China is the world's largest creditor. Beijing's massive money reserves (it is still the largest holder foreign holder of US government debt) currently stand at a healthy $3.6 trillion.  For more than two decades, the world's second largest economy has built up a war chest of foreign currency assets to act as a buffer against global headwinds. But the decision on August 11, to tweak its exchange rate regime and engineer the largest single devaluation of the renminbi in 21 years, has thrust the question of reserve depletion into sharp relief. What most People don't realize is, it's a Game that cost lives who ain't playing it, all the Banks, including the Central Banks in existent, bar 3 Countries to date, that aren't under the control of the Rothschild, Rockefeller Bankers, the main players, Iran, North Korea, Cuba, so it's an illusion that any Country act's independently regarding anything to do with Fiat Money, the Dollar of make believe with Interest, that wasn't tied to Oil for nothing, cause when you control the Money Supply over the last 3 Centuries , you can scam your way into Wealth , control all the major Industries on the Planet, including all those that have a habit of blowing Folks up in the name of Democracy, who just happened to fund Hitler and all his ideals.

The Dollar's worthless, they want to move away from it, they start taking another Currency for the Oil etc, like Saddam, or  Gaddafi going Gold with the rest of Africa, which was to commence in 2011, then we get fed lies via the Media that they control, the Politician's and these People end up Dead, Countries destroyed , but these Rothschild Bankers don't hang around long before they've got a Central Bank up and running, that's the reality, but China's been buying and mining Gold for over 15 years, waiting for the day for it to all explode, Gold is going to be their Savior, unlike USA who've only got others and Brown, well he sold most of Britain's, pocket change to China, they ain't daft, it's only matter of time before China is declared the Winner...With US$, GBP, Euro and Yen increase of money supply (M1) and near negative money velocity (M3); any creditor including China would be bonkers to hold on to US$ denominated assets. The Chinese devaluations of the RMB to US$ have in effect increased their profits measured in RMB. Smart moves.  Why should China care about US$ denominated assets created by a debtor, especially since the US and European economies are in implosion mode, except for a loss of market which is substitutable with the likes of Russia, India or Africa?  However, think ahead and after the implosion of the US economy, the Chinese will mop up all those good value insolvent companies and other hard assets worldwide with the new global substitute for the US$- Brilliant and playing the game like a true capitalist. 'Trust the free market', said the Chicago School of economics, Reagan, Clinton, Bush(s), Blair and Brown.

Lies and deceit...

The Federal Reserve declined to raise interest rates from their record low of near-zero on Thursday, citing concerns that the still fragile world economy may “restrain economic activity” and further drag down already low inflation.  While some economists had expected a rate rise – the first since 2006 – recent stock market turmoil in China and fears that a slowdown in the world’s second largest economy could dampen the global economy appear to have put off the decision for now.  Janet Yellen, the Fed chair, said the central bank had maintained the federal funds rate at 0-0.25% – where it has been since the 2008 financial crisis – because of “heightened concerns” about a sharp slowdown in China and lower-than-desired inflation.  She said the US recovery from “the great recession” meant that there was an argument to be made for increasing rates – and the bank’s poliycmakers had that argument today – but in the end they still needed more evidence that there was a sustained global recovery. The Federal Reserve was not expected to pull the trigger on an interest rate rise until next year in the wake of a global stock market sell-off triggered by economic turmoil in China.  The US central bank held fire on its first rates rise in more than nine years as it admitted on Thursday night that “uncertainties abroad” had made it more risky to tighten policy.  A slump in equities over the past month, sparked by fears over the strength of China’s economy, “may restrain economic activity”, it warned. The Fed’s policymakers said that this could put “downward pressure on inflation in the near term”.   “We’ve long expected some slowing in Chinese growth over time, as they rebalance their economy,” Fed chair Janet Yellen said. “The question is whether there might be the risk of a more abrupt slowdown than we expect.”   Yippeee! Free money forever. It always works, printing, borrowing, spending. Every time. Everywhere. No fear. Borrow away. Low or no interest. I'll have to check, but I believe I posted on the day that QE1 was launched that once you start down the road of 'Stimulating' the economy with ZIRP and QE it is impossible to stop. However - and this is the kicker - just like the Weimar experience, by the time the 'Serious people' come to accept that their clever, clever schemes are not working, it is too late.

Rudy von Havenstein wasn't stupid, he didn't look at the hyperinflation of the mark and do nothing because he was dumb. He did it because for a long time his policies produced no significant inflation and indeed appeared to be working. By the time his folly became clear he could not stop without triggering an immediate collapse.  Seems familiar, somehow.

