Ever downwards towards Depression

A good analysis of the ever deepening economic crisis appears in the Asian Times this morning, titled "Unholy trinity sets up bank failures" written by Chan Akya which may be read from this link. Another worthwhile weekend or summer holiday article of note is in the American Spectator, linked here and titled "America's Ruling Class -- And the Perils of Revolution". I found one particular comment to this article very apt as follows:

Cincinnatius| 7.16.10 @ 3:34PM

Here, here! The apathy/ignorance of the America electorate over decades has allowed the formation of a "political caste" in America. Another way to describe it might be a "political peerage", which I find interesting considering the repugnance that most Americans have for the concept of "better by birth", though many Europeans readily accept the premise. Somehow, Americans forgot the principle espoused and endorsed by Washington, "power comes from the consent of the governed." Now, those in power are more inclined to tell us to sit down and shut up, we know what is best for you, like a parent often tells an unruly child who is throwing a fit for something he doesn't need. Perhaps it is time the American people started acting like rebellious teens, who are often ready to throw the baby with the bath water in order to assert independence. I know one thing, we can't continue to allow our "betters" to act with impunity. Plato said it best, "Either be interested in politics or be ruled by your inferiors."

How the EIO could be used to silence EU dissenters

This linked item in asking if the EIO is anything to be alarmed about, dated yesterday, raises the problem of holocaust deniers, a crime in some EU ex-states but not others. A more likely aim of the directive IMO is to stifle further criticism of the EU as this fatally flawed institution continues to mutate into a full-blown tyranny. The justification for this terrifying instrument may be read from this link. The EU has consistently demonstrated that those who control its direction abhor criticism. (Note the strange absence of links to this blog by EU bloggers portal and many others). Hating democracy, dissent or even mild criticism (witness the attitude towards national referenda giving the "wrong" answers) will eventually require a means to silence those who predicted the fault lines as they steadily become obvious to all (increasingly the case over the ERM and now the Euro currency). With the EIO in force it will be a very simple matter to persuade one of the smaller but heavily indebted former member ex-states to enact harsh legislation against any criticism of the EU or its institutions. The EIO can then be used to disrupt the personal or even business life of any EU critics in any other country of the EU with actual charges and a request for a European Arrest Warrant only becoming necessary as a last resort, hence keeping such activities outside of public knowledge. (A Greek Island could, I half-jokingly suggest, be re-named Sceptos, in return for foregivness of debts which in any event cannot ever possible be repaid) and the few brave individuals, uncowed by such harassment could be taken and left there to rot). One wonders if the Home Secretary, Theresa May, considered such a possibility before putting the UK citizens at risk of such abuses by foreign police powers, subject to only a majority vote from economically distressed (and therefore pressure vulnerable) fellow EU member former nations. One wonders if the entire UK Coalition Cabinet has any grasp of the undeniable fact that their main purpose is the "protection" of British subjects?

Westminster Parliament excluded from EIO consideration

The authoritarian and non-democratic coalition of Cameron and Clegg refused Parliament the right to consider (let alone debate) the oppressive EIO., [as discussed in my earlier postings below]). Worse the totalitarian tendency among civil servants in the Justice Department clearly had plenty of time for full consideration and submitted many suggestions as to how this appalling instrument to extend policing rights to foreign forces within the UK could be improved upon, read here. Other Parliaments and a plethora of Civil Organisations listed under the heading "Civil Society" had plenty of input as may be read from this link. Here can be seen the hard truth, that when it comes to protecting the rights of UK citizens, the UK Government of the Conservative and Liberal Democrat Coalition is, just like their predecessors, not reluctantly proceeding with turning the UK into a police state, they are actually in the vanguard of this movement and deliberately excluding the elected representatives of the people from the chance to have any input. The decision to "opt in" under the terms of the Lisbon Treaty has now been made, leaving all the final changes and the certainty that this will become EU law only subject to a majority vote in the EU Council. Can any now doubt that the power for voters to peacefully change their rulers, without bloodshed, has thus been completely lost, exactly meeting the description of a "tyranny" as defined by Karl Popper. In sneaking these facts out on the last day of Parliament on the day it begins its summer holidays, they are following the well worn track forged last year by Gordon Brown when the National Audit Report that the Government had acted beyond their legal powers over the bank bailout similarly appeared as Parliament dispersed (as blogged about at this same time last year). Those EU member states able to give their Parliaments the chance to review these proposals were as follows, listed as they appear in the link above:

National Parliaments

• Danish parliament [15 KB]
• Die Linke [126 KB]
• Dutch Senate [749 KB]
• French Senate [16 KB]
• German Bundesrat [19 KB]
• Jerzy Montag [18 KB]
• Romanian Senate [163 KB]
• Swedish Parliament [50 KB]

UK opts in to the EIO - Onwards towards Tyranny!

The Hansard report on this disastrous decision is linked here. I quote below the unanswered points made by one Conservative and one Labour MP to the Home Secretary's ludicrous statement: Mr John Redwood (Wokingham) (Con): Many of us were elected on a programme of no more powers whatever passing to the European Union. Given that the Home Secretary promised us that no sovereignty would be transferred by the EIO, will she reassure us of that by putting into the draft proposal a simple clause that says that Britain can withdraw from the arrangement at any time if it proves to be not as advertised? If we have that clause, we are sovereign; if we do not have it, we are not sovereign. [ Interruption. ]

Mrs May: I thank the hon. Member for Bolsover (Mr Skinner) for that sedentary intervention.

