Tag: EURO

UK ‘planning for eurozone collapse’

Lord Sassoon said Britain wanted to see a 'strong and dynamic' eurozone and European economy

The Government is undertaking “extensive contingency planning” in the event of a eurozone collapse, peers have been told.

Treasury minister Lord Sassoon said the planning was aimed at dealing with “all potential outcomes of the eurozone crisis”.

At question time, he said Britain wanted to see a “strong and dynamic” eurozone and European economy.

But he stressed it was for the eurozone countries to “take the lead in supporting the euro as a currency”.

Lord Sassoon also indicated that Britain would be prepared to stump up more cash to tackle the crisis if the IMF requested it.

“The Government sees the role of the IMF to support individual countries and not to support currencies.

“If the IMF puts forward a case, as it may well do, for an increase in its resources, if there is a strong case the UK will, as it has always done in the past, support the IMF in increasing resources as required,” he said.

Tory former chancellor Lord Lawson of Blaby said: “There is only one thing as worrying as the collapse of the eurozone and that’s the continuation of the eurozone.”

He said it has been shown to be “fundamentally flawed and the cause of all these problems”.

Lord Lawson said ministers needed to look at the risk of a banking meltdown, adding: “If it should prove necessary for the UK Government to rescue any British banks, they should do so on much tougher terms than the ludicrously soft terms which the previous administration used.“

www.thisislondon.co.uk, 18 January 2012

January 19, 2012
WikiLeaks cables expose Washington’s close ties to Gaddafi

by Bill Van Auken

US embassy cables released by WikiLeaks on Wednesday and Thursday expose the close collaboration between the US government, top American politicians and Muammar Gaddafi, who Washington now insists must be hunted down and murdered.

Washington and its NATO allies are now determined to smash the Libyan regime, supposedly in the interests of “liberating” the Libyan people. That Gaddafi was until the beginning of this year viewed as a strategic, if somewhat unreliable, ally is clearly seen as an inconvenient truth.

The cables have been virtually blacked out by the corporate media, which has functioned as an embedded asset of NATO and the so-called rebel forces that it directs. It is hardly coincidental that the WikiLeaks posting of the cables was followed the next day by a combination of a massive denial of service attack and a US judge’s use of the Patriot Act to issue a sweeping “production order” or subpoena against the anti-secrecy organization’s California-based Domain Name Server, Dynadot.

The most damning of these cables memorializes an August 2009 meeting between Libyan leader Muammar Gaddafi and his son and national security adviser, Muatassim, with US Republican Senators John McCain (Arizona), Lindsey Graham (South Carolina), Susan Collins (Maine) and Connecticut “independent” Joe Lieberman.

McCain, the Republican presidential candidate in 2008, has in recent speeches denounced Gaddafi as “one of the most bloodthirsty dictators on Earth” and criticized the Obama administration for failing “to employ the full weight of our airpower” in effecting regime change in Libya.

In the meeting held just two years ago, however, McCain took the lead in currying favor with the Gaddafis. According to the embassy cable, he “assured” them that “the United States wanted to provide Libya with the equipment it needs for its security” and “pledged to see what he could do to move things forward in Congress.”

The cable continues to relate McCain’s remarks: “He encouraged Muatassim to keep in mind the long-term perspective of bilateral security engagement and to remember that small obstacles will emerge from time to time that can be overcome. He described the bilateral military relationship as strong and pointed to Libyan officer training at U.S. Command, Staff, and War colleges as some of the best programs for Libyan military participation.”

The cable quote Lieberman as saying, “We never would have guessed ten years ago that we would be sitting in Tripoli, being welcomed by a son of Muammar al-Qadhafi.” It states that the Connecticut senator went on to describe Libya as “an important ally in the war on terrorism, noting that common enemies sometimes make better friends.”

The “common enemies” referred to by Lieberman were precisely the Islamist forces concentrated in eastern Libya that the US then backed Gaddafi in repressing, but has now organized, armed and led in the operation to overthrow him.

