Europe’s Economic Death Spiral


QUESTION: Mr. Armstrong, you said when you were here in Berlin that the EU Commission is about as incompetent as the US Congress. You also said Macron is trying to federalize Europe as the solution Could you elaborate on that comment?

ANSWER: The EU Commission at present is composed of 28 Commissioners, who must always ensure that they are dependent on the nomination from the home country mush as American congressmen who are supposed to represent their state. Every member of the Commission, therefore, has a personal self-interest in staying in office. The complexity of regulations and initiatives often have hidden agendas that are often far too difficult to identify. One of the proposals of Macron is to reduce the Commission to just 15 eliminating state representation and the priority would then, in theory, be given to the professional competence of the candidates rather than representing member states. This would be the FEDERALIZATION of Europe and totally eliminate and democratic process. The people would have no say in changing the direction of Europe.

Macron is proposing to create European politicians. To deal with the end of a democratic process, he has suggested that these 15 commissioners be elected by all EU citizens in the longer term. He has said that with BREXIT, the British vacancies should be the first to be open to elections of all remaining Europeans in the EU. When commissioners are elected by their own politicians, then Macron argues they are not being elected by a European choice of citizens.

In fact, a smaller Commission and a Parliament he hopes would portray Europe as a whole that would forge the EU as a single government at last. This is argued would end the current paralysis that the EU is unable to get out of the economic hole it finds itself in and the ECB has failed with its stimulation to end deflation for nearly 10 years of quantitative easing

Europe suffers from extremely high taxes, taxes and social security contributions combined, which account for around 50% of the business cost which has produced nothing but higher levels of unemployment. In the US and Asia, the comparative rates are between 30% and 40%. Europe just cannot compete in the world economy and is slowly dying.

Macron wants to unify the corporation tax of all EU states or at least the Eurozone members and to make them available to an EU for infrastructure investments. Macron still fails to see that higher taxes produce lower economic growth. Until politicians wake up and see themselves are the source of the problem, there is little hope in producing meaningful economic reform anywhere in the world.After all EU countries suffer from financial distress, the plan can only lead to even more taxes being collected and not less. This also limits the scope of the holdings.

The development of the internal market is constantly being discussed because Europe cannot really compete in the world economy with a high tax burden. However, the fundamental obstacle to creating the internal market within Europe they believed would be settled with a single currency. But that has not proven to be correct as it has merely imposed austerity upon Southern Europe after forcing their past debt to be redenominated in Euro, which then doubled in real value.

Companies operating across Europe are forced to have their own accounting system for each country and act as if they were companies in the country in which they are exporting. The cost of compliance with different rules and taxes in every member state defeats the entire idea of a single currency would solve everything.

Then there is the EU going after Apple and Amazon claiming they were given unfair tax advantages by Ireland and Luxembourg sho they should pay retroactively the difference to the higher tax rate in Europe.

In addition, a complex control system was used to make larger tax evasion responsive to even the smallest billing. There is no talk about these obstacles because each state believes that the existing regulation will generate more tax revenues. A uniform value-added tax and the distribution of revenues to all Member States have been rejected by the member states.

The different VAT tax rates among member states are illustrated here. There is no uniformity. sentences are only part of the problem.

Then there is the Pension Crisis. which is setting the stage where the public sector is facing an explosion of the deficits from 2018 onward.

The reduction of the tax burden MUST be the number one priority, yet that is never addressed. The European Central Bank will not be able to maintain zero and minus interest rates forever. As a result, the states will have to pay higher interest rates on outstanding debt and new debt, which will have an explosive impact on the deficits. We are coming to the point where this system of perpetually borrowing more and more every year will be impossible to maintain once the people begin to realize Europe is in an economic death spiral.

The core problem is never addressed. All of these proposals on how to end the European economic paralysis simply never consider the role of government and its leftist Marxism that failed in China and Russia. They will continue to raise the retirement age across Europe to try to survive another year. Europe has become an economic catastrophe of untold proportions. The high tax burden prevents a dynamic renewal of the economy reducing the standard of living for everyone and perpetuating high unemployment as twice that of the rest of the industrialized world.

