dominance Archives - The Automatic Earth

US President Donald Trump has recommended a “straight 50% tariff” on the entire European Union, citing a $250 billion yearly trade deficit with the bloc. He suggested that the new rate will start being applied on June 1. Writing on his Truth Social account on Friday, Trump suggested that the EU was initially formed “for the primary purpose of taking advantage of the US on Trade,” and stated that the bloc has been “very difficult to deal with.” He further claimed that the EU’s economic policies, taxes, regulations and “unfair and unjustified lawsuits against American companies” have led to a trade deficit with the EU of “more than $250,000,000 a year,” which he described as “totally unacceptable.”

“Our discussions with them are going nowhere! Therefore, I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025,” Trump announced, adding that there would be no tariff on products “built or manufactured in the United States.” In April, Trump imposed a sweeping 20% tariff on all EU goods as well as a 25% tariff on all car imports and metals. However, he later suspended the 20% levy for 90 days, keeping only a 10% baseline tariff.Last week, the US president stated that the EU had proven to be very difficult to deal with regarding trade practices, claiming that the bloc was “in many ways nastier than China.”

“They treated us very unfairly,” Trump said. “They sell us 13 million cars; we sell them none. They sell us their agricultural products; we sell them virtually none,” he claimed, vowing that Washington would “equalize” the situation and that “Europe is gonna have to pay a little bit more…. And America is gonna pay a lot less.” Friday’s announcement comes as Trump has significantly revamped Washington’s tariff policies since returning to office in January, claiming that the entire world had supposedly been taking advantage of the US. On April 2, which he dubbed “Liberation Day,” Trump imposed a baseline 10% tariff on all goods imported to the country as well as additional surcharges on countries such as China, Mexico and Canada, citing significant trade imbalances.

Shortly after the move, he suggested that the US would later negotiate individual deals with all US trade partners. However, earlier this month, he announced that Washington would set the terms unilaterally. He explained that “it’s not possible to meet the number of people that want to see us,” claiming that the US had received deal requests from some 150 countries.The White House has not yet disclosed the terms of these deals or the exact rates that would be applied.

Imagine the Vatican as a venue for negotiations, it is a bit inelegant, I would say, when Orthodox countries will discuss issues related to the elimination of root causes on a Catholic platform..”

• Lavrov: Zelensky’s Legitimacy Will Make or Break Ukraine Peace Deal (Sp.)

Russia is ready to negotiate with Vladimir Zelensky and his administration on the principles of resolving the Ukrainian conflict, but the question of his legitimacy will be decisive when it comes to signing the settlement documents, said Russian Foreign Minister Sergey Lavrov.“The President [of Russia Vladimir Putin] clearly outlined our position regarding the degree of legitimacy of Zelensky and his regime. He emphasized that we do not refuse contacts with him and his administration in order to agree on principles of settlement that are acceptable to all. The other matter is when it comes to signing — that’s where the question of legitimacy will be decisive, because if those sign who, to put it mildly, no longer convince anyone of their legitimacy, then successors may challenge the agreements reached,” Lavrov said at the conference “Historical South Russian lands, national identity, and self-determination of peoples.”

Russia stands for negotiations with Ukraine, and there will be a second round of talks, Lavrov added. “We have always stressed at the highest level and at other levels that we are ready for peace talks that will be devoted to understanding and eliminating the root causes of this crisis,” Lavrov said. The dates and the venue of the next round of negotiations with Ukraine have not yet been set and are being determined, Lavrov added. “I want to say do not waste mental abilities on working out options that are not very realistic. Imagine the Vatican as a venue for negotiations, it is a bit inelegant, I would say, when Orthodox countries will discuss issues related to the elimination of root causes on a Catholic platform… I think it will not be very comfortable for the Vatican itself to receive delegations from two Orthodox countries in these conditions,” Lavrov said.

Lavrov noted that Russia is working on a memorandum on Ukrainian settlement, which is at an advanced stage, Moscow will in any case submit its proposals to Kiev.Ukraine hoped that the US support would be eternal, but the position of US President Donald Trump is that “this is not his war,” Russian Foreign Minister Sergey Lavrov said. “They [Kiev] expected that the support of the West, including the United States, would be eternal, they would always be allowed everything, but President Trump showed a different understanding of the situation. He repeatedly emphasizes that this is not his war, this is the war of [former US President Joe] Biden. That is the way it is,” Lavrov said at the conference Historical South Russian Lands, National Identity and Self-determination of Peoples.

“The IQ of people at the top in Brussels is at dismembered worm level, exemplified by the Estonian batshit crazy chick in theory representing the foreign policy of 450 million EU citizens..”

• European Kakistocracy Locked In A Forever War Against Russia (Pepe Escobar)

Never interrupt your enemy when he is committing serial suicide (in reverse American gore-style, when the serial killer always resurrects). In the case of the EU kakistocracy, serial self-destruction is always a given, and always skyrocketing. So the EUrocrats in Brussels have just adopted their 17th round of sanctions against Russia – the sky is the limit – targeting nearly 200 tankers of the so-called Russian shadow fleet. The package, endorsed by EU member states, includes proverbial scores of asset freezes and visa bans. The EU + UK combo is also scheming how to tighten the oil price cap on Russia to $50 a barrel, aiming to “hurt” Russia’s energy revenue. Cue to a monster pipeline of laughter from the whole Global South, especially India and China. As if they would impeach any vessels of the shadow fleet, or if OPEC+ would care about a puny unilateral EUrocrat oil price cap.

