A kindly worded letter from Gyorgy Matolcsy, the head of Hungary’s CentralBank , asked Managing Director, Christine Lagarde of the International Misery Fund, as some have fondly nicknamed it, to close the office as it was not necessary to maintain it any longer.
The Prime Minister, Viktor Orban, seemed keen to ease off austerity measures and prove that the country could go it alone. It in fact issued its first bond in 2011, borrowing off the global markets.
Hungary borrowed €20 billion loan to avoid becoming insolvent during the economic crisis in 2008. But the debtee debtor relationship has not been smooth sailing.
Many criticised the Prime Minister as making an ill-advised decision in order to win an election, which was due in 2014. He also wanted to refrain from having too many foreign eyes on their economic policies, as many reforms were criticised as being undemocratic.
Paying the loan back early has meant Hungary have saved €11.7 million worth of interest expenses, but Gordan Bajnai, leader of the electoral alliance E14-PM, claimed that they had actually lost €44.86 million by March 2014 because of the early repayment as all they did was replace the loan from the International Mafia Federation (another nickname, we’re still talking about the IMF here) with a more expensive one, labelling the stunt as Propaganda .
And what made further nonsense; another loan at high interest rates was signed to finance a nuclear upgrade, which will mean not only higher repayments but also high electricity costs. But they do have economic sovereignty now.
Many have claimed that the IMF AKA ‘Imposing Misery and Famine’, are owned by the Rothschild group, the biggest banking group in the world, having their fingers in almost every central bank in the world. This means that not only do they make money off usurious interest rates at the misfortune of crumbling economies, they also literally own Governments and people of power – I mean they have considerable influence.
Escaping the banking clutches is therefore, iconic. Iceland joined Hungary in 2014 when it paid back its $400 million loan ahead of schedule after the collapse of the banking sector in 2008 and Russia, of course bowing down to no Western puppeteer, freed itself in 2005, one wonders what other strings are attached though — and how long it will be before the international bankers wheedle their way back in.
The return of these three countries to financial independence has been said to be the first time a European country has stood up to the international fund, since Germany did so in the 1930s. Greece is anxiously trying to make payments but missing them as we all stand on the sidelines routing for them to stick two fingers up to the ‘International M***** F******’.
Hungary’s PM, Victor Orbán, speaking in Budapest on the 170th anniversary of the Revolution of 1848, and in the run-up to the national elections.
He spoke about the ‘migrant crisis’ being intentionally forced upon Hungary and wider Europe, speaking of the deliberate use of open-door mass migration to erode and replace Western national identity; intended to dissolve nation states and supersede the fundamental Western systems of democracy and constitutionality, as well as bring about a superstate of migrant-fueled cheap labor.
A rousing nationalist speech by Orbán, and a solemn call to arms against the encroaching bureaucratic Globalist threat.
Here’s a few key excerpts from the 26 minute speech:
The biggest clash between freedom and tyranny ever.
“They want to take away our country! Not with a stroke of the pen, like they did 100 years ago at Trianon [WW1 treaty that divided up Hungary]. Now — In just a couple of decades — they want us to hand it over willingly to others — to strangers from another continent, who do not speak our language, who do not respect our culture, our laws and our way of life. Who want to replace our way of life with theirs. From now on they do not want us and our descendants to live here, but someone else. There is no exaggeration in this! We can see it day by day, as great European peoples and nations, step by step, area by area, from city to city lose their homeland. The situation is such that those who do not stop the migration at their borders will be lost. Slowly but surely they will be consumed. All of this by external forces, international powers that are trying to force this upon us, with the help of their local allies, and they see the local election as a great opportunity for this. Never before have the nationalist and Globalist forces so openly strained against each other. On one side; us, the millions with national sentiments. On the other side, the elite world citizens. On one side; us, who believe in nation states, the defense of borders, in the value of families and work. And on the opposite side; those who want open societies, a world without nations and borders. Who want new types of families, devalued work, and cheap labour. Above them rules an army of inexorable, impenetrable, and unaccountable bureaucrats. The national and democratic forces on one side, the supranational, undemocratic forces on the other side. This is how the situation in Hungary looks 24 days before the election.”
It is time to abandon petty party politics and unite against the true threat.
