Lagarde was a Minister in the French UMP party. A  coincidence that she is in favor of maintaining financial UMP - in other words funny money. Tapering or whatever euphemism one uses for reducing the amount of money printing is going to be painful as markets are forced to realize the price of debt. Exit strategies are mathematically impossible as we all  know the Central Banks could only withdraw a fraction of the funny money they created.
The UK needs a new bonanza on the scale of North Sea oil to allow any unwinding of QE. Without it there would be a severe depression.
Our fiat currencies have been hijacked by a financial community that operates in  a parallel world to the real economy. There is no way out of this mess unless the masses are driven into poverty and unrest or the global financial system collapses. 

Laggard and Blancmange should both be long gone, having perhaps irreparably damaged a global institution called the IMF by trying to turn it into a French version of a € lifeboat

"The day will come when this period of exceptionally loose monetary policy... must end," she said in a speech to a global gathering of central bankers hosted by the US Federal Reserve in Jackson Hole, Wyoming, on Friday.

"We need to plan for that day, especially since we do not know exactly when it comes," said Ms Lagarde, the managing director of the International Monetary Fund.

"Just as with entry, exit will take us into uncharted territory."

Speaking as the Fed's plans for slowing its $85bn-a-month bond-buying program have shaken emerging economy markets, Ms Lagarde said such "unconventional monetary policy" (UMP) approaches remained important.

"Let me say it up front: I do not suggest a rush to exit. UMP is still needed in all places it is being used, albeit longer for some than for others."

She said specifically that both Europe and Japan still have much to gain from such programmes, which mostly aim to enhance growth by pressing interest rates lower.

But she said the IMF and policy makers should be thinking about the ramifications of reeling in easy-money programmes.

"That includes the implications for global economic and financial stability: the whole system, not just one part of it."

Greeks and other suffering European nations should learn, using Euro , freely convertible currency will not get them out of trouble. If Euro is allowed to be traded freely like US$ and US$ is allowed to be used in Europe, the suffering nations of Europe will move like a slow Train wreck and get doomed. The reason is as follows.

Better European nations like Germany, Holland, France will make high margin products for export and sell in Euros. With the export earnings which can be converted to US$ freely can import low end products and services from Asian nations.

So the countries like Spain, Greece , Italy can neither compete with Germany and France in high margin products and against Asian nations in low value products and services.

The PIIGS and rest have only two options to get out of slump.

1. Get out of Euro Zone or else

2. Make Euro like Rennambi / Yuan or Indian Rupee no trade , nor convertible freely out side Euro zone. Ban US$ use in Euro zone... 

I would say that banks don't have ANY requirement to do anything socially useful, except in as much as it is what their customers desire and is therefore good business, but the bank itself exists to make a profit for its shareholders.  If people prefer a mutual then there are still some left, but most ex-Building Societies got way out of their depth when they tried to become banks.  What we need though is greater competition amongst retail banks.   Virgin now have old Northern Rock branches but it's not enough.  Tesco and Sainsbury both have banking arms now and I would like to see them offer a full range of services.  I would like to see at least 10 high street banks competing with each other.

'Socially useless' is a poor term, implying that banks are supposed to serve some kind of 'social justice'.  A much better and more accurate term would be 'economically destructive' or 'nationally suicidal'.  Banks are licensed by the nation to HELP the nation's economy function, not to dispense social justice.  They have violated their license by DESTROYING the nation's economy instead of helping it.  They do not need moral suasion.  They need to be closed, confiscated, and all major employees hanged for aggravated treason.

Goldman Sachs doubled its profits in the second quarter as the bank benefited from gains in fixed income, currency and commodity trading revenue. The Wall Street giant set out its latest quarterly earnings Tuesday morning announcing net income of $1.93bn, compared with $962m a year earlier. Net revenue, including net interest income, rose 30% to $8.61bn from $6.6bn last year.

The bank said it had set aside $3.7bn for compensation and benefits – including bonuses – in the second quarter, 27% higher than the second quarter of 2012. Goldman said the increase reflected "a significant increase in net revenues". "The firm's performance was solid especially in the context of mixed economic sentiment during the quarter," said Lloyd Blankfein, chairman and chief executive officer. "Improving economic conditions in the US drove client activity and the strength of our global client franchise allowed us to deliver positive performance across a number of our businesses. While the operating environment has shown noticeable signs of improvement, we continue to put a premium on disciplined risk management, particularly in regard to the firm's strong capital and liquidity levels."  Revenue from fixed income, currency and commodity trading totaled $2.46bn in the second quarter, versus $2.19bn a year earlier. Total equities revenue was $1.85bn, compared with $1.7bn a year earlier and $1.92bn in the first quarter.

Goldman Sachs ranked first worldwide in investment banking in the quarter. Net revenues in investment banking were $1.55bn, 29% higher than the second quarter of 2012 and essentially unchanged compared with the first quarter of 2013. Net revenues in financial advisory were $486m, slightly higher than the second quarter of 2012. Net revenues in the firm's underwriting business were $1.07bn, 45% higher than the second quarter of 2012.