To qualify EU actions as self-destructive anti-intellectualism is actually benign. The IQ of people at the top in Brussels is at dismembered worm level, exemplified by the Estonian batshit crazy chick in theory representing the foreign policy of 450 million EU citizens. Brussels has been reduced to a pathetic Estonian propaganda snake pit with a whiff of British accent. The SVR has noted how there is a groundswell of despair in Brussels for the “mistake” of appointing the imbecile Estonian, universally known for “absolute incompetence” and a cringing “inability to build bridges” with EU leaders. She has already been removed from EU strategic defense policy planning. Still, the sanctions package dementia will keep rollin’ on – redacted by careerists with fat salaries who only care about their own retirement gold package.

The next, the 18th, is supposed to be the largest sanctions package in History, according to the Brussels rumor mill, not only accusing Russia of multiples stances of Hybrid War and alleged use of chemical weapons (when it’s actually the neo-nazis of country 404 who resort to it) but targeting several Russian defense sector companies plus companies and intermediaries from third countries supplying sanctioned products to Russia. Add to it the German BlackRock chancellor actively lobbying for an EU ban on the Nord Stream pipeline – blocking any possibility of a U.S.-Russia business cooperation, already signaled by Trump. This ban will be part of the 18th package.

Cue to Grandmaster Sergey Lavrov, who recently felt the need to emphasize that political EUro-trash banning the return of NordStream are “either sick or suicidal.”

On the Baltic front, there’s more, of course – in a “Pirates of the Baltics” register: that’s the SIGINT-heavy Baltic Sentry mission, which aims to block Russian maritime activity. France is on it – which implies a non-regional NATO member directly involved, unlike, for instance, Norway. The Russians are unfazed. A strong possibility is that they will escort Russian ships with multi-functional naval and aerial drones fully equipped with reconnaissance and combat gear. Yet on the Orwellian front, nothing beats the anti-Russian “tribunal” announced on May 9 by EU foreign ministers in Lviv, together with Kiev, to “hold top representatives of the Russian leadership accountable.” That involves 30 partner countries, incuding UK and Australia. The U.S. is out.

The scam was minutely deconstructed by Thomas Roper, who is now viciously demonized and censored by the EU, even though he is a journalist and EU citizen of German nationality. Yes, Brussels now sanctions its own citizens capable of critical thinking, to the point of freezing their assets and forbidding them to visit their home country. And this is just the beginning. The new EU kangaroo “court” will be set up by the Council of Europe – and will issue judgments even in absentia, via 15 judges elected for 9 years each, the whole thing costing the EUrocracy around 1 billion euros. Needless to add that this kangaroo “court” has absolutely no basis in international law, as it’s not approved by the UN; instead, it’s a private club of the fragmented West. Follow the money to understand the rationale.

Few people today remember that last year the European Commission (EU) gave a $50 billion loan to Kiev; actually $35 billion by the EU and $15 billion by the G7. The problem is only Brussels is responsible for repaying this joint EU-G7 loan. And the loan is supposed to be paid from the annual revenues generated by Russian assets frozen – i.e. stolen – in the EU, which Brussels refuses to release before the next 45 years. These are all official EU decisions, enshrined in Regulation 2024/277. Translation: no, I repeat, no European mainstream media has informed taxpaying citizens across the union that the EU has formally decided to be at war with Russia for at least the next 45 years. Brussels has done everything trying to steal for good the “confiscated” Russian assets. The problem is the EC EUrocrats have not found a mechanism to bypass international law.

Enter the “court”. The EUrocracy will force the kangaroo “tribunal” to blame Russia for everything related to the war and the SMO; sentence Russian government members to long-term prison sentences – in absentia; and then decide that Russia has to pay reparations. Endgame: the kangaroo “court” decides to steal for good the frozen Russian assets.Once again: under international law, this is a robbery. Key inevitable consequence: no one across the Global South will trust the euro and European financial centers anymore. This Russian demonization EUro-dementia scenario is in play just as Trump 2.0 still bets on some sort of normalization with Russia via a solution for Ukraine. Yet the key factor here is the cowardly collective fear of the EU kakistocracy: if they don’t rob Russia blind, they have no means to repay that fateful $50 billion loan to the Kiev goons.

That should be the main factor explaining why this collection of political mutts needs, badly, to non-stop escalate what is a de facto Forever War against Russia.So expect only dementia coming from Brussels in the foreseeable future. Like the brilliant idea of setting up a single military bank to alocate loans for weapons production, a replica of the World Bank with a HQ in London. Since they could not find 120 billion euros to come up with a single European military fund – the German economy, for instance, continues to collapse – their plan B is this bank.

For all that cornucopia of sound and fury, Russia remains, once again, unfazed. Putin top aide and former National Security Adviser Nikolai “Yoda” Patrushev has noted how NATO has been “conducting exercises at our borders at a scale unseen in decades. … They are training for conducting a broad offensive from Vilnius to Odessa, seizing Kaliningrad region, imposing a naval blockade in the Baltic and the Black Seas and executing preventive strikes on the staging locations of Russian nuclear deterrence forces.”Good luck with that. Good luck with the military bank. And good luck with stealing Russia blind with no blowback.

Russia takes care of Russians.

• Leaving Millions Under Rule Of Kiev ‘Junta’ Would Be A ‘Crime’ – Lavrov (RT)

Leaving millions in Ukraine under the rule of a “junta” which has banned their native language would be “a major crime,” according to Russian Foreign Minister Sergey Lavrov. Speaking at a conference in Moscow on Friday, the minister pointed out that Kiev’s authorities have effectively banned the use of the Russian language despite it being the native tongue of a large proportion of the population. “We cannot leave people under the rule of the regime that is currently there,” Lavrov emphasized. If Vladimir Zelensky’s “junta” expects that “somehow an agreement will be reached to end the hostilities, and what remains of Ukraine will live according to the laws that they adopted, this is an illusion” the minister said. “This cannot be allowed under any circumstances,” he stressed.

The minister also reiterated that while Russia is prepared to negotiate with Zelensky and his administration about the principles of resolving the Ukraine conflict, the issue of his legitimacy will be crucial when it comes to actually signing settlement documents. Zelensky’s official presidential term expired last year, however, he has refused to step down or hold new elections, citing the ongoing conflict with Russia and martial law, which he has continued to extend since the escalation of hostilities in 2022.

