Greek Debt crisis

Parapundit has financial news. And it is bad. Greek Treasury Bills now charge 88 percent yields in order to attract buyers.

That is incredible. It is like those Great Depression stories grandfather told me.

Wilders and the cost of immigrants

A program to keep Holland Dutch

Dutch populist Geert Wilders is well known for his pro-Dutch stance and opposition against the Islamisation of The Netherlands. In order to stop creeping Islamisation Wilders wants to end all immigration from Muslim countries, send back criminal foreigners to their countries of origin and reduce all other immigration to maximum 1,000 per year.

Stopping all non-western immigration

But Wilders does not only oppose Muslim immigration. He critisises all non-western immigration. I blogged in July 2009 that PVV parlementarian Mr. Sietse Fritsma requested Minister van der Laan of Integration to calculate the cost of immigration. After much hemming and hawing van der Laan refused to make such calculations, arguing that the government cannot put a price tag on groups of people. Geert Wilders argued that the government constantly puts all kinds of price tags on people, but alleged that the government does not want to make it known how costly immigration is. Ethnic Dutch women have only 1.6 children each. Supporters of high levels of immigration in the government have always maintained that immigrants will pay for the pensions and health insurance of the aging Dutch population.

Finding out whats going on

When the government refused to break down the expenses of the government between ethnic Dutch, western immigrants and non-western immigrants Geert Wilders' Freedom Party (PVV) tasked an economic research institute with the task at their expense. This institute, NYFER, diligently did its research, wrote a report and published it in May, a month ago. "Budgetary effects of immigration of Non-Westerners" it is called. The report limits itself to the costs of Non-Westerner immigrants to the state and ignores the costs to society at large.

A bucketful of Euros

To compress the findings of the report to the utmost: the cost of immigration of 25,000 non-westerners annually was calculated at 7.2 billion Euro. The report estimates that 25,000 immigrants who stay here per year is roughly the yearly count in the past ten years.

Raising the pension age

An important issue for the rightwing parties in the elections was raising the pension age from 65 to 67 in order to keep the welfare system affordable. The PVV made keeping the pension age at 65 an important part of their election platform. During the campaign Geert Wilders was able to argue that raising the pension age to 67 would only make an economy of 7 billion Euros until 2030. So just stopping non-western immigration for one year would be able to finance his promise to keep the pension age at 65. And this promise helped to convince enough voters of those who used to vote for the populist leftist Socialist Party (SP) to take three seats from the Left and bring them over to the right.

In conclusion: the PVV does not only discuss the agressive and supremacist ideology of Islam, but debates other excesses of the Multicultural society as well. Geert Wilders does not only use Islam critical arguments, but also economic arguments.

Employers hostile to Wilders

The Freedom Party shockwave

The populist Freedom Party (PVV) had 9 seats in parliament between 2006 and now. The 24 seat victory of Geert Wilders' Freedom Party in the June 9 elections sent a shockwave through The Netherlands. And one of the ships hit by the PVV shockwave is the Dutch business world and they are truly unsettled. Their mouthpieces, the employers' federation has warned in March against the rise of the PVV:

The head of the Dutch employers' federation has accused far-right politician Geert Wilders of "seriously" damaging Dutch interests abroad.

Bernard Wientjes, who chairs the Confederation of Netherlands Industry and Employers (VNO-NCW), said it was outrageous that Mr Wilders recently presented himself in London as the next Dutch prime minister and then derided Turkish Prime Minister Recep Tayyip Erdogan as "a complete fool". Mr Wilders' statement, which was broadcast around the world, caused shock in the British press.

Mr Wientjes, who heads the largest employers' organisation VNO-NCW in the Netherlands, says Mr Wilders poses a serious threat to the Netherlands and the Dutch economy. He underlined that three quarters of Dutch GDP comes from revenue earned abroad.