I did make that statement on sovereignty in relation to the EIO. We are opting in to the draft directive, over which there will be negotiations in the coming months. However, I said what I said because the order and the directive are not about sovereignty moving to Europe, but about making a practical step of co-operation to ensure that it will be easier for us not only to fight crime, but crucially, to ensure that justice is done.

Kate Hoey (Vauxhall) (Lab): I am disappointed but not surprised by the Government's decision to opt in to the EIO. I was a Home Office Minister some years ago, and even then officials tried push all kinds of things by which more power was taken away from this country. Following the Secretary of State's previous answer, is she saying-let us let the public know the truth-that once we opt in, no matter how much we find that it is not working in our interest or that it is costing huge amounts of money, there is absolutely nothing we can do?

The Open Europe Blog has more on this topic and is linked from here.

European Investigation Orders (EIO)

Big Brother makes another giant leap forward bringing the dawn knock on the door ever closer, even to England thanks to the Cameron/Clegg Coalition Government! Read here.

Fragmentation - UN's highest court opines Kosovan Independence as "Legal";;;; Isle of Wight next perhaps.

The report from the NY Times is here. A quote: Reading the nonbinding opinion, whose political consequences could reverberate far beyond Kosovo, Hisashi Owada, president of the International Court of Justice, said that international law contained no “prohibition on declarations of independence” and consequently that Kosovo’s declaration “did not violate international law.” Great news for the many individual parts of the ex-Nations of the EU., but not for peace!

Schauble at French Cabinet meeting. November 2003 all over again?

Never let it be forgotten that it was France and Germany acting in collusion that wrecked the Stability and Growth Pact! That deliberate action in November 2003 inevitably spelt the eventual end of either the European Currency or independent national sovereignty and self-government across the EU. Given the history and the inevitable consequences of the events of that month, can there be any doubt that full EU federalisation was not always the objective for such financial profligacy? If you do not believe that now, please read this full posting and all its links and you can thereafter surely be left with little doubt that such was and is the case. My posting to Ironies on 28th November 2003, linked here had all the facts. (The link will take you to the Ironies Archive page for November and the posting is titled "The EU's Problems from Greece to the Golden Gate with some of the links from the post still active although regrettably not all). The previous day I had clearly laid out the future on the same blog, linked here, which I quote in full as follows: Another nail in the Euro's Coffin The press reports from the German State Broadcaster Deutsche Welle Stability Pact -- Rubber Pact seem to grasp the seriousness of the hollow Franco - German deficit victory, more firmly than the quotes from Holland that we linked yesterday. As a non-economist my reading of the situation is this: If twelve (now increasingly less likely one day to be a score or more) countries are all free to spend as much as they please in a currency that will devalue at the same rate for all, then the outcome is assured. Countries that spend the most the soonest will incur the least interest charges and the greatest real spending power. The devaluing money they later print to serve the debts will encourage others to board the gravy train but those who join the rush the latest will suffer the most. Already in the Dutch press yesterday the editorials were urging that spending restraint be abandoned. As the above realisation grows the need for interest rates to rise will further spur the race to be the earlier borrower and the rates being paid yesterday will appear ever cheaper. The rise of the Euro in the foreign exchange markets seems to me an aberration as the common euopean currency has had its foundations removed. The logical end result "Hyperinflation" or a "Pan-European seige economy with rigid foreign exchange controls". In either scenario economic hardship must result. If an economist disagrees please e-mail the blog and I will post the counter-arguments. Or add a comment below! If this is not the case then what was the point of the G & S Pact in the first place? posted by Martin at 11/27/2003 05:25:00 PM Readers who prefer a mainstream media source to verify the facts can read the Guardian report of 27/11/03 from here. So what self-serving mischief have the French Cabinet agreed with the German Finance Minister at yesterday's meeting? "We have just signed a joint letter destined to Mr (Hermann) Van Rompuy which includes a joint Franco-Germany proposal for improving economic governance and strengthening the stability pact," French Finance Minister Christine Lagarde told a joint news conference with German Finance Minister Wolfgang Schaeuble, according to Reuters, linked here. Consider some of what the German Press itself had to say on 26th November 2003 as reported by German State Broadcaster Deutsche Welle, linked here: The Stuttgarter Zeitung said the game being played by Germany and France -- Europe’s largest economies with the EU's largest deficits -- is damaging common stability policies and creating distrust among the smaller euro zone countries as well as the central European countries set to join the EU in 2004. The German-French rule-bending could heavily burden consultations on the future EU constitution, which are reaching a decisive stage. Cologne’s Express wrote." He won himself some breathing space with his successful coup in Brussels regarding Germany’s budget deficit. But, the paper said, he’s actually just made things worse, since the victory comes at a high price. Germany once believed strongly in the EU's Stability and Growth Pact, which is meant to bolster the euro by requiring euro zone countries to keep their budget deficits below 3 percent. If Germany and France are allowed to break the rules without being burdened with the financial penalties the pact calls for, what incentive do other countries have to save, the paper asked. The Stability Pact has become a rubber pact." (Blog editor's emphasis). Finance Minister Eichel’s self-satisfaction will be expensive for Germany, the Berliner Kurier wrote, because Germans will soon feel the effects of the deficit and will have to pay the accumulating interest on it...etc. No doubt the joint proposals to the Lisbon Treaty created, EU Council President, will envisage just such pan-EU control. In Britain's case, Ministers and the Prime Minister, sit on the Council under the Royal Perogative and thus the authority of the Queen (now a mere EU citizen), therefore Parliament has already effectively renounced its power to govern our country. Economic Governance for the Eurogroup will now also hand signatory powers for the UK's cheque book to foreigners. Presumably something acceptable to Cameron and Clegg, who will surely reap rich personal EU rewards for this final selling out of their country! (The non-constitutional manipulations between Blair, Brown and the Foreign Office which ensured Blair could not be questioned in Parliament on the Lisbon deal he struck are all fully detailed on this blog). If the other 25 members of the EU use yesterday's Franco-German joint proposals to Van Rompuy for anything other than substitute toilet tissue or used paper recycling then given recent history they will surely deserve the certain dire consequences that I detailed in the Ironies posting of 2003 as reproduced above!

