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Agriculture • Germany tests milk in carcinogen scare
Germany tests milk in carcinogen scare
Agriculture ministry says no risk to consumers after animal feed with high levels of aflatoxin B1 delivered to dairy farms
Josie Le Blond in Berlin
The Guardian, Sunday 3 March 2013 18.55 GMT
Germany conducted safety tests on milk over the weekend, after it emerged that thousands of farms had given animals feed contaminated with high levels of the dangerous carcinogen aflatoxin B1.
Thousands of tonnes of poisonous animal feed was delivered to 4,467 farms in Lower Saxony alone, including 968 dairy farms, the state’s agricultural ministry confirmed on Sunday.
Aflatoxin B1, one of the strongest known naturally-occuring carcinogens, is produced by the Aspergillus mould, which can develop on grains when left in warm and damp conditions. German authorities banned milk deliveries from hundreds of dairy farms on Friday, fearing that milk from cows fed up to 30 times the accepted levels of aflatoxin could also contain the cancer-causing substance.
"Aflatoxins are especially dangerous in milk," said Udo Paschedag, state secretary of the ministry, adding that they did not pose a problem in meat or eggs.
The ministry said it believed there was no risk to consumers after initial test results on Saturday showed milk from 79 of the affected dairy farms contained only low traces of the carcinogen. Tests are now being carried out on the remaining farms.
The ministry said it had tracked the breach to a shipment of 40,000 tonnes of maize from Serbia, 10,000 tonnes of which was processed into animal feed for chickens, cows and pigs.
While authorities say meat and eggs from animals which have ingested the cancer-causing substance are not dangerous to human health, they have yet to confirm whether offal from the affected animals is safe to eat.
Anger among consumers grew as the scale of the breach became known, the third food scandal to hit Germany in under a month. As well as horse meat being passed off as beef, 200 German egg farmers are currently under investigation for allegedly falsely labelling battery chickens’ eggs as organic.
http://www.guardian.co.uk/world/2013/ma … ogen-scare
Statistics: Posted by yoda — Sun Mar 03, 2013 1:20 pm
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Germany Worries About a Currency War
With Abe in Japan indicating that devaluation is the goal, other world economic powers are starting to twist in their seats. A race to the bottom? Ja.
Boy that Bundesbank gold can’t get to Frankfurt soon enough.
(From The FT)
The erosion of central bank independence around the world threatens to unleash a round of competitive exchange rate devaluations, which leading economies have so far avoided during the financial crisis, the president of Germany’s Bundesbank warned on Monday.
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Gold and Silver • Why doesn’t Germany Trust The US To Store Its Gold?
Why doesn’t Germany Trust The US To Store Its Gold?
TO WATCH THIS CNBC INTERVIEW GO TO:
http://maxkeiser.com/2013/01/18/hilario … -its-gold/
let’s talk about our market mystery, because this is a question that’s been plaguing our traders all day here. look at that. the german bank is bringing home its gold, saying, quote, by 2020, the bank intends to store half of germany’s gold reserves in its own vaults in germany. the question is, why is germany moving gold out of the united states? big question. why don’t they trust us anymore? guy? well, lower manhattan, actually. couple things. this was out yesterday and i wasn’t here yesterday so i want to — you’ve been thinking about it. when it came out and the conspiracy theorists, i get all that. this is a huge story in my opinion, that is not a huge story now, but will be a huge story. why is that? because you have to ask yourself, why would germany decide to do this? what do they see that the rest of us don’t see that requires them to physically move this gold out of lower manhattan and obviously in paris, as well, back to their borders? and i think that’s really the question you have to ask. and the answer is, it can’t be anything good. and if you think this is the first time, it’s not. because the wacko down in venezuela did it a couple of years ago because people dismissed it — because he’s a wacko. right. if germany is going to be the last, they’re not. people will line up and do this. you talk about runs on banks? this could be exactly that. if everybody wants their metal back at once, you better hope, a, that it’s there and b, we’re able to do it. and i’m telling you, the act itself is not bullish gold necessarily — wait a minute. i have a question. question. go ahead. germany owns this physical gold, so, why is there any risk that is everybody is pulling their gold out that it won’t be there. give the exact answer. when i worked at drexel berner, 1990, and you’re going to say, you’re a real back job — i was going to say, you’re old. we don’t have time. drove the gold of central banks. it was their gold, but we had it. when the bankruptcy hit, everything was frozen. though it was their gold, they had no access to it. beeks can speak to this, as well. so, it’s a lot better to have it in your possession than to have it in your possession in somebody else’s vaults. the gold market is a little weird. if you buy a share of stock, it’s yours, it’s in your account. that’s not the way it is with gold. there’s not necessarily a serial number on every gold bar that says your name. is there maybe not enough gold in the bank? yeah, potentially. you sound like a real conspiracy theorist. well, gold is lent out every single day through the london bullion market. it’s lent everywhere. so, if you have everybody trying to come after it at onetime, just look at what happened with mf global. a lot of people involved in that, warehouse receipts. took awhile to get that back, so, you need to be concerned. i think the bigger picture is, why is germany doing this now. exactly. they’ve had it here for 40-some odd years. why today? maybe they have their own vault. germany’s got 10% of the world’s gold reserves and to men, i don’t think this is going to be a catalyst to other people. i certainly don’t think why it’s that big of a deal to give germany their gold when it’s not backed against anything. so, this is the reason why people — this is why gold is the thing people want to hold. there’s nothing backing gold. there’s mortgages. they don’t have to worry about the soviets, which is why they moved it here in the first place. let’s think about why they moved it here in the first place. you don’t think it’s a big deal and you do — the netherlands, actually, have said they want their gold back, too. mystery. for now, it will remain a market mystery. we need to come up with more
Statistics: Posted by DIGGER DAN — Sun Jan 20, 2013 11:02 pm
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Germany Is Repatriating Much of Its Gold From the New York Fed
Gold, God’s money. The only thing every person in the world wants, and every government.
