Reset all, what is wrong with us and a see breeze

I've just finished reading this book: The Big Reset by Willem Middelkoop.  The author is Dutch and I've been following him for a while (on twitter) and was eager to learn what he had to say in his latest publication. The book was first published in English (so good news for you all) but I waited for the Dutch version to appear (lazy as I am). It has the benefit that it was already slightly updated as it includes some reference to the recent tensions on the Crimea. This may make you wonder what the book is about. Well it is about finances and more specifically about the Dollar as the world's reserve currency, how this has given the US a major advantage over the rest of the world, how the US has and is doing everything to keep their status and - this is the interesting bit - how this is all coming to an end. Hence the title 'The Big Reset'. Whilst I did not learn much new, it is still enlightening to read it all in one book which connects all the dots and makes you look at some events in a different way. If you think this book is about some wild complot theory you'll be disappointed. If you think you'll read about the upcoming financial armageddon, you'll be disappointed too. It does present you with many facts and does point to what may happen next. It is not so pretentious that it gives you a scenario of the world financial future, nor does it give a timeline of what will happen when. And that's good, if the author would have done that, he would have lost all credibility. But the facts do lead to a certain direction our financial future will take and understanding this is of utmost importance for our (individual) financial future. And, not unimportant, it is an easy read as it is written very fluently avoiding financial speak.

Look at this mind boggling infographic. Things like these are often used to show the speed of development and technological progress. But to be honest, it scares the hell out of me. Millions of people don't have access to drinkable water but we do have an average of 3 connected devices per person on this planet. What is wrong with us?

In the mean time, researchers found for the first time an Earth-like planet in a habitable zone around a star (see here). And it is close by, only 500 light years away which is neglectable in the infinity of our universe. The atmosphere seems to be all CO2 so breathing for us might be a problem. But as it will take a while before we get there, we'll probably have mutated by that time so that CO2 will smell like a fresh see breeze.

Sweden has a problem, Europe an even bigger one and a visit well worth it

Ain't life weird. Greece issued for the first time since years new government bonds and they were oversubscribed 6 times! One of our Belgian top economists even found it necessary to state on national tv that "Greece is the only one that is still offering a reasonable interest". The interest he refers to is 6% and yes that's a lot more than anyone else but, and he didn't mention that did he, Greece is still virtually bankrupt. The only reason that banks are buying the bonds is because of the interest rate and because they have seen that European politicians are not going to let any euro-country default. In contrast Sweden, which has one of the healthiest government finances in the world, had difficulties placing its government bonds. Everyone who is not blinded by the hunt for interest will see that this situation is crazy. Question is: how long will it last before it blows up (again) in our face?


"Human rights, democracy and the rule of law in Europe now face a crisis unprecedented since the 
end of the Cold War. Serious violations – including corruption, immunity from prosecution, 
impunity, human trafficking, racism, hate speech and discrimination – are on the rise throughout the 
continent. People’s rights are also threatened by the impact of the economic crisis and growing inequalities. 
The Council of Europe and its member States must act urgently to stop this erosion of fundamental rights.": this is the opening paragraph of Thorbjorn Jagland, secretary general of the Council of Europe, in a just released report titled: State of democracy, human rights and the rule of law in Europe.
In the document they list following shocking numbers:

• Discrimination against ethnic and national minorities: 39 of 47 states
• Overcrowded prisons: 30 states
• Corruption: 26 states
• Police misconduct: 23 states
• Violation of human rights of immigrants and asylum seekers: 20 states
• Human trafficking: 11 states
• Limited freedom of speech: 8 states

In addition they found countries where the judicial system is completely corrupt and they fear that unemployment and poverty in some countries will drive the population to extremism and confrontation.

Yes I know the membership of the Council of Europe is larger than the EU. But with scores like 39 or 30 states out of 49, many EU countries are involved too. None have been named though because of... political pressure. Freedom of speech???

I was scrolling through some photo albums and came across a trip to Seoul in 2007. Every aviation enthusiast has heard about the Smithsonian in Washington DC and, if in the neighbourhood, has visited it (like I did). But I can recommend the Korean War Museum too. Tragic as the Korean military situation has been over the past 50 odd years, they do have a smashing collection! What else would you call following line-up: O-1G Bird Dog, S-2 Tracker, KT-1, T-37, C-46, C-123, H-5H, MiG-15, OH-23G and so much more! So when you do find yourself in that corner of the world, go and have a look, it is well worth it.

