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Charles Gave: "France Is On The Brink of A Secondary Depression"

Tyler Durden's picture


Authored by Charles Gave of,

France is engulfed by a political, economic and moral paralysis. The president has record low popularity, unemployment is making new highs and the tax czar of a supposedly left wing government just quit after repeatedly lying about a pile of cash he had stashed in a Swiss bank account. From such a sorry state of affairs, you might think that things could only get only get better. Unfortunately, economic cycles do not work this way and it is my contention that France is about to enter what was known during the gold standard era as a “secondary depression.” The rigid design of the euro system means the whole eurozone is prone to the kind of brutal cyclical adjustments seen in that hard money era of the 19th and early 20th centuries. But having reached the logical limits of its decades long experiment in state-run welfare-capitalism France is far more exposed than even its struggling neighbors.

By way of refresher the typical economic cycle during the gold standard era ran something like this:

  • The first phase of the cycle sees investors respond to strongly positive returns on capital by bidding up the value of assets and boosting leverage. Banks loosen their lending standards, genuine entrepreneurs and charlatans become indistinguishable and commentators declare that some new innovation means this time is “different”. The scarcest commodity during this period of plenty is memory of past cycles.
  • The first signal that the cycle has turned is a market "panic". The trigger is the realization among market participants that the return on invested capital has fallen below the cost of capital. This shock adjustment phase usually lasts a few months at most, and is associated with collapsing asset markets together with a number of bankruptcies in the financial system.
  • An end to the acute phase of the crisis is usually accompanied by a collapse in interest rates, causing market participants to conclude that normal business conditions have resumed. A massive relief rally usually ensues.
  • What follows is the far more serious secondary depression which unfolds like a creeping hangover after an indulgent night on the town. This capitulation materializes as investors come to realize that the prevailing ROIC has remained below the cost of capital. Back in the gold standard era, such secondary depressions usually lasted three to five years and accounted for most investment losses.

It is increasingly clear that both Italy and Spain are caught in a debt trap and have now entered the debilitating phase of the adjustment cycle. Devaluation—their one viable escape option—is ruled out by the strictures of euro membership.

Last year, I argued that France was primed to follow the same ruinous trajectory as its immediate southern neighbors (see The Coming French Depression). The policies followed by the French government over the last nine months mean this outcome has become a near certainty. The latest awful French economic data has removed any doubt that I reserved.

The case for the French depression

My analysis starts with an assessment of business conditions as illustrated by the INSEE survey. This survey is published monthly and has a long and reliable history. The lead time between the survey release and different economic variables varies from three to nine months.

A simple regression between the survey results and France’s GDP indicates that within six months the economy will be contracting at an annualized rate of about 1%.

I have long used industrial production as the best available proxy for private sector activity and the latest readings are to say the least, ominous. France is extremely unusual in that government spending accounts for a full 57% of national output (only Denmark has a higher ratio). Since the public spending share of GDP is not likely to contract, the burden of adjustment will be borne by the private sector—a 3% cratering of this part of the economy is likely to eventuate.

As a result of this collapse in private sector activity, employment levels are going to implode.

And with French employment collapsing, it is to be feared that French consumption follows suit. The vicious spiral of decline will ensure that France enters a secondary depression of the type outlined at the outset of this piece.

Wider economic consequences

A divergence in the French and German business cycles is starting to open up for the first time in recent history which will lead to escalating risk within the eurozone system.

The severe squeeze on household income will ensure a collapse in French imports which can only have negative consequences for producers in Spain and Italy—for most eurozone countries France is their second largest export market.

France’s budget deficit is going to explode. Higher unemployment will push up government spending, while reduced consumption causes a collapse in VAT receipts. And lower economic activity reduces all forms of tax income that a voracious government machine so depends upon.

As a result, the primary budget deficit will deteriorate massively in 2013 - it is worth noting that this outcome has materialized each time that our business survey leading indicator has fallen so precipitously. French long rates will quickly come under pressure as was the case for Spain and Italy once their budgetary situation deteriorated—the French government is hugely complacent about its entitlement to low cost funding even though any spike in rates will quickly make the budget situation untenable. And as goes the economy, so goes the corporate sector. Profits for those companies exposed to both the domestic economy and the battered southern European markets are also likely to face a severe squeeze.

But what especially scares me about the French situation is that the economy is already suffering a huge credit crunch which can only get worse.


France has economic problems that are particular to its political culture. While speculative excesses in Spain and Ireland were concentrated in an over-built, over-geared real estate sector, French exuberance was a civil service affair. (Remember the adage: too many houses in Spain, too many factories in Germany, too many civil servants in France). This out-of-control public sector machine used easy funding conditions through the 2000s to bolster the ranks of an already bloated bureaucracy - the assumption was that such captive groups would vote for their ultimate pay -masters come election time. (This is what I called social clientelism). As a result France is the only country that we follow which has seen the public sector grow faster than the private sector in every year since 1987!

The interesting thing is that the government share of GDP in France has relentlessly risen regardless of whether a right or a left leaning party was in power. Such has been the complete capture of the French economy by the bureaucracy that the public spending trend has remained unbroken. In simple terms the fellows managing France’s economy have organized a system such that the public sector can continually pillage the private sector. This institutionalized method of stealth robbery has created a self-reinforcing cycle of economic decay such that lower corporate profits feed into reduced private investment, and so on to lower economic growth, resulting in rising unemployment levels.

At its core, France’s economic malaise is a failure of public morality. The public sector elites not only detest the private sector, but they also believe that it is a higher calling to steal money from entrepreneurs and give it to civil servants. Suffice to say this moral bankruptcy of the body politic means the situation is intractable—when the population is bombarded with propaganda that wealth creation is somehow dirty, while it is morally permissible for the state to expropriate all private gains, it will be hard to build an environment for economic growth.

