Monthly Archives: February 2012

Quote of the Day: 20120228

The British Government has run out of money because all the money was spent in the good years…

— George Osborne, British Conservative politician and Chancellor of the Exchequer quoted in The Telegraph. With such an admission coming from a conservative politician, liberal and socialist politicians everywhere should be stocking up on Imodium. Notice: ineffective against verbal diarrhea.

Stratfor: 20120228



The State of the World: Explaining U.S. Strategy

By George Friedman | February 28, 2012
Security WeeklyThe fall of the Soviet Union ended the European epoch, the period in which European power dominated the world. It left the United States as the only global power , something for which it was culturally and institutionally unprepared. Since the end of World War II, the United States had defined its foreign policy in terms of its confrontation with the Soviet Union. Virtually everything it did around the world in some fashion related to this confrontation. The fall of the Soviet Union simultaneously freed the United States from a dangerous confrontation and eliminated the focus of its foreign policy.

In the course of a century, the United States had gone from marginal to world power. It had waged war or Cold War from 1917 until 1991, with roughly 20 years of peace between the two wars dominated by the Great Depression and numerous interventions in Latin America. Accordingly, the 20th century was a time of conflict and crisis for the United States. It entered the century without well-developed governmental institutions for managing its foreign policy. It built its foreign policy apparatus to deal with war and the threat of war; the sudden absence of an adversary inevitably left the United States off balance.

Things That Make You Go Hmmm…: 20120226

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Summary points:

  • Grant provides a (very) brief historical lead-up to today’s situation.
  • He then discusses the just leaked document prepared for Europe’s finance ministers.
  • As he states: the leaked document seemed at pains to make it abundantly clear that, not only was Greece in no position to comply with the parameters which would be set in the bailout agreement, but that, in fact, things were actually FAR worse than anybody had believed.
  • The document concludes, that by 2020, debt-to-GDP could still be 160%, almost exactly where it is now.
  • He also cites reports that after only one month into the new year, the 2012 budget estimate for the contraction in GDP will have to be revised from 2.8 percent to 3.5-4 percent.
  • He details compliance creep that the EU is imposing on Greece. That is they keep adding more and more onerous and impossible demands forcing Greece into an inevitable default condition but in a manner it appears as Greece’s fault and not their machinations.
  • He reviews other issues, some of which we have commented on elsewhere.
  • He concludes his letter with detailed reviews of what he found pertinent from others.

The First German Battalion to Occupy Greece Is Being Formed

We first alerted readers to the financial war being waged against Greece in the post: The Occupation and Looting of Greece, Twenty-first Century Style

Courtesy today of Zero Hedge and the Athens News, we now hear that the first German occupation battalion is being formed:

More than 160 German financial services executives are willing to come to Greece in order to strengthen the Greek tax mechanism

On a broader front, the EU is also marshaling troops to occupy Greece. The online news source Global Finance, reports that Olli Rehn, European Commissioner for Economic and Monetary Affairs, announced that:

the European Commission, the EU’s executive arm, would be installing its own officials at Greek ministries to provide technical assistance and monitoring on a permanent basis on the ground in Athens.

Related Posts

“A Monetary Policy Framework for All Seasons”

This commentary is in response to the speech titled A Monetary Policy Framework for All Seasons that Mark Carney presented to the U.S. Monetary Policy Forum in New York, Feb. 24, 2012. In this speech, he discusses monetary policy-targeting frameworks. He briefly examines the major ones and presents the Canadian context. This speech is a rework of the material found in the speech we reviewed in Carney’s Carnage but has some interesting points for discussion.

Lies My Politico Told Me

We have been hearing for months now, that a Greek default would spell financial Armageddon for the European and global economies. Such statements have rarely been supported by any kind of reasonable argument or evidence. Instead, the mainstream media (MSM) numbly parrots what they have been spoon-fed without any evidence of cognitive activity in the process. So let’s look at the claim.

Quote of the Day: 20120223

Did you ever think that making a speech on economics is a lot like pissing down your leg? It seems hot to you, but it never does to anyone else.
— President Lyndon B. Johnson as quoted in A Primer on the Euro Breakup: Default, Exit and Devaluation as the Optimal Solution.

Stratfor: 20120223


The Myth of the End of Terrorism

By Scott Stewart | February 23, 2012
Security Weekly

In this week’s Geopolitical Weekly, George Friedman discussed the geopolitical cycles that change with each generation. Frequently, especially in recent years, those geopolitical cycles have intersected with changes in the way the tactic of terrorism is employed and in the actors employing it.

The Arab terrorism that began in the 1960s resulted from the Cold War and the Soviet decision to fund, train and otherwise encourage groups in the Middle East. The Soviet Union and its Middle Eastern proxies also sponsored Marxist terrorist groups in Europe and Latin America. They even backed the Japanese Red Army terrorist group. Places like South Yemen and Libya became havens where Marxist militants of many different nationalities gathered to learn terrorist tradecraft, often instructed by personnel from the Soviet KGB or the East German Stasi and from other militants.

Do Flour and Oil Mix?

Our friend, JR, sent us this reference to The Economist: Flipping nerdy. The cost of making pancakes around the world.

Admittedly it’s late at night and we aren’t thinking particularly clearly. But it strikes us that this chart is as pretty as any we’ve seen recently and possibly as significant. It’s apparent utter banality invites deep reflection. And since the the cost of pancake flour is not entirely unconnected to the price of oil or the size of the Fed’s balance sheet (think of that damn butterfly in Brazil – it may yet cause rain on your parade), it contains as much insight and information to be discovered as anything any politico or economist might care to advance.

Sweet dreams.

The Occupation and Looting of Greece, Twenty-first Century Style

The Teutons are sacking Greece! Led by German finance minister Wolfgang Schnabel, the European Union and associated governing tribal bodies are imposing Draconian fiscal measures on Greece in an effort to recover as much as possible of the large sums irresponsibly invested in Greek banks and sovereign bonds by their national commercial banks

Or as reports, Alexis Tsipras, the Syriza [party] leader, told the Greek parliament on Tuesday that his country was victim of a “terrorist” assault.

Make no mistake about it. There is no concern for the Greek people. There is only concern for rescuing their banks and the wealthy elite that made bad investment decisions, prompted by greed.

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