The motor for economic growth is the spending power of the lower and middle income groups. 20% of the pensioners money flows back into the government coffer with VAT.

Those selling must pay taxes, also the manufacturer and farmers that make the products. Selling, buying creates demand that in turn creates jobs.  The UK used quantitative easing, (printing money-leaving the incurred debt to be paid for by later generations) to increase the availability of cash .  Manufacturing is not the economic motor of the UK, the banks that have moved on from lending to businesses now make their money from speculation in 'money products' leaving manufactures without loans and cash strapped like never before.  Without is social safety network and pensions the UK would see consumer power decimated, its the poor that actually keep the UK ponzi scheme afloat.  The new Greek government has pledged to repay in full  obligations to the International Monetary Fund and the European  Central Bank. Finance Minister Yanis Varoufakis outlined plans  to swap some debt into new securities and link repayment with  economic growth.   Until now Greece has been paying its debts with a credit card making the debt larger and unsustainable.  The Greeks must return to growth, for the first time since the 2e world war it has a government that could deliver....As the EU's favourite soap - Greekenders - was entering its fifth  season, we wondered if the writers had run out of ideas.  Of course, we still had all our favourite characters - tough, tight-fisted housewife Mrs Merkel, miserable old sod Mr Schäuble, suntanned (crocodile-skinned?) fashionista Ms Lagarde and stylish, suave Italian lothario Mario Draghi.  But with the endless austerity and falling viewing figures, we wondered whether Greekenders was on the way out as Europe's favourite evening entertainment, whether we were heading for what we in the TV business call a "Grexit".  Thankfully the Greekenders writers have responded to public concern about a boring plot with the introduction of two exciting new characters.  There's the flamboyant young second-hand car dealer Alexis Tsipras with his flashing smile, filmstar looks and smooth sales patter.  And there's the new accountant - Yanis Varoufakis. But the new Greekenders accountant is not some boring, besuited nobody. He's a young, shaven-headed,  motorbike-riding smoothie with a Mediterranean charm and a way with the numbers that might even put a bit of fire into the cold, stone-like hearts of grim misery-guts Merkel and crocodile-skinned Ms Lagarde.

(Bloomberg) -- Greek government bonds rose, with three-year yields falling the most in three weeks, after Finance Minister Yanis Varoufakis backed away from a demand for a debt writedown.

Negotiations between euro-area officials and Greece’s newly-elected government remained tense, and gains made on Tuesday that were the biggest since 2012 were pared in the remainder of the week. Greece’s credit rating was cut by Standard & Poor’s after markets closed on Friday and an emergency meeting of euro-area finance chiefs is scheduled for Feb. 11 in Brussels.

“Nobody knows where this is going,” said Peter Schaffrik, London-based head of European rates strategy at Royal Bank of Canada. “We’ve had a lot of news but we haven’t really gone anywhere.” Compared with the end of last week, “the market is slightly less nervous, particularly because the issue of a unilateral default in Greece is off the table.”

Greek three-year note yields fell 115 basis points, or 1.15 percentage points, to 18 percent at the 5 p.m. London close on Friday. The 3.375 percent security due July 2017 climbed 1.835, or 18.35 euros per 1,000-euro ($1,132) face amount, to 73.02. The 10-year rate dropped 1.07 percentage points since Jan. 30 to 10.11 percent.

Greek bonds were whipsawed through the week as Varoufakis and Prime Minister Alexis Tsipras toured Europe to try to cut a new deal on repaying a rescue package agreed to in 2012. Markets surged on Tuesday, following a meeting between the finance minister and bankers at which he outlined plans to swap some debt for new securities, rather than reducing the amount owed.

Syriza swept to power pledging to rebuild Greece on four pillars - restarting the economy, regaining employment, transforming the political system and confronting the humanitarian crisis.

It has pledged to dramatically increase the minimum wage by over £100 a week, which was cut as part of the austerity programme and get 300,000 more people into work.

In a similar way to post-war Germany, Greece also wants Europe to write off most of its £240billion national debt.  The party also wants Germany to repay a loan that the Nazis forced the Bank of Greece to pay during the occupation and pay war reparations.  German Finance Minister Schaeuble has warned Greece over its negotiating tactics, saying the nation and the EU would not "be blackmailed".  In another newspaper interview this morning with Berliner Morgenpost, Chancellor Merkel said: "We - Germany and the other European partners - will now wait and see what concept the new Greek government come to us with."... However she added: "I don't see a further debt haircut". ... And as for demands over war reparations, she said: "This question doesn't arise."

New Greek PM Alexis Tsipras will visit Cyprus, Italy and France next week but there are no plans as yet to visit Germany. As well as scrapping some austerity measures demanded by the troika, such as a privatisation programme, Greece is now trying to negotiate with other EU members over its level of debt.  There are fears though that if Greece refuses to meet its debt demands, it could be forced out of the Eurozone.  Ms Merkel today said she wanted Greece to be successful and acknowledged "many people there have hard times behind them.  "The aim of our policies was and is for Greece to remain a part of the euro community permanently."

A BRAIN-DEAD idea...

What EU leadership has offered to the world : ... The whole idea of creating the Euro without consolidating the debts was the BRAIN-DEAD idea of academics with ZERO trading experience and lawyers. We really cannot afford these types of people making financial decisions about how the run the world. Whatever Brussels could have done wrong, they did. (It was the idea of brain-dead french politicians with zero experience in almost anything except scooter driving and handling - not too well - multiple mistresses. The idea was to disarm the German Bundesbank by design and concept. A very french approach).   The EU politicians have assumed that they can dictate to the free markets by decree and suppress the right to freedom of choice, vote, and to just live un-harassed. The EU politicians have disregarded the people with the arrogance that they know what is best. The EU politicians are helping to destroy the world economy because they have tied the bank reserves to their own folly and then exempted them from mark-to-market to hide their track record. These politicians can hide their head in the sand to pretend they have not yet failed. However, the free markets ALWAYS win.  Well the free markets have voted. The Euro has crashed to the 1.15 level so far. A monthly closing BELOW 1.18 is a long-term sell signal; and support lies at 1.1375 A monthly closing beneath this level confirms the Euro is dead and should fall back to the 1.03-.96 area.  You just can’t make up this stuff. There should be a law against UNQUALIFIED people taking office. Enough is enough. These people create wars to cover up their mistakes. We have an ABSOLUTE right as a people NOT to be economic slaves to fools.

