Posts Tagged ‘Netherlands’

Philippine President Rodrigo Duterte arrived in China to meet with Chinese Premier Xi Xinping. Duterte has become a very controversial figure in Asian politics as he has publicly excoriated U.S. President Barack Obama’s treatment of him and his country.

Duterte has pursued a frank and brutal policy to clean up drug trafficking and crime in the Philippines while at the same time backing away from U.S. influence over the former U.S. colony.

His meeting with Xinping comes after multiple public clashes with Obama which has led to ending joint sea patrols with the U.S. Seventh Fleet in the disputed South China Sea.

These increased patrols and diplomatic overtures in Southeast Asia, particularly with Vietnam are all part of the ‘Asian Pivot’ of which Hillary Clinton was the architect during her reign as Secretary of State.

That Duterte is looking to mend fences with China after the ruling by the Permanent Court of Arbitration in The Hague, Netherlands back in June which denied China’s historical claims to much of the South China Sea is telling.

Because the Philippines has been the loudest opponent of China’s territorial claims.

Vietnamese Waffling

Across the way, Vietnam, on the other hand, has been vocal and taken steps to make substantive claims in the Paracels, it has also been willing to negotiate with China on this issue.

Tensions in the region are always high given the historical backdrop of past Chinese invasions. Vietnamese political moves, in particular, are largely built based on fear of future Chinese colonization, either de facto or through economic means.

This is why, in particular, Vietnam is willing to green light the reopening of Cold War Era Russian military bases there and invite Russian investment in industries normally closed to significant foreign investment like oil production, including offshore exploration and refining.

Talks between Gazprom Neft and state-owned PetroVietnam broke down over the sale of 49% of the refinery at Dun Quat in January, but the fact that Russia got that far in negotiations for that big a stake is itself significant. Vietnam has been desperate to get Dun Quat sold to expand its capacity for three years now but has been unsuccessful in getting a deal done.

This is likely due to a mix of pressures behind the scenes as the U.S. continues to put pressure on the country to not make ties between it and the emerging Russia/China alliance too strong. And Prime Minister Dung has played his poor hand well to get Vietnam concessions from everyone while remaining, at least nominally, independent.

Don’t be surprised in the near future if Vietnam’s terms on Dung Quat become acceptable to Gazprom Neft if the Russians go through with reopening those bases mentioned above.

Russia is seen as a calming influence on any imperial ambitions of the Chinese by regional actors. It has little to do with Russian territorial imperialism. Vietnam is an important strategic and commercial hub in the region historically and it will be difficult for the U.S.’s pivot there to do anything but delay the inevitable.

Flipping the Philippines

The Philippines understands this as well and Duterte’s breaking with the U.S. leadership publicly hands China a grand opening to firm up support within ASEAN – the Association of Southeast Asian Nations. Ties with Thailand, Myanmar, Malaysia and Singapore are strong thanks to strong trade relations.

Xinping just made a deal with Cambodia to help modernize its military.

Once Obama leaves office, U.S. support for Indonesia will drop off a cliff. His personal ties there have ensured a flood of money into that country. It will now have to make deals without that crutch in its back pocket.

While for China, with its soft-peg to the strengthening U.S. dollar, they have very smartly deepened the market for clearing trade directly in local currencies, bypassing the U.S. dollar and insulating these countries from the worst of a dollar bull market, which is again underway, as I discussed last week.

It is also why China is devaluing the Yuan slowly in order to protect its ASEAN trading partners by keeping its real effective exchange rate from rising further and gutting two-way trade.

None of this is lost on Duterte. The resistance to China’s influence over ASEAN is crumbling as China, smartly, has pivoted a larger portion of its trade towards its regional neighbors. With the depression in Europe and the weakness of the Euro, trade between the regions no longer makes sense.

The Philippines cannot be a hold out against the tide of waning U.S. influence in the region lest all the work he’s done to clean up the corruption and violence – regardless of what you may think of his methods – will come to naught.

His trip to China this week is very bad news for Clinton and Obama and it is very likely that the Asian Pivot policy will unravel in short order.

 

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The signs are ominous, the rhetoric constant. Whichever way you look at it, the world is slowly descending into an ever greater spiral of conflict. We all know that the current wars raging in the Middle East have the potential to go catastrophically wrong and pull the super-powers into something much bigger.

You also know things are not good when the so-called ‘conspiracy theories’ from alternative media outlets eventually goes mainstream, and there’s no shortage:

To confirm the state of the world today, the Global Peace Index states, and I quote – “There are now only ten countries in the world that are free from conflict”. 

The Independent has a 40 second video (HERE) of these ten countries, it’s worth watching, you’ll be surprised…

 

Some believe World War III has already started, most dispute that. It takes no more than a spark to light the fire and currently there are a lot of sparks flying around. Even political instability in the European Union as a result of a refugee crisis is a cause for concern. Pew Research, published just last month, confirmed that European’s fear a wave of refugees will mean more terrorism and fewer jobs. Violent protests have broken out, politician’s are worried. The VP of the International Relations Committee at Hungary’s parliament, Jobbik Member Marton Gyongyosi was supported by other EU leaders when he has suggested that “physical protection of our borders” is required. He went further –

 “The US caused this (refugee) problem in the neighborhood of Europe and then leans back criticizing European countries for not dealing with the problem efficiently.”

In that context, a few EU leaders are calling for an EU wide army and its own intelligence service. It seems America and therefore NATO are not as trusted as they once were. The US/EU trade deal TTIP, the largest deal in the history of humanity, is reported as being over. Is this evidence of the widening gap of disagreement, maybe.

