2015 And EU Future Economic Predictions

An interview with McWilliams on the geopolitical solution to the Middle East. You can skip on past the news - it starts on the left side of Pat Kenny's right shoulder - if that makes sense. :mrgreen:

https://www.newstalk.com/listen_back/13240/21349/07th_September_2015_-_The_Pat_Kenny_Show_Part_1/
 
I wonder is he the same person as Tyler from the Sphere. :mrgreen:

http://www.zerohedge.com/news/2015-09-13/germany-reintroduces-border-controls-austria-sends-riot-police-refugee-crisis-spiral

Germans, Czechs Return To "Border Controls" With Austria, Riot Police Dispatched To Contain Refugee Crisis
Submitted by Tyler Durden on 09/13/2015 16:17 -0400

China Czech European Union Germany Greece Newspaper None Saudi Arabia Twitter Twitter


Two weeks ago, in what was the first official shot across the bow to Europe's long-standing "Schengen" customs union, we reported that the Italian province of Bolzano across from the Austrian border announced it is willing to "temporarily suspend Schengen" and "restore border controls" following a request by the German state of Bavaria.

Today, none other than Europe's master state, Germany itself, is about to launch an ICBM at Schengen when, as BBC reports, "Germany is to reintroduce some form of controls on its border with Austria to cope with the influx of migrants, German and Austrian media report." While the BBC said that it is not clear what measures would be introduced, it is likely that a full return to the pre-Schengen era, with extensive customs checks of every border crosser is imminent.

BBBC further reports that"more than 13,000 migrants arrived into Munich alone on Saturday. Germany's vice-chancellor said the country was "at the limit of its capabilities". Germany's Bild newspaper and Austria's Kronen Zeitung said controls would be in place on the Bavaria-Austria border. Germany expects 800,000 migrants to arrive this year."

Also, according to Germany's Spiegel, German Interior Minister, Thomas de Maiziere, would make an announcement in the coming hours. Since last month, Mr de Maiziere said the Schengen agreement, which allows free movement between a large number of European countries, could be suspended, it is quite likely that as of today, Europe's customs union will officially be halted if only temporarily.

Kronen Zeitung said that Bavarian police will begin to carry out checks "to determine immediately who is entitled to asylum", but it is not clear how such checks would be made.

Earlier on Sunday, Germany's Vice-Chancellor Sigmar Gabriel, who is also economy minister, warned the country was being stretched to its limits by the new arrivals.

"Europe's inability to deal with the migrant crisis has brought even Germany to the limit of its capabilities," he told Der Tagesspiegel newspaper. "It is not just a question of the number of migrants but also the speed at which they are arriving that makes the situation so difficult to handle."

Which is somewhat ironic considering the full-court media propaganda press eager to make Germany seem like the promised land for hundreds of thousands of Syrian refugees: just ealier today CBS had an article on "Angela Merkel: From debt villain to migrant heroine" in which it said "In the space of two months, German Chancellor Angela Merkel has gone from being portrayed as the heartless villain in Europe's debt crisis to the heroine of those flooding in to find refuge on the continent."

Her insistence that Germany and its fellow members in the 28-nation European Union all have a duty to shelter people fleeing civil wars has cemented something similar among hopeful migrants. Some have held aloft pictures of Merkel, and she was greeted with applause and cheers at a Berlin refugee home Thursday.



Oops, may want to rewrite that one quickly, especially following a report from Bild that the German government "will send 2,00 riot police to the Bavarian border, where they will "help the State to secure the border."

Not only that but Express reported that the "German Defence Minister has admitted that the country verges on "an emergency" after cracks have begun to emerge in the 'German generosity' and that some 4000 German troops have been put on standby.



Germany has been viewed as a leader on Europe’s worst refugee crisis for 70 years, with Chancellor Angela Merkel's expectation that the country will take in 800,000 this year alone."

However, the move appears to have backfired as German towns struggle to process the unprecedented number of arrivals.

Defence Minister Ursula von der Leyen said: "For this weekend alone we have put 4,000 soldiers on standby."

He added that the troops would be able "to pitch in in an emergency".
Putting Germany's generosity, which just ended in perspective, "More migrants have arrived at Munich's train station since the start of September than in the whole of 2014."

The good news for Germany is that at least the tens of thousands of Muslims migrants will have a place to pray: just as "generously" Saudi Arabia - in lieu of actually accepting any asylum seekers - offered to help Germany cope by building at least 200 mosques. The Gulf state said it would build one mosque for every 100 Middle Eastern refugees who entered Germany. It will be busy building a lot of mosques.

