Infinite Unknown

Flashback:

- Ron Paul: Sanctions Against Iran Are an ‘Act of War’:

… Ron Paul told voters in Iowa that western sanctions against Iran are “acts of war” that are likely to lead to an actual war.

Paul said that Iran would be justified in responding to sanctions by blocking the Straits of Hormuz, adding that the country blocking the strategically important strait is “so logical” since they have no other recourse.

He then compared the situation to China blocking off the Gulf of Mexico to trade.

We are totally broke (like NAZI GERMANY before) and the only thing we have left is …

… the military.

War with Russia and China, anyone?

- China To Protect Iran Even If It Means World War III

- Russian Military Chief Warns NATO: ‘Under Certain Conditions Local And Regional Conflicts May Develop Into A Full-Scale War Involving Nuclear Weapons’

Britain, America and France delivered a pointed signal to Iran, sending six warships led by a 100,000 ton aircraft carrier through the highly sensitive waters of the Strait of Hormuz.

USS Abraham Lincoln

- Britain, US and France send warships through Strait of Hormuz (Telegraph, Jan. 23, 2012):

This deployment defied explicit Iranian threats to close the waterway. It coincided with an escalation in the West’s confrontation with Iran over the country’s nuclear ambitions.

European Union foreign ministers are today expected to announce an embargo on Iranian oil exports, amounting to the most significant package of sanctions yet agreed. They are also likely to impose a partial freeze on assets held by the Iranian Central Bank in the EU.

Tehran has threatened to block the Strait of Hormuz in retaliation. Tankers carrying 17 million barrels of oil pass through this waterway every day, accounting for 35 per cent of the world’s seaborne crude shipments. At its narrowest point, located between Iran and Oman, the Strait is only 21 miles wide.

Continue reading »

Tags: Barack Obama, EU, Europe, France, Global News, Government, Iran, Military, Obama administration, Strait of Hormuz, U.K., U.S.

See also:

- Marc Faber’s Latest Rant On Global Monetization Wars (Video)

… the majority of European nations deserve a CCC rating …

- The Real Dark Horse: S&P’s Mass Downgrade FAQ May Have Just Hobbled The European Sovereign Debt Market

- France’s credit rating downgraded in latest blow to euro zone (The Globe and Mail, Jan. 13, 2012):

The euro zone’s worst-case scenario of recession and default is looming larger after a mass debt downgrade of France and several other countries, and stalled Greek debt restructuring talks.

Standard & Poor’s stripped France of its prized triple-A rating and slashed the ratings of Italy, Spain and six other European countries Friday, continuing a disturbing pattern of the feared becoming reality in Europe’s smouldering debt crisis.

The move Friday crushed nascent hope that the region’s debt woes might finally be easing after successful bond auctions by Spain and Italy earlier in the week.

The most immediate problem for the euro zone is that France – its second largest economy – will now face significantly higher borrowing costs just as the region slides into recession.

Equally important, the downgrade makes it more expensive for the European Financial Stability Fund to raise cash because France is the fund’s No. 2 backer behind Germany. The EFSF, set up in 2010, is due to raise money in the markets on Tuesday.

Continue reading »

Tags: Austria, Bonds, Cyprus, Debt, EU, Europe, France, Global News, Government, Italy, Malta, Politics, Portugal, Rating, Slovakia, Slovenia, Spain, Standard & Poor's

From the article:

S&P may have just killed the European sovereign market by saying out loud what only “fringe bloggers” dared suggest in the past.

- The Real Dark Horse – S&P’s Mass Downgrade FAQ May Have Just Hobbled The European Sovereign Debt Market (ZeroHedge, Jan. 13, 2012):

All your questions about the historic European downgrade should be answered after reading the following FAQ. Or so S&P believes. Ironically, it does an admirable job, because the following presentation successfully manages to negate years of endless lies and propaganda by Europe’s incompetent and corrupt klepocrarts, and lays out the true terrifying perspective currently splayed out before the eurozone better than most analyses we have seen to date. Namely that the failed experiment is coming to an end. And since the Eurozone’s idiotic foundation was laid out by the same breed of central planning academic wizards who thought that Keynesianism was a great idea (and continue to determine the fate of the world out of their small corner office in the Marriner Eccles building), the imminent downfall of Europe will only precipitate the final unraveling of the shaman “economic” religion that has taken the world to the brink of utter financial collapse and, gradually, world war.

