"Let the Euro Die" Candidate Trails Sarkozy by Slight 2 Percentage Points; Will Sarkozy Survive the First Round Vote? Eurozone About to Become Unglued

From Global Economic Analysis, January 15, 2012

By Mike "Mish" Shedlock

As a refresher course in French politics, presidential elections are a two-stage process. In the first round, voters select from candidates of all the political parties. The second round pits the top two vote getters against each other.

Never before in history has a sitting French president polled so low 100 days before the first round of votes.

Link if video does not play: 100 days to presidential poll 

The video is as of January 13. The first round of elections is April 22, 2012. Here is the pertinent snip.

"Sarkozy's ratings compared to previous presidents make grim readings. Sarkozy is not shown leading the first round of voting. We've never seen a president is such a weak position in terms of public opinion. If polls are to believed come May 6, the country will have a new head of state"

"Let the Euro Die" Candidate Trails Sarkozy by Slight 2 Percentage Points

Bloomberg reports Sarkozy Just Ahead of Le Pen in French Presidency Election Poll.

French President Nicolas Sarkozy is just two percentage points ahead of anti-immigration candidate Marine Le Pen less than four months before the presidential election, an Ifop poll for Paris Match showed.

In the first round, to be held April 22, Socialist candidate Francois Hollande would finish first with 27 percent, followed by Sarkozy with 23.5 percent and National Front candidate Le Pen on 21.5 percent, the poll published today showed today.

The top two vote getters then go to a decisive run-off on May 6, in which Hollande would beat Sarkozy 57 percent to 43 percent, according to the poll. Ifop polled 943 voters Jan. 9- 12. No margin of error was given.

Will Sarkozy Survive the First Round Vote?

Bloomberg reporter Gregory Viscusi depicts Le Pen as "anti-immigration". Yes, that is true. However, Viscusi failed to mention Le Pen's main claim to fame.

Le Pen is running on a platform to "Let the Euro Die" as I commented on September 8, 2011.

See link for Le Pen's comments. This is what I said at the time.

German Chancellor Merkel, Spanish Prime Minister Zapatero, Italian Prime Minister Berlusconi, and Greek President George Papandreou will all be gone after the next set of elections.

French President Nicholas Sarkozy may bite the dust as well, and if he does it may be to a vehemently anti-Euro candidate.

All it takes is one government to say "to hell with this" and the whole mess unravels.

The current set of politicians all want to "save the Euro". But what did the Euro buy Greece, Ireland, Spain, or Portugal except misery?

Even German and Finnish voters wonder what it bought them.

Zapatero, Berlusconi, and Papandreou are now gone. You can kiss Merkel and Sarkozy goodbye as well. 

Le Pen would not likely win a runoff with Hollande. Socialists dominate French politics. However, Sarkozy will not survive and Hollande has vowed to rework the Merkel-Sarkozy agreement.

Think that is going to fly? In what timeframe?

Eurozone About to Become Unglued

All of the agreements hammed out by two arrogant but tough-as-nails and widely respected leaders of Germany and France will fail. Whoever replaces Merkel and Sarkozy will not have the same respect and both will soon be gone.

Politics suggests that the Eurozone is about to become unglued.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Obama names Jew as chief of staff. Imposes Oil sanctions on China. Japan undecided

(1) Obama places Jewish lobby ahead of relations with China, Japan, Europe
(2) Obama names an Orthodox Jew as his next chief of staff
(3) With Jack Lew's appointment, Jewish community again has a White House address
(4) U.S. slaps sanctions on China state energy trader over Iran
(5) China denounces U.S. sanctions on company dealing with Iran
(6) Mark Dubowitz, Jewish head of Foundation for Defense of Democracies, commends Obama for "shot across the bow"
(7) Wikipedia webpage on Dubowitz no mention of "Jewish"; but he studied at Hebrew University & is featured on Jewish websites
(8) Dubowitz is a Hawk on Iran, wrote for Weekly Standard, prepared to take on Russia & China
(9) Japan Finance Minister accedes to Geithner demand to cut oil imports from; China refuses
(10) Japan to cut oil imports from Iran under U.S. sanctions: Finance Minister
(11) Iranian oil cut a source of worry - Daily Yomiuri (Japan)
(12) Japanese PM says Gov't yet to decide whether to cut oil imports from Iran in line with U.S. sanctions
(13) NED is financing Russian "Democracy" movement to block Putin Presidency - F. William Engdahl
(14) President of NED is Jewish; the Jewish war on Putin - Brother Nathanael
(15) Class Division becomes an election issue in US; most candidates seen as representing the 1%

(1) Obama places Jewish lobby ahead of relations with China, Japan, Europe

Peter Myers, January 15, 2012

Obama has just named an Orthodox Jew as his next chief of staff. His first chief of staff, Rahm Emanuel, was also Jewish, as was his top political adviser, David Axelrod; Dennis Ross was his top Iran adviser (items 1-2).

Sanctions just imposed on a Chinese oil company, for trading with Iran, were trumpeted as "a shot across the bow" by Mark Dubowitz, Jewish head of the Foundation for Defense of Democracies (FDD). Dubowitz was quoted in the Reuters report on the sanctions.

Dubowitz has been at the forefront of calls for sanctions on Iran. He studied at the Hebrew University of Jerusalem, lived in Tel Aviv, and his writings are featured on Jewish websites (item 7).

Yet the Wikipedia webpage on him makes no mention that he's Jewish; nor does his own website's biography page.

In the late 1980s, Japan Inc, flush with funds, had its own lobby in Washington. Not any more. Despite their Current Account Surpluses, neither Japanese nor Chinese money buys influence in Washington. Only Jewish money does.

China, Japan, India, South Korea and many European countries depend on oil imports from Iran (item 11). Yet their interests matter not-at-all in Washington, compared to Jewish interests.

Although Japan's Foreign Minister acceded to Geithner's demand to stop oil imports from Iran, the Japanese Prime Minister has since said that no decision has been made (item 12).

Dubowitz has written that Russia and China could become involved in the Iran issue (item 8). China's investments in the US are also under threat (item 5).

In short, the Hawks are prepared to jeopardize the whole Pacific trading system - for Israel and the Jewish lobby.

The only good news is that Americans are finally becoming conscious of the class-warfare being waged by the 1% - outsourcing their jobs, creating wealth disparities etc (item 15). And they're noticing that most Presidental candidates represent the 1%. Perhaps they will decide that Ron Paul, the candidate who wants to audit the Fed, is with the 99%.