O-1G Bird Dog   Picture Kris Van der Plas

OH-23G   Picture Kris Van der Plas

MiG-15    Picture Kris Van der Plas

H-5H   Picture Kris Van der Plas

S-2 Tracker   Picture Kris Van der Plas

C-123   Picture Kris Van der Plas

C-46   Picture Kris Van der Plas

T-37   Picture Kris Van der Plas

KT-1   Picture Kris Van der Plas

Being a contrarian helps, don't take your aircraft for a spin and nice-sounding jargon

Obama made a blitz-visit to Brussels (less then 24h) and the whole country became victim of Obamania.
Police had warned car drivers not to drive to Brussels during the Obama visit as the complete city would be in gridlock. I chose to ignore the advise figuring everyone else would listen to the police and I would have a pleasant drive to work. So I did and had the swiftest most relaxing morning drive into Brussels ever. Sometimes it really helps being contrarian!

In our airspace it was less pleasant. EBBR shut down for Air Force One to get in and out. Obama flew with Marine One a return between EBBR and EBKT which basically shut down the main part of Belgium. This is the chart that went with the NOTAM...

So unless you wanted to test the interception alertness of the Belgian airforce, taking your aircraft for a spin was not a good idea.

And I can't help but also post this table which crossed my internet travels this week:

Do you think there is a problem in the eurozone with non-performing loans? Non-performing loans is nice-sounding jargon for loans that are not being paid back. Nothing to see here, please move on.

All is well, the colour red and a classic giant slalom

We know a thing or two about elections in Belgium. In fact the past 5 years we have been hopping from one election to another, and we have established the world record government formation. So I guess you can call us Belgians a bit of experts. On May 25 there are European elections and with the run up to these elections I'm wondering about something.
Since last Summer, it seems the European crisis is over. The peripheral countries are slowly recovering (btw whoever came up with this dreadful term 'peripheral countries'? As if they are a bit of a drag that we are trailing along behind us, I find the term very denigrating). No one talks any more about the interest rates on government bonds. The eurocrisis is but a long forgotten nightmare. But is this true? Or... are our European politicians purposely painting a rosy picture in view of the European elections? With eurosceptics doing well in the polls the traditional parties are indeed a bit worried the balance of power may shift in the Parliament.
The below slide is made amongst others by the IMF and shows how well Europe is doing economically compared to 2011. For those who forgot, 2011 was the midst of the eurocrisis. And to be clear: the red colour means the situation is worse than in 2011. But hey, all is well.

As the red colour is so prevalent in the above slide, it nicely links up with the major news coming out of our beloved aviation world: the Red Arrows have a new colour scheme on their tailfin!
Here it is:

And yes of course I have seen the Red Arrows numerous times! And, what did you expect, I have the pictures to prove it :-)

Some sport journalists commented a bit laughingly about Vanessa Mae's performance at the women's giant slalom at Sochi. I don't know why. So yes she finished last about half a minute after the golden medal. So what? It was brave to train and participate. I can understand that a young woman who has travelled the world playing the violin, who performed with world renowned orchestras, pop and rock artists and sold millions of records needed a bit of a different challenge. So I take my hat off for her. What a woman.

An open invitation to risk my money, justice exists and aerobatics

This is it. I have warned about it a couple of times but now it's agreed: bail-ins will be possible as of 2016. The eurogroup finance ministers adopted a new "Bank recovery and resolution directive" that puts your savings at risk when your bank goes belly-up. What are the rules? Pretty simple:

• First the shareholders have to cough up. They have to take a minimum of 8% of the banks losses.
• Savings are guaranteed until 100000,- €, anything above that is up for grabs.
• Every member state has to establish within 10 years a 'resolution fund' that has to reach 1% of all deposits covered. All banks have to contribute to this fund.

Before you start applauding a couple of small remarks:

• The 8% minimum coverage of bank losses by shareholders will quickly become a maximum when the dirt hits the fan. Shareholders will argue that they only have to cover 8% of the losses before savings above 100000,-€ can be shaved. With many governments now shareholder of banks, I expect they will also argue this way.
• It is noteworthy that there is no cap above 100000,-€. In other words, you don't risk loosing a part of what you have saved above 100000,-€, no you risk loosing everything above 100000,-.
• There is no differentiation between a personal saving account or an account of a small or medium enterprise. They too will suffer the same fate.
• That 'resolution fund' only needs to be established within 10 years. I would surely hope that we are out of the woods by then! What happens in the mean time (if bank goes bust and no 'resolution fund' available yet) does not bode well for our savings.
• A 1% 'resolution fund' is not going to resolve anything if a big bank is in trouble. A quick calculation: in Belgium there is about 250 billion € on saving accounts. That means the fund will have to be at least 2,5 billion € big. This is peanuts if one of the bigger banks goes bankrupt as they hold tens of billions of € in savings! And it'll be interesting to see how banks can be convinced to depart from 2,5 billion €.
• A lot of that 250 billion € is on Belgian saving accounts but from foreign banks (example PNB Paribas, a French bank, that took over Fortis). So the Belgian fund has to guarantee savings deposited at and controlled by a foreign bank over which it has no control. Am I the only one who sees this as an open invitation for foreign banks to take risks with money collected abroad?

