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IMF Tells Ireland No More Austerity Next Year

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In October the IMF admitted that its Fiscal Multiplier(is not 0.5 percent but really 0.9-1.7) used for justifying austerity measures was wrong and in fact the implication was that austerity doesn’t work. Now shortly after Ireland announced the 2013 budget, the IMF has asked that Ireland does not implement austerity measure next year. It was worried that Irelands growth which is already weaker than forecast may hinder its ability to re-enter the bond markets.

IRELAND should not impose further austerity even if growth targets are missed next year, the IMF has said.

The agency also called on Europe to honour pledges to help make Ireland’s debt more sustainable, in its latest review of the country’s finances.

It outlined fears that growth may be weaker than expected during 2013 – but does not advocate more austerity.

Instead it advises the coalition that if it is failing to reach economic targets next year, it should not rush to bring in any further cutbacks, for fear of damaging any fragile growth. Instead the economic targets could be pushed out until 2015 to help recovery.

The IMF made the statement as it approved its eighth review of the bailout programme, authorising the release of a further €890m funding under the bailout terms.

It said Ireland had so far shown “steadfast policy implementation” with the conditions of the bailout programme, despite slower growth this year.

It is predicting more gradual economic recovery with growth of 1.1pc in 2013 and 2.2pc in 2014. But with many economists forecasting growth of less than 1pc in 2013, there is a real threat to Ireland’s chances of getting out of bailout and back to the markets as planned in 2014.

The IMF says that if growth is weaker than forecast and economic targets begin to slip, the Government should not introduce extra cuts or a mini-Budget. Instead the Government should wait until 2015 before taking extra measures, in order to protect whatever growth there is.

IMF deputy managing director David Lipton said: “The program with Ireland has now been in place for two years and the Irish authorities have consistently maintained strong policy implementation.

“The authorities have demonstrated their commitment to put Ireland’s fiscal position on a sound footing, with the 2012 deficit target expected to be met even though growth has been low.

“Nonetheless, if next year’s growth were to disappoint, any additional fiscal consolidation should be deferred to 2015 to protect the recovery.

“Continued strong Irish policy implementation is essential for the programme’s success,” said Mr Lipton.

In what may be a reference to the ongoing negotiations on repayment of Anglo Irish debt, Mr Lipton called on European partners to deliver on pledges to help Ireland.

“Ireland’s market access would also be greatly enhanced by forceful delivery of European pledges to improve programme sustainability, especially by breaking the vicious circle between the Irish sovereign and the banks.”

The IMF also said that the banking sector needs to be reformed and shored up to help improve lending. “Vigorous implementation of financial sector reforms is needed to revive sound bank lending in support of economic growth,” it said.

Source: Irish Independent

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Irishman Takes Government To Court Over Illegal Tax

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The Irish Minister for the Environment is being taken to court along with other government minister and civil servants over the illegal LOCAL GOVERNMENT (HOUSEHOLD CHARGE) ACT 2011. The man in question has refused to pay the charge and is assisted in his case by Fitzpatrick Financial Solutions of Portlaoise  and the Common Law Society. Apparently the “Act” is against the Irish Constitution and the link to the summons which outlines the legal argument is below.

For the Irish Government to lose the case would have huge ramifications and this case could be used by many to avoid paying a multitude of taxes. A case of this magnitude you would expect to be reported by the MSM but as usual the Irish “presstitutes” are silent on the matter.

by Gabriel Donohoe  (Fools Crow)

The hard-pressed people of Ireland have had enough! They will no longer tolerate corrupt politicians working for vested interests and against the interests of the majority of the Irish people. They will no longer tolerate venal politicians working to feather their own nests by subserving a powerful moneyed elite. And they will no longer lie down like good little croppies and take what their lords and masters care to dish out.

In an unprecedented move, one Irishman has asserted his sovereign rights by standing up to the tyrannical forces of the State, a bought and paid for government that would unlawfully impose its will upon him. A gentleman from the west of Ireland (unnamed for reasons of privacy), after receiving a summons from Mayo County Council for failing to register for the infamous Household Tax, decided to fight back by summonsing three government ministers to the High Court, Hogan, Shatter, and Noonan, along with certain others, to answer for their fraud and deceit.