(2) Obama names an Orthodox Jew as his next chief of staff

http://www.jewishnews.net.au/obama-names-an-orthodox-jew-as-his-next-chief-of-staff/24248

Australian Jewish News

JANUARY 12, 2012

US President Barack Obama named Jack Lew, an Orthodox Jew, to be his next chief of staff.
Lew will replace William Daley, who will be leaving at the end of the month.

Obama announced the personnel changes Monday at a press conference.

Lew is the director of the Office of Management and Budget, a Cabinet-level position and a post he also filled during the Clinton administration. He previously was Obama's deputy secretary of state.

Daley is leaving after just over a year on the job. He had succeeded Rahm Emanuel, who left the White House to run successfully for Chicago's mayor.

Lew, like Emanuel, has close Jewish community ties.

There had been speculation in the organized Jewish community about whether Obama would fill a top spot with someone close to the Jewish community after the departure last month of Dennis Ross, who had been Obama's top Iran policy adviser.

JTA

(3) With Jack Lew's appointment, Jewish community again has a White House address

http://www.jta.org/news/article/2012/01/10/3091107/with-jack-lews-appointment-community-once-again-has-a-white-house-address

By Ron Kampeas

Jewish Telegraph Agency
January 10, 2012

WASHINGTON (JTA) -- @JewishWhiteHouse is back.

President Obama on Monday announced that Jack Lew, his director of the Office of Budget and Management -- a Cabinet-level position -- would replace William Daley as White House chief of staff.

Lew, 56, was chosen for his long years in government and his reputation as a skilled multitasker -- he was top- budget cruncher for Bill Clinton before reprising the job for Obama -- but Jewish officials were offering a sigh of relief for a subsidiary reason: Their who-we-gonna-call pleas were answered.

Since Dennis Ross, Obama's top Iran adviser, announced his departure late last year, community officials wondered who was left to call in a White House that has hemorrhaged top Jews over the last year or so. Lew, an Orthodox Jew, is close to the community and is a go-to person for Jewish events in the capital.

"The reports that there's no one to talk to have always been exaggerated," said Malcolm Hoenlein, the executive vice president of the Conference of Presidents of Major American Jewish Organizations.

Hoenlein pointed to Peter Rouse, a counselor to Obama who has served as acting chief of staff, as someone who has always been accessible.

Still, Hoenlein added, "Jack being there will be beneficial, it will foster communication."

Obama launched his administration with a strong contingent of Jewish advisers: In addition to Ross, David Axelrod was his top political adviser, Rahm Emanuel was his chief of staff and Daniel Shapiro handled the Levant desk at the National Security Council.

Emanuel quit in late 2010 to run for Chicago mayor, Axelrod left soon after to help run Obama's re-election campaign and Shapiro is now in Tel Aviv as ambassador.

That left a perceived gap in the White House -- one that Lew would fill, although Jewish officials stressed that they did not expect the attention from a chief of staff that they received from mid-level staffers.

"That's not the role he's going to play," said Abraham Foxman, the national director of the Anti-Defamation League, referring to the regular conference calls that Ross and Shapiro had with Jewish community leaders. "He will be an adviser to the president on all things and a gatekeeper, but to the extent the president will turn to him for his view, he has an understanding of the community and of its views."

The Obama administration clearly wanted to push across the Jewish message; Shapiro Tweeted the news in Hebrew to his followers. Israeli ambassadors don't usually make a big deal of the appointment of a White House chief of staff. ...

(4) U.S. slaps sanctions on China state energy trader over Iran

{note the quote from Mark Dubowitz, Jewish head of FDD: "It's a good shot across the bow"}

http://www.reuters.com/article/2012/01/12/us-iran-usa-sanctions-idUSTRE80B1DW20120112

(Reuters) - The United States on Thursday imposed sanctions on China's state-run Zhuhai Zhenrong Corp, which it said was Iran's largest supplier of refined petroleum products, as it sought to impress on Beijing and Tehran its resolve to increase economic pressure over Iran's nuclear program.

By Andrew Quinn

WASHINGTON | Thu Jan 12, 2012 6:56pm EST

Secretary of State Hillary Clinton also imposed sanctions on Singapore's Kuo Oil Pte Ltd and FAL Oil Company Ltd, an independent energy trader based in the United Arab Emirates, the State Department said in a notice.

The State Department said the move was part of a broadening international effort to target Iran's energy sector and persuade Tehran to rein in its nuclear ambitions.

"The sanctions announced today are an important step toward that goal, as they target the individual companies that help Iran evade these efforts," the statement said.

The sanction bar all three companies from receiving U.S. export licenses, U.S. Export Import Bank financing or loans over $10 million from U.S. financial institutions, the department said, stressing that the sanctions apply only to the companies and not to their governments or countries.

The U.S. announced the decision after China's rebuff this week of Treasury Secretary Timothy Geithner, who traveled to Beijing to press China on U.S. demands it do more to help curb Iran's oil revenues.

'SHOT ACROSS THE BOW'

Analysts said the U.S. move was largely symbolic, given that Zhenrong was unlikely to have much U.S. business exposure, but that it did send a signal to Beijing and its state-run oil giants such as China National Petroleum Corp (CNPC), China Petroleum and Chemical Corp (Sinopec Corp) and China National Offshore Oil Corp..

These companies have invested billions of dollars in the U.S. energy sector, and are much more exposed to the impact of potential sanctions.

"It's a good shot across the bow and signals the U.S. is serious about vigorous sanctions enforcement. This could be the beginning of a cascade of more sanctions on Chinese companies if China doesn't curtail its Iranian trade," said Mark Dubowitz, executive director of the Foundation for Defense of Democracies, a Washington pressure group that favors stronger sanctions on Iran.

Zhuhai Zhenrong - one of four dominant Chinese state oil traders - brokered the delivery of over $500 million in gasoline to Iran between July 2010 and January 2011 in contravention of U.S. sanctions law, the State Department said. ...

(5) China denounces U.S. sanctions on company dealing with Iran

http://www.reuters.com/article/2012/01/15/us-china-usa-iran-idUSTRE80E01W20120115

BEIJING | Sat Jan 14, 2012 9:55pm EST

(Reuters) - China criticized U.S. sanctions on a Chinese company selling refined petroleum products to Iran, calling Washington's punishment an unreasonable step beyond international sanctions on Tehran's nuclear program.

Thursday, the Obama administration invoked U.S. law to sanction China's state-run Zhuhai Zhenrong Corp, which it said was Iran's largest supplier of refined petroleum products.

"Imposing sanctions on a Chinese company based on a domestic (U.S.) law is totally unreasonable, and does not conform to the spirit or content of U.N. Security Council resolutions about the Iran nuclear issue," the Chinese Foreign Ministry spokesman Liu Weimin said in a statement issued on the ministry's website (www.mfa.gov.cn) late Saturday.

