Banks, companies and investors are preparing themselves for a collapse of the euro. Cross-border bank lending is falling, asset managers are shunning Europe and money is flowing into German real estate and bonds. The euro remains stable against the dollar because America has debt problems too. But unlike the euro, the dollar’s structure isn’t in doubt.08/13/2012 By Martin Hesse
Otmar Issing is looking a bit tired. The former chief economist at the European Central Bank (ECB) is sitting on a barstool in a room adjoining the Frankfurt Stock Exchange. He resembles a father whose troubled teenager has fallen in with the wrong crowd. Issing is just about to explain again all the things that have gone wrong with the euro, and why the current, as yet unsuccessful efforts to save the European common currency are cause for grave concern.
He begins with an anecdote. “Dear Otmar, congratulations on an impossible job.” That’s what the late Nobel Prize-winning American economist Milton Friedman wrote to him when Issing became a member of the ECB Executive Board. Right from the start, Friedman didn’t believe that the new currency would survive. Issing at the time saw the euro as an “experiment” that was nevertheless worth fighting for.
Fourteen years later, Issing is still fighting long after he’s gone into retirement. But just next door on the stock exchange floor, and in other financial centers around the world, apparently a great many people believe that Friedman’s prophecy will soon be fulfilled.
Banks, investors and companies are bracing themselves for the possibility that the euro will break up — and are thus increasing the likelihood that precisely this will happen.
There is increasing anxiety, particularly because politicians have not managed to solve the problems. Despite all their efforts, the situation in Greece appears hopeless. Spain is in trouble and, to make matters worse, Germany’s Constitutional Court will decide in September whether the European Stability Mechanism (ESM) is even compatible with the German constitution.
There’s a growing sense of resentment in both lending and borrowing countries — and in the nations that could soon join their ranks. German politicians such as Bavarian Finance Minister Markus Söder of the conservative Christian Social Union (CSU) are openly calling for Greece to be thrown out of the euro zone. Meanwhile the the leader of Germany’s opposition center-left Social Democrats (SPD), Sigmar Gabriel, is urging the euro countries to share liability for the debts.
On the financial markets, the political wrangling over the right way to resolve the crisis has accomplished primarily one thing: it has fueled fears of a collapse of the euro.
Cross-Border Bank Lending Down
Banks are particularly worried. “Banks and companies are starting to finance their operations locally,” says Thomas Mayer who until recently was the chief economist at Deutsche Bank, which, along with other financial institutions, has been reducing its risks in crisis-ridden countries for months now. The flow of money across borders has dried up because the banks are afraid of suffering losses.
According to the ECB, cross-border lending among euro-zone banks is steadily declining, especially since the summer of 2011. In June, these interbank transactions reached their lowest level since the outbreak of the financial crisis in 2007.
In addition to scaling back their loans to companies and financial institutions in other European countries, banks are even severing connections to their own subsidiaries abroad. Germany’s Commerzbank and Deutsche Bank apparently prefer to see their branches in Spain and Italy tap into ECB funds, rather than finance them themselves. At the same time, these banks are parking excess capital reserves at the central bank. They are preparing themselves for the eventuality that southern European countries will reintroduce their national currencies and drastically devalue them.
“Even the watchdogs don’t like to see banks take cross-border risks, although in an absurd way this runs contrary to the concept of the monetary union,” says Mayer.
Since the height of the financial crisis in 2008, the EU Commission has been pressuring European banks to reduce their business, primarily abroad, in a bid to strengthen their capital base. Furthermore, the watchdogs have introduced strict limitations on the flow of money within financial institutions. Regulators require that banks in each country independently finance themselves. For instance, Germany’s Federal Financial Supervisory Authority (BaFin) insists that HypoVereinsbank keeps its money in Germany. When the parent bank, Unicredit in Milan, asks for an excessive amount of money to be transferred from the German subsidiary to Italy, BaFin intervenes.
Unicredit is an ideal example of how banks are turning back the clocks in Europe: The bank, which always prided itself as a truly pan-European institution, now grants many liberties to its regional subsidiaries, while benefiting less from the actual advantages of a European bank. High-ranking bank managers admit that, if push came to shove, this would make it possible to quickly sell off individual parts of the financial group.
In effect, the bankers are sketching predetermined breaking points on the European map. “Since private capital is no longer flowing, the central bankers are stepping into the breach,” explains Mayer. The economist goes on to explain that the risk of a breakup has been transferred to taxpayers. “Over the long term, the monetary union can’t be maintained without private investors,” he argues, “because it would only be artificially kept alive.”
The fear of a collapse is not limited to banks. Early last week, Shell startled the markets. “There’s been a shift in our willingness to take credit risk in Europe,” said CFO Simon Henry.
He said that the oil giant, which has cash reserves of over $17 billion (€13.8 billion), would rather invest this money in US government bonds or deposit it on US bank accounts than risk it in Europe. “Many companies are now taking the route that US money market funds already took a year ago: They are no longer so willing to park their reserves in European banks,” says Uwe Burkert, head of credit analysis at the Landesbank Baden-Württemberg, a publicly-owned regional bank based in the southern German state of Baden-Württemberg.
