Tag Archives: economy

FYI, News

Union Sponsored Mass Demonstrations in Greece

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The General Confederation of Greek workers (GSEE), the union of civil servants (ADEDY) and unionists affiliated with the KKE communist party began their first face-off with the young Greek coalition government.

These unions have prevented flights, created havoc with local transportation and have closed the services of public offices.  The demonstrations are occurring in about sixty five cities and villages including Athens.

The strike includes air traffic controllers, hospital workers, ship workers and even tax collectors.

Unionist Despina Spanou… “We call on everyone to take part in the strike and resist the austerity measures that hurt Greek people and the economy,”

Source

News

Federal Reserve announces QE3 to aid US recovery – Telegraph

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Federal Reserve announces QE3 to aid US recovery – Telegraph.

The Federal Reserve has announced it will begin another round of quantitative easing. The central bank has said it will buy up $40bn of mortgage backed bonds a month to try and stimulate the housing market.

Economists believe QE3 could see the Fed buying up $1.5 trillion in total. This latest bid to stimulate the economy is being called “Operation Twist”. The Fed have also pledged to keep interest rates at the current record low until 2015.

However, critics argue that QE 1 and 2 were largely ineffective; that you cannot keep printing money indefinitely; and that it may do more harm than good. Some Republicans are saying the move is political, and Romney has said that he would replace Ben Bernanke as chairman of the Federal Reserve if elected.

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A ‘Superpower’ That Couldn’t Keep the Lights On

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Things are not so bright in India right now.

Initially we saw corruption of a magnitude not seen in the developed world.  Then we saw a tax on the job creators.  The economy therefore predictably slowed and the rupee devalued.

Now India’s infrastructure is showing its frailties and is demonstrating how it can’t keep the darkness at bay.

This has affected over 600 million people, maybe more.

See A ‘Superpower’ That Couldn’t Keep the Lights On – Business News – CNBC.

News

DOW DROPS 250 POINTS-

Dow loses 250 points…

…Spain would need to borrow up to $78bn …

…Moody’s expected to start downgrading global banks… Barclays, Deutsche Bank, Citigroup and Goldman Sachs…

Moody’s warned in February that the ratings of 17 banks and securities firms under review because they face increased funding costs and regulatory scrutiny.

…German economy, the safest in Europe, weakening.

German support has so far saved the eurozone from meltdown, Germany’s private sector shrank for the second month running in June, manufacturing, a three-year low.

 

via Markets fall amid gloomy US forecast and global slowdown

 

Markets fall amid gloomy US forecast and global slowdown | Business | guardian.co.uk.

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Market initially rally, but Slump Amid Spanish Debt Fears

After the conservative victory in the Greek election the markets rallied at the opening of trading. However, they soon began to fall again- worries about Spain’s economic position dominating trading.

Spain’s borrowing costs are now so high they are finding themselves locked out of the debt markets. This is despite a bailout of their banking system.

Read more at The Telegraph

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Could France Need a Bail-Out?

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The former UK Prime Minister Gordon Brown has spoken ahead of next week’s G20 summit in Mexico, about the prospect of a required bailout for Italy and France. Gordon Brown has called for the G20 to begin to draw up a “concerted global action plan” to deal with the crisis.

This comes after German Chancellor Angela Merkel, attacked the French President Francois Hollande for allowing the French economy to stall. She also echoed Mr Brown’s comments, warning that Hollande’s socialist policies could lead to France being enveloped by the debt crisis.

Last year, when officials began to speak of the contagion spreading to Italy and Spain, no solid measures were put in place, and now we are on the brink of Spain requiring a full bail-out (the bailout currently under consideration is only to bailout their struggling banking system). Spain and Italy were both labelled at the time as “too big to fail”.  At that time the thought of a French bailout was unthinkable.