The US embassy summarized: “McCain’s meetings with Muammar and Muatassim al-Qadhafi were positive, highlighting the progress that has been made in the bilateral relationship. The meetings also reiterated Libya’s desire for enhanced security cooperation, increased assistance in the procurement of defense equipment, and resolution to the C130s issue” (a contract that went unfulfilled because of previous sanctions).

Another cable issued on the same meeting deals with McCain’s advice to the Gaddafis about the upcoming release from a Scottish prison of Abdelbaset al-Megrahi, who had been convicted for the 1988 bombing of Pan Am 103 over Lockerbie, Scotland. McCain, who now fulminates about Gaddafi having “American blood on his hands,” counseled the Libyan leader that the release was a “very sensitive issue” in the US and that he should handle it discreetly, “in a way that would strengthen the growing relationship between our two countries, rather than hinder its progress.” Ultimately Gaddafi and other leading Libyan officials gave a hero’s welcome to Megrahi, who has proclaimed his innocence and had been set to have his appeal heard when the Scottish government released him.

Other cables highlight the increasingly close US-Libyan military and security cooperation. One, sent in February 2009, provides a “security environment profile” for Libya. It notes that US personnel were “scheduled to provide 5 training courses to host government law enforcement and security” the next month. In answer to whether the Libyan government had been able to “score any major anti-terrorism successes,” the embassy praised the Gaddafi regime for having “dismantled a network in eastern Libya that was sending volunteer fighters to Algeria and Iraq and was plotting attacks against Libyan security targets using stockpiled explosives. The operation resulted in the arrest of over 100 individuals.” Elements of this same “network” make up an important component of the “rebels” now armed and led by NATO.

Asked by the State Department if there existed any “indigenous anti-American terrorist groups” in the country, the embassy replied “yes”, pointing to the Libyan Islamic Fighting Group (LIFG), which it noted had recently announced its merger with Al Qaeda in the Lands of the Islamic Maghreb (AQIM). Again, elements of the LIFG are active in the leadership of the so-called rebels.

An April 2009 cable preparing Muatassim Gaddafi’s trip to Washington that month stresses plans for anti-terrorist training for Libyan military officers and potential arms deals. In its conclusion the embassy states: “The visit offers an opportunity to meet a power player and potential future leader of Libya. We should also view the visit as an opportunity to draw out Muatassim on how the Libyans view ‘normalized relations’ with the U.S. and, in turn, to convey how we view the future of the relationship as well. Given his role overseeing Libya’s national security apparatus, we also want his support on key security and military engagement that serves our interests.”

A May 2009 cable details a cordial hour-long meeting between Gaddafi and the then-head of the US Africa Command, General William Ward.

An August 2008 cable, a “scene setter” for the “historic visit” of Secretary of State Condoleezza Rice to Tripoli, declares that “Libya has been a strong partner in the war against terrorism and cooperation in liaison channels is excellent … Counter-terrorism cooperation is a key pillar of the U.S.-Libya bilateral relationship and a shared strategic interest.”

Many of the cables deal with opportunities for US energy and construction firms to reap “bonanzas” in the North African country and note with approval privatization efforts and the setting up of a Tripoli stock exchange.

Others, however, express concern, not about the Gaddafi regime’s repressive measures, but rather foreign policy and oil policy moves that could prejudice US interests. Thus, an October 2008 cable, cynically headlined “AL-QADHAFI: TO RUSSIA, WITH LOVE?” expresses US concern about the Gaddafi regime’s approach to Russia for lucrative arms purchases and a visit to Tripoli harbor by a flotilla of Russian warships. One month later, during a visit to Moscow, Gaddafi discussed with the Putin regime the prospect of the Russian navy establishing a Mediterranean port in the city of Benghazi, setting off alarm bells at the Pentagon.

