Searching for support and "handouts" (from the US) as usual ...

German Chancellor (Merkel) arrives in Washington late  this sunday for upcoming  meetings with President Obama that start Monday..."We think it's wise to have an (...) accord tied to achievements and bench marks,"  = this is a funny statement though.  Anyway,  here's what they will talk about ( this is the "public agenda" - background talks about further economic support from the FED not made public by neither of the participants - Germany needs help for sure):

 

UKRAINE

"One of the most pressing issues is the crisis in Ukraine," said Peter Wittig, Germany's ambassador to Washington. "All of us are concerned this is a spiraling military conflict. We want to explore the diplomatic options."  Merkel's visit comes as Obama considers providing modern weapons to Ukraine, which has been losing territory in the country's eastern regions to pro-Russian separatists armed with tanks and personnel carriers sporting Russia's most advanced armor.

Ukrainian President Petro Poroshenko on Saturday asked Western leaders at the Munich Security Conference to push for a quick cease-fire and defensive weapons capable of countering the separatists' armored assaults... Merkel, French President Francois Hollande and Russian President Vladimir Putin agreed Friday during a meeting in Moscow to draft a peace plan for Ukraine based on ideas proposed by Putin and Poroshenko, but previous agreements have fallen apart even as the conflict has resulted in more than 5,300 dead in Ukraine.  Merkel has opposed sending weapons to Ukraine. On Saturday, she said she "cannot imagine any situation in which improved equipment for the Ukrainian army leads to President Putin being so impressed that he believes he will lose militarily," according to the Associated Press.  Wittig, who briefed reporters in Washington in advance of Merkel's visit, said that if the West delivered weapons to Ukraine, "Moscow would probably reciprocate" by providing separatists with more weapons.  "How far are we willing to escalate that military spiral? I'm not sure that we are," Wittig said.

TRADE

Finally, the two leaders will discuss a thorny trade pact, the Transatlantic Trade and Investment Partnership (TTIP), which would unite the economies of the USA and the 28-nations of the European Union. The deal would eliminate most trade barriers for many products and financial services.

Backers say it could produce free-market prosperity, but the negotiations have also been controversial because the pact would increase competition. Greece's new leftist ruling party, Syriza, has said it opposes the plan.

THE ISLAMIC "STATE"

Obama and Merkel will also discuss a training center Germany is setting up in Erbil, in Kurdish-controlled Iraq, to train and provide arms to Kurdish Peshmerga forces fighting against the Islamic State, which has seized territory in Iraq and Syria. Merkel will also discuss German interest in pursuing other tracks of destabilizing the militant group, including counter-financing and supporting messages that de-legitimize the group's claims that its actions, including the murder by fire last month of a captured Jordanian pilot, are backed by Muslim religious ideals.
Source - USA Today

^{Greece's finance minister spoke to ECB chief Mario Draghi in Frankfurt (Source: Getty)}

In return, Mr Varoufakis assured German voters his government would seek to dismantle the "cronyism and corruption" that has held back the country for decades.

"Germans have to understand that it doesn’t mean we’re turning away from the reform path if we give an additional €300 a year to a pensioner living on €300 a month. When we talk about reforms, we should talk about cartels, about rich Greeks who hardly pay any taxes."

The finance minister ruled out any plea for financial aid from Russia, and called on the German Chancellor to put forward a "Merkel Plan" based on the post-war Marshall loans granted by the United States to rehabilitate Germany after the war.

"I believe the EU would benefit if Germany conceived of itself as a hegemon," said Mr Varoufakis. "But a hegemon must shoulder responsibility for others.

"Germany would use its power to unite Europe. That would be a wonderful legacy for Germany’s federal chancellor."

^{Who owns Greek debt?}

^{(Source: Open Europe)}

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."

The problem with economists and journalists that report on economics is that they like simple, easy to understand, definitions and cannot think rationally if a definition is involved.  Take for instance deflation. Economists define deflation as inflation below o%. And although the only instance of real deflation was in 1930's USA, economists are almost united in saying it would be bad for any economy. Now, some countries in Europe that import every single drop of oil they use, had very low inflation. The recent steep fall in oil price meant that the economies of those countries were now officially in deflation and economists and journalists had a field day forecasting doom and gloom. Because the economies were in deflation.  But they forgot to include the reason for the fall into deflation into the equation.  Cheaper oil is a godsend to any economy dependent on oil imports, it is in no way a bad thing. It means cheaper transport, heating, manufacturing, farming, in fact cheaper everything that uses oil or oil derivatives.  But most economists and financial journalists, with their closed minds, can only see the minus sign in front of the inflation statistics and therefore denounce a bonanza as a catastrophe. The massive numbers of unemployed and underemployed, or those barely getting by on jobs in our neoliberal economic wonderland where living-wage salaries are a thing of the past, would welcome not having their purchasing power robbed by central bank debasement of the currency and asset bubbles, not to mention the unpayable debts they and their children are being saddled with by being forced to bail out financial speculators.