However, it is expected that the summit in Los Cabos, Mexico, will see world leaders continuing to pressure Chancellor Angela Merkel to agree to Eurobonds. Mrs Merkel has left Germany for the summit, remaining steadfast in her tough austerity stance – in the face of French opposition from Francois Hollande, and with President Obama also backing the new French President.

 

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The Sinking of the Euro Ship or a Step Towards a “German Empire”

Speech from Nigel Farage

With the Spanish banks now in line for a bail-out of €100 billion you would think the markets would be delighted. That faith and confidence would return, that Spain’s salvation from economic oblivion has been averted… hip hip hooray!

Not so fast… the markets have not reacted with joy and happiness. The markets may know more about the present deal than the politicians would like them to.

The fact is Spain’s economic woes require much more than €100 billion. If Nigel Farage of the UK Independence Party (UKIP), and Member of the European Parliament, is to be believed, Spain requires € 400 billion. Watch the part of Farage’s speech to the European Parliament, he explains the problem of the Spanish bailout perfectly.

What is more, the bailout may have averted the bankruptcy of Spain’s banking sector in the short term, but it still has not solved the fundamental problems of the Eurozone. Sadly for the countries of the Eurozone, the only way out of their problems is for a polling of sovereign debt and far greater economic and political ties. This would mean a common economic policy, and loss of national sovereignty.

As George Soros warned last week the solution to the problems will very probably see Europe looking like a German Empire, Mr Soros said in his speech in Italy, “It would be a German empire with the periphery as the hinterland,” Well if Germany is to shoulder the debt of it’s neighbours, she will want to call the shots, and determine the economic path of the Eurozone.

The sad irony is that the EU was established in the wake of the second world war , for the precise reason of stopping German might from taking control of Europe- something which tore Europe apart twice in the 20th century. An important lesson from history that Brussels would do well to remember: attempts in Europe’s history to unite the continent under one rule of government has caused wars throughout the centuries: from Hitler to Napolian Bonaparte.

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IT’S MAKE UP OR BREAK UP FOR THE EUROZONE

IT’S MAKE UP OR BREAK UP FOR THE EUROZONE

The biggest threat to growth in America is the economic situation in Europe.

World leaders are growing frustrated at the Eurozone’s failure to find a workable solution.

The United Kingdom is highly exposed to the trouble in Europe.

With the UK back into recession and figures showing that government spending is propping up the UK economy it is essential the economic storm does not cross the Channel to Britain. As David Cameron the British Prime Minister has said it is time “[the eurozone] make up or break up”.

However as Prophet TV has been reporting for years the financial markets are faith based systems.

Even now if confidence can be restored and correct decisions taken disaster could still be averted.

 

News

IT’S MAKE UP OR BREAK UP FOR THE EUROZONE

The biggest threat to growth in America is the economic situation in Europe.

World leaders are growing frustrated at the Eurozone’s failure to find a workable solution.

The United Kingdom is highly exposed to the trouble in Europe.

With the UK back into recession and figures showing that government spending is propping up the UK economy it is essential the economic storm does not cross the Channel to Britain.

However as Prophet TV has been reporting for years the financial markets are faith based systems.

Even now if confidence can be restored and correct decisions taken disaster could still be averted.

 

News

Francois Hollande Threatens US Business


French President elect is already making U.S. business uneasy.

Francois Hollande has said he will make it “extremely expensive” for businesses to sack French workers.

U.S. businesses employ 800,000 French, and General Motors are looking at closing a large plant in eastern France. At a time when the French economy is struggling, Hollande should make France attractive to foreign investors. France is already famous for it’s powerful unions, who bring the country to a standstill with their frequent strikes.

Standard and Poor downgraded France last year, claiming restrictive labour laws as one of the reasons. Hollande will only make feelings worse, creating an anti-enterprise environment, alienating foreign investment.

