And, the last straw is being drawn

China next?  The only thing keeping us propped up is the petro-dollar.  Be a shame if something happened to it.

...but hey, do what you want...you will anyway.

Game on at Davos

Or, the Roman Colosseum.

Donald Trump's administration is "a danger to the world" and is attempting to "establish a mafia state", according to a speech by financier and philanthropist George Soros at the World Economic Forum in Davos, Switzerland.

  IB times

Actually, as I mentioned before, Trump's whining about Palestine being disrespectful to the US, does sond like mob talk. You have to wonder how any organization could function with him at the top, though.

Soros told the audience that the US Constitution, other institutions and "a vibrant civil society" are standing in the way of Trump's plans.

[...]

Soros told the audience that the US Constitution, other institutions and "a vibrant civil society" are standing in the way of Trump's plans.

[...]

The billionaire also took aim at monopolistic technology and social media companies, which "while once liberating, are now socially damaging". He said that the power to "shape people's minds" now lies in the hands of a few companies, and that those without freedom of mind can be easily manipulated. In another attack on Trump, Soros pointed to the 2016 presidential elections as an example of this.

The billionaire also took aim at monopolistic technology and social media companies, which "while once liberating, are now socially damaging". He said that the power to "shape people's minds" now lies in the hands of a few companies, and that those without freedom of mind can be easily manipulated. In another attack on Trump, Soros pointed to the 2016 presidential elections as an example of this.

[...]

One solution would be a "multi-track" approach to EU membership, in which member states are free to form coalitions of the willing to pursue particular goals in which they agree.

The EU should also drop the requirement for member states to adopt the euro, Soros said, as "I would like to see Britain remain a member of the EU or eventually rejoin it, and that couldn't happen if it meant adopting the euro".

George Soros knows infinitely more about finance than I do, but I think the idea of the Euro was not such a bad one. The problem was that it was not applied equally to all members. That's one of the things that caused Greece to fall. A euro from a Greek bank was not equivalent in strength and favor as a euro from a German bank. Greece's once finance minister who quit once Greece's president decided to go along with the EU austerity proram, does know as much - and maybe more - about finance than George Soros, and this is what he had to say:

Varoufakis: Well, imagine if in the United States you treated people from Arizona as non-Americans or as people that must fend for themselves and whose banking system is their own problem. Then you wouldn't be having the United States of America.

Brancaccio: And that's the conundrum that Europe is still in. It didn't fix it.

Varoufakis: Indeed, we created the common currency, but did not create everything else which is necessary not to make the common currency a place of shared prosperity.

[...]

Brancaccio: Just so we know a piece of the story, what did the finance minister of Germany want to do but his chancellor wouldn't let them do?

Varoufakis: Wolfgang Schaeuble, decades ago, was a committed federalist, but a combination of Angela Merkel — who usurped him and effectively stole, that's in his view, the prime ministership, the chancellorship from him, as well as the French, did not want a proper federation.

They wanted all the benefits from a common currency, but without the obligations of a federal democratic political system. Schaeuble was against that. But over the years, he became a cynical man, using the finance ministry to do that which he would have wanted to do as the chancellor of Germany.

  Marketplace

Want a Smaller Government?

Elect a Republican. Right?

President-elect Donald Trump announced the establishment of the White House National Trade Council, to be headed by Peter Navarro, a hard-line critic of China.

The announcement on Wednesday called Navarro a “visionary economist” who will develop policies to shrink the US trade deficit, expand growth and stop the jobs from going overseas.

  RT

Is he a billionaire?

The National Trade Council will also be in charge of the “Buy America, Hire America” program that will apply to government spending ranging from infrastructure to national defense.

But will not be applied to Trump's business interests.

I'm not sure a "hard-line" critic of China, which by all measures seems to be putting it mildly, is a good idea for a trade relations director.  China holds a shitload of our debt.  What if China (the other largest economy in the world) decides to start trading in Euros instead of dollars?  Or, say, the yuan?

he U.S. debt to China is $1.157 trillion, as of September 2016. That's 30 percent of the $3.901 trillion in Treasury bills, notes, and bonds held by foreign countries.

[...]

It reduced its holdings to allow its currency, the yuan, to rise. It's loosening its peg to the dollar. That will make the yuan more attractive to forex traders in global markets. Long-term, China wants the yuan to replace the U.S. dollar as the world's global currency. [...] For more, see Currency Wars.

  The Balance

The PBOC [People's Bank of China] now has the freedom to allow the yuan to slowly evolve toward a floating exchange rate. That will give the bank more flexibility with monetary policy. It's another step toward promoting the yuan to replace the dollar as the world's global reserve currency.

  The Balance

Even if China wished to “call in” its loans, the use of credit as a coercive measure is complicated and often heavily constrained. A creditor can only dictate terms for the debtor country if that debtor has no other options. In the case of the United States, American debt is a widely held and an extremely desirable asset in the global economy. Whatever debt China does sell is simply purchased by other countries.