In a welcome reversal of roles, this courageous Irishman is now the Plaintiff and the ministers, et al, are the defendants. The Plaintiff charges that the defendants…

“…did and are wilfully conspiring to unlawfully, illegally, unconstitutionally and immorally coerce and force me, against my will, to make a declaration, that which is precluded by Bunreacht na hÉireann and by LAW.”

The Plaintiff further charges that…

“The herein named Defendants are in breach and contempt of the European Convention of Human Rights, the Universal declaration of Human Rights, and their collective and individual acts and actions constitute an offence under “the Non-Fatal Offences Against the Person Act 1997”.

He goes on…

” The Household Charge Bureau in and of itself, is nothing more than a front for an illegal and highly organised criminal gang. Whose aim is to willfully mislead, misinform and misdirect ME and the People of the Island into making “self-declarations” that are NOT MANDATORY, solely for the purpose of fraudulently and illegally coercing People into paying money to them, under the guise of the aforementioned Act.”

This is in truth a dynamite legal action which will have repercussions for years to come. It is long overdue. Is this the beginning of the fightback by the People against a gang of tyrants who have sold us all out for their own selfish interests?

Congratulations are due to Fitzpatrick Financial Solutions of Portlaoise for assisting this particular gentleman in putting his case together and to the Common Law Society for the marvellous work they are doing in helping to educate and inform the people of their sovereign rights and how injustices are being perpetuated against them.

This case was discussed at the Lay Litigation Day in Moate last Saturday which was presented by the Common Law Society of Ireland (not even remotely related to the discredited Law Society of Ireland). One of the salient messages of the day was that anyone who has received a summons from their county council for non-registering or non-payment of the Household Charge can now advise the court that it would be unwise to proceed with the case because of the above-mentioned Constitutional challenge in the High Court to this illegal Act.

A text of the summons:  Phil Hogan Summons 051212.

See also:

http://thecls.blog.com/2012/12/11/hogans-last-stand/

Source: foolscrow

Paul Craig Roberts: America Going To Crash Big Time

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Paul Craig Roberts (fmr Assistant Treasury Secretary in the Reagan Administration) was warned that the US is heading for a major crash. Some of the points covered from interview on USAWatchdog:

  • Jobs were shipped overseas.
  • Rising taxes and crushing social programs
  • Consumer demand has collapsed.
  • Fed printing trillions in order to buy bad debt as dollar is being devalued.
  • No demand for US debt.
  • Foreign nations will eventually have to dump the dollar.
  • Gold price is manipulated and suppressed via paper gold. Any naked shorts can be backed by endless Fed mony printing.
  • Gold manipulation will continue until the World abandons the dollar.
  • Its cheaper for the BRICS not to use the dollar.
  • Asian countries are discussing using a common currency for trading.
  • When the dollar is dumped you are faced with hyperinflation.

Why Bernanke Is Wrong

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Bernanke is turning the US into Japan economically speaking. Instead of taking the banks down the route of Iceland and recovering quickly he has chosen the path of Japan and its slow demise.

There’s a problem with kicking the can down the road – Ben Bernanke, (December 12 2012)

I’ve taken this quote out of context — Bernanke was actually talking about the fiscal cliff, and not monetary policy. But kicking the can down the road is exactly what Bernanke is doing in his domain.

Instead of letting the shadow banking bubble burst and liquidate in 2008, Bernanke has allowed it to slowly deflate, all the while pumping up the traditional banking sector with heavy, heavy liquidity:

It’s been one long, slow brutal grind:

The Fed continues to fight a losing battle, in which it has no choice but to offset any ongoing deleveraging – be it through maturities, prepays, or counterparty failure, or just simple lack of demand for shadow funding conduits – in the shadow banking system.

