Europe keeps being shocked with various scandals, which have a negative impact on the image of the European Union and its national currency. Apart from the debt problems of Greece, Ireland and Portugal and the disputes over the Schengen Agreement, there is another major shock: arrest of the famous French politician Dominique Strauss-Kahn, who used to be the Managing Director of the IMF.
This unpleasant situation has a few peculiarities, which intensify its importance in the eyes of the global community:
1. 62-year-old Dominique Strauss-Kahn was the IMF head at the moment of his arrest
2. He was arrested in New York, USA. He is accused of attempted rape, which means that under the US Law he may be sentenced to many (up to 70!) years of imprisonment if he is found guilty. Anyway, his political career was destroyed when he was arrested. That is the specifics of sexual scandals, which have recently been the most efficient weapons against politicians of any level.
3. The Russian-based “Interfax” news agency has found an interesting fact: Strauss-Kahn’s arrest took place a day before he was to meet with Angela Merkel to finally solve the EU’s debt problem, which literary drowns the EU and its currency. A question arises: was it a coincidence or was someone interested in undermining the debt problem solution?
Is Strauss-Kahn really guilty of the crime?
According to the West-European Association of Traders and Investors say that the court will decide basing on investigation results while paying attention to the following issues:
· As with any criminal case involving high-ranking officials, Strauss-Kahn’s case looks vague and complicated.
· First of all, the situation seems to be developing not in favor of the French politician: the US Court refused to set him free on bail ($1M) for the fear that Strauss-Kahn could escape to France. The USA and France haven’t ever signed an agreement on the mutual extradition of criminals. Moreover, he was arrested on board his plane, which is also not in his favor.
· However, the main thing that is currently working against him is his reputation. Previously he was charged with sexual harassment but was acquitted. Nevertheless, it can seriously influence the trial.
· Consequently, basing on the abovementioned facts, the presumption of innocence is hardly applicable to Strauss-Kahn.
· His attorneys say they have a proof of innocence, which will disprove the victim’s testimony.
· Another thing that makes the situation doubtful is Strauss-Kahn’s interview given to the «Libération» newspaper 2 week before his arrest. He said that there was a chance of some kind of provocation against him, with him being involved in some sexual crime.
· After his arrest numerous French politicians started discussing a possible conspiracy against the EU.
· Now the destiny of the former head of the world’s most influential financial institution depends on the court decision. The trial is scheduled for May 20th.
Cui prodest?
First of all Strauss-Kahn himself is mainly responsible for his own misfortune. However, if to consider the “conspiracy” version (which his attorneys insist on), the following variants well may sound realistic:
Strauss-Kahn used to be a member of the opposing Socialist Party of France with the highest rating among all the members of the party. His fellow party members together with journalists and political scientists expected him to make a brilliant political career and even to run for the presidency in the forthcoming presidential elections. The entire French political “beau monde” considered Strauss-Kahn to be Nicolas Sarkozy’s main opponent. The black PR campaign against Strauss-Kahn was started long before his arrest but had no effect. Now the former Managing Director of the IMF cannot even dream about running for president.
Moreover, he was arrested in the USA (its national currency “wages war” against Euro). Being the IMF’s Chief, Strauss-Kahn had a significant influence on the currency confrontation between EUR and USD. So his temporary isolation could be aimed at confusing the European financial policy and postponing financial aid to Portugal , which could restore the confidence in the common Euro currency.
Moreover, Strauss-Kahn was going to fly from the US to Europe in order to meet with Angela Merkel on Sunday. They were planning to discuss the financial aid to Greece. On Monday he was going to meet with the EU finance ministers in Brussels in order to discuss the same issues (the aid to Greece and Portugal ). It should be reminded that the incident took place on Saturday, May 14th, right in advance of the mentioned events. Indeed, some political circles in the US well may be interested in postponing the salvation of Euro or even in making an American representative the IMF Managing Director.
It is necessary to mention that the US has significant experience when it comes to investigating sexual assault cases involving high-ranking politicians and celebrities.
Major developing countries like China, Brazil and India start playing more important role in the IMF. Consequently, like the US, they wouldn’t like to see a European as the managing director of the world’s most influential financial institution. In 2007 the EU hardly managed to make Strauss-Kahn the IMF’s Chief. But it is unlikely to happen again. So, the representative of which country (USA, India, China, Brazil) will become Strauss-Kahn’s successor?
Strauss-Kahn’s arrest: what are the possible consequences for investors?
1. On May 15th, right after incident in the JFK airport, currency speculators caught at the chance to attack the Euro currency once again. EURUSD declined down to $1,404. The reason for the decline was the concerns that after the arrest of the IMF’s Chief the process of solving the debt crisis would slow down.
2. The next day EURUSD regained the lost position.
3. The IMF authorities haven’t changed their mind concerning the financial aid to the “sick” EU economies. The counties in need will get it without delay. Consequently the common currency may reassure investors making them confident again.
4. However the image of the IMF as the main financial arbitrage is under threat in investors’ eyes.
According to the Department of studying Masterforex-V trading system , EURUSD has recently completed a bullish wave (A H1) and is forming a M15 pullback against it.
The possible future movement scenarios are the following:
· If the price rallies it will form an upward FZR around 1.4285 – wave а(С)/С Н1. Correction grid on D2. Target grids are built on top of А Н2,А Н1.
· If the price declines it will form a downward FZR around 1.4249 – wave С М15. Correction grid on H1. If the downward movement continues and comes out of the sloping channel on H2 it will mean the end of wave C H2. Correction grid on H4.
Market Leader and would appreciate if you could visit the forum for traders and investors and express your own opinion on the matter:
To your mind, the incident is:
· a conspiracy arranged by some secret services
· a sex crime
