So, as I said the other day when discussing my 2017 Preservationist ‘Talent Stack’, I have been diving into economics and becoming a big ol’ nerd in that regard. Now… don’t worry men…. I’m not gonna becoming some uber-nerd Autiste discussing von Mises and engaging in Ayn Rand fan-fic, nor am I going to really go off the deep end and become a Libertarian(!)…I’m not that far gone.
Rather I am interested in economics for two reasons: 1) to help me better invest and handle my entrepreneurial ventures and protect my family, and 2) better understand how war will arrive in Europe, and better figure out what the large 4GW non-state actor force we are a part of can do to topple the corrupt Western European governments busily committing civilizational suicide (and allowing the wholesale rape of their nations’ children and the steady advent of real-life-horrific-as-you-can-imagine-war).
So as a result this article contains five semi-economic observations I think are important to the events we are witnessing on the continent and across the world as a whole.
One: Germany As Hostage Taker
This something I didn’t realize but is very relevant. To segue into it I will quote an excellent economics blog I have been reading lately called Capitalist Exploits.
Here it is:
I’m not sure if you saw it but 3 weeks ago the obvious was finally laid out to bare by none other than Mario Draghi.
“If a country were to leave the Eurosystem, its national central bank’s claims on or liabilities to the ECB would need to be settled in full.”
Even though the pressures have been mounting, there has been scant comments from the elites with regards to the question on everyone’s lips. What happens when/if a member state actually leaves?
Draghi’s threat to member states who are checking the exits and considering their alternatives is the first real public step towards acknowledging the problems.
As Reuters reports:
“Based on data to end-November from the Target 2 payment system, that would leave Italy with a 358.6 billion euro ($383.1 billion) bill. The system records flows of payments between euro zone countries.
The threat of defaults on cross-border debts has often been credited as one element keeping the euro zone together throughout the financial crisis.
As these payments are not generally settled, weaker economies including Italy, Spain and Greece have accumulated huge liabilities towards Target 2 while Germany stands out as the biggest creditor with net claims of 754.1 billion euros.”
Basically what the article explains is that any country wanting to leave the Eurozone (France, Italy, Greece, whomever) is immediately liable for all debts owed to the Eurozone. Now I don’t totally understand what the means, or if the debts are owed to the EU itself or the European Central Bank or to Germany and other specific countries or a mix of all those things, but irregardless it seems to a bit of a big deal.
It also paints Germany in an even worse light (depending on what perspective you are taking). Not only has it- with Angela Merkel at the rein- built up this massively powerful and bureaucratic mega-entity of the EU, with negative effect after negative effect rippling across the continent, not only is it twisting these poor, financially illiterate Southern-European governments/countries for every dime they foolishly borrowed, not only is it imprisoning citizens for questioning mass immigration, not only is it threatening Hungary and Poland if they don’t take infinity Muslims, it also holds a symbolic gun to the head of any of those countries who wish to leave.
I’m not sure what the long-term effect of this is, but it is certainly one more layer of dysfunction embedded in the toppling house of cards that is liberal, globalist Europe.
Two: Why Turkey Is So Confident
In recent days, as VivatEuropa helpfully pointed out and linked to, Turkey has a) encouraged Turks in Europe to have big families to demographically take over the continent, b) threatened to release massive numbers of (young, male) ‘refugees’ to swarm northward across the EU, and c) thrown out a bunch of other threats and invectives, even referring to Turks in Europe with the Ottoman word for ‘advance troops’.
They are obviously confident, and I think the reason can be explained in economic/demographic terms.
Turkey’s birthrate (ironically) dropped to around 2.0 children per woman ten-fifteen years ago. Erdogan understands demographics, and this means that they are on the cusp of a 25-30 year period of profound economic strength. The reason is that this means they will have a bulge societally in the 30-55 year old demographic, with smaller numbers of old people and children (dependents). Those in the 30-55 year old age range are the most economically productive members of society, and this is why Japan, the US, Western Europe, and China all had economic boom times when their demographics were at equivalent points following their own respective birthrate drops.
Now of course eventually when this period passes Turkey’s economic growth will slow back down (presuming their birthrates don’t go back up of course), but that is far in the future, and if they play their cards right and things don’t change they will probably rule half of Europe by that point anyway (unless folks like us are successful of course).
Three: In Europe, Muslims Are Like Old People
This point underscores the fact that ironically the economies in Europe are being HURT by the exact same forces the Turkish economy is being HELPED by.
This is because young Muslims in Turkey are driving its economy by starting businesses, working jobs, buying products, starting families, etc. They are driving growth in every sense of the word.