"China expresses its strong dissatisfaction and adamant opposition," said Liu.

The Obama administration said its sanctions against the Chinese company and two other firms are part of a broadening effort to target Iran's energy sector and press Tehran to curb its nuclear ambitions, which Western governments say appear aimed at developing the means to make atomic weapons.

Iran says its nuclear activities are legitimate and entirely for peaceful ends.

The U.S. sanctions threat is a worry for China, the biggest buyer of Iranian oil, followed by India and Japan. Only Saudi Arabia and Angola sell more crude than Iran to China.

As a permanent member of the United Nations Security Council, China can veto resolutions mandating sanctions. But Beijing has voted for them, while working to ensure its energy ties are not threatened.

China has, however, also long criticized the United States and EU for imposing separate, unilateral sanctions on Iran and said they should take no steps reaching beyond the U.N. resolutions.

"Like many other countries, China and Iran maintain normal energy and trade and economic cooperation," said the foreign ministry spokesman Liu.

Analysts have said the U.S. move was largely symbolic, given that China's Zhuhai Zhenrong was unlikely to have much U.S. business, but that it sent a warning to Beijing and its state-run oil giants such as China National Petroleum Corp (CNPC), China Petroleum and Chemical Corp (Sinopec Corp) and China National Offshore Oil Corp..

These companies have invested billions of dollars in the U.S. energy sector, and are much more exposed to the impact of potential sanctions.

(Reporting by Chris Buckley, Editing by Jonathan Thatcher)

(6) Mark Dubowitz, Jewish head of Foundation for Defense of Democracies, commends Obama for "shot across the bow"

{also see Reuters report above (item 3), where the quote first appeared}

http://blogs.jta.org/politics/#reactions-to-obamas-picking-jack-lew-orthodox-jew

FDD on latest sanctions move: 'A shot across the bow to Beijing'

By Zach Silberman · January 12, 2012

After my earlier post on the newly imposed sanctions on three companies doing business with Iran's energy sector, I spoke with Mark Dubowitz, executive director of the Foundation for Defense of Democracies, a Washington think tank that has pushed for stronger sanctions on Iran. Dubowitz highlighted the importance of the sanctions on the Chinese company, Zhuhai Zhenrong.

"The sanctions signal that the Obama administration is serious about sanctions enforcement on Chinese companies," said Dubowitz, who is also the director of the Iran Energy Project. "It was an important political step in reassuring Congress that the administration is going to move aggressively in 2012 to persuade Chinese and other companies to reduce their exposure to the Iranian energy sector."

In addition, Dubowitz noted that the action against Zhuhai Zhenrong was "a shot across the bow to Beijing that Chinese companies will not be able to act with impunity. At the same time, the sanction does not target the core of China's energy security needs so it is unlikely to cause a major diplomatic backlash as Washington works to persuade the Chinese leadership to target Iranian sales, the real lifeblood of the Iranian regime."

(7) Wikipedia webpage on Dubowitz no mention of "Jewish"; but he studied at Hebrew University & is featured on Jewish websites

The Wikipedia webpage on does not mention that he's Jewish:
http://en.wikipedia.org/wiki/Mark_Dubowitz

His own website's biography page does not mention it either: http://dubowitz.pundicity.com/about/

Much of the Wikipedia page on him (last modified on 1 December 2011 at 19:32) is copied directly from his own website. These paragraphs are identical:

{quote}
Mark has testified before Congress on Iran sanctions issues and briefed the military, government and counterterrorism officials on a range of national security and terrorism-related concerns.

Mark previously worked in the venture capital industry focused on fundraising for early-stage technology companies. He also worked in software management as Director of International Business Development at Doubleclick (purchased by Google) and as Director of Corporate Development and General Manager, European & Asian Operations, at FloNetwork (purchased by Doubleclick).

Mark has lived in the Middle East, Europe, and Africa and speaks three languages. He graduated with honors with a masters in International Public Policy from Johns Hopkins University's Paul H. Nitze School of Advanced International Studies (SAIS) in Washington, D.C. Mark also has JD and MBA degrees from the University of Toronto.
{endquote}

Yet, his writings are featured at the Jewish Policy Center:
http://www.jewishpolicycenter.org/docs/author/Mark+Dubowitz

And he has a webpage at The Jewish Week:
http://www.thejewishweek.com/mark_dubowitz

He studied at studied at the Hebrew University of Jerusalem and lived in Tel Aviv:
http://www.powerbase.info/index.php/Mark_Dubowitz

His Jewishness is obviously important to him; why isn't it worth mentioning in his biography webpage on his website, and in the Wikipedia webpage on him?

(8) Dubowitz is a Hawk on Iran, wrote for Weekly Standard, prepared to take on Russia & China

http://www.powerbase.info/index.php/Mark_Dubowitz

{quote}
In 2010 Dubowitz was writing frequent op-eds calling for sweeping sanctions against any companies or individuals that do business with Iran in a variety of mainstream and right-wing publications. In early October Dubowitz wrote on the Weekly Standard's blog that 'If the Obama administration opts for only symbolic and selective measures, it could collapse our Iran policy, making it likely to require more drastic measures to prevent Iran from acquiring nuclear weapons.'[3]

 According to investigative journalist Eli Clifton, Dubowitz has 'made no secret about his view that both sanctions loopholes or enforcement could well lead to a "military option."'[4] Clifton adds that on September 13, Dubowitz and the FDD's Reuel Marc Gerecht wrote:

Any U.S. action will surely infuriate Moscow and Beijing, as well as those in Washington who have worked to "reset" our relations with both countries. Russia and China could retaliate in a variety of hardball ways that could greatly complicate American and European strategic interests. If Russia were to start delivering S-300 anti-aircraft missiles to Tehran, for example, it could well provoke an Israeli preventive strike on Iran's nuclear facilities.[5]

 In a September 2010 article written for the Jerusalem Post Dubowitz was interviewed by coworker Benjamin Weinthal (a fellow at the FDD's Iran Energy Project where Dubowitz serves as Weinthal's superior in the position of director) about new EU economic sanctions that were approved against Iran in July. Political analyst Eli Clifton wrote that "unlike the U.S. sanctions the new EU sanctions will not place sanctions on individual Iranian officials because of human rights violations."[6] Dubowitz told Weinthal that the EU needs to pressure Iran even more than it is already and the Obama Administration isn't doing enough to make this happen:

A fragile political consensus exists in favor of sanctions in Europe. If the Obama administration doesn't provide determined leadership by either sanctioning foreign companies which are violating US law, or persuading these companies to terminate their Iranian ties, European governments will not enforce their own sanction.[7]

This page was last modified on 9 November 2010, at 00:14.
{endquote}

(9) Japan Finance Minister accedes to Geithner demand to cut oil imports from; China refuses

http://www.businessweek.com/news/2012-01-13/geithner-gets-japan-backing-on-iran-oil-after-snub-from-china.html

Geithner Gets Japan Backing on Iran Oil After Snub From China

January 13, 2012, 3:55 AM EST

By Toru Fujioka and Aki Ito

Jan. 13 (Bloomberg) -- U.S. Treasury Secretary Timothy F. Geithner's efforts to tighten economic sanctions on Iran over its nuclear program won backing from Japan after China rejected limiting oil imports from the country.

