Infinite Unknown

Spectators seek shade at the Australian Open in Melbourne

MELBOURNE (AFP) – Australia’s second-largest city Melbourne ground to a halt Saturday, crippled by a once-in-a-century heatwave that has claimed almost 30 lives and razed at least 17 homes.

Wildfires raged through the southeastern state of Victoria, where authorities said flames had come dangerously close to major electricity transmission lines which supplied power to Melbourne on Saturday.

More than 500,000 homes and businesses in Melbourne were left without power on Friday night after an electrical substation exploded in the heat, bringing the city to a standstill.

Temperatures in Victoria topped 43 degrees Celsius (109 Fahrenheit) for a record-breaking third consecutive day on Friday, when 10 homes and a timber plantation were destroyed in a 6,500 hectare (16,000 acre) blaze.

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Tags: Australia, Climate Change, Earth Changes, Environment, Heat Wave

The confrontaion between North and South Korea has escalated with Kim Jong-il’s regime claiming it was on the ‘brink of war’ after tearing up a non-aggression pact signed in 1991.

North and South Korea stand on the ‘brink of war’ as Kim Jong-il’s tears up the non-aggression pact Photo: REUTERS

In a significant escalation of tensions, North Korea cancelled all military and political agreements after accusing Seoul of aggressive posturing.

Pyongyang’s decision to nullify all accords increases the prospect of an armed confrontation on the Peninsula, where over a million soldiers face each other across the Demilitarised Zone that divides the two Koreas.

North Korea’s Committee for the Peaceful Reunification of Korea blamed the South for pushing the two countries “to the brink of a war”.

Pyongyang said it now regarded the maritime border between the two states as “void”. The last time the two countries clashed militarily was at the disputed frontier in the Yellow Sea, when their navies fought a deadly gun battle in June 2002.

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Tags: North Korea, Politics, South Korea

Honda has stressed its commitment to retaining its Swindon workforce until the autumn when a new Jazz model is due to go into production. Photograph: Garry Weaser/Guardian

Japanese carmaker Honda will shut its British factory for four months this evening, after a slump in sales.

Production at the plant in Swindon, Wiltshire, will be halted at the end of today’s shift until 1 June.

The 4,200 workers will receive full basic pay for the first two months, falling to 60% for the rest of the shutdown.

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Tags: Cars, Economy, Honda, Recession, U.K.

Quantitative easing: The Bank of England will “create money out of thin air” and inject it into the financial system, this will “increase the money supply” (= “Inflation”). Inflation is a hidden tax.

“By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
- John Maynard Keynes

The government and the Bank of England are robbing the people of their wealth.

Economic jitters: Alistair Darling has set out the details of a £50billion scheme to head off a slump

The Bank of England was put on standby to print more money last night amid growing signs of Labour jitters about the Prime Minister’s strategy for escaping a political wipeout.

Alistair Darling set out the details of a radical £50billion scheme to head off a slump by injecting hard cash into the stricken economy.

The move represents a major step towards so-called quantitative easing, whereby the Government creates more money to ease the shortage of credit in the economy.

But it also takes the Bank a step closer to losing the independence it won from Mr Brown more than a decade ago, as ministers prepare to seize control of monetary policy.

The Chancellor wrote to Bank Governor Mervyn King to confirm that the £50billion fund will be used to effectively purchase companies’ debts and even give them extra cash.

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Tags: Bank of England, Banking, Economy, Government, Politics, Treasury, U.K.

- Japanese economy hit by “perfect storm” (Telegraph):
The indicators were so bad that analysts have described it as the day the “perfect storm” came ashore.

- Japan heads for worst recession since the second world war (Guardian)

- Global Worries Over US Stimulus Spending (New York Times)

- US set for ‘big bang’ financial clean-up (Financial Times)

- U.S. Economy Shrinks at 3.8% Pace, Most in 26 Years, as Spending Crumbles (Bloomberg)

- Stocks in U.S. Retreat, Extending Losses in S&P 500′s Worst-Ever January (Bloomberg)

- Barack Obama abandons Afghan President Hamid Karzai (Telegraph):
The Barack Obama administration has abandoned Afghan President Hamid Karzai and now believes he is a major obstacle to defeating the Taliban-led insurgency.

- Saddam’s hometown unveils statue dedicated to man who threw shoe at President Bush (New York Daily News)

- Germany plans individual ‘bad banks’ (Financial Times)

- Toyota set to post first net loss since 1963 (Guardian)

- Zimbabwe abandons its currency (BBC News)

- Opec warns of further oil output cuts (Guardian):
Oil producers’ cartel tells World Economic Forum its members need a higher price if they are to have sufficient income to invest

- Mobs arrested as rioters call for ‘Sarko out’ (This is London)

- Strikes spread across Britain as oil refinery protest escalates (Guardian)

- ‘British jobs for British workers’: Wildcat strikes spread over foreign workers shipped into the UK (Daily Mail)

- Up against basic principle of EU law (Independent)

- Debt has become a drug. Withdrawal will be painful (Guardian)

- Pakistan envoy suggests India faked Mumbai transcripts (Times Online)

- Florida beans and corn destroyed, potatoes delayed (The Packer):
“All of our beans were wiped out,” said Bryan Biederman, assistant sales manager for Pioneer Growers Co-op, one of the region’s largest growers of beans and corn. “Any corn we had planted for the month of March has been wiped out. It was truly a setback for our winter program.”

