Truth Frequency Radio


Feb 11, 2013

This Is It!: China Surpasses U.S. As Number One Global Trading Power

Brandon Smith
Alt Market
Feb 11, 2013

Back in 2008, at the onset of the derivatives and credit collapse, I wrote several economic editorials discussing what I saw as the single most vital trend in the global fiscal system, and how it would cause a disastrous upheaval that would leave the U.S. and the dollar financially sunk. This trend, which seemed to take serious root in 2005, was the massive shift by China from an export dependent source of cheap manufacturing and labor, into a moderate exporter, and consumer hub, and currency powerhouse. In my view at the time, the evidence suggested that China was positioning itself to decouple from its dependence on U.S. markets and the dollar. I was, of course, attacked as a “doom monger” and “conspiracy theorist”. Five years later, the critics have changed their tune…

For the past decade, China has been slowly but surely issuing Yuan denominated bonds and securities around the globe, while simultaneously forming bilateral trade agreements with multiple nations and cutting out the U.S. dollar as the world reserve currency. This process has gone mostly ignored by the mainstream financial media. However, I and many other independent analysts could not overlook the red flags. I tried to summarize as much of the situation and facts as I could in my article ‘How The U.S. Dollar Will Be Replaced’, which was published in May of last year:

http://www.alt-market.com/articles/784-how-the-us-dollar-will-be-replaced

The biggest question for me was, if China is one of the largest holders of Forex reserves on the planet, and had the largest savings of any nation, WHY did they feel the need or desire in 2005 to begin issuing Yuan denominated debt? Why begin borrowing capital from foreign creditors? They certainly didn’t need the money. Why were they moving away from export dependency and building a consumer base? And why attempt to proliferate their currency? Wouldn’t the pursuit of global Yuan circulation lead to an eventual increase in valuation? Didn’t the Chinese want their currency cheap so that they could maintain export superiority? What did the Chinese know in 2005 that we didn’t?

Full Article

China Eclipses U.S. as Biggest Trading Nation

China Jan. CPI Rises 2%, Matching Economists’ Estimates By Bloomberg News – Feb 10, 2013 9:01 AM MT

China surpassed the U.S. to become the world’s biggest trading nation last year as measured by the sum of exports and imports of goods, official figures from both countries show.

U.S. exports and imports of goods last year totaled $3.82 trillion, the U.S. Commerce Department said last week. China’s customs administration reported last month that the country’s trade in goods in 2012 amounted to $3.87 trillion.

China’s growing influence in global commerce threatens to disrupt regional trading blocs as it becomes the most important commercial partner for some countries. Germany may export twice as much to China by the end of the decade as it does to France, estimated Goldman Sachs Group Inc.’s Jim O’Neill.

“For so many countries around the world, China is becoming rapidly the most important bilateral trade partner,” O’Neill, chairman of Goldman Sachs’s asset management division and the economist who bound Brazil to Russia, India and China to form the BRIC investing strategy, said in a telephone interview. “At this kind of pace by the end of the decade many European countries will be doing more individual trade with China than with bilateral partners in Europe.”
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This Is It! China Surpasses U.S. As Number One Global Trading Power

Sunday, February 10, 2013

Brandon Smith, Contributor
Activist Post

Back in 2008, at the onset of the derivatives and credit collapse, I wrote several economic editorials discussing what I saw as the single most vital trend in the global fiscal system, and how it would cause a disastrous upheaval that would leave the U.S. and the dollar financially sunk.

This trend, which seemed to take serious root in 2005, was the massive shift by China from an export dependent source of cheap manufacturing and labor, into a moderate exporter, consumer hub, and currency powerhouse. In my view at the time, the evidence suggested that China was positioning itself to decouple from its dependence on U.S. markets and the dollar. I was, of course, attacked as a “doom monger” and “conspiracy theorist”. Five years later, the critics have changed their tune…

For the past decade, China has been slowly but surely issuing Yuan-denominated bonds and securities around the globe, while simultaneously forming bilateral trade agreements with multiple nations and cutting out the U.S. dollar as the world reserve currency. This process has gone mostly ignored by the mainstream financial media. However, I and many other independent analysts could not overlook the red flags.

I tried to summarize as much of the situation and facts as I could in my article ‘How The U.S. Dollar Will Be Replaced’, which was published in May of last year:

http://www.alt-market.com/articles/784-how-the-us-dollar-will-be-replaced

The biggest question for me was, if China is one of the largest holders of Forex reserves on the planet, and had the largest savings of any nation, WHY did they feel the need or desire in 2005 to begin issuing Yuan-denominated debt? Why begin borrowing capital from foreign creditors? They certainly didn’t need the money. Why were they moving away from export dependency and building a consumer base? And why attempt to proliferate their currency? Wouldn’t the pursuit of global Yuan circulation lead to an eventual increase in valuation? Didn’t the Chinese want their currency cheap so that they could maintain export superiority? What did the Chinese know in 2005 that we didn’t?

Well, apparently they were either psychic, or SOMEONE gave them advanced warning. They knew that there would be a crisis in American consumption and that this would lead to severe reduction in imports, which is why they began building trade deals within the ASEAN trading bloc to insulate themselves. They knew that there would be considerable devaluation in the dollar, which is why they converted much of their long-term treasury holdings to short-term treasury bonds that they could dump with far more ease, and they knew that the IMF would be promoting Special Drawing Rights as a new reserve replacing the dollar, which is why they have been spreading the Yuan everywhere, earning them favor with the global banksters and inclusion in the basket currency. In fact, China has been pumping Yuan into global markets even faster than the Federal Reserve has been printing the dollar:

http://www.zerohedge.com/news/2013-02-08/china-accounts-nearly-half-worlds-new-money-supply

China is flooding the system with Yuan! This means only one thing; China is no longer seeking to maintain the traditional trade relationship it has had with the United States.

To make my case even more clear, I would point out that China has not only become the world’s largest gold producer, but also its largest BUYER, recently surpassing India. Official estimates place Chinese gold purchases in 2012 at around 800 tons; an astonishing increase in their stockpile.

The U.S. and the Federal Reserve can’t even deliver gold it is supposed to be holding for others, including Germany.

China has also recently quadrupled imports of rice and tripled wheat and corn imports in only one year. Why? Again, I ask, what do they know that we are not being told?

http://ajw.asahi.com/article/economy/business/AJ201302020056

As I have stated for many years, China is being groomed as an alternative economic engine in opposition to the United States, and that this will lead to an eventual dump by them of the Greenback. This scenario is not only based on my opinion, it has also been spoken of openly by elitist financiers, including George Soros:

This past month, the same plan has been reiterated by Zhu Min, the deputy managing director of the IMF. In his statement, he proclaimed that the shift by China into a more consumer-based system had been successful, and that the Yuan or RMB, was on the way to becoming a world reserve currency:

http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20130118000075&cid=1102

I believe that the moment for the epic changeover, and all the political and financial conflict that comes with it, has begun…

It has been announced this week that China surpassed the U.S. for the first time ever as the number one trading power in the world:

http://www.bloomberg.com/news/2013-02-09/china-passes-u-s-to-become-the-world-s-biggest-trading-nation.html

U.S. exports and imports last year totaled $3.82 trillion, the U.S. Commerce Department said last week. China’s customs administration reported last month that the country’s total trade in 2012 amounted to $3.87 trillion. China had a $231.1 billion annual trade surplus while the U.S. had a trade deficit of $727.9 billion:

It is remarkable that an economy that is only a fraction of the size of the U.S. economy has a larger trading volume,” Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics in Washington, said in an e-mail. “The surpassing of the U.S. is not because of a substantially undervalued currency that has led to an export boom,” said Lardy, noting that Chinese imports have grown more rapidly than exports since 2007.

According to O’Neill (Goldman Sachs Jim O’Neill), the trade figures underscore the need to draw China further into the global financial and trading architecture that the U.S. helped create.

‘One way or another we have to get China more involved in the global organizations of today and the future despite some of their own reluctance,’ O’Neill said, mentioning China’s inclusion in the International Monetary Fund’s Special Drawing Rights currency basket. ‘To not have China more symbolically and more importantly actually central to all these things is just increasingly silly.’

For those who are still not aware of why this is such a big deal, it is essentially a turning point moment in global trade. There is no doubt that China will now be inducted into the SDR, and that their importance as a trade and consumption center will quickly lead to a move away from the dollar. To put it simply, the dollar is going to lose its world reserve status VERY soon. Many will cheer this change as necessary progress towards a more “globally conscious” economic system. However, it’s not that simple. Total centralization is first and foremost the dream of idiots, and in any mutation (or amputation) there is always considerable pain involved. The proponents of this “New World Order” (their words, not mine) seem to have placed the U.S. squarely in their crosshairs as the primary recipient of this fiscal pain.

In my early analysis, I felt it possible that Japan would be inducted willingly into the new ASEAN trading bloc and that they would swiftly fall in line with a dump of the dollar, mainly because their export markets were suffering greatly due to the decline in American purchases.

Now it appears that Japan has not been as pliable as the globalists wanted, and so, a war may be on the table in the Pacific.

Rhetoric in Chinese newspapers has been very heated and provocative, and the tensions surrounding the Senkaku/Diaoyu Islands is reaching a boiling point. The two countries have done everything so far EXCEPT shoot at each other, and that will be happening in due course now that China is allegedly locking offensive radar onto Japanese ships. Even Chinese films released in the past two years have been soaked with anti-Japan propaganda, most of them usually set during WWII around the brutal invasion and subjugation by the Japanese in Chinese provinces.

The recipe is one of inevitable disaster, with the U.S. at the center of a boiling pot. As I pointed in my last economic piece, we must now look to events rather than numbers to gain insight into where we are headed. The time has come. China is nearly ready for IMF inclusion. Volatility around the world is high. Our government has a final decision to make on the Fiscal Cliff in March, not to mention the sudden push for possible gun registration and confiscation. My instincts tell me that so many explosive aspects coalescing together at the same tenuous moment is not a coincidence. The next few months call for hyper-vigilance and every ounce of energy we can muster to educate as many people as possible in as short a time as possible.

I say again, China has surpassed the U.S. in global trade. A drop of the dollar is the obvious next step…

You can contact Brandon Smith at: [email protected]

Economists: China needs full-scale reform to address inequality

By Agence France-Presse
Friday, February 8, 2013 16:04 EST

A homeless man lies on his bed in an underpass in Beijing on December 7, 2012. (AFP)

China’s stated aim to narrow the income gulf between its sports-car driving elite and vast numbers who still live in poverty will need radical political and economic changes to work, say economists.

Long-delayed “proposals on the distribution of income” were announced this week ahead of Sunday’s Lunar New Year, as hundreds of millions working in cities returned to their rural homes, many without running water or heating.

Beijing promised to improve the lives of these rural migrant workers, who are denied equal access to health, education and housing services in cities under a half-century old system of residency permits known as “hukou”.

“Migrant workers from rural areas will be assisted to register as citizens and entitled to all basic public services in the cities,” according to the measures quoted by the official Xinhua news agency.

But the aspirational document was generally short of concrete steps.

Tax reductions will be “promoted” for low- and middle-income earners, it said, and the government will “target” reducing the number of people living on less than $1 a day by around 80 million by 2015.

In 2011 Xinhua said 150 million Chinese live on less than that, a stark contrast to the country’s image as the world’s manufacturing heartland, the holder of its biggest foreign exchange reserves and a motor of global recovery.

The extent of inequality in China, particularly between urban and rural areas, saw authorities refuse to publish the country’s Gini coefficient, a commonly used measure of inequality, for more than 10 years.

Obama’s Geopolitical China ‘Pivot’: The Pentagon Targets China

Global Research, February 02, 2013
Global Research 24 August 2012

Since the collapse of the Soviet Union and the nominal end of the Cold War some twenty years back, rather than reducing the size of its mammoth defense spending, the US Congress and all US Presidents have enormously expanded spending for new weapons systems, increased permanent military bases around the world and expansion of NATO not only to former Warsaw Pact countries on Russia’s immediate periphery; it also has expanded NATO and US military presence deep into Asia on the perimeters of China through its conduct of the Afghan war and related campaigns.

Part I The Pentagon Targets China

On the basis of simple dollar outlays for military spending, the US Pentagon combined budget, leaving aside the huge budgets for such national security and defense-related agencies of US Government as the Department of Energy and US Treasury and other agencies, the US Department of Defense spent some $739 billion in 2011 on its military requirements. Were all other spending that is tied to US defense and national security included, the London-based International Institute for Strategic Studies estimates an annual military spending of over $1 trillion by the United States. That is an amount greater than the total defense-related spending of the next 42 nations combined, and more than the Gross Domestic Product of most nations.

China officially spent barely 10% of the US outlay on its defense, some $90 billions, or, if certain defense-related arms import and other costs are included, perhaps $111 billion a year. Even if the Chinese authorities do not publish complete data on such sensitive areas, it is clear China spends a mere fraction of the USA and is starting from a military-technology base far behind the USA.

China today, because of its dynamic economic growth and its determination to pursue sovereign Chinese national interests, merely because China exists, is becoming the Pentagon new “enemy image,” now replacing the earlier “enemy image” of Islam used after September 2001 by the Bush-Cheney Administration to justify the Pentagon’s global power pursuit, or that of Soviet Communism during the Cold War. The new US military posture against China has nothing to do with any aggressive threat from the side of China. The Pentagon has decided to escalate its aggressive military posture to China merely because China has become a strong vibrant independent pole in world economics and geopolitics. Only vassal states need apply to Washington’s globalized world.

