The World faces two bad deals: Greece and Iran

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By Christian Takushi, Macro Economist, 14-15 July 2015, Switzerland.

The EU-ECB-IMF deal for Greece and the US-Iran deal if implemented will bring short-lived joy and economic boosts, but they lay the ground for a much bigger crisis in Europe and a possibly devastating War in the Middle East.

You can read in this article also ..

– why the UK and Germany may have to yield to their citizens and exit an EU of ever bigger transfers, rescue payments and rising risks of defaults

– why Greece should look to Peru and learn that austerity with serious reforms works

– Why the widespread vilifying of Germany by many in Europe is unjustified and will backfire

Source: BBC.com/RT News. Iran's ballistic arsenal ready for purchase of nuclear pay-loads as hard currency becomes available

Source: BBC.com/RT News. Iran’s ballistic arsenal ready for purchase of nuclear pay-loads as hard currency becomes available

The deals for Greece and Iran are doomed to fail in the long run, because they stand or fall with the efficacy of unilateral supervisions. Something that has never worked in human recollection. Unless supervisions are symmetric and mutual – like between the two superpowers in the Cold War – they will be always circumvented. The nation on which such supervision is imposed will always find a way to circumvent it, specially if it has an educated elite. Both, Iran and Greece, have it. Had the Greek people desired reforms, they would have implemented them years ago. We have to respect that the majority of the Greek people want more financial aid, but also to keep their way of life. Had the Iranian leaders desired to curtail their nuclear program, they would have done so years ago. Unfortunately when the Iranian people rose bravely against their religious dictators and begged the West to help them, the West looked away although it had just removed other dictators in the Arab-Sunni world that had perpetrated similar or less crimes. Worse even President Obama soon engaged the Iranian leadership in far-reaching talks, legitimizing the Ayatollahs dictatorial grip on a great nation. This cannot be compared with the US rapprochement vs Cuba. I strongly invite you to read the 159 pages of this Iran deal.

Will Greece and Iran do what Western leaders want from them thanks to some observers on the ground? I have great respect for the ulterior motives of President Obama and the Troika members (EU, ECB and IMF), but such hugely dangerous experiments built on supervisions will be seen by millions of tax-payers on both sides of the Atlantic as naive. Naive, because the Iranian leadership hasn’t taken back its annihilation threats against her neighbors and aggressive expansion in the region, nor has President Tsipras stated that he believes in privatization and serious reforms. Just going after the wealthy aggressively is not reform, that is simple re-distribution.

It is amazing that after two massive rescue packages for Greece (along outstanding debt of roughly 250’000’000’000 Euros) and so many circumvented supervision-based Deals with Iran & North Korea, the West wants to do more of the same and yet expect opposite results. A leading American bible teacher, Andrew Wommack, often quotes the famous definition of Albert Einstein for insanity. “Insanity is doing the same thing over and over again and expecting different results”. That is exactly what Western leaders are doing with these two deals.

This week may go into the annals of history: Iran Deal, Greece Deal, China forbids share sales to stop a major market crash, and Japan abandons her Pacifist Credo to build up her Military and contain China. A China no one dares to stand up to – how can we after we transferred our production facilities there.

In Iran supervisions shall guarantee compliance, in Greece supervision shall also guarantee implementation of far-reaching reforms that few in Greece want. These two deals based on unilateral inspection are a deep breach in the sovereignty and dignity of the Iranian and Greek people. Thus observers will be misled or cheated. It has always been like this and it is the very right of the Greek and Iranian people to protect their dignity. The US colonies did it against Britain, the Argentinians did it against the Spaniards, the Germans did it against the French during the occupation of the Rhein-Industrial region after WWI, the Jews did it against the British after WW2, and so will the Greek against Brussels and the Iranians against the West.

As these two deals send wrong signals they will accelerate what is already in motion and eventually lead to ..

