📊 Egon Zakrajšek on Europe’s Financial Trap and Trump's Demands

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Egon Zakrajšek, a well-known Slovenian economist and visiting professor at Istanbul University, shares his opinion on Europe and its relations with Trump’s America.
Here is our (slightly abbreviated) translation of his article published in Turkey.

Even today, the same question arises: "Where will the Europeans take the money from?" What Trump invented is that Europeans must pay for weapons and on the principle of "morning money, evening goods. In the evening, money in the morning is a commodity." But the EU has no money. 💶

The FED has indeed granted large loans to the European Central Bank. Print the Euro without these loans, the ECB cannot for a very simple reason — this is inflation. And when you have dollars in reserve, respectively, you can convert excess cash into dollars and place them on the US financial markets. 💵

The European Union has no analogues on the American financial markets. They don't have their own tool to sterilize excess liquidity in the economy.
📈 Inflation, of course, in the European Union is, and it is much higher than the official indicators, but the question is more complicated.

"The official statistics lie in each country individually to get the maximum subsidies from Brussels and, therefore, they lie at the Brussels level." In the United States, "this is a lie at the level of Washington."
There are optimistic estimates that inflation in the United States is about 8%, pessimistic — around 12%, meaning for households and for small businesses. Because for large companies this is an incomprehensible thing at all. Their production structure in the United States is very weak.

The fact is that "the Europeans have already begun to shout that they have money and have already launched a program, they simply printed to buy weapons." 💣
And there is an assumption that this money was thrown at them, "because the Americans do not need euros."

🇺🇸 The Americans have a deficit trade balance with Europe. Not so long ago, "Europe sold more to the United States than the United States did to Europe." Therefore, "the Euro in the United States is not needed."

For this reason, "withdraw money to buy these weapons, which, according to them, were promised by Trump, can only be if the FED secretly issues dollars to the ECB."
According to US legislation, "the audit of loans that the FED issues to central banks of other countries, allegedly to maintain the stability of the course, is unclassified," That is, "Trump is prohibited from studying these transactions."

#Zakrajsek #Europe #ECB #Trump #FED #Inflation #DebtCrisis #Weapons #Geopolitics

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But there is a subtlety here: since "the American people, who are the bearers of power, cannot be abolished and represent this people in Congress," it is likely that Congress will have the power to appoint a Commission that the FED will examine.
But "they will or will not, this question is still unknown", yet "we know that there is such a thing as intelligence services that, using their methods, not always correct from the point of view of human ethics, can extract various non-trivial information." 🕵️

Here the author strongly suspects that "Trump's irritation about Powell, the head of the FED, is due to the fact that he gave money to the ECB."
Now it is clear "why Trump invented this weapon system." "According to him, instead of giving Ukraine weapons for free, let the European Union first give money that it received from Powell, as if without coordination with the American political elite."

There are a lot of elite groups in the United States that have generally supported Trump — now "they are arguing again because Trump is not doing exactly what they want."
The Euro-Atlantic group, of which Trump is also a member, and Powell "are certainly part of the Euro-Atlantic group that controls the FED, and for this reason he gave money to his own." 💸

The other question: "whether he had the right to give money to political projects" — here, for the author, "it is not obvious."

📉 "Everything is bad in the economy of the European Union" — "as a whole and in each country of the EU, that is, the big countries, individually."
The only exception is Poland, because "Poland is phenomenally using the confrontation with Russia to extract money from Brussels." 🇵🇱

#trump #unitedstates #powell #ecb #money #eu #war #fed #poland #economy

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Dollar’s Iran War Hangover

The dollar is taking a hit, and it’s not because the Fed suddenly got soft — it’s because everyone else decided to go full hawk once Trump set the Middle East on fire. Since the US–Israel war on Iran began and Brent shot roughly 50% higher, markets have flipped from pricing Fed cuts to assuming the Fed just freezes in place while Europe, Britain, Japan and even Australia talk, hint, or move toward hikes.

The result: euro, yen, sterling, Swiss franc and Aussie all gain on the week, while the dollar index posts its biggest weekly drop since January — even as traders warn that if the war drags on, the greenback will come back as a classic “safe haven” riding US energy exports and global fear.

In Brussels and London, central bankers are suddenly rediscovering inflation. The ECB held rates but all but admitted that energy‑driven price pressure means hikes are back on the table; markets now fully price at least one move by June. The Bank of England did the same “on hold but ready to strike” routine and promptly triggered a rout in short‑dated gilts as traders shoved in roughly 80 basis points of tightening by year‑end.

The Bank of Japan, long the global dove, left the door open to a hike as soon as April, giving the yen a rare boost as carry‑traders blinked. Australia simply skipped the winks and raised again, its second hike in two months.

Washington, meanwhile, is stuck in a classic Trump‑era contradiction. The Fed sits on its hands because Powell has no idea how deep the war damage will go, money markets have killed off hopes of rate cuts but haven’t priced hikes, and at the same time the administration is begging Saudi Arabia and Israel not to push Iran’s energy network over a cliff while openly considering unsanctioning Iranian barrels and already relaxing restrictions on Russian oil at sea.

LNG in the Gulf gets hit, the world’s largest gas complex is “crippled,” crude flirts with $120, and the supposed king currency of the system spends a week being marked down because everyone else is hiking to pay for Trump’s freedom‑of‑navigation cosplay.

The punchline for a Telegram feed is simple: the war Trump sold as strength is now rewriting global rate expectations, making Europe and Asia look tougher than the Fed on inflation, and briefly knocking the dollar down — while every serious strategist quietly adds the same caveat.

If this conflict drags on and the shock gets bigger, the dollar doesn’t die; it comes back stronger as the world’s favorite panic asset, backed by US oil and a war bill that someone will eventually have to pay.

#IranWar #Trump #dollar #Fed #ECB #BoE #BoJ #RBA #FX #oil #gas #energyCrisis #markets #warCost #fakeStability

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