Saudi Arabia: The Next “Black Swan” For The Global Economy - by Marcello Minenna

Just two weeks ago, the Saudi government announced that in September it will hit the international bond markets with a Dollar denominated issue. In the Kingdom’s history, this is the first foreign debt issue. Incredible though it may appear, the sheiks, holders of the world’s largest oil reserves, appear cash-starved. The Saudi monarchy that in 2011 was achieving an astounding fiscal surplus of 20% of GDP with zero public debt and sitting on over $700 billion of foreign reserves, has markedly seen its fortunes go into reverse since the oil price collapse in mid-2014. In 2015 the surplus morphed into a nasty deficit of up to 16% of GDP, public debt climbed to 10% while the currency reserves declined to below $ 600 billion. The Kingdom enacted even a few cuts in public expenditures, a measure unheard-of in the land of a guaranteed lifetime employment in the government sector.

In well-informed circles, the theory has been that the sudden decline in oil price was a deliberate strategy orchestrated by the Saudis, to kick the “shale oil” producers out of the market. Since the US producers rely heavily on debt and operate at loss when the oil price slips under $60 a barrel, such a plan could have worked. But it did not happen: with the Fed nailing interest rates around zero, the banks and the investment funds have continued to finance the drillers, who in turn have reduced production and cut costs. The result is that few drillers have effectively been pushed out of the market.

Now the Saudi strategy is backfiring and the big sharks of financial speculation are sharpening their teeth. The target is the fixed exchange rate between the Dollar and the Riyal (the Saudi currency). This monetary agreement between the two governments has lasted more than 30 years. The US economy and the Saudi elites have benefited immensely from it, with the latter accumulating sheer amounts of financial wealth.

The “Petrodollar” system worked in this way: US importers settled oil purchases only in Dollars at a stable, favorable exchange rate (by 1986 fixed at 0.26$ for 1 Riyal). In its turn, the Saudi Kingdom was committed to reinvest the profits in the US economy through the purchase of Treasuries, with the not negligible benefit of the guarantee of a continuous US military umbrella. All trades have been kept confidential for over 40 years till May 2016: neither the US nor the Kingdom has ever released detailed information about the involvement of the Saudis in the refinancing of US public debt.

In recent years, cracks have begun to surface in the apparently rock-solid deal. Thanks to the shale oil boom and the increasing market share of Iraqi and Iranian oil, the US is less dependent on the Saudis. The confidentiality shield has been lifted and finally the US Treasury revealed the amount of debt in the hands of the Kingdom: $120 billion, and it’s reasonable to believe that at least a further $ 100 billion are discreetly held offshore. In the meantime, the US Senate has allowed the victims of 9/11 to sue the Saudi Kingdom for its eventual responsibility for the attacks. All these moves can be interpreted as a progressive cooling in the US-Saudi political relationship.



Read more Saudi Arabia: The Next “Black Swan” For The Global Economy

Globsl Economy: Better look at this if you think markets are over Brexit - Patti Domm

Stocks are sailing higher as Brexit worries fade, but the global bond market is signaling that there's plenty to fear.

Bonds have been on fire globally, as investors rush to snap up safety, particularly at the long end, and that is sending yields to new lows — and some yields even into the black hole of negative rates. The U.S. 30-year Treasury bond is closing in on its all-time low yield of 2.223 percent.

"I think people are hunkering down and buying bonds because of the uncertainty in the world. They want to be able to sleep at night," and Andrew Brenner, head of international fixed income at National Alliance. Brenner said in the U.S., 20-year corporates and 30-year Treasurys were the hot spots in Wednesday's market.

While investors may be frustrated by the low yields, consumers are the winners, with mortgages and a whole host of loans heading lower.

Bond yields move inversely to prices, and that market was trading at rich levels well before the Brexit vote. Investors globally have been responding to yields driven lower by central bank buying and easy policies, such as the negative rates set by central banks in Europe and Japan.

At the same time, investors worry about the strength of the global economy and the fact that central bank easing has been unable to jump-start growth. But the U.K. vote to leave the European Union has driven a new belief that global interest rates will now stay lower for much longer than was previously expected.            

Turkey: At least 28 innocent people killed, 60 injured by "derelicts" as blasts rock Istanbul’s Ataturk Airport

Istanbul: Daesh Deranged Murderers Killing Innocent People

At least 28 people have been killed and 60 more injured in two blasts that rocked Istanbul’s Ataturk airport, according to Turkish officials. The explosions were reportedly suicide bomb attacks.