“If the country is no longer Hungarian, what is all the “orderliness” for? Let’s not delude ourselves [refers to Earl Széchenyi’s sentence]: we do not have to fight against the anemic opposition parties, but an international network that has been organised into an empire. Media financed by foreign groups, and a domestic oligarchy, professional activists for rent, agitators, organizers of riot, chains of NGOs paid by international speculators, which can be summed up with George Soros’ name – since he personifies it. This is the world we must fight against, to defend our own. A good soldier does not fight because he hates the opponent before him, but because he loves what is behind him; loves Hungary and the Hungarian people. Respected celebrators, we came from Christian culture; we differentiate between the man and his deeds. We never hated and we will never hate anybody. Just the opposite. We continue to believe in the power of love and unity. But we will fight against what George Soros’ empire does and wants to do against our country. This is our home, this is our life, so we will fight to the end for it and never give up, ever!”
They want to dilute and replace the people of Europe. Deceptive Globalist opponent not straightforward to fight. Fight nihilism.
“Europe is already under an invasion. If we let it, in the coming decades tens of millions will begin to move into Europe from Africa and the Middle East. Western Europe is watching this with their hands in the air. Whoever puts his hands up is disarming himself. He is no longer making decisions about his fate. The history of the losers will be written by others in the years ahead. The young people in Western Europe will see it, when they become a minority in their own country, and they lose the only thing in the world that they can call home. Such forces as now reveal themselves have not been seen in the world for a long time. Africa will have ten times more young people than Europe, if Europe does nothing, they will kick down the doors and Brussels will not protect Europe, they do not want to stop the migration, but rather support it and organize it. They want to dilute and replace the people of Europe! They [Brussels] throw away our life, our culture, and everything that separates and differentiates us Europeans from other nations of the world. It is a meager consolation that the European nations will not forgive those leaders who — without asking the people — totally changed Europe. Let us be proud that we were the ONLY country in the entire Union that asked the people if they want mass immigration. I know this struggle is hard for everyone, I understand it if some are scared. It’s understandable because we must fight an opponent who is very different than we are. Not with a level playing field, but by hiding. Not straightforward, but crafty. Not fair, but excremental. Not nationalist, but internationalist. Who does not believe in honest work, but in financial speculation; who does not have a homeland, because he feels he owns the whole world. He is not generous, but vengeful, and he always attacks the heart, especially if it’s red, white and green [Hungary’s national colours]. In your life will come a moment when you realize you need a place, a language, a home, where one can be with his own. Safely surrounded by love, can live out his life. A place where you can return, a place where you can feel life is not without meaning, and even at the end, will not fall into nothingness. It will add and build onto the thousand-year-old great creation, which we simply call ‘homeland’, the Hungarian homeland. Respected Hungarian youngsters, your homeland now needs you! The homeland needs you; come and fight with us, so when the time comes that you need the homeland, you will still have it. Raise high the flags! Go and fight; long live Hungarian freedom, and long live the homeland. Up for victory, hoorah Hungary, hoorah Hungarians!”
This coming Friday is when the Trump administration’s previously announced 25% tariffs on imported steel and 10% for aluminum officially take effect, and while Canada, Mexico and Australia have been excluded from the protectionist measure, planned retaliation by China has triggered concerns over a global trade war. And confirming that trade – and broader economic and commercial – ties with China are set for a sharp deterioration, on Sunday the Trump administration ended a decade-old formal economic dialogue with China amid US concerns the country is becoming increasingly protectionist and moving backward on its promise to open its markets to foreign competition.
Speaking in Buenos Aires ahead of the Group of 20 finance ministers meeting, David Malpass, Treasury’s undersecretary for international affairs, said that “the administration is disappointed with China and because there wasn’t a path back toward a market orientation, I discontinued the China economic dialogue.”
The halt of the main economic channel between the U.S. and China – known as the Comprehensive Economic Dialogue – ends conversations started under one of his predecessors, Hank Paulson, during the George W. Bush administration. Paulson singled out an economic track for the Treasury Department to lead, becoming the point-person on all such matters between the nations.
Still, the severance of ties sounds somewhat more extreme that the underlying reality: quoted by Bloomberg, Malpass said that rather than holding formal discussions, Secretary Steven Mnuchin has frequent private talks with senior-level officials in China to bring back focus to free-market capitalism, he said.