The fact is that elites in France are convinced that communist technocracy is a superior system to capitalism, and this belief has been accepted by a large part of the population. So the solution for France is not incremental reforms to labor markets, but a complete overhaul which would bring to power sensible people with a different set of values. In the short term, radical change is mitigated by the fact that France last year voted for more pillaging and enhanced communist technocracy (the government is now in overdrive seeking to oblige them). Of course, the event that will cause the music to finally stop is when foreign investors stop lending. That moment will likely coincide with the last French entrepreneur exiting for London, New York or Shanghai—he or she should turn off the lights before bidding a sad farewell.

Until quite recently, my working assumption was that a full-blown French debt crisis would occur between 2014 and 2017. In light of the extraordinary malfeasance of the current government I have changed my mind and believe that France is now extremely near to that abyss. Fasten your seat belt in Europe—the world’s last truly Communist country is about to implode.


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Tue, 04/09/2013 - 11:03 | 3426485 kushmere
kushmere's picture

How do you say Bitcoin in french?

Tue, 04/09/2013 - 11:10 | 3426525 dick cheneys ghost
dick cheneys ghost's picture

French Toast????????

Tue, 04/09/2013 - 11:12 | 3426538 madcows
madcows's picture

Freedom Fries

Tue, 04/09/2013 - 11:16 | 3426573 Temporis
Temporis's picture

Mass executions with a side of severed heads please.

Tue, 04/09/2013 - 11:29 | 3426627 hedgeless_horseman
hedgeless_horseman's picture



The public sector elites not only detest the private sector, but they also believe that it is a higher calling to steal money from entrepreneurs and give it to civil servants.

This is MOAR propaganda.  The English bankers set this course at Waterloo, when they got rid of he that hated ccentral bankers.

"When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain."


~Napoleon Bonaparte


Tue, 04/09/2013 - 11:33 | 3426655 The Big Ching-aso
The Big Ching-aso's picture

I guess 'boiling frogs' and that oft heard NWO meme is really starting to hit home.

Tue, 04/09/2013 - 11:39 | 3426671 hedgeless_horseman
hedgeless_horseman's picture



...steal money from entrepreneurs and give it to civil servants.

The bankers steal money from EVERYONE and keep it.


PS:  I told you so.  Up 28%+ in 5 days.

Tue, 04/09/2013 - 11:50 | 3426739 onewayticket2
onewayticket2's picture

What is the French word for "Timmmmbberrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr"?

Tue, 04/09/2013 - 11:54 | 3426755 hedgeless_horseman
hedgeless_horseman's picture



Le déluuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuge!

Tue, 04/09/2013 - 12:18 | 3426783 Supernova Born
Supernova Born's picture

I smell Keynesianism wanting to blame the gold standard a second time for what it didn't cause the first time.

Tue, 04/09/2013 - 12:28 | 3426894 BaBaBouy
BaBaBouy's picture

FIAT SYSTEM Is Collapsing ...

WorldWide ...

How Can You Have A Solid Money System based On BITS and BYTES On Banking Hardrives.

The MONEY Does Not Exist!

GOLD $50K Will Back This Fiat In The Nearer Future!

Tue, 04/09/2013 - 13:01 | 3427053 resurger
resurger's picture

Tyler and Zhers:

Please see that Gold today was trading at $1,575 Oz and the gold in Shanghai was trading at $1,606 .. It was free $33 free arbitrage ... in Shanghai they only take Physical delivery of gold, not like the LBMA and COMEX ... see today gold is at 1,586 .. the Arbitrage is closing ..

What this means, is that the BRICS are head strong to destroy the Paper pushers in NY and London .. this was excellent observation by Jim Willie CB

The Shanghai Metals Exchange sports a significant useful practical Gold price spread, higher than the posted London and New York price. It has opened the door for arbitrage for the last two months or more. My firm suspicion is that the BRICS Development Fund will convert USTreasury Bonds by means of the Shanghai window, thus draining the London centers of their gold bullion. As of 8am today in London, the Shanghai Gold price had a 1591 handle, compared to a 1555 handle in London. That constitutes a $36/oz spread, very feasible for arb trades and the associated drainage of London metal. The professionals are having a field day, exploiting the artificially offered Gold price achieved from yet more naked gold futures contract shorting. The depletion of the SPDR Gold Trust (GLD shares) continues at a frenetic pace. The big US banks are shorting the GLD shares, removing its gold bar inventory overnight, and selling into the market. Or else they are covering their similar sales obligations in like manner. The key to the divergence is that as the phony paper Gold price declines more and more, it signals the demise of the COMEX itself, a shutdown. The event cannot happen without the price divergence, the fast falling paper Gold price versus the stable rising physical Gold price. When the COMEX goes dark, from depleted inventory, from vacated client players, the Gold price will actually not be known for some time. Then later, it will be on display from various key centers across the globe, including Shanghai where naked futures contract activity is not sponsored by the state.

See for your self:


Tue, 04/09/2013 - 13:19 | 3427141 hedgeless_horseman
hedgeless_horseman's picture



It was free $33 free arbitrage*



*Shipping and handling charges not included, other transaction costs, taxes, premiums, and fees may apply and could well exceed the 2.09% gross profit from this arbitrage. 




Tue, 04/09/2013 - 13:29 | 3427191 resurger
resurger's picture

My bad ....


Tue, 04/09/2013 - 13:36 | 3427245 Stuck on Zero
Stuck on Zero's picture

The problem is that you cannot arbitrage paper for physical. 

Wed, 04/10/2013 - 07:00 | 3430100 Free_french
Free_french's picture

Difficult question we do not have an equivalent...

In forest we use :

"Attention..... dessous"

"Beware.... under"


As celts the only fear is that "sky is falling upon our heads"

Tue, 04/09/2013 - 12:01 | 3426805 gjp
gjp's picture

Precisely, HH.

Can't stand these financial crooks playing holier-than-thou about the public sector, while they are even worse theives.  Far worse.  It's really just two sides of the same coin (govt/finance), but one side is a lot fatter.

Tue, 04/09/2013 - 11:33 | 3426673 El Oregonian
El Oregonian's picture

Marie Antoinette: "Let them eat Bitcoins".

