Posts Tagged ‘France’

Euro Gypsies: ‘The Right to Roam’

January 16, 2013

Unwanted, marginalised, defiant – the Roma people have become the target of governments across Europe.

In France and Italy they have been thrown out in their thousands – accused of illegally overstaying their welcome and blamed for increases in crime.

They say that in their countries of origin they are victims of discrimination – a minority with few opportunities.

They are now taking advantage of European Union laws that allow freedom of travel to all European citizens – looking West to find a better life, yet reluctant to adapt to Western ways.

The Roma issue has now been forced on EU policy makers – they have to find a balance between the growing hostility and the rights of the Roma.

Panetta: Pentagon may provide ‘limited logistical support’ to French in Mali

January 15, 2013

Washington Post
Craig Whitlock
Jan 16, 2013

LISBON – The Pentagon may become involved in military operations against Islamist rebels in the West African country of Mali by providing airlift and “limited logistical support” to French troops fighting there, Defense Secretary Leon E. Panetta said Monday.
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“We have a responsibility to go after al-Qaeda wherever they are,” Panetta told reporters as he began a weeklong trip to Europe. “We’re going after them in Yemen and Somalia, and we have a responsibility to make sure that al-Qaeda does not establish a base for operations in North Africa, in Mali.”U.S. defense officials said they were reviewing requests for assistance from France, which sent troops to Mali on Friday in an urgent attempt to prevent Islamist rebels and other guerrillas from overrunning the ragtag Malian army. Islamist fighters and Tuareg rebels have gained control of the northern half of the country over the past year, enabling al-Qaeda’s affiliate in North Africa to function unimpeded in a swath of territory the size of Texas.Panetta declined to provide further details about what kind of military assistance the Pentagon might bring to the conflict, but said one option under consideration would be to deploy transport aircraft that move French troops or equipment.The Obama administration has previously ruled out placing “U.S. boots on the ground” in Mali. Officials traveling with Panetta declined to comment when asked if U.S. transport aircraft might actually land in Mali to help the French, or if the territory remained off limits.The United States, France, the United Nations Security Council and several African countries have been working for months on a joint plan to intervene militarily in Mali, one of the poorest and most remote countries in the world.

The planning, however, has been undermined by strategic disagreements, a lack of firm commitments to send troops and Mali’s internal political dysfunctions. The country’s democratically elected president was toppled last March in a coup led by a rogue Army captain who had received military training in the United States. Factionalism has worsened since then as Islamist fighters have tightened their grip on the northern half of the country.

Another complication is that the United States is prohibited by law from providing direct military assistance to the Malian government because of the coup. The Pentagon had to shut down training and aid programs in Mali last year and remove virtually all military personnel.

The U.S. military already has been sharing intelligence about the Mali rebels with France, an exchange that will continue, according to a senior U.S. defense official who spoke on condition of anonymity to discuss sensitive operations. The official said the Pentagon was also considering whether to deploy tanker aircraft to Africa to provide mid-air refueling for French warplanes.

The United States has conducted surveillance over Mali for years with satellites, high-altitude Global Hawk drones based in Europe and small PC-12 turboprop planes based in Burkina Faso, on Mali’s southern border.

Flying armed Reaper or Predator drones over Mali is not an immediate option, however; the Pentagon lacks a base in the region for those aircraft.

The turmoil in Mali was triggered, in part, by a flood of fighters and weaponry arriving from Libya after that country’s civil war erupted. When Libyan ruler Col. Moammar Gaddafi was killed in 2011 – thanks largely to a NATO-led military intervention — many mercenaries and Tuareg rebels who had supported him crossed the Sahara to return to Mali, further stressing the already weak government there.

Asked if the NATO’s involvement in Libya was partly to blame for the unrest in Mali, Panetta did not answer directly but said that al-Qaeda factions have demonstrated an ability to adapt by moving to new regions.

“With the turmoil in Mali, they found it convenient to use that situation to gain some traction there,” he told reporters on his plane while flying to Europe. “There’s no question as you confront them in Yemen, in Somalia, in Libya that they’ll ultimately try to relocate. The fact is, we’ve made a commitment that al-Qaeda is not going to find any place to hide.”

Panetta is scheduled to meet with NATO allies this week in Portugal, Spain, Italy and Britain in what he said is “likely” is last international trip as defense secretary. President Obama has nominated former Nebraska Sen. Chuck Hagel to succeed him.

RELATED: La Folie Solami: Black Hawk Down… Part Deux

Mali Mayhem: ‘French post-colonial ambition to spark African anger’

January 15, 2013

Northern Mali was captured by Islamist militants nine months ago; the international community has been debating since then over what action should be taken. The conflict escalated last week when France launched its air assault to “maintain stability in the region.” Eric Margolis, an award-winning columnist who’s extensively covered conflicts in Africa, believes president Hollande is sensitive to France’s role as a former colonial power in Mali.