Obama Doctrine: China is the new ‘enemy image’

After almost two decades of neglect of its interests in East Asia, in 2011, the Obama Administration announced that the US would make “a strategic pivot” in its foreign policy to focus its military and political attention on the Asia-Pacific, particularly Southeast Asia, that is, China. The term “strategic pivot” is a page out of the classic textbook from the father of British geopolitics, Sir Halford Mackinder, who spoke at various times of Russia and later China as “pivot powers” whose geographical and geopolitical position posed unique challenges toAnglo-Saxon and after 1945, to American hegemony.

During the final months of 2011 the Obama Administration clearly defined a new public military threat doctrine for US military readiness in the wake of the US military failures in Iraq and Afghanistan. During a Presidential trip to the Far East, while in Australia, the US President unveiled what is being termed the Obama Doctrine.[1]

Obama told the Australians then:

With most of the world’s nuclear power and some half of humanity, Asia will largely define whether the century ahead will be marked by conflict or cooperation…As President, I have, therefore, made a deliberate and strategic decision — as a Pacific nation, the United States will play a larger and long-term role in shaping this region and its future…I have directed my national security team to make our presence and mission in the Asia Pacific a top priority…As we plan and budget for the future, we will allocate the resources necessary to maintain our strong military presence in this region. We will preserve our unique ability to project power and deter threats to peace…Our enduring interests in the region demand our enduring presence in the region.

The United States is a Pacific power, and we are here to stay. Indeed, we are already modernizing America’s defense posture across the Asia Pacific. It will be more broadly distributed — maintaining our strong presence in Japan and the Korean Peninsula, while enhancing our presence in Southeast Asia. Our posture will be more flexible — with new capabilities to ensure that our forces can operate freely .. I believe we can address shared challenges, such as proliferation and maritime security, including cooperation in the South China Sea.[2]

The centerpiece of Obama’s visit was the announcement that at least 2,500 elite US Marines will be stationed in Darwin in Australia’s Northern Territory. In addition, in a series of significant parallel agreements, discussions with Washington were underway to fly long-range American surveillance drones from the remote Cocos Islands — an Australian territory in the Indian Ocean. Also the US will gain greater use of Australian Air Force bases for American aircraft and increased ship and submarine visits to the Indian Ocean through a naval base outside Perth, on the country’s west coast.

The Pentagon’s target is China.

To make the point clear to European members of NATO, in remarks to fellow NATO members in Washington in July 2012, Phillip Hammond, the UK Secretary of State for Defense declared explicitly that the new US defense shift to the Asia-Pacific region was aimed squarely at China. Hammond said that, “the rising strategic importance of the Asia-Pacific region requires all countries, but particularly the United States, to reflect in their strategic posture the emergence of China as a global power. Far from being concerned about the tilt to Asia-Pacific, the European NATO powers should welcome the fact that the US is willing to engage in this new strategic challenge on behalf of the alliance.” [3]

As with many of its operations, the Pentagon deployment is far deeper than the relatively small number of 2,500 new US soldiers might suggest.

In August 2011 the Pentagon presented its annual report on China’s military. It stated that China had closed key technological gaps. Deputy Assistant Secretary of Defence for East Asia, Michael Schiffer, said that the pace and scope of China’s military investments had “allowed China to pursue capabilities that we believe are potentially destabilizing to regional military balances, increase the risk of misunderstanding and miscalculation and may contribute to regional tensions and anxieties.” [4] He cited Chinese refurbishing of a Soviet-era aircraft carrier and China’s development of its J20 Stealth Fighter as indications of the new capability requiring a more active US military response. Schiffer also cited China’s space and cyber operations, saying it was “developing a multi-dimensional program to improve its capabilities to limit or prevent the use of space-based assets by adversaries during times of crisis or conflict.” [5]

Part II: Pentagon’s ‘Air-Sea Battle’

The Pentagon strategy to defeat China in a coming war, details of which have filtered into the US press, is called “Air-Sea Battle.” This calls for an aggressive coordinated US attack. US stealth bombers and submarines would knock out China’s long-range surveillance radar and precision missile systems deep inside the country. This initial “blinding campaign” would be followed by a larger air and naval assault on China itself.[6] Crucial to the advanced pentagon strategy, deployment of which has already quietly begun, is US military navy and air presence in Japan, Taiwan, Philippines, Vietnam and across the South China Sea and Indian Ocean. Australian troop and naval deployment is aimed at accessing the strategic Chinese South China Sea as well as the Indian Ocean. The stated motive is to “protect freedom of navigation” in the Malacca Straits and the South China Sea. In reality it is to be positioned to cut China’s strategic oil routes in event of full conflict.

Air-Sea Battle’s goal is to help US forces withstand an initial Chinese assault and counterattack to destroy sophisticated Chinese radar and missile systems built to keep US ships away from China’s coastline.[7]

US ‘Air-Sea Battle’ against China

In addition to the stationing of the US Marines in the north of Australia, Washington plans to fly long-range American surveillance drones from the remote Cocos Islands — an Australian territory in the strategically vital Indian Ocean. Also it will have use of Australian Air Force bases for American military aircraft and increased ship and submarine visits to the Indian Ocean through a naval base outside Perth, on Australia’s west coast.[8]

The architect of the Pentagon anti-China strategy of Air-Sea battle is Andrew Marshall, the man who has shaped Pentagon advanced warfare strategy for more than 40 years and among whose pupils were Dick Cheney and Donald Rumsfeld. [9] Since the 1980s Marshall has been a promoter of an idea first posited in 1982 by Marshal Nikolai Ogarkov, then chief of the Soviet general staff, called RMA, or ‘Revolution in Military Affairs.’ Marshall, today at the ripe age of 91, still holds his desk and evidently very much influence inside the Pentagon.

The best definition of RMA was the one provided by Marshall himself: “A Revolution in Military Affairs (RMA) is a major change in the nature of warfare brought about by the innovative application of new technologies which, combined with dramatic changes in military doctrine and operational and organizational concepts, fundamentally alters the character and conduct of military operations.” [10]

It was also Andrew Marshall who convinced US Defense Secretary Donald Rumsfeld and his successor Robert Gates to deploy the Ballistic Missile “defense” Shield in Poland, the Czech Republic, Turkey and Japan as a strategy to minimize any potential nuclear threat from Russia and, in the case of Japan’s BMD, any potential nuclear threat from China.

PART III: ‘String of Pearls’ Strategy of Pentagon

In January 2005, Andrew Marshall issued a classified internal report to Defense Secretary Donald Rumsfeld titled “Energy Futures in Asia.” The Marshall report, which was leaked in full to a Washington newspaper, invented the term “string of pearls” strategy to describe what it called the growing Chinese military threat to “US strategic interests” in the Asian space.[11]

The internal Pentagon report claimed that “China is building strategic relationships along the sea lanes from the Middle East to the South China Sea in ways that suggest defensive and offensive positioning to protect China’s energy interests, but also to serve broad security objectives.”

In the Pentagon Andrew Marshall report, the term China’s “String of Pearls” Strategy was used for the first time. It is a Pentagon term and not a Chinese term.

The report stated that China was adopting a “string of pearls” strategy of bases and diplomatic ties stretching from the Middle East to southern China that includes a new naval base under construction at the Pakistani port of Gwadar. It claimed that “Beijing already has set up electronic eavesdropping posts at Gwadar in the country’s southwest corner, the part nearest the Persian Gulf. The post is monitoring ship traffic through the Strait of Hormuz and the Arabian Sea.” [12]

The Marshall internal report went on to warn of other “pearls” in the sea-lane strategy of China:

• Bangladesh: China is strengthening its ties to the government and building a container port facility at Chittagong. The Chinese are “seeking much more extensive naval and commercial access” in Bangladesh.

• Burma: China has developed close ties to the military regime in Rangoon and turned a nation wary of China into a “satellite” of Beijing close to the Strait of Malacca, through which 80 percent of China’s imported oil passes. China is building naval bases in Burma and has electronic intelligence gathering facilities on islands in the Bay of Bengal and near the Strait of Malacca. Beijing also supplied Burma with “billions of dollars in military assistance to support a de facto military alliance,” the report said.

• Cambodia: China signed a military agreement in November 2003 to provide training and equipment. Cambodia is helping Beijing build a railway line from southern China to the sea.

• South China Sea: Chinese activities in the region are less about territorial claims than “protecting or denying the transit of tankers through the South China Sea,” the report said. China also is building up its military forces in the region to be able to “project air and sea power” from the mainland and Hainan Island. China recently upgraded a military airstrip on Woody Island and increased its presence through oil drilling platforms and ocean survey ships.

• Thailand: China is considering funding construction of a $20 billion canal across the Kra Isthmus that would allow ships to bypass the Strait of Malacca. The canal project would give China port facilities, warehouses and other infrastructure in Thailand aimed at enhancing Chinese influence in the region, the report said… The U.S. military’s Southern Command produced a similar classified report in the late 1990s that warned that China was seeking to use commercial port facilities around the world to control strategic “chokepoints.” [13]

Breaking the String of Pearls

Significant Pentagon and US actions since that 2005 report have been aimed to counter China’s attempts to defend its energy security via that “String of Pearls.” The US interventions since 2007 into Burma/Myanmar have had two phases.

The first was the so-called Saffron Revolution, a US State Department and CIA-backed destabilization in 2007 aimed at putting the international spotlight on the Myanmar military dictatorship’s human rights practices. The aim was to further isolate the strategically located country internationally from all economic relations, aside from China. The background to the US actions was China’s construction of oil and gas pipelines from Kunming in China’s southwest Yunnan Province, across the old Burma Road across Myanmar to the Bay of Bengal across from India and Bangladesh in the northern Indian Ocean.

Forcing Burma’s military leaders into tighter dependency on China was one of the factors triggering the decision of the Myanmar military to open up economically to the West. They declared that the tightening of US economic sanctions had done the country great harm and President Thein Sein made his major liberalization opening, as well as allowing US-backed dissident, Aung San Suu Kyi, to be free and to run for elective office with her party, in return for promises from US Secretary of State Hillary Clinton of US investment in the country and possible easing of US economic sanctions. [14]

The US corporations approaching Burma are hand-picked by Washington to introduce the most destructive “free market” reforms that will open Myanmar to instability. The United States will not allow investment in entities owned by Myanmar’s armed forces or its Ministry of Defense. It also is able to place sanctions on “those who undermine the reform process, engage in human rights abuses, contribute to ethnic conflict or participate in military trade with North Korea.” The United States will block businesses or individuals from making transactions with any “specially designated nationals” or businesses that they control — allowing Washington, for example, to stop money from flowing to groups “disrupting the reform process.” It’s the classic “carrot and stick” approach, dangling the carrot of untold riches if Burma opens its economy to US corporations and punishing those who try to resist the takeover of the country’s prize assets. Oil and gas, vital to China, will be a special target of US intervention. American companies and people will be allowed to invest in the state-owned Myanma Oil and Gas Enterprise.[15]

Obama also created a new power for the government to impose “blocking sanctions” on any individual threatening peace in Myanmar. Businesses with more than $500,000 in investment in the country will need to file an annual report with the State Department, with details on workers’ rights, land acquisitions and any payments of more than $10,000 to government entities, including Myanmar’s state-owned enterprises.

American companies and people will be allowed to invest in the state-owned Myanma Oil and Gas Enterprise, but any investors will need to notify the State Department within 60 days.

As well, US “human rights” NGOs, many closely associated with or believed to be associated with US State Department geopolitical designs, including Freedom House, Human Rights Watch, Institute for Asian Democracy, Open Society Foundations, Physicians for Human Rights, U.S. Campaign for Burma, United to End Genocide— will now be allowed to operate inside Myanmar according to a decision by State Secretary Clinton in April 2012.[16]

Thailand, another key in China’s defensive String of Pearl Strategy has also been subject of intense destabilization over the past several years. Now with the sister of a corrupt former Prime Minister in office, US-Thai relations have significantly improved.

After months of bloody clashes, the US-backed billionaire, Former Thai Prime Minister Thaksin Shinawatra , managed to buy the way to put his sister, Yingluck Shinawatra in as Prime Minister, with him reportedly pulling the policy strings from abroad. Thaksin himself was enjoying comfortable status in the US as of this writing, in summer 2012.

US relations with Thaksin’s sister, Yingluck Shinawatra, are moving in direct fulfillment of the Obama “strategic pivot” to focus on the “China threat.” In June 2012, General Martin E. Dempsey, chairman of the US Joint Chiefs of Staff, after returning from a visit this month to Thailand, the Philippines and Singapore stated: “We want to be out there partnered with nations and have a rotational presence that would allow us to build up common capabilities for common interests.” This is precisely key beads in what the Pentagon calls the String of Pearls.

The Pentagon is now quietly negotiating to return to bases abandoned after the Vietnam War. It is negotiating with the Thai government to create a new “disaster relief” hub at the Royal Thai Navy Air Field at U-Tapao, 90 miles south of Bangkok.

