Posts Tagged ‘eurozone’

Obama – The Prez Who Says He’ll Screw America To Help Russia If They Wait Till He’s Reelected – Demands Europe Not Save Itself By Booting Greece Until After Election Day

August 25, 2012

I’ll just re-post the whole article for you on what Obama said to the Russians first:

You want to talk about a hard punch right in the gut of American national security.

Allow me to sum this up for you: Obama is telling the Russians, “I assure you that I’m going to cave in to you like the pandering weakling that I am. But I can’t do it yet. If I sacrifice American security before the election, the American people will rightly turn on me and I’ll be out – and you’ll have a strong leader to deal with who will confront you as an obvious opponent rather than the Neville Chamberlain-style Appeaser-in-Chief that you have in me. If you give me ‘space’ to get re-elected I promise you I’ll bow down before you the same way I’ve already bowed down so many times before. I’ll even apologize to you for America’s ‘aggression’ if you want me to. Heck, I just got through apologizing to the people who murdered American soldiers! So you KNOW I’m good for it!”

Hot mike moment: Obama overheard telling Medvedev he needs ‘space’ on missile defense
By NBC News’ Shawna Thomas

SEOUL, South Korea — It was a comment not intended for public consumption, and another lesson for President Barack Obama on the importance of being careful about what you say around microphones, especially in an election year.

At the end of a 90-minute meeting between Obama and Russian President Dmitry Medvedev on Monday, journalists rushed in to hear remarks from the leaders about the content of their talks.

Journalists spied the two leaders leaning close together and talking in hushed tones. According to those in the room, the conversation was difficult to hear but the videotape revealed Obama asking the Russian leader to wait until after the November election before pushing forward on the topic of a planned missile defense shield.

“Pool” videotape provided more information about the conversation between the two leaders:

Obama: This is my last election…After my election I have more flexibility.

Medvedev: I understand. I will transmit this information to Vladimir.

While most journalists didn’t catch the rest, one Russian reporter managed to record the context with his equipment.

Obama: On all these issues, but particularly missile defense, this, this can be solved but it’s important for him to give me space.

Medvedev: Yeah, I understand. I understand your message about space. Space for you…

Obama: This is my last election…After my election I have more flexibility.

Medvedev: I understand. I will transmit this information to Vladimir.

The planned anti-ballistic shield system has been one of many sore spots between the two world powers in the last few years.

Obama says US can reduce nuclear stockpile

Moscow says it fears the system would weaken Russia by gaining the capability to shoot down the nuclear missiles it relies on as a deterrent. It wants a legally binding pledge from the United States that Russia’s nuclear forces would not be targeted by the system.

That’s actually NOT what Moscow wants. Yes, it is their rhetorical posture to make them sound “reasonable,” but the reality is that Russia doesn’t just want some “contract.”

Moscow wants the United States to abandon this missile defense system altogether. Moscow wants to throw a monkey wrench into the entire system that the United States says is necessary to protect America from the now very real prospect of a nutjob Iranian ballistic missile attack.

You need to understand what current American policy is. And then you need to realize that Obama is signalling the Russians that he is going to abandon his own policy and undermine American security if Russia just gets off his back so he can get re-elected. Because getting re-elected is all that Obama cares about. And he’ll violate any trust no matter how sacred if it will purchase enough votes.

To frame it in terms of the title below, if Obama was going to “stick” to the missile shield as is official US policy as of just a few months ago (December 2011), he wouldn’t have anything to be afraid of. Which is to say that Obama is already planning on appeasing Russia; he just needs “space” to betray America:

U.S. sticking to missile shield regardless of Moscow
By Jim Wolf
WASHINGTON | Fri Dec 2, 2011 2:37pm EST

WASHINGTON (Reuters) – The Obama Administration plans to complete an anti-ballistic missile shield to protect European allies against Iran ”whether Russia likes it or not,” the U.S. envoy to NATO said on Friday.

Moscow’s objections to the project, which includes participation by Romania, Poland, Turkey and Spain, “won’t be the driving force in what we do,” Ivo Daalder, the ambassador, told reporters at a breakfast session.

The U.S. estimate of the Iranian ballistic missile threat has gone up, not down, over the two years since President Barack Obama opted for a new, four-phased deployment to protect the United States and NATO allies, Daalder said.

“It’s accelerating,” Daalder said of the U.S.-perceived threat of Iran’s ballistic missiles, “and becoming more severe than even we thought two years ago.”

