or missile launches.
That said, a Chinese foreign ministry spokesman said the call between the two presidents was the latest manifestation of their close communication, which was good for both of their countries and the world.
On Sunday, Trump also spoke by telephone with Japanese Prime Minister Shinzo Abe, who later described the conversation as a “thorough exchange of views”.
“We agreed to strongly demand that North Korea, which is repeating its provocation, show restraint,” Abe told reporters. “We will maintain close contact with the United States, keep a high level of vigilance and respond firmly,” he said. Abe also said he and Trump agreed that China should play a large role in dealing with it.
According to Reuters, a Japanese official said the phone call between Trump and Abe was not prompted by any specific change in the situation. Envoys on the North Korean nuclear issue from the United States, South Korea and Japan are due to meet in Tokyo on Tuesday. The U.S. government has not specified where the carrier strike group is, but U.S. Vice President Mike Pence said on Saturday it would arrive “within days”.
Meanwhile, South Korean Defence Ministry spokesman Moon Sang-gyun gave no details about the South’s plan to join the approaching U.S. carrier group for exercises, apart from saying Seoul was holding discussions with the U.S. Navy. “I can say the South Korean and U.S. militaries are fully ready for North Korea’s nuclear test,” Moon said. South Korean and U.S. officials have feared for some time that North Korea could soon carry out its sixth nuclear test.
As reported on Friday, satellite imagery analyzed by 38 North, a Washington-based North Korea monitoring project, found some activity at North Korea’s Punggye-ri nuclear test site last week. However, the group said it was unclear whether the site was in a “tactical pause” before another test or was carrying out normal operations.
Adding to the already tense situation, North Korea detained a U.S. citizen on Saturday as he attempted to leave the country. The arrest will be a topic of discussion when Trump hold a top level briefing with Senators on April 26.
As a reminder, Trump sent a carrier group for exercises in waters off the Korean peninsula as a warning, amid growing fears North Korea could conduct another nuclear test in defiance of United Nations sanctions.
Angered by the approach of the USS Carl Vinson carrier group, a defiant North Korea said on Monday the deployment was “an extremely dangerous act by those who plan a nuclear war to invade”. “The United States should not run amok and should consider carefully any catastrophic consequence from its foolish military provocative act,” Rodong Sinmun, the official newspaper of the North’s ruling Workers’ Party, said in a commentary on Monday.
“What’s only laid for aggressors is dead bodies,” the newspaper said.
Two Japanese destroyers have joined the carrier group for exercises in the western Pacific, and South Korea said on Monday it was also in talks about holding joint naval exercises.
The risk of a Eurozone breakdown now appears to be taken off the table after a French election that has led to a dramatic repricing in European risk assets. And yet the outcome – which was largely expected – has prompted Bloomberg’s Richard Bresow to muse just how much was truly priced in:
“I guess it shouldn’t come as a huge surprise. It truly unnerved the commentariat that the unpredictable seemed to be unpredictable. The second vote is apparently now knowable with certainty. Europe is saved. Populism is about to be vanquished. A strong euro is a good thing for the economy. And ECB President Draghi can begin normalizing rates. Presto chango. Not bad for a result that was everybody’s base case.”
And yet, as Breslow adds, the wholesale reaction leaves something to be desired:
Gold is interesting. I’d have expected it to leak more than it did. It may require Treasury yields to push higher. As we speak, they left a nasty gap and sit right where the bulls were hoping they wouldn’t have to see anytime soon. This may be the most interesting asset of all.
Equities are happy. Think of all that hard-earned wealth creation. And they get to ignore the Shanghai meltdown and potential U.S. government shutdown. Make tax cuts, not war. Another one-half percent higher in the E-mini and dreams of new all-time highs will be dancing in traders’ heads.
For now, however, it is “springtime in Paris”, and all other concerns can be put on the backburner, if only for the next few days.
The full note from Richard Breslow, a former FX trader and fund manager who writes for Bloomberg
* * *
It’s Morning Time for Springtime in Paris
And they get to ignore the Shanghai meltdown and potential U.S. government shutdown. Make tax cuts, not war. Another one-half percent higher in the E-mini and dreams of new all-time highs will be dancing in traders’ heads.
It’s Morning Time for Springtime in Paris
The pollsters won the first round of the French presidential election. In other news, Emmanuel Macron and Marine Le Pen have advanced to the next phase. There were times last night when there seemed to be as much relief from the forecasts being accurate as the diminished likelihood that one of the extremists will win the ultimate prize. Despite the far-right representative coming second and ahead of either of the main party candidates.
I guess it shouldn’t come as a huge surprise. It truly unnerved the commentariat that the unpredictable seemed to be unpredictable. The second vote is apparently now knowable with certainty. Europe is saved. Populism is about to be vanquished. A strong euro is a good thing for the economy. And ECB President Draghi can begin normalizing rates. Presto chango. Not bad for a result that was everybody’s base case.
Some of the other big winners include SNB President Thomas Jordan as EUR/CHF made a new high on the year. This is a good one to keep an eye on as 1.0850, where it peaked, is where heavy technical resistance begins. If the “everything is right with the world” meme is to hold, the cross needs to show it. Game theory would suggest it wouldn’t be a bad time for him to give it a little nudge.
The BOJ has to be feeling a bit better. And will feel a whole lot more sanguine if EUR/JPY can stick above the really pivotal 120 level. It was just last Monday that 115 was under threat. The U.S. can’t really fault the Japanese for this yen weakness, as they will be referred to the French ministry.
Gold is interesting. I’d have expected it to leak more than it did. It may require Treasury yields to push higher. As we speak, they left a nasty gap and sit right where the bulls were hoping they wouldn’t have to see anytime soon. This may be the most interesting asset of all.
Equities are happy. Think of all that hard-earned wealth creation. And they get to ignore the Shanghai meltdown and potential U.S. government shutdown. Make tax cuts, not war. Another one-half percent higher in the E-mini and dreams of new all-time highs will be dancing in traders’ heads.
Springtime in Paris can indeed be very enchanting.
I have created this site to help people have fun in the kitchen. I write about enjoying life both in and out of my kitchen. Life is short! Make the most of it and enjoy!
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