France fails to free intelligence agent held in Somalia; Paris sends more troops to Mali

January 14, 2013

PARIS — As France reinforced its intervention forces in Mali with additional aircraft and soldiers, Frenc commandos launched a failed raid on the other side of Africa in a vain attempt to rescue an intelligence officer held captive for 3½ years in Somalia, the Defense Ministry announced Saturday.

The unsuccessful overnight rescue attempt, in the Somali town of Bulomarer, was separate from President Francois Hollande’s decision Friday to intervene on the ground and in the air to shore up the crumbling Malian army against Islamist guerrilla groups that have controlled the northern two-thirds of the country for more than seven months.

But both operations seemed to propel France into a position of new prominence in Western efforts to prevent Islamist terrorist groups from establishing themselves — as they did in Afghanistan and Somalia — in countries without solid state institutions that could become launchpads for attacks on European or U.S. interests in Africa or elsewhere around the world.

The failed rescue in Somalia, which cost France the lives of at least two people, dramatized the dangers facing the French military as it takes on the Islamist groups in hostile regions of northern Africa where they have taken root. The Mali-based extremists, for instance, hold seven French hostages and threatened retaliation for Hollande’s willingness to dispatch French soldiers to help restore Malian state authority.

Four French hostages captured in September 2010 at a northern Niger uranium mine and two abducted in northern Mali in November 2010 are held by the region’s main Islamist group, the mainly Algerian al-Qaeda in the Islamic Maghreb (AQIM). A seventh French citizen was taken into custody two months ago on the Mali-Nigeria border by the Movement for Unity and Jihad in West Africa, an AQMI spinoff.

Some of their families have questioned Hollande’s resolution to support the government in Mali, fearing it could lead to the execution of their loved ones. But Hollande has consistently replied that the threat of international military action was the best means of pressure on the hostage takers.

Failure in Somalia

The Somalia rescue operation was designed to liberate Denis Allex, the official identity of an agent of the French intelligence service, the General Directorate for External Security (DGSE). Allex and a colleague were abducted by Somali Islamists in July 2009, soon after the pair, posing as journalists, checked into a hotel in Mogadishu, the Somali capital.

In fact, reports at the time said, they were assigned by the DGSE to train the close protection squad of Somalia’s beleaguered transitional government as part of a French military aid program. Allex’s colleague escaped his captors a month later, but Allex remained in the Islamists’ hands in what the Defense Ministry described as “inhumane conditions.”

Defense Minister Jean-Yves Le Drian told a news conference that “everything indicates” Allex was killed by his captors as DGSE commandos assaulted his place of imprisonment at Bulomarer, an Islamist-controlled town about 70 miles southwest of Mogadishu.

Washington Post
Edward Cody

 

Robbing Recessioners ?

January 6, 2013

As standards of living across the eurozone continue to fall, a number of age-old problems are on the rise. In France, the faltering economy has led to a startling surge in armed robbery – with gold and high-value jewellery the main target.

‘Millions in Harlem March’ Aims to Stop US, NATO War-making in Libya

August 4, 2011

By Saeed Shabazz
FINAL CALL
August 4, 2011

NEW YORK (FinalCall.com) – Activists representing a broad coalition of anti-war organizations, the Nation of Islam, the political left, Islamic organizations and a plethora of grassroots community organizations recently stood together on the stage of the Assembly Hall at the Riverside Church, proclaiming that “all roads lead to Harlem” for the Aug. 13 “Millions in Harlem March” to stop the bombing of Libya.

There is a huge gap between Western Media reports in Libya and what is actually going on there.

“Where are we going to be on Aug. 13?” asked Sara Flounders, co-director of the International Action Center, the main sponsors of the Riverside Church event. “In Harlem!” the standing room only crowd shouted back.

“President Barack Obama never believed that his actions against Libya could galvanize the movement that will be in the streets of Harlem on Aug. 13”, said Abdul Akbar Muhammad, the international representative of the Nation of Islam, in response to a question from The Final Call. Marching alongside of the Nation of Islam the second Saturday in August will be members of the “White Left and other progressives, Pan Africanists, Black grassroots organizations and national Islamic organizations,” he added.

The Honorable Minister Louis Farrakhan will be the keynote speaker at the Harlem march. “Min. Farrakhan will deliver a dynamic speech from 110th Street to 125th Street,” said Mr. Muhammad. The march will start at 110th Street.

The United Nations Security Council March 17 passed resolution 1973 by a vote of 10 in favor with five abstentions, authorizing the North Atlantic Treaty Organization (NATO) to begin a “no-fly zone” over Libyan air space, alleging President Muammar Gadhafi was targeting civilians in the North African nation.

