Wednesday, November 30, 2011

It’s a bank robbery....Central Banks’ Latest concerted Move Shows Desperation....


This isn’t a financial crisis it’s a bank robbery....Central Banks’ Latest concerted Move Shows Desperation....


It is a bank robber and it happens every time the wall street people and the federal reserve talk....




Need a reason to explain the massive central bank intervention from China, to Japan, Switzerland, the ECB, England and all the way to the US? Forbes may have one explanation: "It appears that a big European bank got close to failure last night. European banks, especially French banks, rely heavily on funding in the wholesale money markets. It appears that a major bank was having difficulty funding its immediate liquidity needs. The cavalry was called in and has come to the successful rescue." Granted the post is rather weak on factual backing and is mostly speculative, but it would certainly make sense. That said, it harkens back to our original question: just how bad was the situation if the global central banking cabal had to intervene all over again, and just what was not being told to the general public? Lastly, and most important, slapping liquidity Band-Aids on solvency gangrenes does nothing but buy a few days at most. Furthermore, we now expect the stigmata associated with borrowing from the Fed to haunt each and every European bank as vigilantes will now use the weekly ECB update on borrowings from the Fed as a signal to hone in on this and that weak Italian and French, UK, German, pardon, European bank....


The global bankers just handed Europe another cork for the bottom of their boat … then drilled another hole....

Latest Move Shows Desperation

The coordinated swap line bailout by the Federal Reserve Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank- and China’s reduction of reserve requirements by .5% – shows desperation. (For background on swap lines, see this, .)

The Street notes:

Don’t get flustered by the terminology of “dollar swap lines” above. Here’s a more simple explanation: Central banks around the globe have acted in desperation to boost liquidity in the system, which has sparked a rally in equities.

In a separate article, The Street points out:

What’s great for the banks isn’t so good for everyone else, though. Investment strategists already are noting the desperation of the move, adding that flooding the banking system with liquidity doesn’t do anything to solve the real problem of ballooning, unmanageable debt levels.

Ron Paul said today:

The Fed’s latest actions in cooperating with foreign central banks to undertake liquidity swaps of dollars for foreign currencies is another reason why Congress needs enhanced power to oversee and audit the Fed. Under current law Congress cannot examine these types of agreements. Those who would argue that auditing the Fed or these agreements with central banks harms the Fed’s independence should reevaluate the Fed’s supposed independence when the Fed bails out Europe so soon after President Obama promised US assistance in resolving the Euro crisis.

Rather than calming markets, these arrangements should indicate just how frightened governments around the world are about the European financial crisis. Central banks are grasping at straws, hoping that flooding the world with money created out of thin air will somehow resolve a crisis caused by uncontrolled government spending and irresponsible debt issuance. Congress should not permit this type of open-ended commitment on the part of the Fed, a commitment which could easily run into the trillions of dollars. These dollar swaps are purely inflationary and will harm American consumers as much as any form of quantitative easing.

The Fed is behaving much as it did during the 2008 financial crisis, only this time instead of bailing out politically well-connected too-big-to-fail firms it is bailing out profligate government spending. Citizens the world over deserve better than this. They deserve sound money that cannot be manipulated and created out of thin air by central planners who promise printed prosperity. Fiat money caused this European crisis and the financial crisis before it. More fiat money is not the cure. The global fiat currency system has proven itself a failure, we need real monetary reform. We need sound money.

As last year:

Ron Paul points out that the Fed opening its swap lines to Europe violated its promise to Congress not to do so. Paul also says the bailout will help lead to the destruction of all fiat paper currencies, ensuring that “gold will rule the roost”.

***

Many have predicted that it is only a short-term measure to kick the can down the road. But the numbers themselves show that the bailout might not even be having a sufficient short-term effect.

For example, as the following Euro to Dollar chart shows (courtesy of Finviz), the Euro rallied, and then sunk back almost all the way to it’s pre-bailout level today:

 Central Banks Latest Move Shows Desperation

[And see this.]

(The Euro’s rally against the Japanese Yen didn’t last very long, either. And Morgan Stanley’s Stephen Hull thinks any rally in the Euro will be short-lived, anyway.)

As Bloomberg notes, bank swap and libor rates show that the bailout might not be enough to stem the sovereign default crisis:

Money markets and the cost of protecting bank bonds from losses show investors are concerned the almost $1 trillion rescue plan announced by European leaders may not be enough to contain the region’s sovereign debt crisis.

A credit-default swaps index linked to European banks that usually trades tighter than an investment-grade benchmark is 30 basis points higher, according to CMA DataVision. A measure of banks’ reluctance to lend remained three times higher than it was in March.

***

The difference between [libor] and the overnight indexed swap rate, the so-called Libor-OIS spread that rises as a signal banks are less willing to lend, climbed yesterday even after the rescue announcement. The rate advanced to 18.83 basis points, from 18.11 at the end of last week and 6 basis points March 15.

Morgan Stanley emerging market strategist Rashique Rahman says that – even after the bailout – Europe’s troubles are growing:

Liquidity provision or not, sovereign credit risk has not gone away. Our work suggests ongoing deterioration of DM sovereign creditworthiness going forward, manifested by further downward credit rating pressure. Additionally, the transference of periphery Europe indebtedness to that of core Europe via the stabilization fund – and further, via ECB purchases – bears very close monitoring. Contamination to the core (of DM) lies at the heart of contagion for EM – which again is manifested through DM funding market stresses.

Nouriel Roubini told Bloomberg that the bailout is not a cure-all:

The implications of the plan require fiscal austerity and higher taxes, damping growth and possibly extending economic hardship, Roubini said.

“In the short term, raising taxes and cutting spending is going to imply further recession and further deflationary pressures in the euro zone,” Roubini said.

Greece, Spain, Portugal, Italy, Ireland and other members of the euro zone may struggle to comply with the fiscal requirements and to restore competitiveness after years of an appreciating euro boosting growth, Roubini said. Euro zone countries’ ability to act may be hindered by divided governments such as the U.K.’s hung parliament, German Chancellor Angela Merkel’s weakened clout, and the continuing protests in Greece, he said.

In the longer-term, Simon Johnson points out that the bailout creates huge moral hazard risks:

This is a whole new level of global moral hazard – the result of an alliance of convenience between troubled governments in the south of Europe and the north European banks (and implicitly, north American banks) who enabled their debt habit. The Europeans promise to unveil a mechanism this week that will “prevent abuse” by borrowing countries, but it is hard to see how this would really work in Europe today.

***

The European Central Bank intervention and this package raise enormous moral hazard issues. The ECB’s management was forced into this kicking and screaming. It was only when they realized that the whole euro zone financial system was at risk of collapse that they threw the kitchen sink at the problem. This can now go two ways: either they tighten fiscal policy across the eurozone, and introduce much more rigorous and enforced rules on deficits and profligate credit through banks, or, they let a system persist which is another “doomsday machine” that will live again to grow, and could one day topple them.

And Johnson notes that the bailout might for even more painful decisions in the long-run:

As Willem Buiter (formerly Bank of England, now at Citigroup) remarked last week, you have the greatest incentive to default when you are running a balanced primary budget (i.e., after substantial budget cuts) and still have a large government debt outstanding. His point is that the incentive structure of these programs means they will postpone a decision to default which would otherwise be rational now.

***

The underlying fiscal problems in Europe could fester – and the “rules” designed to limit moral hazard may turn out to be a complete paper tiger. In that case, the Europeans again have to make a fateful decision: Do they try to inflate out of the debt burdens of their weakest member countries; or do they instead try to manage selective default, keeping in mind that most Greek debt at that stage will be held by other eurozone governments.