And the anonymous mass of investors, ranging from German small investors to insurance companies and American hedge funds, is looking for ways to protect themselves from the collapse of the currency — or even to benefit from it. This is reflected in the flows of capital between southern and northern Europe, rapidly rising real estate prices in Germany and zero interest rates for German sovereign bonds.
‘Euro Experiment is Increasingly Viewed as a Failure’
One person who has long expected the euro to break up is Philipp Vorndran, 50, chief strategist at Flossbach von Storch, a company that deals in asset management. Vorndran’s signature mustache may be somewhat out of step with the times, but his views aren’t. “On the financial markets, the euro experiment is increasingly viewed as a failure,” says the investment strategist, who once studied under euro architect Issing and now shares his skepticism. For the past three years, Vorndran has been preparing his clients for major changes in the composition of the monetary union.
They are now primarily investing their money in tangible assets such as real estate. The stock market rally of the past weeks can also be explained by this flight of capital into real assets. After a long decline in the number of private investors, the German Equities Institute (DAI) has registered a significant rise in the number of shareholders in Germany.
Particularly large amounts of money have recently flowed into German sovereign bonds, although with short maturity periods they now generate no interest whatsoever. “The low interest rates for German government bonds reflect the fear that the euro will break apart,” says interest-rate expert Burkert. Investors are searching for a safe haven. “At the same time, they are speculating that these bonds would gain value if the euro were actually to break apart.”
The most radical option to protect oneself against a collapse of the euro is to completely withdraw from the monetary zone. The current trend doesn’t yet amount to a large-scale capital flight from the euro zone. In May, (the ECB does not publish more current figures) more direct investments and securities investments actually flowed into Europe than out again. Nonetheless, this fell far short of balancing out the capital outflows during the troubled winter quarters, which amounted to over €140 billion.
The exchange rate of the euro only partially reflects the concerns that investors harbor about the currency. So far, the losses have remained within limits. But the explanation for this doesn’t provide much consolation: The main alternative, the US dollar, appears relatively unappealing for major investors from Asia and other regions. “Everyone is looking for the lesser of two evils,” says a Frankfurt investment banker, as he laconically sums up the situation. Yet there’s growing skepticism about the euro, not least because, in contrast to America and Asia, Europe is headed for a recession. Mayer, the former economist at Deutsche Bank, says that he expects the exchange rates to soon fall below 1.20 dollars.
“We notice that it’s becoming increasingly difficult to sell Asians and Americans on investments in Europe,” says asset manager Vorndran, although the US, Japan and the UK have massive debt problems and “are all lying in the same hospital ward,” as he puts it. “But it’s still better to invest in a weak currency than in one whose structure is jeopardized.”
Hedge Fund Gurus Give Euro Thumbs Down
Indeed, investors are increasingly speculating directly against the euro. The amount of open financial betting against the common currency — known as short positioning — has rapidly risen over the past 12 months. When ECB President Mario Draghi said three weeks ago that there was no point in wagering against the euro, anti-euro warriors grew a bit more anxious.
One of these warriors is John Paulson. The hedge fund manager once made billions by betting on a collapse of the American real estate market. Not surprisingly, the financial world sat up and took notice when Paulson, who is now widely despised in America as a crisis profiteer, announced in the spring that he would bet on a collapse of the euro.
Paulson is not the only one. Investor legend George Soros, who no longer personally manages his Quantum Funds, said in an interview in April that — if he were still active — he would bet against the euro if Europe’s politicians failed to adopt a new course. The investor war against the common currency is particularly delicate because it’s additionally fueled by major investors from the euro zone. German insurers and managers of large family fortunes have reportedly invested with Paulson and other hedge funds. “They’re sawing at the limb that they’re sitting on,” says an insider.
So far, the wager by the hedge funds has not paid off, and Paulson recently suffered major losses.
But the deciding match still has to be played.
Translated from the German by Paul Cohen
- DER SPIEGEL: Investors Prepare for Euro Collapse (investmentwatchblog.com)
- Spiegel: Investors Prepare For Euro Collapse | ZeroHedge (underinformation.wordpress.com)
- Spanish Banks’ ECB Loans Rise as Rajoy Mulls Second Bailout Call – Bloomberg (bloomberg.com)
- Stop Fooling Yourself… NO Entity On Earth Can Stop This (zerohedge.com)
- Things Are Going To Collapse Again In Europe ( Bank of America and AMP) (ampgoldportfolio.com)
- Merkel Returns to Crisis as Leaders Squabble Over Bond Purchases (bloomberg.com)
- Hedge Funds Capitulate on European Shorts Fastest Since 2009 (bloomberg.com)
- The Market Oracle – DK Matai – European Bankers And Top Politicians Fear Collapse Of The Euro – 12 August 2012 (lucas2012infos.wordpress.com)
End of the Euro?: The IMF warns that one country leaving the single currency could force its entire collapseBy Hugo Duncan PUBLISHED: 12:45 EST, 17 April 2012 UPDATED: 04:28 EST, 18 April 2012
In its World Economic Outlook report, the International Monetary Fund said the collapse of the crisis-torn single currency could not be ruled out.
