June 21, 2024 | Will Macron Start War to Retain Power?

The Rassemblement National (RN), which the press calls the far-right in France, has become the ant-war party with hopes of displacing Macron as prime minister after France’s upcoming parliamentary. In 2022, Marine Le Pen doubled down on her criticism of Europe in support of the Ukrainian war and counteroffensive as tensions within the Russian government were rising. Le Pen saw through this warmongering and was not deflected from her line of consistent opposition to economic sanctions against Russia and deliveries of heavy weapons to Ukraine.

There has even been talk among the far right to remove France from NATO, as de Gaulle did in 1967. What is truly ironic is that the far right is generally anti-war, while the left knows that their socialist promises are bringing the economy down. They will be unable to provide all the promises they have been making, including pensions. They NEED war as a cover for decades of fiscal mismanagement. With war, they get to default by restarting with a new government. In France, this is the Fifth Republic, and every new government never honors the debts of the previous.

In the US Constitution, it was clear that the framers intended for the previous debts to be paid. They never were. It was Alexander Hamilton’s plan that proposed that Congress would agree to redeem Continental Currency at $100 to $1 new US dollar bonds with an indefinite maturity. This was an effort to give some value to the worthless Continental currency and avoid an economic depression by wiping out the value of the currency held by the people. Many did not redeem their currency thanks to the Act of 1790, which they read as an ultimate guarantee of 1:1. They lost everything, and there was never any effort to redeem at face value as implied.

Article VI, Clause 1:

All Debts contracted and Engagements entered into, before the Adoption of this Constitution, shall be as valid against the United States under this Constitution, as under the Confederation.

This provision called the Debts Clause, provides that the United States will recognize the debts and engagements of its predecessor governments—namely, the Continental Congresses and the federal government under the Articles of Confederation. This is only a declaratory proposition that misled people to believe they would cover those debts. This was propaganda for it served to assure the United States’ foreign creditors, in particular, that the adoption of the Constitution did not have the magical effect of dissolving [the United States’] moral obligations.

To assure creditors that the new government would honor these obligations, the Articles of Confederation provided:

All bills of credit emitted, monies borrowed, and debts contracted by, or under the authority of Congress, before the assembling of the United States, in pursuance of the present confederation, shall be deemed and considered as a charge against the United States, for payment and satisfaction whereof the said United States, and the public faith are hereby solemnly pledged.

Let me make this definitively clear: the very question of whether the new constitution should include a similar provision arose at the Constitutional Convention. As initially proposed, the Debts Clause provided that The Legislature of the U.S. shall have power to fulfil the engagements which have been entered into by Congress, and to discharge as well the debts of the U.S.: as the debts incurred by the several States during the late war, for the common defence and general welfare.

There was a debate over whether this Debts Clause should provide that the new Congress shall discharge the debts, which would be mandatory, or should it be merely that it has the power to do so, and this “discretionary” power was the result. The only redemption was Hamilton’s offer to exchange Continental dollars for US dollars at 100:1. The United States pretended it would honor those debts but in the end it concluded to default.

With the “far right” anti-war surging in Europe, Macron has taken a monumental gamble in his attempt to halt their ascendency. The greatest fear here is that Macron may become so desperate that he needs to start a war with Russia ASAP to claim you do not remove the head of state in times of war. Macron may hope to stop the far right, but the people do not want war. While he may risk handing them domestic power, hobbling the final years of his warmongering leftist government, the media pretends to be “centrist,” when the truth is precisely the opposite. Anyone visiting Paris right now can see that it needs a power wash from all the migrants, and there is no way France even appears to be ready for the celebration at the Paris Olympics.

The first round of voting will be on June 3oth, 2024, will be followed with the second round on July 7th. The current Prime Minister Gabriel Attal’s government will remain in place until the day after the second round of legislative elections, July 8th, 2024. When we compare the arrays of the CAC40 from April and May, we can see that a Directional Change appears in July, and we still have the Panic Cycle in September.

The computer was picking up the elections in the Weekly Array of May 27th. A Directional Change appeared the week of June 3rd and the volatility picked up after the election during the week of June 10th. Note the trend sideways for three weeks in the end of June when we have the first French round on the 30th and then note the change for two weeks into the week of July 8th after the Second Round.

It appears that the trend will shift after the second round on July 7th. Note the rising volatility during the week of the 15th of July and the Panic Cycle during the week of July 29th. There are concerns that Macron is in charge of the military, and the election cannot change that. He seems to be a diehard warmonger at this stage in the game, and we do need to be concerned that a loss for him on July 7th may encourage him to try to start a war to regain power.

Martin Armstrong June 21st, 2024

Posted In: Armstrong Economics

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