My front teeth are still kicking around the streets of Paris, probably somewhere on the Left Bank.

They were bashed out by a large cobblestone thrown at me in a riot in 1968. Riots were a daily occurrence in those days, although I can’t remember why.

That was the last time France suffered a revolution.

But it is not the last.

Here comes the next black swan of 2017.

The upcoming presidential elections, scheduled for April 23rd, and the run off on May 17th promise to be the most consequential since the Fifth Republic came into being in 1958, bringing Charles de Gaulle into power.

At stake is the future of the European community, the Euro, and the entire postwar order. None of these are expected to survive if the more extremist factions gain power.

It may also give you the long awaited selloff in global financial markets that you have been waiting for to ramp up your risk exposure.

Consider it another chapter in the disruption trend that began with “Brexit” in June, 2016 and continued with the Trump victory in November.

Suddenly the world is shifting from a right-left conflict, from open to closed economies, from globalization to protectionism, and from equality to supercharged race based politics.

The similarities between the French and American elections are nothing less than stunning. For Pennsylvania, Michigan, and Wisconsin, substitute Artois, Picardie, and Flanders.

Also familiar is workers’ feelings of frustration and impotence, a rage against an establishment they feel has abandoned them.

While the national unemployment rate stubbornly remains stuck at 10%, French corporate profits have posted new all time highs, and share prices are rocketing.

Sound familiar?

It is the French industrial north that has taken the biggest hit from competition with China and Mexico. Unemployment there, at 18%, is nearly double the national average.

Think of it as the Midwest Rust Belt, but with stronger coffee and better food.

The political scene there is also similar.

The National Front used to be an extreme right fringe party that was highly anti-Semitic, and known as France’s Nazi Party. It was lead by an unreconstructed fascist, who I once interviewed for The Economist Magazine in the 1970s.

Today his daughter, Marine Le Pen, has cleaned up the party, honed down some of its sharper edges, and made it somewhat respectable.

It is still heavily anti-immigrant, with Le Pen proposing to ban Muslim headscarves (Gucci will have a fit). But then France has suffered more civilian casualties than any other western country in the past year, over 200.

So the National Front is now leading in the polls.

If elected, Le Pen will take France out of the European Community, end the Euro, and close its borders to foreigners. Charles de Gaulle already took France out of NATO in 1966.

What will happen to the 15% of the population which is Islamic is an open question.

In other words, it would be a Russian dream come true.

The candidate for the center-right establishment Republican Party, François Fillon, has just been indicted for illegally directing $1 million to family members via fake government jobs.

The development has demolished his election prospects.

That leaves former investment banker Emmanuel Macron as Le Pen’s primary contender. He is a French civil servant who is strongly pro trade, pro globalization, pro immigration, and pro EU.

He sees the root of the country’s problems as heavily entrenched unions whose strikes can shut down the country at will.

His party, called “En Marche” (On March) was founded only a year ago.

To say that France is ripe for revolution would be an understatement. The government accounts for 57% of GDP, compared to only 20% in the US. Youth unemployment is a nosebleed 25%.

France is now the most pessimistic country on earth, with 81% saying conditions are getting worse, while only 3% say it is getting better.

Anyone with brains and initiative decamps for England, or the US, if they can get in.

And here’s the big problem.

A century and a half of immigrants from Algeria have never been integrated into French society.

You find fourth generation kids who barely speak French, preferring to converse in their native Arabic.

Needless to say, this has proved fruitful ground for recruiting terrorists.

That is America’s great strength, turning immigrants into locals in a single generation. It is why my cleaning lady’s kids speak English better than I do.

It is also why a homegrown terrorist movement has never really developed here.

This will also sound familiar to Americans. There has been heavy Russian involvement in the election.

Russia has loaned Le Pen $11 million for her campaign, while Macron’s campaign has been non-stop subject to hack attacks.

It is all part of a concerted campaign by Putin to enhance the former Soviet Union’s security by wiping out the economic and military alliance on its borders.

If Le Pen is successful, it will spark a financial crisis of the first order. Stock markets (EWQ) will crash, and the Euro (FXE), (EUO) will plunge.

If Macron wins, you will see a continuation of the current rally after a dip running into the election.

I have always known the French as a fundamentally conservative people. In fact, I am part French (the Carlats were exiled from Dijon to Louisiana in the 1600s for rebelling against the king, and eventually made it out to California in a covered wagon).

So I think Macron will edge out Le Pen.

But I am not betting the ranch on this. After all, I was wrong on Brexit and the US presidential election. Three times unlucky?

And where are my other two front teeth?

They are somewhere in a Tokyo karate dojo, kicked out in a championship bout in 1974.

I lost.


On My Way to a Riot in 1968