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Wednesday, November 09, 2011

Is the Euro About to Become China and the US’s Problem?

America and China must crush Germany into submission


Barack Obama greets Hu Jintao, the Chinese President (Photo: AP)
As we watch Italy's 10-year bond yields near 7.5pc and threaten to detonate the explosive charge on €1.9 trillion of debt, it is time for the world to reimpose order.
You cannot allow the biggest bankruptcy in history to run its course – with calamitous domino implications – before all options have been exhausted.
One can only guess what is happening in the great global centres of power, but it would not surprise me if US President Barack Obama and China's Hu Jintao start to intervene very soon, in unison and with massive diplomatic force.
One can imagine joint telephone calls to Chancellor Angela Merkel more or less ordering her country to face up to the implications of the monetary union that Germany itself created and ran (badly).
Yes, this means mobilizing the full-firepower of the ECB – with a pledge to change EU Treaty law and the bank's mandate – and perhaps some form of quantum leap towards a fiscal and debt union.
Germany will of course try to say no. But it will pay a catastrophic diplomatic and political price, and will fail to save its economy anyway if it does so.
Having followed the German political scene closely for the last five months, it is clear to me that almost the entire German political establishment is out of its depth, ideological, sometimes smug, apt to view the EMU debt-crisis as a Calvinist morality tale, and lacking in deep understanding of what it has got itself into.
One can understand German worries about money printing – and especially the loss of fiscal sovereignty and democratic control – but matters have already moved on. It is too late for that.
As for the EU authorities with their mad contractionary fiscal and monetary policies in an accelerating slump, they seem to have achieved little by toppling two elected governments in one week.
In Italy they have already made matters worse. I doubt that much will change with "technocratic governments" in either Greece and Italy, yet immense damage has been done to democratic accountability.
The EU Project has become both dangerous and insane.

65 comments:

  1. Ambrose must have had some good Italian coffee this morning. No one is going to 'crush' Germany into 'submission’ .

    Oh dear..

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  2. Will Bernake buy some Italian bonds today, say $50-100 billion?

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  3. President Obama's Agriculture Department today announced that it will impose a new 15-cent charge on all fresh Christmas trees-the Christmas Tree Tax-to support a new Federal program to improve the image and marketing of Christmas trees.

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  4. Still can't get over Gingrich doing a global warming ad with Nazi Pelosi.

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  5. Well, it's either an ad, or work on real policy, Ms T.

    The DC politicos knowing they are better off with marketing campaigns, without substance, than "doing" something, anything.

    You can't get over an ad, while the politicos work in a bi-partisan manner to steal the wealth of an entire generation of the "Middle Class".

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  6. The message sent by yesterday's elections scattered across the country, according to CBS:


    Voters across nation stick largely by incumbents

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  7. Mrs Pelosi is no more a NAZI, Ms T, than Newt is the Grinch that stole Christmas.

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  8. Deuce: No one is going to 'crush' Germany into 'submission’

    Vee haff vays.

    The book that all the smart people were reading — a New York Times bestseller for months and a Times “notable book” of 1992 — was a look into the global economy of the 21st century.

    It would be a competition for supremacy with three contenders, wrote renowned MIT economist Lester Thurow in Head to Head. The weakest was the United States. It would fade. That left two horses in the race. Most experts picked Japan to win, Thurow conceded. And that was certainly possible. But Thurow thought the economic colossus that would dominate the 21st century was Europe.

    The United States, Japan, and Europe. They were the only three contenders, according to Thurow.

    Last week, a desperate Europe asked a flush China for cash.

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  9. By Richard Cohen

    Say what you will about Israeli Prime Minister Benjamin Netanyahu, others have said far worse. Yitzhak Shamir, a former prime minister, once said that Netanyahu is “not a very trustworthy man.” He went on to call him “too egotistical,” “not very popular” and to observe that “people don’t like him.” Then, to state the very obvious, Shamir said, “I don’t like him.”

    Not many people do, it turns out. Shamir’s remarks, in a 1998 New Yorker article by David Remnick, its current editor, are newsworthy only because they were stated on the record. Usually, the character appraisal of Netanyahu is conducted in a whisper or a background briefing.

    The word often used is “liar.”