“We’re deploying all four phases, in order to deal with that threat, whether Russia likes it or not,” he added. At the same time, he urged Moscow to cooperate in both to deal with Iran and to see for itself that, as he put it, the system’s capabilities pose its strategic deterrent force no threat.

If the perceived threat from Iran ebbs, “then maybe the system will be adapted to that lesser threat,” Daalder said.

[…]

Daalder said the sides remain at odds over, among other things, Russia’s demand for the legally binding pledge, before any cooperation, that its nuclear forces would not be targeted by the NATO elements.

“They have gotten themselves quite hung up on our unwillingness to put this in legally binding writing,” he said.

The administration was not convinced that such a pledge would be ratified by the U.S. Senate, he said, nor should Moscow be convinced that even if it were, “we wouldn’t necessarily at some point walk away from it,” as the George W. Bush administration did from the 1972 Anti-Ballistic Missile Treaty, the only U.S.-Russia missile defense pact.

That withdrawal opened the way for the creation of an anti-missile defense shield that the U.S. government says is designed to protect the United States from countries like Iran and North Korea.

Daalder said that if the United States ever were placing interceptors to counter Russia’s nuclear missiles, “we wouldn’t deploy them in Europe. We would deploy them in the United States.”

The physics of missile defense intercepts make it “easier and better to approach an incoming missile from the opposite side than it is to try to chase it down.” he said. “That’s the way that it works.”

Russia knows full-well that we wouldn’t build a system designed to protect America from Russian missiles in Europe. What Russia is trying to do is create difficulties that will make the missile shield politically impossible to build altogether. The Russians also very much like the idea (which is why Russia has helped Iran develop its nuclear program to begin with) of America being vulnerable to Iran which very obviously gives Russia more influence and power over US policy. At least unless we build a missile defense shield.

And ask yourself whether the threat from Iran has gone up or down given that Iran was just caught red-handed scrubbing evidence of a nuclear weapons program at its Parchin facility.

But Barack Obama is worried about the Iranian threat. Obama isn’t worried about millions of Americans being murdered. Obama is looking out for #1. Obama is worried about his re-election and he will betray America if that’s what it takes to keep his job so he can continue his “fundamental transformation” of America from a constitutional republic into a Marxist banana republic.

This has always been a nation that was determined to protect itself. Barack Obama wants to “fundamentally transform” that. He just needs “space” to do it so he can betray the American people with impunity.

You see, it really isn’t about 320 million Americans or their pitiful national security.  It’s about Obama and his election.  You suck; Obama actually is a messiah and ergo sum Obama is the only being that is worth a damn on Obama’s view.

The current news item about Iran is that they have massively expanded and progressed on its nuclear weapons program.  And they are just as feverishly working on intercontinental ballistic missiles.  But what is silliness like that compared to the re-election of the most marvellous being who ever existed or who ever will exist? 

Obama supporters assure their fellow liberals, “After November, Obama can do anything he likes without bothering to care about the pitiful American people or worry about their stupid votes.”  We’re not talking about some mere “president,” people.  We’re talking about an emperor – a Führer!  Who are you, you insignificant little pissant gnat, to stop such greatness?

And so this same Obama is telling Europe, “With all due respect, please remember that only I matter.  You can save your continent and preserve the hundreds of millions of peasants who live there, but just don’t do it until AFTER I’m re-elected:

 Obama asks eurozone to keep Greece in until after election day
US officials are worried that if Greece exits the eurozone, it will damage President’s election hopes
Oliver Wright  Friday 24 August 2012

The Obama administration will pressure European governments not to let Greece fall out of the eurozone before November’s Presidential elections, British Government sources have suggested.

Representatives from the International Monetary Fund, the European Central Bank and the European Commission are due to arrive in Athens next month to assess Greece’s reform efforts.

They are expected to report in time for an 8 October meeting of eurozone finance ministers which will decide on whether to disburse Greece’s next €31bn aid tranche, promised under the terms of the bailout for the country.

American officials are understood to be worried that if they decide Greece has not done enough to meet its deficit targets and withhold the money, it would automatically trigger Greece’s exit from the eurozone weeks before the Presidential election on 6 November.

They are urging eurozone Governments to hold off from taking any drastic action before then – fearing that the resulting market destabilisation could damage President Obama’s re-election prospects. European leaders are thought to be sympathetic to the lobbying fearing that, under pressure from his party lin Congress, Mitt Romney would be a more isolationist president than Mr Obama.

The President discussed the eurozone crisis with David Cameron during a conference call on Wednesday and both welcomed statements by the European Central Bank that it was “standing firmly behind the euro”.

The ECB is expected to present a plan in the next few weeks to help indebted countries like Spain and Italy by buying their government bonds.