As Yves Smith notes:

The real problem is that there appears to be no impetus towards a longer term solution. How do solve imbalances within the eurozone? Without a plan to develop a plan on that front, this simply rearranging the deck chairs on the Titanic.

Of course, the myriad fraudulent schemes (using derivatives and other means) to hide the problems of Greece, Italy and other countries are still continuing to some extent. And the size of the too big to fails means they can take down companies or nations using high-frequency trading, short-selling, credit default swaps and other means. Indeed, Jim Rickards argues that the bailout won’t really help because “Goldman can create shorts faster than Europe can print money”.

Therefore, without fundamental reform of the financial system, there can be no true and lasting European recovery.

Indeed, the fact that China coordinated its big cut in reserve requirements on the same day that the big Western central banks and Japan extended swap lines shows the magnitude of panic among world economic leaders.

Is history repeating?

But At Least a Handful of Insiders Will Make Out Like Bandits

Jim Quinn writes:

When you see such coordinated action by all the major Central Banks in the world, you know the situation is much worse than you are being told by the ruling oligarchy. The confidence and trust is gone. Every major bank in the world is insolvent, whether it be in the U.S., Europe or China. These Central Banks are owned and controlled by the very banks they are bailing out. They are telling you they have it under control. They do not. They have lost control. The debt is too great and will destroy the economic system of the world.

This is a last ditch effort by those in power to grab the last vestiges of middle class wealth. The stock market will soar today, benefitting bankers, politicians, and the 1%. They have solved nothing. The debt remains. The debt will not be paid.

Oil, food and commodity prices immediately soared on this announcement. Again, the wealthy will get richer and the average American will be destroyed by inflation on the things they need to live. The game goes on.

Indeed, just as with Hank Paulson’s little tip to the big boys – which is nothing new – some insiders probably made a killing by being tipped off about the swap lines. See this and this.

This isn’t a financial crisis … it’s a bank robbery....



Is there even any chance left to reverse all this Financial Mayhem since 2000, without a Zioconned world war?


Is there even any chance left to reverse all this Financial Mayhem since 2000, without a Zioconned world war?

What's this? - China going bankrupt faster than U.S.?

Economic planning expert says implosion could drag America down....LOL

How about the 16.5 $ Trillions, the US ZOG owes...and its $ 200 Trillions of unfunded Liabilities coming due within the next 25 years....???

  • China's debt is about $36 trillion yuan (or $5.68 trillion USD). This number is astronomical considering that it is just a little more than one-third of the U.S. total debt, but the difference between the U.S. and China is that the U.S. national income per capita is $47,140, whereas China's national income per capita is $4,260 – not even one-tenth of the U.S. amount. To be on par with the U.S., China's total debt should be around $1.5 trillion USD, but it is three times that! Considering that the U.S. has an unsustainable debt position, China's is ridiculously out of control and puts that country in extreme danger of a financial collapse of epic proportions.
  • China's officially published interest rate of 6.2 percent is fabricated. In reality China's inflation is 16 percent. This is eerily similar to the United States as well. The U.S. official inflation of around 3 percent is nowhere close to unofficial inflation estimates of 10-13 percent. What does this mean for China? This means that cost of living, wages and cost of goods sold in China will have to rise, and instead of exporting deflation, China will be exporting higher priced goods, thus affecting the rest of the world that purchases its goods. The world is on the verge of an inflationary cycle like we have never seen. Additionally, central banks around the globe are printing money on a massive scale to try to stimulate liquidity and spending (this is the definition of inflation!). Add to this a rising price structure in China, the major exporter to the world, and we could be preparing for a global hyperinflation.



  • Excess capacity in the economy and private consumption is only 30 percent of economic activity. Of course this is the case, as China's population is extremely poor and China is an exporting nation. The vast majority of its goods should not be private consumption. But, what the excess capacity indicates is that there is a global economic slowdown. Since China's growth is dependent on the rest of the world purchasing its goods, a global recession does not bode well for China's economic future.
  • China's officially published GDP growth of 9 percent is fabricated. The real number is a negative 10 percent! China's robust GDP has always been a pipe dream, as the country has been building infrastructure (railroads, highways and real estate development – including ghost cities). Since personal spending is only 30 percent of China's GDP, roughly 70 percent of China's GDP can be attributed to this massive build-up. It will dry up, as has already started. The regime is about to be exposed, as people are starting to wake up to the fact that the "emperor has no clothes."
  • China's taxes are too high. Taxes on Chinese businesses – indirect and direct – are 70 percent of earnings. Individual tax rates are 81.6 percent. There is no way China can remain strong with these high taxes. We thought our taxes were high – because they are! But we are like schoolboys compared to China. It is the big boy on the taxation block. It's just economics 101 – a country cannot remain strong or viable with tax rates this high. The population will ultimately revolt. I really believe China is ripe for revolution given these numbers; it's just a matter of time. Sadly, for the Chinese citizens, their strong-arm government will not look kindly on any kind of political or social opposition.

Elliott concludes: "There is an economic tsunami about to engulf China, and because of the size of China's economy and its manufacturing might, the impact of the tsunami will be felt far and wide. The United States will feel it in the form of inflationary pressures that we can't afford right now. Periphery countries to China may feel its military might or cower to political pressure as governments that run out of money start to do irrational things (look at the United States, or Greece, or the European Union)."

The people of China won't revolt. They know perfectly well that the regime won't hesitate to resort to massive military force in the event of a widespread uprising...and it has been much more careful about quickly suppressing cases of dissent as their pretense of economic progress has worn thin.

And the people holding those debt instruments know better than to try calling them in. America might go out with a whimper rather than a bang, but the Chinese leadership doesn't have any qualms about pulling the plug on anyone that tries to pull theirs.

It's like a game of musical chairs with too many players and far too few chairs. The music has long stopped, but nobody has a good enough chance at a chair so they've all been humming and pretending that the game is still going.

So everyone's going to play nice and keep trying to print their way out of this, till the global economy is in shambles and our military is cut to the bone...and that's when the Chinese stop whistling and head for the last remaining chair....




Hank Paulson 'gave hedge funds bosses inside information on plans to seize Fannie Mae and Freddie Mac....


Hank Paulson 'gave hedge funds bosses inside information on plans to seize Fannie Mae and Freddie Mac when he was Treasury Secretary....


http://www.benzinga.com/news/11/11/2158122/hank-paulson-should-be-in-jail

Former Treasury Secretary Henry Paulson gave top hedge fund bosses the inside scoop about the government’s plans for Freddie Mac and Fannie Mae at the height of the financial meltdown.

That is the bombshell claim today by the new Bloomberg Markets magazine.

The report details a meeting at the Manhattan headquarters of a hedge fund in July 2008 when Mr Paulson allegedly told the millionaires money managers that the government could seize Fannie and Freddie and wipe out their stock.

There is no evidence that any of the executives attempted to profit from the inside information by selling the stock short or betting against it.

But Bloomberg claimed Paulson gave the hedge fund chiefs a very different story to the one he gave earlier the same day to reporters.

Together, the two home loan giants had more than $5 trillion in mortgage-backed securities and other debts outstanding.

But the Treasury Secretary reportedly gave the impression to New York Times reporters and editors that a government inspection of the companies’ books was likely to offer a signal of confidence to the shell-shocked markets.

During the earlier meeting at the offices of Eton Park Capital management on New York’s 3rd Avenue, Paulson is said to have revealed the government was considering drastic action.

‘Around the conference room table were a dozen or so hedge-fund managers and other Wall Street executives — at least five of them alumni of Goldman Sachs Group Inc., of which Paulson was chief executive officer and chairman from 1999 to 2006,’ writes Bloomberg.

