Europe Launches a Massive Greek Bailout

BRUSSELS—Euro-zone leaders agreed Thursday on a new €100 billion ($144 billion) bailout for Greece and new steps to prevent its debt crisis from metastasizing across the Continent—in a plan expected to trigger the first debt default by a nation using the common currency.

The meeting also produced a stark and open-ended declaration: The wider euro zone is committed to financing countries that take bailouts—thus far, Greece, Ireland and Portugal—for as along as it takes them to regain access to private lenders.

The move is a bold bid by Europe's leaders to corral an 18-month-old debt crisis that is veering dangerously out of control. Markets stopped lending to Greece, then Ireland, then Portugal. Fearful that policy makers have no concrete strategy for shoring up the larger economies of Spain and Italy, investors have lately soured on them as well. After months of dithering, European leaders resolved that they had to stop the bleeding.

Still, it remains to be seen whether the tourniquet will hold. Even after the new plan, Greece will have a staggering load of debt.

Thursday's agreement was the fruit of several concessions. European Central Bank Jean-Claude Trichet lost a fight to prevent default. German Chancellor Angela Merkel pried open her reluctant nation's pocketbook to write another check and be on the hook for still more.

French President Nicolas Sarkozy, though he lost a bid to tax banks to pay for the bailout, may have come out the best by urging Ms. Merkel to a more proactive approach to the debt crisis.

In a declaration crafted here after hours of haggling, and a whirlwind trip Wednesday to Berlin by the French president, the leaders put forward billions more in new loans to Greece. But they extracted a price: Greece's private-sector creditors will accept a bond exchange that gives them less than originally promised.

The euro zone had long insisted that none of its 17 members could contemplate not repaying their debt, and the European Central Bank vigorously fought a default to the very end. Mr. Trichet joined Ms. Merkel and Mr. Sarkozy at their meeting in Berlin on Wednesday to press his case once more. But Greece was reeling under its huge burden, and its woes were threatening to engulf other countries.

To push back against that contagion, the euro zone also agreed Thursday to a wide expansion of its €440 billion bailout fund. That vehicle, once restricted to lending to countries near the brink of collapse, will now be able to buy euro-zone bonds on secondary markets to move prices and lend directly to countries even before they lose access to private funding. That could even include lending money to finance bank recapitalizations.

Continue reading - WSJ - Europe Launches a Massive Greek Bailout

The Fed, Wall Street plan for default

With less than two weeks before the United States cannot borrow more money, the Federal Reserve and Wall Street are making plans to prepare for the country’s possible default on its $14.3 trillion debt.

In the most revealing comments to date, Charles Plosser, the president of the Philadelphia Federal Reserve, told Reuters the nation has for months been in “contingency planning mode” to deal with the fallout when the federal government runs out of money.

“We are developing processes and procedures by which the Treasury communicates to us what we are going to do,” Plosser said. “How the Fed is going to go about clearing government checks. Which ones are going to be good? Which ones are not going to be good? There are a lot of people working on what we would do and how we would do it.”

The Treasury Department has repeatedly denied making plans for default, saying raising the debt ceiling is the lone acceptable option. A spokesman did not comment to Reuters.

Wall Street officials are in the same boat, devising what the New York Times called “doomsday plans in case the clock runs out.”

Meanwhile, the Wall Street firms, the Times wrote, are seeking to reduce their risk related to Treasury bonds while hedge funds are hoarding cash to purchase U.S. debt if the price plummets in the event of a post-default sell-off.

The paper wrote that a full-scale financial panic has not set in but is close.

“The metaphor is a pile of sand,” Mark Zandi, the chief economist at Moody’s Analytics, told the Times. “You keep putting one piece of sand on the pile, nothing happens, and then, all of the sudden it just caves.”

Plosser also told Reuters that, despite the shaky economy, the Fed may raise interest rates before the year is out. He said he expects the unemployment rate, now at 9.2 percent, to fall to 8.5 percent.

“I don’t see the fundamentals of the economy as changed that much,” he said. “Yeah, there’s been some shocks and disruptions, but the underlying forces that are going to cause us to continue a slow, moderate recovery are still in place.”

Continue reading - Politico - The Fed, Wall Street plan for default

Inflation Tough to Digest for Asia as Food Costs Soar From Pork to Onions

Asian cuisine may be too much of a good thing for some of the region’s central banks as policy makers grapple with the challenge of responding to spikes in the cost of staples from rice and pork to onions and chilies.

