A grim report just issued by the Finance Ministry that is circulating in the Kremlin today says the United States Clearing House Interbank Payments System (CHIPS) has ground to a virtual halt signaling that a major global economic collapse is currently underway and could very well likely enter into the dreaded “freefall zone.”

Virtually unknown to all but the global financial elite, CHIPS is the main privately held clearing house for large-value transactions in the United States, settling well over $1 trillion a day in around 250,000 interbank payments that together with the Fedwire Funds Service, which is operated by the Federal Reserve Banks, forms the primary US network for large-value domestic and international US dollar payments where it has a market share of around 96%.

The cause underlying the collapse of CHIPS, this report says, is due to the “unprecedented” demand for immediate liquidity relief being sought by the largest banks in the US and EU that are being crushed under of the combined debt of both the United States and Europe said to total near $39 trillion.

Important to note is that what is currently happening is a virtual repeat of the 2008 Financial Crisis that the United States Senate’s Levin–Coburn Report found “was not a natural disaster, but the result of high risk, complex financial products; undisclosed conflicts of interest; and the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street.”

Grimly echoing this Ministry report is the latest data [see chart 2^nd photo left, or click on link] from The Baltic Dry Index (BDI) that is a number issued daily by the London-based Baltic Exchange and shows it in freefall dropping 65% in the past 30 days alone, a terrifying amount of loss not seen since the dark days of late 2008.

Not restricted to Baltic Sea countries, the BDI tracks worldwide international shipping prices of various dry bulk cargoes that has collapsed so severely global shipping has all but ceased thus leaving our world’s largest transport ships anchored and empty off the coast of Singapore in what is described as“the biggest and most secretive gathering of ships in maritime history whose numbers are equivalent to the entire British and American navies combined.”

During the 2008 Financial Crisis an outright global economic catastrophe was only averted after the US Federal Reserve secretly gave out to US banks and corporations, and foreign banks everywhere from France to Scotland, over $16 trillion that was only discovered due to an amendment to the Dodd–Frank Wall Street Reform and Consumer Protection Act passed by the American Congress that called for their being audited for the first time in their 99-year history.

Note: To place that $16 trillion into perspective, remember that the Gross Domestic Product (GDP) of the United States is only $14.12 trillion, and the entire national debt of theUnited States government spanning its 200+ year history is “only” $14.5 trillion.

Curiously, the aforementioned amendment to the Dodd-Frank law only called only for a one-time audit of any emergency lending facility established by the Federal Reserve since 1 December 2007 and ending with the date of enactment of the law when it was signed by President Obama on 21 July 2010 thus keeping hidden from the American people who is getting their money.

To if anyone in the world, even the powerful US Federal Reserve, has the power to avert this coming catastrophe, this Ministry report warns, it is unlikely due to the cascading collapse of the global derivative market due to the mounting gridlock in liquidity that US billionaire and Obama confidant Warren Buffet warned back in 2003 were “financial weapons of mass destruction.”

Though the word “derivatives” sounds complicated and technical, understanding them is really not that hard.  A derivative is essentially a fancy way of saying that a bet has been made.  Originally, these bets were designed to hedge risk, but today the derivatives market has mushroomed into a mountain of speculation unlike anything the world has ever seen before.  Estimates of the notional value of the worldwide derivatives market go from $600 trillion all the way up to $1.4 quadrillion.

$1.4 Quadrillion is roughly: -40 TIMES THE WORLD’S STOCK MARKET. -10 TIMES the value of EVERY STOCK & EVERY BOND ON THE PLANET. -23 TIMES WORLD GDP.

Failing to be noticed by the Western peoples about this global economic collapse is that it has been, in all probability, a “planned event” due to occur so as to initiate a New World Order that has long been sought after by the elites, but was condemned by the ancients who warned that the uniting of our world as an economic dictatorship would lead to every human being having to obtain the Mark of The Beast thus bringing this present age to its end.

In a Western world devoid of morality, and lacking the knowledge of the ancients, it is beyond doubt that this coming economic collapse will take them by complete surprise (as the last one did) as they have been trained like dutiful slaves to only adhere to those voices leading them to their doom.

But for those who know the truth, the time is nearing an end for preparing… it will come much sooner than anyone will believe.

February 1, 2012 © EU and US all rights reserved. Permission to use this report in its entirety is granted under the condition it is linked back to its original source at WhatDoesItMean.Com.

The EU will immediately ban new oil deals with Iran and implement a total boycott of Iranian oil in July 2012, under sanctions discussed by the 27 Foreign Ministers today.

Sanctions could also target the activities of a number of Iranian companies, individuals and financial institutions, including the country’s central bank.

British Foreign Secretary William Hague said the measure was part of an unprecedented set of sanctions. “I think this shows the resolve of the European Union on this issue.”

Western leaders insist Iran is on a dangerous path towards acquiring nuclear weapons and demand it halts its program. Tehran consistently denies such ambitions, saying its nuclear intentions are civilian, not military.