Justice exists in the financial world... but you have to go to Iceland for it. Those at the helm of the Icelandic Kaupthing Bank that threw the whole country into the abyss got sentenced to 5 years of imprisonment. The rest of the world could learn an important lesson from this.


One of my friends started his own company called AURTE: Aerobatic & Upset Recovery Training Europe. Anyone who followed civil aviation and pilot training discussions over the past years, knows there is an issue with degrading manual flying skills. So this new start-up is very welcome. But it made my heart beat faster for another reason. They are using a Corvus Fusion. Ultralight adepts (like me) know what this means: a fast aerobatic ultralight. Watch how they take it through its paces. In summary: I want one!!!

A definition, breaking records, stars lining up and approaching Queenstown

There was a fantastic quote circulating the net last week regarding inflation. You can’t switch on the tv last months or you have a central banker or a politician proudly saying that inflation is low. Of course we all know the calculation is rigged (last change in Belgium was to include the Summer and Winter sales in the inflation basket). The bread price on the other hand was taken out years ago already. So inflation is not representative at all about the real cost of living, as anyone who does his weekly grocery shopping himself knows very well. So I give you this wonderful definition of inflation and central banking from Dylan Grice:

“Trying to control a variable you can’t measure (inflation) with a tool you don’t fully understand (money) in a complex system with hidden, unobservable and non-linear interrelationships (the economy) is a guaranteed way to ensure that most things which happen weren’t supposed to happen.”

I came across a graph (courtesy of Bloomberg and Zerohedge) that really spooked me.


It’s the New York Stock Index divided by the US FED balance sheet. Ok so 2008 is Lehman we know that. The thing is since Lehman, the US FED has pumped 4 trillion $ in the economy as reported last week. This has not done anything to the stock exchange if you divide it by the FED balance sheet. So the optimists will look at this graph and say: “Wow! The NYSE can go up another 500% just to reach the 2008 levels. Let’s rock-and-roll!” The realist in me however is scared sh#tless (excusez-le-mot) because 4 trillion $ has done nothing, null, zero, rien. Never mind that stock exchanges are breaking new records. Taking the FED balance sheet as basis, shares haven’t moved an inch. Basically we fell off a cliff in 2008 and since then flat line... The economy and financial system is dead and they don’t know it. Bucket loads of money are acting as defibrillator but no matter how often they push the defibrillator button (printing press) the patient is brain dead and the heart beat is not coming back.


Contrary to the new NYSE records which are in the news almost daily, this piece of very interesting news, hardly got any media attention: Germany argued against the use of European funds to help banks.
From Euroactiv:
“Ahead of the meeting, French Finance Minister Pierre Moscovici told reporters: "France continues to believe that we ... must not exclude direct recapitalisation by the European Stability Mechanism as a last resort."
Speaking just yards away, however, Wolfgang Schäuble, Germany's finance minister, poured cold water on the idea.
"The German legal position rules it out now," said Schäuble. "That's well known. I don't know if everyone has registered that."
Inside the meeting room, people close to the talks said the two clashed again, when Germany asked for the removal of any reference to ESM bank aid from the ministers' statement”.

Just politics you say? Well yes of course but there is more behind it. I see some stars lining up here and it doesn't bode well for us working class who try to save some money.

The ECB is going to do a big bank stress test next year. Contrary to earlier bank tests (which were a joke) this time it seems the ECB intends to do a proper job that risks exposing many banks short of capital (because they still have too much bad loans). Latest estimates talk about 95 billion € of losses.

The question then is: who will pay for the losses? A new European wide system was meant to do this, but this is what Germany now opposes to. And what if some banks are not worth salvaging?

The answer is disturbing: “Any state help will come at a heavy cost by imposing losses on shareholders and junior bondholders. In time, possibly as soon as 2015, senior bondholders and even depositors with more than 100,000 euros will be forced to take losses.”

So yet another confirmation that the ‘never-to-be-repeated-once-in-history’ saving of the Cyprus banks slowly but surely becomes institutionalised.


During a meeting in Auckland we were shown below movie of the approach in Queenstown. Very challenging but oh so beautiful. Watch this tribute to airmanship and enjoy the scenery!

Please pay us, cut your flesh or someone else's, surely they can do better than that? And a tribute.