Mr Wientjes stressed that his federation will do business with any Dutch cabinet, including one joined by Mr Wilders' PVV party. But he emphasised that he hoped Mr Wilders party would not be included in the next government following parliamentary elections on 9 June.

And on Friday bussiness daily FD (Financieele Dagblad) published the responses of the chairmen of the employers federations FME-CWM, MKB-Nederland,Holland Financial Centre and VNO-NCW what kind of a government they want on their frontpage. All of the federation are rooting for a coalition which exludes the PVV. In an half page interview inside Mr. Wientjes of VNO-NCW again insisted that he hopes that a centre righwing or a centre leftwing government without PVV is formed. Mr. Wientjes was shocked by the good showing of the PVV and the Socialist SP despite their weakness in the polls. He mourned the weakening of the political centre. He regretted the evident splintering of Dutch politics and could not give a reason for the strength of the PVV apart from his strength in the television debates.

Islamisation is okay

This shows that the business world is hostile to the rightwing surge in The Netherlands. Business is opposed to a brake on mass immigration and the islamisation of The Netherlands. For them a good business climate and good relation with international trading partners take precedence over the continuity and security of the the nation.

Liberal Lying about benefits of immigration

Are immigrants public charges?

In July last year PVV (Freedom Party) MP Sietse Fritsma asked the Dutch Government by way of Integration Minister Eberhart van der Laan what the cost of immigration was to the Dutch taxpayer. Mr. Van der Laan refused to answer, which increases the suspicion many Dutchmen have that immigration is only a boon to the immigrants and not to the Dutch. Minister Van der Laan motivated the refusal by saying that it is wrong for the state to calculate the costs of immigrants broken down by country of origin. A parlementarian majority supported him.

Or are they an economic benefit?

Minister van der Laan visited Morocco from 7 to 11 February. During the visit he stated to newspaper "Le Matin" that

immigrants from Morocco are an economic benefit to The Netherlands.

In a reaction PVV leader Geert Wilders and MP Sietse Fritsma asked the Minister how he could know that, as he had refused to calculate it in July 2009.

Liberalism and equality

In conclusion: to the Liberal mind that everybody worldwide is equal and all cultures are equal is a foregone conclusion. So it does not have to be researched. When a Liberal is confronted with the question whether non-western immigrants he realizes that non-western immigrants cost more than they bring in material advantage. In order to remain liberal Liberals will the knowledge away. And soon they will revert to the belief that all people and cultures are equal.

Minority girls more likely to be jobless

A Dutch News report on minority joblessness reports that:

Girls from an ethnic minority background are more likely to be unemployed than their male peers, despite their better performance at school, Trouw reports on Monday, quoting research by the E-Quality institute.

The jobless rate for girls from a minority background is five percentage points higher than boys and nine percentage points above native Dutch girls.

The institute said early pregnancies, household duties and psychiatric problems are largely to blame.

Snouck's commentary: Minority women generally face less discrimination than their male counterparts. Society pressures males more to find employment and these finding reflect the efforts of minority males to find gainful employment.

DSB Bank: Small enough to fail

A bank goes broke

A week ago this blog featured a story of a minor Dutch bank that got in trouble as a result of its high risk business strategy. This Monday the fate of the bank was settled: DSB Bank is officially bankrupt (Dutch). The immediate problem for the bank was its insolvency. Depositors were insecure about the ability of the bank to protect their savings. The deposits were withdrawn from the bank as quickly as was possible and the bank lost most of their their reserves. In order to be rescued the bank needed about a 100 million Euros from the Dutch Central Bank (DNB) which is tasked with guaranteeing the banking system in The Netherlands. One of the four big banks, ING, had already received a 10 Billion bailout earlier in the year. Minister of Finance Wouter Bos did not support DSB. He insisted that DSB was responsible for itself. Which it is.