The slowdown in China sent shockwaves on the commodity markets. The Bloomberg Global Commodity Index, which measures the evolution of 22 commodities, reached levels that have never been reached since the beginning of this century. The price of oil is the best barometer of the growth of the global economy, as this commodity fuels almost every industry and manufacturing sector of the global markets. The price of oil has dropped by more than half in a year, now getting closer to 40 dollars / barrel on the US market.   Also, the price of iron ore, an essential commodity for the Chinese foundries and the construction sector, has reached 56 dollars a ton, from 140 dollars a ton in January 2014.   The crisis of investing in resources - In the context of the decline of the price of oil and metals, many mining projects which have major loans have been taken out for are now in the red, and investors may never get profits from them...the most affected are the American exploitations of shale gas.  As the needs for refinancing in the sector are increasing, in the future there is the risk of quick contagion.  The domino effect - The pillars of the world's economy are beginning to fall. China is weakening, and the emerging markets that have consumed such huge volumes of commodities are being affected by the weakening of currencies. Brazil, Russia, India, China and South Africa, the BRICS which seemed that they were going to uphold the growth of the world's economy, are now in "disarray".  Central banks are quickly losing control.  The stock market in China has already crashed, and a real disaster was avoided only through the government's intervention, which bought billions of shares. In Greece, the markets are having problems, amid the turbulences in the country. In the currency sector, investors have flocked to the Swiss franc in the beginning of the year, but the quantitative easing of 1,100 billion Euros announced by the Central Bank (ECB) has devalued the Euro, causing the Swiss National Bank to drop peg it had imposed four years ago on the EUR/CHF exchange rate.

Greece's creditors have voiced "serious concerns" about the sustainability of the country's debt ahead of a vote on a third bail-out deal in Athens that is likely to cement a split within the government. Analysis prepared by the country's European lenders projected that Greece's debt share would rise to 201pc of gross domestic product (GDP) next year.   Debt is only expected to fall to 175pc by the end of the decade, even if Greece implements all the terms of its €85bn (£61bn) rescue package and raises €13.9bn from a privatisation drive.   This means the country would not get its debt pile down to 120pc of GDP - which has long been viewed by the International Monetary Fund (IMF) as the target to get Athens back to a sustainable debt level - until 2030, two decades after the country's first bail-out. Just another example of post democratic EU.  The Greek people vote in a referendum against an austerity package,this after they had voted in an anti austerity government.  Result, the same government accept an EU bailout based on austerity measures the Greek population voted overwhelmingly against.To cap it all these stringent measures will be enforced by Brussels bureaucrats,all very undemocrat but typical of EU control.  The flaw in 'democracy' is that you can vote yourself more than you can pay for. When that happens you lose your right to self government. Democracy ends at your borders. You cannot vote yourself access to other peoples money.

Alexis Tsipras resigns and calls September snap election !!!!!!!!!!!

Embattled prime minister will stand down after losing backing from his MPs over Greece's punishing new bail-out agreement ... The rumour mill is well under way, with talk suggesting that speaker of the Greek parliament Zoe Constantopoulou will join a breakaway Leftist faction. Ms Constantopoulou has been a constant thorn in the side of the PM, and is one of the most vocal critics of the new bail-out deal in the government.  However, former minister Yanis Varoufakis - who is not affiliated with the Left Platform - is likely to stick by his prime minister and current finance chief Euclid Tsakolotos.  An election will create more political uncertainty, delay economic recovery and impede reform implementation.  However, it appears to be unavoidable if Greece is to have a government committed to implementing the bail-out agreement. An election will give Mr Tsipras the opportunity to secure a mandate for the reform programme and remove troublesome left-wingers from parliament.  Under Greek electoral law, if an election is held within 18 months of the previous poll, the order in which candidates are listed on ballots is also the order in which they are elected, and that order is set by the party leader.  The mind-boggling scope of the reforms in the new agreement, which extend into virtually every area of the economy and polity, exceed anything visited upon even the post-communist states of eastern Europe. The referendum result of 5 July, in which 61pc of voters rejected austerity measures demanded by Greece's creditors, revealed that there is a large body of opinion that is prepared to countenance a break with the euro. In coming months and years, support for remaining within the euro zone "at all costs" will diminish significantly.

FOCUS ON  PORTUGAL - The imbalance of the Euro between rich and poor countries has acerbated and wrecked the Portugese industries of tourism, and of clothes and shoes from cheap Chinese imports into Europe. The debt is unsustainable and to add any more austerity simply makes it worse. It will, along with Greece, need a massive debt forgiveness to solve its problems, and this will happen as sure as night follows day, and Merkel and Germany will have to swallow it whole.  I should mention the accelerating decline in the population, and particularly the working age population who actually pay most of the taxes (when they can find jobs that is). Since population size is a significant indicator of GDP ( eg less people equals less demand for all sorts of goods and services from food to haircuts, housing and furniture to put in it etc) this is going to be perhaps the major long term issue for Portugal.  This is driven by two factors. The first is that birthrate has been barely half that required to maintain a steady population level for the whole of this century and the second is substantial emigration, especially of graduate level young people who also happen to be just in the age range that provides the majority of children. For a short while the increasing longevity the large number born born from the 1940's to the 1970's is masking what is already certain to happen. But we already know the number of people aged 0-20 years old is barely half that of a generation ago and its thus inevitable that there will be a totally unavoidable drop in the working population for at least the next generation and also because there will be far fewer 20-40 year olds in this period there will also be yet again even fewer children born to them. When you add in the high level of immigration to this the numbers are truly frightening- well they should be if any politician cared to take notice!  Demographics is a much ignored and yet very hard to reverse adverse trend that is going to have an unavoidable impact on many European countries. Portugal is probably the most critical but Italy, Germany and to a lesser extent Spain are all going to have a chronic problem emanating from this for decades to come...THE FACT that the IMF is still working with Portugal is a good sign. I just wonder if Portugal could get the same interest rates and terms that Greece is being offered if its debt situation would be so dire. For example, the Portugese government could, much as China is trying to do, consolidate debt and rationalize industry through debt exchanges with the Central government offering low cost loans to solid Portugese companies to take over the zombie firms or refinancing consumer and business loans.

