September

Saturday, 30 September 2017 00:28

Will Macron Save France as Eurocom Crumbles?

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What has happened in France politically is nothing short of a miracle. A total unknown, Emmanuel Macron, not only captured France’s presidency by an unprecedented majority, but he personally-founded a new political party, “March of the Republic;” that gave France a parliamentary control, not witnessed by the French Republic since the ultimate national domination of Napoleon Bonaparte (1795-1820). Only the latter, not even of French origin, seized power at a younger age than Macron’s 39 years.

What speaks optimistically of France’s future, is that the 65-million strong nation’s greatness had been severely undermined by one of the worst periods of political factionalism to ever befall an outstanding Western superpower.

This has not only held back its potential dominance, but resulted in France’s military defeats in wars against Prussia (1870) and its early defeat by Kaiser Wilhelm’s Germany in World War I, and crushed by Hitler’s Germany (1940) in less than six weeks. This was primarily due to France’s “Maginot” psychology, which believed that giant fortress on the German border would stop the Nazi Wehrmacht.

But what makes the unanticipated, lightning-fast emergence of Macron even more remarkable is his rise from anonymity to ultimate leadership power in less than one year. Little can be learned from his previous experience, that consisted of uninspiring political appointments, and his nominal association with France’s Social Democratic Party. Even then, he made it clear that he was not a “Socialist,” but believed it provided a base for any future political opportunities that might open potential doors.

In delving into his personal background, it appears that his family was “non-religious.” However, his personal career development in the Rothschild/Dreyfus financial banking establishment, his education by “Jesuit” professors, which led to baptizing as Roman Catholic might indicate a Jewish background; with a theological attachment to France’s dominant Catholic history.

But what is most remarkable about this checkered background is that he was able to leapfrog the traditional French power positions that seemed threatened by Marine LePen’s far right conservatism; while a far left combination was ready to come forth with an extremist leftist challenge.

But even more amazing is Macron’s new party, whose parliamentary majority is ready to back the young President’s activities on his ability to reverse the anti-economic decisions of his predecessors. His apparent intent to join forces with Germany’s Angela Merkel-led government, may decide whether the tottering “European Community” has a chance for survival.

Friday, 29 September 2017 00:25

Why Are Europe’s Best Years Mired in the Past?

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It’s hard to imagine that one hundred years ago, the major empires of Europe (British, French, German, Dutch, Austro-Hungarian, and even Russian) effectively controlled 80% of the world’s national wealth and influence. While much of the control of five continents was “lorded” over as “colonies” by Europe’s superpowers, only the evolving U.S.A. stood out as a major independent national entity.

The once world-leading powers of the Iberian Peninsula (Spain and Portugal) maintained such power when discovering and overtaking “the New World” (Western Hemisphere), and substantial parts of Africa and Asia in the 18th and 19th centuries.

In fact, the vaunted name of “America” was taken from the name of a prominent Italian maritime commander in the Spanish Navy, “Amerigo Vespucci,” who was involved in the early Columbus voyages. In addition, it was Vespucci who set out to prove that the West Indies were not part of the Asian continent, but an opening to a New World.

When comparing the overwhelming influence of Europe in the early 20th century with today’s increasingly shrinking importance of the 28 “Eurocom” nations, this would have been hardly comprehensible a mere 100 years ago.

While today’s Germany will likely face production shortages, due to population reduction, and the U.K. finalizing its Eurocom “divorce,” the European economic strength will be increasingly dependent on France and Italy to supplement the gap. With the “ill-advised” influx of several million refugees from the Middle East, adding little to the productive employment pool, the once dominant Western European global economic center is likely to be more dependent on imports. Simultaneously, the gap will have to be closed by the growing Southeast Asian economic dynamics.

At this point in time, the economic world is witnessing the greatest shift in “power balance” since the end of World War II, when the U.S. saved that ravaged European economic colussus, by virtue of the Marshall Plan.

But the biggest question to be answered is whether the Trump Administration’s reversal of the past 16 years of U.S. dependence on “cheap” global imports will again return the great American production capability to the level once reached during the “Reagan presidency” in the middle to late 1980's.

While America still reigns as the world’s lone superpower, what seems incredible is its population increase, which counts 330 million residents living within its 50-state borders. This is only exceeded by China, numbering 2.4 billion population, and India, second with a fast-growing 1.3 billion

While the U.S.A. had been largely empty during most of its 240 years existence, in a geographical context about the same size as China, much of this American growth has occurred in the last 50 years. During that time, America has grown from 165 million, after reaching its 100 million mark in 1917, 125 million in 1940, before skyrocketing to its current level, expected to exceed 400 million by mid-century.