It sounds at first like a crazy thought experiment: One morning, every resident of the euro zone comes home to find a check in their mailbox worth over €500 euros ($597) and possibly as much as €3,000. A gift, just like that, sent by the European Central Bank (ECB) in Frankfurt.  Currently, the inflation rate is barely above zero and fears of a horror deflation scenario of the kind seen during the Great Depression in the United States are haunting the euro zone. The ECB, whose main task is euro stability, has lost control.  In this desperate situation, an increasing number of economists and finance professionals are promoting the concept of "helicopter money," tantamount to dispersing cash across the country by way of helicopter. The idea, which even Nobel Prize-winning economist Milton Friedman once found attractive, has triggered ferocious debates between central bank officials in Europe and academics. For backers, there's more to this than just a new instrument. They are questioning cast-iron doctrines of monetary policy.  One thing, after all, is becoming increasingly clear: Draghi and his fellow central bank leaders have exhausted all traditional means for combatting deflation.  The failure of these efforts can be easily explained. Thus far, central banks have primarily provided funding to financial institutions. The ECB provided banks with loans at low interest rates or purchased risky securities from them in the hope that they would in turn issue more loans to companies and consumers. The problem is that many households and firms are so far in debt already that they are eschewing any new credit, meaning the money isn't ultimately making its way to the real economy as hoped.  In response to this development, Sylvain Broyer, the chief European economist for French investment bank Natixis, says, "It would make much more sense to take the money the ECB wants to deploy in the fight against deflation and distribute it directly to the people." Draghi has calculated expenditures of a trillion euros for his emergency program, funds that would be sufficient to provide each euro zone citizen with a gift of around €3,000.

Whatever your opinion of Syriza or Podemos or their respective leaders, Alexis Tspiras and Pablo Iglesias, it is clear that an electoral victory for either party would represent a significant blow against the raggedy status quo. According to Yanis Varoufakis, a university professor of economics hotly tipped to be Syriza’s first ever finance minister, a Syriza government’s first task would be to “destroy the Greek oligarchy system.”

If Syriza wins enough votes to control parliament and its leadership honors its electoral pledges – granted, a massive if! – then perhaps, just perhaps, the country might have a slim chance of getting off rock-bottom as well as setting a more socially inclusive standard of economic governance.

As for those shrieking about Greece’s sacred duty to pay off all its debts, I present Michael Hudson’s mantra of perfect logic:  “Debts that can’t be repaid, won’t be repaid.”

It is the overriding dilemma of our times. As Australian economist Steve Keen says, the only sane and effective response to this dilemma is to ask ourselves “not whether we should or should not repay this debt, but how we are going to go about not repay­ing it.”

If the Syriza bloc does win a landslide victory it will be placed under almost unbearable pressure to toe the Brussels line. The ECB’s choice of timing for its virgin round of Quantitative Easing, just four days before the Greek elections, was surely no coincidence. Nor was the central bank’s decision not to extend its QE program to Greece unless, that is, it concludes the pending Troika review.

As if that were not enough, the ever-dependable U.S. rating agency Standard & Poor’s just issued a statement that it may downgrade the rating of European countries where Eurosceptic parties may assume power. According to the rating agency, the most “credit negative” parties are SYRIZA and Podemos, since they both favor increasing public spending and restructuring their debts.

Iceland's government is now set to make a second attempt at revoking the country's EU application. The country's ruling coalition first decided to submit a bill to stop EU accession early last year, sparking major protests in the capital, Reykjavik.   Iceland is expected to withdraw its application to become a member of the European Union, the Reykjavik Grapevine reported Monday, citing the country's prime minister.   "Participating in EU talks isn't really valid anymore. Both due to changes in the European Union and because it's not in line with the policies of the ruling government to accept everything that the last government was willing to accept. Because of that, we're back at square one," Icelandic Prime Minister Sigmundur David Gunnlaugsson was cited as saying by the magazine.  In an interview with the Icelandic Morgunbladid newspaper on Monday, Birgir Armannsson, chairman of the Foreign Affairs Committee in Iceland's parliament, stated that "it is not unexpected that the prime minister is likely to present a new parliamentary resolution to revoke the membership application."   Iceland applied to join the European Union in 2009 and began formal negotiations the following year. After the 2013 elections, the country's new center-right government decided to end accession talks with the EU. Iceland is currently a member of the European Economic Area, the European Free Trade Association, and a part of the Schengen Area.

The European Central Bank is considering three possible options for buying government bonds ahead of its January 22 policy meeting, according to reports.   As fears grow that cheaper oil will tip the eurozone into deflation, speculation is rife that the ECB will unveil plans for mass purchases of eurozone government bonds with new money, a policy known as quantitative easing, as soon as this month.   According to the Dutch newspaper Het Financieele Dagblad, one option officials are considering is to pump liquidity into the financial system by having the ECB itself buy government bonds in a quantity proportionate to the given member state's shareholding in the central bank.

A second option is for the ECB to buy only triple-A rated government bonds, driving their yields down to zero or into negative territory. The hope is that this would push investors into buying riskier sovereign and corporate debt. The third option is similar to the first, but national central banks would do the buying, meaning that the risk would "in principle" remain with the country in question, the paper said. So let me get this right..  The ECB buys all the nice juicy lower risk AAA rated bonds leaving my pension and insurance company Greek, Spanish, Italian etc. bonds plus corporate bonds.