At the moment the Greek government receipts are used to pay for  pensions and public salaries. Afterwards there is practically no money left to pay for social, health, education, traffic, communication,  military etc.  All these items are paid by credits from partners. Interests and debt  repayment is only done by partners.  Without a "haircut" on pensions and public salaries Greece has not even a slight chance to survive..."To relieve the present exigency is always the object which principally interests those immediately concerned in the administration of public affairs. The future liberation of public revenue they leave to the care of posterity." -Adam Smith, The Wealth of Nations (1776) 2010. Greece was about to default on its debts. As usual, politicians and bureaucrats blamed everyone but the perpetrators — the politicians and bureaucrats. They claimed that the only way to relieve the crisis of debt was debt itself.  Problem: An excess of borrowing behavior by Greeks.

Goal: To have saved the Big Banks, mainly in France and Germany. Plan: To allow Greeks to default to non-banking creditors; have the European Central Bank and International Monetary Fund lend even more money to Greece in order to give Big Banks time to rid themselves of basically worthless Greek debt; then, when Greece finally defaults, charge the taxpayers in the European Union, that phony paradise of united social democracies, for the losses to the ECB and IMF. Measurement: Success for bankers, bureaucrats, and politicians. Failure for taxpayers. There were alternatives more fair and just; for example, see "Debt & the Race to the Bottom" at ... http://nationonfire.com/catego... In 2015. Greece defaults. Consequence? Another rescue from the EU in exchange for more Greek promises.

ECB - Christian Noyer said that Greece's debt cannot be restructured

Chancellor Angela Merkel's spokesman says Germany sees no basis at present for entering negotiations on a new bailout program for Greece. Steffen Seibert said Monday that Germany respects the "clear 'no' vote" by Greeks against austerity measures demanded by creditors and that "the door for talks always remains open." However, he said the conditions are "not there at present to enter negotiations on a new program." He said the "no" vote is a vote against the principle - still supported by Germany - that solidarity requires countries to take responsibility. Seibert says Europe will explore what possibilities there are to help Greek citizens and "a lot will depend on what proposals the Greek government now puts on the table." Regarding requests by Athens to restructure its debt, finance ministry spokesman Martin Jaeger said: "I can see no reason to enter into discussions."  Meanwhile, ECB governing council member Christian Noyer said that Greece's debt cannot be restructured. "Greek debt held by the Eurosystem is debt that cannot by its very nature be restructured because that would be monetary financing of a state," he said...The French advisor went on to say that Merkel had gone out on a limb to reach a compromise with Greece over a credit deal. 

"Merkel was very open to negotiations with Greece, showing patience and even a sort of maternal protection regarding Alexis Tspras," he said. France's Socialist government still hopes to avoid Greece leaving the euro, but France's opposition conservatives are now calling for Greece's orderly exit from the eurozone.  Alain Juppé from Nicolas Sarkozy's centre-right Republicans party, said: "Greece is no longer capable of sticking to the disciplines of the eurozone."

"We must help it to organise its exit without any drama."...Angela Merkel displayed "maternal protection" towards Greece's Leftist prime minsiter Alexis Tsipras who betrayed the trust of the German Chancellor and François Hollande - despite France's more conciliatory line with Athens, according to a French presidential aide. The comment comes as the French and German leaders are to meet in Paris at 6pm local time (5pm BST) to discuss the Greek crisis, followed by a working dinner at 7.30pm at the Elysée Palace.  The Hollande advisor's comment to AFP suggests France is hardening its line as facilitator vis a vis Greece and aligning itself more with Germany in a bid to show a united Franco-German front.  The aide admitted Hollande got his fingers burned after seeking a compromise with Greek PM Tsipras, saying: "It will be difficult with Tsipras. There's a real problem of trust between him and us and us and him."    Brussels to Greece: we're going to make your life much harder That was quite the press briefing from Commission vice-president Dombrovskis. In short, Brussels will not be giving the Greek government anywhere near an easier ride after last night.

Some points:

• "The place of Greece is and remains in Europe", but when pressed, Mr Dombrovskis did not repeat that Greece's place remained in the single currency

• Brussels questions the legality of the referendum and the nature of the question: it is "neither legally nor factually correct"

• The Commission will not carry out any talks with Athens before they get a mandate from the eurozone's finance ministers who are meeting tomorrow

• Greece's vague promise of debt relief as agreed back in 2012 is now no longer on the table after the second bail-out expired last week

• The No vote has made life much more "difficult" for the Greek government, but the ball is in their court to now come up with some credible reforms

No one believed Porter Stansberry seven years ago.  As head of one of America’s largest independent financial research firms, Mr. Stansberry’s work back in 2008 led him to a bold, but worrisome, conclusion:  That the world’s largest mortgage bankers–Fannie Mae and Freddie Mac, which at the time were responsible for nearly 50% of all the mortgages in America–would soon go bankrupt.

In fact, in June of 2008, while their stock prices were still trading at well over $20 per share, Stansberry published a report to his customers titled: “Fannie Mae and Freddie Mac Are Going to Zero.”Inside this report, Stansberry explained:  “For those of you who don’t work in the financial industry, it might be hard for you to immediately grasp what’s so dangerous about the extreme amount of leverage employed by Fannie Mae and Freddie Mac. Let me explain exactly what Fannie and Freddie do and why they’re in so much jeopardy…” We all know what happened next.