It was the first time the Washington-based institution has accepted the prospect of the eurozone splitting up and follows fears over the health of the Spanish economy.
The IMF predicted a return to recession in the eurozone this year but upgraded its growth forecasts for Britain.
However, it warned that the world remains at risk of collapsing into a slump that would rival the Great Depression – with ‘acute risks in Europe’ the major threat.
‘Things have quietened down but there is a very uneasy calm,’ said IMF chief economist Olivier Blanchard. ‘I have a feeling that at any moment things could get very bad again.’
Speaking at the launch of the half-yearly report in Washington, Mr Blanchard said there was ‘no plan’ in place to deal with a country leaving the euro.
However Greece is widely expected to default on its crippling debts and quit the doomed single currency.
‘If such an event occurs, it is possible that other euro area economies would come under severe pressure as well, with a full-blown panic in financial markets,’ the IMF report said.
‘Under these circumstances, a break-up of the euro area could not be ruled out. This could cause major political shocks that could aggravate economic stress to levels well above those after the Lehman collapse.’
U.S. investment bank Lehman Brothers imploded in September 2008 – plunging the world economy into the worst recession since the 1930s. The IMF said that although ‘the outlook for the global economy is slowly improving again’ it is ‘still very fragile’.
It warned of the ‘possibility that several adverse shocks could interact to produce a major slump reminiscent of the 1930s’.
The IMF forecast growth of 0.8 per cent in Britain this year – more than the 0.6 per cent it predicted in January, but less than last September’s target of 1.6 per cent. Its 2013 forecast was unchanged at 2 per cent.
Asked about the IMF’s comments on the eurozone, a Downing Street spokesman said: ‘The eurozone still needs to get its house in order. Those issues still exist and no doubt will be a focus of discussions at the coming meeting of the IMF towards the end of the week, which the Chancellor will be attending.’
The IMF said Britain will outperform Germany and France this year – their economies are expected to grow by just 0.6 per cent and 0.5 per cent respectively.
The Italian and Spanish economies are forecast to decline by 1.9 per cent and 1.8 per cent, while a slump of 4.7 per cent is expected in Greece following a 6.9 per cent drop in 2011.
But the report warned that output in the eurozone could fall by 3.5 per cent over the next two years if the debt crisis escalates.
This would knock 2 per cent off the world economy, said the IMF, while a 50 per cent rise in the oil price would lower output by a further 1.25 per cent.
In the absence of such ‘shocks’ the global economy is expected to grow by 3.5 per cent this year, down from 3.9 per cent in 2011, with the U.S., Canada and Japan leading the way in the developed world.
‘Because of the problems in Europe, activity will continue to disappoint in the advanced economies as a group, expanding by only about 1.5 per cent in 2012 and by 2 per cent in 2013,’ said the report.
- Euro meltdown will be a bigger disaster than the credit crunch’ (express.co.uk)
- IMF: Euro Break-up Cannot Be Ruled Out (news.sky.com)
- IMF Exploits Euro-Crisis to Create Global Money Power (mb50.wordpress.com)
“The only world I know is drowning in rage.” Al Jourgensen, Front man for the band Ministry.
There are no words I can think of that sum up 2011 better than Al Jourgensen’s. Our planet, our world, our home is on the verge of chaos. It is hard to conceive of a year that has brought more mayhem and misery to humanity than the last 12 months. Governments are falling like dominoes in the Middle East and Sharia is rearing it’s head in country after country. Israel and the Palestinians are now in their 63rd year of hostilities with no end in sight. Iran is on the verge of building an atomic bomb and no one seems to have the will or the desire to understand the risks of a nuclear Iran; no less the guts to do something to prevent it. Japan was racked by a massive tsunami and the near meltdown of several nuclear reactors. In Russia and China, it is the same old fist in a new glove. In Africa, there is famine, disease and death for millions. Europe and America are in dire financial straits and the politicians are unable to put aside their political differences to solve the problems. Protesters rampage and rant in cities across the globe with little purpose and no clear goals in sight. Al Gore and his ilk are still trying to sell the pipe dream of carbon credits while touring the world in their Lear Jets and milking the global warming scare for all it is worth. It certainly has been a year to inspire doubt and fear while chilling our hearts about the future.
