Tag Archives: Europe


Large scale immigration has changed the demographic of many of Europe’s cities. In the UK, multiculturalism has left some of England’s largest cities with areas in which Muslims make up with majority of the population, and schools have more children with English as a second language, than native English speakers.

Now some of the failures of multiculturalism are becoming more apparent as some Muslim communities have failed to integrate into the local communities.

In many parts of London, and other English cities, white residents are moving out. With one London borough seeing a third of the white British population leave in recent years. The result is, areas which feel more like downtown Islamabad than inner city London. Those who have remained feel increasingly like strangers in the places they grew up.

Now an anti-extremist organisation has warned that Britain could see more Muslim Patrols on their city streets. Muslim Patrols are springing up across Europe. Groups of young Muslim men intimidating non-Muslims to conform to the demands of sharia law.

Recently a video posted on YouTube showed a Muslim Patrol confront a man drinking alcohol telling him to stop, that he was in a “muslim area”. The video also showed the men verbally abuse a homosexual man, and a young woman for not dressing modestly, describing white women as “naked animals with no self–respect”.

Maajid Nawaz, the chairman of the Quilliam Foundation, has now raised concerns that these Muslim Patrols could become more common, and more violent. As more and more young British Muslim men go to dangerous Islamic nations, like Syria, Libya, Mali and Somalia, and become more radicalised by al-Qaeda groups operating in these countries.

“Scores of young European-born Arabs and Somalis are following in the footsteps of British Pakistanis in travelling to lawless conflict zones.

“What happens when these men, schooled in the use of political violence in far-flung places, return to Britain?”

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Luc Besson unveils Cinema City production studio in Paris – FRANCE – CINEMA – FRANCE 24

Luc Besson unveils Cinema City production studio in Paris – FRANCE – CINEMA – FRANCE 24.

French film maker Luc Bessson has realised his dream of building a Hollywood style studio complex on the outskirts of Paris.

Cinema City will provide costume and model building; as well as production and post production facilities.

“France has Europe’s biggest film industry and yet until now it was the only European country without the infrastructure to produce a film,” said Christophe Lambert, general director of Besson’s production firm EuropaCorp.

Cinema City is being called “Hollywood on Seine”.

The project as cost 170 million euros and will need to major productions a year to cover operational costs. EuropaCorp believes the facility will be fully booked within the year, with European and America producers eager to use the studios.

Oil Prices drop to $91 per barrel which should improve the cost of living-

Monday saw a drop in oil prices which has continued through today. No one can figure out what happened, as much of the news reports.

Many are quick to report that these are all indicators of a further down turn in the economy.

But we must be quick to remember, it is HIGH oil prices that drive the cost of living up and CHEAP oil prices that bring prosperity.

Which brings the question, is the news media bent on seeing the worst on every side or have they just been doing it for so long that they forgot to be optimistic?


George Soros: Germany should back growth or leave euro – Telegraph

George Soros: Germany should back growth or leave euro – Telegraph.

As the debt crisis continues in Europe, many of the same arguments are being made within the eurozone countries as to the best way forward. Italy and Spain are both edging closer to needing a bailout; and it will not be long before Greece will be requiring another bailout package.

However, the arguments between growth and austerity continue. Germany are reluctant to continue to pay the bills, without the proper checks in place. But will Spain and Italy be prepared to sign away political autonomy?

Now George Soros has said “Germany must back growth or leave the euro”.  To back growth means Germany continues to bailout and lend more money – increasing indebtedness. Germany has made it clear it desires growth, but not by creating more debt.

However, if Germany were to leave the euro it would enable the Euro to devalue and ease the economic pain in the struggling nations.

French writer says Anders Breivik was what Norway deserves’ – Telegraph

French writer says Anders Breivik was what Norway deserves’ – Telegraph.

Last year Norway was shocked, when Andres Breivik killed 77 people in a bomb blast and shooting rampage at a youth camp.

Breivik has said his actions were politically motivated and an attack at the rise of Islam in Europe, fuelled by high immigration.