Government takeover: The headquarters of Fannie Mae in Washington DC

Government takeover: The headquarters of Fannie Mae in Washington DC


http://dailybail.com/home/how-paulson-appointees-former-gs-employees-dan-jester-ed-lid.html


A fund manager who attended said they were told there was a scenario being considered where Freddie and Fannie would be placed into a ‘conservatorship,’ which meant the government would effectively seize control of the companies and allow them to carry on operating despite heavy mortgage losses.

Paulson allegedly told the group the move could mean that the common stock of the government-sponsored companies would be effectively wiped out.

Bloomberg said Paulson didn’t break any laws by disclosing the information.

But while there is no proof that any trades were made as a result of the meeting, investors do not have to make short sales public.

Seven weeks later, the boards of Fannie Mae and Freddie Mac voted to go into conservatorship. The takeover became effective on the Saturday, September 6, and when markets opened the following Monday stocks in both companies plummeted below $1.

William Black, associate professor of economics and law at the University of Missouri-Kansas City, told Bloomberg he can’t understand why Paulson felt impelled to share the Treasury Department’s plan with the fund managers.

‘You just never ever do that as a government regulator - transmit nonpublic market information to market participants,’ said Black, a former general counsel at the Federal Home Loan Bank of San Francisco. ‘There were no legitimate reasons for those disclosures.’

Janet Tavakoli, founder of Chicago-based financial consulting firm Tavakoli Structured Finance Inc, added: ‘What is this but Zioconned crony capitalism? Most people have had their fill of it.’


http://other-stuff.tumblr.com/


Both these bastards should be tarred and feathered and run out of town. Too bad the North Vietnamese AA gunners weren't better shots on a certain A-4 Skyhawk....




Iranians ignore sanctions pinch; Tehran's bazaars full of keen shoppers...


Iranians ignore sanctions pinch; Tehran's bazaars full of shoppers keen to buy the latest....

By Jason Rezaian

TEHRAN - As the Iranian economy struggles under international sanctions intended to halt its nuclear programme, one unofficial indicator that has yet to be rattled is the Islamic Republic's robust consumer confidence.

Last March, during his annual nationally televised Persian New Year's address, Iran's Supreme Leader, Ali Khamenei, dubbed 1390 the year of the "economic jihad", declaring that, "These sanctions that the enemies of the Iranian nation have planned or implemented are intended to strike a blow to the progress of our country, or impede its accelerating progress."

Indeed, the sanctions, coupled with high unemployment and inflation, as well as a massive banking scandal, have the populace angered and nervous about what lies ahead, and foreign analysts convinced that Iran will erupt in protest any moment. Iran's currency, the rial, is trading at all-time lows against all major global currencies and is likely to continue in free-fall in the coming months.

For most countries the succession of bad financial news would have been disastrous, but as we've learned time and again, Iran is not most countries. Adjusting spending habits is seemingly out of the question for nearly all Iranians, as commerce is an integral part of their identity and traditions.

An example that may seem trivial to a non-Iranian but remains deeply ingrained in this ancient culture is the importance of gift giving. It is unacceptable in most instances to arrive at someone's home empty-handed. Thus, florists and confectionaries are thriving, even as even as local dentists struggle to make a living.

Furthermore, as prices on most goods and services have increased more rapidly in the year since subsidy reforms were first implemented, the average Iranian is nowhere near going to bed hungry - a fact that shows just how far off US hawks may be in their assessment of contemporary Iranian life is.

Senator Mark Kirk's plan to "economically cripple" Iran and his prediction that sanctioning it would make the rial "become like little more than like North Korea's currency" seem like wishful thinking at this point.

To compensate for the increase in prices on formerly subsidized goods and utilities, the government has been making direct cash deposits into the bank accounts of any Iranian who signed up for the program. According to Kevan Harris, a researcher at Johns Hopkins University and frequent visitor to Iran, these monthly deposits are "adding cash flows to everyone's lives, not just the wealthy".

Not only does this make bread riots very unlikely, it has brought Iranians' already well-known tendency toward conspicuous consumption to new levels in recent months.

Shopping in one of Tehran's major bazaars, 27-year-old accountant Golnaz hardly flinched at spending US$6 of her $500 monthly salary for a half pound of dried fruit. "This is the price," she remarked, "We're used to things getting more expensive. It's been like this for my generation."

The proliferation of retail ventures opening in urban centers, especially restaurants, is staggering. For a country supposedly on the verge of bankruptcy, the long cues in front of many urban eateries - where a meal, without alcoholic beverages, can often cost much more than a similar meal in the US or Europe - paint a very different picture than the one circulating in Western capitals.

Restaurants serving everything from sushi to burritos are cropping up throughout the capital, and their clientele don't seem overly concerned about spending whatever remains in their pockets despite the uncertain future. In this land where bars and clubs don't exist, a $7 cappuccino is commonplace, and the increasingly trendy cafes serving them are prospering more than ever before.

One phenomenon that seems to have made its way into the new Iran is the concept of going Dutch.

"At first I didn't like doing this because I thought it was stingy," admits 30-year-old computer engineer, Javid, "But now I realize this makes a lot more sense. Why fight over the bill? It's silly. We should have been doing this a long time ago."

With the cost for 10 diners at many of Tehran's restaurants often equaling a month's salary for younger members of the workforce, it is easy to see why they would split the bill.

Regardless of who pays, someone is still paying, and no belt tightening seems to be on anyone's mind.

"There are two things Iranians won't stop spending on," says Shabnam, a local journalist. "One is food and the other is luxury items. New clothes, new cell phones, new cars if they can afford it. It may not be wise, but we're very concerned with what other people think of us."

A growing problem, however, is that many of the goods fueling the boom in consumption are not produced domestically. Reliance on imports is increasing. Locally grown meat, for example, costs nearly $20 per kilo, while frozen meat imported from South America (either Brazil or Uruguay) is closer to $6.

Contrast this with neighboring Turkey which, unlike Iran, has worked hard to develop domestic production, simultaneously providing its economy with enough goods to satisfy local needs, as well as creating millions of jobs in export industries.

With a reciprocal visa-free policy, Iranian consumers have been flocking to Turkey to take advantage of the lower prices and often higher-quality goods. Turkish exports are also claiming a growing market share in Iran at the expense of domestic producers.

Similarly, China has become Iran's chief supplier of imported goods, and many Chinese businesses are quietly opening branches within the Islamic Republic.

As Harris points out, "The problem in Iran's case is not a lack of money, but too much money that is undirected towards productive efforts."

Along with its exports, the number of Chinese travelers in Iran has risen sharply in recent months. While much of the world has agreed to stop doing business with Iran, China seems eager to fill the void with whatever the voracious market might desire.

The one industry where Iran has had some recent success is automobile manufacturing. Iran is the top producer and exporter of cars in the region.

But that's not the impression one gets driving in Tehran, where the number of foreign luxury cars has skyrocketed, even in the face of import taxes than can exceed 100%. Maseratis, Porsches, BMWs and Mercedes are now common sights in Tehran, where just a few years ago one would have been hard-pressed to find any vehicle that was not locally manufactured or assembled.

Despite the nearly four-fold hike in petrol prices since the subsidy reform, Tehran's legendary traffic jams are as bad as ever.

Given Iran's millennia-long commercial legacy and the necessity of survival despite the international ostracism it has experienced virtually since its birth, the Islamic Republic has become adept at withstanding punitive measures.

From using third parties to purchase goods it can't import directly, to paying for airline fuel with suitcases full of cash, the regime has applied the often-byzantine style of doing business preferred inside the country to get what it needs from the outside, diminishing - or at least delaying - the effects of ZIOCONNED foreign efforts to weaken it.