Today, Prime Minister Antonis Samaras will travel to Berlin to meet Chancellor Angela Merkel, and to France tomorrow for talks with President François Hollande. He is asking that Greece be given more time to meet its deficit targets and implement its reforms as its economy is struggling through a fifth year of recession.

But Germany’s Finance Minister, Wolfgang Schäuble, said it was only months since creditors drew up a second bailout package and agreed on a massive debt write-down for Greece.

Britain is understood to have pressed the Germans to ensure that if eurozone leaders decide Greece’s position is unsustainable the financial “firewall” around Spain and Italy is made stronger. Officials are worried that if Greece was to exit the eurozone, the move could result in dramatic increases in the cost of debt for other weaker eurozone members – making their financial situation unsustainable.

Allow me to translate that part that says, “European leaders are thought to be sympathetic to the lobbying fearing that, under pressure from his party lin Congress, Mitt Romney would be a more isolationist president than Mr Obama.”  It’s pretty much the same thing as saying that Obama has assured Europe that he’ll promise to screw the American people to give Europe whatever bailout it wants as long as Europe doesn’t interfere with his re-election.  It’s pretty much the same promise Obama gave to Russia to screw American national security if Russia didn’t do anything to interfere with his re-election.

Greece, of course, has long-since proven that it is a giant black hole of bailouts.  Greece is a country that will promise anything to get the next bailout, then completely renege on its promises, then come begging for another bailout.  And given that it’s already worked so many times for them before, they’re going to keep doing it until Europe is a dry husk.  Greece is one of those cancers that has to be surgically removed or else the patient dies.

Not that Obama cares.  Obama is worried about the most important thing that ever existed or ever will exist: Obama.

I frankly don’t know whether Obama didn’t get his ass kicked nearly enough when he was a kid, or whether he got his ass kicked way too many times.  It was clearly one or the other, given the malignant narcissist he’s become.

Greece’s economy, Europe’s economy, hell our own economy, are all teetering and will very likely go over the brink.  But what matters any of that if Obama is re-elected?  His sheer wonderfulness is really all that ought to matter to anyone with the proper perspective.  All of the rest of us are but dust before him, and we ought to remember that.

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Coming To America (Thanks, Obama!): Spain On Verge Of Collapse While Liberals Turn Violent In Streets

June 23, 2012

The OWS (“Occupy”) Movement pretty much proves it: this is liberalism on failure:

Spain’s economy on the edge of collapse as protests turn violent
By Hugo Duncan
PUBLISHED: 19:38 EST, 19 June 2012 | UPDATED: 01:49 EST, 20 June 2012

Europe plunged deeper into crisis last night as Spain lurched closer to needing a full-blown bailout to save it from collapse.

The government in Madrid was forced to pay prohibitively high interest rates to borrow money on another bruising day for the single currency bloc.

It raised fears that Spain is on the verge of becoming the biggest victim of the euro crisis so far – following the bailouts of Greece, Ireland and Portugal.

 

A coal miner sets fire to a barricade made of tires during a protest against government cuts in Villafranca del Bierzo, Leon, North-eastern SpainA coal miner sets fire to a barricade made of tires during a protest against government cuts in Villafranca del Bierzo, Leon, North-eastern Spain

The country – the fourth biggest economy in the eurozone – is back in recession and unemployment is at 25 per cent with half of young workers unable to find a job.

And the problems on the stock markets were matched on the streets.

Striking Spanish coal miners armed with homemade rockets, slingshots and rocks clashed with police firing rubber bullets yesterday.

They drove officers out of the town of Cirena in northern Spain in protest at government mining subsidy cuts that could devastate their industry.

Analysts warned that the situation was ‘critical’ for both Madrid and the eurozone despite the £80 billion lifeline thrown to the Spanish banking system last week.

Nicolas Spiro, a government debt expert at Spiro Sovereign Strategy, said: ‘We are in a critical situation now. This is the Rubicon that should have never been crossed.

‘It should have never come to this. We are dealing with a broken government bond market in Spain and quite possibly in Italy. This is exactly where you did not want the cancer to spread.’

 

Striking Spanish miners fire homemade rockets towards Spanish Civil Guards in Cinera, near Oviedo, northern Spain, during a mass strike against subsidy cuts that they claim threaten tens of thousands of jobsStriking Spanish miners fire homemade rockets towards Spanish Civil Guards in Cinera, near Oviedo, northern Spain, during a mass strike against subsidy cuts that they claim threaten tens of thousands of jobs

Spain had to pay an interest rate of 5.07 per cent to sell 12-month debt yesterday – up from 2.99 per cent a month ago and the highest level since the euro was launched in 1999.