The US military built the two mile long runway there, one of Asia’s longest, in the 1960s as a major staging and refueling base during the Vietnam War.

The Pentagon is also working to secure more rights to US Navy visits to Thai ports and joint surveillance flights to monitor trade routes and military movements. The US Navy will soon base four of its newest warships — Littoral Combat Ships — in Singapore and would rotate them periodically to Thailand and other southeast Asian countries. The Navy is pursuing options to conduct joint airborne surveillance missions from Thailand.[17]

In addition, Deputy Defense Secretary Ashton Carter went to Thailand in July 2012 and the Thai government has invited Defense Secretary Leon Panetta, who met with the Thai minister of defense at a conference in Singapore in June.[18]

In 2014, the US Navy is scheduled to begin deploying new P-8A Poseidon reconnaissance and anti-submarine aircraft to the Pacific, replacing the P-3C Orion surveillance planes. The Navy is also preparing to deploy new high-altitude surveillance drones to the Asia-Pacific region around the same time. [19]

PART IV: India-US Defense ‘Look East Policy’

US Secretary of Defense Leon Panetta was in India in June of this year where he proclaimed that defence cooperation with India is the lynchpin of US security strategy in Asia. He pledged to help develop India’s military capabilities and to engage with India in joint production of defence “articles” of high technology. Panetta was thr fifth Obama Cabinet secretary to visit India this year. The message that they have all brought is that, for the US, India will be the major relationship of the 21st century. The reason is China’s emergence. [20]

Several years ago during the Bush Administration, Washington made a major move to lock India in as a military ally of the US against the emerging Chinese presence in Asia. India calls it India’s “Look East Policy.” In reality, despite all claims to the contrary, it is a “look at China” military policy.

In comments in August 2012, Deputy Secretary of defense Ashton Carter stated, “India is also key part of our rebalance to the Asia-Pacific, and, we believe, to the broader security and prosperity of the 21st century. The US-India relationship is global in scope, like the reach and influence of both countries.” [21] In 2011, the US military conducted more than 50 significant military activities with India.

Carter continued in remarks following a trip to New Delhi, “Our security interests converge: on maritime security, across the Indian Ocean region; in Afghanistan, where India has done so much for economic development and the Afghan security forces; and on broader regional issues, where we share long-term interests. I went to India at the request of Secretary Panetta and with a high-level delegation of U S technical and policy experts.” [22]

Indian Ocean

The Pentagon “String of pearls” strategy against China in effect is not one of beautiful pearls, but a hangman’s noose around the perimeter of China, designed in the event of major conflict to completely cut China off from its access to vital raw materials, most especially oil from the Persian Gulf and Africa.

Former Pentagon adviser Robert D. Kaplan, now with Stratfor, has noted that the Indian Ocean is becoming the world’s “strategic center of gravity” and who controls that center, controls Eurasia, including China. The Ocean is the vital waterway passage for energy and trade flows between the Middle East and China and Far Eastern countries. More strategically, it is the heart of a developing south-south economic axis between China and Africa and Latin America.

Since 1997 trade between China and Africa has risen more than twenty-fold and trade with Latin America, including Brazil, has risen fourteen fold in only ten years. This dynamic, if allowed to continue, will eclipse the economic size of the European Union as well as the declining North American industrial economies in less than a decade. That is a development that Washington circles and Wall Street are determined to prevent at all costs.

Straddled by the Islamic Arch–which stretches from Somalia to Indonesia, passing through the countries of the Gulf and Central Asia– the region surrounding the Indian Ocean has certainly become the world’s new strategic center of gravity.[23]

No rival economic bloc can be allowed to challenge American hegemony. Former Obama geopolitical adviser Zbigniew Brzezinski, a student of Mackinder geopolitics and still today along with Henry Kissinger one of the most influential persons in the US power establishment, summed up the position as seen from Washington in his 1997 book, The Grand Chessboard: American Primacy and It’s Geostrategic Imperatives:

It is imperative that no Eurasian challenger emerges, capable of dominating Eurasia and thus of also challenging America. The formulation of a comprehensive and integrated Eurasian geo-strategy is therefore the purpose of this book. [24]

For America, the chief geopolitical prize is Eurasia…. America’s global primacy is directly dependent on how long and how effectively its preponderance on the Eurasian continent is sustained. [25]

In that context, how America ‘manages’ Eurasia is critical. Eurasia is the globe’s largest continent and is geopolitically axial. A power that dominates Eurasia would control two of the world’s three most advanced and economically productive regions. A mere glance at the map also suggests that control over Eurasia would almost automatically entail Africa’s subordination, rendering the Western Hemisphere and Oceania geopolitically peripheral to the world’s central continent. About 75 per cent of the world’s people live in Eurasia, and most of the world’s physical wealth is there as well, both in its enterprises and underneath its soil. Eurasia accounts for 60 per cent of the world’s GNP and about three-fourths of the world’s known energy resources. [26]

The Indian Ocean is crowned by what some call an Islamic Arch of countries stretching from East Africa to Indonesia by way of the Persian Gulf countries and Central Asia. The emergence of China and other much smaller Asian powers over the past two decades since the end of the Cold war has challenged US hegemony over the Indian Ocean for the first time since the beginning of the Cold War. Especially in the past years as American economic influence has precipitously declined globally and that of China has risen spectacularly, the Pentagon has begun to rethink its strategic presence in the Indian Ocean. The Obama ‘Asian Pivot’ is centered on asserting decisive Pentagon control over the sea lanes of the Indian Ocean and the waters of the South China Sea.

The US military base at Okinawa, Japan is being rebuilt as a major center to project US military power towards China. As of 2010 there were over 35,000 US military personnel stationed in Japan and another 5,500 American civilians employed there by the United States Department of Defense. The United States Seventh Fleet is based in Yokosuka. The 3rd Marine Expeditionary Force in Okinawa. 130 USAF fighters are stationed in the Misawa Air Base and Kadena Air Base.

The Japanese government in 2011 began an armament program designed to counter the perceived growing Chinese threat. The Japanese command has urged their leaders to petition the United States to allow the sale of F-22A Raptor fighter jets, currently illegal under U.S law. South Korean and American military have deepened their strategic alliance and over 45,000 American soldiers are now stationed in South Korea. The South Koreans and Americans claim this is due to the North Korean military’s modernization. China and North Korea denounce it as needlessly provocative.[27]

Under the cover of the US war on Terrorism, the US has developed major military agreements with the Philippines as well as with Indonesia’s army.

The military base on Diego Garcia is the lynchpin of US control over the Indian Ocean. In 1971 the US military depopulated the citizens of Diego Garcia to build a major military installation there to carry out missions against Iraq and Afghanistan.

China has two Achilles heels—the Straits of Hormuz at the mouth of the Persian Gulf and the Strait of Malacca near Singapore. Some 20% of China oil passes through the Straits of Hormuz. And some 80% of Chinese oil imports pass through the Strait of Malacca as well as major freight trade.

To prevent China from emerging successfully as the major economic competitor of the United States in the world, Washington launched the so-called Arab Spring in late 2010. While the aspirations of millions of ordinary Arab citizens in Tunisia, Libya, Egypt and elsewhere for freedom and democracy was real, they were in effect used as unwitting cannon fodder to unleash a US strategy of chaos and intra-islamic wars and conflicts across the entire oil-rich Islamic world from Libya in North Africa across to Syria and ultimately Iran in the Middle East. [28]

The US strategy within the Islamic Arch countries straddling the Indian Ocean is, as Mohamed Hassan, a strategic analyst put it thus:

The US is…seeking to control these resources to prevent them reaching China. This was a major objective of the wars in Iraq and Afghanistan, but these have turned into a fiasco. The US destroyed these countries in order to set up governments there which would be docile, but they have failed. The icing on the cake is that the new Iraqi and Afghan government trade with China! Beijing has therefore not needed to spend billions of dollars on an illegal war in order to get its hands on Iraq’s black gold: Chinese companies simply bought up oil concessions at auction totally within the rules.

[T]he USA’s…strategy has failed all along the line. There is nevertheless one option still open to the US: maintaining chaos in order to prevent these countries from attaining stability for the benefit of China. This means continuing the war in Iraq and Afghanistan and extending it to countries such as Iran, Yemen or Somalia.[29]

PART V: South China Sea

The completion of the Pentagon “String of Pearls” hangman’s noose around China to cut off vital energy and other imports in event of war by 2012 was centered around the increased US manipulation of events in the South China Sea. The Ministry of Geological Resources and Mining of the People’s Republic of China estimated that the South China Sea may contain 18 billion tons of crude oil (compared to Kuwait with 13 billion tons). The most optimistic estimate suggested that potential oil resources (not proved reserves) of the Spratly and Paracel Islands in the South China Sea could be as high as 105 billion barrels of oil, and that the total for the South China Sea could be as high as 213 billion barrels. [30]

The presence of such vast energy reserves has not surprisingly become a major energy security issue for China. Washington has made a calculated intervention in the past several years to sabotage those Chinese interests, using especially Vietnam as a wedge against Chinese oil exploration there. In July 2012 the National Assembly of Vietnam passed a law demarcating Vietnamese sea borders to include the Spratly and Paracel islands. US influence in Vietnam since the country opened to economic liberalization has become decisive.

In 2011 the US military began cooperation with Vietnam, including joint “peaceful” military exercises. Washington has backed both The Philippines and Vietnam in their territorial claims over Chinese-claimed territories in the South China Sea, emboldening those small countries not to seek a diplomatic resolution.[31]

In 2010 US and UK oil majors entered the bidding for exploration in the South China Sea. The bid by Chevron and BP added to the presence of US-based Anadarko Petroleum Corporation in the region. That move is essential to give Washington the pretext to “defend us oil interests” in the area. [32]

In April 2012, the Philippine warship Gregorio del Pilar was involved in a standoff with two Chinese surveillance vessels in the Scarborough Shoal, an area claimed by both nations. The Philippine navy had been trying to arrest Chinese fishermen who were allegedly taking government-protected marine species from the area, but the surveillance boats prevented them. On April 14, 2012, U.S. and the Philippines held their yearly exercises in Palawan, Philippines. On May 7, 2012, Chinese Vice Foreign Minister Fu Ying called a meeting with Alex Chua, Charge D’affaires of the Philippine Embassy in China, to make a serious representation over the incident at the Scarborough Shoal.

From South Korea to Philippines to Vietnam, the Pentagon and US State Department is fanning the clash over rights to the South China Sea to stealthily insert US military presence there to “defend” Vietnamese, Japanese, Korean or Philippine interests. The military hangman’s noose around China is being slowly drawn tighter.

While China’s access to vast resources of offshore conventional oil and gas were being restricted, Washington was actively trying to lure China into massive pursuit of exploitation of shale gas inside China. The reasons had nothing to do with US goodwill towards China. It was in fact another major weapon in the destruction of China, now through a form of environmental warfare.

F. William Engdahl author of, Es klebt Blut an Euren Händen (FinanzBuchVerlag)

 

Notes:

[1] President Barack Obama, Remarks By President Obama to the Australian Parliament, November 17, 2011, accessed in
http://www.whitehouse.gov/the-press-office/2011/11/17/remarks-president-obama-australian-parliament.

[2] Ibid.

[3] Otto Kreisher, UK Defense Chief to NATO: Pull Your Weight in Europe While US Handles China, July 22, 2012, accessed in
http://defense.aol.com/2012/07/19/uk-defense-chief-to-nato-pull-your-weight-in-europe-while-us-ha/?icid=related4 .

[4] BBC, China military ‘closing key gaps’, says Pentagon, 25 August 2011, accessed in http://www.bbc.co.uk/news/world-asia-pacific-14661027 .

[5] Ibid.

[6] Greg Jaffe , US Model for a Future War Fans Tensions with China and inside Pentagon, Washington Post, August 2, 2012, accessed in
http://www.turkishweekly.net/news/139681/us-model-for-a-future-war-fans-tensions-with-china-and-inside-pentagon.html.

[7] Ibid.

[8] Matt Siegel, As Part of Pact, U.S. Marines Arrive in Australia, in China’s Strategic Backyard, The New York Times,

April 4, 2012, accessed in http://www.nytimes.com/2012/04/05/world/asia/us-marines-arrive-darwin-australia.html.

[9] Greg Jaffe, op. cit.

[10] F. William Engdahl, Full Spectrum Dominance: Totallitarian democracy in the New World Order, Wiesbaden, 2009, edition.engdahl, p. 190.

[11] The Washington Times, China Builds up Strategic Sea Lanes, January 17, 2005, accessed in http://www.washingtontimes.com/news/2005/jan/17/20050117-115550-1929r/?page=all#pagebreak

[12] Ibid.

[13] Ibid.

[14] Wall Street Journal, An Opening in Burma: The regime’s tentative liberalization is worth testing for sincerity,

Wall Street Journal, November 22, 2011, accessed in
http://online.wsj.com/article/SB10001424052970204443404577049964259425018.html

[15] Radio Free Asia, US to Invest in Burma’s Oil, 7 November, 2011, accessed in
http://www.rfa.org/english/news/burma/sanctions-07112012185817.html

[16] Shaun Tandon, US eases Myanmar restrictions for NGOs, AFP, April 17, 2012, accessed in
http://www.google.com/hostednews/afp/article/ALeqM5jmwmJ3e0yIjyD-7N52GAFISnweAA?docId=CNG.a8c1c3e2edf92a30cc1b3c9bd5ed11c1.131

[17] Craig Whitlock, U.S. eyes return to some Southeast Asia military bases, Washington Post, June 23, 2012, accessed in
http://www.washingtonpost.com/world/national-security/us-seeks-return-to-se-asian-bases/2012/06/22/gJQAKP83vV_story.html

[18] Ibid.