Gold is as valuable in Beijing as it is in Bombay as it is in London as it is New York. For a long time the US dollar nearly achieved this status. It didn’t hold its value, but it was (and still is for the most part) desired by almost everyone around the world, and every government. The dollar has long been the reserve currency of the world. Alan Greenspan once even bragged that he and his cohorts had succeeded in making the dollar “as good as gold.”
It seems pretty clear that if this was ever the case, it is not the case now. Even Mr. Greenspan has called for a re-institution of the gold standard.
Germany, though not calling for a gold standard (yet) is very keen on getting its hands back on the gold it owns. The majority of which is within the bowels of the New York Federal Reserve.
The reason it is in New York and not Frankfurt or Berlin goes back to the Cold War and fears that the Soviets would take the reserves in an international hot war.
Earlier this year the Germans said they wanted to see their gold housed at the New York Fed. Some domestic voices were insisting on an audit as the economic situation in Europe continued to remain problematic. Germans wanted to put an eyeball on their wealth.
The Federal Reserve told the sovereign government of Germany that it could not see its own gold.
The Germans I guess have had about enough of that kind of treatment.
(From The Globe and Mail)
“If gold repatriation becomes a worldwide trend, it will be obvious that both the U.S. and U.K. have lost their credibility as gold custodians,” the CRG said.
An independent auditing office, the Federal Court of Auditors, recommended last year that the Bundesbank monitor its gold holdings outside Germany more frequently, sparking a political row, and officials said they would listen to the recommendations where possible. The Bundesbank said, though, that it had “differing views” with the FCA over the scope of an audit sought by the agency, which did not conform to the practices of central banks.
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Gold and Silver • Why It’s Taking 7 Years For Gold To Be Returned To Germany
Why It’s Taking 7 Years For Gold To Be Returned To Germany
http://kingworldnews.com/kingworldnews/ … rmany.html
Today acclaimed money manager Stephen Leeb told King World News the reason Germany is only getting small portions of their gold sent to them over the years is because the gold is not at the Fed. Leeb also believes the United States is now running out of physical gold to sell in their price suppression scheme. Here is what Leeb had to say: “There are two main parties engaged in a battle for economic and monetary supremacy in the world. This is China vs the United States. Interestingly, at least for a period of time, both countries don’t want to see the price of gold take off.”
“The Chinese don’t want to see the price of gold take off because they still want to buy a lot of it. The Chinese took in at least 1,000 tons of gold last year, and maybe even more. This total represents Hong Kong imports plus their own production.
This year the Chinese are really going to play the game much more aggressively with these Shanghai markets that are going to have international players actively trading in them. They will also trade derivatives, and the Chinese will accumulate gold through their new ETF.
The trouble the Chinese have is their internal production of gold is becoming more difficult to maintain….
“They just can’t, like so many others, replace the gold reserves, which would then be exploited in future mining.
It’s extraordinary up to now the percentage of reserves the Chinese have been mining, up to 35% of their gold reserves. I’ve never seen any country mine that percentage of reserves for any metal. You look at the pace of their mining and you can easily conclude they are desperate for gold.
If the gold price lifts off, that poses a major threat to the US dollar. So the United States has been the leader in the gold price suppression scheme. This is why so much gold has left Western vaults. The Germans now want their gold back from the Fed.
So Germany has asked for the gold stored at the Fed to be returned to Germany. The amount of gold the US supposedly has stored for the Germans is 1,536 tons. This can certainly be shipped to Germany. Yet it’s going to take 6 or 7 years to return a small portion of the gold to Germany? Why?
They ship much more oil than gold. This is ridiculous. What do they expect? Do they expect the gold to blow up? Last I heard gold doesn’t even oxidize or even tarnish, much less blow up. Why can’t they just load it on a ship or on planes and send it? Something doesn’t add up here, Eric.
The reality here is that the German gold has been leased out and it’s not sitting in the vault. So the Fed has agreed to return very small portions of the German gold each year, which is supposedly stored at the Fed. Well, the gold isn’t there and that’s why it is going back to Germany in small portions each year.
People also need to remember gold is not going down much, because the US doesn’t have enough to sell. The problem is what you sell in the physical market, you have to deliver. At a certain point, the US will run out of other countries gold to sell. The US will reach a point where they have to hope that the gold price doesn’t start to really fly.
There is a strong bid for gold every time it goes down. When the cat gets out of the bag, and I think the Germans are helping the cat get out of the bag, at a certain point when all of the gold moving from West to East is stopped, the price of gold will really begin to ramp up in price.
Where will the gold come from to satisfy the demand? Where will the gold come from to send back to Germany? And do you know what the Chinese will say? They will say, ‘OK, we will let our banks hold the yuan, but in contrast to your dollar, our yuan will be backed by gold.’