The crucial 10-year bond yield was also above 7 per cent – a psychologically important level which proved to be the point of no return for Greece, Ireland and Portugal.

Marc Otswald, an analyst at City firm Monument Securities, said Spanish borrowing costs could lead to a full-blown bailout worth around £250 billion.

‘It is becoming very difficult to see how it can manage without that beyond the end of September unless yields fall dramatically,’ he said.

Ishaq Siddiqi, a market strategist at trading firm ETX Capital, said: ‘The sustained high yields on Spanish bonds remain a considerable concern for markets.

If the Spanish government fails to address the country’s economic crisis, like Greece, sky high borrowing rates could eventually force Spain into a full sovereign bailout.

A Spanish bailout would mark a disastrous escalation of the euro crisis, threatening Italy and core eurozone nations such as France and even powerhouse Germany.’

Obama is trying to make America more and more like Spain even as Spain is beyond obviously going to collapse into ruins.

Kind of makes you wonder what kind of demon-possessed people voted for this turd.

The same people – LEFTISTS (AKA “liberals”) – who are rioting in Europe are rioting in America as the Occupy fascists show us that violence invariably comes from the left.

Obama and the Democrat Party want for America EXACTLY what liberals in Spain created there.

Greek Crisis Coming To Your Neighborhood Soon

February 21, 2010

Let me summarize what is going on: the Western world (and most definitely the United States) is playing the subprime loan game.  We’re not talking about a few schmucks; we’re talking about the whole country.

We’re borrowing huge sums of money at a current rate of about 3% interest.  But as the lenders start getting nervous, they’re going to want to increase that interest.  We are in plenty of trouble paying these trillions of dollars back at 3% – but what happens if the interest increases to 5% or 7% as it could very quickly do?  The costs of paying these loans would rise to catastrophic levels, and we could find ourselves literally bankrupt overnight.

That’s what happened to Greece.  And it’s what’s ultimately going to happen to the USA.

A Greek crisis is coming to America
By Niall Ferguson
Published: February 10 2010 20:15

It began in Athens. It is spreading to Lisbon and Madrid. But it would be a grave mistake to assume that the sovereign debt crisis that is unfolding will remain confined to the weaker eurozone economies. For this is more than just a Mediterranean problem with a farmyard acronym. It is a fiscal crisis of the western world. Its ramifications are far more profound than most investors currently appreciate.

There is of course a distinctive feature to the eurozone crisis.  Because of the way the European Monetary Union was designed, there is in fact no mechanism for a bail-out of the Greek government by the European Union, other member states or the European Central Bank (articles 123 and 125 of the Lisbon treaty). True, Article 122 may be invoked by the European Council to assist a member state that is “seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control”, but at this point nobody wants to pretend that Greece’s yawning deficit was an act of God. Nor is there a way for Greece to devalue its currency, as it would have done in the pre-EMU days of the drachma. There is not even a mechanism for Greece to leave the eurozone.

That leaves just three possibilities: one of the most excruciating fiscal squeezes in modern European history – reducing the deficit from 13 per cent to 3 per cent of gross domestic product within just three years; outright default on all or part of the Greek government’s debt; or (most likely, as signalled by German officials on Wednesday) some kind of bail-out led by Berlin. Because none of these options is very appealing, and because any decision about Greece will have implications for Portugal, Spain and possibly others, it may take much horse-trading before one can be reached.

Yet the idiosyncrasies of the eurozone should not distract us from the general nature of the fiscal crisis that is now afflicting most western economies. Call it the fractal geometry of debt: the problem is essentially the same from Iceland to Ireland to Britain to the US. It just comes in widely differing sizes.

What we in the western world are about to learn is that there is no such thing as a Keynesian free lunch. Deficits did not “save” us half so much as monetary policy – zero interest rates plus quantitative easing – did. First, the impact of government spending (the hallowed “multiplier”) has been much less than the proponents of stimulus hoped. Second, there is a good deal of “leakage” from open economies in a globalised world. Last, crucially, explosions of public debt incur bills that fall due much sooner than we expect.

For the world’s biggest economy, the US, the day of reckoning still seems reassuringly remote. The worse things get in the eurozone, the more the US dollar rallies as nervous investors park their cash in the “safe haven” of American government debt. This effect may persist for some months, just as the dollar and Treasuries rallied in the depths of the banking panic in late 2008.

