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Greece's debt crisis has plunged the euro into a ‘ difficult situation’, the German Chancellor Angela Merkel admitted last night, prompting fresh fears about the collapse of the single currency.
In the gravest sign yet of the international threat posed by Greece’s crippled economy, Mrs Merkel warned for the first time that the eurozone faces a ‘ dangerous’ period.
Originally posted by nydsdan
reply to post by Cabaret Voltaire
I think most of us are in agreement that a top is in and we get to go testing bottoms soon.
Japan is drifting helplessly towards a dramatic fiscal crisis. For 20 years the world's second-largest economy has been able to borrow cheaply from a captive bond market, feeding its addiction to Keynesian deficit spending – and allowing it to push public debt beyond the point of no return.
"Right now, the 1.2 million workers who will lose benefits in March are being held hostage by partisan attempts to delay and block this critical legislation," said Christine Owens, executive director of the National Employment Law Project.
The man who broke the Bank of England in 1992 is said to be at the centre of a plot to cash in on the demise of the euro.
George Soros's investment business Soros Fund Management is among a group of heavyweight Wall Street hedge funds which have launched a series of massive bets against the euro.
Originally posted by Vitchilo
UPDATE : Just another news story for the week-end...
AIG posts $8.9 billion loss on loan repay, reserves
Can we close that damn bank please?
[edit on 26-2-2010 by Vitchilo]
Despite claims to the contrary by the U.S. Chamber of Commerce and the Obama administration, proposed free trade agreements with South Korea and Panama, if implemented, would add to the nation’s already exploding trade deficit and result in the loss of hundreds of thousands of manufacturing jobs, according to a new study by the Economic Policy Institute
The pound has tumbled to a 10-month low as fears grow the UK will have a hung parliament in the forthcoming election.
The currency fell 1.6% to drop below the $1.50 level against the dollar for the first time since May. It has lost 7% against the dollar this year.
The pound also fell against the euro and most other major currencies.
Separately, the world's biggest bond fund manager Pimco told the BBC it is concerned about UK government debt unless drastic action is taken...
...Pimco's head, Mohamed El-Erian, told the BBC the UK's creditors would become "significantly concerned" if the UK did not cut spending and grow quickly.
He also expressed concern over other European nations with troubled public finances - such as Greece and Spain.
Governments need companies such as Pimco to keep buying their debt. If large bond buyers believe that governments will default on their debt or that they will keep falling in value, they will not buy the debt - further driving up the cost of borrowing for those countries.
The UK's total borrowing for the financial year now totals more than £122bn.
Mr El-Erian told the BBC World Service: "If the UK cannot combine higher growth with fiscal adjustment, then its debt dynamics will continue to deteriorate to a point where its creditors will become significantly concerned." He added that there was only a "very small" chance that the UK would default on its debt.
Mr El-Erian previously was in charge of Harvard University's $30bn endowment fund.
Pimco - or the Pacific Investment Management Company - is based in California and has more than $1 trillion of assets under management. It is a unit of German insurance giant Allianz.
Billionaire financier Jim Rogers, former George Soros partner, predicts GB Pound is on the brink of a collapse, foreshadowing a huge global economic shakedown, worse than 2008/9.
The UK Pound is on the brink of a collapse which will herald a downturn worse than 2008/9, it could well happen within weeks and the British government is powerless to prevent it. And this in turn will foreshadow a global economic winter that could come before the end of 2010 and make the last two years seem like a mild spring day.
This is the dire prediction of the legendary George Soros' former business partner, respected billionaire financier Jim Rogers, together with millionaire investment adviser and best-selling author Dr Marc Faber and the controversial millionaire trader and coach Vince Stanzione, ahead of their keynote appearances at next month's Global Trading Day seminar in Westminster.
As the UK economy stands on the brink of its much heralded double dip after a dismal January and rumblings about its credit rating, as Swiss Bank UBS speculates the risk of a run on the pound, and as sterling hit a nine month low against the dollar on Friday, the three experts - who all have reputations for making much of their fortunes from predicting and riding economic downturns - are forecasting that a currency crash and then a full scale global "shakedown" are almost inevitable.
"The last few months have seen a 'false bounce', shorn up by massive short-term injections of government underwriting," says Rogers, "but it can't last. We've been applying temporary sticking plasters, not long-term cures. Later this year we'll see the start of the real recession, with more Lehman-scale disasters and a fallout which won't stop until the underlying malaise is genuinely cured..."
The U.K. pound sank against the dollar Monday as the country's shaky fiscal position and uncertain political picture led investors to sell off sterling more than 2.25% on the day.
The euro also fell against the dollar--dropping below the key $1.35 level--as investors wary of Greece's swollen debt questioned whether reports of a possible aid plan would pull that country--and the rest of the teetering euro zone periphery--from the fiscal doldrums.
