Showing posts with label Dutch government. Show all posts
Showing posts with label Dutch government. Show all posts

Monday, December 11, 2017

Visualizing The World"s Most Valuable Companies Of All Time

MODERN JUGGERNAUTS LIKE APPLE DON’T EVEN COME CLOSE


The Chart of the Week is a weekly Visual Capitalist feature on Fridays.



Courtesy of: Visual Capitalist


Before speculative bubbles could form around Dotcom companies (late-1990s) or housing prices (mid-2000s), Visual Capitalist"s Jeff Desjardins notes that some of the first financial bubbles formed from the prospect of trading with faraway lands.


Looking back, it’s pretty easy to see why.


Companies like the Dutch East India Company (known in Dutch as the VOC, or Verenigde Oost-Indische Compagnie) were granted monopolies on trade, and they engaged in daring voyages to mysterious and foreign places. They could acquire exotic goods, establish colonies, create military forces, and even initiate wars or conflicts around the world.


Of course, the very nature of these risky ventures made getting any accurate indication of intrinsic value nearly impossible, which meant there were no real benchmarks for what companies like this should be worth.


SPECULATIVE PEAK


The Dutch East India Company was established as a charter company in 1602, when it was granted a 21-year monopoly by the Dutch government for the spice trade in Asia. The company would eventually send over one million voyagers to Asia, which is more than the rest of Europe combined.


However, despite its 200-year run as Europe’s foremost trading juggernaut – the speculative peak of the company’s prospects coincided with Tulip Mania in Holland in 1637.


Widely considered the world’s first financial bubble, the history of Tulip Mania is a fantastic story in itself. During this frothy time, the Dutch East India Company was worth 78 million Dutch guilders, which translates to a whopping $7.9 trillion in modern dollars.


MODERN COMPARISONS


The peak value of the Dutch East India Company was so high, that it puts modern economies to shame.


In fact, at its height, the Dutch East India Company was worth roughly the same amount as the GDPs of modern-day Japan ($4.8T) and Germany ($3.4T) added together.


Even further, in today’s chart, we added the market caps of 20 of the world’s largest companies, such as Apple, Microsoft, Amazon, ExxonMobil, Berkshire Hathaway, Tencent, and Wells Fargo. All of them combined gets us to $7.9 trillion.


At the same time, the world’s most valuable company (Apple) only makes it to 11% of the peak value of the Dutch East India Company by itself.


HISTORIC HEAVYWEIGHTS


Despite the speculation that fueled the run-up of Dutch East India Company shares, the company was still successful in real terms. At one point, it even had 70,000 employees – a massive accomplishment for a company born over 400 years ago.


The same thing can’t be said for the other two most valuable companies in history – both of which were the subject of simultaneous bubbles occurring in France and Britain that popped in 1720.


In France, the wealth of Louisiana was exaggerated in a marketing scheme for the newly formed Mississippi Company, and its value temporarily soared to the equivalent of $6.5 trillion today. Meanwhile, a joint-stock company in Britain, known as the South Sea Company, was granted a monopoly to trade with South America. It was eventually worth $4.3 trillion in modern currency.


Interestingly, both would barely engage in any actual trade with the Americas.


The other historic heavyweights included in our chart?


  • Saudi Aramco, at $4.1 trillion, based on calculations by University of Texas finance professor Sheridan Titman in 2010, and adjusted for inflation.

  • PetroChina surpassed $1 trillion in market cap in 2007. Adjusted for inflation that’s $1.4 trillion today.

  • Standard Oil, before its famous breakup due to monopolistic reasons, was worth at least $1 trillion. Adjusted for inflation it would likely be more, but we kept this conservative.

  • Microsoft reached its peak valuation in 1999, at the top of the Dotcom Bubble. Today, that would be equal to $912 billion.






Tuesday, September 12, 2017

All Food Is Gone! Violence Erupts On Caribbean Island Of St. Martin

Authored by Mac Slavo via SHTFplan.com,


Hurricane Irma ravaged the Caribbean islands last week and wiped entire islands off the map. Now that the food and water have been scavenged from every grocery store on St. Martin, people are resorting to violence.



The people obviously started with the grocery stores, scavenging what they needed for sustenance; water, crackers, and fruit. But according to the New York Times, by nightfall on Thursday, what had been a search for food took a more menacing turn, as groups of people (some of whom were armed), swooped in and violently took anything of value that was left. Things like electronics, appliances, and vehicles were all stolen.


The social fabric has begun to fray now that people are without the most basic of essentials: food and water.



 “All the food is gone now,” Jacques Charbonnier, a 63-year-old resident of St. Martin, said in an interview on Sunday. “People are fighting in the streets for what is left.”



Residents of St. Martin, and elsewhere in the region, spoke about a general disintegration of law and order as survivors struggled in the face of severe food and water shortages, and the absence of electricity and phone service.





As reports of increasing desperation continued to emerge from the region over the weekend, governments in Britain, France and the Netherlands, which oversee territories in the region, stepped up their response.


 


They defended themselves against criticism that their reaction had been too slow, and insufficient. Both the French and Dutch governments said they were sending in extra troops to restore order, along with the aid that was being airlifted into the region. –New York Times



“There was some looting in the first few days, but the Dutch marines and police are on the street to prevent it,” Paul De Windt, publisher of The Daily Herald, a newspaper on the Dutch side, said on Sunday. “Some people steal luxury things and booze, but a lot of people are stealing water and biscuits.”


The storm directly hit the region beginning on Wednesday. Irma destroyed entire airports and ports, knocked out power and potable water systems, and left tens of thousands of residents and tourists isolated and increasingly desperate for food and water, and unable to go anywhere to get it. The crisis then worsened on Saturday as Hurricane Jose rumbled through the region. Though the islands hit by Irma avoided a direct blow from the second hurricane, its arrival forced the suspension of relief and rescue operations, prolonging the agony for many already desperate to survive.


According to NBC News, the State Department said Sunday that more than 1,200 United States citizens have been evacuated from the hurricane-damaged island vacation hot spot of St. Martin amid reports of looting and violence - but the Dutch government said reports of a rumored prison break were “unfounded.”