Comparing a big bank with a small bank

The question which has to be answered next is why ING was not responsible for itself in a similar situation. The answer is that ING is too big to fail. As an example of this bigness, about a quarter of all Dutch payrolled employees receive their montly wage on an ING account an a similar share of Dutch firms are using ING bank accounts for their transactions. If the bank would fail the other banks would not be able to administer the application for new private and business accounts quickly enough. Millions of Dutchmen would not receive wages and dozens of thousands of companies would not be able to pay their bills. The dislocation of the economy would cripple Dutch society.

The advantage of the small bank for society

By contrast DSB is a bank with a small market share in private accounts. Account holders can swith to other accounts without swamping the big banks so there is hardly any economic dislocation. And thusly the finance minister and the head of the national bank saw no reason to save DSB.

Is it good to have four big banks?

The new situation is that the big four banks (RABO, ING, Fortis, ABN-AMRO) in The Netherlands have been strengthened by the fall of DSB. The Dutch banking system has become more monolithic as a result of this. The very fact that the governments was able to let DSB go under shows that it is preferable to have a larger number of smaller, local banks than the current system where only four banks rule the roost.

Dutch bank DSB in heavy seas

DSB bank sinking?

A minor and politically well connected bank in The Netherlands in in deep problems after its solvency came in doubt in the past week. Last Sunday Finance Minister Wouter Bos, (Labour Party) had emergency regulations imposed on DSB bank. The bank was bleeding liquidity as the public was doubting whether the bank was solid. The Dutch public was shocked when accounts were frozen and people could only draw limited amounts of money to pay their bills.

Political connection reflect badly on the Government

DSB bank was a bank with aggressive sales policies for instance in the field of mortgages and insurance. They had several VVD politicians on their Board of Directors amongst them Gerrit Zalm, former Finance Minister. During the Financial crisis Gerrit Zalm was recalled by the government as a special advisor. He is regarded as one of the most influential advisors of the Ministry of Finance. With the demise of the DSB bank the authority of this advisor and the Minister of Finance and the Government as a whole have taken a serious hit.

The judiciary, the police, the banks, the Government. All institutions seem to be failing the Dutch.

Amsterdam provides jobs to Muslim criminals

Criminal records obstruct Muslim employment

The Amsterdam municipality has a policy which requires all those hired by the municipality to have a conduct certificate. Many Muslim youth have criminal records and they can not obtain the certificate and hence no cushy municipal jobs for them.

Allah intervenes on behalf of those who believe

Allahkarim! Allah is Merciful. And he appointed a messenger and sent him to the densest concentration of Muslims in Amsterdam: Amsterdam-West. His name is Achmed Marcouch, the mayor of the borough Amsterdam-West. Mr. Marcouch the Messenger is powerful! His words bent law and justice! Thus spoke the Messenger at the time appointed by Allah:

These youths do not know the paths to employment. Ya Allah! We want to touch these youths with a bad employment record and who do not know how to find jobs. We created the agency "Mo Money". Bismillah "Mo Money" will assist youths making applications and support them even after they landed a job.

Snouck lies!

My readers will say this cannot be true. Okay, I made up the "Allahkarim" and "Bismillah" and "Ya Allah" and all that malarky. But the rest is the Christian Truth! The plan is cooked up by Ad Agencies TBWA and Hot DNA and is financed by Mr Marcouch´ borough Amsterdam-West and Job Agency Tempo Team.

Tyrrano-Anarchy in action

So you see how it works. If you are functional and employed you are taxed by the state. Your money is taken from you. In return you are not protected by the state. The state gives the money to those who are violent and prey on the law-abiding. The lawless are also assisted to do what the law-abiding do without state assistence.

Is it not time that the state would crack down on criminals, expells them and restore justice, law and order while lowering the tax burden on the law abiding citizens of The Netherlands? Dutchmen can now vote for such a program: the PVV's. In the polls it is the biggest party already. Meanwhile the media are rife with speculation on the collapse of the Labour Party, the party of Marcouch the Messenger.