The outcome is a changing political landscape. Before the European Union was created by the Maastricht Treaty on November 1st 1993 there were just 25 nationalist political parties. Since the birth of the formalised EU there has been a 150 per cent rise in political parties on the extremes of the political spectrum, now totalling 64. One of them was Ukip that focused on immigration and subsequently produced the ‘Brexit’ protest vote that now threatens to tear the EU project apart.

North Korea is a wild card scenario – anything could happen, but if South Korea was attacked, America would have no option but to step in. And what would China do – it’s anyone’s guess.

John Pilger's interview on Going Underground spells out the increasing risk of a global conflicthttps://www.youtube.com/watch?v=ahEdcuxlN1o

John Pilger’s interview on Going Underground spells out the increasing risk of a global conflict

Tension has substantially risen around the world over USA and Russia/China relations, the South China Sea, Ukraine and Crimea, multiple Mid-East conflicts, north Africa and South America. One should not forget currency wars, economic and political sanctions adding to the global strain. John Pilger’s interview on the Threat of World War Three leaves the viewer in no doubt as to where he lays blame, and if anyone knows about war, he should, he’s covered most of them since Vietnam.

Even basic resources are a cause for concern. Natural water for one, food scarcity, food security and environmental disasters all add to a backdrop where global terrorism is massively on the rise, global debt is now a third bigger than prior to 2007, mass protests due to political instability, such as South America (Brazil being a new hotspot) all adding to increasing tension.

The geo-political situation is now characterised by ever-increasing militarism across the world, bringing the prospect of another world war closer than at any time since 1939.

Scrutinising the underlying issues and causes for the devastating outbreak of World War I in 1914 which ended up killing 17 million, Leon Trotsky laid bare the startling similarities between the crisis of the world economy at the time and the turn to militarism. Historical records display a relevance for today that should serve as an advance warning of the horrors that extreme neoliberalism and globalisation offers up if we do not make efforts to pull back from the brink.

From WSWS  in an article entitled “Capitalist breakdown and the drive to war,” comparisons are made between the extreme economic conditions just prior to the first world war and today.

“The years leading up to the outbreak of World War I, like the period prior to 2008, were marked by stormy economic growth. But by 1913–14, the limits to that growth had been reached and the world economy experienced a fundamental shift. From the middle of the 1890s, Trotsky explained, the basic curve of capitalist development climbed steeply upwards. But this very upswing created the conditions for a breakdown. “In 1914,” Trotsky wrote, “a crisis broke out which marked not merely a periodic oscillation, but the beginning of an epoch of prolonged economic stagnation. The imperialist war was an attempt to break out of the impasse.” Further economic development at the pace of the previous period was “extremely difficult,” as the bourgeoisie “flinched against the limits of the market.” “This created class tensions, made worse by politics, and this led it to war in August 1914.”

Corrupt bankers represent a threat not only to those they directly rip off but also potentially the entire global financial system, the Governor of the Bank of England has warned.

Corrupt bankers represent a threat not only to those they directly rip off but also potentially the entire global financial system, the Governor of the Bank of England has warned.

The parallels are striking, particularly as the financial crisis forced upon us in 2007/8 by an out of control banking system, that benefited a tiny elite, caused wave after wave of economic turbulence, austerity and the dismantling of the social democratic movement that itself was born from the wreckage of World War Two. Peoples across the world are getting angry as inequality worsens.

Mark Carney has written a very strongly worded letter, in his capacity as chair of the Financial Stability Board (FSB) to a global forum of national regulators, financial ministries and central banks – to the G20, which is currently meeting in China.

“The incidence of financial sector misconduct has risen to a level that has the potential to create systemic risks” he says. The message is quite clear. Carney believes there is another systemic crisis centred around financial markets. Even he believes and openly stated that corrupt bankers now represent a threat not only to those they directly rip off but also to the entire global financial system. Last year, just four of Britain’s banks were fined well over £50billion ($67bn) for their egregious acts of criminality. Prison beckoned for no-one, whilst poverty soared. Don’t forget the London riots. Spreading like wildfire, the resulting chaos generated looting, arson, and mass deployment of police and resulted in the death of five people. In just three days, a dozens towns and cities were no-go areas of violence, 3,443 crimes reported, over a thousand arrests – from an unrelated spark.

According to Jim Rickards, the CIA’s Asymmetric Warfare Advisor, the probability of a new global conflict is rising every day. In a startling interview from last year he reveals that all 16 U.S. Intelligence Agencies have begun to prepare for World War III. Richards is predicting the fall of the dollar with the result of “an extended period of global anarchy”.

In the meantime, Russia is preparing to be attacked by NATO and America. Global Research reports that “Colonel General Leonid Ivashov, President of the International Centre of Geopolitical Analysis explained in an interview to KP, that ‘if data on Russia-NATO power balance at the Western direction is analyzed, as well as military activity build-up rate at our borders, scale of combat equipment deployment, if the grade of Russia’s demonization is estimated, one can say that preparation to a real war is taking place, as such acts are usually undertaken at the forefront of a war.’

Russia, so threatened by the West, it is now building huge nuclear bunkers around Moscow to protect itself at a time when financial resources are at best ‘stretched’.

As TIME reports “The South China Sea has instantly become uncharted waters for the globe’s two most-powerful nations. The ruling from the Netherlands, while legally binding, has no mechanism for enforcement. That means negotiations will be required to ease the growing territorial tensions in and around the South China Sea. If talks don’t happen, or go nowhere—and China continues to refuse to back down—a military clash could occur.”

Dr.Paul Craig Roberts quite firmly believes a Third World War is currently being fought. How long before it moves into its hot stage he asks.