Pork prices jumped 57 percent in June in China, leading Premier Wen Jiabao to vow to curb inflation even as growth slows. India had to buy onions from arch-rival Pakistan this year for curries and Indonesia told spice lovers to grow their own chili as shortages stoked prices. A wider variety of diet and greater purchasing power for non-food items leave wealthier nations less vulnerable to food-cost spikes.

Food makes up more than 30 percent of inflation indexes on average in Asia, compared with about 15 percent in Europe and less than 10 percent in the U.S., according to Rabobank Groep NV. The sensitivity of their economies to swings in meat and vegetable costs means emerging-market policy makers need to raise interest rates more to stem inflation when global agriculture prices soar.

“People can’t change their diets overnight,” said Song Seng Wun, an economist at CIMB Research Pte in Singapore who has analyzed Asian economies for more than two decades. “All monetary policy can do is to try to contain what is perhaps a supply disruption issue from broadening to the wider economy.”

Rice, the staple food for about half of the global population, has surged 70 percent in the past year according to futures traded on the Chicago Board of Trade. The export price of rice from Thailand, the world’s biggest exporter of the grain, has jumped 23 percent.

World food prices held near a record in June as the cost of sugar, meat and dairy increased. An index of 55 food commodities rose to 233.8 points from 231.4 points in May, the United Nations’ Food and Agriculture Organization said July 7. The gauge climbed to an all-time high of 237.7 in February.

A fivefold jump in Indonesian chili prices last year made the spice costlier than beef, the Jakarta Globe reported in January. Indonesian’s Agriculture Minister Suswono said at the beginning of 2011 that the government will distribute chili seeds to 100,000 households, the paper said. Bank Indonesia, while trailing counterparts from Thailand to Malaysia this year, raised rates in February.

In India, where the price of onions has at times become an election issue, the central bank has raised rates 10 times since the start of 2010. The world’s second-biggest onion grower said in December it would buy the vegetable from abroad and banned exports after excess rainfall damaged crops and stoked prices.

Continue reading - Bloomberg - Inflation Tough to Digest for Asia as Food Costs Soar From Pork to Onions

Ron Paul: 'Freedom Is a Young Idea and We're Throwing It Away'

Judy Woodruff sat down with Texas Rep. Ron Paul Wednesday to discuss his campaign for the GOP presidential nomination and the ongoing debt-ceiling negotiations. The interview is the first in a series of conversations with GOP contenders seeking to take on President Obama in the 2012 election.

Ron Paul: 'Freedom Is a Young Idea and We're Throwing It Away'


Floor Speech on Debt Ceiling July 19 2011

MALAWI REVOLT - Malawi riots erupt in Lilongwe and Mzuzu

Riots have broken out in cities in Malawi as opposition groups protest against President Bingu wa Mutharika's government.

At least one person has died in the northern city of Mzuzu and protesters are burning barricades and looting property in the capital.

The authorities have banned live broadcasts of the riots.

The trouble started after a court ruled on Tuesday the protests, called against the high cost of living, were illegal.

"We have more than 10 people in the hospital right now, some are in a serious condition," she said, speaking on condition of anonymity.

The BBC's Joel Nkoma in Lilongwe says the situation is also tense there, where angry crowds have been shouting, "Let him [Mr Mutharika] go".

The demonstrations were called to protest against rising fuel prices, a shortage of foreign exchange reserves, alleged bad governance and poor international relations.

Last week, the UK cut direct aid to Malawi after a diplomatic spat with Mr Mutharika's government.

The UK accused Malawi of mishandling the economy and failing to uphold human rights.

The government recently passed an austerity budget, raising taxes to reduce dependence on aid.

Malawi is one of the poorest countries in the world, with an estimated 75% of the population living on less than $1 (60p) a day.

Continue reading - BBC - Malawi riots erupt in Lilongwe and Mzuzu

For Liberty Re-cut - Ron Paul 2012 HD

Writes Chris Rye, director of the For Liberty Documentary:

Just got the final version uploaded in HD to Youtube today! The new ending of this is awesome:

For Liberty Re-cut - Ron Paul 2012 Handout DVD HD


Conviction, Not Compromise! (Ron Paul's First 2012 TV Ad)

MUST WATCH! Bernanke Fights Ron Paul In Congress: Gold Isn’t Money

Chairman Ben Bernanke faced-off with Fed-hating Representative Ron Paul during his monetary policy report to Congress on Wednesday. The head of the Fed was forced to respond to accusations of enriching already rich corporations while failing to help Main Street, while he was pushed on his views on gold. When asked whether gold is money, Bernanke flatly responded “No.”