So my pension buys some corporate bonds in a few lower risk European blue chips, probably those who think it's a good wheeze to borrow at low rates and buy back shares (mmm. where have I seen that before??).   Hey presto the European equity market starts to lift off with an (un?)expected liquidity injection. We see asset price inflation.   How exactly does the real Euro economy benefit?

How does this extra liquidity translate into money velocity / inflation when there is no obvious connection between the printing press and job creation?   For the last six years the developed world has been suffering from a chronic shortage of demand: demand for goods, demand and services, demand for investment. The need to deleverage personal, corporate and government debt has meant that there has been massive excess capacity and a huge shortfall in aggregate demand. This lack of demand has been driving up unemployment and driving down prices and it is this problem that the ECB need to address.

The Guardian (Ted Elliot) writes :
For Mario Draghi, Thursday is the day the talking stops. It is two and a half years since the president of the European Central Bank said he would do “whatever it takes” to safeguard the future of the euro. Financial markets now want him to deliver on his pledge.  All the hurdles – economic, political and legal – have allegedly been cleared. The ECB will announce a programme of sovereign bond purchases, its equivalent of the quantitative easing programmes that were announced by the US Federal Reserve and the Bank of England six years ago.  But nothing is ever simple when it comes to the eurozone. So when François Hollande stated earlier this week that the ECB would create a “movement that is favourable to growth” by buying sovereign debt, it was only a matter of hours before the French president rowed back, saying that he was speaking “hypothetically”.  It was not hard to see why Hollande backtracked so quickly. The German government has been dragged kicking and screaming towards this latest attempt to boost activity in the 19 countries that use the single currency, fearful that it will be the citizens of Europe’s biggest economy that foot the bill for any losses from the bond-buying plan.  The signs this week were that Germany’s still massively influential Bundesbank was seeking to limit the scale of the programme and ensure that each eurozone country’s central bank bear the risk for buying its own national bonds. Reuters said on Monday that it had been talking to a source familiar with Bundesbank thinking, who said: “What exactly comes and in what dosage, that’s where the real action is at the moment. It could be that the decision is taken with details to follow.” Few were in doubt that “familiar with Bundesbank thinking” meant a Bundesbank official speaking on a non-attributable basis.  Having ramped up expectations, there is now a danger that the long-awaited plan proves a damp squib. Markets want Draghi to put a figure on the size of his programme (preferably at least €1tn) and they want to know exactly how it will be operated. Given the length of time that has elapsed since Draghi’s “whatever it takes” speech, they will be unhappy with anything less.  In reality, the nature of the challenge facing the ECB has changed since July 2012. Then, the eurozone was facing an existential crisis: the interest rates on the government bonds issued by Italy and Spain suggested that the financial markets foresaw the risk of the single currency breaking up. Today, the problem is more chronic than acute: the eurozone has been gripped by economic torpor ever since the deep recession of 2008-09 and prices are lower than they were a year ago. The risk of a euro break-up is more remote but is still seen as possible if stagnation leads to a persistent deflation that makes the debts of some euro members too expensive to bear. Draghi’s plan is designed to ease the deflation risk.   But it is by no means certain that the ECB will succeed. One fear is that the plan is too, little late. Jonathan Loynes, chief European economist at Capital Economics, said: “It is virtually certain that the ECB will announce some form of quantitative easing (QE) at its governing council meeting on January 22nd. But given the ECB’s natural caution and Germany’s objections, we’re not very confident that the programme will be big and effective enough to revive the eurozone economy or eliminate the risk of a prolonged bout of deflation.”   Others are sceptical about whether QE has worked in the US and the UK, even though the central banks in both countries believe that bond buying has led to both growth and inflation being higher than they otherwise would have been. Dhaval Joshi, of BCA research, said the recent growth and employment differences between the world’s major economies were largely due to fiscal policy – the severity of austerity – and whether governments had facilitated new lending by repairing their banking systems.   “Meanwhile, like-for-like inflation (which requires stripping out shelter costs in the US and the VAT tax hike in Japan) is converging towards the same near-zero level in all the major economies”, Joshi added. “Simply put, the different directions of central bank balance sheets have had zero impact on inflation outcomes.”   In the end, the buying of bonds by a central bank can only work through one of three channels. Banks can use the money they receive in exchange for their bonds to increase lending to consumers and businesses. Purchases of sovereign debt can drive down interest rates because the removal of bonds from the market makes them more attractive. This increases their price and reduces the yield (interest rate) payable on them. Finally, central banks can use bond buying to drive down a currency, since increasing the supply of dollars, pounds, yen or euros makes them less attractive to hold.   Eurozone banks are already awash with cash so analysts suspect they will fail to increase their lending no matter what the ECB does. Interest rates on eurozone sovereign debt are already low. That leaves only the exchange rate as a somewhat indirect means for generating the growth and inflation Draghi is looking for. Such are the deep-seated problems of the eurozone that even a €1tn bond buying programme unencumbered by German-imposed limitations is unlikely to do the trick on its own. 

An honest analysis of recent Greek opinion polls suggests that the radical left wing Syriza is on course to win a clear mandate to implement anti-austerity policies that are inconsistent with continued euro membership.  Syriza support is sufficient to secure a workable majority. 36% of the final vote is the approximate threshold beyond which a strong anti-austerity government is plausible. Syriza’s performance has been consistent with this in each of the last 20 opinion polls, and over 40% of the vote on average in the last five.  The electoral system may work in Syriza’s favour. It is not just that a sixth of all seats are awarded as a bonus to the winner; but also that the votes of parties with less than 3% do not count in the final analysis.  It is not over yet. The ruling New Democracy party is entitled to portray the vote as a referendum on euro exit (around 75% of Greeks strongly wish to stay in). The experience of mid-2012 suggests voters’ sight of the exit abyss could help New Democracy close the gap slightly on Syriza.  But the binary (in or out) nature of the vote decision may also help Syriza to achieve a decisive victory by squeezing out smaller parties (eg. Independent Greeks), as voters herd to the big two.  A decisive Syriza victory in such a “referendum” would lower the probability of full capitulation to Troika program requirements. Even if Syriza were to sign off on a continuation of the programme, adequate implementation appears unlikely. It was hard enough for determined centre-right politicians, never mind Syriza.  Should Syriza fail to implement the program adequately, Greece could return to the precipice. Perhaps the government would fall at or before this point and there would be a return to an implementation-minded government; perhaps Greece would exit (this is not our baseline).  Greek assets have responded negatively; bond prices suggest default probabilities have risen sharply.