 “Washington is currently conducting economic and propaganda warfare against four members of the five bloc group of countries known as BRICS—Brazil, Russia, India, China, and South Africa. Brazil and South Africa are being destabilized with fabricated political scandals. Both countries are rife with Washington-financed politicians and Non-Governmental Organizations (NGOs). Washington concocts a scandal, sends its political agents into action demanding action against the government and its NGOs into the streets in protests.”

We have already seen what the New World Order has done with Islam. As Pope Francis says, they have used it to foment a crisis, a clash of civilisations

“We have already seen what the New World Order has done with Islam” As Pope Francis says, “they have used it to foment a crisis, a clash of civilisations”

Even The Pope believes the start of World War Three is underway – ““To be clear, when I speak about war, I speak about real war. Not a war of religion. There is a war of interests. There is a war for money. There is a war for natural resources. There is a war for domination of peoples” Pope Francis said, alluding to globalisation and the goals of the so-called New World Order of complete and total control over every human being on the planet.

Already, the world has more displaced people than at any time during the course of either World War One or Two. The fight for resources as a direct result of globalism now threatens peace on every continent in the world.

The Doomsday Clock is an internationally recognised design that conveys how close we are to destroying our civilisation with dangerous technologies of our own making, nuclear weaponry by far our most dangerous experiment, makes the clock tick each year. It puts the current time of war at 23.57 – just 120 seconds left.

The current position of the Doomsday Clock is the closest it has been since 1984 and is actually a few clicks closer to reaching a global extinction event for humans than in 1962 when the Cuban missile crisis had twitchy American and Russian fingers on red buttons. What a cataclysmic ending for humanity, bombed back into the stone age. For what?

The possible holding of a Brexit-like referendum in the Netherlands may contribute to scrapping anti-Russian sanctions, Tom van Grieken, chairman of the Flemish far-right party Vlaams Belang.

In an interview, Tom van Grieken, chairman of the Flemish far-right party Vlaams Belang, did not rule out that a possible Brexit-like referendum in the Netherlands could result in the ultimate elimination of sanctions against Russia.The interview came after founder and leader of the Dutch Party for Freedom Geert Wilders called for a referendum on EU membership to be held in the Netherlands; the proposed vote has come to be known as Nexit.

“I think that the anti-Russian sanctions are nonsense and that they should be scrapped as soon as possible. But this is not the main thing. The EU’s main problem is that the bloc is out of line with democratic principles, and the EU’s sanctions against Russia are evidence of this. We do not understand why we should impose sanctions on Russia,” he said.

He also referred to an independent study conducted in the Netherlands two years ago, which showed that the country could benefit from a potential withdrawal from the EU. “I am convinced that it is quite possible to organize a Dutch referendum on the issue of Nexit,” according to Van Grieken.

He was echoed by Jean-Luc Schaffhauser, a Member of the European Parliament from the National Front party, who told Sputnik that euroscepticism in on the rise in France and that many in France and beyond are opposed to the anti-Russian sanctions.

“Currently, many countries are up in arms against these anti-Russian sanctions. However, the current weak consensus  leads to a situation where we do not want to talk out loud about our opposition to sanctions with a number of other countries,” he said.

Earlier in an interview with Sputnik, Moscow-based political analyst Konstantin Voronov said that the Dutch Party for Freedom’s drive to hold a referendum on the Netherlands leaving the EU is a sign that it is time to start rethinking the European integration project.

He said that it is still unclear whether a national referendum will be held in the Netherlands, but that the very fact that the party has put forward this initiative is very symptomatic of disillusionment with the Union.

Party for Freedom leader Geert Wilders, meanwhile, said that “Brussels should not dictate who we can have economic and political relations with” and that “restoring ties with Russia is a priority direction for the traditionally trade oriented country which the Netherlands has always been.”

“For centuries, our countries have benefited from bilateral cooperation despite conflicts. And today lifting the anti-Russian sanctions is a mandatory condition for our positive future,” Wilders told the Russian newspaper Izvestia earlier this month.

The European Union, the United States and some of their allies have introduced several rounds of anti-Russia sanctions since Crimea reunified with Russia in 2014, accusing Moscow of meddling in the Ukrainian conflict. Russia has repeatedly refuted the accusations, warning that the sanctions are counterproductive and undermine regional and global stability.According to Ron van Dartel, the Dutch ambassador to Russia, the introduction of anti-Russian sanctions by the European Union in 2014 resulted in Dutch exports to Russia decreasing by one third and imports from Russia falling by about a quarter.

Falling rates of global trade growth have attracted much comment by analysts and officials, giving rise to a literature on the ‘global trade slowdown’ (Hoekman 2015, Constantinescu et al. 2016). The term ‘slowdown’ gives the impression of world trade losing momentum, but growing nonetheless. The sense of the global pie getting larger has the soothing implication that one nation’s export gains don’t come at the expense of another’s. But are we right to be so sanguine?

World trade volume plateaued around January 2015

Using what is widely regarded as the best available data on global trade dynamics, namely, theWorld Trade Monitor prepared by the Netherlands Bureau of Economic Policy Analysis, the 19th Report of the Global Trade Alert, published today, evaluates global trade dynamics (Evenett and Fritz 2016). Our first finding that the rosy impression painted by some should be set aside. We demonstrate that:

World export volumes reached a plateau at the start of January 2015. The same finding holds if import volume or total volume data are used instead.

 

Both industrialised countries’ and emerging markets’ trade volumes have plateaued (Figure 1).

Figure 1 World trade plateaued around the start of 2015

 World trade plateaued around the start of 2015

 

Except during global recessions, a plateau lasting 15 months is practically unheard of since the Berlin Wall fell.

