Merkel Thinks Greece Will Default

Andrew Neil of the BBC has just twittered today that the British Foreign office has reported:

Angela Merkel thinks Greece will default !

Unbelievable that she would come out and say it even though everybody else has thought this for a long time. Normally the process is to DENY, DENY, DENY. Not long now folks till the shit hits the fan.

 

Debt Supercycle

Chris Martenson submitted an excellent article of an interview with John Mauldin on ZeroHedge regarding the “Debt Supercycle” which was a concept originally introduced in the 1930s by Irving Fisher. In a nutshell it means

  that when there is a buildup of too much debt within an economy, there reaches a point where there simply is no other available solution but to let it rewind.

According the Martenson the US has now reached that point where the debt supercycle has ended and needs to be paid off.

You can’t look to monetary policy for help (which will try to stimulate businesses to get more debt) because debt is the problem. If you are drunk and you need to cure yourself; another fifth of the whiskey is not the answer. So when debt becomes the problem, when it gets to be too much, more debt is not the issue. You’ve just simply got to work it off. There’s no easy way out of it. And, it takes years to work through it. It takes a long time, generally — 60 to 70 years, in the US’s case — for these debt cycles to build up. It’s when you can no longer adequately service your debt and the market loses confidence in your ability to service the debt at a price that it finds adequate.

Normally to deal with debt you can try to grow your way out, but

The problem is, when you’re at the end of the debt supercycle, when you’re running up against your ability to borrow money, that liquidity no longer works.

 ……

So you can either repudiate the debt, you can default on it, you can monetize it, you can try to grow your way out of it; but you’re going have to deal with it. And there’s no easy way, when you’re at the end of the debt supercycle, when debt has become too much. Printing money doesn’t work.

So Europe is already has gone too far according to Mauldin, Japan is nearly there and will have disastrous consequences when it finally falls and the US will suffer 5-6 years of very low growth. Bottom line is if debt is not caught early in the cycle, then there is no easy solution but to let it unwind. 

As Fisher pointed out, the time to solve the debt bubble is before it becomes a bubble. He was wanting separation of commercial banks and lending. He wanted a much less fractional-reserve-based banking because he wanted the debt to keep from building up past levels that we saw in the 1920’s. He saw that as something that was so bad that it created the Depression.

Unfortunately every time the business cycle was about to break down in the US, printing presses kicked in and along with low-interest rates there was always somebody there to buy the debt. Finally we are reaching that point where money printing no longer works, hence debt supercycle is reached.

Click here for full video interview.

Germany Pushes For Greek Sovereignty

Germany has called for Greece to cede it sovereignty as has been reported this week in the Financial Times.

The German government wants Greece to cede sovereignty over tax and spending decisions to a eurozone “budget commissioner” to secure a second €130bn bail-out, according to a copy of the proposal obtained by the Financial Times.

In what would amount to an extraordinary extension of European Union control over a member state, the new commissioner would have the power to veto budget decisions taken by the Greek government if they were not in line with targets set by international lenders. The new administrator, appointed by other eurozone finance ministers, would take responsibility for overseeing “all major blocks of expenditure” by the Greek government.

Even before Germany circulated its proposal, the EU and International Monetary Fund had presented a 10-page list of “prior actions” Athens must implement before the new bail-out is agreed. According to a copy of the document, also obtained by the FT, Greece must cut an additional 150,000 government jobs within three years.

But it gets worse for Greece as the EU and IMF have called for a number of actions to be completed before another bailout, including :

1. Absolute priority to debt service
Greece has to legally commit itself to giving absolute priority to future debt service. This commitment has to be legally enshrined by the Greek Parliament. State revenues are to be used first and foremost for debt service, only any remaining revenue may be used to finance primary expenditure.

2. Transfer of national budgetary sovereignty
Budget consolidation has to be put under a strict steering and control system. Given the disappointing compliance so far, Greece has to accept shifting budgetary sovereignty to the European level for a certain period of time. A budget commissioner has to be appointed by the Eurogroup with the task of ensuring budgetary control.

