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A Bad Summer ahead.

The West is turning to Institutional Anarchy (see 05/30/2019) and Regime Confusion. We are in for a long hot summer.

The tradiltional checks and balances in the US have failed to constrain a demented President tricking and treating his closest neighbours – Canada and Mexico; threatening and insensitive to long time allies in Europe, and to emerging major future states and allies (India) quite apart from mishandling what may prove his nemesis, China. The leader of the world capitalist system seems not to understand the complexities of the supply chain that his system relies upon* and in his ignorance has released an economic virus that will go global. 5G, new climate change technologies, cross border financing could take civilisation into the next era – but they will only do so on the back of mutual collaboration, win/win policies, and respect – not through bullying, bluster, ignorance and mistrust.

Europe though rather larger in population than the US is faring no better – the elections last week have opened the doors to anarchy and confusion, to the tampering of Putin and there is no sophisticate in Camp David to turn to.

European leadership has long overlooked the “have nots” – they now urgently need a new language, new actions, new policies, and new leaders. But the elections have rewritten the political map – the continent is in a state of hiatus. The centralist coalitiions have lost out and the extremists with no experience of government are trying to find their way to their new offices. Expect a flock of black swans. It could start yet again in the Balkan States just east of the Adriatic and Italy’s new aspirant despot, Salvini. It is there that over the last 30 years Montenegro’s Djukanovic has quietly led the trend to despotism and confrontation with Bosnia, Serbia and Albania. In another era a formidably led E.U. could have helped these 4 degenrate nations – but there are no political leaders now, only factional decomposition and a vacuum.

No one can look to Britain. Confused in a constitutional spider’s web of its own making, its reputation for solid good sense is long gone.

So continue to sell Europe, keep a tight leash on your all American stocks and add to cash and gold.

Have a good day, James.

For the history lovers amongst you, read “An Empire on the Edge” by Nick Bunker to get some idea of the volatility of trade in the 18th century. It has been one of the achievements of 20th century globalisation to find a way to manage the supply chain with at least some degree of equanimity.