Alex Krainer: Economic Collapse & Civil War Fears in Europe

Hi everyone and welcome back. We are joined today by Alex Cranor, a market analyst and author, to discuss seemingly the crumbling of this coalition of the willing, which is a group of European states devoted to continuing this proxy war against Russia. So welcome back to the program. Thank you for the invite, Glenn. Always good to join you and warm greetings to your viewers and I don't know why they picked this name, by the way, the coalition of the willing. Again, it's the same name as the group of countries that invaded Iraq. I'm not sure about this, but it doesn't appear to be going very well with this coalition either. That is, they seem to have all run out of weapons, they run out of Ukrainian soldiers, they run out of money, and now it seems that they're also running out of political capital. So among the large countries, France, United Kingdom, Germany, they all seem to be suffering from a lack of political legitimacy due to the lack of support for the governments and also what seems to be increasingly authoritarian means to go after the opposition, which again emerges in the vacuum that they leave behind. But I guess a good place to start is France, as their government is now, well, has begun to fall apart. What is this political crisis they've entered? Well, I think we're only seeing now symptoms of a crisis that has been brewing under the surface for a very, very long time. And I think it started even well before the corona pandemic, only I think that the pandemic and the psychological operations that were being played against the population in that period derailed it and delayed it. But now we're facing the same realities. The governments in power are extremely unpopular. They may be willing to sacrifice most of us and our children to fight their war against Russia, but they have no support from the people. They tell us that Emmanuel Macron has 10%, 11%, 15%, depending on what poll you read, support among the people. I very much doubt that even that much is true. I think that his support must be in the single digit, mostly people who are not paying any attention at all. And the same situation exists in the UK and in Germany. And we see that the democracies in these countries are being attacked by populist party leaders dying suddenly. That's a deeply suspicious development in Germany where AfD has become the number one most popular party, which wants no part of the war in Ukraine, which wants to repair its relations with Russia. And we saw that in a space of two weeks, seven of their candidates died suddenly. It's being dismissed as, well, it's just purely a coincidence, nothing suspicious there. But at the same time, none of the other parties' candidates died. It would be less suspicious, I guess, if they hadn't labeled the party an extremist organization and talking about bad politics. Yes, exactly. And they've been obsessed with somehow rendering AfD illegal or preventing them from running in elections for a few years now. We saw yesterday that the Beirut government in France, no, the day before, lost the confidence vote, which puts Macron, President Macron, in a big lurch. And there are now official proceedings to impeach Macron in France. And he himself is ready to simply assume these dictatorial powers and to rule by decree, so to completely overrule the French democracy. We've seen attacks against democracy in Slovakia, where the president, there was an assassination attempt against Robert Fico. We saw an attack on democracy in Romania, where we saw Kalin Djordjescu disqualified from running for president and even arrested. And on and on and on it goes. And so I question to what extent any coalition of the willing cobbled up together from all unpopular leaders with questionable legitimacy in support of Ukraine, which is the most corrupt country in the world, with a completely illegitimate president, because his term expired in May of 2024. So he's effectively a dictator who just simply usurped the presidency of Ukraine. How this could possibly work? And I worry that the way they will try to make this work is by continuing to cancel democracy, by continuing to eviscerate Europe's economy. Because remember, people don't go to war when they feel happy and prosperous, and they look forward to the future. People go to war when their futures have been stolen from them, when you have very high youth unemployment, where you have millions of men with no future. And then you can spread ideologies to society that tells you, well, everything is wrong in your country because of Russia and Vladimir Putin, so we have to go to war and destroy Russia. So this is what worries me. And we can see from statements by Macron, by Starmer, by Friedrich Merz in particular, the rhetoric is escalating. So Friedrich Merz called Vladimir Putin a very serious war criminal. Emmanuel Macron said that Russia is the ogre at our gate that needs to feed, and so they're coming for us. The British have been obsessing about having to go to war against Russia for many, many years now. And so this is all escalating gradually. And when you combine this psychosis with very poor economic development, with deepening recession, with rising unemployment, with rising costs of living, then maybe it's just a question of galvanizing the society with something like