This post was published at WeAreChange
No one else I know can muster as much deep experience and insight into the sprawling, incendiary world of geopolitics as my good friend George Friedman, founder and chairman of Geopolitical Futures; and in today’s Outside the Box – part 2 of my 8-part SIC Speaker Series – George brings all his powers to bear to issue quite a declamatory statement on the present and future of the European Union.
George’s argument can be summarized as ‘the center cannot hold.’ With Brexiteers on its western front and unruly right-wingers on its eastern wing in Poland, Hungary, and the Czech Republic, the EU is sore beset. But as George notes, the center is quietly debating whether that might not be a good thing:
There has been some talk in the central region of either creating a separate union consisting of Germany, France, Belgium and the Netherlands, or creating a bloc within the existing bloc. The point would be for these countries to stop being responsible for countries not ready to operate at the center’s level of performance. It would mean that southern Europe, with its economic problems, and Eastern Europe, with its distinctly different political culture, could go their own way.
That is what I would call a desperate conversation. Far from ever achieving a ‘United States of Europe,’ the EU members will be lucky (or maybe not so much) if they can retain their economic union. George agrees, and he has concluded that dissolution is inevitable:
This post was published at Mauldin Economics on DECEMBER 20, 2017.
Last weekend while I was in Denver, I had the opportunity to speak with a young man from the Netherlands who was attending our charity event.
It was his first trip to the United States, and I’m always interested to hear people’s first impressions.
He told me he was really overwhelmed with the size and scale of everything. China is about the only other country in the world that does everything as big as the US.
He also told me he couldn’t get over how much stuff there is to buy in the US… and how easy it is.
He’s absolutely right. The US is an amazing place for a number of reasons; it’s modern, generally safe, and boasts a high standard of living.
And, yes, as a consumer, it’s one of the best places in the world.
(Though I would suggest that there are parts of Asia that are even better; Hong Kong, for example, has a similar selection of goods and services from all over the world, yet ZERO tax.)
This post was published at Sovereign Man on December 6, 2017.
We always shudder slightly when we discuss ABN Amro, since nothing ever seems straightforward in the ongoing saga of the Dutch bank. However, this time at least nobody has died. In 2015, we notedthat Chris Van Eeghen, head of the bank’s corporate finance and capital markets ‘startled’ friends and colleagues after the ‘always cheerful’ banker reportedly committed suicide. Van Eeghen was the fourth ABN banker suicide since the financial crisis.
When it comes to bonuses, ABN also has a chequered history. The Dutch government nationalised the bank at the height of the financial crisis at a cost to Dutch taxpayers of 22 billion Euros. There was a national outcry in 2015 over bonuses ABN paid to its top executives, as Business Insider reported.
Public outcry over bankers’ bonuses is pretty common, but the anger sweeping the Netherlands, over nationalised ABN Amro’s executive pay packets is on a completely different level. Over the last week, Dutch newspapers Financieele Dagblad and NOS (Holland’s version of the BBC), and other media outlets were awash with debates over the justification of how ABN Amro’s high ranking executives were getting huge bonuses ahead of the bank being re-privatised.
In fact, the outcry was, and continues to be, so bad that Dutch finance minister Jeroen Dijsselbloem delayed the IPO of the nationalised bank at the end of March because the row over giving six executives a 100,000 (73,000) bonus on top of their salaries escalated so greatly.
This post was published at Zero Hedge on Dec 1, 2017.
Co-authored with Craig Tindale.
I recently watched the federal treasurer, Scott Morrison, proudly proclaim that Australia was in ‘surprisingly good shape’. Indeed, Australia has just snatched the world record from the Netherlands, achieving its 104th quarter of growth without a recession, making this achievement the longest streak for any OECD country since 1970.
I was pretty shocked at the complacency, because after twenty six years of economic expansion, the country has very little to show for it.
For over a quarter of a century our economy mostly grew because of dumb luck. Luck because our country is relatively large and abundant in natural resources, resources that have been in huge demand from a close neighbour.
This post was published at Zero Hedge on Nov 15, 2017.
If Europe is driving you nuts, we have some simple advice… head to Finland!
As Statista’s Niall McCarthy notes, according to new Eurostat data released to mark World Mental Health Day, the European Union has about 90,000 psychiatrists in total and Finland has the most per 100,000 inhabitants (23.60) followed by Sweden (23.19) and the Netherlands (22.95).
This post was published at Zero Hedge on Oct 12, 2017.
Accounts of the financial crisis leave out the story of the secretive deals between banks that kept the show on the road. How long can the system be propped up for?