Hungarian Central Bank Gyorgy Matolcsy: IMF office in Budapest not necessary any longer. A long-running dispute between Hungary and the International Monetary Fund escalated on Monday when the head of the country's central bank called on the IMF to close its office in Budapest, saying it was no longer needed. Relations between the government of Hungarian Prime Minister Viktor Orbán and the International Monetary Fund have never been especially good. Now they have hit rock bottom. Orbán's former economy minister and current central bank governor, Gyorgy Matolcsy, wrote a letter to IMF Managing Director Christine Lagarde on Monday calling on the fund to close its representative office in Budapest as it was "not necessary to maintain" it any longer. Hungary owes its economic survival to the IMF. When the country was caught up in the global financial crisis in 2008, the fund and the EU came to the rescue with a €20 billion ($26 billion) loan. At the time, Orbán's predecessor was in office. Ever since Orbán became prime minister in 2010, Hungary has had trouble with international institutions. His government pushed through a new constitution and many laws that curtailed democracy, the powers of the constitutional court, the justice system and press freedoms. The EU responded by launching several proceedings against Hungary for breaching EU treaties. In early July, the European Parliament passed a resolution calling on Hungary to repeal the "anti-democratic changes." Orbán angrily dismissed the demands as "Soviet-style" meddling. Under Orbán, all negotiations with the IMF about fresh aid have failed. On Monday, central bank chief Matolcsy said the country didn't need the IMF's money and that Hungary would repay the 2008 loan in full by the end of this year. He said the government had succeeded in pushing its budget deficit below the EU ceiling of 3 percent of GDP and had reduced government debt. Matolcsy is the architect of Orbán's unorthodox economic policy which is based on imposing heavy special taxes on large companies. He became central bank governor four months ago. The Hungarian economy shrank by 1.7 percent last year. The EU Commission expects it to return to weak growth in 2013. The budget deficit is expected to rise again, back up to 3 percent of GDP.

UK to claw back power from the EU.

EUOBSERVER(source)BRUSSELS - The UK wants to retain 35 EU-wide police and justice laws out of some 130 in its wider efforts to claw back power from the EU.

“We believe the UK should opt out of the measures in question for reasons of principle, policy, and pragmatism,” UK home secretary Theresa May told ministers in London on Tuesday (9 July).

Tory-right wingers want to repatriate all 133 laws, but May said the UK should retain its co-operation with the EU police agency, Europol, and the EU's joint judicial authority, Eurojust.

“We should opt in post-adoption provided that Europol is not given the power to direct national law enforcement agencies to initiate investigations or share data that conflicts with our national security,” she noted.

The European Arrest Warrant will also figure into UK’s provisional opt-in list but with added conditions to better protect British nationals of extradition to other member states in case of minor offences.  May wants to amend the Extradition Act so that people in the UK can only be extradited under the European Arrest Warrant when the requesting state has already made a decision to charge and a decision to try. The UK parliament is set to vote and adopt the measures next week but opposition ministers say they need more time to examine the 159-page document that details the government’s full plans. Others accused the home secretary of double standards over the government’s stated position on EU-related justice issues.

May had previously suggested that the European Arrest Warrant was not in the UK’s interest. Shadow home secretary Yvette Cooper said “the home secretary has been forced to admit the truth, Britain does need the European Arrest Warrant, it does need joint-investigation teams, Europol, the exchange of criminal records, and help to tackle online child abuse.” Other proposed desired opt-in laws include the principle of mutual recognition to financial penalties, confiscation orders, and simplifying the exchange of information and intelligence between law enforcement authorities with member states.

The UK has to accept all 133 measures, made before the Lisbon Treaty was adopted in 2009, or reject them all. If it rejects them all, it can then opt back into individual laws it wants to keep.

The decision must be made by June 2014 or all the EU laws, as of December of the same year, will be subject to oversight by EU judges as well as the European Commission’s enforcement powers.

“Following our discussions in Europe, another vote will be held on the final list of measures that the UK will formally apply to rejoin,” said May. Some senior government officials see the move as part of David Cameron’s push for an in/out referendum on its EU membership.  MPs last week unanimously backed a bill that guarantees the popular vote by the end of the 2017. The opposition Labour party, however, boycotted the vote on the bill.

The commission, for its part, says it respects the UK government's choice to opt out, and welcomes the UK intention to also opt back into certain measures. “The commission will clearly need to take the necessary time to assess the indicative list of proposals for opting back in that the UK has outlined,” said a commission spokesperson in a statement. The commission will formulate an official position after it receives formal notice following the December 2014 deadline.  Official negotiations between the two have yet to start.

China - British deal = "adios" Euro !!!