Lavrov suggested that Zelensky’s status could become an obstacle to signing a peace deal, given that his successor could dispute the agreement if it is signed by someone “whose legitimacy, to put it mildly, no longer convinces anyone.” The minister stated that the best way to resolve this issue would be to hold elections in Ukraine. At the same time, Lavrov insisted that the first priority should be reaching an agreement with Ukraine, suggesting that only after it is finalized should the question of who signs it be brought up and discussed.

Zaluzhny. Candidate to succeed Zelensky.

• Kiev Can’t Retake Lost Regions – Former Top General (RT)

Kiev should abandon its ambition to regain control over the territories it has lost to Russia, Valery Zaluzhny, the former commander-in-chief of the Ukrainian army, has said. Only through a “miracle” could Ukraine achieve such a goal, according to the general. “I hope that there are no people in this hall who are still hoping for some miracle… that will bring peace to Ukraine and will bring back the borders of 1991 or 2022,” the former commander, who currently serves as Kiev’s ambassador to London, told a Ukrainian defense export forum on Thursday.

Zaluzhny was referring to Kiev’s territorial claims on Crimea and the four former Ukrainian regions that have since joined Russia. Crimea voted to return to Russia in the wake of the Western-backed Maidan coup in Kiev in 2014, and the two Donbass republics, as well as Kherson and Zaporozhye regions, followed suit in autumn 2022 following the escalation of the Ukraine conflict in February of that year. Kiev has never recognized the referendums’ results and continues to claim sovereignty over the regions. According to Zaluzhny, Kiev is locked in a “war of attrition” with Moscow, and Russia still has the resources to strike at Ukrainian targets and conduct offensive operations. Ukraine faces “a tremendous shortage of human resources and… a catastrophic economic situation,” the retired general warned.

Under such circumstances, Ukraine can only wage a “high-tech war of survival,” where it should strive to use “minimal resources” to achieve “maximum” results, Zaluzhny maintained. He said that the country “is not capable” of waging any other type of war and “should not even think about it.” Zaluzhny’s remarks come amid continued Russian advances on the front line. In late April, Moscow’s troops fully liberated Kursk Region on the Ukrainian border, driving out Kiev’s forces that had occupied some areas there last year.

Over the past seven days alone, the Russian military has taken control of six settlements, including four villages in the Donetsk People’s Republic, according to the Russian Defense Ministry. Last week, Moscow and Kiev also sat down for the first direct peace talks in some three years, after President Vladimir Putin suggested resuming the process without any preconditions. The two sides are now expected to exchange draft peace proposals, according to Russian Foreign Minister Sergey Lavrov.

It’s about money.

• ‘Era of Uncontested US Dominance Over’ – Vance (RT)

The era of Washington’s uncontested global dominance has come to an end, with growing competition from Russia, China, and other nations, US Vice President J.D. Vance said on Friday. Speaking to graduates at the Naval Academy in Annapolis, Maryland, Vance said that US leaders had assumed after the Cold War that “American primacy” was assured. “Nor did we believe any foreign nation could possibly rise to compete with the United States of America,” he stated. Vance said that following the end of the Cold War, America enjoyed a mostly unchallenged command of the air, sea, space and cyberspace.

The vice president warned that the global landscape has shifted. “The era of uncontested US dominance is over. Today we face serious threats in China, Russia, and other nations determined to beat us in every single domain – from spectrum, to lower Earth orbit, to our supply chains and even our communication infrastructure,” he said. During the post-Cold War period, Washington began focusing on “soft power” and “meddling in foreign country affairs,” even when they had “very little to do with core American interests,” Vance said, adding that the administration of President Donald Trump would be ending this “decades-old approach to foreign policy.” Washington now aims to put an end to “undefined missions” and “open-ended conflicts,” he said.

Trump has indicated his desire to help bring an end to both the Israel-Hamas war in Gaza and the conflict in Ukraine. The United States has been the primary military sponsor of both West Jerusalem and Kiev during both conflicts. Israeli Prime Minister Benjamin Netanyahu has set the US president’s plan to relocate the Palestinians of Gaza to surrounding countries as a precondition for ending the war. Trump has previously expressed his ambition to invest in the enclave and transform it into a resort after the hostilities conclude. The current US administration has also been pushing for a diplomatic resolution of the Ukraine conflict, and slowing its long-time military support for Kiev. Additionally, Trump has moved to recoup funds spent on the aid through a joint mineral exploitation deal signed with Ukraine, but did not provide Kiev with formal security guarantees.

This way, the problem will never be solved.

• Barriers to EU Will Reduce Kiev To Begging – Ukrainian MP (RT)

The EU’s latest decision to reinstate import duties on Ukrainian exports will leave Kiev begging for money, according to Dmitry Natalukha, a member of the nation’s parliament. His claim comes shortly after the European Commission (EC) announced that the bloc won’t extend the current duty-free trade regime that is set to expire in early June.On Friday, the EU executive branch said that the bloc’s member states have backed the reimposition of import quotas on Ukrainian agricultural goods that were suspended in the wake of the escalation of the country’s conflict with Russia in February 2022.

“This could create an idiotic situation where we will be forced to come and beg you [the EU] for money, instead of simply earning money through trade – which, in my opinion, is a very wicked and twisted situation, because rather than trading and profiting both from the trade in a normal way, Ukraine is being pushed to become a beggar,” Natalukha, who heads Economic Affairs Parliamentary Committee, said on Friday in an interview with Euractive.