As preppers are well aware, when the needs of the population cannot be met in an allotted time frame, a phenomena occurs and the mindset shifts in people. They begin to act without thinking and respond to changes in their environment in an emotionally-based manner, thus leading to chaos, instability and a breakdown in our social paradigm. When you take the time to understand how a breakdown behaves and how it progresses, only then can you truly prepare for it. –Ready Nutrition


People get violent when food and water are scarce. Even minimal prepping and a small safe space for non-perishable food and water would have been an asset to those in the path of Irma.

Thursday, April 13, 2017

Turkey's Barks And Bites

Authored by Burak Bekdil via The Gatestone Institute,




  • This is the first time that Erdogan is openly challenging a concerted European stand.




Turkey"s foreign policy and the rhetoric that presumably went to support it, has, during the past several years, aimed less at achieving foreign policy goals and more at consolidating voters" support for the Ankara government.


Self-aggrandizing behavior has predominantly shaped policy and functioned to please the Turks" passion for a return to their glorious Ottoman past.


Assertive and confrontational diplomatic language and playing the tough guy of the neighborhood may have helped garner popular support for President Recep Tayyip Erdogan and his Justice and Development Party (AKP), but after years of "loud barking and no biting", Turkey has effectively become the victim of its own narrative.


In 2010, Turkey froze diplomatic relations with Israel and promised "internationally to isolate the Jewish state", and never to restore ties unless, along with two other conditions, Jerusalem removed its naval blockade of Gaza to prevent weapons from being brought in that would be used to attack Israel. Turkey"s prime minister at the time, Ahmet Davutoglu, said Israel would "kneel down to us".


In 2016, after rounds of diplomatic contacts, Turkey and Israel agreed to normalize their relations. The blockade of Gaza, to prevent shipments of weaponry to be used by Gazans in terror attacks remains in effect.


In 2012, Davutoglu claimed that Syrian President Bashar al-Assad"s days in power were numbered, "not by years but by weeks or months". In 2016, Davutoglu had to step down as prime minister, but Erdogan"s and his worst regional nemesis, Assad, is in power to this day, enjoying increased Russian and Iranian backing. In 2012, Erdogan said that "we will soon go to Damascus to pray at the Umayyad mosque" -- a political symbol of Assad"s downfall and his replacement by pro-Turkey Sunni groups. That prayer remains to be performed.


In November 2015, shortly after Turkey shot down a Russian Su-24 military jet and cited violation of its airspace, Erdogan warned Russia "not to play with fire." As for the Russian demands for an apology, Erdogan said it was Turkey that deserved an apology because its airspace had been violated, and that Turkey would not apologize to Russia.


In June 2016, just half a year after Russia imposed a slew of economic sanctions on Turkey, Erdogan apologized to Russian President Vladimir Putin.



In July 2016, Erdogan apologized for downing a Russian plane, and in August he went to Russia to shake hands for normalization. Pictured: Russian President Vladimir Putin with Turkey"s then Prime Minister Erdogan, meeting in Istanbul on December 3, 2012. (Image source: kremlin.ru)


Erdogan and his government have countless times warned the United States not to side with the Syrian Kurds --whom Turkey views as a terrorist group-- in the allied fight against radical jihadists of ISIL"s Islamic State. In March 2017, Washington denied that Syrian Kurds were a terrorist group and pledged continued support for them.


Erdogan"s Turkey has done more than enough to show that its bark is worse than its bite. Yet it keeps barking badly. This time, the enemy to bark at, not bite, is Europe. This is the first time that Erdogan is openly challenging a concerted European stand.


In a recent row between several European capitals and Ankara over Erdogan"s ambitions to hold political rallies across Europe to address millions of Turkish expatriates, the Turkish president said he would ignore that he was unwelcome in Germany and would go there to speak to his Turkish fans.


In response, the Dutch government deported one of Erdogan"s ministers who had gone uninvited to the Netherlands to speak to the Turkish community there.


Germany launched two investigations into alleged Turkish spying on German soil.


Similarly, Switzerland opened a criminal investigation into allegations that Erdogan"s government had spied on expatriate Turks.


In Copenhagen, the Danish government summoned the Turkish ambassador over claims that Danish-Turkish citizens were being denounced over views critical of Erdogan.


The barking kept on. In Turkey, Erdogan warned that Europeans would not be able to walk the streets safely if European nations persist in what he called "arrogant conduct." That comment caused the EU to summon the Turkish ambassador in Brussels to explain Erdogan"s threatening language.


Farther east, in the rich European bloc, several hundred Bulgarians blocked the three main checkpoints at the Bulgarian-Turkish border to prevent Turks with Bulgarian passports, but who were living in Turkey, from voting in Bulgarian elections. The protesters claimed that Turkish officials were forcing expatriate voters to support a pro-Ankara party.


Meanwhile, at the EU"s southeast flank, Greece said that its armed forces were ready to respond to any Turkish threat to the country"s sovereignty and territorial integrity.


What happened to Erdogan"s promised "bite" that he could go to Germany to speak to the Turkish community despite repeated German warnings that he would not be welcome? "I will not go to Germany," he said on March 23.


Erdogan may be winning hearts and minds in Turkey with his neo-Ottoman Turkey "barks." But too few foreign capitals find his threats serious, too few politicians think that he is convincing and too many people tend to believe Turkey"s bark is worse than its bite.


The recent wave of European constraints against Erdogan shows that, for the first time in recent years, Europe does not seem to fear Erdogan"s bluffing and thuggishness.


At the moment, Erdogan"s priority is to win the referendum on April 16 that he hopes will change the constitution so that he can be Sultan-for-life. Picking fights with "infidel" Europeans might help him garner more support from conservative and nationalist Turks.


When the voting is done, however, he will have to face the reality that an alliance cannot function forever with one party constantly blackmailing the other.

Wednesday, April 12, 2017

Geert Wilders And The Suicide Of Europe

Authored by Guy Milliere via The Gatestone Institute,


  • None of Wilders"s speeches incites violence against anyone; the violence that surrounds him is directed only at him.

  • The only person talking about these problems is Geert Wilders. Dutch political leaders and most journalists seemingly prefer to claim that Geert Wilders is the problem; that if he were not there, these problems would not exist.

  • What adherents of this view, that the West is guilty, "forget" is that Islam long oppressed the West: Muslim armies conquered Persia, the Christian Byzantine Empire, North Africa and the Middle East, Spain, Greece, Hungary, Serbia and the Balkans, and virtually all of Eastern Europe. The Muslim armies were a constant threat until the marauding Ottoman troops were finally turned away at the Gates of Vienna in 1683.