Both agencies went bust—and if not for a bailout from the Federal Government, both would have declared bankruptcy.  Barron’s—America’s second biggest financial newspaper—even wrote a story about Mr. Stansberry’s accurate prediction short, and called it “remarkably prescient.”

Over the years, Mr. Stansberry has made a name for himself by accurately predicting the biggest and most important collapses in America.  A few of the others he’s accurately identified well in advance include: General Motors, General Growth Property (America’s biggest mall owner), D.R. Horton (a homebuilder), and Gannett newspapers, to name just a few.  Stansberry also predicted the recent collapse of oil and natural gas prices as early as 2010, when he wrote a report titled: “Peak Oil is a Flat Lie.”  Well, now Mr. Stansberry has issued another fascinating warning, about a new and looming bankruptcy.

Gold Rush ??? -A few years ago annual production was 13,000,0000 ozs,it is now 10,000,000 ozs worldwide,although figures for Russia and China are vague and possibly unreliable.We do know,however,that they do not export in any volume that which they do mine.  I have a friend ,a board member ,of a company ,that produces 1,000,000 ozs per annum.it s no secret that they have enough ore above ground for about two years production,they are ,at the moment,not mining.  Now,onto consumption,prefaced by the admission that I reside in Thailand,and I am speaking as I see the situation here and indeed the surrounding countries of S.E.Asia.  The general population buy gold to keep for weddings and the rainy day syndrome.They do not buy as an investment or for trading,the spread is too great.  The Chinese will,if the coming year is thought to be unfavourable.  India,the largest consumer, placed tax on imports a couple of years ago of  (I believe) 5%.  My question to my self at the time was answered by an Indian who was trying to come to an agreement with the company mentioned above,to no avail of course,when he reminded me of our conversation of sometime before,years in fact,when he predicted that middle class Hindu brides,say five or ten million every year,would swallow world production.  The presumption I now have confirmed to myself is that most markets are manipulated,you and I will be allowed to gamble in shares bonds and propery,because they are our decisions and will be our fault.The underpinning we used to enjoy fifteen years ago ,is no more.Good luck and God bless you all ... $1000 dollars of gold stuffed under the mattress a hundred years ago would be more valuable today than $1000 in cash stuffed under the same mattress, so people saying pieces of paper issued by a central bank are a better bet than gold are clearly talking nonsense, how are those Hapsburg thalers, Reich marks or Czarist rubles doing these days?  But, and it is a huge but, gold only retains its value in a civilized society, it is spectacularly useless when society breaks down a fact about which many gold buyers seem to be completely unaware. How the heck do you think gold coins will save your neck when the Morlocks are coming over the garden fence?  The mere fact of owning gold will mark you out for immediate attack. The first time you go to the market to buy your bag of rice with a gold sovereign is the moment your fate is sealed.  Historically Jews and other persecuted groups kept their wealth in gold as they figured it was their passport when the crisis came, all it meant was that the bad guys knew to strip them naked and steal their clothes and luggage after chasing them out while the peasants ransacked their homes looking for the secret stash.  Think of those caches of gold dug up by archeologists, which we are told were hidden to keep it safe from the Vikings and ask yourself how much use all that gold was to its original owner. 

Searching for support and "handouts" (from the US) as usual ...

German Chancellor (Merkel) arrives in Washington late  this sunday for upcoming  meetings with President Obama that start Monday..."We think it's wise to have an (...) accord tied to achievements and bench marks,"  = this is a funny statement though.  Anyway,  here's what they will talk about ( this is the "public agenda" - background talks about further economic support from the FED not made public by neither of the participants - Germany needs help for sure):

 

UKRAINE

"One of the most pressing issues is the crisis in Ukraine," said Peter Wittig, Germany's ambassador to Washington. "All of us are concerned this is a spiraling military conflict. We want to explore the diplomatic options."  Merkel's visit comes as Obama considers providing modern weapons to Ukraine, which has been losing territory in the country's eastern regions to pro-Russian separatists armed with tanks and personnel carriers sporting Russia's most advanced armor.

Ukrainian President Petro Poroshenko on Saturday asked Western leaders at the Munich Security Conference to push for a quick cease-fire and defensive weapons capable of countering the separatists' armored assaults... Merkel, French President Francois Hollande and Russian President Vladimir Putin agreed Friday during a meeting in Moscow to draft a peace plan for Ukraine based on ideas proposed by Putin and Poroshenko, but previous agreements have fallen apart even as the conflict has resulted in more than 5,300 dead in Ukraine.  Merkel has opposed sending weapons to Ukraine. On Saturday, she said she "cannot imagine any situation in which improved equipment for the Ukrainian army leads to President Putin being so impressed that he believes he will lose militarily," according to the Associated Press.  Wittig, who briefed reporters in Washington in advance of Merkel's visit, said that if the West delivered weapons to Ukraine, "Moscow would probably reciprocate" by providing separatists with more weapons.  "How far are we willing to escalate that military spiral? I'm not sure that we are," Wittig said.

TRADE

Finally, the two leaders will discuss a thorny trade pact, the Transatlantic Trade and Investment Partnership (TTIP), which would unite the economies of the USA and the 28-nations of the European Union. The deal would eliminate most trade barriers for many products and financial services.