The EU will start to work when first, Greece is out and every average, say, Spanish voter can communicate with the average German voter without more than 40% lost in language issues. Cross border communication between the people, not politicians, is downright crucial. They can all spend years learning French, Slovenian, or whatever, or spend about a year learning the easiest language possible. Which? The one hears more than 50% of the time on German, Spanish, Italian, French, Portuguese, Dutch, Austrian radio. The day the average German farmer walks up to a French farmer and can actually carry out important discussions about their future as Europeans, as farmers with common interests, then there is hope. Despite the damn taboos about discussing politics in Europe which is a bar hobby by comparison in America... 

With regards to Greece ...  There is an often quoted figure of €240 billion "pumped into their economy". It wasn't. It went in and came straight out again, into the hands of desperate and grateful banksters across Europe, who, had Greece defaulted, would themselves have gone tits up.

Now. The €240 billion is most definitely still there as "extra Greek debt". And it's that extra debt that Syriza, and many Greeks, are rightly not very happy about, regardless of the "generous interest rates" they've been offered. They got no injection of capital into their economy. They instead got a gun held to their heads to accept a loan to make sure foreign banksters didn't suffer any consequences of their reckless, even criminal (Goldmann Sachs) financing of the various groups of oligarchs running the country over the past 30 years. There are many things wrong with the structure of the Greek economy. It is a monumentally corrupt place. But still, there are an equal number of things wrong with the "solutions" offered by the rest of the EU and others. And the real wrongdoers - the Greek oligarchs and the banks - have yet to suffer any meaningful consequences of their actions. Syriza would definitely see to it that that at least changed.

China will relax restrictions on banks' yuan trading from next year, in a small but significant move toward relaxing its capital controls.  The changes will replace daily caps on banks' foreign exchange positions with weekly limits, and for the first time establish unified standards for total foreign exchange positions that banks can hold.  The State Administration of Foreign Exchange published a set of new rules on Tuesday to simplify 14 sets of related regulations and add new provisions liberalizing banks' forex trading practices.  "The timing is well chosen," said a senior dealer at a major European bank in Shanghai.  "With the dollar strengthening globally and emerging market currencies suffering from lingering weakness, it is a good time to relax restrictions."

The yuan has lost 1.3 percent so far this month and looks set to close the year down 2.8 percent in the face of bearish pressure, which is expected to last well into 2015.  Starting Thursday, the SAFE will check banks' position compliance status each week, according to the rules published on the regulator's website, www.safe.gov.cn, leaving them leeway to short dollars within that period, traders said.  However, the SAFE appeared to discourage this interpretation in its statement.

"While banks manage their positions on a weekly basis, their average daily positions should be kept within the limits defined by SAFE," the regulator said, in what traders said was an apparent signal that banks should not go too far.  While position caps for shorting dollars will remain unchanged, the SAFE has published standards for total forex positions that will apply to everyone.

Banks previously needed to apply for quota individually.   All banks with less than $100 million worth of forex settlement business in the previous year will be allowed total positions of $50 million on average by the end of each day in a week, with a maximum short position value of $3 million, according to the new rules.  Those recording a value between $100 million and $1 billion will be granted total positions of $300 million and short positions of $5 million.

Those doing more than $1 billion of business can have total positions of $1 billion and short positions of $10 million.  "Those banks that cannot meet their business demand via the above-mentioned positions can apply to SAFE for additional quotas," the regulator said.

The rules also apply to China-based foreign banks; overseas lenders that have more than one office in China must appoint one key office to manage the positions, the rules said.

...a sign to start stuffing the mattresses...

I still hold out hope that an economic implosion of the Eurozone could lead to the break up of the EU which affords Romania and others an easy low cost and smooth exit without any political upheaval. If such a bounty were to happen it could mark the very lowest point of 100 years of perpetual decline. The eurozone has officially slipped into deflation, after latest figures showed prices in December were 0.2pc lower than a year earlier.   The figure, far short of the European Central Bank's target of just under 2pc, is the latest pointer towards fresh intervention by the bank as it tries to prop up a sluggish economy.   Energy prices slumped 6.3pc compared to a year ago, driven by falling oil prices. The cost of industrial goods and food was flat while services rose 1.2pc. This is the first time the euro area has experienced deflation since 2009.   The ECB will meet on January 22 to consider whether to go beyond its existing stimulus measures and start buying sovereign bonds in a program of quantitative easing.   ECB president Mario Draghi has dropped numerous hints that he hopes to push cash through the eurozone economy in this way, despite grumblings in Germany that such measures are outside the central bank’s mandate. The euro, which reached a fresh nine-year low of $1.1842 before the figures were released, rose slightly after the announcement.   The currency has dropped from a high of $1.39 in May as the economic recovery in the United States diverged from the torpid eurozone.  The inflation figures follow German data on Monday showing that the currency bloc’s biggest member had experienced inflation of just 0.1pc in December, down from 0.5pc in the previous month and short of forecasts of 0.2pc. A purchasing managers’ index for December was published on Tuesday showing continued weak growth in the eurozone economy, with a reading of 51.4. A score of 50 or above denotes growth, but survey compiler Markit said the reading pointed to expansion of just 0.1pc in the final three months of 2014.   Watched from the sidelines of the UK, a fanatically driven religious war and deflationary spiral both coming from different directions to annihilate the entire European Project and re ignite a nationalist / fascist backlash throughout Central and Eastern Europe that engulfs the Continent would undoubtedly be the most exhilarating and awesome piece of history to unfold in 1000 years.   Armed with 24 hour digital media, chilled beers and comfy armchairs it would deliver the most stunning entertainment on a perennial basis as seminal pages of history are written whose importance to the future of Humanity and the map of the earth is of such magnitude that will be taught, debated and analyzed for hundreds, possibly thousands of years into the future.   Every time I dismiss it as just a dream events take it one big step nearer....So, the Eurozone enters a deflationary spiral and the markets? Shows just how disconnected they are from real economic data. Pushing up on a few words of obfuscation from Draghi as opposed to looking at the hard aspects of economics and the ability for major companies to generate profit / return.   If that ain't a sign to start stuffing the mattresses, I don't know what is.