Now a highly respected French writer, Richard Millet, says Breivik is “without doubt what Norway deserves”.

Millet says he was commenting on Breivik’s 1,500 page manifesto which is an attack on the last 20 years of mass immigration, social democracy, and multiculturalism in Europe, though he in no way condones Breiviks actions.

Many have been highly critical of Millet’s comments, with one writer Annie Eraux, saying his comments are “a politically dangerous act.”

Last week Breivik was sentenced to 21 years in prison.


Spanish bail-out impossible’, experts warn – Telegraph

Spanish bail-out impossible’, experts warn – Telegraph.

As the economic situation in Spain worsens by the day, many think it is only a matter of time before Spain will need a full bail-out.

However, economists looking at Spain’s borrowing needs, their crippled banking sector, and their ailing economy now believe the required bail-out would be more than the eurozone could manage.

Head of economic research at Open Europe, believe Spain will require around €650bn.

The situation may force Germany into finally deciding whether to work towards the break up of the eurozone, or the pooling of all the eurozone sovereign debt. The pooling of the debt would lead to a full economic union, and inevitably to much stronger political ties.  With Greece likely to require yet another bailout before the end of the year, and the fall out from the current situation nudging Italy ever closer to the economic death spiral, it is only a matter of time before Germany will have to make some very difficult choices. The question is will the people of Europe accept the outcome, whatever that may be?


Dow loses 250 points…

…Spain would need to borrow up to $78bn …

…Moody’s expected to start downgrading global banks… Barclays, Deutsche Bank, Citigroup and Goldman Sachs…

Moody’s warned in February that the ratings of 17 banks and securities firms under review because they face increased funding costs and regulatory scrutiny.

…German economy, the safest in Europe, weakening.

German support has so far saved the eurozone from meltdown, Germany’s private sector shrank for the second month running in June, manufacturing, a three-year low.


via Markets fall amid gloomy US forecast and global slowdown


Markets fall amid gloomy US forecast and global slowdown | Business | guardian.co.uk.

Spain and Italy to be Bailed Out

At the G20 summit in Mexico European leaders have agreed on a deal which will see Spain and Italy being bailed out using a €750 billion bail out fund. In the deal European governments will buy up Italian and Spanish debt, in effect transferring the debt to other countries within the eurozone; instead of bailing out the individual governments.

This is a step towards the issuing of eurobonds, which would in effect be under written by Germany

For further information: The Telegraph

The Bilderberg Meeting June 2012

These annual gatherings are made up of world leaders in politics, economics, business and the media, from countries across Europe and North America.

The Bilderberg meetings were started in 1954, in Holland.

The discussions are in private, and are meant to help relations across the broad range of western nations.

However, the secretive and elite nature of the meetings point to the illuminati links to this group.

Past and present attendees of the meetings are a who’s who of the most influential people in the world.

The decisions they make affect all our lives, as they have the power and influence to make things happen.


The 60th Bilderberg Meeting will be held in Chantilly, Virginia, USA from 31 May – 3 June 2012. The Conference will deal mainly with political, economic and societal issues like Transatlantic Relations, Evolution of the Political Landscape in Europe and the US, Austerity and Growth in Developed Economies, Cyber Security, Energy Challenges, the Future of Democracy, Russia, China and the Middle East.

Approximately 145 participants will attend of whom about two-thirds come from Europe and the balance from North America and other countries. About one-third is from government and politics, and two-thirds are from finance, industry, labor, education, and communications. The meeting is private in order to encourage frank and open discussion.

Bilderberg takes its name from the hotel in Holland, where the first meeting took place in May 1954. That pioneering meeting grew out of the concern expressed by leading citizens on both sides of the Atlantic that Western Europe and North America were not working together as closely as they should on common problems of critical importance. It was felt that regular, off-the-record discussions would help create a better understanding of the complex forces and major trends affecting Western nations in the difficult post-war period.