Trillions and trillions of liquidity later, Bernanke is barely keeping the system afloat:

The reduction in shadow liabilities remains a massive deflationary and depressionary force (and probably the main reason why a tripling of the monetary base has not resulted in very severe inflation). We could have taken the pain in one go back in 2008 — let the failed banks and failed sectors fail, let the junk be written down, and let all efforts go toward rebuilding a more robust system less sensitive to counterparty risk. But we chose to kick the can down the road, and try to reinflate the biggest bubble in history through helicopter drops to the financial sector, the outcome of which has been booming incomes for the rich, and a total lack of growth and opportunity for the poor (except, perhaps for the dubious “opportunity” to join the masses of the long-term unemployment and claim a slice of the increasingly unsustainable welfare pie).

We chose the path of Japan (which has spent the last twenty years depressed) not the path of Iceland (which is emerging from its depression). We chose to kick the can down the road. Like Bernanke said, there is a problem with that. No amount of buying financial sector assets up to an unemployment or inflation or NGDP target — which empirically seems to do more to enrich the financial sector and the big banks than to create jobs  — will fix that. The system is rotten, and the debt load is unsustainable.

Source: azizonomics

Troika Want More Made Homeless In Ireland

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“Throw them out on the streets” cries the IMF. The Troika in its latest Memorandum of Understanding with Ireland is pushing for more house repossessions. The only reason it hasn’t happened so far is because the banks aren’t able to cover the losses and the State would have to go back to the taxpayer to further capitalize the banks. The fragile housing markets also would not be able to survive the shock of an avalanche of houses hitting the market coupled with the inevitable property tax.

Of course the politicians have framed it so far, that they are protecting the people’s interest. The country can ill afford this move currently, as the Troika well knows, but is pushing for this because of a repeal of the 1964 Act (used for repossessions) with a new Act in 2009 meant due to a drafting oversight, it applied only to loans taken out after December 1, 2009. The timing is lousy just as the Economic and Social Research Institute (ESRI) announces that Ireland has the highest proportion of households without a working adult out of 31 European countries and more than double that of the euro zone average.

The EU-IMF Troika wants the Government to remove a legal impediment constraining banks from repossessing properties tied to bad loans.

In the latest revision of Ireland’s bailout terms, published today, the Troika says the Irish authorities must introduce legislation remedying a flaw in legislation governing property repossessions.

Last year, Ms Justice Elizabeth Dunne found a failure to save aspects of old legislation when the Land and Conveyancing Law Reform Act 2009 was introduced meant the only registered properties that lenders could repossess for failure to pay mortgages were those for which they had demanded full repayment before December 1st, 2009.

According to the Central Bank’s latest figures, there were 167,000 mortgage accounts with €35 billion of debt in arrears at the end of June 2012.

At the same time, some 265 orders for possession were granted by the courts in the first six months of the year, down by almost 32 per cent on the same time last year, when 390 orders were granted.

The Central Bank’s head of banking supervision Fiona Muldoon recently criticised the banks for their slow progress in tackling mortgage arrears cases. saying the scale of the problem showed that “wait and see” had become the strategy of choice for lenders.

The latest update to the Troika’s memorandum of understanding with the Government states the authorities must move to remedy the flawed repossession legislation once adequate protections for debtors and their principal private residence were enacted via the proposed personal insolvency legislation.

The document also obliges the Irish authorities to publish banks’ reported data on loan modifications, including defaults of modified loans, “to permit analysis of the effectiveness of alternative resolution approaches”.

The bailout programme review also called on the authorities to halt overruns in health spending and to keep overall health expenditure below €13.6 billion next year.

Source: IrishTimes

German Growth Rate For 2013 Drops Massively

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The Bundesbank massively cut its growth forecasts for 2013 for the German economy from previous estimate of 1.6% down to 0.4%. Such a huge drop in growth forecast shows even the mighty German economy which has benefited from a weak euro is now feeling the pressure. Its the last thing Merkel needs as she faces an election next year with a weakened economy and a growing bill for bailing out the rest of Europe. Couple that with the TARGET2 imbalance and a strong possibility of Italy or Spain needing a bailout, she could be facing an angry electorate.

germanThe German economy could slam into reverse this winter as the crisis in the eurozone intensifies, the country’s central bank warned yesterday.

