Telegraph – The head of China’s central bank has given the strongest signal yet that the country will move away from pegging its currency to the dollar, but he said any changes would be gradual. At the annual session of the legislative National People’s Congress in Beijing, Zhou Xiaochuan, governor of the People’s Bank of China, said that the days of the “special yuan” policy were numbered. He described the dollar peg as a “temporary” response to the global financial crisis, but gave no timescale for any change in policy. The currency has been pegged at about 6.83 yuan per dollar since July 2008. Read Article
Washington Post – President Obama’s proposed budget would add more than $9.7 trillion to the national debt over the next decade, congressional budget analysts said Friday. Proposed tax cuts for the middle class account for nearly a third of that shortfall. The 10-year outlook released by the nonpartisan Congressional Budget Office is somewhat gloomier than White House projections, which found that Obama’s budget request would produce deficits that would add about $8.5 trillion to the national debt by 2020. Read Article
Business Insider – Is your nation under massive financial pressure due to deteriorating sovereign debt ratings?
Rising interest costs got you down? Rather than having to actually tackle your mounting debt problems, here’s an innovative solution from some Eurozone finance ministers — create your own, friendlier credit ratings. Read Article
Daily Express – EUROPE’S chief bureaucrat last night provoked fury after threatening to use the “full force” of the Lisbon Treaty to impose economic control over every EU nation.European Commission President Jose Manuel Barroso claimed that financial stability was so critical that sweeping new powers were needed for Eurocrats in Brussels to meddle in the economies of all EU members.But his threat sparked an angry backlash from critics of an ever- growing Brussels bureaucracy. Read Article
BBC – Voters in Iceland have overwhelmingly rejected proposals to pay the UK and the Netherlands in the wake of collapse of the Icesave bank.With a third of results counted, 93% of voters said “No” in a referendum. Iceland’s prime minister says her government will remain in office and continue to seek a repayment deal. The British and Dutch governments want reimbursement for the 3.8bn euros (£3.4bn; $5.2bn) they paid out in compensation to customers in 2008. Read Article
New York Times – As Greece’s debt troubles batter the euro, Britain has done its utmost to stay above the fray. The pound fell to $1.4954 on Tuesday, its lowest level against the dollar in months. Until now, that is. Suddenly, investors are asking if Britain may soon face its own sovereign debt crisis if the government fails to slash its growing budget deficits quickly enough to escape the contagious fears of financial markets. The pound fell to $1.4954 on Tuesday, its lowest level against the dollar in nearly 10 months. The yield on 10-year government bonds, known as gilts, slid as investors fretted that Parliament would be too fragmented after a crucial election in May to whip Britain’s messy finances back into shape. Read Article
BBC – At least 63 people have died in a stampede after the gate of a Hindu temple collapsed in the northern Indian state of Uttar Pradesh, police say. Dozens more were injured in the panic at the temple in Pratapgarh district, 650km (400 miles) south-east of Delhi. All of the dead identified so far are women and children, police say. The temple gate was still being built. Read Article
Politico – Senate Democrats are furious that the vast majority of grants from the clean-energy program from last year’s stimulus have been awarded to foreign companies. Democratic Sens. Chuck Schumer of New York, Bob Casey of Pennsylvania, Sherrod Brown of Ohio and Jon Tester of Montana announced Wednesday a new initiative to require the “Buy America” provision of the stimulus to all programs, not just the government ones. A study done by the Investigative Reporting Workshop found that 79 percent of the $2 billion in clean-energy grants allocated since Sept. 1, 2009, has gone to foreign wind companies. Read article
Reuters – Icelanders are set to reject the terms for repaying Anglo-Dutch debts in a referendum on Saturday, forcing new negotiations with creditors and delaying financial aid the country needs to fix its shattered economy. Read Article
BBC – Chinese Premier Wen Jiabao has said China must reverse its widening income gap between rich and poor. He said benefits of a growing economy – expected to expand by 8% this year – should be distributed more fairly. Read Article
Daily Telegraph – The European Union is drawing up plans for its first direct tax with a “green” levy on petrol, coal and natural gas that could cost British consumers up to £3 billion. The European Union is drawing up plans for its first direct tax. Proposals expected to be announced next month would give the EU its first funding which would not come from national governments. Algirdas Semeta, the new European commissioner for taxation, is planning a “minimum rate of tax on carbon” across the whole EU as a “priority”. Read Article
Ed – Using the cult of CO2-hate as a trigger for another tiny step towards a country called Europe, a country that already has a President, a Parliament, a currency, a central bank, a national anthem and the beginnings of an army……and a step closer to towards the end game of a world government for the benefit of the few over the many.