Backers say it could produce free-market prosperity, but the negotiations have also been controversial because the pact would increase competition. Greece's new leftist ruling party, Syriza, has said it opposes the plan.

THE ISLAMIC "STATE"

Obama and Merkel will also discuss a training center Germany is setting up in Erbil, in Kurdish-controlled Iraq, to train and provide arms to Kurdish Peshmerga forces fighting against the Islamic State, which has seized territory in Iraq and Syria. Merkel will also discuss German interest in pursuing other tracks of destabilizing the militant group, including counter-financing and supporting messages that de-legitimize the group's claims that its actions, including the murder by fire last month of a captured Jordanian pilot, are backed by Muslim religious ideals.
Source - USA Today

....and a lot of BS - since the "FED" pumped trillions of dollars in the Bundesbank in the last 3 years

Germany has balanced its budget for the first time in more than 40 years, and pressed eurozone partners to follow its austere example rather than try to stimulate their stagnant economies with borrowing or central bank money-printing.   Berlin had aimed to achieve the so-called "schwarze Null" (zero deficit) this year, but strong tax revenues and lower debt service costs due to rock-bottom interest rates helped it meet the goal a year early in 2014, the finance ministry said.   It is the first time Germany has balanced its budget since 1969 .  Chancellor Angela Merkel's government has rebuffed calls from EU partners, led by France and Italy, and international organizations such as the IMF and the OECD to spend some of the fiscal windfall on growth-promoting public investment.   Germany's announcement came nine days before the European Central Bank (ECB) may decide to launch large-scale purchases of eurozone government bonds in an effort to boost growth and avert deflation in the 19-nation currency area. The European Commission set out detailed rules on Tuesday for a planned €315bn investment programme over the next three years, involving no new public money in deference to German objections.  Public investment and structural reforms could win limited leeway for countries breaking EU budget rules, it said. That reduces the likelihood of tough penalties on France or Italy, the eurozone's second and third largest economies, when their fiscal plans are reviewed again in March.   Countries that put capital into a proposed European Fund for Strategic Investment would not be penalized if it tips them over the EU's deficit limit of 3pc of gross domestic product. However, those that already have an deficit in excess of the ceiling would win no indulgence.  The mood of self-congratulation in Berlin over the balanced budget made any easing of fiscal policy seem unlikely, even though the German economy is expected to slow this year. 

Far from using the leeway to invest more in creaking public infrastructure or cut taxes to stimulate weak domestic demand, politicians in Ms Merkel's conservative CDU party said the government should now focus on paying down the country's debt.

Quantitive Easing is just distribution of money from the poor to the rich !

2015 will show the complete collapse of the Western world we have known since 1945. It will be a gigantic hurricane, which will blow and rock the whole planet, but the breach points are to be found in the “Western Port”, which hasn’t been a port for a long time but, as will be clearly shown in 2015, has been in the eye of the storm in fact, as we have repeatedly said since 2006. Whilst some boats will try to head offshore,  the Ukrainian crisis has had the effect of bringing some of them back  to port and firmly re-mooring them there. Unfortunately, it’s the port itself which is rocking the boats and it’s those with the strongest  moorings which will break up first. Of course, we are thinking of Europe first and foremost, but more so Israel, the financial markets and world governance.....Come on guys.. Look the similarity of the so called Wirtschaftswunder in Germany after the WWII and the current hate to the €uro currency in the Anglosphere...."Wirtschaftswunder (German for "economic miracle") describes the rapid reconstruction and development of the economies of West Germany and Austria after World War II (adopting an Ordoliberalism based social market economy). The expression referring to this phenomenon was first used by The Times in 1959.[1]  Beginning with the replacement of the Reichsmark with the Deutsche Mark as legal tender (the Schilling was similarly established in Austria), a lasting period of low inflation and rapid industrial growth was overseen by the government led by German Chancellor Konrad Adenauer and his Minister of Economics, Ludwig Erhard, who went down in history as the "father of the German economic miracle." In Austria, efficient labor practices led to a similar period of economic growth."... Bear in mind the EU is anti democratic.  Its powers are centralized and in the hands of the few.  Examples: Merkel stage managed Juncker becoming  chief commissioner and he, in turn, appointed the others.  The central bank dictates fiscal policy.  The EU even wants a centrist defence policy.  In truth the euro cannot survive long term because it defies  bedrock economics. The interactive, social, daily  value of any currency finds its own level.  Greece will be better off outside the EU in the medium  and longer term.  With a naturally evolving currency.....And now, the big lie - :
There are concerns….once deflation actually takes hold there is no stopping it….until all debt is destroyed….this would be a ghastly ghastly human catastrophe…social welfare states would collapse plunging millions upon millions into untold misery…it might already be too late to stop deflation…there is no evidence that quantative easing actually always solves the structural problem of too much debt - rather it might just delay the great reckoning of too much debt…meaning the destruction of debt by default or hypo inflation...   In brief: The banks loaded everyone up with so much debt that it can't be repaid even at zero rates. The owners of that debt (the rich) won't take a haircut on their "investment". So they need to sell the debt to the public indirectly, via the central bank. Meanwhile if everyday prices show a hint of dropping and making people's lives easier (deflation!), even more money must be given to the banks and the wealthy. And if at some point wages show a hint of rising and making people's lives easier (inflation!), interest rates will rise. Nice system isn't it? I wonder who profits most from this arrangement. It should be simple enough to work out: look around and see who has all the money. It's not us.