Even if the Dutch politcian Geert Wilders had won and if the Party for Freedom (PVV) he established eleven years ago had become the first party in the country, he would not have been able to become the head of the government. The heads of all the other political parties said they would reject any alliance with him ; they maintain this position to this day.


For years, the Dutch mainstream media have spread hatred and defamation against Wilders for trying to warn the Dutch people - and Europe - about what their future will be if they continue their current immigration policies; in exchange, last December, a panel of three judges found him guilty of "inciting discrimination". Newspapers and politicians all over Europe unceasingly describe him as a dangerous man and a rightist firebrand. Sometimes they call him a "fascist".


What did Geert Wilders ever do to deserve that? None of his remarks ever incriminated any person or group because of their race or ethnicity. To charge him, the Dutch justice system had excessively and abusively to interpret words he used during a rally in which he asked if the Dutch wanted "fewer Moroccans." None of Wilders"s speeches incites violence against anyone; the violence that surrounds him is directed only at him. He defends human rights and democratic principles and he is a resolute enemy of all forms of anti-Semitism.


His only "crime" is to denounce the danger represented by the Islamization of the Netherlands and the rest of Europe and to claim that Islam represents a mortal threat to freedom. Unfortunately, he has good empirical reasons to say that. Also unfortunately, the Netherlands is a country where criticism of Islam is particularly dangerous: Theo van Gogh made an "Islamically incorrect" film in 2004 and was savagely murdered by an Islamist who said he would kill again if he could. Two years earlier, Pim Fortuyn, who had hoped to stand for election, defined Islam as a "hostile religion" ; he was killed by a leftist Islamophile animal-rights activist. Geert Wilders is alive only because he is under around-the-clock police protection graciously provided by the Dutch government.



In 2004, Moroccan-Dutch terrorist Mohammed Bouyeri (left), shot the filmmaker Theo van Gogh (right) to death, then stabbed him and slit his throat.


More broadly, the Netherlands is a country where the Muslim community shows few signs of integration. There are now forty no-go zones in the country; riots easily erupt, recently in Rotterdam, Amsterdam and Nijmegen. People recently from other countries repeatedly attack Dutch-born citizens. Some are so sure of their impunity that they publish online videos of their crimes. Throughout the country, an ethnic cleansing that Europeans are too scared to name is taking place in the suburbs, and non-Muslim residents often say they feel harassed.


Non-Muslim women are encouraged by local authorities to dress "modestly". As in Islam dogs are haram (impure), dog owners are asked to keep their pets indoors. In 2014, 2015 and 2016, Islamists demonstrated and shouted slogans in support of Hamas and the Islamic State.


Daily life has become particularly difficult for the 40,000 Jews still living in the country; districts long inhabited by members of the Jewish community have become almost entirely Muslim. Authorities recommend that Jews avoid any "visible sign" of Jewishness to avoid creating "unrest". Muslim delinquency is high; the percentage of Muslims sent to jail for various crimes is notably higher than the percentage of Muslims in the population. Six percent of the country"s population are Muslim; about 20% of all inmates are Muslim. None of this is secret.


The only person talking about these problems is Geert Wilders. Dutch political leaders and most journalists seemingly prefer to claim that Geert Wilders is the problem; that if he were not there, these problems would not exist. At best, they utter fuzzy words intended to show strength; at worst, they turn their back.


A large percentage of the Dutch population is anxious; the constant demonization of Geert Wilders apparently tries to indoctrinate the people to settle for less.


A year ago, London"s Muslim Mayor Sadiq Khan stated that "living with terror attacks is "part and parcel of living in a big city." It did not used to be that way . Rotterdam"s Muslim mayor, Ahmed Abutaleb used harsher words; he said that migrants had to "respect the law or go home".


In late January, the incumbent prime minister, Mark Rutte, published a full-page advertisement in several newspapers warning immigrants to "act normal or be gone"; he did not use the word "Islam". On March 11, 2017, four days before the Dutch elections, Rutte decided to send a "strong message" to bar Turkish ministers from speaking in Rotterdam. Voters who had considered supporting Geert Wilders voted instead for Rutte"s People"s Party for Freedom and Democracy (VVD); he thereby secured a last minute win. Wilders"s party came in second. The Party for Freedom (PVV) won five more seats than before, but will have only 20 seats, out of 150. Rutte"s VVD will have 33 seats. The Labor party, Rutte"s main ally until March 15, collapsed and is down to nine seats, its worst result ever. The left, however, is not retreating: GroenLinks, a party largely made of former communists and radical environmentalists won 14 seats,10 more than before. The Socialist Party won 14 seats. Democrats 66, a "social-liberal", "progressive" and multicultural party won 19 seats, almost as much as the Party for Freedom. A Muslim party, Denk (Dutch for "think, Turkish for "equality "), won three seats. The VNL, a conservative party established by two former Party for Freedom members, was beaten so severely it will have no seat at all.


The next Dutch government will be a coalition of four parties, maybe five, and probably lean more to the left than previous governments. It will certainly include Democrats 66, and could include Groenlinks.


In the years to come, the situation in the country is certin to deteriorate. The Netherlands" fertility rate (1.68 children per woman) is not as catastrophic as in Germany, Italy or Spain, but is far below the replacement rate. The Muslim birth rate is higher than the non-Muslim one. Dozens of churches close each year due to the rapid decline in the number of practicing Christians; the churches are replaced by mosques. Radical preachers keep coming and proselytizing; Islamist organizations keep recruiting. In a report on the Islamization of the Netherlands published ten years ago, Manfred Gerstenfeld wrote that "resistance to radical forces within the Dutch Muslim community is weak". Nothing has changed since that time.


What is happening in the Netherlands is similar to what is happening in most European countries. In the United Kingdom, Belgium, France, Germany and Sweden, the number of no-go zones is rapidly growing. Islamic riots occur more and more often. Ethnic gangs are growing more violent. Ethnic cleansing is transforming neighborhoods. Jews are leaving for Israel or North America.The Muslim population is sharply increasing. Radical mosques are proliferating. Islamic organizations are everywhere.


Politicians who dare to speak the way Geert Wilders does are treated the way Geert Wilders is treated : scorned, marginalized, put on trial.


