Geopolitical crisis : A moribund NATO

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As we have explained on other occasions, NATO is still there, of course, but only because there are no better options at hand. Everyone wants to be rid of it – the Europeans who want a common European defence[1] and Donald Trump who wants Europeans to participate more in their own defence. They are all contributing to a slow process in which NATO continues to get in the way whilst Europeans dither between several strategies:

  • To increase their share[2] and thus acquire an equal say with that of the US within NATO (with the long-term aim of separating off to form a European NATO[3]). Problem: For this strategy to have a chance of success, much greater cohesion is needed in the European camp – something that is still a long way off at the moment. Continue reading

The Art of the Deal Vs. The Art of War

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At the risk of beating a dead horse on the topic of trade wars, the sequence of unfolding events is making me cautious near term.

Let me explain why.

First, for all those market pundits, analysts and investors who are following the twists and turns of this trade tiff using Trump’s Art of the Deal as their playbook…

I have a better read for you. Pick up a copy of Sun Tzu’s, The Art of War instead! Continue reading

The Emerging Trump Doctrine- Defeat Communist China

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The meeting between Donald Trump and Vladimir Putin today in Helsinki offers an insight into what might be called the Trump Doctrine.

The common denominator for Mr. Trump’s foreign and trade policies seems to be a determination to isolate and counter Communist China. Continue reading

Did the President Just End Theresa May’s Career?

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He insists his comments to The Sun newspaper critical of the UK prime minister were ‘fake news’ that didn’t demonstrate his complete views.

The United Kingdom’s The Sun newspaper published a report today following an exclusive interview Thursday in which President Donald Trump criticized Prime Minister Theresa May’s approach to Brexit and how it may impact trade with the U.S. Continue reading

Trump Calls the European Union a Foe: ‘What They Do to Us in Trade’

 

President Donald Trump said during a Sunday interview with CBS News anchor Jeff Glor that the European Union is a foe.

“What’s your biggest competitor, the biggest foe globally right now?” Glor asked the president

“Well, I think we have a lot of foes. I think the European Union is a foe, what they do to us in trade,” Trump said. “Now, you wouldn’t think of the European Union, but they’re a foe.” Continue reading

Germans Actually Want US Troops Out Of Germany, Poll Finds

While Donald Trump is 100% correct on Germany being controlled by Russia, it’s not a 100% influence over Germany… and he’s also unwittingly helping someone else fill in the vacuum of a post-American-protected Europe. Europeans have already longed for the day American troops leave Europe, long before this poll ever came out. The question is who will fill that vacuum. The likely answer is a European Army replacing NATO, which is already Under Construction as we speak.

There may be partnerships going on between Europe and Russia, but Europe, militarily speaking, understands the need for its own independent defense mechanism and still feels threatened by Russia despite energy and business deals. Moreover, this is not necessarily something thought of by EU members as a whole, but Germany. Germany is the powerhouse of the EU and has always had ambitions to take Europe — even in this new generation. It dictates its policy and those who don’t follow end up being vassal states like Greece and Cyprus. Although harder to push around, Italy is the next target for the chopping block after the election of an anti-EU leadership. This is Germany’s way of getting member states in sync.

The creation of a new superpower is underway, all lead by Berlin’s Fourth Reich. If you’re still looking for Nazis, you’re 70 years too late. The game plan has changed, but the goal remains the same: A multi-national United States of Europe with its own European Army.

 

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Map source: Wikimedia Commons

 

A central irony behind Trump’s rumored “threat” that he could withdraw or at least greatly reduce American troops stationed in Germany, who last month wrote to Angela Merkel of “growing frustration in the United States that some allies have not stepped up as promised” on defense spending, is that Germans don’t actually want US troops on their soil to begin with, according to a new poll. Continue reading

Russell Napier: “Trade War Is The Beginning Of A New Global Monetary System”

A Country Matures, An Exchange Rate Declines

After two weeks on the road visiting clients your analyst returns with a better view of the consensus outlook. There is, though, much in the consensus to disagree with. In particular it seems peculiar that the consensus believes the democratically elected government of Italy, with policies entirely contrary to EU membership, will be put through the bureaucratic meat grinder in Rome and Brussels and turned into EU sausage, in a similar process that minced the political representatives of Greece.

While this might well be the case, it is hard to understand that the grinding destruction of this democracy, even if it is only moderate compared to the Greek experience, can be anything but bad for growth and asset prices in the EU. Disciplining these politicians to abandon their manifesto promises and follow the ways of the EU is highly unlikely to be a painless experience, either for Italy or the rest of the EU. Nonetheless, investors are content to believe that a painless disciplining of Italy’s elected representatives is all but inevitable. We shall see.

Perhaps the most prevailing consensus view is that the recent weakness of the RMB represents a Chinese counter-punch in the trade war with the US. Coming when it does, it is easy to see the accelerated decline of the RMB as a tactical and not a strategic move. Comments by the PBOC on July 3rd have probably reassured many investors that the managed exchange rate regime is not at risk and that the RMB will continue to be managed against a basket of currencies. Your analyst does not agree. Continue reading

China asks European Union to form ‘ANTI-US’ grand ALLIANCE in SHOCK move

China EU USA trade war alliance Donald Trump President Xi

Chinese state media has promoted the message that the EU is on China’s side

 

CHINA has asked to form an alliance with the EU against the US as the spectre of an international trade war looms and is due to start this Friday.