BEIJING (AFP) -  China has appointed a top official of the ruling party's propaganda department as president of the Xinhua news agency, the key mouthpiece of the Communist state.

The appointment of Cai Mingzhao, a vice director of the propaganda department, is the latest of several replacements in the party's key information and media agencies over the past year.

Cai, 59, replaced Li Congjun, who turned 65 in October and reached the age limit for ministerial-level posts, the agency said in a statement on Wednesday.  Cai is "politically sober and firm, keeps an appropriate grasp in guiding public opinion and conscientiously aligns himself with the party's central committee", the statement quoted Pan Ligang, a deputy head of the party's Organisation Department, as saying.  Cai was previously head of the information office of the State Council, China's cabinet.  He worked for Xinhua for 23 years from 1978, reports said, first as a journalist and later promoted to managerial level. On Sunday, Luo Shugang, a vice director of the Propaganda Department, took over from Cai Wu as culture minister.

In April, Yang Zhenwu was appointed the new president of the People's Daily, the party's flagship newspaper.   Xinhua was founded in 1931 and started using its current name in 1937. It is headquartered in Beijing and has more than 180 outlets overseas, according to the agency's website.

The agency has a virtual monopoly on the distribution of information for the Chinese domestic market.

 

Clashes have erupted in the capital of Greece during protests marking six years since police shot dead an unarmed teenager.  At least 5,000 demonstrators marched in Athens on Saturday. Some attacked shops and hurled petrol bombs at riot police.  Police officers used tear gas and a water cannon to disperse protesters.  The demonstrators had been marking the anniversary of 15-year-old Alexis Grigoropoulos' death. He was shot by an officer who has since been jailed.  Mr Grigoropoulos' killing on 6 December 2008 sparked violent riots across Greece, with cars being set alight and shops looted in a number of cities.  Clashes have also broken out on previous anniversaries of his death.  On Saturday, anti-establishment protesters attacked banks and damaged shops and bus stops.
At one point, demonstrators looted a clothes shop and set fire to the merchandise in the street, the Associated Press news agency reported.  According to Reuters, police said they detained close to 100 protesters.  Clashes primarily took place in Athen's Exarchia neighborhood, but violence was also reported in Thessaloniki, in northern Greece.   No injuries were reported in either city.
The ECB is already buying asset-backed securities (bundles of bonds) in an attempt to stimulate lending. This of course will not lead to a credit expansion as all it accomplishes is to add to bank reserves and banks do not lend bank reserves to commercial clients, ever.  QE has no measurable impact on aggregate demand and a shortfall in aggregate demand is the problem with the EMU economies. This has been beyond dispute for over 7 years now in some nations and yet nothing has been done to address this shortfall which is manifested in massive unemployment, massive underemployment, increased poverty, social breakdown political instability.
The mindless devotion to monetary policy actions has proven to be ineffective across both time and geography in stimulating economic activity, yet the Troika will not accept reality.
Expansionary fiscal policies directed at employment rich activities such as health care, education, infrastructure and the advancement of the public good is what is called for.

Euro Zone QE will be the last nail in the coffin for the Euro, the single currency will fail. The moment the ECB pulls the QE trigger they will find themselves in a difficult position. The ECB will struggle to unleash the amount of QE required to drag the Euro Zone out of the economic mire and at the same time QE will silently destroy huge amounts of productive capacity.

The net outcome will have a huge impact on the UK economy. We will import deflation, we will be infected by the Euro Zone disaster. Ramping up the valuations of old houses and importing huge numbers of immigrants is not going to save us.  The time has come for the UK to negotiate a gradual exit from the EU. We do not need to be full members, we only need a customs union and harmonisation of laws. As long as we maintain our place at the Council of Europe we will maintain our legal basis to trade with our European neighbors.  The immediate danger for the UK is an economic stall as a result of Euro Zone QE and the rampant super-USD. Take care , don't take on more debt than is absolutely necessary, look at what has happened to the Japanese economy.... Swapping government bonds for reserves actually *removes* money from the economy because the interest normally paid to bondholders would instead go to the ECB and be returned to the states via the ECB bank dividend.

That's why other asset prices go up. There is less income around in general from assets in the currency.  At best QE relieves pressure to cut spending or raise taxes on the governments, and it is actually simple fiscal policy that increases the level of spending and therefore real activity in the economy.  I think ongoing indicative trends in energy sector , particularly oil and gas seem to be corresponding to predictions made by this writer on 2 June 2014 in article - " Stressful times ahead for world economy in 2015 and 2016" - published online at www.astrologyweekly.com. Briefly speaking, the following were mentioned :

(1). The trends are likely to commence from November 2014 and onwards ;comment(2). The commodities likely to be impacted by the trends include " minerals and metals" and " oil and gas".

(3). Regions or countries which could be possibly be impacted by the likely trends have also been mentioned though this is only artistic interpretation and may not be construed as conclusive.

(4). Readers may like to know that such likely trends are suggestive or indicative and not deterministic. There is always a room for reform and improvement through a still better strategic planning and prudence.

(5) I think a further period of one and a half month covering January to mid February next year 2015 could perhaps be a bit disturbing for, among other things, minerals and metals and oil and gas.

