Mainstream News

Bernanke backpedals, says Federal Reserve stimulus still needed

"Federal Reserve Chairman Ben Bernanke said Wednesday that the Fed’s easy-money policy is still necessary, throwing cold water on fresh market expectations that the Fed’s stimulus would soon be ended. Bernanke told an audience of economists in Cambridge, Massachusetts, that the jobs market remains too weak and inflation remains too low for comfort. He also warned that the full impact of steep government spending cuts initiated in March was yet to be seen. Together, the evidence underscored the need for the Fed to keep in place its highly accommodative monetary policy, he said." Continue reading →

Continue ReadingBernanke backpedals, says Federal Reserve stimulus still needed

Italy’s Credit Rating Cut to BBB by S&P; Outlook Stays Negative

"The outlook on the rating, reduced from BBB+, remains negative, the New York-based ratings company said in a statement late yesterday. S&P analysts said that, even with unprecedented easing by the European Central Bank, real interest rates for non-financial companies in Italy exceed the level before the financial crisis. Austerity measures, while enabling Italy to reduce its deficit to within European Union limits, deepened the nation’s slump. With the economy headed for its eighth quarter of contraction and joblessness at its highest since at least 1977, Prime Minister Enrico Letta in the last two months postponed a sales-tax increase and suspended a property tax payment." Continue reading →

Continue ReadingItaly’s Credit Rating Cut to BBB by S&P; Outlook Stays Negative

Portugal Throws Open Europe’s Them-And-Us Austerity Divide

"Half way through his four-year term, Prime Minister Pedro Passos Coelho is trying to curb popular resentment over what opponents say is a widening gulf between private employees and about 600,000 public workers who have mostly stayed immune to mass job cuts. What’s bothering the Portuguese isn’t just that austerity helped prolong a recession and sent unemployment to a record 18 percent, it’s also that the government used taxation more than those in Greece and Ireland to try to narrow the budget deficit. Some workers on the state payrolls are perceived to have escaped the deterioration in living standards being felt by others." Continue reading →

Continue ReadingPortugal Throws Open Europe’s Them-And-Us Austerity Divide

Euro Zone Grants Multibillion Euro Lifeline for Greece

"Greece secured a 6.8 billion euro ($8.7 billion) lifeline from the euro zone but was told it must keep its promises on cutting public sector jobs and other reforms in order to get all the cash, officials said Monday. The deal, which spares Greece defaulting on debt that falls due in August, will see Athens drip-fed support under close watch from its international creditors to drive through unpopular reforms. Central banks in the Eurosystem will contribute 1.5 billion euros in July and 500 million euros in October, the officials said. The International Monetary Fund will give 1.8 billion euros in August." Continue reading →

Continue ReadingEuro Zone Grants Multibillion Euro Lifeline for Greece

UK ministers to seize back 100 powers from Brussels

"In the first part of efforts to renegotiate Britain’s relationship with the European Union, ministers will announce plans to claw back the powers. Theresa May, the Home Secretary, will give MPs details of proposals to opt out of 133 EU measures covering justice, home affairs and the police by next spring. Some of the measures that are seen to be in the national interest will then be opted back into, in a complex process, but 'more than two thirds' will disappear permanently from British law. The move follows last week’s unanimous Commons vote in favour of moves to hold an 'in-out' referendum on Britain’s membership of the EU by 2017." Continue reading →

Continue ReadingUK ministers to seize back 100 powers from Brussels

Mad Latvia defies its own people to join the euro

"EU finance ministers have just given the go-ahead for Latvia to join the euro in January 2014. No matter that the latest SKDS poll shows that only 22pc of Latvians support this foolish step, and 53pc are opposed. This is a very odd situation. The elites are pushing ahead with a decision of profound implications, knowing that the nation is not behind them. No country has ever done this before. The concerns of the Latvian people are entirely understandable. Neighbouring Estonia found itself having to bail out Club Med states with a per capita income two and a half times as high after it joined EMU. Latvia may find itself embroiled in an even bigger debacle." Continue reading →

Continue ReadingMad Latvia defies its own people to join the euro

European Union gives Latvia final OK to join eurozone

"'Yes we are joining the euro as of January 1 next year,' said Prime Minister Valdis Dombrovskis, adding that it was 'good news not only for Latvia but also for Europe and the eurozone.' Asked whether he had any qualms about joining the single currency at such a difficult time, Vilks acknowledged that 'those hard times will last several years at least'. 'We trust Europe and we trust the euro,' he said later, adding that he hoped Latvia would prove to be one of the 'best performers' in the single currency zone. Latvia has been the EU’s fastest-growing economy, having posted GDP growth of more than five percent year-on-year in both 2011 and 2012." Continue reading →

Continue ReadingEuropean Union gives Latvia final OK to join eurozone

Currency Controls in Cyprus Increase Worry About Euro System

"On a visit to Athens this year, Marios Loucaides, a Cypriot businessman, saw an apartment he liked in the heart of the Greek capital and decided to buy it. However, Mr. Loucaides discovered that the euros he had on deposit here in Nicosia, the capital, could not be moved to Greece, even though the two countries share the same currency and, in theory at least, the same free movement of capital.The apartment deal collapsed. And so, too, did Mr. Loucaides’s belief that Europe has a common currency. Tangled in restrictions imposed in March as part of a bailout for the country’s ailing banks, a euro in Cyprus is no longer the same as one in France, Germany or Greece." Continue reading →

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French business leaders lash out at Francois Hollande

"The chief executives of top firms including Peugeot Citroën, EADS, Sanofi and Publicis signed a joint letter to Les Echos, complaining that France is being suffocated by high taxes and an over-regulated system that is no longer fit for purpose. The group called for a radical shake-up of labour markets to let each firm set its own working hours, and a 'coherent' energy policy to bring down costs from current ruinous levels. Gas prices are three times as high as in the US. Christophe de Margerie, head of the energy giant Total, said France’s outdated welfare model is draining the economy’s life-blood." Continue reading →

Continue ReadingFrench business leaders lash out at Francois Hollande

Failed Banking System Prompts Iraqis to Hoard Gold

"There is an old Arabic saying that 'gold is both for decoration and storing.' Currently, Iraqis, particularly residents of the Kurdistan Region of Iraq, are taking these words to heart. In the absence of a trustworthy banking system, they are converting their money into gold and stashing it in their homes. The Department of Standards and Quality Control for Gold and Minerals in the Kurdistan Region acknowledges that, indeed, large quantities of gold are being imported and distributed. The entry of such massive amounts of gold into the country is offset by the exit of large amounts of foreign currency, in particular US dollars, in which gold traders often deal." Continue reading →

Continue ReadingFailed Banking System Prompts Iraqis to Hoard Gold