Daily Telegraph – More than nine million savers have seen a “severe” drop in their income since the Bank of England cut interest rates to their lowest level exactly one year ago, it has been disclosed. It is equivalent to one in five Britons, according to the research by campaign group Save Our Savers. During the past year, savers have been hit by “pitiful” interest rates, it said. The reduction in rates means many savers no longer receive a real return on their money once inflation and tax is taken into account. Read Article
New York Times – In an effort to secure Republican support for an overhaul of financial regulations, the chairman of the Senate Banking Committee on Monday proposed giving the Federal Reserve responsibility for protecting consumers from abusive and deceptive financial products. The new plan, described by an official briefed on the negotiations, was the latest iteration of an idea that has divided members of the committee, largely along party lines, and has been the major barrier in the path toward the most significant overhaul of banking rules since the Depression, a priority of the Obama administration. Read Article
Ed – Not only therefore would the wolves have the keys to the chicken coop, but they would also be appointed gamekeeper too.
Irish Independent – A revolution will erupt if billions of euro more in taxpayers’ money is handed over to Anglo Irish Bank, Enda Kenny has warned. The Fine Gael leader said people can no longer tolerate massive public funding of the nationalised bank as it stands.Expected record losses at the bank, to be announced later this month, have fuelled speculation it will seek another six billion euro from the Government, on top of the four billion it has already pumped in. Read Article
Bloomberg — George Soros is helping drive up gold prices by doubling his bet in a market even he considers a “bubble” as Goldman Sachs Group Inc., Barclays Capital and HSBC Holdings Plc predict more gains before it bursts. Soros Fund Management LLC, which manages about $25 billion, increased its investment in SPDR Gold Trust, the world’s largest exchange-traded fund for the metal, by 152 percent in the fourth quarter, a Feb. 16 Securities and Exchange Commission filing shows. While prices have fallen 9.2 percent since reaching a record on Dec. 3, 15 of 22 analysts in a Bloomberg survey say gold will reach a new high, with the median forecast predicting a 17 percent advance to as much as $1,300 an ounce this year. Read Article
Ed – With the coming inflationary crisis in the USA & UK (due to significant ‘quantitative easing’ over the last 2 years – in other words printing lots of extra money) the smart money will go to the safest bet there has always been in such times, gold.
De Spiegel - With Greek finances dragging down the euro, calls for coordinated fiscal policy within the common currency zone have become more frequent. Now, Germany and France have presented a paper outlining what such a regime might look like,” reports Spiegel Online, outlining the move towards a centrally planned economy with Brussels exercising complete control over of the financial affairs of member states in a shocking lurch towards economic fascism. Chair of the European Commission Jean-Claude Juncker, who received the new proposal from German Finance Minister Wolfgang Schäuble and French Finance Minister Christine Lagarde, highlighted the need for a “European economic government” to solve the Greece debt crisis Read Article
Ed – Exactly the turn of events that we predicted would happen on 6th February
Washington Report – This estimate of total U.S. direct aid to Israel updates the estimate given in the July 2006 issue of the Washington Report on Middle East Affairs. It is an estimate because arriving at an exact figure is not possible, since parts of U.S. aid to Israel are a) buried in the budgets of various U.S. agencies, mostly that of the Defense Department (DOD), or b) in a form not easily quantifiable, such as the early disbursement of aid, giving Israel a direct benefit in interest income and the U.S. Treasury a corresponding loss. Given these caveats, our current estimate of cumulative total direct aid to Israel is $113.8554 billion. Read article
