The Catalan secession crisis rolls on, threatening not only Spain, but also offering succor to various regional independence movements (we did not include any stories this week about Kurdistan, but this regional independence movement is worth keeping an eye on as well). At the same time, outgoing German finance minister Wolfgang Schäuble is warning of the dangers of excessive QE worldwide. To cheer you up this week, we also have some lighter stories of a supervolcano that may be on the verge of erupting and destroying all life on earth, a chubby, nuclear-armed real estate developer, and the breakdown of the post-War economic and political order.

Here is a curated list of important stories outside the main headlines that caught our attention this week.

Catalan Leader caught in independence dilemma (Financial Times). When I was a kid, I loved to hang out at the local swimming center. I bragged to my friends that I could do a “one and a half” off the high dive even though I had never attempted the feat. One of them challenged me to it. I climbed up the steps and out onto the board and, looking down at the pool far below, realized just what trouble I was in. My guess is that Catalan president Carles Puigdemont is feeling very much like that this week. About half of the Catalan populace voted overwhelmingly to declare independence (the other half of Catalans boycotted the vote), despite widespread police suppression. Spanish Prime Minister Rajoy offered a hardline response to the vote – both by sending police from other regions (including the Guardia Civil – a police force especially hated and feared in certain Spanish regions due to its association with Franco) and by condemning the vote afterwards. Puigdemont is stuck. Europe looks to be on the verge of unraveling. Russia is pleased, but we continue to worry what a breakdown in the easy flow of goods, services, and people in Europe and around the world might mean to global economies.

Wolfgang Schäuble warns of debt-driven global financial crisis (Financial Times). As we’ve seen in the news lately, politicians and officials who know they will not be in office much longer suddenly seem to start telling uncomfortable truths. Schäuble, Germany’s finance minister who has steered the country through some very rough times, is speaking up about the potential damage and excesses caused by central banks’ continued use of Quantitative Easing. The US Federal Reserve has just started on a path of reversing the size of its massive balance sheet, and we have been seeing some real excitement in the bond market that is likely due to those moves. As many speakers pointed out in the March Grant’s Conference, it is hard for a central banker to reverse QE, but hard not to reverse it either. Tightening tends to dampen growth; not tightening creates destructive bubbles. Schäuble seems to be more worried about the latter.

A Surprise From the Supervolcano Under Yellowstone (NY Times). There is an enormous pool of magma sitting under Yellowstone park. Prior eruptions of pools like this have literally wiped out 99% of life on earth. This week, scientists reported that an eruption of the Yellowstone supervolcano – thought to be likely to occur next only hundreds of thousands of years from now – might be more likely and more imminent than previously conceived. As if we had nothing else to worry about… Starting over the summer, there were “clusters” of thousands of tiny earthquakes in Yellowstone. Scientists now think that these earthquake clusters might signal a transition to an eruption. Not much you can do about this from an investing standpoint, but I thought you all might like to know…

Wonsan: Where Tourism Meets Tanks (Reuters). Described as Kim Jong Un’s Mar a Lago, Wonsan is a tourist town on the east coast of North Korea. Fate will laugh at us in a hundred years when history books are written of a time when two chubby, nuclear-armed autocrats shared a common passion – real estate development. Kim Jong Un wants to turn Wonsan into a workers’ tourist’s paradise, with a swanky hotel and convention center to go along with its beautiful sand beaches and ICBM launch site. This Reuters Graphics article is very well done and pulls the reader into Wonsan with brief explanations, graphics, and videos. Worth taking a look.

Source: DPRK Tourism (!)

Trump to unveil NAFTA proposals that throw the deal into peril (Axios). So far, every substantive forecast we made in our November 2016 report on investing in the Trump era has come true. Except, crucially, one – the market continues to rise no matter how crazy or tense things become internationally or domestically. The NAFTA negotiations are a perfect example. President Trump has suggested he might scrap NAFTA, rewrite NAFTA to exclude Mexico, or rewrite NAFTA in such a way that several large and important industries (e.g., autos) would be changed forever. The willingness of the President to walk back negotiated treaties and trade arrangements signed by his predecessors make it difficult for other nations to know how to deal with the US and makes corporate planning riskier. We continue to believe that the spread of nationalism, if continued at the present trajectory, cannot help but slow future economic growth. As Framework members know well, it is the assumption of robust future growth that contributes the most value to an enterprise.