There is a massive market for high-level intellectual engagement. The narrow band of TV made us feel stupider then we are, and people have a real hunger for deep intellectual dialog. I know that I do, which is why I am typing these essays every week and I don’t even consider selling any advertisements, even though the readership is through the roof, from Japan to São Paulo and everything in between. It’s free of commercials and always will be.
A good example of the TV narrow band came just in recent days again. Chancellor Merkel announced that it’s time for Germany to take more of a leadership role in Europe. Now, Germany is already the most dominate economical and political power in Europe. They also control the currency through the European Central Bank in Frankfurt, so what other increased leadership is she talking about?
Not in the movie making, I hope.
She is talking about the military build up.
With the US withdrawing from managing Europe, and the world at large, the problem that Germany has is plain to see. Their supplies of energy and raw materials are from outside of the EU, hence outside of their control. The same holds true for the markets they sell to (the automotive market alone exports 80% of what they make, there is hardly any domestic demand).
The obvious way forward for them is first to get close with Russia to secure the supply side, but they don’t have a great history in doing that – the last pact lasted only 22 months before they started shooting at each other (Ribbentrop – Molotow in 1939).
There is also an internal problem that Germany has, and it’s the collapsing demographic.
This is the reason for their desperate attempts to bring people from outside, the Turks back in the day and the Syrian refugees recently.
As for the access to oversees market part of the equation, Germany needs to develop a serious naval power to secure it and in doing so, it will face fierce pushback from Great Britain.
They say that history doesn’t repeat, but it rhymes, and we will see how close the rhyme comes this time around.
Not the time yet for red shoes dancing the blues, I will say my two cents on the economy first.
The markets are massively overvalued. In fact – a recent Bank of America survey had 78% of fund managers saying that stocks are overvalued higher than ever in the history of the survey, and it includes the Internet bubble from 20 years ago too. More importantly – we never saw a stock bubble like this in times of such political and social uncertainty. Now add the covid disaster to top it off.
The one thing that surprises some market players is that gold isn’t reacting to the super massive money printing by the central banks.
I subscribe to some Swiss gold promoter’s websites (physical bullion selling and storage services) and lately they’re getting plain angry, as they don’t understand what’s going on. Well, boys and ladies, the concept of money is changing, and since it has zero connection to gold since 1971, you’re left behind.
May as well leave the gold in the tunnels drilled in Swiss Alps - nobody is going to come and look for it anytime soon.
The important point is that this covid crisis is different enough to matter. We haven’t have a lockdown of the global macro economy for any pandemic - the polio epidemic of the 50s, for War World I, World War II, for the Spanish flu, this one now is a first. It’s the biggest disruption by far to the economy since the Great Depression (and even back then we didn’t have a lock down of businesses).
The decision to shut down the economy was a political one and it will be studied for years as an example what not to do.
Now, did you want to hear about the deal?
Let's dance, she said, while colour lights up your face.
For fear your grace should fall
For fear tonight is all *
And all this happened, more or less.
* Lyrics by David Bowie
Tom Kubiak is the author of The Traveler