This past week saw a number of interesting and important geopolitical events taking place throughout Europe, the United States, and Asia. In the United States, the national Gross Domestic Product slowed to a crawl of only .7 percent for the first quarter. This followed a previously better 2.1 percent performance for the fourth quarter. Economists had been looking for a better 1.2 percent growth in GDP. The takeaway is that today’s American GDP growth is not keeping pace with inflation.
In Europe, the eyes of the world were transfixed on the most critical French presidential election in modern history. Though polls have continued to show independent centrist Emmanuel Macron defeating his far-right, nationalist, anti-EU rival Marine Le Pen, computer program models show Le Pen will win the May 7th runoff this weekend. At stake is nothing less than the future of the entire European Union project.
Meanwhile banks across the European continent received subpoenas from the United States’ Justice Department in the latest investigations on foreign-based banks. This time Justice and lawsuit plaintiffs have their sights set on Swiss banking giant UBS, French international banking behemoth BNP Paribas, and British banking powerhouse RBS.
And over in Asia, the crisis situation with North Korea continued to simmer as the United States administration and President Trump himself reminded everyone that the military conflict option is still very much on the table. This could of course lead to a full-blown war in the Korean Peninsula which could quickly involve South Korea, Japan, the United States, China, and North Korea.
All of it amounts to so many reasons to include gold bullion in your retirement portfolio. Gold is the glue that will hold your most important assets together in the event of a geopolitical event which upends the global economy. Given the state of affairs in the world today, it’s time to learn what gold goes in an IRA.
Intense French Presidential Election Promises a Down to the Wire Campaign
The twists and turns in France’s most critical presidential election in modern history continue to remind global investors that they can not take a centrist Emmanuel Macron victory for granted, especially as far-right leader Marine Le Pen continues to pick up voters and endorsements from defeated first-round rivals.
Never before in modern French history have the two Frances collided so desperately as now. This election has shone the spotlight on the ugly truth that there are two French nations today, one that is prospering from globalization, and the other nearly half of the country that is dying because of the harsh consequences that come along with unrestricted free trade.
With under a week until the most critical vote in the history of the Fifth French Republic, Marine Le Pen has been holding major rallies throughout Paris. The last one centered on the Parisian suburb Villepinte where she gave a one hour long speech before many thousands of French citizens. Throughout her fiery, defiant speech, the animated and enthusiastic crowd interrupted her repeatedly with their chants “Marine president” and “we will win” in scenes reminiscent of the President Donald Trump campaign phenomenon that took America by storm. Le Pen declared:
“Patriots from different currents can now gather to defend their country. We now form a big patriot and Republican alliance.”
The far-right candidate was referring to her new alliance with her one-time rival Nicolas Dupont-Aignan, the right-wing leader who commanded nearly five percent of the French electorate’s vote in the first round of the presidential election. She has named him her running mate who will be the prime minister of France if she succeeds in winning the this Sunday election.
Already Le Pen has demonstrated she can bring in other candidate’s voters with this move. Some analysts have claimed that she has given her candidacy new legitimacy and hope with such an appointment. There were defeated conservative party leader Francois Fillon’s voters who travelled to her rallies and will vote for her now as she has successfully softened her hard-right image in a clever effort to bring in more of the conservative French voters.
While Le Pen has been campaigning for border controls, a repatriation of powers from the European Union, an end to the euro currency in France, and against unrestricted, uncontrollable immigration, Macron is pushing the old-line policies of France being able to flourish in a unified European Union and the open, global world. The 39 year old centrist independent also held a final large rally before the May 7th vote. At his very different rally, EU and French flags were flying side by side.
Macron’s huge task is to attempt to persuade voters who have decided to abstain from the poll to vote for him. Analysts see an open door for Le Pen if enough of the other candidates’ and undecided voters stay home or cast defaced ballots in protest of the status quo. “No” votes work to the advantage of Marine Le Pen whose own supporters are fanatical and will be at the polling stations no matter how long they have to wait. This is why Macron has told people that they must mobilize to vote in order to overcome the far-right leader.
In an effort to woo the many angry and disenfranchised voters of the extreme left and right which represented over 40 percent of the first round vote on April 23rd, he told the supporters of both Marine Le Pen and Jean-Luc Melenchon that he “understands their anger.” Macron has promised he will consider their needs and the problems that have driven them to vote extremist if he wins the presidency with:
“I hear this anger. I’ll never judge someone who votes for the National Front. You’ll never hear me with this sort of moralizing discourse.”
Despite the fact that the latest OpinionWay polls for Les Echos French financial newspaper still show Macron with a 61 percent vote share versus Marine’s 39 percent, prominent computer program models and economists who correctly predicted President Trump’s highly unlikely victory in November are pointing to a Le Pen victory on Sunday, May 7th.
This is the vote of the year to watch, as the future of the over 70 year old European economic and political integration project is literally on the line with the determination of who becomes France’s next president this weekend. Gold and silver bullion are your retirement portfolio’s best friend with so much at stake for the European and global economy and worldwide financial markets.
U.S. Department of Justice Subpoenas UBS, RBS, and BNP Banks In Latest Assault on Foreign Based Banks
In the latest example of attacks on foreign-based banks, the U.S. Department of Justice has issued subpoenas to three of the largest international banks which have significant operations in the United States. This included Swiss giant UBS Group AG, French multinational behemoth BNP Paribas SA, and British banking powerhouse Royal Bank of Scotland Group Plc.
The prosecutors’ gathering of information from the banks stems from a two year old criminal investigation into the potential manipulation of the $14 trillion United States’ Treasuries market. Back in November of 2015, American investment bank Goldman Sachs revealed that American authorities had been to see them looking for information on the trading of when-issued securities. These have been called the most opaque instruments of the U.S. debt market, which is the largest on earth.
The issue surrounds these so-called when-issued placeholders for bonds, notes, and bills that have been sold before the actual instruments become auctioned since 1975. They guarantee the customers will be able to secure their Treasury bills, notes, or bonds once the U.S. government auctions them. These when-issued’s are sold over the counter and only have a few days’ lifespans.
RBS, BNP Paribas, and UBS represent major primary dealers of the U.S. Treasuries markets. Civil lawsuits have also been filed against these and other primary dealers for the possible collusion of the big banks in the prices of the instruments. These lawsuits date to July of 2015. They claim that the primary dealers pre-sell the debt as when-issued securities then purchase the actual instruments at a suppressed price which they supposedly work together to keep low so they can make more money at the expense of the investors.
President Trump Threatens Military Action Against North Korea with All Options on the Table
As the heat continues to rise in the Korean Peninsula ballistic missile and nuclear program development crisis with North Korea, President Donald Trump refused to take the option of military force against the rogue state off the table in his “Face the Nation” interview on CBS this past Saturday a mere few hours after Kim Jong-Un’s outlaw regime launched yet another missile in a test determined to defy the international world mandate.
As the host John Dickerson queried the President on if he would deploy military force against the North for engaging in their likely sixth nuclear test, President Trump replied:
“I don’t know. I mean, we’ll see… But we have a situation that we just cannot let — we cannot let what’s been going on for along period of years continue.”
It might be a good idea to prepare your retirement portfolio for potential Korean Peninsular conflict.