Dollar loses reserve status

Seignorage and Empire

Every era has a reserve currency. This reserve currency is the currency all trading partners accept as payment. The state that produces the reserve currency is said to possess seignorage. This is the profit associated with the ability to buy real things with money that was created out of nothing.

What happens if an empire loses the possession of seignorage?

The US Dollar empire

Between say 1713 and 1929 the Pound Sterling was the reserve currency. After 1945 the US Dollar was the global reserve currency, backed up by the vast productive power of US industry. The US Dollar had been pegged to gold at 35 US Dollar an ounce between 1934 and 1972. After 1972 the US Dollar along with all currencies in use were backed by trade flows. Currencies were floating up and down. Money could be created by central banks by expanding credit.

But the position of the US Dollar had weakened by unpegging it from gold. More and more international trades were done in currencies like the Deutschmark and the Yen. Despite the weakening position of the US Dollar commodities like oil, rubber, coffee and goods like airplanes and arms continued to be traded in US Dollars. A problem of an international trading system with floating currencies is the inherent insecurity of international merchants and traders. They never know what their returns will be, which hinders trade. This also disrupts the taxes that are levied on their trade, which fill the coffers of states that manage the international order.

The US milked the US Dollar for what it was worth, recklessly expanding the money supply with cheap credit. This way the elites could keep expanding an intrusive managerial state and a international empire with roughly 800 Army, Navy and Airforce bases around the world.

The beginning of the end of the US Dollar as a reserve currency

But expanding the money supply by easy credit led to a succession of boom bust cycles in the 1990ies and thereafter. After every bust the US flogged the economy back to life again by expanding credit. The biggest bust came in 2007. The political and monetary elites reacted by giving the same treatment again. The FED created the biggest expansion of credit thus far, to prop up their hollowed out financial institutions, vastly expanding government debt, adding to the household debt and showing up in a unbalanced trade balance with Asia.

The American public is eyeing the new debts warily. And the international trading partners of the US are increasingly wondering about the worth of the currency that is created so recklessly. The trading partners must worry about the ability of the US taxpayer to service the government debt burden in addition to their private debt burdens. Not to mention that the interest on the debts are choking off buying power of US households. Unless said households increase the rate at which they take on new debts, which they prudently seem unwilling to do.

What is the alternative?

There is no currency to take the place of the US Dollar in international trade. To set prices, act as a medium of exchange and a reliable unit of value. Now however a new currency is being worked on behind the scenes.

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil

No Dollars for oil, because the US Dollar is an increasingly unreliably unit of value.

moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency

This would provide a solution for the unit of value, pricing and exchange medium challenges a new currency would face. The Middle East, Russia as suppliers of raw materials plus Asia and Europe as suppliers of finished goods would possibly be able to manage their trade flows in this way.

The timeline

When will the new currency come about? It will take 9 years.

The current deadline for the currency transition is 2018

In the mean time gold will be used as a stop gap to fill the place of the US Dollar. Expect the gold price to rise against the US Dollar. It is now at more than 900 US Dollars for an ounce, up from 35 US Dollars per ounce between 1934 and 1972.

The consequenses for the US

If oil would be traded in a new currency, it would be a big hit for the US. The US Dollar would lose reserve currency status. The demand for US Dollars would fall and the exchange rate would fall. The central government of the US would lose the profits of seignorage. Prosperity for US citizens would drop as import prices rise. In the short term the shock to the US political and social system would be sharp. On the other hand US made goods would become cheaper and manufacturing and employment in the US would actually increase in the MEDIUM TERM at the expense of Europe and Asia.

Collapse of the Empire

Political conflict in the US will intensify if the government will not be able to create money at no cost. Politicians will have to cut budgets. This would break up the internal or external empire of the US. Possibly both.