The bad news for Germany is that not only will the migrant situation not improve any time soon, but it is now in a lose-lose situation, with the facade of its former faux generosity crumbling, just as countless more migrants are set to lose their lives on their way to a promised land that no longer is.

And confirming just that, moments ago Xinhua reported that 28 migrants were killed as a boat capsized off Greece.


For now, however, one thing is certain: Europe may still have the Euro now that Greece is a permanent German debt colony, but the true heart of Europe, its customs union, is about to go on into indefinite V-fib as nation after nation follows in Germany's footsteps and closes its doors to all those refugees it so generously welcomed until now.

* * *

Update: just minutes after we wrote the following, we got confirmation we may have been on to something. Oh, and goodbye Schengen, only for the "time being" of course. from Czech News:

Prime Minister Bohuslav Sobotka (Social Democrats, CSSD) is going to make a public statement on the current situation, his spokesman Martin Ayrer told CTK.

The Interior Ministry´s spokeswoman Petra Kucerova confirmed for CTK that the measure is linked to the launch of border checks on the German-Austrian border over the influx of refugees.

Earlier today, German Interior Minister Thomas de Maiziere announced that Germany will temporarily introduce checks on its borders, the EU´s internal ones, beginning with its border with Austria. He said Germany consulted Austria before taking the step.

The Czech police expected Germany to take this step, Foreigner Police spokeswoman Katerina Rendlova told CTK.

"For the moment, we will react by taking our own measures, which is the reinforcement of the police on duty in the border areas. Our further steps will depend on the number of incoming migrants," Rendlova said.

She said the measures would concern the South Moravia and South Bohemia Regions, both of which border on Austria. The police would release information about the reinforcement and further details only later.
To the refugees (and/or masked ISIS terrorists of course) that successfully made it into Germany/Europe, congratulations. To the rest of them: better luck next time.
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The latest news is that the father of the dead child, Aylan Kordi, is apparently a people smuggler which has backed up by a third party on the boat. He was in charge of the boat and basically got the people killed by going too fast in high waves.

More current is that Russia now has troops and equipment in Syria presumably to fight the insurgents.
 
Regional elections in Catalonia vote in the secessionists. The Catalans versus the Castilians. It will be interesting to see what happens there. Spain looking more and more fragmented.
 
The latest rumour is a covert Italian force has killed one of the leading people smugglers and his bodyguards in Libya. News of this should probably break soon.
 
http://www.davidmcwilliams.ie/2015/10/05/the-great-maul-of-chinas-partners

The great maul of China's partners
Posted in Sunday Business Post · 14 comments · SHARE d e h
When you look around at the world economy, one thing strikes you: America is on its own in terms of having a growing economy. There simply has not been a period in recent history where global growth rates are so divergent. Europe is still gripped by austerity, Japan hasn’t been right for a generation and the Chinese economy is facing a rapid post-boom contraction. Elsewhere, the big commodity-based emerging markets like Brazil, South Africa and Russia are simply derivatives of China, as their wealth is largely a function of China’s demand for their raw materials.

In this article, I will focus mainly on events in China – or at least in countries affected by China.

The first major issue is that the emerging markets, all those countries that were doing fantastically well because of China’s demand for commodities, are faltering. China doesn’t want their stuff anymore and their wealth is based on the Chinese bidding up the price of commodities, which allows dollars to gush into their coffers. Now that this flow of cash has stopped, they are in trouble.

The second issue is the impact of these divergent growth trajectories on currencies. The dollar has been gaining steadily because the Federal Reserve is on the cusp of raising rates and, even though the trajectory of rates is not going to be significantly upwards, the other major countries are pushing their interest rates downwards. All this is driving the dollar upwards and driving the price of commodities downwards, contributing to the financing problems of the large emerging markets.

Falling commodity prices are not merely the result of technical or exchange rate issues. There is a massive overhang of capacity in the world. Since 2008, the Chinese have been investing in almost everything. All these huge machines, factories, buildings, roads and infrastructure have been built and are now idle. This means that if you want to make anything – you can still make it in China. Imagine a large multinational that operates globally and has a factory in China. Where do you think it is going to make stuff if the demand for that stuff increases? Why in China of course!

Multinational companies operate a global supply chain so until all this excess capacity in China is used up, there will be deflationary pressures everywhere.

This has a massive impact on countries, like Australia, which depend on commodities for much of their wealth. When the price of what you produce falls, it means you have to sell much more of this stuff to buy the other stuff you don’t have and want to have. This is called your “terms of trade” in economics. In recent months this has been turning against Australia.

