On Sept. 2, a new report was compiled by Zerohedge on the changes occurring in the Purchasing Managers Index (PMI) since U.S. sanctions on Russia began in earnest back in May of this year. However, what is most astonishing from this report is how U.S. sanctions have had little effect on the overall Russian economy, but are having devastating results for nations in Europe which are caught in the middle. In fact, the large drop in PMI over the past three months in the Eurozone is so great, it is creating a split in several countries including Germany, which are seeing business unions stand in direct opposition to the banker supported government of Angela Merkel.
This split between the two most powerful forces in Germany was detailed on Aug. 31 by Dr. Jim Willie in an interview he did with Paul Sandhu on the Wake Up and Live radio show. During the 92 minute interview, Willie explained that most of what is coming out in the media by Germany and other countries in the Eurozone is simply lip service support of the United States, but behind the scenes business forces are placing so much political pressure on elected officials that covertly, Germany and even France are sending professional troops to Ukraine to fight with Russian separatists against the U.S. led Kiev government as a show of support to aid Russia in successfully winning the proxy war in Ukraine.
The Euro area final manufacturing PMI printed at 50.7 in August, 0.1pt below the Flash and the consensus estimate (Flash, Cons: 50.8). This implies a 1.1pt contraction from the July print. The French component was revised up relative to the flash (+0.4pt), while the German component was revised down (-0.6pt). The August figure in both Italy and Spain showed continued loss of momentum, with the manufacturing PMI easing 2.0pt in Italy and 1.0pt in Spain relative to the July print (against a consensus expectation of a smaller decline). - Zerohedge
PMI is a leading economic indicator that is made up of five sub-indicators that paint a picture of the overall strength of an economy. These sub-indicators, along with their weighted percentages are: Production Level (.25), New Orders (.30), Supplier Deliveries (.15), Inventories (.10), and Employment Level (.20). A drop or rise in any one of these can determine improvement or decline in an economy, and represent the clearest picture to the overall viability of that economy.
Economic sanctions placed upon Russia by the United States have backfired against them, causing only pain and economic destruction to their allies in Europe. In fact, besides allowing Russia and China to accelerate their plans for de-dollarization of the petro-dollar, as seen by last week's opening of oil sales in both Yuan and Roubles, it has also increased pressure on the recessionary economies in Europe, and is creating for the first time since the end of World War II, a split away from the U.S..
Germany will be the deciding factor on which direction nations from the EU move towards in the future, and the choices are becoming more and more apparent as the West seeks to use sanctions and finance as a weapon against any and all countries that oppose their national agendas. And while Russia and China are proving to be less a military threat and more of an economic opportunity in this war for monetary supremacy, the only loser so far in this proxy war is the European Union, and as winter approaches, their decisions on which side to stand with may not be too far away.