Greece was plunged into a renewed political crisis  after parliament failed to elect a head of state, setting the stage for snap polls tipped to bring radical leftists to power. Athens’s 300-seat house voted by 168-132 in favor of Stavros Dimas, a former European commissioner and the sole candidate for the post, becoming president, but he had been required to win 180 ballots.

“The number of 168 votes is a clear parliamentary majority but as the constitution foresees it does not allow my election,” he said. “What is important, now, is the interests of the country and the Greek people … what unites us is Greece.”  Under Greek law the parliament now has to be dissolved within 10 days and elections called within 30. The prime minister, Antonis Samaras, whose conservative-dominated two-party alliance has been in office since June 2012, said he would seek elections as soon as possible. “Tomorrow I will go to the president of the republic to request snap polls as early as possible on 25 January,” he said. “It is the hour of democracy, which means truth and responsibility, not populism.”  Five years into Greece’s worst economic crisis in decades, the stridently anti-austerity Syriza party is leading polls and likely to win. The leftists have declared that renegotiation of the accords Athens has signed with the EU, ECB and IMF – the bodies that have kept it afloat to the tune of €240bn – will be among its top priorities. It will also seek to write off the country’s monumental €320bn debt – ambitions that have revived fears of Greece colliding with creditors and being ejected from the eurozone.   Following the vote, Syriza’s leader, Alexis Tsipras, told reporters the country had experienced “a historic day”.

“In a few days the Samaras government, which pillaged the country, will belong to the past, as will the memoranda of austerity,” he said of the bailout accords. “The future has already begun. You should be optimistic and happy.”  The roll-call vote took place in a somber atmosphere, eclipsed by the tragedy on board a ferry in the Adriatic where rescue efforts were at that point continuing almost 24 hours after the vessel caught fire.  Saying it is a crisis depends very much from where the individual is sitting. For the pro-EU and the bankers it might well be a crisis as it threatens their corrupt game, but for ordinary Greeks and eurosceptics this is a good day.

For 5 years Greece has been plunged into crisis, GDP down 27% from the 2008 peak, average household income down 40%, debt to GDP over 170%, unemployment near 30%, youth unemployment over 50%, Golden Dawn Nazis on the march, suicide rate up...........and so it goes on. If that isn't a crisis in the last 5 years I don't what is. If Syriza wins then the real hard work starts, they are going to renegotiate the MOU with the Troika, and if no agreement can be reached will leave the euro. That will cause even more pain in the short run, but ultimately it is the only salvation for Greece.   If there is contagion, and a fair chance there will be then the blight of the euro can be consigned to the dustbin of history where it belongs, along with the EU. This could be the re-ignition of the eurocrisis which has been dormant for the last year or so. ,, That sucking noise you can faintly hear? that's Euros, rushing out of Greek banks by the truckload. If you had EU denominated savings, you'd move them too. It may not be a high probability, but one outcome is a Grexit and anyone with EU savings will have them swapped for new currency at a rate they didn't like, which would probably get a lot worse rather quickly. Anyone with EU denominated debts might quite like such a settlement (unless it was you who was owed the money).   After a ghastly reset, the country would find it hard if not impossible to borrow, and imported goods (in EU) would be unaffordable expensive.
Inequality would probably get worse, as those with assets will long ago have hedged by parking some of what they own outside of Greece and they'll be rich in local currency.
Whatever happens, it will be bad for those at the lower end, as always it is. I feel very sorry for them. I have no idea what would be the best as well as realistic to happen.

Demonstrators gathered in Brussels to rally againist painful austerity measures and the upcoming TTIP trade deal. Protestors managed to shut down one of the European capital's busiest districts. Tractors rolled into central Brussels Friday as more than a thousand people protested European Union economic policy and a planned free trade deal with the United States. The demonstrations brought together farmers, trade unionists and environmentalists, who burned bales of hay and an effigy of German Chancellor Angela Merkel, long considered the driving force behind Europe's policy of reducing social programs in order to curb government debt. The protest was meant to coincide with the final day of the EU year-end summit, but the talks between European leaders wrapped up a day early. The police cordoned off the whole of Brussels' EU quarter, causing early morning chaos in one of the city's busiest districts.

Turning people in merchandise - "Merry Christmas and Happy Austerity," read one banner the protestors hung outside the European Council building. The D19-20 Alliance, which organized the demonstration, represents not only Belgian organizations but French, Dutch, and German ones as well. People came from all four countries to voice their outrage at "policies that do not work and keep accentuating inequalities," one of the organizers told German news service dpa.
The D19-20 Alliance denounces austerity as a means by which the government makes workers pay for the financial crisis and allows for a roll-back of important social programs forged over generations, like free medical care. The Alliance is worried that the upcoming Transatlantic Trade and Investment Partnership (TTIP), a free trade agreement between the EU and the US, will increase these inequalities and give American businesses too much power over European governments to the detriment of their citizens. Rudy Janssens, a senior official with Belgian socialist union CGSP, said the TTIP will turn people into "merchandise” and medical patients into customers.
At the summit, EU leaders reaffirmed their commitment to signing the TTIP by the end of 2015, ushering in the largest free trade agreement in the world.
es/tj (AFP, dpa)

