Archive for February, 2012

— Posted Wednesday, 29 February 2012 | | Source:

The following are some snippets from the most recent issue of the International Forecaster. For the full 34 page issue, please see subscription information below.



The aspirations of the EU and euro zone took a hard hit in 2008 from which it has yet to recover. Its weaknesses were exposed as they were in the 1990s in the formation of a euro zone. As always few would listen to the negatives. Now Europe is entrapped in a terrible situation and the only way out is to abandon the euro and return to their original currencies.


          At the Maastricht meetings it was obvious that many of the rules and directions would not work, but they went ahead with them anyway. The idea was to weld Germany to its neighbors, so that it would not be in a position to start another war and to amalgamate all of Europe in a trade and then political union with a common currency for the core members. The biggest mistake was to start the union financially and economically, which as we have seen was wrong. They should have begun with a constitution, which they managed to get a couple of years ago by deceit, fraud, and extortion under the Lisbon Treaty. What had happened is participants found the EU and euro zone did not fit their needs and did not work. Not having thought the situation through from the beginning they were entrapped and they were going to lose their sovereignty, which they had overlooked from the beginning. They were focusing on those cheap loans under one-interest rate fits all. This element was what really brought Greece, Portugal and Ireland financially to their knees. You cannot have one rate when you have 17 nations at different stages of development.


          The European Union is an unnatural association of nations all of which have had separate tribal cultures for more than 10,000 years. There wasn’t and isn’t a chance that the EU can last, as we predicted in 1992. There was never a chance that the EU would transcend nationalism and become a unit in a new one-world government, and that is really what this was all about.


          The worldwide credit crisis of 2008 changed all that and exposed many of the weaknesses of the EU and the euro zone. It became very apparent that the euro zone could not withstand crisis and adversity and its only inner strength came from several members. It was apparent that what we had written about 22 years ago was now coming to pass. That is the cultural, social and economic realities that divide European nations. This means the unique qualities of the USA will not be duplicated in today’s Europe. That is why we have believed from the very beginning this mad experiment would never work.


          As you can see the future of Europe is in flux. Will Germany and others leave the euro zone and perhaps the EU? There is a good chance of that. Germans are fed up with subsidizing others and want to go ahead on their own. They never wanted to be in the EU or the euro zone in the first place. That is contrary to what pundits think, but all they do is follow the New World Order party line. Germany and Russia want to be the masters of Europe and that is the way it will eventually be. The antics of the US, UK and Europe are also at play in the sale of Iranian oil production, which these nations have demanded has to be in US dollars. These demands could be very disruptive along with keeping Iran from using the Swift Code system. Both stupidities are exercises in futility. Irrespective they are happening and they could lead to long-term disruption, which could push Germany further from the euro zone and EU. Europe has changed over the past five years in all ways and more changes are coming.


          As an example, Germany’s ruling parties are going to try to block any further increase to the EU’s bailout machinery, which complicates a Greek rescue and sets up a confrontation with the IMF, which is really a subsidiary of the US government.


          Germany is facing strict austerity to control the national debt and is being asked to give more in raising the bailout firewall to $1 trillion, which is not going over well on Bahnhofstrasse. This could become the moment of truth in Germany’s confrontation with the IMF, Holland, Finland and the Illuminists.


          As a veiled threat Brussels announced that the EU GDP would shrink by 0.3% this year. We see higher positive numbers.


          A Greek depression will sink Europe. Bad news and loss of confidence spreads. Making matters worse Europe cannot come up with any solutions, because there are none.


          Tomorrow the Greek Parliament is supposed to endorse the debt plan with bondholders, which must be completed by March 12th prior to the March 20th deadline when a $20 billion debt payment is due.