As pressure is ratcheted up and more sovereignty to be handed over, Mike Shedlock reckons

Expect Greek “Bank Holiday” Soon

Perhaps I am mistaken but I do not see any chance Greece will agree with this proposal.

German and IMF demands make meaningless any hint of a deal “soon”. Germany has signaled it has had enough and will not throw another 130 billion euros down a rat hole. The IMF signaled the same thing but not as emphatically.

Thus, if Germany does not back down and the IMF insists on a 10-page list of “prior actions” a Greek exit from the Eurozone is at hand. 

Look for a “bank holiday” in Greece soon.

2012: $7.6 Trillion of Debt To Turnover

Guess how much debt the worlds leading economies are rolling over this year according to Bloomberg. $7.6 trillion and if you included interest payments its over $8 trillion.

Looks like they will all be competing for the same buyers. Best of luck 😉

Europe is Warmup, US is Main Event.

Peter Schiff CEO of Euro Pacific Capital, gave an interview on RT’s Capital Account. Below is the video clip but the main points are as follows:

• We are in intensive care and zero interest rates prevent the cure.
• We need higher interest rates, more savings, lower property prices, less government spending and to balance the books.
• Europe is the warmup and America is the main event.
• We are where the real sovereign debt crises is going to be and it will be enormous.
• It was going to happen because of mistakes government made in the past, but it will be worse because of mistakes made in the present.
• We haven’t had a free market for a long time and is getting less and less free.
• The more government gets involved in the economy, the more they screw it up.
• We are going to have an inflationary depression worse than the 1930s. Everything the government is likely to do will exacerbate it.
• The more government stimulate, the worse it gets.
• We are a lot sicker than we were in the 1930s. We know what the cure is but we can’t get the politicians to allow the economy to swallow it.
• We are in a climate where real tyranny can flourish. Look at what happened in Weimar Republic, Germany. After hyper-inflation we got the Nazis.
• We are going to have civil unrest and rioting.
• Ultimately we will have price controls even though government currently are denying we have inflation, because prices will be so high.
• Government may start to silence the voices of people. They can already classify anyone they want as a terrorist.
• Young people are getting the message now. So there is hope.

Irish PM Lets Mask Slip

The Irish Taoiseach (Prime Minister) Enda Kenny was in Davos this week and caused a storm back in Ireland by his comments. When asked what caused the crisis in Ireland he responded:

‘What happened was that people simply went mad borrowing

This is unbelievable because just six weeks earlier he said:

‘Let me say this: You are not responsible for the crisis

The real causes of the crisis is the following which he well knows:

1. Low interest rates caused by being in the euro. Especially when Ireland needed to raise them to stop property bubble and high inflation. Of course low-interest rates meant nobody saved. People invested in property as a pension because they got so little in the banks.

2. Government never warned the property bubble was getting out of control, despite been warned repeatedly by its own Dept of Finance (which it ignored) , OECD, IMF, ERSI etc.

3. Media never warned the people, because they made a fortune from advertising.

4. Anyone who spoke out was laughed at. Taoiseach (Prime Minister) Bertie Ahern once famously said these people should “commit suicide”.

5. Banks massively changed their lending policies, where the golden rule was you could only get a maximum of 2.5 times your yearly salary plus 1 times your spouse, it went up to nearly 10 times you salary. In fact there was stories of people be encouraged to make up figures.

6. The opposition political parties (including current Taoiseach Enda Kenny) keeping their mouths shut. Strange that 😉

7. Banking Regulator and Irish Central Bank did NOTHING.

8. Bank auditors DID NOT DO THEIR JOB. Including letting Irish Permanent deposit €7bn overnight in Anglo Irish Bank to cook the books for the audit and then transfer back once audit was over.

9.Governement tax policy was completely wrong. It was setup for property based taxes EVEN THOUGH THEY WERE WARNED. When the property bubble was about to collapse naturally in 2002 they pumped it up with first time buyer grants in invester tax breaks. When over 20% of GDP was based on property they kept going.