The internal empire

The internal empire is the empire which the US proper has become. The territory of the US now contains in addition to the White core nation plus Blacks millions of Asians and dozens of millions of Mexicans plus significant numbers of other unimportant minorities. Without cheap money to pay for an expanding military, bureaucracies and welfare millions would be without jobs, status, income and access to healthcare in addition to the number who are already there. Politically it would cause all these groups to become more confrontational and to view politics like a zero sum game, a game were one party´s loss is the other parties gain. Especially the Mexicans and Whites are likely to collide over the possession of some of the Southern states of the US.

And this coincides with the rule of the nation´s first non-white President.

The external empire

The external empire are the network of military bases the US maintains around the globe, dominating the world militarily and politically. Without cheap funding the political elites could decide to withdraw in the manner of the Soviet Union withdrawing from Central Asia and Eastern Europe in 1989.

Withdrawing from the external empire would cause wars breaking out accross the globe, in Africa, the Middle East and Central Asia. Conflict which were hitherto surpressed by the US would come to the fore. Getting the situation under control requires a new empire or several new empires.

People will be nostalgic for the lost US empire, in the way they are nostalgic for the Soviet Union of the Yugoslav Federation.

The question of Western Decline

The deeper causes of the decline of the West?

The blogger Randall Parker recently raised the spectre of another bubble, cause by low savings by the American public. He wondered if the underlying problem might not be national economic decline of the US and inquired about the possible causes.

Shifting ethnic demographics

A commenter calling himself Glenn Beck mentioned as an important underlying cause the

2.) Shifting ethnic demographics that are depressing our human capital

In The Netherlands the issue of the financial decline of the nation as a result of mass immigration has now become political.

Asking the right questions

This blog featured an article in July about this question being asked by the Freedom Party (PVV):

In the last month Freedom Party MP (PVV) Sietse Fritsma has been asking Dutch government ministries what their immigrant related costs are and how they relate to the costs of native Dutchmen. He has also asked questions about the revenue of the state related to immigrants. He has forecast the result that immigrants ON AVERAGE cost more than they bring in.

The question by the Freedom Party (PVV) about the cost of immigration was not answered by Eberhard van der Laan, the responsible Minister. Despite the fact that article 67 of the Constitution instructs ministers to answer questions from Parliament. Mr. van der Laan argued that he did not want to devide the population in groups and have costs and revenues calculated accordingly.

An estimate goes mainstream

A mainstream Dutch magazine Elsevier calculated the cost of immigration at 13 billion Euros annually out of a 877 billion GDP. The tally was a total of 216 billion, for a limited number of items, excluding for instance the total damages of the high immigrant crime rates.

Throwing in pension age to make the brew more potent

The resistance against calculating and making public the costs of colonization by non-westerners of The Netherlands is strong. The PVV is going to make it one of the most important issues in their campaigns and is now connecting the issue to the age that citizens can start their pensions. The other parties want to raise this age in order to counter the effect of the aging of the population. This will extent the interest of the electorate from to right wing voters to include left wing voters and possibly make the PVV a national party.

Western decline is population decline

All Western countries will have to deal with these questions eventually. The decline of economies and the resulting inability of the state to provide income and services to its clients will force these issues to the forefront.

Contrary to what political elites tell the public, immigration is not an economic gain for receiving nations. The problem of aging populations will not be softened by third world immigration, but exacerbated by it.

Muslims, immigrants, public charges or not?

Muslim and other immigrants a boon to the receiving nation?

Yesterday IslaminEurope - Commentary featured a story on the Dutch Freedom Party (PVV) asking Dutch Ministers to calculate the costs and revenues of immigration. Later yesterday there was a vote on the issue. All parties were against Dutch Departments to calculate the revenues and costs associated with immigration. All parties apart from the Liberal-Conservative VVD, Wilders' old party.

There was a big show of moral indignation at PVV MP Sietse Fritsma's request. But it is clear that the PVV is not finished. During a speech in Parliament on 18 september last year Mr. Wilders (Dutch) said:

This Multicultural society is a expensive hobby. A Bureau for Economic Policy Analysis (CPB) study of a few years ago has shown that the average non-western immigrant family casts the Dutch taxpayer 230.000 euro.

