Here’s Why The EU Won’t Last Another Five Years

I told you last week that I was working on my Europe forecast for 2017, and – as it turns out – it’s not a very rosy one.

The truth is, we may be much closer to the end of the current form of the European Union than most people – and markets – assume.

Investors treated Brexit and rejection of the Italian constitutional referendum as reasons to rally in 2016, a reaction I did not expect and believe is misguided (perhaps the negative reaction will be delayed until later in 2017). The current structure of the European Union and the monetary policies of the European Central Bank (ECB) are anti-growth.  The ECB is pursuing the same policies that failed to stimulate sustainable economic growth in the United States and Japan – ZIRP and QE.  Rising economic and political pressures may hasten a new governance model in which individual nations could regain control of their own economies and currencies, but such a process will engender serious economic and market instability.

With important elections on the horizon in Germany, France and Italy, the future of the European Union may be rewritten by voters before the end of 2017.

As I’ve been explaining for a long time, that instability will create ripple effects that are felt round the world.

And it could start a lot sooner than we think.

Here’s where Europe is headed in the near future – and how to profit.


The One Sector That Hasn’t Been Fooled By “Dow 20,000 Fever”

The financial media is nothing if not predictable. Barron’s didn’t even wait for the ink to dry on the Dow Jones Industrial Average’s 20,000 print before declaring in a new cover story: “Next Stop Dow 30,000.” Barron’s argument is that “[t]he Dow hitting 20,000 was no fluke. Today’s stock prices are well supported by corporate earnings and economic growth. In fact, if President Trump can avoid stumbling into a trade war – or a real war – the Dow could surpass 30,000 by the year 2025.”

Leaving aside that this National Enquirer-style headline is little more than a desperate attempt to pump up readership and is followed by an extremely thin article lacking any analytical substance whatsoever, let’s take a serious look at Barron’s claims that corporate earnings and the economy are strong. You can wipe the rear end of a cow with these claims.

Then, let’s take a look at the one sector that hasn’t bought into the hype – and how you can profit.


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