Brussels adopted special regulations, known as Autonomous Trade Measures (ATMs), aimed at enabling grain and other agricultural goods from Ukraine to reach global markets. However, the massive inflow of cheap produce into Eastern Europe sparked widespread protests among the country’s neighbors, where farmers said they could not compete. In response to the outrage, the EU has reintroduced some of the restrictions over the past year, targeting such commodities as oats, sugar and eggs. Natalukha also stated that the suspension of the ATMs could cost the country more than €3 billion – equivalent to around 70% of Ukraine’s projected total economic growth for the current year, sending its economy into a near-recession.

The EC has, however, cast doubt on Kiev’s figures. Earlier this month, a senior official at the Directorate General for Trade and Economic Security, Leon Delvaux, stated that the €3 billion estimate was inflated, arguing the real value of the ATMs is half of the amount. Last week, Politico reported, citing proposed legislation, that Brussels was considering replacing the ATMs with revised limits under Ukraine’s existing trade framework with the bloc, known as the Deep and Comprehensive Free Trade Area (DCFTA), rather than extending the measures on a yearly basis.

They feel like they live abroad.

• Most Germans Would Like To Leave Country – Poll (RT)

More than half of Germans would consider moving abroad, Die Welt has reported, citing a new survey by YouGov. Respondents pointed to migration and economic challenges as the main reasons for wanting to leave the country. According to the poll, 31% of those surveyed said they would “definitely” move abroad if they were entirely free to choose, without constraints related to work, personal life, or finances. Another 27% said they would “probably” leave. In contrast, 22% responded “probably not,” and 15% said they would “definitely not” consider relocating. Among those who said they could generally or potentially imagine moving abroad, 36% noted that the thought of leaving Germany had crossed their minds more frequently in recent months.

Within this group, 61% identified the country’s immigrant situation as a major factor. In addition, 41% cited Germany’s ongoing recession as a reason to consider emigration. Political concerns were also reflected in the responses, with 29% pointing to the rise of the right-wing AfD party and 22% mentioning the perceived military threat from Russia. Twelve percent of respondents expressed concern over a possible decline in US protection of Europe due to Donald Trump’s presidency, while 36% cited “other reasons” for wanting to leave. According to the survey, respondents who would consider emigration most frequently named other German-speaking countries as preferred destinations. Switzerland topped the list with 30%, followed by Austria at 23%. Spain (22%) and Canada (17%) were also among the most popular choices.

Germany remains the only G7 country to record no economic growth over the past two years, making economic recovery a key focus for the new government under Chancellor Friedrich Merz. The International Monetary Fund projects that Germany will continue to lag behind its G7 peers in 2025, with expected growth of just 0.1%. Despite its economic slowdown, Germany remains the EU’s leading destination for asylum seekers. In 2024, the country received over 237,000 applications – more than a quarter of all claims filed across the bloc’s 27 member states. Earlier this month, Berlin implemented stricter border controls to curb the number of asylum seekers entering the country, reversing the open-border policy adopted by Chancellor Angela Merkel in 2015.

“Every time I watch The View, I become even more misogynistic.” — Laura Loomer

• Stumblebum’s Legacy (James Howard Kunstler)

Bad as it was, “Joe Biden,” the figment president was merely one manifestation of a nation made mad by power-seeking demons, real-live, ill-intentioned human beings driving a runaway political machine, the party of hoaxes, hustles, and hatred. The country is just now struggling to exit a convulsion of mass mental illness. The demons are still there, though, and still hard at work trying to drag you all back into mass formation. A central mystery is how the news media made itself the enemy of the people, and this conundrum is not at all explained by Jake Tapper and Alex Thompson in their book Original Sin. It’s actually just another hustle with overtones of hoax, like everything else in the evil cavalcade of narratives spun out in the news media’s war on reality.

Tapper and Marshall want you to believe that a faceless collective they call “the White House” managed to conceal “Joe Biden’s” well-advanced disintegration from the voting public, and that was. . . that. The media wuz fooled! Goll-lee!] Of course, that fails to explain a whole lot — such as: how come anybody watching daily video clips of “Joe Biden” in action, could not fail to see the broken old puppet he is. Alex Thompson, receiving his “award for excellence” from the White House Correspondents’ Association weeks ago said, “We just missed it.” Yeah, sure. . . . They also apparently missed the programmatic devastation to American society that was carried out in the old stumblebum’s name. I will give you the key to that conundrum, and then you will understand why all this happened, and why the many lingering demons are still at it in their self-styled “resistance” to America-in-recovery.

Mr. Thompson lied, you understand. The media connived with the demons. They were in on the gag the whole time. If there is any “original sin” in the story, it revolves around Hillary Clinton. This monster emerged as the junior partner to her husband, political wonder-boy Bill Clinton. From the get-go, the narrative painted her as a wife sore-beset by her charismatic husband’s infidelities. (Forget that her only child, Chelsea, is a dead-ringer for her former law partner, Webb Hubbell.) However their connubial affairs worked, Hill and Bill had a deal: when he was done, she would eventually rise to become the first woman president, and they would go down in history as two era-defining, Boomer gen, political wonder-geniuses.

It was a flawed plan. For one thing, Hillary utterly lacked Bill’s political charisma, which was his ability to avidly engage with other people and their issues. Hillary didn’t care much for other people, and only pretended to be interested in their issues. Also, people could easily read that in her demeanor. Nobody was fooled. If anything, she had negative charm, anti-charisma. Her own interests were strictly limited to obtaining power and riches. With enough power, Hillary noticed, you didn’t need charm or charisma. You could simply order people around. But the power couple left the White House broke in 2001, and were caught trying to spirit away some of the presidential dinner-ware.

The next phase of Hillary’s career was fortune-building. The Clinton Foundation was set up in 1997, ostensibly to fund Bill’s presidential library. It would become a fantastic grift magnet in the years to come, taking them from broke-ass-broke to demi-billionaires. Her launching pad was a seat in the US Senate. (She ran and won in New York when she was still First Lady in the 2000 election.)

