Friday, 24 October 2014

The European Union continues on its path to economic self-destruction: Agrees on "World´s most ambitious climate energy policy"

The grim reality for the European Union:

Now that German growth has stumbled, the euro area is on the verge of tipping into its third recession in six years. Its leaders have squandered two years of respite, granted by the pledge of Mario Draghi, the European Central Bank’s president, to do “whatever it takes” to save the single currency. The French and the Italians have dodged structural reforms, while the Germans have insisted on too much austerity. Prices are falling in eight European countries. The zone’s overall inflation rate has slipped to 0.3% and may well go into outright decline next year. A region that makes up almost a fifth of world output is marching towards stagnation and deflation.

Surely the leaders of the European Union should be more than worried. However, instead of taking the necessary measures to create growth, those leaders have chosen to reinforce the only really "succesful" EU project, the self-destruction of the European economy:

in the early hours of Friday, Mr Van Rompuy, wrote in a tweet: "Deal! At least 40% emissions cut by 2030. World's most ambitious, cost-effective, fair #EU2030 climate energy policy agreed ."

The EU Commissioner for Climate Action, Connie Hedegaard, said she was "very proud" that the leaders "were able to get their act together on this pressing climate challenge".

Meanwhile, German Chancellor Angela Merkel said: "We made a decisive step forward."

The EU is already on target to cut its CO2 emissions by 20% by 2020, compared with 1990 emission levels.

EU officials earlier said they wanted the EU to have an "ambitious position" in the run up to the UN climate change conference in Paris in December 2015.

They must be smiling in the US, China and India ...

Friday, 17 October 2014

Alan Greenspan on the never ending euro failure

There is no end to the ongoing euro crisis. Former Fed Chairman Alan Greenspan explains why the euro is - and will stay - a huge failure:

"At the outset of the creation of the euro in 1999, it was expected that the southern eurozone economies would behave like those in the north; the Italians would behave like Germans. They didn’t," Greenspan said. "Instead, northern Europe fell into subsidizing southern Europe’s excess consumption, that is, its current account deficits."
Greenspan predicts that as the south's fiscal crisis deepens, the flow of goods from the north will stop altogether and southern Europe's standard of living will go down.
"The effect of the divergent cultures in the eurozone has been grossly underestimated," he added. "The only way to have several currencies from divergent nations lumped together is if they are culturally close, such as Germany, the Netherlands and Austria. If they aren’t, it simply can’t continue to work."

Tim Worstall also has a good piece on the same subject in Forbes:

While these very different economies are locked into the one currency, one interest rate, system there’s really not a lot anyone can do about it. Some talk of fiscal union, which is in essence the rich areas sending money to the poor ones. But absolutely no one at all thinks that those rich areas have the desire nor capacity to ship enough money: we’re not talking about a few billions here or there, but substantial percentages of GDP being necessary.
All of which is what made me conclude long ago that the failure of the euro is inevitable. Please note, I don’t mean that collapse of it is: political finagling can hold it together for decades if people really try. What I mean is failure in an economic sense. Interest rates will always be set for the core economies, meaning that they will always be wrong for the peripheral ones. Which means that those peripheral economies are condemned to a cycle of huge boom and bust as interest rates are either way too low or way too high for their circumstances.
Yes, I do think it fair to say that wild gyrations are a sign of failure in an economic policy or system. And in this sense, I think it inevitable that the euro will fail. For it already has.

Wednesday, 15 October 2014

Obama is ready for another "reset" with Russia´s criminal dictator Putin

This was to be expected: Suddenly Putin´s aggression against Ukraine is (in reality) forgotten. Barack Obama, one of the weakest US presidents ever, is offering the corrupted and criminal dictator another "reset" (even if his administration is not using the word). It will not take long before the former KGB agent is again welcomed and embraced by the "leader of the Free World":

Secretary of State John Kerry said on Tuesday that the United States and Russia had agreed to share more intelligence on the Islamic State, as he sought to lay the basis for improved cooperation with Moscow.
Just six months ago, Obama administration officials suggested that their goal was to isolate President Vladimir V. Putin following Russia’s decision to annex Crimea and provide military support to separatists in eastern Ukraine.
But Mr. Kerry made it clear that he would welcome expanded cooperation with Mr. Putin after a meeting here with Sergey V. Lavrov, the Russian foreign minister.
While nobody on the American side said the United States was undertaking another “reset” — the term the Obama administration used to describe its early attempt to improve ties with Russia — the tenor of Mr. Kerry’s comments suggested that the State Department was pursuing a new tack.
“It is no secret that the United States and Russia have had our differences over Ukraine,” Mr. Kerry told reporters. “We came together today in order to try to focus on those issues where we can find the capacity to be able to make a difference to other countries, to the world in general, and certainly to the relationship between Russia and the United States.”
 