    ...
    ... when it comes to Netanyahu, Obama is part of a throng of people — Israelis much more than Americans — who finds the man overbearing and duplicitous. Now we know Sarkozy feels the same way. If the peace process is affected by all this, then the fault is not Obama’s or Sarkozy’s, but Netanyahu’s. In the fractious Middle East, he is about the only thing world leaders can agree on.

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  10. Russell Pearce was spearheading the "Anti-Immigrant" movement.

    The folks at home, didn't like it.


    West Mesa voters have ousted state Senate President Russell Pearce in a historic recall election.

    On Tuesday night, with early ballots and all precincts counted, unofficial results showed challenger Jerry Lewis with 53 percent of the vote ...

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  11. .

    Accused Al-Qaeda Leader is Arraigned in U.S.S. Cole Bombing

    FORT MEADE, Md. — A Saudi man accused of plotting the 2000 bombing of the American destroyer Cole walked into a military courtroom at the naval base at Guantanamo Bay, Cuba, on Wednesday morning, appearing in public for the first time since his capture nine years ago...


    Nine Years to Arraignment?


    A year? Sure. Two to three years? OK. But nine years just to get the guy arraigned?

    Those military tribunals are really kicking them out.

    .

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  12. Quirk: Those military tribunals are really kicking them out.

    Don't do the crime if you can't do the time.

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  13. Only ol' "Ambrosia" could use a line like

    "Massive Diplomatic Force" with anything resembling a straight face. :)

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  14. Only ol' "Ambrosia" could use a line like

    "Massive Diplomatic Force" with anything resembling a straight face. :)

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  15. Bloomberg reporting...


    German Finance Minister Wolfgang Schaeuble today told lawmakers that Italy should request aid from the EFSF if it needs it, two people present at the Berlin meeting said.

    Higgins at Capital Economics said Italy needs about 650 billion euros to keep out of markets for the next three years, rising to 700 billion euros with support for its banks. Another alternative is the EFSF buys Italian bonds in markets, he said.

    A problem is that the rescue fund has about 270 billion euros left after subtracting commitments to Greece, Portugal and Ireland. Governments also have yet to flesh out last month’s promise to boost its spending power to 1 trillion euros. With Italy facing bond maturities of about 475 billion euros in the next three years, Citigroup Inc. and Royal Bank of Scotland Group Plc are among those saying the fund needs at least double that amount to insulate Italy and Spain.
    Too Big

    “It’s hard to see that Europe would have the resources to take a country the size of Italy into the bailout program,” Finnish Prime Minister Jyrki Katainen said yesterday.


    Italy Bond Attack Breaches Euro Defenses, Contagion Worsens

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  16. The BBC reports:



    Russia has ruled out supporting fresh sanctions against Iran, despite a UN report that says Tehran may be trying to develop nuclear weapons.

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  17. Russian Deputy Foreign Minister Gennady Gatilov told Interfax news agency that extra sanctions "will be seen in the international community as an instrument for regime change in Iran".

    "That approach is unacceptable to us, and the Russian side does not intend to consider such proposals."


    The Russian foreign ministry later issued another statement saying that the report

    "does not contain fundamentally new information".

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  18. This is reminding me, more and more, of 2007.

    Distillate (diesel, and heating oil) Demand up 3.9% from year ago period.

    Gasoline Demand falls farther behind the same 4 weeks last year - 5.6%.


    EIA Report

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  19. Did we not crush Germany into submission (without China) about 66years ago?

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  20. by Robert Haddick

    November 8, 2011


    A U.S. Air Force general has affirmed that Iraq's air space will be undefended for at least two years. With attention now on Iran's nuclear program, is this outcome a bug or a feature?

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  21. The question Deuce, is not if the US national bank is buying Italian bonds, but why is it that they do not have tell US that they are?

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  22. Iraqi airspace can be defended at a moment's notice.

    The moment any hostle aircraft is headed in that direction will be known instantly.

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  23. Only if the US chose to violate Iraqi airspace, to defend Iran from Israeli aircraft.

    Which the US may not be obligated to do.

    As soon there will be no US forces in Iraq, not tasked with providing security to that country or its government, anyway.

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  24. If the US is no longer tasked with defending Iraqi airspace, then violations of that airspace, not a concern for the US, either.

    Unless, of course, Mr Obama chooses it to be.

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  25. The Israeli previously required staging options in Turkey or Georgia, to strike at Iran.