2008 was supposed to be Hillary’s apotheosis from senator to president. The setup was perfect. The country was tired of Double-ya Bush. The time was exactly right for a woman president. Hillary was the obvious choice by a country mile. Except that she was edged out in the primaries by the Democratic Party’s alternative play for something even more amazing, in a contest of historic firsts, than a woman president — a black president, proving to the world how morally upright the USA had become, America liked how it felt. We were good people, after all!

Boar

Surrounded by wild boars, a leopard jumps down, grabs one, and climbs back up. pic.twitter.com/jIAevOtekf

— Nature is Amazing ☘️ (@AMAZlNGNATURE) May 23, 2025

Donkey

Donkey wants some love too pic.twitter.com/qPTt960llO

— Nature is Amazing ☘️ (@AMAZlNGNATURE) May 23, 2025

Manatee

Meet manatees, large aquatic mammals with a gentle temperament.pic.twitter.com/8HVq9p1tUE

— Massimo (@Rainmaker1973) May 23, 2025

Sea water
https://twitter.com/Rainmaker1973/status/1926510890259558900

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Debt Rattle February 23 2017

Feb 232017

February 23, 2017 Posted by Raúl Ilargi Meijer at 9:53 am Finance Tagged with: abyss, asylum, austerity, crisis, debt, dominance, EU, Exxon, globalism, refugees, Trump 5 Responses »

Jack Delano Colored drivers entrance, U.S. 1, NY Avenue, Washington, DC 1940

• The Absolute Dominance Of The US Economy, In One Chart (MW)

• Trump Scorns the IMF’s Globalism, and Now He Gets to Vote on It

• The Problem with Gold-Backed Currencies (CHS)

• What’s So Great About Europe? (BBG)

• Italy Warned by EU Over High Public Debt With Spillover Risk (BBG)

• ‘Spain Is Ruined For 50 Years’ (Exp.)

• Why Greece’s Crisis Has Broken All Previous Records (K.)

• Millions In UK Are Just One Unpaid Bill Away From The Abyss (G.)

• Oz Reserve Bank Interest Rate Moves Limited By High Debt, House Prices (AbcAu)

• Exxon Wiped A Whopping 19.3% Of Its Oil Reserves Off Its Books In 2016 (Q.)

• Turkish Provocations Test Greek Resolve (K.)

• Greece Okays Asylum Requests Of 10,000 Refugees (K.)

Not sure that’s what I get from the graph.

• The Absolute Dominance Of The US Economy, In One Chart (MW)

Despite the bleak picture painted by President Donald Trump of the U.S. as a country in disarray, America’s status as an economic superpower is still very much intact, even as China steadily closes the gap. The U.S. economy, as measured by GDP, is by far the largest in the world at $18.04 trillion. China, the closest thing the U.S. has for a competitor, is No. 2 with a GDP of $11 trillion, while Japan is a distant third with $4.38 trillion. As the chart by HowMuch.net illustrates, the U.S. accounts for about a quarter of the global economy, nearly 10 percentage points more than China’s 14.84%. Put another way, the U.S. economy is roughly equivalent to the combined GDPs of the eight next-biggest countries after China — Japan, Germany, the U.K., France, India, Italy, Brazil and Canada.

However, the narrative shifts when countries are grouped by geography, with Asia clearly in the lead. The region, denoted in yellow in the chart, contributed 33.84% to the global GDP. “Asia’s economic center of gravity is in the east, with China, Japan and South Korea together generating almost as much GDP as the U.S.,” said Raul Amoros at HowMuch.net. North America follows Asia at 27.95%, and Europe trails at 21.37%. The three blocs combined represent about 83% of the world’s economic activity. The chart also highlights the chasm between wealthy and poor countries. South America’s four largest economies — Brazil, Argentina, Venezuela and Colombia — only add up to 4% of the global GDP, while Africa’s three biggest — South Africa, Egypt and Nigeria — account for around 1.5%.

I picked the last bit of the article.

• Trump Scorns the IMF’s Globalism, and Now He Gets to Vote on It

The IMF has already survived one major mission-change. It’s known today as the lender of last resort to countries facing balance-of-payments crises. But in its first three decades, the Fund managed the world’s currency order. That was the role assigned at Bretton Woods in 1944, when the IMF and World Bank were set up. Forty-five nations attended the summit, but two men dominated it: John Maynard Keynes and America’s Harry Dexter White. From the back of her car in Uganda, Lagarde calls them the “founding fathers.” Their goal was to avoid a repeat of the 1930s, when competitive devaluations and tariff wars led to the collapse of world trade. Keynes wanted the IMF to act as a central bank of central banks, denominating their accounts in a new global currency. It would let members devalue or borrow with relative ease. Both creditors and debtors would pay interest on their holdings, discouraging large trade surpluses as well as deficits.

White’s plan was more creditor-friendly, reflecting the U.S. position as world lender. There would be no new currency: IMF members would tie their money to the dollar. They couldn’t devalue without consulting the Fund, and were only supposed to borrow short-term to close balance-of-payments gaps. “The British wanted an automatic source of credit, the Americans a financial policeman,” wrote Keynes’s biographer Robert Skidelsky. The English economist was one of the 20th century’s sharpest thinkers, but it was the U.S. Treasury official who got his way. The system turned out to have a flaw: It depended on the supply of U.S. dollars backed by gold. That link came under pressure as America, financing social programs at home and war in Vietnam, slipped into persistent deficit. In 1971, President Richard Nixon took the dollar off the gold standard, ending phase one at the IMF.