          It reminds us of the tactics Gandhi used in the 1940s and 50s, by refusing to play the bankers game. It is surely civil disobedience when those in charge of public facilities refuse to charge fees, merchants refuse to charge VAT, tollbooths are shuttered and subway ticket machines are covered. This is the “I won’t pay movement.” All those austerity measures may be a big failure as people refuse to supply revenues to pay off the bankers. This is the public’s answer to austerity, political scandals, bribes and corruption. One group of protestors were wearing brightly colored vests with total disobedience spread across the back of their vests. They chanted, “We won’t pay for their crisis.” Of course, the government calls them freeloaders.


          As government tries to ban smoking in restaurants there is widespread tax avoidance despite desperate government efforts to stop it. People are refusing to pay for the mistakes, but more the corruption and cronyism of a series of dreadful governments since 1974, particularly the term of Andres Papandreou, the father of George Papandreou. One smoking bar owner put it this way. The rules do not apply to the ministers and others who have been stealing. Well, if the laws are not implemented at the top, others won’t implement them. As you can see the Greeks do not care anymore and we do not blame them.


          Politically both President Sarkozy and Chancellor Merkel are probably going to get thrown out of office. The bankers do not care who has the posts as long as they continue to control them and wiggle out of the toxic debt they own by letting the ECB and the central banks buy it so the taxpayer will foot the bill. As we reported in a previous issue banks only have about 25% of their toxic debt left on their books. The solvent euro zone nations are tired of paying the bills for the perpetually insolvent. The Greek people take no responsibility for what has transpired and that is reflected in the I won’t pay movement.” Two and a half years ago we told Greece to totally default, return to the Drachma and clean their house up. No matter what happens that is the direction in which they are headed. Broke, they may not be able to import anything including oil, although under the circumstances we see Iran making an exception and have been helpful. It is a perfect piece of positive P. R. for Iran.


          The imbalance of the relationship of euro zone and EU nations was allowed by one-interest rate fits all. It should never have happened. Look at the result, economic and financial chaos. After creating such a disaster the bankers and euro leadership do not know what to do. The bankers control the structure, so any conclusions would always be in their favor. If the bankers’ banks go under all their power goes with them. That is why there is no solution. They are holding on as long as possible to their power base. This is the same problem shared by the US, UK and others. The bankers have pushed this problem to the very edge and if Greece defaults by 100% you can expect massive bank losses. Is the Fed going to cover those losses as well, and the answer has to be yes. Inflation will be raining from the skies. The interconnectivity of the world banking system is now its biggest weakness. Like, one goes they all go.


          A Greek or other sovereign default could bring down the system of credit default swaps, a totally unregulated market that keeps the system from collapse. All the news is about Europe and nothing about the US and UK. As we said long ago Europe is being used as a cover to shelter the US and UK.


          Over the last few years, in this publication as well as on Greek radio, TV and in editorials, we said a military coup was possible, and recently we have been hearing such rumors. We thought this was a viable alternative to the appointment of an Illuminist president and the terrible ordeal the Greek people have been through. Greece was entrapped by its political leadership and the bankers. No one ever asks should those loans or bond purchases ever have been made with funds created out of thin air. Of course not, so the bonds and loans should be defaulted upon. All the bankers and politicians knew what was going on but no one said anything. The military could save Greek sovereignty, especially when Germany wants to put Greece under the control of a EU commission, treating it like an EU territory. Under the rules states have to be governed by an elected parliament or government. Military government would exclude Greece. All of this is possible and all we can say is they best have that early April election.


          The stupid arguing has been going on for three years or more, yet no solutions. The EU has lost whatever solidarity and confidence they ever might have had. It has been one long political sideshow. These bureaucrats and politicians have let fraud go on far, far too long. There is no more confidence in Europe – its bankers, politicians and bureaucrats. Trust has evaporated over a long period of time. We get tired of hearing of federalist dreamers when they are in fact Illuminist one-worlders who want to enslave the world. Even those in Northern Europe, who were willing to sell out their countries, are having second thoughts about what they have done. They have finally realized the price is too high.



