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Greece Takes Next Step To Serfdom

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The bankers demands get more and more brazen but this latest one takes the biscuit. According to a leaked Troika letter, Greeks are about to be asked to work a 6 day week. This comes on top of a OECD report in 2010 which said the Greeks are the 2nd hardest workers in the world, after the South Koreans.

Area: Flexibility of labour arrangements
Measure: Increase flexibility of work schedules:
 
•     Increase the number of maximum workdays to 6 days per week for all sectors.
•     Set the minimum daily rest to 11 hours.
•     Delink the working hours of employees from the opening hours of the establishment.
•     Eliminate restrictions on minimum/maximum time between morning and afternoon shifts.
•     Allow the consecutive two week leave to be taken anytime during the year in seasonal sectors.
This is right up there with that Australia nut job, (300 lb) Rinehart (the worlds richest woman, who inherited her wealth and knows nothing about having to work for it).
Australian mining magnate Gina Rinehart has criticised her country’s economic performance and said Africans willing to work for $2 a day should be an inspiration.
Chrstine Lagarde’s recent condescending comments towards Greece demonstrate further, what the elites feel about them. Whats in store for the rest us ?
“I think more of the little kids from a school in a little village in Niger who get teaching two hours a day, sharing one chair for three of them, and who are very keen to get an education. I have them in my mind all the time because I think they need even more help than the people in Athens.”
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Hey Germany, Room For A Little One?

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As if, Greece, Ireland, Portugal, more than likely Spain and possibly Italy are enough, along comes Slovenia. It entered the eurozone in 2007 and proceeded to follow the template, i.e borrow, borrow and when you cant borrow anymore to keep the party going, there is always the good old Germans to bail you out. Ah God bless the Germans and their deep pockets. Seriously though, when will they wake up and pull the inevitable plug?

Slovenia joined the Eurozone in 2007, went on a borrowing binge that blind bond buyers eagerly made possible, dousing some of its two million people with riches, creating a real estate bubble that has since burst, and driving up its external debt by 110%. And in October, it may go bankrupt, admitted Prime Minister Janez Jansa. Because borrowing binges can last only so long if you can’t print your own money. The sixth Eurozone country, of seventeen, to need a bailout. But it’s just a speck, compared to Spain, which will strain the bailout funds, and Italy, which is too large to get bailed out. The other option is the European Central Bank. Its printing press—the one it is not supposed to have—could easily bail out the once blind but now seeing bondholders. As in all bailouts, workers and taxpayers would get a haircut. And in Germany, the debate itself may tear up the Eurozone—just as its economy is tanking.

The Germans we are told have benifited from the cheap euro and this is the primary reason for Germany to remain within the eurozone, but the weakness of the euro is now affecting demand for German products. This might explain why Merkel went on trip to Beijing this week. She knows demand is weak in Europe and is looking to strenghten trade ties with China.

New car sales in Germany had been holding up well through June—a miracle in face of the fiasco playing out in the Eurozone’s auto industry. But they caved in July; and instead of miraculously recovering in August, they caved again: down 4.7% from August 2011 and down 8.6% from July. Ominously, sales of medium-heavy and heavy trucks, a thermometer of the business investment climate, fell off a cliff: -18.8% for trucks over 12 metric tons, -15.1% for trucks over 20 tons, and -9.4% for tractors (now down 5% for the year!).

Retail sales, which had been on a roll through May, stalled in June, and skidded in July. Early indications are even worse for August: retailers’ negative sentiment worsened for the fourth month in a row. They suffered from a nasty margin squeeze, given the dual pressures of wholesale price inflation that “increased sharply,” and heavy discounting, as Germans struggle to make ends meet [read….  The “Pauperization of Europe”].

And manufacturing, the vaunted engine of the German economy, after a rout in July, was hit by another “deterioration in business conditions” in August. It recorded the fifth month in a row of job losses. And export orders plummeted at the “steepest rate since April 2009.”

With Germany against the ECB’s plan for buying bonds, the key to all this is how far will Germany let its economy decline before it says enough.

But the Bundesbank is having conniptions; printing money to fund government deficits violates EU treaties that limit the ECB to the single mandate of price stability. It just can’t find, not even between the lines, any traces of a hidden second mandate, such as funding government deficits. Bundesbank President Jens Weidmann—”I cannot see how you can ensure the stability of a monetary union by violating its legal provisions,” he’d said last November—has hardened his attacks on bond buying programs. With broad public support in Germany. And Merkel, who wants to hang on to her job more than anything else, will tread carefully. Yet, if Germany skids into a deep export-driven recession, all bets are off.

Source: testosteronepit

 

Draghi’s Great Bond Buying Plan To Be Sterilized

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Bloomberg has leaked ahead of tomorrows ECB meeting that Draghi’s hyped up plan to buy bonds is not at all what Draghi had hinted. Instead any bonds purchased will have to be sterilized. In other words, no new money added to the system.

European Central Bank President Mario Draghi’s bond-buying proposal involves unlimited purchases of government debt that will be sterilized to assuage concerns about printing money, two central bank officials briefed on the plan said.

Under the blueprint, which may be called “Monetary Outright Transactions,” the ECB would refrain from setting a public cap on yields, according to the people, and a third official, who spoke on condition of anonymity. The plan will only focus on government bonds rather than a broader range of assets and will target short-dated maturities of up to about three years, two of the people said.

Most likely to be announced tomorrow.

Policy makers are deliberating on the plan today and Draghi will announce whether it has been agreed to at a press conference tomorrow.

..but any bond purchased by the ECB has to be sterilized.

To sterilize the bond purchases, the ECB will remove from the system elsewhere the same amount of money it spends, ensuring the program has a neutral impact on the money supply.

 

Spain Is Printing Its Own Euros

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When the SHTF, central banks always resort to money printing. Thats all they know. Just before Ireland was forced into requested a bailout, the Irish Central Bank had to provide ELA to Irish banks to keep the system from collapsing. Reports from WSJ are that the Spanish Central Bank has had to resort to printing money ELA because of the dire situation in Spain. Meanwhile the bank jog/run continues.

As we described in detail yesterday, things are going from worse to worserer as the problems in Spain – more specifically in its banking sector – are deepening as deposit flight accelerates. As the WSJ notes PIMCOs’ comment: “A bank ‘jog’ is happening in Spain – the private sector is leaving the banking system.” But the Bank of Spain isn’t leaving anything to chance. The WSJ disconcertingly highlights that last month the central bank appears for the first time to have activated an emergency lending program that will enable its banks to borrow from the Bank of Spain directly, bypassing the ECB’s relatively tough collateral demands.

The so-called Emergency Liquidity Assistance program is shrouded in secrecy, and the Bank of Spain won’t confirm that it has been used. The Bank of Spain appears to have doled out about EUR400mm under the program, based on publicly available data. That would make Spain at least the fourth euro-zone country – following Greece, Ireland and Portugal – to use the ELA, which generally is reserved for situations when banks have exhausted all other financing options.

As we pointed out yesterday, this would appear to confirm a “full-blown bailout” is imminent, as the collateral problems mount.

 and The Bank of Spain was quick to respond to this reality (with a denial):

Bank of Spain comments in e-mailed statement on WSJ report that central bank provided ELA to lenders:

Sept. 5 (Bloomberg) — Bank of Spain says “liquidity provision to banks other than ordinary monetary policy operations represents an insignificant fraction of total lending by the Bank of Spain to financial system.”

Measures adopted to lift restrictions on interest rates on deposits is not aimed at helping banks attract deposits, central bank says

 

Source: ZeroHedge

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