1) much larger aid packages and rising risks of default in Europe

2) the EU-Exit of big net payers like Britain and Germany

3) two major wars in the Middle East involving Arab nations, Iran, Turkey and Israel

a) Greece, a failed Economy, cheated her way into a Eurozone, to which she was never fit for

Source: www.hradf.com; One of the regional airports in Greece, whose privatization was stopped by Mr. Tsipras' anti-reform drive

Source: www.hradf.com; One of the regional airports in Greece, whose privatization was stopped by Mr. Tsipras’ anti-reform drive

Greece said two weeks ago it needed 54 Bn Euros. One week later it needed 75 Bn. This week new numbers revealed it would need 86 Bn. As a macro economist that has been critical of the premature launching of the Euro since 1992, I believe Greece needs close to 150 Bn Euros over the next three years. And I put the likelihood of a default or a 4th rescue package at more than 67%. The state of the Greek administration, national accounting and tax system are simply incompatible with the Eurozone. The official numbers are simply not available or void of credibility. It is a bottom-less pit for European tax-payers. You cannot transform the way of thinking of a nation over night. It is unrealistic and unfair. Are German taxpayers ready to foot the lion-share of a Greek default over Euro 332’000’000’000? And this will be only the first one, others are almost certain to follow. 

Greece was never fit for the Euro and only a temporary or definitive Exit guarantees the well-being for both the Greek people and the Eurozone. Once out of the Euro, Greece could take a hair cut and assume again self-responsibility for her future with a sovereign Monetary Policy suitable to Greek mentality and domestic conditions. Macroeconomic wisdom and macroeconomic history both suggest clearly that Greece could stabilize and possibly thrive again if it is willing to implement serious reforms to attract investors. The Eurozone without Greece would be a healthier union and her economy could thrive, so the Euro. Both Greece and Eurozone could thrive again.

It is also time for EU leaders to question their Economic Advisers that tell them the exit of a member state out of the Euro would be an economic catastrophe – no matter how sick that state is. They use “fear” to ensure that European leaders believe any reform of the EU would be a disaster. I, along many independent economists, have tried for years to understand this rationale and never managed to figure it out. How can the necessary exit of a nation that was never fit for the Eurozone be the end of the European Integration Process? Was the fact that Switzerland, which boasts four European cultures & languages, rejected to join the EU, the end of the European Integration process? It wasn’t. Every great enterprise knows adjustments. A Grexit is not a disaster as so many observers say, it is a necessary course correction. Keeping a bankrupt dysfunctional state, even as small as Greece, within the EU at any price could lead not only to the collapse of the EU. It would be a costly collapse, Germany and Britain will have to bear. 

In fact allowing a bankrupt reform-reticent economy to exit the Eurozone, makes sure

– contagion to other weak economies is limited (the biggest threat being an entitlement-thinking coupled with opposition to reforms)

– the option to play with the idea of default becomes costly

austerity without reforms is a sure path to an Exit

– the joint monetary policy is more effective for the remaining economies.

The idea that “once in the Eurozone (or EU) always there” is a gigantic mistake: It opens the door wide for maximum misbehavior, cheating and living at the expense of others. Imagine an association where members think: “I can afford to do whatever I want, because they can never kick me out” . This is a deeply flawed understanding of fraternity and solidarity.

Common sense and economic theory suggest: when members know that the consequences for lying, cheating and repeated breaking of the rules means Exit, they will behave differently. Only a conditional membership with respect to common rules can deliver a strong and healthy Eurozone (EU). Currently Germany is being vilified for defending those rules. 

People have gone over board with attacking Germany indeed. Austerity has not been the problem of Greece! Greece is where it is, because Greece never implemented the reforms that should have accompanied the austerity measures. In fact it never even meant to implement such reforms, which explains why the biggest enemy of “market economy-reforms”, Mr. Tsipras, was elected. That is why the parliament’s approval of them means really nothing. Austerity without reforms leads nowhere.

Austerity flanked by serious reforms can lead to sustainable growth: Greece could look at Peru!

Peru in 1989 was in a worse shape than Greece is today: cut off from financial markets, heavily indebted, civil war, water & power outages, impoverished, 1’000% inflation, the capital Lima under a bloody siege by terrorists. I lived in the early 80’s in Lima. As the nation was at the edge of the abyss Peruvians realized they were themselves responsible for their mess. That was good news, because they could also do something about it. They elected a university professor that promised a radical market economy, privatization, removal of all protective tariffs and massive layoffs to reduce the overblown government: he promised 4 years of ultimate pain and radical reforms. It become the famous Fuji-Shock and the rest is history. Since 1990 – after a painful start – the economy has been on an unprecedented growth path, which many have called an economic miracle. The GDP per capita went from USD 1’180 to 6’661 in 23 years. Moreover, no Peruvian president since then, whether from the right or left political spectrum has departed from the Market Economy path struck by Mr. Fujimori in 1990. Austerity with (serious) Reforms are indeed the path to success for a heavily indebted nation. Sadly the Greek people are still electing the populists offering them the sweetest promises.

