Faced with Angela Merkel’s categorical rejection of Eurobonds, the EU engaged a horde of financial specialists to find a creative way to circumvent it. They came up with the EFSI. Though the fund will not be operational until mid-2015, EU member countries have already proposed projects for the European commission’s consideration. By early December, all 28 EU governments had submitted applications – and they are still coming.  An assessment of the application documents conducted by the Ifo Institute for Economic Research found that the nearly 2,000 potential projects would cost a total of €1.3tr, with about €500bn spent before the end of 2017. Some 53% of those costs correspond to public projects; 15% to public-private partnerships (PPPs); 21% to private projects; and just over 10% to projects that could not be classified.  The public projects will presumably involve EFSI financing, with governments assuming the interest payments and amortization. The PPPs will entail mixed financing, with private entities taking on a share of the risk and the return. The private projects will include the provision of infrastructure, the cost of which is to be repaid through tolls or user fees collected by a private operator.  Just like the many other “protective” measures taken during the crisis, this distortion of market processes will help to cement the sub-optimal allocation of European investment capital, hampering economic growth for years to come.  Making matters worse, only a fraction of the new borrowing enabled by the mutualisation of liability will be factored into national budgets. This will render EU-wide debt-management agreements meaningless, including the stability and growth pact, which limits the overall deficit to 3% of GDP, and the 2012 “fiscal compact,” which stipulates that countries whose debt-to-GDP ratios exceed the 60% limit should reduce them by one-twentieth annually, until they are in compliance. (Hans-Werner Sinn)

Italy’s manufacturing sector shrank at the fastest rate in more than a year-and-a-half according to the Markit PMI.  The headline index of activity fell to 48.4 last month from 49 in December, where anything below 50 signals contractions. It was the lowest in 19 months and the third successive month of contraction.  Manufacturers shed staff at the fastest rate in more than a year-and-a-half. The one bright spot to the report was a continued growth of orders from abroad.

Phil Smith, economist at Markit:The manufacturing sector’s performance has deteriorated throughout the final quarter, with the PMI posting its worst reading for 19 months in December. Factories have cut back production amid falling intakes of new orders, particularly among domestic clients, and this trend looks set continue as new business fell to the greatest extent for over a year-and-half in December and backlogs were depleted sharply. Without the support from export sales, the situation would be worse still...

Mario Cuomo, the golden-tongued son of Italian immigrants who rode his liberal views and hard-nosed political acumen to the pinnacle of Democratic politics as New York’s governor but repeatedly shunned a run for the White House, died Thursday at the age of 82.

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

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

...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.

The answer is NO.....

Michael Fuchs, deputy parliamentary floor leader of the German chancellor's Christian Democrats (CDU), told Deutschlandfunk on Friday: "We shouldn't pump extra money into these states, but rather make sure they continue along the reform path.  "I'd be grateful if (ECB President Mario) Mr Draghi would make statements along these lines."  In an interview with German financial daily Handelsblatt published on Friday, Draghi urged politicians to implement necessary reforms, reduce tax burdens and cut red tape to support a fragile euro zone recovery.

He also said the risk of the central bank not fulfilling its price stability mandate was higher now than half a year ago, and reiterated its readiness to act soon if needed, with government bond purchases among the tools it could use.  With the euro zone flirting with deflation, financial markets interpreted Draghi's comments on Friday as strongly suggesting the ECB would soon embark on outright money-printing, and the euro sank to a 4-1/2 year low against the dollar.  Printing money to buy government bonds, a measure known as quantitative easing (QE), is seen as one of the last tools the ECB has to revive inflation. The bank has already pushed its key interest rate down to a record low of 0.05 percent and doubts are growing about the impact of earlier measures.

"I expect there to be fierce discussion over this at the next ECB meeting," said Fuchs, referring to opposition to the bond-buying plan by the head of the Bundesbank Jens Weidmann. The ECB's next policy meeting is on Jan. 22.  Fuchs has frequently expressed frustration felt by many German politicians and the public about the pace of reform in twice-bailed-out Greece.

He was quoted as saying in a newspaper interview published on Wednesday that euro zone politicians were not obliged to rescue Greece as the country was no longer of systemic importance to the single currency bloc.  Greece holds a general election just three days after the ECB meeting and polls suggest the left-wing Syriza party, which rejects the terms of Greece's euro zone bailouts, will emerge as the strongest party. 
Reuters...
Do you think that Americans, Chinese, Russians will let the Germans to prosper from now on? --- The answer is NO.
Do you think that Europe will help the Germans? --- The answer is NO.
Do you think that Europe will forget the arrogance and loans-debt-injustice-blackmailing forced to their children for 100 years or more by Germans ? --- The answer is NO.

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.

Global consumption of crude oil grew from around 83.2 million barrels a day to 90.4 million in the 10-years from 2004 to 2013, according to the EIA. With the exceptions of 2008 and 2009, when the global financial crisis stifled economic growth in much of the world, oil consumption has been rising, but about 65% of the increase is from the developing economies of China and India. China consumed about 6.44 million barrels a day in 2004 and 10.12 million barrels a day in 2013, while India added about a million barrels a day of consumption in the same period.

About 80% of world oil consumption is attributable to transportation by road, rail, sea and air. As a transportation fuel, products derived from oil are difficult to replace due to their high energy content, their transportability and their relative safety.

As a fuel for generating electricity, oil’s role has largely been relegated to one of meeting peak demand for short periods, but there are some exceptions. Saudi Arabia, for instance, currently generates 100% its electricity by burning oil or natural gas. Japan, following its nuclear disaster in 2011, is another temporary exception.

Among many developed countries, oil consumption is falling, due in part to slow economic growth that tamps down demand for crude. Another contributor to slowing demand is more fuel-efficient motor vehicles. As for future demand projections, it is too early to know how much of the decline in consumption is due to structural changes like more fuel-efficient vehicles and how much to a weak global economy. The answer to those questions will indicate both the direction and the strength of crude oil demand in the years to come.