Reuters – Greek Prime Minister George Papandreou said on Tuesday his country was fighting for survival against bankruptcy and urged civil servants and pensioners to accept sacrifices to save the debt-burdened nation. In a dramatic speech to his Socialist PASOK party on the eve of a cabinet meeting expected to approve new austerity measures, Papandreou said: “I will fight to save the fatherland from whatever the nightmare possibility of bankruptcy might entail.” Under pressure to meet European Union demands to find up to 4.8 billion euros ($6.5 billion) in additional savings before he visits Germany on Friday, he played up the risk of default, saying speculators had made borrowing costs prohibitive. Read Article
Washington Post – A blizzard of bank notes is flying out of Afghanistan — often in full view of customs officers at the Kabul airport — as part of a cash exodus that is confounding U.S. officials and raising concerns about the money’s origin. The cash, estimated to total well over $1 billion a year, flows mostly to the Persian Gulf emirate of Dubai, where many wealthy Afghans now park their families and funds, according to U.S. and Afghan officials. So long as departing cash is declared at the airport here, its transfer is legal. Read article
ABC – One of the OECD’s leading economists says there is a strong chance that the world’s leading economies could quickly slide back into recession. The deputy director of the OECD’s financial and enterprise affairs, Dr Adrian Blundell-Wignall, has told ABC1’s Inside Business program that the threat of a double dip recession remained because problems in the banking system have not been solved. “There are many icebergs the ship has to negotiate before we’re out of jail here. This is going to be a 10 year process, not a one year process,” he said. Dr Blundell-Wignall says many of the banks’ problems have been hidden by changes to accounting rules and their most toxic assets have been shifted to the balance sheets of the big central banks in the US and Europe. Read Article
Bloomberg – When a congressional panel convened a hearing on the government rescue of American International Group Inc. in January, the public scolding of Treasury Secretary Timothy F. Geithner got the most attention. Lawmakers said the former head of the New York Federal Reserve Bank had presided over a backdoor bailout of Wall Street firms and a coverup. Geithner countered that he had acted properly to avert the collapse of the financial system. A potentially more important development slipped by with less notice, Bloomberg Markets reports in its April issue. Representative Darrell Issa, the ranking Republican on the House Committee on Oversight and Government Reform, placed into the hearing record a five-page document itemizing the mortgage securities on which banks such as Goldman Sachs Group Inc. and Societe Generale SA had bought $62.1 billion in credit-default swaps from AIG. Read Article
Washington Times – With uncharacteristic bluntness, Federal Reserve Chairman Ben S. Bernanke warned Congress on Wednesday that the United States could soon face a debt crisis like the one in Greece, and declared that the central bank will not help legislators by printing money to pay for the ballooning federal debt. Recent events in Europe, where Greece and other nations with large, unsustainable deficits like the United States are having increasing trouble selling their debt to investors, show that the U.S. is vulnerable to a sudden reversal of fortunes that would force taxpayers to pay higher interest rates on the debt, Mr. Bernanke said. Read Article
The Times – Sterling fell sharply on foreign exchanges yesterday after Mervyn King, the Governor of the Bank of England, warned again that it may be necessary to extend the Bank’s asset purchase programme. The pound lost more than a cent against the US dollar in only ten minutes after Mr King told the Treasury Select Committee that the Bank was “ready to do whatever seems appropriate”. Read Article
Wall Street Journal – Greece set off the crisis rattling the euro zone. Spain could determine whether the 16-nation currency stands or falls. The euro zone’s No. 4 economy, Spain has an unemployment rate of 19%, a deflating housing bubble, big debts and a gaping budget deficit. Its gross domestic product contracted 3.6% in 2009 and is expected to shrink again this year, leaving Spain in its deepest and longest recession in a half-century. Read Article
BBC – The role of Wall Street firms in deals that may have helped Greece mask its debt woes are under scrutiny in the US, the Federal Reserve chief has said. Ben Bernanke said the Fed and the US financial watchdog were “looking into a number of questions” related to banks’ derivatives arrangements with Greece. But he stopped short of saying an official inquiry was under way by either the Fed or the regulator. Read Article