The blasts occurred in the airport’s International Arrivals Terminal. 

A Turkish official confirmed to Reuters that two explosions have hit the airport. According to some Turkish media, the blasts were terrorist attacks targeting two separate locations in the airport.

Twenty-eight people have lost their lives in the blasts that hit the airport, Istanbul Governor Vasip Sahin said, Turkey’s NTV channel reported.

More than 60 people have been injured, six of them seriously, in explosions at Ataturk Airport in Istanbul, according to the Turkish state Anadolu news agency.

Many people caught in the blasts and near the airport posted photos and videos from the scene, showing the destruction caused by the explosions as well as people hiding in various places in search of safety.

Gunfire was heard from the car park near the airport, CNN Turk reports, citing the witnesses. Four armed men were reportedly seen running away from the terminal building after the explosions, according to Turkey’s NTV channel.

Note EU-Digest: Whoever eventually gets  blamed for this cruel act can only be regarded as totally deranged murderers. 

Read more: Over 20 killed, 60 injured as blasts rock Istanbul’s Ataturk Airport — RT News

Global Economy: US losing its grip on Europe: Why Wall Street fought so hard against Brexit - by Renae Merle

For decades, Wall Street has considered London a beacon through which it could reach the rest of Europe. Large U.S. banks moved thousands of employees there to trade currencies and complex financial products. A couple of years ago, Goldman Sachs began building a massive new headquarters to house its 6,000 employees in the city.

But Britain’s stunning vote on Friday to divorce itself from the European Union has thrown London’s status as Europe’s financial center into question -- and with it, the city’s relationship with New York bankers.

From London, Wall Street has been able to sell its services across 28 nations without the headache of having to get regulatory approval from each individual country. The prospect of a more complex, and potentially costly, regulatory structure has some banking officials worried, analysts said. U.S. banks could move more than 10,000 employees out of London after Britain completes its exit from the European Union, according to Keefe, Bruyette & Woods, a boutique investment bank.

"U.S. banks have used London as a primary center for activity, not only to operate in the U.K., but to provide services across Europe," said James Chessen, chief economist for the American Bankers Association.

The shock of the British vote tanked U.S. markets Friday with the financial sector taking among the toughest hits. Goldman Sachs and JPMorgan Chase were both down 7 percent. Morgan Stanley tumbled 9 percent.

Britain's exit is also expected to impact other U.S. industries. Technology firms have jousted before with European regulators, but that process could become more complicated as  populist leaders call for referendums in France and the Netherlands to leave the EU, as well.

On Friday, shares of Apple fell 2.5 percent. Alphabet, Google’s holding company, lost 3.5 percent and Yahoo and Microsoft were each down about 4 percent.

In energy stocks, BP was trading down 5 percent, and Shell, domiciled in both Britain and the Netherlands, was down 6 percent after news of the “Leave” vote. American crude oil prices dropped $2.54 a barrel, or 5 percent.

Oil prices stiffened in the weeks leading up to the vote, as the “Remain” camp surged in polls. The Brexit caught investors by surprise. They rushed to sock assets away in non-eurocentric currencies and products, opting for American investments instead, or staying out of the market completely.

But the impact on U.S. banks is expected to be among the most severe, and the industry was both vocal -- and aggressive -- in its opposition to Britain leaving the EU.

Goldman Sachs and JP Morgan Chase, the country’s largest bank by assets, contributed 500,000 pounds, then about $720,000, each to the campaign to keep the status quo in the European Union, according to people familiar with the matter. Citigroup and Morgan Stanley donated 250,000 pounds each, according to the Sunlight Foundation.

On Friday, U.S. banks quickly began to draw up plans to deal with the fallout.

Citigroup created a "group of senior leaders from across our businesses and functions to ensure we were prepared for this possible outcome," Mike Corbat, the bank's chief executive, and Jim Cowles, its chief executive in Europe, Middle East and Africa, said in a letter to employees. "While the result of the vote is not what we would have preferred, our diligent work over the past six months means we can be confident that Citi is well positioned to serve our clients."

Britain's finalization of its exit from the E.U. is expected to take at least two years, and banking industry officials say they will carefully watch the process for clues into how vast the fallout will be. Britain, for example, may be able to establish a financial regulatory framework that is harmonious with the rest of Europe. That would minimize the potential impact, analysts said. But if that is not possible, banks may be forced to move jobs to Frankfurt or Dublin, they said.