It speaks volumes that to many in the Western World, May 2, 2011 was probably the high point of the year. That is the day that Osama Bin Ladin is supposed to have been killed by U.S Navy Seals. Of course, skeptics of American politics will be happy to remind us that no one in the public has ever seen any actual proof of Bin Ladin’s death. All we have is the word of Obama, who has not had the best record for honesty. Using the feeble excuse that he didn’t want to offend or incite Muslims by showing any evidence of Bin Ladin’s death, Obama sealed all the records of the raid and all the photos of Bin Ladin’s body. We should remember that Lyndon Johnson bombed North Vietnam into the stone age based on a previous government lie called the “Gulf Of Tonkin Incident.” Until proof is available to every single person who wants to see it, all we have is the word of a President who used the killing of Bin Ladin as part of his re-election strategy. Hopefully, Bin Ladin really is dead and buried but the way our leaders play so lose and easy with the truth, it is quite possible to believe that we will never know the entire story. Some people even think he was killed years ago and kept on ice until a convenient moment. Far fetched, but with politicians being what they are, anything is possible
On the economic front, the United States is now 15 trillion dollars in debt and there is no indication that anyone in political power is willing to do anything about it. The country is broke and yet the spending spree continues unabated. The only answers we hear from our leaders in Washington are laced with partisan political nonsense and outrageous attacks on the opposition. The Democrats and the Republicans have spent the nation into decades of debt and the only solution they have is to blame the other party or blame the rich and start a class war. The Republicans act like total cowards and instead of attacking the problem head on and calling the Democrats on their fiscal policies, they pull their punches and talk about working with the opposition. Democrats stick to their guns, blame Bush and continue to expand entitlement programs with no idea where the money will come from to pay for them. Conservatives, who are still the largest block of voters in America, are totally baffled as to why the Republicans will not stand up to Obama and his left wing cronies. It seems to them as if the Republican Party is determined to give Obama and the Democrats a pass and let everyone have free rein to spend America into oblivion. The Left wants to create a socialist state and turn what was once the world’s greatest economic miracle into a another failed European nation. Meanwhile many Americans are losing their jobs, their homes, their savings and their patience.
Politically in America, we are suffering under the non-leadership of President Obama, who may be on his way to becoming the worst President in American history. There is still a sizable percentage of voters who say they have no clear idea of who he really is or why he has a Connecticut Social Security Number. He continues to vacation, play golf and make one campaign speech after the other while we watch America’s AAA credit rating fly out the window. Meanwhile, the nation is experiencing the worst racial tensions since the 1960′s era of segregation and our society is on the verge of an Obama inspired class war. He has contributed to an atmosphere where people are looked upon as exploiters just for being successful or having personal wealth. Of course, if you are rich and contribute to the Democratic party, then you are forgiven. We have seen billions of Federal dollars given to questionable business ventures run by major fund raisers to the Obama campaign. Light Squared and Solyndra are just two examples of the new heights that political cronyism has reached on Obama’s watch. So much for what was promised to be the most honest, transparent, lobbyist free presidency in American history.
In the Democrat controlled U.S. Senate, party politics have taken over the functions of government. Bill after bill languishes on Harry Reid’s desk, never to be voted on, because they were sponsored and passed by the Republicans in the House. While the country is in dire need of effective governance to repair the damage that has been done by generations of political game playing, the Congress has ground to a virtual halt. Voters can barely remember the last bill that actually made its way through the Congress to end up on the President’s desk. The Republican controlled House is no better. The Republicans are caught up in a turf war between the old guard Rinos and the Tea Party. They can’t seem to decide if they would rather fight among themselves or attack Obama and the end result is a weakened Republican party that has no clear voice to present its plan for the future.
Out on the campaign trail, the Republicans candidates for the 2012 Presidential election have ignored every single opportunity to go after Obama on his record. Instead, they have engaged in an endless stream of ugly personal attacks on each other. When they were not clubbing Newt Gingrich over the head with the sordid details his divorce, they are busy making idiotic mistakes and political gaffes that would embarrass a ten year old. In 2008, it was Obama and the 57 states he visited. In 2011, it was the bad word that was written on a rock at a hunting camp that Rick Perry’s father acquired in the early 1980′s. If the current crop of Republican candidates doesn’t wake up and start to confront the real issues that plague America, we will see Obama re-elected. Maybe a Republican candidate of character and honor will surface before it is too late, but the time is getting late for a miracle.
The elephant in the room in the United States is illegal immigration. When the Democrats failed to pass the Dream Act, they decided to ignore the will of the people, 70% of whom are opposed to amnesty for illegals. The Democrats encouraged Obama to bypass the Constitution by Executive Order. In 2011, the Obama Administration issued one order after the other that reduced the number of illegal aliens who will be deported. Desperate to get re-elected and courting Latino voters, Obama has done everything he can think of to open our borders. Americans are struggling to pay their rent and put food on the table. True unemployment is estimated to be between 15% to 20% and yet the country is being overrun by 400,000 illegals a year, who are taking jobs away from legal citizens. The vast majority of Americans are simply appalled that there are close to 15 million illegal aliens and there is no end in sight. The American people have demanded secure borders and all they have gotten in return is politics as usual. Most voters are blissfully unaware of the real goal of the Progressives and the Democrats, which is to subvert the Democratic process by flooding the nation with new voters who will strongly side with their policies. To quote Eliseo Medina, international executive vice-president of Service Employees International Union, or SEIU, “We reform the immigration laws, it puts 12 million people on the path to citizenship and eventually voters…. Can you imagine if we have, even the same ratio, two out of three? Can you imagine 8 million new voters who care about our issues and will be voting? We will be creating a governing coalition for the long term, not just for an election cycle.” Voters who were bribed to vote for destructive, Socialist programs by giving them easy access to the gift of citizenship, all at the expensive of close to 300 million of us, who were either born here or came here legally.
