Sarkozy (who has been posturing alongside Merkel) had the old ‘rabbit in the head-lights’ look when Standard & Poor’s stripped France (as well as Austria) of AAA ratings and further downgraded Italy, Portugal, Spain, Cyprus, Malta, the Slovak Republic and Slovenia.  There have been moves internationally to have the number of letters in the alphabet  increased, but as to whether this is political move; finanical commentators don’t believe so, they said they will wait to see what happens and then report on it.

As Ms Gillard settled more comfortably into the 1.5 seat (no doubt enjoying not being on the defensive), and her her brittle laugh echoed around the bank loans manager’s outer office, she said there is always a price to be paid by governments that had put off reforms, spent more money than they had and borrowed like there was no tomorrow (well at least not in their electrol term). She warmed up to the task and continued by suggesting that for too many years, European governments have deferred the nation-building, productivity-enhancing reforms which Australia has made the foundation of our dynamic and resilient economy …

In stark contrast to Europe, Australia had strict fiscal rules that would return it to surplus in – at this stage her voice lowered to a mumble but an aide (the minister from NSW who is clearing his name with respect to misappropiated funds) stated “she said 2012-13″.   Ms Gillard stated she was available – along with world’s second greatest treasurer (Wayne Swan) – to advise them how to (mumble but it sounded like) ‘cook the books’, but it would cost and she would bring along some pay sheets to validate her (and Wayne’s) hourly rate … (but they would bring their own gutting knives and other ‘tools of their trade’). She said European leaders should swiftly undertake structural reforms to boost their economic potential and lift growth.

When no-one asked AMP economist Shane Oliver, he warned swift action to repair European budgets could cut growth further and is alleged to have said ‘fiscal austerity leads to economic deterioration and budget deficits that blow out; effectively worsening the economic outlook’. Poor little rich kid and sometime shadow treasurer, Joe Hockey – walking out of Jenny Craig – lambasted Ms Gillard for the intervention, saying it was “a little rich” for the Prime Minister to lecture Europe; then he muttered ‘did someone mention lamb, mmm BBQ lamb’.

In August, the world’s most succussful borrowing country ever – the USA – had its credit rating cut from AAA to AA (it would have been lower but the agency had an offer they couldn’t refuse; a drone with coordinates of their homes or $1 billion in any currency they wanted – which the USA would print).  Now the Germans are stoic people and their economy is used to pretty much prop up the Euro with a AAA rating. Another unasked question (till now) is why have Portugal’s and Cyprus’s ratings been cut to junk status and not the USA? Oh yeah, the drone.

France is the Euro fund’s second-biggest guarantor and before the downgrade, the head of the French central bank, Christian Noyer, used diplomatic means (he cried like a girl) to have Standard & Poor’s strip Britain of its top rating before France (little realising that England had threatened to send over soccer hoodlums).  Britain’s Deputy Prime Minister, Nick Clegg, offered to shake his hand (no doubt for the ‘Yorkshire hand shake’ – a rapid knock of his forehead on the bridge of the Frog’s nose) and said (in his best Prince Charles accent) ‘the suggestion was unacceptable, do please calm the rhetoric’ and logically pointed out that Britain is not part of the euro zone and should be spared a downgrade.

What gets me is why do they need to keep borrowing money? When the man in the street gets a loan, he just pays it back. …

WTF ?

How can anyone in their right mind – let alone Ms Gillard – swallow that crap?

Bernanke (head of the USA Federal Reserve and chief architect of the American financial collapse) has also offered guidance to the European Union. What drugs do these imbeciles take?

Listening to either of these two failures in financial management will not help the IMF or the EU. And what exactly will Australia contribute in money we don’t have?  We Australians must look like right Wallies to the world given this ill thought out, rush of blood to the head gibbering.