While most of Bernanke’s reports to Congress serve politicians to pursue their own agendas by gearing the Chairman towards their issues, with Republican Rep. Bacchus talking of the unsustainability of Medicaid and Rep. Frank (D, Mass.) asking about the need to raise the debt limit without cutting spending, it was a stand-off between Bernanke and Ron Paul that took all the attention.

Rep. Ron Paul, Republican for Texas, asked Bernanke why a capital injection of more than $5 trillion “hasn’t done much” to help the consumer, who makes up about two-thirds of GDP in the U.S., and prop up the economy, while it helped boost corporate profits. “You could’ve given $17,000 to each citizen,” Ron Paul claimed.

Bernanke, clearly on the defensive, told Rep. Ron Paul that his institution hadn’t spent a single dollar, rather, the Fed has been a “profit center” according to the Chairman, returning profits to the federal government. As Bernanke began to sermon Rep. Paul on the history of the Fed (“we are here to provide liquidity [in abnormal situations],” the Chairman said), he was interrupted.

“When you wake up in the morning, do you think about the price of gold,” Rep. Paul asked. After pausing for a second, Bernanke responded, clearly uncomfortable. that he paid much attention to the price of gold, only to be interrupted once again.

“Gold’s at about $1,580 [an ounce] this morning, what do you think of the price of gold?” asked Rep. Paul. A stern-faced Bernanke responded people bought it for protection and was once again cut-off, with Ron Paul once again on the offensive.

“Is gold money?” he asked. Clearly bothered, Bernanke told the representative, “No. It’s a precious metal.”

After Paul interrupted him to note the long history of gold being used as money, Bernanke continued,”It’s an asset. Would you say Treasury bills are money? I don’t think they’re money either but they’re a financial asset.”

Paul asked Bernanke why central banks didn’t hold diamonds, clearly hinting at his fiat money criticism of the U.S. monetary system. The Fed Chairman told Rep. Paul it was nothing more than tradition, and, as he was attempting to develop his argument, Rep. Ron Paul quickly asked the acting authority of the House of Representative’s Committee on Financial Services, Rep. Bacchus, to excuse him for exceeding his time, as he returned the floor to the Committee.

The interesting exchange served as one of the few times Bernanke has been publicly pushed off his comfort zone by an elected official. Rep. Ron Paul brought up the issues that he’s famous for, namely, a sort of allegiance between the Fed and the nation’s most powerful institutions, the illusion of fiat money, and the gold standard. Bernanke, angered and bothered, had no option but to respond.

Continue reading - Forbes - Bernanke Fights Ron Paul In Congress: Gold Isn’t Money

Ron Paul asks Ben Bernanke - Is Gold Money? July 13, 2011


Financial Services Hearing July 13 2011

Bernanke: Fed ready to act if economy worsens

Federal Reserve Chairman Ben Bernanke told lawmakers Wednesday the Fed is ready to act if the economy gets weaker. He warned them that allowing the nation to default on its debt would send "shock waves through the entire financial system."

Underscoring how fragile the economy remains two years after the Great Recession, Bernanke laid out three new steps the Fed could take, including a fresh round of government bond purchases designed to stimulate economic growth.

"We have to keep all the options on the table. We don't know where the economy is going to go," Bernanke told the House Financial Services Committee.

The Fed chairman stopped short of promising anything, but Wall Street appeared comforted that the central bank was poised to act. The Dow Jones industrial average was up more than 150 points during his testimony to Congress, and closed up 45.

But some of the early stock gains were lost after Richard Fisher, president of the Federal Reserve Bank of Dallas, said in a speech that the Fed had already "pressed the limits of monetary policy."

"If we went so far as to default on the debt, it would be a major crisis because the Treasury security is viewed as the safest and most liquid security in the world," he said.

"It's the foundation for most of our financial -- for much of our financial system," he added. "And the notion that it would become suddenly unreliable and illiquid would throw shock waves through the entire global financial system."

The Fed bought $600 billion in government bonds late last year and early this year, a program designed to keep interest rates low and support the prices of assets such as stocks.

It was the second time the Fed had taken that step since the recession started. It was known on Wall Street as "QE2," or a second round of "quantitative easing." Besides a third round, Bernanke laid out two additional options if the economy gets weaker:

-- The Fed could offer financial markets more clarity about how long it tends to leave interest rates at record lows, where they have stood since December 2008. For now, the Fed says only that rates will remain "exceptionally low" for an "extended period."

