EU Crisis Emerging; Battle Lines Drawn…
01/02/12 INSIIDE Track: The Storm Before the Calm…
In many cases – whether it be a stagnant relationship, an illness, etc. – circumstances often deteriorate before they improve. Thus, the saying: It’s always darkest before the dawn.
There is often a cause and effect reason for this principle. Change is often difficult… and scary. So, if ‘things’ have not gotten too bad, we don’t want to undertake the risk of change. This is closely related to the proverbial ‘frog in the kettle’ syndrome.
And, it particularly applies when you are dealing with a large group of people and a great diversity of opinion. It is much easier to maintain the status quo – even if it is responsible for a steady deterioration of society – than to risk shaking things up. This plays into another well-worn cliché: “The devil you know is better than the devil you don’t”.
A prime example is Europe. More specifically, there are nations within Europe that have spent decades ‘lowering the bar’ for what is expected from the populace (as far as hard work and productivity), even though it pushes them farther into debt – a very real form of slavery.
As a result, they fall into the trap that Patrick Henry described in his famous ‘Give me liberty or give me death’ speech, when he rhetorically asked if colonists would choose to indulge in the illusions of hope, shut their eyes against a painful truth and… “listen to the song of that siren till she transforms us into beasts’.
From an economic standpoint, I still contend (based on cycles and technical analysis) that Europe has farther to go – in a negative direction – before hitting bottom and choosing to make the sacrifices necessary to produce a stable union.
These ‘sacrifices’ refer not only to sacrifices made by individual nations (of their own resources, sovereignty, autonomy, etc.) but also refer to what nations will be ‘sacrificed’ (evicted) on the road to European Union… and the development of the Euro currency…
This dovetails with my long-term analysis for the Dollar to reach a MAJOR transition point in 2013. In a way, the Euro & the U.S. Dollar are in a ‘race to the bottom’. From 2001–2008, the Dollar was winning. From 2008 into early-2011, it was more of a ‘neck-and-neck’ race where one would gain momentum – heading lower – only to have the other catch up and surpass it later.
May 2011 ushered in the latest period…when I expected the Euro to jump ahead… in the race to the bottom. Cycles portended a multi-quarter, possibly multi-year, Euro peak for May 2011.
The second phase of this expected decline was forecast to begin in late-October… and is likely to culminate in January 2012. And then, Europecould see an intervening calm… before the storm… before the calm. This coincides with analysis for Gold & Silver, with Silver cycles pointing lower from May 2011 into early-February 2012. A multi-month period of consolidation is likely to follow.
The bottom line is that the Euro is likely to suffer more selling – and Europe is likely to experience more instability – at multiple points…
D.U.P.E. & David
This ongoing analysis may have been powerfully reinforced… precisely on schedule. A ‘do-or-die’ EU summit in Brussels – on December 8th – produced a shocking and polarizing revelation from Britain’s David Cameron, when he vetoed an emergency treaty that was formulated to ‘save the Eurozone’.
As is so often the case with events on D.U.P.E. (see December 2011 INSIIDE Track for more details and dozens of examples of similar events on December 8th), it pitted a minority on one side – the antagonist – against a suddenly unified majority on the other.
France’s Nicolas Sarkozy – one of the guiding forces behind this treaty that would have simultaneously marginalized the U.K. within the EU – had to be ‘physically restrained’ during a 10-hour marathon negotiating session. He snubbed Cameron after that.
The treaty would have given Brussels – the governing center of the EU – increasing power to dictate national budgets and choose when/how to rescue defaulting nations, with only a majority of support needed (Cameron wanted this to be unanimous). European power is destined to ultimately be consolidated in Belgium – housed in a replica of the ancient Tower of Babel – but the timing is not quite right.
This debacle (the summit was said to have ‘descended into chaos’) is a perfect microcosm of what I have described with regard to European Unity Cycles – that need to get worse before they get better – and with regard to D.U.P.E. Cycles. But, it was not the only event that transpired on and/or around December 8th. More on that in a minute… [D.U.P.E. stands for Date of Unifying Plans & Events and describes the unique events that repeatedly occur on/around December 8th.]”
EU troubles are only beginning to emerge… and should steadily intensify leading into 2018. The UK/EU battle is already intensifying and should be watched as an archetype of what could be seen across the European landscape in the coming ~7-year period.