"We want to take concrete steps to reduce our share in an orderly way as soon as possible," Finance Minister Jun Azumi said at a joint press conference in Tokyo yesterday with his U.S. counterpart. "The world cannot tolerate nuclear development."

Geithner's meetings were part of a trip to Asia's two largest economies aimed at building support for tighter Iranian economic sanctions after international monitors detected an acceleration in the nation's nuclear development program. China, which counts Iran as one of its top petroleum suppliers, snubbed the U.S. this week, with a vice foreign minister saying his nation "opposes imposing pressure and sanctions."

Crude for February delivery climbed 49 cents yesterday, or 0.5 percent, to $101.36 a barrel in electronic trading on the New York Mercantile Exchange as of 5:00 p.m. Tokyo time.

JX Nippon Oil & Energy Corp., Japan's biggest refiner, is in talks with Saudi Arabia and other producers to replace crude shipments in the event of an embargo, according to an official who declined to be identified, citing company policy. JX buys about 90,000 barrels of Iranian oil a day, the official said.

Japanese Chief Cabinet Secretary Osamu Fujimura said the government hasn't made a final decision on cutting Iranian imports, and that Azumi's pledge "is just one of several opinions." Azumi later said he is seeking ways to make sure sanctions on Iran don't hurt the Japanese economy.

'Halfway Solution'

"Japan will try and seek a halfway solution where they'll try and limit imports from Iran and boost imports from other Middle Eastern countries that are also U.S. allies," said Razeen Sally, a professor at the Lee Kuan Yew School of Public Policy at the National University of Singapore. Given its military alliance with the U.S., Japan "is much more susceptible to U.S. pressure than China," he said.

The U.S. will send officials to Japan next week to discuss how the Japanese government will implement its plans, NHK Television quoted Geithner as saying in an interview. "We share a sense of urgency," he told NHK.

Asked about China, Geithner told NHK: "They have been actually very cooperative with the international community with this common objective because of course they share our interests in trying to make sure Iran is compliant with its international obligations."

'Quite Supportive'

"They actually have been quite supportive in tangible ways," Geithner said. "I heard additional evidence of their intentions on that when I was there."

The Obama administration's "basic objective is to assure that China is more fully integrated into the global economy and financial system," he said. The yuan's exchange rate, which the U.S. claims is undervalued, is "just one part" of a broader agenda Chinese leaders are pursuing, he said. ...

(10) Japan to cut oil imports from Iran under U.S. sanctions: Finance Minister

Japan to cut oil imports from Iran under U.S. sanctions: Azumi

http://mdn.mainichi.jp/mdnnews/news/20120112p2g00m0dm036000c.html

Mainichi Daily News Japan

January 12, 2012

 U.S. Treasury Secretary Timothy Geithner, left, shakes hands with his Japanese counterpart Jun Azumi prior to their meeting in Tokyo, Thursday, Jan. 12, 2012. (AP Photo/Koji Sasahara) TOKYO (Kyodo) -- Finance Minister Jun Azumi said Thursday that Japan will cut its crude oil imports from Iran, agreeing to U.S. sanctions against Tehran for its nuclear development program, but Tokyo also expressed concern about the possible negative impact on the global economy from the U.S. action.

Japan, which depends on Iran for about 10 percent of its crude oil imports, plans to reduce its intake "as soon as possible and in a planned and measured manner," Azumi told reporters after holding talks with U.S. Treasury Secretary Timothy Geithner.

The U.S. sanctions target the oil industry in Iran by barring financial institutions of other countries from the U.S. market if they do business with the Central Bank of Iran, which settles oil transactions.

"The United States and Japan can work together to encourage the government of Iran to comply with its international obligations," Geithner said at a joint press conference in Tokyo.

Washington says Iran is not meeting its obligations for its nuclear programs under U.N. Security Council resolutions. Iran says its atomic programs are for peaceful purposes.

Azumi said Japan has "full understanding" of the U.S. sanctions. But he also underscored that Japan has already reduced oil imports from Iran by some 40 percent over the last five years.

Japan is concerned the planned further reduction could add to the woes of the nation's utilities, which have boosted oil-fired thermal power generation to cover the loss of power from nuclear power plants due to the idling of many reactors over safety concerns following the Fukushima Daiichi plant disaster, triggered by a massive earthquake and tsunami in March.

The Japanese government has already frozen the assets of Iranian commercial banks, groups and individuals involved in the nuclear program. A similar sanction on the central bank means Japanese industries would be unable to settle their oil imports through banks, causing such trade to be halted completely. ...

(11) Iranian oil cut a source of worry - Daily Yomiuri (Japan)

http://www.yomiuri.co.jp/dy/business/T120113005987.htm

Iranian oil cut a source of worry / Reestablishing ties could be hard; other supplier could seek higher prices

Hideyuki Ioka and Hiromi Uechi / Yomiuri Shimbun Staff Writers

Yomiuri Shimbun Jan. 14, 2012

Japan must now tackle the difficult task of finding an alternative crude oil supplier following a decision to gradually reduce crude oil imports from Iran, which supplies 10 percent of the nation's crude oil.

The government officially informed U.S. Treasury Secretary Timothy Geithner of the decision Thursday.

The United States had pressured Japan to reduce Iran-produced crude over allegations that the Middle Eastern nation is engaged in programs to develop nuclear weapons.

At a joint press conference with Geithner on Thursday, Finance Minister Jun Azumi said, "We can't overlook the problem of Iran's nuclear development. We want to take actions to decrease oil imports [from Iran] at an early date in an organized manner."

On Dec. 31, Washington passed and enacted the National Defense Authorization Act, which includes a clause imposing sanctions on Iran's central bank.

The act prohibits banks in third-party countries from conducting financial deals with U.S. banks if they are found to have crude oil trade-related transactions with the Iranian central bank, effectively banning Iran from exporting crude oil to other countries.

However, the act also has an exemption clause stating that sanctions will not be imposed on financial institutions in countries that have drastically reduced crude oil imports from Iran.

The U.S. government will decide which countries will be exempted within 180 days from the NDAA's enactment date.