a false flag operation. We know that from statements of some of the leaders, like Poland's Radek Sikorski and others, that they think that Europe might be ready for war by 2029, 2030. And so I think that we will see gradually this psychosis and this propaganda escalating. And then at some point we might even get that famous false flag attack. Who knows what that might be? But it's been done in the past and there's no reason to believe that it won't be done in the future. Of course, there's a possibility on the optimistic side that democracy in Europe prevails, in which case then we don't know what the outcome might be. It will probably include the disintegration of the European Union, a disintegration of NATO, and a new global order taking shape with individual European countries or groups of countries, maybe becoming BRICS partners, joining the SCO, dropping sanctions towards Russia, opening their markets to the East, to Russia, Belarus, and so forth. So that could be a positive development. But I think that ultimately it's a clash between the people and their current governments, which are all in the globalist camp. And they all happen to be also very close to the banking circles. Macron is a former Rothschild banker. Friedrich Merz in Germany is the former head of BlackRock in Germany. Keir Starmer is not a banker, but he's a bizarre minion of Tony Blair who is a fixture of the city of London. And then this whole globalist camp seems to be led by these same or similar characters like Mark Carney, Mario Draghi. They all have something in common. They're very, very close to the globalist banking cartels. And so I think this is ultimately what the conflict is. It's people versus the banks. And this is what Lord Acton already prophesied in the 19th century, that the issue which has swept down the centuries, and which would have to be fought sooner or later, is people versus the banks. And this is where we're at now. You can add to this dangerous rhetoric of this leaked document from France, that is the country's health ministry, that French hospitals have been told to prepare for a major war in Europe by March of 2026. So essentially a few months from now. It's quite extraordinary, but it does make sense to a large extent, given that everyone can see now, despite what the media is writing, that the front lines are crumbling faster and faster. And this war of attrition is simply Ukraine can't plug the holes anymore. So it doesn't seem as if the French are prepared to simply let this proxy go. I mean, this is an opportunity they can't really let go. I mean, if they have now a proxy there with hundreds of thousands of soldiers, they can have their disposal to confront the Russians. If this would fall apart, they would personally be held accountable for what they've been doing over the past decade. It would be a disaster. But still, preparing for war with Russia, I'm not sure how they think this is going to play out. But you did touch on the situation in the United Kingdom, though. And we have Kirill Starmer warning about this massive hole in the budget, which has to be plugged. Obviously, they're not going to plug it by cutting the military financing of the proxy war against Russia. But how severe is actually this economic problem? I think it's definitely a lot more severe than we know. And I am pretty convinced that the Bank of England and the government in England are concealing the true extent of the crisis. Because when Kirk Starmer came to power, he made sure to warn the country about the 22 billion pound black hole in the nation's finances, as he said, which supposedly he discovered only as he took office and looked into the books. But when he was in opposition, the same Kirk Starmer was warning about the 32 billion pound black hole. And then at a later stage, he was talking about 67 billion pound black hole. And then in the media, he corrected himself. He said not 67, 76 billion pound black hole. And then, you know, when he was no longer in opposition, when he was government, suddenly the black hole shrunk to 22 billion pounds. So I think that it's a psychological game of, let's say, scaring the people enough to justify savage austerity being imposed on ordinary people and small and medium-sized businesses, while at the same time not spooking the markets into abandoning the United Kingdom and dumping their guilt and the British pound. But then, you know, we had the budget in October, on 30th October 2024, where the government came up with this very profligate program. That is, you know, profligate in terms of government spending on their cockamamie schemes of net zero and carbon capture and renewable energy sources and, you know, dimming the skies at the same time when they're covering the countryside with the solar panel to generate electricity. But at the same time, cutting all kinds of social benefits to the people, increasing taxes on businesses, and then still having a very large budget deficit. Not quite as large as what Liz Truss and Kwasi Kwarteng were, you know, proposing a few years ago, which cost Liz Truss her premiership, but also very, very substantial. And then even at that, it was depending on the GDP growth, which we know is completely anemic to negative, perhaps even. The debt to GDP is over 100% now, even though I think even that number is falsified. Unemployment is