What will countries prefer to hold, the yuan, backed by gold, or the US dollar, which is backed by absolutely nothing? So we are now getting to a situation where we are getting close to the end game.”
Leeb also spoke about silver: “Switching gears to silver, we all know there are shenanigans that go on in the silver market. Regardless, China wants to accumulate a great deal of physical silver. China knows silver is a monetary metal.
It’s also important to note that Warren Buffett recently purchased the largest solar project in the world. Well, the Chinese know what Warren Buffett knows, and that is solar is the future. The Chinese are going to need a staggering amount of silver to accomplish this task.
The Chinese know that oil, coal, and other alternatives are becoming much more scarce, and so they are designing the entire country’s energy infrastructure around things like solar. Again, this will require quantities of silver that most likely can’t even be facilitated.
People wonder why are we seeing shortages in the silver market right now? Well, yes, there is investment demand, absolutely. But the Chinese are also in the silver market buying every single ounce they can get their hands on for the energy needs.
So silver is going to levels in the future that investors can’t even fathom today? Silver, next to oil, is the single most important commodity and strategic resource on the planet. I would also add that the quality junior mining shares will eventually enter a mania that will be one for the history books.”
Statistics: Posted by DIGGER DAN — Thu Jan 17, 2013 1:34 am
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International News • Schäuble’s Secret Austerity Plan for Germany
Schäuble’s Secret Austerity Plan for Germany
By Christian Reiermann and Michael Sauga
DPA
The German government and opposition are pledging higher benefits for pensioners, families and the long-term unemployed ahead of elections next year, but Finance Minister Wolfgang Schäuble is secretly planning cutbacks to prepare for a weakening economy and possible fallout from the euro crisis.
German Finance Minister Wolfgang Schäuble has an inimitable way of misleading his listeners with a torrent of obfuscating words. When asked if the Greek bailout would cost more money, he responded: "Not necessarily," adding that there was merely "a greater financial requirement on the timeline."
ANZEIGE
It could soon be a similar story with yet another gem from Schäuble’s repertoire of quotations. "Germany is clearly a gainer from the euro," as the minister likes to say. But if what his team has been writing over the past few weeks is true, Germans will soon find that their presumed winnings have transformed into losses.The government in Berlin is living in a dual reality. Strategists in the center-right coaliton parties are planning to enhance benefits for families, pensioners and the long-term unemployed in a bid to woo voters in the upcoming elections.
By contrast, due to the economic slowdown, experts in Schäuble’s ministry are anticipating an entirely different scenario: The next government — no matter who will be chancellor and which parties will be in power — won’t be able to boost spending. Instead, it will have to impose rigorous spending restraint.
According to the recommendations made by Schäuble’s team, in order to brace itself for the consequences of the euro crisis, Germany will have to drastically increase taxes and make painful cuts in social services over the coming years.
These ideas don’t fit with the current political climate in Germany, which has been characterized for months by a passionate debate about how additional money could be used to combat poverty among the elderly and improve life for low-wage earners. Schäuble nevertheless feels that his experts’ forecasts are realistic. He has expressly approved their proposals and ordered them to continue to work on the cost-cutting program. At the same time, he has ordered strict secrecy to avoid any adverse effects on his party’s campaigns for the upcoming state election in Lower Saxony in January and the general election in the fall of 2013.
The Germans face a bitter déjà vu. It was only 10 years ago that then-Chancellor Gerhard Schröder of the center-left Social Democrats (SPD) and his conservative challenger Edmund Stoiber fought an election campaign that was primarily focused on social justice. After Schröder’s victory, it became clear that Germany was strapped for cash. Subsequently, the chancellor introduced his radical — and widely unpopular — "Agenda 2010" reforms of the labor market and welfare system. This time, Schäuble’s team has calculated that even deeper cuts may be needed.
Historic Cuts Looming
What the Finance Ministry officials have listed under the seemingly innocuous title "Medium-Term Budget Goals of the Federal Government" is nothing less than the most comprehensive austerity program in postwar German history. In order to avoid forcing the government to incur additional debt, the officials are scrutinizing subsidies, entitlements and welfare benefits worth tens of billions of euros.
There are also plans to raise taxes. Finance Ministry officials propose increasing the reduced VAT rate of 7 percent — which currently applies to such items as food, books and streetcars tickets — to the regular VAT rate of 19 percent. This alone would allow the state to collect an extra €23 billion ($30 billion) every year.
Schäuble’s team wants to slash €10 billion from the federal government’s contributions to the German health fund, which currently helps to stabilize premiums in the statutory health insurance system. At the same time, they know that Germany’s statutory insurers will require more money over the coming years as the population’s life expectancy increases. This has led them to consider introducing a surcharge on income tax to support the system. The experts call this a "health solidarity tax."
The plan also calls for state pension funds to do their part. At the same time, Schäuble intends to counteract the expected labor shortage. Since the baby boomer generation of the 50s and 60s will go into retirement in the future, Germans will be expected to work longer. The ministry envisages the retirement age remaining at 67, but the retirement benefit period will have "to be linked to life expectancy." In other words, the older Germans get, the longer they will have to work — if need be, beyond the age of 67.
Measures to Discourage Early Retirement
In order to achieve this goal, Schäuble’s team wants to make early retirement even less attractive. "Inappropriate incentives for early retirement have to be removed," they write, and they have come up with proposals for achieving this. Until now, retirees who leave the workforce before they reach the statutory retirement age have had to accept a 3.6 percent reduction in their pension payments for each year. In the future, this would be 6.7 percent.