However, opinions within the Japanese government regarding the latest U.S. sanction are divided.

In the past, Japan gradually reduced the percentage of crude oil imports in accordance with the U.S. government's hard-line stance against Iran.

Japan also withdrew from a project to develop an Azadegan oil field in southwestern Iran in autumn 2010, even though the project was seen as a symbol of "Hinomaru oil wells"--Japanese-developed oil fields overseas.

Should Japan further reduce crude oil imports from Iran, one of the world's largest oil producers, it may become difficult to reestablish ties in the future.

If Japan increases imports from another oil-producing country, it also runs the risk that country may try to take advantage of the situation and demand higher prices.

However, the Japanese government had no choice other than to take concerted steps with Washington.

The European Union's 27 member nations basically agreed to ban crude oil imports from Iran. South Korea is also expected to follow suit.

"As Europe and many other countries have shown they will cooperate with the United States, we don't want to isolate Japan [in the international community]," a senior Japanese government official said.

But Japan will surely have to increase crude oil imports given that many of its nuclear power reactors are now idle.

One estimate shows that the crude oil used for thermal power plants in fiscal 2012 will be triple the amount in fiscal 2010.

A government source said the U.S. government had sent a behind-the-scenes signal that Washington "would not demand a total ban on imports" from Iran. Ahead of the finance ministers' meeting Thursday, the two sides agreed to make a compromise to reduce crude oil imports in an "organized manner." ===

Alternatives hard to find {continues from above article}

Observers warned that a shutout of Iranian crude oil may result in global economic confusion.

In 2010, Japan imported 20.61 million kiloliters of Iranian crude oil, which is equivalent to about a 47-day reserve from the government's oil stores.

Simple calculations indicate that annually about 80 average-size tankers carry crude oil from Iran to Japan.

The petroleum industry has already lowered its reliance on Iranian crude oil. A senior official at the Economy, Trade and Industry Ministry said the percentage of Iranian crude oil imported in 2011 is estimated to have fallen to 8 percent.

But it is extremely difficult to secure an alternative crude oil supplier.

If many countries reduce imports from Iran, they will also try to import crude oil from other oil-producing countries, raising the possibility of a worldwide surge in crude oil prices.

The price of West Texas Intermediate, an indicator of global crude oil prices, was about 70 dollars per barrel in autumn last year, but has recently risen to about 100 dollars.

Iran has warned that if U.S. sanctions officially go into effect, it will blockade the Strait of Hormuz, which is used by about 80 percent of Japan-bound tankers carrying crude oil from the Middle East.

In the event this worst scenario becomes reality, the world may be hit by another oil shock reminiscent of those in the 1970s. Hidetoshi Shiota, senior analyst at SMBC Nikko Securities Inc., said, "Crude oil prices may jump exponentially."

This could cause serious turmoil in global crude oil markets, making it extremely difficult for Japan to secure crude oil.

Foreign Minister Koichiro Gemba visited Saudi Arabia, the United Arab Emirates and other oil-producing countries in the Middle East from Jan. 5 to 12.

Mitsuyoshi Yanagisawa, economy, trade and industry vice minister, is also scheduled to visit Saudi Arabia and the UAE from Saturday to ask for a stable supply of crude oil.

JX Nippon Oil & Energy Corp. plans to work around Iranian crude oil cuts by increasing imports from Saudi Arabia and countries in western Africa.

An oil industry official said, "There will be no serious problems for the time being in securing crude oil."

However, Japan will have to closely watch the United States' actions and Iran's response from now on.

(Jan. 14, 2012)

(12) Japanese PM says Gov't yet to decide whether to cut oil imports from Iran in line with U.S. sanctions

http://www.japantoday.com/category/politics/view/japan-backtracks-on-iran-oil-cut-no-decision-yet-says-gemba

Noda says no decision yet on reducing Iran oil imports

By Mari Yamaguchi

JAN. 14, 2012 - 06:30AM JST ( 33 )

AFP TOKYO — Prime Minister Yoshihiko Noda said Friday the government has yet to decide on whether it will reduce oil imports from Iran in line with U.S. sanctions, saying businesses implications need to be considered.

Noda's comments retreated from the strong support voiced a day earlier by his finance minister, Jun Azumi, who said Japan would start reducing oil imports as soon as possible.

Noda described Azumi's remarks as a "personal view," and said his government needs to first consult with businesses about the sanctions.

Noda didn't rule out Japan's participation in the sanctions effort, and said he shared strong concerns about Iran's nuclear program.

"Japan's basic stance is to resolve such matters diplomatically and peacefully," he said during a news conference. "We need to consult with the business community, and we need to work out details with U.S. officials. We have to think about the implications for Japanese banks, and what measures are needed to resolve possible negative impact."

Washington is seeking to win global support for sanctions aimed at halting what Western governments say is Iran's effort to develop nuclear weapons. The sanctions, targeting Iran's main export of oil, would bar financial institutions from the U.S. market if they do business with Iran's central bank.

Azumi's supportive comments Thursday came after a meeting with U.S. Treasury Secretary Timothy Geithner, who had traveled to China and Japan this week partly to muster support for the sanctions. He got a chilly response from Beijing.

Tehran denies the West's allegation that the program is aimed at building nuclear weapons.

Earlier Friday, Foreign Minister Koichiro Gemba also took a cautious stance toward the sanctions, warning that the move could drive up global oil prices that would only benefit Tehran and hurt the global economy.

Japan is heavily dependent on imported oil and natural gas to meet its energy needs, and obtains about 9% of its oil from Iran. Japan's energy demands have increased even more since it shut down many nuclear plants in the wake of last year's tsunami and the nuclear crisis in Fukushima.

"We need to respond carefully and wisely," and Japan will finalize its policy in consultation with the U.S., Saudi Arabia and other countries, Gemba said during a joint news conference with visiting French Foreign Minister Alain Juppe.

"What's going to happen if oil prices surge is that sanctions will not be effective," Gemba said. "The higher oil prices, the more affluent Iran becomes," he said, apparently referring to the likelihood of some countries ignoring the sanctions and continuing to buy from Iran.

Rising oil prices could "have an adverse effect not only on the Japanese economy but also the entire global economy," he said, adding that his recent trip to the Mideast was made in anticipation of possible sanctions on Iran.

Gemba said Iranian oil accounts for about 9% of Japan's oil imports, having decreased from 500,000 barrels per day to 300,000 barrels per day over the past five years.

Juppe, however, brushed off Gemba's concerns about oil prices, saying that similar sanctions against Libya in the past did not drive up oil prices.

"Minister Gemba sounds extremely wary of higher oil prices, but I don't think that would necessarily be the case," Juppe said. "Once we had a similar situation with Libya but that didn't lead to higher oil prices. We also believe we can obtain oil from other oil producing countries."