    With the US providing CAP over Iraq, for the past decade, that airspace was off limits for the IAF, on its way to Iran.

    With the US out of that airspace, and the Iraqi without the capability to CAP it, themselves...

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  26. It sure would be a turn about of reality, if the US leaving the Iraqi to their own devices, allowed the Israeli to strike Iran.

    Another smooth maneuver by President Obama - "The Stealth Hawk".


    Well, up there in Canada, they don't recognize the "Stealth" mode, they just see a "Hawk".

    The last decade was dominated by the Bush administration’s “shock and awe” display of U.S. military might, a swagger that descended into a “long war” of occupation and nation building in Afghanistan and Iraq that left thousands of Americans dead and wounded, and cost upward of a trillion dollars.


    But cold, calculating and nimble, Obama has turned a new page on the projection of American power.

    His emphasis on technology, intelligence, and leaning on allies is leaving a smaller and less costly U.S. military footprint on the globe, but one that is proving to be just as lethal to its adversaries.

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  27. Obama the Wawk



    Sure, he’s pulling troops out of Iraq, but he’s found lethal new ways to flex America’s military muscle

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  28. A problem is that the rescue fund has about 270 billion euros left after subtracting commitments to Greece, Portugal and Ireland

    Not to worry. Every month when the next sovereign debt payment is due for Greece, Portugal, Ireland, and now Italy, the heads of the European countries will meet in Cannes, or Monaco, or Ibiza, and announce another "historic" agreement to kick the can down the road.

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  29. 9. 13times: Chinese traders bought whole breweries and shipped them to mainland China. Olympia Brewing, General Brewing Company [lucky lager] and the San Fransisco Falstaff brewery come to mind.

    Perhaps it's just as well. Oly was pisswater anyway, and Lucky was what you pissed after you drank that. Made Pabst Blue Ribbon or Animal Beer seem like Hopfenperle by comparison. Hence the $6 a case they were asking.

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  30. Perry just made the biggest political implosion of all time.

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  31. Ah, I've been "out." I forgot it was on. How's our boy Newt doing?

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  32. And, whut'd ol; perriwinkle do?

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  33. Never mind; I saw the "highlight."

    He was definitely, absolutely going to, on the first day, turn the lights off and send everyone home in 3 agencies - But he couldn't remember what the 3rd one was.

    Yep; he's a brainiac.

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  34. I honestly think I would have left the stage after that. Gingrich did well. As badly as Perry performed,CNBC got their collective ass kicked.

    It is a shame about Perry. It is one of those things that if it happened at dinner everyone would have had a good chuckle, but the media is going to kill him with it. Painful to watch.

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  35. Santorum looked whiney. Cane is over. Huntsman looked a little off his game. Paul was Paul, smart guy though. Bachman was sensible. Romney a little wonky, had some good comebacks.

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  36. Interesting typing away on this keyboard with people I have never met. The first time I did that was on teletype machines up and down the Polevault line in 1964. My goodness, 47 years of texting. Whooda thunk it.

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  37. I must really hate myself. There are six more debates this year. I keep swearing I won’t watch. Can Herman Cain continue using the same answer for every question he is asked for six more debates? Newt really should read this blog. His undisciplined hostility is one of the true pleasures of these debates. It's like someone poured vinegar and baking soda into his brain and stuff just bubbles up furiously.

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  38. Dark days:
    European debt crisis spiralling out of control

    Reports that Germany and France have begun talks to break up the eurozone amid fears that Italy will be too big to rescue

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  39. I haven't watched one debate this year...

    the 99%

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  40. He probably couldn't get elected, but Newt would be a hoot

    (hey, how about that? I'm a poit, and didn't know it)

    as President. :)

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  41. According to the students, Romney went from 25% to 40%, Newt went from Nowhere to 25%, Paul was 11%, and everyone else disappeared.

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  42. .

    As badly as Perry performed,CNBC got their collective ass kicked...


    This is the first GOP debate I watched, but I didn't see it the way you did. The format sucks of course. How can you question eight people at a time and get anything of value out of it (except for negatives of course).

    The fact that the CNBC questions were booed at times? Chalk it up to you're having a GOP audiance. And how can you say asking Cain about the sex charges is off limits, at least to most Americans?