 

-In 2015 the best available data on world export volumes diverges markedly from that reported by the WTO, IMF, and World Bank, and probably explains why analysts at these organisations have missed this profound change in global trade dynamics (Table 1).

 

Table 1 Marked differences in reported global trade volume growth in 2015

 Marked differences in reported global trade volume growth in 2015

Image: VoX EU

Our argument is not that world trade has stopped. Rather, that according to a benchmark measure of trade volume, world trade isn’t slowing down – it is not growing at all.

More products accounts for the lion’s share of trade’s fall in 2015

So much for trade volumes, but what of the total value of world trade? Our last report showed that three oil-related products accounted for just over half of the fall in the value of world trade from October 2014 to June 2015 (Evenett and Fritz 2015). Coupled with the rising value of the US dollar, some felt that these factors – rather than a change in global trade dynamics – accounted for the falling value of world trade in 2015. Does this story fit the facts?

To examine the variation in trade flows across products during the global trade plateau, a detailed product-level dataset of the value of trade was assembled from the monthly UN trade data releases through to December 2015. Analysis of this dataset revealed that:

Falling commodity prices could not have accounted for the majority of the fall in the value of global trade in 2015. In fact, raw materials trade recovered partially in the fourth quarter of 2015.The total value of capital goods trade fell in the first half of 2015 and then plateaued; same for consumer goods.Meanwhile, parts and components trade fell in value throughout 2015.The pain is spreading – in our last report we showed that 28 product groups each accounted for 0.5% or more of the fall in the value of world trade. That number has now risen to 38.The product groups that contributed more to the fall in the value of world trade in 2015 faced policies skewed towards trade restrictions and away from subsidies and export incentives (Figure 2).

Figure 2 Products where trade fell the most in 2015 faced proportionally more trade restrictions

 Products where trade fell the most in 2015 faced proportionally more trade restrictions

Image: VoX EU

 

In sum, the variation across products in how much trade fell in value in 2015 suggests that an across-the-board currency valuation effect (caused by the rising value of the US dollar) or a ‘commodities only’ story are not enough. That there could be a link between the policy mix facing a product on global markets and changing trade values begs the question as to whether trade policy dynamics changed during the global trade plateau as well. We turn to this matter.

Was 2015 unusual for trade policy dynamics too?

In a nutshell, yes. Using the latest update of the Global Trade Alert, which saw 1,016 new reports of government policy measures added to the database from mid-October 2014 to 1 May 2015, we found that:

Resort to protectionism in 2015 is 50% up on that seen in 2014.Policy initiatives harming foreign commercial interests in 2015 outnumbered trade liberalisation three-to-one.Since 2010 between 50 and 100 protectionist measures were implemented in the first four months of each year; in 2016 the total had exceeded 150.G20 members were responsible for 81% of protectionist measures implemented in 2015.

Before world trade plateaued, duties for dumping, subsidisation, and import surges were used most; during the plateau, trade-distorting bailouts and financial assistance were number one. Since global trade plateaued, another trade restriction – export taxes – were used less and requirements on investors to source locally imposed more often. In short, the policy mix used by governments appears to have shifted once trade plateaued, suggesting trade policy dynamics have evolved as well (Figure 3).

Figure 3 Top 10 most used harmful measures since the crisis began

 Top 10 most used harmful measures since the crisis began

Image: VoX EU

 

The new GTA report also includes a chapter on the high-profile trade policy tensions in the steel sector. Last year and this, steel sector interventions have been under the spotlight. However, our report shows that protectionism in this sector has been ratcheting up since 2010 and, while so much attention is focused on tariffs targeting dumped steel, in fact, state incentives to promote steel exports are a far larger systemic problem.

In contrast to high-profile steel, our report also includes a chapter on the quiet spread of old and newer forms of local content requirements. This development is remarkable in light of the widely held view that these measures were banned over 20 years ago in a WTO accord. Nevertheless, they have made a comeback and we draw out the key lessons from the growing body of analysis of the adverse trade, foreign direct investment, and welfare impact of rules that force firms to source locally.

Multinational firms are adjusting to the new reality of ever-more fragmented markets. As the CEO of General Electric recently put it: “A localization strategy can’t be shut down by protectionist politics” (Bhatia et al. 2016) Many more firms have announced plans to ‘localise production’. Since political leaders won’t rein in protectionism, pragmatic business people are adjusting – often by substituting foreign direct investment for trade.

Risk of a negative feedback loop

Either finding – of global trade growth coming to a halt or a sharp increase in beggar-thy-neighbour activity – ought to worry policymakers. That both coincide prompts questions of linkage. In our report we don’t claim to have shown definitely what is causing what – after all, multiple factors likely trade and policy decisions and the data available to check won’t be published for years.

Analysts have the luxury of waiting for data to mount up before taking a stand; decision-makers in the public and private sectors do not. As a result, going forward an even more important concern is that a negative feedback loop develops where zero trade growth fuels resort to even more zero-sum trade policies which, in turn, discourages cross-border supply of national markets.

In a world where global commerce isn’t growing any more, governments may conclude that larger market shares for their exporters can only be grabbed from trading partners. Parallel contests for talent, foreign direct investment, research and development hubs, and intellectual property would intensify. This could, in turn, precipitate a 21st century variant of mercantilism that, unlike its predecessors in earlier centuries, affects more types of global commerce.

The Brexit vote is history, and so is David Cameron’s reign as Britain’s prime minister whose gamble to allow an EU referendum backfired spectacularly. And today, in what Bloomberg earlier dubbed his “last summer” Cameron had the unpleasant task of telling his Eurocrat peers during what is hist last Brussels summit why he failed. Only he didn’t and instead, as the FT writes, Cameron flipped the tables and told European leaders he lost the EU referendum because they failed to address public concerns over immigration, as tensions rose ahead of looming Brexit negotiations.