He also said the impact from the suspension of transactions with Iran's central bank would be "minimal."

"I think we should prioritize what we consider a more pressing issue - the economy or nuclear weapons development," Juppe said. "We have to decide which is more important."

(13) NED is financing Russian "Democracy" movement to block Putin Presidency - F. William Engdahl

http://www.pacificfreepress.com/news/1-/10643-finito-with-putin-the-shady-national-endowment-for-democracy-a-the-prime-agenda.html

TUE 10 JAN 2012

'Finito' with Putin: The Shady National Endowment for Democracy & The Prime Agenda

Why Washington Wants 'Finito' with Putin: The Shady National Endowment for Democracy & The Prime Agenda of 'Whoever' is Next US President

by F. William Engdahl

Washington clearly wants 'finito' with Russia's Putin as in basta! Or as they said in Egypt last spring, Kefaya–enough!

Hillary Clinton and friends have apparently decided Russia's prospective next president, Vladimir Putin, is a major obstacle to their plans. Few however understand why. Russia today, in tandem with China and to a significant degree Iran, form the spine, however shaky, of the only effective global axis of resistance to a world dominated by one sole superpower.

On December 8 several days after election results for Russia's parliamentary elections were announced, showing a sharp drop in popularity for Prime Minister Putin's United Russia party, Putin accused the United States and specifically Secretary of State Hillary Clinton of fuelling the Russian opposition protesters and their election protests.

Putin stated, "The (US) Secretary of State was quick to evaluate the elections, saying that they are unfair and unjust even before she received materials from the Office of Democratic Institutions and Human Rights (the OSCE international election monitors-w.e.) observers."[1]

Putin went on to claim that Clinton's premature comments were the necessary signal to the waiting opposition groups that the US Government would back their protests. Clinton's comments, the seasoned Russian intelligence pro stated, became a "signal for our activists who began active work with the US Department of State." [2]

Major western media chose either to downplay the Putin statement or to focus almost entirely on the claims of an emerging Russian opposition movement. A little research shows that, if anything, Putin was downplaying the degree of brazen US Government interference into the political processes of his country. ...

Let's examine closely Putin's charge of US interference in the election process. If we look, we find openly stated in their August 2011 Annual Report that a Washington-based NGO with the innocuous name, National Endowment for Democracy (NED), is all over the place inside Russia.

The NED is financing an International Press Center in Moscow where some 80 international NGOs can hold press briefings on whatever they choose. They fund numerous "youth advocacy" and leadership workshops to "help youth engage in political activism." In fact, officially they spent more than $2,783,000 in 2010 on dozens of such programs across Russia. Spending for 2011 won't be published until later in 2012. [4]

The NED is also financing key parts of the Russian "independent" polling and election monitoring, a crucial part of being able to claim election fraud. They finance in part the Regional Civic Organization in Defense of Democratic Rights and Liberties "GOLOS." According to the NED Annual Report the funds went "to carry out a detailed analysis of the autumn 2010 and spring 2011 election cycles in Russia, which will include press monitoring, monitoring of political agitation, activity of electoral commissions, and other aspects of the application of electoral legislation in the long-term run-up to the elections."[5]

In September, 2011, a few weeks before the December elections the NED financed a Washington invitation-only conference featuring the Russian "independent" polling organization, the Levada Center. According to NED's own website Levada, another recipient of NED money, [6] had done a series of opinion polls, a standard method used in the West to analyze the feelings of citizens. The polls profiled "the mood of the electorate in the run up to the Duma and presidential elections, perceptions of candidates and parties, and voter confidence in the system of 'managed democracy' that has been established over the last decade."

 One of the featured speakers at that Washington conference was Vladimir Kara-Murza, member of the federal council of Solidarnost ("Solidarity"), Russia's democratic opposition movement. He is also "advisor to Duma opposition leader Boris Nemtsov" according to NED. Another speaker came from the right-wing neo-conservative Hudson Institute. [7]

Nemtsov, one of the most prominent of the Putin opposition today is also co-chairman of Solidarnost, a name curiously enough imitated from the Cold War days when the CIA financed the Polish Solidarnosc workers' opposition of Lech Walesa. More on Nemtsov later.

And on December 15, 2011, again in Washington, just as the series of US-supported protests were being launched against Putin, led by Solidarnost and other organizations, the NED held another conference titled, Youth Activism in Russia: Can a New Generation Make a Difference? The featured speaker was Tamirlan Kurbanov, who according to the NED, "most recently served as a program officer at the Moscow office of the National Democratic Institute for International Affairs, where he was involved in developing and expanding the capacities of political and civic organizations; promoting citizen participation in public life, youth engagement in particular." [8] The National Democratic Institute is an arm of the NED.

The shady history of NED

Helping youth engage in political activism is precisely what the same NED did in Egypt over the past several years in the lead up to the toppling of Mubarak. The same NED was instrumental by informed accounts in the US-backed "Color Revolutions" in 2003-2004 in Ukraine and Georgia that brought US-backed pro-NATO surrogates to power. The same NED has been active in promoting "human rights" in Myanmar, in Tibet, and China's oil-rich Xinjiang province. [9]

As careful analysts of the 2004 Ukraine "Orange revolution" and the numerous other US-financed color revolutions discovered, control of polling and ability to dominate international media perceptions, especially major TV such as CNN or BBC is an essential component of the Washington destabilization agenda. The Levada Center would likely be in a crucial position in this regard to issue polls showing discontent with the regime.

By their description, the National Endowment for Democracy (NED) is a "private, nonprofit foundation dedicated to the growth and strengthening of democratic institutions around the world. Each year, with funding from the US Congress, NED supports more than 1,000 projects of non-governmental groups abroad who are working for democratic goals in more than 90 countries."[10]

It couldn't sound more noble or high-minded. However, they prefer to leave out their own true history. In the early 1980's CIA director Bill Casey convinced President Ronald Reagan to create a plausibly private NGO, the NED, to advance Washington's global agenda via other means than direct CIA action. It was a part of the process of "privatizing" US intelligence to make their work more "effective." Allen Weinstein, who helped draft the legislation establishing NED, said in a Washington Post interview in 1991, "A lot of what we do today was done covertly 25 years ago by the CIA."[11] Interesting. The majority of funds for NED come from US taxpayers through Congress. It is in every way, shape and form a US Government intelligence community asset. ...