Everyone came to realize that efforts to deepen Ukraine's ties with the EU had failed. But no one at the time was fully aware of the consequences the failure would have: that it would lead to one of the world's biggest crises since the end of the Cold War; that it would result in the redrawing of European borders; and that it would bring the Continent to the brink of war. It was the moment Europe lost Russia.  For Ukraine, the failure in Vilnius resulted in disaster. Since its independence in 1991, Ukraine has strived to orient itself towards the EU while at the same time taking pains to ensure that those actions don't damage its relations with Moscow. The choice between West and East, which both Brussels and Moscow have forced Kiev to make, has had devastating consequences for the fragile country.  But the impact of that fateful evening in Vilnius goes far beyond Ukraine's borders. Some 25 years after the fall of the Berlin Wall and almost 70 years after the end of World War II, Europe is once again divided. The estrangement between the Russians and the Europeans is growing with Moscow and the West more inimical toward each other today than during the final phase of the Cold War. It's a reality that many in Europe have long sought to ignore. The story of the run-up to Vilnius is one filled with errors in judgment, misunderstandings, failures and blind spots. It is a chronicle of foreign policy failure foretold -- on all sides. Russia underestimated the will of Ukrainians to steer their country toward the EU and was overly confident in its use of its political power over Kiev as a leverage.  For its part, the EU had negotiated a nearly 1,000-page treaty, but officials in Brussels hadn't paid close enough attention to the realities of those power politics. Even in Berlin, officials for too long didn't take Russian concerns -- about the encroachment of NATO and the EU into Eastern Europe -- seriously enough. The idea that Moscow might be prepared to use force to prevent a further expansion of the Western sphere of influence didn't seem to register with anyone.

With the special role it plays and the special responsibility it has for Europe, the meltdown also represented a failure for Germany. Foreign policy has long been considered one of Chancellor Angela Merkel's greatest strengths, but even she ignored the warning signs. Merkel has proven herself over the years to be a deft mediator who can defuse tensions or work out concrete solutions. But crisis management alone is not enough for good foreign policy. Missing in this crisis was a wider view and the ability to recognize a conflict taking shape on the horizon. Instead, officials in Berlin seemed to believe that because nobody wanted conflict, it wouldn't materialize.

Merkel did say at the summit that, "The EU and Germany have to talk to Russia. The Cold War is over." But the insight came too late.

Swiss elections, gold, currency and such...

With the prospect of the ECB engaging in full-blown quantitative easing in the coming months, it is possible that the SNB will have to buy up more euros to keep it above the 1.20 franc cap. If this were to be the case, a vote in favor of the “Save Our Swiss Gold” campaign would have meant further gold purchases to maintain the 20pc quota. The sales ban would mean gold making up an increasing proportion of the central bank’s balance sheet when it attempts to shrink its euro holdings.  "The resolute ‘no’ to Switzerland’s referendum on re-building its gold reserves is clearer than expected," said Reto  Foellmi, Professor of International Economics at the University of St Gallen. "The result is certainly due to the fact that the Swiss population is largely confident in the monetary policy pursued by the Swiss National Bank.   "It sends a clear sign that there will be no immediate change in Swiss monetary policy."   Recent opinion polls predicted that the motion would be defeated, but the price of gold may fall further on Sunday’s confirmation.  Voters also strongly rejected strict limits on immigration that could have threatened Switzerland's relationship with the EU, as well as voting against tax privileges enjoyed by wealthy foreigners.   I note the US Treasury released a statement last Wednesday afternoon revealing that they had been forced to issue $1,040,965,000,000 in new debt since fiscal 2015 started just eight weeks ago in order to raise the money to pay off Treasury securities that were maturing and to cover new deficit spending by the government. I don’t know how long this international printing money out of thin air (Ponzi Scheme) can go on for, but the Swiss vote notwithstanding, I’m keeping my pile of gold sovereigns safely tucked up in my mattress...  Gold is mostly a speculative bubble. It's intrinsic value is marginal compared to what it is traded at. The value of Gold largely depends upon the whim of the people who like to own it and the amount of disposable money they possess .If you notice today huge swathes of Indians and Chinese are buying gold. They are only buying because of increased disposable wealth they are generating due to actual economic activity and growth. If that economic activity ceases - gold will lose its value pretty fast.  The situation was the same in ancient times - when kings and local warlords had excess disposable wealth. Those tiny group of people drove gold demand. Today more people are driving the demand - all thanks to increased economic activity. If the world economy collapses gold value will also collapse along with it.  Gold value depends on economic activity. If economy grows - the value of gold increases. Or else your gold is only worth the eye of the beholder - glitter. You cannot eat it, nor can make any tools out of it.