Tue, 04/09/2013 - 11:13 | 3426551 Key-Rick
Key-Rick's picture


Tue, 04/09/2013 - 11:33 | 3426666 tarsubil
tarsubil's picture


Tue, 04/09/2013 - 11:15 | 3426552 Salah
Salah's picture

The French could turn it around here... but they REALLY NEED TO READ & STUDY & PRACTICE 

Dr. Bryan Caplan's "The Idea Trap"

It's totally apropos in their case.

Tue, 04/09/2013 - 11:25 | 3426617 McMolotov
McMolotov's picture

French bitcoin = Royale with bits?

And you know what they put on Freedom Fries in Holland instead of ketchup? Mayonnaise. I seen 'em do it, man, they fuckin' drown 'em in that shit.

Tue, 04/09/2013 - 11:28 | 3426647 rqb1
rqb1's picture

All they need is DSK to get back to work!  His parties must have contributed to GDP.

Tue, 04/09/2013 - 13:17 | 3427107 1100-TACTICAL-12
1100-TACTICAL-12's picture

Mayonnaise......On fries.... I think we still hang people for that shit here.

Tue, 04/09/2013 - 11:03 | 3426489 autonomos
autonomos's picture

ça craint

Tue, 04/09/2013 - 11:05 | 3426492 TeamDepends
TeamDepends's picture

What France needs is a cheese-backed franc.  Think about it.

Tue, 04/09/2013 - 11:07 | 3426509 HD
HD's picture

Sounds Gouda to me.

Tue, 04/09/2013 - 11:12 | 3426540 Joe Davola
Joe Davola's picture

Switzerland's looking to poke holes in your theory.

Tue, 04/09/2013 - 11:16 | 3426576 ParkAveFlasher
ParkAveFlasher's picture

That's a lotta cheddar.

Tue, 04/09/2013 - 11:39 | 3426697 booboo
booboo's picture

Brie that as it may the French are still smelly.

Tue, 04/09/2013 - 13:10 | 3427111 debtor of last ...
debtor of last resort's picture

Chateau Migraine has the future in France.

Tue, 04/09/2013 - 11:45 | 3426710 Dead Canary
Dead Canary's picture

The Greeks are already Feta up.

Tue, 04/09/2013 - 11:09 | 3426521 3FrenchHens
3FrenchHens's picture

that'll get yer goat

Tue, 04/09/2013 - 11:33 | 3426668 Bangin7GramRocks
Bangin7GramRocks's picture

And she stepped on the ball..........

Tue, 04/09/2013 - 12:43 | 3426983 Dead Canary
Dead Canary's picture

Muffy, that story is just darling.

Tue, 04/09/2013 - 11:25 | 3426624 Mototard at Large
Mototard at Large's picture

...or maybe red wine?  That I could get into!

Tue, 04/09/2013 - 11:04 | 3426495 Ivanovich
Ivanovich's picture

Another Year in the Merde.

Tue, 04/09/2013 - 11:04 | 3426497 Dr. Engali
Dr. Engali's picture

On the brink of a depression? When did we leave the current depression?

Tue, 04/09/2013 - 11:14 | 3426556 McMolotov
McMolotov's picture

Yes, which makes this part even more hilarious:

The interesting thing is that the government share of GDP in France has relentlessly risen regardless of whether a right or a left leaning party was in power.

Exactly what's happened in the US — so France obviously didn't spend enough, according to people like Paul "Special K" Krugman. Spend moar! Moar! MOAR!!!

Tue, 04/09/2013 - 11:19 | 3426581 gjp
gjp's picture

Charles Gave has been relentlessly down on continental Europe and a champion of Anglo-Saxon 'innovation' / financial fraud / Bretton Woods II etc. since early 2000s at least.  Just another silver spoon sycophant toady.

Why the treatise on France?  How about a global perspective for a global financial system that is obviously rotten at the very core?

Tue, 04/09/2013 - 11:55 | 3426765 Ghordius
Ghordius's picture

+1 reminds me of this guy that said: "And why beholdest thou the mote that is in thy brother's eye, but considerest not the beam that is in thine own eye?"

to which the interlocutor replied: because he is a damn frog, that's why! or something similar...

nevertheless I agree with the article on one main (paraphrased) point: either France makes itself more confortable for small and medium enterprises or this pain will increase

Tue, 04/09/2013 - 14:26 | 3427575 trader1
trader1's picture

isn't Charles Gave from France?

Wed, 04/10/2013 - 07:04 | 3430107 Free_french
Free_french's picture

Yes he is french

Wed, 04/10/2013 - 07:09 | 3430121 Ghordius
Ghordius's picture

small correction: French, with a capital letter. it's an English language convention that nationalities are always capitalized, and I break often the capitalization conventions Because It Annoyes Mightily Some English Speakers

Tue, 04/09/2013 - 11:26 | 3426625 Vashta Nerada
Vashta Nerada's picture

I think I see the problem:

France is extremely unusual in that government spending accounts for a full 57% of national output

If anyone needed proof that Keynesian economics is doomed to failure, here it is.  The only difference between what is happening in France (and most other western nations) and what happened during the hard money era is the size of the bust.  Having the government spend your money for you only centralizes the foolish choices and takes the control from the individual's hands.

Tue, 04/09/2013 - 11:36 | 3426680 spankfish
spankfish's picture

Double dip depression?  Is that like double dipping a chip in the dip... just plain old nasty.

Tue, 04/09/2013 - 12:04 | 3426814 dracos_ghost
dracos_ghost's picture

Queue DSK for the double dip double entendre....

Tue, 04/09/2013 - 12:12 | 3426849 Joseph Jones
Joseph Jones's picture

Many times I attended the largest annual convention in Las Vegas.  By the last day of the show in 2011, show management and Las Vegas power brokers had spread the rumor (AKA lie) that show attendance returned (almost) to pre-recession numbers.

Do they lie?  Do their lips move? 

Anyone with eyes could see numbers were still horribly depressed compared to early-mid-00s.