The GDP Decline Post-2015.75


The economic decline that we are now in moving into really 2036, is significantly different than pre-2015.75. The confidence shifted and 2015.75 was the peak in confidence in government. This is the rising discontent which produced Trump, BREXIT, and the rising separatist movements around the globe. The old way of running the economy is what has been declining and even when the GDP growth rate is being reported as up, the levels of growth are substantially in a bear market.

Likewise, unemployment has decline the the USA while rising outside, but even this is misleading. The quality of jobs has declined and much of the rise is attributed to part-time employment while more than 60% of college graduates cannot find employment in the field in which they paid a lot of money for. The student loans imposed upon them by the Clinton saddle the youth with such burdens for worthless degrees they are forced to live at home with their parents into their 30s. It has been the drop-outs who are the real innovators. Ernst & Young has been one of the top graduate recruiters in the UK and USA. They have announced the firm will be removing the degree classification from its entry criteria, saying there is “no evidence” that success at university correlates with achievement in later life. The best education has ALWAYS been an apprenticeship – not some university course taught by someone who has never practiced what they teach.

The economic growth is distorted and not really what governments are reporting. But even if we use their numbers as is we can see that the 2007-2009 recession was the worst since World War II. The top chart is the Fed data showing gross dollars so it looks like the economy is rising. Now let us look at that data on an annual growth rate basis. We can see the peaks and valley in GDP growth rates much more clearly. The third chart is simply month over month growth rates, very short-term. Now you can see what the central banks are so concerned about. The growth rate is declining sharply. Since 2015.75, even the USA is having a very hard time to reach 2% and sustain it and the USA IS THE BEST IN THE WORLD!!!!
Because the US is the core economy in the world, I have been stating that the decline unfolds from the peripheral first and moves into the core. The trouble we see in Europe and the start of the Refugee Crisis began with 2015.75. We see the rising economic problems even in China no less Japan. Emerging market debt has exploded and will be ripe for default. Trump was elected because the average person sees they are losing ground, not gaining. The youth no longer believe in the American Dream.
The model is forecasting NOT a “recession” in the old terms, but an economic decline. This is why taxes keep rising for they need money to try to retain bower. This creates DEFLATION and not the HYPERINFLATION that so many falsely believe is the only way empires, nations, and city states crumble into the dust of history.
As far as unemployment is concerned, here too we have to pick up the rug. Even the Post Office is hiring part-time workers so they do not have to pay pensions. There has been a rise in part-time employment to escape the benefits of Obamacare. The definition of employment has also been altered. You are not unemployed unless you look for a job.
This is all part of the economic decline that began with 2015.75. Even the poverty rate in Europe, the great socialist economy, has risen to 16% and is still rising. This is part of the discontent. The youth unemployment in Europe is just astonishing. High taxes on the “rich” who create small businesses that employ 70% of the population has devastated Europe. But the politicians are so married to Marxism, they cannot see what they are doing is the same economic extinction that took place in China and Russia that forced political change.
The USA is holding everything up right now. But our growth rates have declined and we are looking at the USA turning more negative starting from 2018 onward.

Italy’s Solution for Unemployment = Pension Crisis


The high taxation in Europe has crippled the economy. Those in power have not yet figured out that 70% of employment is created by the small business owner who they consider the rich and thus the enemy. Nowhere has this been more the case in Italy, Greece, and Spain. Italy is the next on the list of this Year From Political Hell come May 2018 and with youth unemployment above 30% for the past six years, the solution is not to lower taxes, but to steal from pensions to pay benefits to the youth.

In 2015 alone, some 50,000 Italians under 40 years of age migrated elsewhere to find jobs. Nearly half of them had gone to university to get degrees to no avail. All the fancy papers to frame and hang on the wall are not worth the cost of a frame. Italy and Greece are bleeding as their young talent cannot find a job and are pouring out of the country. The loss of these people is being argued is costing Italy 1% per year in economic growth. The estimate is closer to a 2% loss on GDO for Greece.

