Saturday, 11 February 2017

Weekend Update 11/02/2017 – Germany Tries to Square the Circle.

Donald Trump is not just a problem for the EU, but for the whole world.

Martin Schulz. German SDP leader.

We focus this weekend on Germany, the current President of the increasingly acrimonious G-20. With GB leaving the EUSSR, Germany will have to pick up the lion’s share of GB’s former contribution, the second largest in the wealth and jobs destroying, dying EUSSR. And that at a time when President Trump is calling on all NATO members but three, to live up to their pledge to spend at least 2 percent of GDP on their defence. In addition to the USA, only the UK, Poland and Latvia comply.

Below, China asks Chancellor Merkel to square the circle. So far, as seen from London, President Trump seems to be in a ”take no prisoners” mood with Germany. Next month’s G-20  meeting looks set to be the most interesting in years.

“The EU has been created as a tool for solving problems, but many people think of it as a part of the problem rather than a solution.”

Martin Schulz. German SDP leader.

Germany wants G20 to keep language on trade, currencies, climate: sources

Thu Feb 9, 2017 | 4:37am EST
Germany will press the Group of 20 to reaffirm its commitment to promoting free trade, resisting currency wars and fighting climate change when finance ministers meet next month for the first time since the election of Donald Trump, G20 sources said.

But the sources said there was far more uncertainty than usual surrounding the drafting of the G20 communique because of the Trump administration's confrontational rhetoric on trade and currencies, and its scepticism about whether humans are contributing to global warming.

Germany, which holds the rotating presidency of the G20, is in the awkward position of having to forge a consensus on a range of global issues without a clear sense of where Washington stands and amid pressure from China to push back against Trump's protectionist language.

"The Chinese want the G20 to reaffirm the importance of free trade, a cooperative financial order, and the fight against climate change," one German official told Reuters on condition of anonymity. "The challenge is to do this without giving it an anti-U.S. flavor."

The German government declined to comment.

The sources said it was too early to say whether there would be a major clash at the March meeting of finance ministers in the western spa town of Baden-Baden, describing the outcome as wide open.

But one G20 source said that Germany would push to preserve the essential elements of what has been agreed by the G20 in past years. Another source said currencies would "definitely be discussed".

In its 2016 communique, the G20 agreed to "refrain from competitive devaluations" or any targeting of exchange rates for "competitive purposes."

Merkel says euro zone must remain one bloc

Thu Feb 9, 2017 | 2:48pm EST
The euro zone must remain as one bloc, German Chancellor Angela Merkel said on Thursday, urging members of the single currency bloc to deliver on their common commitments.

"For me it is not a matter of two speeds within the euro zone," Merkel said. "The euro zone must remain together. And what we agreed on should be delivered together by all the euro member states."

Finance Minister Wolfgang Schaeuble said on Wednesday that Greece would have to leave the euro zone if it failed to meet its bailout commitments.

"The pressure on the Greeks to undertake reform must be maintained so that they become competitive, otherwise they can't remain in the currency area," Schaeuble told public broadcaster ARD.

Next, more on the arrogant German old socialist who wants to replace Migrant Mad Merkel and boss around Europe and President Trump. If he wins power in Germany later in the Autumn, continental Europe will split, though the next G-20 meeting with Trump v Schulzy in 2018 will be epic.

'Many of my colleagues say behind closed doors: 'Don't stop a rolling stone. If the Brits want to leave, let them leave' 

Martin Schulz. German SDP leader.

SPIEGEL Interview with Martin Schulz'The Trump Approach Will Never Be Our Approach'

Martin Schulz, the former president of European Parliament, is now running against Angela Merkel for the German Chancellery. SPIEGEL speaks with him about populism, the stability of democracy and Donald Trump.
February 08, 2017  03:01 PM
----- SPIEGEL: Donald Trump was successful in reaching out to those American men and women who have been left behind -- the workers and normal people who used to vote for the Democrats. What can the SPD learn from Donald Trump's electoral success?