Tue, 04/09/2013 - 11:21 | 3426505 realtick
realtick's picture

nice charts

come to think of it, France GDP YoY% gives us a preview of what is going to happen to US Initial Claims data

Tue, 04/09/2013 - 11:06 | 3426506 azzhatter
azzhatter's picture

I don't understand the srticle- it says France but it also says last truly communist country so it's clearly about the US.

Tue, 04/09/2013 - 11:08 | 3426507 francis_sawyer
francis_sawyer's picture

"France Is" ~ Oh wait, I thought this article was about me...

Tue, 04/09/2013 - 11:09 | 3426511 Bicycle Repairman
Bicycle Repairman's picture

What to do?  What to do?  Lets go over the playlist:

1.  Sell nuclear plants to third world nations

2.  Scam some West Africans

3.  Scam Viet Nam (no, scratch that one)

4.  Export more fromage and vin

5.  Force the printing of more Euros

I am going with 1, 2 and 5.

Tue, 04/09/2013 - 11:15 | 3426564 ParkAveFlasher
ParkAveFlasher's picture

My father is a wine buff, 8 months ago I chastised him for wanting to build a wine cellar to store his "gold".  I said he was speculating, that France is in a bad way, and that France had more old wine and more ways to rebottle and sell it with a new label than he'll ever know.  He scoffed.

Fast forward to Easter, he commented that he's never seen so much good wine being sold so cheaply in recent months.  I told him that they were liquidating, literally.  They are emptying out the tuva caves and cashing in while they can.

I've also mentioned here that my consumer goods company sells a traditionally French product and I have seen plans to close all operations & factories down in France and offset the production in Spanish, English, and American factories.

France is being isolated, and is in a very bad place.  VERY bad.

Tue, 04/09/2013 - 11:22 | 3426601 Bicycle Repairman
Bicycle Repairman's picture

Thanks for the data.  Maybe I'll try to find some cheap, exotic French wine.

Tue, 04/09/2013 - 11:48 | 3426730 ParkAveFlasher
ParkAveFlasher's picture

The man is infatuated with Bordeaux.  Me, I'll drink anything that gets me schlitzed, preferring choice conversation with choice company over choice vintage.  And I'm partial to American products so I'll do a foxy Finger Lakes and grow hair on my back as a result.

Tue, 04/09/2013 - 12:34 | 3426939 francis_sawyer
francis_sawyer's picture

You forgot 'surrender' & 'fart in your general direction'... [both of which any clever banker ought to be able to monetize]...

Tue, 04/09/2013 - 13:01 | 3427056 ParkAveFlasher
ParkAveFlasher's picture

The French will fall apart at the seams, yet still somehow remain French.

This is a people who are a premier western power, essentially by cultivating mold into various high-margin products.  To your point, there is great wealth in France and they only set out to conquer every few centuries or so.

Tue, 04/09/2013 - 15:00 | 3427775 marathonman
marathonman's picture

They are in a noose somewhat of their own fashion.  Vive le difference.

Tue, 04/09/2013 - 13:21 | 3427156 natronic
natronic's picture

Don't forget the fragois!!

Tue, 04/09/2013 - 11:09 | 3426512 BandGap
BandGap's picture

Non merde, Sherlock!

Tue, 04/09/2013 - 11:09 | 3426519 LawsofPhysics
LawsofPhysics's picture

The propaganda, bread and circuses will continue.  Humanity will continue "Beating expectations" all the way down...

Same as it ever was.

Tue, 04/09/2013 - 11:11 | 3426522 Sudden Debt
Sudden Debt's picture



Tue, 04/09/2013 - 11:10 | 3426528 pashley1411
pashley1411's picture

How on earth do people think that the working European core (Germany, et al) is going to support the French hyper-bureaucracy?   Cyprus was the test run in all sorts of ways.

Tue, 04/09/2013 - 11:58 | 3426665 LawsofPhysics
LawsofPhysics's picture

Okay, I'll play along.  Let's be optimistic, let's say the the world get's it shit together and becomes an efficient producer like Germany.  Please, answer one question.  Who is the earth selling to and what are they giving us in exchange for our labor and all the resources that we used to create those products?

Tue, 04/09/2013 - 14:07 | 3427470 francis_sawyer
francis_sawyer's picture

Krugman?... KRUGMAN??... BUELLER?!!...

Tue, 04/09/2013 - 12:00 | 3426788 SokPOTUS
SokPOTUS's picture

Same way they did it last time.  Tanks.

Tue, 04/09/2013 - 11:12 | 3426530 madbraz
madbraz's picture

On top of that you have the French consumer who is quite negative towards indebtness (consumer debt of only 50% of GDP, albeit an inflated GDP) and government bonds yields currently lower than ours (30 yr).



Tue, 04/09/2013 - 11:11 | 3426534 youngman
youngman's picture

one thing though..they will make a great sauce for their shit sandwich.....

Tue, 04/09/2013 - 11:39 | 3426700 Wile-E-Coyote
Wile-E-Coyote's picture

A la carte Sauce poo poo

Tue, 04/09/2013 - 11:13 | 3426536 Bearwagon
Bearwagon's picture

Roll over already, you Bitchez!

Tue, 04/09/2013 - 11:12 | 3426547 LoCicero
LoCicero's picture

"So long, and thanks for all the fish."

Tue, 04/09/2013 - 11:18 | 3426585 Bearwagon
Bearwagon's picture

I already booked a great table at the restaurant at the end of the universe for Zerohedgers ...

Tue, 04/09/2013 - 15:01 | 3427782 Z Beeblebrox
Z Beeblebrox's picture

Thanks! See you there!

Tue, 04/09/2013 - 11:13 | 3426548 I Am Not a Copp...
I Am Not a Copper Top's picture

Frogs in a pot of water...

Tue, 04/09/2013 - 11:13 | 3426549 buzzsaw99
buzzsaw99's picture

If they had more billionaire kleptocrats running things for their own amusement (like in the usa) then they would have full employment and no debt. [/sarc.]

