Money by itself has little value : it is a government permit allowing you to make transaction. It's like a building permit. And, even a thousand building permits do not make a single building if nobody wants them. In the desert a hundred dollar bill is useless if there is no water and nobody around to sell it to you.
The rich put their money in banks, buy assets, invest in companies, and get money income from it. But their (eternal) problem with that is that they are rich already. Lucky for them ,these assets and companies give them "control" and now the game has no end. And of course becomes more and more unreal all the time (not even Napoleon Bonaparte, with all his brothers and his marshals managed to control Europe} In the end the rich do no longer control those assets, but only the (tax free) foundation that does it. Such control usually ends up (in the long run) in watered down control and spin off in monetary assets i.e. money again and little control. Only the poor guy, who picks up a dollar bill in the street ,gets full value ,as well as control at full value, until he finishes his beer.

Click links ...very interesting ...

The most remarkable story of the day comes from Ireland. Secret tapes released this morning give the clearest signal yet that senior bankers at Anglo Irish Bank deliberately tricked the Irish government into a rescue deal on 2008.

The recordings, released by the Irish Independent today, show John Bowe and Peter Fitzgerald discussing their request for €7bn of emergency funding to keep Anglo Irish running, once the financial crisis struck. The final bill was €30bn, helping to precipitate Ireland's own bailout. There have long been suspicions that Anglo's management knew the full scale of the crisis and hid it from the Dublin government, who fatefully decided to pick up the bill on the taxpayers' behalf. Our correspondent in Ireland, Henry McDonald, explains: On tape Fitzgerald asks Bowe how did he arrive at the figure of €7bn to which the latter replies: "Just as Drummer [the then Anglo Irish Bank CEO David Drumm now in exile and disgrace in Boston] would say, 'picked it out my arse.'" The conversation also tends to back up the view that Anglo Irish bankers knew that €7bn would never be enough to save the bank but once they had hoodwinked the Dublin government the taxpayer would keep picking up the tab. In their exchange Bowe says: "Yeah, and that number is seven, but the reality is that actually we need more than that. But you know the strategy here is you pull them in, you get them to write a big cheque and they have to keep, they have to have support their money, you know."

Here's Henry's full story: Irish bankers 'hoodwinked' government over bailout, secret recordings show

And you can listen to the recordings on the Irish Independent's site (the third recording, 'strategy', is the real humdinger).

In a statement released this morning, leaders promised that their fiscal and monetary policies would “not target exchange rates.”

“We, the G7 Ministers and Governors, reaffirm our longstanding commitment to market-determined exchange rates and to consult closely in regard to actions in foreign exchange markets,” said the statement.

“We reaffirm that our fiscal and monetary policies have been and will remain oriented towards meeting our respective domestic objectives using domestic instruments, and that we will not target exchange rates.”

Spelling out the fears that have been raised, particularly by Francois Hollande, the French president, the statement added: “We are agreed that excessive volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability. We will continue to consult closely on exchange markets and cooperate as appropriate.”

Fears of so-called “currency wars” were sparked when Japan's new prime minister Shinzo Abe ordered the country's central bank to be more expansionary. Mr Abe is determined to force down the value of the yen in a bid to boost exports and in turn Japan's sluggish economy.