Call it graduated diplomatic escalations meant to find China’s trigger point.
“One of the things we are doing is trying to keep open lines of communication with them even as we express concern” about the growing influence of China’s state-owned enterprises.
He also said that China’s movement toward market liberalization has “stalled or reversed” adding that “it’s become more clear that’s the case. We now see China’s political process moving away from a term limit.”
Referencing the recent “perpetualization” of Xi Jinping, Malpass also highlighted a risk for the world from China’s autocratic rule, saying that the “risk of autocrats being in power too long now exists” and highlighted China’s zombie companies, pointing out that “China is producing steel, aluminum with subsidized finance” which of course is just another form of protectionism.
In a surprisingly accurate take for a government official, Malpass cautioned that “with low bond yields and the availability of capital in both the public and private sphere there is a quiet but very broad leveraging up that we have to recognize as a vulnerability.”
As Bloomberg adds, the first Comprehensive Economic Dialogue during the Trump administration fell apart in July 2017. The two super-powers were unable to produce a joint statement after Commerce Secretary Wilbur Ross scolded China over its trade imbalance with the U.S. in his opening remarks. Both sides canceled a planned closing news conference.
“After 10 years of discussions, certainly the U.S. has grown frustrated with the lack of progress” that resulted from the Comprehensive Economic Dialogue, said Timothy Adams, president of the Washington-based Institute of International Finance and a former Treasury undersecretary in the George W. Bush administration.
“I don’t fault them for their frustration, they’re looking for different ways of bringing about change of Chinese behavior,” he said in an interview earlier this month.
Anticipating the collapse of formal relations, President Xi Jinping recently sent his top economic adviser, Liu He, to meet with Mnuchin. In that meeting, Liu is said to have asked Mnuchin for a point-person to provide a list of specific demands from China, a sign that Treasury’s shuttering of the formal dialogue process may be hampering the process. Liu pointed out that different U.S. administrations have wanted various things, the person said, with Bush focused on monetary policy and Obama emphasizing investment.
Meanwhile, in the latest indication of bilateral relations, Malpass said the U.S. wants to work with other nations to come up with a united response to what America sees as China’s foot dragging on economic changes, ranging from reforming state-owned enterprises to curbing the ruling party’s role in the economy.
“Above all, their markets are not reciprocal in the sense that there’s not an ability for other countries to work in China the way that China works in elsewhere,” Malpass said later Sunday in a Bloomberg TV interview.
As Bloomberg further notes, the new rhetoric contrasts with the more collaborative approach of both the George W. Bush and Obama administrations, who courted China as an economic partner even as the U.S. asserted its military power in Asia. However, in light of Trump’s recent trade war rhetoric, the shift is hardly a surprise.
As discussed last week, as part of the next round of targeted trade wars, Trump is considering clamping down on Chinese investments in the U.S. and imposing tariffs on a broad range of its imports to punish Beijing for its alleged theft of intellectual property. A number between $30 and $60 billion (and perhaps even higher) in tariffs on Chinese imports has been floated.
Also last week we laid out a Goldman report analyzing which Chinese imports are most likely to be hit by the upcoming round of China-focused tariffs.
All this takes place ahead of the year’s first G-20 meeting of central bankers and finance ministers in Buenos Aires. Talks start Monday and conclude with the release of a statement on Tuesday. They convene at a time when the global economy is in surprisingly strong health, yet concerns are growing that its upswing may boil over, and predictably, the topic of the moment is President Trump’s trade war plans, and as a result many governments are lobbying to be exempted. That could make for an uncomfortable couple of days for U.S. Treasury Secretary Steven Mnuchin as he tries to play down trade frictions. Scandal-plagued Japanese Finance Minister Taro Aso will not be attending.
According to Bloomberg, one of Mnuchin’s primary aims at the G-20 this week is to gain greater visibility into loans China has made to developing countries. The Trump administration is concerned that the U.S.’s top strategic rival is attempting to extend its influence with the loans while moving away from opening its markets to American goods.
“On the positive side, the world is recognizing that and beginning to work together. Recognizing that having such a big economy in the world move away from markets has not been good for us, for the world,” Malpass concluded ominously.