Opps, Egypt Cuts Israel Off from 40% Of Its Natural Gas Supply

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Its all kicking off now. Egypt out of the blue has just cut Israel off from the natural gas supply. Currently 40% of Israel’s supply comes from Egypt. Apparently it was people power to forced this move after constantly attacking the pipeline.

Egypt’s energy companies have terminated a long-term deal to supply Israel with gas after the cross-border pipeline sustained months of sabotage since a revolt last year, a stakeholder in the deal said on Sunday.

Ampal-American Israel Corporation, a partner in the East Mediterreanean Gas Company (EMG), which operates the pipeline, said the Egyptian companies involved had notified EMG they were “terminating the gas and purchase agreement”. 

The company said in a statement that the Egyptian General Petroleum Corporation and Egyptian Natural Gas Holding Company had notified them of the decision, adding that “EMG considers the termination attempt unlawful and in bad faith, and consequently demanded its withdrawal”

It said EMG, Ampal, and EMG’s other international shareholders were “considering their options and legal remedies as well as approaching the various governments”.

Before the sabotage, Egypt supplied about 40 percent of Israel’s natural gas, which is the country’s main energy source.

Israeli officials have said the country was at risk of facing summer power outages due to energy shortages.

Companies invested in the Israeli-Egyptian venture have taken a hit from numerous explosions of the cross-border pipeline and are seeking compensation from the Egyptian government of billions of dollars.

Ampal and two other companies have sought $8 billion in damages from Egypt for not safeguarding their investment.

As usual ZeroHedge has a very interesting view point.

The only question Israel may want to answer now is whether it wants to get cozy with Russia, whose nat gas it may suddenly be very, very attractive. And for that to happen, it means a huge softening in its anti-Iran tone, which in turn will have a huge impact on regional geopolitics, and specifically the risk of war in Iran, and thus the price of Brent. All of this, of course assumes, Israel does not immediately retaliate against Egypt, recently a big recipient of US aid, not to mention tear gas, and start a pre-emptive two front pre-war…


Source: ZeroHedge

Ireland – New Currency Solution

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Steve Keen has proposed a solution to Ireland’s debt problems with a new currency IRP which be issued on a 1:1 basis with the euro. Over time for every euro spent will be taken out of the economy to pay off Ireland’s debts and change given in the new IRP. This would be done until eventually the debt is paid off, and then the IRP can be given up and traded back to euros afterwards. check out the full proposal below. Of course its radical ideas like this that can sort out this problem but will our banker owned politicians go for this. The answer lies in how well-informed our electorate are and how politically active they want to become. My opinion is “Normalcy Bias” will win the day as usual.

An excellent idea which could be used for other eurozone countries.



Source: A plan for economic recovery

US Brings Back Debtors Prison via Loophole

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Yesterday on alternativeeconomics we mentioned a story of how US Corporations are exploiting prisoners as a source of cheap labour. A story appeared today on the Daily Mail of debtor’s prisons coming back in the US through the back door. More and more people are being through in prison for not paying debt even though debtor prisons were illegal for over 150 years.

A breast cancer survivor who was sent to prison over a mistaken $280 medical bill has highlighted the return of debtor’s prisons in the U.S.

Illinois resident Lisa Lindsay had received the medical bill in error and was told she did not have to pay up.

However, the bill was turned over to a collection agency and state troopers arrived at her home and took her away in handcuffs.


Debt collectors have become so aggressive claim some that poor people who are behind on payments of as little as $25 a month are being sent to jail.

Even though debtor’s prisons have been illegal since 1833, lenders are being accused of exploiting legal loopholes to have their borrowers found and sent to jail until they pay up.

So how do they get around the loophole and get debtors locked up?

Acting within the law, debtors aren’t arrested  for nonpayment, rather for failing to arrive to court hearings thereby falling foul of contempt of court laws.

This results in a police arrest warrant being issued for ‘failure to appear’, the debtor is tracked down, packed off to jail and can only get out by paying the set bail bond which of course matches the amount owed.

Affecting everyone who owes money from health care services to automobile loans, debt collectors are using publicly funded courts, sheriff deputies and county jails to pressure people with prison to pay back their money reports CBS News.
The fightback begins

And now some state legislators are trying to plug this loophole by making court notices be served in person rather than mail, arrest warrants to expire after a year and the bail bond returned to the debtor not the lender.

Following a spate of hard-working people being forced to spend time in prison, state legislators across the U.S are examining ways to change the law. In fact in Illinois alone, legislation designed to plug loopholes aimed at debtors is waiting to pass through the state senate.

‘Creditors have been manipulating the court system to extract money from the unemployed, veterans, even seniors who rely solely on their benefits to get by each month,’ said Illinois Attorney General Lisa Madigan last month in a statement voicing support for the legislation.

‘Too many people have been thrown in jail simply because they’re too poor to pay their debts. We cannot allow these illegal abuses to continue.’

A 2010 report by the American Civil Liberties Union that examined five states – Georgia, Louisiana, Michigan, Ohio, and Washington — discovered that people were being imprisoned at ‘increasingly alarming rates’ through legal debts.

Government and State use threat of prison against people.
‘In this era of shrinking budgets, state and local governments have turned aggressively to using the threat and reality of imprisonment to squeeze revenue out of the poorest defendants who appear in their courts.’

Gonzala Lira – Spain Needs To Exit Euro And Devalue

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Gonzala Lira was interviewed by Max Keiser on his programme On The Edge. In it, they discussed the French elections and Spain’s ongoing problems. The video of the interview is below and the following are some of the main points

French Elections

  • Marine LePen is very popular amongst youth vote which used to go to left.
  • People are discontent and their votes are going to the extremes leaving few in the center.

Euro and Banking Crisis

  • Euro needs to be devalued but Germany doesn’t want this.
  • Bankers are very good with their propaganda – their attitude is “if you come after us the entire system will crash”.
  • Whats happening now is similar to 1930s and 40s.
  • Politicians on both sides of Atlantic are going out of their way to protect bankers.
  • Marine LePen is rightly pointing figure at Goldman Sachs and benefiting from votes of  people who understand this.
  • LTRO (€1trn) has run out of gas after 3 months, in the past  this would have lasted a year but they can’t inflate the system.
  • What happens if you keep on pumping money in ?


  • Spain is a sinkhole and the only way you can solve it is to devalue the currency. This was done a lot in 70s and 80s.This lightens the debt burden.
  • Spain have 3 options – 1 Ask troika for €1.5 trillion(won’t happen because it’s too big), 2 Exit euro and devalue, 3 Spanish economy crashes
  • Only option 2 or 3 will happen.


  • Collectively have €8 trillion worth of GDP, interesting as a self-sustained trading block with their own oil from Iran.

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