Treasures from the threads - Number forty-five

The following comment from bastion calling for a return to money with a definable value is to an article by Ambrose Evans-Pritchard in the Daily Telegraph this morning, worth reading in itself if only for this paragraph "When the US Federal Reserve reveals suddenly that it may abandon its exit strategy and resort instead to another blitz of stimulus – ie, QE2 – it is surely worth asking why. Leaving aside the collapse in the ECRI leading indicator last week to -9.8 (a level that has always preceded recession in the post-war era, but may of course be wrong this time because we are in a zero-rate, mega-stimulus, fin de regime, total upheaval that makes any comparison with past cycles meaningless), there are some hard facts." The selected comment was as follows: +++++

Today 02:14 AM

Recommended by 3 people

Oh boy! We really are having a quite extraordinary retrospective history lesson today with all the fangs and talons showing. Suddenly we have coined the phrase "The Great Recession", presumably to distinguish this self-inflicted economic farce stoked by the "Great QE" from the better termed "Great Depression" which was alleviated by the "Great Keynesian introduction of FI(Fiduciary Issue)" which,in turn, has led to the "Great Inflationary Splurge" into worthless currencies. Yet we are accepting unquestioningly the "The Great Globalised Free Market Experiment" a la Adam Smith without even discussing (or at least I haven't seen any sensible discussion) the merits and demerits or even the practicality of trying to operate such globalised free market economic policies within the existing financial system. The existing international trading system evolved logically over thousands of years. For a currency of exchange to be acceptable by an international trader in exchange for goods or services it needed to have to have an intrinsic value (ie backed by something of substantial practical value such as cowrie shells in the distant past or gold. comparatively recently). That was an absolutely logical and practical trading development from barter because such a currency represented a real store of value for the trader. This logical system began to be undermined by the adulteration of the backing of such currencies. Can anyone say with hand on heart that it is still logical for an international trader to exchange goods and services for paper which represents no more than an IOU which the market has no realistic way of valuing because, in the last resort, it can't be redeemed It is this illogicality that lies at the heart of virtually every problem the financial system faces today. I suggest that all the talking in the world, all the blogs flowing from commentators pens, all the comments that we like to make on them in an attempt to be self-important and clever are an utter waste of time and an irrelevance unless we first discuss this underlying problem and find a solution to balancing the payments between nations and thereby living within our means. Forget measuring wealth in terms of GDP, get back to basics. Split external and domestic finance and make both balance like any household should do. There ain't no real difference between a household and a nation when you get down to basics. Let's get real again!

+++++

UK Homeowners - re-mortgaging to survive?

While public sector borrowing exceeded forecasts to 14.5 Billion Pounds, worse news appears in the mortgage lending figures for June rising to 13.1 Billion Pounds, read here. Against forecasts of an approaching further 20% house price fall and a buying slowdown this is ominous news indeed for the UK Treasury. Artificial extreme distortion of interest rates such as we are now seeing, where savers are financially crucified, can lead to all kinds of strange results. Question: Why are so many loans still being made with no income verification on the applicant and why are interest rates charged not reflecting the real risks both to the future earnings of the applicant given the present looming depression, the coming likely further fall in property prices and the potential default of the lending institution itself? Possible Answer: A political imperative for our present political lightweights perhaps! Likely Cause: They have run out of answers or alternatives!

IMF Boost to further strain Britain's resources

A report that the IMF will seek to increase its lending capacity by a further 250 billion dollars to a total of a trillion is bad news for Britain as a likely future recipient for the funds. The magic roundabout of debtor nations underwriting loans to international organisations coming to their aid is already in danger of reaching absurd proportions, as proven by the credit downgrading of Ireland this morning! If the contributions to the extra IMF cash are called upon in the same ratio as detailed here, reported to be decided at the November G20 meeting, then the UK share will be around 5% or 12.5 billion US dollars. The Slovakian decision to not agree to contribute cash to the Greek bailout will almost certainly prove not to be an isolated case when real transferable funds, rather than pompous intenational verbiage and fudged agreements over expensive meals are eventually a necessity. Time for another shock and awe EU package to save the PIGS financed by the self-same sovereign debtors (posing as the EU) perhaps!

MEPs celebrate SWIFT and Vacations

The Miserable European Parasites of Strasbourg are off on holiday in celebratory mood over their new powers granted by the Lisbon Treaty and demonstrated by the SWIFT compromise. Power at last brings some justification for their obscene salaries, pensions, perks and wasted lives over many decades. Read the EU subsidised BBC report here and the BBC The Record Europe, presented by that shining example of EU and BBC nepotism, Shirin Wheeler, from here. The video reflecting the reality of life when elites grind ordinary people into the ground and ever deeper debt is something MEPs should reflect upon during their fully undeserved holidays. Britain's Prime Minister, who claims not to understand the Facebook support for the recently dead gunman and murderer Moat, read here, should reflect that mindless anger may be randomly directed anywhere - the consequences of the enormity of the theft of an entire Continent's national sovereignties and democracies cannot possible be imagined ........ those who owe their souls to "Company Stores" taste helplessness! (Later update - same message, more words on the same US problem in the American Spactator, linked here).