Does Gillard really believe the pap that she and Wayne Swan peddle to the masses in OZ ? They can change the G 20 Go Broke Summit in gay Paris (Cannes to be specific).  Our least liked Prime Minister (ever) says she plans to ‘garner support for the idea in bilateral meetings with other leaders from the world’s most powerful countries’; shouldn’t that be the most indebted countries ? The implication that Gillard implies she is pushing for support among non-EU members to pressure European leaders to resolve their debt crisis impasse, what a crock.

Gillard met with Brasil’s (first lady) President Dilma Rousseff to ’discuss the importance of providing the IMF with adequate resources to help manage the crisis and restore confidence to the markets’ her spokesman is to have said; Brasil is far more viable than Australia. Gillard can meet with whomever she wants, but they should – and most likely will – be sceptical about anything she says. Opposition treasury spokesman Joe Hockey asked Gillard how much money Australia would provide to help fund a Eurozone bailout; that the British are not prepared to do so, but Joe, the Poms couldn’t help even if they wanted to; their banking system is also in a rotten state.

I can remember being short of money and my children (then aged 10 and under) offering me their pocket money (even future pocket money earnings) and that is exactly what Gillard’s offer is worth, Australia offering to bail-out one of the world’s largest economies – also built on poor financial practices (thats why they are in the pickle they’re in) – we haven’t got the money, but we’ll borrow it – and put our citizens last – so she can look good; how generous Julia.

In Australia we have seen federal governments implement owrk practices at the behest of corporations; its common practice to employ people from many other conuntries to ‘supply labour where there is a shortage’, the problem is that most of these industries have skilled and semi-skilled unemployed Australians on the dole because of off-shore labour.

There needs to be a more balanced approach between Unions and Corporations, otherwise the inflexability of egos will end up with conflict. As in the USA and Greece, there will be increasing protests and bloodshed.

Anyone who has stood on a bindi (a sharp seed from a weed) knows how something so small – maybe as fine as a needle – can have such an impact on one’s ability to walk, so is Iceland the world’s bindi?

The American public have been foisted with an easily approaching trillion $ bill passed onto them by their government from the banking industry; however, the Icelandic people (who said there is strength in numbers) of only 320,000 have refused to be shouldered with the bill created by its bankers’ greed.

The anger of the people on the recession-hit island is growing as they have come to understand how politicians are kowtowing to ‘higher masters’ who want them to become responsible for a $5 billion overseas debt. Partial referendum results from around a third of the cast votes showed 93% opposed the deal, less than 2 % supported it and the rest cast invalid votes.

While polls may show Icelandic people believe the debts should be repaid, they quite rightly resent being stuck with a bill for the mistakes of a handful of bankers under the watch of foreign governments. The debt works out to be about $16,000 each and came about after Iceland’s top banks all collapsed within days of each other in 2008.

But what is really happening is a bully-boy tactic, where about 400,000 investors in Britain and the Netherlands deposited money in the banks of ‘Icesave’ online deposit accounts. As in America, investors ‘can’t lose’ even if their poor investment goes awry, they childishly want their cake and eat it, and with their connections in corporate government, they demand someone else pays.

But its not just the people hot under the collar, volcanic action is spreading another cause and effect reminder on how fragile the chain is, with bans on flights through UK-controlled airspace which will soon cause shortages in supermarkets and rising costs.

Parcel delivery firms, passengers and business people (who are protected by airline incompetence) are also suffering because of the flight ban and an obligation for them to meet their own costs of accommodation and food etc. Food comes into the UK from all over the world from fresh pineapple from Ghana to baby sweetcorn from Thailand.

The UK imports about 90% of its fruit and 60% of its vegetables and while the majority does come by sea, air freight makes up about 25% of all British imports by value. So the Iceland people and their volcano Eyjafjallajokull will disrupt the whole spectrum of survival. As hot ash spews into the atmosphere, reduced sunlight, polluted air and potable water are also problems not immediately addressed ot though of.

