Tuesday, July 05, 2016

Europe Is A Minefield
In his latest missive, John Mauldin* highlights how..
Europe was a minefield even before the Brexit vote. 
• If Remain had won, refugees from Africa & the Middle East, many with the UK as their
destination, would still be struggling across the Mediterranean or taking land routes into
Eastern Europe. The EU would still be desperately trying to stem the tide & to
accommodate those whom it can’t stop.
• If Remain had won, thousands of refugees would still be dying as their rickety boats capsized
& sunk.
• If Remain had won, Greece would still be chafing under EU-imposed austerity as its
economy endures depression-like conditions. Spain & Portugal would still be wondering if
they are next.
• If Remain had won, Poland & Hungary would still be fighting against EU mandates that
disrupt their internal affairs.
• If Remain had won, several EU governments would still be engaged in deficit spending that
exceeds EU guidelines, while the EU’s inability to stop them continued to expose its inability
to enforce its decisions.
• If Remain had won, the European Central Bank would still be holding interest rates below
zero, buying private assets with public money, & propping up insolvent banks that must fail
if the Eurozone economy is to ever recover.
• If Remain had won, Russia & NATO would still be facing off in the Baltic Sea, forcing
already stretched governments to boost defense spending.
• If Remain had won, ISIS-sponsored or ISIS-inspired terrorists would still be plotting attacks
like the ones in Paris & Brussels.
• If Remain had won, border checks would still be in force within the supposedly free-travel
Schengen zone countries, making one of the EU’s greatest achievements into a mockery.
• If Remain had won, sizable minorities or even majorities in other European countries would
still be agitating for their own exit opportunities. Catalonia would still be trying to separate
from Spain. The Lega Norde in Italy would still be agitating for Northern Italy to secede. The
Walloons and the Flemish would still want to sunder their ties with Belgium. Marine Le Pen
would still be gaining strength in France.
• If Remain had won, the Supreme Court of Austria’s ruling that an extremely close
presidential vote must be taken again would still stand, opening up the possibility that a farright-wing
party might take control of a major European country. The frustration over
immigration & immigrants is growing. Nationalism, as opposed to loyalty to the European
Union, is a rising tide that shows no sign of receding.
• If Remain had won, Italian banks would still be down some €400 billion, an enormous
proportion of Italy’s GDP. German banks would still be teetering. I’ve written about both
before. What I haven’t mentioned is how desperate the situation is becoming for European
insurance companies, which are even larger than the banks. Arguably, many are in worse
shape in a negative-rate regime.
• If Remain had won, the growing criticism of the ECB would still be growing, & negative
rates would still be distorting European financial markets
Click "Mauldin July 3" to download Mauldin's letter (may need to provide your email address), or hit "View Fullscreen" at the bottom next to the Scribd logo to enlarge viewing .. John Mauldin, Best-Selling author and recognized financial expert, is also editor of the free Thoughts From the Frontline that goes to over 1 million readers each week. For more information on John or his FREE weekly economic letter go to: http://www.frontlinethoughts.com/learnmore

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