First crack in Eurogroup now official

Le nouveau gouvernement slovaque a en revanche refusé de contribuer à un plan d'aide séparé de l'UE et du FMI de 110 milliards d'euros de prêts sur trois ans en faveur de la Grèce. La part de la Slovaquie était de près de 800 millions d'euros. Membre de l'UE depuis 2004, la Slovaquie a rejoint la zone euro en 2009. Link to Le Monde Rough Translation: The new Slovak Government has refused to contribute to the EU aid plan of 110 billion euros over three years for Greece. Slovakia has been a Eurogroup member since 2004. Open Europe reports - Slovakian Finance Minister Ivan Miklos made clear that his country "will give its approval to the actual launch of the mechanism only if the EU remarkably strengthens the Stability and Growth Pact". In addition, Prime Minister Iveta Radicova said that Slovakia will not contribute to the joint EU/IMF €110 billion bailout package for Greece, since "the Greek loan is about irresponsible government policies, irresponsible behaviour of the banking sector".

Britain's real debts - Criminal negligence charges now essential!

The Office of National Statistics has now confirmed what this blog has been maintaining over many years, namely that the true debt of the country (some four trillion pounds, read here), represents one obvious fact, namely that a huge theft has been taking place from future generations to such an extent and in such secrecy that criminal negligence charges or worse ( treason perhaps as much of the money has gone to the EU) seem a necessary first step to make the adjustments to be borne by the general public over many years even slightly acceptable. Politicians who have overseen the Treasury since the resignation of Margaret Thatcher should be taken into custody and their actions over many years fully investigated naturally at the expenditure level but also considered alongside the benefits received by their political parties in the form of sinecures, appointments and payments, including pensions, from the EU. A quadrupling of national debt figures, kept hidden from the public, as it has been for many years, can only possibly result from the complete connivance of the entire political class in a truly monstrous conspiracy. Remember this post from just over one year ago, raising similar questions that still remain unanswered!

Is the Eurozone breaking up - Bruges Group Meeting

Wednesday, 14th July 2010 6.45pm for 7.00pm

ADMISSION: £10 payable on the door or in advance Including wine, orange juice, mineral water and nibbles

To purchase your ticket in advance visit: www.brugesgroup.com/meetings Or call Robert Oulds on 020 7287 4414, or reply to this e-mail

QUOTES

PROFESSOR TIM CONGDON, CBE Professor Tim Congdon is one of Britain’s leading economic commentators. He has written a number of books on monetary policy, contributes widely to the financial press, and makes frequent radio and television appearances. Professor Congdon will say; "The eurozone is close to breaking-point. The banks of Ireland, Greece, Spain and Portugal have become heavily dependent on the European Central Bank for their funding - but there must be limits to how much the other Eurozone member countries are willing to let the ECB lend to the troubled banks in those four countries. The yield on Greek government bonds had shot up to over 12% before the ECB started buying Greek government debt on 10th May, which pushed the yield down again to single-digits - but now the ECB is saying that it cannot keep on buying Greek government bonds and the yield has crept up to over 10% once more. Back in the 1990s the architects of the single currency didn't think through how the ECB was meant to act as a central bank - the banker to both the government and the commercial banks - in a crisis. "Their folly and neglect then seems likely now to lead to the worst setback for the cause of European integration since the founding of the EEC in 1957."

Click here to view Tim Congdon's power point presentation

DOUGLAS CARSWELL MP Douglas Carswell is the Member of Parliament for Harwich and Clacton. Dod’s political biography describes Douglas as being “Tall and Eurosceptic ... one of his party’s radical thinkers”. Douglas is a leading advocate of Direct Democracy – pushing power away from Whitehall and Brussels, down to the individual, where possible, or failing that the town hall. Achieving Britain’s independence is one of Douglas’ overriding political interests.

LOCATION: Princess Alexandra Hall, Royal Over-Seas League, Over-Seas House 6 Park Place, St James’s Street, London SW1A 1LR

AGENDA: Lectures: 7pm – 8pm Discussion: 8pm – 8.30pm Wine and refreshments: 8.30pm – 10pm

Germany finally admits it wants other Nation's Sovereignty!

Read the confirmation of what this blog and its forerunner have been reporting for many, many years from this link. The article's headline:

Now Merkel Wants A Country's Sovereignty In Exchange For Germany's Cash

A Quote: The designing of this new scheme is being done behind the scenes because Merkel's government is concerned it might jeopardize the current Greek bailout, according to Der Spiegel. Confirmation from Der Spiegel!

Mix it up with lies...