rising, tax receipts are shrinking, and the Starmer government clearly expected that they would be able to fund their budget and their programs from the private credit markets. And this hasn't panned out quite as well. So about a year ago, in the summer, last summer, the Bank of England made an announcement that they were entering the repo markets. Repo markets is where the financial institutions routinely obtain very short-term financing, so that at the end of every day, they could close their books and balance them. And so if they come up short, then they borrow the funds from other financial institutions. Now, when a financial institution expects that their counterpart might not be able to repay them, then the repo market starts to grind down, and then there's a risk that some financial institution will not be able to close their books at the end of the day, and that will reveal that they're insolvent, in fact. And so at that point, the financial establishment panics, and they draw the central bank into the game so that they could provide infinite liquidity to the system. That itself, central bank announcing that they're entering the repo markets, is the admission that at least one of the large financial institutions is insolvent, in fact, and they have to conceal that fact from the markets and from the people. And so this has been going on for the last year. We don't know where it's at because repo markets are extremely non-transparent, so nobody really knows how much liquidity the central bank has pumped into the market. But what we know is that this is a, let's say, this is the typical response that ultimately leads to very high inflation and hyperinflation. So the central bank just keeps pumping liquidity into the system, and over time that generates, that increases the inflationary pressures in the economy. And so, you know, that is exactly the same syndrome that, you know, we saw in places like Zimbabwe in 2009, and we saw it in Argentina, and we saw it in Venezuela in 2015-2016, and in Israel in mid-1980s, and so forth. And that always ends in the same way, you know, interest rates spike, the currency collapses, and also, you know, as people lose confidence in their currency, they bid up the stock markets. So the stock markets basically take off on a vertical trajectory. The problem is, of course, that the loss of purchasing power of the currency always outstrips the increase in stock market prices. So I think this is where Britain, as well as Europe, are headed. And I think that it's pretty much a mathematical certainty that this is what's going to happen. And I think it's only a matter of time, that there's pretty close to nothing they can do other than continue printing money. SL. I guess you put Germany in the same category, or would you say this is worse than the British? Because they also have this problem of massive de-industrialization, not just because of the energy issue, they have credit issues, they have skilled labor issues. It seems that the focus now from Mertz is, what do you expect them to do when they're going through these difficulties? Well, you have Mertz pointing to a possible future sabotage by Russia. So with a straight face warning that the infrastructure of Germany is under threat. He's mentioning Nord Stream, of course, sorry. HG. Yeah, he's warning that Russia might attack Germany's infrastructure in the Baltics. No mention of Nord Stream system. It's truly bizarre how comfortable they are with these brazen lies, thinking that we're all idiots. Yes, absolutely, you're correct that Germany is in the same bind, that France is in the same bind. It's very difficult to say which country is better off and which one is the worst off. Germany looks dismal, and so does France, by the way. But the financial markets seem to have singled out Britain as the weakling, because I've been actually predicting this outcome since 2021, since August, when the United States withdrew from Afghanistan, because that's when you started getting these bizarrely hysterical reactions to US withdrawal from Britain, which I thought that was very strange for a junior partner in these imperial misadventures. They should be relieved that they can now pack up and go home. But the collective British foreign policy leadership and defense establishment were absolutely hysterical. And so I started looking into all this, and I've been then paying attention over the past few years to the trajectory of the government treasury bonds in Europe, in the United States and in Britain. And the British ones are the ones that have lost the most. So I think that since 2021, the American treasuries lost about, I think, 10 or 15 percent, something like that, in a broad brush. But the British 10-year gilts have declined by 30 percent, and then Europeans by maybe 24, 25, 26, something like that. I haven't looked at those figures for a few weeks, but ballpark, it's around that. So the British gilts have taken the heaviest beating in the markets, which tells me that the markets have singled out Britain as the weakling. People might say, well, the markets, who is the markets? What is the markets? That's a result of five years of collective action of all the market participants. And there is some kind of collective wisdom in the markets that they, not in the short run, maybe, but over the long run, the markets do