[19] Ibid.

[20] Premvir Das, Taking US-India defence links to the next level, June 18, 2012, accessed in http://www.rediff.com/news/slide-show/slide-show-1-taking-us-india-defence-links-to-the-next-level/20120618.htm

[21] Zeenews, US-India ties are global in scope: Pentagon, August 02, 2012, accessed in
http://zeenews.india.com/news/world/us-india-ties-are-global-in-scope-pentagon_791212.html

[22] Ibid.

[23] Gregoire Lalieu, Michael Collon, Is the Fate of the World Being Decided Today in the Indian Ocean?, November 3, 2010, accessed in
http://www.michelcollon.info/Is-the-fate-of-the-world-being.html?lang=fr

[24] Zbigniew Brzezinski, The Grand Chessboard: American Primacy And It’s Geostrategic Imperatives, 1997, Basic Books, p. xiv.

[25] Ibid., p. 30.

[26] Ibid., p. 31.

[27] Cas Group, Background on the South China Sea Crisis, accessed in
http://casgroup.fiu.edu/pages/docs/3907/1326143354_South_China_Sea_Guide.pdf

[28] Gregoire Lalieu,, et al, op. cit.

[29] Ibid.

[30] GlobalSecurity.org, South China Sea Oil and Natural Gas, accessed in
http://www.globalsecurity.org/military/world/war/spratly-oil.htm

[31] Agence France Presse, US, Vietnam Start Military Relationship, August 1, 2011, accessed in
http://www.defensenews.com/article/20110801/DEFSECT03/108010307/U-S-Vietnam-Start-Military-Relationship

[32] Zacks Equity Research, Oil Majors Eye South China Sea, June 24, 2010, accessed in www.zacks.com/stock/news/36056/Oil+Majors+Eye+South


World Banker Makes Stunning Confession

theintelhub.com
February 11, 2013

Former World Bank president James Wolfensohn discusses the future of the global economy.

40 Ways That China Is Beating America

Michael Snyder

American Dream
Feb 11, 2013

China is wiping the floor with the United States on the global economic stage, and most Americans are so clueless that they have absolutely no idea what is happening. The number one global economic superpower is in anadvanced state of decline, and the number two global economic superpower is becoming stronger with each passing day. Unless something truly dramatic happens, it is only a matter of time before China overtakes America and become the dominant economic force on the planet. In fact, China is already exercising economic superiority over the United States in a whole host of ways. China produces more goods than we do, China does more total trade in goods with the rest of the world than we do, China produces more cars than we do, China produces more gold than we do, China consumes more energy than we do, China produces more coal than we do and China produces more steel than we do. Every single year, we buy far more from them than they buy from us, and this has made them exceedingly wealthy. Our politicians regularly make trips over to China to beg them to lend us back some of the money that they have taken from us. Today, we owe China more than a trillion dollars and the Chinese are sitting on the biggest pile of foreign currency reserves that the world has ever seen. All of this wealth has fundamentally transformed the nation of China over the past couple of decades. Just check out the startling photographs of China from space in this article that show how China dramatically changed between 1992 and 2010. As China continues to become stronger and as America continues to become weaker, will our children some day wake up in a world where the Chinese are telling them what to do?

China became the number one exporter of goods back in 2009, but now China has reached another milestone on the road to global economic dominance.

When you total up all exports of goods and all imports of goods, China now conducts more total trade in goods with the rest of the globe than the United States does.

China’s emerging role as the dominant player in global trade is shaking things up all over the planet. The following is a brief excerpt from a recent Bloomberg article

China’s growing influence in global commerce threatens to disrupt regional trading blocs as it becomes the most important commercial partner for some countries. Germany may export twice as much to China by the end of the decade as it does to France, estimated Goldman Sachs Group Inc.’s Jim O’Neill.

“For so many countries around the world, China is becoming rapidly the most important bilateral trade partner,” O’Neill, chairman of Goldman Sachs’s asset management division and the economist who bound Brazil to Russia, India and China to form the BRIC investing strategy, said in a telephone interview. “At this kind of pace by the end of the decade many European countries will be doing more individual trade with China than with bilateral partners in Europe.”

If current trends continue, what will the world look like in 10 years?

Will the Chinese dominate the entire global economy?

Full Article

Well, gee, I don’t know, maybe we should ask Zbig what he thinks…

Argentina’s Financial Collapse – Past Is Prologue

Submitted by Tyler Durden on 02/10/2013 21:16 -0500

ZeroHedge

The following rather stunning documentary provides a critical insight into what Europe (and Argentina once again) could well be progressing towards. There is a reason we highlight the ‘scariest chart in Europe’ as that of youth unemployment and with the central banks printing money at ever increasing paces and the next round of global competitive devaluation beginning, the debt slaves will suffer ever more. In 2001, Argentina collapsed; after many years of apathy in the country, the insurrection exploded. As TopDocumentary notes, the spontaneous revolt of ‘faceless’ people meant saucepans were being banged in every neighborhood.

What happened to Argentina? How was it possible that in so rich a country so many people were hungry? The country had been ransacked by a new form of aggression, committed in time of peace and in a democracy. A daily and silent violence that caused greater social disruption, more emigration and death than the terrorism of the dictatorship and the Falkland Islands war.

Ever since independence, almost 200 years ago, Argentina’s foreign debt has been a source of impoverishment and corruption and the biggest scandals. Since the first loan negotiated by Rivadavia in 1824 with the British Bank Baring Brothers, the debt was used to enrich Argentinean financiers, to control the finances and empty the country of its wealth.

This foreign debt always went hand in hand with big business, and with the complicity of nearly every government, from Miter and Quintana to Menem and De la Rua. The policy of indebtedness gave rise in Argentina to generations of technocrats and bureaucrats, who favored banks and international corporations over their own country. Educated at Harvard, Chicago, Oxford or Buenos Aires, their portraits hang in the official galleries.

Full Article

Argentina Freezes Supermarket Prices To Halt Soaring Inflation; Chaos To Follow

Zero Hedge

Feb 5, 2013

Up until now, Argentina’s descent into a hyperinflationary basket case, with a crashing currency and loss of outside funding was relatively moderate and controlled. All this is about to change. Today, in a futile attempt to halt inflation, the government of Cristina Kirchner announced a two-month price freeze on supermarket products. The price freeze applies to every product in all of the nation’s largest supermarkets — a group including Walmart, Carrefour, Coto, Jumbo, Disco and other large chains. The companies’ trade group, representing 70 percent of the Argentine supermarket sector, reached the accord with Commerce Secretary Guillermo Moreno, the government’s news agency Telam reported. As AP reports, “The commerce ministry wants consumers to keep receipts and complain to a hotline about any price hikes they see before April 1.”

Perhaps they will. What consumers will certainly do is scramble into local stores to take advantage of artificially-controlled prices knowing very well they have two short months to stock up on perishable goods at today’s prices, before the country’s inflation comes soaring back, only this time many of the local stores will not be around as their profit margins implode and as owners, especially of foreign-based chains, make the prudent decision to get out of Dodge while the getting’s good and before the next steps, including such measures as nationalization, in the escalation into a full out hyperinflationary collapse, are taken by Argentina’s female ruler.

As such expect photos of empty shelves from Buenos Aires to start popping up in a few days, comparable to how threats of a gun and weapon ban by the US government did more for the top and bottom line of US arms dealers than any military conflict ever could.

Sure enough:

Economist Soledad Perez Duhalde of the abeceb.com consulting firm predicted on Monday that the price freeze will have only a very short term effect, and noted that similar moves in Argentina had failed to control inflation. Consumers shouldn’t be surprised if the supermarkets are slow to restock their shelves and offer fewer products for sale, she added.

In other news Argentina, just like the rest of the “developed” world, appears to have a slight inflation tracking problem:

Polls show Argentines worry most about inflation, which private economists estimate could reach 30 percent this year. The government says it’s trying to hold the next union wage hikes to 20 percent, a figure that suggests how little anyone believes the official index that pegs annual inflation at just 10 percent.

The BLS has the solution: just exclude any product whose price is rising from your CPI calculation, and voila. For everything else there is a hedonic adjustment.

The ironic comparison to the US does not end there however:

A more effective way to contain inflation would be to “reduce government spending, which is financing an expansion of the money supply, and to have a credible price index.”

Wait, are they still talking about Argentina or the US?

The government announced the price freeze on the first business day after the International Monetary Fund formally censured Argentina for putting out inaccurate economic data. The IMF has given Argentina until September to bring its inflation and economic growth statistics up to international standards. If Argentina doesn’t comply, it could face expulsion from the world body in November.

Well good thing the US complies with the IMF’s stringent “seasonally adjusted” data reporting quality control. Or else, the US may have been expelled from the IMF too. And then who would fund the creeping bailout of Europe (aside from Germany of course)?

The IMF censure “is not just a new error … it’s also a clear example of the organization’s unequal treatment and double standards in regard to certain member countries,” Lorenzino said. “Argentina, just as it agreed with the IMF to do, will keep working to improve its statistical procedures in accordance with good international standards.”

So to summarize: first capital controls, then a currency crisis, then expectations of sovereign default, then a rise in military tensions, and finally – price controls, after which all out chaos usually follows.

Study this sequence well: it is coming to every “developed” country near you in the months and years ahead.

But, as with every other hyperinflationary implosion, there is a silver lining: the stock market is soaring…

… at least in Peso terms. When priced in USD, the 360% stock market “rise” is more like -9% in the past 21 years. But luckily, the general public has a gene that prevents it from grasping the difference between nominal and real – something Ben Bernanke is very well aware of.

 

IMF censures Argentina for dodgy economic data, threatens sanctions

Published: 02 February, 2013, 22:51

RT

International Monetary Fund (IMF) Managing Director Christine Lagarde attends a session of the World Economic Forum Annual Meeting (WEF) on January 26, 2013 at the Swiss resort of Davos.(AFP Photo / Johannes Eisele)

The International Monetary Fund (IMF) has issued Argentina with a ‘declaration of censure’ for providing inaccurate inflation and GDP data and has given it until September 29th to amend the problems or will impose sanctions.

The IMF Friday called on Argentina to fix its statistics “without further delay”

“The fund has issued a declaration of censure against Argentina in connection with its breach of obligation to the fund,” The IMF said in a statement.

The IMF said it would review Argentina’s progress in November and warned that if the problems are not sorted then it could impose sanctions on the country. This would bar one of South America’s biggest economies from voting on IMF policies and accessing financing.

Relations between the South American country and the IMF have been steadily deteriorating since Argentina’s 2001-2002 debt crisis, which many in Buenos Aires blame on IMF policies.

Argentina’s Economy Ministry slammed the IMF for unfair treatment and accused them of double standards.

The Friday declaration was “not only a new IMF error but a clear example of unequal treatment and the double standards with which this organization treats certain members. This is the same fund that showed itself to be complacent about the inexact data and failed policies that led to the global financial crisis,” the statement said.

The ministry pointed out the IMF hailed Argentinian economic policies of the 1990’s as a success, the same policies that resulted in Argentina’s economic meltdown and debt default. The ministry also asked for an extraordinary meeting of the IMF board to discuss the lender’s decisions and policy.

Full Article

 

Chavez Risks Backlash After Venezuela Devalues Bolivar 32%

By Charlie Devereux & Corina Pons – Feb 9, 2013 11:39 AM MT

Venezuela devalued its currency for the fifth time in nine years, a move that may undermine support for ailing President Hugo Chavez and his allies ahead of possible elections later this year.

Venezuela Devalues Currency From 33% to 6.30 Bolivars Per Dollar South America’s biggest oil producer may have to call elections if Chavez, who hasn’t been seen for two months after undergoing cancer surgery in Cuba, dies or steps down. He ordered his government to weaken the exchange rate by 32 percent to 6.3 bolivars per dollar starting Feb. 13, Finance Minister Jorge Giordani told reporters yesterday in Caracas.

Venezuelan Bolivares notes are shown in this photograph taken in Buenos Aires. Photographer: Diego Giudice/Bloomberg

A spending spree that almost tripled the fiscal deficit last year helped Chavez, 58, win a third six-year term. The devaluation can help narrow the budget deficit by increasing the amount of bolivars the government receives from oil exports. Yet the move also threatens to accelerate annual inflation that reached 22 percent in January.

“There is surely going to be a political cost, which may weigh against the Chavistas and hence be viewed favorably from the markets if it shifts protest votes to the opposition,” Siobhan Morden, the head of Latin America fixed income strategy at Jefferies Group Inc. in New York, said in a note to clients.

Former opposition presidential candidate Henrique Capriles Radonski said the measure “mocked Venezuelans” and he criticized the government for attempting to hide the impact of the devaluation by announcing it the day before the annual carnival holidays.