The Cold War has now ended. But in practically all respects there are more, not fewer, common problems – from trade to jobs, from monetary policy to investment, from ecological challenges to the task of promoting international security. It is hard to think of any major issue in either Europe or North America whose unilateral solution would not have repercussions for the other.

Thus the concept of  a European-American forum has not been overtaken by time. The dialogue between these two regions  is still – even increasingly – critical.

What is unique about Bilderberg as a forum is the broad cross-section of leading citizens that are assembled for nearly three days of informal and off-the-record discussion about topics of current concern especially in the fields of foreign affairs and the international economy; the strong feeling among participants that in view of the differing attitudes and experiences of the Western nations, there remains a clear need to further develop an understanding in which these concerns can be accommodated; the privacy of the meetings, which has no purpose other than to allow  participants to speak their minds openly and freely.

In short, Bilderberg is a small, flexible, informal and off-the-record international forum in which different viewpoints can be expressed and mutual understanding enhanced.

Bilderberg’s only activity is its annual Conference. At the meetings, no resolutions are proposed, no votes taken, and no policy statements issued. Since 1954, fifty-nine conferences have been held. The names of the participants are made available to the press.  Participants are chosen for their experience, their knowledge, and their standing; all participants attend Bilderberg in a private and not an official capacity.

For further information refer to www.bilderbergmeetings.org. A list of participants is attached.



The biggest threat to growth in America is the economic situation in Europe.

World leaders are growing frustrated at the Eurozone’s failure to find a workable solution.

The United Kingdom is highly exposed to the trouble in Europe.

With the UK back into recession and figures showing that government spending is propping up the UK economy it is essential the economic storm does not cross the Channel to Britain.

However as Prophet TV has been reporting for years the financial markets are faith based systems.

Even now if confidence can be restored and correct decisions taken disaster could still be averted.


If You’re into Global Economics, Read on

The following was sent to us by one of our partners:

if you’re into global economics, read on — thought provoking — if not, run away!!!

A note to readers. This 2000-word commentary is a longer-term view; think in terms of years, not months or days. The essay is not in conflict with the fully invested position currently held at Cumberland. The words reflect my personal thinking only. Some of my colleagues disagree. In my personal view, the future is uncertain (of course) and may be unattractive for the longer-term outlook. In my view, our American political system is failing us. In my view, we are joining the list of declining world powers. The framework to support that argument follows.

“The external menace ‘You’ll end up like Greece, if you do not do this and that’ and the internal opprobrium heaped on some categories of taxpayers are very powerful and dangerous instruments to deprive people of their own personal freedoms.” –Vincenzo Sciarretta

My friend Vincenzo is a journalist from Italy. He is a serious writer and researcher. He has covered the financial markets and economy of Italy for years. He and I co-authored a book on Europe during the optimistic period. If he and I were to write such a book now, it would probably be quite pessimistic.

Vince responded to my recent email series about the downward spiral underway in the euro zone. Readers may find those essays at www.cumber.com. Vince noted my reports from the meetings in Paris and my reference to the upcoming French elections, where the promise of the Socialist candidate is to raise the tax rate on the highest income level to 75%. I will end this commentary with a longer email from Vince, in which he quotes historian Will Durant and discusses the fall of the Roman Empire.

Now to write some thoughts that gnaw at me in the late of the night, when sleep is elusive.

Simply put: I’m worried.

When I get worried, I read and re-read in my library. I can honestly say that I have had my nose in a thousand of those books. The library holds many texts by giants. They wrote about history, economics, and finance. They took the strategic view. George Akerlof, Jared Diamond, Niall Ferguson, Carmen Reinhart & Ken Rogoff, Robert Shiller, and Nassim Taleb are among the modern writers. Milton Friedman, Martin Gilbert, Friedrich Hayek and his polar opposite John Maynard Keynes, Ludwig von Mises, R.R. Palmer, and Adam Smith are among the classics.