2/29/12 (9) IF


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Speaking in front of MPs and the leaders of the three main parties – George Papandreou, Antonis Samaras and George Karatzaferis – Schulz stressed that the eurozone crisis was poisoned by suspicion, mistrust and the lack of mutual solidarity.

“It has been painful for me to watch a country which was once so passionately pro-European turn its back on the European Union in disappointment and anger. The fact that the European flag – which should be a symbol of unity and peace, democracy and solidarity – has for some now become a symbol of economic and political subjugation and national self-interest should leave us in no doubt as to the desperate nature of the situation, here and throughout Europe.”

Schulz is the first EU leader to visit the debt-laden country since April 2011, a period during which the population has witnessed massive salary and pension cuts, as part of painful reforms needed to get the EU and IMF rescue packages.

The trip to Greece of Schulz, who is German, coincided with the vote on a package of tough salary and pension cuts that had sparked vivid debate among Greek deputies. MPs passed the law with 202 votes in favour and 80 against, after a roll-call vote.

Although Schulz represented the EU assembly, he has also spoken as a German MEP, whose country has voted in favour of the Greek bailout with 496 votes, but where 62% of the population opposes a second Greek rescue package.

“It has been painful for me to watch as the crisis gradually poisoned the friendship between Greeks and Germans, which has lasted for decades. Admittedly, our relationship has never been an easy one”, he said giving the example of Greek President Karolos Papoulias who had fought against the German occupation at the age of 14 but who later concluded his law studies in Germany.

“Today my home country is living up to its duty of solidarity by guaranteeing the financial support for Greece,” he said.

Facing criticism that Europe today is led by a small number of countries, including Germany, Schulz replied that Germany is only one part of the decision-making body of the European Council and that every decision is taken by unanimity. “For a German Socialist it seems almost obscure to defend Mrs Merkel, but at this point it is essential to avoid generalisation and target specific countries.”

“It is my heartfelt wish that the wounds left by the harsh words which have been spoken should be given the chance to heal and that, rather than being characterised by arrogance, sweeping generalisations and disparagement, our relationship should once again be based on respect, dialogue and cooperation. My wish is that we in Europe should be partners, not adversaries.”

The same plea was made by Italian Prime Minister Mario Monti, who has condemned the dangerous trend of dividing Europe into ‘goodies and baddies’.

Return to growth

As an essential step following the bailout packages, Schulz underlined the need for Greece to  come up with growth initiatives that would boost the economy and create new job opportunities to put the country “back on track”.

“Greece needs confidence-building measures. The 45% youth unemployment rate is unacceptable and we risk losing a generation if we do not act. Greece’s plight is Europe’s plight; we in Europe are all in the same boat,” he said following a meeting with Greek President Karolos Papoulias. The President from his side questioned whether Greek people could bear further heavy cuts.

Meanwhile, rating agency Standard Poor’s downgraded Greece to ‘selective default’ following a bond-swap deal with private creditors.

“Greece must remain in the euro – this is in the best interests of Greece, and in the best interests of Europe.  By saving the euro, we are saving the European ideal”, he said.

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Greece and Israel announced Tuesday a unique diaspora conference, the brainchild of visiting Greek Deputy Foreign Minister Dimitrios Dollis, to take place in Thessaloniki (Salonika) this summer.

The idea to discuss how Greece and Israel can strengthen their ties with their diaspora communities isn’t Dollis’s only brainchild – he is also widely credited with being a major force behind Athens’ dramatic realignment of its foreign policy toward Israel.

The Greek diplomat, who has an Australian accent, lived in Melbourne for 28 years and worked in Parliament, where current Prime Minister Julia Gillard served as his chief of staff.

“Dollis is one of Israel’s best friends in Greece,” said Aryeh Mekel, the envoy to Athens.

“He has been arguing for more than 20 years that Greece should get closer to Israel. He is a close associate of former prime minister [George] Papandreou, and was one of the architects of Greece’s decision to upgrade its relationship with Israel, which has only flourished since then.”