The vision of the world in Western Europe is now "hegemonic". It is based on the idea that the Western world is guilty; that all cultures are equal, and that Islamic culture is "more equal" than Western culture because Islam was supposedly so long oppressed by the West. What adherents of this view, that the West is guilty, "forget" is that Islam long oppressed the West: Muslim armies conquered Persia, the Christian Byzantine Empire, North Africa and the Middle East, Spain, Greece, Hungary, Serbia and the Balkans, and virtually all of Eastern Europe. The Muslim armies were a constant threat until the marauding Ottoman troops were finally turned away at the Gates of Vienna in 1683.


This European vision also includes the idea that all conflicts can be peacefully settled, that appeasement is almost always a solution, and that Europe has no enemies.


It also stands on the idea that an enlightened elite must have the power, because if Adolf Hitler came to power through democratic means eighty years ago, letting people freely decide their fate might lead to ill.


The dream seems to be of a utopian future where poverty will be overcome by welfare systems, and violence will be defeated by openness and love.


It is this vision of the world that may have prompted Germany"s Chancellor Angela Merkel to open the doors to more than a million unvetted Muslim migrants, despite a migrant crime wave and an increasing number of rapes and sexual assaults. The only candidate likely to beat Angela Merkel in this year"s German elections is a socialist, Martin Schulz, a former European Parliament president.


In France, Marine Le Pen, the only candidate who speaks of Islam and immigration, will almost certainly be defeated by Emmanuel Macron, a former minister in the government of François Hollande -- a man who see no evil anywhere.


It is this vision of the world that also seems to have led British Prime Minister Theresa May to say that the Islamic attack on March 22 in Westminster was "not an act of Islamic terrorism".


This romanticized, utopian vision of the world also explains why in Europe, people such as Geert Wilders are seen as the incarnation of evil, but radical Islam is considered a marginal nuisance bearing no relation to the "religion of peace". Meanwhile, Wilders is condemned to live under protection as if he were in jail, while those who want to slaughter him -- and who threaten millions of people in Europe -- walk around free.


This adolescent vision is so embedded in the minds of millions of Europeans that a lot fast growing-up will be required to eradicate it.

Sunday, March 26, 2017

America's March To Default

Authored by MN Gordon via Acting-Man.com,


Style Over Substance


“May you live in interesting times,” says the ancient Chinese curse.  No doubt about it, we live in interesting times.  Hardly a day goes by that we’re not aghast and astounded by a series of grotesque caricatures of the world as at devolves towards vulgarity. Just this week, for instance, U.S. Representative Maxine Waters tweeted, “Get ready for impeachment.”



Well, Maxine Waters is obviously right – impeaching the president is an urgent task of the utmost importance. As everybody knows, he is best friends with Vladimir Putin, the shirtless barbarian who rules the Evil Russian Empire (they were seen drinking kompromat together in Moscow, a vile Russian liquor that reportedly tastes a bit like urine. Senator McCain has the details on that story). And as Maxine Waters has just disclosed, Putin’s armies are recently advancing into Korea! We cannot let this stand, or he’ll invade Kekistan next (note that he already controls Limpopo and Gabon). Who knows where it will end?


We assume this was directed at President Trump.  But what Waters meant by this was sufficiently vague.  There was no guidance as to how President Trump should be getting ready.


Should he pack his bags?  Should he double knot his shoelaces?  Should he say a prayer? Naturally, the specifics don’t matter in the darnedest.  Rather, these days, it’s style over substance in just about everything.  This is why Waters – a committed moron – rises to the top of class in the lost republic of the early 21st century.


At the same time, the individual has been displaced by the almighty aggregate.  Economists pencil out the unemployment rate, with certain omissions, as if it represents something meaningful.  Then lunkheads like Waters repeat it as if it’s the gospel truth.


Somehow, through all of this, our representatives are oblivious to what’s really going on; that the U.S. government is just months away from a possible default.



The Dutch Experience


Last week, via our friends at Zero Hedge, we came across as article by Simon Black of Sovereign Man titled, The U.S. Government Now Has Less Cash Than Google.  Inside, Black details the invention of the government bond in 1517 Amsterdam and the long term ramifications for the Dutch government.  Here we turn to Black for edification:





“It caught on slowly.  But eventually government bonds became an extremely popular asset class.  Secondary markets developed where people who owned bonds could sell them to other investors.  Even simple coffee shops turned into financial exchanges where investors and traders would buy and sell bonds.  In time, the government realized that its creditworthiness was paramount, and the Dutch developed a reputation as being a rock-solid bet.



“This practice caught on across the world.  International markets developed.  English investors bought French bonds.  French investors bought Dutch bonds.  Dutch investors bought American bonds.  (By 1803, Dutch investors owned a full 25 percent of U.S. federal debt.  By comparison, the Chinese own about 5.5 percent of U.S. debt today.)



“Throughout it all, debt levels kept rising.  The Dutch government used government bonds to live beyond its means, borrowing money to fund everything imaginable– wars, infrastructure, and ballooning deficits.  But people kept buying the bonds, convinced that the Dutch government will never default.



“Everyone was brainwashed; the mere suggestion that the Dutch government would default was tantamount to blasphemy.  It didn’t matter that the debt level was so high that by the early 1800s the Dutch government was spending 68 percent of tax revenue just to service the debt.



“Well, in 1814 the impossible happened: the Dutch government defaulted.  And the effects were devastating.



“In their excellent book The First Modern Economy, financial historians Jan De Vries and Ad Van der Woude estimate that the Dutch government default wiped out between 1/3 and 1/2 of the country’s wealth.



“That, of course, is just one example.  History is full of events that people thought were impossible.  And yet they happened.  Looking back, they always seem so obvious.”





Amsterdamsche Wisselbank, a.k.a. the Bank of Amsterdam. The bank’s history is deeply intertwined with the Dutch march toward default in 1814. When the bank was originally founded, it was rightly considered the soundest bank in Europe – it was 100% reserved and for a long time its notes were indeed “as good as gold” and were accepted in payment all over Europe. Holland’s downfall was closely tied to the decision to abuse the bank’s hard-won reputation by surreptitiously forcing it to adopt fractional reserve banking in order the fund the government (in particular, in order to fund its wars).



March to Default


Like the Dutch several hundred years ago, everyone believes it’s impossible for the U.S. government to default on its debt obligations.  U.S. Treasuries are considered the safest investment in the world.