"Likely London will lose some influence," Erik M. Oja, equity analyst for S&P Global Market Intelligence. But it depends on the negotiations that will occur over the new few years, he said:   "These banks have invested a lot into the London hub, it’s not like they will move overnight."

On Friday, JPMorgan Chase CEO Jamie Dimon told employees in a memo  that the bank will maintain a large presence throughout Britain. "In the months ahead, however, we may need to make changes to our European legal entity structure and the location of some roles," Dimon said. "While these changes are not certain, we have to be prepared to comply with new laws as we serve our clients around the world."

Read more: Why Wall Street fought so hard against Brexit - The Washington Post

Britain: First, the Brexit. Now the United Kingdom is falling apart - by Ben Wellings

Britain: Playtime is over

Britain’s decision to leave the EU is a major moment in post-War European history. This is like the collapse of communism, but with the West on the losing side. It is the first defeat for the British Establishment for centuries.

It is hard to believe in the wash-up of the referendum campaign but this was meant to be cathartic. It was supposed to heal divisions within the Conservatives by giving the people of the United Kingdom a say on membership of the European Union. But it has only entrenched and exacerbated divisions rather than healed them.

Referendums are not compulsory in the UK. Any decision to hold one is essentially political. Usually, you only initiate referendums that you are certain to win; Brexit has altered the rulebook.

What was proposed as a catharsis has induced trauma: trauma that the process and politics of Brexit will do little to repair. The referendum campaign laid bare deep divisions within the United Kingdom.

Other divisions were evident: between young and old; city and country; men and women. The biggest division that this exposed was between the so-called ‘winners’ and ‘losers’ of globalization and European integration: those who have done well out of these political structures and those who have not.

The disbelief amongst the ‘winners’ that Brexit might have been a realistic and attractive prospect was matched amongst the ‘losers’ by anger directed at the prosperous and secure classes.

 Perhaps the most pernicious division was between politicians and people. The murder of Jo Cox was not only a horrific attack on an individual striving for what she saw as the good society. It was an attack on democracy. Her example showed that not all politicians are remote fat cats in thrall to big business. Politicians still hail from the deprived areas in which they grew up, lived and worked.

Of course, direct blame cannot be laid at the door of the Brexit campaign. But in adopting UKIP’s anti-immigration language, Vote Leave’s leaders subordinated some principled critiques of the EU’s failings to a xenophobic politics of fear.

The referendum campaign deepened existing divisions within the Conservatives, from which they may not recover for years. Cameron’s position is surely untenable. BoJo is waiting in the wings.

The Labour Party under Corbyn was missing in action during this campaign, hoping that the Conservatives would hang themselves whilst Labour’s own internal divisions were overlooked. Many former Labour voters opted to leave and the party must answer questions about how its successive leaderships became so divorced from grassroots opinion.

The main beneficiary of Breixt is UKIP. Its message dominated the last three weeks of the campaign and will shape discussion about national identity, inclusiveness and tolerance in England for years to come. There are calls for it to disband having achieved its central aim. But the wind is in the sails of HMS UKIP and we should expect it to change into an established right populist party, ironically making British politics look much more ‘European’ at the very moment when it left.

The term ‘England’ is used advisedly since this was in many ways an English revolt. Outside of London it was rural England and, admittedly, Wales that dragged the UK out. Whether Scotland will abide this remains to be seen. Northern Ireland’s situation is similarity unsure.

There will always be an England; whether there will always be a United Kingdom remains far from clear.

For the first time in history the process of European integration has been reversed. The idea that Brexit will represent ‘the end of western political civilization’ as Donald Tusk claimed may have been alarmist. But Brexit is part of a wider revolt against the established political order whereby the ‘losers’ in the globalized economy are given voice by rich tribunes, be they Old Etonians, City stockbrokers or New York property magnates. This is their first major victory.

Brexit is the product of a revolt against the way that people have been governed in the past thirty years. This was its sole unifying function. It united left and right against the political ‘elite’, ushering in the first defeat for the British Establishment since the loss of the American colonies.

It is hard to be optimistic about this referendum and the politics that it unleashed. The Scottish independence referendum in 2014 was seen as a laudable exercise in democracy. In contrast the Brexit referendum revealed an angry and ugly streak in political life, especially in England.