Maybe Greece’s biggest problem is that it has access to kind neighbors that keep lending money to it, which Peru didn’t have. The Greek people cannot entirely blame Mr. Tsipras, the EU or Germany alone for their suffering. They themselves elected leaders that campaigned the most against drastic painful reforms. Greece needs again austerity because it has refused to reform seriously and is asking for more rescue money. Prof. Krugman’s ferocious attacks against Germany (as only demanding austerity) are deeply flawed and only raise questions about his ability to separate economic theory from ideology and cast a shadow on the reputation of nobel prizes.

We can understand that France wants to keep Greece in the Eurozone at any cost, because Paris fears the balance between spending-leaning and discipline-leaning nations in the Eurozone would tilt in Germany’s favor. But the end of game may come soon enough with Britain exiting the EU. And without the UK the EU would tilt dramatically away from discipline and market economy, forcing Germany also to exit the EU. Britain after painful austerity with reforms has been the only big nation really supporting Germany to foot the cost of the EU. It is a flawed mainstream belief that Germany would never dare to exit the EU.

History is full of flawed consensus views among economic and political analysts: Germany would never leave the EU (?)
Source: obS/ZDF: pensioner Heidi cannot live on her pension. She said in interview she may work till she collapses.

Source: obS/ZDF: pensioner Heidi cannot live on her pension. She said in interview she may work till she collapses.

I think EU citizens in nations receiving close to 1’000 million Euros of German net money transfers every month, should be more thankful instead of pounding on Germans as the ultimate evildoers. Millions of German families and retirees have endured painful reforms and austerity for over a decade, and on top of that they keep the EU going. Many work long after their retirement to make ends meet. We could estimate that over half a million German pensioners are poor and the number is rising fast. In the larger cities roughly 1 out of 4 Germans face economic hardship. Germans may soon have enough.

I assure you that Germany could thrive without the EU – surely after some adjustment costs. All over the world people dream to buy German products. Even if the EU would raise tariffs against German products, people in Spain, Italy and France would still pay premiums for German quality products and machines. The complacent consensus view that Germany would never leave the EU is as flawed as the huge consensus among economists that for over a decade said the Swiss Franc was overvalued and would never rise towards parity vs the Euro – they said the Franc will go instead towards 1.30-1.40 to the Euro. There is a big problem in the consensus amongst economists and financial experts. Diverse independent views are neither cultivated nor welcome.

Germany is a rising superpower, welcome and respected all over the world – probably – like no other. Only Britain has a similar reach and influence, but unlike Germany, it has nuclear weapons, the most effective global grid of military bases and a close alliance with Washington. If the view about Germany so prevalent in Greece is true, then the rest of the world is in a delusion. Germany is being increasingly hindered by the EU for years now, and if EU citizens keep treating Germans the way they are doing these past five years, Germans could soon leave the EU, specially if Britain, the second largest net payer, leaves next year. Germans have been told that they need the EU to do well and that there would be war again in Western Europe if they don’t pay. But increasingly Germans are refusing to be blackmailed. Looking at the macroeconomic and geopolitical trends in the world, it is clear that Germany could do better outside the EU. If Mrs Merkel would ask my opinion, I’d advise her to take Germany out of the EU. Germany could do much more for Europe outside of the EU. Now it is in a straight jacket of never ending bad compromises. I believe, not only Germany, also other European nations would be better off today without the EU – an excessive solidarity killed their self-responsibility and the EU shielded them from outside competition in labor & product markets. Switzerland has fared much better than most EU nations by staying out of it. It was a widespread but flawed consensus among professors and experts that if Switzerland stays out of the EU it would become poor within less than 10-20 years. History proved them totally wrong.