Here are the key take home messages from the FAQ (source): Continue reading »

Tags: Banking, Belgium, Bonds, cds, Debt, Derivatives, Derivatives market, ECB, Economy, EU, Europe, France, Germany, Global News, Government, Greece, Holland, Ireland, Italy, Keynesianism, Politics, Portugal, Rating, Standard & Poor's

- Faber’s Latest Rant On Global Monetization Wars (ZeroHedge, Jan. 13, 2012):

There is a little for everyone in Marc Faber’s latest appearance on CNBC. The infamous boomer (and doomer) believes (as we do) that today’s downgrades are less significant for stocks (at least until the realization that banks and more importantly insurance companies are about to be cut as well – keep a close eye out on Allianz and Generali (of ASSGEN fame) – it is not incidental that they are abbreviated to A&G, just one letter away from our own AIG) as it is largely priced in but the equity market’s rally of the last few weeks (with its lack of breadth and volume) is strongly suggestive of a bear-market rally (as opposed to the decoupling bull market that so many hope for). His view quite simply is that the ECB has undergone a backdoor monetization and without this the EUR would be significantly stronger especially given the huge short-interest (though he sees the trend for EUR is down). However, he remains unenthusiastic at the inevitable outcome – suggesting the majority of European nations deserve a CCC rating (which is clearly not priced in) and that the USA should not be AAA (noting that even Germany has huge unfunded liabilities as it writes check after check to save its socialist sorority sisters).

Admitting that he was wrong on US Treasuries (short) last year, he still worries of the long-term value in holding the ponzi-paper and addresses what seemed like the theory-du-jour that a weaker EUR is good for European exports and so all-is-well in the world by pointing out (among other things) that many large European corporations have huge amounts of USD-denominated debt making their debt servicing costs much higher. His perspective on Europe is interesting, concerned that we may see one country say enough-is-enough and leave the Euro, he believes the US outperformance over Europe will unwind and that quality companies in Europe and Emerging Markets are the place to be for investors. Noting that they are admittedly not compelling values he points to the difficulty of valuing anything in a zero-interest rate environment. The worse the global economy looks, the weaker the Chinese economy performs,  and the more the reaction will be money printing which will lift equity prices (whereas the real economy is faltering and standards of living going down fast) leaving him holding gold at the core but realizing stocks will rise nominally.

Finally, his “black swan” scenario is some country saying “we’ve had enough. We are exiting the euro.” Which brings us to the issue of the Greek coercive restructuring which now appears to be just a matter of weeks if not days away. And once Greece pulls the plug, and the Eurozone does not implode (hypothetically), it will set an example whereby more and more countries do the same, until finally the system does crash under its own weight, as everyone does a CDS-triggering restructuring, in effect tearing the Eurozone from the inside.

Tags: Bonds, Debt, Dollar, ECB, Economy, EU, Euro, Europe, France, Germany, Global News, Government, Marc Faber, Politics, Quantitative Easing, Rating, U.S.

And if I remember it correctly then France and Germany were the ones that forced that deal upon Greece before. The military purchases were part of the bailout condition.

So it is the people (everywhere) who have been looted AGAIN. Only this time taxpayer money gets funnelled to the military-industrial complex instead to the banksters.

All these unnessecary bailouts are the biggest robbery of the people allowed by our own politicians, who are only elite puppets robbing and looting us until there is nothing left, thereby perfectly serving their elite masters.

Remember, all these losses are somebody’s gain, but you only hear about the losses and that more bailout money is needed from you to save the totally corrupt system from collapse.

And when a government goes bankrupt, it is really not the government that goes bankrupt, but the people, … which is THE PLAN.

Currency reform, anyone? Got physical gold and silver?

- Greece Spends Bailout Cash On European Military Purchases (ZeroHedge, Jan 9, 2012):

As Greek standards of living nose-dive, loans to households and businesses shrink still further, and Troika-imposed PSI discussions continue, there is one segment of the country’s infrastructure that is holding up well. In a story on Zeit Online, the details of the multi-billion Euro new arms contracts are exposed as the European reach-around would be complete with IMF (US) and Europe-provided Greek bailout cash doing a full-circle into American Apache helicopters, French frigates, and German U-Boats. As the unnamed source in the article notes: “If Greece gets paid in March the next tranche of funding (€ 80 billion is expected), there is a real opportunity to conclude new arms contracts.” With the country’s doctors only treating emergencies, bus drivers on strike, and a dire lack of school textbooks and the country teetering on the brink of Drachmatization, perhaps our previous concerns over military coups was not so far-fetched as after the Portuguese (another obviously stressed nation), the Greeks are the largest buyers of German war weapons.  It seems debt crisis talks perhaps had more quid pro quo than many expected as Euro Fighter commitments were also discussed and Greek foreign minister Droutsas points out:”Whether we like it or not, Greece is obliged to have a strong military”.