H/T Samizdata and www.timhawkins.net

The Battle of Britain and The Dawn Knock on the Door

The Telegraph this weekend notes the 70th anniversary of the date deemed to represent the start of the Battle of Britain, read here. My Mother was a nurse at the Middlesex Hospital in Central London during the battle and the dreadful Blitz of London that followed. I was lucky to be born in the later part of the war and was amazed by the description she gave of the battle at its height over London when she observed the dog fights and successes of the Spitfires and Hurricanes over the City. Naturally enough, in view of the horror, she was less detailed on her experiences as a Ward Sister during the Blitz. In later years she described to me her thoughts on the conflict and the most compelling description of the horrors that had overtaken Europe and required military action on our democratic country's part was, in her view, the fear of the whole Continent of the Gestapo's dawn knock on the door of their home, thereafter removing men, women and entire families to deportment, torture and the death camps. I suppose therefore that it is a small mercy that she has not lived to see the sacrifices and trauma of our parents generation laid to waste, through the self-interested deceit and vaulting ambition of our treacherous political classes, as the European Arrest Warrant now allows, upon the signature of any jumped-up petty official across any one of the other 26 countries of the EU, without the need for production of evidence nor any hearing before an English court, any British subject to be forcibly removed to any other part of the EU for trial, entirely in accordance with their own foreign legal procedures on offences that may not even be criminal under English Law. Could the pilots of the RAF fighters ever have contemplated such an event a mere seventy years following the Battle and without one protest from the population at large? What value has our generation placed upon the sacrifices of the few, and all the other less lauded heroes, such as my own Mother?

Why the Euro should break up.

In an item in this morning's Daily Telegraph the head of the huge bank HSBC, who has tellingly left the EU to live in Hong Kong, Michael Geoghegan, is quoted as asking the following "Why should the Euro break-up, it was created to form a common trading platform across Europe," The journalist writing the report one Harry Wilson, described as Financial Services Correspondent and therefore, we must presume the newspaper itself, chooses to precede this quoted question with the following paragraph: "One striking point of optimism in his speech was his belief that the Euro would survive and that break-up of the currency pact was unlikely as it was still useful for its members." There is little doubt that for the head of a large international banking group that is part of a conspiracy that has brought the economy of the West to its knees and is now living in comfortable tax exile in Hong Kong there is little doubt that the euro currency is still seen as useful. To the ordinary citizens of Europe, however, who can daily now witness the fact that the euro currency was created for no other purpose than to consolidate the destruction of their democratic rights to periodically change their rulers without bloodshed, the "democracy" cited as the opposite of tyranny as defined by Karl Popper, the continuation of the euro is the one step that will guarantee that the Continent of Europe will be almost certainly doomed to return to the darkest days of the nineteen thirties. In this context, is it not incredible that a newspaper such as the Daily Telegraph can describe as a "striking note of optimism" the very notion of survival for the currency which the Nation State which is home to the Telegraph group has always shunned for reasons of Sovereignty and the absence of democratic legitimacy and accountability. International Bankers may well welcome a centrally controlled EU with a cowed and subservient population of some 350 million to exploit, none of whom will have any say as to how they are governed nor right to elect their leaders. Survival of the euro currency now clearly makes such an outcome an imperative for the EU, as argued by President Sarkozy of France and the three EU Presidents in justifying the necessity for "Economic Government". Without "Total" therefore "totalitarian" control of all the 27 economies of the member states (the Lisbon Treaty requires that all must eventually join the euro) the disparity between the countries inevitably suggests that the common currency will fall apart. Therefore to survive, totalitarianism is required, ( e.g. we must all have the same retirement age, working hours, wage rates, health rights etc., as decreed from Brussels) that is what is meant by "Economic Government"and any suggestion otherwise is a confidence trick, very much in line with the manner in which the EU has 'advanced?' up to this point. I would have hoped that a newspaper based in Britain, the nation that 70 years ago stood alone during the Battle of Britain to fight the dictatorships of Hitler and Mussolini, would have today been capable of recognising a putative tyranny approaching its adolescence. Imagine the controls necessary to achieve the euro's survival and weigh them against the well known consequences of the short term pains of sovereign default. Only bankers with huge sums at stake could possibly choose the former. Wake up Telegraph readers, I only regret that I am blacklisted from comments to that newspaper for earlier remarks, such that this plea cannot be made as a comment to the online article itself! (Later update - I have made an intended positive suggestion as to how the Coalition Government in the UK could proceed on helping to resolve this crucially important issue on another blog, linked here.)

Bank stress tests are a Catch 22

Brilliant analysis from Tracy Corrigan of the Telegraph, linked here! Two quotes giving the flavour: Stress-tests are the Catch-22 of banking supervision. Their purpose is to demonstrate that banks are safe. To do so, the tests must be rigorous. Yet because their purpose is to bolster confidence, their rigour is bound to be doubted. Unless the tests reveal that the banks are in a terrible mess. In that case, the stringency of the tests would be proven, but the primary mission of reassurance would have failed horribly. ...... Can we trust this batch of tests any more than the models which demonstrated AAA-rated sub-prime mortgage-backed securities were safe as houses? According to Alistair Ryan of UBS: "What we are going to get from the stress tests is a group of regulators, who already have been determining whether banks are appropriately capitalised - based on certain scenarios which they run all the time anyway - telling us that on the basis of these same scenarios, they remain confident." And if that isn't what we get, surely regulators should have mentioned it before now.

61% of German Banks are Pessimistic

The report is from Spiegel Online linked here, the following is the exact passage: According to the semi-annual "Bank Barometer" survey carried out by Ernst & Young in Germany, which was released on Thursday, only 39 percent of the 120 banks surveyed feel that the situation on the financial markets will improve in the next six months. In December, 65 percent thought it would.

Sixty percent now worry that the European debt crisis and concurrent difficulties that have struck Europe's common currency will endanger Germany's recovery.