Herr Juncker, the head of the European Commission, is about to announce a plan whereby the EU puts $26 billion or so into an investment fund which is then geared up with private money to amount to a $390 billion fund that will revolutionize the European economy, light the flames of the white heat of technology and so drearily on. Sadly, the plan is based upon a simple misconception. It’s possible that there’s a case for public investment in a number of areas: there are such things as public goods, after all. It’s also possible that there’s a case for greater private investment in certain areas: that is how the economy advances, after all. But there’s no case at all for trying to make those public investments, potentially in public goods, on private sector terms. Yet that is what the fund is trying to do: I suspect that some have been reading a little too much Professor Mazzucato here (to the extent that Mazzucato’s “work” is not just an extended justification for this type of action).  The European Union is planning a 21 billion-euro ($26 billion) fund to share the risks of new projects with private investors, two EU officials said.  The new entity is designed to have an impact of about 15 times its size, making it the anchor of the EU’s 300 billion-euro investment program, said the officials, who asked not to be named because the plans aren’t final. European Commission President Jean-Claude Juncker is due to announce the three-year initiative in coming days.  The commission will pledge as much as 16 billion euros in guarantees for the vehicle, which will also include 5 billion euros from the European Investment Bank, the officials said. Loans, lending guarantees and stakes in equity and debt will be part of its toolbox, with the goal to jumpstart private risk-taking so that stalled projects can get off the ground.  Here’s what the problem with this sort of idea is. It’s absolutely true that there’re such things as public goods. These are, in the jargon, non-rivalrous and non-excludeable. No, don’t worry, it just means that it’s very difficult indeed to make money out of them. That people can’t make money out of them means that we think that private investment won’t produce enough of them. So, to get to the optimal level of their production we should have government, which doesn’t have to worry about making a profit, do the investing. This is the argument in favor of government funding basic research and even of their funding primary schools. It’s fine, it’s a simple argument that we see as far back as Adam Smith.  It’s also true that there’s things that will be funded, happily, by private investment. Assuming success it’s possible to make a profit so people have every incentive to gather in some capital, invest, and try to make a success out of whatever it is. There is no need for government funding here as the necessary incentives already exist. Government wouldn’t be helping here, at best they might crowd out private investment and more likely to, due to incomprehensible paperwork (yes, I have looked at such schemes myself, in my day job in business), slow down projects and even make them less likely to succeed.  So there is an argument for government investing. But that argument only holds for those public goods, where it’s not possible (or very difficult) to make a profit assuming success. Government investment where profit can already be made is contra-indicated. So what does this fund intend to do? Invest government money on commercial, private sector terms. To take equity and bond stakes in the projects funded. But if a project is viable, in the sense that it is possible to profit from success, then we don't need nor want the government involvement. Where we do want the government involvement, where there is one of those public goods, then we can't, by our very definition, appropriate the returns from that public goods component. So there’s nothing there that we can pay back that government portion of the investment from.  In fact, by forcing the commercial, non public goods, part of the investment to share the returns with the public sector we then lower returns for everyone and make the project less likely to happen, not more.

In mid-April 2003, German author Hans Magnus Enzensberger published a piece in the daily Frankfurter Allgemeine Zeitung in which he celebrated the fall of Saddam Hussein. He wrote of his "deep," even "triumphant" joy upon learning of the end of Iraq's brutal dictatorship. The article was also full of derision and mockery for the skeptics who warned against the wisdom of US President George W. Bush's invasion.  At the time, I was thrilled about Enzensberger's contribution. His was one of very few voices that dared counter the almost unanimous public opposition to the American offensive in Iraq. Just before the outbreak of the war, I visited northern Iraq, including the town of Halabja, where Saddam murdered thousands of Iraqi Kurds with poison gas in 1988. The gas killed children playing in the streets and women on their way to the market. I met with survivors whose lungs were almost destroyed: people who had been dying a painful death for the 15 years since the attack. More than any other city, Halabja is symbolic of the crimes Saddam perpetrated against his own people. Although I was not in favor of the Iraq war, my visit made it clear to me that the overthrow of a dictator is cause for joy.   But in the end, the skeptics were proven right. In 2003, Enzensberger believed forecasts that up to 200,000 people would die in Iraq as a result of the invasion were absurdly high. But serious studies have suggested that that number has been significantly exceeded in the 11 years since Saddam's fall. Iraq and the entire region have descended into chaos and anarchy, clearing the way for the radicalization fostered by Islamic State. There are many reasons to be gratified by the end of a dictatorship. For one, it means that a criminal is no longer in a position of power. And there's the prospect that democracy could take root in its stead. Some people also believe that anything is better than despotism.  But that last belief is incorrect ... The last decade has shown that there is something worse than dictatorship, worse than the absence of freedom, worse than oppression: civil war and chaos. The "failing states" that currently stretch from Pakistan to Mali show that the alternative to dictatorship isn't necessarily democracy -- all too often, it is anarchy. In the coming years, global politics will not be defined by the polarity between democratic and autocratic states as much as it will by the contrast between functioning and non-functioning ones.  Rule is order. For Thomas Hobbes, the father of modern political science, the intrinsic function of the state was to impose legal order in order to subdue the "state of nature." In "Leviathan," which he wrote in the 17th century under the shadow of the English Civil War, he argued that the state's monopoly on violence was legitimate when used to protect the lives and possessions of the state's citizens. When the state was no longer able to guarantee order, the threat of "war of every man against every man" loomed. The latter was the state of nature that the state, symbolized by the Leviathan, was tasked with taming.    In his 1525 article "Against the Murderous, Thieving Hordes of Peasants," Martin Luther also argued in favor of a severe sovereign putting a stop to the German Peasants' War. Luther was largely sympathetic to the complaints of the peasants, but he was turned off by the rampant violence and anarchy of their rebellion. The rebels, Luther wrote, should be dealt with "just as one must kill a mad dog."   Germany last experienced an extended period of anarchy almost 400 years ago during the Thirty Years' War. In the long period of peace and stability that has followed World War II, we in the West have come to view political continuity as the norm. During the decades of the Cold War, the threat to Western Europe did not come from weak states, warlords and terrorist organizations but from Communism. The era was marked by the confrontation between Western democracy and socialist dictatorship: The opposite of dictatorship was democracy.

The peaceful revolutions in Eastern Europe in the 1990s confirmed this view. In those countries, the collapse of the socialist dictatorships led not to anarchy but to the installation of a new, democratic order. This created the illusion that one merely had to remove obstacles for democracy to appear, almost automatically.... But in Russia the transition from the Soviet system to democracy failed. After the end of socialism, Russians were able to vote in more-or-less democratic elections and the economy was privatized. But the rule of law did not take hold. Instead, capriciousness and corruption gained the upper hand; power was monopolized by the strong. Chechnya began fighting for independence and the state started to disintegrate.  Such was the situation when Boris Yeltsin named Vladimir Putin prime minister in 1999. To Yeltsin, Putin, the head of domestic intelligence, seemed to be the only person capable of keeping the country together. Putin's task when he took over the Russian presidency a short time later was to return a crumbling state to functionality.