In an ideal world Europe should do one of two things. Either move toward full political union and effectively ditch the nation state, with a main central EU wide government based in Brussels, major pan european parties that seek a mandate there and from which the ELECTED leaders of the EU are drawn. Just writing it down shows how impossible that is going to be.  Alternatively, Ditch the EU and retain the nation state and national parliaments and abolish the euro. This is enormously difficult and would cause immense short term damage and disruption but has a good chance in the middle term of reaching a situation with autonomous freely trading economies and currencies and one could rely on market mechanisms to restabilise the EU economy. EU states could continue to function as a political semi- entity (shared econ development, shared foreign policy, shared defense) if they wished with the commission coordinating this effort. Hopefully eventually the EU could get back to the dynamic entity that it was prior to the euro.   This view, it seems to me is only somewhat further along the road that the Cameroons want to progress. But the UK will be a be bystander because the tories have been such willful and inconstant EU players. And I don't know why we bother to send anyone from UK.   The reality is that we are going to get some awful Kludge which won't address the underlying issues and will try further to ride roughshod over democracy and inflict yet more austerity onto the unwilling , a road which will lead sooner or later to EU breakup...   It’s funny how history repeats itself. The inconclusive general election in 2010 took place when the economy appeared to be on the mend and against the backdrop of a crisis in the eurozone prompted by Greece. As things stand, we could be in for a repeat performance in May 2015.  Be in no doubt, what’s happening in Europe matters to Britain. The eurozone is perhaps one crisis and one deep recession away from splintering. The more TV pictures of rioting on the streets of Athens or general strikes in Italy between now and the election, the better support for Nigel Farage’s UK Independence party will hold up.  Stronger support for Ukip will encourage the Conservatives to adopt a more Eurosceptic approach, hardening their stance on the concessions required for them to continue supporting Britain’s membership of the EU. Meanwhile, a permanently weak eurozone economy will push Britain’s trade balance into the red. The economic debate in the current parliament has been about sorting out the budget deficit; the debate in the next parliament will also be about sorting out the current account deficit.  Let’s start with Greece, which was where the eurozone crisis began all those years ago. The French statesman Talleyrand once said of the Bourbons that they had learned nothing and forgotten nothing. The same applies to the bunch of incompetents in Brussels, Berlin and Frankfurt responsible for pushing Greece towards economic and political meltdown.

European stocks tumbled after Mario Draghi, head of the eurozone's central bank, failed to give a concrete sign that it would undertake sovereign quantitative easing following a highly-anticipated policy meeting.  Spain’s IBEX index fell as much as 1.5pc, the FTSE MIB dropped as much as 1.6pc and both Germany’s DAX and London’s FTSE 100 slid 0.4pc after Mr Draghi said the European Central Bank (ECB) would reassess the impact of existing economic stimulus measures “early next year” .  The euro also climbed on signs that Mr Draghi was in no hurry to inject further stimulus. It climbed as high as $1.24, having fleetingly touched a two-year low as the ECB President began to speak.  He said: “Should it become necessary to further address risks of too prolonged a period of low inflation, the Governing Council remains unanimous in its commitment to using additional unconventional instruments within its mandate.”   At the same time, the ECB slashed its forecasts for Eurozone growth. The economy is now expected to grow by 0.8 pc this year, 1pc next year and 1.5pc in 2016.   As expected, the bank did not cut rates, with the main refinancing rate staying at an all-time low of 0.05pc and the deposit rate at -0.2pc. ... In order to drag the Euro Zone out of the economic mire more than 5 billion Euros of QE is required. This is never, never, never going to happen! The most likely outcome for the Euro Zone is a prolonged period of disinflation\deflation. We are going to import Euro Zone deflation, it is already here, visit your local Lidl supermarket and check out the prices.... The press conference ended with Draghi slapping down the idea that a sovereign QE program  would be illegal.  "Not to pursue our mandate would be illegal, he replies."  Hi Ho Hi Ho it's off to court we go!  Further his comments that QE did not even need a majority vote will infuriate AFD and perhaps many more in Germany.  Can't wait for the German court to rule on this after the ECJ return their answer to the German court's question.  Maybe Draghi assumes that QE is ultra vires and is just 'talking the talk' to calm things down until the legal reality come known. After all, his dubious but famous 'do what ever it takes' comment, also awaits the same determination, but no one can deny the fact that his 'talk' saved the EU (or the €) at that time.... Mario has slashed growth predictions to almost to no growth - 0.8% in 2015. The revised down numbers for 2016, 2017 barely matter.   I do not think Mario has any effective measures he can undertake. The till says 'NO SALE'.  TLTRO uptake will be risible in a few days time and in those countries where it is just a giggle, the carry trade will be used to Botox bank balance sheets and not to lend to the private sector, so no consumer demand incentive there.   ABS - is he sure there are any, or enough assets to act as collateral for the balance sheet the ECB has got to have to become a lender of last resort in a non-growth €Z.   Sovereign bonds are almost a joke, especially as, if wrong will accept correction, he has to buy in some form of national proportionality. Germany first, France second, Italy third, Spain (perhaps not too bad) fourth.  More currency. Well he'd better pick the right nations to do it to unless he wants intra-euro capital flows in the shoots of spring.   Mario seems to have no means of exciting any consumer demand left so that export items can be bought or supply chain imports purchased to unblock this incestuous, nigh protectionist, 'single market' trading circle that all 18 highly divergent economies are monolithically, irrespectively and overly locked into because of the misshapen bairn hatched out of Brusstraslux.  I suspect there is an acceptance of a long period of deflation and non-FDI, not that the imperial court in Brusstraslux could care and the only measures we will see are the arraignment of taxpayers savings, pensions and a whole plague of new taxes. 'Cypress' will be the new funding source. Hopefully the last gasp but it will be a very long one.