Nonetheless, a series of events are coming down the turnpike in such rapid succession that Washington will be incapable of dealing with them.  Before Congress can say knife, irreparable damage will be done to the government’s financial standing.


No doubt, the great story of our time, that few seem to appreciate, is the increasing likelihood the U.S. government will default on its debt before the year is over.  Of course, this isn’t a certainty.  But by simply connecting a dot or two, one can construct a highly plausible scenario where this happens.




The federal debtberg. As Ludwig von Mises noted: “The long-term public and semi-public credit is a foreign and disturbing element in the structure of a market society. Its establishment was a futile attempt to go beyond the limits of human action and to create an orbit of security and eternity removed from the transitoriness and instability of earthly affairs. What an arrogant presumption to borrow and to lend money for ever and ever, to make contracts for eternity, to stipulate for all times to come!” – click to enlarge.



Presently, the national debt is over $19.8 trillion.  The $20.1 trillion debt ceiling will be reached in the second quarter.  After that, Treasury Secretary Steven Mnuchin will be forced to take extraordinary measures to avoid a default.


However, Mnuchin can only rob Peter to pay Paul for so long.  By summer’s end, Congress will have to increase the borrowing limit or suffer a default. Most likely Congress will wait until the 11th hour to take action.  They have in the past.  But this time, given its complete dysfunction, Congress may not get it done.


Yesterday, the Obamacare repeal and replace vote was pulled.  Regardless of the outcome, this highlights why Congress will be unable to raise the debt ceiling.  There’s just plain too much animosity to get it done.


Ultimately, the quickest way to reduce the size of government is to cut off its funding.  Here at the Economic Prism, where we believe in smaller government and greater individual autonomy, a U.S. government default sooner rather than later is more preferable.


Still, the march to default is a stoic trudge.  For the looming chaos to financial markets, the economy, and everything else will be unconditionally ruthless.

Thursday, March 23, 2017

Economics Of The Standoff Between Turkey And The Netherlands

Authored by Altay Atli via The Strategic Culture Foundation blog,



As the diplomatic squabble between Turkey and the Netherlands continues to fester, concerns are raised about whether — and to what extent — the tensions will harm bilateral relations, particularly in economics where the two countries have robust trade and investment connections.


For Turkey, the Netherlands offers a large and expanding export market. Trade between the two countries has roots in the 17th century when the Ottomans exported wool and cotton (later tobacco as well) to the Netherlands and imported clothes and linen in return. Commerce between the two countries remained strong into modern times; in 2016 the bilateral trade volume was US$6.6 billion.


The Netherlands is the 10th largest export destination for Turkey, and perhaps more importantly from the Turkish perspective, it is also a fast-growing market. Last year Turkish exports to the Dutch market amounted to $3.6 billion, against $3 billion in imports. And while the annual increase in imports was 3.4%, exports expanded much faster, at 13.8%. For the Turkish economy, which is suffering an acute current-account deficit, the increasing trade surplus with the Dutch is a precious commodity.



On the other side of the equation, Turkey is and has always been a favored destination for Dutch investment. A process that started in 1930 when the Dutch company Philips set up shop in the newly established Republic of Turkey has reached new levels since then, making the Netherlands by far the largest source of foreign direct investment in Turkey today. According to data by the Turkish Central Bank, Dutch investment stock in Turkey was $22 billion in 2016, compared with $11.2 billion in US investments in second place, and $9.8 billion from Austria in third place.



Turkey is home to 2,700 companies funded by Dutch capital. This figure includes those transnational companies registered in the Netherlands for legal and tax-related purposes. This sizeable Dutch involvement in the Turkish economy benefits both sides. For Dutch multinationals such as Unilever, ING Bank, Philips, Perfetti, Royal Dutch Shell and Philip Morris, Turkey is not only a favorable production base but also a lucrative market and a trading and logistics hub for access to the Middle East and North Africa, Balkans, Caucasus and Central Asia. More Dutch investment is set to come to Turkey, such as the recent purchase by Vitol Group of the Turkey-based fuel products distribution company Petrolofisi for $1.47 billion. Investment needs a stable political climate, and the diplomatic spat between Turkey and the Netherlands doesn’t help.


It is also worth nothing that while the amount of Turkish investment in the Netherlands is considerably smaller, there are several large Turkish firms that have set up subsidiaries enabling access to the larger EU market.


For the past week, Dutch pundits have been commenting that Turkey is more dependent on the Netherlands, so possible sanctions imposed by Ankara would only mean “shooting themselves in the foot.” Turkish authorities have imposed political sanctions over the Dutch government’s refusal to allow Turkish ministers to meet with members of the Turkish diaspora there, including halting high-level political discussions between the two countries and the closing of Turkish airspace to Dutch diplomats. But Ankara has carefully ruled out economic sanctions. Turkey’s economics minister, Nihat Zeybekçi said: “If we take these steps, both sides would be hurt.” Ömer Çelik, minister of EU affairs said the Dutch business community, which is “investing in Turkey, doing commerce and generating employment” is “certainly not a part of this crisis,” and “Dutch investment in Turkey is by no means under risk”.


Economic sanctions between Turkey and the Netherlands don’t seem likely at the moment, but longer-term threats remain.





First, even if no sanctions are imposed, the significant loss of confidence caused by recent events will take a toll on bilateral economic relations for some time.



Second, the sizeable Turkish diaspora in the Netherlands, as well as the relatively smaller Dutch community living in Turkey, will face uncertainty, and this will have an economic impact too. An estimated 400,000 Turks live in the Netherlands, according to a diaspora association, and there are 25,000 businesses with Turkish owners, most of them smaller enterprises. Many of these companies are doing business with Turkey, and they are negatively affected by the current dispute between the two governments. So is the much smaller Dutch community in Turkey. But it is equally active in the economy, especially in the tourism sector. Declining tourist numbers will hurt Turkish and Dutch operators alike, and it might take some time to recover to pre-crisis levels of business.



Third, the diplomatic spat is likely to have a negative effect on efforts to revise the Turkish-EU Customs Union. The union, which took effect in 1996, is outdated, failing to catch up with the requirements of today’s global trade. Ankara and Brussels had begun talks to improve the deal, but the current circumstance is likely to overshadow attempts based on economic rationality.