-- It could start paying banks less interest on the excess money they park with the Fed. It doesn't pay much now -- 0.25 percent. But paying even less would encourage the banks to loan the money out rather than sending it to the central bank.

Bernanke said the measures would be necessary only if deflation, a cycle of falling prices that damages the economy, became a threat. For now, prices are still rising. Some inflation is healthy, economists say.

Critics of the Fed's two previous rounds of "quantitative easing" have said the real threat is the opposite -- that the central bank will create runaway inflation by flooding the economy with money.

Bernanke said the Fed was ready to raise interest rates if inflation becomes a serious threat.

Continue reading - Bernanke: Fed ready to act if economy worsens

China worried about US economy

China is watching whether the Federal Reserve launches a new stimulus that might hurt China by pushing up commodity prices, a Cabinet researcher said Thursday.

The U.S. economy "has been doing worse than expected" and Beijing needs to "seriously assess" possible risks to its vast holdings of American debt, said Yu Bin, an economist in the Cabinet's Development Research Center.

"The prospects of the U.S. economy are worrying," Yu said at a government-organized briefing. Beijing uses such briefings to explain official views, though the researchers do not act as government spokespeople.

Yu expressed concern about a possible third round of Fed purchases of government bonds, known as "quantitative easing" or QE. He said that might hurt China by depressing the value of the dollar and driving up prices of commodities needed by its industries. Most commodities are traded in dollars.

The Fed bought $600 billion in bonds late last year and early this year to keep interest rates low and support prices of assets such as stocks. On Wednesday, Chairman Ben Bernanke said the Fed was ready to take action if the U.S. economy weakens and said a third round of purchases was a possible option.

"We are following closely whether the United States will introduce QE3, because we believe it will have a major impact on China's economy," said Yu, director-general of the Development Research Center's Department of Macroeconomic Research.

"The drastic rise in commodity prices caused by the devaluation of the U.S. dollar will have a major impact on inflation, on economic growth and on Chinese people's daily lives."

Yu warned that such a move also would affect the "long-term trajectory of the U.S. economy."

Continue reading - China worried about US economy

MALAYSIA REVOLT - Bersih 2.0 | Malaysia cracks down on protesters

Police in Malaysia have fired tear gas and arrested hundreds of protesters in the biggest opposition-backed rally in years.

More than 20,000 demonstrators massed across Malaysia's capital Kuala Lumpur on Saturday, demanding electoral reforms, activists said.

The federal police force arrested 1,400 people in a clampdown called Operation Erase Bersih, referring to the Bersih coalition, the group that organised the rally.

Those arrested included several senior opposition officials.

Ambiga Sreenavasan, head of the Bersih coalition, said that the suppression of the protests had "stirred a sense of outrage against the exhibition of raw power by our government".

"What is the necessity for a show of might against right? No matter what, right will always prevail," she said.

Prime Minister Najib Razak's government had declared the demonstration illegal, and police had sealed off parts of the capital in advance, warning those who took part in demonstrations that they would face "stern action".

Witnesses said riot police armed with batons charged at some protesters and dragged them into trucks.

Strict security measures

Authorities took extraordinary security measures to deter the rally by closing train stations and deploying lorries mounted with water cannons near the Independence Stadium in a suburb of Kuala Lumpur, where activists sought to gather.

Nevertheless, thousands tried to reach the stadium from various parts of the capital, chanting "Long live the people" and carrying yellow balloons and flowers as they marched.

Police fired numerous rounds of tear gas and chemical-laced water in repeated attempts to disperse the crowds, causing demonstrators to scatter into nearby buildings.

Helicopters flew overhead as a brief downpour failed to deter the protesters.

Anwar Ibrahim, the opposition leader, said he had sustained a "minor injury" when his group was hit by tear gas.

"We were attacked from both corners but what was horrifying is that the police shot directly at the protesters, some of them clearly aimed at me personally, so my security assistants had to cover me and one was badly injured because the canister was shot direct, he is badly injured," Anwar told the Associated Press news agency.

"This is a simple portrayal of the extent of desperation of brutal action approved by the Prime Minister Najib."

Government officials accuse Anwar's three-party alliance of endorsing the rally to cause chaos on the streets and undermine the National Front, the federal ruling coalition.

Electoral reforms

The rally organisers called for reforms following accusations that the Malaysian election commission is biased towards the ruling coalition, which has been in power since independence from Britain in 1957. The commission denies the charge.

The government insists the current electoral policies are evenhanded.