China and Britain have reached a three-year deal to swap their currencies when needed, the first such agreement between Beijing and a major developed economy and a move that could help boost the Chinese Yuan outside Asia.... In a statement released late Saturday, the Bank of England said Governor Mervyn King and his counterpart at the People's Bank of China, Zhou Xiaochuan, signed an agreement to set up a three-year swap line with a maximum value of 200 billion Yuan ($32.6 billion). It means that Bank of England could draw on the line with the PBOC when there is a sudden shortage of Yuan funds in the U.K. market—and make the Yuan, also known as renminbi, available to banks under its jurisdiction.  China's central bank has increasingly used such bilateral currency-swap deals in its effort to promote the Yuan in global trade and finance. So far, the PBOC has signed nearly two trillion Yuan worth of currency-swap deals with some 20 countries and regions, including Hong Kong, Thailand, Singapore, New Zealand, Argentina and Malaysia. Most of the pacts so far have been with emerging economies in the Asian-Pacific region and don't include major economies such as the U.S., Japan and those in the euro zone. These currency lines, though rarely tapped, could enhance foreign investors' confidence in trading of the Yuan. An expansion of Yuan trading into London could help China advance its goal of turning the Yuan into an international currency, a key part of its broader push to open up its financial system. Currently, Beijing maintains a tight leash on cross-border fund flows, making it difficult for the Yuan to accumulate overseas. Chinese officials in recent months have increased their rhetoric toward making the Yuan a freer currency, hinting that a plan on Yuan convertibility would be proposed later this year and include steps aimed at allowing freer flows of its currency and ways to let Chinese individuals make overseas investments. Some scholars within China expect the Yuan to become basically convertible as early as 2015, though Chinese officials have never given a timeline for how soon that would occur. The timing would depend on progress in China's efforts to overhaul its creaky financial system and open its capital account—efforts that could be slowed if China's economy sputters or its financial system hits turbulence.  U.K. and European bankers as well as the politicians are counting on the Yuan to help cement London's role as the center for global foreign-exchange trading. This comes as cities such as Singapore, Tokyo, Taipei, Luxembourg and Kuala Lumpur are all exploring the possibility of becoming offshore Yuan trading hubs—a status only the Chinese.

....Move on, nothing to see here....or is it ?

At least the French have a convincing politician to whom they can turn.  She also doesn't pull her punches on the unmitigated and undeniable social and cultural disaster that is mass immigration.  All we have in our political class are varying degrees of effete, self serving liars, traitors and multi-cult fetishists.

Mrs Le Pen said her first order of business on setting foot in the Elysee Palace will be to announce a referendum on EU membership, "rendez vous" one year later. "I will negotiate over the points on which there can be no compromise. If the result is inadequate, I will call for withdrawal," she said. It is no longer an implausible prospect. "We cannot be seduced," she said, brimming with confidence after her party secured 46pc of the vote in a by-election earthquake a week ago. Her candidate trounced the ruling Socialists in their own bastion of Villeneuve-sur-Lot.  "The euro ceases to exist the moment that France leaves, and that is our incredible strength. What are they going to do, send in tanks?" she told the Daily Telegraph at the Front National's headquarters, an unmarked building tucked away in the Paris suburb of Nanterre. Her office is small and workaday, almost austere. "Europe is just a great bluff. One side there is the immense power of sovereign peoples, and on the other side are a few technocrats," she said. For the first time, the Front National is running level with the two governing parties of post-War France, Socialists and Gaullistes. All are near 21pc in national polls, though the Front alone has the wind in its sails. Yet it is the detail in the Villeneuve vote that has shocked the political class. The Front scored highest in the most Socialist cantons, a sign that it may be breaking out of its Right-wing enclaves to become the mass movement of the white working class....

Asked if she intends to pull France of the euro immediately, she said: "Yes, because the euro blocks all economic decisions. France is not a country that cannot accept tutelage from Brussels," she said. Officials will be told to draw up plans for the restoration of the franc. Eurozone leaders will face a stark choice: either work with France for a "sortie concertee" or coordinated EMU break-up: or await their fate. Mrs Le Pen fears that other EMU states will resist and let "financial Armaggedon" run its course, but it is a risk that has be taken. Her plan is based on a study by economists from l'École des Hautes Études in Paris led by Professor Jacques Sapir. It concludes that France, Italy, and Spain would all benefit greatly from EMU-exit, restoring lost labour competitiveness at a stroke without years of depression. They say the eurozone's North-South imbalances have already gone beyond the point of no return. Attempts to reverse this by deflation and wage cuts must entail mass unemployment and loss of the industrial core. The current strategy of internal devaluation is self-defeating in any case, since recession causes debt ratios to climb faster. 

No mention of this Euro bombshell in: Der Spiegel, El Pais, BBC
and very little in Le Monde....Move on, nothing to see here.

There is hope, real hope, that the Euro monster will implode.

And before you call me racist, I love Europe, the culture and the people. I am a European....Please don't get me wrong. I deplore the EU and all it claims to stand for (itself)!!

Same crap allover the place ...

Mark Carney, the incoming Bank of England governor, has appointed Charlotte Hogg, a senior executive at Santander and the scion of one of Britain's most blue-blooded political dynasties, to become the Bank's first chief operating officer.

Hogg, who heads Santander's high street operations, will start at the Bank on 1 July – the day that Carney takes over from Sir Mervyn King. The 41-year-old will head all the day-to-day management functions of the Bank – from personnel to property, IT and security – and become the most senior female employee in its 319-year history.