Widows and widowers would also have to tighten their belts. Currently, the surviving spouse receives 55 percent of the deceased spouse’s pension. The idea is to significantly reduce this level in the future. This initiative would annually save billions of euros for the state pension fund.
Finance Ministry officials see additional cutbacks in social services as unavoidable if the state is to spend more money in other areas, for example, on repairing roads and improving the education system. These investments would "entail stronger limitations on consumptive expenditure," as it says in the draft paper.
The proposals from Schäuble’s ministry serve to tighten a regulation that has only been enshrined in the German constitution for the past few years: the so-called debt brake, which calls for the German federal government to "maintain a nearly balanced budget" starting in 2016.
The government will still be able to take out loans to some extent. In 2016, for instance, it will be allowed to borrow some €10 billion. However, Schäuble and his staff say that Germany should not completely exhaust this scope for borrowing. They want a safety buffer. "It is absolutely necessary to maintain sufficient distance to the constitutional limit during budget planning to prepare for unexpected structural expenditure and revenue developments," it says in the paper. The experts also note that they intend to safeguard the national budget against a series of risks.
One of the examples that they cite is "a sharp economic downturn." If the economy collapses, as it did in the wake of the financial crisis in 2009, experience has shown that public coffers come under considerable pressure. Tax revenues decline while expenditures, such as for the unemployed, massively increase.
This can have a devastating impact on state finances. Following the most recent recession, government debt soared from 65 to nearly 83 percent of gross domestic product (GDP). Schäuble’s experts say that the country cannot withstand another similar increase in public debt and conclude that it’s time to take appropriate countermeasures.
Bank Bailouts, Euro Crisis Pose Budget Risks
To make matters worse, Finance Ministry officials say that it’s also possible that Berlin will have to absorb the costs of its bank bailouts. At the height of the financial crisis, the German government supported ailing financial institutions such as Hypo Real Estate, Commerzbank and WestLB with capital injections and guarantees amounting to nearly €180 billion. Large quantities of toxic assets were transferred to so-called "bad banks."
But it’s questionable whether these banks will ever be able to completely pay back this money. If that is the case, the federal government will have to waive its claims and permanently absorb the debt.
Schäuble’s team foresees the possibility of a similar development with the euro rescue. Indeed, "irrevocable ESM payment defaults" is one of the reasons they list for their contingency plans. Behind the bureaucratic jargon lies the concern that Germany — despite the government’s solemn statements to the contrary — will have to pay for the euro rescue.
Germany is currently supporting the European Stability Mechanism (ESM) to the tune of at least €190 billion. A portion of these guarantees and loans could actually be lost if Greece’s government creditors forgive some of the country’s debt. The losses to German public coffers could then easily amount to tens of billions of euros.
Consequently, Finance Ministry officials contend that the government will have to make cutbacks elsewhere in the future. Now, in a scenario that euroskeptics have long been warning about, German Chancellor Angela Merkel’s government has finally admitted, for the first time, that to balance out the impact of the monetary crisis it will have to reduce expenditure for pensioners and people taking early retirement.
Germany Didn’t Impose Austerity On Itself
The paper by the Finance Ministry officials contains a further admission. The next finance minister will have to make up for what Schäuble has failed to accomplish. Merkel’s most important minister forced half of Europe to submit to austerity measures while the Germans were spending money hand over fist at home.
The current center-right coalition of Merkel’s Christian Democratic Union (CDU), its Bavarian sister party, the Christian Social Union (CSU), and the pro-business Free Democratic Party (FDP) ignored the opposition’s warnings and pushed through a costly childcare allowance that pays mothers who stay home €150 per child per month. Starting in mid-2014, over €1 billion per year will be budgeted for this expense. Public coffers are also missing €1.8 billion every year because the FDP managed to push through a bill eliminating a €10-per-quarter copay charge for visiting the doctor or dentist, payable since 2004 by people in the statutory — meaning non-private — health insurance system. But perhaps the most blatant example of overgenerous public spending during the coalition’s current term was the tax reduction for hotel owners, which costs the government roughly €1 billion a year. The political process that preceded each jump in spending was always the same. Schäuble grumbled audibly, but ultimately agreed.
No wonder the opposition now accuses him of having failed. "The increased revenues from the economic recovery were not completely used to reduce deficit spending," says SPD finance expert Carsten Schneider. "This government demands harsh austerity measures from other European countries," he argues, "while it lavishly spends its own tax revenues."
Schäuble’s team apparently has a similar view of the situation — and even the boss himself has recently changed his tune. Schäuble says that he wants to run again in the next election, and he could even see himself serving another term as finance minister.
And, in keeping with his style, he is carefully preparing the Germans for hard times with his signature inscrutable Schäuble-speak: "We cannot allow ourselves to believe that the current positive situation is automatically secured for the future," he says. He goes on to say that sound public finances are "not a notion created by stubborn finance ministers, but rather the prerequisite for prosperity and social security." In plain language: Germany is going to start subjecting itself to some iron fiscal discipline.
Translated from the German by Paul Cohen
http://www.spiegel.de/international/ger … 74377.html
Statistics: Posted by yoda — Mon Dec 24, 2012 12:54 pm
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International News • Germany shocks EU with fiscal overlord demand
By Ambrose Evans-Pritchard8:39PM BST 16 Oct 2012
There must be an EU “currency commissioner” with sweeping powers to strike down national budgets; a “large step towards fiscal union”; and yet another EU treaty.