I'm starting to get worried that my blog will rise on the anti-US hitlist... It's really not meant like that. And I'll make up for it at the end (well... a little bit anyway). But it's not me that is spewing criticism, it's Joe Stiglitz. Sitglitz is a US citizen, Nobel price winner, former chief economist of the World Bank, author of several books and one of the most influential thinkers of today. And what he said last week was not open for interpretation. He said that if a country had applied for World Bank aid during his tenure, with a financial regulatory system similar to the Federal Reserve's - in which regional Feds are partly governed by the very banks they're supposed to police - it would have raised alarms: "If we had seen a governance structure that corresponds to our Federal Reserve system, we would have been yelling and screaming and saying that country does not deserve any assistance, this is a corrupt governing structure."

No further comments but you can read more here: http://www.huffingtonpost.com/2010/03/03/stiglitz-nobel-prize-winn_n_484943.html

In the mean time the US is still in shutdown. This also affects the National Weather Service where about 4000 employees are continuing working but without being paid. The NWS amongst others provides the weather forecasts for airports. The Anchorage office issued last week this forecast, including a message to its government (see red box):

But then yesterday, the big whammy hit those of us who live in the eurzone with thanks to the IMF. I wrote before (here) about the bail-in becoming standard procedure in case of a bank default. Saving accounts will be stripped above a supposedly guaranteed amount of 100000,- €. The IMF has just taken this a step further and proposes to levy a one-time tax of 10% on all saving accounts of the 15 countries of the eurozone. I repeat: the IMF proposes to levy a one-time tax of 10% on all saving accounts of the 15 countries of the eurozone. The idea is not new and has been floated by other groups and a (Danish) bank CEO (by the way it seems the Danish banks are in need of > 15 billion € to meet capital rules - see Bloomberg - now I don't believe in coincidence, do you?).

The idea is included in the IMF Fiscal Monitor of October 2013 under the chapter "Taxing our way out - or into? - trouble". I copy the relevant text for you below:

So is this just some brainstorming thoughts of economists who don't have their feet in reality any more? Hmmmm, not sure. It becomes difficult to further tax industry without killing it completely. It is equally difficult to further tax the income of employers. Substantially raising the VAT would have equal detrimental effects. So what is left is that enormous amount of capital that is 'hiding' in saving accounts and is low taxed (or not at all below a certain level). If I take Belgium's example: the total amount on saving accounts is 246 billion €. Yes largely untaxed (only if your interest rises above 1880,- € / year, you pay taxes). But bear in mind I only get to keep half of my salary (50% is taxed away) and VAT is 21% so anything that I manage to save is already after our government took the bulk of my gross income (in addition my employer pays another 30% of tax on top of my gross income). Now this 246 billion € of savings, you need to offset it against Belgium's debt: 370 billion €. So a 10% tax levy would substantially lower it. Very tempting for politicians and I bet they would already have done it if they thought they would get away with it. So far it hasn't happened but the pressure is rising. Every budget control our government does look with watering mouth to these savings and you can hear them think "if only...". Of course scaling down the government expenditure would be another way of making savings but of course that doesn't even cross their mind. If you had the choice what would you do: cut your own flesh or someone else's? So read that IMF proposal again and draw your conclusions.

One of my fellow twitterers pointed me to an article on helicopters of the future (this is the kiss-and-make-up part with the US) . The Pentagon is running several projects looking a couple of decades ahead. Four companies have been selected to refine their initial designs: Bell Helicopter, Sikorsky Aircraft, AVX Aircraft and Karem Aircraft. One particular design study from AVX caught my eye. I love new technology, and gazing into the future mesmerising what might be possible is fascinating. And the US has often been the birthplace of many new technologies, so the Pentagon projects promises to be very inspiring. But when I saw the AVX, I had a flash-back.

Picture courtesy of AVX

It immediately reminded me of an iconic rotorcraft: the Gironef! The Gironef was first used in 1945 (The Island of Amoras), designed by professor Barabas. Ok ok it's from a (Belgian) comic strip (Suske en Wiske - or Spike and Suzy in English - for other languages see http://en.wikipedia.org/wiki/Spike_and_Suzy).I know both designs are not identical (double main rotor, canards, ducted fans, tailplane) but that's only because the AVX design is just a first study and needs further refinement :-).

From the album 'The Island of Amoras'

But let's be honest: if we Belgians thought this one up back in 1945, then surely the US can come up with something better than this?

This morning I heard the news that Scott Carpenter died at the age of 88. He was one of the Mercury Seven, the second American to orbit the Earth and the fourth American in space, following Alan Shepard, Gus Grissom and John Glenn. As a small suggestion  to all of you who won't be watching football this evening (like me), I suggest to watch the epic movie "The Right Stuff" (watch it here or here) which tells the story of the Mercury program. As a tribute to Astronaut Carpenter.