Hogg, who has been at Santander since September 2011, will collect the same £260,000 salary and benefits as the Bank's three deputy governors. It is a significant pay cut from the £2.5m she earned from Santander last year, including buy-out awards from her previous employer, the credit checking agency Experian.

Carney, who is joining the Bank from Canada's central bank where he reorganised the management structure, said he was delighted to have been able to poach Hogg from Santander. "My tenure at the Bank will oversee a significant transition," he said. "Charlotte brings an outstanding track record and breadth of experience that will help to catalyse that change and I look forward to working closely with her to realise the full potential of the new institutional structure of the Bank."

Hogg, who like Carney studied at Oxford and Harvard, started her career at the Bank before moving to McKinsey in Washington. She also worked at Morgan Stanley, before joining Experian as head of its operations in the UK and Ireland.

"I'm delighted to be returning to the Bank of England, where I started my career in 1992," she said on Tuesday. "I am looking forward to working closely with Mark Carney as he takes over the governorship."

Hogg is descended from one of Britain's most high profile political families – with both her mother and father holding life peerages. Her mother is Baroness (Sarah) Hogg, a senior adviser to Sir John Major when he was prime minister. Her father is Viscount Hailsham, the former Tory cabinet minister Douglas Hogg, who stepped down as an MP after claiming £2,200 expenses for cleaning the moat at his 13th-century country estate.

Her paternal grandfather was Lord Hailsham of St Marylebone, a former lord chancellor. His father, her great-grandfather, was also a lord chancellor. Her maternal grandfather was Lord Boyd-Carpenter, a former chief secretary to the Treasury.

"You can have too much of a good thing in one family," Hogg once told her local newspaper.  Paul Tucker, the Bank's deputy governor for financial stability who lost out on the top job to Carney, announced his intention to leave the Bank last week.  Santander UK's chief executive Ana Botín said: "During her two years at Santander Charlotte has reshaped our retail distribution business. Her work has made us a more customer-centred organisation and has put us in a strong position for further development."

Hogg's responsibilities at Santander will be taken over by Martin Bischoff and Miguel Sard. Prior to Hogg, the most senior woman at the Bank was Rachel Lomax, who served as a deputy governor from 2003 to 2008.

Rubbish, it's about pretending that the Euro is still viable as a currency, and that Greece can continue to stay within in.

"Austerity" wasn't a political choice for the Greeks - just a simple statement of reality. When your economy produces almost nothing, when your country has been living on cheap borrowed money for a decade, and when the source of borrowing dries up - you can't just decide to carry on spending money that isn't there: A point that the writer of this article seems incapable of grasping....

Since Greece can not stimulate the economy with more government spending, they must encourage businesses through other means. Here's some possible ideas...

1. Go through their regulatory environment, removing any regulation whose purpose is not obvious and sound. or which favors special interests over the public interest. I have heard, for example, that transporting goods in Greece is a nightmare because of all of the restrictions. That's grit in the wheels of commerce.

2. Go through their labor code as well, asking if they've struck the right balance between worker's and employer's rights. Employers are reluctant to hire someone who's near impossible to fire.

3. Revamp their tax code, perhaps making it more favorable for business, but then make sure it's rigorously enforced.

As a topic of debate, the Greek economy certainly seems to attract more than it's share of people keen to testify to their fervent belief in the heavenly mandate of the rights of property.

And the constant attempts to blame the economic situation there on the likes of taxi drivers, barbers and waiters certainly qualifies as one of the shabbier sophistries dragged into play.

It really needs to be stressed: they get the blame for the tax gap because otherwise the light would be shone on the real tax cheats - professionals and business owners large and small, in comfortable complicity with the Greek state. And that can't be allowed because it would undermine the moral authority of everything that the Greek people are being sacrificed to protect. Taxi drivers, waiters and barbers all come across as essentially plebeian -- so blaming them fits comfortably with the received wisdom that the rightful lot of the little people is externally-imposed discipline and obeisance to their betters. ...Blaming them solves any number of issues of cognitive dissonance - if we can speak of 'cognition' when referring to the beliefs of those whose world-view doesn't stray beyond kneejerk loyalty to the status quo....Over the past few weeks, Athens' top brass have been trying to convince the world that happy days are here again. Prime minister Antonis Samaras now talks of the Greek "success story". The boss of the central bank and the finance minister say Greece has turned a corner. Editorialists in the national press and parts of the international financial press dutifully nod their assent. And those with Greek or European assets to sell clap along: "Forget Grexit – it could be Greecovery instead," ran one particularly bone-headed "research" note I received on Friday....What's at stake here is a much bigger prize than whether an economy worth 2% of Europe's annual GDP really is on the mend. It's about justifying the shock therapy imposed on distressed members of the eurozone.

This was frankly put by Maria Paola Toschi, a market strategist at JP Morgan, in the FT last week. "If Greece can present itself as a recovering economy, having taken the medicine of fiscal austerity and supply-side reform, then the reform agenda of the European Central Bank and International Monetary Fund will be given a further boost."  If the elites of Europe and Washington can claim to have "healed" Greece, then they can shrug off criticisms of eurozone austerity. And they can also defend an economic model that just three years ago looked as if it had crashed into a wall.