The United Kingdom is a divided country. It may have won its independence or have made a catastrophic error, depending on your point of view. The fact that it took a xenophobic campaign to achieve this result is nothing to be proud of.

This foundational moment will be tainted with shame for decades to come.

Read more: First, the Brexit. Now the United Kingdom is falling apart - The Globe and Mail

EU Commission: Britain's EU commissioner, finance chief Hill, resigns

The British member of the EU executive, Financial Services Commissioner Jonathan Hill, resigned on Saturday after having campaigned against Britain leaving the European Union.

Following the referendum vote for Brexit on Thursday, few expected a Briton to retain oversight of the EU banking and finance market that will be a key battleground in negotiations between London and Brussels on dissolving British membership.

European Commission President Jean-Claude Juncker said he was handing the portfolio to Valdis Dombrovskis, who will take it into his brief as vice president for the euro from July 16.

An EU official said the move made it clear that plans for an EU capital markets union would now focus on the euro zone after Hill had worked to ensure new EU rules would not disadvantage London's huge finance industry based outside the currency area.

"It's clear there will be a less clear division between the capital markets union and the euro zone," the official said.

London-based banks and other financial firms are concerned about access to the EU once Britain leaves the single market.

Hill said in a statement a day after British voters backed Brexit in a referendum called by Prime Minister David Cameron: "I don't believe it is right that I should carry on as the British commissioner as though nothing had happened."

Dombrovskis, who as prime minister took Latvia into the euro, and whose current role already oversees Hill's portfolio, said his priority was to maintain financial stability in markets.

Cameron, who will be replaced once his Conservative party elects a new leader, will leave it to his successor to discuss what to do with Britain's seat on the Commission, a British spokesperson said. It retains the right to a seat, along with the 27 other EU states, until it finally leaves the Union.

Read more: Britain's EU commissioner, finance chief Hill, resigns | Reuters

Scotland seeks independence: Nicola Sturgeon: second Scottish independence poll highly likely - by Severin Carrell Libby Brooksand

Scotland is on the brink of staging a fresh referendum on independence after Nicola Sturgeon requested talks with the EU on separate membership after the UK’s vote to leave.

The first minister said she believed a second referendum on independence was highly likely after Scotland voted overwhelmingly to remain within the EU, but was unable to prevent the leave campaign winning by 52% to 48% across the UK as a whole.

Sturgeon said that was a “democratic outrage” and constituted the clear, material change in Scotland’s circumstances referred to in the Scottish National party’s carefully worded manifesto commitment in May to hold a second independence vote if needed.

“It is a significant material change in circumstances. It’s a statement of the obvious that the option of a second independence referendum must be on the table, and it is on the table,” she said.

Sturgeon announced that she was instructing Scottish government officials to draft fresh referendum legislation for Holyrood, only two years after her party lost the first independence vote in 2014, to ensure it could be held quickly if enough Scottish voters backed it.

UK government sources said David Cameron, who quit as prime minister after the referendum defeat, was anxious that his successor make sure the Scottish, Welsh and Northern Ireland government were closely involved in the UK’s Brexit negotiations to avoid increasing Scottish grievances and fuelling the case for independence.

Sturgeon’s cabinet will meet in emergency session on Saturday morning at her official residence Bute House, and is expected to agree plans to put forward referendum legislation in September’s programme for government.

Read more: Nicola Sturgeon: second Scottish independence poll highly likely | Politics | The Guardian

Opinion: Brexit poses challenge to peace in Europe

 The German government - most of its members convinced, experienced Europeans - knows this, but can't say it out loud. A bitter foretaste of what's to come for the Germans and all the other Europeans is that an issue of existential importance for all is being voted on by no one but Britain: everyone else has no say in the matter.

Chancellor Angela Merkel's government is especially aware of the dilemma. It knows that at least in this question, it's backed by the majority of Germans. But no matter what German ministers or the chancellor herself have to say, it's almost certain to be used against them, and against the EU, in Germanophobe Britain.

The German finance minister - who is considered a hardliner, just ask the Greeks - summarized this dilemma in one sad sentence. Asked in London in March what Germany would do if Britain left the EU, Wolfgang Schäuble said: "We would cry."

Angela Merkel has taken a public vow of silence where the Brexit is concerned. Little more is said than the repeated affirmation that of course Berlin believes Britain should be in the EU - always accompanied by the assertion that it's up to the British people to decide. When there are no microphones nearby, the chancellor takes a more concrete stance, stating that a Brexit would be "terrible."