It’s thought France sought immediate sanctions against Iran while others, including debt-laden Greece, reportedly asked for a 12-month stay. Italy, Spain and Greece account for up to 68 per cent of Iranian oil consumed in Europe.

The EU embargo follows tough US sanctions approved earlier this month. Taken together, they remove 2.6 million barrels of oil from international markets, driving oil prices up and adding to global economic instability.

Doubts remain on whether the sanctions will have the desired effect. China remains the biggest buyer of Iranian oil, and so far, it has not agreed to any sanctions, and could possibly take up the quota now banned by the west.

Source.

2012 is shaping up to be a very tough year for the global economy.  All over the world there are signs that economic activity is significantly slowing down.  Many of these signs are detailed later on in this article.  But most people don’t understand what is happening because they don’t put all of the pieces together.  If you just look at one or two pieces of data, it may not seem that impressive.  But when you examine all of the pieces of evidence that we are on the verge of a devastating global recession all at once, it paints a very frightening picture.  Asia is slowing down, Europe is slowing down and there are lots of trouble signs for the U.S. economy.  It has gotten to a point where the global debt crisis is almost ready to boil over, and nobody is quite sure what is going to happen next.  The last global recession was absolutely nightmarish, and we should all hope that we don’t see another one like that any time soon.  Unfortunately, things do not look good at this point.

The following are 22 signs that we are on the verge of a devastating global recession….

#1 On Thursday it was announced that U.S. jobless claims had soared to a six-week high.

#2 Hostess Brands, the maker of Twinkies and Wonder Bread, has filed for bankruptcy protection.

#3 Sears recently announced that somewhere between 100 and 120 Sears and Kmart stores will be closing, and Sears stock has fallen nearly 60% in just the past year.

#4 Over the past 12 months, dozens of prominent retailers have closed stores all over America, and one consulting firm is projecting that there will bemore than 5,000 more store closings in 2012.

#5 Richard Bove, an analyst at Rochdale Securities, is projecting that the global financial industry will lose approximately 150,000 jobs over the next 12 to 18 months.

#6 Investors are pulling money out of the stock market at a rapid pace right now.  In fact, as an article posted on CNBC recently noted, investors pulled more money out of mutual funds than they put into mutual funds for 9 weeks in a row.  Are there some people out there that are quietly repositioning their money for tough times ahead?….

Investors yanked money out of U.S. equity mutual funds for a ninth-consecutive week despite a bullish 2012 outlook from Wall Street and a December rally that’s carried over into the New Year.

#7 There are signs that the Chinese economy is seriously slowing down.  The following comes from a recent article in the Guardian….

Growth had slowed to an annual rate of 1.5% in the second and third quarters of 2011, below the “stall speed” that historically led to recession.

#8 The Bank of Japan says that the economic recovery in that country “has paused“.

#9 Manufacturing activity in the euro zone has fallen for five months in a row.

#10 Germany’s economy actually contracted during the 4th quarter of 2011.  At this point many economists believe that Germany is already experiencing a recession.

#11 According to a recent article by Bloomberg, it is being projected that the French economy is heading into a recession….

The French economy will shrink this quarter and next, suggesting the nation is in a recession as investment and consumer spending stagnate, national statistics office Insee said.

#12 There are a multitude of statistics that indicate that the UK economy is definitely slowing down.

#13 The credit ratings of Italy, Spain, Portugal, France and Austria all just got downgraded.

#14 It is being reported that the Spanish economy contracted during the 4th quarter of 2011.

#15 Bad loans in Spain recently hit a 17-year high and the unemployment rate is at a 15-year high.

#16 According to a recent article in the Telegraph, the Italian government is forecasting that there will be a recession for the Italian economy in 2012….

#17 Italy’s youth unemployment rate has hit the highest level ever.

#18 The unemployment rate in Greece for those under the age of 24 is now at39 percent.

#19 Greece is already experiencing a full-blown economic depression.  About a third of the country is now living in poverty and extreme medicine shortages are being reported.  Things have gotten so bad that entire families are being ripped apart.  According to the Daily Mail, hundreds of Greek children are being abandoned because the economy has gotten so bad that their parents simply cannot afford to take care of them anymore.  The note that one mother left with her child was absolutely heartbreaking….

One mother, it said, ran away after handing over her two-year-old daughter Natasha.

Four-year-old Anna was found by a teacher clutching a note that read: ‘I will not be coming to pick up Anna today because I cannot afford to look after her. Please take good care of her. Sorry.’

#20 In Greece, large numbers of people are simply giving up on life.  Sadly, the number of suicides in Greece has increased by 40 percent in just the past year.

#21 In many European countries, the money supply continues to contract rapidly.  The following comes from a recent article in the Telegraph….

Simon Ward from Henderson Global Investors said “narrow” M1 money – which includes cash and overnight deposits, and signals short-term spending plans – shows an alarming split between North and South.

While real M1 deposits are still holding up in the German bloc, the rate of fall over the last six months (annualised) has been 20.7pc in Greece, 16.3pc in Portugal, 11.8pc in Ireland, and 8.1pc in Spain, and 6.7pc in Italy. The pace of decline in Italy has been accelerating, partly due to capital flight. “This rate of contraction is greater than in early 2008 and implies an even deeper recession, both for Italy and the whole periphery,” said Mr Ward.