It is a decade since the first tremors of what would become the Great Financial Crisis began to convulse global markets. Across the world from China and South Korea, to Ukraine, Greece, Brexit Britain and Trump’s America it has shaken our economy, our society and latterly our politics. Indeed, it has thrown into question who ‘we’ are. It has triggered both a remarkable wave of nationalism and a deep questioning of social and economic inequalities. Politicians promise their voters that they will ‘take back control.’ But the basic framework of globalisation remains intact, so far at least. And to keep the show on the road, networks of financial and monetary co-operation have been pulled tighter than ever before.
In Britain the beginning of the crisis was straight out of economic history’s cabinet of horrors. Early in the morning of Monday 14th September 2007, queues of panicked savers gathered outside branches of the mortgage lender Northern Rock on high streets across Britain. It was – or at least so it seemed – a classic bank run. Within the year the crisis had circled the world. Wall Street was shaking, as was the City of London. The banks of South Korea, Russia, Germany, France, Belgium, the Netherlands, Ireland and Iceland were all in trouble. We had seen nothing like it since 1929. Soon enough Ben Bernanke, then chairman of the US Federal Reserve and an expert on the Great Depression, said that this time it was worse.
This post was published at Zero Hedge on Aug 9, 2017.
German Finance Minister Wolfgang Schaeuble joined his counterparts from the Netherlands and Austria in calling for a review of European Union bank-failure rules after Italy won approval to pour as much as 17 billion ($19.4 billion) of taxpayers’ cash into liquidating two regional lenders.
Schaeuble said Italy’s disposal of Banca Popolare di Vicenza SpA and Veneto Banca SpA revealed differences between the EU’s bank-resolution rules and national insolvency laws that are ‘difficult to explain.’ That’s why finance ministers convening in Brussels on Monday have to discuss the Italian cases and consider ‘how this can be changed with a view to the future,’ he told reporters in Brussels before the meeting.
Dutch Finance Minister Jeroen Dijsselbloem said the focus should be on E.U. state-aid rules for banks that date from 2013, before the resolution framework was put in place. Italy relied on these rules for its state-funded liquidation of the two Veneto banks and its plan to inject 5.4 billion into Banca Monte dei Paschi di Siena SpA.
The E.U. laid down new bank-failure rules in the 2014 Bank Recovery and Resolution Directive after member states provided almost 2 trillion to prop up lenders during the financial crisis. The BRRD foresees small banks going insolvent like non-financial companies. Big ones that could cause mayhem would be restructured and recapitalized under a separate procedure called resolution, in which losses are borne by owners and creditors, including senior bondholders if necessary.
This post was published at bloomberg
2017 has been a surprisingly kind year for the European Union – so far! Staunchly pro-EU candidates not only survived the gauntlet of national elections in France and the Netherlands but emerged triumphant. The once-imminent threat of political populism is now on the wane, we are led to believe. As if to prove that point, even the UK government is struggling to preserve a united front to see out Brexit after recent elections delivered a hung parliament.
The governments of the EU’s two core nations, Germany and France, appear to share a unified sense of purpose. Merkel has expressed a willingness to go along with two central French demands – the appointment of a Eurozone finance minister and the creation of a common budget – as long as certain conditions are met. ‘We can of course think about a Eurozone budget as long as it’s clear that this is really strengthening structures and achieving sensible results,’ she said.
Ms. Merkel’s surprise overture, however qualified, suggests the stalled process of EU integration could kick back into life sooner than most experts had expected. Particularly surprising is the timing of Merkel’s comments, coming as they do ahead of make-or-break general elections in September.
This post was published at Wolf Street by Don Quijones ‘ Jun 22, 2017.
First the bad news: following Friday’s “tech wreck” European equity markets have opened lower, with the Stoxx 600 sliding 0.9% and back under the 50DMA for the first time since December, dragged by selloff in tech shares, mirroring Asian markets as Friday’s “FAAMG” volatility in U. S. markets spreads globally, battering shares from South Korea to the Netherlands. European banks lag as the Spanish regulator stepped in to prevent another bank collapse, this time of LiberBank which we profiled yesterday, by banning short-selling in the regional commercial bank to mitigate Popular-related contagion.
Samsung Electronics, ASML Holding and Tencent Holdings led declines in Europe and Asia, dragging down benchmark indexes according to Bloomberg. U. S. stock futures, which ignored Friday’s tech move, also fell as markets continue to digest the Nasdaq 100’s plunge on Friday. Europe’s tech index fell as much as 2.8% to put it on track for its biggest one-day loss since October. The index had reached a 15-year high earlier this month and has soared around 40 percent over the last year
This post was published at Zero Hedge on Jun 12, 2017.
The World Economic Forum, in conjunction with Mercers (the actuaries) recently estimated that the combined pension deficit currently stands at $66.9tr for eight countries, rising to $427.8tr in 2050. The eight countries are Australia, Canada, China, India, Japan, Netherlands, UK and US. Of the 2016 figure, $50.5tr is unfunded government and public employee pension promises.
