The UN warned that failure to agree on a united response to the crisis endangered the concept of European unity. Peter Sutherland, the UN’s special representative on international migration, said: “If there is no agreement to share refugees between the countries of the European Union, it risks undermining the very essence of the European project.”Europe’s biggest refugee crisis in 70 years atomized into a chaotic series of border confrontations and diplomatic disputes this weekend, as crowds of refugees were blocked from passing through a number of crossings in central Europe, prompting the UN to warn that the concept of European unity was at risk.  Hungary sent armored vehicles to its border with Croatia, while Slovenian police sealed several crossings after Croatia attempted to offload tens of thousands of refugees who are using it as an alternative entry point to the European Union. Croatian policemen accompanying hundreds of migrants into Hungary were disarmed by their Hungarian counterparts and turned away, while Slovenian police used pepper spray to ward off hundreds, mostly Syrians and Afghans, trying to cross to reach the countries of northern Europe.  The chaos had been sparked by Hungary’s decision to shut off its southern border with Serbia, blocking a well-trodden refugee railroad that has brought more than 170,000 refugees into the EU since the start of the year. .. Cultural differences. When there is a crisis, Austria, Germany, France, Holland, Italy, Belgium, Sweden all talk to each other and try to solve the problem together. Whereas Eastern Europe starts a bitching war amongst each other. Old EU and the new kids in it. Not sure it was wise to take them in. Not only do they only cost money, they also start beating each other up. Maybe just suspend them for 10 years from the EU until they have grown up?

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

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

The European Central Bank (ECB) has cut its inflation and growth forecasts for 2015 and the next two years.  It expects inflation in the eurozone to remain "very low" for some years as threats to economic growth increase.  ECB president Mario Draghi said Europe's economic recovery would continue, "albeit at a somewhat weaker pace than expected".  The euro fell sharply as Mr Draghi also hinted that the bank could expand its stimulus programme if necessary.  He was speaking after the ECB kept its main interest rate on hold at 0.05%.  The ECB is now forecasting economic growth in the eurozone of 1.4% in 2015, down from 1.5%, and 1.7% in 2016, compared with its previous projection of 1.9%.   However, Mr Draghi said that risks to the outlook for economic growth and inflation had worsened since mid-August, when the latest projections were calculated.  "Lower commodity prices, a stronger euro, somewhat lower growth, have increased the risk to a sustainable path of inflation towards 2%," he told a news conference in Frankfurt.  The euro fell sharply following Mr Draghi's comments, dropping a cent against the dollar to $1.1127. He also admitted that inflation could turn negative in the coming months. The bank expected inflation to be 0.1% for 2015, rising to 1.5% in 2016 and 1.7% in 2017, dampened by lower energy prices.  The ECB made no change to its bond-buying programme, but Mr Draghi said it could be extended beyond its planned conclusion in September 2016 if necessary.

The Federal Reserve could raise interest rates for the first time since 2006 at this week's meeting Wednesday and Thursday. A debate is raging whether this would be the right time to do it. Economic growth has been slow and jobs growth has lagged. Leaders from The World Bank to the International Monetary Fund to former Treasury secretary Larry Summers have publicly asked the Fed to hold off on the first rate hike in the face of a sluggish global economy and plummeting commodities prices. Of course traditional thinking is that lower oil and gasoline prices will ultimately help consumers and encourage them to spend more money which will lead to economic growth. But we have yet to see that happen. So I turned to one of my favorite independent research analysts: Stephen Schork who writes The Schork Report, and got a dreadful picture of the global economy. He says the drop in commodities is critical because it is a sure sign of a recession on the way. Our interview follows, edited for length and clarity...The Fed has painted itself into a corner. Just from a credibility standpoint, it's probably a better than 50% chance that they do raise rates. But I think that obviously is going to add a further blast to economic growth going forward. The biggest takeaway here is that commodities don't lead economies. Economies lead commodities. And falling commodity prices are a big telltale for us all.

A great part of the European project is tainted with the fact that the Dutch, Belgians Luxembourgers do not like the Germans, the French do not like the Brits, nobody likes the Spanish etc.and so it goes on all over Europe. Suppose the big plan is to merge all the debt into one big pile and as one the then union explodes dissolving all monetary ties as no one will be able to untangle the debt pile. The result is a complete mess almost parity with one big nuclear bomb over the entire EU. Except the working man and woman wake up not to radiation sickness but to an empty bank account and little or no coherent government structure or judiciary to collect fresh debts such as utilities, etc. Begin day one...Germany is set on a collision course with Brussels' visions for deeper eurozone integration, by setting out its objections to greater financial risk-sharing in the single currency. Berlin is determined to break the toxic link between distressed banks and indebted governments, and will insist on new "bail-in" procedures to impose losses on private sector creditors in the event of another financial crisis. The eurozone has been thrown into turmoil since 2009, after the banking systems of Ireland, Spain, and Greece were rescued by taxpayer money, loading debt on to government balance sheets. As Europe's largest creditor nation, Germany wants senior bank bondholders and private sector depositors to take the hit when banking or government solvency is threatened.   The red lines have been laid out in a Germany finance ministry "non-paper" seen by the Financial Times. It will be presented by Wolfang Schaeuble at an informal gathering of European finance ministers in Luxembourg today. "The restructuring of banks without taxpayers’ money will function only if sufficient resources are available for a bail-in and if member states ensure that the bail-in is legally enforceable," said the paper.