10. Guaranteeing the banking system and taking on its debts. What a F**king disaster. WHICH IS THE REAL REASON IRELAND IS FUCKED.

Fianna Fail’s Niall Collins said:

“Where was the Taoiseach’s harsh criticism of European banks which helped flood Ireland with credit for years? He should be standing up for the Irish people and challenging the role of the banks when he has the chance,” he said.

Sinn Fein‘s Padraig Mac Lochlainn said

“This analysis that people in Ireland went drunk with credit, were reckless and they have to now be cleansed by a decade of austerity is very worrying.”

And finally, after paying back €1.25bn to junior bondholders of a bank that DOESN’T EXIST ANYMORE, Enda Kenny had to say about the €30 bn of IOUs (promissory notes) that Ireland has to pay to bondholders of the bank that DOESN’T EXIST ANYMORE.

The Taoiseach said there would be no discussion at next week’s summit on reducing the level of debt associated with Anglo Irish Bank’s bailout.

The European Central Bank is understood to be open to proposals to replace Anglo Irish Bank’s €30bn promissory note or government IOU, for another type of debt repayment.

Finally, Enda enjoy Davos. After all we’re paying for it. 😉

source: Irish Independent

Cashless Society Coming Soon

There has been warnings for years of the banks moving away from cash to an electronic financial system. In the latest move in Ireland, the National Irish Bank will no longer handle cheques. It announced in 2010 that it wasn’t going to handle cash.

Asked how a customer who needed €5,000 in cash would get it, a spokesman for the bank said that a branch could issue a bank draft if the money was needed urgently. This could be taken to a post office and cashed there.

We have already seen capital controls on Italy with plans to limit withdrawals to €300.  Greece too announced in 2010 that it would limit cash transactions to a max €1500. These are not large amounts.

It’s a disturbing (1984) move which looks to be started with the PIIG nations first. Lets face it, their citizens  have more things to worry about right now. The trend looks to be moving toward an electronic system controlled by the banks of course. More control by the banking system never ends well.

😦

Why Banks Love War

 As the situation in Iran intensifies daily, we must always remember the expression

…follow the money…

Banks can’t make money from debt free people. Who benefits from War? It’s a great way to get people in debt. Both sides. FACT.

The Petrodollar System Explained

Below is an article from MarketOracle which explains the PetroDollar system. The original article itself questions the wisdom of sanctions on Iran which will force nations away from trading oil in petrodollars and would eventually lead to a collapse of the dollar as the worlds reserve currency. In fact I wrote already about Iran trading oil with India in gold and how Russia has dropped dollars when trading with Iran.

A cynic might suggest that the elites running the US knows that Iran sanctions would lead to a collapse in the dollar forcing a default which would get rid of its debt and the US citizens couldn’t hold them responsible or war.  According to chart below, every period of expansion in debt resulted in WAR. But then again, I’m not a cynic 😉

The Petrodollar System

To explain this situation properly, we have to start in 1973. That’s when .President Nixon asked King Faisal of Saudi Arabia to accept only US dollars as payment for oil and to invest any excess profits in US Treasury bonds, notes, and bills. In exchange, Nixon pledged to protect Saudi Arabian oil fields from the Soviet Union and other interested nations, such as Iran and Iraq. It was the start of something great for the US, even if the outcome was as artificial as the US real-estate bubble and yet constitutes the foundation for the valuation of the US dollar.

By 1975, all of the members of OPEC agreed to sell their oil only in US dollars. Every oil-importing nation in the world started saving its surplus in US dollars so as to be able to buy oil; with such high demand for dollars the currency strengthened. On top of that, many oil-exporting nations like Saudi Arabia spent their US dollar surpluses on Treasury securities, providing a new, deep pool of lenders to support US government spending.

The “petrodollar” system was a brilliant political and economic move. It forced the world’s oil money to flow through the US Federal Reserve, creating ever-growing international demand for both US dollars and US debt, while essentially letting the US pretty much own the world’s oil for free, since oil’s value is denominated in a currency that America controls and prints. The petrodollar system spread beyond oil: the majority of international trade is done in US dollars. That means that from Russia to China, Brazil to South Korea, every country aims to maximize the US-dollar surplus garnered from its export trade to buy oil.