The British prime minister said at his final summit in Brussels on Tuesday that fears of mass immigration were “a driving factor” behind the vote and free movement would have to be addressed in Brexit talks. While he did not call her out by name, Cameron was effectively blaming Angela Merkel, whose overly accepting immigration policy in 2015 unleashed a historic refugee wave which ultimately ended up being the deciding factor behind the referendum outcome.

As the FT writes, Angela Merkel, the German chancellor, and other leaders “blocked British demands before the referendum for an “emergency brake” on migrant numbers and the idea remains anathema to many member states.  Cameron, who announced his ­resignation after last week’s referendum, said that he wanted Britain and the EU to retain “as close an economic relationship as possible”. But, at an emotional dinner, he warned that the UK could not continue to accept large numbers of EU migrants, even if that meant losing access to the single market.”

His remarks underscored the hard task facing both sides in reaching a new accord. Addressing the German Bundestag before the Brussels summit, Ms Merkel warned the UK that there would be no “cherry picking” in its Brexit negotiations. European Commission president Jean-Claude Juncker underscored this when he said that he wants the article 50 “letter to be sent as soon as possible.” Giving the UK instructions on how to proceed, Juncker said during a press conference that “if someone from the Remain camp will become British prime minister, this has to be done in two weeks after his appointment. If the next British PM is coming from the Leave campaign, it should be done the day after his appointment.”

 Juncker urged the UK “swiftly” to clarify its position regarding its plans to break from the EU, warning that the bloc could not be “embroiled in lasting uncertainty”. He also hit back at criticism of him in some parts of the British press, claiming he was not a “faceless bureaucrat” and “would like to be respected”.

More importantly, Cameron’s resignation – not literal but figurative – suggests that any hope the Remain camp may have had for a redo of the referendum has been extinguished.

It wasn’t just Cameron: even before the session began there had been signs of renewed hostility towards Downing Street. After a heated debate, which at one point degenerated into catcalls and boos for Nigel Farage, the UK Independence party leader, the European Parliament voted for a resolution calling on Britain to begin divorce proceedings immediately.

Some of Mr Cameron’s fellow EU leaders made similar testy remarks. “Married or divorced, but not something in between,” said Xavier Bettel, the Luxembourg prime minister. “We are not on Facebook, with ‘It’s complicated’ as a status.”

As explained over the weekend, the pace and nature of Britain’s exit from the EU together with the triggering of Article 50, have become the most contentious issues in both London and Brussels since last week’s vote. Most of the leaders of the UK’s Leave campaign, who are likely to form the core of a new British government, have said they want to begin Brexit negotiations before invoking Article 50 of the EU treaties, which would formally trigger two-year exit proceedings.

Merkel made it clear that she and other EU leaders have refused to engage in negotiations until Article 50 is invoked, setting up the first of what could be years of difficulties facing Cameron’s successor. Mark Rutte, the Dutch premier and formerly one of Mr Cameron’s closest allies, argued for Britain to be granted “some space”. But he was unforgiving in his reasons why, saying: “England has collapsed politically, monetarily, constitutionally and economically.” Which, incidentally, is what Brussels calls a victory for Democracy.

Manuel Valls, the French prime minister, said it was not for Britain to dictate the pace of talks. “It’s not up to the British Conservative party to set the agenda,” he told the National Assembly in Paris.

What happens next?

On Wednesday, Mr Cameron will be asked to leave the summit while the remaining 27 members hold informal talks on how to approach Brexit negotiations and how to stop them from stretching out over many years.

 Addressing the German Bundestag before the Brussels summit, Ms Merkel warned the UK that there would be no “cherry picking” in its Brexit negotiations, her toughest response yet to the Leave campaign’s hopes of securing access to the EU’s internal market while limiting freedom of movement.

She spelt out that the EU’s internal freedoms were indivisible: if Britain, like Norway, wanted access to the internal market then, like Norway, it would have to accept freedom of movement, she said.

Which goes back to the original point Cameron made, namely that it is Merkel’s stickiness on freedom of movement that led to the victory of the Leave camp.

The winner today, however, was Nigel Farage, who stole the limelight when he was booed after he called on the EU to take a “grown-up and sensible” attitude to negotiations with the UK. He claimed the result would offer a “beacon of hope” to “democrats” across Europe and threatened that  “the UK will not be the last member state to leave the European Union.

As we showed earlier, Farage concluded: “When I came here 17 years ago and said I wanted to lead a campaign to get Britain to leave the European Union, you all laughed at me. Well, I have to say, you’re not laughing now, are you?”

 

Farage’s moment in the spotlight aside and Cameron’s apparent concession on the possibility of a second referendum, the reality is that while all EU leaders would be delighted to see Britain reverse course and choose to stay, most would be loath to offer any concessions for fear that succumbing to blackmail would encourage others.

Cited by the FT,  a senior adviser to one the eurozone’s most powerful leaders said that “this is a matter of survival for us. We cannot allow these tactics to succeed.

Countries such as France and the Netherlands that were once sympathetic to Britain’s plea for curbs on free movement of workers would now be some of the most opposed to further concessions.

As the FT adds, yielding to British pressure would be a gift to anti-EU politicians that the French and Dutch leaders are trying to defeat in elections early next year. Eastern European leaders, meanwhile, appear as implacably opposed to overturning cherished free movement rights.

Then again, as we reported last night, it is now too late, and most likely by design: sensing the Brexit crisis “opportunity”, Italy is already planning how to bend Eurozone rules against the use of public funds for bank bailouts, and is strategizing how to funnel €40 billion of European cash into its insolvent banking system. Should Europe reject Italy’s overture? Then Italy’s PM Renzi will simply threaten with his own referendum, which considering the recent shocking wins by the Euroskeptic 5 Stars Movement in the Rome and Torino mayoral election, will be all he needs to say to get his way.