News

America May Save the Euro

Some new and more radical solutions are beginning to be discussed about how to save the Euro from collapse. One of these solutions is for the IMF to provide funding for Italy and Spain if they need help. They are thought to be planning an $800bn bailout package, but the deal would mean the European bailout fund would have to underwrite the first 30% of any defaulted debt, therefore they still need the €1 trillion in the bank (which still poses the same problem of where to get that from), and they also suggest the bail out fund begin to issue bonds. This would mean many other countries other than Eurozone ones, helping bailout the Eurozone. America contributes 17% to the IMF, consequently, America would send Italy $136 billion under this deal!

Another solution is that the US Fed, buys up the European countries bonds. These are currently all but unsellable. By doing so, the borrowing costs of Spain and Italy would fall overnight, and the US Fed would in effect take the place of lender of last resort, a role the European Central Bank has thus far refused to fill. However, there are two problems with this plan: firstly it could hurt the dollar, and secondly inflation, as it would have the same effect as printing money. The fear of inflation is one of the issues which has hampered action being taken. Germany has an unhappy history with inflation, and the German people and government are wary of anything that may trigger it again. But, many respected economists believe the main threat facing Europe is hyper-deflation.

However, neither of these solutions deal with the underling cause of the crisis. That of a single currency operating with a 30% misalignment between north and south; only the exit of either the wealthy northern states, or the exit of the poorer PIIGS states can solve that. Perhaps some US imposed inflation will make this prospect seem more palatable to the German’s?

With the European stale-mate still very much evident, it looks more likely that the rest of the world will have to take action in order to avoid a global depression, worse than that of the 1930’s financial crash.

 

News

The Death of the Euro?

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The Euro crisis is thought to be entering it’s most critical phase. A toxic mix is contributing to a complete loss of confidence in the Euro as a currency, and the policy makers involved in it’s management.

Countries across Europe are beginning to see their borrowing costs rise, as fear spreads from nation to nation. Italy and Spain are both in the danger zone, and France has received repeated warnings that their credit rating is at risk of being cut. Now, what many believed to be unthinkable, Germany is struggling to attract investors on the bond market.

The Euro bailout deal, looks more and more uncertain, as Europe struggles to raise the €1 trillion it requires for it’s bailout fund. Logically, you do not need to be an economist to know Europe is not a sound investment at present.

However, this is beginning to look like end game. UK banks are now openly making plans for the biggest default in history, and the unorderly break up of the Eurozone. American investors are trying to take money out of Europe as quickly and decently as they can. British embassies in Eurozone nations, have even been told to start preparations to help Britons caught up in riots, in the wake of the Euro collapse. Even the lethargic Europhiles, who have seemed to be one step behind this entire crisis, are beginning to wake up to the fact they have very little time and few options.

Although most believe the politicians and Eurocrates will seek to do all they can to ensure the survival of the Euro, they may have ran out of time, thanks to the rapidly increasing investor panic, the worsening economic outlook, the perceived refusal of the Germans to accept a fiscal union (although lessing this to many of the other Eurozone nations may prove highly problematic) and the rejection by the European Central Bank (ECB) to act as lender of last resort.

It would take very little to cause the Euro to collapse within weeks, rather than months. However, the big test will come in January when Italy needs to raise € 30 billion.  If it cannot do so, then Italy will default. With the fear in Europe that the business sector has dried up, and 2012 looks like there will be a deep recession throughout Europe, fuelled by the austerity measures which are already crippling Greece’s economy.

Even at this eleventh hour, there is still a little hope. Policy makers need clear vision, and wisdom if Europe is to find her way through this crisis. Support Prophet TV so we can run missions into Europe. It will be anarchy if it all collapses, and not only Europe will be affected but the whole of the western economy including the USA.

 

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Eurozone Debt Deal…


At the much anticipated meeting of European Union heads of state in Brussels a deal was reached to hopefully solve the continuing debt crisis threatening the world economy.