The US has reaped many rewards. As oil usage increased in the 1980s, demand for the US dollar rose with it, lifting the US economy to new heights. But even without economic success at home the US dollar would have soared, because the petrodollar system created consistent international demand for US dollars, which in turn gained in value. A strong US dollar allowed Americans to buy imported goods at a massive discount – the petrodollar system essentially creating a subsidy for US consumers at the expense of the rest of the world. Here, finally, the US hit on a downside: The availability of cheap imports hit the US manufacturing industry hard, and the disappearance of manufacturing jobs remains one of the biggest challenges in resurrecting the US economy today.

There is another downside, a potential threat now lurking in the shadows. The value of the US dollar is determined in large part by the fact that oil is sold in US dollars. If that trade shifts to a different currency, countries around the world won’t need all their US money. The resulting sell-off of US dollars would weaken the currency dramatically.

So here’s an interesting thought experiment. Everybody says the US goes to war to protect its oil supplies, but doesn’t it really go to war to ensure the continuation of the petrodollar system?

The Iraq war provides a good example. Until November 2000, no OPEC country had dared to violate the US dollar-pricing rule, and while the US dollar remained the strongest currency in the world there was also little reason to challenge the system. But in late 2000, France and a few other EU members convinced Saddam Hussein to defy the petrodollar process and sell Iraq’s oil for food in euros, not dollars. In the time between then and the March 2003 American invasion of Iraq, several other nations hinted at their interest in non-US dollar oil trading, including Russia, Iran, Indonesia, and even Venezuela. In April 2002, Iranian OPEC representative Javad Yarjani was invited to Spain by the EU to deliver a detailed analysis of how OPEC might at some point sell its oil to the EU for euros, not dollars.

This movement, founded in Iraq, was starting to threaten the dominance of the US dollar as the global reserve currency and petro currency. In March 2003, the US invaded Iraq, ending the oil-for-food program and its euro payment program.

There are many other historic examples of the US stepping in to halt a movement away from the petrodollar system, often in covert ways. In February 2011, Dominique Strauss-Kahn, managing director of the International Monetary Fund (IMF), called for a new world currency to challenge the dominance of the US dollar. Three months later a maid at the Sofitel New York Hotel alleged that Strauss-Kahn sexually assaulted her. Strauss-Kahn was forced out of his role at the IMF within weeks; he has since been cleared of any wrongdoing.

War and insidious interventions of this sort may be costly, but the costs of not protecting the petrodollar system would be far higher. If euros, yen, renminbi, rubles, or for that matter straight gold, were generally accepted for oil, the US dollar would quickly become irrelevant, rendering the currency almost worthless. As the rest of the world realizes that there are other options besides the US dollar for global transactions, the US is facing a very significant – and very messy – transition in the global oil machine.

Christine Lagarde Warns Of Depression Unless Governments Pay Up

IMF chief, Christine Lagarde warns that there could be another Great Depression unless Governments pay up. Sounds like extortion to me. She met with Angela Merkel on Sunday, and went on to say

“It is about avoiding a 1930s moment,” she said at the German Council of Foreign Affairs in Berlin, “a moment, ultimately, leading to a downward spiral that could engulf the entire world.”

On Monday Lagarde hinted that Germany is going to have to stump up the cash as she outlined what she wanted:

€500 billion in mostly German taxpayer money to double the size of the future bailout fund, the ESM, to €1 trillion, so that it would be large enough to bail out Italy and Spain. Their insolvency “would have disastrous implications for systemic stability,” she threatened.

$500 billion in taxpayer money from around the world, specifically from the US, Japan, and Germany, the three largest contributors to the IMF, to double its bailout lending power to $1 trillion.