Or rather not his way, but the way of the person who is quietly covering up all his tracks: after all why are Italy’s banks insolvent? Well, who was governor of the Bank of Italy from 2005 to 2011 when he blessed all of the hundreds of billions of now non-performing loans? Why former Goldman Sachs employee and current head of the ECB, Mario Draghi of course, who just may end up the biggest winner from the Brexit crisis. Because as everyone knows, one should never leave a crisis go to waste.

“Britain Votes Merkel Out Of Office, Too” is the astonishing headline from Germany’s 3rd largest newspaper Die Welt. Pinning the blame for The Brits’ vote, the op-ed lambasts The EU’s political failure, “The British do not leave the EU as narrow-minded snobs that had not meant it to happen that way, but as proud democrats that no longer wanted to put up with the snags and political failures of the EU;” and puts the blame squarely on the sagging shoulders of Angela Merkel (and her solo attempts at refugee policy)… “voters in Britain basically also voted Angela Merkel out of office. Before she becomes the EU’s gravedigger for good, she should follow David Cameron’s example.”

Via Die Welt,

Britain leaves the EU because a majority no longer wants to tolerate the union’s political failure. One key factor contributing to that is the German chancellor’s solo attempts in the refugee policy.

The exit of the British marks the beginning of a new era, perhaps less so for Britain, which never really felt at home in the EU, rather than for the rest of Europe. Eventually, citizens between Scotland and the White Cliffs of Dover did not only vote David Cameron out of office, but also the hesitant and narrow-minded leaders in the EU whose arguments did not persuade a majority. Their policy of stubbornly sitting it all out has also failed.

What has until now been the biggest democratic field test on membership in what used to be an exclusive club called EU has demonstrated three things: first, despite undisputable merits, the EU in its current state is simply incapable of mustering majority support. As a result, second, the institutions simply cannot muddle along, out of touch with reality as they are, as they have done so far. And third, the current leaders have been unable to halt the obvious erosion of the biggest political project of the day. Structural problems and crises have apparently been too much for the professional troubleshooters in the compromise factory called EU.

 What the EU would actually need now is stringent reforms: tightening decision-making processes, simplifying the tangled institutions, ending the undemocratic procedures by strengthening the European Parliament, and, above all ending the selfish wheeling and dealing in the European capitals that, in most cases, leads to leaving Brussels holding the bag. Yet how is that supposed to be done? How can one calmly go about refurbishing a wrecked home that some of its residents have just left? And how does the administration in Brussels, involved as it will be over the next few months in customarily tedious and obscure exit negotiations, intend to prevent a domino effect?

The British do not leave the EU as narrow-minded snobs that had not meant it to happen that way, but as proud democrats that no longer wanted to put up with the snags and political failures of the EU. It was not them that divided the country into supporters and opponents, beneficiaries and losers, those preferring to live in the past and those looking ahead, nationalists and cosmopolitans. That was all the making of the EU itself. That same institution that accepted the Nobel Prize as a unique peace project has dramatically lost support by allowing chaos to reign over the euro and tolerating unregulated immigration far beyond Britain. Before the British said bye-bye, lots of other places were ablaze as well. The triumph of the neo-nationalists, Orban in Hungary and Kaczynski in Poland, as well as the advance of the leftwing populists of Syriza in Greece, the Five Stars in Italy, and Podemos in Spain have demonstrated how moribund Europe’s disagreeing union has long since become. The Brexit is not a dress rehearsal that, when failing, can still be salvaged with a few repairs by the actors involved.

If we are unlucky, the historic drama is already in its final act. On closer examination, the Brexit is just the logical consequence of the EU constitution that failed in referendums in the Netherlands and France in 2005 already. After that, the intricate institutions rumbled on more or less without control and leadership while policymakers ignored to cut the most ambiguous projects of state sovereignty — Schengen and the euro — down to size.

Europe has neglected its citizens — not the other way round. When those citizens can watch the EU, the spin-off and replacement of the traditional nations, doing badly on a daily basis, its leaders should not be surprised when an increasing number of people prefer the somehow functioning original to the shaky innovation. This is the real reason, rather than stupidity and backwardness, that made nationalism, already on the way out, fashionable again in the middle of Europe. The narrow outcome, which would have been impossible one year ago, also shows clearly that Angela Merkel’s laissez-faire in the refugee crisis has ruined David Cameron’s political career — and estranged Britain from the EU for good. It was the pictures of the Balkans and the excesses of Cologne, which UKIP [United Kingdom Independence Party] leader Farage loved to refer to with relish, that decided the Brexit.

There are a number of precedents. For some 10 years or so, the EU has no longer been working properly, because it has bound together countries economically and politically that are simply not suited to one another. The fabulous career of Alexis Tsipras from Trotskyite nutcase to prime minister of a bankrupt euro-zone country is due to the failure of the single currency in Greece. Austrian Chancellor Werner Faymann was the first, but not the last, head of government falling victim to the refugee crisis. France, Europe’s central nation, has been governed for months in a state of national emergency because Islamist bombers were able to also cross the open borders in the Balkans and attack the core of Europe’s liberal way of life. There is quite a lot that would allow the situation to be described as a multiple systemic crisis.

Is it a surprise then, when in view of such failure individual EU member states delegate responsibility for their immigration policy to tiny Macedonia and close the Schengen borders at will? Is it a surprise when a whole generation of hopeful young people in Southern Europe have given up on the EU, when the resolution of the euro crisis is deferred again and again for the sole benefit of the banks — in contravention of all European rules? Grit your teeth and get over with it has long since ceased to be an option, because that stupid tactic has helped the EU go to the wall in Britain.