Over the past two weeks, more than 200 other activists have been arrested nationwide for trying to promote the rally.

Earlier, speaking to Al Jazeera over phone from Kuala Lumpur on Saturday, Edmund Bon, a human-rights lawyer, said: "It's an extraordinary clampdown on the whole [city] and we are not allowed to go anywhere.

"People are getting arrested on the streets and about 250 to 300 people have been arrested so far in connection with the rally.”

The activists' demands include an overhaul of voter registration lists, tougher measures to curb fraud and fairer opportunities for opposition politicians to campaign in government-linked media.

A general election is not due until 2013 but Najib has not ruled out early polls, after economic growth accelerated to a 10-year high in 2010.

Major street demonstrations are rare in this Southeast Asian country, but the rise of alternative media channels and a growing opposition voice are gradually creating a more vocal Malaysian public.

Continue reading - Malaysia cracks down on protesters

Bersih 2.0 Global

Bersih 2.0 Hotspots Around the World
Bersih Global's Gallery

Malaysia cracks down on protesters


BERSIH 2.0 - A Day to Remember!


BERSIH 2.0 - Malaysians March Together


709-This is Our Land


Walking With People


Truth that Cannot Be Cover - Bersih 2.0


Newsflash: Bersih 2.0 Rally In KL


1600 arrested in Malaysia democracy protest - 09Jul2011


Bersih 2.0 - 9 Julai 2011


Gased in Pudu


Chinese Version

蘋果日報 - 2011-07-10 - 5萬人上街促選舉改革大馬鎮壓示威拘 1667人


クアラルンプールで選挙制度改革求め1万人以上がデモ　約1,700人拘束


国民媒眼看 20110709 净选盟Bersih2.0大集会全都录 Part2


国民媒眼看 20110709 净选盟Bersih2.0大集会全都录 Part3

Peter Russell's Words of Wisdom

Letting go is a recurrent theme of many spiritual traditions. In this clip from his Burning Man interview, Peter Russell reframes letting go as "letting in" and "letting be".

Letting Go


Samsara means "to wander on endlessly". Peter Russell discusses how we wandering on through life seeking one transient satisfaction after another, not realizing that that which we seek is our true nature. Nirvana means "to extinguish" as in blowing out a flame. Knowing our true nature blows out the flame of desire that drives the endless wandering on.

Samsara and Nirvana


Entheogen means "generating god within". Ayahuasca may well produce profound spiritual openings and personal transformation, but does it really generate a connection with the Divine? From a talk by Peter Russell at Institute of Noetic Sciences

Ayahuasca: Is It Really an Entheogen

Running Scared in Malaysia

The Malaysian government has pulled out all the stops to prevent an opposition rally this weekend. This week, army units conducted crowd control exercises with banners that said, "Disperse or we will shoot!" The police set up roadblocks and arrested Malaysians simply for wearing yellow T-shirts, the signature color of Bersih, a coalition of 62 nongovernmental organizations that demands changes in Malaysia's electoral system. To date, the police have arrested over 250 supporters of Bersih, claiming that they are "waging war against the king."

Then something unprecedented happened. Malaysia's King Tuanku Mizan Zainal Abidin, allegedly the target of Bersih's campaign, intervened. He called on both Prime Minister Najib Razak and Bersih to resolve their differences in a spirit of harmony and cooperation, for the good of the nation.

There was a collective sigh of relief in Malaysia. The leader of Bersih, Ambiga Sreenevasan, an attorney and former president of the Malaysian Bar Council, met with the king and announced that the "Walk for Democracy," as it was called, was cancelled. She said that she was ready to meet with the government to discuss Bersih's concerns about electoral fairness. Prime Minister Najib then offered an olive branch, saying, "We are willing to provide a stadium for them to rally in … from morning until night," an offer that Ms. Ambiga and Bersih immediately accepted.

Then Mr. Najib backed off. His government says that because Bersih is still illegal, it cannot apply for a permit. It also has banned Bersih's leadership from entering Kuala Lumpur on the day of the rally. On Thursday, he joined a gathering of martial artists who said that their 50,000 members will "wage war" against Bersih. Donning their militant uniform, Mr. Najib said, "If there are evil enemies who want to attack the country from within, you, my brothers, will rise to fight them."

Mr. Najib has undermined the authority of the king, who gave Bersih and its concerns credence by meeting with its leadership and calling for a negotiated solution. The political situation in Malaysia is a fast-moving target, and each day brings new developments. Ms. Ambiga and Bersih now say that because of Mr. Najib's actions, they will go ahead with their assembly, no matter what.

