European Data Shows: Deflation Does not Exclude Economic Growth

While Mario Draghi is pursuing his campaign against deflation that is allegedly so bad for the economy, almost all European countries with deflation have recorded quite a significant GDP growth in the 2nd quarter 2016. The only one deflation-country that is still in recession is – not surprisingly – Greece. Poland, Slovakia and Romania with an over-one-year deflation are at the fore of the EU fastest growing states.

Greece’s deflation has lasted for more than three years, but this is a special case of economics. Deflation in Cyprus has also been lasting for more than three years and still the island has been able to boost its economy. Poland, Slovakia and Romania with their longer-than-one-year deflation are in the vanguard of the European GDP growth. Short-term deflation has not damaged Spanish, Bulgarian or Hungarian growth either. Continue reading →

Breaking the Siege of Aleppo Will Make Erdoğan the father of all Sunni Muslims

The events in Syria are changing rapidly. Turkey has entered Syria and is heading for Al-Bab, a city 35 kilometers from Aleppo, according to a Turkey government official and a statement issued by the Turkey-supported Muslim militia united in the FSA (Free Syrian Army).The next step is lifting the siege of Aleppo from the east. Atatürk became the Father of all Turks after he had won the Battle of Gallipoli and defeated major European powers; Erdoğan will be the father of all Sunni Muslims if he liberates Aleppo and thus gains the upper hand over Russia and Iran.

Russia, the Kurds, and the Syrian army were very close to cutting off the Raqqa-Turkey supply route. Turkey’s invasion is a gift from heaven for the Jihadists in Raqqa: it prevents them from being cut off from Turkey. Turkey’s invasion of Syria is clearly to the advantage of ISIS.

Turkey’s objectives in Syria have always been clear and these are to:

1. prevent the Kurds from gaining autonomy, destroy the YPD, the sister organisation of the PKK, and
2. remove Assad from power.

Continue reading →

Poland Should Rethink its Defense Strategy

It was 77 years ago today that the Second World War began. Early in the morning on September 1^st German troops violated the country’s territorial integrity along all of the shared borderline and later that same day Chancellor Adolf Hitler delivered a speech in the Reichstag some of whose words went down in history: Polen hat heute Nacht zum ersten Mal auf unserem eigenen Territorium auch mit bereits regulären Soldaten geschossen. Seit 5:45 Uhr wird jetzt zurückgeschossen! Continue reading →

Apple Ruling is a Retaliation for US Unjustified Fines on EU Banks

Apple’s $14 billion EU tax fine, and the suspension of the TTIP negotiations cannot come as a surprise; they are a clear retaliation for the totally unjustified penalties the US authorities imposed on European banks during the period between 2009 and 2014.

These fines were based on a change in U.S. regulations made in the second half of the 2010’s, i.e. that all operations done in dollars need to conform to American regulations. As the Dollar happens to be the world’s reserve currency, the US unilaterally expanded its jurisdiction on all other nations. The U.S. has the power to subjugate their partners to their authority and hand over some of their sovereignty to the ruling elites in Washington. BNP Paribas was forced to pay $8.9 billion to Washington regulators. The extraordinary high penalty on the French bank was for all intents and purposes a humiliation of France. Continue reading →

Middle East Oil Challenges Russian East-European Oil Cartel, But it is Not a Game Changer

Russia still has supremacy over Central and Eastern Europe, especially over its crude oil market. However, Middle-East countries like Saudi Arabia, Iraq and Iran, have entered this traditional Russian trade because every oil producing country is searching for new markets and bigger market share regardless the price.

Last year, oil from the Saudi Kingdom arrived in Poland for the first time, and in August this year Iranian crude has come back to the Polish market after it has been absent for a couple of years. Hungary, the second biggest export destination for Russian oil in the region, has increased the import of fuel from Iraqi Kurdistan, while Ukraine, the greatest adversary of Russia, is trying to become the gate to Eastern and Central Europe for National Iranian Oil Company. It appears that the energy supply security has increased in the region, but will oil from the Middle East be a real secure alternative to the Russian Urals oil? Continue reading →

Europe’s road to war: NATO Failures and Infighting

NATO has become a liability to the security of Europe. NATO operations across the globe have emboldened Islam extremism in North Africa and Central Asia. NATO failed the European people as the organisation is completely absent now thousands of Arabs poring into the continent.
By expanding NATO into the former Soviet Union, NATO for all purpose and intention makes West Europe part of the brewing ethnic conflicts between the old Soviet republics.
The relation among the NATO members themselves is hostile. The relationship between Turkey and Greece is hateful. The Washington and European ruling elite supported the coup in NATO country Turkey while Turkey has no problem to destabilize its NATO comrade Germany as it sends million Arabic young men into Europe’s Heartland.

Hedge-fund manager Kyle Bass Was Wrong on Japan and the Yen.

In 2013, Kyle Bass from Hayman Capital predicted a loss of confidence in the Japanese Yen, and that the dollar will consequently rise far over the 200 yen.

Kyle argued: “you have to realize when your debt is 24 times central government tax revenue, and you have a secular decline in population…what happens when you have a debt crisis? Well, your currency collapses.”

We never believed this would happen, and as we wrote in February, we expect the Japanese Yen regain value. Since then the yen rose more than 10%.

We cannot understand how Japanese public debt can crush the Yen as long as foreign investors do not hold Japanese debt. Japanese fiscal and monetary policy kept the Yen relative cheap and Japanese authorities struggled to prevent the Yen from gaining value. We cannot follow Kyle Bass reasoning. Unless you assume the Japanese public debt was issued to foreign creditors to keep the Yen expensive as is the case with the dollar, Japanese government debt cannot crush the currency. Continue reading →