– More government spending in those European countries that can afford it, to stimulate the economy for everyone else. She didn’t mention Germany, but German taxpayers, please step up to the plate. Your money is needed elsewhere. Or else—

– Common liabilities, such as Eurobonds, through which taxpayers in fiscally stronger countries, like Germany, would guarantee the debt of others.

– Elimination of trade imbalances by stimulating internal demand in countries with large trade surpluses. Alas, Germany’s economy lives and dies by its exports, and a drop in the surplus has a vicious effect on GDP. Read…. Germany’s Export Debacle.

Source: Blacklistednews

India Buys Oil In Gold And Dumps Dollar

Check out the clip below from Russia Today whereby India agrees to buy its oil from Iran with gold. In the report is also the possibility of China buying its oil also with gold.

Sounds like the sanctions by the US and EU against Iran will be counter-production as this forces the dollar as the worlds reserve currency to dropped in trade amongst these large trading nations.

India has reportedly agreed to pay Tehran in gold for the oil it buys, in a move aimed at protecting Delhi from US-sanctions targeting countries who trade with Iran. China, another buyer of Iranian oil, may follow Delhi’s lead.

The report, by the Israeli-based news website DEBKAfile, states that Iran and India are negotiating backup alternatives with China and Russia, should the US and EU find a way to block the gold payment mechanism.

Delhi’s move is seen as surprising, as earlier India and Iran said they would switch to yen and rupees. China, another major importer of Iranian oil, may follow Delhi’s lead, the report adds.

India and China need to switch from the dollar in bilateral trade, since the US and EU have issued unilateral sanctions against the Iranian oil industry and financial institutions. The sanctions would ban any bank involved in oil trade with Iran from dealing with American and European counterparts.

All Fiat Systems Collapse – Mike Maloney

Mike Maloney in an interview on Capital Account show on Russia Today channel discusses how fiat currencies always collapse and typically last only 30-40 years.

All fiat currencies before 1971 had a 100% failure rate. This monetary system which went off the gold standard in 1971 is coming to an end.

Oil Prices To Collapse in 2012 Like 2008 – Chris Cook

Chris Cook gave an interview today on Max Keiser show. Check out the 2nd half of the show for interview. In it Chris predicts a collapse of oil prices in first 6 months of 2012 just like a similar collapse in 2008 when it went from $147 to $35 dollars per barrel. He made an interesting point that investors and hedge funds were buying oil contracts because they didn’t want to hold dollars. A few of the points covered are:

Selling oil today and lease back in a months time.

Oil market entirely corrupted.

People are buying long-term to avoid a loss because they didn’t want to hold money in dollars.

For article written by Chris Cook and full explanation of his view checkout theoildrum.com

ECB Force Ireland To Pay Back More Debt For Bank That Doesn’t Exist

Want more proof that ECB runs Europe for the benefit of bankers at the cost of taxpayers 😉 Next week Ireland is to pay back debt for a bank that doesn’t exist anymore on the insistence of the ECB. The bank in question is Anglo Irish Bank  which was shut down long ago. This particular bank wasn’t even important to the economy. Joe Soap didn’t bank there, just developers got loans in a massive ponzi scheme for the property market in Ireland. The debt which Irish taxpayers are being asked to pay are of course unsecured and unguaranteed bondholder debt which means it doesn’t and shouldn’t be paid back. But the ECB have other ideas. Banks before People.

Next week, the media attention will focus on another pay-off to holders of unguaranteed and unsecured bonds in the collapsed Anglo Irish Bank, who will collect 100 per cent of the due amount on their inspired investment, back in 2007, in this highly leveraged property hedge fund.

The European Central Bank continues to insist that reimbursements in full be made to those who hold bonds issued by Anglo Irish — bust many times over, closed down and under garda investigation — at the expense of an insolvent State. This will in time come to be seen as one of the strangest episodes in the history of central banking.

So is the ECB policy of ass-raping taxpayers working?   😦

The ECB has chosen to persist in regarding the insolvency of an EU member state as a minor sacrifice in the great cause of pretending that Europe does not have a banking crisis. The policy is now entirely pointless and failing to achieve its unexplained but presumed objective, continued access to the bond market for European banks.