Usually, deflation is defined as a contraction of the money supply. Lower prices are a consequence of that drop in money supply as there is less money chasing goods.   However, there is currently a contradiction in this definition as the money supply has never been greater, but that is because practically all of that money supply growth sits in banks and shores up their balance sheets, rather than entering the mainstream economy.   Western banks have chosen to hold onto that money because almost to a man, the banks are technically bankrupt already.  Its like there are two pots of money - the one in the banks and the one on the streets.  On the streets money is in short supply as wages flat line.  The good news is that deflation will help end the euro, which is simply a gangster racket now, to enrich elites and bankers at the expense of ordinary people. Hence Greece.

Let's hope it lasts long enough to end the euro ... Let Germany eat the same crap Greece has been eating for the last 5 years. Deflation and misery should be a constant German diet until the end of time.

Do we ever mention the dark secret about artificial interest rates? About obstructing the workings of the genius mind of the human race that we call the free market. When government gives away cheap money - using banks simply as storefront brokers, the story always has a sad outcome.  It's not their money, so the banks don't care at all about the eligibilty or the prospects of the borrowing businesses. You're in a dying industry? No problem. Have a few million to keep the operation going for a few more months. You know failure is inevitable, so be sensible and pocket as much as possible.  With free market interest rates, the banks are putting their own money on the line. They want a decent return, and they want to know the borrower is a competent operator in a viable industry.  That means higher interest rates - and it means resources directed toward high-growth sectors (and away from the weak and moribund). This obviously contributes to a higher overall economic growth rate - whereas easy money puts us on a long-term low growth trend line.

Look at Japan and Europe to see what happens when you treat a hangover with more booze. You get a decrepit alcoholic.  You must take a bit of pain to rise again - and the occassional downturn is vital to preserving the essential institutions that provide real security and comfort and sustenance to the human being - religion, the family and the local community. Socialism and government intervention in general undermine these institutions - bringing isolation and misery for the individual, and collapse of civilised society... And the reactions of the online article's German readers are also very eloquent - deep anger and dismay from all, and some of the darkest prophesies I have ever seen in the FAZ comments section: their articulacy puts the DT comments pages to shame.  It's interesting that Merkel has waited until now to allow Draghi to make this QE happen - in a year (2015) that sees - I believe - only two German regional elections, Hamburg and Bremen, both cities ruled by the SPD, and in neither of which the CDU would expect to win in any case.  Merkel is quite keen on power: and for all her contempt for her fellow European political leaders and their 'local problems', is extremely careful to ensure she is protected against such problems herself....So - what's going to happen in Greece?  The ECB is going to give the Greek Central Bank bucketloads of money to go out and buy Greek bonds, flooding the Greek economy with liquidity?  The problem isn't one of liquidity. 

The problem that the Euro is at a level which has rendered the Greek economy uncompetitive. Only a massive fall in the Euro would help the Greeks. This isn't going to happen, so the problem remains, unsolved.

Translation: Tsipras took money under the table to sell out his supporters and his nation.

"The new Syriza-led government has demanded some form debt write-off on the country's €317bn liabilities, two-thirds of which are owned to official creditors in the form of the EU and the IMF."

"Prime Minister Tsipras says a debt deal is imminent and there is "no way" Greece will not fulfill obligations to the Troika".  "The battle lines between Greece and its creditors were drawn in Athens as the Greek finance minister announced that the new government would refuse to engage with representatives of the country’s hated troika of lenders."  "Greece's new prime minister has insisted his country will fulfil all of its loan obligations to creditors as it appointed private bank Lazard ahead of crunch talks with the Troika."  Confused? You should be.   Greece's new prime minister has insisted his country will fulfil all of its loan obligations to creditors as it appointed private bank Lazard ahead of crunch talks with the Troika.    In a statement released earlier, Alexis Tsipras said: "I am absolutely confident that we will soon manage to reach a mutually beneficial agreement, both for Greece and for Europe as a whole."  "No side is seeking conflict and it has never been our intention to act unilaterally on Greek debt."  Mr Tsipras said his commitment to end austerity and kickstart growth in the country, "in no way entails that we will not fulfill our loan obligations to the ECB or the IMF."  His comments came after German Chancellor Angela Merkel ruled out the possibility of debt forgiveness for Greece's new government, insisting that the indebted country should abide by the terms of its bailout arrangement....The stand-off between Greece and its creditors escalated on Friday after Yanis Varoufakis, Greece's new finance minister, ruled out any cooperation with the country's Troika of lenders, calling them a “rottenly constructed committee."  Anti-austerity Syrzia campaigned on the platform of staying within the euro and agreeing better terms on which it can service its debt.  Chancellor Merkel said Europe would stand by Greece should it continue to meet the conditions of its bailout.  "The aim of our policy was and is that Greece remains permanently part of the euro community," said Ms Merkel.  "Europe will continue to show its solidarity with Greece, as with other countries hard hit by the crisis, if these countries carry out reforms and cost-saving measures."  At over 175pc of its national output, Greece's debt mountain is the highest in the Eurozone.