MY POINT OF VIEW : David Cameron is now speaking more like the type of person of Scots ancestry, whom I’ve known throughout my life, in four different countries. I, too, was named after the Old Testament legend. Let us hope this David is able to skilfully negotiate, with his slingshot, an escape from the crushing, networking giant of the Continent, knowing euphorically as the ‘Guy Fawkes Club’ – to put it into context. As every attempt has been made to make the bible look irrelevant in today’s world (just see what Romans Ch1v22-32 says of homosexuality), those directing the course for British governments seemingly more concerned to make it easier for the Anglican church to be gobbled up by the Guy Fawkes Club – which long ago gave up any pretence of following Scripture (apart from the subject of marriage – talk of straining at a gnat...swallowing a camel)! Perhaps David has done a crash course in Comparative Religion, and has noticed how undemocratic it has been, for mostly Romans to have held key positions in government & quasi government organisations since UK membership of the Common Market – if only because no decent, self respecting Protestant could bring his/herself to be involved in the systematic destruction of the English Speaking peoples, to advantage that jealous rabble on the Continent. Which Cardinal was it who said, ‘Secret mines may take the town when open batteries fail,’ – on the very same subject ! At last, David Cameron is speaking like a Prime Minister of the Greatest little Britain of all time! UK only started to prosper, to the benefit of the rest of the world, also, when Henry VIII cut the haemorrhage of resources to Italy, & UK began to stand on her own two feet, trusting only in holy scripture, & herself. Mussolini’s mentoring Hitler was meant to reverse all that, & when it didn’t, citizens steeped in Mussolini’s theory & logic began settling in the nations of the victors after cessation of WW2 hostilities, with Mussolini’s Plan B. Part of that was Franca Arena’s setting up our first ever republican movement in Australia, & Ray Bellisario, family also from Italy, setting up England’s first republican movement since Cromwell, to discredit the leadership which caused Mussolini to lose, while other aspects of his culture were trumpeted as superior both directly & subliminally in influential nations, so that, for instance, cat spew chino & pissa (my spelling) became something considered superior, & with an arrogantly assumed dash of romance attached to it. A sense of inferiority amongst the nationals of some other countries, about their own cultures, only helped feed the appetite for self aggrandisement, of those keen to rebuild a new Roman Empire. To assist in this plan the IRA were entrusted with the removal of those who could have warned Great Britain’s leadership what was really going on: battle experienced heroes like the Queen’s relative, Earl Mountbatten, & Airey Neave, MP. I fear, though, that Cameron’s telling the nation how he would vote in any referendum, will tend to make it a foregone conclusion, as voters seem to follow what is seen as the ‘party line.’ Even the Soviet Union discovered that ‘individualism’ whether as nations or as persons, do far better when left to find their own level, instead of being part of some vast metaphorical farm growing peanuts, with individual humans’ means of self expression being emasculated – as though ‘bigger’ is ‘better !’ The communist experiment failed, so why allow catholic activists promote the lie that the British were better off under the Treaty of Rome? It has been an entirely religion driven exercise, cynically aimed at achieving what Mussolini failed to during WW2.

History explains all....

History explains all....The EU is experiencing its 'Stalingrad' moment....Sheer hubris makes it impossible for the EU to make the right decisions. Draghi's wears his vanity as if it alone is enough to save the EU. His vision is correct in his eyes, and to him that is all that matters, and that imprisons him in a course of action that is clearly failing. He is the only one who can't see it, though his generals nod their approval to maintain their salaries and privileges. Even Greece has deferred the worst effects of their austerity measures, which means that there will be no avoiding mounting civil disorder. If Golden Dawn show some political maturity (which they haven't so far) they'll walk in to power. Samaras is trying to defuse the Golden Dawn threat with some cynical changes to citizenship law but that's only upsetting his coalition partners. His government is doomed to collapse. European governments should focus on spending cuts, not tax rises to get their deficits down, according to the head of the European Central Bank. Mario Draghi said that the ECB's action (via its €1 trillion LTRO bazooka and announcement of the OMT programme) had helped to calm markets, but that it was up to governments to regain credibility.The growing tension between Germany and Greece was on show today as public sector workers stormed a building where officials from the two countries were meeting in the Greek city of Thessaloniki. Police had to form a shield around German Consul Wolfgang Hoelscher-Obermaier as he tried to enter the building. They also pelted him with water bottles and coffee in a protest against austerity measures. The workers chanted: "It's now or never!" and held up mock gravestones and banners proclaiming "Fight until the end!" ...Workers said that they were furious at comments by German envoy Hans-Joachim Fuchtel, who reportedly told journalists on Wednesday that it takes 3,000 Greek public sector workers to do the work of 1,000 of their German counterparts. Mr Fuchtel is Angela Merkel’s special envoy to Greece. Michael Meister, a member of Chancellor Angela Merkel's Christian Democratic Union party, told reporters that he could "live with" giving Greece more time to bring down its debt levels, adding that the EU had "many tools" to enable this to happen. However, he said that a writedown of Greek debt would be unacceptable to Berlin, and that MPs would not rush through a vote on the country's next aid tranche.

I've been wondering about Norway; for many the model to emulate. Many of the numbers here come from Norsk Industris Konjunkturrapport 2012. It's an employers' association, so expect a center-right bias. I'd be delighted if a Norwegian were to comment.

Norway's Sovereign Wealth Fund means the country has no insolvency problems. Unemployment is a low 3%. One out of three jobs is in the public sector. The Norwegian oil industry is expected to show a revenue growth of 15% next year, and is hiring. But Norway's traditional export sectors - industry and mining - will grow only 0 to 2%, and are firing people. And these traditional sectors employ about five times as many people as the oil sector.

