Merkel, Schultz, & The Prelude To A European Liquidity Shock

Authored by Tom Luongo,

“While out loving Watchmaker loves us all to death.” — Rush “BU2B”

Politicians are cockroaches who walk upright.

If there was ever an example of political leadership selling out their constituents for their own agendas it is the coalition negotiations happening in Germany right now.

Both Angela Merkel and SPD Leader Martin Schultz have to retain power in Germany in order to retain power in Brussels heading up the European Union.  To do this they will agree to anything regardless of what Germans actually want.

Not So Grand After All

The talks between the two to form a government have resulted in a Grand Coalition bargain that no one is happy with.  And it’s killing Schultz’s SPD among voters.  Thanks to Mike Shedlock over at Mish Talk, we’ve got the latest German political polling.

The SPD is down to 18%.  With Merke’s CSU/CDU’s 33% they barely have the support of a majority in Germany.  Since the election the SPD has lost more 2.5% or 10% of its support.

german polling 2-5.jpg

This is the SPD that ran Germany for decades.  This is the SPD that got 25.7% in 2013.  Martin Schultz’s approval rating among Germans is dropping faster than Hillary Clinton’s at a rape survivors club meeting.

Seriously, Schultz is approved by just 25% of Germans.  Frustration is growing among German voters. Mike makes the salient point that:

That Germany has no new government more than four months after the election is barely comprehensible to the Germans: 71 percent do not understand why it takes so long to form a government.

I think part of this 71 percent fully understand that Merkel and Schultz are working so hard on this Grand Coalition for not Germany’s sake but for the European Union’s.  That’s the reason why support for the minor parties is growing at the SPD’s expense.

If the SPD votes down the coalition agreement, which is becoming more likely by the day, then these talks will fail and Germans will have to go back to the polls.  German President, former SPD leader and Merkel’s foreign minister during the last government, Sigmar Gabriel does not want a 2nd election.

He knows the results would be catastrophic both for Merkel and for the SPD.  Merkel would have to step down as head of the CSU/CDU Union party and then the whole situation bursts wide open.

The Alternatives to Grand Plans

If the coalition is ratified by the SPD then it will create an unstable alliance and Alternative for Germany (AfD) will assume the Opposition Party role in the Bundestag.  Any opportunity for AfD to govern will add credence to it among Germans.

This is a win-win scenario for Eurosceptics in the end.  Either way the opposition parties rise in value to Germans as the Union/SPD will take the blame if the government fails.  AfD, the FDP and Der Linke will continue gaining support.

The bigger the toe hold AfD gains in national politics the less radical they appear. Basrriers to people voting for them will crumble.  People are bonded to their party like their sports teams.  It’s basic human in-group/out-group bias behavior.

So, while Germans may not be ready to hand AfD the reins of power yet seeing them in government legitimizes them for the long game.  And that’s the nightmare scenario for EU-firsters and Marxists like Merkel and Schultz.

This is why they are fighting so hard to retain power.  They know the next four years are important to the survival of the EU.

This is their window of opportunity to go for further political and monetary integration.  This is why they both agree on the European Stabilization Mechanism against the wishes of Germans.

In true Progressive fashion, both Schultz and Merkel agree that Germany must lead a greater Europe to save it from its own tribal in-fighting.  But, to do that they need to also destroy German culture in the process.

Thankfully the German people have woken up to their insanity at the right moment in time.  Let’s see if its enough for 2018.

Euro Worries

If the SPD rank and file reject this coalition agreement that will likely mark the top in the Euro.  For now the markets believe the story that it’s just a rubber stamp away and regime certainty will prevail.

But, if it doesn’t then there will be accelerating capital flight out of Europe.  The U.S. dollar will bottom, the euro will peak and bond yields will begin rising sharply.

In fact, they already are and I fear that this rally in the euro is a rush to cash before a market dislocation.  This is why eurodollar markets are crashing, the dollar has been in free fall while bond yields are rising.

Now that stocks are correcting this feels more and more like the prelude to a liquidity shock than anything else.  And the epicenter for it, in my opinion, is in the details of the European political nightmare unfolding.

Comments

Haus-Targaryen Bunga Bunga Tue, 02/06/2018 - 02:27 Permalink

Average German also isn't food insecure, has a job (although it might not pay very well) and still "enjoys" a functioning state. 

To right the ship here we all need to relive what Uroma und Uropa experienced in the 30s and what Oma and Opa experienced in the 40s. Anything less than that and Germany along with all of Europe turns into a turkey mixed with Africa. 

In reply to by Bunga Bunga

Money_for_Nothing Haus-Targaryen Tue, 02/06/2018 - 08:25 Permalink

Biggest problem in the US is obesity. Don't believe everything the legacy media feeds you. Children starve in the US because their parents are abusing illegal substances smuggled or manufactured by illegal aliens and paid for by FDR and LBJ's Great Society Programs. End Great Society and War on Drugs and 90% of US Federal Agencies would have their budgets zeroed out. Trump was elected because regular people have had enough of this BS.

In reply to by Haus-Targaryen

MK ULTRA Alpha Haus-Targaryen Tue, 02/06/2018 - 02:51 Permalink

All it takes is Merkel being forced out. That will change the downward spiral. It would lead to the break up of the EU.