From Zeit Online: Fine Weapons For Athens (Via Google Translate)

Frigates, tanks and submarines: A Greek military passes any savings package. And Germany benefited.

The Gift of the Greek Ministry of Defense has the man in the head: up to 60 fighter aircraft fighter for maybe € 3.9 billion euros. French frigates for about four billion, patrol boats worth 400 million euros, as much is the necessary modernization of the existing Greek fleet. Then it still lacks of ammunition for the Leopard tank , also would have two American Apache helicopters will be replaced. Oh, and one would like to buy German U-boats, total price: two billion euros.

What the man who goes in and out of Greece’s Defence Ministry, in an Athens cafe is because of the sounds absurd. A State which is on the verge of bankruptcy and is supported by billions of the European Union wants to buy tons of weapons? The man in the café is often seen in photos next to the generals of the Army or Defense, he phoned often with these people, so he knows his way around. He knows how sensitive the issue, and would therefore – like most other party – are not named in the newspaper. He even holds for arms purchases currently not communicable. But could soon change that, he says: “If Greece get paid in March the next tranche of funding of € 80 billion is expected, there is a real opportunity to conclude new arms contracts.”

Continue reading »

Tags: Economy, EU, Europe, France, Germany, Global News, Government, Greece, Military, Politics

- Turkey freezes all political relations with France over genocide row (Guardian, Dec. 22, 2011):

Recep Tayyip Erdogan recalls ambassador after Paris’s decision to prosecute people who deny killing of Armenians was genocide

Turkey has frozen relations with France, recalling its ambassador and suspending all economic, political and military meetings in response to French MPs’ approval of a law that would make it a crime to deny that the mass killing of Armenians in 1915 by Ottoman Turks was genocide.

The furious Turkish reaction to Paris’s parliamentary vote marked an unprecedented low between the Nato partners.

- Turkey accuses France of genocide in Armenia row (Telegraph, Dec. 23, 2011):

The war of words between France and Turkey has escalated, when the Turkish premier accused Paris of committing genocide in Algeria and of stirring hatred of Muslims.

Furious that the French lower chamber had voted on Thursday to outlaw denial of the 1915 Armenian genocide in Ottoman Turkey, Prime Minister Recep Tayyip Erdogan hit back directly at France’s President Nicolas Sarkozy.

Earlier, Turkey’s ambassador to France had left Paris and Ankara had announced diplomatic sanctions – banning political visits between the countries – and frozen military ties between the nominal Nato allies.

“France massacred an estimated 15 per cent of the Algerian population starting from 1945. This is genocide,” Mr Erdogan said, accusing Mr Sarkozy of “fanning hatred of Muslims and Turks for electoral gains.”

Continue reading »

Tags: Armenia, Europe, France, Genocide, Global News, Government, Nicolas Sarkozy, Politics, Recep Tayyip Erdogan, Turkey

– Chart Of European Emergency Liquidity Back At Record Levels, And Why Bank Of America Is Long French CDS (ZeroHedge, Dec, 21, 2011):

Yesterday we charted the combined ECB balance sheet which showed that it had hit an all time record of €2.5 trillion, exclusing today’s operation (to the stunned surprise of all those who scream that the ECB should be printing more, more, more). Today, we focus exclusively on the various forms of unsecured liquidity measures, such as today’s 3 Year LTRO, because as the following chart from Bank of America shows, European emergency liquidity provisioning post today’s liquidity bailout brings the total to €873 billion and is just shy of its all time record of €896 billion, a number which we expect will be taken out as soon as the next liquidity provisioning operation. In other words, European liquidity in euro terms, has virtually never been worse. And as today’s additional drawdown of Fed swap lines indicates, the USD liquidity crunch is getting worse not better (confirmed by the rapid deterioration in basis swap levels). Perhaps the fact that not only is nothing fixed, but things are about as bad as they have ever been explains why Europe closed blood red across the board, and also why Bank of America continues to push for an outright crash in all risk (and some were doubting our earlier analysis that BAC is outright yearning for a market crash): To wit from Bank of America’s Ralf Preusser: “The tender results do not however change either our longer term  cautious outlook on growth, or the periphery. We remain long 5y CDS protection on France, at 210bp (target 300bp, stop loss 175bp).” So let’s see: BAC is shorting the EURUSD, which implies they are pushing for a market drop, and now they want French CDS to soar? Who was it that said the megabanks do not want a crash?