Some Libyans had begun anti-Gadhafi demonstrations in February in the city of Benghazi, which turned into armed rebellion. The UN offered no proof Libya’s leader was killing unarmed civilians, though he vowed to fight those who had taken up arms against the government.

INNOCENT? There is still no evidence that Gaddafi had "gunned down innocent protestors" back in Feb 2011.

The U.S. and France March 18 started bombing so-called military targets, but the damage done by a “peace effort,” according to some observers, was more costly than what the Libyan leader had been accused of. Then came attacks on personal compounds that killed Libyan officials as well as a son of Col. Gadhafi and his grandchildren. NATO bombs hit the home of Libya’s leader at least twice as Western nations declared he had to go, pushing a policy of regime change.

Cynthia McKinney, a six-term former congresswoman from Georgia, was the keynote speaker for the Riverside Church rally. She told The Final Call she agreed with Mr. Muhammad’s assessment. “This will galvanize public opinion, as people see this as being important to them. Obama certainly stumbled this time,” referring to the president’s continued support for the NATO bombing of Libya. According to news outlets, the Obama administration is sending $10 million a day to NATO for the bombing of Libya.

Ms. McKinney had been on an 11-city tour telling packed audiences about her experiences in Tripoli in the early days of the NATO/UN aggression.

“There is definitely a buzz in the streets around Aug. 13,” said Larry Holmes of the Newark-based Bail Out the People Not the Banks movement. “Expect people to be in the streets of Harlem in numbers,” he said.

Information about the street mobilization for the march may be found at www.millionmarchinharlem.com. There are organizing teams in all five New York boroughs that have saturated neighborhoods with green posters announcing the march.

“The people are very excited about the march, and Min. Louis Farrakhan as the keynote speaker is great. We are going to fill up Malcolm X Boulevard,” said one volunteer.

During a June 15 press conference at a hotel across the street from the United Nations, Min. Farrakhan told the media the “United Nations, U.S.-sponsored, NATO-led bombing of the North African country of Libya” was the work of “a coalition of demons,” governments who have joined together to assassinate Col. Gadhafi.

But even some who voted for the initial resolutions and allowed the resolutions to pass have expressed reservation, if not outright regret. The African Union, in particular, has been calling for and working for a negotiated settlement only to be disregarded by Western nations intent on putting a new Libyan government in place.

The South African ambassador to the UN, Baso Sangqu, told the 15-member Security Council July 28 that his country’s delegation “echoes the African Union demand for an immediate pause in the fighting and in the NATO bombing.”

“We have noted the calls that ‘Gaddafi must go.’ We maintain that such statements do not bring us closer to a political solution,” the South African ambassador said. South Africa is occupying a rotating seat on the Security Council and supported the initial resolutions.

In a speech that was not widely covered by the media, Ambassador Sangqu said, “South Africa remains concerned about the implementation of resolutions 1970 and 1973. Taking sides in an internal conflict situation to institute regime change in Libya sets a dangerous precedent that will surely damage the credibility of the Security Council.”

“Clearly action focused on a military solution has not had its intended purpose, instead it has worked to destabilize the country even further,” he added.

Gabon and Nigeria also initially voted yes on resolutions 1970 and 1973, but the African Union has strongly condemned the bombing of any African nation.

The UN Secretary General’s special envoy to Libya announced July 26 through a press office that the “two sides remain far apart on reaching agreement on a political solution.” The two sides are the Gadhafi government and the rebel Transnational Council, which the U.S., France, Italy, Britain have recognized as the legitimate government of Libya.

The two sides, however, “have reaffirmed their desire to continue to engage with the UN in the search for a solution,” said special envoy Abdel-Elah Al-Khatib, a member of Jordan’s parliament. Libyan Prime Minister Baghdadi Al-Mahmoud reiterated his government’s previous positions against the NATO air strikes and against the removal of Libya’s president.

“There comes a time when people have no alternative but resistance,” Viola Plummer, co-founder of the December 12th Movement one of the sponsoring organizations for the Harlem march, said July 30.

“This march will revitalize the Pan African movement. It will broaden our people’s world view and demonstrate the need for Africans to unite in our own political and economic interests internationally,” she added.

“We must expose the UN Security Council machinations, Western imperialism; the attack on Black people in the U.S. and all collaborations at every turn,” Ms. Plummer said.

March organizers say the Harlem event has garnered worldwide attention. One dignitary supporting the march is Father Miguel d’Escoto Brockman, a former Nicaraguan foreign minister and the 63rd president of the UN General Assembly.

During his speech at the press conference announcing the march, Father Brockman said the event was important in light of how the media “systemically deceived” the American people.

Meanwhile the killing of a major rebel commander by compatriots raised questions about how the group could stay together and raised again reports that elements of Al-Qaeda were heavily involved in the rebel effort. (See related story on page 12.)