Full Article

Britain’s Super-Rich Just Keep Getting Richer

Heather Stewart

The Guardian
February 10, 2013

The super-rich – the top 1% of earners – now pocket 10p in every pound of income paid in Britain, while the poorest half of the population take home only 18p of every pound between them, according to a report published this week by the Resolution Foundation thinktank, which reveals the widening gap between those at the very top and the rest of society.

Inequality has grown sharply over the past 15 years, according to Resolution’s analysis: the top 1% of earners have seen their slice of the pie increase from 7% in the mid-1990s to 10% today, while the bottom half have seen their share drop from 19% to 18%.

There was a dip in top earnings between 2009-10 and 2010-2011, but Resolution’s analysis suggests that may have been because highest-paid employees brought forward earnings to avoid the 50p top tax rate on earnings above £150,000, which Chancellor George Osborne has cut to 45p from this April.

‘Lift the Burden’: Tens of thousands march against austerity in Ireland (VIDEO)

Published: 10 February, 2013, 04:57

RT

Tens of thousands of people have marched through cities in Ireland in a massive show of anger against severe austerity measures and high costs of living.

More at EndtheLie.com – http://EndtheLie.com/2013/02/09/lift-the-burden-tens-of-thousands-march-against-austerity-in-ireland-video/#ixzz2Kd3YTZCW

The Irish Congress of Trade Unions,which organized the rallies, claimed more than 100,000 people attended, with some 60,000 marching in Dublin. Demonstrators also protested in Cork, Galway, Limerick, Sligo and Waterford.

Tough cuts were implemented to please Ireland’s creditors in the wake of the country’s banking crisis. It has been relying on a joint EU-IMF loan since 2010.

The “Lift the Burden” march took place despite the Irish government’s recent bank debt deal with the European Central Bank. It saw 28 billion euro worth of costly promissory notes swapped for long-term sovereign bonds.

The union’s General Secretary David Begg vowed that the campaign against the debt burden will carry on until the European authorities fully honor the agreement reached last July to separate bank debt from sovereign debt, The Irish Times reported.

It would be fatal for people to believe this issue is now resolved and we can all move on,” David Begg said. “At the onset of the crisis Ireland had one of the lowest debt to GDP ratios in Europe. The difference between then and now is due entirely to Ireland socializing bank debt at the behest of the ECB, to save the European banking system.”

Full Article

Bank of Italy seeks more powers in wake of Monte Paschi troubles

By Francesca Landini

BERGAMO, Italy | Sat Feb 9, 2013 1:10pm EST

(Reuters) – Bank of Italy Governor Ignazio Visco called on Saturday for more powers for bank regulators to step in and dismiss bad managers but defended his institution’s oversight of the troubled Monte dei Paschi di Siena (BMPS.MI).

Responding to criticism about banking oversight in the case of the Tuscan lender, Visco repeated that central bank supervisors had acted appropriately but asked for more scope to act in exceptional cases.

“The supervisor should have the power to intervene when – based on solid evidence – it believes it is necessary to oppose the appointment of (bank) executives or to remove them,” Visco, who also sits on the European Central Bank governing council, said in a speech to the Assiom-Forex conference in Bergamo.

The comments echoed remarks from ECB President Mario Draghi, who also called for regulators to be able to force out top executives in cases where a bank had run into trouble through the fault of its management.

Monte dei Paschi, Italy’s third largest bank, has been at the center of a financial and political storm over a series of problematic derivatives contracts which has widened into a probe by magistrates into suspected bribery and false accounting.

EU leaders reach $1.3 trn budget deal

PTI
Brussels, February 09, 2013
First Published: 20:58 IST(9/2/2013)
Last Updated: 20:59 IST(9/2/2013)
European Union leaders have reached a deal on 960-billion euro ($1.3 trillion) budget for the next seven years, averting a stand-off over 27-nation bloc’s future spending.

The agreement hammered out after two days of tough negotiations at a special summit here is a compromise between northern European countries, including Britain and Germany, who pressed for a sharp reduction in the EU spending from 2014-20, and those fiercely opposed to any cuts.The heads of state and governments of the 27-nation bloc agreed to reduce EU long-term budget by around 3.3%, from the current 2007-2013 budget for the first time.

They also agreed to cap actual spending at 908.4 billion euros and to reduce the spending on agriculture and regional development, which traditionally receive the largest share of funds from the EU.

European Council president Herman Van Rompuy hailed the agreement on the next budget and said it will be a balanced and growth-oriented budget that is realistic and driven by pressing concerns.

“It was not an easy task; this was our single longest meeting so far in my mandate, but it was worth working for this result,” he said in a statement. “The compromise shows a sense of collective responsibility from Europe’s leaders.”

The dispute over the next budget had threatened to cause a new split in the EU and to reignite the debt crisis, after the last budget summit in November broke down.

Full Article

Austerity is a Scam: Crisis Legislation and Dodgy Debt Repayment Schemes

Promissory Notes to Government Bonds

Global Research, February 08, 2013
stealing_money_safe_lg_nwm

Austerity is a sham. Debt is economics for the ‘little people’. If the people produce the wealth then why are they always poor and/or paying back debts? Because the national and international wealthy lend us back the money (with interest) they have taken out of society in the form of profits to fill in the gap they created in the first place. Thus we are triply exploited: We are taxed on wages, alienated from wealth created (profits) and we pay interest on the money borrowed from the wealthy to pay for the capital and current expenditure needed for the maintenance of society.

When there is an economic crisis caused by this constant draining of the wealth from the economy, the ‘experts’ then debate the best way to impose cutbacks to get us back on to ‘the road to recovery’. This would be funny if so many people were not caught up in the sea of unemployment and subsistence living. Furthermore, any rejection of these ‘debts’ will not be countenanced by the elites who oversee the ‘debt repayments’ by the ‘little people’.

If one form of debt repayment (promissory notes) is seen to be dodgy and possibly unsustainable (due to legalities or public repugnance) then legislation is rushed in overnight to convert the ‘debt’ in to a more acceptable form – the government bond. That was the situation this week in Dublin. How did thiscome about?“In 2010 the banks that were then Anglo Irish Bank and Irish Nationwide (now Irish Bank Resolution Corporation or IBRC) required around €30.06 billion in additional cash from the State because of their perilous state in the aftermath of the collapse of the property market.

Finance minister Brian Lenihan wrote a promissory note to the IBRC – basically saying “We owe you €31 billion” – which the bank used as collateral to borrow from the Cental Bank of Ireland’s emergency liquidity assistance (ELA) fund. Under the agreement, the State agreed to pay €3.06 billion every year to the IBRC until 2023 and smaller payments after that to satisfy the principal and the interest.

But creating cash or monetary financing is a no-no as far as the European Central Bank (ECB) is concerned. Its founding principles – the Maastricht Treaty – dictate that EU member states cannot finance their public deficits by printing money.

As Stephen Donnelly, who has been vehemently opposed to the promissory notes, points out: “[It] would certainly have run afoul of Europe’s two directives: That no European bank would fail and that the potential losses and lost profits of senior investors would be paid in full by the public.”

One of the options put on the table by Ireland has been to swap the notes for a long-term government bond – possibly sourced from the ESM – with the repayments spread over 40 years. What’s all this about? Well our dear Taoiseach Enda Kenny probably describes it best when he recently said it would be like switching “from a serious overdraft to a long-term, low-interest mortgage”.”

You see, the appalling vista for the ECB would be the loss of control over the supply of money and the knock-on effect this would have on the markets if every government in the EU were to do the same. Therefore, bonds-for-notes legislation was brought in overnight in Dublin to wind up the IBRC and put the repayments on a more stable, ‘normalised’ footing. The Taoiseach Enda Kenny told “the Dáil:

“The first principal payment on these bonds will be made in 25 years time, 2038, with the final payment being made in 2053. The average maturity of these bonds will be over 34 years rather than the 7 – 8 years on a promissory note.” The average interest rate on these bonds will be 3 per cent, compared to 8 per cent on the promissory notes.”
Sure the children and the grandchildren of the ‘little people’ can pay the ‘debt’ instead! This was confirmed by the Minister for Finance Michael Noonan who said that the deal on bank debt secured by the Government “eases the burden on everybody” (except their unsuspecting children).

The Anglo: Not Our Debt campaign spokesperson, Andy Storey, describedthe debt as “illegitimate – it was accrued to pay off the speculators who gambled their money on a dodgy bank now under criminal investigation, it is not the debt of ordinary people and should under no circumstances be reclassified as ‘sovereign’”. He also stated that rushing “emergency legislation through the Dáil and Seanad this evening on this basis, this would be “devious and undemocratic – instead of having a proper, informed debate about this hugely serious issue the government would be railroading through legislation that would see people living in Ireland take formal responsibility for debts that are not theirs to pay”.”As if that wasn’t bad enough, Eurostat, the EU Commission’s data agency, has calculated the cost of the banking crisis in each EU country and according to Michael Taft, Ireland just edges “out Germany for the dubious title of spending the most on the banking crisis. €41 billion to date according to the Eurostat accounting data (this doesn’t count the billions ploughed into the covered banks from our National Pension Reserve Fund as this was not counted as a ‘cost’ to the General Government budget). […]The European banking crisis to date has cost every individual in Ireland nearly €9,000 each. The average throughout the EU is €192 per capita. […] The Irish people have paid 42 percent of the total cost of the European banking crisis.”

Full Article

Watch The Financial Markets In Europe

By Michael Snyder

Economic Collapse Blog
February 8, 2013

Watch The Financial Markets In EuropeIs the financial system of Europe on the verge of a meltdown? I have always maintained that the next wave of the economic crisis would begin in Europe, and right now the situation in Europe is unraveling at a frightening pace.

On Monday, European stocks had their worst day in over six months, and over the past four days we have seen the EUR/USD decline by the most that it has in nearly seven months.

Meanwhile, scandals are erupting all over the continent. A political scandal in Spain, a derivatives scandal in Italy and banking scandals all over the eurozone are seriously shaking confidence in the system.

If things move much farther in a negative direction, we could be facing a full-blown financial crisis in Europe very rapidly. So watch the financial markets in Europe very carefully.

Yes, most Americans tend to ignore Europe because they are convinced that the U.S. is “the center of the universe”, but the truth is that Europe actually has a bigger population than we do, they have a bigger economy then we do, and they have a much larger banking system than we do.

The global financial system is more integrated today than it ever has been before, and if there is a major stock market crash in Europe it is going to deeply affect the United States and the rest of the globe as well.

So pay close attention to what is going on in Europe, because events over there could spark a chain reaction that would have very serious implications for every man, woman and child on the planet.

As I noted above, European markets started off the week very badly and things have certainly not improved since then. The following is how Zero Hedge summarized what happened on Thursday…

EuroStoxx (Europe’s Dow) closed today -1% for 2013. France, Germany, and Spain are all lower on the year now.

Italy, following ENI’s CEO fraud, collapsed almost 3% from the US day-session open, leaving it up less than 1% for the year. Just as we argued, credit markets have been warning that all is not well and today’s afternoon free-fall begins the catch-down.

In addition, the euro has been dropping like a rock all of a sudden. Just check out this chart which shows what happened to the euro on Thursday. It is very rare to see the euro move that dramatically.

So what is causing all of this?

Well, we already know that the economic fundamentals in Europe are absolutely horrible. Unemployment in the eurozone is at a record high, and the unemployment rates in both Greece and Spain are over 26 percent. Those are depression-level numbers.

But up until now there had still been a tremendous amount of confidence in the European financial system. But now that confidence is being shaken by a whole host of scandals.

In recent days, a number of major banking scandals have begun to emerge all over Europe. Just check out this article which summarizes many of them.

One of the worst banking scandals is in Italy. A horrible derivatives scandal has pushed the third largest bank in Italy to the verge of collapse

Monte dei Paschi di Siena (BMPS.MI), Italy’s third biggest lender, said on Wednesday losses linked to three problematic derivative trades totaled 730 million euros ($988.3 million) as it sought to draw a line under a scandal over risky financial transactions.

There is that word “derivative” that I keep telling people to watch for. Of course this is not the big “derivatives panic” that I have been talking about, but it is an example of how these toxic financial instruments can bring down even the biggest banks.

Monte dei Paschi is the oldest bank in the world, and now the only way it is able to survive is with government bailouts.

Another big scandal that is shaking up Europe right now is happening over in Spain. It is being alleged that Spanish Prime Minister Mariano Rajoy and other members of his party have been receiving illegal cash payments. The following summary of the scandal comes from a recent Bloomberg article

On Jan. 31, the Spanish newspaper El Pais published copies of what it said were ledgers from secret accounts held by Luis Barcenas, the former treasurer of the ruling People’s Party, which revealed the existence of a party slush fund. The newspaper said 7.5 million euros in corporate donations were channeled into the fund and allegedly doled out from 1997 to 2009 to senior party members, including Rajoy.

That doesn’t sound good at all.

So what is the truth?

Could Rajoy actually be innocent?

Well, at this point most of the population of Spain does not believe that is the case. Just check out the following poll numbers from the Bloomberg article quoted above…

According to the Metroscopia poll, 76 percent of Spaniards don’t believe the People’s Party’s denials of the slush-fund allegations. Even more damning, 58 percent of the party’s supporters think it’s lying. All of the Spanish businessmen with whom I discussed the latest scandal expect it to get worse before it gets better. Their assumption that there are more skeletons in the government’s closet indicates what little trust they have in their leaders.