With its own struggling economy and bloated deficits, some investors worry the U.K. could become the market's next Greek-style problem, analysts said. The pound slipped more than 1% against the euro on the day.
"Downward pressure on sterling continues to build, giving the impression that the next crisis could be brewing in the U.K.," said Camilla Sutton, currency strategist at Scotia Capital in Toronto.
As an election looms, investors are concerned the U.K. Parliament could emerge hung, with no party enjoying a majority, leading to gridlock.
Xristos Kiriakou, 30, joined the Feb. 24 strike against the austerity measures announced by the Panhellenic Socialist Party (Pasok), although he has never been involved in public protests before.
''I have been unemployed for the last seven months and realised that all avenues to a decent job are shut and sealed,’’ said Kiriakou, who had done a year of obligatory military service but had nothing to return to.
A graduate of European Studies, Kiriakou speaks several languages and has work experience, but finds it impossible to get a job that pays more than 700 euros (945.6 US dollars) a month.
''I protested also because I believe that what Greece is being asked to do will not lead to an exit from the recession,’’ Kiriakou said. ‘’It might make the numbers look good for the European Central Bank (ECB) or the International Monetary Fund (IMF) but it will sink our society deeper into desperation".
"The government has to pay attention not only to the needs of the markets but also to what is necessary for people," Giannis Panagopoulos, president of the General Federation of Greek Labour (GSEE) - which has more than 1.5 million members - told IPS.
"Unfortunately the first battle is lost for this administration although it is not responsible for spending any remaining trust in the country’s economy, Greece is now an example everyone wants to avoid. Still it remains a fact that markets are faceless and ruthless and in our case they are asking for blood. Together with speculative interests they are creating an explosive atmosphere".
"Social reaction has already begun and the strike sends a first message not only to the Greek administration but also around Europe," Panagopoulos said. "Similar problems will follow in other member states, so more attention and serenity are necessary for coming up with sound political and economic policies that are able to protect the labour force and people who do not own and exploit property".
Panagopoulos’ warning is no exaggeration. Italy’s debt is in fact up to 120 percent of its GDP and there is evidence that the country has employed similar irregular tactics in hiding debt.
The unemployment rate in Spain is up to 20 percent and the country is not faring any better than Greece.
As Kiriakou says, "If in the future Europe needs to force other countries through shock therapy like Greece it can’t have failed here, which means that in case the Greek public resists the measures a standoff can very well turn into a fight.’’
"Greeks will not swallow the measures," he says. "Thus if Pasok enforces them on society this might push us back to violence. Don’t forget what happened to this place two years ago.’’
Kiriakou’s belief is shared by many who believe that they are being asked to pay for the mistakes and misdeeds of a small elite group.
"You listen to international media saying how Greece mishandled its fiscal policy and deceived Brussels about its financial wrongdoing, but I know very few Greeks who have been involved in this process.
‘’The people, who cooked the numbers, adopted the euro and failed, but still dictate economic policies are the political elite and their banker friends who preach neoliberal orthodoxy. These people are now are asking us to waste our lives in order to pay for their mistakes. I don’t see why this ought to happen really,’’ Kiriakou said.
James Rogers, a former business partner of George Soros and a well-known currency investor, denied saying the U.K. pound is on the brink of collapse, but confirmed his negative views on sterling
In a telephone interview from Singapore, Rogers said he will attend the conference for investors in London in March, citing “contractual obligations.” As regards his views on the pound: “I do not think the pound sterling is going to collapse within the next few weeks. I’m on record as saying the U.K. has serious problems, serious debt problems, and the pound sterling has got problems, too,” Rogers said. He emphasized the U.S. and other countries also face serious economic problems.
Regarding a separate forecast released by UBS earlier this week calling for a possible fall in the pound to “$1.05 and below,” Rogers said he wouldn’t be surprised if sterling fell that far, “but whether that happens this year or this decade, I don’t have a clue.”
wonder why hes doing that?
Originally posted by GreenBicMan
reply to post by TheCoffinman
He never said that in the first place it was denied about a week ago actually. I posted it on this thread or another one specifically about that.. I saw it in Reuters I believe.. I linked it anyway if you do happen to find it
A statement from Vince Stanzione:
The quotes attributed to Jim Rogers yesterday – including the one that the pound could collapse within weeks – were issued by me prematurely, without the approval of Mr Rogers, who was travelling at the time and did not have knowledge of the press release before it went out. While Mr Rogers does note that the pound has had a downward adjustment, and that a severe double dip in the global economy is a strong likelihood, the idea that it might happen within weeks came from me, not Jim Rogers. It was based on my belief that the pound is vulnerable in the run-up to the UK general election…
I apologise to Jim Rogers, the media, our press agency and to anyone else who may have been affected by the statement. I believed I was reflecting Mr Rogers’ sentiments but I accept that I should have sought his final approval before issuing the release. I take full responsibility.