Having learnt from the flawed European Union, the UK, Germany, Holland, Sweden, Norway, Finland, Denmark and Austria could then consider forming another Union, one with common values, compatible cultures and respect for rules. All committed to Market Economy, Democracy, Self-responsibility, Competitiveness and Reforms-to-stay-fit. Such a powerful combination of countries could for example attract Switzerland and Singapore as members. It is in this spirit of enterprise and self-responsibility that solidarity would flourish and not be abused, thus this body could have a positive impact on the world. A far cry from the Fortress Europe (EU) of encapsulation and lethargy. The distinct characteristic, this Union could welcome reform-friendly competitive nations from all continents. Such a set of countries with compatible characteristics could eventually have a viable full Fiscal-Monetary-Political Union. Such a union would be a great success and countries would line up in all continents to join. Europe’s Integration Process will not end with the exit of Britain or even Germany. If anti-reform nations refuse to let Greece exit, they will face the risk of Britain exiting. Even French voters could elect Mrs. Marine Le Pen into government and she could take France out of the EU too. Geopolitically and macro-economically a Grexit increases the chances the UK and Germany will stay in the EU.

EU heavily incentivizes solidarity instead of self-responsibility, so much that rules mean nothing 

I hear many people talk these days about the great dream of the EU and a United Europe, but my impression after having listened to countless people on why they joined the EU is that more than 80% of EU citizens have joined the EU to get transfer payments (to finance their pensions, bridges, theaters etc) and Germany’s low interest rates. 15 years laters many feel strongly entitled to receive money from Germany and Nordic countries. Surely, some mistakes were made by all parties in this long and tragic Greece Saga, but it is amazing that millions of citizens and most media across Europe are airing attacks against Mr. Wolfgang Schäuble, blaming him for Greece’s problems. The fact is Greece wants yet more money from German tax-payers. I’m impressed by the degree of control and moderation most Germans – including Mr. Wolfgang Schäuble and Mrs. Angela Merkel – respond with to so many horrifying verbal attacks. Most other Europeans would have long walked away saying “I’m, sorry, but I don’t need this – please, sort out your problems by yourself”. As if German taxpayers had not shown kindness and solidarity in the past with gigantic transfers of money and aid. I feel many Europeans underestimate how much Germany has changed over the past two decades. Germans now have a healthy sense of national pride and the new generation cannot be blackmailed with guilt over Nazi crimes. After all no other civilized nation has yet so truthfully repented of past crimes, teaching all new generations with remarkable openness and detail about the past. I wished other European nations would deal with their past failures with equal humility. 

b) Another bad Deal: US-Iran

As we’ve been saying for a long time “there will be a US deal with Iran”. I was certain of it, because the US administration was throwing everything at it. Monetary, energy, foreign and military policy. According to my analysis this US-Iran deal was the main reason why the USA supported the pro-democracy movement in Ukraine. Russia’s intelligence services were outsmarted by the Obama administration and the State Department. But everyone else was outsmarted too: the Congress took a bate, the Pentagon, NSA and CIA faced their own crisis and those who opposed Obama’s plan were removed. Many high ranking officers in US military circles were removed by the president. This was important to him. Once oil prices were headed for the bottom, the Ukrainian Crisis sparked forcing Moscow to react. With oil prices at the bottom, Iran was also at her weakest to accept concessions. De facto it is a US-deal, because the US State Department mobilized everyone involved. Even Russia and China received something in exchange for their approval. Something in exchange for US lenience on specific actions. The US pulled away her aircraft carrier and marine expeditionary groups away from China, in the vacuum China built and secured islands in the Pacific and arrested all human rights lawyers nationwide. No reaction from Washington.

Who are the big winners?
Screen Shot 2016-03-02 at 4.54.22 PM

Source: original chart by the C.I.A.; Further development, N/S edits & analytical comments by Christian Takushi MA UZH. We assume an Obama-pushed Northern Alliance with desired core members: Turkey-Syria-Iraq-Iran. Obama’s Syria strategy to remove Assad by Dec 2016 may not materialize though.

Geopolitically the biggest winners are the USA, Iran, Turkey and Iran-backed terrorist groups. But in human terms the biggest winners are the Iranian people. After decades of oppression and deprivation they can see their living standards improve. A great culture and a vast economy with huge potential sees a new dawn. From a macroeconomic perspective the Obama Strategy is superb: opening the vast Iranian economy now that the Turkish economy has reached a critical mass. With Turkey and Iran on the US-side, Obama hopes to rein in in Syria and Iraq. President Obama wants to establish a Northern Alliance around Turkey-Iran-Syria-Iraq. The down-side? By betting on Turkey and Iran the US President is dangerously empowering two autocratic Islamic governments with radical ideologies and aggressive expansion plans. The old balance between Arab states on one hand and the powerhouses Iran and Turkey on the other is over. The fear and distrust towards Iran and Turkey among Arab states cannot be comprehended by the linear rational thinking of Western observers. Thus, Western leaders have no idea what they have set in motion.