Nobody knows what will happen tomorrow. Bersih's main issue is not freedom of assembly but the fairness of Malaysia's democratic process. Bersih's backers ask how anyone can be opposed to free and fair elections.

It's an easy question to answer. The United Malays National Organization, of which Mr. Najib is president, is the longest continuing ruling party in the world, and it is running scared.

Continue reading - WSJ - Running Scared in Malaysia

Malaysian Opposition Digs In

Election reform advocates said Thursday they would proceed with a rally in a stadium here on Saturday, despite warnings from the authorities that such a gathering would be illegal.

Tensions have risen in this Southeast Asia nation in recent weeks, with the police arresting more than 200 people in connection with the planned rally, which is being organized by the Coalition for Clean and Fair Elections, also known as Bersih, or “clean” in Malay. The coalition is made up of 62 nongovernmental organizations.

Opposition leaders, who strongly support the campaign for electoral changes, have predicted that the rally could attract about 300,000 people.

A street rally calling for similar changes in 2007, in which the police used tear gas and water cannons to disperse protesters, was credited with helping the opposition make historic gains in the 2008 elections. The next election must be held by mid-2013, but there is speculation it could be held as early as this year.

Last Saturday, the government declared Bersih illegal, because it had not registered as an organization and was causing unrest among the public. Bersih countered that it was not a new organization, but rather an alliance of existing groups. Prime Minister Najib Razak then said the coalition could hold the rally, if it agreed to meet in a stadium, rather than on the streets as first planned.

After a rare mediation meeting Tuesday with the Malaysian king, Tuanku Mizan Zainal Abidin, Bersih organizers agreed to these terms. Now, however, the authorities have said that Bersih cannot proceed without a police permit, which normally would not be granted to a group that has been declared illegal.

Bersih leaders responded by accusing the prime minister of having “reneged” on his offer to provide a stadium for their rally and said they would assemble at Merdeka Stadium in Kuala Lumpur on Saturday afternoon “whatever happens between now and then.”

“We are coming, we will be peaceful and together, we will build a better Malaysia,” the coalition said in a statement.

Continue reading - NY Times - Malaysian Opposition Digs In

Once Greece goes…

The economic crisis in Greece is the most consequential thing to have happened in Europe since the Balkan wars. That isn’t because Greece is economically central to the European order: at barely 3 per cent of Eurozone GDP, the Greek economy could vanish without trace and scarcely be missed by anyone else. The dangers posed by the imminent Greek default are all to do with how it happens.

I speak of the Greek default as a sure thing because it is: the markets are pricing Greek government debt as if it has already defaulted. This in itself is a huge deal, because the euro was built on the assumption that no country in it would ever default, and as a result there is no precedent and, more important still, no mechanism for what is about to happen. The prospective default could come in any one of several different flavours. From everybody’s perspective, the best of them would be what is known as a ‘voluntary rollover’. In that scenario, the institutions that are owed money by the Greek government will swallow heavily and, when their loan is due to be repaid, will permit their borrowings to be rolled over into another long loan. There is a gun-to-the-side-of-the-head aspect to this ‘voluntary’ deal, since the relevant institutions are under enormous governmental pressure to comply and are also faced with the fact that if they say no, they will have triggered a proper default, which means their loans will plummet in value and they’ll end up worse off. The deal on offer is: lend us more money, or lose most of the money you’ve already lent.

This is, at the moment, the best-case scenario and the current plan A. It reflects the failure of the original plan A, which involved lending the government of George Papandreou €110 billion in May last year in return for a promise to cut government spending and increase tax revenue, both by unprecedented amounts. The joint European Central Bank-EU-IMF loan was necessary because, in the aftermath of the financial crisis of 2008, Greece was exposed as having an economy based on phoney data and cheap credit. The cheap credit had now dried up, and Greece was faced by the simplest and worst economic predicament of any government: it couldn’t pay its debts.