Meanwhile, the underlying economic fundamentals in Europe just continue to get worse. One of the biggest concerns right now is France. Just check out this excerpt from a recent report by Phoenix Capital Research

The house of cards that is Europe is close to collapsing as those widely held responsible for solving the Crisis (Prime Ministers, Treasurers and ECB head Mario Draghi) have all been recently implicated in corruption scandals.

Those EU leaders who have yet to be implicated in scandals are not faring much better than their more corrupt counterparts. In France, socialist Prime Minister Francois Hollande, has proven yet again that socialism doesn’t work by chasing after the wealthy and trying to grow France’s public sector… when the public sector already accounts for 56% of French employment.

France was already suffering from a lack of competitiveness. Now that wealthy businesspeople are fleeing the country (meaning investment will dry up), the economy has begun to positively implode.

As the report goes on to mention, over the past few months the economic numbers coming out of France have been absolutely frightful

Auto sales for 2012 fell 13% from those of 2011. Sales of existing homes outside of Paris fell 20% year over year for the third quarter of 2012. New home sales fell 25%. Even the high-end real estate markets are collapsing with sales for apartments in Paris that cost over €2 million collapsing an incredible 42% in 2012.

Today, the jobless rate in France is at a 15-year high, and industrial production is headed into the toilet. The wealthy are fleeing France in droves because of the recent tax increases, and the nation is absolutely drowning in debt. Even the French jobs minister recently admitted that France is essentially “bankrupt” at this point…

France’s government was plunged into an embarrassing row yesterday after a minister said the country was ‘totally bankrupt’.

Employment secretary Michel Sapin said cuts were needed to put the damaged economy back on track.

‘There is a state but it is a totally bankrupt state,’ he said.

So what does all of this mean?

It means that the crisis in Europe is just beginning. Things are going to be getting a lot worse.

Perhaps that is one reason why corporate insiders are dumping so much stock right now as I noted in my article yesterday entitled “Do Wall Street Insiders Expect Something Really BIG To Happen Very Soon?“ There are a whole host of signs that both the United States and Europe are heading for recession, and a lot of financial experts are warning that stocks are way overdue for a “correction”.

For example, Blackstone’s Byron Wien told CNBC the other day that he expects the S&P 500 to drop by 200 points during the first half of 2013.

Seabreeze Partners portfolio manager Doug Kass recently told CNBC that what is happening right now in the financial markets very much reminds him of the stock market crash of 1987…

“I’m getting the ‘summer of 1987 feeling’ in the U.S. equity market,” Kass told CNBC, “which means we’re headed for a sharp fall.”

Toward the end of 2012 and at the very beginning of 2013 we saw markets both in the U.S. and in Europe move up steadily even though the underlying economic fundamentals did not justify such a move.

In many ways, that move up reminded me of the “head fakes” that we have seen prior to many of the largest “market corrections” of the past. Often financial markets are at their most “euphoric” just before a crash hits.

So get ready.

Even if you don’t have a penny in the financial markets, now is the time to prepare for what is ahead.

We all need to learn from what Europe is going through right now. In Greece, formerly middle class citizens are now trampling one another for food. We all need to prepare financially, mentally, emotionally, spiritually and physically so that we can weather the economic storm that is coming.

Most Americans are accustomed to living paycheck to paycheck and being constantly up to their eyeballs in debt, but that is incredibly foolish. Even in the animal kingdom, animals work hard during the warm months to prepare for the winter months. Even so, we should all be working very hard to prepare during prosperous times so that we will have something stored up for the lean years that are coming.

Unfortunately, if events in Europe are any indication, we may be rapidly running out of time.

Full Article

European Union leaders agree to slash 2014-2020 budget

EU leaders during a meeting at the EU headquarters in Brussels, Belgium, February 8, 2013

EU leaders during a meeting at the EU headquarters in Brussels, Belgium, February 8, 2013
Fri Feb 8, 2013 6:16PM GMT
The Europeans brace themselves for more austerity measures after their leaders agreed to slash the European Union’s (EU) budget over a seven-year period from 2014 to 2020.

The EU leaders reached the deal on the bloc’s spending plans on Friday. The agreement was made following 24 hours of negotiations in the Belgian capital, Brussels.

The deal sets a ceiling of USD1.3 trillion for the EU’s budget. The budget still needs to be ratified by the European Parliament.

Reports say that several countries including Britain and the Netherlands had been pressing for cuts while France, Italy and some other eurozone states were seeking to protect spending. This is the first decrease in EU’s budget in the history of the bloc. The deal means more spending cuts and austerity measures for European people.

Steelworkers clash with riot police outside French-based EP

French riot police who cordoned off a demonstration outside the European Parliament in Strasbourg, eastern France, are surrounded by tear gas, February 6, 2013.

Wed Feb 6, 2013 7:10PM GMT
The protests of hundreds of steelworkers have broken out into scuffles with the police outside the European Parliament (EP) in France’s eastern city Strasbourg.

On Wednesday, workers of the world’s largest steelmaker, ArcelorMittal, came from factories across Europe to demonstrate against the company’s job cuts and restructuring plans.

The workers who were throwing buckets and breaking glass on the roadside, faced tear gas and batons flung from squads of riot police dressed in full protective armor.

Management of ArcelorMittal in January announced the planned closures of plants in Europe, leading to thousands of job cuts across the continent.

The angry protesters flocked in from plants in neighboring countries Luxembourg and Belgium as well as from Lorraine’s northeastern commune of Florange in France.

The protest comes on the day the Luxembourg-based company said global steel consumption would top last year’s two percent with a rise to three percent in 2013.

The French Democratic Confederation of Labor (CFDT) union backed the rally.

CFDT union member Edouard Martin said the company “has shutdown around ten factories in Europe,” allowing the steelmaker to slash “nearly 60,000 jobs.”

Full Article

Her Majesty’s “Post Imperial” Government in Crisis: Prime Minister Cameron in Blunderland

Global Research, February 05, 2013
british empire

“The refuge of the morally, intellectually, artistically and economically bankrupt is war.”(Martin H.Fischer, 1879-1962.)

It has not been an auspicious couple of weeks for UK Prime Minister David Cameron.

His Cabinet colleagues, largely a bunch of millionaires, have accused the unemployed of being work-shy and a burden on the taxpayers – never mind that businesses are closing in near industrial numbers and that often hundreds, if not thousands, apply for one job. Additionally, according to the Literacy Trust: ” One in six people in the UK struggle with literacy. This means their literacy is below the level expected of an eleven year old … Men and women with poor literacy are least likely to be in full-time employment at the age of thirty.”

A junior Health Minister has accused the poor of being fat because, she has decided, they eat the wrong things.

The latter of course, implies that the overweight poor will be a further burden on Britain’s National Health Service, being more likely to develop chronic conditions. It seems this health fascism exempts government Ministers and politicians such as the Minister for Communities and Local Government, Eric Pickles, who must flatten the tires and springs of his Ministerial limousine, along with other political rotundas, politicians who of course, live entirely at the taxpayers expense, from large salaries, with all financial outputs covered and health care.

David Cameron himself stated that without the health help he had received, often twenty four hours a day, for his little son Ivan, suffering a chronic condition which subsequently proved fatal, his family would have been unable to cope. Now under his government, the Health Service too is under government fire – slash and burn style. Cuts in welfare include attempting to force the very disabled, even potentially terminally ill back to work. Some have committed suicide.

Public anger and resentment is palpably mounting against pretty well all policies in a government seen as completely blind to the reality in Britain’s villages, towns and cities.

The government message of course is fiscal belt tightening, ”getting the economy back on track.”

Then the Prime Minister cancelled a long planned address in Europe on Britain and the EU (another mess) leapt on a ‘plane for Mali, a geographical stone’s throw away from the ruins of his last African foray, Libya, and announced support for France’s reckless insurgency, in one of the few countries the British have not invaded, plundered or colonised. So much for fiscal probity.

Full Article

Is This The Beginning Of A Horrifying Stock Market Crash In Europe?

Tuesday, February 5, 2013

Michael Snyder, Contributor
Activist Post

Are we witnessing the start of a historic financial meltdown in Europe? In recent days, two massive corruption scandals have greatly shaken confidence in European financial markets. The first involves Spanish Prime Minister Mariano Rajoy. It is being alleged that he has been receiving illegal cash payments, and the calls for his resignation grow louder with each passing day. The second is a derivatives scandal at the third largest bank in Italy.

Allegedly, there were some very large unreported derivatives deals that were supposed to help hide losses at the bank, but instead they actually made the losses much larger. The investigation that is looking into this derivatives scandal is starting to spread to other banks, and nobody is quite sure how far down the rabbit hole this thing goes. But what everyone does agree on is that this derivatives scandal has shaken up Italian politics, and the outcome of the upcoming election is now very uncertain. Former Prime Minister Silvio Berlusconi is rapidly rising in the polls, and the European establishment is less than thrilled about that. Meanwhile, stock indexes all over Europe fell rapidly on Monday, and even the Dow was down 129 points. So will all this blow over in a few days, or is this the beginning of a full-blown stock market crash in Europe?

That is a very good question. Perhaps there would not be so much concern if the overall European economy was doing well, but the truth is that the underlying economic fundamentals in Europe have continued to get even worse. The unemployment rate in the eurozone is at an all-time high, and the unemployment rates in both Greece and Spain are now over 26 percent. Much of southern Europe is already in the midst of a full-blown economic depression, so it really has been remarkable that the financial markets in Europe have been able to hold up as well as they have so far.

But now all of that may be changing. Just check out what happened on Monday according to Bloomberg

National benchmark indexes declined in all of the 18 western European markets, except Greece and Denmark. Italy’s FTSE MIB Index (FTSEMIB) sank 4.5 percent, the most in six months. Spain’s IBEX 35 slid 3.8 percent for a sixth day of declines, the longest losing streak in 10 months. France’s CAC 40 plunged 3 percent for the biggest drop since April. The U.K.’s FTSE 100 dropped 1.6 percent and Germany’s DAX lost 2.5 percent.

Unfortunately, what happened on Monday was just the continuation of a trend that started last week. The following is from Zero Hedge

The last four days have seen the biggest plunge in over six months with the IBEX (Spain -5.7%) and Italy’s MIB -6.7%. At the same time, Europe’s seemingly invincible OMT-promise-protected sovereign bond market has started to underwhelm. Italian bond spreads are 32bps wider and Spain 28bps wider – the biggest increase in risk in two months.

European banks have been hit particularly hard during this recent downturn.

Just check out some of the huge declines that European banking stocks experienced on Monday

UniCredit SpA: -8.3 percent
Commerzbank AG: -5.9 percent
Santander: -5.7 percent
Intesa Sanpaolo SpA: -5.4 percent
Credit Agricole SA: -5.4 percent
Société Générale SA: -4.8 percent
Banco Bilbao Vizcaya Argentaria SA: -4.7 percent

Those are huge moves for just a single day of trading. If we have a couple of more days like that, everyone is going to be talking about a “stock market crash” in Europe.

Unfortunately, it does not appear that any solutions to the scandals that are shaking up southern Europe right now will be forthcoming any time soon.

In Spain, it is increasingly looking like the Prime Minister may actually have to resign. A recent CNN article explained what the scandal is all about…

Rajoy denied on Saturday allegations that he and other leaders of his conservative People’s Party had received secret cash payments from a fund operated by the party’s former treasurer. Rajoy said he would publish details of his personal wealth and income tax states on the prime minister’s website.

Of course politicians all over the world are accused of doing evil things all the time, but in this instance it appears that there may be some solid evidence that Rajoy may not be able to deny. The following comes from a Bloomberg report

Newspaper El Pais last week published allegations of illegal cash payments, featuring extracts from handwritten ledgers by the former People’s Party Treasurer Luis Barcenas showing payments to officials including Rajoy.

At this point, opinion polls are showing that even most of his own supporters do not believe him

Polls show that 60pc of his own supporters do not believe the official explanation. A national petition drive calling for his resignation has already collected almost 800,000 signatures. Socialist oppo­sition leader Alfredo Pérez Rubalcaba yesterday joined the chorus calling for Mr Rajoy’s head, saying the country had ­become ‘ungovernable’.

So definitely expect things in Spain to get worse before they get better.

Meanwhile, the derivatives scandal in Italy continues to get more “interesting”. Italy’s third largest bank is on the brink of collapse due to huge problems with derivatives contracts, and that bank just happens to be closely linked with the Italian politician that is currently leading in the polls

The Italian scandal is related to Italy’s third-biggest bank, Monte dei Paschi di Siena, which has received two government bailouts and may yet have to be nationalized as its losses mount.

The bank is closely associated to Italy’s Democratic Party, whose leader, Pier Luigi Bersani, is leading in the polls, though slipping from his highs as former prime minister Silvio Berlusconi makes a late surge before the Feb. 25th general election. ‘The Monte [banking] scandals now look like overwhelming the Italian election campaign and put [Mr.] Bersani and the Democratic Party’s victory at risk,’ James Walston, political commentator at the American University of Rome, said in his Monday blog.

The Monte scandal centres on allegedly unreported derivatives deals that were apparently designed to hide losses and instead made the losses deeper. The bank, now under new management, has admitted that the derivatives losses might total more than €700-million.