tend to get the picture right. So even if the statistics exactly are not terribly transparent, it's very difficult to try to compare on an apples-to-apples basis. It's very clear that the United States is in the strongest position, and that the British economy and financial system is the closest to collapse, probably. Yeah, well, I'm not too optimistic on that country either at the moment. But the United States, though, it seems that at least they have some plans in terms of how to turn things around. I'm not sure these plans will work, but there is a recognition that one is reaching now the end of the line, that debt is unsustainable, there's too much pressure on the currency, the bond market. And I wanted to ask you about a comment coming from a senior advisor to President Putin, in which Anton Kobyakov, who argued that the United States would likely shift its debt into stable coins, again, drive it all into a crypto cloud, and then begin to devalue it, and effectively wipe out its debts and start from scratch. It sounds very dramatic and drastic, but again, these are very unusual times. Again, we have reached now the end of the line in terms of how this economic model over the past decades has worked. So I guess my questions are twofold. Can this be done? And do you think it's likely that they will go to this extent, to look at crypto as a way of destroying or wiping out their debts? I think that what Kobyakov explained is probably true. I think that the Trump administration is making those plans. And something has to be done, because the situation is completely unsustainable. People talk about the United States having 37 trillion in debt, but that's just the federal government's debt. If you add to it the state and local governments, and the private corporate and financial debt, you get to, I think, between 110 and 120 trillion, which works out to something close to $400,000 per man, woman, and child living in the United States. And then if you want to figure per taxpayer, then that's very substantially higher still. Well, well over half a million dollars per person. And so this is absurd. This is completely unpayable. The whole system is unsustainable. You have these hundred and, let's call it 115 trillion dollars worth of total credit market debt in the system, yet you have only about six trillion dollars worth of money in circulation that's available for repayment of those debts. That's the definition of unsustainable, and it's only a matter of time until the system implodes. So generally there are a few ways to deal with the debt overhang. One of them is you can increase the wealth in the system. So let's say if you increase productivity, or you find new resources like oil or gold, or something that's valuable which you can exploit and generate the revenues with which to service the debt. For which maybe if you took a chunk of Canada or Greenland, that would help. Or if you took control of Venezuela's oil resources, that would help. So that's one way. And other ways deal with, you know, if we're not talking about increase in productivity or increase in wealth, then you're talking about defaults, which you can have an outright repudiation where you say like, well, you know, we can't service these debts, so we're not going to. And that's that, you know, your bonds are now worthless paper. Another softer, subtler mean is through inflation. You basically inflate the value of the dollar away, and then you pay back your debts with worthless paper, basically. So that's what pretty much every economy which has found itself under this weight of unpayable debts, that's what they do. They just print money and pay the debt with the newly printed currency, and they default in this way. And, you know, the negative thing in this is that inflation is extremely adverse to an economic system. So you could destroy your economy, and you could risk derailing economic development for many years, maybe even decades, if you go that route. So maybe you can play some kind of clever three-card Monty against the markets and, you know, force everybody to transfer their holdings of US treasures into some kind of new cryptocurrencies. You wipe the slate clean. You create a dual circulation, one for external markets, for, let's say, for investors and for foreign trade, and then you protect the domestic currency from the pressures that could come from abroad and that could present a shock to the US economy. Stephen Mirren has been alluding to something like that, creating a dual circulation, and I think that makes perfect sense, in fact, because this is what the Chinese have done. And it's the way that the Chinese have protected themselves from the 1997 East Asian financial crisis, when all the East Asian economies practically collapsed except for China, because its domestic currency was shielded from external shocks. So I think that this is the direction in which the US administration wants to go. How they will pull it off, I genuinely don't know, but I think that something to that effect is going to come down the line. And I think that some developments might start coming our way relatively quickly, and I think that they could end up very destabilizing for the markets. Well, there's alternatives now being created, though, because I think an important lesson was made at the global financial crisis of 2008 and 