And then there was “Operation Fast and Furious.” In what many commentators felt was nothing more that attempt to undermine the 2nd Amendment, the ATF allowed thousands of guns to “walk” into the hands of Mexican narco-terrorists, resulting in the death of United States Border Patrol Agent Brian Terry. No one will ever know how many innocent Mexican citizens died as a result of this debacle but the vast majority of the weapons still remain in the hands of violent criminals. Despite the fact that Attorney General Holder actually mentioned the operation by name in a speech 2 years earlier, he claimed ignorance when he testified before Congress on May 3, 2011, where he stated, “I probably heard about Fast and Furious for the first time over the last few weeks.” Documents released by CBS News in October, 2011 showed that Holder had been receiving briefings on the Operation as far back as July, 2010. Other documents released by CBS showed that ATF Officials had openly discussed using Fast and Furious to to make the case for stricter gun regulations. Many on the Right are calling for the resignation of Holder yet Obama has remained silent and refuses to comment further on the issue. Obama’s opponents wonder if this will be his “Watergate.”
Rounding out the year in America has been the dubious rise of the Occupy Movement aka OWS or Occupy Wall Street. There has never been an uglier, more dis-organized and destructive group of malcontents to raise their collective, unwashed heads. OWS has been praised by the political bigwigs of the Democratic party including Harry “This bill is dead on arrival” Reid, Nancy “Insider Trader” Pelosi and Community Organizer Obama. Financed by their well funded union buddies, the Occupy movement has caused havoc in every city they have appeared. The mainstream media, always looking for something demeaning and negative to spike their ratings, transformed a small handful of professional agitators, disgruntled outsiders and a sprinkling of the homeless into what they have portrayed as a mass movement out to change the world. Nothing could be further from the truth. The reality is that no one in the movement could agree on anything, drug use, robbery and rape was rampant and everywhere they went, they turned once lovely public parks into disgusting open air toilets. What made it even more despicable was that the media tried to portray these vermin as no different than the protesters of the Tea Party, who worked their rear ends off to elect new, responsible leaders to office, cleaned up after themselves, went home at the end of the day and showed up for work in the morning. It is a sad commentary on the state of education in America that the Occupy movement does not know the difference between the right to lawfully gather to protest and taking over public property without permission. The fact that these bozos think they have a right to do what ever they want, when ever and where ever they wish, shows how far we have fallen in our once proud nation. GIMME is the new mantra and Immediate Gratification is the new way of life. They think smashing in the windows of banks will restore freedom in America. Never mind finding someone to pay to replace all the broken glass.
Across the Atlantic, things are not any better. The European Union has finally shown itself to be the bad idea every sane person knew it was. Spain, Portugal and Greece are bankrupt. Italy is on the verge and the rest of Europe is footing the bill. The Euro is on its last legs and Germany is tired of paying for bailout after bailout. The misguided experiment of multiculturalism is proving to be the final nail in the coffin of the once great countries of Europe. While rampant socialism put a strain on Europe’s finances, the endless invasion of immigrants has taken Europe from the pinnacle of prosperity to the pit of crime and poverty. The invading masses refuse to assimilate and demand special treatment based on their religion while draining the coffers of every European nation. Jews are becoming an endangered species in Europe thanks to the rampant, unchecked hostility of Muslim immigrants towards the few Jews who survived the holocaust. When someone is brave enough to speak out about the problem, as in the case of Geert Wilders, they are faced with intimidation, ridicule, arrest, and trial. Political correctness has been taken to the height of true insanity in the European Union and people are being threatened with lengthy jail terms, or even killed, for saying anything against Islam or immigrants. The truth is no longer matters. The left leaning governments of Europe are so intent on their atheism and multiculturalism that they are cutting their owns throats while Europe is invaded by millions of impoverished immigrants who will change the very nature of everything Europeans ever held dear.
No where are things more explosive than in the Middle East. Starting with fall of Mubarak in Egypt, we have seen one Arab nation after the other replace their government with a strict Muslim theocracy based on Sharia. The Muslim Brotherhood has taken over Egypt and is openly talking about canceling the peace treaty with Israel. Coptic Christians in Egypt are being murdered with impunity and their churches burned. Once the most modern country in the Arab world, 90% of all Egyptian women are now subjected to Female Genital Mutilation. LET ME REPEAT THAT FOR YOU. 90% of all Egyptian women are now subjected to Female Genital Mutilation. Fifty years ago, hardly a woman in Egypt wore a headscarf. Today the majority of Egyptian women wear head scarfs and burqas are becoming a common sight. Egyptian Muslim clerics, some of whom are considered the highest authorities on Islam in the world, have come out in favor of wife beating, female genital mutilation, slavery, taxing infidels and openly called for the death of every single Jew on the planet. Yet Hillary Clinton and Obama talk to the Muslim Brotherhood like they are just another political party and plan to give billions to Egypt in aid and military assistance. Even sadder, not a word has been heard from the Woman’s Rights Movement on Female Genital Mutilation and the 2nd class treatment of Egyptian women.