Endnotes: [1] Alexei Druzhinin, Putin says US encouraging Russian opposition, RIA Novosti, Moscow, December 8, 2011 [2] Ibid. [3] Jonathan Turley, The NDAA's historic assault on American liberty, guardian.co.uk, 2 January 2012, accessed in http://www.guardian.co.uk/commentisfree/cifamerica/2012/jan/02/ndaa-historic-assault-american-liberty . [4] National Endowment for Democracy, Russia, from NED Annual Report 2010, Washington, DC, published in August 2011, accessed in http://www.ned.org/where-we-work/eurasia/russia. [5] Ibid. [6] Ibid. [7] NED, Elections in Russia: Polling and Perspectives, September 14, 2011, accessed in http://ned.org/events/elections-in-russia-polling-and-perspectives. [8] NED, Youth Activism in Russia: Can a New Generation Make a Difference?, December 15, 2011, accessed in http://ned.org/events/youth-activism-in-russia-can-a-new-generation-make-a-difference . [9] F. William Engdahl, Full Spectrum Dominance: Totalitarian Democracy in the New World Order, 2010, edition.engdahl press . The book describes in detail the origins of the NED and various US-sponsored "human rights" NGOs and how they have been used to topple regimes not friendly to a larger USA geopolitical agenda. [10] National Endowment for Democracy, About Us, accessed in www.ned.org. [11] David Ignatius, Openness is the Secret to Democracy, Washington Post National Weekly Edition, 30 September-6 October,1991, 24-25. ...

(14) President of NED is Jewish; the Jewish war on Putin - Brother Nathanael

Date: Thu, 12 Jan 2012 20:50:16 -0800 (PST) From: Brother Nathaniel <bronathaniel@yahoo.com>

http://www.realjewnews.com/
My Name Is Brother Nathanael Kapner    I'm A "Street Evangelist"
I Grew Up As A Jew    I'm Now An Orthodox Christian
I Wish To Warn How Zionist Jews    Are Destroying Christianity Throughout The World ==

http://www.realzionistnews.com/?p=690

The Jewish War On Vladimir Putin

By Brother Nathanael Kapner

January 12, 2012 @ 9:17 pm

A new clash of civilizations is now unfolding before our very eyes.

While the atheistic West is in decline, a renewed Russia based on the Christian Faith, the historic Church, and cultural unity – whose leader is a devout Orthodox Christian – is emerging as an opposing force to the pernicious spread of Zionist imperialism.

It was at the World Economic Forum held in Davos Switzerland in 2009 that Russian Prime Minister Vladimir Putin signaled to the Judaic-empowered West that its era of a "unipolar" world was coming to an end.

[Clip: "Not only the architecture of global finance is to be changed. We're talking about the fact that a system of interaction based on a number of centers should replace a unipolar world."]

The demonization of Russia's leader which I call, "The Jewish War on Vladimir Putin," then shifted into high gear. The smearing had already begun in 2007 when Gerald Levin's and Norman Pearlstine's Time Magazine portrayed Putin as a tyrannical monster as Time's Man of the Year.

It all came to a head during the Duma parliamentary elections held in Russia's provinces last month.

Even before the so-called 'election monitoring groups' issued their reports, US Secretary of State Hillary Clinton, at a "human rights" meeting in Lithuania, accused Putin of "rigging" the vote.

[Clip: "A number of governments continue to view civil society as adversaries instead of partners. We just witnessed a flawed Duma election in Russia including efforts to halt the election monitoring."]

Putin was quick to respond, pointing out that Clinton's blatant lie of voter fraud, "signaled" to Zionist-funded NGO's to begin their staged, well-rehearsed, anti-Putin protests.

[Clip: "We need to work out ways to protect our sovereignty, defense against interference from outside. The first thing that the US Secretary of State did was to give her opinion about the elections. She said they were unfair and unjust, even before she got Office for Democratic Institutions and Human Rights monitors' materials. She set the tone for some of the activists inside our country, gave them a signal, they heard the signal and started their activist work with support from the US State Department."]

With Jewish chess champion Gary Kasparov at the lead of the protests, complete with the typical and obviously heavily funded—lots of money here folks, this is NOT some spontaneous, grassroots protests—rehearsed theatrics, catchy slogans, and expensive Photo-Shopped posters. Some of them pointedly anti-Christian…the sure work of Jews…since the Church is very popular under Putin.

The leading US State Department-sponsored NGO behind the contrived protests in Russia, as reported by the renowned contemporary historian, William F Engdahl, is the National Endowment for Democracy, known as the NED.

This organization has absolutely NOTHING to do with democracy but rather with subverting governments that oppose the Zionist West's quest for world hegemony through Conferences, Elections Monitoring, and Social networking.

Dubious beginnings mark this so-called "democracy" group.

You see, the NED's Jewish founders in the 80's, Allen Weinstein and Carl Gershman, were careful to prevent any exposure of the laundered funds coming to them from the CIA – for such exposure would have aborted the organization at its birth.

Indeed, the NED was created to do "overtly" what the CIA could not do "covertly."

Gershman remains the President of the NED where he is enabled by two powerful monied-Jews who serve on the Board of Directors: Kenneth Duberstein, who also serves on the Board of the Boeing Company, and Larry Liebenow, former Chairman of the US Chamber of Commerce, who now directs the NED's International Policy Center.

The Jewish War on Vladimir Putin is now in full bloom.

Yet in spite of Jewry's efforts to destroy him, Vladimir Putin, a devout Orthodox Christian, has as his reinforcement troops, all the powers of heaven.

And of this battalion, fully equipped for lethal battle, international Jewry has NO defense!

(15) Class Division becomes an election issue in US; most candidates seen as representing the 1%

http://www.dailyfinance.com/2012/01/13/its-official-wealth-gap-has-turned-america-into-a-seething-pit/

It's Official: Wealth Gap Has Turned America Into a Seething Pit of Class Resentment

By Bruce Watson

Posted 11:55AM 01/13/12

http://www.dailyfinance.com/2012/01/13/its-official-wealth-gap-has-turned-america-into-a-seething-pit/

Do you think that the biggest conflict in America is between the rich and the poor? If so, join the club: According to a recent poll published by the Pew Research Center, nearly two-thirds of Americans believe that the wealth gap is the greatest cause of tension in America.

According to the poll, which was released Wednesday, 66% of Americans believe that there is a "strong" or "very strong" conflict between the rich and the poor. These numbers are particularly noteworthy when one considers that in July 2009 -- less than three years ago -- only 47% of respondents expressed those opinions. What's more, the number of respondents who stated that there was a "very strong" conflict has more than doubled, and is currently at the highest level since Pew began asking the question in 1987.

America: Melting Pot or Boiling Cauldron?

Pew's findings are also surprising when one considers all the other things that cause social tension. Essentially, during the past three years, more traditional sources of friction -- race, gender, religion, sexual preference, age and national origin -- have become vastly overshadowed by distrust over wealth.