 Tears and terror aside, the economic cost of a Brexit would be high for everyone, from London and Manchester to Paris, Berlin and Warsaw - but highest of all for Britain. Even Brexit supporters seem to suspect that leaving the EU would be economic idiocy.

So their arguments have come to target emotions instead, and the retreat to a nation of one's own - with its suggested greater self-determination and simplicity. And that's where they cross paths with their right-wing populist European brethren. Nationalists of all countries, unite - in order to separate.

But it is the political consequences of a Brexit that could truly be awful.

For all the historically illiterate talk of an EasyJet generation, the Europe that forged monetary union, and that was built upon the European Coal and Steel Community, the European Economic Community and the European Community always was, and is, a project of peace.

It was never ultimately about coal, but about cannons. This difficult trade-off is only possible if all of Europe's large states are engaged in the major everyday issues and the many small details.

Without London, the EU would find itself imbalanced. Berlin would be pushed into assuming a dominance it doesn't want and can't cope with. The German finance minister knows what that could mean - again, ask the Greeks: People no longer believe Germany is acting in Europe's interests

 In the first half of the last century, European crises resulted in war; the second half - not least thanks to the treaties of Paris, Rome and Maastricht - brought peace to an extent that in this century, it seems a given.

But it isn't. Military solutions seem acceptable once more - just look to Europe's eastern fringes. Hostile warships might one day patrol the English Channel again, not in three or five years, but perhaps 30 years from now - just because back in 2016, quite needlessly, the wrong answers were given to the wrong questions.

Yet right now, no one in the German government can say that out loud.

 Read more: Opinion: Brexit poses challenge to peace in Europe | Opinion | DW.COM | 22.06.2016

Brexit - latest news, breaking stories and comment

The Labour leader Jeremy Corbyn last night warned he would not take the “blame” if Labour supporters tipped the balance in favour of Brexit.

In an interview on Sky News Mr Corbyn, who has been accused of running a lackluster remain campaign, admitted he was “not a lover of the European Union”.

But he insisted he wanted Labour supporters to vote to stay – although if they didn’t it was not the fault of his party.

“I am not going to take blame for people’s decision,” he said.

“There will be a decision made on Thursday. I am hoping there is going to be a remain vote. There may well be a remain vote. But there may well be a leave vote. Whatever the result – that will be the result of the referendum. We have got to work with it.”

Mr Corbyn also warned that the EU must change "dramatically" even if Britain remains a member.

Facing questions from a studio audience Mr Corbyn admitted that most people “do not understand” all of the implications of this Thursday’s vote.

But despite having voted against European treaties in the past Mr Corbyn insisted that Britain was better off in the EU than outside.

Read more: Brexit - latest news, breaking stories and comment - The Independent

EU-Russia Relations, EU pledge to continue dialogue despite sanctions: Juncker

Dialog not confrontation

Russia and the EU should continue their dialogue despite sanctions, the European Commission head Jean-Claude Juncker has said at the St. Petersburg Economic Forum. Russian Foreign Minister Sergey Lavrov responded by saying that Russia is in favor of an equal, mutually beneficial, but not selective dialogue.

"We can have no illusions about the problems weighing on our relationship today. They exist. It would be pointless, even dangerous, to ignore them. We must tackle them urgently," Juncker added."I have strong preference for pipelines that unite, rather than pipelines that divide," he added, as quoted by Reuters.

The dialogue should start with discussing the Minsk agreements, and ensuring the norms and rules of international law, Juncker said.

"Russia's actions have shaken the principles of European security. Sovereignty, sovereign equality, the non-use of force, and territorial integrity matter. They cannot be ignored," he added.

As for Ukraine, it should make its own decisions regarding relations with all states, including with Russia and the EU, or both, and the choice should be respected, Juncker said, adding that a stable Ukraine would do the Russian economy good, too.

Juncker also defended his decision to arrive in Russia for the summit, saying it was just common sense to continue the dialogue with Moscow despite any tensions, and that he knew some didn't support his step to come to St.Petersburg. He said he was expecting "frank" negotiations with President Vladimir Putin on many subjects.

Russia has never courted confrontation with the West and is always open to dialogue, Russian Foreign Minister Sergey Lavrov has said during the St. Petersburg Economic Forum.

“The current crisis should help us, as well as the EU, understand how to proceed. We will neither take offense nor go into isolation,” Lavrov added.