The Chinese news service Xinhuanet reported July 31 NATO’s claim of bombing three satellite dishes in Tripoli to “stop” what was labeled “terror broadcasts” by President Gadhafi. However, there are Twitter messages, also July 31, that say Libya television is still on the air.

Just before the Aug. 1 start of Ramadan, the Muslim month of fasting and prayer, NATO bombs struck Tripoli, and officials in Brussels would not rule other more strikes—though they were worried about a possible backlash in the Muslim world about strikes during the sacred month. “Tripoli shook with the sound of several explosions as NATO warplanes roared overhead doing what they have been doing since March, striking at what are supposedly Al Qathafi strategic infrastructure, particularly in the Libyan capital, Tripoli,” the Tripoli Post reported. “In normal times, much of the economy in Muslim countries world-wide shuts down as everyone enters a 30-day period of all-day fasting, prayer and the strict avoidance of conflict. But for Libyans this year it is an altogether different proposition. Libyans worry about sanctions and NATO strikes during this month.”

“There is an ongoing armed internal conflict as the rebels from the eastern part of the country battle on in order to reach their aim, of toppling or forcing Libyan leader Muammar Al Qathafi to step down from his high chair. They are involved in a battle that is barely making progress at the best of times, and with NATO forces, attempting to bomb Al Qathafi out of office,” the English language publication said.

“The NATO alliance thought it could finish it off before the start of the Muslim holy month of Ramadan, in time for a new government to take shape. They failed and this month could become a perilous black hole threatening to undermine their whole campaign,” the Tripoli Post observed Aug. 1. “Muslims are not allowed to fight amongst themselves during Ramadan; they are also not allowed to attack another nation. However, they will fight back if they are attacked first, they are allowed to do that.”

     EDUCATIONAL FILM: The Process of “De-Demonizing” Gaddafi

NORWAY’S MONSTER AND THE QUESTION

July 27, 2011

By Alan Hart
Opinion Maker
July 27, 2011

How much was the mind of Anders Behring Breivik conditioned and warped by Zionist propaganda as peddled with the assistance of Christian fundamentalism by much of the Western mainstream media and many web sites?

In his summary of what the monster had stated behind closed doors in court, Judge Heger said he had argued that he wanted to create “the greatest loss possible to Norway’s governing Labour Party”, which he accused of failing the country on immigration and opening the door to the “Muslim colonization” of Norway and all of Europe.

AGENT OF INFLUENCE: How much of Breivik's manifesto will influence public opinion and impact society?

There could not have been a more effective way of inflicting at a single stroke a great loss than gunning down many members of the Norwegian Labour Party’s youth wing, the Workers Youth League (AUF), which was assembled on Utoya Island.

Two days before the massacre there, and as Gilad Atzmon has researched and noted, the AUF’s leader, Eskil Pedersen, gave an interview to Dagbladet, Norway’s second largest tabloid newspaper.

In it he said: “The AUF has long been a supporter of an international boycott of Israel but the decision of the last Congress demands that Norway impose a unilateral economic embargo on the country… I acknowledge this is a drastic measure but I think it gives a clear indication that, quite simply, we are tired of Israel’s behaviour.” (My own view is that behind closed doors all Western governments, including the one in Washington D.C. in the person of President Obama, are tired of Israel’s behaviour).

There are two things we know for sure.

One is that Breivik is fanatically anti Islam and pro Zionism.

The other is that Zionism’s propaganda machine has been set to work at full speed, day and night, eight days and nights a week, to demonize, discredit and destroy all who are calling and campaigning for Israel to be boycotted.

From the obscenity of the Nazi holocaust to the present, Zionism’s success in selling its propaganda lies as truth is the reason why the search for peace based on an acceptable amount of justice for the Palestinians has been, and remains, a mission impossible.

I describe the Israel-Palestine conflict as the cancer at the heart of international affairs which threatens to consume us all. It’s bad enough that Zionist propaganda has prevented a cure for it, but if now that same propaganda is inspiring Europeans in Europe to slaughter their own, the future is very, very frightening.

I don’t know the answer to my headline question but I think investigators in Norway, prosecutors and psychiatrists, must dig deep enough to find it.

FATHER OF NORWAY GUNMAN HELD UP IN FRANCE, PROTECTED BY ARMED LEGION

July 26, 2011

By Patrick Henningsen
21st Century Wire
July 26, 2011

Following the Norway Massacre this past weekend, the background story on gunman Anders Breivik is slowly being pieced together.

It has been reported that his father, Jens Breivik is currently being protected by police and gendarmerie, including French Foreign Legion guards around his luxurious villa in the village of Cournanel, in the Aude region near the Pyrenees in south-west France.

Father Jens Breivik held up at his villa in South West France (PHOTO: Sipa Press/Rex Features)

Speculation has been rife regarding the family of Anders Breivik. According to recent French reports, the father turned up in France, officially in 1995. Neighbors in his village of 600 inhabitants “never saw him and didn’t know he existed”. Some reports say he is married and lives with a wife or female companion, others say he lives alone.

