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US v Europe Divergence

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DAXCSH-W 2-27-2015


CSP500-w 2-28-2015

A lot of questions have come in regarding this subject. Keep in mind that we have two aspects converging (1) Cycle of War targeting 2017, and (2) the Sovereign Debt Crisis. The first has also the Civil Unrest v International Conflict. This divergence need not simply be just international war, although Obama seems so brain-dead that he allows himself to destroy every possible diplomatic effort since Nixon in 4.3 years. Refusing to see the Prime Minister in the White House before he addresses Congress is just unbelievable. He is clearly trying to influence the Israeli elections.

In Russia, this idiot and his manipulators probably were too busy to take and political science courses on history. Politics 101 warns that a politician will turn against an external adversary to save himself. If there were civil unrest inside Russia to the extent that it would threaten an overthrow of Putin, that alone would be incentive for him to invade a neighbor. The Ukrainian people failed to get reform since their government says – gee we have this war and that comes first. This is basic political response. Germany has no army, so it is the USA responsibility through NATO to defend Germany. So yes, this divergence could reflect a turn to war.

Nevertheless, we then have simultaneously a European banking crisis that even Dumb & Dumber would have done a better job at creating the Euro. Reserves of banks are member sovereign debt. So precisely how can Germany threaten to declare Greece bankrupt? Sorry, that to me is not a threat.

Great Britain was forced to abandon the Gold Standard and everyone said that would be a disaster. They suspended all payments on their debt. The strangest thing happened. That was the low in the Great Depression for them. George Warren showed FDR what happened when the austerity policy was abandoned. Roosevelt’s Brain Trust were dead against it taking the very same policy position that is destroying Europe – austerity, which supports bondholders at the expense of the economy. This is why I warn Government CANNOT borrow money. It puts them as the antagonist against the economy, not its supporter. When Government borrows, it competes against the efficient job creating private sector for money and thus it consumes wealth and reduces economic growth. We have some governments today who by law order pension funds to have “safe” government debt as their asset up to even 85%.

Greece will experience the very same result as did Britain if its leaves the insane demand of Europe. DEFAULT on the debt or suspend all payments period. State outright that the nation will not RAISE TAXES and hunt its own people, but encourage them to reinvest. Cut taxation dramatically and Greece will flourish. Greece must invest in its people and they will do the job. Just let the people retain what they earn and stop this insane Marxism that is counter-human nature. This perpetual borrowing machine just does not work. How long will it take before every moron notices this is crazy?

So the divergence may also stem from the Sovereign Debt Crisis as the European banking system goes into meltdown mode.