#22 The major industrialized nations of the world must roll over trillions upon trillions of dollars in debt during 2012.  At a time when credit is becoming much tighter, this is going to be quite a challenge.  The following list compiled by Bloomberg shows the amount of debt that some large nations must roll over in 2012….

Japan: 3,000 billion
U.S.: 2,783 billion
Italy: 428 billion
France: 367 billion
Germany: 285 billion
Canada: 221 billion
Brazil: 169 billion
U.K.: 165 billion
China: 121 billion
India: 57 billion
Russia: 13 billion

Keep in mind that those numbers do not include any new borrowing.  Those are just old debts that must be refinanced.

As I mentioned at the top of this article, things do not look good.

The last thing that we need is another devastating global recession.

As I wrote about yesterday, the U.S. economy is in the midst of a nightmarish long-term decline.  The last major global recession helped to significantly accelerate that decline.

So what will happen if this next global recession is worse than the last one?

Sadly, the people that will get hurt the most by another recession will not be the wealthy.

The people that will get hurt the most will be the poor and the middle class.

So what should all of us be doing about this?

We should use the time during this “calm before the storm” to prepare for the hard times that are coming.

As always, let us hope for the best and let us prepare for the worst.

But things certainly do not look promising for the global economy in 2012.

Source.

Iran’s representative to OPEC says the European Union will “undoubtedly” commit an ‘economic suicide’ if it introduces an oil embargo against Iran.

“With economic crisis in euro zone area any sanctions on Iran’s oil will put European countries in a deeper crisis,” Mohammad-Ali Khatibi told the Mehr News Agency.

Khatibi warned that the U.S. and some European countries must avoid adventurism in the global oil market.

Iran, OPEC’s second biggest producer after Saudi Arabia, exports an average 2.2-2.3 million barrels per day, of which roughly 18-20 percent goes to the European market.

EU member states have agreed in principle to impose an embargo on Iranian oil exports to Europe but it is likely to have a much bigger impact on the EU member states that depend most on Iranian oil as a source of their imports, in particular Spain, Italy and Greece.

Some EU countries reportedly have been seeking a grace period of around six months for the embargo to give them time to source alternative supplies.

Iran has also warned Persian Gulf Arab states not to make up for any shortfall in its oil exports under new U.S. and EU sanctions.

If Arab neighbors compensate for a looming EU ban on Iranian imports, “we would not consider these actions to be friendly,” Khatibi told the Sharq newspaper in an interview published on Sunday.

“They will be held responsible for what happens” in that case, he said, adding, “One cannot predict the consequences.”

“If the oil producing Persian Gulf states give the green light to replacing Iran’s oil these countries would be the main culprits for whatever happens in the region — including the Strait of Hormuz,” Khatibi warned.

“Our Arab neighbor countries should not cooperate with these adventurers… These measures will not be perceived as friendly.”

Saudi Arabian Oil Minister Ali al-Naimi told CNN on Monday that his country could increase production by two million barrels “almost immediately” if sanctions are imposed on Iran’s oil exports.

Source.

Introduction

The economic, political and social outlook for 2012 is profoundly negative. The almost universal consensus, even among mainstream orthodox economists is pessimistic regarding the world economy. Although, even here, their predictions understate the scope and depth of the crises, there are powerful reasons to believe that beginning in 2012, we are heading toward a steeper decline than what was experienced during the Great Recession of 2008 – 2009. With fewer resources, greater debt and increasing popular resistance to shouldering the burden of saving the capitalist system, the governments cannot bail out the system.

Many of the major institutions and economic relations which were cause and consequence of world and regional capitalist expansion over the past three decades are in the process of disintegration and disarray. The previous economic engines of global expansion, the US and the European Union, have exhausted their potentialities and are in open decline. The new centers of growth, China, India, Brazil, Russia, which for a ‘short decade’ provided a new impetus for world growth have run their course and are de-accelerating rapidly and will continue to do so throughout the new year.

The Collapse of the European Union

Specifically, the crises wracked European Union will break up and the de facto multi-tiered structure will turn into a series of bilateral/multi-lateral trade and investment agreements. Germany , France , the Low and Nordic countries will attempt to weather the downturn. England – namely the City of London, in splendid isolation, will sink into negative growth, its financiers scrambling to find new speculative opportunities among the Gulf petrol-states and other ‘niches’. Eastern and Central Europe, particularly Poland and the Czech Republic , will deepen their ties to Germany but will suffer the consequences of the general decline of world markets. Southern Europe ( Greece , Spain , Portugal and Italy ) will enter into a deep depression as the massive debt payments fueled by savage assaults on wages and social benefits will severely reduce consumer demand.