To date, were details were given on what the father did, or does as a profession or occupation. He was simply described as “retired”.

In a broadcast discussion Sunday by the Norwegian newspaper Verdens Gang, Jens Breivik was said to be “in a state of the shock”. 

According to the interview, the retired Norwegian ex-pat had not seen his son since years and only discovered his involvement in Friday’s massacre while reading newspapers on internet.

According to the discussion, he had no relations with his son since 1995, and said that his son went to the USA when the family broke up in Norway during the 1980’s. Following last week’s tragic event the father vowed never to return to Norway.

It is reported that Jens Breivik was an economist for the Norwegian embassy in London. He had already been married and had three children when he met Anders’s natural mother, Ms Wenche Behring, a nurse living in the city with her own daughter from a previous relationship. Within a year of Anders’s birth, in February 1979, the couple had split. Jens Breivik remained in London and Anders’s mother then moved back to Oslo with Anders and his elder half-sister.

Anders’s natural mother later married a Norwegian army major and settled in Oslo. Jens went on to married a fellow embassy worker, Tove Overmo, later moving to Paris.

More details about his family background can be found in the recent Guardian report here.

According to the father, Anders was “a very ordinary boy”, and that when he lived with his son “he was always secretive”.

Breivik also stated that his wish was that his son “should have committed suicide”.

Local government official in Carcassonne, Antoine Leroy, indicated to AFP reporters that the policemen have been located there since Sunday, as a preventive measure. 

“There should be no indication to think that there is the least threat against the father, this is preventative measure only.  There were rumors of a search of his villa, but this is not true”, declared the french prosecutor. 

If military officers belonging to the Foreign Legion were seen Sunday in front of the villa, but this was because the one of them was working as translator, indicated prosecutor Leroy yesterday. 

French police foresee a long-term presence to oversee the approaches to the house of the father, set away in this quiet town of 600 inhabitants. 

FIAT vs METAL: DREAMTIME GOLD, THE EURO AND OTHER NEW MONEYS

July 16, 2011

The ECB is technically insolvent, but we won’t hear that on primetime

By Andrew McKillop
21st Century Wire
July 16, 2011

Once upon a time there was the Eurozone and its all-new hard money, the EURO…

It got off to a good start with a monstrously high forced surrender cash-in rate for the national moneys it replaced: depending on country, around 15 to 25 percent above the euro’s real worth. This yielded several years in the early 2000’s when it wasn’t even necessary to doctor the official inflation numbers, but through a penchant for old ways and traditions, national economic agencies, the European Commission, the ECB and other rightly named players kept on doing it. This made sure that all of its fundamental economic data was absolutely fake, an important aid to launching a now-floundering ‘cuckoo’ fiat money.

KEEPING THE MONEY STRONG

The 1956 Treaty of Rome and subsequent treaties like Maastricht and Nice lectured that governments must leave their central banks alone and not force them to liquidate gold assets. They could play around with SDRs and paper gold behind closed doors at the IMF, but in their home patch the central bank’s role is currency and money supply management, not government financing woes. Making this a lot less than sure by creative interpretation of the founding texts, the creation of the ECB and operation of the Eurozone, recently expanded to 17 countries, included the Protocol of the European System of Central Banks and European Bank, with “ESCB” being the correct name for the Euro zone. 

THE "EURO-FED" : The ECB will not be told what to do by the European Union.

This protocol says in one of its Articles that neither the ECB, nor any national central bank, nor any member of their decision-making bodies will be told what to do by any European Union institution, body or national government. 

Another article prohibits community institutions or governments having what the article calls ‘overdrafts’, or any other type of easy loan facility with the ECB, or with any national central bank. This rather ferocious, seeming limit on selling gold, of course in secret, was easily got around by interpreting it to mean that gold cannot be put up as collateral for loans received by a central bank and passed on to private banks or to its national government- but it can be swapped.

While the IMF’s recent director Strauss-Kahn was surely interested in wife-swapping, his gold-swapping appetite was even stronger, with the IMF’s action in this domain on an extreme high since Strauss-Kahn moved in, during late 2007. Since then, the swapping bug has new and powerful adepts, or competitors, in Europe as the IMF, ECB, the US Federal Reserve and European central banks scramble to invent, shuffle, swap and sell paper gold, buy government debt, and bail out any private banks who belong to the club.

SELLING GOLD

The ECB under another French political nominee, J-C Trichet, lost no time with its Eurozone central banking partners in ignoring these strictures and ran official gold sales rising from around 35 tons a year, to their first high point in 2009 at 142 tons. In 2010 the brakes were slammed, and sales crashed to 6.2 tons. Official reasons given for this nicely underline the schizophrenic balancing act played out by all central banks and the governments they are officially independent from and unrelated to.