A dramatic shift in the Middle East that started already five years ago, has been sealed and accelerated today. It will be hard for the UN or the US Congress to stop it. And this US-Iran deal will lead most probably to a large-scale War with the use of weapons of mass destruction (WMD). Why? Arab states feel horribly betrayed by the Obama Administration and the West. Saudi Arabia begged the USA not to trust Iran. As it failed, it asked the USA to at least demand that Iran detracts and takes back her repeated threats of annihilation against Arab states. Israel did the same. To no avail. The Saudi King even asked Israel to attack the Iranian installations before a deal is struck in Vienna. Israel, in agony over securing their own existence and despite having the tools to do the job, declined to attack Iran and risk the total loss of the US as ally. It is bad enough already. As a result, the Arab states see no other option, but to step up a huge military buildup to protect themselves. Worse even, Arab states are now certain Iran will build those nuclear weapons to fulfill her threats, thus they are seeking Nuclear Weapons of their own. They will try to strike Iran before Iran strikes at them. The US-Iran deal is a historic watershed that will spark economic growth, but also accelerate a dangerous Arms Race and Nuclear Arms Race in the Middle East.

The Nuclear Security over Europe is fading away – The latest generation of ballistic rockets by Iran can reach Western Europe and could carry nuclear pay-loads. What many overlook is that without an embargo on Iran and with full access to cash and financing, Iran will also be able to buy ballistic-compatible nuclear and WMD devices from Pakistan, North Korea and China if necessary via Turkey to allow her modern ballistic missiles to carry nuclear warheads. The different parts could pass inspections and be assembled in Iran. Iran has the know-how for this.

US president Barrack Obama says “this is not about trust, but verification”. But if you look at the practicality details, they raise serious questions. Nothing in the behavior and rhetoric of the Iranian government and parliament over the past 40 years can lead the US or Europe to assume the Iranian leadership has peaceful intentions towards us, our allies and Iran’s Arab neighbors. We are putting millions of Arab, Jewish and Iranian people at risk.

Who are the losers? 
Obama's charm offensive towards Iran has not only shocked Arab nations

Source: www.teaparty.org; Obama’s charm offensive towards Iran has not only shocked Arab nations

Geopolitically this is a bad deal for most of the Arab World, Israel and Europe. Long term for the entire world. Yes, some of our large firms will grab some big business deals and the economic expansion unleashed in Iran could be strong. But the Shia-Sunni conflict that was reignited in recent years by the Obama Strategy will accelerate and bring yet more migrants to Europe and further destabilize the region. For years now the Obama administration is helping Iran and her radical Islamist ideology expand and put Iran’s rivals under pressure. This US-Iran deal is a huge blow to all those trying to contain Iran and her radical Islamist ideology, specially to Saudi Arabia, Egypt and Israel. President Obama seems to think that a powerful Iran dominating over all Sunni-Arab nations can bring peace, stability and economic power to a new Islamic World (Califate). But this has only further radicalized Sunni Islamist groups and helped produce the feared IS militia. Yes, IS wasn’t born in a vacuum, it is in part a response to a policy shift that threatens the existence of a Sunni prophetic ideology. Devout Sunni Islamists resent that the US has de-facto given Iraq over to Iranian control.

Only our lack of respect for the thinking, ideology and faith of the different peoples and tribes in the Middle East can lead Western leaders to take sides the way they have. I’ve heard so many Western experts say that economic prosperity will remove the threat of Islamist terrorists, implying that Islamic religion is only for the poor, needy and unstudied. Did the poorest Japanese fly Kamikaze planes? In fact if anything the better educated & wealthier the more dangerous & fanatic Islamist terrorists are. We are so caught up in our Western way of thinking, that we believe a radical Islamist will give up his fanaticism if we give him a steady job, and the people in the Middle East just need an economic perspective. Yes, they need that. But even an economic boom will not take away the Radical Islam and the radical groups Iran has planted across the Middle East and the world since the 1980’s. Now these are morphing and radicalizing further.