Europe is being "structurally readjusted" by a Zioconned private banking cartel.....


Germany being pressured to back off Banks; Europe is being "structurally readjusted" by a Zioconned private banking cartel.....


ECB a barrier to crisis exit....?
By Ellen Brown

"To some people, the European Central Bank seems like a fire department that is letting the house burn down to teach the children not to play with matches." So wrote Jack Ewing in the New York Times last week. He went on:
"The ECB has a fire hose - its ability to print money. But the bank is refusing to train it on the euro zone's debt crisis.

"The flames climbed higher Friday after the Italian Treasury had to pay an interest rate of 6.5% on a new issue of six-month bills ... the highest interest rate Italy has had to pay to sell such debt since August 1997 ... But there is no sign the ECB plans a major response, like buying large quantities of the country's bonds to bring down its borrowing costs."
Why not? According to the November 28 Wall Street Journal,


"The ECB has long worried that buying government bonds in big enough amounts to bring down countries' borrowing costs would make it easier for national politicians to delay the budget austerity and economic overhauls that are needed."

As with the manufactured debt ceiling crisis in the United States, the ECB is withholding relief in order to extort austerity measures from member governments - and the threat seems to be working. The same authors write:
"Euro-zone leaders are negotiating a potentially groundbreaking fiscal pact ... [that] would make budget discipline legally binding and enforceable by European authorities. ... European officials hope a new agreement, which would aim to shrink the excessive public debt that helped spark the crisis, would persuade the European Central Bank to undertake more drastic action to reverse the recent selloff in euro-zone debt markets."
The eurozone appears to be in the process of being "structurally readjusted" - the same process imposed earlier by the International Monetary Fund on Third World countries.

Structural demands routinely include harsh austerity measures, government cutbacks, privatization, and the disempowerment of national central banks, so that there is no national entity capable of creating and controlling the money supply on behalf of the people. The latter result has officially been achieved in the eurozone, which is now dependent on the ECB as the sole lender of last resort and printer of new euros.

The ECB serves banks, not governments
The legal justification for the ECB's inaction in the sovereign debt crisis is Article 123 of the Lisbon Treaty, signed by EU members in 2007. As Jens Eidmann, president of the Bundesbank and a member of the ECB Governing Council, stated in a November 14 interview:
"The eurosystem is a lender of last resort for solvent but illiquid banks. It must not be a lender of last resort for sovereigns because this would violate Article 123 of the EU treaty."
The language of Article 123 is rather obscure, but basically it says that the European Central Bank is the lender of last resort for banks, not for governments. It provides:
1. Overdraft facilities or any other type of credit facility with the European Central Bank or with the central banks of the Member States (hereinafter referred to as 'national central banks') in favour of Union institutions, bodies, offices or agencies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States shall be prohibited, as shall the purchase directly from them by the European Central Bank or national central banks of debt instruments.
2. Paragraph 1 shall not apply to publicly owned credit institutions which, in the context of the supply of reserves by central banks, shall be given the same treatment by national central banks and the European Central Bank as private credit institutions.
Banks can borrow from the ECB at 1.25%, the minimum rate available for banks. Member governments, on the other hand, must put themselves at the mercy of the markets, which can squeeze them for "whatever the market will bear" - in Italy's case, 6.5%.

The reason eurozone countries are drowning in debt
Why should banks be able to borrow at 1.25% from the ECB's unlimited fountain of euros, while the tap is closed for governments? The conventional argument is that for governments to borrow money created by their own central banks would be "inflationary". But private banks create the money they lend just as government-owned central banks do.

Private banks issue money in the form of "bank credit" on their books, and they often do this before they have the liquidity to back the loans. Then they borrow from wherever they can get funds most cheaply. When banks borrow from the ECB as lender of last resort, the ECB "prints money" just as it would if it were lending to governments directly.

The burgeoning debts of the eurozone countries are being blamed on their large welfare states, but these social systems were set up before the 1970s, when European governments had very little national debt. Their national debts shot up, not because they spent on social services, but because they switched bankers.

Before the 1970s, European governments borrowed from their own central banks. The money was effectively interest-free, since they owned the banks and got the profits back as dividends. After the European Monetary Union was established, member countries had to borrow from private banks at interest - often substantial interest.

And the result? Interest totals for eurozone countries are not readily accessible; but for France, at least, the total sum paid in interest since the 1970s appears to be as great as the French federal debt itself. That means that if the French government had been borrowing from its central bank all along, it could have been debt-free today.

The figures are nearly as bad for Canada, and they may actually be worse for the United States. The Federal Reserve's website lists the sums paid in interest on the US federal debt for the last 24 years. During that period, taxpayers paid a total of $8.2 trillion in interest. That's more than half the total $15 trillion debt, in just 24 years.

The US federal debt has not been paid off since 1835, so taxpayers could well have paid more than $15 trillion by now in interest. That means our entire federal debt could have been avoided if we had been borrowing from our own government-owned central bank all along, effectively interest-free. And that is probably true for other countries as well.

To avoid an overwhelming national debt and the forced austerity measures destined to follow, the eurozone's citizens need to get the fire hose of money creation out of the hands of private banks and back into the hands of the people. But how?

Interestingly, Paragraph 2 of Article 123 of the Lisbon Treaty carves out an exception to the rule that governments cannot borrow from the ECB It says that government-owned banks can borrow on the same terms as privately-owned banks. Many eurozone countries have publicly-owned banks; and as nationalization of insolvent banks looms, they could soon find themselves with many more.

One solution might be for the publicly-owned banks of eurozone governments to exercise their right to borrow from the ECB at 1.25%, then use that liquidity to buy up the country's debt, or as much of it as does not sell at auction. (The Federal Reserve does this routinely in open market operations in the US.) The government's securities would be stabilized, keeping speculators at bay; and the government would get the interest spread, since it would own the banks and would get the profits back as dividends.

Taking a stand in the class war
In a November 25 article titled "Goldman Sachs Has Taken Over", Paul Craig Roberts writes:
The European Union, just like everything else, is merely another scheme to concentrate wealth in a few hands at the expense of European citizens, who are destined, like Americans, to be the serfs of the 21st century.
He observes that Mario Draghi, the new president of the European Central Bank, was vice chairman and managing director of Goldman Sachs International, a member of Goldman Sachs' Management Committee, a member of the governing council of the European Central Bank, a member of the board of directors of the Bank for International Settlements, and chairman of the Financial Stability Board.

Italy's new prime minister, Mario Monti, who was appointed rather than elected, was a member of Goldman Sachs' Board of International Advisers, European chairman of the Trilateral Commission ("a US organization that advances American hegemony over the world"), and a member of the Bilderberg group.
And Lucas Papademos, an unelected banker who was installed as prime minister of Greece, was vice president of the European Central Bank and a member of America's Trilateral Commission.

Roberts points to the suspicious fact that the German government was unable to sell 35% of its 10-year bonds at its last auction; yet Germany's economy is in far better shape than that of Italy, which managed to sell all its bonds. Why? Roberts suspects an orchestrated scheme to pressure Germany to back off from its demands to make the banks pay a share of their bailout. ....

Europe is in the process of being "structurally readjusted" by a private banking cartel. If its people are to resist this silent conquest, they need to rise up and, using the ballot box and public banks, throw out the new banking hegemony before it is too late. .....

“To some people, the European Central Bank seems like a fire department that is letting the house burn down to teach the children not to play with matches.”

So wrote Jack Ewing in the New York Times last week. . . .

“The E.C.B. has a fire hose — its ability to print money. But the bank is refusing to train it on the euro zone’s debt crisis.