Yes, we are now talking in hundreds of trillions. Other welfare-providing states missing from the list have deficits that are additional to these estimates.i
$66.9tr is roughly 1.5 times the GDP of the eight countries combined, and $427.8tr is nearly ten times. Furthermore, if we take out the non-productive government element, the figures relative to the private sector tax-paying base are closer to twice productive GDP today, and thirteen times greater in 2050. That 2050 deficit assumes a 5% compound annual growth rate. This is a linear projection, but the deterioration in finances for unfunded government pensions may turn out to be exponential, in line with the accelerated increase in the broad money quantity since the great financial crisis.
The problem is mainly in the welfare states, so we know that the welfare states are in big trouble. Governments routinely offer inflation-protected pensions to state employees, funded out of current taxation. The planners in government treasury departments are coming alive to the scale of the problem, though the politicians would rather ignore it. Government finances are already being subverted by both unfunded pension obligations, and by additional rising healthcare costs for aging populations.
Furthermore, people are living longer. Someone born in Japan ten years ago who retires at 60 can expect to live to 107, leaving the state picking up a forty-seven-year welfare and pensions bill. And it’s not much less expensive in other countries, with 50% of North American and European babies born in 2007 expected to live to 103.
The global dependency ratio, those in work relative to those in retirement, is expected to deteriorate from 8:1 to 4:1 by 2050. When most people retire, they stop paying income tax and become a burden on the state welfare system. Therefore, retirement ages must rise. Not only must they rise, but they must rise by enough to pay for those who are otherwise fit but mentally incapacitated by dementia, Alzheimer’s and Parkinson’s, set to spend the last decades of their lives expensively kept.
That is the background to a global problem. But we shall just say ‘poor taxpayers’, and move on. Instead, this article focuses not on the problems of funding state pensions (which is admittedly 75% of the problem), but is an overview on why the current low growth, low interest rate environment is so detrimental to private sector pensions.
This post was published at GoldMoney on JUNE 08, 2017.
The Netherlands is marking the 200th anniversary of the current gold ducat with a special issue featuring the coin’s original design, introduced in 1817.
To mark the milestone, the Royal Dutch Mint has issued the single ducat for 2017 with the design of the thin, armored knight that was used from 1817 until 1986, and with the dual dates of 1817 and 2017. A companion double ducat features the design in use since 1986, and is dated 2017.
The first gold ducat with the legendary standing knight was struck in Holland under the United Provinces in 1586. The first double ducat came from the province of Friesland in 1612. The Dutch Kingdom continued the practice.
The gold single ducat and its companion coin, the gold double ducat, both bear a Proof finish and are only available for pre-sale until the end of May. Sales will then close and the mintage will be restricted to the number of orders received.
This post was published at Coin World
Dutch prosecutors say they have launched co-ordinated raids in several countries against suspected money-launderers and tax evaders.
They are investigating about 3,800 Dutch-linked accounts in an unnamed Swiss bank following a tip-off they could contain undeclared assets.
Paintings, a gold bar, cash, a luxury car and jewellery have been seized.
As well as the Netherlands, there have been searches in France, Germany, the UK and Australia.
The Dutch government has passed information to the other countries about more than 50,000 suspect accounts at the bank.
This post was published at BBC
Gold: $1247.30 UP $2.30
Silver: $18.23 UP 5 cents
Closing access prices:
SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
SHANGHAI FIRST GOLD FIX: 1252.28 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: 1241.50
PREMIUM FIRST FIX: $10.78
SECOND SHANGHAI GOLD FIX: 1260.78
NY GOLD PRICE AT THE EXACT SAME TIME: 1242.46
Premium of Shanghai 2nd fix/NY:$18.32
This post was published at Harvey Organ Blog on March 31, 2017.
Credit Suisse has confirmed that the Swiss bank, some of its employees and hundreds of account holders are the subjects of a major tax evasion probe launched in UK, France, Australia, Germany and the Netherlands, setting back Swiss attempts to clean up its image as a haven for tax evaders.
According to Bloomberg, Dutch investigators seized jewellery, paintings and even gold bars as part of a sweeping investigation into tax evasion and money laundering in the Netherlands. They added that the sums involved amounted to ‘many millions’ of lost tax revenue.
This post was published at Zero Hedge on Mar 31, 2017.
If the ECB scales back stimulus, banks face even greater risk of collapse. But now there’s a new solution.