Cables from 2008 and 2009 raise concerns about US corporations not getting in on “billions of dollars in opportunities” for infrastructure contracts and fears that the Gaddafi regime could make good on the Libyan leader’s threat to nationalize the oil sector or utilize the threat to extract more favorable contracts from the foreign energy corporations.

The cables underscore the hypocrisy of the US and its allies in Britain, France and Italy, who have championed “regime change” in the name of protecting Libyan civilians and promoting “democracy.”

Those like Obama, Sarkozy, Cameron and Berlusconi who have branded Gaddafi a criminal to be hunted down and murdered were all his accomplices. All of them collaborated with, armed and supported the Gaddafi regime, as US and European corporations reaped vast profits from Libya’s oil wealth.

In the end, they seized upon the upheavals in the region and the anti-Gaddafi protests in Libya as the opportunity to launch a war to establish outright semi-colonial control over the energy-rich country and rid themselves of an ally who was never seen as fully reliable or predictable and upset his patrons with demands for better deals with big oil, closer ties with Russia and China and the threat of replacing the euro and dollar with a “gold dinar.”

Bill Van Auken is a frequent contributor to Global Research.

www.globalresearch.ca, 27 August 2011

September 2, 2011
Soros suggests Greece, Portugal quit euro-zone

BERLIN (AFP) – George Soros, the US speculator turned billionaire philanthropist, has suggested both Greece and Portugal quit the European Union and the euro-zone because of their massive debts.

“One has so mishandled the Greek problem that the best way forward at present might be an orderly exit” with Greece leaving both the EU and the euro common currency, he said in an interview published Sunday by the German magazine Spiegel.

He suggested the same might go for Portugal.

“The EU and the euro would survive it,” he added.

Debt-stricken Greece and Portugal are struggling to implement eurozone and International Monetary Fund-mandated reforms, by slashing spending and raising taxes in exchange for financial aid.

Soros also suggested the time had come for eurozone members to accept the introduction of eurobonds.

“Whether you like it or not, the euro exists. And for it to function properly, countries sharing the currency must be able to refinance a large part of their debt under the same conditions.2

Berlin is opposed to the introduction of such bonds, but Soros suggested Germany, as Europe’s strongest financial partner, should be responsible for defining the rules for its introduction.

Soros, who made over $1 billion by betting against the British pound in 1992, also said he had no intention of playing the market against the common european currency.

“I am certainly not betting against the euro. Because the Chinese have a huge interest in an alternative to the dollar and will do everything possible to help Europeans save it,” he said.

Both Greece and Portugal, along with Ireland, have been granted multi-billion EU-IMF rescue loans to prevent them from defaulting on their huge debts.

nz.news.yahoo.com, August 14, 2011

August 15, 2011
Euro is ‘unsaveable’

Telegraph columnist Ambrose Evans-Pritchard tells Robert Miller why the single currency cannot work in its current form, and what he believes will happen to the next.

August 11, 2011
Is the U.S. dollar on the brink?

By: Julian D. W. Phillips, Gold/Silver Forecaster – Global Watch

Just take a look at the chart of the U.S. dollar Index and you see a frightening sight.   If it sinks any further its support will have evaporated.   We have watched all this week the gold price rise and look good in the dollar.   But in the euro it has barely moved.   Against the Swiss Franc the dollar looks so weak.   With the Technical picture looking so poor, one turns to the fundamentals to see if they conflict or support a downturn for the dollar.

The U.S. dollar Fundamentals

Can government govern finances?

The United States, right now, is on the brink of having used up all its legislated credit capacity.   At $14.3 trillion there is a desperate need for a higher credit limit.   Unless, by Friday, they have passed legislation to raise this, the government cannot issue checks or pay staff.   Yes, they can use various tricks to delay this to accommodate political brinkmanship, but the outside world will be alarmed that the government is unable to tend to such basics or allows politics to overrule finances.   Here there is a clash of systems, the need for financial correctness against the games politicians play.   With President Obama’s administration without sufficient power to legislate as they want at a critical time when government should be strong, there is little to inspire confidence in the U.S. government.   Global confidence in the U.S. dollar will be shaken if such a financial mess were to happen.   We would most likely see the ratings agencies downgrade U.S. debt before that happens.   From outside it looks as though the U.S. is oblivious to foreign investor’s opinions at a time when the U.S. is reliant on foreign investors buying U.S. debt.