“The flames climbed higher Friday after the Italian Treasury had to pay an interest rate of 6.5 percent on a new issue of six-month bills . . . the highest interest rate Italy has had to pay to sell such debt since August 1997 . . . .

“But there is no sign the E.C.B. plans a major response, like buying large quantities of the country’s bonds to bring down its borrowing costs.”

Why not? According to the November 28th Wall Street Journal, “The ECB has long worried that buying government bonds in big enough amounts to bring down countries’ borrowing costs would make it easier for national politicians to delay the budget austerity and economic overhauls that are needed.”

As with the manufactured debt ceiling crisis in the United States, the E.C.B. is withholding relief in order to extort austerity measures from member governments—and the threat seems to be working. The same authors write:

“Euro-zone leaders are negotiating a potentially groundbreaking fiscal pact . . . [that] would make budget discipline legally binding and enforceable by European authorities. . . . European officials hope a new agreement, which would aim to shrink the excessive public debt that helped spark the crisis, would persuade the European Central Bank to undertake more drastic action to reverse the recent selloff in euro-zone debt markets.”

The Eurozone appears to be in the process of being “structurally readjusted” – the same process imposed earlier by the IMF on Third World countries. Structural demands routinely include harsh austerity measures, government cutbacks, privatization, and the disempowerment of national central banks, so that there is no national entity capable of creating and controlling the money supply on behalf of the people. The latter result has officially been achieved in the Eurozone, which is now dependent on the E.C.B. as the sole lender of last resort and printer of new euros.

The E.C.B. Serves Banks, Not Governments

The legal justification for the E.C.B.’s inaction in the sovereign debt crisis is Article 123 of the Lisbon Treaty, signed by EU members in 2007. As Jens Eidmann, President of the Bundesbank and a member of the E.C.B. Governing Council, stated in a November 14 interview:

“The eurosystem is a lender of last resort for solvent but illiquid banks. It must not be a lender of last resort for sovereigns because this would violate Article 123 of the EU treaty.”

The language of Article 123 is rather obscure, but basically it says that the European central bank is the lender of last resort for banks, not for governments. It provides:

“1. Overdraft facilities or any other type of credit facility with the European Central Bank or with the central banks of the Member States (hereinafter referred to as ‘national central banks’) in favour of Union institutions, bodies, offices or agencies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States shall be prohibited, as shall the purchase directly from them by the European Central Bank or national central banks of debt instruments.

“2. Paragraph 1 shall not apply to publicly owned credit institutions which, in the context of the supply of reserves by central banks, shall be given the same treatment by national central banks and the European Central Bank as private credit institutions.”

Banks can borrow from the E.C.B. at 1.25%, the minimum rate available for banks. Member governments, on the other hand, must put themselves at the mercy of the markets, which can squeeze them for “whatever the market will bear”—in Italy’s case, 6.5%.

The Real Reason Eurozone Countries Are Drowning in Debt

Why should banks be able to borrow at 1.25% from the E.C.B.’s unlimited fountain of euros, while the tap is closed for governments? The conventional argument is that for governments to borrow money created by their own central banks would be “inflationary.” But private banks create the money they lend just as government-owned central banks do. Private banks issue money in the form of “bank credit” on their books, and they often do this before they have the liquidity to back the loans. Then they borrow from wherever they can get funds most cheaply. When banks borrow from the E.C.B. as lender of last resort, the E.C.B. “prints money” just as it would if it were lending to governments directly.

The burgeoning debts of the Eurozone countries are being blamed on their large welfare states, but these social systems were set up before the 1970s, when European governments had very little national debt. Their national debts shot up, not because they spent on social services, but because they switched bankers. Before the 1970s, European governments borrowed from their own central banks. The money was effectively interest-free, since they owned the banks and got the profits back as dividends. After the European Monetary Union was established, member countries had to borrow from private banks at interest—often substantial interest.

And the result? Interest totals for Eurozone countries are not readily accessible; but for France, at least, the total sum paid in interest since the 1970s appears to be as great as the French federal debt itself. That means that if the French government had been borrowing from its central bank all along, it could have been debt-free today.

The figures are nearly as bad for Canada, and they may actually be worse for the United States. The Federal Reserve’s website lists the sums paid in interest on the U.S. federal debt for the last 24 years. During that period, taxpayers paid a total of $8.2 trillion in interest. That’s more than half the total $15 trillion debt, in just 24 years. The U.S. federal debt has not been paid off since 1835, so taxpayers could well have paid more than $15 trillion by now in interest. That means our entire federal debt could have been avoided if we had been borrowing from our own government-owned central bank all along, effectively interest-free. And that is probably true for other countries as well.

To avoid an overwhelming national debt and the forced austerity measures destined to follow, the Eurozone’s citizens need to get the fire hose of money creation out of the hands of private banks and back into the hands of the people. But how?

Governments Cannot Borrow from the E.C.B., but Government-owned Banks Can

Interestingly, Paragraph 2 of Article 123 of the Lisbon Treaty carves out an exception to the rule that governments cannot borrow from the E.C.B. It says that government-owned banks can borrow on the same terms as privately-owned banks. Many Eurozone countries have publicly-owned banks; and as nationalization of insolvent banks looms, they could soon find themselves with many more.

One solution might be for the publicly-owned banks of Eurozone governments to exercise their right to borrow from the E.C.B. at 1.25%, then use that liquidity to buy up the country’s debt, or as much of it as does not sell at auction. (The Federal Reserve does this routinely in open market operations in the U.S.) The government’s securities would be stabilized, keeping speculators at bay; and the government would get the interest spread, since it would own the banks and would get the profits back as dividends.

Taking a Stand in the Class War

In a November 25th article titled “Goldman Sachs Has Taken Over,” Paul Craig Roberts writes:

“The European Union, just like everything else, is merely another scheme to concentrate wealth in a few hands at the expense of European citizens, who are destined, like Americans, to be the serfs of the 21st century.”

He observes that Mario Draghi, the new president of the European Central Bank, was Vice Chairman and Managing Director of Goldman Sachs International, a member of Goldman Sachs’ Management Committee, a member of the governing council of the European Central Bank, a member of the board of directors of the Bank for International Settlements, and Chairman of the Financial Stability Board. Italy’s new prime minister Mario Monti, who was appointed rather than elected, was a member of Goldman Sachs’ Board of International Advisers, European Chairman of the Trilateral Commission (“a US organization that advances American hegemony over the world”), and a member of the Bilderberg group. And Lucas Papademos, an unelected banker who was installed as prime minister of Greece, was Vice President of the European Central Bank and a member of America’s Trilateral Commission.

Roberts points to the suspicious fact that the German government was unable to sell 35% of its 10-year bonds at its last auction; yet Germany’s economy is in far better shape than that of Italy, which managed to sell all its bonds. Why? Roberts suspects an orchestrated scheme to pressure Germany to back off from its demands to make the banks pay a share of their bailout.

Europe is in the process of being “structurally readjusted” by a private banking cartel. If its people are to resist this silent conquest, they need to rise up and, using the ballot box and public banks, throw out the new banking hegemony before it is too late.....

http://www.youtube.com/watch?feature=player_embedded&v=NvFj4ZwWszY

Open proposal for US revolution: end unlawful wars, criminal economics. 1 of 4

Ellen Brown is an attorney and president of the Public Banking Institute, http://PublicBankingInstitute.org.



Beijing's sharp eyes on economy, gobbling-up most of Turkmenistan's Gas....


Beijing's sharp eyes on economy, European energy demand and Russia's pricing policy is gobbling-up most of Turkmenistan's Gas....