Donald Trump is due to slap as much as $34billion (£25 billion) of Chinese exports with 25 percent tariffs.

In response, China asked the EU, which is the world’s largest trading bloc, for an alliance against the US while promising to open up more of China’s economy to European competitors.

Continue reading

Britain’s Navy at Half Strength

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iStock.com/Alan_Lagadu

 

Britain now has fewer than half of the naval vessels it had in 1990, the Telegraph reported on June 21. In that time, there has been a 60 percent decrease in the number of submarines, frigates and destroyers in the Royal Navy, according to a 2013 Ministry of Defense report. The service had two aircraft carriers in 1990: It currently has zero.

Britain’s defense budget has decreased dramatically. Today, Britain’s military spending is a little over half of what it was 25 years ago. Its defense spending has decreased from a Cold War high of 3.8 percent of its gross domestic product to only 2.2 percent, just above the nato minimum.

Despite keeping its nato commitment, Britain has lost its naval supremacy and is “at a historic ebb in firepower,” according to National Interest.

Britain does not recognize the need to maintain its defenses against military threats. Instead, it prioritized funding for foreign aid, the National Health Service and other domestic welfare programs. In the past, health, education and defense spending were equal. But expenditures in these non-defense areas have roughly doubled since 1990. Today, Britain spends almost six times more taxpayer cash on welfare than it does on defense. Continue reading

Coalition of Those Willing to Go to War

PARIS/BERLIN (Own report) – Germany is participating in a new European military formation that was launched yesterday. Originally a French proposal, the European Intervention Initiative (EII) will be open to EU and Non-EU member countries to join. Expanding the existing EU military cooperation (“PESCO”) with a new operational component, the EII should facilitate rapid decisions on joint military interventions. A first meeting of military commanders from the hitherto nine participant states is set for September. The EII includes Great Britain, which plans to continue its military cooperation with the continent, even after Brexit, as well as Denmark. Since the coordination of military interventions is now officially set outside of the EU framework, Denmark can sidestep the opt-out from EU military policy, it had once granted its population. Referred to by experts as a European “coalition of the willing,” it goes hand in hand with the EU Commission’s militarization plans worth billions and the high-cost German-French arms projects.

Continue reading

The European Intervention Initiative: a New Military Force Established in Europe

The European Intervention Initiative: a New Military Force Established in Europe

 

The predictions have come true about the emergence of a new defense group that will change the European security environment. On June 25, the defense chiefs from nine EU countries signed off on the creation of a new force called the European Intervention Initiative (EII), which is spearheaded by French President Emmanuel Macron. The new organization will have a common budget and a doctrine establishing its guidelines for acting and joint planning for contingencies in which NATO may not get involved. The group includes the UK, Germany, Denmark, the Netherlands, Belgium, Estonia, Spain, and Portugal. Italy may join soon. The initiative is not tied to the EU’s Common European Defense, which includes the PESCO agreement as well as NATO. Great Britain has always opposed the idea of creating a European defense alliance, fearing it would undermine transatlantic unity. Now it has done an about-face, as the rifts within the US grow deeper. Continue reading

9 European States To Form Joint Military Intervention Force

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Leopard II battle tank is pictured in action at the Oberlausitz training area in Weisskeissel. Source: Reuters

 

Nine European states – France, the UK, Germany, Belgium, Denmark, the Netherlands, Estonia, Spain and Portugal are going to establish a joint military intervention force, France’s Defense Minister Florence Parly has told the French newspaper Figaro.

“Defence Europe requires a common strategic culture … The deadlines and decisions in the EU are still much too long compared to the urgency that can arise from a critical situation in a country where Europeans would consider that there is a strong stake for their security,” she said. Continue reading

Farage: Merkel’s finished, migration policy is her downfall

 

“She was the most powerful European leader, been in power over a decade. She was the dominant figure, not just in Germany, but in the entire European Union,” Farage said. Continue reading

Germany Has Made Over 3 Billion Profit From Greece’s Crisis Since 2010

Extorted, subjugated and conquered. Greece has been a German vassal state for years already.

 

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Germany has earned around 2.9 billion euros in profit from interest since the first bailout for Greece in 2010.

As KeepTalkingGreece reports, this is the official response of the Federal Government to a request submitted by the Green party in Berlin.

The profit was transmitted to the central Bundesbank and from there to the federal budget. Continue reading

“It’s A New Chapter For Europe”: Merkel, Macron Unveil Plan To Reform Europe

Lost among the other overnight news, was the launch of “a new chapter” for the EU as termed by Germany’s troubled chancellor Merkel. After her meeting with French President Macron on Tuesday, Merkel said Germany and France have agreed to cooperate to reform the EU’s asylum system as both “understand the topic of migration is a joint task” and “our goal remains a European answer to the challenge.” What she really meant is that if her government is toppled by the collapse of the CSU-CDU coalition – recall Merkel has a 2 week ultimatum to reach a solution on Germany’s treatment of refugees by July 1 – the rest of Europe gets it too, and the grand experiment is over.

Aside from immigration, the two leaders agreed to an in principle plan to strengthen the Euro area, including setting up a euro-area budget and a crisis backstop under the ESM (European stability mechanism), although they postponed decisions on some elements which could prove consequential. Chief among them: specifics on the size and conditions of the euro-area budget. Continue reading