Today there’s a patchwork of floating rates, pegs and currency unions like the euro. It’s not working to everyone’s satisfaction – notably Trump’s. His team has called out several countries, from China to Germany, for gaming the system. Money courses around that system on a scale that would have been unimaginable at Bretton Woods. Massive trade imbalances built up. The dollar remains central. The risks were laid bare in 2008, when a collapsed U.S. housing bubble led to world recession. Since then, some financial leaders – among them the governor of the People’s Bank of China, Zhou Xiaochuan, and his U.K. counterpart Mark Carney – have gently hinted that something more like Keynes’s plan might be in order, to reduce the world’s dollar dependency.

Lagarde doesn’t see that happening on her watch. “It didn’t happen in 1944, when the world had destroyed itself,” she said. “I’m not a dreamer.” She argues instead that what the IMF is doing today will remain useful tomorrow. Countries will always be getting in a financial mess. Someone has to clean it up. Ukraine needed money in 2015: without the IMF, “where would the $17.5 billion come from? Whose pocket would it be?”

The curse of the reserve currency. And if you look a bit deeper, any gold-backed currency.

• The Problem with Gold-Backed Currencies (CHS)

There is something intuitively appealing about the idea of a gold-backed currency –money backed by the tangible value of gold, i.e. “the gold standard.” Instead of intrinsically worthless paper money (fiat currency), gold-backed money would have real, enduring value–it would be “hard currency”, i.e. sound money, because it would be convertible to gold itself. Many proponents of sound money identify President Nixon’s ending of the U.S. dollar’s gold standard in 1971 as the cause of the nation’s financial decline. If our currency was still convertible to gold, the thinking goes, the system would never have allowed the vast pile of debt to accumulate. The problem with this line of thinking is that it is disconnected from the real-world mechanisms of capital flows and the way money is created in our financial system.

This article explains why Nixon took the USD off the gold standard: since the U.S. was running trade deficits, all of America’s gold would have been transferred to the exporting nations. America’s gold reserves would have disappeared, leaving nothing to back the dollar. The U.S. Empire Would Have Collapsed Decades Ago If It Didn’t Abandon The Gold Standard. The problem to sound-money proponents is trade deficits: if the U.S. only had trade surpluses, then the gold would not drain away. But Triffin’s Paradox explains why this doesn’t work for a reserve currency: a reserve currency has two distinct sets of users: domestic users and global users. Each has different needs, so there is a built-in conflict between the two sets of users.

Global users of the USD need enormous quantities of dollars to use as reserves, to pay debts denominated in USD and to facilitate international trade. The only way the issuing nation can provide enough currency to meet this global demand is to run large, permanent trade deficits–in effect, “exporting” dollars in exchange for goods and services. This is the paradox: to maintain the “exorbitant privilege” of a reserve currency, a nation must “export” its currency in size; a nation that runs trade surpluses cannot supply the world with enough of its currency to act as a reserve currency.

That is one damning set of numbers.

• What’s So Great About Europe? (BBG)

A woman said that maybe the problem with the European Union – or at least the common currency, the euro – was that it was too advantageous to Germany. “Because we have a common currency, we get an edge in exports,” she said. “I profit from this. Thanks!” “Do you think this is harming our neighbor countries?” Armbruster asked. “Yes, definitely,” she responded. “Germany was always a problem in Europe,” interjected Andre Wilkens, a Berlin-based policy wonk who was one of the evening’s featured speakers but mostly sat and listened. “The EU was formed to solve that problem.” Others got up to say that Europe needed more solidarity, with Germans leading the way. It needed more of a sense of community. More attention needed to be paid to the millions of jobless young people in Greece, Italy, Portugal and Spain.

Then things shifted to straight-out Euroenthusiasm. “To be totally honest, I think Europe is super,” said a woman sitting in the front row. Added a man a few rows back: “There are problems that we Germans alone can’t solve.” By working together with the rest of Europe, he went on, Germany had a better shot at fighting climate change and preventing war. It isn’t exactly news that a bunch of people gathered in a theater in downtown Stuttgart support the idea of Europe and even, for the most part, the reality of the European Union. The home of Daimler, Porsche and Robert Bosch is one of the continent’s great economic success stories – and its residents’ political views aren’t necessarily shared by other Germans. On the whole, Germans see the EU in a more positive light than the citizens of most other European countries (I’ve included the 10 most populous EU member countries in the chart below), but they’re still pretty negative about it.

All Italy can do is pretend. And Brussels likes it that way.

• Italy Warned by EU Over High Public Debt With Spillover Risk (BBG)

The European Commission warned that Italy faces excessive economic imbalances as the country’s shaky center-left government struggles to control public debt, boost sluggish growth and mend ailing banks. Troubles including soured bank loans risk spilling into other euro-area countries, the commission said on Wednesday. Italy’s public debt is projected to rise to 133.3% of gross domestic product this year from an estimated 132.8% in 2016. “High government debt and protracted weak productivity dynamics imply risks with cross-border relevance looking forward, in a context of high non-performing loans and unemployment,” the European Union’s executive arm in Brussels said in a set of annual policy recommendations to EU governments. Italy is struggling to maintain government stability amid infighting in the ruling Democratic Party, where some members are pushing for early elections.

The country also faces sluggish GDP growth of 0.9% this year and lingering issues at domestic banks, which are weighed down by €360 billion of bad loans that have eroded profitability, undermined investor confidence and curtailed new lending. “The stock of non-performing loans has only started to stabilize and still weighs on banks’ profits and lending policies, while capitalization needs may emerge in a context of difficult access to equity markets,” the commission said. In May it plans to recommend whether Italy should be subject to a stricter oversight regime – one with fines as a last resort – for failing to keep public debt on a trajectory toward the EU limit of 60% of GDP. The assessment will take into account final economic data for 2016 and Italian government pledges to adopt by the end of April budget-austerity measures worth 0.2% of GDP.

“We have a third world production model of speculators and waiters, with a labour market where the majority of jobs created are temporary and with remunerations of €600, the largest wage decline in living memory..”

• ‘Spain Is Ruined For 50 Years’ (Exp.)