Nobody at the ECB appears to understand that this policy is increasingly seen as an act of straightforward hostility towards this country, notwithstanding Ireland’s errors and failings in the stewardship of its banking system.

The policy does not even enjoy the justification of succeeding on its own terms, since hardly any European banks can any longer sell bonds into a market thoroughly disenchanted with the myriad failures of the European response to the crisis.

There are three eurozone member states in bailout programmes. The programme agreed for Greece in May 2010 has failed and Portugal is unlikely to exit its programme on schedule. Would the ECB like to have even one success?

Source: Colm McCarthy, Irish Independent

To follow on this theme, below is a clip of a news conference this week when the troika came to town. A reporter Vincent Browne posed a question to Klaus Masuch of the ECB of why Ireland has to pay back Anglo’s unguaranteed bondholders? Vincent asked. To maintain the financial stability of the Irish banking system, explained Klaus. But then why pay Anglo bondholders, when Anglo is no longer a part of our banking system, and when the paying of them makes it harder for Ireland to recover and in fact makes it more difficult to honour our legitimate, sovereign debts? No explanation was forthcoming.

Masuch squirmed in his chair as Browne criticised the ECB for inflicting huge damage on society in Ireland by requiring irish people to repay back debt for the benefit of european financial institutions. Masuch sat in an embarrased silence.

Good to see someone tell the ECB what they think. Of course the Irish presstitutes completely ignored the story.

EU Plans New Powers To Coordinate Taxation

In a secret document revealed by the Daily Telegraph, France and Germany have plans for more than just the financial tax, which always sounded like a stepping stone to more control over taxation at a later date. They also plan to control taxation policies on energy and corporation tax.

A confidential Franco-German paper, seen by the Daily Telegraph, reveals that the financial transaction tax is seen in Berlin and Paris as the first step to giving the EU a new power to “coordinate” taxation.

The secret text also links existing European Commission proposals on energy taxation and a common method for calculating corporate tax to the push for new EU powers, heralding a major battle over sovereignty this spring.

“European institutions and member states should accelerate the process of tax co-ordination,” the Franco-German paper argues. “In particular the negotiation of the European Commission proposals on energy tax directive, common consolidated corporate tax base and common system of financial transaction tax should be accelerated.”

The EU plan for common energy taxes means we pay more for transport and energy cost.

EU officials have said that the Franco-German push will give a new lease of life to Brussels for new energy taxes that will set higher minimum road and heating fuel duties based on carbon emissions.

British and other European industries are concerned that the legislation will lead to increases in the level of duty on red diesel, damaging competitiveness during a recession.

 

India And Iran To Drop The Dollar

Reuters has reported that India and Iran have decided to drop the dollar in some of their oil trade between the two countries.

 India and Iranhave agreed to settle some of their $12 billion annual oil trade in rupees, a government source said on Friday, resorting to the restricted currency after more than a year of payment problems in the face of fresh, tougher U.S. sanctions.

India, the world’s fourth-largest oil consumer, relies on Iran for about 12 percent of its imports or 350,000-400,000 barrels per day (bpd) and is Tehran’s second-biggest oil client after China.

…..

An Indian delegation has been in Tehran this week discussing options for payment and the source said the decision to pay in rupees was made after a meeting there.

“The Central Bank of Iran will open an account with an Indian bank for receiving payment and settling its import,” the source, who has direct knowledge of the matter, said, adding the new system will start “soon”.

The source did not specify the name of the Indian bank. But other sources have said that Iran could open an account with India’s UCO Bank as it does not have any interests in the United States.

In addition to rupee payments, Indian refiners will continue to make payments through the current mechanism using Halkbank, this source said, “as long as it continues”.

How about this for a kick in the stones for Obama’s administration 😉

India Trade Secretary Rahul Khullar said this week that the Indian delegation to Iran would work around the U.S. sanctions to protect oil supplies and promote Indian exports.

………..