Tue, 04/09/2013 - 11:14 | 3426557 Winston Churchill
Winston Churchill's picture

I've lost track.

Will this be be the fifth or sixth Republique.

If it at firsts you don't  succeedl, keep repeating the same BS for 200+ years.

Tue, 04/09/2013 - 11:17 | 3426571 creeko
creeko's picture

After me, the deluge!!

Tue, 04/09/2013 - 11:16 | 3426574 Ban KKiller
Ban KKiller's picture

Without France we would never have defeated the British so I wish there was something we could  do to help the Frence people with their coming revolution against the banks. Where is Benjamin Franklin when we need him. His third trip to France sealed the deal to get arms, material and men to fight the British here in the colonies...

Good luck, people of France! Is "prepping" illegal there?

Tue, 04/09/2013 - 11:28 | 3426640 eclectic syncretist
eclectic syncretist's picture

Maybe we could give them the Statue of Liberty back to melt down and sell for scrap.  It doesn't seem to mean anything real over here any more.

Tue, 04/09/2013 - 15:17 | 3427861 Ckierst1
Ckierst1's picture

The damnable thing is that by the time they gave us the statue we were already a liberty has-been, screwed by the Lincolnians.



Wed, 04/10/2013 - 21:34 | 3434742 mkkby
mkkby's picture

Bailing their sorry surrendering asses out of 2 world wars wasn't enough payback?  And BTW, they hate us for that.

Tue, 04/09/2013 - 11:28 | 3426642 Mototard at Large
Mototard at Large's picture

"we would never had defeated the British"  ??

What is with this "we" shit?


PS - hello from Canada!

Tue, 04/09/2013 - 12:21 | 3426880 toadhall
toadhall's picture


US war of independence was actually the first civil war - mostly yank on yank.

Tue, 04/09/2013 - 15:02 | 3427776 Ckierst1
Ckierst1's picture

Yes, it was a secession, but No, the Redcoats weren't having much luck recruiting in the colonies unless they were native americans pushing back against the colonists.  They didn't even get many slave volunteers jumping over to their side, probably because they weren't particularly sincere.

Tue, 04/09/2013 - 16:44 | 3428360 Analyse2
Analyse2's picture

Did somedy ever teach you that without the help of the French at the Battle of Yorktown in 1781 there would be no United States of America.

At this decisive battle, more than half of the fighting troops were French, and above all, the French fleet succeeded to prevent the arrival of the British troop reinforcements




Tue, 04/09/2013 - 11:20 | 3426582 THE DORK OF CORK
THE DORK OF CORK's picture

"failure of public morality"


Give me a fucking break.


What happened to France during the last depression ?


The currency was too stong............its that simple.

This affects inter european and global trade systems.........


France raided Greek capital (oil ration) to buy time.

Ask yourself :What are they buying ?


Tue, 04/09/2013 - 11:37 | 3426684 Cpl Hicks
Cpl Hicks's picture

But....the unemployed deserve to travel in style too!

Liberté, égalité, fraternité.

Tue, 04/09/2013 - 12:09 | 3426833 THE DORK OF CORK
THE DORK OF CORK's picture

The British run the monetary system of the Euro

The French do the other stuff..............


 Germany is a colony.


Sometime around 2010 the powers that be stopped the flow - why ?

So they have time to prepare.


The flow when it is restarted  will follow the point of less resistance.


See above.

French workers are in for a shock soon - they will be work available.............their wages will allow them to travel on public transport , not cars.

Tue, 04/09/2013 - 13:24 | 3427177 dick cheneys ghost
dick cheneys ghost's picture



Time to prepare for what???

Tue, 04/09/2013 - 11:20 | 3426584 css1971
css1971's picture

Communism is not socialism.

France is more socialist than most. It certainly isn't communist.

Tue, 04/09/2013 - 11:30 | 3426659 Joe A
Joe A's picture

I also thought that the term communism was a bit too much. France however is a very centrally led state and there lies the problem. I wouldn't call that communism but more paternalism.

Tue, 04/09/2013 - 12:51 | 3427014 rvremi
rvremi's picture

We're not (I'm french) a centrally led state... Not more than you now that you've became a soviet country :-).

What's in the 57% is social wealthcare and it's very efficient compared to your system - it poses ethical question to solve the problem of the cost and nobody wants to talk about it -, pensions (including private's one), educations, polices, army -. That doesn't mean it's centrally planned, that means it's public managed and sometimes (not always) much more efficiently than a private's company can do. I can't judge if the fact that the best schools in France are free is bad or not... But I think it's good (maybe i'm a communist)... Usually (not always), it's private schools that are bad (because it's easier to get in : when you missed the exam, you can always go to a private school).

French administration is very efficient.

French governement is totally inefficient and that's the problem. But, Sarkozy was worst. I want to remember that the french's public debts was raised by 60% during the mandate the mandate of Saroky, and now we have to pay it.

France is a capitalist country andt hat's the reason we have the same problem as you : all the jobs goes to china and india...


Tue, 04/09/2013 - 14:52 | 3427700 Ckierst1
Ckierst1's picture

"That doesn't mean it's centrally planned, that means it's public managed..."

That's a real howler!  I don't disagree that we are heading deeper into socialism, just that there are a lot more of us who aren't at all comfortable with it, will resist it and there is hope that we can reverse it, although we may have some real bad times before the political will to correct the course emerges.  The Republican Party having its head up its neocon ass doesn't help a bit and neither does evangelicals trying to hasten the end of times.  We're working on that also (Campaign for Liberty - C4L,,  Don't jerk yourself around.  USA is a socialist country and you make us look like pikers.  I don't think you would know real capitalism if it fell out of a window and hit you on the head!  I thought you folks were acquainted with "laissez faire".  Calling Messrs. Bastiat and deTocqueville!

Tue, 04/09/2013 - 11:34 | 3426676 El Oregonian
El Oregonian's picture

Regardless, their still screwed...

