Notes From Underground: Slovakia … Never Has Something So Insignificant Attracted So Much Attention

The media was all aflutter with the vote in the Slovakian Parliament on the issue of the July 21 changes to enhancing the increased funding for the EFSF. This vote was meaningless for Europe and the world but of significance for the Slovakian government. The amount of money that Slovakia would have to add to the EFSF is a pittance compared to the funds that Europe has sent and will send to the Slovak people under the guise of the EU COHESION FUNDS. Europe has sent the less-affluent states money to help ease the wide disparities between the wealthy core nations and the newly developing nations of the former Soviet Empire.

The NO voters in Slovakia were hoping to bring down the present government by holding the entire nation hostage. Slovakia will vote YES and the money will continue to flow from Brussels and all the media hype is merely fluff. As Charles De Gaulle said, “Europe is France and Germany: The rest are just trimmings.” The proof to this is that the EURO failed to move after the initial NO vote.

This evening the U.S. Senate passed a bill that would seek to punish Beijing and other nations that are deemed to be CURRENCY MANIPULATORS. The U.S. has threatened to do this before but when the HOUSE passed a similar BILL, the Senate blocked it. Some analysts believe that the Senate did this to have political cover for passing the pending free trade agreements. The Senate leaders are sure that the Republican-led House will not pass the legislation, thus making the legislation meaningless. The Chinese are voicing their anger and raising concerns about the possibility of a trade war, but also know that this legislation arises as the U.S. enters the political cycle. HOWEVER, WHAT IF THE BOEHNER-LED HOUSE PASSES THE BILL AND DEFIES ALL THE PUNDITS?

The Republicans could vote yes and send the BILL to Obama where the President will be in a difficult situation as he would risk a trade war with the Chinese or else alienate his base by vetoing the BILL. This political gambit by the SENATE DEMOCRATS may become interesting. If you thought the EQUITIES WERE VULNERABLE TO EUROPE, THE CONCEPT OF A GENUINE TRADE WAR WITH YOUR BIGGEST CREDITOR CAN REALLY SET THE MARKETS ALIGHT. John   and Eric Cantor, what say ye?

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6 Responses to “Notes From Underground: Slovakia … Never Has Something So Insignificant Attracted So Much Attention”

  1. Joe Says:

    Quite a bit like the game of chicken the legislative and executive branches played with the supreme court over the McCain Fiengold campaign finance “reform” law. Politics over principle. Of course, modern civics defines that as pragmatic compromise. You can just picture the hands on shoulders dance taking place as the details are worked out among the honorables in and around the cloakroom.

  2. erich Says:

    Hi Yra,

    Where do you find these quotes and historical nuggets? I have never seen them ONCE on any news channel nor financial channel (even in your interviews!)


  3. usikpa Says:


    As a side note, is the growing Baltic Dry index back on the Note’s radar by any chance? Perhaps, worthwhile to be mentioned in one of your quick hitters?

  4. yra Says:

    usikpa–I have been watching it but its usefulness is difficult to measure as so many new dry bulk carriers are coming on line,but your point is well taken and we will be watching.Also ,pay attention to the european bond markets as the french-german rates are widening as even Greenspan has talked about it—but we will get on top of this—thanks

  5. yra Says:

    Eric—the great Bernard Connolly has taught me much over the past 15 years but as you can tell I am a student of political economic history.To understand Europe you must reach back to De Gaulle who also said that France and Germany were the horses and coach of Europe and of course he had France as the coachman driving the horses.Much can be found in these little nuggets.What bothers me is how little knowledge there is in the television media who merely rely on the last tick of the DOW.

  6. algotr8der Says:

    I don’t have a screen shot of the baltic sea index but here is a good chart of shipping rates (note they are falling off a cliff).

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