Finance minister Wolfgang Schaeuble dropped his bombshell in talks with German journalists on a flight from Asia, and apparently had the blessing of Angela Merkel, the chancellor. “When I put forward such proposals, you can take it as a given that the chancellor agrees,” he said.
Officials in Brussels reacted with horror. “If that is the demand, they are not going to get it. Nobody in the Council wants a new treaty right now,” said one EU diplomat.
“We’ve got the fiscal compact and quite enough fiscal discipline. Not even the Dutch want a commissioner telling them how to tax and spend,” he said.
The new demands risk another stormy summit in Brussels on Thursday, pitting Germany against the Latin bloc. The last summit in June ended with an acrimonious deal in the small hours on a banking union that began to unravel within days.
Mr Schaeuble said the currency chief should have powers similar to those of the EU’s competition commissioner, a man “feared around the world”.
The competition Tsar is the arch-enforcer of the EU machine, with powers to launch dawn raids, deploy SWAT teams, and block mergers on his own authority. The job was the making of Italy’s Mario Monti a decade ago when he blocked the GE-Honeywell merger after it had been cleared by Washington.
The Schaeuble plan is highly provocative. The EU can set deficit targets but it cannot manage budgets, unless a country requests a bail-out and gives up fiscal sovereignty.
Nor is it clear how Germany’s constitutional court would react. It ruled last year that the Bundestag’s budgetary powers are the bedrock of democracy and cannot be alienated to any supra-national body.
Mr Schaeuble poured scorn on counter-proposals by EU president Herman Van Rompuy, including a first step towards debt pooling through joint “eurobills”. The term “Fiskalunion” in Berlin has a specific meaning: more power to police the affairs of debtor states. It does not mean debt mutualisation or a joint EU treasury. Germany has so far refused to cross this Rubicon.
Michael Link, the country’s Europe minister, said Mr Van Rompuy’s plans are dead on arrival. “When you make proposals that are simply unacceptable for certain members, this will only give the impression of division. You can phrase it any way you like, ‘treasury bills’, ‘debt-redemption funds’ or ‘eurobonds’, this type of debt issuance will not fly with our government. We have always said this very clearly.”
The comment invited a barbed retort from his French counterpart, Bernard Cazeneuve. “Well, for us, it is ‘yes’, just as clearly,” he said. Such an open rift between Germany and France on the eve of a summit is rare.
However, Berlin has softened its line on a rescue for Spain, suggesting that Madrid may be able to tap a precautionary credit line with “limited conditionality”, instead of forcing it to accept an EU-IMF Troika regime.
Michael Meister, Mrs Merkel’s key fixer in the Bundestag, told Bloomberg that German legislators might be open to the idea, “but one thing is clear: whatever is requested, it won’t be without conditions”.
Spain is quietly trying to find out what those terms might be. Demands for public-sector job cuts would set off a storm. “It’s all down to haggling over the price,” said Steven Englander from Citigroup.
Huw Pill, from Goldman Sachs, said Germany has, in fact, allowed “veiled” debt mutualisation through its share of €750bn (£607bn) of bail-out liabilities. Less visibly, it has let the ECB boost its balance sheet to 32pc of GDP, even before it embarks on “unlimited” purchases of Club Med bonds. This includes a €1?trillion lending blitz to banks, and more than €200bn of bond purchases.
The Bundesbank has also accepted €750bn in claims from EMU peers under the ECB’s internal Target2 payment system. These claims rotate risk from banks to the German taxpayer. “The Bundesbank’s Target2 balances need to be evaluated carefully. They do represent a real German exposure towards the periphery: they cannot be dismissed as mere accounting entries,” said Mr Pill, who helped create the Target2 system.
It is precisely for this reason that Swiss rating agency I-CV stripped Germany of its AAA rating last month. “Germany has taken on contingent liabilities of €2 trillion. When you create these backstops, the money comes from somewhere and it can all go wrong,” said I-CV’s Rene Hermann.
Germany is in deeper than it likes to tell its own people.
http://www.telegraph.co.uk/finance/fina … emand.html
Statistics: Posted by yoda — Tue Oct 16, 2012 10:12 pm
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International News • Spain And Italy Are Toast Unless Germany Allows The ECB To
Spain And Italy Are Toast Unless Germany Allows The ECB To Print Trillions Of Euros
The financial chess game in Europe is still being played out, but in the end it is going to boil down to one very fundamental decision. Is Germany going to allow the ECB to print up trillions of euros and use those euros to buy up the sovereign debt of troubled eurozone members such as Spain and Italy or not? Nothing short of this is going to solve the problems in Europe. You can forget the ESM and the EFSF. Anyone that thinks they are going to solve the problems in Europe is someone that would also take a water pistol to fight a raging wildfire. No, the only thing that is going to keep Spain and Italy from collapsing under the weight of a mountain of debt is a financial nuke. The ECB needs to have the power to print up trillions of euros and use that money to buy up massive amounts of sovereign debt in order to guarantee that Spain and Italy will be able to borrow lots more money at very low interest rates. In fact, this is probably what European Central Bank President Mario Draghi has in mind when he says that he is going to "do whatever it takes to preserve the euro". However, there is one giant problem. The ECB is not going to be able to do this unless Germany allows them to. And after enduring the horror of hyperinflation under the Weimar Republic, Germany is not too keen on introducing trillions upon trillions of new euros into the European economy. If Germany allows the ECB to go down this path, Germany will end up experiencing tremendous inflation and the only benefit for Germany will be that the eurozone was kept together. That doesn’t sound like a very good deal for Germany.