[...]

China’s large U.S. Treasury holdings say as much about U.S. power in the global economy as any particularity of the Chinese economy. Broadly speaking, U.S. debt is an in-demand asset. It is safe and convenient. As the world’s reserve currency, the U.S. dollar is extensively used in international transactions. Trade goods are priced in dollars and due to its high demand, the dollar can easily be cashed in. Furthermore, the U.S. government has never defaulted on its debt.

  China Power

That was before Trump became president.

"Whatever debt China does sell is simply purchased by other countries."

If they're sure of our future stability.  And if they have any money.

Sadly, I don't know enough about finance to make any sound prophecies. The Guardian has no such restriction. Who knows if their economic analyses are correct, but here they are:

[US growth] will almost surely accelerate above the 2.2% average annual rate during Barack Obama’s second term. This is because the Republican aversion to public spending and debt applies only when a Democrat like Obama occupies the White House. With a Republican president, the party has always been glad to boost public spending and relax debt limits, as it was under Presidents Ronald Reagan and George W Bush. Thus, Trump will be able to implement the Keynesian fiscal stimulus that Obama often proposed but was unable to deliver.

[...]

[G]rowth and inflation will both increase. As the US economy runs into the limits of full employment, additional growth will push inflation higher, but that bad news can wait until 2018 and beyond.

  Guardian

Well, that'll be swell, won't it?

The Republicans’ hegemony will enable easy agreement on tax cuts financed mainly by higher public borrowing, rather than by facing down special interest lobbies’ resistance to the elimination of exemptions and loopholes. These tax reforms will create even bigger budget deficits, which in turn will stimulate more growth and inflation.

Something tells me the knobs who voted for Trump are not going to see inflation as their friend.

A third boost to economic growth will come from deregulation. While battles over energy and environmental laws may dominate the headlines, the biggest economic impact will come from reversing bank regulations. As banks are encouraged to loosen lending standards, especially for middle-income households, an upswing in residential construction and debt-financed consumption should add further growth impetus. Excessive deregulation could cause a re-run of the 2007 financial crisis, but that, too, is a risk for 2018 and beyond.

Oh, swell.

Will banks really loosen their lending standards for middle-income households? The TARP money was supposed to do that, and look where that went: the pockets of the banksters.

Trump’s election could force Americans to recognise flaws in their own democracy, even as they abandon global “democracy promotion.”

Well that's a laugh. Besides, Americans are not going to acknowledge any flaws even if they do recognize them.

Now for the bad news.

Yes. That was the good news.

For the first time since the 1930s, the US has a president who views trade as a zero-sum game.

[...]

US global leadership is therefore bound to shift away from free trade, globalisation, and open markets. Nobody can predict the full effects of the biggest regime change in global economic management since the 1980s; but they will surely be negative for emerging economies and multinational companies, whose development models and business strategies have assumed free trade and open capital flows.

A second, more immediate, threat stems from enacting large tax cuts and boosting public spending in an economy already nearing full employment, which implies accelerating inflation, higher interest rates, or probably some combination of the two.

Wait a minute. We're approaching full employment? That's going to come as news to a lot of people. And, in what area are we approaching this wonderful point? Fast food service?

With the US economy growing faster than expected and long-term interest rates rising, excessive strengthening of the dollar is a third major risk.

[...]

[T]he combination of a dollar squeeze and protectionism spells big trouble for developing countries, with the possible exception of some relatively closed economies such as Brazil, Russia, and India, whose development strategies are less reliant on free trade and foreign financing.

[...]

Just as Britain’s referendum proved uncannily predictive of Trump’s win, Trump looks like a leading indicator of populist upheavals in Europe, which could trigger another euro crisis and threaten the breakup of the European Union. The next anti-establishment victories, according to opinion polls, will be in Italy’s constitutional referendum and Austria’s presidential election.

Well, the Guardian was wrong about Austria. They rejected the far-right candidate. They haven't forgotten WWII. In fact, the Green Party candidate won that election.

Italy, however, did make the move to the right and toward the possibility of leaving the EU. Apparently, they HAVE forgotten the war.

The result was [...] lauded by one of Italy's leading right-wing politicians, Matteo Salvini, whose anti-immigrant party will seek to make gains in a general election.

The conservative leader of the Northern League is known to be a vocal supporter of Italian fascist leader Benito Mussolini.

  CNN

The EU hasn't stopped rocking.  The Big Short set off a huge shock wave.  And we may be fast approaching the aftershock.

...but hey, do what you want...you will anyway.

Just What Is Bernanke's Word Worth?

US Federal Reserve chief Ben Bernanke told Republican lawmakers Wednesday that he cannot and will not bailout struggling European economies, senators at the meeting said.