Depression level unemployment and under-employment running to one-third of the labor force will detonate year-long social conflicts, intensifying into popular uprisings. Eventually a break-up of the European Union is almost inevitable. The euro as a currency of choice will be replaced by or return to national issues accompanied by devaluations and protectionism. Nationalism will be the order of the day. Banks in Germany , France and Switzerland will suffer huge losses on their loans to the South. Major bailouts will become necessary, polarizing German and French societies, between the tax-paying majorities and the bankers. Trade union militancy and rightwing pseudo ‘populism’ (neo-fascism) will intensify the class and national struggles

A depressed, fragmented and polarized Europe will be less likely to join in any Zionist inspired US-Israeli military adventure against Iran (or even Syria ). Crises ridden Europe will oppose Washington ’s confrontationalist approach to Russia and China .

The US : The Recession Returns with a Vengeance

The US economy will suffer the consequences of its ballooning fiscal deficit and will not be able to spend its way out of the world recession of 2012. Nor can it count on ‘exporting’ its way out of negative growth by turning to previously dynamic Asia, as China, India and the rest of Asia are losing economic steam. China will grow far below its 9% moving average. India will decline from 8% to 5% or lower. Moreover, the Obama regime’s military policy of ‘encirclement’, its economic policy of exclusion and protectionism will preclude any new stimulus from China .

Militarism Exacerbates the Economic Downturn

The US and England will be the biggest losers from the Iraqi post war economic reconstruction. Of $186 billion dollars in infrastructure projects, US and UK corporations will gain less than 5% (Financial Times, 12/16/11, p 1 and 3). A similar outcome is likely in Libya and elsewhere. US imperial militarism destroys an adversary, plunging into debt to do so, and non-belligerents reap the lucrative post-war economic reconstruction contracts.

The US economy will fall into recession in 2012 and the “jobless recovery of 2011” will be replaced by a steep increase of unemployment in 2012. In fact, the entire labor force will shrink as people losing their unemployment benefits will fail to register.

Labor exploitation (“productivity”) will intensify as capitalists force workers to produce more, for less pay, thus widening the income gap between wages and profits.

The economic downturn and growth of unemployment will be accompanied by savage cuts in social programs to subsidize financially troubled banks and industries. The debates among the parties will be over how large the cuts to workers and retirees will be to secure the ‘confidence’ of the bondholders. Faced with equally limited political choices, the electorate will react by voting out incumbents, abstaining and via spontaneous and organized mass movements, such as the “occupy Wall Street” protest. Dissatisfaction, hostility and frustration will pervade the culture. Democratic Party demagogues will scapegoat China ; the Republican Party demagogues will blame the immigrants. Both will fulminate against “the Islamo-fascists” and especially against Iran .

New Wars in the Midst of Crises: Zionists Pull the Trigger

The ‘52 Presidents of the Major American Jewish Organizations’ and their “Israel First” followers in the US Congress, State Department, Treasury and the Pentagon will push for war with Iran . If they are successful it will result in a regional conflagration and world depression. Given the extremist Israeli regime’s success in securing blind obedience to its war policies from the US Congress and White House, any doubts about the real possibility of a major catastrophic outcome can be set aside.

China: Compensatory Mechanisms in 2012

China will face the global recession of 2012 with several possibilities of ameliorating its impact. Beijing can shift toward producing goods and services for the 700 million domestic consumers currently out of the economic loop. By increasing wages, social services and environmental safety, China can compensate for the loss of overseas markets. China ’s economic growth, which is largely dependent on real estate speculation, will be adversely affected when the bubble is burst. A sharp downturn will result, leading to job losses, municipal bankruptcies and increased social and class conflicts. This can result in either greater repression or gradual democratization. The outcome will profoundly affect China ’s market – state relations. The economic crisis will likely strengthen state control over the market.

Russia Faces the Crises

Russia ’s election of President Putin will lead to less collaboration in backing US promoted uprisings and sanctions against Russian allies and trading partners. Putin will turn toward greater ties with China and will benefit from the break-up of the EU and the weakening of NATO.

The western media backed opposition will use its financial clout to erode Putin’s image and encourage investment boycotts though they will lose the Presidential elections by a big margin. The world recession will weaken the Russian economy and will force it to choose between greater public ownership or greater dependency on state funds to bail out prominent oligarchs.

The Transition 2011 – 2012: From Regional Stagnation and Recession to World Crises

The year 2011 laid the groundwork for the breakdown of the European Union. The crises began with the demise of the Euro, stagnation in the US and the outbreak of mass protests against the obscene inequalities on a world scale. The events of 2011 were a dress rehearsal for a new year of full scale trade wars between major powers, sharpening inter-imperialist struggles and the likelihood of popular rebellions turning into revolutions. Moreover, the escalation of Zionist orchestrated war fever against Iran in 2011 promises the biggest regional war since the US-Indo-Chinese conflict. The electoral campaigns and outcomes of Presidential elections in the US , Russia and France will deepen the global conflicts and economic crises.