Libya, Yemen, Tunisia and Syria are in chaos. Bahrain, Morocco, Algeria, Kuwait and Oman are rumbling in protest. In Libya, Muammar Gaddafi was killed and soon after Libya’s vast stockpile of modern weapons began to disappear into the hands of terrorists in Gaza and the Sinai. Iraq is about to plunge into anarchy as the American troops head home for good. Afghanistan has seen decades of war and this year was filled with one assassination after the other of ranking members of the U.S. backed government. Pakistan continues to beg for billions in aid from the U.S. while constantly undermining American policy in the region. In every single one of these countries, there are common factors. There is the crushing poverty that the vast majority live under and there is an oppressive government that rules over the masses. But more importantly, there is a rejection of liberal, democratic ideals and a total embrace of all things Islamic. Without exception, every government that has fallen has been replaced by an Islamic theocracy and without exception, in every country where the government is under attack, the prime movers are the Islamists. There is no majority in the Arab world for democracy. There is no majority in the Arab world for tolerance and freedom. There is no majority in the Arab world to ever accept non-Muslims as equals who are entitled to all the freedoms and privileges that are granted to Muslims. The real question is why can’t the Western World understand this simple truth and stop trying to force Democracy on people who have no interest in Democracy? When will the Western world stop living under its delusions and understand that Islam has a 1400 year, unbroken history of aggressive expansion at the expense of all other faiths and peoples? Do politicians like Obama, Sazorky and Ashton really believe that Islam is a religion of peace or do they just think we are all such idiots that we should be happy to have them constantly mislead us about the intentions of Islam?
March 11th, 2011 was the date of one of the ugliest acts of Muslim terrorism ever perpetrated on Israel. The murder of the Fogel Family by two Muslim teenagers aroused anger in Israel to new heights. “The victims were the father Rabbi Ehud (Udi) Fogel, the mother Ruth Fogel, and three of their six children—Yoav, 11, Elad, 4, and Hadas, the youngest, a three-month-old infant, who was decapitated.” As is typical of the leftist world media, these murders were barely mentioned outside of Israel, while the Jew hating, has been, Jimmy Carter, continued to place all the blame on Israel for every problem in the Middle East. Anti Israeli publications, like The New York Times and The Guardian in the U.K., were more interested in harping on the fact that the Fogel family lived in a Settlement. That a 3 month old child was decapitated in her bed, simply because she was a Jew, was not even considered. 63 years of agitation and hate towards any Israeli presence in the Middle East was not mentioned. The fact that Hamas has a charter that calls for the eventual death of every single Jew on earth was not mentioned. All the Israel haters in the mainstream media could do was to try to find a way to blame the Fogels for being butchered.
September saw the Israeli – Palestinian conflict taken to the heights of the absurd as a former terrorist, Abu Mazin aka Mahmoud Abbas, stood before the U.N. to demand statehood for Palestine, despite the continuous terror attacks and rocket attacks against Israel. The fact that the Palestinians are 100% dependent on foreign aid for every aspect of their so called nation’s budget made no difference to the corrupt minds of those who are determined to eliminate the one safe haven on earth for the Jewish people. For the moment, the Palestinian application for statehood has failed because of the threat of a U.S. veto in the Security Council. Obama was afraid of losing much needed Jewish financial support and votes for his re-election so he said he would veto any move for Palestinian statehood. If Obama gets re-elected, many fear that he will reveal his true beliefs and totally throw Israel under the bus by voting in favor of Palestinian statehood. It should be noted that Abbas, the so called “moderate” Palestinian leader, based his doctoral dissertation on denying the Jewish Holocaust of WWII, even accusing Jews of making a deal with the Nazis to allow the Holocaust to happen in order to gain sympathy for the re-establishment of the Jewish nation of Israel.
During the 12 months of 2011, hundreds of rockets were launched at Israeli citizens from Gaza. If the occupation or the settlements were really the cause of the conflict, then why are attacks coming, almost daily, from territory that Israel turned over to full Arab control several years ago. The truth is there are no distinct Palestinian people. There are Arabs who hate Jews and wish to destroy anything Jewish based on a religious agenda that dates back 1400 hundred years. Let’s remember the words spoken about Palestine by a leader of the PLO. The Dutch newspaper Trouw published an interview with Palestine Liberation Organization executive committee member Zahir Muhsein. Here’s what he said: ‘The Palestinian people does not exist. The creation of a Palestinian state is only a means for continuing our struggle against the state of Israel for our arab unity. In reality there is no difference between Jordanians, Palestinians, Syrians and Lebanese. Only for political and tactical reasons do we speak today about the existence of a Palestinian people, since Arab national interests demand that we posit the existence of a distinct “Palestinian people” to oppose Zionism. For tactical reasons, Jordan, which is a sovereign state with defined borders, cannot raise claims to Haifa and Jaffa, while as a Palestinian, I can undoubtedly demand Haifa, Jaffa, Beer-Sheva and Jerusalem. However, the moment we reclaim our right to all of Palestine, we will not wait even a minute to unite Palestine and Jordan.” Let us also remember four of the points in the PLO’s charter: 1. Jews are the enemy of Allah. 