Amid suspicions that Fed funds may be used to help debt-ridden eurozone countries, leading Republican Lindsay Graham said Bernanke assured senators “he doesn’t have the intention or the authority to do that.”

  

Of course he has the “authority.” The Fed is beholden to no one but the bankers that run it. And he might not bail out European economies per se, but I feel quite certain that he’ll bail out any European central bank that comes a callin’. And he won’t necessarily tell us he’s doing it, either.

...but hey, do what you want...you will anyway.

The Next Hundred Years War

Choosing up gangs.

After what French daily Le Figaro has described as a "virile" 10-hour meeting, David Cameron has walked away from closer European integration. In the bleary Brussels dawn, his mouth was drawn into a melancholic but virile rictus.

  UK Guardian

A virile rictus? How British.

It may be, in the words of one British diplomat, a "crap acronym", but the UK is now a founding member of the "Chuks" – joining the Czechs, Hungarians and Swedes in refusing to join from the outset the 23 other EU states preparing to endorse a new treaty to save the euro.

[...]

Unlike the Brics, this may turn out to be a short-lived grouping, as the prime ministers of the Czech Republic, Hungary and Sweden said after its birth they would consult their national parliaments on joining.

Oh, yeah. They may need to do that.

Diplomats said it was unlikely the Czechs and Swedes would join, and question marks remain over the Hungarians.

Good grief. Almost as ridiculous as the Coalition of the Willing.

Close, Britain, but no cigar.  Ya got nuttin'.

As a clear damp dawn rose over Brussels on Friday morning, the tired and tetchy leaders of Europe emerged, bleary-eyed from nine hours of night-time sparring over how to rescue the single currency and indeed the entire European project.

[...]

Histrionics from France's Nicolas Sarkozy, poker-faced calm from Germany's Angela Merkel, David Cameron gambling the UK's place in Europe by opting to battle for Britain rather than helping to save the euro. When the dust settles, Friday 9 December may be seen as a watershed, the beginning of the end for Britain in Europe. But more than that – the emergence for the first time of a cold new Europe in which Germany is the undisputed, pre-eminent power imposing a decade of austerity on the eurozone as the price for its propping up the currency.

  UK Guardian

Well, a cold Europe dominated by Germany wouldn’t be entirely new, would it?

Whether or not the summit has saved the euro remains, of course, to be seen. At a single stroke, however, it has transformed Britain's place in Europe. With the fate of the currency at stake in the EU's worst crisis, Cameron opted for a fight and lost, placing the interests of the City of London before the European priority.

Sort of the George Bush method, eh? Bring it on. Perhaps Mr. Cameron is counting on Britain’s former colony for backup.

Cameron went to Brussels saddled with backbench taunts of being the new Neville Chamberlain […] nasty references to the 1938 appeasement of Hitler.

I guess he showed them.

In Greece, Italy and Spain the talkshows and newspapers are bristling with anti-German grudges, regularly bringing up the second world war, the Nazis, the alleged "Fourth Reich"

I think we have all the Nazis over here now.

"We are going to have to put up with a bit of Germanophobia," wrote Jakob Augstein in Der Spiegel this week. "Europe has returned to the stereotypes of the postwar years. The ugly German is back … it would be better for Germany to get things wrong together with its partners than to insist on being right alone."

That wouldn’t be very German.

Because of the German preoccupation with saving and not spending and what is seen as monetarist fetishism, says [Charles Grant, director of the Centre for European Reform thinktank], "we face 10 years of austerity with grim German schoolmasters rapping everyone else over the knuckles".

Now THAT sounds German.

The shift in the way power is wielded in the EU has been building incrementally for 20 years, since German unification, the destruction of the deutsche mark, the birth of the single currency, and the liberation then integration of eastern Europe redrew the map and the politics of Europe.

Are there any salvageable pieces of that Berlin wall around?

"Eventually Germany too will need to spend and invest," says the senior EU official. "You will probably have a different French leader. Merkel could lose the next election. There can be a return to Keynesian economics. This may be a moment of the domination of German orthodoxy, but things can change."

They can always get worse.

I keep having the feeling that the universe has demanded a do-over of WWII. But just what outcome is it looking for?

Stick around and we shall see, I suppose.

...but hey, do what you want...you will anyway.

Euro - But Not Equal

French President Nicolas Sarkozy hosts German Chancellor Angela Merkel on Monday to thrash out details of a plan to save the euro at the start of a pivotal week for the single currency.

  Raw Story

Because they’re the only countries involved?

The meeting comes as Italy kicked off the crucial week with a draconian austerity package of cuts, taxes and pension reforms to be presented to parliament on Monday.

Ireland’s Prime Minister Enda Kenny is also to announce a 3.8 billion euro austerity budget on Monday, a day after warning citizens to brace for years of economic hardship during a historic television address.

And we know what’s been happening to Greece.

Now. What about Germany and France?

...but hey, do what you want...you will anyway.