On the one hand central banks seek a low and preferably declining gold price, because a low gold price (by money magic) means that fiat paper moneys they also print and circulate will seem relatively stronger in comparison. To help that process, claimed to generate and maintain confidence and trust in their paper moneys, they have to sell gold.

On the other hand if the gold price is rising, they have to buy gold, and by 2010 (in fact long before), gold was showing ugly signs of going only one way: up. Central bankers mulled the dire fact that gold, by 2010, had its best 10-year streak for price growth – since the 1920s – a fateful decade for central bankers, and everybody else after 1929.

The Central Bank Gold Agreement (CBGA) set at the dawn of the 2000’s, sought limited and controlled European central bank gold sales because of concern that uncoordinated selling was destabilizing the gold market and driving down gold prices too far – despite this being what one side of the Jekyll-and-Hyde central banker psyche wants.  In February 2001 gold prices had fallen from their previous record high (in nominal dollars) of $850 an ounce, reached in 1980, to $253. By September 2010 the price had grown to $ 1300, and today is menacing to break out from current levels around $1550 to unknown and exotic new extremes – for central bankers.

By pure schizophrenia therefore, gold selling suddenly became dangerous and unacceptable in late 2010 but well before then, from 2008, national governments were in panic mode on sovereign debt, budget deficits and collapsing private banks across Europe, in the USA, and Japan. They needed huge new amounts of financing, and central banks had no choice but to pony-up liquid cash using the only real hard asset they have: their gold reserves. They were therefore thrust into the purest of all two-way splits: they had to buy (or in fact invent) gold, while they also had to sell both real and invented gold: needing a frenzy of gold swaps.

THE FRAGILE ECB

The ECB could be called the worst possible mix-and-mingle of classic central bank and semi-federal bureaucratic institution. Both secretive and incompetent, it has intensified Europe’s sovereign debt crises by waiting too long to act, then panicking in an unproductive way. The Bank’s hard asset gold and gold related financial resources (called gold-related receivables), are based on its declared gold reserves of 522 tons at end 2010, with a value of less than €20 bn at today’s gold price ($1550 per ounce). With other resources, whose value or present worth is market price-related, its total reserves are in nominal terms about €82bn but its current operations and exposure, notably the buying of Greek debt and loans to Greece, and loans to other PIIGS countries, stood at around 444 billion euro as of June 2011.

The Bank is therefore now leveraged around 23 to 24 times relative to its real capital base, meaning that should the ECB see the value of its assets fall by less than 5 percent, from booking losses on its loans, from purchases of bad government debt in the PIIGS, or from selling gold at one price but then having to buy it back again at a higher price, its entire capital base would be wiped out. To be sure, that is ‘unthinkable’ because the ECB, even more so than most other central banks is ultimately underwritten by taxpayers. In turn this means there is a hidden – and potentially huge – cost of the Eurozone crisis to taxpayers buried in the ECB’s books.

Hefty losses for the ECB are no longer a remote risk. Greece is effectively already in ‘rolling default’  because it does not have the capacity to pay double-digit interest rates on its ballooning debt, as shown by the supposedly disappointing results from each new bail-out package from the EU, ECB and IMF. To date. the ECB has probably taken on around €200bn in Greek assets, in other words well over twice the ECB’s capital base, and as much as 8 times the value of its 500-odd tons of gold at current gold prices. Since value compression from the penny-on-the-dollar forced sale of Greek national assets is predictably ferocious, and investor-speculators operate a classic raid on its assets, encouraged by all the institutional players including the European Commission and European governments, this will cause large losses to the ECB.

Some forecasts put the probable loss for the ECB, only on its Greek operations at around €45 to €65 billion, depending on how deep the write-downs and losses are and how long the crisis drags on.. 

A loss of this magnitude would make the ECB insolvent – meaning taxpayers in the Eurozone 17 countries will have to finance its recapitalisation. Alternatives exist: the Bank could ask Eurozone governments to send it more cash through a capital call on their national central banks, which could sell some of their gold to raise the cash. In theory and almost always in practice when a central bank is recapitalised it will print and issue more money. The ECB would therefore almost certainly print more euro notes and organize more euro coin minting, making it certain the results are inflationary, which is  specially unacceptable for Germany, the strongest economy in Europe, with the second-largest central bank stock of gold in the world. The risk of Germany quitting the euro, or in fact, keeping it for a selected and restricted club of ‘hard money capable’ countries would radically increase. 

THE NUMBERS DON’T ADD UP

Looking at the debt-and-deficit crises of the Europe-USA-Japan threesome it is hard to say which one might be less out of control than the others. Each has its special edge of unreality and uncontrollability, with the USA oppressed by the single biggest debt load, the Europeans having the fastest spreading and most dangerous loss of control, and the Japanese having the oldest and most untreatable hyper-debt.