Yet the exhibits the boosters are using do not a case make. Athens shares doubled in the past year? Cheap money from central banks and investors desperate for returns can play funny tricks. Wages have fallen? Yes, but the business investment that was meant to follow on from that hasn't materialised. The public finances are back in some kind of order? Taking an axe to the welfare state and public services will do that; still, few think Athens could go a day outside the sovereign version of debtor's jail.

And no one is seriously disputing that the economy remains badly sick; the OECD predicts Greece will face its seventh year of recession in a row in 2014. More than one in four Greeks are out of a job; of young Greeks, nearly two in three. Around 60% of those out of work haven't been employed in more than a year. According to a recent piece by Nick Malkoutzis and Yiannis Mouzakis for Ekathimerini, there are 400,000 families in Greece without a single breadwinner.

Commission published a web-based information guide....

Small and medium sized enterprises (SMEs) will drive the recovery in Europe, but they need improved and easy access to finance. Over the last few years the European Commission has been constantly working to improve their situation.  This commitment is reiterated in a joint European Commission/European Investment Bank (EIB) Group report published today. At a time when the situation remains difficult, the EIB Group's support for SMEs reached €13 billion in 2012. In addition, with a budget of €1.1 billion, Commission-funded guarantees helped to mobilize loans worth more than €13 billion, boosting nearly 220 000 small businesses across Europe. Today´s report covers the results of the current funding schemes as well as the new generation of financial instruments for SMEs. Financial resources for SMEs will be significantly enhanced through the €10 billion increase in the EIB’s capital.  As part of the Commission’s continuing efforts to support SMEs, European Commission Vice President Antonio Tajani, responsible for enterprise and industry policy, today also launched a new single online portal on all EU financial instruments for SMEs as well an information guide to promote SME stock listings, at a meeting of the SME Finance Forum on the eve of an Informal Competitiveness Council on 2 and 3 May in Dublin.  European Commission Vice President Antonio Tajani, Commissioner for Industry and Entrepreneurship, said: "

Access to finance of SMEs remains difficult and is one of the main reasons for the current economic downturn. Therefore we intend to enlarge our loan guarantees to SMEs under the new COSME  programme as of 2014. Each euro dedicated to our guarantees has the power to stimulate - on average – 30 euros in bank loans. This is crucial to help Europe's jobs engine, our small enterprises, to run smoothly again. It is they who create 85% of all new jobs."

The European Commission also launched today a targeted information campaign to promote SME listings and stimulate investors’ interest in SMEs and mid-caps. To this end the Commission published a web-based information guide for SME stock listings. This tool provides advice to small and medium-sized businesses on how to go public.

It will be combined with the creation of an award for the best European stock market listings among small and mid-cap companies.

GERMANY–Deutsche Bank said Monday it will raise €2.8 billion ($3.65 billion) in fresh capital in a dramatic about-face for the bank, which has repeatedly said it won't turn to shareholders for help boosting its capital cushion. The bank, Europe's second-largest by assets, has long faced doubts from investors and analysts about whether it has enough capital to absorb potential future losses and to meet increasingly stringent regulatory requirements. On paper, Deutsche Bank had one of the thinnest capital ratios of large European banks.  The Basel rules don't fully kick in until 2019, but banks across Europe are under pressure from regulators and investors to comply with the rules well before then. Few investors or analysts expected the bank to meet the targets in 2013.  The size of Deutsche Bank's capital hike is relatively modest compared with what some bankers, analysts and investors think it needs. Analysts previously estimated the bank needs up to €10 billion. Deutsche Bank executives have been meeting in recent weeks with senior investment bankers to sound them out about how much capital the bank would need to raise to placate investors, according to people who participated in the meetings. The bankers' response: Deutsche Bank should come up with at least €6 billion and possibly as much as €10 billion to put the capital concerns behind it, these people said. The bank's change-of-heart apparently stemmed from executives' frustration with the lack of reaction among investors to the bank's strategic changes, according to industry officials. The bank's management felt they could raise a token amount to alleviate market concerns without destroying credibility, these people said. "This is a blatant U-turn," said a senior investment banker who was involved in the talks. "It's a real climb-down for them."  The timing of the capital increase could raise questions because earlier this year, with Deutsche Bank's stock trading more than 15% above its current levels, executives insisted they had no plans to raise new capital. If they had proceeded with the share sale at the time, they could have raised more capital by selling a fewer number of shares, a preferable outcome for the bank's existing shareholders. While Deutsche Bank didn't disclose the terms of the share sale, industry officials said the deal's structure would likely involve a small number of big institutional money managers picking up the shares at a small discount to the stock's current trading price. Because the share sale is relatively small, Deutsche Bank doesn't need to go through the process of offering all existing shareholders the right to participate, a potentially costly and complex process that Deutsche executives were eager to avoid....NOW, WE ALL KNOW THAT THE fed PUMPED OVER 25 TRILLION DOLLARS IN THIS BANK IN THE PAST TWO YEARS !!! Show us the money Mrs. Merkel !!!!

We are gradually realising how stupid and falsely mis-led we have become...