During 2011 the Obama regime announced a policy of military confrontation with Russia and China and policies designed to undermine and degrade China ’s rise as a world economic power. In the face of a deepening economic recession and with the decline of overseas markets, especially in Europe , a major trade war will unfold. Washington will aggressively pursue policies limiting Chinese exports and investments. The White House will escalate its efforts to disrupt China ’s trade and investments in Asia, Africa and elsewhere. We can expect greater US efforts to exploit China ’s internal ethnic and popular conflicts and to increase its military presence off China ’s coastline. A major provocation or fabricated incident in this context is not to be excluded. The result in 2012 could lead to rabid chauvinist calls for a costly new ‘Cold War’. Obama has provided the framework and justification for a large-scale, long-term confrontation with China . This will be seen as a desperate effort to prop up US influence and strategic positions in Asia . The US military “quadrangle of power” – US-Japan-Australia-South Korea – with satellite support from the Philippines , will pit China ’s market ties against Washington ’s military build-up.

Europe: Deeper Austerity and Intensified Class Struggle

The austerity programs imposed in Europe, from England to Latvia to southern Europe will really take hold in 2012. Massive public sector firings and reduced private sector salaries and job opportunities will lead to a year of permanent class warfare and regime challenges. The ‘austerity policies’ in the South, will be accompanied by debt defaults resulting in bank failures in France and Germany . England ’s financial ruling class, isolated from Europe, but dominant in England , will insist that the Conservatives ‘repress’ labor and popular unrest. A new tough neo-Thatcherite style of autocratic rule will emerge; the Labor-trade union opposition will issue empty protests and tighten the leash on the rebellious populace. In a word, the regressive socio-economic policies put in place in 2011 have set the stage for new police-state regimes and more acute and possibly bloody confrontations with workers and unemployed youth with no future.

The Coming Wars that Ends America “As We Know It”

Within the US , Obama has laid the groundwork for a new and bigger war in the Middle East by relocating troops from Iraq and Afghanistan and concentrating them against Iran . To undermine Iran , Washington is expanding clandestine military and civilian operations against Iranian allies in Syria , Pakistan , Venezuela and China . The key to the US and Israeli bellicose strategy toward Iran is a series of wars in neighboring states, world- wide economic sanctions , cyber-attacks aimed at disabling vital industries and clandestine terrorist assassinations of scientists and military officials. The entire push, planning and execution of the US policies leading up to war with Iran can be empirically and without a doubt attributed to the Zionist power configuration occupying strategic positions in the US Administration, mass media and ‘civil society’.

A systematic analysis of American policymakers designing and implementing economic sanctions policy in Congress finds prominent roles for such mega-Zionists (Israel-Firsters) as Ileana Ros-Lehtinen and Howard Berman; in the White House, Dennis Ross in the White House, Jeffrey Feltman in the State Department, and Stuart Levy, and his replacement David Cohen, in the Treasury. The White House is totally beholden to Zionist fund raisers and takes its cue from the ‘52 Presidents of the Major American Jewish Organization. The Israeli-Zionist strategy is to encircle Iran , weaken it economically and attack its military. The Iraq invasion was the US ’s first war for Israel ; the Libyan war the second; the current proxy war against Syria is the third. These wars have destroyed Israel ’s adversaries or are in the process of doing so.

During 2011, economic sanctions, which were designed to create domestic discontent in Iran , were the principle weapon of choice. The global sanctions campaign engaged the entire energies of the major Jewish-Zionist lobbies. They have faced no opposition from the mass media, Congress or the White Office. The Zionist Power Configuration (ZPC) has been virtually exempt from criticism by any of the progressive, leftist and socialist journals, movements or grouplets – with a few notable exceptions. The past year’s re-positioning of US troops from Iraq to the borders of Iran , the sanctions and the rising Big Push from Israel ’s Fifth Column in the US means expanded war in the Middle East . This likely means a “surprise” aerial and maritime missile attack by US forces. This will be based on a concocted pretext of an “imminent nuclear attack” concocted by Israeli Mossad and faithfully transmitted by the ZPC to their lackeys US Congress and White House for consumption and transmission to the world. It will be a destructive, bloody, prolonged war for Israel ; the US will bear the direct military cost by itself and the rest of the world will pay a dear economic price. The Zionist-promoted US war will convert the recession of early 2012 into a major depression by the end of the year and probably provoke mass upheavals.

Conclusion

All indications point to 2012 being a turning point year of unrelenting economic crisis spreading outward from Europe and the US to Asia and its dependencies in Africa and Latin America . The crisis will be truly global. Inter-imperial confrontations and colonial wars will undermine any efforts to ameliorate this crisis. In response, mass movements will emerge moving over time from protests and rebellions, and hopefully to social revolutions and political power.

by Prof. James Petras
Global Research, December 25, 2011

The world risks sliding into a 1930s-style slump unless countries settle their differences and work together to tackle Europe’s deepening debt crisis, the head of the International Monetary Fund has warned.

On a day that saw an escalation in the tit-for-tat trade battle between China and the United States and a deepening of the diplomatic rift between Britain and France, Christine Lagarde issued her strongest warning yet about the health of the global economy and said if the international community failed to co-operate the risk was of “retraction, rising protectionism, isolation”.

She added: “This is exactly the description of what happened in the 1930s, and what followed is not something we are looking forward to.”