2009. Again, in those days, there was so much dependence on the United States and the political West that, well, if the US would sneeze, the whole world would catch the cold. But with the Chinese, I remember back then, they told the Chinese, you have to buy more of our treasuries. If you don't, we'll have to have the Federal Reserve buy it, which means we'll print more money. So it was a nice blackmail, because either you invest more in the United States, or we'll devalue your current investment. That's effectively what it translated into. So this is when the Chinese began to speak a bit more openly about creating an alternative economic architecture. They didn't see the US restoring its fiscal stability. I remember the same time Putin came out with comments that the US dollar was a leech, seeking to suck the blood out of the productivity of the rest of the world. And of course, after this, you have China starting Belt and Road initiatives, all this tech, industrial policies, new investment banks in 2015, the Asian Infrastructure Investment Bank, and more internationalization, or diversification, at least, of currencies now. So there's been a lot to prepare for this big splash coming up, to make sure that they don't get pulled down by the Americans and Europeans. But part of this was achieved, I guess, with this recent meeting in China over the Shanghai Cooperation Organization meeting. I just want to get your opinion how significant you think this meeting was in terms of preparing the rest of the world for, well, to use dramatic language, the downfall of the West. It seems to me that it was extremely significant, in fact, because what has happened at the same time is that the Trump administration has antagonized India as one of their important trade partners in the world. Because ostensibly, and I don't necessarily believe that this is the real reason, ostensibly they are punishing India for buying large quantities of Russian oil. I think that Trump and his government are simply using the acceptable language of the day to do what they planned and wanted to do anyway. And what they're planning to do is they want to create a protected market inside of the United States for the development of local domestic industries. So in order to do that, you have to protect it from outside competition with tariffs. And so, if everybody's talking about Russia bad and we have to punish Russia and we have to sanction Russia, then you can simply use that narrative to justify doing what you wanted to do anyhow. Because otherwise, you're really antagonizing an ally for no good reason, right? And I think that the relationship between India and the United States is going to be patched up. This is probably not fatal, it's not going to turn them into enemies. But nevertheless, it was a signal to India, to the government of Narendra Modi to diversify away from the United States, to embrace trade with China, and to become a more committed partner to BRICS, including a future, perhaps a future trade settlement currency that they will develop and a future reserve currency. And then also, in the same vein of your question, we've seen that more and more central banks around the world, even in nations that are allied with the United States, they have been buying gold hand over fist as a reserve asset, which maybe 20-30 years ago, everybody was just simply buying US treasuries. Gold was unpopular, it doesn't generate return, US treasuries generate return. There was this mindset that gold was a barbarous relic and it's a thing of the past. But now we see that this is all changing back. And in fact, the price rise in gold has been mainly driven by central banks buying gold as their reserve asset. Well, just as a final question, do you have any nice, or not nice, sorry, do you have any predictions in terms of where this is all heading now? Because the rhetoric, as we began talking about from Europe, is changing at alarming rates. We now see that there's this talk about drones entering Polish airspace, the Russian ones. Again, I'm not sure if it's correct. It's a good chance it is, given that the Russians are now engaging in more deep strikes against the production facility and infrastructure. Again, attrition warfare is escalating, the front lines are collapsing. And it's within this context that also Putin warned that any European troops in Ukraine would be considered to be legitimate targets. So I think it's important to see the context in this seemingly end stage of the war, that all this European, very aggressive rhetoric now appears, and entertaining the idea of sending in troops. I'm sure there's already sent by the British and French, some special forces to places like Kiev and Odessa. But what do you think we're witnessing? I guess there's not that many cards the Europeans really have to play anymore. But desperation often breeds stupidity, so I do get a bit worried that the recklessness will take a new level. Well, I think that as far as Europe is concerned, my prediction would be that things are going to go from bad to ugly. We have to always keep in mind that one of the main functions, one of the main reasons for having external enemies and facing a prospect of war is to bolster the social cohesion at home. Because even if a local government is very unpopular and has questionable legitimacy, if there's a credible threat