What is particularly puzzling are the on-off U.S. immigration policies, that seemed to discourage a surge of foreigners, and a shrinking family size, a trend becoming increasingly popular in the white, Western Judeo-Christian world.

These factors would generally indicate a slowing of, and flattening out of a population increase of the size that has catapulted the U.S. into third place of population total today,

While the majority of politicized confrontation revolving around our southern border with Mexico, hardly a word is mentioned about the vast expansion of “Asiatics” settling in the U.S. in ever greater numbers. This is confirmed by population growth experts, who project that Asians (Chinese, Indians, Japanese, Vietnamese, etc.) will comprise the nation’s largest single minority within the next 50 years.

Many of these are graduates from American universities, given preferred status, due to their advanced educational standards, and easy integration into the middle, and even upper classes. Not officially confirmed by the nation’s Immigration and Naturalization Service (INS), these also tend to “wink” at those immigrants investing $500,000 or more into America’s broad-based economy.

In fact, the projection indicates that Asiatics will exceed African-Americans or Hispanics as a percentage of the growing U.S. population. This is a highly controversial issue, that successive U.S. governments have done their best to downplay.

Be that as it may, this huge population increase will give the U.S.A. international power and global influence ever greater strength in the long-term future.

Wednesday, 27 September 2017 00:38

Why are $80 per Oil Barrel Predictions Unrealistic?

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When so-called experts attempt to predict the price of oil later this year, and early in 2018, these pundits, writing for such prestigious business publications as the Wall Street Journal, Barron’s, etc., tend to confuse those investors without appreciable background in the varied factors impacting on such critical numbers.

Using the prestige and influence of such publications, on-line commentaries, and newsletters, these projections are usually made by columnists with varying degrees of understanding about the factors impacting such critical predictions. With both supply and demand having undergone critical changes in the past three years, the following has to be considered:

  1. The emergence of U.S.-based hydraulic fracturing (fracking) having become cost-effective. This has elevated America’s previous conventional oil production from less than 3.5 million barrels a day to a daily production level of 10 million barrels, equivalent to world leaders Saudi Arabia and Russia.
  2. While oil prices exceeded $100 per barrel for the light-weight (WTI) versions found in most American “shales,” and an average of $110 or more for the Brent Crude version found in most of the world’s on and offshore production, the sudden mid-2014 price drop to $50 per barrel or less, took most producers and oilfield extractors by surprise, occurring in such a dramatic price downturn before the end of 2014.
  3. While global demand since then has remained relatively stable, this has generated a record global inventory glut. Although the many major energy exploration and production supplies have cut their costs appreciably, this has brought the global break-even costs down to less than $60 per barrel. Many smaller marginal exploration and production oil companies have barely gotten by as the market rates settled in at $50 or less in mid-year 2017.
  4. While optimists predict a substantial demand increase during the next year, this prediction is based on hopes rather than reality. This resultant inventory glut has reduced prices, as the U.S. became a million barrels per day exporter, after the near 50-year American oil export embargo was lifted late last year. This speaks well for America’s West Texas Intermediate (WTI) extractors, but makes the availability factor even more relevant to disproportionally larger inventories.
  5. Since America’s almost exclusive “light-oil” is preferred by Asia’s less sophisticated refineries, it puts an even greater squeeze on the dominant Mideast suppliers, and offshore availability from the North Sea, bordering Norway and Scotland. Although the Saudi Arabia-dominated OPEC cartel has attempted to cut back its daily production from 32 million to 30 million per day, this practically negates even Russia’s cooperation in its production downturn.

To put these varied factors in perspective, an expectation by media columnists of $80 per barrel by the end of the year seems like a fancied forlorn hope.

Unfortunately, most investors rely on the highly respected publications submitting these unrealistic price predictions. In the longer term, such misleading information will likely discourage investors, as they begin to doubt the unsupported higher prices predicted by years’s end.

Tuesday, 26 September 2017 12:34

Is Japan’s Future Rooted in the Past?

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While Japan remains a leading global exporter, and among the top manufacturers and generators of gross domestic product, not far behind the U.S., China, and Germany, its future outlook does not share the dynamic expansion momentum of the world’s “Big Three” economic giants.

Even its dramatic bounce-back from its World War II humiliation, with its indication of becoming America’s number one economic competitor in the 1970's and early 1980's, Japan has been eclipsed by the rampaging surge of fast-expanding India, China, and even South Korea and Taiwan, today’s Pacific region’s main competitors.