He was also being asked to lead a vast, sparsely populated country where state control had always been fragile: "Russia is large and the czar is far away," holds one Russian proverb. The specter of the "Smuta" -- a period of chaos and anarchy in the early 17th century -- continues to hang over Russian history. The iron-fisted Brezhnev era, by contrast, is considered by many in the country to be among the happiest periods in recent times.  In Yugoslavia, it also later became apparent that it is much easier to topple dictators than to establish democracies. Although a few weeks of bombing is generally sufficient to mortally wound autocratic regimes -- such as those run by Milosevic, Saddam, Gadhafi or Mullah Omar -- even in Europe, in relatively small territories such as Bosnia-Herzegovina and Kosovo, it took years to establish halfway stable countries with reasonably democratic governments.  The effort -- both in terms of money and labor -- was enormous. For years, control in Bosnia was largely in the hands of the High Representative in Bosnia and Herzegovina -- an office created by the Dayton Peace Agreement -- while in Kosovo, the United Nations ran the country...All of which raises the question: Is stability a value in and of itself? Those who answer in the affirmative are often seen as cynics who place little importance in freedom and human rights. But the uncomfortable truth is that dictatorship is often preferable to anarchy. Were people given a choice between a functioning dictatorship and a failing or failed state, the dictatorship would often be seen as the lesser evil. And most people believe that a more-or-less secure livelihood and a modicum of justice are more important than individual freedoms and unimpeachable democracy.

It is easy to label these kinds of attitudes as backwards from the comfort of a Western democracy. When I ask my Iranian friends why they don't rebel against the Islamic system they hate, they say they don't want a revolution because it might worsen the situation. And they know what they are talking about -- the last revolution in Iran was just 35 years ago.  Political instability triggers the yearning for order, sometimes at any price -- and thus often paves the way for extremists. That was true in Germany at the end of the Weimar Republic; in Russia, Stalinism followed the revolution and civil war; in Afghanistan, the period of unrest following the Soviet withdrawal spurred the rise of the Taliban. And now Islamic State has appeared in Iraq and Syria.  That is why the swath of political instability stretching from Pakistan to Mali is so disconcerting. In Iraq, Syria, Yemen and Libya, central governments have lost control over vast portions of their territory and entire countries are becoming ungovernable. Tribes and clans are fighting with each other while warlords are exerting regional control -- at least, until they lose it again.  The failed democratization of Iraq and the unsuccessful "Arab Spring" in Syria have fed the rise of Islamic State. In neither of these countries does democracy currently have realistic prospects for success. The best solution for Syria -- and this is not cynicism speaking -- would perhaps be a military putsch against Assad. It would rid the country of its dictator while leaving the country's last center of power, the Syrian army, intact and able to resist Islamic State.  This kind of argument isn't particularly attractive -- smelling, as it does, of cool realpolitik. It is an admission of the West's impotence -- of its limited ability to export its values and lifestyle. It feels like a selling out of ideals. The argument is also often used to justify doing business with dictators and, even worse, provides dictators with justification for their own policies of oppression.  But that doesn't make it wrong. There are an increasing number of failed states in the world. According to the Fragile State Index assembled by the Fund for Peace, the number of states receiving a rating of "very high alert" or "high alert" has increased from nine to 16 since 2006. The spread of democracy and freedom, by contrast, has hardly made any progress. According to Freedom House, following a significant increase in the number of free countries at the beginning of the 1990s, there has been little change since 1998.   Democracy can only function in an environment where there is at least a minimum of stability. And it cannot necessarily establish this stability itself. In Iraq and Egypt, that process has failed, at least for the time being. In Afghanistan, the power of President Hamid Karzai, who made way for his successor at the end of September, never extended much beyond the city limits of the capital, Kabul, despite massive Western support. It is debatable whether the rudimentary rule of law established there after 13 years of Western involvement can survive ISAF's departure at the end of this year.  Free countries, as constitutional law expert Ernst-Wolfgang Böckenförde once wrote, flourish in conditions that they themselves are unable to guarantee. Without a cultural learning process -- like the one undergone by Europe over the centuries -- the toppling of a dictator and the holding of elections are not sufficient to establish democracy. As such, the West should value functioning states to a greater degree in the future.

Even as it longs to see the departure of autocrats in Russia, China, Central Asia and elsewhere, the alternatives must be seriously examined. And the next time an intervention is considered -- whether this means military force, sanctions, or the support of opposition powers -- the West must consider what will follow the toppling of the dictator. Indeed, that is exactly the argument US President Barack Obama used recently to justify his reticence to use force: "That's a lesson that I now apply every time I ask the question, 'Should we intervene militarily? Do we have an answer (for) the day after?'"     Hans Magnus Enzensberger now sees the toppling of Saddam and the Iraq War as an illustration for the fact that it is necessary every now and again to change one's opinion. At an August literature festival in Potsdam, he said that, with the opinion piece he wrote, he "fell heavily on my face."

MOSCOW, November 11 (Sputnik) – Military veterans and about 80 families of US soldiers killed in Iraq are suing five European banks, accusing them of transferring money to Iran that was later used to finance attacks against American troops, the Guardian reports.

The lawsuit is based on the allegation that "Iran funded, trained and armed a number of 'special groups' among the Shia militia that perpetrated attacks on US forces [in Iraq]," Gary Osen, the New Jersey-based lawyer for the plaintiffs said Monday, as quoted by the Guardian.

Osen told the Guardian that the lawsuit, lodged with the US district court in Brooklyn, New York, on Monday, was designed to tell a "largely untold story" of Iran's involvement through proxies in Iraq "to kill large numbers of coalition forces".  The five defendant banks are Barclays plc, Credit Suisse Group AG, HSBC Holdings plc, Standard Chartered and Royal Bank of Scotland Group plc. According to Osen, the banks were earlier subject to US Department of Justice investigation after they were alleged to have bypassed sanctions rules by siphoning money to Iran, as well as Cuba and Libya.  None of the banks have yet commented on Monday's lawsuit, according to the Guardian.

The five defendant banks are Barclays plc, Credit Suisse Group AG, HSBC Holdings plc, Standard Chartered and Royal Bank of Scotland Group plc.