Right now, the yield on 10 year Spanish bonds is above 7 percent and the yield on 10 year Italian bonds is above 6 percent.
Those are unsustainable levels.
The only thing that is going to bring those bond yields down permanently to where they need to be is unlimited ECB intervention.
But that is not going to happen without German permission.
Meanwhile, the situation in Spain gets worse by the day.
An article in Der Spiegel recently described the slow motion bank run that is systematically ripping the Spanish banking system to shreds….
Capital outflows from Spain more than quadrupled in May to €41.3 billion ($50.7 billion) compared with May 2011, according to figures released on Tuesday by the Spanish central bank.
In the first five months of 2012, a total of €163 billion left the country, the figures indicate. During the same period a year earlier, Spain recorded a net inflow of €14.6 billion.
If those numbers sound really bad to you, that is because they are really bad.
At this point, authorities in Spain are starting to panic. According to Graham Summers, Spain has imposed the following new capital restrictions during the last month alone….
A minimum fine of €10,000 for taxpayers who do not report their foreign accounts.
Secondary fines of €5,000 for each additional account
No cash transactions greater than €2,500
Cash transaction restrictions apply to individuals and businesses
How would you feel if the U.S. government permanently banned all cash transactions greater than $2,500?
That is how crazy things have already become in Spain.
We should see the government of Spain formally ask for a bailout pretty soon here.
Italy should follow fairly quickly thereafter.
But right now there is not enough money to completely bail either one of them out.
In the end, either the ECB is going to do it or it is not going to get done.
A moment of truth is rapidly approaching for Europe, and nobody is quite sure what is going to happen next. According to the Wall Street Journal, the central banks of the world are on "red alert" at this point….
Ben Bernanke and Mario Draghi, with words but not yet actions, demonstrated this week that they are on red alert about the global economy.
Expectations are now high that Mr. Bernanke’s Federal Reserve and Mr. Draghi’s European Central Bank will act soon to address those worries. But both face immense tactical and political challenges and neither has a handbook to follow.
So what happens if Germany does not allow the ECB to print up trillions of new euros?
Financial journalist Ambrose Evans-Pritchard recently described what is at stake in all of this….
Failure to halt a full-blown debt debacle in Spain and Italy at this delicate juncture – with China, India and Brazil by now in the grip of a broken credit cycle and the US on the cusp of fresh recession even before the “fiscal cliff” hits – would tip the entire global system into a downward spin, triggering the sort of feedback loop that caused such havoc in late 2008.
As I have written about so frequently, time is running out for the global financial system.
Even Germany is starting to feel the pain. This week we learned that unemployment in Germany has risen for four months in a row.
So what comes next?
There is actually a key date that is coming up in September. The Federal Constitutional Court in Germany will rule on the legality of German participation in the European Stability Mechanism on September 12th.
If it is ruled that Germany cannot participate in the European Stability Mechanism then that is going to create all sorts of chaos. At that point all future European bailouts would be called into question and many would start counting down the days to the break up of the entire eurozone.
If Germany did end up leaving the eurozone, the transition would not be as difficult as many may think.
For example, most Americans may not realize this but Deutsche Marks are currently accepted at many retail stores throughout Germany. The following comes from a recent Wall Street Journal article….
Shopping for pain reliever here on a recent sunny morning, Ulrike Berger giddily counted her coins and approached the pharmacy counter. She had just enough to make the purchase: 31.09 deutsche marks.
"They just feel nice to hold again," the 55-year-old preschool teacher marveled, cupping the grubby coins fished from the crevices of her castaway living room sofa. "And they’re still worth something."
Behind the counter of Rolf-Dieter Schaetzle’s pharmacy in this southern German village lay a tray full of deutsche mark notes and coins—a month’s worth of sales.
I have a feeling that it would be much easier for Germany to leave the euro than it would be for most other eurozone members to.
The months ahead are certainly going to be very interesting, that is for sure.
Europe is heading for a date with destiny, and what transpires in Europe is going to shake the rest of the globe.
Sadly, most Americans still aren’t too concerned with what is going on in Europe right now.
Well, if you still don’t think that the problems in Europe are going to affect the United States, just check this news item from the Guardian….
General Motors’ profits fell 41% in the second quarter as troubles in Europe undercut strong sales in North America.
America’s largest automaker made $1.5bn in the second quarter of 2012, compared with $2.5bn for the same period last year. Revenue fell to $37.6bn from $39.4bn in the second quarter of 2011. The results exceeded analysts’ estimates, but further underlined Europe’s drag on the US economy.
Profits at General Motors are down 41 percent and Europe is being blamed.
The global economy is more tightly integrated than ever before, and there is no way that the financial system of Europe collapses without it taking down the United States as well.