Although its superb reputation in global brand names, such as the automotive industry’s Lexus, and brands technologically superior to most competition, Japan seems to have lost the growth dynamics of the post World War II recovery. Much of this inertia seems due to its manifestation of inflexible traditions, which have not restrained the impressive growth of Japan’s Asian competitors. Even one of Japan’s many Pacific conquests, French Indo-China (now Vietnam) has modernized into a leading Asian economic power.

What has made Japan increasingly insular, after its unprecedented buildup of its post-war years, its industrial infrastructure growth has been superceded by its unflinching commitment to its “glorious” past. Even after suffering two nuclear bombings to end World War II, and experiencing an amazing post-war recovery, Tokyo is clinging to a pre-war historical past that has suspended Japan’s evolution into the new world realities, strongly embraced by their wartime ally European equivalent, Germany.

A major additional hurdle facing modern Japan is its total discouragement of foreign immigration influx, and the shrinking of its families; as Japanese women have joined the role of Western women in maintaining smaller families.

This combination of historic ritualism, along with immigration lack, and family shrinkage is facing this once dominant Pacific superpower with a potential future decline.

What could become one of the greatest evolutions in modern France’s turbulence of political leadership, since the Napoleonic Era of the early 20th century, is manifest in the presidential emergence of previously unknown Emmanuel Macron as that nation’s overwhelming presidential victory. This was reinforced by the subsequent electoral dominance of his “Republic on the March” political party, non-existent prior to his presidential candidacy.

Even more amazing was that emerging party’s clear parliamentary majority in a previously continuous series of governments dependent on supplemental support of adjunct political groups.

The lengthyg history of France has been marked by constant infighting between left-and-right-leaning parties, that weakened the ability of that discontented nation to develop solid domestic and foreign policy objectives.

This lack of national unification had previously been abetted by the strength of left and right political extremism. These had dogged the once mighty French Colonial Empire throughout most of the post-Napoleonic 19th and 20th centuries. Such fragmentation further weakened France, inviting humiliation by its powerful German neighbor in two world wars. Only the intervention of the U.S. in World War I and the Anglo/American/Russian combine in World War II, saved France from total decimation by Germany during its occupation of France.

With France’s potential economic strength constantly undermined by its ongoing political friction, and its leaning toward Socialism in shorter workweeks, higher minimum wages, and ongoing bickering with labor leaders, that 65 million strong nation is still far from reaching its economic potential.

Ironically, with the U.K.’s Brexit and weakness of Germany’s Chancellor Angela Merkel’s Conservative Union, these unexpected events offer Paris the opportunity to assume the dominant position in the European Community. This may become the acid test for the “unknown” Macron, and how he fashions France’s immediate future. This is abetted by foreign policy changes in the U.S., and Eurocom’s new outlook, with the U.K.’s departure.

Even the large Islamic minority that represents more than 10% of France’s total population, will likely continue to flex its muscles, as the growing Mideast unrest washes up on France’s shores.

How goes the new France may influence much of the Eurocom’s changes likely to occur in the foreseeable future.

Since the beginning of the current century, the incredible growth and complexity of the global Internet has become the latest in the world’s unexpected technological breakthroughs. This unexpected original expansion in the last decade alone, has developed into an all-time high communication acceleration, as well as an incomparable agent of economic change.

While achieving heretofore unimagined goals in such a shortened time period, its success has achieved well-deserved praise, despite its displacement of centuries-old methods of information dissemination. These include books, magazines, letters, telegrams, and even, to some extent, television, radio and conventional education methods.

While such kudos are well-deserved, a “dark side” companion has become manifest in the ease with which worldwide terror groups have been able to greatly widen their nefarious activities. Although such FANG (Facebook, Apple, Netflix, and Google) entities have been celebrated as one of modern history’s most dramatic leaps forward, the utilization by global major terrorist perpetrators have also been a prime beneficiary of this modern miracle.

With the stock market issues of the Internet’s leading companies experiencing record values, the world’s financial investment institutions support such unbridled optimism, while downplaying its dangers. In subduing the urgency of the Internet’s uncontrolled messaging, its unquestionable that such communications advancement has become the leading method by which terrorist activities have benefitted immeasurably.

Although attempts to restrain this communications miracle have been attempted, its opposition cites “censorship” and freedom of speech as a victim of such shackling, while advocates point to the undercutting of security necessities. The ultimate defendants of unfettered communications freedom cite the role of the “Internet” as platforms, rather than publishers, that can’t be effectively short-circuited by opinion restraint.

The reality of these pro and con arguments, is that politicians, wrong doers, and hate inciters have found the Internet as the ultimate method of greatly increased volume and speed of these nefarious messages.