Asian support for U.S. sanctions is vital since the region buys more than half of Iran’s daily crude exports

This follows a list of large Asian and Middle East countries that have abandoned the dollar in trade between themselves. In a previous post we wrote about Iran and Russia dropping the dollar.

No Solution For Euro Says Fitch Ratings Agency

Edward Parker of ratings agency Fitch gave a speech in Madrid yesterday and admitted that they believe

a comprehensive solution to the eurozone crisis is “technically and politically beyond reach.”

Fitch said it came to this conclusion after the EU summit on December 9, 10, as it prepares to downgrade Ireland and five other eurozone states.

As a consequence of Fitch’s views on the euro being unresolved, it plans a spate of sovereign downgrades this month which follows on from S&P who last week downgraded a number of countries. This spells further bad news for the eurozone leaders plans to bring calm to the situation.

the agency was likely to cut the ratings of six euro nations by the end of this month. Fitch, the third-largest rating agency, placed Belgium, Cyprus, Ireland, Italy, Slovenia and Spain on “negative” watch in mid-December, after the summit.

Source: Irish Independent

 

New Draft EU Treaty On Stability Is Toothless

Two articles appeared today on the proposed draft of the EU treaty on growth and stability. According to ZeroHedge, it’s completely toothless:

the entire fiscal treaty is toothless from the ground up as every breach of deficit targets will always be attributed to “exceptional circumstances.”

…….

in the impossible event that a country is found to have breached deficits due to non-exceptional circumstances, what does the EU do? Why it punishes the country by making the deficit even bigger, by up to 0.1% of GDP. Because there is nothing like teaching a deficit transgressor a lesson, than by forcing what caused the punishment in the first place to get even worse…

Only in Europe.

Mike Shedlock writes on his blog that the reason the treaty was watered down in the first place was because the Irish government feared it would have a referendum to pass it, so requested that it be watered down to enable it to be ratified by the Irish Government without having to put it to its angry voters with a referendum.

The treaty hammered out by French President Nicolas Sarkozy and German Chancellor Angela has been watered down to complete meaningless with new provisions that would allow countries to “temporarily deviate from the rules in case of an unusual event” or in “periods of severe economic downturn.”

He quotes from an Irish Independent article

The Irish government is likely to face a court challenge if it decides not to hold a referendum on a new European fiscal treaty, potentially plunging the country and Europe into months of legal uncertainty.

Sinn Féin, the fourth largest party in Ireland’s parliament, told The Financial Times on Thursday that the party had sought legal advice on the issue and was “seriously and actively considering” making a challenge to the Irish Supreme Court.

finally

so behind the scenes Irish conspirators working with the EU have put in language that waters down the treaty hoping to do two things.

1. Water down the treaty so that it does not have to be voted on
2. Change the rules of the treaty later quietly, after the fact, with majority rule votes or other procedures

Give the Voters a Chance

The very last thing the unelected EU officials want is a public vote on anything. They intend come hell or high water to make their socialist nanny-zone state complete with a bureau of nightmarish regulations and agencies governing virtually every aspect of everyone’s lives.

 

LTRO to Banks 1%, Loans To Ireland 6%

Just a quick question. Why is the ECB lending money to Banks at 1%, yet Ireland has to pay back its loans to ECB at 6% ?

The only conclusion you can draw is:

The system is set up for and on behalf of banks.

Bank Holiday Worldwide

Unbelievable interview on Max Keiser’s show with Warren Pollock. In it is a discussion that MF Global wealth confiscation by JP Morgan is a trial run to be used globally. With the massive amount of derivatives out there that need to be covered on the balance sheet, then customer accounts have to be tapped to cover the losses. Hence the trial run by JP Morgan.

According to Warren Pollock , the empire(wetern financial system) is broken down and will have a bank holiday in Europe first then the US.

Personally I think the best way to look at things is like double entry book keeping. Every debt needs to be accounted for. We have massive derivatives losses worldwide. Somebody has to cover it. Guess who that somebody is ?

For further info on outstanding derivatives, click here for an earlier post.

The clip below is from the second half of the show.