According to Wednesday's poll, the biggest jump in class awareness has occurred among white respondents: While 74% of black and 61% of Hispanic respondents said they believed that there is a serious class conflict in America, the increase in people holding that opinion since 2009 among both those groups was less than 13%. By comparison, the number of white respondents who believe that there is a strong or very strong conflict between the rich and the poor has shot up from 43% to 65% -- an increase of more than 50%.

The Political Equation

According to the survey, Democrats are most likely to perceive class tension in America, but respondents across the political spectrum overwhelmingly agreed that there is conflict between the rich and the poor. In 2009, only 38% of Republicans said they thought there was a strong conflict between classes. Today, 55% do. Among independent voters, the numbers were even more stark: in the last three years, the percent of people who perceive a serious class conflict has jumped from 45% to 68%.

This perception of class conflict has already changed the contours of the 2012 Presidential race. Earlier this month, Rick Santorum attacked Mitt Romney and Barack Obama for using the term "middle class": The governor used a term earlier that I shrink from. It's one that I don't think we should be using as Republicans: "middle class." There are no classes in America. We are a country that don't allow for titles. We don't put people in classes. There may be middle-income people, but the idea that somehow or another we're going to buy into the class-warfare arguments of Barack Obama is something that should not be part of the Republican lexicon. That's their job -- divide, separate, put one group against another.

While Santorum might be uncomfortable with Gov. Romney's terminology, it would appear that the two are in agreement about the issue of class warfare. In a later interview, the Today show's Matt Lauer asked Romney if there are legitimate questions to be asked about the fairness of wealth distribution in the country. Romney responded by suggesting that any such questions were based in envy and class warfare, and left little question about who he felt was behind these arguments:

You know, I think it's about envy. I think it's about class warfare. When you have a President encouraging the idea of dividing America based on the 99% versus 1% -- and those people who have been most successful will be in the 1% -- you have opened up a whole new wave of approach in this country which is entirely inconsistent with the concept of one nation under God.

Not Just a Democratic Issue

But Romney may be misreading his audience: There is evidence to suggest that Democrats aren't the only people who are concerned about wealth distribution in America. In addition to the growing number of worried Republicans that the Pew poll identified, an earlier poll by Bloomberg and The Washington Post found that 53% of Republicans believe that taxes should be increased on households making more than $250,000 per year.

While all of the major Republican candidates endorse tax cuts for the wealthy, Romney's personal wealth and his perspective on class warfare have made him especially vulnerable to attacks on the issue. A recent Newt Gingrich ad features a collection of Romney gaffes, including the now-famous clip in which he tries to make a $10,000 bet with Gov. Rick Perry, and the campaign rally in which he explicitly asserts that "corporations are people." Meanwhile, Winning Our Future -- a political action committee that endorses Gingrich -- has released "When Mitt Romney Came to Town," a half-hour video that links Romney's position as CEO of Bain Capital, a private-equity firm, to job losses across the country.

While it remains to be seen how much the struggle between the rich and the rest will affect the next election, one thing is clear: For a growing number of voters, one eye will be on the ballot box, and the other will be on the bottom line.

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971. 

Saxo Bank 2012 Report: "The perfect storm is coming but there is no need to panic."

Just published from one of the world's biggest investment banks. Up to now only radical libertarian analysts (like Jim Willie, Bob Chapman, Doug Casey, the crowd of The Daily Reckoning, and others) had the guts to tell things as it is such as the following:


Excerpts:

[...]
Now, we are reaching the end of the line for extend-and-pretend/kicking the
can/printing money/interventionism/call-it-what-you-will from the public
sector puppeteers. After the recent beginning-of-the-end phase that we have
dubbed Maximum Intervention, the marionettes in the economy are tiring and
will soon no longer be able to respond to government and central bank
manipulations. The EU is in the hottest water at the moment due to
its awkward political and fiscal framework, but the rest of the developed
world and possibly also China also face this critical inflection point - the
point at which ever mounting intervention from the public sector only finds
rapidly diminishing returns. The other name for this point is Crisis 2.0 –
the needed destruction of the old order that allows the construction of the
new.

[...]
In the EU, the coming austerity will be the most vicious and is thoroughly
entwined with the sovereign debt crisis, as the German preference for
discipline over the printing press will ensure a particularly severe
deflationary spiral as long as the EU holds together under the sway of the
austerity impulse.
Somewhere along the line, the siren song of the ECB printing press may
finally be yielded to, but in the meantime, the die is cast for a very sharp
recession in the EU. Elsewhere, the US may attempt “just one more” round of
stimulus, but this will mostly represent a feeble extension of existing
breaks and must be credibly counterbalanced with fiscal reductions
elsewhere. In China, the leadership is dealing not only with a regime
change, but is looking at an economy with grotesque distortions brought
about by its reliance on over investment in infrastructure and property. All
in all, global growth is likely to be effectively recessionary in the first
half of the year, even if nominally not so.
[...]
The global financial crisis and the drift in society towards a larger gap
between rich and poor and higher unemployment, particularly among the young,
means that we have an explosive social cocktail across the developed world.
The first indications of the potential for strife have popped up in the
Occupy movements starting in the US and spreading rapidly.
In Europe we have a historically strong anti-EU sentiment that will
represent a serial challenge as the elections get underway all over Europe,
most critically in 2012 in France. The rise of True Finns of Finland in 2011
might be a strong indication of what kinds of parties will gain increasing
popularity.
[...]
As the EU leaders have failed to address the fact that the banking/sovereign
debt crisis is one of solvency, not liquidity provision (and they haven’t
even done that particularly well) a renewed crisis is inevitable.
After all, the funding needs for Italy quickly mount toward EUR 300 billion
by the end of January and Spain’s funding needs are of similar magnitude in
the New Year. This time around, we may finally see a true systemic climax,
with a liquidity freezing over across the financial system and European
equity markets dropping 25 percent or more in short order. Basically, this
would be a crisis so intense that it forces EU leaders to pull together,
shut down markets and hold the summit to end all summits to design a new EU,
somewhat like how cardinals select a new pope at a papal conclave. A new EU
would likely mean massive debt restructurings, bank nationalizations and
possibly
two or more nations dropping out of the 17 nation EMU.
[...]
The perfect storm is coming but there is no need to panic. We feel that the
onrushing Crisis 2.0 will prove constructive in the sense that it forces the
hands of the policymakers and politicians. Ultimately we need to find a
long-term solution anchored by popular support. The “non-elected” government leaders in Italy and Greece shouldn’t be seen as a model for a solution nor a promise for longer term stability, but rather as a warning sign of the alternative.
Read the full report here