Tue, 04/09/2013 - 12:39 | 3426959 Cthonic
Cthonic's picture

PCF Headquarters (Parti Communiste Francais)

Tue, 04/09/2013 - 14:30 | 3427580 Ckierst1
Ckierst1's picture

Socialism is the tree.  Communism is a branch, like Nazism, Ba'athism and Fascism.  They all produce shitty fruit and shared misery for all but the elitist scum at the top.

Tue, 04/09/2013 - 11:20 | 3426587 smartstrike
smartstrike's picture

Back in 2007 GAVEKAL passionately argued that Americans were wealthier beyond what was reported, they surmised that Americans had 'sweatwealth' equity in their houses, that's all the house improvements that were in residential real estate. The point was that there was so much wealth in US that it was foolish to worry about the economy.


Tue, 04/09/2013 - 11:20 | 3426588 Mototard at Large
Mototard at Large's picture

Calling them communist sounds so harsh.  Couldn't we agree to call them a socialist collective run by an unaccountable enarquist cabal with Marxist tendencies?

That sounds so much nicer and not so Cold War-ish    :-)

Tue, 04/09/2013 - 11:19 | 3426592 shovelhead
shovelhead's picture

Pouvons-nous résoudre ce problème?

Non, c'est fucked.

Tue, 04/09/2013 - 11:20 | 3426596 vote_libertaria...
vote_libertarian_party's picture

Depression...say that means buy buy buy???

Tue, 04/09/2013 - 11:26 | 3426629 MFLTucson
MFLTucson's picture

No son, you have the wrong country, they cannot print Euro's.  

Tue, 04/09/2013 - 11:23 | 3426610 tbd108
tbd108's picture

But after France crashes and burns, will there be plenty of good frog legs to eat?

Tue, 04/09/2013 - 11:24 | 3426620 TahoeBilly2012
TahoeBilly2012's picture

I love French women! They could teach American women a few the "pout" look and how to work it.

Tue, 04/09/2013 - 11:25 | 3426628 de3de8
de3de8's picture

Kinda looks like what's coming here.

Tue, 04/09/2013 - 11:26 | 3426634 Cpl Hicks
Cpl Hicks's picture

France needs to think outside of the box and go for the tried-and-true stimulus.

They need to invade Germany.

Tue, 04/09/2013 - 11:32 | 3426667 Joe A
Joe A's picture

Force de farce

Tue, 04/09/2013 - 11:33 | 3426670 Winston Churchill
Winston Churchill's picture

They tried that again in 1871.

Didn't work out so well without Napoleon in charge.

Tue, 04/09/2013 - 11:42 | 3426708 zjxn06
zjxn06's picture

"plus ça change, plus c'est la même chose"

Mark Twain translation 1: "History may not repeat, but it rhymes" 

Yogi Berra Translation 2 (using his best French): "It's deja vu all over again"

Tue, 04/09/2013 - 11:46 | 3426714 Tinky
Tinky's picture

hmmm...maybe a good deal on a mint Citroen SM?

Tue, 04/09/2013 - 11:45 | 3426716 flyingpigg
flyingpigg's picture

Sovereighn bond market is not worried yet because France 10Y government bonds are trading below 2 pct...


Tue, 04/09/2013 - 11:56 | 3426768 hairball48
hairball48's picture

Tuff titty for France. I never liked the place much anyway when I was there in the early 70's. The French hookers were not only arrogant, but they smelled bad. Greece was more fun for sailors in those days. Lot cheaper too.

Tue, 04/09/2013 - 12:04 | 3426817 HastyP
HastyP's picture

Oh Gay Paree!

Tue, 04/09/2013 - 12:08 | 3426829 ParisianThinker
ParisianThinker's picture

It's still better to live in France since the financial crisis than in the states.

Tue, 04/09/2013 - 12:19 | 3426832 FIAT
FIAT's picture

Nothing 100 more mosques and a few hundred thousand africans can't fix.

You import a Third World peoples, you become Third World

Same has been done in the 'kwa since 1965.

Tue, 04/09/2013 - 12:19 | 3426863 All is chosen
All is chosen's picture

France, the constantly failing state. They were kind of hoping to (EU) hide this time. Can pride ever be terminated?

Tue, 04/09/2013 - 12:19 | 3426866 toadhall
toadhall's picture

All French people do is sit around in cafes, chomping on onions, and going oheehoeehooeh. That's not racist, thats a fact.

Tue, 04/09/2013 - 12:27 | 3426907 rvremi
rvremi's picture

All americans are doing is eating ice creams and french fries... That's a fact.

Tue, 04/09/2013 - 14:03 | 3427439 Cpl Hicks
Cpl Hicks's picture

I prefer Cheetohs.

I am an American!

Tue, 04/09/2013 - 12:24 | 3426891 rvremi
rvremi's picture

On facts, the article is very good. I'm always surprise to see that americains have a really false idea of lives in Europe and in France. Telling France is a communist country can only makes Charles Gave seems to be a stupid person who doesn't know of what he is talking and that's suprising when you see the quality of the studies...

Reading zerohedge it seems to me than M. Obama is more communist than M. Hollande. And when I see how America is drowning in social wealthcare and pensions problems it makes me laugh. Come and see a French hospital : I don't think it's possible to find something more efficient relatively to the price it costs. Come and try to open a company : it takes you 10' minutes... and you can do anything by internet, the phone is cheap and efficient, electricity is cheap, water is cheap... we have good companies...

OK, it's really a pity to have Presidents like M. Sarkozy or M. Hollande, but I won't change them with M. Obama or M. Bush.

The problem with France is 1/ we are in NATO and that's a pity 2/ We're in europe and it's impossible to do something intelligent to adapt to a world where growth is only in coutries when salaries are less than 1$ per hour 3/ We have president that don't care about the country (like your president) but only about themselves and theirs friends.

Tue, 04/09/2013 - 12:33 | 3426937 Meremortal
Meremortal's picture

I helped bring the mini-storage industry to France and Belgium and your take on French business practice and "opening a company" is BS.