So who benefits from all of this? Well, it turns out that as a result of this scandal former Prime Minister Silvio Berlusconi is rapidly gaining more support. The following is from a recent Telegraph article

In Italy, ex-premier Silvio Berlusconi has upset the political landscape just three weeks before elections, surging back into contention with vows to rip up ‘German-imposed’ austerity policies and cancel a hated property tax.

His Right-wing alliance has risen to 28pc in the polls, relishing a widening scandal at Banca Monte dei Paschi that has embroiled the Italian left.

But even if none of these scandals had happened, it was inevitable that the gigantic debt bubble in Europe would end up bursting at some point.

In fact, the entire globe is on the verge of a debt implosion. This was something that Bill Gross of Pimco discussed in his February newsletter

So our credit-based financial markets and the economy it supports are levered, fragile and increasingly entropic – it is running out of energy and time. When does money run out of time? The countdown begins when investable assets pose too much risk for too little return; when lenders desert credit markets for other alternatives such as cash or real assets.

No debt bubble can expand indefinitely. At some point it can no longer hold itself together.
Europe is rapidly approaching that point, and so is the United States.

So how much time do we have left?

Feel free to share your thoughts on that question by posting a comment below…

This article first appeared here at the American Dream. Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.

Gloom as EU budget talks resume in Brussels

BBC

EU Commission President Jose Manuel Barroso (left) with European Parliament President Martin Schulz - file pic The EU is under pressure to cut the budget in line with national austerity policies

The EU is resuming tough negotiations on its multi-year budget, with leaders warning that big differences remain ahead of a Brussels summit this week.

Irish PM Enda Kenny is meeting the three EU presidents, to explore possible compromises. The Republic of Ireland currently plans the EU agenda.

France’s President Francois Hollande warned that “conditions are not there yet” for a deal between the 27 nations.

A summit in November failed to produce a deal on the 2014-2020 budget.

There are very different visions about how the EU funds, totalling nearly 1tn euros (£863bn; $1.36tn), should be spent.

The EU foreign ministers and their diplomats are drafting the summit conclusions on Monday – but the continuing disagreements are likely to leave many gaps.

In a video message on Saturday about this week’s summit German Chancellor Angela Merkel said: “We still cannot say today if the discussions will succeed. All I know is, the negotiations will be very difficult.”

She stressed that EU funding was “extremely important” for many member states, faced with high unemployment and weak growth. Answering critics who say too much money goes into EU coffers, she said the budget is only one-fiftieth of the member states’ total combined national budgets.

The member states did finally agree on the 2013 budget in December, but the multi-year budget – officially the Multi-Annual Financial Framework (MFF) – is more complex, involving long-term priorities and financial commitments.

Full Article

Spain Economy Still ‘Very Challenging’ Despite Progress

Published: Monday, 4 Feb 2013 | 9:13 AM ET

Risks to Spain’s economy and financial sector remain elevated as the country undergoes a difficult process of fiscal and external adjustment, the International Monetary Fund reported Monday.

The IMF’s statement came after the fund’s second quarterly visit between Jan. 25 and Feb. 1 to review the country’s financial sector.

Despite its concerns, the IMF praised Spain’s progress in bank recapitalization.

“This clean-up is a major achievement that should strengthen confidence in the system and improve its ability to support the real economy,” the IMF said.

“Remaining elements of the recapitalization and burden sharing exercise should be completed in a timely manner and in ways that minimize taxpayer costs.”

The IMF was also complimentary about Spain’s success in establishing a “bad bank” called SAREB.

“Important progress has been made. Key achievements include the establishment of the company, the receipt of real estate-related assets from the weakest banks, and the adoption of strong servicing agreements, with participating banks to manage the transferred assets.”

Olli Rehn, vice president of the European Commission, said the review proved that reform of Spain’s banking sector is on track.

“Bank recapitalization and restructuring is under way, and the asset management company SAREB is up and running.

“In parallel, important decisions have been taken to reinforce the supervision and regulation of the sector,” Rehn said. “This process must be completed on schedule and implemented rigorously.”

In a joint statement, the EC and the European Central Bank said: “Although prospects have recently improved, the economic situation remains very challenging, with very high and rising unemployment, gross domestic product contraction, and a need to reduce large stocks of internal and external debt.”

Full Article

Commerzbank Reports Quarterly Loss of 720 Million-Euro

Commerzbank Reports 720 Million-Euro Loss in Fourth Quarter By Annette Weisbach – Feb 4, 2013 5:48 AM MT

Commerzbank AG (CBK), Germany’s second- largest lender, posted its biggest quarterly loss in three years after taking charges related to the sale of Bank Forum and a tax asset writedown.

The fourth-quarter loss of 720 million euros ($976 million) compares with a profit of 320 million euros in the year-earlier period, the Frankfurt-based bank said today in a statement. Bank Forum charges totaled 185 million euros, while Commerzbank wrote down 560 million euros on deferred tax accruals.

“Management already indicated at the investor’s day some deferred tax issues, but we are surprised by the large amount,” Christoph Bast, an analyst at DZ Bank in Frankfurt with a hold rating on the shares, wrote in a note. “This was due to Commerzbank’s weaker earnings outlook in the medium term.”

Commerzbank last month announced plans to cut as many as 6,000 jobs over the next four years to achieve an after tax return on equity of more than 10 percent at the core bank. The lender, which is restructuring its retail unit as it offloads sovereign debt and exits shipping and real estate funding, expects the job losses to result in 500 million euros of charges in the first quarter.

EU Funds Cyber Trolls to Propagandize Critics

Youtube – RT

UK Independence Party’s Nigel Farage on the European Parliament’s plan to spend huge sums of taxpayer money on social network smear campaigns against those who speak out against it. “The words ‘legal’ and ‘European Union’ don’t fit together. Nothing matters here, there are no rules”.

Angela Merkel’s office rug was Herman Goering’s

Herman Goering’s love of wartime loot has come back to haunt modern Germany after it emerged a rug acquired by the Luftwaffe commander still lay in Angela Merkel’s office.

Angela Merkel's office rug was Herman Goering's

6:21PM GMT 28 Jan 2013

The Persian rug had lain undisturbed for decades in the chancellor’s office until journalists from the news magazine Der Spiegel uncovered its origins.

Spiegel estimates that the rug could be one of an estimated 600 pieces of furniture and art work plundered during the war still lying in German government buildings.

During the Second World War Nazi Germany launched one of the biggest campaigns of looting ever seen in history. Museums and stately homes, especially those in Eastern Europe, were systematically stripped clean, while the valuable possessions of Holocaust victims also made their way to the private collections of leading Nazis.

Goering was an enthusiastic recipient of stolen booty, and amassed a huge collection of paintings, tapestries and jewellery during the course of the war.

Although Spiegel reported that the Goering rug will soon be removed from Mrs Merkel’s office, just how it got there remains unclear, and the news of its presence comes as an unwanted embarrassment to the chancellor and the German government.

Full Article

Hitler’s rise to power ‘constant’ warning: Merkel

By Agence France-Presse
Wednesday, January 30, 2013 11:33 EST

German Chancellor Angela Merkel file photo via AFP

Chancellor Angela Merkel said on Wednesday that Adolf Hitler’s rise to power 80 years ago should go on reminding Germans that democracy and freedom cannot be taken for granted.

Merkel was speaking at the inauguration of an exhibition in Berlin to commemorate eight decades since Hitler became chancellor on January 30, 1933 — an anniversary which has aroused much interest in Germany.

“Human rights don’t assert themselves. Freedom doesn’t preserve itself all alone and democracy doesn’t succeed by itself,” Merkel said.

“That must be a constant warning for us, Germans,” she added referring to Hitler’s arrival at the chancellery.

The exhibition, “Berlin 1933. On the Path to Dictatorship”, is on a site charged with history as the former headquarters of the Gestapo, the secret police of the Nazi regime.

It now houses The Topography of Terror, an open-air documentation centre whose exhibition traces Hitler’s first months in power through photos, newspapers and posters.

Merkel noted that it only took six months for the dictator to “wipe out all the diversity” of German society.

But she also underscored that a large part of society had supported “or at least acquiesced” to Hitler’s regime.

Full Article

Nigel Farage’s UKIP On The Increasing European And Soviet Union Similarities

Zero Hedge
Feb 4, 2013

From Margaret Thatcher’s original (now extremely prescient) warning of the European Union’s structure creating “insecurity, unemployment, national resentment, and ethnic conflict” to Nigel Farage’s recent clarifications on the agonizing direction in which the unelected leadership of the Union are pulling Europe, this brief 3 minute clip draws some significantly eery similarities between the former Soviet Union and the current European Union. Every now and again, a step back to look for context in history is important – as while the Soviet Union was created by armed force, the European Union is being forced by political coercion and economic bullying. Perhaps Churchill summed up best how it should be, “We are with Europe, but not of it; we are linked but not combined; we are interested and associated but not absorbed.”

The Putrid Smell Suddenly Emanating From European Banks

By now we should have gotten used to the odor emanating from banks—bailouts, money laundering, Libor rate-rigging, the other misdeeds. But in Europe over the last few days, it was particularly dense.

A nauseating whiff came from Barclays today, when it leaked out that it has been under investigation by the Financial Services Authority and the Serious Fraud Office in Britain for illegal fundraising in 2008. Allegedly, the bank secretly loaned £5.3 billion ($8.4 billion) to one of Qatar’s sovereign wealth funds, which then turned around and with great public fanfare pumped that money back into Barclays—a scheme to raise capital on paper to escape a government takeover during the financial crisis.

Then Crédit Agricole, France’s third largest bank, announced €3.8 billion ($5 billion) in write-downs, mostly of “Goodwill” due to the “present macro-economic and financial environment.” Goodwill reflects money paid out for certain items in excess of their value—an expense that, by a quirk of accounting, is temporarily parked as an asset on the balance sheet to be expensed eventually. After the write-off, the bank will still have about €14 billion of Goodwill clogging up its balance sheet, and more write-offs are to come. It already wrote off €2.5 billion last year, when it agreed to sell its stake in the Greek bank Emporiki for €1, which it had acquired with impeccable timing in 2006 for €2.2 billion.

Greek banks… oh my! They’re being investigated by Greek financial crime prosecutors for €232 million in loans that they handed out to the ruling parties, Prime Minister Antonis Samaras’ New Democracy and the Socialist PASOK. “Suspected crimes against the state,” a court official called it.

The state funds political parties based on their share of the vote, and both parties pledged hoped-for state funding as collateral for these loans. But during the election last June, New Democracy’s share of the vote dropped from 33% to 29% and PASOK’s from 43% to 12%. With it, state funding suddenly collapsed, and some of the loans are turning sour.

Bitter irony: teetering Greek banks, hoping at the time to get bailed out by taxpayers in other countries, funded Greek political parties that then negotiated the bank bailouts with the EU for the benefit of bank investors [likewise, Proton Bank got bailed out in 2011 though it engaged in fraud, embezzlement, and money laundering, when a bomb exploded…. European Bailout Fund For Greek Money Laundering And Fraud]

Still on Friday, SNS Reaal, fourth largest bank in the Netherlands, was bailed out again—after already having been bailed out in 2008. This time, it was nationalized. The €10 billion package would cost taxpayers initially €3.7 billion. Stockholders and junior debt holders lost out too, but holders of senior debt and covered bonds were made whole.

There is never an alternative to bailouts. A collapse “would have unacceptably large and undesirable consequences,” according to Finance Minister Jeroen Dijsselbloemsaid. As brand-spanking new President of the Eurogroup, he thus confirmed: bank bailouts will be the norm in the Eurozone.

They’re worried that letting even a smallish bank fail could take down the electron-thin confidence in the entire financial system—just when the debt crisis has been officially declared “over.” And so, based on the operative set of rules, the Dutch government shanghaied its strung-out taxpayers, whose belts are already being tightened by austerity, into paying, once again, for the misdeeds of the bankers.

In Italy, a billowing scandal got new fuel. It kicked off with a criminal investigation into Monte dei Paschi di Siena, Italy’s third largest bank, for alleged market manipulation, false accounting, obstructing regulators, and fraud. The bank used derivatives to hide losses during the financial crisis, but these losses are now seeping from the woodwork. So Standard & Poor’s just cut the bank’s credit rating, fearing that the announced losses may just be the tip of the iceberg.

That form of financial engineering came to light when new management took a gander at the books. Now a government bailout is in the works. Because there is never an alternative. Taxpayers tighten your belts!

And on Thursday, Deutsche Bank waded deeper into its quagmire of “matters,” among them the Libor rate-rigging scandal, which might cost it €2.5 billion, and the carbon-trading tax-fraud scandal that broke with a televised raid by police on its headquarters. So, more write-downs are due, and the bank announced a €2.2 billion loss for the fourth quarter. “In 2013,” said co-CEO Jürgen Fitschen reassuringly, “we will be confronted with more developments in these and other matters.”

And other matters! More revelations to come. Already, there are estimates that these misdeeds would eventually amount to €10 billion. Now suddenly: “Building capital is our top priority,” said the other co-CEO Anshu Jain. He wants to do it without diluting current stockholders. “But in this uncertain world, I cannot exclude anything,” he mollified his audience.