Of course, Australia is important to Ireland because so many of our young people are there.

For the past few years Australia has been China’s quarry. The resource boom that underpinned Australia’s impressive economic performance is now winding down. Sharp falls in the prices of bulk commodities because of the fall-off in Chinese demand – and to a lesser extent agricultural products – have resulted in a rapid reversal in the country’s terms of trade from a remarkable 140-year high. As a result, the growth rates of household incomes, corporate profits and public sector revenues have all moderated; mining investment spending has fallen. The overall share of plant and equipment outlays as a share of GDP has slumped from a peak above 18 per cent of GDP in 2012 to around 15 per cent of GDP today, and it looks set to drop further.

The only thing that is keeping Australia motoring is a massive credit/housing/lending binge reminiscent of Ireland ten years ago. As we know, this can go on for as long as the banks keep lending, thus inflating the bubble further but at some stage it stops and heads into reverse.

However, the real issue in Asia, Australia aside, is currency related. The dollar links China to the US.

For years the Chinese have linked the Yuan to the dollar. As the dollar rose in recent months, it dragged the Chinese currency upwards. This has made the problems in China worse because they can’t export their way out anymore because the country is losing competitiveness, not least because the currency is going the wrong way.

I fully expect that the Chinese will respond to economic decline and financial market carnage with massive credit creation, exactly as it did in 1989 (Tiananmen), 1997 (Asian flu) and 2008 (subprime/Lehman). The Politburo and the Communist Party cannot allow growth to slip again because economic growth is all they have.

Years ago the Communist Party slogan in China shifted from equality for all to prosperity for all, or at least most, so economic growth is essential for the party to remain in power.

As a result of this, like the Fed in 2008, or the ECB in 2014, the Chinese central bank will become the “lender of last resort” and will print money. This will drive the Chinese currency down and is likely to prompt “me too” devaluations all over Asia from Thailand to Malaysia and ultimately to Japan – China’s biggest trading partner in the region.

This will all drive the US currency up further and will have the impact of making US investments outside of the US cheaper. After all, if your cost base is in euro and you book your profits in dollars, a strong dollar means it makes sense to put more of your business abroad.

And this is where we come in.

Ireland is an unusual country because, although we are notionally European, we actually do best when the US is strong and the eurozone is weak. This is because of the huge amount of US investment here. We look hyper competitive to corporate America when the dollar is strong and we look expensive when the euro is strong.

As a result, the turmoil in Asia and China may actually prompt more investment into Ireland because we look cheap to Americans. Sometimes luck comes your way and it could just be our good fortune that problems somewhere very far away precipitate a positive outcome for us.

It’s the bounce of the ball. Sometimes the ball bounces unexpectedly and you lose and sometimes it just bounces right up into your hands and you are over for the try.

Don’t ask too many questions, just take it!
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And the PMIs for BRIC.

Best go to Gurdgiev's site to see the actually charts.

http://trueeconomics.blogspot.ie/2015/10/61015-bric-quarterly-economic-activity.html

Tuesday, October 6, 2015
6/10/15: BRIC Quarterly Economic Activity & PMIs: 3Q 2015
Posted by Constantin Gurdgiev

Now, as promised, the summary of 3Q 2015 BRIC PMIs and the insights these give us into global growth trends. Note: series history refers here to data from 1Q 2006, since some countries in the group only started collecting PMI data from that period.

Brazil:

Brazil’s Manufacturing PMI averaged poorly 46.7 in 3Q 2015, which is… drum roll… an improvement on disastrous 46.1 recorded in 2Q 2015. All in, Brazil manufacturing sector contraction is now 6 consecutive quarters-long. Over the last two consecutive quarters, Brazil posted the worst Manufacturing sector performance of all BRIC economies.

Meanwhile, Brazil Services PMI tanked to 41.9 on 3Q 2015 average basis from already abysmal 42.3 reading in 2Q 2015. This means that Brazil Services sectors are in a deep contraction over the last 6 months and the rate of contraction accelerated in 3Q 2015. This is the worst quarterly reading in all BRIC economies for Services sector for the second consecutive quarter running and the fourth consecutive quarter of recession in Brazil’s Services.
While Manufacturing PMI in 3Q 2015 was the fifth lowest in history of the series, Services PMI hit its lowest level in history. In brief, Brazil is in deep trouble and is currently the worst performer across both manufacturing and services sectors of all BRIC economies. Brazil recorded now four consecutive quarters of sub-40 readings in both indices - the only economy in the BRIC group to have done so (in Russia case, such coincident sub-50 readings have occurred for the duration of only two quarters) in post-Crisis period.