Yet even a casual look at the fiscal position of the federal government (not to mention the states) makes a nonsense of the phrase “safe haven”. US government debt is a safe haven the way Pearl Harbor was a safe haven in 1941.

Even according to the White House’s new budget projections, the gross federal debt in public hands will exceed 100 per cent of GDP in just two years’ time. This year, like last year, the federal deficit will be around 10 per cent of GDP. The long-run projections of the Congressional Budget Office suggest that the US will never again run a balanced budget. That’s right, never.

The International Monetary Fund recently published estimates of the fiscal adjustments developed economies would need to make to restore fiscal stability over the decade ahead. Worst were Japan and the UK (a fiscal tightening of 13 per cent of GDP). Then came Ireland, Spain and Greece (9 per cent). And in sixth place? Step forward America, which would need to tighten fiscal policy by 8.8 per cent of GDP to satisfy the IMF.

Explosions of public debt hurt economies in the following way, as numerous empirical studies have shown. By raising fears of default and/or currency depreciation ahead of actual inflation, they push up real interest rates. Higher real rates, in turn, act as drag on growth, especially when the private sector is also heavily indebted – as is the case in most western economies, not least the US.

Although the US household savings rate has risen since the Great Recession began, it has not risen enough to absorb a trillion dollars of net Treasury issuance a year. Only two things have thus far stood between the US and higher bond yields: purchases of Treasuries (and mortgage-backed securities, which many sellers essentially swapped for Treasuries) by the Federal Reserve and reserve accumulation by the Chinese monetary authorities.

But now the Fed is phasing out such purchases and is expected to wind up quantitative easing. Meanwhile, the Chinese have sharply reduced their purchases of Treasuries from around 47 per cent of new issuance in 2006 to 20 per cent in 2008 to an estimated 5 per cent last year. Small wonder Morgan Stanley assumes that 10-year yields will rise from around 3.5 per cent to 5.5 per cent this year. On a gross federal debt fast approaching $1,500bn, that implies up to $300bn of extra interest payments – and you get up there pretty quickly with the average maturity of the debt now below 50 months.

The Obama administration’s new budget blithely assumes real GDP growth of 3.6 per cent over the next five years, with inflation averaging 1.4 per cent. But with rising real rates, growth might well be lower. Under those circumstances, interest payments could soar as a share of federal revenue – from a tenth to a fifth to a quarter.

Last week Moody’s Investors Service warned that the triple A credit rating of the US should not be taken for granted. That warning recalls Larry Summers’ killer question (posed before he returned to government): “How long can the world’s biggest borrower remain the world’s biggest power?”

On reflection, it is appropriate that the fiscal crisis of the west has begun in Greece, the birthplace of western civilization. Soon it will cross the channel to Britain. But the key question is when that crisis will reach the last bastion of western power, on the other side of the Atlantic.

The writer is a contributing editor of the FT and author of ‘The Ascent of Money: A Financial History of the World‘

The United States is on life support, and it won’t be long before the doctor turns off the machine and calls the time of death:

It is now mathematically impossible for the United States to repay its debts, even if every single penny was seized from every single man, woman, and child, from every single bank, and from every single business.

This is our future, assuming we can stave ff the fate of Greece:

“Within 12 years…the largest item in the federal budget will be interest payments on the national debt,” said former U.S. Comptroller General David Walker. “[They are] payments for which we get nothing.”

Economic forecasters say future generations of Americans could have a substantially lower standard of living than their predecessors’ for the first time in the country’s history if the debt is not brought under control.

Greece’s budget deficit-to-GDP is an astonishing 12.7%.  And that massive unsustainable spending is the thing that is killing them.  But we shouldn’t laugh: ours is at 11.2%, according to Goldman Sachs:

We now expect the US budget deficit to rise to $1.64 trillion (11.2% of GDP) in fiscal year (FY) 2010 and to total $10.8 trillion (trn) over the next ten years. This profile is modestly above our early October forecast and well above the administration’s figures.

Even so, near-term risks lie to the side of a bigger deficit. Tax receipts have started the year in a deep hole and could continue to fall short. And if the economy struggles as the current dose of fiscal stimulus wears off, as we expect, then policymakers are apt to adopt more stimulus than we have assumed.

The United States is sixth on the list of countries with the highest ratios of budget deficit to GDP.  And the other countries are PIIGS (Portugal, Ireland, Italy, Greece, and Spain).

About the only thing separating us from the fate of Greece right now is the fact that we can keep printing our own currency until we plunge right off the economic cliff.

One morning we’re going to wake up and learn that our currency isn’t worth the paper it’s printed on.