The IMF managing director’s call came amid growing concern that 2012 will see Europe slide into a double-dip recession, with knock-on effects for the rest of the global economy. “The world economic outlook at the moment is not particularly rosy. It is quite gloomy,” she said.

Since arriving in Washington in the summer, Lagarde has been forced to cut her organisation’s forecasts for global growth next year and is now putting pressure on countries outside the eurozone – including Britain – to play their part in containing Europe’s sovereign debt crisis.

An IMF plan, agreed at the Brussels summit last week, involves obtaining €200bn (£168bn) from European countries and then asking the rest of the world to contribute. Beijing has so far proved reluctant to join in a rescue of the eurozone and has said it is up to Europe to sort out its own problems.

Speaking at the State Department in Washington, Lagarde said: “There is no economy in the world, whether low-income countries, emerging markets, middle-income countries or super-advanced economies, that will be immune to the crisis that we see not only unfolding but escalating.

“It is not a crisis that will be resolved by one group of countries taking action. It is going to be hopefully resolved by all countries, all regions, all categories of countries actually taking some action.”

Lagarde said that the scale of the eurozone crisis, and its implications for other countries, meant that Europe’s governments could not tackle it alone. “It is going to require efforts, it is going to require adjustment; and clearly it is going to have to start from the core of the crisis at the moment, which is obviously the European countries, and in particular the countries of the eurozone,” Lagarde said.

As Lagarde called for unity, there were strong attacks on Britain from both the French finance minister, Francois Baroin, and the governor of the French central bank, Christian Noyer, in what appeared to be a concerted attempt by Paris to escalate a war of words with London in the wake of Britain’s decision to veto a new EU treaty.

Noyer, speaking amid financial market speculation that the Standard & Poor’s ratings agency was about to strip France of its coveted AAA rating, said Britain’s credit rating should be downgraded first.

He said a downgrade for France (which would drive up the interest Paris pays to borrow, and make loans in the wider economy more expensive) “doesn’t strike me as justified based on economic fundamentals.

“If it is, they should start by downgrading the UK, which has a bigger deficit, as much debt, more inflation, weaker growth, and where bank lending is collapsing.”

In strikingly similar language, Baroin poked fun at David Cameron in a speech to the French parliament. “Great Britain is in a very difficult economic situation: a deficit close to the level of Greece, debt equivalent to our own, much higher inflation prospects, and growth forecasts well under the eurozone average. It is an audacious choice the UK government has made.”

Downing Street responded with restraint. Cameron’s official spokesman said: “We have put in place a credible plan for dealing with our deficit, and the credibility of that plan can be seen in what has happened to bond yields in this country.” Privately, officials said it was a “strange thing” for Noyer to speak as he did, but there was no desire in London to inflame the situation.

In another sign the financial crisis was deepening last night, Fitch cut its ratings on eight of the world’s biggest banks, including Barclays, Bank of America, and Deutsche Bank. It warned that they all faced “increased challenges”, with potential losses hard to calculate.

John Bryson, the US commerce secretary, signalled that Washington would retaliate against Beijing’s decision to put tariffs on high-performance US cars imported into China. “The United States has reached a point where we cannot quietly accept China ignoring many of the trade rules. China still substantially subsidises its own companies, discriminates against foreign companies, and has poor intellectual property protections,” he said.

Britain has been given observer status on a working group set up by the Economic and Financial Committee of the EU to carry out technical work ahead of the full-blown negotiations on the treaty, boosting Cameron’s claim that Britain has not been marginalised by his move last week.

On Thursday Hungary and the Czech Republic raised doubts about the proposed agreement, saying they would not sign the new treaty if they had to give up their right to decide tax policy. Downing Street denied that Cameron was attempting to foment opposition to the treaty, and said that the prime minister was talking to all sides. But by Thursday the only eurozone leader he had spoken to was Enda Kenny, the Irish prime minister.

Source.

Ever dream of leaving it all behind and heading out of America? You’re not the only one. A new study shows that more US citizens than ever before are living outside of the country.

According to statistics from the US State Department, around 6.4 million Americans are either working or studying overseas, which Gallup says is the largest number ever for such statistic.

The polling organization came across the number after conducting surveys in 135 outside nations and the information behind the numbers reveal that this isn’t exactly a longtime coming either — numbers have skyrocketed only in recent years. In the 24 months before polling began, the number of Americans between the ages of 25 and 34 living abroad managed to surge from barely 1 percent to over 5.1 percent. For those under the age span wishing to move overseas, the percentage has jumped in the same amount of time from 15 percent to 40.

While the United States of America was at one point (and largely still is) a magnet for foreigners in search of work, the statistics makes it clear that an opposite trend is quickly picking up steam.

“There’s a feeling among more entrepreneurial Americans that if you really want to get anything done, you have to get out of country and away from the depressing atmosphere,” Bob Adams of America Wave tells Reuters. “There’s a sense of lost direction, so more people are looking for locations that offer more hope about the future.”

Many of those leaving the US have job skills that would transfer quite well in the American market. Instead, however, they chose to bring those out of the States, attracted instead to opportunities elsewhere.