Schulz: People must once again be able to trust that Social Democratic politicians understand the lives they live. I can say that of myself. I know their problems: the problems of those who work hard, who must slave away. The couples who have two incomes but who can nevertheless barely cover their rent. The people who get stuck in traffic on their way to work. The people who have to wait in vain for a train to come just as they are supposed to be picking up their children from daycare. I can say with a clear conscience to those people: I understand your problems. And I will do all I can to decrease them.

SPIEGEL: Can you also learn something from the way in which Trump led his campaign?

Schulz: Yes. That one shouldn't run such a campaign under any circumstances. What baseness! The overstepping of all bounds necessary for the fundamental consensus of democracy! It takes my breath away.

SPIEGEL: Do you believe that Trump is a danger to democracy?

Schulz: Very much so. A person who brings the former head of the right-wing extremist Breitbart News into the National Security Council is gambling with the safety of the Western world. Donald Trump must be taken seriously. He is fulfilling his dangerous campaign promises.

SPIEGEL: Horst Seehofer, the head of the CSU, recently praised exactly this aspect of Trump's leadership.

Schulz: That astonished me. If we, like Horst Seehofer, no longer judge the content of people's actions, but merely their form, then we are entering dangerous times indeed.

SPIEGEL: How should Germany react to Trump?

Schulz: With a real strengthening of the EU. Trump has a clear goal: the division of Europe and the destruction of the European domestic market. The fact that Brexit propagandist Nigel Farage was the first European he received in his tower speaks volumes. That is why we must strengthen the European domestic market and work even more closely together in Europe. That is absolutely compulsory for Germany.

SPIEGEL: Do you think that Angela Merkel has thus far struck the correct chord with respect to Trump?

Schulz: Trump is the freely elected president of the U.S. and as such deserves respect. But she cannot remain silent in the face of actions that we cannot accept. Gerhard Schröder offered a clear German NEIN to an American president's war of aggression that was in violation of international law. That took courage. Ms. Merkel did not join him at the time. If Trump now begins to take the wrecking ball to our set of values, we must say clearly: That is not our approach.

SPIEGEL: What will the long-term consequences be of Trump's recent travel ban on the citizens of seven primarily Muslim countries?

Schulz: Such a generalized assessment of people is unacceptable. I find it shocking, particularly for a country which, more than any other, always stood for freedom, tolerance and immigration. (…...) For the United States of all countries to issue such a decree shows that we are living through an epochal shift. If we aren't careful, the elementary foundations of our pluralistic democracy will be threatened.

SPIEGEL: How would you deal with Trump were you to become chancellor?

Schulz: It is impossible to swear an oath to the German Basic Law without realizing that our constitution is among the most liberal constitutions in the world. As the head of government in such a country, I would stand up to all those who call into question this free, open and tolerant model of society.

"When it becomes serious, you have to lie"              

Jean-Claude Juncker. Failed Luxembourg Prime Minister and ex-president of the Euro Group of Finance Ministers. Confessed liar. EC President.

In Brexit news, UK Plc will do just fine after the EUSSR.

Apple CEO Cook 'optimistic' about UK's future after Brexit: BBC

Thu Feb 9, 2017 | 3:44pm EST
Apple Inc (AAPL.O) Chief Executive Tim Cook told Prime Minister Theresa May the company was optimistic about Britain's future after it leaves the European Union, the BBC reported on Thursday.
Cook met May at Downing Street and said he thought the UK would be "just fine" outside the European Union, BBC said.

Apple could not be immediately reached for a comment.

Last year, Apple said it was moving its London headquarters to the landmark Battersea Power Station, a move that was hailed by the government as a sign that major firms are still investing after the Brexit vote.

BOE Nears Its 2% Inflation Target for First Time in Three Years

by Fergal O'Brien and Harumi Ichikura
U.K. inflation is almost back on target.

Economists forecast that consumer-price growth accelerated to 1.9 percent in January, part of an upward trend that’s expected to continue through this year. While the prediction would leave inflation just shy of the Bank of England’s 2 percent goal, last hit in 2013, there have been upside surprises for the past two months. The 1.6 percent pace recorded in December beat a 1.4 percent median estimate.

Forecasts in the survey for January range from 1.7 percent to 2.1 percent.