And here is what near record liquidity needs look like: Continue reading »

Tags: Bank of America, Banking, Bonds, cds, Collapse, Debt, Derivatives, Derivatives market, ECB, Economy, EU, Europe, France, Global News, Liquidity, Politics

- Massive outage as storm batters France (Adelaide Now, AFP, Dec. 16, 2011):

A STORM has battered north-western France, leaving hundreds of thousands without power, disrupting rail traffic and grounding a ship that spilled oil off the coast of Brittany.

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Tags: electricity, Environment, Europe, France, Storm

Flashback ( on ECB’s Mario Draghi):

- ECB’s Mario Draghi: We Need Fiscal Union (= EUSSR), Not Bank Intervention

- Former Goldman Sachs Managing Director Mario Draghi Appointed European Central Bank President!

- Mario Draghi (Wikipedia):

Draghi was then vice chairman and managing director of Goldman Sachs International and a member of the firm-wide management committee (2002–2005). A controversy existed on his duties while employed at Goldman Sachs. Pascal Canfin (MEP) asserted Draghi was involved in swaps for European governments, namely Greece, trying to disguise their countries’ economic status.

- French banks downgraded by Moody’s (Telegraph, Dec. 9, 2011):

Moody’s has downgraded BNP Paribas, Societe Generale, and Credit Agricole warning their creditworthiness is being damaged by the fragile operating environment for European banks.

The agency cut its ratings on the long-term debt of BNP and Credit Agicole by one notch to Aa3, concluding reviews that began in June and were continued in September. Societe Generale’s long-term debt was cut by one notch to A1.

The downgrades were driven by the increasing difficulties the banks were having in raising funding and the worsening economic outlook, Moody’s said.

The news comes a day after the European Banking Authority (EBA), warned the region’s banks must find €114.7bn of extra capital in order to withstand the euro zone debt crisis and restore investor confidence.

Moody’s said its ratings did take into account the fact that all three French banks were likely to benefit from state support if the crisis deepened.

“Liquidity and funding conditions have deteriorated significantly,” said Moody’s, adding that the banks have historically relied on wholesale funding markets.

“The probability that the will face further funding pressures has risen in line with the worsening European debt crisis.”

- Eurozone banking system on the edge of collapse (Telegraph, Dec. 9, 2011):

Senior analysts and traders warned of impending bank failures as a summit intended to solve the European crisis failed to deliver a solution that eased concerns over bank funding.

The European Central Bank admitted it had held meetings about providing emergency funding to the region’s struggling banks, however City figures said a “collateral crunch” was looming.

“If anyone thinks things are getting better then they simply don’t understand how severe the problems are. I think a major bank could fail within weeks,” said one London-based executive at a major global bank.

Many banks, including some French, Italian and Spanish lenders, have already run out of many of the acceptable forms of collateral such as US Treasuries and other liquid securities used to finance short-term loans and have been forced to resort to lending out their gold reserves to maintain access to dollar funding.

“The system is creaking. There is a large amount of stress,” said Anthony Peters, a strategist at Swissinvest, pointing to soaring interbank lending rates.

Continue reading »

Tags: Banking, BNP Paribas, Bonds, Credit Agricole, Debt, Economy, EU, Europe, France, Gold, Government, Liquidity, Moody's, Politics, Rating, Societe Generale

- Bank of France debts jump tenfold on capital flight (Telegraph, Dec. 6, 2011):

French lenders lost €100bn (£86bn) in short-term deposits in September alone, mostly due to precautionary moves by US money market funds and Asian investors afraid of France’s exposure to Italy. “There were huge net capital outflows,” said Eric Dor from the IESEG School of Management in Lille.

The effects of this capital flight are surfacing on the Bank of France’s books under the European Central Bank’s so-called “Target2″ scheme, an ECB payment network that lets funds move automatically where needed.

Liabilities jumped suddenly in late July, rising from €10bn to €98bn by September. Ireland’s central bank owes €118bn, Spain’s €108bn and Italy’s €89bn.

The triple-trigger appears to have been a sudden drop in Club Med manufacturing orders, an ECB rate rise, and the EU’s July summit – which led to haircuts on Greek bondholders and battered faith in EMU sovereign debt.

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Tags: Bank of France, Debt, ECB, Economy, France, Global News, Greece, Italy