The center-left government of Prime Minister Paolo Gentiloni has recognized the crisis but as all leftist governments, they just cannot bring themselves to look in a mirror.  The proposition in the coming budget is to provide for measures that would motivate companies to hire young people. Because of the EU budget rules imposed by German Austerity, there is no room for more government spending. This youth unemployment is becoming a major issue because of the upcoming elections in 2018.

How can government create more spending yet remain inside the EU rules? The new scheme is to lower social security contributions for newly hired employees under a certain age. Therefore, employers will see that young people who they hire will have less money taken out for state pension contribution and thus make them cheaper to hire. In addition, Italy’s government is considering sending up to half a million civil servants to retirement and therefore create government jobs for the youth.ng workers.

The solution is by no means lowering the taxes on small business to create economic growth. These proposals will create the incentive for business to ONLY hire the youth and to terminate the higher cost employees whenever possible. Lowering the pension costs in social security contributions can only lead also to the dismissal of those employed young people as soon as they grow older and exceed the age limit to be determined. And the promise of new jobs in the state fails to account for the rise in pension costs.

The Italian pensions system is a Ponzi Scheme so retirees are paid for by the contributions from the youth. The entire pension system is in crisis and this scheme concocted post-World War II is reaching the breaking point. Even in the USA, the census has revealed that of the 18-34 age group, 32.1% live in their parents’ house, while 31.6% live with a spouse or partner in their own homes and 14% live alone, as single parents or in a home with roommates or renters. The number of youth living at home into their 30s is greater than out on their own.

In Italy, the age at which young Italians can expect to be financially dependent on their parents is also growing rising rapidly and is expected to reach 38% by as early as 2018. Without a complete restructure of government, using the analysis of whatever trend is in motion will remain in motion will reach a staggering 48% by the end of the next 8.6-year wave 2028.

The Italian government is not addressing the issue and even on the retirement front, the government plans to increase the retirement age to 67 years after the elections.

This is why the whole system is simply UNSUSTAINABLE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

The Coming One-World Currency


QUESTION:

Bitcoin + Cryptocurrencies
Firstly, thank you – I’ve learned more from your blog and models that high-school would ever have hoped to teach me. And even after a year I am a still at the start-line of knowledge.
I am also been a follower and investor/gambler on crypto for over a year.
I concur with your findings that Govt’ will ultimately try to ban or regulate to tax crypto currencies. It really is all about tax. nothing else. I really don’t see how it can have anything to do with terrorist funding and the need to track all transactions, considering that as far back as 1996 the Federal Reserve that “ about $200 billion to $250 billion of U.S. currency was abroad at the end of 1995, or more than half the roughly $375 billion then in circulation outside of banks.” So how do the track this cash? or do they really care?
But what happens if the people just ignore the gov’t(s) attempt to ban crypto? What then?
Is it likely, or even remotely possible that most gov’ts would work jointly and simultaneously to ban crypto currencies?
Will there always be several countries that will ignore / not join this movement to benefit from the flow of currency – even if this inflow is crypto currency or not hard currency?
What will happy if the people just revolt and ignore the gov’’s efforts to tax crypto or ban it?
Some insight on how and what happened with previous alternative currencies who help shed some light on this. Could you also recommend some reading in this area.
Thanks again for your patience and skill in translating your work into digestible English so people like myself can benefit from your knowledge
D

ANSWER: This is a battle to the death.  A cryptocurrency is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency. However, this idea has also falsely embraced the notion that a cryptocurrency will be a store of value and hence defeat inflation. That has proven to be absolute nonsense. The rise of cryptocurrency is a reflection that people do not trust government. Those in power know that and see this as unacceptable. Edward Snowden has pointed out that BitCoin is not as safe as everyone believes. He said:

“Obviously, Bitcoin by itself is flawed. The protocol has a lot of weaknesses and transaction sides and a lot of weaknesses that structurally make it vulnerable to people who are trying to own 50 percent of the network and so on and so forth.” … “Focusing too much on bitcoin, I think is a mistake. The real solution is again, how do we get to a point where you don’t have to have a direct link between your identity all of the time? You have personas. You have tokens that authenticate each person and when you want to be able to interact with people as your persona in your true name, you can do so.”