We are gradually realising how stupid and falsely mis-led we have become. - Fundamentally, it is energy and a cheap supply of energy that fuels our economy - not the bankers, and the monetarists who now rule over the hegemony of the market. Their 'stake' in the economy, is largely 'unreal', what is 'real' is energy, and particularly oil, and the products it manufactures.

We see this we've all the propaganda about Thatcher. She wasn't the 'Iron Lady' - a personality cult - she was the 'Oil Lady' - her crude policies were made possible through crude oil.

Without a supply of cheap energy, there can be no cheap production of goods, or pump-priming consumption, or financial inflation in the developed world making us 'feel' rich.

The 'first world consumers' / 'third world producers' model of global capitalism is gradually breaking down because the producers are catching up with the consumers - in a race to the bottom - driven by economics (and crippling debt levels) and an increasing lack of cheap energy.

The average man or woman in the west, is having to pay more for their fuel/food bills than ever before. They can't afford to buy the latest goods made in India or China. They could only afford to do so, latterly, through building up debt, which they are now having to pay back, and at the exact same time, the cost of living, i.e. food and energy is going up.

I think that is what is being revealed to us. Economic debt is the tip of the iceberg, with energy distribution being the mass of the ice berg. Consequently, our high living standards cannot be sustained - economically, or more importantly - via high energy consumption.

Economics in many ways is only a proxy measurement for energy consumption. Where there is a high consumption of energy, there are developed economies. Where there is a low consumption of energy, there are developing economies. Modernity is based on oil and energy development - primarily, and economic development - secondarily. We seem to have completely forgotten which way around things go.  We've certainly become consumer junkies in the developed world, but the things sustaining that (cheap, plentiful energy and cheap, plentiful debt) is no longer available to us.

The question is what comes next? What are we as 'consumer junkies' going to demand? A rational and reasonable solution that suits most people doesn't seem possible, as long as people keep buying into what they're currently sold.

We are witnessing the unraveling of the hard truth: The economy is built largely on the reality of finite energy resources, not on the unreality or symbolism of money as a resource.

Thatcher is dead, and her economic philosophy is dying because, as we are seeing - it is wholly false ideology - not based on the core truth of what makes modern life; modern economics; modern politics; and modern society, possible and 'sustainable': oil and energy resources.

Portugal's opposition party has called for a renegotiation of the country's EU/IMF bailout package and labeled the government an "incompetent" one which must be replaced. Socialist leader Antonio Jose Seguro, presenting a largely symbolic no confidence motion, said his party was against the spending cuts the government agreed to. He said (as reported by Reuters): Your government is destroying Portugal and there is only one solution - to replace the incompetent government. But the prime minister Pedro Passos Coelho, whose centre-right coalition has a comfortable majority, said the country had to comply with the programme to guarantee funding, and the no-confidence vote created a climate of political instability. He said a bailout renegotiation would lead to a second bailout.... The weaker than expected jobs data out from the US today could mean analysts are being too optimistic about Friday's non-farm payroll numbers, suggested James Knightley at ING. He said: The employment component [of the ISM non-manufacturing survey] dropped to 53.3 from 57.2. Given today’s ADP payrolls survey also showed a slowdown in private sector hiring to 158,000 from 237,000 in February this perhaps indicates some downside risk to the consensus forecast of non-farm payrolls rising 198,000 on Friday. With ongoing concerns about the potential economic impact from sequestration we suspect that we are going to see a softer period of activity data. As such we doubt that the Federal Reserve’s quantitative easing plans will be scaled back before the third quarter of 2013.

Greek business head calls for rethink on bailout terms - It may count as stating the obvious but the head of Greece's biggest business group reckons the Cypriot crisis could tip his country into an even deeper recession this year. He also called for the troika of international lenders, due in Greece this week, to rethink the bailout programme by promoting growth measures as well as austerity. From Reuters: "Greece is directly affected by the Cyprus crisis and based on some estimates this may chop up to one percentage point off GDP (gross domestic product)," Dimitris Daskalopoulos, head of the Hellenic Federation of Enterprises (SEB), told reporters. "With the success of the Greek bailout programme already hanging by a thread, many signs show the recession is deepening with the prospect of recovery in 2014 fading," Daskalopoulos said. He said the insistence on austerity by the eurozone's core to cure the ills of the debt crisis risked breeding euro scepticism and anti-German sentiment among the suffering countries of the single currency bloc. "The North must give and the South must change, otherwise the historic demons of Europe will find again room to act." He said the protracted economic downturn and fiscal austerity were testing society's tolerance limits and called on the government and its international lenders to retool the applied programme with growth measures. "The bell of reforms must finally ring loudly in Greece," Daskalopoulos said. "We cannot be fighting tooth and nail against firing a few thousand public sector workers when almost one million people have lost their jobs in the private sector."

