When you read about female doctors feeling forced to prostitute themselves to feed their children, about the number of miscarriages doubling, and about the overall sense of helplessness and destitution among the Greek population, especially the young, who see no way of even starting to build a family, then I can only say: Brussels is a bunch of criminals. And Draghi’s QE announcement is a criminal act. It’s a good thing the bond-buying doesn’t start until March, and that it’s on a monthly basis: that means it can still be stopped.
Since last May (and likely long before) when the topic of "de-dollarization" was first uttered in official circles (and not just tin-foil-hat-wearing blogs), the rest of the world (un-isolated as they are) has been warming to the idea that perhaps - just perhaps - it is time to de-dollarize (more or less depending on the despotic region in question). From currency swap agreements to bi-lateral trade agreements to selling US Treasuries and greatly rotating USD reserves into gold, the world's nations (small and large) appear less and less comfortable holdings dollars in this tempestuous world. Among the supporters of that first "de-dollarization" meeting were China and Iran and while the former continues to work down its exposure, the latter - Iran, according to Tasnim news agency, has almost entirely eliminated USDollars from its reserves and is no longer using dollars in foreign trade. De-dollarization complete...
Pro-Separatist Rebels Launch Offensive On Ukraine City Of Mariupol, Where At Least 21 Die After Intense ShellingSubmitted by Tyler Durden on 01/24/2015 11:28 -0500
Yesterday the main separatist leader in the rebellious Donetsk region, Alexander Zakharchenko, vowed to push Ukrainian soldiers out of the area and said insurgents would not take part in any more cease-fire talks. Another rebel went even further, saying they would not abide by a peace deal signed in September. The separatists said rebel fighters went on the offensive to gain more territory and forestall a Ukrainian attack. He declared they would push government troops to the border of the Donetsk region and possibly beyond. Which, according to the latest news, is precisely what they have done. As AP reports, indiscriminate rocket fire slammed into a market, schools and homes Saturday in the eastern Ukrainian city of Mariupol, killing at least 21 people, authorities said. Ukraine's top rebel leader announced that an offensive had begun on the strategically important port.
The 7-month-old plunge in oil prices will force Moscow to cut its budget for 2015 by 10 percent, perhaps even 15 percent, a senior Russian government official told a panel discussion at the World Economic Forum in Davos Switzerland, adding that Russia may find itself reducing oil production by as much as 1 million barrels per day, but he stressed that such a cut would not be made in coordination with OPEC.
Another day goes by. Another day of the West’s (the One Bank’s) economic terrorism against Russia: an overt attack on that nation’s currency, and thus the economy itself. As noted in the commentary which preceded this; such economic terrorism against the ruble damages Russia’s economy, on a percentage-for-percentage basis.
Another day of defiance: by Russia itself, and (increasingly) the Rest of the World. We now know that part (and perhaps most) of the motive for this escalation of Western terrorism against Russia is gold.
The ongoing 'isolation' of Russia took another turn for the un-isolated-er today when, as Bloomberg reports, China will build a 7,000-kilometer (4,350-mile) high-speed rail link from Beijing to Moscow, at a cost of 1.5 trillion yuan ($242 billion), Beijing’s city government said. The rail-link - which will bring travel time between Beijing and Moscow down from 5 days to 30 hours - signals a 10-year partnership between the two nations and follows the dropping of the French company, Alstom, from the project.
If speeches like the State of The Union this week, and the reactions to it, make anything clear, it’s that the PR guys won the fight against critical thinking. All you need to do is get people to believe whatever it is you got for sale. And 99.9% of people are easily fooled. That’s how you define democracy in 2015: how many people can you fool? Which is the most convincing sleight of hand?
With NATO's top military commander, General Breedlove, proclaiming that fighting in Ukraine is worse than pre-truce levels (and noting he could not confirm Poroshenko's Russian force numbers accusations), the news overnight, as The Telegraph reports, that Ukrainian forces appeared to withdraw from Donetsk airport last night, ending an 8-month battle in a bitter blow for pro-Kiev forces and apparent triumph for the Russian-backed separatists they are fighting. While the Pro-Russian separatists' Pyrrhic victory over the completely destroyed (as we noted here) airport may be a blow, a Ukrainian military spokesman on Thursday played down the surrender of the terminal buildings, saying it was simply a tactical withdrawal. Additionally, Russia has denounced an attack on a bus in separatist-held Donetsk which killed civilians as a "monstrous crime."