Zcash is far better than BitCoin for to remain equally interchangeable, units of Zcash are unlinked from their history so that one unit is as good as any other unit and this makes them really fungible in the to cryptocurrency world. They have unlinked shielded coins from their history on the blockchain. This means they can be used for tax avoidance and the government can use its Terrorist Card. They will not allow cryptocurrency to defeat taxes and BitCoin is not secure enough in that manner.

The rise in cryptocurrency has another side to it that is not being mentioned. Many of the people cheering BitCoin, are the dollar-haters who also tend to be the goldbugs. The interesting question that arises from this is very blunt. Has the introduction of cryptocurrency  been displacing gold as the alternative currency?

This is a subject that requires a lot more space for analysis than a blog post. We also have central banks looking at creating their own cryptocurrency  and that raises the possibility that private cryptocurrency will be banned.

There is absolutely no question that we are heading into a new Monetary System. The Monetary Crisis Cycle turns up next year. We saw what happened as soon as the ECM peaked in 2007 and we forecast new highs in the Dow back in 2010 (See Barrons), the War Cycle turned up in 2014 and our Political Cycle that pinpointed the political change in 2016 produced Trump, the ECM peak in 2015.75 marked the day of the Russian invasion of Syria that began the Refugee Crisis in Europe, our Models of Britain forecast BREXIT, and those on Catalonia forecast the separatist movement would rise 2 years in advance – just to mention a few.

We will issue a special report on the coming One World Currency. There is just too much to address in a blog post and this will be food for thought as we move forward through the end of this current cycle wave on the ECM.

Theresa May Needs to Got to Vegas to Learn Poker


QUESTION: Mr. Armstrong; I know you use to live here in London and in Berlin, you said you still had your British driver’s license. Everyone knows you were friends with Prime Minister Margaret Thatcher and that you are the one they called when Britain had to face its disaster in joining the ERM. If you were to advise Prime Minister Theresa May, what would you tell her right now?

Thank you for your guidance in Britain

PH

ANSWER: Well the first thing, Theresa May should run to Las Vegas and take a course of playing poker and observe the game. You can win with a losing hand if you know how to project confidence and look like you have a winning hand. In law, I could get you on the witness stand and then ask when was the last time you beat your spouse. You will now have to deal with that agenda. You will swear you never beat anyone and you will want to call your spouse to say you never beat them. I will say that’s irrelevant because they will lie fearing you will beat them again. I have just set the agenda and you will be on defense the whole time. Forget everything else. You will leave the stand and people will think where there is smoke there is fire and surely I would have never asked that question without a reason.

This is what Brussels is doing to Britain. They have ABSOLUTELY no interest in actually negotiating any sort of a reasonable deal because their agenda is all about punishing Britain to set an example that nobody else will follow Britain out the door.

It is painfully obvious to anyone who is from the non-political world what is going on here. Britain has not yet realized there is no negotiating with the EU. The Brussels bureaucracy is protecting their jobs and it has NOTHING to do what is best for the people of Europe. So Theresa May is actually negotiating with herself. She offers a deal, the EU declines but makes no counter-offer, and she runs back trying to sweeten the offer.  She is trying to fit a square block into a round hole. Hello! The EU negotiators Michel Barnier, Jean-Claude Juncker and assorted company, are NOT negotiating in good faith because it is NOT in their best interest to do so.know four things that Britain’s team doesn’t seem to grasp.

As long as they can keep the uncertainty in play, they hope to see the pound collapse and that will make the British see they should stay. But the lower the pound declines, the better the British economy for exports are doing better. Companies I have talked with in Britain who were against BREXIT, are now saying it’s not so bad.