Russia:

Russian Manufacturing PMI averaged 48.4 in 3Q 2015 unchanged on 48.4 reading in 2Q 2015. This is the lowest (tied with 2Q) reading since 1Q 2014 and marks the third consecutive quarter of sub-50 readings in the sector. The level of contraction singled by 48.4 reading is, however, not particularly remarkable, marking the 6th sharpest rate of activity decline in series history.

Russian Services PMI posted a reading of 50.7 in 3Q 2015, consistent with weak growth, following 51.0 reading in 2Q 2015 and marking two consecutive quarters of above 50 readings. Growth is still weak in the sector, with 3Q 2015 reading being 9th lowest in series history.
Overall, Russian economy is still in a recessionary scenario, judging by PMIs although some improvement is visible in the Services side of the economy. In my view, it is too early to call the bottom of the recession, yet, but there are some potentially encouraging signs emerging.
Russia remained the second weakest economy in the BRIC group, only marginally (by about 0.1 points) underperforming China when comparative is taken across both sectors of the economy.


China:

Chinese Manufacturing PMI fell off the cliff in 3Q 2015, declining to 47.4 compared to 49.2 in 2Q 2015. This marks second consecutive quarter of sub-50 readings for the index. 3Q 2015 index was 3rd lowest in the history of the series, highlighting just how sharp the deterioration was. Over the last 4 quarters, Chinese manufacturing failed to post a reading above 50.0 in all quarters, meanwhile, over the last 16 quarters, Chinese Manufacturing posted a statistically significant growth reading in only one quarter.

China Services PMI fell from 52.7 in 2Q 2015 to 51.9 in 3Q 2015. This is the 5th lowest reading in the history of the series and, although nominally above 50.0, statistically is not consistent with a signal of even moderate growth.
In simple terms, China is getting dangerously close to statistically zero growth across the economy, which, in my view - given the low quality of Chinese official data - can be anywhere around 3-4 percent official GDP expansion for 2015. Potentially - lower.


India:

Indian Manufacturing PMI continued to lead the BRIC economies indices, rising to 52.1 in 3Q 2015 from 51.7 in 2Q 2015. Still, the case of growth is 9th slowest in data series history.

Indian Services PMI posted a strong rebound from 49.9 reading in 2Q 2015 to 51.3 in 3Q 2015. Even with this rebound, latest indicator is signalling 10th slowest rate of growth in the Services side of the economy.

Overall, India returned to the scenario of broadly based (across both Services and Manufacturing) growth in 3Q 2015. However, considering past performance, growth across both sectors in India was anaemic in 3Q and it has been weak since the start of 2013.


Charts below illustrate key trends:

Overall, BRIC group activity has been pretty disastrous in recent quarters, as shown in the Chart below

As the above illustrates, combined BRIC Manufacturing index is currently running at 48.5 down from 49.4 in 2Q 2015 and marking second consecutive quarter of sub-50 readings. This the third worst performance level for the indicator. Across Services sectors within the BRIC economies, activity also fell in 3Q 2015 (to 50.7) from already weak 50.9 in 2Q 2015. 3Q 2015 Services reading is 5th worst in history.

Table below summarises recent changes in quarterly PMIs:

Key conclusions:

BRIC economies are in a sharp, structural slowdown across both manufacturing and services, with Brazil and Russia lingering in sustained recessions, China effectively falling off the growth cliff and India slowing down, but still generating positive growth. The rot is global - it is driving global trade and currencies imbalances and is also driven by global trade, demand and currencies imbalances. With the world’s largest EMs in deep trouble, one has to wonder how low can global GDP growth revisions go in months ahead.

The structural or longer-term nature of this rot is best highlighted in the last chart above, showing clearly the dramatic trend decline in Manufacturing activity starting with 2Q 2011, followed with the onset of decline in Services side of the economy in 2Q 2013.
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Looks like Front National are sweeping the regional elections in France. And now they are rumours of Merkel doing secret deals with ISIS supporter Turkey.

They wouldn't even give Greece a few billion when things were dire but now they want to fast-track Turkey into Europe as well as hand them €3 billion. This is turning into a nightmare. Merkel is by far the most incompetent politician Europe has seen in decades. For the last century every time a major crisis in Europe occurs Germany seems to be always at the heart of it.
 
Allex said:
Thats because Germany is Europes central motor.
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WW1 was about politics, WW2 was about economics and this latest event is all about politics again.