In Europe, if you were looking down from on high, you might think the same thing was happening, but the difference is that there, they are on the whole net liabilities on the economy. The migrants and ‘refugees’ coming into Europe are not working, they are not starting business, they are living in government subsidized housing, they are eating government paid for food, they are receiving government-sponsored welfare checks, and (occasionally) being prosecuted in taxpayer-funded courthouses.
Tragically, these millions upon millions of young, 18-30 year old migrants that Europe is taking in, are the economic equivalent of 85 year-old old ladies, or 2 year old orphans whose every need must be paid for by the state.
With Europe already in debt up to its eyeballs and with its own population being older than any in the history of the world (apart from present day Japan perhaps), it has for all intents and purposes imported what economically amounts to an army of geriatrics, only these ones are angry young Muslims with sky-high asabiya and disdain/hatred for their adoptees.
Four: The Fed Are Like College Professors
This is shifting gears a bit but is something I found interesting.
It comes from Robert Kiyosaki at Rich Dad Radio. Kiyosaki is the author of Rich Dad, Poor Dad, the greatest financial literacy/self-improvement book ever written. I have read it and every other book he has written a dozen times, they are incredible.
He does a weekly radio show/blog where he interviews people about economics and investing and building wealth.
I can only link to the radio show as a whole and not the individual episode, but he recently interviewed two authors about the Fed (or Federal Reserve) in the United States.
It was very interesting and actually most people do not even know what ‘the Fed’ truly is. Arguments were given on both sides about whether one could accurately call the Federal Reserve
‘conspiracy-theory based’ or dangerous or just inept. Koyasaki’s position was that it is basically inept. He argues that the people who sit on it, and its Chairman (Chairwoman) Janet Yellen, are basically academic egg-heads who have spent all their lives in universities and have absolutely no idea how the real world or business works.
His two guests had somewhat similar but different positions, but all three agreed that the Federal Reserve is engaging in disastrous decision making that is likely going to make the coming economic crash they all predict that much worse.
From my own layman’s economic theorizing it seems the next crash will be based around (among other things) commercial real estate, retail, auto loan defaults, and student loan defaults (or those will be its symptoms at least), and if the debt-fueled economy as a whole really goes belly up, that will certainly have significant influence on the political situation in both America with Trump and in Europe.
That brings us to the final observation.
Five: Things Bode Well For Europe
When I say this, I mean they bode well for us – we that want to see the Merkel’s and Hollande’s and other war criminals fall, to be replaced by patriots who will right the sinking ship of Europe.
The reason that I believe things bode well for us is that it seems to me (from all this reading I am doing) that when things start to go downhill, massive amounts of money will go to where it is considered safest.
Even though it is likely the United States economy will be reeling too, it will still be the best of a bunch of bad bets.
I’ll again quote Capitalist Exploits:
When allocating capital, imagine for a minute you’re managing a few billion dollars (as I know some of you are). Now let me ask you where you’re going to allocate looking out over the next couple of years?
Europe? Looks to be on the precipice and uncertainty is rising, not falling
Emerging markets? Lost $60 billion in December and are typically considered more of a “risk on” trade
A blow up in Europe, which looks more and more inevitable with each passing day, will see capital flee to the land of warm apple pie.
This will have to go somewhere, and so much of it will go into treasuries causing the dollar to strengthen and stoke inflationary fears.
Much will head into equities too.
This too will stoke fears of inflation and the clowns Fed who are way behind the curve already will scurry to catch up, raising rates. Ironically, raising rates will further exacerbate the spreads between US and non-US paper causing more capital to head to the US, creating a self perpetuating cycle.
This will actually be highly contractionary for the global economy as it will cause further dollar funding shortages (read my piece on the eurodollar market for more on this topic).
As the rest of the world contracts, the US will seemingly appear to be the only safe place to park capital. More self perpetuating capital influx.
So, while normies across the land currently have a 10% chunk of their massive, collective 401k hopes invested in Europe through ‘international’ funds, and while Hedge Funds from Aruba to Switzerland have investments made in Stockholm Migrant Housing, Inc, and a bunch of German and United Kingdom real estate REIT’s, all that money will be rapidly sucked out of the Eurozone once thing start to fall apart.
All these economic folks I have been reading are predicting that Europe will fall apart, and they aren’t even focused on the social (mass-immigration) side of things. We know that the situation in Europe is a thousand times worse than most people are aware of, and the combination of all these factors suggests very fluid times in Europe.
That is hopeful, for fluid is EXACTLY how we need things to be.