The Bundesbank slashed its growth forecasts in an abrupt reversal for Europe’s powerhouse economy. It now expects Germany to grow by 0.7 per cent this year and just 0.4 per cent next year.

It was previously expecting growth of 1 per cent in 2012 and 1.6 per cent in 2013.

But the Bundesbank added that there was a risk of recession – defined as two quarters of contraction in a row – this winter. ‘There are indications that economic activity may fall in the final quarter of 2012 and the first quarter of 2013,’ it said. Germany has been the key driver of an otherwise moribund eurozone.

Experts warned the country’s slump is ‘a big reality check’ and casts doubt over the future of the single currency. Any setback in the eurozone, Britain’s major trading partner, raises the risk of a new recession here. The Bundesbank blamed the crisis crippling the eurozone for the downturn amid signs that German patience with struggling economies such as Greece and Spain is wearing thin. ‘Germany cannot prosper alone,’ it said. ‘It has a particular interest in the welfare of its partners.’

The gloomy analysis came a day after the European Central Bank warned that the 17-nation eurozone will remain mired in recession until late next year. ECB president Mario Draghi said a ‘gradual recovery’ will not start until ‘later in 2013’ as the region lurches from one crisis to the next. The eurozone sank back into recession over the summer as the malaise in peripheral states spread to Germany and France.

The German government put on a brave face in response to the Bundesbank forecast. A spokesman for Chancellor Angela Merkel said: ‘The government is cautiously optimistic that we’ll keep growing.’

Source: Daily Mail

 

 

Japan Back In Recession

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Japan has sunk back into recession and the solution according to opposition leader Abe is to call for even more stimulus through unlimited monetary easing according to Bloomberg. That is not a good sign when its open-ended, as it demonstrates a lack of a clear plan as to when the economy will recover. A strong yen, weak demand from Europe and a spat with China have all combined to weaken Japan’s economy. The auto industry is factoring in a sharp contraction in sales next year  driven by a dramatic decrease in demand from China.

Japan’s economy sank into recession in the second and third quarters, fueling opposition leader Shinzo Abe’s calls for more stimulus and highlighting the risk that weak growth will derail a planned sales-tax rise.

Gross domestic product shrank an annualized 3.5 percent in the three months through September, the Cabinet Office’s second estimate showed in Tokyo today, matching a preliminary reading. The government revised the previous quarter to a 0.1 percent contraction, meeting the textbook definition of a recession.

Abe, whose Liberal Democratic Party is leading in polls to win elections on Dec. 16, has called for more fiscal stimulus and “unlimited” monetary easing, and has said that economic conditions next year will determine whether the sales tax rise goes ahead. Banks including Citigroup Inc. forecast another contraction this quarter as exports fall and domestic demand stays weak.

“It’s likely that Japan’s economy hit bottom in the last quarter,” said Shuichi Obata, senior economist at Nomura Securities in Tokyo. “The new government will aim to have solid growth by the middle of next year as they have to decide whether to raise the sales tax or not.”

……..

Japanese manufacturers such as Sharp Corp. (6753) and Honda Motor Co. (7267) are grappling with weaker earnings after a strong yen, slow European demand and anti-Japanese demonstrations in China hurt exports.

Nissan Motor Co. (7201) and Honda cut their profit forecasts for the year ending March 2013 by about 20 percent, citing a slump in China sales.

The sales tax bill raises the levy to 8 percent in April 2014 and to 10 percent in 2015, and a clause allows for implementation to be canceled based on an assessment of economic conditions. The last sales tax increase in 1997 contributed to pushing the economy into a 20-month recession, costing then- premier Ryutaro Hashimoto his job.

From the previous quarter, the economy shrank 0.9 percent in the July-September period, unchanged from the government’s initial forecast, today’s report showed.

Source: Bloomberg

 

 

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