Frightening Shifts in European Politics Keeps Disaster in Focus

Headlines are a buzz with this week’s French presidential debate where candidate Emmanuel Macron came out on top.

Market sentiment improved, evidenced by gains in the Euro currency and a narrowing yield differential between French and German government bonds.

This also follows last week’s election in the Netherlands where voters denied far-right populist candidate Geert Wilders in favor of liberal conservative Prime Minister Mark Rutte.

Because of these events, current European leadership hopes to avoid another Brexit or U.S. election outcome.

But, the European train wreck is not over by any stretch. Take a look …

How’d we get here?

Years of aggressive financial risk-taking, overspending and burgeoning debts led to financial panic, bailouts and rising social unrest.

Between 2014 and 2016, the euro sank fast, taking much of Europe down with it. The trillion-dollar bailouts and money-printing operations engineered by Europe’s strongest economies only made the situation worse.

And volatile political conditions are fueling extreme right-wing movements that pushed the political landscape further to the right.

Consider recent headlines …

  • Energized populist movement fueling fascism, with some going as far as “embracing World War II era policies.”
  • Neo-fascists winning regional offices in Slovakia.
  • Turkish President Erdogan referring to European leaders as Nazi’s.

With several political elections across Europe in the coming months, many strongmen choose to ramp up nationalist rhetoric.

This too will not end well.

Consider the French election, where Marine Le Pen broadens her appeal and puts a presidential victory in reach.

While support for far-right populist candidate Le Pen may be ticking lower, so was Donald Trump’s going into the November 2016 election.

It’s too early to say if the populist tide may turn away from the Brexit movement. But it doesn’t matter.

Reforms across the euro zone are needed right now to restore confidence. But that’s going to be a tough row to hoe, especially with so many deep-rooted beliefs over what should be done. Here are just a few:

  • Common market underpinned by substantial subsidies for poorer countries.
  • Direction on immigration.
  • Managing very different growth rates across the European Union.

And don’t forget the lingering debt load that has Europe drifting closer to a sovereign debt crisis.

The fact is, Europe is splintering and going bust.

And as the final shoe drops, there will be massive capital flight into safe-havens such as U.S. stocks and AAA Corporate debt.

Like Larry said: Prepare for a five-year roller coaster ride through hell.

The best way to do this is to buy blue-chip U.S. stocks on pullbacks and buy gold when the signal comes — I’ll tell you when.

Good Investing,

Mike Burnick

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Comments 13

  1. Marina March 22, 2017

    May you please provide AI GOLD chart after 5/10/17. Thank you.

    Reply

    • MICHAEL BOLIN March 23, 2017

      I agree. you should make a tab on the website that has all AI charts. Update the chart, indicate below it “updated_____ date.”

      Reply

  2. Ayax March 22, 2017

    Hi,
    First of all we must wonder if the last Netherlands elections were not corrupted. Strangely the Netherlands people
    has enough of the economical and inmigrational situation, and casually the status quo was finally kept.
    Second, the U.K. should never had been accepted in the EU, because it is the ingoing door for the USA power, market, will, intelligence, commercial corruption, etc. (globalization, social decay, and more). So we must say that the Brexit is good and necessary.
    Third, the EU should have never been greater than 12 states. (The USA were pushing up to prepare the chaos.). So, not Greece, not Romania, Bulgaria, Txechia, Slovenija etc.
    Fourth, France is the principal state of the Union that can stop this madness of the muslim inmigration. Not Germany, not Denmark, not Swede, specially not Italy (thei are out of mind), etc. Therefore it is desirable that Le Pen to be the next elections winner.
    I don’t like her, she a fascist like his father, but between the bad things, the less one.
    Finally everything I’ve been telling is falling down if we consider that everything, absolutely everything that is happening has been studied in depth decades ago by the owners of the world power in order to reach the NWO.
    They have made till now no mistake. Step by step their program is going ahead. No stop, no way astern is possible.

    Reply

  3. Bob Porter March 22, 2017

    Mike,

    We all loved Edelson and wish the best a new world for you. Being an ex-stock broker, it seems to me that you learned well. Can’t wait for your next notice.

    Bob Porter

    Reply

  4. Steve Nellissen March 22, 2017

    Mike,

    Appreciate your taking on Larry’s wave work. Hope your studies with Larry keep you on his track.

    Steve N

    Reply

  5. Denise Wright March 22, 2017

    Where’s the AAA corporate debt? Everything seems to be B rated

    Reply

  6. brian March 22, 2017

    A good suggestion as to US economic health is to keep your eyes fixed on the XRT 100 top retailers ETF rather than the Goldman micro managed ten highest priced DOW stocks that make up the DOW reading .
    At present there is now approximately 30% difference between those indexes the majority of that difference happened since 12 December when that difference averaged less than 5% .
    Since the consumer is 70% of GDP that stat shows US GDP is cratering while the FED/GS team attempts to delude investors with idea that the US is recovering through manipulating DOW stocks higher

    Reply

  7. roger March 23, 2017

    Thanks for taking over – however, miss the guy

    Reply

  8. Donald E. Ghidoni March 23, 2017

    if Le Pen wishes to win she needs to not ask for France to leave the EU that is why Wilder of the Netherlands lost.

    Only state that a referendum will be called for, too many people are afraid of leaving the EU.

    Reply

  9. Ken March 23, 2017

    I laugh every time someone suggests a candidate who opposes open borders can win in western Europe. Have you noticed the way France conducts its federal election (ie. first vote, second vote, etc). Who do you think that favors? Besides, Europeans are already too brainwashed to even recognize what is happening to them. Let me correct that – …what has already happened to them.

    Reply

  10. David Latham March 23, 2017

    Mike: Your last GMM recommendation was a foreign penny stock that will cost me $50 to buy and another $50 to sell. Is this typical of trading houses. I currently use Options House.

    R, David

    Reply

  11. Duncan March 26, 2017

    Why is Le Pen labeled as “far right”? Maybe if she”s being compared to Lenin.

    Reply

  12. Jas April 3, 2017

    Larry was far too young to pass away, he was one of life’s good guys, he thought there would be a return to the gold bullion standard, possibly even a gold tranche, he was a unique human being and one of life’s good guys. I just wish I was as good an mathematician as he was an anthropologist. I am still in shock that he’s gone. Whatever trouble we are having here in Europe pales into insignificance to Larry’s unfortunate demise. But his spirit lives on. God bless you Larry.

    Reply