While America offers some employment opportunities unmatched outside of the United States, the country has also seen dire economic statistics since the dawn of the Obama administration, with jobless benefit claims soaring in recent months, and only last week did the Department of Labor reveal an unemployment statistic below 9 percent. On the contrary, the number of Americans that want full-time work and have given up on finding it or unable to locate it is closer to double that figure, while at the same time many of America’s largest employers have outsourced positions across the globe. Banking giant Goldman Sachs announced earlier this year that in the wake of a recession, they would finally be creating 1,000 new positions, yet making them available only to workers in Singapore. Other industries, significantly American, have been relocated as well; the ending of NASA’s space shuttle program this year left many intelligent US citizens with little choice but to continue in their field outside of the States.

“We’ve pretty much outsourced everything else,” aerospace technician Giovanni Pinzon tells RT. He was left scrambling for a job after years working in America’s space program.

America Wave’s Adams adds to Reuters that the statistics prove surprising to him, but noted that it doesn’t exactly make sense to think that it is a fluke.

“They’re looking for work because of the sluggish economy, and they’ve lost confidence that the U.S. is going anywhere,” says Adams.

Source.

More than a quarter of small businesses struggle to find ‘suitably skilled’ staff despite rising unemployment, a survey revealed yesterday.

The report by the Federation of Small Businesses said many of its members were desperate to hire workers but could not find them.

It warned many school leavers and graduates lacked basic skills needed for a job.

These range from turning up on time for an interview to being able to write basic English or do the most elementary maths.

The survey of more than 1,500 small businesses showed a ‘worrying’ 27 per cent have ‘found it difficult to find suitably skilled staff’.

The issue will be investigated as part of an inquiry into entrepreneurship by the Federation of Small Businesses and MPs on the All-Party Parliamentary Small Business Group.

Brian Binley, Tory MP and chairman of the parliamentary group, said: ‘Small and medium-sized businesses and entrepreneurs are expected to be driving economic growth in support of Britain’s recovery.

‘But they are finding it difficult to get the right people to help them in that task.’

One of the big problems was ‘the poor performance in our primary and secondary schools, especially with regard to literacy and numeracy’.

Unemployment has jumped to a 17-year high of 2.62million, amid warnings it will continue to rise as the Government cuts the state workforce.

Despite the massive number of people looking for a job, there are still 464,000 unfilled vacancies, according to the Office for National Statistics.

To add to the problems facing small firms, the report also found 34 per cent had ‘difficulty securing finance’.

The Federation of Small Businesses is calling on the Government to create more competition on the high street to break up the dominance of the ‘big five’ banks – Barclays, HSBC, Lloyds, Santander and RBS.

The Department for Education said the Government was ‘prioritising’ literacy and numeracy by ‘recruiting specialist maths teachers, introducing a phonics-based reading check for six-year-olds and restoring the rigour of GCSE and A-level exams’.

Source.

Imagine for a moment that somewhere in the middle of Texas there was a large foreign military base, say Chinese or Russian. Imagine that thousands of armed foreign troops were constantly patrolling American streets in military vehicles. Imagine they were here under the auspices of “keeping us safe” or “promoting democracy” or “protecting their strategic interests.”

Imagine that they operated outside of US law, and that the Constitution did not apply to them. Imagine that every now and then they made mistakes or acted on bad information and accidentally killed or terrorized innocent Americans, including women and children, most of the time with little to no repercussions or consequences. Imagine that they set up checkpoints on our soil and routinely searched and ransacked entire neighborhoods of homes. Imagine if Americans were fearful of these foreign troops, and overwhelmingly thought America would be better off without their presence.

Imagine if some Americans were so angry about them being in Texas that they actually joined together to fight them off, in defense of our soil and sovereignty, because leadership in government refused or were unable to do so. Imagine that those Americans were labeled terrorists or insurgents for their defensive actions, and routinely killed, or captured and tortured by the foreign troops on our land. Imagine that the occupiers’ attitude was that if they just killed enough Americans, the resistance would stop, but instead, for every American killed, ten more would take up arms against them, resulting in perpetual bloodshed. Imagine if most of the citizens of the foreign land also wanted these troops to return home. Imagine if they elected a leader who promised to bring them home and put an end to this horror.

Imagine if that leader changed his mind once he took office.

The reality is that our military presence on foreign soil is as offensive to the people that live there as armed Chinese troops would be if they were stationed in Texas. We would not stand for it here, but we have had a globe-straddling empire and a very intrusive foreign policy for decades that incites a lot of hatred and resentment towards us.

According to our own CIA, our meddling in the Middle East was the prime motivation for the horrific attacks on 9/11. But instead of re-evaluating our foreign policy, we have simply escalated it. We had a right to go after those responsible for 9/11, to be sure, but why do so many Americans feel as if we have a right to a military presence in some 160 countries when we wouldn’t stand for even one foreign base on our soil, for any reason? These are not embassies, mind you, these are military installations. The new administration is not materially changing anything about this. Shuffling troops around and playing with semantics does not accomplish the goals of the American people, who simply want our men and women to come home. 50,000 troops left behind in Iraq is not conducive to peace any more than 50,000 Russian soldiers would be in the United States.