But it is not just fruit and vegetables, its the likes of flowers not being sold through Europe that affects the economies of countries that rely on the income to pay for fuel and fertilizers etc. If the eruption lasts for another four or five days, there will be selective shortages; however, if it lasts months, then what the global finance crisis started, this could finish off.

A classic case of how microeconomic shocks end in macroeconomic tidal waves ..

We know that the banks and big business in Iceland incurred large debts, which they now want to pass onto the populace; and we know the Greeks spent more than they had and now have to tighten their populace’s belt to pay back debts to be able to borrow more (for more debts and debt servicing no doubt) and one has to wonder how the wheels could fall off everywhere.

The USA started the the rot and have been flooding the ‘markets’ with more money than they have now or will ever have even of they did take over the world, and a destabilising effect of that and all currencies in general is that they are falling in value.

Now, part of this is deliberate (as the USA borrowed in US$ and by over-printing and devaluing the US$, they lower their debt), but it was also intended to cast doubt other currencies. The euro has tumbled to its lowest level in 10 months against the US$ after Fitch Ratings downgraded Portugal to AA- and markets digested the likelihood of an IMF rescue for Greece, a move that reveals a fundamental break-down of Europe’s governing machinery.

There are clearly concerns that the crisis runs deeper than Greece and may set off further North-South tensions in Europe. A report by UBS entitled “How to Break up a Monetary Union” has been circulating like wildfire in financial centres. “It is relatively clear that the euro does not work. That is to say, parts of the Euro area would have been better off (economically) if they had never joined,” it said. UBS said Greece should consider default within EMU rather that risk leaving monetary union if matters ever reach that stage.

And there continues to be confusion over the role of the IMF (a creation of the once powerful USA) in any rescue for Greece as briefings from different EU capitals muddy the waters. However, it is clear that France has bowed to German demands, opening the way for the once unthinkable step of IMF policing within Euroland borders. German Chancellor Angela Merkel imposed stringent conditions by refusing to back EU aid for Greece until the country is on the brink of disaster and cannot raise money from the capital market.

Leaving Greece to hang until a full crisis begins would validate the IMF and take Europe down a perilous path; the Euro would have the image of a currency that can only survive with the help of an international organisation (and that organisation is backed by the USA).However, if the EU does iintervene (to bail out the over-spending Greeks),the assistance may well be illegal and drop the Eurozone into an even deeper crisis, given a `no bail-out’ clause of Article 125 of the EU Treaties.

Markets are concerned that any recourse to the IMF increases the risk that Greece may ultimately resort to debt restructuring, which is a technical default. If you holding onto a heavy chain that is falling down a hole, how long do you hold on and for what purpose … to pay for someone elses poor choices and living beyond their means and covering the losses of those who lent the money in the first place … where is the due diligence?

How they intend to do this is a leaf out of Victoria’s book, they want to rename palm oil plantations as forest to me EU biofuels sustainability criteria.

Dear friends,

A leaked draft EU document shows that the Commission would like to rename palm oil plantations as “forest” in order that biodiesel from palm oil plantations can still meet EU biofuels sustainability criteria.

Palm oil expansion is a major cause of tropical rainforest destruction and biodiesel from palm oil can easily cause more greenhouse gas emissions that the fossil fuel it is meant to replace. Please email the new energy and environment Commissioners and ask them to amend this document to give a clear message to member states that biodiesel from palm oil has no role to play in a sustainable EU energy mix.

This email was cleaned by emailStripper, available for free from http://www.papercut.biz/emailStripper.htm
The alert can be found at http://www.rainforest-rescue.org/protestaktion.php?id=514

Many thanks.

Best regards,

Reinhard Behrend
Rettet den Regenwald e. V.
Friedhofsweg 28
22337 Hamburg
Germany
info@regenwald.org
http://www.rainforest-rescue.org

In Italy they have stopped being nice and putting on appearances; Italy’s financial police are seizing 73.3 million Euros of assets from Bank of America Corp. and a unit of Dexia SA as part of a probe into an alleged derivatives fraud in the region of Apulia.