The strategy of Mr. Wilders

The PVV is going to make this matter of whether immigrants are public charges the main issue in the rest of the year and leading up to the 2010 election. We have not heard the last of this.

The other parties are going to be in a lot of trouble over this. Them trying to keep the facts under wraps makes them look vicious and deceitful. And once the facts are out Multicultural society will have taken a crippling injury.

The Borjas question: do immigrants pay for their stay?

Do the natives profit from immigration?

The US economist George J. Borjas did research to answer the question who profits by immigration. His findings are contrary to the message of the Multiculturalists. He concluded that it is mostly the immigrants who benefit by their wages. Also employers who employ immigrants will benefit, or they would not do it.

What about Europe and The Netherlands?

In the last month Freedom Party MP Sietse Fritsma has been asking Dutch government ministries what their immigrant related costs are and how they relate to the costs of native Dutchmen. He has also asked questions about the revenue of the state related to immigrants. He has forecast the result that immigrants ON AVERAGE cost more than they bring in.

Knocking on heaven's door: the costs

Previously there have been studies undertaken. In 1999 Dutch economist and journalist Pieter Lakeman published a book that estimated the directly attributable cost of immigration at 70 billion guilders in 30 years. The total costs will be much higher.

Euwals, Rodenburg and ter Rele wrote a study, immigration and the Dutch economy, which also concluded that an average 25 year old non-western immigrant constitutes a net loss to the tax payer of a 100.000 euros in his life time. Here is an abstract of the study of the costs of immigrants in Dutch. While the average 25 year old Dutchmen (including immigrant stock!) creates a surplus of 165.000 euros. And the 25 year old immigrant is the best case. All the other ages are more costly. The report also warns that these costs do not include the expected "family reunification" costs of wife and children!

Immigration is priceless

There are other costs not vectored in. Such as loss of security due to high crime. Loss of political rights for the native population due to political-correctness and imposition of Sharia.

What answer will the Freedom Party get?

The media are already speculating that the Ministers and civil servants will not answer the questions that Sietse Fritsma has fielded. But Mr. Fritsma and his fellows will continue to ask this question and the avoidance of the answers will be noticed and interpreted by the voters.

More and more of them will conclude that there is no benefit to immigration. And that the assurance by politicians that immigrants will pay for their old age is a lie.

In financial terms immigrants are unequal to Westerners.

Germany: the Social State throttles the Nation

The Social State bribes the people to win their loyalty

Since the Germany's Iron Chancellor Bismarck introduced pensions Western states have followed its lead to bribe the people into loyalty towards the state. Especially after the demise of nationalism as an ideology, states have transferred large sums from economically active citizens to inactive ones.

Good pensions and a dearth of babies

With the question of care in old age solved by the State, procreation to ensure offspring that will be responsible for old-age care is no longer required for German citizens. German birthrates have fallen to 1.4 child per woman, below the 2.1 replacement rate.

Recession hits workers, but not pensioners

With the current recession many Germans are falling on hard times. Many lose their jobs, others are on short time contracts and others see their incomes falling. But the German state is guarantueeing the income of its pensioners. In fact the pensions of West-German pensioners are set to rise by 2.4 percent. And East-German pensioners get a whopping 3.4 percent rise of their pensions.

The funds have to be coughed up by the 25 to 35 year olds. Herr Finance Minister Steinbrück stated that this is a wrong signal to

the 25 to 35 year old cohort, who have to bring children (German) in the world. For this generation we ought to care more.

Labour (SPD) Minister Steinbrück added that the pensioners

are doing well like never before.

The grey wave is cresting

As Germany's population is aging, the vote of pensioners becomes more and more important for political parties. The pensioners seem to be careless of the future of their children and the German nation. Unlike e.g. The Netherlands or France which seek to prop up the native birthrate such measures are taboo in Germany. Birth rate increasing policies are connected to the days of the reign of the Nazi Party, which wanted a growing population to populate conquered territories in the East.