While such celebrated Internet providers as Facebook, Twitter, and Google permanently bring forth the most egregious propaganda with ongoing speed, there is no way the growth of adversely considered implementation of terrorists’ messaging can be prohibited from the constant propaganda infecting today’s airwaves.

While this confrontation between “security” and “speech freedom” becomes ever more intense, the ultimate progress of the “Internet domination” will not be slowed, no matter how justifiable this may seem to those fearful of global security breakdowns against unrestrained terrorist expansion.

Saturday, 23 September 2017 00:03

What are Consequences of UK’s Eurocom Withdrawal?

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What is turning out to be a major faux pas by British Prime Minister Theresa May, could turn out to be disastrous, geopolitically, as well as economically for the British.

This series of events emanated from Britain’s number of missteps, followed the public plebiscite by the U.K. more than a year and a half ago, regarding Eurocom withdrawal.

At that time, the London government decided to allow a public vote to determine its future withdrawal from the European Community, resulting in the series of steps subsequently taken to extricate the U.K. from the Eucom.

Significantly, the majority of those participating in this vote, that normally would have been only “advisory” to the British Parliament, became Britain’s withdrawal position. Not only was this “public” advisory unprecedented, the “ayes” came primarily from the “greater London” segment of the U.K., with Scotland, Wales and Northern Ireland displaying no such support.

While the United Kingdom’s public was generally uninformed regarding the long-term impact of this action, it had previously signaled its growing displeasure for this action. In much of this initiative, the complexity and consequences of the public vote first came to light after such results were declared binding.

While Britain has previously depended substantially on its Mideast financial involvement, the Eurocom provided increasing import/export activities with the “continentally-based” Eurocom’s 28 members. Furthermore, as this Eurocom “divorce” gathered momentum, it was discovered that much of the original Eurocom agreement signed by London, was much more complicated than originally perceived.

An even more incredible blunder was manifested by current UK Prime Minister Theresa May, who had enjoyed a comfortable Parliamentary majority in the “House of Commons,” and was not required to hold Parliamentary elections in the foreseeable future. May’s stated purpose was that of certifying the personal public support which the “Conservative” Party enjoyed. This was not required, but implemented by the June “snap” election.

May’s rationale was to emphasize continued majority dominance over “Labor,” long before such a voter mandate was requested. She desired a majority of personal ratification, as she was not the Prime Minister, when her party had previously reached a solid majority.

The end result of this welter of miscues has been to weaken Britain’s negotiations with “Brussels” in its final “divorce papers” signing. With Scotland, especially, venting its displeasure at this turn of events. Britain now looks to a much stronger U.S. bi-national commercial relationship. Even this is not assured, as President Trump is primarily interested in rebuilding America’s domestic industrial, commercial infrastructure, and less concerned with “higher cost” imports.

With current American housing construction barely reaching a million starts per annum, this ongoing new housing start figure compares adversely with the 1.6 million new homes completed annually prior to the 2008-11 financial crisis.

While the U.S. started to dig out of this “financial depression” aftermath, this muted construction level posed few problems during that period, due to the high subsequent unemployment, and far stricter mortgage availability requirements. However, these stricter bank lending limitations, and the growing demand created by increasing job openings, are now putting new pressures on the national housing market.

Unfortunately, the indiscriminate piles of new housing construction regulations and impediments created by the EPA, and associated agencies, unrestricted by Congressional opposition, have greatly discouraged the home builders nationally. This accounts for a drop of 35% below construction normal across the country. Combined with the much higher prices of new houses being sold in the past few years, this slowdown has added to the drop in starts, and added to the resultant shortages.

While this has proved beneficial to the value of existing home ownership, the overall costs to national housing starts has increased by one third, according to the National Association of Home Builders.

This has become increasingly valid in the big metropolitan areas of the East and West Coasts. To compound these problems even more, the many areas that require additional housing availability, are those where new job creation has been the most voluminous. This affects such newly-vibrant cities as Atlanta and Houston, whose conservative state and local governments have been the most effective in fending off the Obama regulating steamroller.

Ironically, the most stringent regulations have occurred in the so-called “sanctuary cities,” states and regions, which seemed to indicate little interest in the fact that the unrestrained regulations were hurting the middle and low income population. These were the most vulnerable in the environmental, and financially restraining impact that was hurting those that could least afford it. The average one-third increase in building costs, imposed on the construction industry and their associated support personnel, occurred even more in such major cities as Chicago, New York and Los Angeles— most amenable to the blind eye of the last eight years of overwhelming EPA and Dodd-Frank restrictions.

Whether this can be ameliorated in the months and even years to come, is a factor that must be considered by the White House, and a less than cooperative Congress.

