Dr. Pippa Malmgren, a US policy analyst and former member of the Working Group on Financial Markets, a government entity better known by its nickname, the "Plunge Protection Team," appeared on Erik Townsend's MacroVoices podcast to discuss bitcoin and the European refugee crisis, while also offering some clues about how the PPT, famous for its secrecy, operates.
On The Financial Implications of Europe's Refugee Crisis
Townsend started the interview by asking Malmgren, who also served as a special assistant to the president during the Obama administration, her thoughts about the thousands of refugees who continue to pour into Europe. Surprisingly, despite her liberal views regarding the free movement of people, Malmgren said she's "quite worried" about the crisis, and believes it will only worsen as governments in Northern Africa become increasingly unstable, potentially leading to a financial crisis in Europe.
Erik: What do you see the outcome of this refugee crisis being? We had Italy the other day threatening to issue EU visas to refugees to force other countries to do their part to absorb more people. We have seen German politics affected by what seems like a growing divide in the German populace in their attitude towards accepting refugees. mIs this going to lead to a bigger problem or is it coming under control?
Pippa: I think there is a much bigger problem in immigration coming. To be clear, I am actually in favor of the freest possible movement of people, which means human capital and goods, and capital across borders. But there are always limits. And the socially acceptable limits seem to be in flux right now across Western Europe. Here's the problem. We are not just talking about the magnitude of refugees we have already seen. We are talking about what's coming. And so this is where the Italian threat is very important. They basically said, look, nobody is helping us and we get all of them because of our geographical location. So unless you guys give us a hand here, then we are just going to issue them papers and then let them loose. They can go anywhere they want in Western Europe. That is of course a bit scary for the rest of Western Europe, which would prefer to have the problem contained, but they are not prepared to help Italy in the containment process, just as they weren't particularly prepared to give Greece any extra money to deal with their refugee problem, which happens for the same reason. But this is the beginning.
The bigger issue is that you still have a buildup of immigration happening in Turkey, and the Turks have also been very threatening, saying if you don't give us what we want, and we have got a long list of things, then we might have parts of the border that there's just nobody to police it that afternoon. And suddenly, you get a big wave. But even more important than that, I now see Northern Africa becoming more destabilized. So Algeria, Libya, and Egypt all becoming a little more wobbly and unstable, and that wave of immigration, I think, could begin to dwarf what we have already seen. In addition to that, there's also the fact that everybody in Africa has registered that it is possible to get to the north. Of course, all of them would like to because they are not stupid. They completely understand that there's a potentially better quality of life and much greater opportunity. It is not just a temporary phenomenon. It is now that people in that part of the world have begun to register I can get to Europe. Look, turn on CNN and you will see, which they can all do these days because they have got the telephone in their pocket. The television is on their phone.
This is the key thing. The realization that movement may be worth it. They are saying now in parts of even Sub-Saharan Africa that the greatest luxury good, the thing a person will buy when they have any extra money is passage to Europe. And so this is why there's a really big question about what is the European Union's immigration policy. Do they really have one? Or do they really believe in this concept of having basically no border whatsoever? I think it is a big debate. A lot of Europeans are like we never signed up for a world where we had no borders at all. Others say once you are inside the border, you are in. And I recently had a German say to me. For example, the Polish citizens that were in the United Kingdom weren't immigrants. They were just European Union citizens. This is the type of debate that's occurring. But at the end of the day there is still no money to deal with them for whatever reason they are arriving, and so it will continue to be a pressure on finances. I explained the example of Britain in 1834, when they abandoned the traditional system they had used for 1,000 years at that time, which was called the Tally Stick system. So when we say we tally things up or the word stock market refers to the use of little wooden stocks. They were little pieces of wood on which you record every transaction during your life, every borrowing, every lending deal, every asset acquisition, every tax payment."
On The Financial Implications of Europe's Refugee Crisis
Townsend started the interview by asking Malmgren, who also served as a special assistant to the president during the Obama administration, her thoughts about the thousands of refugees who continue to pour into Europe. Surprisingly, despite her liberal views regarding the free movement of people, Malmgren said she's "quite worried" about the crisis, and believes it will only worsen as governments in Northern Africa become increasingly unstable, potentially leading to a financial crisis in Europe.
Erik: What do you see the outcome of this refugee crisis being? We had Italy the other day threatening to issue EU visas to refugees to force other countries to do their part to absorb more people. We have seen German politics affected by what seems like a growing divide in the German populace in their attitude towards accepting refugees. mIs this going to lead to a bigger problem or is it coming under control?
Pippa: I think there is a much bigger problem in immigration coming. To be clear, I am actually in favor of the freest possible movement of people, which means human capital and goods, and capital across borders. But there are always limits. And the socially acceptable limits seem to be in flux right now across Western Europe. Here's the problem. We are not just talking about the magnitude of refugees we have already seen. We are talking about what's coming. And so this is where the Italian threat is very important. They basically said, look, nobody is helping us and we get all of them because of our geographical location. So unless you guys give us a hand here, then we are just going to issue them papers and then let them loose. They can go anywhere they want in Western Europe. That is of course a bit scary for the rest of Western Europe, which would prefer to have the problem contained, but they are not prepared to help Italy in the containment process, just as they weren't particularly prepared to give Greece any extra money to deal with their refugee problem, which happens for the same reason. But this is the beginning.
The bigger issue is that you still have a buildup of immigration happening in Turkey, and the Turks have also been very threatening, saying if you don't give us what we want, and we have got a long list of things, then we might have parts of the border that there's just nobody to police it that afternoon. And suddenly, you get a big wave. But even more important than that, I now see Northern Africa becoming more destabilized. So Algeria, Libya, and Egypt all becoming a little more wobbly and unstable, and that wave of immigration, I think, could begin to dwarf what we have already seen. In addition to that, there's also the fact that everybody in Africa has registered that it is possible to get to the north. Of course, all of them would like to because they are not stupid. They completely understand that there's a potentially better quality of life and much greater opportunity. It is not just a temporary phenomenon. It is now that people in that part of the world have begun to register I can get to Europe. Look, turn on CNN and you will see, which they can all do these days because they have got the telephone in their pocket. The television is on their phone.
This is the key thing. The realization that movement may be worth it. They are saying now in parts of even Sub-Saharan Africa that the greatest luxury good, the thing a person will buy when they have any extra money is passage to Europe. And so this is why there's a really big question about what is the European Union's immigration policy. Do they really have one? Or do they really believe in this concept of having basically no border whatsoever? I think it is a big debate. A lot of Europeans are like we never signed up for a world where we had no borders at all. Others say once you are inside the border, you are in. And I recently had a German say to me. For example, the Polish citizens that were in the United Kingdom weren't immigrants. They were just European Union citizens. This is the type of debate that's occurring. But at the end of the day there is still no money to deal with them for whatever reason they are arriving, and so it will continue to be a pressure on finances. I explained the example of Britain in 1834, when they abandoned the traditional system they had used for 1,000 years at that time, which was called the Tally Stick system. So when we say we tally things up or the word stock market refers to the use of little wooden stocks. They were little pieces of wood on which you record every transaction during your life, every borrowing, every lending deal, every asset acquisition, every tax payment."
Read more and watch the video at http://www.zerohedge.com/news/2017-07-22/pippa-malmgren-talks-bitcoin-refugee-crisis-and-plunge-protection-team.
