As we predicted at the time, the return of Mandelson has reopened the question of joining the Euro. Recent events tend to confirm that Mandelson has influential backing within the British elite: his coming out on the euro seems to indicate, therefore, a deep division within them. We could posit that Mandelson represents a “realist” element, who recognise the game is up for the pound. It will be interesting to look for the reaction to this statement.
China’s fraught relations with the International Monetary Fund are driven by two conflicting agendas – the country’s effort to gain unimpeded access to resources in the developing world on bilateral terms, and its interest in using the IMF’s facilities as a international organization to issue Special Drawing Rights (SDR) assets to help Beijing diversify away from the US dollar.
The US dollar certainly could stem its losses or even recover ground, if the ongoing commodities and emerging market rallies become too “animal-spirited” and get too far ahead of the reality of global supply and demand, and a significant correction occurs in these fledgling rallies. Read the rest of this entry »
Mientras Estados Unidos y Europa luchan para salir del pantano del endeudamiento, el desempleo y la deflación, la resistencia de los países BRIC a los embates de la crisis ha sido la grata sorpresa. Brasil, Rusia, India y China se han convertido en un factor de estabilidad y crecimiento logrando producir un desacople del eje Estados Unidos-Japón-Europa.
JUNE 3, 2009
In a speech on Tuesday in Berlin, Chancellor Angela Merkel expressed ‘great skepticism’ over the clout of central banks and suggested their aggressive moves in Europe, the U.S. and the U.K. might backfire. She is shown here at a rally later in Saarbrücken, Germany, for European Parliamentary elections.
German Chancellor Angela Merkel, in a rare public rebuke of central banks, suggested the European Central Bank and its counterparts in the U.S. and Britain have gone too far in fighting the financial crisis and may be laying the groundwork for another financial blowup. Read the rest of this entry »
Chinese soft power, as Michael Hudson indicates here, may be increasingly influencing US foreign policy in a trade off in which continued support for US treasuries is premised on the dismantling of the US empire. This is a scenario which we have been anticipating for some time:
The Treasury said there was a lot of economic uncertainty around and that it had already published plans to halve the budget deficit – predicted to hit £175 billion ($275bn) this year – over the next five years.
The problem is S&P does not believe the government numbers
Britain risks losing its precious triple-A credit rating because of the danger that government debt may soar close to 100 per cent of GDP, and uncertainty over policy before an election due by next year.
“There is a big difference in practice between the levels of capital banks need to be stabilised… and those required to persuade banks to exhibit normal levels of risk-aversion. How big that gap is is impossible to say… but it looks as if it will be quite big.”
We have lost everything, unless we’re a bank, except that peculiarly Brit gift for understatement. Roughly speaking the above translates as: how much do we have to give banks in order that they lend something back to us? Quite a lot I’d say, old chap.
Mervyn King said although banks’ survival had been assured by recent bail-outs, they would not start lending freely unless more capital was pumped into their balance sheets.
Iceland is under attack – not militarily but financially. It owes more than it can pay. This threatens debtors with forfeiture of what remains of their homes and other assets. The government is being told to sell off the nation’s public domain, its natural resources and public enterprises to pay the financial gambling debts run up irresponsibly by a new banking class. This class is seeking to increase its wealth and power despite the fact that its debt-leveraging strategy already has plunged the economy into bankruptcy. On top of this, creditors are seeking to enact permanent taxes and sell off public assets to pay for bailouts to themselves.
Brown continues his strutting and fretting on the world stage tirelessly pursuing the chimera of another century(or is it a thousand years) of Anglo-saxon world hegemony. Given that the game is up Brown has to be commended for his “never say die” attitude, However, said or unsaid, the empire is dead.
In These New Times 