The Police are investigating losses on *derivatives linked to the sale of 870 million Euros of bonds sold by the regional government in 2003 and 2004, according to an e-mail from the prosecutor’s office in Bari. The banks misled the municipality, located in the heel of Italy, on the economic advantages of the transaction and concealed their fees, the prosecutor said.

The region, also known as Puglia, joins more than 519 Italian municipalities that face 990 million Euros in derivatives losses according to data compiled by the Bank of Italy. In Milan, prosecutors seized assets from four banks including JPMorgan Chase & Co. and UBS AG in April and requested they stand trial for alleged fraud. Hearings started this month.

Dario Loiacono (a banking lawyer in Milan not involved in the case) said ‘it’s the result of the unavoidable asymmetry of information between the banks and the municipal borrowers’. Police are sequestering a further 30 million Euros that the municipality had set to place in a fund managed by the banks on Feb. 6; the magistrate also asked that Charlotte, North Carolina-based Bank of America be stopped from doing business with Italian municipalities for two years. A hearing is slated for next month.

Merrill Lynch (bought by Bank of America in January 2009) managed the bond sales for Apulia in 2003 and 2004; the bank didn’t provide the municipality with appropriate information on the financing, said the prosecutor and officials at the municipality didn’t speak English yet the contracts weren’t translated into Italian.  Merrill Lynch also recommended that Apulia seek advice from an international law firm, without disclosing that Merrill itself had a long-standing business relationship with the law firm, the prosecutor said.

Prosecutors allege that ‘banks arranged swaps’ and created a fund that invests money the region set aside to repay the bonds in 2023, they ‘misled the region’ about the economic advantages of the transaction and ‘skewed the swaps’ to their advantage ‘to hide fees’.

* Derivatives are financial instruments derived from stocks, bonds, loans, currencies and commodities, or linked to specific events like changes in interest rates or weather.

As banks around the world showed, Gordon Gecko was their idol and no avenue of extracting $’s from anyone anywhere, from local governments, the retired and pension funds put there for those who – after a life-time’s work – could live a comfortable life.

Stupidly, these bankers and other corporate heavyweights and their minions aka politicians and senior bureaucrats didn’t pay attention to other regions / countries that had likewise been stripped bare; the people fought back, firstly by civil disobedience, then sabotaging, then whats good for the goose is good for the gander stealing things ‘back’ and then threats, then kidnapping and taking the law into their own hands and even murder.
We have entire social structures that ‘live in the future’; by this I mean we are encouraged to borrow from a better future to enjoy some of it now and we are encouraged to put money aside for the future which in all probability will never come. The number of places you can visit in ‘its natural state’ are few and far between; and already over-populated regions found anywhere around the world show that high-rise living is the norm.      

The more visible – plane cash compared to a bus crash is – collapse is the USA and Japan is also showing signs of falling over as is Britain, but the bus crash and ripple effect on the EU is Greece’s sovereign debt crisis, which has the ability to raise doubt about the Euro, by putting European institutional arrangements on the line.

At the January 18, 2009, the Eurozone finance ministers kept pressure on Greece to fulfill its commitment to cut its budget deficit below 3% of GDP by 2012 which is estimated at close to 13% of GDP in 2009. Because the Eurozone is a monetary union with a no-bail-out clause, rather than a political or fiscal union with the associated fiscal federalism, budget cuts to contain the explosion of Greek public debt are urgently needed. In 2010, a sustainable fiscal adjustment must be delivered to restore policy credibility, market confidence and ECB/EU member-state solidarity. The problem is, the Greek government – like every other government around the world in self-protection mode – knows that if the populace knows its living beyond its means and has to tighten its belt, the depth of the living by borrowing from the future will  will come as a massive shock; and remember that even in this modern day, piracy is alive and well in Greek waters.