By Robert M Cutler

MONTREAL - Turkmenistan has agreed to increase future natural gas exports to China from the already planned 40 billion cubic meters per year (bcm/y) to 65 bcm/y, or more than half of China's total consumption of natural gas.

President Gurbanguly Berdimuhamedow of Turkmenistan is in Beijing this week to sign over a dozen agreements with his Chinese counterpart, Hu Jintao, including several that will provide also for increased Chinese investment and sales of drilling equipment in the energy sector, and loans for those purchases.

The agreements that Berdimuhamedow signed in Beijing provide for further Chinese investment in the South Yolotan gas field, which is the world's second-largest, with estimated reserves between 13 trillion and 21 trillion cubic meters. Other agreements


will cover such areas as police training, and counterterrorism. Berdimuhamedow will also hold meetings with Premier Wen Jiabao and chairman of the People's National Congress Standing Committee Wu Bangguo.

On Thursday, Berdimuhamedow will attend ceremonies marking the inauguration of a US$22 billion pipeline that will carry his country's gas to southern China. This is the second West-East Gas Pipeline (WEGP). The first was completed in 2004 and, with a length of 4,000 kilometers, was at the time one of China's largest energy projects. Originally carrying 12 bcm/y from the Tarim Basin in Xinjiang to Shanghai on the eastern coast, its volume was increased to 17 bcm/y through the addition of more compressors and upgrading of the industrial plant.

When gas from Turkmenistan came on line via the Turkmenistan-Uzbekistan-Kazakhstan-China natural gas pipeline in 2009, it was put into the first WEGP. The gas that originally fed it, from Xinjiang's Tarim Basin and secondarily from Changqing (Shaanxi province), is now held in reserve for that purpose in case of emergency. The second WEGP's western segment has been operating for roughly two years. Berdimuhamedow's visit was timed for the ceremonial opening of the eastern segment, although it had been operating already for several months.

The second WEGP cost nearly four times as much as the $5.7 billion that the first one cost, partly due to increase expense for the raw materials required to manufacture the pipe. Its main line inside China runs 4,843 km from Khorgos in northwestern Xinjiang to Guangzhou, the capital of Guangdong province. If one begins measuring at the source of the gas in Turkmenistan, one gets an impressive length of 9,102 km, although the WEGP designates only the internal Chinese leg.

The second WEGP has a design capacity of 30 bcm/y, which may be upgraded to 40 bcm/y in order to receive gas contracted also from Kazakhstan, through which the pipeline runs. In the beginning, the Kazakhstani gas will come from Aqtobe in the west of the country, whence a feeder pipeline runs to Kyzl-Orda and then to Shymkent in the south.

The Chinese have been active in Aqtobe for well over a decade in anticipation of this opportunity, and the pipeline inside Kazakhstan will make the southern part of the country independent of imports (mainly from Uzbekistan) for the first time in its history. The pipeline will then turn east towards Almaty and the Chinese border.

Work on a third WEGP has begun. This pipeline will start in Xinjiang and take mainly Central Asian gas to the Yangtze and Pearl River deltas in Fujian province in the southeast. It looks to be roughly as long as the second WEGP. A fourth WEGP is on the drawing boards, and even a fifth is being talked up.

The Russian newspaper Kommersant quoted an unnamed Chinese diplomat as saying that "Beijing will do its best to make sure the Trans-Caspian [Gas] Pipeline project [from Turkmenistan to Azerbaijan] is not developed," because China does not want Turkmenistan to use European prices to bargain for an increase in prices to China.

Consequently, China will "contract more and more gas volumes in Turkmenistan" as the Chinese gas market expands, and as soon as possible, in order to draw supplies away from a possible Western direction for Turkmenistan's exports.

Russia already wishes to charge European prices to China for Siberian gas that has been under discussion between the two sides since 2004. The gas would have two routes, one in western Siberia (30 bcm/y) and one in the east (38 bcm/y). A Siberian contract could be worth as much as $1 trillion, but whereas China has preferred that the former route be developed first, Russia concentrated on the latter and opened the Sakhalin-Khabarovsk-Vladivostok pipeline two months ago.

Russia shares with China the wish to prevent Turkmenistan's gas from reaching Europe, so that Gazprom may maintain its already large market share, which is set to grow further if the capacity of the Nord Stream pipeline under the Baltic Sea to Germany is doubled, as has been bruited.

However, one result of the China's increasing purchase contracts with Turkmenistan may be a further diminution in Chinese interest in Russian gas from Siberia, which Kommersant cites sources as saying is offered by Moscow at $400 per thousand cubic meters (tcm). The price of Ashgabat's gas to Beijing, according to the newspaper, is about $250/tcm. A Chinese press leak a year ago had put the difference between the two sides in the range of $100/tcm.
....

Russia is only the third-largest importer of Turkmen gas at present (it ranked first until 2008-2009). Moscow makes no objections to Turkmen gas exports eastward to China or southward to Iran; and it looks favorably at the Turkmenistan-Afghanistan-Pakistan-India pipeline project, which Gazprom even proposes to join as a co-investor. Russia is content to see Turkmen gas heading in any direction except westward to Europe. There, Russia wants to cement its dominant positions.

Turkmenistan and the European Commission envisage deliveries of 40 billion cubic meters of Turkmen gas annually, by the second part of this decade, through the trans-Caspian project and the Southern Corridor to Europe. The Kremlin, apparently, hopes to intimidate Turkmenistan directly, Kazakhstan and Azerbaijan indirectly, scare off the EU, and discourage Western investment in trans-Caspian pipelines.

Using semi-official channels to threaten the use of force is a tactic with limited deniability. It reflects both a sense of impunity and a calculated bluff by Russia's high-level authorities. It does not deserve a direct response at the public level; this would unnecessarily dignify the bluff.

The proper Western response at this stage is to make clear in Moscow that the trans-Caspian project is a shared Western interest; and to demonstrate this commitment to the Caspian partners.



Tuesday, November 29, 2011

China again, looking to snap up Africa, EU factories, railways.....


China Is Buying Up Africa While The West "Yawns" and when the Euro unravels, those with the gold will make the rules...., China again, looking to snap up EU factories, railways.....

http://www.atimes.com/atimes/China/ML07Ad03.html

China is looking to buy EU factories and railways instead of wobbly government bonds as prices fall amid the eurozone crisis.

Minister of commerce Chen Deming articulated the strategy at a business congress in China on Monday (28 November).

"Next year, we will send a delegation for promoting trade and investment to the European countries ... Some European countries are facing a debt crisis and hope to convert their assets to cash and would like foreign capital to acquire their enterprises. We will be closely watching and pushing forward the process," he said.

Chen's remarks come after the chief of the $410 billion Chinese Investment Corporation, Lou Jiwei, wrote in an op-ed in the Financial Times on Sunday that EU infrastructure needs outside help.

"Traditionally, Chinese involvement in overseas infrastructure projects has been as a contractor only. Now, Chinese investors also see a need to invest in, develop and operate projects," he explained.

Lou praised the UK as "one of the most open economies in the world" and mentioned involvement in a new UK north-south railway project in the context of political hostility to China in some countries.

Chinese port operator Cosco last year bought a 35-year lease for two container terminals in debt-struck Greece. But crisis-hit Iceland last week blocked the sale of a large farm to Chinese businessman Huang Nubo on national security grounds.

Huang said he wanted to build a hotel and a golf course.

Speaking to the Sina Finance news agency, he hit out at what he called European "prejudice ... like the view that state-owned enterprises represent your country, that whatever your background is you're a military business."

"You can come and buy a house, and you can emigrate here and bring your riches with you, or you can buy my luxury goods, but if you want to touch my natural resources, then I'm sorry, I won't let you."