This week Turkish football team Be?ikta? played the Greek side Olympiakos in the European cup. The Turks won 4-1 helped by two goals from Ryan Babel, the Amsterdam-born Dutch striker. Turkey and the Netherlands have links that are closer than many realize, and it will benefit both to keep them intact.

Monday, March 13, 2017

"Nazi Dogs": Turkey Prepares Sanctions Against The Netherlands

The bizarre diplomatic scandal that erupted over the weekend, after the Netherlands banned several prominent Turkish politicians from organizing and participating in pro-Erdogan rallies just days ahead of the Dutch general election where immigration will be perhaps the most important topic, and which prompted numerous accusations of "nazism" and "fascism" by Turkey"s president Erdogan, appeared set to escalate further on Monday when the Turkish cabinet is expected to consider imposing sanctions on the Netherlands in a deepening row with the country"s NATO ally. Cited by Reuters, one minister said punitive measures were likely.


A government source told Reuters that sanctions were expected to be discussed when the cabinet of ministers meets at 7 pm (1600 GMT). Ankara"s minister for EU Affairs, Omer Celik, said sanctions were likely. "We will surely have sanctions against the latest actions by the Netherlands. We will answer them with these," Celik said.


In addition to economic measures, sanctions could affect cultural activities, and military and technological cooperation. "When the sanctions are imposed, what we need to be careful about is being realistic. We are not completely closing the windows," the source said. "However, we want to show that what has been done to Turkey will have a response." He said certain cultural activities may be cancelled and the re-evaluation of military and technological cooperation was also on the table.


Earlier, Turkey summoned the Dutch charge d"affaires on Monday to complain about the ban - imposed due to fears of unrest and distaste at what the Netherlands sees as an increasingly authoritarian tone from Erdogan - and the actions of Rotterdam police against Turkish protesters over the weekend, foreign ministry sources said. As we reported on Sunday Dutch police used dogs and water cannon to disperse hundreds of protesters waving Turkish flags outside the consulate in Rotterdam. Some protesters threw bottles and stones and several demonstrators were beaten by police with batons, a Reuters witness said. Mounted police officers charged the crowd.


"The Turkish community and our citizens were subject to bad treatment, with inhumane and humiliating methods used in disproportionate intervention against people exercising their right to peaceful assembly," a statement attributed to ministry sources said.


As further reported over the weekend, President Erdogan, who is seeking support from Turks in a referendum on boosting his powers, accused the Dutch government of acting like "Nazi remnants" and said it should face sanctions for barring his ministers from addressing expatriate Turks to drum up votes. The row marks another low point in relations between Turkey and Europe, further dimming Ankara"s prospects of joining the bloc. It also comes as Turkey is caught up by security concerns over militant attacks and the war in neighboring Syria.


Some 400,000 Turkish citizens live in the Netherlands and an estimated 1.5 million Turks live in Germany.





Commenting on the Turkish official visits, the Dutch government said the visits were "undesirable" and it would not cooperate in their campaigning. According to polls, it is set to lose about half its seats in elections this week as the anti-Islam party of Geert Wilders makes strong gains. Monday was the third time the Dutch envoy had been called in since Saturday over the row. The Dutch ambassador is on leave and the Turkish foreign ministry says it does not want him back "for some time".



For now, economists do not anticipate a major fallout from the diplomatic scandal. Ozgur Altug, chief economist at BGC Partners in Istanbul, said at this stage he did not foresee the row having serious short-term economic consequences. Still, with Dutch direct investment in Turkey amounting to $22 billion, making the Netherlands the biggest source of foreign investment with a share of 16%, there is a substantial risk of escalating retaliation which could impact the deteriorating Turkish economy which recently posted double digit inflation.


"If the tension escalates and if countries start imposing sanctions against each other, it might have serious implications for the Turkish economy," Altug said.





Turkish exports to the Netherlands totalled $3.6 billion in 2016, making it the tenth largest market for Turkish goods, according to the Turkish Statistical Institute. Turkey imported $3 billion worth of Dutch goods in 2016.



Additionally, Reuters notes that Dutch visitors are important to Turkey"s tourism industry, which was hit hard in 2016 by security fears due to attacks by Islamic State and Kurdish militants. Some 900,000 Dutch people visited Turkey last year, down from 1.2 million a year earlier.


Ankara has given the paramaters it seeks to de-escalate: it is is seeking an official written apology for the treatment of its family minister and diplomats in Rotterdam, the Turkish foreign ministry sources also said. However, as noted on Sunday morning, Dutch Prime Minister Mark Rutte has said it is Erdogan who should apologize for comparing the Netherlands to fascists and Nazis, adding that Turkey was acting "in a totally unacceptable, irresponsible manner". NATO Secretary-General Jens Stoltenberg called on Turkey and the Netherlands to defuse the row.


Meanwhile, assuring that the scandal is likely to get worse before it gets better, a front page headline in the pro-government Aksam newspaper place a photo of a police dog biting the thigh of a man during Saturday night"s protest in Rotterdam, above which it placed the headline "Nazi Dogs."


Sunday, March 12, 2017

Turkey Vows "Harsh Retaliation" After Dutch PM Says "Not Apologizing, Are You Nuts"

The diplomatic scandal between Turkey and the Netherlands deteriorated overnight, when Prime Minister Binali Yildirim warned on Sunday that Turkey would retaliate in the "harshest ways" after Turkish ministers were barred from speaking in Rotterdam, leading to a major protest in front of the Turkish consulate in Rotterdam, while the Dutch embassy in Istanbul was closed off due to "safety concerns."


"This situation has been protested in the strongest manner by our side, and it has been conveyed to Dutch authorities that there will be retaliation in the harshest ways ... We will respond in kind to this unacceptable behavior," Yildirim said in a statement.



Turkey"s Prime Minister Binali Yildirim


At the same time, continuing his ongoing tirade in which he has compared virtually all of his political foes to Hitler or Nazis, president Tayyip Erdogan said "Nazism is still widespread in the West" after the Netherlands joined other European countries worried about political tensions inside Turkey spilling beyond its borders that have prevented Turkish politicians from holding rallies.


As reported on Saturday, the Dutch government first barred Turkish Foreign Minister Mevlut Cavusoglu from flying to Rotterdam and later stopped Family Minister Fatma Betul Sayan Kaya from entering the Turkish consulate in the port city, before escorting her out of the country to Germany.


