quote, “There is an urgent need to channel retail
savings into capital markets to develop those markets and finance EU priorities.” And this isn’t
a fake conspiracy post. It’s a real post by the European Central Bank. And everyone who’s read
it is wondering if this means the EU will start seizing retail savings to fund its ideological
agendas. Well, technically no. Technically, no. But as with all EU policies, the devil is in
the details. And that’s why today we’re going to do a deep dive into the EU’s so-called savings
and investment union, including who’s behind it, why it’s being done, and what it means for
you. My name is Nick and this is a video you can’t miss. First things first, you need to know
that nothing in this video is financial advice. It’s educational content intended to inform you
about the savings and investment union recently proposed by the EU. And if you want to make sure
you keep seeing this kind of educational content, have been discussing the possibility of using
retail savings to fund their agendas since as early as 2015 when the capital markets union
or CMU was proposed. As the name would suggest, the CMU would basically integrate capital
markets across the EU’s member countries, making it easier for money, particularly loans,
to flow across borders. Not surprisingly, many EU countries have opposed the CMU. And that’s
simply because it would ultimately benefit larger countries like uh France or Germany at the
expense of smaller ones. For example, it could result in large French and German banks buying
up the smaller banks of other European countries or result in most European companies moving to
France and Germany, leaving other EU countries destitute. As a not so fun fact, the euro has a
similar effect. The strength of a currency depends largely on the size of a country’s economy. And
when you have a large economy like Germany sharing a currency with a smaller economy like Slovakia,
for example, it makes the currency weaker than it should be for Germany, but stronger than it
should be for Slovakia. And this makes Germany more competitive in global trade at the expense
of Slovakia. Anyways, when a technocratic policy like the CMU doesn’t gain democratic support,
there’s only one course of action, and that’s to rebrand and try again. As you might have guessed,
the recently announced Savings and Investment Union or SIU would introduce many of the same
policies once found in the CMU. The difference is that these latest policies are a bit watered
down and focused on us regular folk. Officially, the SIU was revealed by the EU back in March.
But if you’ve been keeping up with this channel, you’ll know that top EU officials, including
Ursula Fanderlayan and Christine Lagard, started talking about using the savings of
retail investors to fund the EU’s agendas at the World Economic Forum’s Davis conference
earlier this year. And you can find our coverage of that using the link down below. But to refresh
your memory, Vanderlayan lamented the fact that Europeans have€ 1.4 trillion euros of savings
sitting in their bank accounts and was upset that about€300 billion of this was invested
abroad. From her perspective, the solution is simple. Find a way to get Europeans to invest that
money in European companies working on the EU’s ideological agendas. And that’s the primary goal
of the SIU. There’s just one thing we do need to fact check. Vanderlayan mentioned that Europeans
have€ 1.4 trillion of savings, something that we repeated in our Davos summary. Apparently, this
is fake news. Europeans actually have over€ 10 trillion in savings. The 1.4 trillion euro figure
comes from the annual increase in savings and €300 billion of these new savings are going into
foreign assets every single year. That reminds me, you should also know that Vonlayan isn’t actually
the architect of the SIU. She handpicked another EU bureaucrat named Maria Louise Albuku
to lead the initiative. In an interview, a Maria revealed that she spent a lot of time
working on the CMU in the past. And you’ll recall part of the SIU’s purpose is to introduce some
policies in the CMU that EU countries opposed. So, she’s a perfect fit. When the SIU was officially
revealed in March, a Maria did a presentation where she said that European savings would be
used to increase investment in green energy, digitization, and defense, specifying that part
of the money would go towards the Rearm Europe initiative. Claims that the EU would use part of
the savings of Europeans to invest in defense have since been dismissed as fake news, even though she
said it. And this might have something to do with the fact that the EU technically won’t be seizing
the savings of Europeans to do this. Instead, Maria said that the SIU will include auto
enrollment in pensions for all European workers. The money invested into these pensions
would go to asset managers like BlackRock who are aligned with the EU and they will allocate the
money to green energy, digitization, and defense. Now, this begs the question of what exactly is
in the SIU? The answers can be found on the EU’s website. The page about the SIU reveals another
significant statistic, and that’s the recent report by former ECB president Mario Draghi, which
found that the EU will need around €800 billion of annual investment to meet its ideological
agendas. Again, the idea is to try and find a way to use European savings for this. And if you’re
wondering why the EU needs European savings, it’s because governments and corporations borrowed as
much as they can and it’s not enough to get what they want. Rather than concede that they’re on the
wrong path, they’re trying to convince the average person to finance their utopian vision. First, it
will be with carrots. And if that doesn’t work, out come the sticks. More on that later. But
you’ll remember that it’s not just about trying to convince Europeans to invest their savings into
the EU’s agenda. Per the fact sheet about the SIU, there are four pillars. The first is to
incentivize Europeans to save by investing in stocks rather than letting cash sit in their
bank accounts or sovereign bonds. The second is to funnel these savings into businesses
that adhere to the EU’s ideological agendas. The third is the integration of European
capital markets, which was obviously one component of the failed CMU. As to what exactly
that would look like, it’s not entirely clear, but Maria noted in that affforementioned interview
that there will not be a single exchange hosting all European assets. And this suggests there will
probably be some kind of exchange aggregator for all European markets. It’s a similar story
with the fourth pillar of the SIU, which is unified and standardized supervision across