The West is now partnering with radical Islamist militias trained by Iran to fight the radical militias of IS. But it is deceitful for the West to single out the IS as evil. The elevating of Iran-backed Islamist militias as our partners will only embolden Hizbollah, Hamas, Islamic Jihad and other Shia-funded Islamist terror groups. The US-Iran deal comes on top of this and should fill Arab nations and radical Sunni islamists with greater determination to fight back. We are supporting radicalized Islamists in their fight against other radicalized Islamists, and that along tribal lines. The West will sadly harvest what it sows.

Iran backed terror groups set to benefit from Iran's full access to hard currency

Source: zoonpolitikon2.blogspot.com/Hamas Children’s Magazine; Iran backed terror groups set to benefit from Iran’s full access to hard currency

Why the West, the Arab World and Israel have reasons to be cautious about the Obama Strategy of partnering with Iran: First, Iranian leaders were not asked to take back her aggression against Arab states, nor her threat to annihilate Saudi Arabia and Israel. 2nd, unilateral Inspections via observers have never worked in human history. Even if you have an occupying military force, you cannot fully control another country with an educated elite. 3rd, the White House says they have 24/7 access to Iranian installations. But in practicality the West has to request permission and explaining what exactly they want to visit and why. Thus, long after Iran has been adverted, observers might be allowed in. As with any deal with 159 pages, everyone will read into it what he/she wants to read.

The Northern Alliance envisaged by pres. Obama is one with vast economies and ample energy capable to be shipped or piped over land to NATO countries. That is why Romania is the most strategic European state for the US government. There the US wants to build large energy hubs to redistribute Iranian gas into NATO realm. But this is only the energy part of a Grand Strategy and Vision for the Future that the US president has.

No one in Ryad, Cairo and Jerusalem doubts that the USA has downgraded her alliance with them in favor of Iran. It is “Everyone for himself” now, even Egypt and Israel are seeking support and assurances from Russia. Turkey has entered a military deal with Russia as NATO looks away. Every nation in the Middle East is talking to the USA, Russia, China, Pakistan and even Brazil for weapons and military aid. Now that the USA has won over Iran as a regional partner, Syria will be sorted out soon. For the USA the risks of this strategy seem minimal, but not for Europe. Many in the US have opposed it, specially in the Pentagon and military circles. But all high ranking officers that opposed it were removed by President Obama. Many have underestimated President Obama as an underachiever. I think he has outsmarted most of his opponents. Unlike others, he has a clear idea of priorities and has let his adversaries fight him in the secondary battlegrounds. The big issues close to his heart, he has seen through with stoic patience worth admiration. Yes, he has used all means, good ones and those that will remain classified for decades to come.

Despite all the risks this deal unleashes, we can share in the joy of the Iranian people. Their economic hardship will be reduced. They endured over four decades of dictatorial regime and isolation. But as many Arab intellectuals have been warning, the relentless embrace of Teheran by President Obama has been emboldening Iranian leaders to step up their threats as well as their religious & military influence across the Muslim-Arab world. This deal may only speed up the rise of a radical Islamic Super-State (Caliphate). In its excessive Russia-phobia, the West wants full access to Iranian Gas & Oil, no matter the price. A price that thousands if not millions of Arab, Iranian and Jewish people may have to pay in the future. The geopolitical motives of the West are understandable, but this shouldn’t be sold as a great move for World Peace. It reminds me of the Deal Great Britain reached with Hitler. Pacifists and economists celebrated for one to two years.

Christian Takushi MA UZH, 15 July 2015, Switzerland

Disclaimer and Warning: The opinions expressed here reflect the personal view of Christian Takushi and the current stage of his Global Macroeconomic & Geopolitical Research. His analysis and views are completely independent. The views of the independent experts in Christian’s global panel and network were also taken into consideration. Readers should be aware that global macroeconomic and global geopolitical research are highly complex and subject to sudden changes and shocks. Our view may change within 3 to 6 hours following an event or data release, and we will notify and advise our clients first. This website will only be updated a few days later!

Any Investment Strategy consideration is for institutional investors & corporate decision makers only. Other investors should NOT take any action based on our research without consulting a professional investment advisor first. They should heed the advise of professionals who can continually follow the markets for them and their portfolios. Overall this research should be considered as an additional independent perspective, and not as the sole basis for any important decision. No matter how realistic and correct our predictions may be, the same analysis could lead to very different conclusions and actions in different portfolios. That depends on portfolio structure, risk pattern, benchmark, reference currency, risk budget, personal background, tax profile, personal asset & liabilities and other factors.

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