Europe

Switzerland and Britain are now at currency war

"'Everybody is trying to weaken their currency at the same time. The Swiss have got away with it and now the Japanese want to try. The Sandinavians are pulling their hair out. The Turks are cutting rates even though the economy is overheating, and putting in credit controls instead because they don’t want the currency to rise. Policymakers are doing things that if you had suggested four years ago they would have put you in a straitjacket and thrown you in a cell. I don’t rule out anything any longer in this market. Desperate times lead to desperate acts,' said David Bloom, currency chief at HSBC." Continue reading →

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Portugal warns EU-IMF troika to back off on austerity demands

"Portugal has taken its medicine with stoicism until now, winning praise from the EU leaders for sticking to its bail-out terms. But Troika officials fear that 'social cohesion' is fraying as the slump deepens. The country saw the biggest street protest this autumn since the end of the Salazar dictatorship. Portugal’s jobless rate has risen from 13.7pc to 16.3pc over the past year, reaching 39pc for youth, even before the full impact of austerity hits." Continue reading →

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Nigel Farage: This Is My Greatest Worry As We Head Into 2013

"What really has me worried, and this may go beyond 2013, but I think the one thing that is going to change is we’ve been through a period, since 2008, of interest rates being virtually zero. During that period of time, governments have racked up vast, vast amounts of debt, and are continuing to run huge budget deficits. And I think we are going to be heading into a world of rising interest rates. That is when our governments, who are continuing to run these deficits, are going to be in real, real trouble...." Continue reading →

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Thought The Euro Crisis Was Over? These 18 Charts Show The Real Crisis That Lies Ahead

"The latest Eurostat unemployment figures released today remind of a far bigger problem that the eurozone now must face – staggering levels of youth unemployment across the region. Governments on the euro periphery – which desperately need to institute difficult economic reforms to put budgets on sustainable paths – receive little support from a younger generation that feels like its opportunities and its future have been crushed already by the very same actors." Continue reading →

Continue ReadingThought The Euro Crisis Was Over? These 18 Charts Show The Real Crisis That Lies Ahead

America’s tactical interests cannot dictate Britain’s sovereign destiny

"The White House does not want to be distracted by internecine European disputes as it switches its main focus to the Pacific Rim – the 'Asian Pivot' – and deals with the really dangerous issue of China’s maritime conflict with Japan and South East Asia. But at the end of the day, the British people cannot let America’s taste for tidy structures in Europe determine policy on matters that go to the heart of our democracy and sovereign self-government. For me the snapping point was the disgraceful saga of the European Constitution, which I covered in minute detail as it wended its way through the Convention." Continue reading →

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Now Greece Bans Cash – Again

"Greece is going to ban most cash transactions. As of last year, cash transactions over 1500 euros were banned. This moves the ban down by 1,000 euros. In fact, the Greek Parliament is voting today on a new tax bill that broadens the tax base to raise another 2.5 billion euros, and also introduces new annual income thresholds for salaried taxpayers. It does away with tax breaks for the self-employed. Entrepreneurs have emerged as the latest 'bandits' in Greece's ongoing efforts to bleed the wretched Greek carcass of its last available drop of revenue. Government benefits have been slashed, taxes raised and Greeks are being pursued with maniacal determination." Continue reading →

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How The Swiss National Bank Went “All In”, Three Times And Counting

"The nation's central bank is printing and selling as many Swiss francs as needed to keep its currency from climbing against the euro, wagering an amount approaching Switzerland's total national output, and, in the process, turning from button-down conservative to the globe's biggest risk-taker. Switzerland's virtue is the root of its problem: broad confidence in the Swiss currency and economy has investors hungry for francs to escape euros, the currency of its shaky European neighbors." Continue reading →

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Sterling crisis looms as UK current account deficit balloons

"Some of the reasons for this need little explanation. Low growth has undermined attempts to reduce the fiscal deficit, which remains one of the highest in the OECD. This in turn is likely to lead to the loss of Britain’s prized triple A credit rating this year, making the UK comparatively less attractive to overseas investors. What’s more, capital flows from the eurozone to perceived 'safe havens' such as the UK are slowing as the crisis eases. There is also evidence of elevated concern among investors about Bank of England money printing." Continue reading →

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Britain should stay in European Union, says Obama administration

"The Obama administration issued a direct challenge to David Cameron over Europe, on Wednesday when it warned of the dangers of holding a referendum on Britain's membership of the EU. A senior US official questioned the merits of holding a referendum as the prime minister's campaign to reset the terms of Britain's EU membership also came under assault from Brussels and Dublin. With just weeks to go until Cameron delivers a landmark speech in which he is expected to promise to hold a referendum on a 'new settlement' for Britain in the EU, the US assistant secretary for European affairs warned that 'referendums have often turned countries inwards'." Continue reading →

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Spain Plunders 90% Of Social Security Fund To Buy Its Own Debt

"Spain has been quietly tapping the country's richest piggy bank, the Social Security Reserve Fund, as a buyer of last resort for Spanish government bonds, raising questions about the fund's role as guarantor of future pension payouts. Now the scarcely noticed borrowing spree, carried out amid a prolonged economic crisis, is about to end, because there is little left to take. At least 90% of the €65 billion ($85.7 billion) fund has been invested in increasingly risky Spanish debt." Continue reading →

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