all European markets. It’s a measure that would take away control from countries when it comes
to managing their capital markets. Of course, this brings the EU one step closer to having more
of Europe under its control. To our understanding, this is likely to be a big point of contention for
that reason. Now, additional details about the SIU can be found on the frequently asked questions
page, which we’ll link to below if you are indeed interested. The most important details, though,
relate to the creation of a new pension scheme and the auto enrollment in these pensions, which the
EU hopes to push through as part of the SIU. And I’ll remind you that this is a key component of
how the EU will invest European savings in what it wants. Now, in terms of timeline, the EU is hoping
to have the SIU partially finished by Q2 2027. So, it’s not exactly an imminent threat. However,
there are plenty of milestones that will happen before then. And as you can see, the first
milestone on the road map is to increase retail participation in markets and financial literacy.
And this milestone is expected to occur this quarter. And it looks like it’s going to be the
most interesting one. And that’s because it seems to be the most important part of the SIU. And this
makes sense when you consider that integrating capital markets is only half of the battle. And
making investments more accessible doesn’t mean that people will naturally invest. As a fun fact,
this is also the case with things like a digital ID, for example. Sure, you can introduce it
and even force people to adopt it, but you can’t force them to use it in their day-to-day
lives. Achieving this involves education, or more accurately, indoctrination. In Maria’s own words,
it involves ensuring that Europeans are getting quote the right information to make the right
decisions. From the perspective of the EU elites, uh the right decision is to ape your life savings
into renewable energy, digitization, weaponry, and especially risky startups and illquid
infrastructure projects. More on that in a second. At the same time, educating Europeans about
investing requires censoring other people trying to do the same. And this isn’t a conspiracy theory
either. According to a recent report by Euro News, the EU politicians working on the education
milestone of the SIU road map are discussing regulations around what financial influences can
say on social media, including forcing them to register and preapproving their content. If
that wasn’t insane enough, though, this Euro News report revealed that EU politicians are also
looking to work with financial influencers to spread their propaganda. So, we could see European
influencers talking about why Bitcoin is a bad investment because it’s bad for the environment or
whatever in the not too distant future. And FYI, this is a myth that’s been debunked many times,
but uh the EU will say it’s a fact and censor the truth. And that’s because the EU feels threatened
by cryptocurrency by its own admission primarily because it could compete with the euro, which is
already on shaky ground for the reason I mentioned earlier. And this is a big part of why the ECB
is rushing to roll out the central bank digital currency or CBDC. Thankfully, it’s not too late to
get your hands on digital currency that can’t be censored, at least if you’re watching this video
shortly after it’s published. And if you want to most shocking thing we found in our research about
the SIU is that it’s explicitly targeting retail investors and explicitly looking to get them
invested in startups or as the EU calls them small and medium-sized enterprises or SMUs. And I’ll
reiterate thatmemes the EU wants European retail investors to ape their life savings into are in
quote critical sectors such as digital technology, defense, green, and infrastructure development
per the FAQs about the SIU. Besides the fact that profitability of these industries is questionable
given all the hurdles they face, EU politicians somehow want retail investors not to speculate
on thesememes. And this was yet another bombshell Maria dropped in that interview. And it seems to
be at odds with the reality of the situation. If you want retail investors to invest in shares
ofmemes, you’re going to get speculation. And what’s wild is Maria believes that they can
convince retail to huddle these volatile assets. And this was revealed in a presentation
she recently did for EU politicians about the SIU, specifically the question period, which was
absolutely unhinged in our opinion. For instance, the moderator asked Maria as to whether there will
be any guard rails in place for retail investors in case there’s extreme market volatility because
of something like say war in the Middle East that causes energy prices to spike. She essentially
said that retail guardrails won’t be necessary because retail investors will know that they
should buy and hold instead of panic sell. It seems she forgot that you’re dealing with retail
investors and that the entire point of the SIU is to invest money that would otherwise have been
sitting safely in savings. From our perspective, these investors would pull their capital at
the first sign of trouble. The craziest part of all of that is that Maria concluded in her
presentation by admitting that they need to focus on financing big companies because small
companies don’t create enough GDP growth. So, the EU wants retail investors to ape their
life savings into risky startups, but also wants that money to go to large corporations
because they are the ones that will provide the most GDP growth. It makes zero sense. And to add
insult to injury, while rambling during the Q&A, Maria said that if retail investors get burned
by the SIU, then they can’t come complaining to Brussels. It seems that EU politicians can see
the bubble coming and the pop it will create and are absolving themselves of responsibility before
it all happens. But this all assumes that the SIU will succeed in getting the hundreds of billions
of dollars the EU needs to fund its ideological agendas. You don’t need to be an economist or
even a financial adviser to understand that it will probably fail, even if implemented. Again,
that’s just because making assets accessible won’t guarantee that people will allocate their capital
to them, much less their savings. I’ll repeat that the EU needs at least €800 billion of investment
every year to make its dreams come true and that Europeans are investing €300 billion annually into
foreign assets. Even if 100% of that capital was redirected back into Europe, it still wouldn’t be
enough to meet the EU’s minimum. This will require convincing Europeans to part with their savings.