The EU in recent weeks had tried to interest China in buying weak European bonds instead through a special purpose investment vehicle.

For their part, Chinese analysts predict the spending spree will not begin until prices hit rock bottom.

"The euro zone crisis has not entirely played out and asset prices are very volatile. They haven't found their floor ... Europe is not a resources player, but its manufacturers are what would most interest us, with their market, their technology, and their strong experience," Wang Jun, an economist at the Beijing-based CCIEE think-tank told us.

Imagine what would happen if America barged its way into a developing country, buttered up its homicidal dictator and agreed a back-of-the-envelope deal in which he signed over his nation’s mineral wealth in return for roads, railways and sports stadiums. Everyone would benefit, no?

No. The problem is that the infrastructure turns out to be worth a hell of a lot less than the minerals. Fortunately, Washington has had the foresight to top up the dictator’s Swiss bank account. Problem solved! As for the mining operation, the Americans really don’t want to be bothered by minimum wages or trade unions. They’re banned. And no complaints from the workforce, please, because no one wants a repeat of that “misunderstanding” in which an American mine supervisor opened fire on stroppy employees.

If the United States embarked on this sort of colonial experiment, it would produce a furious “Occupy Grosvenor Square” camp outside the US embassy and a withering play by Sir David Hare at the National. But since these things are actually being done not by America but by the People’s Republic of China across the entire African continent, the “anti-colonialist” Left just yawns.

Ordinary Africans care, of course. The subject of China will loom large in Monday’s election in Congo, though since President Joseph Kabila has arranged to be re-elected, it won’t affect the result. It was Kabila who approved a $6 billion copper-for-infrastructure barter deal with China. Unfortunately, the sale of state mines has left Congo with a $5.5 billion black hole in its budget. Meanwhile, The Economist reports: “The sale of mining licenses at below-market value to firms associated with friends of the president has raised eyebrows.”

I can’t say it raised my eyebrows. How else do you think China does business in Africa? It suffered a setback in Zambia last year when President Michael Sata was elected on an anti-Chinese ticket. But Sata hasn’t fulfilled his promise to regulate Zambia’s Chinese-run copper mines, branded “dangerously unsafe” by Human Rights Watch. And this week none other than ex-president Dr Kenneth Kaunda was in Beijing’s Great Hall of the People to discuss “deepening substantial co-operation”.

There’s a school of thought which says that China’s modus operandi, however brutal, at least gets things built. In contrast, Western aid is tipped into dictators’ pockets without anything to show for it. But the benefits of Beijing’s “investment” are elusive, because the Chinese don’t usually employ Africans to perform anything but menial tasks. Chinese construction engineers build motorways and hospitals without passing on the skills to maintain them. The result: everything falls into disrepair within a decade, by which time the copper is safely out of the ground.

From a moral point of view, China’s policy towards Africa is despicable. But it’s ingenious, too. Beijing has worked out that, by virtue of being a non-Western power, it can pose as a “developing country” while creating its sub-Saharan satrapies. The anti-racism lobby in the United Nations makes sure that the finger of guilt is pointed firmly at the former colonial powers, who are always happy to put on a display of breast-beating by, say, the Archbishop of Canterbury. Meanwhile, something close to slavery is being quietly reintroduced to the dark continent (which is how China thinks of it).

For 50 years, it’s been unclear in which direction Africans were heading. Now the question is almost irrelevant: the decision has been made for them....



Iceland wins in the end against Bankster-Shisters.....


Iceland wins in the end against Bankster-Shisters.....


http://www.nordpaul.de/islan-en.html



"The nation has held its social fabric together. Had Iceland been in the eurozone, it would have been forced to pursue the same reactionary polices of "internal devaluation" and debt deflation being inflicted today on the mass ranks of unemployed across the arc of depression."....


The OECD has come very close to predicting a depression for Europe unless Zioconned EU leaders conjure up a lender-of-last resort very quickly, and somehow manage to make the world believe that the EFSF bail-out fund really exists.

Even if disaster is avoided, the eurozone growth forecast is dreadful. Italy, Portugal, Greece will all contract through 2012, while Spain, France, Netherlands, and Germany will bounce along the bottom.

Unemployment will reach 18.5pc in Greece, 22.9pc in Spain, 14.1pc in Ireland, 13.8pc in Portugal.

Yet Iceland stands out, with 2.4pc growth and unemployment tumbling to 6.1. Well, well.

Here is the box from the OECD.

Iceland's policy of drastic devaluation with capital controls has not proved to be the disaster that so many foretold. Its refusal to accept the full burden of private bank losses has not turned the country into leper-land.

The nation has held its social fabric together. Had Iceland been in the Zioconned eurozone, it would have been forced to pursue the same reactionary polices of "internal devaluation" and debt deflation being inflicted today on the mass ranks of unemployed across the arc of depression.....



Currency Wars: The ZIOCONNED Anglo-American Century and Why the Financial Engineers Hate Gold and Silver....



Currency Wars: The ZIOCONNED Anglo-American Century and Why the Financial Engineers Hate Gold and Silver....LOL

"Every nation ridicules other nations, and all are right."

Arthur Schopenhauer

'Nominal GDP targeting' is a way of raising the Fed's inflation target without admitting to it explicitly.

Nominal GDP means that one can meet their growth target simply by inflating the money supply to make up the difference between 'real growth' and 'headline growth.'

NGDP targeting is so obvious and clumsy that I doubt that the Fed will try and hide their future monetization of the debt under such a small fig leaf, as Jim Rickards suggests. I think the monetization is already occurring in the Eurodollar markets, and an ongoing stealth bailout of European debt, in order to save the big money center banks at home.

And this is why the Fed stopped reporting on Eurodollars, as a component of M3. It was to pave the way for the monetary equivalent of a financial neo-con Marshall Plan, to addict European governance to the US dollar and pave the way for a stronger position for the dollar as a one world currency.

That dominance 'could' come in the form of the SDR for global trade if the composition of the SDR contains a significant dollar component. Here is a prior blog entry
here that explains the struggle for the SDR that is now occurring. Here is an overview of what I call the Currency Wars.

A slightly different plan has been underway for Asia, whose economies have become addicted to export production for US dollar paper, which makes up a huge portion of their reserves and financial system.

At some point those Eurodollars may come home, if Europe finds a way out of its dilemma caused in part by the US banks and hedge funds, and of course Europe's own political weakness and greed. And the Fed is confident they have a way to stem that tide of dollars 'back in the system.' But they do not expect this to happen, because the ratings agencies and the funds have the power to submit any government to a relentless credit assault.

As I have suggested in the past, the model has been to bring the system to a crisis, and then to have the bankers make an 11th hour 'offer which they cannot refuse' to the people of the nation, as they did in the adoption of TARP in the US. 'Adopt our plan, or suffer the consequences.' And I believe that the Anglo-American banking cartel will make this same play again, but this time with Europe and the world.

A sticking point in the US financiers plan is the precious metals, gold and silver. It is a pivotal point of control that will become much more prominent in the future. China and Russia will play that card with some of their BRIC allies. But in the short term the Anglo-Americans are solidifying their power in the oil rich Middle East, since like gold and silver, oil is a powerful piece in this global chess game.

In the meantime, here is an exposition of 'Nominal GDP targeting' so you can become familiar with it......




After the bell, Fitch reiterated the US AAA credit rating but changed the outlook from stable to negative.

"The Maastricht treaty set a limit of 60% for Government debt as a Percentage of GDP. As of May, 2011 only 4 of the 17 countries in the Euro-zone are below this requirement. The worst violators of the debt limit requirements are probably obvious: Greece at 157.7%, Italy at 120.3%, Ireland at 112%, Portugal at 101.7%, and Belgium at 97%. (By the way, Belgium debt was downgraded on Friday following downgrades of Portugal and Hungary.)