Shutting down military bases and ceasing to deal with other nations with threats and violence is not isolationism. It is the opposite. Opening ourselves up to friendship, honest trade and diplomacy is the foreign policy of peace and prosperity. It is the only foreign policy that will not bankrupt us in short order, as our current actions most definitely will. I share the disappointment of the American people in the foreign policy rhetoric coming from the administration. The sad thing is, our foreign policy WILL change eventually, as Rome’s did, when all budgetary and monetary tricks to fund it are exhausted.

Imagine!: speech written & given by Ron Paul
should you be a US citizen in support of Ron Paul: http://revolutionpac.com/defense

Analysts are doing a lot of worrying lately about all the bad things that could happen in the global economy, despite positive economic data and occasional market rallies.

Looking ahead to 2012, Deutsche Bank analysts Tom Joyce and Ram Nayak lay out 10 of the biggest worries investors have to look out for in the coming year in a massive investor note about what we should be looking forward to in the coming 12 months. What’s more, they tell you how to hedge for the worst case scenario.

Ironically enough, analysts remains so bearish that one of the biggest risks is that the economy does well.

#1 A Greek exit rom the euro

Image: real democracy

Probability: A Greek euro exit and return to the Drachma is not DB’s base case, but then again it’s not inconceivable.

What would happen: Big haircuts on private sector assets, capital controls, collapse of Greek banking system, run on peripheral European banks

Hedges: Switch from European assets to gold or U.S. Treasuries, long yen or sterling, and long volatility indices

#2 Funding crises in Italy and Spain

Image: Alberto Pizzoli / AFP / Getty

What to watch: In Spain, the private sector and banking system. In Italy, politics and growth.

What would happen: A crisis of confidence would prohibit both countries from accessing cash and threaten both the euro and the global financial system.  The European Central Bank would need to “respond aggressively,” to save the global economy from collapse.

Hedges: Short French and British banks, short Eastern European currencies, long options on CDX.IG

#3 The U.S. gets hit with a downgrade or double-dip recession

Image: bthomso via Flickr

Catalysts: Risks #1 or #2 materialize, fiscal cuts disappoint, or growth underperforms

What would happen: The U.S. bank sector could also be downgraded. Timing is everything to measure the impact.

Hedges: Issuers can win out by pre-funding, investors should be overweight on non-financials and highly rated non-cyclicals.

#4 A hard landing in China

Image: Daniel Goodman / Business Insider.com

How it happens: 5-6% growth, which would feel like a recession

What would happen: Global capital markets would be affected by sharp declines in commodity prices, but China’s large Forex reserves it could probably stop the fall and stimulate growth.

Hedges: 6-month put option on commodities baskets

#5 France loses its AAA rating

Image: MJC Rodez on Flickr

Probability: “Quite possible,” given lack of progress on austerity measures

What would happen: French-German bond spreads may indicate that this risk is already priced in, but this would have negative implications for the European Financial Stability Facility and already mounting funding pressures.

Hedges: Buy French CDS, “buy best-of-put options”—a put over the equity index that performs best on the period (because equity markets generally go down simultaneously with a macro shock)

#6 Aggressive and sustained deleveraging of European banks

Image: eyeSPIVE on Flickr

Probability: Deleveraging is definite. The only question is by how much.

What would happen: Deleveraging will probably total up to $2 trillion in 18 months, but this could be exacerbated by crisis.

Hedges: Investment in cyclical industries, lower-rated credits and financials, long volatility indices.

#7 Commodity trade finance faces a liquidity crunch

Probability: High, particularly if aggressive bank deleveraging (risk #6) materializes.

What would happen: The European banks that provide financing for the big Swiss-based commodity trading houses could cut funding, and commodities prices would fall.

Hedges: European borrowers should seek funding from the U.S., one-year USD puts on Brent

#8 Safe haven assets disappear

Signs for caution: Traditional safe-haven assets like gold, the Swiss franc, and the yen have all been volatile/

Worse still: U.S. Treasuries and bunds have been go-to investments recently, but high debt levels in the U.S. and Germany could change that.

Hedges: Other AAA-rated investments like supranational bonds and gilts.

#9 U.S. pension fund deficits continue to balloon

Image: Flickr Vertigogen

How it happens: Both public and private sector funding gaps for pensions are out of control, and this could get worse. Rock bottom interest rates are making this worse.

What would happen: Rating agency downgrades, declines in corporate profitability, and funding crises.

Hedges: Puts on equity indices where premium is only paid out when rates rise (the idea is that they don’t).

#10 BETTER than expected economic growth

Image: Aepoc, CC.

How this is a problem: Betting against the market always carries the risk of being surprised.

What would happen: Europe stabilizes, the global economy grows, and risk asset prices exceed expectations.

Hedges: “10y/20y euro rates payer spreads; long non-conforming mezzanine debt; Short AUD v Long MXP”

Source.