Greece's bailout program is not working. After receiving hundreds of billions of Euros in new loans to stave off a sovereign default, Greeks are on the verge of electing a new government that may throw Eurozone politics into turmoil. How things will play out in Greece and abroad is anybody’s guess. But it is important to consider the factors which have contributed to the current state of affairs.
NATO's Jens Stoltenberg unleashed the latest tirade against Russia this morning proclaiming - though offering no proof - that there are Russian forces and heavy equipment in Ukraine and a high number of Russian forces on the border which "doesn't contribute to a peaceful solution." Apparently pre-empting this outburst, Pravda reports Anatoly Tsyganok, director of the Military Forecasting Centre, exclaims, "Ukraine reiterates that Russia is in the war, but it's not true," adding that in fact "the USA and the NATO have artificial satellites continuously circulating above this territory and control the situation," concluding with a jab at The US & NATO that "Russia has never participated in the military conflict. And no attempt to involve Russia in the conflict will be crowned with success." The propaganda battle continues...
- Obama Targets Income Gap in Address That Shapes 2016 Election (BBG)
- Republicans Reject Obama’s Main Economic Proposals (WSJ)
- Senate’s Shelby Says White House Bank Tax Is Dead on Arrival (BBG)
- Is Dollar Next? Investors Reassess After Swiss Shock: Currencies (BBG)
- Bank of Japan Cuts Price Forecast, Maintains Record Stimulus (BBG)
- Pound Weakens After BOE Policy Makers Drop Call to Raise Rates (BBG)
- Putin not flinching on Ukraine despite economic crisis (Reuters)
- Indonesia will not make public full preliminary AirAsia crash report (Reuters)
- Party Hasn't Stopped for Russians at Davos Even With Ukraine Sanctions (BBG)
Major central banks claim to be independent, but they are totally under the control of politicians. Many developed countries have tried to anchor an independent central bank to offset pressure from politicians and that’s all well and good in principle until the economy spins out of control – at zero-bound growth and rates central banks and politicians becomes one in a survival mode where rules are broken and bent to fit an agenda of buying more time. What comes now is a new reality...
UPDATE: Full SOTU Speech released - "THE SHADOW OF CRISIS HAS PASSED"
By now it is well known that The State of The Union tonight will be about President Obama's Robin-Hood Agenda. Furthermore, it is entirely clear that his proposals have no chance of becoming law. As WaPo's Marc Thiessen notes, Obama is not delusional, his move is completely and transparently political... And just as Eric Cantor suggests will merely serve to inflame the GOP. From taxes to cyber security and from community college to housing... in 50-65 minutes, all will be clear...
The fix for low oil prices is... low oil prices. Past some point high-priced producers will naturally stop producing, the excess inventory will get burned up, and the price will recover. Not only will it recover, but it will probably spike, because a country littered with the corpses of bankrupt oil companies is not one that is likely to jump right back into producing lots of oil while, on the other hand, beyond a few uses of fossil fuels that are discretionary, demand is quite inelastic. And an oil price spike will cause another round of demand destruction, because the consumers, devastated by the bankruptcies and the job losses from the collapse of the oil patch, will soon be bankrupted by the higher price. And that will cause the price of oil to collapse again. And so on until the last industrialist dies...
After reportedly rejecting Vladimir Putin's peace proposal and continuing heavy shelling in the pro-Russian-held regions of Donetsk, Ukraine's military spokesman Lysenko is reporting the Russian army is directly attacking Ukraine forces in the north conflict zone. The fight over what is now a destroyed Donetsk airport continues with Lysenko claiming to have stalled Russian forces adding that three Russian battallions are approaching the Ukraine border. CNN reports that the Russian Defense Ministry says, "Ukraine's allegations that Russian troops are in Ukraine are complete rubbish."