If we took the total official gold stocks of the world’s 180-plus central banks, or the 15 – 19 European parties to different versions of the CBGA since 1999, and the current gold price which central bankers tell us is extreme high and dangerous, the present total net worth of these two official gold piles is not just tiny, but minuscule in relation to present-day sovereign debt and deficit crises.

If by magical means it was possible to sell the biggest of these two piles, world total central bank gold reserves as reported to the World Gold Council, around one-third of it held by CBGA parties, this would produce about $1500 billion. This is far short of the Obama administration’s annual deficit for 2011. Even the recent and current ECB and IMF bailout of Greece, costing above $250 billion, is one-sixth of that amount – to unsuccessfully bail out the sinking finances of one small country with 11 million inhabitants. Japanese sovereign debt is over $12 300 billion, and growing, most recently by a probable $150 billion hit from the Fukushima disaster, with the same again for tsunami damage.

Question: What can central bank gold stocks do against that ?

Possibly this is known, but also possibly it is too extreme to be understandable – by central bankers and their ilk. Heavy attention in government-friendly and politically correct media has gone to the horse-trading process for shoehorning France’s own Christine Lagarde, a near world class swimming champion in her youth – into the IMF. Europe wants and needs the directing role, because Europeans must invent and swap an awful lot of gold, fast.

Under Strauss-Kahn the “loan portfolio” of the IMF was multiplied from $1 billion in 2006 to around $100 billion today, and the amount of paper  SDRs the IMF could print, allocate and shuffle between member countries were drastically raised, but the numbers remain derisively small compared with the size of the problem.

The next quantum leap in IMF financial resource creation, all of which have a ‘gold handle’ somewhere in their design, might only need to be 10-fold, or 20-fold, we are told by believers to expect ‘good luck’ and to muddle through, but how the IMF could do this trick is still relatively unknown. In the event of failure, we are forced back to the rather gob-smacking scenario of an ‘entirely new money’ being created.

Financial markets, as expected are doing their predictable best to drive the crisis. The US debt ceiling of $14 300 billion sets a nice playing field for political horsetrading and name-calling;  after Greece, market operators in Europe are quaking with music hall fear from their surprise discovery that Italy is a super Greece;  and Japan’s latest weak government is on its way out as national debt racks on and up by as much as $400 billion only since March. Ingredients have fallen into place for a Summer Panic on world stock markets – which is unusual in modern times, but no problem at all if we go back to classic Victorian-era panics.

NEW MONEY

To be sure, both political elites and their well-disciplined media and press supporters will hunker down and try to ignore the crisis, driving financial market operators to new extremes of saying out loud what they want: easy cash and low interest rates. They have the whip hand for exactly that reason. Easy cash and low interest rates has been the only tune in town since 2008 – but the results are unreal. Saying there is no cause for concern is nice or traditional, but the vastest amounts of extra money ever printed in human history has failed to do anything to, or with the real economy: this is more than just alarming.

Today’s crisis is totally unlike the 1979-1980 panic era. This is despite the “Crash of 79” being cited more and more as the likely model for what happens now, featuring the solid-looking precedents of high gold and oil prices, high unemployment, banking sector stress, rising government deficits and falling regimes in the Arab and Muslim world. Today’s crisis has major missing ingredients: high inflation and high interest rates. It also includes ingredients that weren’t present in 1979: the BRICS are big creditor nations today, both China and India are massively industrialising. They have both, like Russia and Brazil, on many times warned they are not happy with the dollar’s constant loss of value. In 1979, sovereign national debt in the OECD countries was often tiny and sometimes nonexistent – Japan for example was a huge net creditor country with the rest of the world.

One new money could in theory therefore come from over the horizon, BRICS Money, but even a moment’s look at the idea shows this neat fantasy is as unreal as the debt-and-deficit crisis of the OECD group. Gold-backed money, an idea that was tried in the 1920s, but resulted in gold prices only rising and the gold-backed moneys of the day folding one by one, is another popular quick solution, among many observers, but would have direct consequences. To work, it would need a cut in world liquidity by let us say 90 percent, to allow each new bill or note to command, equate to and freely exchange with a measurable speck of metallic gold.

Bancor-type money of the Keynesian genre, in fact never really detailed in the ramblings of Keynes but featuring a basket of real resources able to range across the commodities space, could or might be a candidate new single world reserve currency. Massive intervention across global commodity markets would be needed, with a huge risk of price spirals, and crashes in the value of the ‘fiduciary resources’, that is commodity values. Setting up this nice idea would take a lot more than a single day’s work for ex-swimming champ Lagarde at the IMF. 

Other genial-seeming solutions have already come and gone. In particular the Carbon Money trial balloon of 2009, heavily promoted by Strauss-Kahn at the IMF, which folded as fast as it had appeared.