This current crisis has got nothing to do with economics in the EU and everything to with politics and mismanagement. Merkel and the Germans have been allowed to constantly make unilateral decisions effecting the whole of Europe. Her moronic public plan for Germany to accept a million plus migrants was spectacularly ill-thought out and put every one else in the shit. Not to mention the growing debt problem and ignoring the IMF's recommendations on debt restructuring. We have rising disinflation/deflation and the ECB can't keep buying national government bonds into perpetuity.

Now to add to our woes we have mounting corporate debt lead by the US - the world's true economic engine. Basically, the Japanese problem has become a global problem. Everyone is carrying too much debt.

http://trueeconomics.blogspot.ie/2015/12/31215-of-debt-central-banks-and-history.html

One of the only euro countries experiencing growth is Ireland and that has nothing to do with the EU and everything to do with the Anglo-sphere and the multinationals. And this is a temporary phenomenon.

Anyway, I'm only repeating what everyone knows. Merkel is a menace but the German's love her (49 per cent still approve of her which is beyond ludicrous) even though she has let German infrastructure crumble through years of neglect - long before this latest debacle had occurred.

For years George Bush was the butt of jokes by us, Europeans, but he never played anything comparable to the active hand the German Chancellor is playing in the destruction of the EU. Schengen is on the verge of collapse, the eastern and Balkan countries are on the verge of rebelling, UK wants out and France is listing towards the far right. The EU is now a powder keg of shit with Germany doing its damndest to rip off the coupler.
 
Look, for the record I'm not naive. I realise that we need Turkey as a bulkhead to stop Russian expansion and we need them in NATO.

But we don't have to actively support terrorist sympathisers, give them 3 billion and fast track them into the EU. The less we have to do with Turkey the better. And all EU nations should cut off the supply of foreign funding from Turkey and Wahhabi gulf states for mosques.

At least America is finally starting to wise up and engage with Iran - we badly need another bulkhead to stop Saudi Arabia spreading its bile especially if France and the UK are going to continue to arm the terrorist nation. All of these problems begin and end with Saudi Arabia and the House of Saud - they are ground zero.
 
Its been awhile, now 2017 and things look more grim than during the 2015 set of posts. Now, while the reality of Brexit is being dealt with by the EU, on its opposite shore, the reality of a Grexit will once again surface to further destabilize post-WWII Europe. That's when American bred capitalism took root in the form of global neoliberalism. The EU is only one, but a principal result.

I'm thinking about this after reading this: Greece’s Debt Crisis Isn't Over—and It Could Still Bring Down Europe by Yiannis Baboulias Thursday, March 16, 2017. Its an excellent summary and assessment of the situation.

My own geopolitical predilections remain the same. Because of the drivers of climate change, meaning an economic system highly dependent on the fossil fuel industry and resource extraction in general, I can only hope and pray for a change in the course of human history that emerged in the last century. Then and now, that is a hope for a new economic basis that might have a chance of moving us, collective humanity, to environmental sanity. It was a hope for the complete failure and upheaval of the neoliberal order. I don't care whether its in the form of socialism, communism, or even reformed democracy, as long as it serves as a global wake-up call and a massive rejection of capitalism-business-as-usual approaches to both our environmental and social problems.

Unfortunately, here in America, we've had our own version of the hard-right nationalists reaction that underlies Brexit. It seems that order may give way to chaos and that chaos may impose its own revision of the status quo. A decrease in the globalists mind-set may likely bring with it significant economic retrenchment, as in Greece. And all that proffers a lower carbon footprint. While I had hoped for both environmental AND social sanity, so less suffering for both humankind AND the biosphere, it appears we may have to sacrifice ourselves on the altar, and accept a fate that in the long term holds out the promise for environmental health, albeit not our own.

In Greece we see what that failure looks like and that human toll comes with it. The alt-right metaphor of a border wall stemming the tide of refugees has its populist appeal. But it simply can never work, no matter how tall and deep you make it. How can you hold back the tide? You can't. With rising sea levels, so also the human tide. I'll be adding my own tears to the seas.
 
arkmundi said:
..... I don't care whether its in the form of socialism, communism, or even reformed democracy, as long as it serves as a global wake-up call and a massive rejection of capitalism-business-as-usual approaches to both our environmental and social problems.
.
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...i think that is termed "Out of the frying pan, into the fire !"
Reformed Democracy could mean anything with unknown consequences.....Scary !
But Socialism and Communism have very well known outcomes as witnesses by many human catastrophies.
You are obviously a "glass half empty" type of guy, Shame , that will stop you enjoying what this life has to offer.
 
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