And considering the fact that the U.S. economy has already been steadily collapsing, the last thing we need is for Europe to come along and take our legs out from underneath us.
http://theeconomiccollapseblog.com/arch … s-of-euros
Statistics: Posted by yoda — Fri Aug 03, 2012 12:11 am
View full post on opinions.caduceusx.com
Spain And Italy Are Toast Unless Germany Allows The ECB To Print Trillions Of Euros
The financial chess game in Europe is still being played out, but in the end it is going to boil down to one very fundamental decision. Is Germany going to allow the ECB to print up trillions of euros and use those euros to buy up the sovereign debt of troubled eurozone members such as Spain and Italy or not? Nothing short of this is going to solve the problems in Europe. You can forget the ESM and the EFSF. Anyone that thinks they are going to solve the problems in Europe is someone that would also take a water pistol to fight a raging wildfire. No, the only thing that is going to keep Spain and Italy from collapsing under the weight of a mountain of debt is a financial nuke. The ECB needs to have the power to print up trillions of euros and use that money to buy up massive amounts of sovereign debt in order to guarantee that Spain and Italy will be able to borrow lots more money at very low interest rates. In fact, this is probably what European Central Bank President Mario Draghi has in mind when he says that he is going to “do whatever it takes to preserve the euro”. However, there is one giant problem. The ECB is not going to be able to do this unless Germany allows them to. And after enduring the horror of hyperinflation under the Weimar Republic, Germany is not too keen on introducing trillions upon trillions of new euros into the European economy. If Germany allows the ECB to go down this path, Germany will end up experiencing tremendous inflation and the only benefit for Germany will be that the eurozone was kept together. That doesn’t sound like a very good deal for Germany.
Right now, the yield on 10 year Spanish bonds is above 7 percent and the yield on 10 year Italian bonds is above 6 percent.
Those are unsustainable levels.
The only thing that is going to bring those bond yields down permanently to where they need to be is unlimited ECB intervention.
But that is not going to happen without German permission.
Meanwhile, the situation in Spain gets worse by the day.
An article in Der Spiegel recently described the slow motion bank run that is systematically ripping the Spanish banking system to shreds….
Capital outflows from Spain more than quadrupled in May to €41.3 billion ($50.7 billion) compared with May 2011, according to figures released on Tuesday by the Spanish central bank.
In the first five months of 2012, a total of €163 billion left the country, the figures indicate. During the same period a year earlier, Spain recorded a net inflow of €14.6 billion.
If those numbers sound really bad to you, that is because they are really bad.
At this point, authorities in Spain are starting to panic. According to Graham Summers, Spain has imposed the following new capital restrictions during the last month alone….
- A minimum fine of €10,000 for taxpayers who do not report their foreign accounts.
- Secondary fines of €5,000 for each additional account
- No cash transactions greater than €2,500
- Cash transaction restrictions apply to individuals and businesses
How would you feel if the U.S. government permanently banned all cash transactions greater than $2,500?
That is how crazy things have already become in Spain.
We should see the government of Spain formally ask for a bailout pretty soon here.
Italy should follow fairly quickly thereafter.
But right now there is not enough money to completely bail either one of them out.
In the end, either the ECB is going to do it or it is not going to get done.
A moment of truth is rapidly approaching for Europe, and nobody is quite sure what is going to happen next. According to the Wall Street Journal, the central banks of the world are on “red alert” at this point….
Ben Bernanke and Mario Draghi, with words but not yet actions, demonstrated this week that they are on red alert about the global economy.
Expectations are now high that Mr. Bernanke’s Federal Reserve and Mr. Draghi’s European Central Bank will act soon to address those worries. But both face immense tactical and political challenges and neither has a handbook to follow.
So what happens if Germany does not allow the ECB to print up trillions of new euros?
Financial journalist Ambrose Evans-Pritchard recently described what is at stake in all of this….
Failure to halt a full-blown debt debacle in Spain and Italy at this delicate juncture – with China, India and Brazil by now in the grip of a broken credit cycle and the US on the cusp of fresh recession even before the “fiscal cliff” hits – would tip the entire global system into a downward spin, triggering the sort of feedback loop that caused such havoc in late 2008.
As I have written about so frequently, time is running out for the global financial system.
Even Germany is starting to feel the pain. This week we learned that unemployment in Germany has risen for four months in a row.
So what comes next?
There is actually a key date that is coming up in September. The Federal Constitutional Court in Germany will rule on the legality of German participation in the European Stability Mechanism on September 12th.
If it is ruled that Germany cannot participate in the European Stability Mechanism then that is going to create all sorts of chaos. At that point all future European bailouts would be called into question and many would start counting down the days to the break up of the entire eurozone.
If Germany did end up leaving the eurozone, the transition would not be as difficult as many may think.
For example, most Americans may not realize this but Deutsche Marks are currently accepted at many retail stores throughout Germany. The following comes from a recent Wall Street Journal article….
Shopping for pain reliever here on a recent sunny morning, Ulrike Berger giddily counted her coins and approached the pharmacy counter. She had just enough to make the purchase: 31.09 deutsche marks.
“They just feel nice to hold again,” the 55-year-old preschool teacher marveled, cupping the grubby coins fished from the crevices of her castaway living room sofa. “And they’re still worth something.”
Behind the counter of Rolf-Dieter Schaetzle’s pharmacy in this southern German village lay a tray full of deutsche mark notes and coins—a month’s worth of sales.
I have a feeling that it would be much easier for Germany to leave the euro than it would be for most other eurozone members to.
The months ahead are certainly going to be very interesting, that is for sure.
Europe is heading for a date with destiny, and what transpires in Europe is going to shake the rest of the globe.
Sadly, most Americans still aren’t too concerned with what is going on in Europe right now.