2. Islam is fighting a continuous religious war against the Jews. 3. The killing of Jews is a religious obligation. 4. Palestinians are the vanguard in this war against the Jews, and all Islamic nations are obligated to assist in this war. Finally let us remember the words of Mohammed himself who said, “The Day of Resurrection will not arrive until the Moslems make war against the Jews and kill them, and until a Jew is hiding behind a rock and tree, and the rock and tree will say: ‘Oh Moslem, oh servant of Allah, there is a Jew behind me, come and kill him!’ Let us reply to this hate by saying ” Oh American, remember these words well the next time you hear someone say Jews are to blame for everything in the Middle East. It is the Jews who rebuilt Israel from rubble after 2000 years of exile and the death of the six million. Let the Jewish people have their own land, promised forever in the holy bible, by the G*d of Abraham. Let there be peace with their neighbors so that all nations may prosper”
Sadly, just like in the Middle East, Militant Islam is on the march in Africa. Nigeria, Somalia and Sudan have all seen death and destruction at the hands of Islamic supremacist groups like Boko Harum, al-Shabaab and AL Qaeda. Nigeria has borne the brunt of Boko Harum’s viciousness towards non-Muslims with hundreds of Christian civilians killed and dozens of churches burned or bombed. Millions face famine in Somalia, where the Islamic group al-Shabaab murders, kidnaps or expels foreign aid workers while the people starve. The influence of Islam has spread to Kenya where a new constitution based on Sharia is being proposed. Even the one bright spot, which was the recognition by the United Nations of the newly formed nation of South Sudan, is being marred by ruthless border violence and constant threats from Islamic Northern Sudan. The one never changing fact is that Islam is always at the root of the violence and the attacks are being made on predominately unarmed Christians. As usual, Islamic leaders in Africa responded to the bloodshed by denying it all as a plot to defame Islam. At a meeting in Istanbul in November, they “denounced the identification of violence with Muslims and Islam, stressing that Islam is a religion of peace, love and brotherhood and that associating it with terrorism cannot be accepted.” Islamic leaders continue to ignore the persecution of “infidels” and the beheading and church bombings while happily blaming everything but Islam for the last 1400 years of jihad against non-believers.
Then there is Iran; the hotbed of crazed mullahs who are waiting for the 12th Imam to re-appear from the well he has been hiding in since the Occultation in 869 CE. For those readers who don’t study Islam, the Occultation refers to when the 5 year old Imam, Muhammad ibn al-hasan al-Mahdi, disappeared into a well, where he has remained hidden without dying until he returns to usher in the Islamic end times. The Occultation or lack of Occultation is at the root of centuries of bloody fighting between the Shia and Sunni sects of Islam. Iran’s leaders are members of the Shia sect and are deeply devoted to the return of the 12th Imam. Now all this may seem like a great deal of religious silliness to some of you, but when you combine the desire to usher in the end of the world with Iran’s race to build an atomic bomb, things start to get scary. Really scary. Add into the mix the fact that the current Grand Ayatollah of Iran and supreme leader, Ali Khamenei, also claims to be the only human who is in direct contact with the 12th Imam and it is time to panic. Most experts on the Middle East and Islam, who are not apologists for Islam, will tell you in no uncertain terms, that keeping Iran from getting nuclear weapons should be the world’s number one priority in the foreign policy arena. Meanwhile, Iran remains oblivious to any and all sanctions and continues its steamroller rush towards joining the world’s nuclear club. G*d help us all if the rest of the world allows it to happen.
Certainly, Russia and China have done their part in 2011 to compound the world’s problems. Russia continues its retreat back to the good old dictatorial days of heavy handed oppression under the rule of Vladimir Putin. They are merrily supplying Syria and Iran with weapons and technology while constantly obstructing any effective sanctions in the United Nations. It is rather ironic that Russia has more than its own share of problems with terrorists from parts of what used to be the U.S.S.R and surprise, surprise, once again the terrorists are Muslims. Blowing up airports and subways is par for the course but now woman who try to swim in the Caspian Sea in a bathing suit are being blown to bits by intolerant Muslim men. The situation has gotten so bad that the Russian State authorities opened the first Sharia compliant beach, where women swim while covered head to toe, in an attempt to stop the reign of terror against women.
China continues to build its economy on the sweat of its people and by releasing more poisons into the atmosphere than any other nation on earth. While the economy is booming and billionaires are starting to become common place, the iron fist of old guard communist oppression still wins the day in China. Dissidents routinely disappear into prisons for decades, foreign businesses are stolen from and spied upon, religious groups of any sort are ruthlessly stamped out and woman are arrested and sterilized for daring to become pregnant for a second time. At a time when the world is on the edge of a major explosion, China spent billions this year to vastly increase the size of its military arsenal. They continue to make threats to attack Taiwan and one Chinese General even went as far as to mention the possibility of using nukes on the United States if we tried to intervene. It seems with China, the more things change, the more things stay the same.