There is a good moment in one of the otherwise terrible Star Trek movies, in which Spock quotes an ancient Vulcan proverb: ‘Only Nixon could go to China.’ Similarly, it is probably true that only George Papandreou could confront the fundamental economic structure of the modern Greek state, since his father Andreas did more than anyone else to build it. Andreas Papandreou took Greece into the EEC in 1981, and subsequently the Greek government created a client state in which direct subsidies and transfers from the EEC were supplemented by easy loans from Western European banks. Money poured into Greece, and was used to fund a huge boom in public-sector jobs, most of them linked to political patronage. Various forms of corruption permeated the system, where cash gifts in fakelaki or ‘little envelopes’ were a fact of life, and where, crucially, the rich regarded paying tax as something that only the poor and stupid would ever choose to do. This latter fact meant that Greece was in certain vital respects a country without a functioning version of the social contract. To outside observers, all this was largely familiar, but the younger Papandreou, on becoming prime minister in 2009, was the first prominent Greek politician to admit it and promise to challenge it head-on. ‘Corruption, cronyism, clientelistic politics; a lot of money was wasted basically through these types of practices.’ Papandreou’s admission was jaw-dropping: everyone knew it was true, but since when do prominent politicians say very unpopular things which everyone knows to be true? The EU lent Greece the money to fund Papandreou through his programme of cuts and crossed its fingers that this would buy enough time for the deficit to narrow – the deficit being the gap between what Greece was spending and what it was raising in tax.

That was the old plan A, and it didn’t work. Papandreou made deep cuts across public-sector spending, but two things went wrong. One, the Greek economy kept crashing. Economists have varying theories about the practical effects of ‘austerity’, meaning sharp cuts in public spending. To an outsider, it’s a little alarming how they differ about something so big and basic as the effect of large public spending cuts. But if you ignore the economics and look at the history, it seems to be the case that you can’t simply cut your way to growth. (There are a couple of contentious counter-examples, but this is the broad rule.) Holding public spending flat while other parts of the economy grow is historically a more valid model – and, by the way, holding public spending flat is in itself a huge struggle, being roughly what Mrs Thatcher did in the UK. So the first problem was that the Greek cuts led to a worsening of the Greek predicament: the economy kept contracting, and unemployment hit a record high of 16.2 per cent. The second problem was that those richer Greeks who had never fancied paying their taxes showed no increased desire to do so, and, much worse, the state showed no new ability or desire to make them. Without the ability to raise more tax, the old plan A was invalid.

So this is the new plan A: the Greeks borrow another €120 billion, the bondholders allow their debt to be rolled over, Papandreou’s government introduces further austerity measures and privatisations, rich Greeks start paying their taxes, the Greek economy recovers, and by the time the next huge chunks of debt repayment are due – from mid-2012 – Greece can afford to pay back its lenders and the crisis is over.

Continue reading - John Lanchester - Once Greece goes…

The Zeitgeist Movement LA, CA | Townhall Talks

The Zeitgeist Movement's Townhall Meeting is a community forum for the public to engage the Movement's coordinators about root-cause understandings to social problems, and the solutions we advocate culminating in what can be termed a "global, resource-based economic model."

The Zeitgeist Movement, Regional LA, CA Townhall, 6/21 [Part 1 of 2 ]


The Zeitgeist Movement, Regional LA, CA Townhall, 6/21 [Q&A - PART 2/2]


The Zeitgeist Movement | LA, CA Townhall [ Talks ] 7/19

Goldman’s Central Bank Connections Deepen

The revolving door between Goldman Sachs Group Inc. (GS) and central banks is spinning again.

The fifth-biggest U.S. bank by assets said yesterday it hired Bank of England economist Andrew Benito after recruiting Huw Pill from the European Central Bank in May and Naohiko Baba from the Bank of Japan in January. Moving in the other direction, Ben Broadbent, Goldman Sachs’s ex-chief U.K. economist, started at the Bank of England last month. Former vice chairman Mario Draghi will take up the presidency of the ECB in November.

The targeting of central banks reflects the value banks such as New York-based Goldman Sachs place on the skills economists gather working in policy-making at a time when growth in advanced economies is struggling to gain momentum. Meantime, governments seeking top officials are again turning to Goldman Sachs for top decision-makers 12 months after it settled U.S. fraud claims and almost four years since the start of the worst financial crisis since the Great Depression.

“The people they’re hiring from central banks tend to have valuable understandings of monetary policies, currencies, what’s going on with regulation and have access to all sorts of important people,” said Roy Smith, a finance professor at New York University and former Goldman Sachs partner. “Goldman Sachs has taken a bashing in the crisis. It’s bound to be near the bottom or recovering now, as there’s nothing of substance to follow the charges. Governments recognize that to be the case.”

‘Talented People’

Benito, who most recently served as a senior economist at the Bank of England’s structural economic analysis division, arrived at Goldman Sachs this week as senior European economist based in London, according to an internal memo obtained by Bloomberg News. Fiona Laffan, a Goldman Sachs spokeswoman, confirmed the memo’s contents. She declined to comment further.