Patrick L Young: Greece is in a hideous situation. The only sane approach - presuming you do not endorse beggaring the population (which curiously it seems the current Marxist Prime Minister does...) - is Grexit. The whole affair is a disaster for Europe and Greece. The latter is impoverished, the former looks entirely incompetent and incapable. A third bailout merely renews the fuse of Grexit and the longer the fuse burns, the more likely the whole Eurozone will collapse. The political classes are incapable of evaluating the risks objectively (or are in denial about it). As an entrepreneur and investor, I cannot afford to avoid economic reality in the way the dysfunctional blob of Europe goes about conducting its (to put it mildly) rather disorganised affairs.  Reporter: What investments do you consider to be most interesting at the moment? What estimations do you have for the next period? What events should investors pay attention to, this year?  Patrick L Young: I happen to still like exchanges. We are working on several projects in this area, as the digital world perfectly fits with the benefits of exchanges. These network opportunities are enormous - everywhere.  At the same time, I have a considerable involvement in startups per se and am closely involved in Poland (through a startup group I cofounded "Mission ToRun) and across the world.  Technology is fundamentally interesting and there are huge opportunities for everybody at every age in the current environment. I am however worried about the overall macroeconomic picture and hence have been selling/pruning my portfolio of conventional assets in real estate, equities and so forth. I have no bond holdings right now - in fact I am more likely to be short of bonds/equities currently...awaiting much juicier yields in the near future (I like P2P / marketplace lending for this reason incidentally).  The biggest issue to pay attention to is the state of the world economy. China is in difficulty, the US remains sluggish thanks to the leftward lurch of the Obama administration, yet the US expansion is surely closer to an end for this cycle. Europe is a basket case overall. Sorry I cannot be more optimistic on the short to medium term but look at it this way - we live in a world of opportunity and technology on the horizon is simply incredible....albeit we have to work hard to get government to move out of the analogue era and accept our exciting digital future, even at the cost of the upheaval it can create. Then again that could work hugely to Romania's advantage if we can break the remaining influence of corruption and empower a better, broader meritocratic society for the nation which thrives with a nimbler bureaucracy such as, say Estonia's wondrous digital government...

The European Commission is proposing the emergency relocation of 120,000 migrants across Europe from Greece, Italy and Hungary, the EU executive's president Jean-Claude Juncker announced in a speech in Strasbourg on Wednesday (9 September), adding it "has to be done in a compulsory way." In his first State of the Union address to the European Parliament, Juncker said: "Addressing the refugee crisis is a matter of humanity and human dignity, for Europe [it is] also a matter of historical fairness."  "Action is what is needed," he noted, citing historical examples from Hungarians, Czechs, Slovaks, and Spanish fleeing for their lives in previous crises. He called on EU ministers of justice and home affairs to adopt the proposal on September 14 for the relocation of a total of 160,000 migrants. Juncker said he hoped that everyone would be on board this time. A relocation plan, presented by the Commission for 40,000 migrants in May, was only agreed upon on a voluntary basis. The plan subsequently fell far short of the target. "Italy, Greece, and Hungary cannot be left alone to cope with the enormous challenge," Juncker added.  He recalled that 500,000 people have made their way into Europe so far this year, and pointed out that this number represents only 0.11 percent of the total EU population. "Winter is approaching. Do we really want families sleeping in railway stations?", Juncker asked.  Besides the emergency relocation measure, Juncker announced that the European Commission is proposing a permanent relocation mechanism, which "will allow Europe to deal with crisis more swiftly in the future".  The Luxembourgish politician also announced that the Commission wants to turn Frontex, its border control agency in Warsaw, into a proper external border control and coast guard force.  He said the passport-free travel zone, Schengen, must be protected.  "Schengen will not be abolished under the mandate of this commission," Juncker said. He said the Commission plans to set up a Trust Fund of €1.8 billion to help Africa tackle the root causes of migration, and called on all EU members to pitch in.  Other measures include the review of the so-called Dublin system, which stipulates that people must claim asylum in the state in which they first enter the EU, and lays out a common list of safe countries of origin to process economic migrants more swiftly.   Juncker said Europe needs to open legal channels of migration. "We are an ageing continent, migration must change from a problem, to a well managed resource,” he said, adding that asylum-seekers should be allowed to work while awaiting the completion of their asylum process.   Juncker announced that the Commission will present a common refugee and asylum policy in early 2016, and reiterated that member states need to adhere to existing common asylum mechanisms.  "It is a matter of credibility," he said, adding that, before the summer, the Commission launched 32 proceedings to force EU members to uphold European standards and that more investigations are under way.