Turns out, the bank intends to get rid of €16 billion in high-risk credit default swaps by end of March. It might boost its core Tier 1 capital ratio from 8% to 8.5%. More such sales are planned—a wholesale dumping of its credit correlation book, an outgrowth of the financial engineering it used to hide whatever needed to be hidden.

The bitter irony of the financial crisis is just how common the putrid smell has become since. And how routine it has become for these inscrutable institutions with their opaque financial statements to transfer risks and losses to the people. In the US, too, the smell refuses to evaporate. And nothing indicates that this will change anytime soon.

Weary of all this, the French—whose economy is spiraling deeper into crisis—expressed disdain for their political class; they’re dreaming of authoritarian leadership, a “real leader” who would clean up the mess and “reestablish order.” Read…. Could 87% of the French Really Want A Strongman To Reestablish Order?

All Wars Are Bankers’ Wars

WRH


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Iran: US sanctions imposed to raise tension

DEBKAfile February 8, 2013, 1:23 PM (GMT+02:00)

Iran’s Foreign Ministry said on Friday that US sanctions imposed this week to force Tehran to scrap sensitive nuclear work were aimed at “creating tension, crisis and instability” and “a gap between the nation and government” in the Islamic state ahead of its June presidential elections

MSNBC: “I Love the CFR” – Treasury Secretary Geithner Joins Council on Foreign Relations as Corporate Media Continues Globalist Coverup

“The CFR is the American Branch of a society which originated in England, and which believes that national boundaries should be obliterated, and a one-world rule established.”By Alex Thomas
theintelhub.com
February 6, 2012

Former U.S. Treasury Secretary and one of the architects of the bailouts that gave hundreds of billions of dollars to the big banks (including foreign-owned banks) Timothy Geithner has rejoined the globalist Council on Foreign Relations.

In a move that should have been seen a mile away, the CFR has brought their puppet Geithner onboard as a “distinguished fellow,” which apparently happens after you have worked for the big banks and the idea of a world government long enough to distinguish yourself among the globalists that occupy this organization.

In a post on the councils official website, president and noted globalist Richard N. Haass let us all know how thrilled the CFR is to have Tim back on the team.

“We are thrilled to welcome Tim back to the Council on Foreign Relations,” said CFR President Richard N. Haass. “Both at Treasury and at the New York Federal Reserve, Tim was a tireless, creative, and responsible custodian of the public trust.

His coming to CFR only strengthens our capacity to produce thoughtful analysis of issues at the intersection of economic, political, and strategic developments.”

The post also made it clear that Geithner was very instrumental in the Obama Administration, overseeing the bailout and supposed reforms to the financial system. (which only made it easier for the biggest globalist controlled banks to reign rough-shot over the world)

As President Obama’s treasury secretary, Geithner played a central role in formulating U.S. domestic and international economic policy for the past four years.

He was a principal architect of the president’s strategy to avert economic collapse and to reform the financial system, while also tackling a broad set of international economic challenges. He served in this position from January 26, 2009 through January 25, 2013.

Clearly the Council on Foreign Relations has an extreme amount of power within the United States. (and through connected round table groups throughout the world)

A group this powerful must be covered by the mainstream media on a daily basis right?

Sadly, this couldn’t be further from the truth, with the corporate controlled media worshiping the group and using psychological manipulation tactics to convince the American people that they are just a bunch of old guys with little to no real power.

MSNBC: “I Love the CFR”

A perfect example of the corporate medias CFR psyop occurred this morning during a segment on MSNBC’s Morning Joe when a guest from Politico revealed (a few hours before the CFR itself announced it) that Geithner was joining the group.

After being told the news, the hosts, including the daughter of globalist godfather Zibgniew Brzezinski, can be heard jumping with joy and then immediately attempting to downplay the CFR by making fun of those who have spoken out against the organizations stated goals which include the loss of US sovereignty in favor of a one world order.

After making a joke about the CFR presidents eating habits as if he really doesn’t do anything important, the hosts went on to not only shill for the group but to reveal their absolute love for the globalist organization.

“People always tell me oh the CFR, one world government, international conspiracy… Its like I’ve been over there man, they can’t even get my sandwich order right, there is no international plot.”

“Its a lovely place.”

“I love the CFR!”

“I do too.”

If anything, the above mentioned segment on MSNBC was at least transparent, with the hosts openly worshiping the group and, in turn, letting the American people know who they actually work for.

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Who Controls The Money? An Unelected, Unaccountable Central Bank Of The World

Michael Snyder

Economic Collapse
Feb 6, 2013

An immensely powerful international organization that most people have never even heard of secretly controls the money supply of the entire globe. It is called the Bank for International Settlements, and it is the central bank of central banks. It is located in Basel, Switzerland, but it also has branches in Hong Kong and Mexico City. It is essentially an unelected, unaccountable central bank of the world that has complete immunity from taxation and from national laws. Even Wikipedia admits that “it is not accountable to any single national government.“ The Bank for International Settlements was used to launder money for the Nazis during World War II, but these days the main purpose of the BIS is to guide and direct the centrally-planned global financial system. Today, 58 global central banks belong to the BIS, and it has far more power over how the U.S. economy (or any other economy for that matter) will perform over the course of the next year than any politician does. Every two months, the central bankers of the world gather in Basel for another “Global Economy Meeting”. During those meetings, decisions are made which affect every man, woman and child on the planet, and yet none of us have any say in what goes on. The Bank for International Settlements is an organization that was founded by the global elite and it operates for the benefit of the global elite, and it is intended to be one of the key cornerstones of the emerging one world economic system. It is imperative that we get people educated about what this organization is and where it plans to take the global economy.

Sadly, only a very small percentage of people actually know what the Bank for International Settlements is, and even fewer people are aware of the Global Economy Meetings that take place in Basel on a bi-monthly basis.

These Global Economy Meetings were discussed in a recent article in the Wall Street Journal

Every two months, more than a dozen bankers meet here on Sunday evenings to talk and dine on the 18th floor of a cylindrical building looking out on the Rhine.

The dinner discussions on money and economics are more than academic. At the table are the chiefs of the world’s biggest central banks, representing countries that annually produce more than $51 trillion of gross domestic product, three-quarters of the world’s economic output.

The article goes on to describe the room that these Global Economy Meetings are held in. It sounds like something out of a novel…

The Bank of England’s Mr. King leads the dinner discussions in a room decorated by the Swiss architectural firm Herzog & de Meuron, which designed the “Bird’s Nest” stadium for the Beijing Olympics. The men have designated seats at a round table in a dining area scented by white orchids and framed by white walls, a black ceiling and panoramic views.

The central bankers that gather for these meetings are not there just to socialize. No staff members are allowed into these meetings, and they are conducted in an atmosphere of absolute secrecy…

Serious matters follow appetizers, wine and small talk, according to people familiar with the dinners. Mr. King typically asks his colleagues to talk about the outlook in their respective countries. Others ask follow-up questions. The gatherings yield no transcripts or minutes. No staff is allowed.

So the fate of the world economy is determined by unelected central bankers in secret meetings that nobody ever hears about?

That certainly does not sound very “democratic”.

But this is the direction that “global governance” is taking us. The elite believe that the “big decisions” are far too important to be left “to the people”, and so most of the “international institutions” that have been established by the elite operate independently of the democratic process.

Sadly, the truth is that all of this has been planned for a very long time.

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The Real New World Order. Bankers Taking over the World

Global Research, February 06, 2013

 

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How quickly best laid plans become passé. New world orders come, it seems, as frequently as eclipses.

The old world order (ancien régime), along with 16 million people, died during the Great European War which began on June 28, 1914 when the Austrian heir to the throne, Archduke Franz Ferdinand, was assassinated by a Serb nationalist, Gavrilo Princip, in Sarajevo. (Today he would be called a terrorist.) This assassination sent nations that had no desire to go to war into the most destructive war the world had yet experienced.

Europe at the beginning of 1914 consisted of six major empires and an assortment of minor states that the major empires didn’t care much about. The six major empires, (the Austro-Hungarian, French, German, British, Ottoman, and Russian) were ensnared in military alliances (much like the US is today) which were formed to keep the peace. The diplomats, like those today, believed that forming alliances that balanced the powers of different groups would keep them from attacking each other. The Central Powers consisted of Austro-Hungary, Germany, and the Ottoman Empire; the Triple Entente consisted of the other three. Peace, the diplomats thought was assured. What happened?

When the archduke was assassinated, the Austrians, confident in their military prowess (as Americans are today), decided to punish Serbia which was attacked on July 28. But the Serbs ambushed the Austrians at the battles of Cer and Kolubara. The Austrians were thrown back with heavy losses. Russia came to the aid of its ethnically related Serbs, and Germany invaded France through Belgium and Luxembourg. Britain came to the defense of France and the Ottoman Empire joined the war in the Balkans on the side of the Central Powers. The alliances that were to ensure the peace changed a single assassination into a massive war. When it was over, the Austro-Hungarian, the German, the Ottoman, and the Russian Empires had vanished and the United States, which joined the war late on the side of the Triple Entente had become a world player. The old world order was gone!

Woodrow Wilson, the American President, sought to create a new old world order by proposing his Fourteen Points. Wilson wanted to create separate nations out of former colonies and ensure the peace by creating a League of Nations (another peace by treaty scheme). Territorial reductions were made to Germany and Austria, a slew of new and revived nations were created in Eastern Europe, while France and Britain carved up the Ottoman Empire to suit themselves. The new old world order was just a reconfigured old world order. It didn’t last and it didn’t ensure the peace. So much for the best laid plans of diplomats.

Germany was reborn in 1933 when Adolph Hitler became Chancellor. He, too, sought to create a new world order, one dominated by a Thousand Year Reich (Empire). To that end, his policies were aimed at seizing Lebensraum (living space) for the German people by extending Germany’s borders. Austria and parts of Czechoslovakia were annexed and Poland was invaded. But alas, Poland had a mutual defense treaty (another alliance formed to ensure the peach) with Great Britain and France, so the invasion of Poland started World War II.

When it was over, Germany again was destroyed and Great Britain and France, for the most part, had had their empires diminished. The United States and the Union of Soviet Socialist Republics (Russia) found themselves at the top of another new old world order.

The victorious powers, the US, the USSR, China, Great Britain, and France tried again to ensure the peace by creating the United Nations which they attempted to keep firmly in their control by making themselves rulers of the Security Council which had a veto on all UN Activities all five nations didn’t give unanimous approval to. That was to be the new old world order. But it began to come unglued immediately. China was not represented by mainland China which had become Communist but by “Nationalist” China whose government had fled to Taiwan. Communist China soon took the Chinese seat and the two Communist nations formed a bloc while the remaining three Capitalist nations formed another. The United Nations became the Disunited Nations and has remained so to this day. This new old world order was stillborn.

Sometime after 1950 (because of secrecy, the exact date is unknown) the Bilderbergers, realizing that the old world ancient régime and all of these new old world orders were founded on nation states that kept going to war with each other, began an attempt to create a truly new world order. David Rockefeller writes,

“We are grateful to the Washington Post, the New York Times, Time Magazine and other great publications whose directors have attended our meetings and respected their promises of discretion for almost forty years. . . . It would have been impossible for us to develop our plan for the world if we had been subjected to the lights of publicity during those years. But, the world is more sophisticated and prepared to march towards a world government. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national auto-determination practiced in past centuries.”

“For more than a century ideological extremists at either end of the political spectrum have seized upon well-publicized incidents such as my encounter with Castro to attack the Rockefeller family for the inordinate influence they claim we wield over American political and economic institutions. Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’ and of conspiring with others around the world to build a more integrated global political and economic structure – one world, if you will. If that’s the charge, I stand guilty, and I am proud of it”

If there were no nation states, no wars could erupt between them!

Some believe that these international bankers have succeeded in taking over the world, but it has never succeeded in abolishing nation states. In fact, there is some evidence that nation states may be disintegrating into smaller ones. Scotland is going to hold a referendum on withdrawing from England, Catalonia is talking about withdrawing from Spain, Czechoslovakia has broken up into the Czech and Slovak republics, there is talk again of secession in the US, and no one quite knows what is really happening in the Arab world. A new world order ruled by one government? Not hardly!

But things began to break down in the 1950s. Until then, wars were fought between armies supported by nation states, and their endings were foreseeable. A war ended when one army, either voluntarily or on command, surrendered. That era appears to have ended. Old world order warfare appears to have become passé.

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Terrorism: Judge Imposimato accuses Bilderberg

Voltaire Network

In a book published in early January, La Repubblica delle stragi impunite (The Republic of the Unpunished Massacres. The unpublished papers of the bloody events that have shaken our country), Italian Judge Ferdinando Imposimato places the blame on NATO for organizing the bloody attacks that ripped through Italy during the 1980’s.

JPEG - 25.2 kbHonorable Imposimato presided over several terrorism-related cases, including the kidnapping and ultimate assassination of President Aldo Moro and the attempted assassination of Pope John Paul II. He was a leading anti-Mafia and is currently honorary President of the Supreme Court of Italy. He was elected to the Chamber of Deputies (Parliament) under the label of the Democratic Party of the Left and subsequently to the Senate.

The book comprises, in particular, a 1967 document pointing to the involvement of the Bilderberg Group, a club that brings together the most influential people to defend the interests of NATO.

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