By Don Quijones, Spain & Mexico, editor at WOLF STREET. Events are moving so fast in Europe these days, it’s almost impossible to keep up. While much of the attention is being hogged by political developments, including the election in the Netherlands, Reuters published a report warning that the European banking sector may face even higher bad loan risks if the ECB begins to scale back its monetary stimulus programs, something it has already begun, albeit extremely tentatively.
The total stock of non-performing loans (NPL) in the EU is estimated at over 1 trillion, or 5.4% of total loans, a ratio three times higher than in other major regions of the world.
On a country-by-country basis, things take look even scarier. Currently 10 (out of 28) EU countries have an NPL ratio above 10% (orders of magnitude higher than what is generally considered safe). And among Eurozone countries, where the ECB’s monetary policies have direct impact, there are these NPL stalwarts:
Ireland: 15.8% Italy: 16.6% Portugal: 19.2%
This post was published at Wolf Street by Don Quijones ‘ Mar 17, 2017.
A general election in the Netherlands on March 15 led to a fragmented parliament, meaning a coalition of several parties will be needed to form a government. Through the results, voters expressed frustration with the establishment parties in power but also mostly rejected extremism.
According to early results, Prime Minister Mark Rutte’s center-right People’s Party of Freedom and Democracy won 32 of the 150 seats in the House of Representatives, clearing the way for Rutte’s reappointment as prime minister. But although Rutte’s party managed to remain the most popular in the country, it lost nine seats from the previous election in 2012. In the meantime, Rutte’s current coalition partners, the center-left Labor Party, suffered a major defeat, falling from 38 seats to only 10.
This post was published at FinancialSense on 03/16/2017.
The diplomatic spat between Turkey and the Netherlands spilled into the internet on Wednesday after a large number of Twitter accounts including news agencies, and political entities were hacked by a pro-Turkish group and posted content supporting Turkish President Recep Tayyip Erdogan in his feud with Europe, with hashtags in Turkish reading ‘NaziGermany’ and ‘NaziHolland.’
As Bloomberg reports, the messages and swastikas appeared on the verified Twitter accounts of German newspaper Die Welt, Forbes Magazine, Duke University, BBC North America, UNICEF, and Reuters Japan. Also targeted were the Twitter accounts of the European Parliament, French politicians like Alain Jupp, Sprint’s CEO Marcelo Claure, among others. The attacks, which appeared to be simply a form of political vandalism, used the hashtags #Nazialmanya or #Nazihollanda.
This post was published at Zero Hedge on Mar 15, 2017.
Dutch citizens will vote today for a new government in one of the most-watched elections in years. While polls have tilted towards PM Rutte’s VVD Party in recent days, the euroskeptic leader of the Freedom Party, Geert Wilders, looks set to gain the most seats but the necessary coalition will be anything but clean (since World War II, it’s taken an average of 72 days to form a government).
The timing of the vote results is as follows (via Bloomberg):
Polling stations across the Netherlands close at 9pm (4pm ET), and counting of the votes, which is done by hand, starts immediately. Polls will still be open for five more hours on three Dutch islands in the Caribbean — Bonaire, Saba and St. Eustatius — but they represent only a tiny fraction of the overall electorate of 12.7 million.
This post was published at Zero Hedge on Mar 15, 2017.
It is fitting that just a few hours until the Fed’s second rate hike in two quarters, and one day after Goldman downgraded global stocks to Neutral for the next 3 months, not to mention with the results of the anticipated Dutch election due shortly, that global stocks as well as S&P futures are higher, while crude oil has finally managed to stage a rebound as the Dollar DXY index is fractionally in the red.
In addition to the Fed, a barrage of monetary policy decisions at the BOE, the BOJ, the SNB and Bank of Indonesia within the next 36 hours were further reasons for investors’ cautious stance.
East Coast traders return to their desks following a rather disapponting nor’easter, where they will be prompted bombarded by data over the next 2 days. Here is a quick summary of main events over the next 36 hours courtesy of Bloomberg:
The Fed’s decision will be announced at 2 p.m. in Washington, followed by Chair Janet Yellen’s news conference a half hour later. Investors are focused on any hints of a change in the number of increases the central bank foresees this year. Wednesday’s vote in the Netherlands will deliver a reading on the state of populism in Europe as races in France and Germany heat up. The Bank of Japan is set to keep its rates and yield-curve policy unchanged in its policy decision on Thursday. The Bank of England, Swiss National Bank and Bank Indonesia are also expected to stand pat with policy decisions. U. S. Secretary of State Rex Tillerson travels to Japan, South Korea and China in his first visit to the region since taking office. U. S. President Donald Trump’s first budget outline for fiscal 2018 is expected on Thursday. He’s said he’ll seek a $54 billion boost in defense spending, paid for by an equal amount of cuts to non-defense agencies.
This post was published at Zero Hedge on Mar 15, 2017.