Moving down the ladder we have seen so much in the press that individual States are on the brink of bankruptcy and some already there and little seems to be being done to rectify matters to date.   Or should foreigners just presume that the Fed will rescue them with bailouts?   If that is to be the path followed that again will undermine foreign investors confidence in the dollar.

What needs to be understood is that government finances at all levels have to be sound to inspire confidence?   It seems to be a simple obvious statement, so why is it not being applied?   Even Fed Chairman Mr. Ben Bernanke is calling for government to sort out the Federal deficit but all we see is a partisan battle that seems oblivious to their countries crying needs.   Or do we misunderstand the scene.   Are politics more important than good order?   Today saw the revelation that China owns more than $360 billion of Treasuries than was thought to be the case.   Does the government not worry about this dependence?   Or does the government want to ensure that the dollar weakens?   This is a strong impression pervading so many foreign exchanges now.

And the inflation coming from the food and energy worlds is globally pervasive and capable of threatening what little economic growth there is in the developed world. It will affect many, many countries and could reach into the U.S.A.   We do expect the U.K to experience a shrinking of its GDP in the first quarter of 2011 announcing the arrival of a double-dip recession, so shrinking growth could also affect the U.S. still with its lackluster economy.   What will this somewhat emasculated government do then?

The Trade Deficit

For so many years now the U.S. has run a Trade deficit balanced by a surplus on the Capital account.   This inflow of capital is the flow of power from the U.S. to foreign creditors.   Already we are seeing a tendency to try to diversify away from the U.S. dollar.   If this trend gathers momentum then the overall picture on the Balance of Payments could sink to a deficit.   How close is it now?   Or is it happening as foreign investors diversify into other currencies to stave off or reduce the impact on their surpluses of a falling dollar and overweight natures of their dollar holdings.   It’s bound to happen if only because of prudence.   And yet the U.S. is doing nothing to address the situation, why not?   We see that the main beneficiary of a weak dollar would be the U.S. on the trade front as well as on the debt front. So one question that needs an answer is, does the U.S. government want a weak dollar?   Or is the U.S. government unconcerned at the U.S. dollar’s exchange rate.

Inevitable weakness

It seems that Europe and other nations are more worried about the U.S. dollar exchange rate than the U.S. is.   This laissez-faire attitude appears to confirm that the U.S. has no intention of protecting the U.S. dollar’s exchange rate.   For that reason we have to conclude that the U.S. dollar is inevitably headed to more weakness.   In the past the ‘top dog’ nature of the U.S. currency meant that the rest of the world had to suck it up.   Now, it’s only a matter of time before the U.S. is second to China’s economy in the world.   By 202 the Chinese economy will have doubled and we have no doubt that the Yuan will be the world’s ‘top dog’ currency, eclipsing the dollar.   When that happens and it may be well before 2020, the dollar like all other global currencies will have to pay its own bills with goods not simply freshly printed dollars.

The $ and the € Gold Price

Is it any wonder then that the gold price is rising in the U.S. dollar.   The euro is, the Swiss Franc, the Pound and other currencies are rising in the dollar too.   It’s not the gold price rising in the dollar it’s the dollar falling in terms of gold. Likewise other currencies are not rising against the dollar, the dollar is falling against them.

To get a clearer picture of what is really happening in the gold price one has to look at the gold price in the euro or the Swiss Franc.   That will reflect demand and supply better.   We have and will see the gold price rise in the euro for fundamental reasons but for accuracy’s sake we have to relegate the dollar price of gold to second or third place, because that’s more about the dollar than about gold.