At some point these taboos will have to be addressed or the German state will not be able sustain to paying worthwhile pensions to its citizens.

House prices come down in the Eurozone

House prices come down in Europe

According to the European Central Bank (ECB):

House prices in the Netherlands have gone down just 0.3% in the first three months of this year

However according to the Dutch Realtor Association NVM prices fell by 3.1 percent in the same period. The ECB further stated that:

national figures and its own calculations showed prices were falling year-on-year in at least six of the 16 nations sharing the common currency and worse was to come.

Dutch economy contracts, vacancies drop

Gross Domestic Product (GDP)

Dutch GDP recorded the biggest drop since the Second World War. According to a quarterly report by the Dutch Statistics Office (CBS) Dutch GDP dropped by 2.8% in Q1 2009 compared to Q4 2008. This last quarter of 2008 saw negative growth, as well. On an annual basis Dutch GDP fell by a whopping 4.5 percent.

Dutch employment

The number of vacancies fell to 152,000, a 50,000 drop. The Netherlands has a 7.83 million labour force. Unemployment is now at 4.4 percent of the Labour force.

GDP report in February 2009

Dutch News: Police Cuts in The Netherlands

A leak at the Ministry of the Interior

A confidential report leaked stating that Interior Minister Guusje ter Horst wants to reduce the intake of aspiring policemen (Dutch). The policemen are necessary to keep the police force up to strength as many older cops are starting to retire in two years. The plan is supposed to achieve an cut of 190 million euros on the yearly police budget.

Opposition enraged

Opposition parties such as the Freedom Party (PVV) and the Socialist Party (SP) voiced their outrage about the plans.

Planned reduction in Crime endangered

One of the goals of the government is to reduce crime by 25 percent. Mayors and police chiefs of towns and cities warn that crime figure will show a significant impact due to the cuts.

Read more on Police Cuts on Dutch News.

Somali Pirates have spy teams in London's shipping business

The Somali pirates attacking shipping in the Gulf of Aden and Indian Ocean are directed to their targets by a "consultant" team in London, according to a European military intelligence document....

Read more on Somali Pirates

U.S. Fed prints money - economy will not revive

The U.S. Fed is expanding the money supply

The U.S. are trying to drown their nation in debt. The GDP of the U.S. is 14 Trillion U.S. Dollars. The Fed is creating a Trillion dollars which will be made available to private and business which they can borrow. This means an expansion of the money supply of 7 percent against GDP.

It remains to be seen whether the public will actually be foolish enough to borrow more money. The experience of Japan in the 90ies showed that the public preferred saving over spending in a similar situation.

But that will mean that the U.S. economy will continue to stagnate.

Thrifty Continental Europe

The situation in Europe is not too different. Kindly read an earlier post on UK money printing and interest rate slashing here.

The Anglo-Saxons have built up huge debts to finance their decade lasting spending spree. But European nations, which were thrifty saving up money and lending it to the Anglo-Saxons are in stagnation. The Anglo-Saxons at least had a party before the hang-over....

Analysis

The causes of the economic stagnation are for a considerable part demographic. As European and American societies are reproducing below replacement rate, the population is aging rapidly. The economic base of the welfare state is shrinking. High immigration is seen as a solution by the political classes, but in reality the third world colonists are an enormous drain on said shrinking public purse. Many of the immigrants are not working and if they are working they earn on average far less than indigenous population. They use up more public means than the indigenous. Think of high consumption of medical care, police, benefits, higher per capita educational outlays. The average net earnings of the total population (indigenous plus immigrants) are decreasing at the same time as the public expenses increase.

The blindness of the political class

The political class can not see the predicament their nation is in because they have outlawed reporting unfavourable facts and analysis and if it were reported to them they would refuse to grasp it as their liberal worldview makes it EVIL to form thoughts that are illiberal.