Tue, 04/09/2013 - 13:11 | 3427104 rvremi
rvremi's picture

I open mine in 10'... Maybe you take a lawyer and he needed money...

Tue, 04/09/2013 - 13:08 | 3427093 SmallerGovNow2
SmallerGovNow2's picture

Mychal Massie is a respected writer and black talk show host in Los Angeles.


The other evening on my twitter, a person asked me why I didn't like the Obama's?   Specifically I was asked: "I have to ask, why do you hate the Obama's?   It seems personal, not policy related.   You even dissed (disrespect) their Christmas family picture."


The truth is I do not like the Obamas, what they represent, their ideology, and I certainly do not like his policies and legislation.   I've made no secret of my contempt for the Obamas.   As I responded to the person who asked me the aforementioned question, I don't like them because they are committed to the fundamental change of my/our country into what can only be regarded as a Communist state.


I don't hate them per definition, but I condemn them because they are the worst kind of racialists, they are elitist Leninists with contempt for traditional America.  They display disrespect for the sanctity of the office he holds, and for those who are willing to admit same, Michelle Obama's raw contempt for white America is transpicuous.


I don't like them because they comport themselves as emperor and empress.   I expect, no I demand respect, for the Office of President and a love of our country and her citizenry from the leader entrusted with the governance of same.  

Tue, 04/09/2013 - 14:49 | 3427716 bichat
bichat's picture

rvremi is soooo right

How is it possible to take this Charles Gave seriously when he writes that France is a communist country?! Seriously, it just shows me that this guy is a pro capitalist with pro finance ideas...

Tue, 04/09/2013 - 17:06 | 3428439 WhiteNight123129
WhiteNight123129's picture

While it is true that the cost/quality in France for hospitals is far better than in teh US (I lived in France and US for quite a few years), I am afraid to say that the level of gov control over business activity is maybe only surpassed by I don´t know maybe... soviet Russia. I am French, your take on doing business is France is totally wrong. No I leave outside of the OECD.

The cost of doing business would be largely reduced if the clows and their mignons were not bloodsucking the productive population.

I mean you want design, you want luxury, you want craft, come the fuck on, when you are in Charles De Gaulle airport you see entire airplanes landing of Chinese ladies going to the luxury Galeries in Paris.

You know what is a "petite main" in couture, you can not do that anywhere else in the world. Some of those ladies where flawn in Condorde to do the fitting of couture of some rich ladies in the US. Some of the ateliers they know who to sew feathers on cloth or in cloth the other they do things with leather which are just mind boggling.

You want nice booze? You have the best in this country, nice food? The only thing we need is to get rid of welfare state and taxes, get rid of demagocracy, re-introduce republic, re-introduce hard money and banking with no safety nets for bankers and that is it, V shape. As for engineering, we still have very talented engineers, but at that rate we will lose a lot of them fast.

France is just like the US, it is has built a system which is suffocating it from within. The Welfare state is a lie, but I guess the French population does not want this illusion to die, so the gov and its ruling class becomes more and more of a liability for the country.


Tue, 04/09/2013 - 12:32 | 3426910 steve from virginia
steve from virginia's picture





1491 words, 7,630 characters without spaces, 8,067 characters including spaces and nothing about energy.


Not a word, not even a character without spacing ...


Go here: Dial in 'France', see France burns 1.7 million barrels of crude oil every day, notice that France imports every single barrel.


France exports €140-150 million every single day. What does France 'sell' that it might earn that money?


Wine ... cheese ... some crappy cars. Not nearly enough to pay the fuel bill. France must borrow ... hundreds of millions/billions of euros every single day to pay for fuel and for all that goes along with the fuel: distribution, cars, highways, parking, 'destinations', military, finance, insurance ... big government ... France is bankrupt because of its fuel consumption. At the end of the day, Frenchmen do not have the fuel because they've burned it all. They have earned nothing from burning the fuel ... all they have are the massive debts taken on to obtain the fuel ... as well as all the extra needed crap! Frenchmen must borrow to buy more fuel as well as service the massive debts taken on to buy fuel ... over the past 40-50 years!


Gave blames the problem on Communism which would be funny if not so idiotic. Why not blame witches, instead?


Tue, 04/09/2013 - 13:08 | 3427065 Ckierst1
Ckierst1's picture

Somebody has to provide the fuel for the cars all those French bureaucrats are driving. On a side note, you're right, everyone knows that it is marxist-leaning socialism, not communism.  Just like everyone knows we have capitalism back here in the good ol' US of A. Maybe they'll finally start shipping some of the good stuff at lower prices to stack a bit.

Tue, 04/09/2013 - 13:17 | 3427138 rvremi
rvremi's picture

France have one of the biggest oil company in the world (fourth ou fifth), the second distribution company in the world, one of the fist cosmetic company in the world, the fist luxury company in the world, one of the biggest cars company (which owns 40% of Nissans), one of the biggest gaz company in the world (that puts gaz in your coca cola and helps you refine of your oil)... I forget... And we have foie gras, wines, cheeses... and nice women but we keep them for ourselves :-).

Tue, 04/09/2013 - 16:11 | 3428205 Analyse2
Analyse2's picture


Get rid of your old clichés. There is not only cheese and wine in France. All that fuel used is also for production.

See for instance 2011 Fortune magazine’s ranking of the 500 biggest companies in the world: 35 of them are French (US = 133, Germany = 34, UK = 30 ).

France produces planes (Airbus is the challenger of Boeing), and cars - Renault-Nissan group produces more than Ford (8.4 million vs 5.1 million), and also high-speed trains, and nuclear-power plants, and rockets (53td consecutive successful launching of satellite by Ariane 5 occured end of 2012 ), and chemical and pharmaceutical products (Sanofi)…etc…

Happily, all that things have not yet gone in China !

In 2010 France exported 517 Md $ to compare with the US 1289 Md $ (Source Wikipedia). Proportionally to the population (65 million versus 312 million) it is a twice better ratio. Isn’t it surprising from supposed very lazy people, as I read in some comments ?