Dutch police used dogs and water cannon early on Sunday to disperse hundreds of protesters waving Turkish flags outside the consulate in Rotterdam. Some threw bottles and stones and several demonstrators were beaten by police with batons, a Reuters witness said. Meanwhile, Dutch officers carried out charges on horseback.



Protesters also gathered outside the Dutch embassy in Ankara and consulate in Istanbul, throwing eggs and stones at the buildings.


The Dutch government, which is set to lose about half its seats in elections this week as the anti-Islam party of Geert Wilders makes strong gains, said the ministers" visits were undesirable and it would not cooperate in their political campaigning in the Netherlands.


Erdogan warned the Netherlands that "if you can sacrifice Turkish-Dutch relations for an election on Wednesday, you will pay the price," during an awards ceremony in Istanbul. "I thought Nazism was dead, but I was wrong. Nazism is still widespread in the West," he said. "The West has shown its true face." Speaking to reporters before a public appearance in the northeastern French city of Metz, Cavusoglu said Turkey would continue to act against the Netherlands until it apologizes.


Meanwhile, Dutch Prime Minister Mark Rutte said he would do everything to "de-escalate" the confrontation, which he described as the worst the Netherlands had experienced in years. But he said the idea of apologizing was "bizarre".


"This is a man who yesterday made us out for fascists and a country of Nazis. I’m going to de-escalate, but not by offering apologies. Are you nuts?" he told a morning talk show.


Supporting Rutte"s decision to ban the visits, the Dutch government said there was a risk of Turkish political divisions flowing over into its own Turkish minority, which has both pro- and anti-Erdogan camps. It cited public order and security worries in withdrawing landing rights for Cavusoglu"s flight.


Turkey fired back saying the Dutch ambassador to Ankara should not return from leave "for some time". Erdogan is looking to the large number of Turks living in Europe, especially in Germany and the Netherlands, to help secure victory next month in a referendum that would give the presidency sweeping new powers.


Concerns about Turkey"s erratic diplomacy spread to Germany where Chancellor Angela Merkel said she will do all she can to prevent Turkey"s domestic tensions spreading onto German territory. Austria and Switzerland have also canceled Turkish rallies due to the escalating dispute. A senior member of her conservative bloc in parliament, Hans Michelbach, demanded on Sunday that the EU stop aid to Turkey and ruled out any hopes that it would join the EU. "There is no prospect of entry in the long run. Turkey is getting further and further away from the European Union. Support programs (that it gets as an EU candidate) are therefore a waste of taxpayers" money," he said in a statement.


In what may have been the harshest recent diplomatic takedown of Turkey, Michelbach said that "it is time that the EU stops performing like a diplomatic paper tiger towards Ankara. Europe must not be led by the nose round the Turkish election arena." Needless to say, such a move would delight Putin as the Kremlin has been aggressively courting Erdogan and Turkey as Russia seeks to make headway with its new middle-eastern Axis which also includes Syria and hopes to add Iran.


In the near-term, however, the outstanding question is how will Saturday"s events impact Wednesday"s Dutch general election, and whether the diplomatic clash will boost votes for Geert Wilders. As Reuters notes, "the diplomatic row comes in the run-up to the coming week"s Dutch election in which the mainstream parties are under strong pressure from the far-right party of Geert Wilders."





After Kaya, the Turkish family minister, was escorted out of the country, Wilders told her on Twitter "go away and never come back".



Erdogan"s spokesman responded by saying the Netherlands had bowed to anti-Islam sentiment.



"Shame on the Dutch government for succumbing to anti-Islam racists and fascists, and damaging long-standing Turkey-NL relations," presidential spokesman Ibrahim Kalin wrote on Twitter.



In a sign the row could spread further, the owner of a venue in Sweden where a senior official from Turkey"s ruling party had been due to hold a rally on Sunday canceled the rental contract, Turkey"s private Dogan news agency reported. The news agency said the owner had not given a reason for their decision. Cavusoglu also decided against traveling to Zurich, Switzerland, for an event on Sunday after failing to find a suitable venue. Zurich"s security authorities had unsuccessfully lobbied the federal government in Bern to ban Cavusoglu"s appearance.

Angry Turks Protest Near Rotterdam Consulate As Dutch Embassy In Turkey Closed Off

Update 3: The Mayor of Rotterdam has issued an order to vacate the city"s center, where the Turkish protesters are situated



* * *


Update 2: Dutch authorities have arrested Turkey"s family minister and are deporting her to#Germany according to RTL. The escalation may lead to a spike by Turks in the Netherlands, with some speculating that a curfew is imminent:



Update: As expected, Gert Wilders has just chimed in, responding to the Turkish Family Minister who earlier in the day was barred by Dutch police from entering the Turkish consulate:



* * *


Hundreds of demonstrators waving Turkish flags gathered outside the Turkish consulate in the Dutch city of Rotterdam on Saturday night, demanding to see the Turkish minister for family affairs as a diplomatic scandal between the two countries escalated.





Earlier in the day, Turkish Foreign Minister, Mevlut Cavusoglu was barred from flying into Rotterdam to participate in pro-Erdogan rallies, to which the Turkish president responded by calling the Dutch "fascists" and his NATO partner a Nazi remnant" as the scandal over Ankara campaigning among emigre Turkish voters, which has recently swept Germany, Switzerland and Austria, intensified.



The Dutch quickly responded:



In any case, as a protest built up by the Turkish consilate, the Police erected metal barriers and patrolled on horseback to keep the demonstrators away from the consulate as the crowd grew with more pro-Turkish protesters arriving from Germany, according to Reuters. A video released by a Turkish camera operator shows him being attacked by a police dog after he refused to leave the area in front of the consulate.




Turkish Family Minister Fatma Betul Sayan Kaya traveled by road to the Netherlands from neighboring Germany after the Dutch government revoked the landing rights for the plane carrying the foreign minister earlier on Saturday. Dutch TV footage showed police stopping the minister"s convoy near the Turkish consulate in Rotterdam and preventing her from entering the building.




The Dutch government said it did not want Turkish politicians campaigning among Turkish emigres in the Netherlands, leading President Tayyip Erdogan to brand the fellow NATO member a "Nazi remnant". The government also said it does not object to meetings in the Netherlands to give information about the Turkish referendum, "but these meetings should not add to tensions in our society and everybody who wants to organize a meeting must adhere to instructions from authorities so that public order and security can be guaranteed." It said the Turkish government "does not want to respect the rules in this matter."