Leaders agreed that the European Financial Stability Facility (EFSF), used to bailout nations like Greece when they are in trouble, has been increased to €1 trillion. Leaders also managed to reach a deal which will see a Greek debt haircut of 50%, and a plan was also reached to recapitalize the European banks. The problems in Italy were also discussed, with Italian Prime Minister Silvio Berlusconi giving assurances to the EU meeting, that his government will continue with it’s austerity drive and will seek to have a balanced budget by 2013.

When the deal was announced global stock markets rose at the signs that action had finally been taken. However, it very quickly became apparent Europe was by no means out of the woods. The deal is very short of detail. Nothing was said about how the EU will find the €1 trillion required for the EFSF and since then EU officials have been in talks with China to raise the loan. It was agreed that the fine detail of how to raise the money would be discussed at the next EU summit of leaders in December.

Furthermore, despite stock markets rising on the news, the global bond markets did not follow. The bond markets treated the deal with a great deal of caution. Since it is the global bond markets that lend to governments this is not a good sign. Put simply, investors are not investing in Europe, it is too high risk. If bond markets stop lending to large western economies, it means public sector wages go unpaid, schools close, and hospitals run out of cash. This would result in  serious civil unrest.

As for the recapitalization of the banks. When the details were looked at it was found the amount agreed upon is woefully inadequate. Analysts at Credit Suisse, after looking at the figures, concluded that this is not really a bank recapitalization at all. The recapitalization was so important because the banking sector in Europe makes up a significant proportion of GDP. If the banks fail, and require sovereign nations to bail them out it will be very difficult, and would likely have a snow ball effect on that nations credit rating. This is a particular problem for France, whose banks have a high exposure to the Greek debt.

The haircut for Greece also comes with undesirable consequences for Greece. They are to have EU officials installed in Athens, who will not oversee the running of their economy, in effect Greece has lost her economic sovereignty. This is the fate of any nation now, that requires a bailout.

With the recent attention being given to Greece and Italy, we cannot forget Portugal. Portugal is beginning to show the same signs that Greece had before it went into financial meltdown.

Behind all the deals and negotiations are the citizens of Europe, who are becoming increasingly angry at the whole affair. Solvent nations are seeing their citizens angry that they are having to bailout out the wrongs of others, and those nations in financial difficulty are seeing increased civil unrest due to the crippling austerity packages put in place. Across Europe nationalism is growing.

The deal may succeed, but there are a lot of factors at work which could cause it to unravel very quickly. This is not a time for us to be putting our faith in the politicians to find a solution; It is the time to support the work of Prophet TV, to enable the missions in Europe to continue. Economic meltdown need not happen, but we must protect Europe to ensure that it doesn’t.

 

 

 

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Turmoil in the Global Stock Markets

The close of trading this week has seen the Dow Jones down for the fourth consecutive week. The last few weeks have seen global markets fluctuate wildly. On many days the spread of the gains and losses have been so extreme, one would expect to see such changes over the course of a year, not a day’s trading.

The erratic behavior of the markets has fueled fears of a double-dip recession in the US and Euro-zone nations, as already slow growth reduces even further.

Economic analysts are seeing markets behave in ways never before seen in the history of stock market trading- this is unknown territory.  Some believe we may be heading for a global depression, or Japanese style stagnation.

The fear within the markets is primarily being fed by the continued uncertainty in the Euro-zone nations. Italy and Spain are looking increasingly unstable, and either one of their economies would be too big to bail out, in the manner of Greece. Even the second Greek bail-out package is looking uncertain, as the other Euro-zone nations loose confidence in Greece’s ability to pay back their debts.

Economists have not given up all hope of finding a way through this present crisis, although the margin for error is very slim. Many believe the only way out is for a break up of the single European Currency. If the economic heavy weights of the Euro- Germany in particular- were to leave it would allow the Euro to devalue, bringing relief for the PIGS nations. Despite the economic virtue of such a plan it is currently politically unthinkable in Germany, as such a move would plunge Germany into a harsh recession.