A leading Spanish economist has hit out at the ECB saying “crazy” loans will ruin the lives of the population for the next 50 years.And it is only a matter of time before the Government is forced to default as a debt bubble and low wages effectively forge the worst declines in “living memory”. Leading economist Roberto Centeno, who was an advisor to US president Donald Trump’s election team on hispanic issues, says the country has borrowed €603 billion that it cannot conceivably pay back. And he says Spanish politicians including Minister of Economy Luis de Guindos are “insulting their intelligence” after doing back door deals with the ECB. In a blog post Mr Centeno says there needs to be audits so the country can understand the magnitude of its debt mountain.

He said Spain was “moving steadily towards the suspension of payments which is the result of out of control public waste, financed with the largest debt bubble in our history, supported by the ECB with its crazy policy of zero interest rate expansion and without any supervision.” The expert added the doomed situation will “lead to the ruin of several generations of Spaniards over the next 50 years”. And that current Prime Minister Rajoy has employed 2500 special advisors in his central government as opposed to other leaders. He said: ”Our economic future requires drastic decisions to cut public waste, such as eliminating thousands of useless public companies, thousands of useless advisers, [Prime Minister Mariano] Rajoy has 2,500 in Moncloa, compared to Obama’s 600, Merkel’s 400 or the 250 working for Theresa May.

“There’s disastrous management of Health and Education, the cost of which has skyrocketed 60 per cent since they were transferred to the Autonomous Communities while the quality plummeted.” Mr Centento also said the Government and the European Union’s estimations of GDP are completely wrong and has presented them with figures he claims are accurate. He said the country is currently suffering from a “third world production model”. He added: “We have a third world production model of speculators and waiters, with a labour market where the majority of jobs created are temporary and with remunerations of €600, the largest wage decline in living memory, “And all this was completed with a broken pension system and an insolvent financial system.”

Forecasting an unprecedented shock to the European financial model, Mr Centento is calling for an immediate audit despite a recent revelation that the ECB is failing in its supervisory role over Europe’s banks. He also claimed the Spanish government and European Union leaders have been manipulating figures since 2008. Mr Centento said: “We will require the European Commission and Eurostat to audit and audit the Spanish accounting system for serious accounting discrepancies that may jeopardise stability. “The gigantic debt bubble accumulated by irresponsible governments, and that never ceases to grow, will be the ruin of several generations of Spaniards. “The Bank of Spain’s debt to the Eurosystem is the largest in Europe. “The day that the ECB minimally closes the tap of this type of financing or markets increase their risk aversion, the situation will be unsustainable.”

A feature not a bug.

• Why Greece’s Crisis Has Broken All Previous Records (K.)

How unique is the Greek crisis? Two charts tell the tragic tale. The first – from the International Monetary Fund’s recent Article IV report on Greece – compares four major economic crises that took place in the developed world in the last 100 years: the Great Depression in the United States, the Asian financial crisis of the late 1990s, the eurozone recession and Greece’s long collapse. Greece’s performance is by far the worse. The East Asian countries caught in the hurricane of 1997-8 returned to pre-crisis real GDP within three years. The eurozone needed six years, and today its real GDP is only 2% higher than the pre-crisis high point. The output of the US economy had shrunk by a quarter three years after the Wall Street Crash of 1929, but by 1936 it had recovered to pre-crisis levels. The Greek economy contracted by 26% in real terms between 2007 and 2013, and at the end of 2016 – nine years after the start of its own Great Depression – it remained stuck at the bottom.

The second chart, from the analysis service Macropolis, compares the performance of eight countries that have sought assistance from the IMF since 1997 seven years after the start of their programs. The Fund’s best student was Turkey, which doubled its GDP in real terms between 2000 and 2007. Russia was a close second, largely thanks to growth fueled by climbing oil and gas prices. South Korea comes next, with growth well above 50% from its baseline year, while Indonesia, Brazil and Thailand are hovering around 25%. The only countries which remained below their pre-crisis GDP levels seven years after seeking the Fund’s assistance are Argentina (in the aftermath of the 1998-2002 crisis) and Greece. At its low point, three years into its crisis, Argentina’s dollar-denominated GDP – largely because of the devaluation of the peso after the abolition of convertibility – had fallen by two-thirds compared to pre-crisis highs. At the seven-year mark, Argentina, unlike Greece, was experiencing a robust recovery.

Focusing on the comparison with the Great Depression in the United States, US unemployment peaked in May 1933 at 26%, to be cut by more than half by the end of 1936. In Greece it reached 28% in July 2013, and has since fallen to 23%. The Dow Jones Industrial index lost 85% of its value between August 1929 and May 1932, but it rose fourfold in the three-and-a-half years to the end of 1936 (another 23 years would pass, however, before it got back to pre-crisis levels).

No, it’s not just the EU, or the euro.

“..an economic climate that is normalising low-income families having to live hand to mouth..”

• Millions In UK Are Just One Unpaid Bill Away From The Abyss (G.)

As the cocktail of long-term austerity, rising living costs and a slumping post-Brexit economy hits, what’s really frightening is the crisis that is brewing but is barely being noticed. Look at this week’s finding that one in four families now have less than £95 in savings. That’s staggering, not simply because it gives an insight into how large swaths of families in Britain are clinging on financially in a climate of low wages, cut benefits and high rents, but also because it offers us a warning of how little it will take to push them over the edge. There are now 19 million people in this country living below the minimum income standard (an income required for what the wider public view as “socially acceptable” living standards), according to figures released by the Joseph Rowntree Foundation (JRF) this month.

