EU Commission VP: 'This Is A Perfect Storm' - 'Winter Is Coming'

"This Is A Perfect Storm" - EU Leader Warns Of "Black Swans" Everywhere, Says 'Propaganda Is Our Battlefield'

 TYLER DURDEN

"This is a perfect storm," exclaims European Commission Vice President Josep Borrell in his opening speech to EU Ambassadors this week.

Having noted previously his warnings to The Fed that it is "bringing us to a world recession," Borrell went considerably further in a surprisingly frank and plain-speaking address.

He began by warning that "the world we are facing is a world of radical uncertainty."

The speed and scope of change is exceptional. We should not try to deny it. We should not try to resist it. It would be a futile effort. We have to accept it and to adapt [to] it, prioritising flexibility and resilience.

But uncertainty is the rule. Events that one could imagine that they will never happen, they are happening one after the other.

At this pace, the black swan will be the majority. It will not be white swans – all of them will be black – because one after the other, things have happened that had a very low probability of happening, nevertheless they happened, and they had a strong impact and certainly they happened.

The EC VP then goes on to try and summarize the extent of the European crisis and how they got there, admitting that they were entirely dependent on China (trade), Russia (energy), and US (security)...

I think that we Europeans are facing a situation in which we suffer the consequences of a process that has been lasting for years in which we have decoupled the sources of our prosperity from the sources of our security. This is a sentence to provide the headline, and I am taking that from Olivier Schmitt, who has been developing this thesis – I think - quite well.  

Our prosperity has been based on cheap energy coming from Russia.

Russian gas – cheap and supposedly affordable, secure, and stable. It has been proved not [to be] the case.

And the access to the big China market, for exports and imports, for technological transfers, for investments, for having cheap goods. 

I think that the Chinese workers with their low salaries have done much better and much more to contain inflation than all the Central Banks together.  

So, our prosperity was based on China and Russia – energy and market. 

Clearly, today, we have to find new ways for energy from inside the European Union, as much as we can, because we should not change one dependency for another.

As Borrell noted at the very start of his speech: this is a perfect storm indeed... and winter is coming.