Obviously, we were ahead of ourselves with the quote above, but it may apply now as the market is again rolling over amidst a unprecedented loss of momentum in the free trade movement. We talked about the fraying world trade picture in the “Last Call for Open Markets” entry of June 19.
 Potsdam is an appropriate venue for the latest breakdown as it brings the process full circle from the early days of the bull market. When the multi-decade, Supercycle-degree bull was just breaking out of the Great Depression, Russia, Britain and the United States set the stage for 60 years of accords with their victory over Nazi Germany, which was consummated at Potsdam in July 1945. By contrast, the latest Potsdam trade summit shows a clear wane in inclusionary sentiments.
A sudden return to World War II era animosity is evident in another key European summit, this one involving members of the European Union in Brussels. According to reports, a rift between Poland and Germany is increasing the possibility that the summit could collapse. The London Daily Express says, “Anger erupted after Polish Premier Jaroslaw Kaczynski breached the unspoken convention of not mentioning the war during EU negotiations.” The flare-up marks a very conspicuous return to the politics and ill will of the last Supercyle degree bear market. Arguing against a country per-capita weighting in EU decision making, Poland’s Premier, Jaroslaw Kaczynski, said Poland deserves a greater say because a fifth of its population was wiped out in World War II. “If Poland had not had to live through the years of 1939-45, Poland would be today looking at the demographics of a country of 66million,” said Kaczynski.
According to the Express, “Berlin diplomats were astounded by the highly emotive tone of the comments.” They will get used them. In fact, it should not be long before their own voices take on similar tones. The Polish outburst is the opposite of the international apology fest that hit in the 1990s and accompanied the peak in 2000. It reveals an increasingly rancorous political environment that will move Europe away from the unification efforts of recent years and back toward the divisiveness that marks its history. |