According to many analysts, the future of the eurozone was secured after a now famous speech by ECB chief Mario Draghi, in July 2012, in which he promised to do “whatever it takes” to save the euro.  But according to leaked transcripts - obtained by the FT - of interviews for a book by former US treasury secretary Timothy Geithner, the ECB chief’s comments were anything but planned.

According to Geithner, the remarks were “off-the-cuff” and “totally impromptu”. “I went to see Draghi and (...) at that point, he had no plan. He had made this sort of naked statement of this stuff. But they stumbled into it”, a leaked transcript of the interview says.  Improvisation as the origin to one of the most important comments on the eurozone fits with other descriptions of the ECB president.  Simeon Djankov, Bulgarian finance minister from 2009 to 2013, describes the different personalities of Draghi and his predecessor, Jean-Claude Trichet.

In his book “Inside the Euro Crisis”, he writes about the different personalities of successive ECB presidents Jean-Claude Trichet and Draghi.  During meetings with the EU finance ministers, Trichet “would read prepared statements, and after that he would fade into the role of passive observer,” Djankov wrote in his book “Inside the euro crisis”.  Draghi, on the other hand, had a “more instinctive approach” and “scribbled his talking points on bits of paper a few minutes before the meeting began, tossed out comments throughout the discussions, and stayed until the end”...

Eurozone inflation rose to 0.4pc in the year to October, up from 0.3pc in the preceding month. At that level, price growth remained stuck well below the ECB's medium-term target of close to 2pc.

“It is essential to bring back inflation to target and without delay”, Mario Draghi, president of the ECB, said in a speech in Frankfurt on Friday.

The central bank official made reference to the quantitative easing schemes launched by the Federal Reserve and the Bank of Japan, noting that they had reduced the strength of the country's respective currencies.  Traders sold the euro on Mr Draghi's dovish comments, as the currency fell by more than three-quarters of a percentage point to less than 1.25 against the dollar. Mr Draghi stressed that while there had been improvements in the financial sphere, these had “not transferred fully into the economic sphere”, where the situation “remains difficult”.   The currency bloc has an eye-wateringly high unemployment rate of 11.5pc, while economic growth has ground to a near-halt .   The eurozone managed to dodge a third technical recession since the financial crisis, but it now appears that the euro area economy is unlikely to pick up speed by the end of the year.  The ECB has made a number of interest rate cuts across the year in an attempt to boost the economy, consequently bringing one of its three main rates - the deposit facility rate - into negative territory.   The rate is currently maintained at -0.2pc, meaning that banks that park their money with the ECB overnight have to pay the central bank for the privilege.

 

Cold war, this is the new mantra, it is on every lips. It is trendy. Gents you must be scared, they (the West) have run out of idea on how to demonize Russia as it is not working so well anymore, so let's go back to Cold war fears and wake up some old demons.  And with the Republicans back in power in the US, it might as well end up in a hot war....Western countries are at the gates of a new cold war with Russia, sparked by the Ukraine crisis and a continuing failure to grasp the depth and seriousness of Vladimir Putin’s grievances with the US and EU, the Finnish president, Sauli Niinistö, has warned.  Speaking to the Guardian at his official residence before Thursday’s conference in Helsinki attended by the UK prime minister, David Cameron, and Nordic and Baltic state leaders, Niinistö said Finland had a long tradition of trying to maintain friendly relations with Russia. But it would not be pushed around. ... “The Finnish way of dealing with Russia, whatever the situation, is that we will be very decisive to show what we don’t like, where the red line is. And that is what we are prepared to do,” Niinistö said, referring to recent violations of Finnish airspace by Russian military aircraft.  “We put the Hornets [US-made Finnish air force F-18 fighter aircraft] up there and the Hornets were flying alongside the Russian planes … The Russians turned back. If they had not, what would we have done? I would not speculate.”... "Finland, formerly a grand duchy of the Russian empire, declared its independence in 1917 after the Russian revolution. It survived two separate conflicts with the Soviet Union during the second world war. During the cold war Finland followed a policy of “active neutrality” to keep Moscow at bay. The two countries share an 830-mile (1,300km) land border."  No mention of effectively being allied with Nazi Germany.  Although we all know that the Nazis are being rehabilitated as they become re-useful to Europe and its latest Drang nach Osten....Putin is what he is, and Russia is what it is. Unfortunately the EU is what it is as well, and the EU largely caused this by meddling in the Ukraine, forcing it to make a choice when it is a country divided by a national and ethnic faultline. The part in contention was actually part of Russia until about 60 years ago and the population there naturally feel an affinity with Russia because they speak and are ethnically, Russian.  Whether the EU wants a Cold War is a moot point given the economic ties and the danger of further conflict, but lest we forget, this is an organisation comprised of countries that regard defence spending as an overhead and their armed forces as a ceremonial guard for foriegn dignitaries, and flag wavers for third world disaster relief. If there was a new Cold War we would be relying on the hated Americans for military muscle, and where was the EU when Bush wanted to put early warning radar in Poland