Eurozone crisis hits development funds - The eurozone crisis is having far-reaching effects, not least on the aid being sent to the developing world. Deep cuts in aid budgets by crisis-stricken euro zone countries have prompted the biggest fall in development assistance to the world’s poorest nations since the mid-1990s. Sharp drops in spending by Spain, Italy, Greece and Portugal resulted in a 4% decline in financial assistance to the developing world in 2012, according to the annual assessment conducted by the Organisation for Economic Cooperation and Development. The OECD, a club for 33 rich nations, said it was concerned by the decline, which it blamed on the austerity programmes forced on many euro zone countries over the past three years. After a 2% drop in 2011, the decline in 2012 was the biggest in 15 years and was the first back-to-back drop in development assistance since 1996-97 - the years immediately before the mass public campaigns in the West for debt relief and increased development assistance.

Over to Italy, where the treasury has cut its growth expectations, just two weeks after the last forecasts. Treasury undersecretary Gianfranco Polillo said the economy is likely to contract by 1.5% and 1.6% this year. Speaking to Radio 24, he said: This year we will see a fall in gross domestic product of 1.3% if things go well, but it will probably be -1.5% or -1.6%. The currency bloc's third largest economy has shrunk for six consecutive quarters, its longest recession in 20 years. Mario Monti's outgoing government slashed this year's forecast to -1.3% last moth from its previous estimate of -0.2%.

The wounded, bleeding elephant in the room in Brussels today is the awful damage that has already been done to Europe's economy.

Local firms in Cyprus saw business dried up as the country's banks remained closed, and customers learned the full scale of the crisis.

The looming capital controls (restrictions on cash withdrawals, bank transfers, etc) will hurt trade, possibly for months. And the destruction of parts of the Cypriot banking sector will take a great, big chunk out of the country's economy.

A well-respected fund manager based in London who blogs/tweets as Pawelmorski says the scale of the economic destruction achieved in the last week is unheard of 'without the use of weapons'.

He wrote yesterday....The combination of laying waste to the financial sector and tearing up the savings of thousands of residents means that Cyprus won’t return to current levels of output for a decade, a funeral pyre which bears comparison only with Greece.   There are four shocks happening at once; the bog-standard austerity shock; the trauma of bank withdrawal controls; the wealth shock; and the structural shock of wiping out the financial sector. The bailout bill is certainly going to get a lot higher too, as a larger amount of debt is piled onto a smaller economy.
The central bank in Cyprus imposed a €100 a day withdrawal limit at cash machines for all local banks on Sunday to avert a run on lenders, as the island's leaders meet its international lenders for last-ditch talks to avert a financial meltdown.

"The euro bloc did not shoot themselves in the foot .. they shot themselves in the head"

For any thinking citizen the writing is now on the wall, not hidden somewhere in Brussels-am-Main. Don't trust the banks with your money, don't trust the government with your private pension (they are being nationalized in several European countries), and don't trust them with your property (a wealth tax cometh this way) and look for them to come after your gold (France now registers all gold purchases and the UK any greater than £5k). I genuinely didn't think we'd hit this point until the end of 2015, but the deck of cards is crumbling faster than anticipated....

Now it has all turned into such a complete farce, due to eurozone and troika arrogance, assuming they could bully the little guy the 64Bn euro question is what confidence can anyone have any longer that the eurozone finance ministers and the IMF know what they are doing? It's their credibility that is on the line now ... and arguably is already shot.

The lessons of Lehman Brothers, Northern Rock, HBOS, and Royal Bank of Scotland were all the same. Once confidence evaporates, a bank is dead. No wonder Cyprus’s deposit tax sent a shiver through the markets.

The message it sent out could not have been clearer. Deposits across the eurozone are now at risk. No one’s money is safe. Italy, which could be first in the firing line, even has precedent. It introduced a deposit levy under a socialist government two decades ago – albeit at just 0.6pc compared with the 6.75pc on “insured” deposits under €100,000 (£85,700) in Cyprus and 9.9pc on “uninsured” ones above the threshold.
Here are my  suggestions for Cyprus... call it Plan C:
1. Default
2. Leave Eurozone
3. For new Currency backed by Gold - Cyprus has 14 tonnes of Gold, 58% of forex reserves.
4. As World's ONLY Gold Backed Currency against a World of fiat paper currency, watch Cyprus' economy BOOOOM overnight.
5. Sit back and enjoy how Greek, Spanish, Portugese, Irish and other Savings Deposit holders flock to Gold backed currency
(as opposed to their fiat paper currency based on their stupid trust in the Euro).
6. Gold rockets in price as World investors/savers flock to Gold/Silver
7. As a result Cyprus BOOOOMS! Its depositors >10x richer than at present.
Unfortunately, though  there is no provision in any treaty for leaving the euro. Rationale being it would be too easy then for a country to leave and make a competitive devaluation. The only clause existing is the one in the Lisbon treaty for leaving the EU. This article 50 doesn't talk of the euro.