Pill, the ECB’s deputy director general of research, will start at the firm as chief European economist in August, succeeding Erik Nielsen, who will become global chief economist at UniCredit SpA (UCG), Italy’s biggest bank. Baba joined in January as chief economist for Japan after leading financial systems analysis at the country’s central bank.

“Investment banks seek out talented people and those who have skills, insight and access to how policy decisions are made are very attractive,” said Peter Hahn, a former Citigroup Inc. banker who lectures on finance at London’s Cass Business School.

Mario Draghi

The Securities and Exchange Commission sued Goldman Sachs last year for misleading investors in a mortgage-linked investment that was sold in 2007. Then British Prime Minister Gordon Brown said the firm’s employees showed “moral bankruptcy” amid calls to ban the company from government work. Goldman Sachs paid $550 million in July to settle the SEC’s civil claims.

Bank of Italy Governor Draghi’s three years as a vice chairman of Goldman Sachs’s international division from 2002 to 2005 became an obstacle to his candidacy to run the ECB before his German rival Axel Weber dropped out. Goldman Sachs arranged currency swaps that helped Greece hide the extent of its budget deficit. Draghi said on June 14 he “had nothing to do with this deal whatsoever” and that it had started before his arrival.

Goldman Sachs isn’t alone in recruiting central bankers. UBS AG, Switzerland’s biggest bank, said today it plans to appoint former Bundesbank President Weber to its board and then make him chairman in 2013. Barclays Plc said in May it hired Brian Madigan, the Federal Reserve’s former top staff adviser on interest-rate policy, to provide counsel on economic research and regulation.

‘Government Sachs’

Goldman Sachs has been a breeding ground for central bankers. Broadbent is the third Goldman Sachs alumnus to sit on the Bank of England’s Monetary Policy Committee since its creation in 1997. In his first vote on policy in June, he sided with the majority choosing to leave the U.K.’s benchmark rate unchanged. Former MPC members David Walton and Sushil Wadhwani also had Goldman Sachs on their resumes before joining the central bank.

Bank of Canada Governor Mark Carney and Fed Bank of New York President William Dudley both previously worked for Goldman Sachs. Former U.S. Treasury secretaries Robert Rubin and Henry Paulson ran the bank before entering government, helping to earn the company the nickname “Government Sachs.”

“Goldman Sachs partners are extremely fortunate that due to the success of their firm they can afford to go into public service sooner than their competitors,” said Philip Keevil, a partner at New York-based advisory firm Compass Advisers LLP.

Continue reading - Bloomberg - Goldman’s Central Bank Connections Deepen

HK REVOLT - Marchers vent anger on Hong Kong prices, policies

HONG KONG - Tens of thousands of people vented anger over Hong Kong's skyrocketing property prices and government policies Friday at an annual march marking the former British colony's return to Chinese rule.

People blew whistles, beat drums and banged metal cups to express their unhappiness. Many waved flags caling for universal suffrage while others chanted "Down down with property tycoons" and called for Chief Executive Donald Tsang to step down.

Since the territory was handed back to China on July 1, 1997, Hong Kong has largely retained its Western-style civil liberties, including press freedom and the right to hold public protests. But its people still cannot directly elect the city's chief executive or all legislative members.

One of the big themes of the march marking the 14th anniversary is the growing rich-poor divide in Hong Kong, where skyrocketing property prices have left many residences unaffordable and forced out small shopkeepers. March organizers say they want to protest the "hegemony" of Hong Kong's big property developers over the market.

Some protesters carried large signs depicting Tsang and billionaire Li Ka-shing, Hong Kong's richest man whose business empire includes a major property developer, with devil horns and vampire fangs. They chanted slogans accusing the government and developers of colluding to establish a monopoly.

Prices for apartments in Hong Kong have been driven up by ultra-low interest rates and excess liquidity, and the government has twice introduced measures since November to cool the market.

"But also on social issues, there is a lot of unhappiness. That's why the people are coming."

As many as 100,000 people were expected to take to the streets, according to an estimate by the nonpartisan Hong Kong Transition Project reported by the South China Morning Post newspaper. Hong Kong police said they would not have a crowd estimate until the rally ends.

Continue reading - Tens of thousands vent anger at Hong Kong rally over wealth gap, gov't policies

2011年香港"七一"大游行实况精选（视频）上


2011年香港"七一"大游行实况精选（视频）下


Thousands march on Hong Kong handover anniversary