The German Constitutional Court and the EU Bail Out

Ambrose Evans-Pritchard has provided a competent explanation in his column in the Daily Telegraph this morning, read it from here. Up to now the German Constitutional Court has hesitated to go as far as to rule that the constant infringements against Parliamentary Democracy break their Constitution, while the Parliaments of all the other member states have similarly watched their powers destroyed. The EU has been put in such a powerful position so that today it is able to say to the people of the EU "We have control of your money, give us the right to tax and govern you as only we non-democratically see fit, or we will destroy your money, savings and pensions by allowing the chaos of a Euro collapse." The collapse of the Euro was always an economic certainty without centralised, totalitarian EU control. National Parliaments can resist now at far less cost than will result following years of despotic and elitist rule. Never forget, as detailed on this blog, that the EU project has always been bound to arrive at this point! Will the pain of a Euro collapse this year be less than that which would follow yet more years of non-democratic corrupt Governance à l'EU?

EU Banks - stress test farce

Good article from Forbes just released on the web. Read here. A short quote:

After so many months of angst as to the fate of Greece and then Spain, when special funds and loans have been arranged to keep such nations afloat, the idea that a reduction in asset value or “haircut” of just 17% on Greek debt and 3% on Spanish is more like Alice in Wonderland than Banking in Euroland! Given that the European Central Bank has been mopping up Greek bonds it perhaps no wonder that the haircuts are not stringent enough!

The haircuts are of no value at all especially since the market is pricing Greek credit default swaps to imply a 40% chance of a default and Spain CDS's to suggest a 25% possibility of default. This is more like a white wash as derivatives called “recovery swaps” currently trade at a rate that says in the event of a default investors holding Greek paper would lose 60% of face value, meaning they would get back just 40%. For Spain the loss is 25%.

The Euro has no clothes!

The following is quoted from here, on a report by ING warning of the consequences of a Euro currency collapse. Loose lips could sink entire economies if European policy makers continue to question publicly the survival of the euro zone, according to ING economists.

To show what is at stake, the Dutch bank has helpfully attempted to "quantify the unthinkable." Even an exit by Greece would hurt the whole currency bloc, they calculate. But a complete collapse would dwarf the impact of the Lehman bankruptcy: Output would drop by between 4% and 9% in the various states in the first year. German bond yields would head below 1%, while southern European rates would head for 7% to 12%, and the new Spanish peseta, Portuguese escudo and Irish pound would devalue by 50% against the new Deutschmark. Meanwhile, the rush into the U.S. dollar would likely cause a bout of deflation there. The euro zone may be far from an optimal currency area, but suboptimal is far from bad. overheard@wsj.com

Naturally the consequences of a Euro breakdown will be severe, that was always known, but they were deemed worth risking by the power-crazed federalists intent upon imposing "economic governance" namely totalitarian non-democratic rule across the whole of Europe! Which European leader will have the courage to voice the fact now recognised by ordinary citizens across the Continent, that like the Emperor in Hans Christian Anderson's tale, the end of which is quoted below, the euro currency is naked and worthless, extending its life will only bring greater misery than the ING report could begin to imagine. A child, however, who had no important job and could only see things as his eyes showed them to him, went up to the carriage.

"The Emperor is naked," he said.

"Fool!" his father reprimanded, running after him. "Don't talk nonsense!" He grabbed his child and took him away. But the boy's remark, which had been heard by the bystanders, was repeated over and over again until everyone cried:

"The boy is right! The Emperor is naked! It's true!"

The Emperor realized that the people were right but could not admit to that. He though it better to continue the procession under the illusion that anyone who couldn't see his clothes was either stupid or incompetent. And he stood stiffly on his carriage, while behind him a page held his imaginary mantle.

Remember it was EU Commission President Barroso, one of three such EU Presidents, who recently claimed that EU spending was superior to national expenditure and that the EU budget should remain exempt from austerity cuts. How many Germans facing yesterday's announced budget cuts this morning feel such sacrifices will continue to be worthwhile for their Spanish footballing conquistadors? How many in Britain, the second largest EU contributor, but outside the eurozone, will still feel the present economic sacrifices worthwhile when the corrupted mainstream medias' propaganda campaign is eventually exposed. Money spent on or by the EU is apparently only worthwhile when expanding the power and influence of those within the Brussels or possibly Belgian bubble, or elsewhere when receiving the EU's pay or pension, there the power hungry federalists feed off the fast dwindling wealth of Europe's former nation states. The EU is exactly like the Emperor in the fairy tale, indeed was it also not Barroso who recently claimed that the EU is now an Empire? Maybe so, but with three naked emperors at its head, can it long survive? We must all hope not, for no meaningful steps towards worldwide economic recovery will be possible as long as its inherent madness remains unrecognised by the world's elites.

German Constitutional Court complaint extended to full 440 billion package

Open Europe reports this today with their main links all in German. A good explanation appears on their blog however and that is linked from here. Two items I would like to highlight are quoted herewith: Firstly a written Council Answer to Question H-0237-09 7th May 2009 regarding what is now Article 122/ "The Council recalls the terms of the Declaration on Article 100 of the Treaty establishing the European Community, which is attached to the Nice Treaty. According to this declaration, "decisions regarding financial assistance, such as are provided for in Article 100 and are compatible with the 'no bail-out' rule laid down in Article 103, must comply" with the provisions of the inter-institutional agreement on budgetary discipline and financial perspectives." Secondly the third point raised by the blog but apparently not included in the German complaint: ...the EU Treaties clearly specify that any decision that involves the EU’s budget must be taken by unanimity, meaning that individual member states have a veto over any agreement. The stabilisation fund clearly does involve the EU budget, as the loans are backed by the budget and any defaults will be covered by the budget (there are even p.m. lines in the EU budget for the fund) – and yet it was decided by majority vote. Moving from unanimity to QMV is a transfer of power which needs the approval of national parliaments. The decision taken by Qualified Majority Voting on the stabilisation packages should therefore have been subject to non-eurogroup Council Member veto, had any the courage to wield it! Meantime the vote on the "Economic Government" of the EU, code for full federalisation has been deferred until September, praise be, by which time the real problems of the euro currency and multiple defaults may have perhaps been faced making the matter moot. The Irish Times has the report, linked here.