At the moment, and that says it all, the European Union is only popular and highly regarded in the countries in Eastern Europe. Where people are in fear of Putin’s expansionist policy such as in the Baltic states, where billions from Brussels are pumped into infrastructure and agriculture such as in Poland, or where the domestic political elite is much more corrupt and undemocratic than in the EU such as in Romania or Bulgaria — there, and unfortunately only there, people are eager to join the rundown golf club.

Yet a European Union that will routinely hold membership negotiations with Kosovo, Albania, or semi-dictatorship Turkey will only stagger into collapse. Citizens will simply not play along. And the next referendums could be on the doorstep in core Europe, with neo-nationalists such as Geert Wilders in the Netherlands and Marine Le Pen in France loudly demanding to let their people democratically vote on membership in the EU. When the benefits of a deal called EU are not eventually felt in the minds and pocketbooks of all citizens, it is unmarketable as a model for the future.

At the moment, the most powerful European, Commission President Jean-Claude Juncker, tries his hand at being crisis manager of the sorrowful countenance. As Luxembourg’s prime minister, he has been diligently involved in dismantling the EU with elaborate tax tricks at the expense of the neighbours. It is an irony of history that Cameron, a democrat, steps down while bureaucrat Juncker could be allowed to slouch over his desk and even lead the humiliating exit talks. If the EU eventually wants to present itself as a democracy, the European Parliament must remove Juncker. Tightening and resuscitating the entire project must be in the hands of younger, changed leaders. If not now, when?

 The European disaster in Britain, which – notwithstanding its bitter aftertaste – is a feast day of popular sovereignty, also puts a woman at the centre that has been highly praised by the media and the elites and that many already regarded as Europe’s unofficial chancellor. Angela Merkel, together with her finance minister, made the euro crisis in Greece a matter for Berlin to settle. By making the breach of the rules — the financing of governments — a permanent state of affairs, she bought time and damaged the sensitive European currency project for good without structurally resolving the malaise in the Mediterranean countries. And when Angela Merkel opened the borders in the migration crisis entirely on her own only to negotiate a dubious deal with Turkish ruler Erdogan also on her own, she demonstrated to citizens what she thinks of the EU and its institutions: very, very little. For the head of a party in charge of the European legacy of Konrad Adenauer and Helmut Kohl, this is a confession of political bankruptcy. On Thursday [23 June], voters in Britain basically also voted Angela Merkel out of office. Before she becomes the EU’s gravedigger for good, she should follow David Cameron’s example.

preciousgoldmetal

June 25 – Gold $1315.60 – Silver $17.72

“There are no markets anymore, just interventions.” … Chris Powell, April 2008

GO GATA!

Friday was a historic one for a number of reasons. One of them leaps off the charts this morning in our gold/silver sector world.

Due to the unexpected and stunning Brexit vote, the price of gold began to take off like a cat on a hot tin roof, as you know. At one point gold shot up just pennies shy of $100 an ounce … a price move that my friend John Embry has long said is needed to show The Gold Cartel is in the biggest of trouble. How close that came. Course, the real deal $100 up day has to be on a closing basis.

The jolting uncertainty over how that vote, and developing ramifications, will affect the world economic scene created a surge of interest in gold as the go-to fallout investment play. Zero Hedge reported that on Friday Google showed something like five times the normal hits on gold as a subject matter.

It seems that interest also reverberated into the investment arena.

The gold and silver open interests are tallied on a daily basis. A “Preliminary” tabulation of their changes is usually posted late in the evening with a “Final” number posted mid-morning the following business day. At times the two numbers can be noticeably different, but for the most part, they are in decent sync.

Well, the “Preliminary” gold open interest just released revealed a mind boggling rise of 59,379 contracts to 628,885. The August contract alone was up 49,124 contracts. Throw out the window any over the top adjective you want to describe that number, and what took place on Friday, and it would not do it justice.

A big increase in the gold open interest would be in the 10,000 to 20,000 contract range with a 25,000 increase really registering on the radar screen. For that number to go up nearly 60,000 contracts puts it into seismic earthquake category.

Overnight the gold open interest shot up into multi-year high territory by a huge margin, the latest high being around 608,000. Gold’s all-time high number is around 650,000 when prices were FAR higher than they are at the moment.

Meanwhile, to add to the drama the silver open interest, after soaring into its own all-time high territory by a SIGNIFICANT amount this week, went surprisingly down 636 contracts to 218,343. My expectation was that it would have gone up sharply once again. Scratching head time on that score. However, it is important to keep in mind the silver open interest was already 10% over its latest all-time high number and 15% over its older all-time high set a few years ago. And that is with silver prices in the DUMPSTER!

An explanation perhaps. Thursday is First Notice Day for the July silver contract. The July OI went down 3603 contracts with some spec longs deciding to take some profits ahead of exit time … especially considering the way the silver price was under such obvious JPM/Gold Cartel control on Friday, with the price of gold going bonkers at the same time.

The bottom line: the silver open interest is in all-time high territory, and gold is on its way there, with the prices of both precious metals artificially suppressed to very LOW levels. Simplistically, the gold price is less than half of what it would be if it had kept up with inflation in the U.S. and silver is nearly 1/3 of a price it was able to reach 36 years ago.

The current gold/silver prices of $1315.60 and $17.72 respectively are only that low because of the relentless efforts of The Gold Cartel forces. That their open interest numbers are skyrocketing with prices so low strongly points out the increasingly desperate situation THEY find themselves in.