Athens negotiates over Greek property taxWith recession worsening, higher taxes are another key issue The highly controversial property tax, introduced in 2011 and slapped on households through electricity bills, has elicited particular opprobrium, so much so that the conservative-dominated coalition promised to slash the EU-IMF mandated measure after assuming power in June 2012.  Hit by successive rounds of pay and pension cuts and a barrage of other duties, more and more Greeks, who have seen their disposable income drop by as much as 50% in the last two years, say even if they wanted to, they can no longer afford to pay the tax.  Growing numbers, who have inherited properties, say they are caught between a rock and a hard place: unable to sell properties in a depressed market but also unable to pay the duties now slapped on them.  The emergency measure raises approximately €3bn a year - vital to revenues. Under immense popular pressure, prime minister Antonis Samaras' fragile coalition has attempted to persuade troika technocrats that it can raise the money if the tax is merged with other property duties.  Mission chiefs and the German Governor of Greece - Horst Reichenbach from the EC, ECB and IMF, however, have not been convinced, citing the innate weaknesses of Greece's infamously leaky tax collection system.  Insiders worry that if the government is seen to lose yet another battle in the tug and pull of negotiations, it could suffer a potentially fatal PR communications defeat. The fiercely anti-bailout political opposition has stepped up criticism of the government saying it is already reneging on its promises.

Source : BBC ...

The European Central Bank (ECB) has kept eurozone interest rates unchanged at 0.75% for the eighth month in a row.

Rates have remained at the same level since the ECB cut rates from 1% in July last year.

The ECB's president, Mario Draghi, said they had discussed a rate cut, but the consensus was to leave them as they were.

Many analysts do not expect the ECB to alter rates from their current record low until next year at the earliest.

The decision matched that of the Bank of England, which on Thursday also decided to keep its interest rate unchanged at 0.5%.

Latest figures for inflation for the 17-nation eurozone showed a fall from 2.2% to 2% in January.

The European Commission has estimated inflation in the eurozone will fall to 1.8% this year. Its target for inflation is "close to, but below 2%". Widespread austerity and weakening economies have left consumers with little free cash to spend, depressing retailers' ability to increase prices. Some analysts thought that the drop could leave the European Central Bank (ECB) room to cut interest rates at the March meeting. Mr Draghi said: "We have discussed the possibility of doing it [cutting rates]. So there was discussion.

"The prevailing consensus was to leave the rates unchanged."

Risks. At a news conference on Thursday afternoon, the president of the ECB, Mario Draghi, said that the eurozone's economy would start to stabilise this year and would pick up in the second half, although downside risks remained.

He said growth could return in 2014, although the forecast range was wide, between 0% and 2% growth.

The range for inflation next year was also wide, with expectations of price rises of between 0.6% and 2%.

Mr Draghi said the need to cut costs would hold back recovery: "Necessary balance sheet adjustments in the public and private sectors will continue to weigh on economic activity.

Later in 2013, economic activity should gradually recover, supported by a strengthening of global demand and our accommodative monetary policy stance."

Bond yields, the implied price governments pay for borrowing, narrowed slightly, with German prices rising and Italian, Spanish and French falling, suggesting markets saw the current policy as helpful to the eurozone as a whole.

Mr Draghi said he did not think Italy's recent inconclusive elections - which rocked markets - were unduly unsettling, as markets "understand that we live in democracies" and that the initial negative reaction was overdone.

He said Italy had already carried out cuts to reduce the deficit and that would "continue on automatic pilot".

He added that a year ago, the turmoil resulting from the ballot would have been worse.

MILAN—Italian police early on Tuesday arrested Finmeccanica SpA FNC.MI -7.31%Chief Executive Giuseppe Orsi as part of an investigation into possible international corruption related to the 2010 sale of helicopters by the Italian aerospace company to India, according to the prosecutor in the investigation. Hours after the arrest, India's Defense Secretary Shashikant Sharma told The Wall Street Journal that the country's government had ordered its federal investigation agency to investigate the helicopter deal. The official gave no further details of the Indian investigation. Mr. Orsi has been under investigation for several months in the case, in which Italian prosecutors are looking into whether the helicopter unit of Finmeccanica paid bribes to secure the €560 million ($750 million) sale of 12 helicopters to the Indian government, according to Finmeccanica and a person close to the investigation. Mr. Orsi was chief executive of AgustaWestland, the helicopter unit, at the time. Eugenio Fusco, the prosecutor on the case, also said that Bruno Spagnolini, current head of AgustaWestland, had been placed under house arrest as part of the same probe. Mr. Spagnolini was chief operating officer of AgustaWestland in 2010. A lawyer for Mr. Orsi, who hasn't been charged in the case, wasn't immediately reachable for comment. Mr. Orsi has in the past denied any wrongdoing. In a statement, Finmeccanica expressed support for Mr. Orsi and said the company's operations would not be affected by the arrest. A spokesman for AgustaWestland had no comment, and a lawyer for Mr. Spagnolini—who hasn't been charged—wasn't reachable for comment. The arrest of Mr. Orsi—who runs a company that is majority-owned by the Italian state—comes at a politically sensitive moment, just two weeks ahead of national elections. Outgoing Prime Minister Mario Monti said the government would deal with management issues created by the arrest. "(This opens up) a problem of governance at Finmeccanica, which we will address," he said in a radio interview on Tuesday morning. Mr. Orsi has said that he would step down from his position if the Italian government, which owns 30.2% of Finmeccanica, asked him to. Finmeccanica's stock fell 8.06% to €4.37—its lowest in two months—after being suspended from trade on the opening of the Milan exchange.