Juncker responded to Theresa May’s Florence speech saying of if she would stay until 2021, the Britain had to surrender sovereignty to the European Courts, which have consistently ruled against Britain just about every single time. The demands for a huge divorce payments is to fill the pension funds of the Brussels bureaucracy. This is a divorce where they want everything and Britain gets nothing in return.

Their refusal to make any counter-offer demonstrates their lack of good faith in any negotiation. This whole thing is a joke and Britain should refuse to pay anything and just leave. Do not forget, if Germany cannot sell cars to Britain, watch the economy in Germany collapse very fast. About a fifth of all cars produced in Germany last year, or around 820,000 vehicles, were exported to the UK, making it the single biggest destination by volume. The trade deal works both ways, yet you would think it is a one-way street according to Jean-Claude Juncker and his gang of self-aggrandizing bureaucrats.

May holds the winning hand in the game and she seems not to understand even what it is. First, I would say find, (1) negotiations are over since there is never any proposal from Brussels, (2) there will be no divorce payment at all, (3) I would exit NATO and let Europe spend to defend itself, and (4) join NAFTA and cut my own trade deals with China.

END OF NEGOTIATION!

Then, and only then, will you see Jean-Claude Juncker suddenly lose 2 stone (28 pounds) as his phone melts down from German Industry screaming you IDIOT!!!! May holds the winning hand because Britain pays the most for the defense of Europe and they are the biggest market for German exports in Europe.

 

Being Humble is Required for Trading


QUESTION: I have a personal question. You have said that what you know has been taught to you by your clients. People who attend your WEC say you are humble and not arrogant. Could you explain that?

MN

ANSWER: Look. You cannot go to university to get a degree in trading or being a hedge fund manager. You have to be self-taught in this field. If you want to be a successful trader, you MUST be humble!!!!!! The market is the ONLY thing that is 100% infallible. So you better be humble and survive. If you want to be arrogant and try to dictate what the market should do, you will not survive very long. So I do not understand why that should be a surprise. This is about reading the markets and listening to what they are trying to tell us. This is NOT about being personally right or wrong. Your bank account will determine that. You can tell someone who will never survive because as soon as they start blaming other people for their own failures like Hillary Clinton, they should quit and save a lot of money for they will NEVER be a good trader.

Trading teaches you to be humble or you will not survive. The market is much bigger than you or even government. One primary trading tip I have perhaps been famous for saying is: Intelligence is not measured in the definitive knowledge that is never wrong. It is measured by the ability to see when you are wrong and quickly adapt to the new reality.

There are some people who could never do anything with respect to trading if they (1) cannot admit a mistake, and (2) be a dynamic thinker where you see everything around you.

I have been TRAINED by my clients. I was given a seminar in Zurich in the early ’80s. People were flying in from many different countries. This became the origin of the WEC events. Why are they so different? Because you have a very diverse audience. At that Zurich seminar, a client from Canada had asked about gold. I responded that it would be a short-term buy. The guy from Zurich quickly said that since I had said the Swiss franc would rise more than gold, he would lose money on that trade. Right then and there I began to realize that giving advice depended COMPLETELY upon your currency base.

Once I understood that I had to tailor advice and forecasts to the currency base of every client, that was the first step in understanding currency flows. From there, the world began to come into focus.

So if you define “humble” as being flexible to adapt to the changing trends, then you will survive.

China Looking at Taking Stake in Aramco


According to local sources in the Middle East, financial difficulties in Saudi Arabia may see a cash injection coming for its oil industry – Aramco. The Saudis are considering a private placement of its shares instead of a traditional float of shares on the stock exchange. The buyer is of course China.

Saudi Aramco has been considering the international public offering but it has been pushed beyond its 2018 target according to sources. The initial public offering was expected to be the world’s largest stock sale, which would then be a major component of the Saudi government’s economic reform program which aims to diversify the desert kingdom away from its reliance on oil exports.