A favorite of mine is Paul Kennedy. Twenty-five years ago, this Yale historian concluded his monumental work The Rise and Fall of Great Powers with a profound observation:

“In the largest sense of all, therefore, the only answer to the question increasingly debated by the public of whether the United States can preserve its existing position is ‘no – for it simply has not been given to any one society to remain permanently ahead of all the others, because that would imply a freezing of the differential pattern of growth rates, technological advance, and military developments which has existed since time immemorial.”

Kennedy then argued that the United States has the ability to moderate or accelerate the pace of decline. Such is also the case for other great powers, many of which are in a state of decline from their centuries-old power peak. Among others in his treatise, Kennedy’s history lessons examine Spain, France, Rome, and the Austro-Hungarian Empire.

I think I just covered a lot of the euro-zone geography.

In 1987, Kennedy warned us, “The task facing American statesmen over the decades, therefore, is to recognize that broad trends are under way, and that there is a need to ‘manage’ affairs so that the relative erosion of the United States’ position takes place slowly and smoothly.” He added the additional warning that it not be “accelerated by policies which bring merely short-term advantage but longer-term disadvantage.”

Unfortunately, America’s leadership has not heeded such warnings.

For decades futurists have complained about the rising use of government debt financing by the United States. They predicted calamitous outcomes, which did not arrive as expected. Paul Volcker and Alan Greenspan applied monetary policy in ways that allowed inflation and, hence, interest rates to spend a quarter century in decline. The Volcker-Greenspan era opened with the highest interest rates since the Civil War. Building on this downward momentum, Ben Bernanke has taken the target short-term interest rate to near zero and held it there.

During the same three decades, the US altered its fiscal policy, first under Ronald Reagan and almost continuously since. (The Clinton administration was the exception.) Rising deficit financing has been facilitated by falling nominal interest rates. That combination leads to level, or even falling, aggregate debt service. You can owe more and more and have smaller and smaller monthly payments. That is the magic of falling interest rates. Until they hit the zero boundary.

What happens when the music stops and the chairs are full? Are we reaching that point in the United States? It appears we have done so in Europe, certainly in Greece, the eldest of the declining great powers. We are also getting there in Japan and the UK. All four confront similar financial straits: zero-bound interest rates coupled with expanding national government debt.

About 85% of the capital markets of the world trade by means of the dollar, yen, pound, and euro. The G-4 central banks have collectively expanded their holdings of government securities and loans from $3.5 trillion to $9 trillion in just four years. At the prevailing very low interest rates, the functioning of monetary policy and the role of fiscal policy merge. Is there any difference between a million-dollar suitcase of one hundred dollar bills and a million-dollar, zero-interest treasury bill? You need an armed guard to protect the first one. With the second one, you need to clear an electronic trade in a safe financial institution, not an unsupervised (no more Fed surveillance) Federal Reserve primary dealer like MF Global. Your earnings on either the cash or the T-bill are the same: you earn zero. You can use the treasury bill to secure a repo transaction at a near-zero interest rate. You can use the cash to conduct many types of black-market or gray-market trades. Is it any wonder that the hundred-dollar bill is so popular? Isn’t it understandable that roughly two-thirds of US currency circulates outside the United States?

Is this a healthy situation? How long can it persist? What happens next? When interest rates eventually rise, what will be the result of this blend of monetary/fiscal policy as its unwinding turns malignant?

Moreover, who then will be the politicians that inherit this mess? Who will occupy the central banker’s chair?

I worry because there is no rationally explained strategic-exit plan in the G4. Not in the US. Not in Japan. Not in the euro zone. Not in the United Kingdom.

I also worry because the direction of taxation is up, if certain politicians continue to have their way. I worry because US business tax rates are now the highest in the entire world. In addition, I worry because of the increasing power that national governments wield in the mature economies of the world.

Applied power eventually leads to serfdom.

Increasing taxation is a characteristic of a declining great power.

Governments are failing to heed Paul Kennedy’s warnings. They are worsening the longer-term outlook. The Western world’s leaders ignored Kennedy when he wrote “… accelerated by policies which bring merely short-term advantage but longer-term disadvantage.”