There is a clear dichotomy in Norway's industry: on the one hand a booming oil sector which keeps the currency strong and wages high; and on the other hand an export-oriented industry which are suffering from the combined effect of the high kronor and high wages.  Surprisingly enough, given the strong sense of crisis in Europe, Norwegian companies actually increased their exports to the EU in 2011 by 12%. Exports increased to all EU countries except the PIGS countries in the south. Norway is not whining demand is weak. Exports to the UK increased +6.2%. Exports to the US dropped -4.3%. These are data for the whole of 2011. 80% of Norwegian exports go to the EU, 2% to China. Being outside the EU, Norway is free to make its own free-trade agreements with China, but China is not interested. Negotiations broke off when Norway gave Liu Xiaobo the Nobel Prize back in 2010. Norway had its banking crisis, following a period of financial deregulation. Small banks began to fail in 1988. The crisis peaked in 1991, and ended in 1994, six years after it began. Just imagine the Guardian running a "Norwegian Banking Crisis Live Blog" six years on end.
What's my take on Norway?

There are two Norways. The oil industry is booming; the export-oriented industry is suffering. The kronor-euro exchange rate is causing discomfort for Norway's export industry.  When a overvaluation of the Swiss franc threatened Swiss exports the Swiss National Bank intervened, and the Swiss franc has been at exactly 1.20 euro since. Of course, this means a large part of Swiss monetary policy is no longer determined in Bern, Switzerland but rather in Frankfurt, Germany. Nevertheless, pegging the franc to the euro is seen by many Swiss as a pragmatic solution.  Norway's future may be Switzerland's past. We may see the Norwegian kronor pegged to the euro sooner than we think. Yes, such a move would be political suicide in the UK. So what?

Most notably, the Dow Jones Industrial Average jumped 700 points in the last three days of November to give the index an overall gain of 0.8 percent for the month. Much of the market's returns are determined by surprises, not simply by good or bad news. A company can experience its greatest quarter ever and still see its stock price hammered simply because the outstanding news still wasn't as good as the market expected. The same is true of bad news: A stock can soar if its company reports overall poor results that were much better than expected. The market as a whole responds similarly. In this case, we see the IMF action to provide liquidity to banks on a major scale, addressing the liquidity problem threatening the markets. Also, many economic indicators -- such as consumer confidence numbers, employment numbers and retail sales figures from the past weekend -- were all positive surprises. The market reacted accordingly.

Therefore : always keep in mind these two issues. Your plan should realize that surprises will occur and that just because things are bad (or good, for that matter) doesn't mean it will continue that way.

Almost £50bn was wiped off the value of britain's 100 biggest companies on a day of global stock market mayhem triggered by a deepening of the eurozone crisis and fears for the US economy. After a day of massive stock market falls in Europe and the US of a kind not seen since the depths of the last economic downturn, traders said the atmospherewas reminiscent of the banking crisis of October 2008. Wall Street endured one of its worst days since the height of that crisis, with the Dow Jones Industrial Index closing more than 500 points or 4.3% lower at 11,383 in heavy volume, as it resumed a two-week streak interrupted only briefly on Wednesday. It was the biggest single-day loss since 2008. "For many traders this week has felt like the start of the banking crisis in 2008, which would go some way to explaining the panic selling we have seen today," said Will Hedden, sales trader at IG Index. The fall on Wall Street is expected to cause further falls in the FTSE 100 index of leading shares today, after the index fell to its lowest close, 5393.14, since September 2010 yesterday. The futures market was predicting a further 100 point fall. Rumours were swirling around the City that hedge funds were being forced to sell assets such as gold in order to cover deepening losses on other investments. This led to a surprise 1% drop in gold, which in recent weeks had hit record highs of more than £1,000 an ounce as a safe haven bet in the eurozone and US debt crisis. Brent crude fell 5% to $107 a barrel amid signs of slowdown in the west's economies. Anxiety over the debt crisis in the eurozone, and increasingly in Italy, set the tone for nervous trading during the London morning, but the pace of the decline accelerated as Wall Street opened sharply lower. By early afternoon in New York the Dow Jones had declined by 400 points, resuming the two-week losing streak only briefly interrupted on Wednesday. Despite this week's 11th-hour agreement to raise the US debt ceiling, Wall Street is increasingly anxious over the health of the world's biggest economy. A major test comes today with the release of US employment data giving the latest health check of an economy which barely grew in the first half of the year.

Published articles, opinions, usefull informations about Eastern Europe and The European Union

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