----While Governor Mark Carney has kept the central bank in a neutral stance -- where interest rates could go up or down depending on the outlook -- some policy makers have begun to sound the alarm on inflation. Monetary Policy Committee member Kristin Forbes said this week that the pace of the economy, coupled with the outlook for price growth, could mean tighter policy will be justified soon.

We close for the week with Trumpmania. The man has a plan from Goldman Sachs. Poor sclerotic, dying Europe is becoming irrelevant. Everyone is moving on except Europe. Still it might be a good time to add to holdings of fully paid up physical gold and silver.

White House: Cohn-Led Tax Plan Is Real and It’s Phenomenal

by Margaret Talev
Former Goldman Sachs Group Inc. president Gary Cohn is leading the effort to craft President Donald Trump’s plan to overhaul taxes that will be released within weeks, a White House official said.

Unnamed congressional leaders have been consulted on the blueprint, the official said. It’s separate from Trump’s proposed budget, the official said, requesting anonymity because the plan is still under development.

During a meeting at the White House with U.S. airline executives Thursday, Trump said he had a “phenomenal” plan to revamp business taxes that would be revealed within the next two or three weeks, without offering details. White House Press Secretary Sean Spicer told reporters later that day that specifics would emerge only in the coming weeks. Still, he said the White House is at work on an outline of the most comprehensive business and individual tax overhaul since 1986.

Cohn, 56, stepped down as Goldman’s president and chief operating officer in December after agreeing to lead Trump’s National Economic Council, an influential panel that helps coordinate and develop the president’s economic program. He was long seen as the heir apparent to the bank’s Chief Executive Officer Lloyd Blankfein.

During a news conference Friday with Japanese Prime Minister Shinzo Abe, Trump said he was working with House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell on the tax measure, which would be guided by an “incentive-based policy” and released “over the next short period of time.”

Congressional leaders weren’t commenting on Trump’s tax plans. Staff members in the offices of Ryan and Ways and Means Chairman Kevin Brady referred questions about it to the White House. A spokesman for McConnell had no immediate comment after a scheduled meeting Friday between the Kentucky Republican and the president.

There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.

Ludwig von Mises.

As usual at the weekend, we end with an update from Jason in California. The Trump era is certainly different to the lethargy of the Obama era.

Fervor Over “Travel Ban” Exemplifies Trumpian Shift in American Political Discourse
N. Jason Jencka  February 11th 2017  2:20 am ET
In a few short days, a calendar month will have passed since Donald J. Trump became the 45th American president. In this time, the cable-news networks have careened between coverage of a litany of presumed cataclysmic events from contentious Cabinet member conformation hearings to the issuance of a litany of Presidential executive-order. One such executive order though has garnered attention that surpasses that of all the others combined. This is the so-called “travel ban” that temporarily (for 90 days) bars entry to the country from Iraq, Syria, Iran, Sudan, Libya, Somalia and Yemen. Additionally, the order freezes refugee applications for a variable period from 90 days to “permanently” in the case of Syria. 

While commentators in the national media have covered the sometimes dramatic stories of those with impacted travel plans, one reality gets very little attention: This is that a majority of Americas (55% per a recent Politico/Morning Consult) poll actually are in favor of the restrictive policy. Fifty-five percent is a particularly striking figure considering that President Trump’s polled approval rating rests below 45%. Polling figures such as these suggest that “Trumpian” policy on sensitive issues may be more popular than the bombastic businessman himself. A shift of this nature represents a 180 degree shift from former President Obama who consistently saw higher personal favorability relative to responses to his legislative agenda. Following from the example of the 2016 election cycle, featuring a ritual-like reading of the polls at each rally, President Trump is acutely aware and indeed motivated by this polling data as the Administration navigates the process of defending his most controversial actions.


N. Jason Jencka is presently studying Finance and Economics at Sierra Nevada College, located near the shores of Lake Tahoe on the border of California and Nevada. His interests include the interplay between world markets and the global political sphere, with a focus on developments of both sides of the Atlantic in North America and Europe. In his leisure time he enjoys connecting with those people that have an interesting story to tell and a genuine desire to make an impact in the world.

No comments:

Post a Comment