Around 8 million of them could be classed as Theresa May’s “just about managing” families: those who can, say, afford to put food on the table and clothe their children but are plagued by financial insecurity. The other 11 million live far below the minimum income standard and are, the JRF warns, “at high risk of falling into severe poverty”. We are entering a period not simply of growing hardship in this country but of what I would call precarious poverty: the sort that isn’t characterised by the traditional image of lifelong, deep-seated deprivation, but which can hit in a matter of days: a broken washing machine, a late child tax credit payment, an injury that leads to time off work. In an economic climate that is normalising low-income families having to live hand to mouth, increasingly, for a whole economic class, one small unexpected cost can trigger a spiral into debt.

And now they’re stuck. This is where it gets risky.

• Oz Reserve Bank Interest Rate Moves Limited By High Debt, House Prices (AbcAu)

Fears of inflating housing bubbles in Sydney and Melbourne are stopping the Reserve Bank from cutting interest rates to boost the economy, the central bank governor conceded today. The stark admission by Reserve Bank governor Phillip Lowe about the RBA’s dilemma comes as soaring house prices in the eastern states have Australians carrying “more debt than they ever have before”. Dr Lowe delivered the reality check at the Australia Canada Economic Leadership Forum, where he said low interest rates made it attractive for borrowers in both countries to invest in real estate, making further rate cuts an undesirable option. “We are trying to balance multiple objectives at the moment,” he said in response to questions after the speech.

“We’d like the economy to grow a bit more quickly and we’d like the unemployment rate to come down a bit more quickly than is currently forecast. “But if we were to try and achieve that through monetary policy it would encourage people to borrow more money and it probably would put more upward pressure on housing prices and, at the moment, I don’t think either of those two things are really in the national interest.” For the moment, it looks like the Reserve Bank feels content — or locked in — to leaving official interest rates on hold at a record low 1.5%. However, Dr Lowe expressed optimism that this level of rates was low enough to spark business investment and stronger economic growth, and therefore there would be no need to lower rates further.

That’s a lot of (not) oil.

• Exxon Wiped A Whopping 19.3% Of Its Oil Reserves Off Its Books In 2016 (Q.)

ExxonMobil has taken a big hit to one of the pillars underlying its decades of braggadocio: its oil reserves. In an announcement today, Exxon said it had written down its proven oil reserves by a massive 19.3%, a stinging reduction to what is a primary measure of any oil company’s value. As of the end of 2016, Exxon had 20 billion barrels in proven reserves, compared with 24.8 billion a year earlier. This includes the erasure of all 3.5 billion barrels of Exxon’s proven oil sands reserves at Canada’s Kearl field. Last year’s low oil prices made it uneconomical to drill at Kearl, which had been at the core of Exxon’s growth strategy. In addition, for the second straight year, Exxon failed to replace all the reserves it pumped—in 2016, it replaced just 65% of its produced reserves. In 2015, it replaced just 67%.

Prior to these years, Exxon had replaced at least 100% of its production every year since 1993. As bad as that was, it was expected: Exxon had signaled that it would write down reserves in 2016, and analysts had expected the company not to replace what it pumped. What wasn’t anticipated was the impact on Exxon’s vaunted longer-term performance. Almost every year, when Exxon announces its earnings, dividend payouts, reserve replacement results—and nearly any other important annual result—it throws in its 10-year record in the respective category to demonstrate its steady, reliable hand on the tiller. This time, bringing up the 10-year record backfired: The replacement failures of the last two years and the 2016 writedown punched a hole in Exxon’s vaunted 10-year reserves replacement average—it plunged to 82% in 2016, from 115% a year earlier.

Simmering conflict.

• Turkish Provocations Test Greek Resolve (K.)

The recent spike in Turkish provocations in the Aegean and incendiary comments emanating from Ankara are aimed at testing Greece’s resolve, according to Greek analysts. In what was seen as its latest transgression, Turkey dispatched its Cesme research vessel to conduct surveys on Wednesday in international waters between the islands of Thasos, Samothrace and Limnos, but within the area of responsibility of the Hellenic Search and Rescue Coordination Center. The night before, Turkish coast guard vessels conducted patrols in the region around the Imia islets. At the same time, the Cyprus talks are being undermined over what Greeks believe is a minor detail – the decision by the Cyprus Parliament for schools to commemorate a 1950 referendum calling for union with Greece.

Greeks say it is an attempt to shift attention from the fundamental issues of the peace talks, namely post-settlement security and guarantees. In response, Athens has pursued the principle of proportionality by countering the presence of Turkish military and coast guard vessels with an equivalent number of Greek ones, while embarking on a diplomatic campaign at international organizations and in major capitals. Analysts also attribute the spike in tension to the Supreme Court’s refusal to extradite the Turkish servicemen that Ankara says were involved in the July coup attempt. But they also note that it serves as a convenient pretext for Turkey to up the nationalistic rhetoric ahead of the April 16 referendum called by President Recep Tayyip Erdogan in a bid to expand his powers.

Think maybe rich Europe has slipped Tsipras a few bucks?

• Greece Okays Asylum Requests Of 10,000 Refugees (K.)

At least 10,000 refugees, including around 2,000 minors, are expected to remain in Greece over the coming three years as their asylum applications have been approved. The approved asylum claims account for about a sixth of more than 60,000 migrants who are currently stranded in Greece following the decision last year by a series of Balkan states to close their borders amid a massive influx of refugees from Syria and other war-torn states. The arrival of migrants in Greece has slowed significantly following an agreement between the European Union and Turkey in March last year to crack down on human smuggling across the Aegean.

However, boatloads of migrants continue to arrive on Greek shores from neighboring Turkey. On Wednesday, another 145 migrants arrived on the eastern Aegean island of Chios alone. Authorities attribute the sudden spike in arrivals to the unseasonably good weather. According to the Greek Asylum Service, a total of 1,912 migrants lodged asylum applications in January of this year. Last year, when hundreds of thousands of migrants flooded through Greece toward other parts of Europe, a total of 51,091 people applied for asylum in Greece, compared to 13,195 in 2015, 9,432 in 2014 and 4,814 in 2013.