Thursday, 21 September 2017 00:00

US Oil Exports Reach Record Global Levels

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As predicted in these columns more than a year ago, the U.S. has now become a major exporter of crude oil in a short time period, exceeding a million barrels a day, and verging on going higher.

This unexpected surplus in world supply has played havoc with OPEC, whose 30 million barrels a day had combined with non-member Russia (10 million barrels a day production) to cap its output of Brent crude, for prices to work their way higher.

Despite a lifting of the 40-year old U.S. oil embargo to assure America’s energy independence, by President Obama, passed late last year, this has been capitalized on by U.S. oil producers, taking advantage of their lower cost West Texas Intermediate (WTI), and able to cover shipping costs; as well as a profitable margin over global Brent crude. The U.S. producers also utilized foreign tankers, unloading Mideast exports to the U.S., thereby using empty tankers to convey crude oil to new customers. This has cut U.S. export costs.

Such fast-growing export use of America’s rising fracking oil production has added India, Hong Kong, and Denmark to the expanding list of original buyers since late last year. These already included China and the U.K. early on. This expanding glut of competitive WTI available oil has had a negative world profit effect, down to the low $40 per barrel price. But longer term global demand growth (2018-2020) should serve to solidify future pricing.

But it also faces the OPEC price fixers with the conundrum of how to maintain even minimal export optimum pricing and volume. The fresh addition of U.S. oil exports, not reckoned with by the OPEC membership previously, has no restrictive control relationship with the U.S. America’s WTI light oil is actually preferred by many new U.S. overseas customers, whose unsophisticated refineries find the U.S. light weight oil preferable to the heavier worldwide Brent crude.

This unexpected export trend is enthusiastically supported by the Trump Administration, committed to use America’s vast commodity reserves for U.S. economic expansion, especially exports.

This was not only resisted by previous President Barack Obama, but would have been totally extinguished by Democrat presidential nominee, Hillary Clinton. She was ready to close all U.S. remaining coal mines. As an enthusiastic devotee of the “Paris climate control sell-out,” she would have been ready to finish the job that Obama had started.

If President Trump is able to overcome his mounting Congressional opposition, aiming to negate Trump’s reversal of Obamacare, a realistic national tax approach, and a solid start toward infrastructure update, the U.S.A. will be blessed with the greatest leap forward in its 240 year-long history.

Wednesday, 20 September 2017 00:58

Was German/Japanese World Conquest Plan a Reality?

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While only a few historians have unraveled the German/Japanese world “Orient Plan,” a master attempt at world conquest by this combination of Pacific and European military superpowers, enough evidence exists to verify the reality of such a maniacal objective.

The forerunner to this Hitlerian global nightmare was the addition of Japan to the Berlin/Rome axis in October, 1941. At that time, Japan’s overwhelming military might seemed set to overrun the major European colonialized Pacific Island nations, and bringing Australia to heel.

Japanese Military Commander Hideki Tojo had informed Hitler of their certain belief that the Philippines, Dutch East Indies, and French Indochina could be crushed by the end of the year, in light of America’s diminutive armed forces, the only potential obstacle to this certain conquest.

At that particular time, the German Army had besieged the Soviet’s Leningrad, were approaching Moscow, while having overwhelmed the Russian Army and occupying almost all of European Russia. It seemed only a matter of weeks till the Soviets would be knocked out of the war.

At that fateful October meeting, Adolf Hitler revealed his “Orient Plan,” which would cede all of Asia to the Japanese, with China’s defenses already overrun.

Knowing full well that American “isolationism” had reduced American World War I military strength to its former self, the Japanese would then be free to invade America’s West, while Germany would subsequently launch a U.S. East Coast walk-over from previously occupied Central and South American bases.

That was the main reason that Hitler decided to declare war against America on December 11, 1941, four days after the Japanese “Pearl Harbor” sneak attack, expecting the Japanese to neutralize Russian Siberia after declaring victory by the end of 1941.

As events subsequently indicated, this master plan soon became a “pipe dream,” as the coldest Russian winter on record and Marshall Georgy Zhukov’s Siberian Red Army stopped the German “Wehrmacht” from defeating the Soviet Union, by successfully defending Moscow.

Hitler believed that his war declaration against America would signal a Japanese Siberian invasion, which was never promised, and never occurred. His assumption of Japanese collaboration was never validated with Tokyo, which was not interested in being mired down in the vast Siberian wastelands. This served no useful purpose to the Japanese military chief Tojo, given free reign by Emperor Hirohito.

Hitler’s attack against an indefatigable Russia, together with the Japanese/American military put an end to the world’s most homicidal German warlord and his world conquest dreams.

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