    John Harwood was pretty good, as was Kramer. Maria Bartiroma's nasel twang is as offsetting as Sarah Palin's whine but I loved it when she wouldn't put up with Ginrich's bullshit and told him he could answer the question or she'd move on. The 'money honey' get's down.

    To me, Gingrich lost ground by showing the "pompous asshole" side that people have become accustomed to in the past.

    Cain keeps trying to resurrect 9-9-9 but it's dead. Likely he is to. He looked pretty silly tonight.

    Actually, Bachman didn't do too bad. (But she's out anyway.)

    Perry screwed up but as you pointed out it's the kind of thing anyone could do. If life were fair it wouldn't hurt him, but it probably will. (He's probably out anyway.)

    Santorum, Huntsman, and Paul provided nothing to move them up. (They are probably out too.)

    Romney is Romney. Not real impressive or inspiring but I didn't see anything that would hurt him.

    Hopefully, some of these people will start dropping out sooner rather than later so you can get a 'real' debate going with two or at the most three candidates.

    .

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  43. A series of "heads-ups" between Romney, and Gingrich would be worth watching. I would tune in for that.

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  44. .

    According to the students...

    Likely few of them will vote anyway.

    One of the few things I liked about Gingrich tonight was his response on student loans.

    .

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  45. Well, they're starting the re-run. To watch, or not to watch?

    God, that's a lot of stupid for one stage.

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  46. .

    God, that's a lot of stupid for one stage.


    I've watched my one for the year. I'll wait until the primaries winnow these guys down a bit.

    .

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  47. Newt is the type that would be attractive to a "student" population.

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  48. .

    The campers of OWS probably won't like Newt's response on student loans.

    If I'm paraphrasing it right, it went something like,

    - The government shouldn't be in the student loan business.

    - Students should be spending their money on college for four years rather than on i-Pods, and cell-phone and twitter charges.

    - If they worked their way through college they wouldn't have student loans to worry about after four years.

    There is a lot of truth in what he says. That's the way I got through college so I can sympathize.

    Of course, it's also pretty simplistic given the current economy. It's easy to say get a job to pay for your college but it really doesn't make sense when even recent graduates can't find jobs much less teenagers.

    .

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  49. Romney is, by far, the best debater. This is a rout.

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  50. Gingrich would be way the most fun to get drunk with.

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  51. Newt is getting tiresome. Pedantic. Arrogant.

    It looks like I'll get stuck with the Obamaman.

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  52. .

    Newt is getting tiresome. Pedantic. Arrogant.

    If I got drunk with the guy, it probably wouldn't be long before we were out in the parking lot duking it out.

    .

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  53. Just a bunch of hypocritical assholes. I know they're forced, right now, to play to the "base," but it's tiresome.

    I can't stand any more.

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  54. Worse, I'd probably be over at the bar hitting on Bachmann.

    :) Me an Herman. :)

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  55. Man, :) it's hard to find the "upside" in that scenario.

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  56. .

    I go with Maria and just tell her to shut up and drink.

    .

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  57. I can just see it now:

    Michelle: Herman, where'd you come up with that "nine" deal, . . big boy?

    Herman: Do you really want to know, Michelle . . . ? :)


    I don't know if I commit suicide by drinking all the Southern Comfort, or by just breaking the bottle and cutting my own throat.


    Did Newt mention that he is a Historian?

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  58. If you could get Maria drinkin' I'd probably come sit at Your table. :)

    Cain't get "lucky" if you ain't in the game. :)

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  59. .

    Did Newt mention that he is a Historian?



    No. But he did mention he was an author, as in, "I don't really have enough time to answer that question, so I can only suggest you go back and read my book, the one from 2001, for a complete answer."

    .

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  60. I've seen Newt Gingrich in interview situations where he was Spectacular, but his debating style just irritates me for some reason.

    I never was all that good a "student," I guess.

    And, to hear Romney dissing Romneycare II, otherwise known as Obamacare, is just plain discombobulating.

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  61. .

    I expect Doug's head will explode when he finds out I can't vote for Romney because I'm a PETA member.

    .

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  62. Well, if it don't 'splode over that, it'll 'splode over something else. :)

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  63. .

    Time to go Ruf.

    Jimmy Fallon's coming on.

    Like to catch the monologues from Leno, Fallon, and Kimmel.


    .

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  64. Don't blame you; think I will too. This shit is just too depressing.

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  65. This cannot work in fact, that is what I consider.

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