Martin Armstrong’s Merkel departure is a euro systemic crisis view is somewhat of a bearish outlook for the world’s second-largest trading bloc which boasts an estimated GDP of $18.8 trillion (2018).
But Martin Armstrong, a top trend forecaster, and macro investor/ trader has always waved the Eurosceptic flag and (along with a number of other British economists) doubted the mechanics of a single bloc currency, the euro, for multi-tier economies with varying levels of productivity. One size cannot fit all, the eurosceptics argue.
“Merkel is on her way out and she has been the face of the entire European Union. This is incredibly important for it will ultimately undermine the Euro itself”
MARTIN ARMSTRONG
The euro was driven more by political ideology, to bring European nations closer, rather than economic principles. The euro is celebrated as an ideology with high ideals which kept member European nations at peace.
But political ideology is as changeable as the weather. Popularism, nationalism and extremism, the polarisation of politics from far left, far right is the new political climate of the day.
Martin Armstrong’s Merkel departure is a euro systemic crisis view could hold water.
So just how long will a monetary currency based on ideology rather than sound economics survive in this current harsh climate of political extremism?
Creating a monetary currency that has a foundation based on ideology rather than economics is could be flawed from the start.
“The entire play within Euroland has been to buy the Bonds and sell just about everything else”
MARTIN ARMSTRONG
The political climate is constantly changing. When the electorate decides to replace their Europhile leaders (for whatever reason) with Eurosceptic leaders then the political momentum for supporting the EU and the single bloc currency, the euro vanishes.
So Martin Armstrong’s Merkel departure is a euro systemic crisis underscores the phase that the EU and the euro could be at.
“Merkel is on her way out and she has been the face of the entire European Union. This is incredibly important for it will ultimately undermine the Euro itself,” writes Martin Armstrong.
If Martin Armstrong’s Merkel departure is a euro systemic crisis is a bang on the money then how should investors/traders game it?
“The entire play within Euroland has been to buy the Bunds and sell just about everything else,” writes Martin Armstrong. Why?
“The primary reason has been the prevailing view that if the Euro collapses, then owning German bonds means you will get back Deutschmarks,” adds Martin Armstrong.
“France, a founding member of the EU pro-EU French President Emmanuel Macron has also been hit with his lowest ever approval rating as his popularity continues to tumble”
Martin Armstrong’s Merkel departure is a euro systemic crisis because Merkel has been the face of a united Europe on the international stage. Merkel led Germany as chancellor since 2005.
Moreover, Merkel has been the head of Europe, the figurehead that symbolized a united Europe on the international stage. Merkel was the EU’s nucleus that kept other member states in line and together in the face of adversity from the Greek sovereign crisis, Brexit and the rise of a Europe skeptic party in Italy.
Britain referendum vote to leave the EU was a bitter blow, nevertheless with a staunch Europhile at the head of Germany and Europe the EU and the single bloc currency had a good fighting chance of shacking off Brexit, surviving and maybe even thriving. Then Europe’s wild card, Italy became the latest to have succumbed to popular politics and elected a hard line anti-migrant, Eurosceptic populist government.
So Martin Armstrong’s Merkel departure is a euro systemic crisis that could end with Germany.
Europe’s new wave of political instability is a genie out of the bottle. The center-left in Europe is collapsing and there is a rise of strongman populism, nationalism which has no love for the EU.
France, a founding member of the EU pro-EU French President Emmanuel Macron has also been hit with his lowest ever approval rating as his popularity continues to tumble.
Whatsmore, Only 29 percent of French citizens surveyed in September said they were satisfied with Mr. Macron, according to a new Ifop poll, which is the lowest figure recorded by the firm during his presidency.
“it will undermine the euro, that is what our computer models are warning about” – Martin Armstrong (on Merkel’s departure)
Martin Armstrong’s Merkel departure is a euro systemic crisis, according to the top forecaster’s computer model.
Merkel departure is incredibly important because “it will undermine the euro, that is what our computer models are warning about”, writes Martin Armstrong.
Martin Armstrong believes that Merkel’s departure will drive the dollar to all-time record highs “breaking the back of the entire world monetary system”, adds Martin Armstrong. “Curiously enough, December has been shaping up as a major turning point on the Arrays. We may have just got the explanation why,” writes Martin Armstrong.
Martin Armstrong’s Merkel departure is a euro systemic crisis is also in tune with the German media. Various German outlets have warned that Merkel departure will weaken Europe and is a potential threat to the single bloc currency.
Munich newspaper the Münchner Merkur said Mrs. Merkel was increasingly being seen overseas as a “lame duck”.
“For years, Merkel has shaped EU policy. Banking crisis, financial crisis, refugee crisis – she has always been the constant in an often turbulent continent. In the circle of EU heads of state and government, she is by far the most senior official”.
Merkel’s loss of authority has become obvious since a mini-migration summit was scheduled in June. Just 16 of 27 where heads of state and government came together at that time to support Merkel in her Union-internal dispute with CSU leader Horst Seehofer”.
Martin Armstrong’s Merkel departure is a euro systemic crisis view could have legs. Martin Armstrong’s is also forecasting that EU will break apart when QE stops. So stay tuned as the EU and the euro yet again becomes another evolving story.