Selling shares in Aramco would raise billions for a government that it will really need because of budget problems. However, such an asset is never just about the money. The Saudis were looking for prestige with trillions of dollars trading in the world with Aramco becoming the cornerstone of a public investment designed to help pull Saudi Arabia’s economy into the 21st century.

Larry Kudlow Extensive Interview With Commerce Secretary Wilbur Ross…


This is a great interview from the perspective of seeing first hand how the disconnect between historic economic theory (Kudlow) runs into the reality of a person (Ross) who completely understands how Trade and Finance are enmeshed in a completely new economic paradigm. [The Myth of Modern Free Markets]

If you have read “The New Economic Dimension” you’ll note that Kudlow represents the economist sitting in the Atlantic, only able to see the Wall Street economy; while Wilbur Ross has a satellite perspective on both the Main Street and Wall Street economic engines.

Kudlow’s financial perspective runs into Ross’s reality about two-thirds of the way through the interview when Secretary Ross asks the question: “I bet you can’t give me an example of an economically sound investment that hasn’t found capital”.  It’s just a splendid thing to watch.

.

Despite his financial-centric economic focus Kudlow is a good MAGA ally.  However, Wilbur Ross understands every single pixel of the larger economic picture, and how trade interacts with the larger U.S. economy within the Main Street -vs- Wall Street dynamic.

RELATED:

♦The Modern Third Dimension in American Economics – HERE

♦The “Fed” Can’t Figure out the New Economics – HERE

♦Proof “America-First” has disconnected Main Street from Wall Street – HERE

♦Treasury Secretary Mnuchin begins creating a Parallel Banking System – HERE

♦How Trump Economic Policy is Interacting With The Stock Market – HERE

♦How Multinationals have Exported U.S. Wealth – HERE

♦The myth of Modern Global MarketsExfiltration of Wealth – HERE

It’s Always About the Money


In Sweden, the government has realized that if fossil-fuel cars were to disappear, the government would lose around SEK 50 billion a year in tax revenues. Just like cigarettes, the government realized that stopping smoking is costly for them. So what did they do? They imposed taxes of e-cigarettes. And if everyone stopped e-cigarettes, they will probably have to tax air.

Sweden used the Global Warming issue to tax people driving cars to help the environment. But as soon as a tax is imposed, government becomes addicted to the revenue just like a drug addict. The purpose of the kilometer tax is to overcome the so-called Pajala / Stockholm syndrome. It will, therefore, be more expensive to drive a dirty car in the city’s congestion compared to a clean car in a rural area.

Europe is moving faster than North America towards an increasingly electrified fleet of cars. However, when fossil fuel-driven car traffic is decreasing supplanted by electric cars, the government starts to lose money. Sweden has authorized a new project that will last for two years. The goal is to develop a method for calculating a distance-based tax system so they can tax electric cars to compensate for their loss in revenue of the fossil-fuel cars.

It’s always about the money, wrapped in in some sort of noble pretense, to disguise the greedy intentions.

The Political Turf War in Europe and why Britain is Considering Joining NAFTA


QUESTION: Marty; There is talk that Britain will join NAFTA rather than the EU. Does that make sense? What do you think?

ANSWER: The EU is in a death spiral. Every law they pass is to preserve their own power – not for the good of the people or Europe. Once again, the government solution always runs counter-trend to the Free Markets setting the stage for the next crisis. The EU banking rules allow them to just seize everything and shareholders get zero. This is what they did when Spain’s Banco Santander bought rival Banco Popular for €1. The bank which was valued in the collapse at €1.6 billion yet it was sold for €1. Now, banks are finding it extremely hard to raise new share capital. That will only result in more bank seizures. Hello! It would be nice to have someone in government with common sense.

Britain should run away from the EU and slam the door shut and then nailed it to be sure. The British should abandon the EU altogether and undeniably join the NAFTA trade agreement. If they do not, Britain will find itself being dragged down with the sinking ship.