Dollis credits his time in Melbourne, where there are large Greek and Jewish communities that work closely on a number of issues, with planting in him the idea of Greek-Israeli cooperation.

“Our communities abroad have grown up together and cooperate, and it makes sense for us to do it here as well,” he said in an interview with The Jerusalem Post.

Asked what took so long, Dollis replied, “Strange things happen, and strange things don’t happen.”

He said that Greece was preoccupied with everything else in the 1970s and 1980s: the country’s path to the EU, changes after the dictatorship.

“It doesn’t matter that it took so long,” he said of the dramatic warming of ties.

“What is important is that it taking place in truthful manner, with an emphasis on the long run, and not only on the present.”

Dollis returned to Greece in 1999 at a time when Papandreou, then foreign minister, was trying to get Greek expatriates to return to the country.

Dollis became one of his advisers. When Papandreou became prime minister in 2009, he named Dollis deputy foreign minister.

Papandreou, with Dollis advising him, made a historic visit to Israel in 2010, signaling the significant upgrade in ties. While this improvement in relations came as Israeli- Turkish ties were already in a tailspin, Dollis denied that this was part of the equation in improving ties with Israel.

“If we try to build relationships on something temporary, then the foundations would not be real,” he said.

Dollis admitted that some in the Arab world were surprised with the dramatic change in ties – there were nine Greek ministerial visits in 2011, contrasted with almost zero from 1991 to 2010 – but said he did not think the relationship cost Greece friendships elsewhere.

“You don’t lose friends by making new friends,” he said.

Dollis, explaining what Israel could provide Greece, mentioned the country’s expertise in agriculture, water management and technology.

He also said that there were tremendous opportunities for Israeli-Greek cooperation, along with Cyprus, in the energy sphere. With the huge discoveries in Israel’s territorial waters of natural gas, and significant discoveries off the coast of Cyprus as well, Greece is beginning the process of its own exploration efforts, and is interested in being an energy hub for Israeli and Cypriot gas exports to Europe.

“This offers huge opportunities,” Dollis said, adding that Greece could serve as a gateway to Europe. Concrete plans are premature to discuss, he added, since Israel has not yet determined whether it intended to export natural gas west to Europe, or east to Asia.

“We are developing plans to have Greece as a hub for energy distribution,” he said, adding that this was something Israel might take into consideration when considering its own plans.

Asked what Greece was interested in from Israel, the deputy foreign minister said investments. Paradoxically, according to Dollis, the deep economic crisis in Greece was opening up investment opportunities for foreigners, since one of the EU’s conditions for assisting the country is that it privatizes the economy.

This is leading to investment opportunities in a wide range of fields, from real estate to tourist development.

Dollis expressed appreciation to Prime Minister Binyamin Netanyahu for extending a $100 million line of credit in September to Israeli businesses investing or trading with Greece.

As to what else Israel could do to help Greece overcome its present difficulties, Dollis said it was always good to have “friends speaking for you,” alluding to Israel’s ties with the US.

While acknowledging that Greece has very good ties with the US and does not need Israel as a channel to Washington, “it is always better to speak with more than one voice,” he said.

Regarding Iran, Dollis danced around the question about whether Athens was concerned about a possible Israeli strike, saying, “I have learned over the years not to worry about things that I don’t control.”

He acknowledged that Greece was hit hard by the EU decision to embargo Iranian oil, since over the past two to three years the country has become more dependent on Iran as a fuel source than other European countries because of its economic crisis.

Dollis said that Iran became a primary supplier of oil to Greece because it was willing to provide the best credit terms and lowest prices.

Even though Iran became the cheapest source of oil, and over the last two years has at times supplied some 50 percent of the country’s oil needs, Athens is now looking for alternative sources, primarily in Latin America and with the Saudis, Dollis said.

Greece is going along with the embargo decision regardless of the hardship, he stated, because there are some important decisions “you have to make,” and then figure out later ways to deal with their consequences.

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