Janet Yellen signaled that the Fed is grappling with the problem I have been warning about; the dollar has become the de facto only real currency and the Fed is indeed becoming the world’s central bank. Yellen has admitted that the Fed is being lobbied by everyone to surrender its domestic policy objectives to international. This is precisely what took place in 1927. Yellen stated that the Fed should worry less about inflation domestically than about global growth risks. While pointing to the slowdown in China and depressed commodity prices, Europe is a real basket case. She used the words that the Fed must consider “caution is especially warranted” when it comes to raising interest rates. This has put most Fed watchers off to expecting any possible rate hike into retirement as they expect nothing before September. The BREXIT will most likely be rigged because it is exactly opposite of what they are telling the Brits that they will be isolated and the economy will collapse if the exit the EU. Nobody says Britain did fine before it joined only in 1973 or that it is the other-way-around; with BREXIT, Europe will fail. This heated issue in Britain is most likely the final nail in the coffin. Britain will collapse with the Euro and should have just handed its sovereignty to Brussels. Europe will never reform so it will be all go down together. The political risk in Europe is tremendous and Yellen cannot prevent that with simply interest rates. Continue reading
The European Union no longer exists, at least not as we know it. And the question is not what will be the form of the new Union, but rather why this Europe, which was the focus of so many of our dreams no longer exists. The answer is simple: today, all of the pillars that served to build and justify the existence of the European Union have collapsed.
Chief among these was the memory of the Second World War. A survey of German secondary school students in the 14-16 age bracket, which was published a little over a year ago, showed that a third of these young people did not know who Hitler was, and 40 per cent were convinced that human rights had been respected to an equal degree by every German government since 1933. This in no way implies that there is a nostalgia for fascism in Germany. No, it simply means that we now have to contend with a generation that has nothing to do with this history. Today the conviction that the EU continues to derive legitimacy from its roots in the war is in an illusion. Continue reading