Zero-bound interest rates are a short-term advantage. We enjoy them. We profit from them. We expect them to continue for a while. They are like the oxygen administered to a very ill patient. If the patient dies, the oxygen has eased the pain in the terminal phase. If the patient lives, the lungs have been scarred and need many years of healing and repair. Today, the patient is receiving oxygen in the G4. Death is being delayed (Greece) or, perhaps, thwarted (elsewhere in the euro zone, Japan, US, and UK).

We do not know how this will play out. History only warns us that many of the likely outcomes may be unpleasant. The authors I cited have articulated their differing and diverse views. Their conclusions have tended to be in the form of warnings.

Paul Kennedy favors candor. In his second, exquisite work, Preparing for the Twenty-First Century, he wrote: “Many earlier attempts to peer into the future concluded either in a tone of unrestrained optimism, or in gloomy forebodings, or (as in Toynbee’s case) in appeals for spiritual revival. Perhaps this work should also finish on such a note. Yet the fact remains that simply because we do not know the future, it is impossible to say with certainty whether global trends will lead to terrible disasters or be diverted by astonishing advances in human adaption.”

Of course, we hope for the latter and worry about the former. History gives us little comfort.

For the time being we shall remain on the sanguine side with regard to this global experiment with increasing debt, zero-bound interest rates, and a monetary/fiscal policy compromise that obfuscates the difference between them.

As long as this persists, it means financial markets do well, stocks rise, risk assets regain favor, bonds with hedges yield results, and cash continues to earn zero return.

That is now. It may change tomorrow, next week, next month, next year or not for quite some time. There is no way to know.

For the downside from history we return to Vincenzo’s email to me:


“Dear David,


“I invite you to read the last few sentences of the below article from The Lessons of History, by Will and Ariel Durant. It is about how the destruction of the Roman Empire through the taxation channel made people ‘slaves,’ in other words how serfdom emerged. This is my number one fear for Italy, but I guess France is making the same mistakes, just starting from a lower debt level. You can also find an online version of the book, thanks to Google.


“Rome had its socialist interlude under Diocletian. Faced with increasing poverty and restlessness among the masses, and with the imminent danger of barbarian invasion, he issued in A.D. 3 an edictum de pretiis, which denounced monopolists for keeping goods from the market to raise prices, and set maximum prices and wages for all important articles and services. Extensive public works were undertaken to put the unemployed to work, and food was distributed gratis, or at reduced prices, to the poor. The government – which already owned most mines, quarries, and salt deposits – brought nearly all major industries and guilds under detailed control. ‘In every large town,’ we are told, ‘the state became a powerful employer, standing head and shoulders above the private industrialists, who were in any case crushed by taxation.’ When businessmen predicted ruin, Diocletian explained that the barbarians were at the gate, and that individual liberty had to be shelved until collective liberty could be made secure. The socialism of Diocletian was a war economy, made possible by fear of foreign attack. Other factors equal, internal liberty varies inversely with external danger.


“The task of controlling men in economic detail proved too much for Diocletian’s expanding, expensive, and corrupt bureaucracy. To support this officialdom – the army, the courts, public works, and the dole – taxation rose to such heights that people lost the incentive to work or earn, and an erosive contest began between lawyers finding devices to evade taxes and lawyers formulating laws to prevent evasion. Thousands of Romans, to escape the tax gatherer, fled over the frontiers to seek refuge among the barbarians. Seeking to check this elusive mobility and to facilitate regulation and taxation, the government issued decrees binding the peasant to his field and the worker to his shop until all their debts and taxes had been paid. In this and other ways medieval serfdom began.”


Thank you, Vincenzo, for this serious response. Thank you Paul Kennedy for superbly articulating history and issuing clear warnings.


Thank you, dear reader, if you are still with me. I hope I have provoked some thought.


Now we will seek another night’s sleep and hope it is not elusive.


David R. Kotok, Chairman and Chief Investment Officer