It is Obvious

Chris Rick has got altogether too much to say

Archive for October, 2018

Horsemen of the Apocalypse (First XV) – more new signings

Posted by chrisrick13 on October 27, 2018

It is obvious: you are not alone shouting into the void

Nobody can see or at least only a few. The financial system is heading for a reset. Except a lot of people can see, it seems, not just me.

Mrs Mirkin’s party lost a lot of seats in the recent Bavarian election. They lost seats in all the recent elections – lots of them. Her days are numbered as Chancellor – accurately numbered.

Mr Orbán is running things in Hungary. Something to be avoided.

There is a clown in charge in Italy.

All over Europe a lot of people have realised that the EU does not offer them much. They are voting for anything but the politicians that got them there. Alas, that means that some unsavoury people are getting into power. (I will pay them the compliment of calling them extreme.) As much as anything it is because these unsavoury types are the only alternative on offer. The French are slick operators. They created a new party and leader to get into power. Except it was the same people as before. Smart. The USA is already a step ahead. Perhaps they will show us what happens next.

There is a message here for Mr Corbin. He meets the requirements for extreme. A box well ticked. Trouble is he sort of supports the EU. He has to really as his core support is fanatically for the EU. Trouble is that there are not many of them. Certainly not enough. Were he to take Mr Farage’s stance on  Europe Labour would win by a landslide. He won’t get power, not because he is too extreme, but because he is not extreme enough.

Saw some German economic numbers this week. I don’t believe the statistics I see so why do I believe these? They are not good and those kind of numbers are never allowed out to play, except if they are covering up something bad. Germans are busy making stuff and selling it abroad. They are not paying themselves much and so are not buying that much. The economy is expanding much of at all. This is the country that has the largest net contribution to the EU budget.

The UK is not far behind Germany in net contributions to the EU budget and that only because Saint Thatcher got us a rebate.  Take out Germany and the UK contributes more than the other 26 nations put together.  When we go that does make a big hole in the budget. But all that is small stuff compared to the support for the ECB. Germany is supporting the rest of Europe and is moving to a point where it can’t do it anymore. What is more it looks like the German population now realises how much they are supporting Greece where they will not get a penny back. It is only pennies though.

What is more interesting is Italy. Greece found out that when you owe the bank beans the bank is in charge. Italy or at least its current leaders have realised what when you owe the bank gazillions then you are in charge. The current problem with the Italian banks and the national budget is interesting. If the EU bullies the Italians into changing their budget the economy will still move into recession and kill the banks. The people in power will double their majority in parliament if they stand up to the EU. They got in on that promise. Can’t see any reason for Italy to change course. It is going to fail and resort to the only solution possible and devalue the Lira…ooops. Stitch that Germany.

Two weekends in a row senior ministers in Italy have said they have no intention of creating a new Lira or of leaving the EU. So it is going to happen then.

(…you do own some gold don’t you?)

 

It is obvious: you are not alone shouting into the void sometimes you get back more than just an echo

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Got a sledgehammer – any nuts need cracking?

Posted by chrisrick13 on October 14, 2018

It is obvious: there are a lot of good ideas

I know it is not obvious but I am a big supporter of getting out of the EU. It is only an experiment and it has failed. It needs a reboot. I think it will get one soon. I don’t know what will cause it but when the German population realises they are paying for everything they might demand that Germany comes out of the EU.

Jean Monnet is considered one of the ‘the fathers’ of the EU. He was a French politician active at the end of the war. He was instrumental in diverting all of southern Germany’s coal production into France weakening German industry and strengthening French industry. He arranged for the Saar to come under French control for its coal also.  Such a good set of ideas that in 1950 tensions between the countries were increasing and to prevent conflict between the two countries (only 5 years after the war) he came up with the idea of creating the European Coal and Steel Community which has become the EU of today.

There are some chilling quotes attributed to him that on a little research are not all of good provenance. There is the general idea that the ECSC and now the EU were created to prevent conflict between France and Germany. My thought, as above, is, that the people creating it were just trying to fix a problem they had created earlier.

Is it right to force all the nations of Europe into a federation to prevent conflict? It certainly works in the US. It works in the UK. There are agglomerations of smaller states now forming larger countries that are working reasonably well in Italy and Spain.

Is there a simpler and cheaper way?  Yes!  Having the USSR as a big ugly bear on the border helped the countries of Europe adopt a unified approach. However one organisation ensured that there was a defence against the USSR and that any members would not attack each other. That organisation is NATO. It is cheap and effective while also providing some deterrence to Russia. Indeed without NATO we would already have a unified Europe…called the USSR.

With its tariffs the EU is anti-trade and isolationist. While it is trying to take down borders internally it is strengthening the external borders. It continues to support CAP which distorts trade and favours one country. It gives little to the member countries. Ask the people of Greece: what has Europe done for you?

We know what NATO costs as most countries are below the 2% of GDP on defense spending that it asks for. Wished the EU was a cheap.

It is obvious: there are a lot of good ideas and many more bad ones

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Horsemen of the Apocalypse (First XV) – late kickoff on next game

Posted by chrisrick13 on October 3, 2018

It is obvious: predicting ‘when’ is difficult

2010 was the year that UK government debt first exceeded 60% of GDP.  If you include personal debt and a lot of unfunded liabilities such as pensions then it is a lot more, but the moment it is at 84%.

Italian debt is 131% of GDP.

German debt is 64% and has come down from 84% in 2010.

French debt is 97%.

Spanish debt is 98% and it too went over 60% in 2010.

Finnish debt is 61% only recently exceeding 60% and on a downward trend.

Belgian debt is 103%.

Debt for an economy is acceptable as the economy will grow and be able to service the debt.  Not pay it off.
Alongside that, 2% GDP growth is accepted as a normal rate of growth that countries can reasonably be expected to achieve.  Do not forget that 2% growth doubles an economy every 35 years.

There is a level of debt that means that a country can never grow enough and will eventually default.  That figure is 60%.  It is so well accepted that it is an EU rule that 60% is the maximum debt allowed by any member…60%.

Just for a giggle: the Greek national debt is 178%.

It is inevitable that these countries will eventually default on the money lent to them.  Take out Germany and Finland as they are both pretty close to 60% and we get 5 basket cases that include 4 of the 5 largest economies in the EU.

It is troubling for the numbers people that Germany did get their debt from 84% to 64%.

If EU rules are treated like the 60% rule then those about free movement of people can’t be that set in stone.  Indeed immigrants entering the EU must stay in the country they first arrived in.  So how come thousands of immigrants clustered around Calais trying to get into the UK.  According to the EU France should have been dealing with them…or Italy…or Greece.

What the 60% rule means, if it is right, is that a lot of EU countries will default.  If not tomorrow then next week, next month, next year.

Any large disruption but the UK leaving the EU could easily tip one of those economies into default and drag many more with them.

It is obvious: predicting ‘when’ is difficult, ‘if’ is not nearly so

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