But readers will probably be surprised by the next two countries which are currently above the Maastricht limit: France currently has 84.7% debt to GDP and Germany is close behind with 82.4%. Both of the two 'fiscal leaders' of Europe have a worse debt to GDP than Spain which is three places better than Germany at 68.1%!

The only countries which currently adhere to the Maastrict treaty limit for debt to GDP are Finland, Slovakia, Slovenia, and Luxembourg, certainly not what most investors would consider the leaders in Europe! The average Euro-zone debt limit as of last May is 87.7%, over 25 percentage points above the required limit. I have gone on a bit too long about this, but the slide really brings home the fact that the treaties of the EU don't need to be tightened, but instead the adherence to these treaties need to be strengthened. Leaders can talk about new requirements all they want, but what good is this talk if no-one is going to adhere to these new requirements anyway?"

Chris Gaffney, The Daily Pfennig, 28 Nov 2011

Gold and silver enjoyed a post-option expiration bounce back to trend.

Markets overall remain headline driven.

"Every nation ridicules other nations, and all are right."

Arthur Schopenhauer

Germany Isolated on Euro as US Was On Iraq; euro zone hurtles deeper into crisis....


Germany thrust into a disliked leadership role, and Isolated on Euro as US Was On Iraq as the euro zone hurtles deeper into crisis....

Prophecies of doom are mounting as the euro zone hurtles deeper into crisis, and the world pins its hopes on Germany to solve it. The country has been thrust into a leadership role it has avoided for decades, isolating Berlin from its partners, say commentators. Poland's foreign minister has implored the country to save the euro "for your own sake and for ours."

Market participants and EU politicians are starting to sound more apocalyptic in their warnings about the euro crisis as yet another make-or-break summit, on Dec. 8 and 9, draws near. Meanwhile the pressure on Germany to drop its opposition to euro bonds or a massive intervention in bond markets by the European Central Bank is intensifying by the day.

Polish Foreign Minister Radoslaw Sikorski resorted to dramatic rhetoric on Monday evening when he appealed to Germany to avert the collapse of the euro zone.

"There is nothing inevitable about Europe's decline. But we are standing on the edge of a precipice. This is the scariest moment of my ministerial life but therefore also the most sublime," Radoslaw Sikorski said in a speech in Berlin on Monday evening. "I demand of Germany that, for your own sake and for ours, you help it (the euro zone) survive and prosper. You know full well that nobody else can do it."

"I will probably be the first Polish foreign minister in history to say so, but here it is: I fear German power less than I am beginning to fear German inactivity," he said, referring to the troubled history of relations between the two nations.

So far, though, Germany is resisting calls to allow the European Central Bank to conduct unrestricted purchases of government bonds issued by ailing euro-zone countries in order to push their borrowing costs down to sustainable levels.

It also remains opposed to jointly issued euro bonds. Its arguments are that the measures would remove the incentive on high-debt nations to get their budgets in order, would stoke inflation and would end up costing Germany too much.

Increasing Pressure

Adding to the sense of foreboding, the OECD said on Monday that the euro zone's debt crisis has become the biggest threat to the global economy and that a breakup of the currency zone can no longer be ruled out.

Credit rating agencies piled on the pressure, with a French newspaper report saying Standard & Poor's could change its outlook on France's triple-A rating to negative in the next 10 days, and Moody's warning on Monday that the crisis threatened the credit standing of all European government bond ratings.

Markets may calm down a little if finance ministers from the 17 euro-zone countries, who are meeting in Brussels on Tuesday, manage to fix details of leveraging the European Financial Stability Fund (EFSF), the euro zone's bailout fund, so it can help Italy or Spain if they need aid. The two countries are considered too large to bail out under the current arrangement.

German media commentators once again slammed the euro zone's crisis management, and sharply criticized a rumored idea that the euro zone's six strongest members -- Germany, France, the Netherlands, Finland, Austria and Luxembourg -- could get together to issue so-called elite bonds. The German government on Monday denied a report in Die Welt that the proposal was being discussed as a way to stabilize the core of the euro zone and raise cash to help the other members.

The conservative Die Welt writes:

"Germany is being confronted with unfulfillable demands. On the one hand our fellow Europeans expect Germany to show more leadership in solving the crisis. On the other hand our new power is triggering rejection and resentment.

"The Germans are the indispensable nation on the continent, and a rescue is inconceivable without them. At the same time this dependence triggers defensive reactions -- a mixture of hurt national pride and discomfort at the thought that there's an elephant in the center of Europe that is being forced by the crisis to show its full power.

"Scarcely a people is less suited to this task than the contrite Germans, who spent decades pretending to be smaller than they really are and who would prefer to be just a big Switzerland in foreign policy terms. But now they're suddenly realizing that the world is relying on them to save the euro and avert a disaster for the global economy. The Germans are going through a crash course in being a leading power.

"With their focus on austerity and their refusal to permit a bigger role for the ECB, the Germans are as isolated as the Americans were with the Iraq war. Even euro allies are starting to distance themselves from Germany's rigidity. Berlin must examine its conscience and ask itself if it really has the better arguments on its side. Just referring to the German hyperinflation trauma of 1929 isn't enough.

"That doesn't mean Germany should yield to the pressure of the others. But like every other big power we have a duty to clearly communicate our position and to avoid giving the impression that we always know everything better."

The left-leaning Die Tageszeitung writes:

"The fans of 'elite bonds' appear unaware of how disastrous the consequences would be. The euro would be immediately dead -- and would disintegrate into many individual currencies. That's because the elite bonds would signal that Italy, Spain or Belgium will be dropped. These states would immediately go bankrupt because all investors would flee. Germany would not be unaffected by this chain reaction. German banks would have to write off most of their loans to debtors in the euro zone -- and would become insolvent themselves. German exports would collapse and unemployment would increase. Some German citizens might find it tempting to feel special by having elite bonds -- but unfortunately Germany itself would go bankrupt."

Business daily Handelsblatt writes:

"In the short term, Europe is the biggest threat to the global economy. Companies and investors are well advised to make contingency plans for a break-up of the euro zone. The euro can fail, even though no one wants it to. Much now depends on whether the next crisis summit on Dec. 9 will take steps towards a workable fiscal union while at the same time finding short-term funds to end the buyers' strike in bond markets.

"But if that succeeds, Europe can become a driving force for global economic growth in the medium and long term. OECD figures show that the austerity measures that have already been decided will push the euro zone's budget deficit below the level of 2 percent of GDP in 2013, while the US and Japan will remain at far too high levels above 8 percent. At that point at the latest, an investment in European government bonds will start to look more attractive."

The center-left Süddeutsche Zeitung writes:

"Last autumn in Deauville, at a meeting between German Chancellor Angela CIA Merkel and French President Nicolas MOSSAD Sarkozy, they agreed the following: Merkel agreed to drop her demand for truly dramatic sanctions for countries that don't keep their budgets in order. Sarkozy in turn agreed to the German demand that private creditors share the cost of the crisis.

"Just under a year later, both have performed U-turns. Merkel again wants to change the treaties. This time all euro states are to be forced to maintain solid budget discipline. Sarkozy has agreed -- but is now demanding to drop the involvement of private creditors.... While Europe's two most influential politicians happen to change their minds, others are bent on presenting ever more new ideas, such as elite bonds. This idea is likely to prove even more short-lived than the Deauville deal. And none of all this is suited to boosting confidence in the Zioconned euro club...."

-- David Crossland