Meanwhile, over in Turkey, the Dutch embassy and consulate in Turkey were closed off "for security reasons" on Saturday following the latest diplomatic scandal. The residences of the Dutch ambassador, charge d"affaires and consul general were also closed off, according to Reuters.


The Turkish Foreign Ministry said earlier in a statement that Ankara did not want “the Dutch ambassador, currently on leave, to return to his post for some time.”


“It has been explained to our counterparts that this grave decision taken against Turkey and the Dutch Turkish community will cause serious problems diplomatically, politically, economically and in other areas," the statement said, as cited by Reuters.


Turkey"s president Erdogan is expected to make a statement to the nation momentarily in response to the Dutch "provocation."


The unexpected escalation in tensions between the Netherlands and Turkey comes just three days ahead of the critical Dutch general election on March 15, in which the anti-immigration, anti-EU, Freedom Party of Geert Wilders is expected to emerge as the largest party. Today"s tensions may boost support for his platform which has seen a modest drop in public approval in recent days. A full preview of the Dutch General Election can be found here.

Saturday, March 11, 2017

Erdogan Calls Dutch "Fascists" After Turkish Foreign Minister Barred Entry

One week after Turkey president, and wannabe tyrant, Tayyip Erdogan launched a new diplomatic scandal when he accused Germany of "fascist actions" reminiscent of "Nazi practices" after various rallies organized by Turkish minister in Germany were cancelled ahead of an April referendum on granting Erdogan sweeping new presidential powers, he doubled down on Saturday after the Netherlands barred Turkey"s Foreign Minister from flying to Rotterdam, to which Erdogan responded by calling the Dutch "fascists" and his NATO partner a Nazi remnant" as the scandal over Ankara campaigning among emigre Turkish voters intensified.


"Listen Netherlands, you"ll jump once, you"ll jump twice, but my people will thwart your game," Erdogan said. "You can cancel our foreign minister"s flight as much as you want, but let"s see how your flights come to Turkey now. They don"t know diplomacy or politics. They are Nazi remnants. They are fascists."



Shortly after Erdogan"s comments, Dutch Prime Minister Mark Rutte said Turkish President Tayyip Erdogan"s remark comparing the Dutch to the Nazis was "way out of line." 


"It"s a crazy remark of course," Rutte told journalists during campaigning for the March 15 election. "I understand they"re angry, but this of course was way out of line."


Rotterdam banned Foreign Minister Mevlut Cavusoglu from attending a Turkish rally in support of Erdogan"s drive for sweeping new powers, to be put to a referendum next month, Reuters reported.


Landing rights for the flight of Cavusoglu were withdrawn, the Dutch Foreign Ministry said Saturday in a statement. The government acted after an invitation to Turks to “participate in a public meeting” with Cavusoglu in Rotterdam put “public order and safety in jeopardy."


With Netherlands itself set to hold a national election on March 15, in which anti-immigration sentiment has played a prominent role with nationalist candidate Geert Wilders calling Erdogan a dictator, the Dutch have been especially careful how they tread vis-a-vis Turkey. However, today"s ban has prompted a lashing out which may well boost the recently deflated Wilders" anti-immigration campaign.


After being grounded, Cavusoglu said on Saturday morning he would fly to Rotterdam anyway and accused the Dutch of treating Turkish citizens in the country like "hostages".


"I sent them so they could contribute to your economy ... They"re not your captives," he told CNN Turk television.


"If my going will increase tensions, let it be. What damage will my going have on them? I am a foreign minister and I can go wherever I want," he said before the Dutch barred his flight.


Cavusoglu had threatened harsh economic and political sanctions if the Dutch refused him entry, a threat that proved decisive for the Netherlands government. According to Reuters, the Dutch cited public order and security concerns in withdrawing landing rights for Cavusoglu"s flight. But it said the sanctions threat made the search for a reasonable solution impossible.


Dutch prime minister Mark Rutte said that while the Netherlands and Turkey could search for "an acceptable solution", Turkey was not respecting the rules relating to public gatherings. "Many Dutch people with a Turkish background are authorized to vote in the referendum over the Turkish constitution. The Dutch government does not have any protest against gatherings in our country to inform them about it," he said on Facebook. "But these gatherings may not contribute to tensions in our society and everyone who wants to hold a gathering is obliged to follow instructions of those in authority so that public order and safety can be guaranteed," Rutte added.


In addition to Germany and the Netherlands, four other planned Turkish rallies in Austria and one in Switzerland have also been cancelled in the dispute. Chancellor Merkel, whose country Erdogan also compared last week with Nazi Germany, has said she will do everything possible to prevent any spillover of Turkish political tensions onto German soil.


Meanwhile, Cavusoglu said Turks in Germany were under systematic pressure from police and intelligence services.


The reason for the ongoing rallies which are alienating the already scandal-plagued Turkey from its (former) European allies is that Erdogan is looking to the large number of emigre Turks living in Europe, especially Germany and the Netherlands, to help clinch victory in next month"s referendum which will shape the future of a country whose location on the edge of the Middle East makes it of crucial strategic importance to NATO and explains why despite the ongoing diplomatic fallout, Western "leaders" have engaged in little more than polite diplomatic rebuttals.


Erdogan cited domestic threats from Kurdish and Islamist militants and a July coup bid as cause to vote "yes" to his new powers. But he has also drawn on the emotionally charged row with Europe to portray Turkey as betrayed by allies, facing wars on its southern borders and in need of strong leadership.


More importantly, Cavusoglu has made a veiled threat of possible realignment of Turkey in the world in a reference to Russia. "The Netherlands should stop this faulty understanding and approach...If they think Turkey will take whatever they do, that Turkey is gone. I told them this, stop this boss-like attitude. If Europe keeps this up, they will lose many places, including Russia and us.”


The scandal comes one day after Erdogan flew to Moscow for his latest summit with Vladimir Putin during which he said that "we can say with certainty that our countries have returned to the path of authentic multi-faceted partnership," Putin said at a news conference following expanded talks with Turkish President Recep Tayyip Erdogan in Moscow, to which Putin responded "I"d like to emphasize that we view Turkey as our key partner. We are ready to maintain active political dialogue at the highest level."