And laws would be passed to force deportation with a small monetary gratuity for being forced out and being a part of Merkel's failed concept of socialist integration  by a process of destroying the nation's culture for the contrived reason, we must make the 3rd worlders feel at home.

In reply to by Haus-Targaryen

Xibalba HRH of Aquitaine 2.0 Tue, 02/06/2018 - 03:28 Permalink

Last summer a bunch of 'guests' were too hot.  So they took their 'free' mattress from their free hangar and went to the Rathaus (mayors office) and they burned them.  The next night they spent was in a hotel with proper AC, and from there they were 'accommodated' of course.  Pork free sausages and halal sides were served I'm sure.  Fun times in Rheinland Pfalz!

 

Supposedly the city I live in has collected too much tax.  WTF...!  I'd like it back then.  Instead they find these pet projects. 

In reply to by HRH of Aquitaine 2.0

Golden Showers Tue, 02/06/2018 - 02:25 Permalink

Love this. I'ma put my arms up on this ride. go WHEEEEEEE! All the way home.

This little piggy went to market...

No shit politicians are cockroaches who walk up right. That's why Ima beat them with my shoe.

silver140 Tue, 02/06/2018 - 03:08 Permalink

"Marxists like Merkel and Schultz"

B.S. Those two are capitalist neo-liberal corporate, wage slave, debt slavers. WTF. Anyone who believes that they're Marxists lives in anti-reality where there's no threat of nuclear war, or false flag ops, or ecocidal maniacs in control of the planet.

Guderian Tue, 02/06/2018 - 04:09 Permalink

Merkel; an ex-FDJ (Free German Youth -of soviet East Germany) agitprop cadre and Martin Schultz; an ex-alcoholic, ex-mayor of a village who ran the EU without ever seeing a poll box from the inside, until the recent election, are to run Germany and decide on the future of the EU? After decimating their parties voter basis by double digits? WTF could possibly go wrong?

Feels like losing WW2 all over again -except last time we had our inner strength and resolve to work ourselves back into the light. This time around we have millions of Turks and now millions of Africans and Arabs, who are ready to play a deadly role. 

As a German who lived, travelled and worked around the world, it is incomprehensible, how this evil hag was voted again by anything above 5%! But there you have it; MSM here is the same as in the USA: monitored, controlled and fed by the CIA via the 'Atlantik Brücke' (Atlantic Bridge). The extent of lies, propaganda and spin is unbearable! Trump is demonised just as Assad. The EU is the great peace project and immigrants "more valuable than gold!" (quote: Martin Schultz). If keeping the peace in the EU takes German disintegration, tax money and bottomless guarantees (Target come to mind), then I prefer war -not against the hapless ppls of Europe, but against our true enemies:

-Banxters

-MSM

-Govt. apparatchiks

-EUrocrats

-Marxists and SJW teachers, professors, 'NGO' and public admin

-Antifa

-Vatican AND protestant churches

The latter uses its self-granted moral high ground to plea for more chain-immigration and appeasement. Their 'social orgs' are the greates net beneficiaries of immigration related spending.

We do need a major crisis! Big time! Then you will see what we are truly made of! The above mentioned will be dealt with and migrants (invaders they are!) will learn the hard way, how German hospitality can turn sour. We will shatter their dreams of muslim occupation and a happy life on welfare!

YouJustCouldnt Guderian Tue, 02/06/2018 - 15:18 Permalink

So eloquently put. As you will be aware, it is not just the Germans who have had an absolute belly full of  this garbage-A British man was jailed for one year for leaving bacon sandwiches outside a mosque.  Half way through his sentence he was found dead in his cell.  One year on and still no answers how he died. An English man drove into a crowd of Muslims, he did not kill anyone but was given a minimum sentence of 43 years while an English Muslim, who drove into a crowd of pedestrians in a fit of anger had his sentence of 5 years reduced to 4. Something's gotta give.

In reply to by Guderian

ukipboy Tue, 02/06/2018 - 04:29 Permalink

 "German President, former SPD leader and Merkel’s foreign minister during the last government, Sigmar Gabriel does not want a 2nd election."

Potential confusion here between two different politicians.

The incumbent German President is Frank-Walter Steinmeier, an ex-Foreign Minister and SPD representative. The current German President is not Sigmar Gabriel (who is a leading member of the SPD and currently caretaker vice-chancellor).

Guderian Tue, 02/06/2018 - 04:30 Permalink

BTW, the poll in this article is outdated. Facing the Grosse Koalition, INSA pollsters and BILD tabloid have published how more voters turn away in disgust:

CDU/CSU lost 2,5% to 30,5%, SPD down 1% to 17%. AfD lgains another point to 15%. The SJW and antiGerman GREEN up to 12,5%, LINKE marxists and AntiFa 11%  and the ever power-horny FDP 10%

This is historic; CDU/CSU and SPD combined not winning the majority of votes, but only 47,5%

greven40 Tue, 02/06/2018 - 08:15 Permalink

Martin Schulz--->" For me, the new Germany exists only in order to ensure the existence of the State of Israel and the Jewish people."   Another article mentioned zombie Germany...  In more ways than one really.

Germans are slaves of the zionists, just like Americans are.

Ace006 Tue, 02/06/2018 - 23:25 Permalink

**  must lead a greater Europe to save it from its own tribal in-fighting **

Those wild and crazy guys....  Comes the full moon and it's into the forests.