Gold as part of the global monetary system

Today we read that the shareholders of the Bank of Italy, the Italian banks want to use the gold held by the central bank to shore up their balance sheets.   The Bank of Italy has gold reserves of 2451.8 metric tonnes (68.6% of their foreign exchange reserves) at the moment.   As shareholders assets, by including these reserves at market value, Italian banks look a lot healthier.   Yes, this is a touch of ‘cooking’ the books, but it recognizes the fact that gold has a monetary value, recognized in the monetary world.   In inter-nation currency transactions gold is being used to secure loans.   It has a de facto role in the monetary system that is getting harder and harder to avoid.

Could gold be confiscated?

Of course gold will never be confiscated for the same reasons it was in 1933 [money supply expansion].   Its role today can be as collateral for international transactions, as we see it being used now.   In a global world it is the only real monetary asset that bypasses nations to be global money that is truly mobile.   Should a nation find itself in trouble, much like these Italian banks, then gold sits there waiting to shore up balance sheets and serve as collateral for international currency swaps for nations with questionable creditworthiness.   Will the dollar fall into that category once the Yuan is a truly international currency?   Certainly holding gold will bypass that eventuality.   Even in the hands of the U.S. government its citizen’s gold could give the dollar a golden hue.

In China it is understood by all that all assets of the nation including citizen’s gold is the property of the state.   In the U.S. citizens are allowed the privilege of owning gold and don’t have the right.   How small a step to confiscating the huge tonnage of citizen’s gold wherever it is.

news.goldseek.com, 1 March 2011

March 8, 2011
Euro vs. dollar

© Photo: SXC.hu

France is preparing a full-scale reform of the world financial system. Paris, which is chairing the G20 at present, is suggesting lowering the clout of the dollar, abandoning currency and trade wars, and focusing on economic cooperation.

This is not the first initiative of the French authorities for radical reform of the financial system. Paris is practically the main critic of the European Central Bank’s policies and opponent of a strong Euro which is hitting national exports. This time, French Minister of Finance Christine Lagarde has put forward the idea of reforming the world financial system so as to rule out the possibility of the authorities of different countries manipulating currency rates. Dmitry Smyslov, an expert from the Institute of World Economics and International Relations at the Russian Academy of Sciences, agrees that the need for this reform is ripe.

“The first problem is establishing an orderly, well-balanced international currency system, which is different from the one we have now, a system that is dollar-centric but not pinned to any realities or international agreements. The reason is that the Bretton Woods is no longer applied and now there are no clear-cut international boundaries within which the currency system functions.”

The French Minister of Finance did not even try to conceal that she was first and foremost unhappy about the respective moves of the USA and China. Those two countries are rather openly pursuing weak national currency policies that are beneficial for local manufacturers but detrimental for European ones. Experts warn that for this very reason these two giants of the world economy will be against the radical reconstruction of the world financial system. Analysts recommend that Europe should start with itself, that is establish a uniform taxation system, strengthen the economic integration of the EU and, most importantly, sort out its debts. The burden of this indebtedness is what is worrying investors and discrediting the Old World currency, Dmitry Smyslov says.

“Another issue for the EU authorities is improving how the European Currency Union functions. To achieve this aim, countries should agree upon their national budgets and centralize their coordination. Simultaneously, a permanent mechanism for helping countries in trouble should be set up.”

It is not all that simple. Even the establishment of a 750 billion euro Rescue Fund in 2010 could not do without a scandal. Some countries openly declared that they did not want to bail out their imprudent neighbours. While the Europeans were arguing, China built up its gold reserves, adding 19% in 2010, and even began to buy up the bonds issued by European countries. This strengthened the yuan even more. The USA breathed down China’s neck, raising the value of the dollar, pumping cash into the market and selling more and more bonds to foreign investors. France is hardly likely to be able to change this situation without serious support from other members of the G20.

, Feb 8, 2011

March 8, 2011