Three coinciding events have brought this to a head, the shortage of funds caused by the Dubai default, a common systemic risk factor and a severe cyclical and structural deterioration in public finances. Greece faces a Hobson’s Choice: whether to accept social pain with financial and economic stability, or instability.

Whatever it chooses, Greece will face economic pain and difficult socio-political fallout and  even inciting social unrest. If the debt becomes unfinanceable in the primary market or if Greece elects to exit the euro and devalue and redenominate its liabilities (a la Argentina), this could render its banking system insolvent and tip it into economic and financial isolation and decline, also with dire socio-political consequences.

As Greece is not an isolated island, disenfranchised Greek nationals and immigrants will look further afield, placing more stress on surrounding countries in not too dissimilar positions.

The story translated from Russian (said to be based on autopsies) came to the ‘conclusion’ it’s not pneumonia, but cardiopulmonary insufficiency and cardiogenic shock; the virus enters directly into the lungs, there is bleeding. Antibiotics should not be used, only those with strong immune systems will survive, people with weak immune systems will succumb to the illness.

Face masks provide 30% extra protection and wearing glasses gives an additional 10% protection 40% said the head of the Chernivtsi, the regional forensic bureau, Professor Victor Bachinsky M.D.

His statement was that all the victims of the virus in Bukovina (22 persons aged 20 to 40 years) died not from bilateral (double) pneumonia, as previously thought, but as a result of viral distress syndrome, i.e. the total destruction of the lungs.

However, the latest reports of what is being called a deadly Swine Flu outbreak in Ukraine appears to be a little more than a political concoction by a threatened government to avoid election defeat and to possibly declare martial law.

The details indicate how convenient the current WHO “Swine Flu” H1N1 “pandemic” scare is used by regimes in trouble or wanting to distract the populace. America is one of the prime ‘civilised’ countries to use fear to control its people and John Howard also used the ploy.

And how is Swine Flu going in Australia? Well it’s difficult finding out up to date information on the ‘world’s greatest pandemic’, but less than 30 deaths have been attributed to this plague.

Meanwhile, drug companies are making a fortune.

Can or will anyone tell me that Australia is not being paid in US$ for our exports from other countries intent of divesting themselves of the American greenback?

The Europeans are perhaps more sophisticated and less trusting than us in the ebb and flow of commerce with the Americans and rightly so when we saw protectionist policies prevent our goods being sold in the USA but no such restrictions of theirs – or other countries – products that damaged or killed off jobs – being sold here.

Apart from the Chinese (Yuan) and the Arab States (Gulf), Japan (Yen), Russia (Rubble) and the Euro, now Latin America is about to float a new currency, the Sucre, which is directly aimed at scaling back the use of the US dollar.

There are 9 countries of ALBA, a leftist bloc conceived by Venezuelan President Hugo Chavez, who met in Bolivia and vowed to press ahead with a new currency for intra-regional trade to replace the US dollar.

Bolivia’s President Evo Morales – who is hosting the summit – said its a done deal and the roll out date is next year in a non-paper form, which is the way the European Union introduced the Euro. The ECU was an account unit designed to tie down stable exchange rates between member states before the national currencies were scraped.

ALBA’s member states are Venezuela, Bolivia, Cuba, Ecuador, Nicaragua, Honduras, Dominica, Saint Vincent and Antigua and Barbuda. It will be interesting to see whether other Latin countries join and if they do, the likes of Argentina and Brasil will present a formidable bloc to other currencies as the USA$ is printed into irrelevance.

But even more importantly, this bloc also called for the replacement of the World Bank’s International Centre for Settlement of Investment Disputes, which arbitrates international contract disputes and has probed a slew of disputes involving ALBA members and western energy firms.

Bolivian media reported that the country intents to nationalize a electricity distribution firm owned by Spain’s Red de Electrica de Espana, so this will place Spain in a bind, given its economic ties to the EU and its cultural and physical position to Latin America.