A free trade agreement with the USA would be a slap in the face for the EU and even that will never cause the EU to look in the mirror. Like Hillary, they will blame everyone other than themselves.

The government data on British GDP clearly demonstrates that Britain has NOT benefited from joining the EU because of the secret agenda to federalize Europe to eliminate European War. This theory of one government in Europe, The United States of Europe, will end a possible war is just absurd.

This narrative that the entire purpose of the federalization of the EU is to stop any war was stated bluntly by Hollande in the European Parliament. You cannot get more one-world government than this theory. But this spills over into economic power and the surrender of all sovereignty to Brussels.

Margaret Thatchers Burges Speech was spot on about the European Project. It was clear behind the curtain back on September 21, 1988, that this was all about the federalization of Europe and the surrender of national identity. The Guardian ran the story: Thatcher sets face against united Europe. Let me make this very clear. Maggie was thrown out of office by a coup orchestrated by her own cabinet. They were eager to surrender sovereignty to Europe and bought into the whole idea of the United States of Europe.

The new government headed by John Major took the Pound into the Exchange Rate Mechanism (ERM) the same month that German unification began. The monetary policies of Germany were starkly different from Britain. I was called when the attack on the Pound unfolded and was asked what our model said about the Pound because they knew I was a friend of Thatcher. I relayed its analysis that the Pound had to be devalued. I was told that was impossible that John Major had said even the week before the Pound would be maintained in the ERM. I then said that the Pound must be suspended if not officially devalued. The pressure was intense. I explained that a fixed rate is a GUARANTEED trade. I can bet billions and if wrong, nothing happens and I get my money back. That finally made the point.

Black Wednesday, September 16th, 1992, was when the UK Conservative government that had thrown Thatcher out of power to take the Pound into the coming Euro was forced to withdraw from the ERM. While everyone blamed George Soros for making over US$1 billion from this GUARANTEED trade, the truth of the matter this is the only thing that SAVED Britain. Britain was headed into the Euro and the elite Conservatives would not listen to Margaret Thatcher.

Now that BREXIT is in play, the British should be on their hands and knees and be kissing their ground that they are not connected to continental Europe. There are many national and regional sensitivities that must be taken into account when it comes to trade. The British want to conclude agreements with India, Turkey, and China, that are not on the same page with the EU.

The government in London is targeting a free trade agreement following the BREXIT to limit disadvantages that people think exist for the domestic economy after the EU exit 2019. The EU is more interested in punishing Britain as an example of other member states that they better not leave the EU or else. This is all about punishment – not economics.

The British government is under pressure, as the EU will only negotiate the free trade agreement in London if the BREXIT divorce talks have made sufficient progress. Donald Tusk has been playing hard-ball to punish Britain and actually said the EU was negotiating in good faith without any evidence whatsoever to prove that statement. He said in turn: “We hear from London that the UK government is preparing a ‘no deal’ scenario. I would like to say very clearly that the EU is not working on such a scenario. “

There has been little tangible results in trying to negotiate with the EU. British Prime Minister Theresa May is expecting the conclusion of the BREXIT talks only before the departure from the EU in March 2019. Clearly, the British government is also preparing for a situation where no agreement is reached with the EU on exit and contingency plans are being put into place for this likelihood. Keep in mind that the EU will NOT make easy for they fear other states will take the same option.

This is a matter of pride for the EU. A hard BREXIT would hit especially the German economy. The representatives of the German economy are already nervous because of the slow negotiations. The German Federation of German Industries (BDI) has already warned the government that German companies had to “take precautionary measures for a very hard departure.” The Association of German Machinery and Plant Engineering (VDMA) said: “A tough Brexit is a conceivable but not acceptable scenario for the economy.”

Why is German industry getting nervous with its politicians seeking revenge? Britain is the world’s fourth-largest international market with an export volume of €7.4 billion euros last year for German products. Conversely, the Britain delivered 2016 machinery construction products worth €2.4 billion to Germany.

The problem is purely political and has become a turf war and pressure builds against the dreams of the centralized federalization of Europe.