Well, if you still don’t think that the problems in Europe are going to affect the United States, just check this news item from the Guardian….
General Motors’ profits fell 41% in the second quarter as troubles in Europe undercut strong sales in North America.
America’s largest automaker made $1.5bn in the second quarter of 2012, compared with $2.5bn for the same period last year. Revenue fell to $37.6bn from $39.4bn in the second quarter of 2011. The results exceeded analysts’ estimates, but further underlined Europe’s drag on the US economy.
Profits at General Motors are down 41 percent and Europe is being blamed.
The global economy is more tightly integrated than ever before, and there is no way that the financial system of Europe collapses without it taking down the United States as well.
And considering the fact that the U.S. economy has already been steadily collapsing, the last thing we need is for Europe to come along and take our legs out from underneath us.
So what do all of you think about the problems in Europe?
Do you see any possible solution?
Please feel free to post a comment with your thoughts below….
View full post on The Economic Collapse
Gold and Silver • Germany and gold
Germany and gold
Posted JUL 5 2012 by RESEARCH DESK in FEATURED COMMENTARY, GOLD BULLION
We have a new member to The Real Asset Company research desk – Mandy Lindner has joined us from Germany for a summer internship. This week, Mandy has written a short article for readers on Germany and their take on gold investment.
Gold has been used by humans for thousands of years as a means of payment. Since the beginning of the 20th century the role of gold as money declined. In 1971 the Bretton Woods agreement, a version of the gold standard, was abandoned. The consequences were a huge increase in money supply and the decline in purchasing power. In modern times, gold is more likely to be used as an investment opportunity.
The global supply of gold is about 163,000 tonnes. When looking at the gold holdings of each country Germany plays an important role. The Bundesbank and private investors together hold 8 percent of the worldwide amount of gold, which represents about 12,000 tonnes. After the United States, Germany is second in terms of the amount of the gold holdings. A high part of it is privately owned.
Germany´s private gold holdings, in 2010, stood at 7,000 tonnes around 5 per cent of the worldwide supply of gold. At the time this was approximately €253 billion. Compared with other countries it becomes clear that German citizens have much more than the German central bank. In 2010 gold holdings represented approximately three percent of total assets held by Germans. From a statistical point of view every German possesses 111 grammes of gold. 89 percent of the German population, according to 2010 figures, hold gold in the form of gold jewellery or gold bullion such as coins or bars. Gold-related securities play a minor role, because only 11 percent of the population own gold securities. The per capita consumption of gold in Germany illustrates a very high value as one in four people over 18 years have assets in the form of physical gold.
The above-average gold wealth of Germans can be explained by the fact that people have a high need for security due to bad experiences in the past in the form of currency devaluation. The fear of renewed inflation and the thought of protection against it are the most important explanations for the enormously high amount of gold in Germany. The German hyperinflation, which captivated the country in the years from 1914 to 1923, was one of the largest inflations the economy of a nation had ever seen. The causes and consequences affected Germany for many years. The hyperinflation in the German Empire has its foundation in the financing of the First World War and its aftermath. This is illustrated by the fact that the Mark at the end of the war in 1918 had already lost more than half of its value.
In all hyperinflations, gold has proven an ideal currency for monetary crises. Those who held gold during those times could be described as winners. Another advantage of investing in gold is that it is a hedge against the falling dollar which is continuously devalued. In addition, as opposed to real estate or life insurance, gold refuses access by the government to a large extent. If someone has debts to the tax office for example, it cannot fall back on gold reserves, because such an investment is not visible anywhere. Gold also offers a protection against monetary reform, because it is immune against it.
One reason for Germans’ predominant investment in gold in the form of gold bars and bullion coins is that they are exempt from sales and capital gains tax. The Germans have to pay the withholding tax on interest, dividends and proceeds from the sale of securities which accrue since the 1st of January 2009. The withholding tax rate of 25 percent is retained by the bank directly and paid to the tax office. The sales tax is levied on all goods and services. An entrepreneur or self-employed has to add this tax on each of the invoices for revenue. In addition, physical gold is also a form of money. This means that gold is not exposed to counterparty risk. Other securities such as bonds or permanent installations by contrast are usually only demands on money.
The reason for the enormous stock of gold owned by the German central bank is that it is seen as an anchor of stability within the scope of the former currency system. The gold reserves of the German central bank represent 17 percent in the balance each year.
Germany’s gold is stored mainly abroad; 66 percent are located in New York, 21 percent in London, 8 percent in Paris and only 5 percent in Frankfurt Mainz. There are currently campaigns which are working towards the repatriation of Germany’s gold. “Repatriate our Gold!” is an example of such a campaign which believes that withthe financial crisis there is a need for the gold to be on home soil, and also for the gold to be audited in order to prepare for a partially-backed currency.
Potential investors often ask how their gold is recognisable as theirs, when it is stored in a vault. However this question can be answered easily: every single gold bar has a number, a seal and a stamp for the purity of gold. In this way, the gold bars can be assigned to their owners easily.
How the buying of gold in Germany will develop in the next few years is not clearly predictable. However some experts believe that many investors will continue to invest in gold in the future and as a result the price may increase. This can be explained by the current economic situation, which greatly falters and thereby the gold purchases by the population are encouraged.
http://therealasset.co.uk/germany-and-gold/
Statistics: Posted by yoda — Sun Jul 08, 2012 1:32 am
View full post on opinions.caduceusx.com