I wish I could have written a glowing report on what a wonderful place the world became in 2011 but I am not given to fantasy. Surely there has been much to be happy about and proud of in 2011, but the world is teetering on the brink and people need to face reality. If we have any chance to change things for the better in 2012, we have to stop telling each other fairy tales and start to face the truth. The religious divisions that are creating such havoc in the world are real. It is time to stop making excuses for any religion that tries to impose itself on humanity. It is time to stop giving aid, treasure and support to nations or religions that oppress and brutalize non believers or outsiders of any sort. You may wish to deny that Islam is at the forefront of terror attacks, oppression of non-believers and persecution of women but it is the truth and it needs to be accepted before it can be changed for the better. Being politically correct and making more excuses for bad behavior will just encourage more bad behavior in the future. Do we really need to see signs like we saw from Muslim protesters in London on the 10 year anniversary of 9/11. Signs that said “DEMOCRACY GO TO HELL” and “BEHEAD THOSE WHO INSULT ISLAM.” The very fact that the British police allowed the public display of death threats against non-Muslims within a few hundred feet of where the Prime Minister of England was making a memorial address shows just how far we have fallen in the name of the dual evils of multiculturalism and political correctness. While it is mainly militant fanatics who are at the forefront of the violence, the utter silence of so-called “Moderate Islam” is alarming. When the supposed majority of “Moderate Muslims” start to make their voices heard against Islamic expansion, oppression and supremacist beliefs, maybe non-Muslims will start to see Islam as a true “Religion of Peace.” At the moment, the silence is deafening and the body count continues to rise is the name of Allah.
While religion may lie at the root of many of our Foreign Policy problems, we should also remember that politics in the United States have become an absolute disgrace. Republicans and Democrats alike put party loyalty ahead of the welfare of the people who elected them. They have replaced honesty, morality and ethics with cleverly written loopholes that allow elected officials to ignore the law with impunity while vastly increasing their personal wealth. The influence that lobbyists and special interest groups have on our elected officials is a gross breech of trust that should make every member of Congress hang their head in shame. The political elite in America have become the new royalty of the ruling class; throwing the working peasants scraps while they gorge themselves.
The men and women who run the major corporations in America are no better. Companies lose billions and the bosses still take home millions in annual bonuses and stock options. Executives get caught stealing and instead of going to prison, they quietly retire with a 20 million dollar golden parachute. Companies that are making billions in profits will close a factory in the United States that employs 2000 people in order to be able to pay slave wages in a Third World country. 2000 hard working Americans out of work so a company that already made 10 billion in profits can make another 100 million. Hardly anyone in business or government gives a second thought to all the lives damaged by such behavior. No one will say a word about it unless someone thinks it will gain them more votes or make a good ad campaign. While there is nothing wrong with capitalism, there is plenty wrong with the sort of greed and lack of business ethics displayed by many large corporations.
Passing more useless laws will not solve the problem. False flag movements like the OWS movement that are nothing but fronts for political insiders will not solve the problem. Letting manipulators like George Soros play puppet master while throwing around billions to impose his ideas on society will not solve the problems. The problems will only be solved when we finally realize that we are all Americans and we start to demand that government leaders and elected officials behave in a responsible manner and represent the will of the voters or they will be replaced. The problems will only be solved when we make it clear to big business that if they wont put the needs of their customers and their workers ahead of pure profit and greed, then we will spend our hard earned money elsewhere. We do need a movement but not one that is based on race, religion, status or political philosophy. We need a movement that speaks as one to say that we demand change. We demand an end to greed and corruption. We demand that our elected officials do everything in their power to improve our lives; not by enslaving us with endless handouts but by balancing the budget, reducing the deficit and rebuilding our nation. We will use our voices, our minds, our vote and our wallets to make sure that we are heard in 2012. Ignore us at your own peril.
[The views expressed in this political commentary are the sole view of Wolff Bachner and do not express the views of Inquisitr.com or the Inquisitr.com writing staff.]
- American election: Republicans are struggling to counter Obama | Observer editorial (guardian.co.uk)
- The Impact of 2011 (socyberty.com)
They argue that one euro will fall to just $1.20 within the next four months, compared to a current value around $1.34. What’s more, they think this estimate has downside risks.
Their analysis is predicated on a baseline scenario that EU leaders will put stop-gap measures in place in the near-term but will ultimately have to adopt large-scale QE to stave of the crisis in the medium term.
From their investor note:
In our central case, in which the ECB will be forced into a delayed and reactive large-scale QE, risk assets could trade better over time (assuming that the QE amount is sufficient). But it is likely to be seen as a change in the ECB reaction function, and hence we think EUR/USD would trade lower in the medium term. AUD, CAD and EM FX should perform quite well in this scenario.
We also expect ECB QE and although the immediate effect upon announcement of such measures may well be EUR bullish, large-scale monetization is likely to weigh negatively on the EUR in the medium term, hence providing an offsetting force to any USD negativity related to Fed QE3.
- NOMURA: The Euro Is Going To See A MASSIVE Drop In Value In The Next Four Months (businessinsider.com)
- Analysis: ECB’s Failure To Sterilize Bond Buys – Is It QE? (forexlive.com)
- The Pound rallied from a low just above 1.56 against the US Dollar Exchange Rate (torfx.com)
- Complete Summary Of What To Expect From Europe This Week (zerohedge.com)
- ForexLive European wrap: Euro shows a bit of backbone after S&P’s announcement…… (forexlive.com)
- S&P Threatens To Downgrade Euro Rescue Fund Amid Crisis Of ‘Governance’ In Euro Area (businessinsider.com)