And it’s worth underscoring the fact that this can only be done with intense indoctrination.
I mean education. News flash, but the macro backdrop isn’t exactly what it needs to be for
Europeans to ape into startups, particularly in the EU. For example, strict regulations
around technology means you’re unlikely to get many tech unicorns. Dozens of renewable energy
projects across the continent have gone bankrupt because the wind doesn’t always blow and the sun
doesn’t always shine. And increasing dependence on these unreliable and intermittent energy sources
means Europe is unlikely to become a mass weapons manufacturer anytime soon either. Throw in the
relentless fear-mongering that a Russian invasion of Europe is imminent and you have a recipe for
Europeans hunkering down and becoming preppers, not locking in and speculating on inherently
impaired startups with a full hodddle strategy. In our view, the only way you’ll convince Europeans
to invest their savings against this backdrop is to force them to do it with a digital euro.
And chances are this would be done through the introduction of things like negative interest
rates, which have been extensively discussed by the ECB as a feature that the digital euro
could potentially have. It’s one thing when you have savings gradually losing purchasing power
from inflation. It’s another thing when you’re checking your savings account and seeing the
balance slowly deleted in real time by the ACB. And this brings me to the big question, and that’s
what the SIU means for you. If you’re European, it means that you’ll likely have the opportunity, but
not the obligation to invest in more EU companies. If you work in Europe, it means that you’re likely
to be autoenrolled into a new pension scheme, which will see your money automatically invested
into companies complying with the EU’s agenda by default. So, uh, watch out. The more fascinating
question, though, is what the SIU means for the markets. And the answer could be a scenario
like what we’ve seen in US markets, but on a slightly smaller scale. To bring you up to speed,
most flows into the US stock market are passive flows from pension funds and the like. And these
passive flows will automatically buy regardless of the price, unless there’s some exogenous shock, in
which case they will sell. And this is effectively why US markets have been going up and to the
right in recent decades. To be clear, the EU has a similar system in place, but most of those
passive flows currently end up in multiple assets across multiple markets rather than a select
group of assets in a unified market. News flash, but these are the flows that the EU is looking
to change with the SIU, and it could present some juicy opportunities. If you can identify
which assets the EU’s new pension system will be directing these passive flows to early on, you
could make a solid return on investment over the long term. In the shorter term, figuring out which
small and medium-sized businesses are the most aligned with the EU’s agenda could be incredibly
profitable, as these would be the most likely to receive preference in the SIU’s architecture. The
bad news is that these dynamics will likely result in the unprecedented misallocation of capital as
the EU uses this capital to double down on the ideas that have tanked its economy in recent
years. The good news is that if you play your cards right, you could survive or even thrive
in its managed markets. And the silver lining is that this massive misallocation of capital will
inevitably lead to a serious financial or societal crisis that will finally force the EU to move
away from its increasingly Soviet style system and back towards the free markets. Naturally,
the EU will do everything it can to prevent such a crisis from occurring, and it will likely
use the digital euro to take even more control during the next European crisis. And that’s why
you need to stay informed about what’s going on with the digital euro. And you can do exactly that
by watching our most recent video on it right over here. And if you’re not subscribed to the channel
yet, you can do that right over here. This is me, Nick, signing off. Thank you guys very much
for watching and I’ll see you again soon.