More simplicity…

*The world financial situation is in a precarious state.
*Quantitative Easing and low/negative interest rates have been undertaken by the world powers to stimulate world economic sluggishness.
*Those efforts have really become stale in the tooth.
*Gold is a barometer of U.S., and world, economic health. Down is good, up is bad. Way up is terrible. Thus the gold price is suppressed over and over again thanks to the elitist/establishment world.
*Silver is allied with gold. It has  been put in the penalty box along with gold because a noticeable price dichotomy between the two would attract too much attention to what and why The Gold Cartel is doing to the price of gold.

There have been signs all year that this Gold Cartel is reaching a Tipping Point in which they will be unable to carry on and be effective at the current artificially low gold/silver prices … that they are going to be forced to retreat to MUCH higher price levels to continue their operations … operations which might even not be viable in the years ahead.

As you know, the mantra here this year is that gold and silver will never go up again from current price levels until we get a Commercial Signal Failure … which means The Gold Cartel forces short positions are routed by price explosions … with the weakest cabal members, and followers, forced to cover because the financial pain is too great.

The incredibly high gold/silver open interest numbers strongly suggest that Commercial Signal Failures are getting closer and closer at hand. As those failures manifest themselves, the prices of both precious metals will soar. For if a number of THEM are buying, who in the heck is going to be selling? It certainly won’t be the specs, who based on all of history, will be adding to their positions, like they are doing now.

POINT: the jolting Brexit vote is VERY likely to be the catalyst which finally causes Commercial Signal Failures because of the whopping new interest to buy gold (and silver) all over the world. It is going to be just TOO MUCH for the bums to deal with.

So, no matter what sort of counterattack The Gold Cartel feels compelled to launch in the days ahead, it is going to be overrun and fail. As time goes by these last gasp efforts to keep the gold and silver prices artficially submerged will look both pitiful and pathetic.

The price of gold is going to soar this year.

As for silver, been pounding my thoughts on the table all week. What THEY have done to the silver price is probably unprecedented. As a result, it is a coiled spring that is about to be sprung. Once silver is able to penetrate $18.50 on the upside, it will open Pandora’s Box. The price action at times will be similar to what we saw in gold on Thursday with its $10 higher upticks. Stay tuned!

The price action of the gold/silver shares have been screaming all year that mega upside price moves are in the works for the precious metals prices. The correction in the shares have been few and far between. Big Money (perhaps some of the in-the-know bad guy’s own money) keeps piling in. These savvy investors know what is coming down the pike and many certainly have a clear idea that The Gold Cartel’s jig is soon to be up.

If there ever was a time to be all over the precious metals sector, this is it!
So rule, Britannia — Britannia, rule thyself

 

Submitted by cpowell on 02:21PM ET Friday, June 24, 2016. Section: Daily Dispatches

By Chris Powell
Journal Inquirer, Manchester, Connecticut
Friday, June 24, 2016

http://www.journalinquirer.com/opinion/chris_powell/rule- britannia—-br…

Recognizing that the objective of the European project, ever-closer political and economic union, meant the destruction of democracy, sovereignty, and the country’s very culture, Britain has voted in a great referendum to withdraw from the European Union.

The majority arose from a remarkable combination of the free-market, limited-government political right, the core of the Conservative Party, with the working-class political left, the core of the Labor Party, both party cores repudiating their leaderships as well as the national elites.
The result has enormous implications for the United Kingdom, starting with whether it can remain united, since Scotland – – formerly the most industrious and inventive province in the world, now perhaps the most welfare-addled — probably will make a second attempt to secede, figuring that free stuff is more likely to flow through continued association with the EU than with England, which is growing resentful of the freeloaders up north.

But there are enormous implications for the world as well. The EU project never has won forthright ratification by the people of its member states and indeed has sometimes refused to accept rejection by them. Indeed, the whole EU government is largely unaccountable. So the British vote quickly prompted demands for similar referendums in France and the Netherlands, where conservative populist movements have been gaining strength.

The politically correct elites are portraying the British vote as a “xenophobic” response to free movement of labor across the EU and particularly as opposition to the vast recent immigration into Europe from the Middle East and Africa. This immigration is widely misunderstood as being mainly a matter of refugees from civil war. In fact this immigration has been mainly economic and it has driven wages down in less-skilled jobs while increasing welfare costs throughout Europe, which explains the British Laborite support for leaving the EU.

But it is not “xenophobic” to oppose the uncontrolled and indeed anarchic immigration the European Union has countenanced. For any nation that cannot control immigration isnt a nation at all or wont be one for long. Since most immigration into Europe lately has come from a medieval and essentially fascist culture and involves people who have little interest in assimilating into a democratic and secular society, this immigration has threatened to destroy Europe as it has understood itself. Britain has been lucky to be at the far end of this immigration, but voters there saw the mess it has been making on the other side of the Channel. They wisely opted to reassert control of their borders.

Their example should be appreciated in the United States, which for decades has failed to enforce its own immigration law and as a result hosts more than 10 million people living in the country illegally and unscreened. Fortunately few of this country’s illegal immigrants come from a culture that believes in murdering homosexuals, oppressing women, and monopolizing religion. But the negative economic and social effects here are similar to those in Europe and properly have become political issues.

The main lesson of Britain’s decision may be an old one – – that nations have to develop organically, arising from the consent of the governed and a common culture, and that they can’t be manufactured by elites. Having defended its sovereignty and indeed liberty itself against Napoleon and Hitler, Britain now has set out to defend them again. So rule, Britannia — Britannia, rule thyself.

The nations not so blest as thee
Must in their turn to tyrants fall,
While thou shalt flourish great and free,
The dread and envy of them all.