Tags: Global News

Plan for cash-strapped state to become member by 2011

Iceland will be put on a fast track to joining the European Union to rescue the small Arctic state from financial collapse amid rising expectations that it will apply for membership within months, senior policy-makers in Brussels and Reykjavik have told the Guardian.

Ian Traynor on fast-tracking Iceland into the EU and the euro Link to this audio

The European commission is preparing itself for a membership bid, depending on the outcome of a snap general election expected in May. An application would be viewed very favourably in Brussels and the negotiations, which normally take many years, would be fast-forwarded to make Iceland the EU’s 29th member in record time, probably in 2011.

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Tags: Croatia, Economy, EU, Euro, Iceland, Politics

Russian prime minister Vladimir Putin has called for concerted action to break the stranglehold of the US dollar and create a new global structure of regional powers.

For a few dollars less: Vladimir Putin has called for the end of the dollar as the world’s reserve currency. Photo: ASSOCIATED PRESS

“The one reserve currency has become a danger to the world economy: that is now obvious to everybody,” he said in a speech at the World Economic Forum.

It is the first time that a Russian leader has set foot in the sanctum sanctorum of global capitalism at Davos.

Mr Putin said the leading powers should ensure an “irreversible” move towards a system of multiple reserve currencies, questioning the “reliability” of the US dollar as a safe store of value. “The pride of Wall Street investment banks don’t exist any more,” he said.

For all his bluster, Mr Putin’s bargaining power is weakening by the day. Russia’s foreign reserves have fallen by 34pc since August to $396bn (£277bn) after months of capital flight and the collapse in the price of Urals crude oil to $45 a barrel. The rouble also fell to a record low yesterday after sliding for weeks in a controlled devaluation.

Mr Putin said: “We are witnessing a truly global crisis. The speed of developments beats every record, and the strategic difference from the Great Depression is that under globalisation this touches everyone. This has multiplied the destructive force. It looks exactly like the perfect storm.”

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Tags: Dollar, Economy, Politics, Russia, U.S., Vladimir Putin

Jim Rogers: If Obamanomics happens it’s all over

The prospect of a trade war between the US and Europe is looming after “Buy American” provisions were added to President Barack Obama’s $820 billion (£573 billion) stimulus package.

President Barack Obama’s $820 billion stimulus package was passed by the House of Representatives Photo: AP

The EU trade commissioner vowed to fight back after the bill passed in the House of Representatives late on Wednesday included a ban on most purchases of foreign steel and iron used in infrastructure projects.

The Senate’s version of the legislation, which will be debated early next week, goes even further, requiring that any projects related to the stimulus use only American-made equipment and goods.

The inclusion of protectionist measures has quickly raised hackles in Europe.

Catherine Ashton, the EU trade commissioner, said: “We are looking at the situation. The one thing we can be absolutely certain about, is if a bill is passed which prohibits the sale or purchase of European goods on American territory, that is something we will not stand idly by and ignore.”

Despite the parlous state of the US economy, some major American firms, including General Electric, are also opposed to the Buy American stipulations, fearing reprisals from overseas and further damage to the global economy.

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Tags: Barack Obama, Economy, EU, Government, Obama administration, Politics, U.S.

“The Fed currently owns some $413 billion in Treasurys.”

Poole

The Federal Reserve should stop dropping hints that it could buy longer-maturity Treasurys to help the economy, said former St. Louis Federal Reserve President William Poole, adding that buying long-end Treasurys to anchor rates would be a serious mistake.

Poole, who retired from the central bank last spring after serving for 10 years, said instead, the Fed should let the expansion in money work its way through the economy. While that will take some time to kick in, it will eventually aid the recovery.

Poole said the costs of potential Treasury-buying aimed at anchoring interest rates far surpass the benefits, and exiting such a strategy would be a messy affair for the government bond market. Already, speculation over what the Fed might do has led to volatile trade.

Treasury yields shot lower in December after the Fed first said it was considering the benefits of Treasury-buying. The 10-year yield, which moves inversely to price, dropped by about 25 basis points after the Fed’s hints. The Fed’s failure to shed more light on possible buying Wednesday led to a 13-basis-point rise in the 10-year yield.

“The Fed has completely and unnecessarily whipsawed the market by putting this idea out there,” said Poole in an interview with Dow Jones Newswires on Thursday. “The Fed ought to abandon these hints that it might intervene directly in the Treasurys market for the purpose of setting a particular Treasury rate or price.”

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Tags: Economy, Fed, Federal Reserve, Politics, U.S.

The airline industry reported on Thursday an “unprecedented and shocking” plunge in global air cargo traffic.

Air freight accounts for 35 per cent of the value of goods traded internationally and the International Air Transport Association said traffic volumes had fallen by 22.6 per cent year-on-year in December.

Giovanni Bisignani, Iata director general, said, “there is no clearer description of the slowdown in world trade. Even in September 2001 (after the 9/11 terrorist attacks in the US), when much of the global fleet was grounded, the decline was only 13.9 per cent.”

“there is no clearer description of the slowdown in world trade,” … oh, wait a minute:

- Investmenttools.com
- In German: Baltic Dry Index crasht
- Baltic Dry Index (Wikipedia)

US to be CUT OFF from World – Baltic Dry Index Falls 93%

Source: YouTube

International passenger traffic fell in December by 4.6 per cent. Iata said the drop was less dramatic than in cargo, as volumes had been supported by year-end leisure travel that had been booked in advance.

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Tags: Airlines, Baltic Dry Index, Economy