1984

George Orwell showed in his book 1984 how the the ruling party or Inner Party creates Newspeak. Newspeak is political correctness. The objective of Newspeak is to make political thought that disagrees with the ruling party's ideology impossible, because the language has been so degraded that nobody can form an alternative point of view anymore.

The memory hole. The memory hole!

George Orwell was a Trotzkyite Socialist. He thought the attempt by the Inner Party could be succesfull. It never occurred to him that when the Inner Party had impaired its ability to orient itself on reality by creating a false ideology reality would intrude on society in a vicious way. He believed that the Inner Party was powerful enough to use the media to such an effect that any changes to reality would be cast down the "memory hole".

The ability to react by an ossified social system

But how do you hide double digit unemployment and a decade of economic stagnation from the public and the party faithfull? What if the Inner Party, ossified by decades of unchallenged rule and exclusive reliance on bureaucratic process loses its faith and self-confidence?

Western Governments, bankers are frantically pushing their controls in order to revive the economy, which is the only prop of the present social system. But nothing is happening......the system does not respond. It will be a long time before it does.

Bank of England announces it will begin printing money

The all time lowest interest rate

The Bank of England (BoE) has announced it will cut the lending rate with another 5 points to 0,05 percent. This is the lowest interest rate since the BoE's founding in 1694 by William III of Orange.

Last resort of the "lender of last resort"

This is the UK's last resort. If it does not work, there is nothing to stop the descent into a deep recession, with the attending DOUBLE DIGIT unemployment.

Lessons are not being learned

Quantum Fund co-founder Jim Rogers criticized the U.S. governments policy of bailing out of failing financial and other firms. The bail-outs are impairing the learning ability of the economic leadership and are morally wrong. Those institutions who took the biggest risks are bailed out at the taxpayers expense. Smarter, more prudent leaders are not reaping the benefits of being able to pick up the assets of the failing companies when they go broke.

Those who created the mess are sitting high and dry

Leaders of U.S. Industry who took criminal risks are now walking around with hundreds of millions of Dollars in their pockets, while the U.S. middle class is going to be squezed once taxes are raised to pay off the huge Debts the U.S. Government is incurring in order to spend its way out of the Debt crisis. Basically the U.S. is taking more of the poison that got it into this terrible spot in the first place.

"They all took huge, huge profits. Who was the head of Citigroup? Chuck Prince? I mean, how many hundreds of millions of dollars did Prince take out of the company? How many hundreds of millions of dollars did other Citibank execs take out of the company? Wall Street has paid something like $40 billion or $50 billion in bonuses in the past decade. Who was that guy who was the head of Merrill Lynch (MERR)?

Right, Stan O'Neal. He got $150 million for leaving, even though he ruined the company. Look at the guy at Fannie Mae (FNM), Franklin Raines. He did worse accounting than Enron. Fannie Mae and Freddie Mac (FRE) alone did nothing but pure fraudulent accounting year after year, and yet that guy's walking around with millions of dollars. What the hell kind of system is this?"

Global Social Unrest

Jim Rogers sees this Debt crisis as a global problem and forecasts global social unrest.

In my opinion this crisis will hit the nations with more ethnically and culturally diverse societies harder than more homogenous society. This crisis will do for the West what the Brezhnev years of stagnation did for the Soviet Union and Communism.

Dutch GDP shrinks dramatically

This week the Dutch CPB (Central Planning Bureau, a Governmental Econometrist Information Service) undertook an unusual step. It published the estimate of economic performance a month early due to their serious and disturbing nature. As a result of the international financial crisis the growth estimate for Dutch GDP for 2009 is MINUS 3.5 percent. The 2010 estimate is minus 0.25 percent. This means two consecutive years of economic contraction.

This means we are in a very serious kind of recession or rather a depression type of situation. An unusually deep contraction of the economy. Unemployement is rising. As a result the social peace and "community relations" will suffer seriously.