We can unfortunately be sure that financial market operators have their own solution: another 1929. Lemming-like and driven by herd instinct, they are drawn to these kind of events because. In certain market contexts like the present there is one Total Solution: sell everything, except of course gold.

Leads and ideas from the finance sector can be counted on for their apocalyptic-type absence, forcing the question back into the public arena. This unfortunately is not prepared to deal with such a fundamental question. We could or might suggest that No Alternative economics, as some early neoliberals in their heyday right after the crash of 1979 called their first solution of the day – high street bank interest rates gouged to 20% or more in OECD countries – has generated a No Solution crisis in 2011.

The problem may be so special, and so big we can only anticipate and hope for unprecedented solutions. These would likely be forced to include debt moratoriums on some of the biggest economies of the world, starting with the USA, existing moneys would have to be protected from implosion, world prices of key basic commodities would have to controlled – but whatever the solutions, they will have to come fast.

Gold and Silver Likely to Go Parabolic Due to ‘Global Shockwaves’ if U.S. Defaults

July 16, 2011

Before it’s News
July 16, 2011

Gold is some 0.5% lower against the U.S. dollar and most currencies today but higher in Australian dollars as the Aussie fell on Australian and global economic growth concerns. Asian equity indices were mixed as are European indices.

Bond markets have seen subdued trading but Greek bonds are again under pressure and the Greek 10-year yield has risen to 17.37% in increasingly illiquid trade.

The dawning reality that the U.S. will be downgraded due to its appalling fiscal position led to new record nominal gold and silver prices yesterday.

Denial regarding the possibility of a U.S. default continues with some analysts denying that such an event is “possible”. Such an event is possible and it grows more likely by the day. US Federal Reserve Chairman Ben Bernanke warned overnight that a default on America’s debt will spark a major crisis and send shockwaves through the global economy.

“The Treasury security is viewed as the safest and most liquid security in the world, and the notion it would become suddenly unreliable and illiquid would throw shockwaves through the entire global financial system,” he told a congressional committee.

US CDS has broken out to the upside and there is the potential for sharp moves up here as was seen in the aftermath of the Lehman and global financial crisis.

The fundamentals for gold and silver could not be better as the outlook for most paper currencies and government paper (sovereign debt) is not good. The precious metals are again being seen as safe haven assets to protect from government profligacy and currency debasement. The risks of a “depression” and currency crises in Europe and the U.S. are rising and this is contributing to significant safe haven demand.

The fact that gold and silver have no counter party risk and cannot default and cannot be debased or printed into oblivion makes them crucial diversifications. Gold, global equities and AAA rated, short dated bonds remain the best way for investors to protect themselves from today’s growing sovereign debt and monetary risk.

Gold, silver, good equities and good bonds will be better than depreciating cash or currencies in the coming years. Real diversification will help protect preserve and grow wealth…

FLASHBACK: 21st Century Wire Reports on Summer Gold Parabolic on May 24, 2011

MARKET FLASH: GOLD PARABOLIC COMING THIS SUMMER

By Andrew McKillop
21st Century Wire
Originally published May 24, 2011

Question: Why could gold go parabolic?

Prices for the Yellow Metal have recently suffered, along with silver, from sudden investor retreat using rationales like ‘inflation is beaten’, the global economy is recovering and the US dollar is getting stronger. Against the overvalued euro, maybe, but against gold the US dollar, euro, yen and almost all other paper moneys only have one way to go:  down.

Gold is a very special market and gold plays a key arbiter role in the unending attempt by the IMF and central banks to bolster and defend the value of “fiat moneys”. Their strategy is simple: push down the price of gold, anyway they can.

With the sudden and spectacular fall of the IMF’s Strauss-Kahn, 18 May, a large number of gold shuffling and swap operations between the IMF, central banks, the ultra-secret BIS and the world’s highly restricted number of authorized bullion banks could have been frozen in mid-air. When the balls hit the ground the collateral monetary damage could be a lot more interesting and much more powerful than what Strauss-Kahn did with his personal playthings in a Manhattan hotel room.

Strauss-Kahn’s sudden ouster comes at a key moment for its biggest debt bailout operations in favour of governments like that of Greece or Portugal, Ireland or Spain, the Baltic states, Iceland and others – who have to run a constant financing operation to save their national private banks, insurance companies and mortgage lenders. IMF austerity cures and forced firesale of government assets, under Strauss-Kahn or any body else, only makes the debt-load financing problem worse. To be sure, the IMF line is things have to get worse before they get better

Other so-called rich countries with similar crisis-level debt loads start with the USA, but at such fantastic rates of new financing need that, since late 2008, the USA is in permanent crisis territory…

SEE FULL MAY 24th REPORT HERE

SEE ALSO:

The Strauss-Kahn Affair: It’s Now Make or Break Time for the IMF