Read the entire article here
 

Wednesday, 8 October 2014

Plummeting oil prices will weaken Putin´s Russia

Oil prices are plummeting. They have gone down as much as 20% since June. This - together with Western sanctions - weaken Vladimir Putin´s chances to continue his policy of aggression in Ukraine and elsewhere:

Lower oil prices could have lots of knock-on effects around the world. Take Russia, which depends on oil sales to bring in foreign currency. The Russian government has set its three-year budget with the expectation that oil prices would stay at $100 per barrel. A sustained fall in prices could cripple the Russian economy and run up deficits.

Indeed, some energy analysts are starting to wonder if an oil crash might even force Russia to pull back in Ukraine and elsewhere. And on Tuesday, the Russian finance minister warned that the country could no longer afford a multibillion-dollar upgrade to its armed forces that had been approved by President Vladimir Putin

Read the entire article here

Tuesday, 30 September 2014

Garri Kasparov on Putin: “the most dangerous man in the world”

Western leaders should listen to what Garry Kasparov has to say about Russian dictator Vladimir Putin:

Garry Kasparov, the world’s most renowned chess master, has branded Vladimir Putin “the most dangerous man in the world” in a passionate interview with Yahoo News, in which he stressed that the Russian President is more dangerous that Islamic State (ISIS) and “all the Al-Qaedas in the world”.
Asked if Islamic State or Putin were a bigger threat to global stability, Kasparov responded with “Of course Putin… Of course Putin!”
“Because Putin cannot be defeated militarily,” he explained. “The war with ISIS can be won on the ground. It is very clear that if America decides to eliminate ISIS, they will turn it into dust in 24 hours!” --
 
Russia’s nuclear arsenal gives Putin an “ability to create instability - a thousand times bigger than all the Al-Qaedas of the world,” Kasparov also said.
“Putin wants to stay in power at any cost and for him to stay in power he needs to create global instability. I would not be surprised if he starts blackmailing the world with nuclear armageddon because for him there is no life if he loses power.”
 
Of course Kasparov is right about Putin, and Obama, Merkel and the rest understand how dangerous the man is. But because unstable Putin is in charge of a large nuclear arsenal, they are too scared to take the action needed ...

Monday, 29 September 2014

Walter Russell Mead on EU: "The price for two decades of policy incompetence is goind to be high"

Walter Russell Mead is right:

Putin is dancing on the face of the West, and in Tehran, Beijing and across the world, the message is clear: Western statesmen are not serious, they don’t think before they act and they don’t mean what they say.
Ukraine continues to pay the penalty for standing up to Russia at the instigation of a ditzy, incoherent and vainglorious EU. History’s contempt for this generation of european leaders—authors of the euro disaster, disarmers of Europe as threats grew to the east and the south, creators of the worst mass unemployment in Europe since the depression—will be harsh and deep. The price for two decades of policy incompetence is going to be high, and the bill is already coming due.

Wednesday, 24 September 2014

The staggering costs of feeding the climate change "monster"

Tom Harris, executive director of the Ottawa-based International Climate Science Coalition gives some interesting facts about the staggering costs of feeding the climate change "monster":

According to the Congressional Research Service, from 2001 to 2014 the US government spent $131 billion on projects meant to combat human-caused climate change, plus $176 billion for breaks for anti-CO2 energy initiatives.
Federal anti-climate-change spending is now running at $11 billion a year, plus tax breaks of $20 billion a year. That adds up to more than double the $14.4 billion worth of wheat produced in the United States in 2013.
Dr. Bjørn Lomborg, director of the Copenhagen Consensus Center, calculates that the European Union’s goal of a 20 percent reduction in CO2 emissions below 1990 levels by 2020, currently the most severe target in the world, will cost almost $100 billion a year by 2020, or more than $7 trillion over the course of this century.
Lomborg, a supporter of the UN’s climate science, notes that this would buy imperceptible improvement: “After spending all that money, we would not even be able to tell the difference.”
Al Gore was right in one respect: Climate change is a moral issue — but that’s because there is nothing quite so immoral as well-fed, well-housed Westerners assuaging their consciences by wasting huge amounts of money on futile anti-global-warming policies, using money that could instead go to improve living standards in developing countries.