Treasures from the threads - Number forty-four

Link to Hansard for any interested in Article XII of the Act of Union referred to in the quoted comment. House of Lords Privileges Case for Lord Gray, click here. Two highly intelligent comments to the Telegraph in one day, wow reality must be finally setting in back in blighty, this is from 'anyoldiron' to Simon Heffer, linked here, as follows:

anyoldiron

Today 12:05 AM

Recommended by 2 person

Do the LibDems really think that uppermost in people's mind at this terrible time financially is the Alternative Vote? After what is happening now, all those presently in Parliament will be very lucky if any one of us ever votes for any one of them again. It is time to be aware that the people will turn on ALL politicians, not just those that presently lodge in a ‘pretend’ Government. We vote and contribute towards their pay for actually Governing this Country in everything. There is an EU Navy we are told working off Somalia. Do this Government expect the people just to accept an EU Army, and EU Air-Force? Do we just accept an EU Police Force? I am not even asking for a referendum on whether we should accept any of these things, or a referendum to see whether we should remain in the EU because to say 'Yes' in a referendum would, in view of our solemn Oath of Allegiance to the British Crown and through the Crown to all in this Country would be, quite simply, treason, wouldn't it Simon? We should never have joined and every Government has known that too, for they make those same Oaths of Allegiance. Perhaps the greatest betrayal of all is to our serving forces in Afghanistan that need more and better equipment. Over the last years of Labour our Forces have been drastically cut down-and they have needed far more protective gear and equipment. Yet since 2004, our Government has been contributing each year to the European Defence Force and £4.01 million is expected for 2010. Spend THAT money on our own Forces. We are having cuts in schools and Hospitals yet when is our Government going to cut down permanently on the billions we pay to the EU each and every year? They are putting the EUJ before their own Country and quite simply, WE CANNOT AFFORD TO REMAIN IN THE EU ANY LONGER. All this and all the LibDems can do is whitter on about AV and yet another messed up reform of the House of Lords which will put the United Kingdom of Great Britain and Northern Ireland in jeopardy if no attention is given to Clause XXII in the Act of Union for16 Scottish Hereditary Peers must remain to fulfill that long standing Treaty. (There were only Hereditary Peers at that time, and obviously there is a great difference between the two otherwise there would have been no need to get rid of the Hereditary Peers). At least 16 Hereditary Peers must remain in the House of Lords for if the Act of Union is repudiated then the Act of Settlement comes under scrutiny for the whole of her Majesty’s Commonwealth is at risk and those are long lasting friends we certainly do not want to lose.

Treasures from the threads - Number forty-three

'Welfare for the rich', is the topic for this Telegraph blog posting by AEP from Owainglynwr, (I thought he had been assassinated for twenty pounds at Mortagne-sur-Gironde, but on checking that was Owain Lawgoch a perhaps more legitimate claimant to the title as last truly Welsh Prince of that name?) I digress for what was posted is fascinating and may be read herewith:

owainglynwr

Today 01:32 AM

Recommended by 4 people

Amrose you wrote: 'I do think think that the American political class will have to face up to the new reality of a semi-permanent slump for a decade or more that will blight a great number of lives. The cyclical recovery that normally makes it possible for most Americans to find a job if they want one is not going to happen this time because the overhang of debt, fiscal tightening, and a liquidity trap have combined to jam the mechanism.' Agreed. Further on you wrote: 'But once welfare has been deployed so generously for the rich, it cannot be so easily be denied for the poor. This was the Faustian Pact.' By describing stimulus as generous, this implies the welfare deployed for the rich has been enough. Not so I fear. Few politicans could dare to articulate this. What has been deployed so far has been emergency surgery, some I admit, weirdly prescribed by politicans to gain votes and therefore wasted. If banks ATM's for example, ceased delivering savings for any longer than a couple of days, it moves from a simple financial crisis to a law and order issue. Most depositors are unaware when 'their money' is deposited into a bank, it ceases to be 'their money'. It becomes the bank's to do as they see fit. Depositor's have a claim for that amount in return for an agreed interest rate, thats all. So the bond holders had to be appeased, as the banking system was so interdependent with modern life. Mark to market accounting should rightly be suspended in a non functioning market. Yet when times improve and investors appetite returns, for stability and funding its important assets are valued at a fair price for both banks and investors. Easier said than done. Under the new corporate accounting standards rules proposed in the US, banks and other lenders would be required to book their loans at their current market value, a method called mark-to-market accounting. Previously, they had more leeway in valuing assets, so long as they expected to hold them for a long period of time. Critics call that approach “mark to make believe.” The question is are there banks and other lenders engaged in denying crystalizing losses? European banks and governments for example are experincing what happens when investors question the validity of their accounting systems. Pushing on a string for funding at any reasonable price. US Banks already use mark-to-market accounting for stocks and complex mortgage bonds whose value fluctuates through daily trading. The change in the way they treat the value of loans, however, will be greeted with fierce opposition from banks. Banks claim that the change in the way they treat the value of loans would force them to take big losses on loans during periods of economic distress. Doing so would mislead investors, they say, because the loans would probably still pay off over time even if they were trading at lower market prices. 'Risk Off' investors however, might call mark to market accounting for loans prudent. Big US investment banks, have traditionally used mark-to-market accounting. So stress testing for these large US banks has been well regarded by investors. For regional and community banks that make commercial loans — the vast majority of the USA's 8,000 lenders — the impact could be well, drastic. This is the catch- 22. Fail to recognise poorly performing loans adequately not just the outright delinquent, investors will avoid funding to those regional and community banks. Currently I believe Spain's cajas are experiencing this. Tighten and credit for the poor and the private sector which help generate the growth needed to get the unemployed back to work will be dramatically reduced. Welfare for the rich Ambrose before the poor can benefit, still has some way to go. Unless carefully handled politically, the next stage in this ongoing crisis (it never really went away, despite the media hype) could be generated by accounting standards not applied consistently internationally. The vast majority of the public remain blissfully unaware. Politicans are still blaming the 'greedy bankers' for the 'past' crisis. Labour politicans are a prime example. They are deluded if they do not see Depression 2 could still quite easily beckon. The 'rich' in America and Europe might still need welfare as a matter of urgency before the poor.