It is less than Germany, which exports more than the US, with 1337 Md $  - but it is however also better than UK (410 MD $)  

Even if the crisis is now very tough in France and the future uncertain (as it is in the US),  I hope these few figures – that you can easily verify – will “smell” good enough to make you change your mind about France’s economy ... and Europe's too.


Tue, 04/09/2013 - 17:17 | 3428486 WhiteNight123129
WhiteNight123129's picture

Yup but the French welfare state is just bankrupt, done over with.

We need a Gambetta style republic again. Unlike the brits we are not relying on financial industry.

Tue, 04/09/2013 - 12:30 | 3426922 smartstrike
smartstrike's picture

In France you could hire 5 civil-servants for what cops, firemen and other Fed bureaucrats make in the US. And they could probably staff the whole department for what a school administrator retires on in US.

Thu, 05/30/2013 - 13:15 | 3610847 Non Passaran
Non Passaran's picture

But if you pay by weight it's about the same.

Tue, 04/09/2013 - 12:40 | 3426960 Black Markets
Black Markets's picture

France voted for this

Tue, 04/09/2013 - 12:49 | 3427009 Lucius Corneliu...
Lucius Cornelius Sulla's picture

How different is Amerika really?  I know so many liberal assholes who think that they deserve a piece of something that doesn't belong to them.  It is pervasive in the USSA.

Tue, 04/09/2013 - 12:49 | 3427011 Joebloinvestor
Joebloinvestor's picture

France, where the answer for a failing socialist state was to elect a bigger socialist.



Tue, 04/09/2013 - 14:57 | 3427751 bichat
bichat's picture

shut up, François Hollande ideas are far FAR from socialist...

People should understand that the socialist party in France is leaning towards the center (a little bit like the democrats) ...they are only socialist by name...

Tue, 04/09/2013 - 16:16 | 3428220 Joebloinvestor
Joebloinvestor's picture

I bet I can name the tyre factory you don't work at.

Tue, 04/09/2013 - 17:25 | 3428507 WhiteNight123129
WhiteNight123129's picture

Shut up, Francois Hollande is a joke. I know I voted for him just because I could not stand a douchebag with far right tendencies of Sarkozy who was even a bigger joke.

Where the fuck are the Gambetta, Clemenceau and de Gaulle?

The ruling class in France now is vulgar, uneducated,  know a fraction of classic litterature and philosophy they used to know, and more importantly economically illiterate, and has no clue of how currency, money, banking work. They do not know why their banking system was more stable in the XIX century (bi-mettalism) they are knee deep in fiat and welfare and have lost track of how we got there and are clueless about how to get out of it.

Sad sad, but one day maybe old style Gambetta style republic will come back. I hope... or I will never come back in the country I was born again (France).

The first world war has precipitated Europe and Russia into a form of statism which only Switzerland managed to escape.

Switzerland is today what Europe used to look like prior to world war I.

World War I was collective suicide for Europe and it only went down from then.


Tue, 04/09/2013 - 20:39 | 3429121 smacker
smacker's picture


Sarkozy is/was never "far right" as you think.

He's a million miles (or kilometres if you prefer) away from any such thing.

As I said elsewhere in this thread, he's simply the Right cheek of the Big Govt ass. France IS all about Big Govt and has been for many decades.

Wed, 04/10/2013 - 07:44 | 3430192 bichat
bichat's picture

Sarkozy is not far right, but some of his ideas were/are though... He felt that he needed that to get elected.

Tue, 04/09/2013 - 12:51 | 3427025 snakeboat
snakeboat's picture

Mon dieu, sacre bleu!

Tue, 04/09/2013 - 13:00 | 3427055 AynRandFan
AynRandFan's picture

Are we still embarrassed that we aren't more like France?

Tue, 04/09/2013 - 13:05 | 3427077 WillyGroper
WillyGroper's picture

Looks like the COMEX might be sinking into a little depression.

How much longer?

Tue, 04/09/2013 - 13:13 | 3427126 resurger
resurger's picture


Did you notice the spread is $33/Oz just today ... see my post in page 1

Tue, 04/09/2013 - 13:34 | 3427227 FIAT
FIAT's picture

abn muppets cannot take delivery of gold......must accept "paper gold"

Tue, 04/09/2013 - 13:20 | 3427140 q99x2
q99x2's picture

If they wanted to turn those graphs around the have they'd have the  banksters, the JP Morgue and the Goldman Sach gangs, the banksters rounded up and in prisons. Until they do that: the have no right to screw with Social programs. At least not until they remove the parasites and see where they stand..

Tue, 04/09/2013 - 13:24 | 3427171 Wanton1
Wanton1's picture

Exactly what Merkel was waiting for.

Auf Wiedersehen Euro.

Amerika next.

Tue, 04/09/2013 - 13:38 | 3427255 smacker
smacker's picture



I think the author is wrong or exaggerating to call France a 'communist' country. But I understand what he means and it most certainly is a strong socialist country and has been all my life. That explains in part why so many Brits love living in France; they too are Lefties and it's home from home with better food and wine on tap!

It is a misnomer that anybody described Sarkozy as being on 'the Right'. There is no such thing in France in modern history. What you have is the Left cheek and the Right cheek of the same Statist ass. Witnessed by the French State's share of GDP: 57% supported by armies of apparatchiks. Quite ridiculous.

One must also not ignore that it isn't really very different in most other EU member states, they only differ from France in scale. Eg; the so-called conservative PM in Spain, Rajoy, is hardly any different to his socialist predecessor. Both committed to the disaster that is the European Union and big government.

Tue, 04/09/2013 - 14:02 | 3427423 The Carbonator
The Carbonator's picture

The French are toast.


Get it.  French Toast.  Haha I made myself laugh.


F Bernank

Tue, 04/09/2013 - 16:56 | 3428407 WhiteNight123129
WhiteNight123129's picture

I am french, but I like your joke. The entire west is toast. I love american pancakes, and now with the Canadian economy going south we will have maple suryp on top of it. So picture that french toast and american pancakes with maple syrup. Sweet.


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