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It’s Time to Get Ahead of This “Trillion-Dollar Tsunami”

Friday, January 6, 2017 11:48
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by Doug Casey, Casey Research:

There was Brexit…Trump’s upset victory…and U.S. stocks soaring to record highs after treading water for nearly 15 months.

At this point, everyone is wondering what 2017 will have in store. After all, you don’t make money by dwelling on the past. You make money by getting ahead of the next big trends.

Today, Crisis Investing editor Nick Giambruno tells us what he thinks will be two of this year’s biggest stories. We encourage you to read this interview closely. It could mean the difference between making a lot of money this year and suffering huge losses.

Justin Spittler, editor, Casey Daily Dispatch: Thanks for joining me today, Nick. With 2016 in the books, what big themes do you see playing out this year?

Nick Giambruno, editor, Crisis Investing: I think the European Union (EU) could collapse this year. Now, this might sound crazy to some people, but hear me out.

A populist tsunami is washing through Europe. It will drastically change the Continent’s political landscape in a way not seen since before World War II.

This wave will flush away traditional “mainstream” parties and usher in anti-establishment populists who want to leave the European Union and its currency, the euro.

In June of last year, it took shape in the United Kingdom in the form of Brexit, which killed David Cameron’s pro-EU government.

Six months later, it struck Italy. As your readers know, Italy held an important constitutional referendum on December 4. This vote forced Matteo Renzi, Italy’s former pro-EU prime minster, to step down.

I think you’re going to see a lot more European countries do the same. The momentum is clearly building for this anti-elite surge. It’s like a hurricane gathering strength. I think the failure of the Italian referendum is the tipping point. It will make this trend unstoppable.

Voters in Europe’s biggest countries could soon throw out their “mainstream” parties in favor of populist and Eurosceptic alternatives.

2017 will be a decisive year.

Voters go to the polls in major elections in the Netherlands (March 15), France (April 23), and Germany (between August 27 and October 22).

Anti-euro populists have a real chance to win in any of those countries. If they win in even one, the EU would likely unravel.

J.S.: I know many of our readers are following this story closely. It will be interesting to see how things shake out. Any other big themes investors should keep their eyes on?

Nick Giambruno: China’s New Silk Road is one of the biggest stories in the world right now. The U.S. media has barely made a peep about it. That’s probably because the idea is too big to fit into sound bites. But that doesn’t make it any less important.

For thousands of years, the Silk Road was one of the world’s most important land routes. It stretched 4,000 miles long and was the main trade route for lucrative Chinese silk, passing through a chain of empires all the way from China to Europe. Famed merchant Marco Polo traveled to the Orient on this path.

Now China is building a New Silk Road. It is history’s biggest infrastructure project.

If all goes according to plan, the New Silk Road will be up and running by 2025. A train will be able to zip from Beijing to London in only two days.

Chinese President Xi Jinping announced the gigantic plan in late 2013. The New Silk Road will include high-speed rail lines, modern highways, fiber-optic cable networks, energy pipelines, seaports, and airports. It will link Europe’s Atlantic shores to the Pacific shores of Asia.

Unlike Western governments, the Chinese rule by consensus. They’re careful long-term planners. When they make a strategic decision of this magnitude, they’re totally committed.

Not only does China have the political clout to pull this off, it also has the financial, technological, and physical resources to make it happen.

J.S.: Interesting. How will the New Silk Road impact the global economy?

Nick Giambruno: It will likely trigger the biggest shift in global power since World War II.

To understand why, it helps to look at a map…

You’ll notice that Asia and Europe are shown as one giant land mass called “Eurasia.”

Decades ago, Sir Halford Mackinder, the godfather of geopolitical theory, argued that the key to becoming a dominant global power was controlling Eurasia.

Zbigniew Brzezinski, a renowned Polish-American geopolitical strategist, also thinks controlling Eurasia is key to becoming a global economic power. He wrote in his 1997 book The Grand Chessboard: American Primacy and Its Geostrategic Imperatives:

Ever since the continents started interacting politically, some five hundred years ago, Eurasia has been the center of world power. . . . A power that dominates Eurasia would control two of the world’s three most advanced and economically productive regions . . . rendering the Western Hemisphere and Oceania geopolitically peripheral to the world’s central continent. About 75 percent of the world’s people live in Eurasia, and most of the world’s physical wealth is there as well, both in its enterprises and underneath its soil. Eurasia accounts for about . . . three-fourths of the world’s known energy resources.

In other words, if a single country controlled Eurasia, it would be an unstoppable global superpower. And that’s exactly what China plans to do.

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