to your society from abroad, people tend to rally around the government, they tend to rally around the leaders, and so those leaders will seek to basically foment fear in the population of the external enemies. So there's going to be more reports about the drones and the submarines and hack attacks and EMF attacks and who knows what else. I think that a real attack from Russia would be absolutely a Christmas gift to the government in London, Paris, Berlin. Well, Warsaw government, they just won popular mandate, they might not need that war as badly. Finland, Sweden, Norway, Germany, France and Britain principally, they would just love for Russia to stage some kind of an attack that they could say, there it is, we told you so, the Russians are coming, we have to all unite and go to war. It would preserve not only the government, or it would at least help them, give them a chance to survive, it would also preserve the ruling system, which is now under threat of not just social uprisings, but potential revolutions and civil wars. I've listened to a few lectures by an American researcher in England. He works in England and his specialty is these social uprisings and civil wars. He said that empirically looking at the social, his name is David Betts, that not only is the civil war likely in Europe, that the European countries are, he said, explosively configured for an outbreak of civil wars. This is what the people in power are very afraid of, because then we might be talking of something like the storming of the Bastille and rolling out of the guillotines on the city squares and prosecution of current governments and their ministers. They're obviously very afraid, so they want to misdirect people's grievances to the external enemy. Of course, that external enemy always is, always has been Russia. It's always Russia, Russia, Russia, Putin bad, and we'll probably get a lot of that. Only I think that we have a completely new element in the social equation, which is the internet and the social media, which we never had before. So predicting what might happen this time around is, I think, very close to impossible. We'll just have to see. Yeah. Well, thank you for your insights on this. It is extraordinary that we are at this point, and instead of looking at how to address the problems, we're seeing this, yeah, as we said, this scare tactics, and you could have added to that list of trying, the desperation to stoke this external threat would be this recent report of Wanderlei, this idea that the Russians were blocking or electronically jamming their GPS signals. She wasn't able to land. As it turned out, Politico revealed this didn't actually happen. But there was a certain weird excitement in the air that, aha, now this time the Russia gate is real. Again, I'm not sure what the thesis was there, a decapitation strike against our glorious leader, Wanderlei. It was weird from the start, but what you were suggesting, this almost excitement in the air that, aha, we're under attack now, we are victims. There's something very strange about this. Yes, you're very right. I paid attention to that episode and I thought, no, this cannot possibly be true. And of course, they were lying. I think that there's, I would say, extreme reluctance on the part of most people in Europe to even contemplate going to war against Russia. Why should people go to war? The best they can hope for is to come back intact, to not get blown up, to not die. There's no upside to anyone from going to war against Russia or from going to any kind of a war. There's zero upside, there's only downside. So why should anybody care to go to war against Russia? And I think that the stories about, you know, how Ukraine is just the beginning, that's just the start, and then they're going to start gobbling up the whole rest of Europe and they're coming for us and so on. I think that people aren't buying it. And so I think that when they try to concoct this kind of a lie, to say like, oh look, the Russians tried to take down Ursula von der Leyen's plane, I think that people's reaction isn't the predictable, oh that's terrible, we have to punish Russia. I think that the people's reaction is like, we don't believe you. And then these stories, instead of getting amplified, they get muffled and suffocated. And so I think that that's a good thing. And I'm sure that many people secretly think, well, I wish that the Russians would have succeeded if that's what they were doing with Ursula von der Leyen, because as far as I can tell, nobody can stand her. Not only is she illegitimate and unpopular, I don't know anybody who likes her. And so I think that people want to be rid of these leaders, rather than even remotely contemplating to close ranks behind them and to say, all right, Ursula, lead us to war. We want to fight and give our lives for whatever reason you think we should. Yeah, this has always been a problem with the European Union as well, but at least the nation emulated something profound within human nature, that is the desire to contribute to and be part of the tribe, based on something the European Union hasn't really been able to replicate in this. So the Europeans are going to die for von der Leyen, it does have some problems. But yet again, Alex, thank you so much for your time. Always a pleasure, Glenn. Thank you for having me. Bye-bye.