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May 27, 2019 | Fragmentation in Europe – Meaning?

Donald B. Swenson: Born January 24, 1943, Roseau, Minnesota. Graduated H.S. 1961, Moorhead High, Minnesota. Graduated College 1968, Moorhead State University, Minnesota. Designated member of Appraisal Institute (MAI), 1974. Employed with Western Life Insurance Company, 1968 – 71; Iowa Securities Company, 1971 – 73; American Appraisal Company, 1974 – 81. Part-time teacher/valuation consultant/bartender, 1979 – 2008 (taught workshops at Waukesha County Technical Institute, Wi. and Madison Area Technical College, Wi.). Retired 2008 (part time teacher/blogger), AZ. Self educated economist/philosopher/theologian: http://kingdomecon.wordpress.com.

The elections over in Europe have resulted in division and fragmentation. This means that our political and economic decision-making will be difficult going forward for 2019 and 2020. The current slowdown in our global economy is likely to grow as there is no consensus of views on the difficult issues. Group-think is less likely going forward.

 

The issues over in Britain seem most difficult to resolve. Some 50% desire a Brexit and some 50% seem to desire to Remain. This tension will likely continue for the remainder of 2019. I find this a negative for economic growth and for our stock markets. These negatives could grow and lead to a serious recession down the road.

 

The European parliament has become weakened in that consensus will be more difficult going forward. The center is unlikely to have the group-think agreements which it had prior to this election. This means that the central banks will need to pump-up the liquidity to cover over the likely stagnation. Low interest rates and more QE seems to be the only solution for this economy.

 

Elections to the European Parliament take place every five years by universal adult suffrage, and with more than 400 million people eligible to vote, it is considered the second largest democratic elections in the world. 751 MEPs are elected to the European Parliament, which has been directly elected since 1979. No other EU institution is directly elected, with the Council of the European Union and the European Council being only indirectly legitimated through national elections.

 

NBC News says the following:  Far-right populists had some wins, but it wasn’t quite the dramatic, widespread surge seen in recent elections at the national and local level across the continent. What is clear is that the mainstream parties from the center-left and center-right hemorrhaged votes, with much of their support going to a fragmented collection of environmentalists and pro-European Union liberals.

 

That said, while the gains might not have been as dramatic as some forecast, the election arguably cemented far-right populism as a European force that isn’t going away soon. Such parties are often anti-migrant, anti-Muslim and anti-E.U., or at least wish to radically reshape the bloc from within.

 

Conclusion:  the fragmentation over in Europe will affect the global markets and we could witness some major selling of stocks in the near future. Safe haven investments should benefit from this fragmentation and confusion. Watch the markets for evidence of a further decline and possibly a crash. Enjoy! I am: https://kingdomecon.wordpress.com.

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May 27th, 2019

Posted In: Kingdom Economics

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