ONLY country to have benefited from the creation of the euro was Germany

Posted Jan 24, 2016 by Martin Armstrong

Schengen Agreement & the Fall of Europe

QUESTION: Mr. Armstrong, You have been nominated for the FX analyst of the year in 2016 again. True, your calls on the Euro and the Swiss peg were amazing. But what has fascinated me even more is you also forecast that the Schengen Agreement would come to an end before the refugee crisis. Can you elaborate on how these forecasts are even possible for you obviously do what no one else has ever been able to accomplish?

Thank you for a eye-opening blog.

FJ

ANSWER: Everything is connected. Nothing takes place in some isolated vacuum. Hopefully, people will open their eyes and see what I see; when they do, it will change how the world is managed. Just the other day, a die-hard Democrat tried to argue that Trump would start World War III and that Hillary has more experience. I said her experience was limited to working at the State Department, hiding her own emails, and setting up a Canadian entity that sold foreign influence to the highest bidder who then deposited the money in her “charity”. Come on. What experience? Then I mentioned how people made the very same argument about Ronald Reagan, saying that he too was a tough “hawk” who would also start World War III. He continued to bring down the Berlin Wall.

When we wake up and realize that the system cannot be altered by one person, then perhaps we will start to investigate the truth. As far as the EU is concerned, it is a total disaster. Brussels is fighting Poland, Hungary has fallen further into an abyss, and passports are being checked again, even between Denmark and Sweden, because now everyone is afraid after Germany allowed rapists and terrorists in and tried to cover it up. In short, the EU is functionally moving into a supernova. Brussels remains in a state of denial and tries to force the EU upon everyone while denying any democratic process in order to save the jobs of the Eurocrats.

Everything is connected. The Schengen Agreement is just one domino. The Schengen Agreement was wearing down because of economic differences. Let’s be honest here. The ONLY country to have benefited from the creation of the euro was Germany. Why? It eliminated the FX risk for German manufacturers. Thus, Germany was able to expand its trade within Europe. The rest of Europe had to convert their debts to the euro and they doubled. The failed structure of the euro placed tremendous pressure upon the entire world economy. The collapse of the Schengen Agreement was inevitable and not exclusively caused by the refugee crisis.

So as Mark Twain said, “The reports of my death have been greatly exaggerated.” Keep in mind the euro still has a few years left. However, its days are clearly numbered, as we know it today.

Schengen Agreement to come to an end or be highly restricted no later than 2017

Europe’s Migrant Crisis

Posted on September 11, 2015 by Martin Armstrong

Question: What is your analysis of the recent migrant crisis in the the Middle East and Europe? Is this the death knell for European Civilization demographically, socially and politically? To me it appears to have parallels to the 3rd and 4th Century Roman Empire when tribes like the Goths first came as migrants fleeing the Huns and ended up subjugating Italy and the Eastern Empire. Is this the third Muslim invasion of Europe?… the first being stopped by Charles Martel at Poitiers in 732, ending with the Battle of Granada in 1492. The second being stopped at the Battle of Vienna in 1683, ending with the fall of the Ottoman Empire after WWI.  How does this play out? Would it lead to extremist right wing parties in Europe again like the 1930’s? Maybe the end of the Schengen Treaty or the dissolution of the EU itself?

Thanks for your analysis!

ANSWER: The Schengen Agreement led to the creation of Europe’s borderless Schengen Area. The treaty was signed on June 14, 1985 by five of the ten member states of the European Economic Community near the town of Schengen in Luxembourg, but was not implemented (partially) until 1995. It proposed the gradual abolition of border checks at the signatories’ common borders. Measures proposed included: reduced speed vehicle checks that allowed vehicles to cross borders without stopping, allowed residents in border areas the freedom to cross borders away from fixed checkpoints, and the harmonization of visa policies.

The problem we have is that 2016 will be 31 years from the signing of that agreement. So if there is a risk that the Schengen Agreement will come to an end, it will arrive in 2016. If we look at when it began to be partially implement in 1995, we can see that tensions should have begun questioning its survivability 19 years later. That has also been on target as of 2014. The freedom of movement within Europe began to come into question in 2014. Angela Merkel rejected British plans for immigration quotas in 2014, stating that the principle of free movement in the European Union was “non-negotiable”. Nevertheless, there has been concern about restricting movement of “trouble makers” looking to stir up resistance to Brussels.

The Schengen Agreement will fail for it is an invitation that will bankrupt the governments for they cannot afford to take care of the welfare of so many people. Expect this agreement to come to an end or be highly restricted no later than 2017