Long history of EU lying lies at the heart of the Euro collapse.

The stress tests on the Eurozone banks may initially be believed by market movers but the general public across the EU has largely long given up any belief in the words of those connected with the EU in Brussels. A report from Reuters India this morning spells out the problems amongst the financiers but the general disbelief amongst the general public as reflected in the comments to this article on the stress tests highlight the deeper and more immediate dangers. The history of the EU over the ERM and EMU, at the centre of which we invariably find Jean-Claude Trichet, leaves no statement from any ECB official, EU Commissioner, Eurocrat or MEP believable by the public at large. The only solution for such a fundamental malaise is to disband the institution as presently constructed and hold the deliberate liars to account for the consequent economic woes. Interesting comment along these lines appeared in the Wall Street Journal, linked here, from which comes this quote: The question now is what is to be done that both ensures the survival of the euro and is also politically feasible. On one thing the eurocracy agrees: it must not trigger an amendment to the Lisbon Treaty, lest voters be given another chance to let their masters know just what they think of the European Project, and torpedo it. Less kindly put, fight fiscal deficits but maintain the EU's democratic deficit at all costs.

40% Cuts prepared yet silence on EU costs!

A report issued by the Bruges Group and prepared by Gerard Batten MEP, linked here, showed that in 2008 the EU cost every British taxpayer two thousand one hundred and nineteen pounds. Annual costs will continue to rocket! Yet the Coalition Government has no plans to curb our contributions to a club that is on the edge of disintegration. This is an outrage, yet even a poll today for the Local Government Association makes no apparent suggestion in this summary that the hugely costly EU be targeted ......... What is going on in that insane country where I was born? If people were not meant for shearing they would not have been born as sheople I guess can be the only answer to that. It is ASTOUNDING that such STUPIDITY can so quickly become apparently institutionalized. It seems a bit like a playground bully taking 90p of your weekly one pound pocket money and then when you seek to make economies you only look at the 10p with which you have been left as a source of possible cuts. Is that dumb or what. Fight back England for heavens sake!

Slovakia sees sense!

Signing up to a scheme that only the moon-mazed could ever believe can be funded seems hardly likely to underpin belief in the doomed euro-currency. At least the incoming Slovakian Government seems to recognize this point as this linked article from the Irish Times points out.

Hypocrite Hague

Were William Hague to be honest, let alone have the slightest degree of honour, the speech he would make on the EU today would rather than this outrageous garbage cover the following critical points: The EU today is at a crisis point brought upon its constituent former national states by the devious manipulations and plain lies of those behind its formation and development. The economic consequences of its failures now seem likely to plunge the citizens of Europe into a decade of reduced wealth and civil conflict. William Hague has, while using politics as a handy back-up in his own wealth creating activities, claimed to have been amongst those who doubted the direction of the EU project while actually acting as one of the many useful idiots who behind the scenes have enabled its destruction of democracy and national sovereignty. Today Hague might have chosen to challenge the legality of the Lisbon Treaty and earlier such Treaties as non-constitutional under English Law and sought unilateral withdrawal for the UK at a saving of billions of pounds of expenditure for each year of the coming dreadful decade of austerity. The EU in any event cannot long survive the failing of its single currency therefore such expenditure will not just be wasted in the usual self-indulgent EU manner but be lost for ever. Instead he reportedly proposes offering Britain's brightest to the service of the Evil Union to make the non-democratic system ever more efficient in its trampling of Europe's remaining rights and assets. (Has news on the raid by police investigators on the Gothic nave of St Rombout Cathedral in Brussels not percolated the walls of the Foreign Office this week and has the ability to put 2 and 2 together and draw a sensible list of possibilities entirely fled the Foreign Office? Is such a City really the place that William Hague desires our brightest adminiustrators be based? And under whose control will these expensively educated individuals be placed and with what end in mind?) Hague, unlike many from his party who are clearly only culpable as facilitators in this European conspiracy, now appears as likely to be among the main conspirators, others (previously presumed to be Continentals) have as yet not emerged from the shadows. This blog has recently been fairly silent as the EU chaos grows and the consequences of years of intrigue slowly become clear can be daily read in the mainstream media and viewed on TV. The fact that none of this is anything other than entirely deliberate may be read in the archives of this blog. William Hague's public betrayal this morning, however, could not possibly be allowed to pass without comment on this blog. Is Hague one of the main EU conspirators? Was that why he was briefly allowed to lead the Conservative Party? Is Cameron now following in Hague's footsteps?