“We have carried out an inventory of our relations with the EU, drafted it on paper, and have an extensive document. We’ll give it to our colleagues and offer to conduct an inventory together,” Lavrov said.

The foreign minister also said that the EU is a most important economic partner for Moscow, and expressed his certitude that “the development of various ties in economics, politics, culture, security directly aligns with the interests of both Russia and European countries.”

The EU is Russia's main trading partner (44.8 percent of Russia's foreign trade in 2015). Russia is the fourth largest trade partner of the bloc after the US, China and Switzerland, plus the biggest natural gas supplier to the EU and one of its biggest oil suppliers.

However, due to recent tensions, trade between Moscow and Brussels sharply dropped from $417.7 billion in 2013 to $235.7 billion last year.

The St. Petersburg International Economic Forum is held on June 16-18, focusing on the theme ‘Capitalizing on the New Global Economic Reality’.

Read more: Russia, EU pledge to continue dialogue despite sanctions: Juncker | Russia

Britain: the Brexit drama

Days before the crucial June 23 vote, the debate surrounding Britain's membership in the European Union is heating up.

For the complete report click here

Britain: Bank of England: economy will be hit hard if Britain leaves EU

The Bank of Englandhas issued a fresh warning that a vote to leave the EU in next week’s referendum risks knocking economic growth, pushing the pound sharply lower and sending shockwaves through the global economy.

Against the backdrop of jittery financial markets, the Bank alsorevealed its top policymakers had been briefed by staff on contingency planning for the referendum as it readies measures to prevent markets seizing up in the event of a leave vote next week.

Announcing its decision to keep interest rates at their record low of 0.5%, the Bank said the referendum on 23 June was the biggest immediate risk to UK financial markets, and perhaps those overseas, and that the current uncertainty was already denting spending. The pound has weakened in the run-up to the vote as opinion polls have pointed to a lead forthe leave vote and the Bank warned in minutes to its latest rate-setting meeting that it would fall further in the event of Brexit.

“The outcome of the referendum continued to be the largest immediate risk facing UK financial markets, and possibly global financial markets,” said the minutes. In addition: “On the evidence of the recent behaviour of the foreign exchange market, it appears increasingly likely that, were the UK to vote to leave the EUsterling’s exchange rate would fall further, perhaps sharply.”

The minutes also noted recent comments on potential Brexit risks to global financial markets made by the US central bank as it left interest rates there on hold this week. The record of the Bank’s finalm rate-setting meeting before the referendum showed all nine members of the monetary policy committee (MPC) voted unanimously to keep interest rates at 0.5%. That was as expected by financial markets and economists,given the impending vote.

The minutes said the MPC had been briefed on contingency planning for the referendum, including on the “more intensive supervision by the Prudential Regulation Authority of major financial institutions to ensure they had sufficient liquidity”.

The Bank said in the minutes that it was “well placed to address liquidity needs and support the functioning of financial markets”. In the minutes, policymakers noted a pick-up in uncertainty ahead of the vote, which could knock economic growth.

“The main focus of the committee’s policy discussion this monthconcerned the difficulty in identifying the underlying momentum in the domestic economy, amidst the influence on activity of uncertaintyrelated to the EU referendum,” the minutes said.

“Measures of uncertainty had increased further over the past month, with the UK a clear outlier internationally. And there had been growing evidence that uncertainty about the outcome of the referendum was leading to delays to major economic decisions that were costly or difficult to reverse.”

There had been a “sharp decline” in the value of commercial real estate transactions and in merger and acquisition (M&A) activity and reports of delayed business investment, the Bank said, echoing some private sector reports of spending decisions being deferred. The Bank also noted some possible influence oconsumer spending.

Regarding households, both car purchases and residential housing activity had declined, although it was difficult to isolate the extent to which these effects related to the referendum or a more general underlying slowing,” the minutes said. But the Bank added retail sales had been stronger than expected in April and that confidence indicators, as a whole, “remained healthy”.

Interest rates have been on hold at a record low of 0.5% for more than seven yearsExpectations of when rates might start to rise back to more normal levels have been shifted back amid signs the economy may have slowed recently. Some policymakers and economists have even discussed the prospect of interest rates being cut further. In the near-term much will depend on the referendum and market reaction to the outcome.

Read more: Bank of England: economy will be hit hard if Britain leaves EU | Business | The Guardian

European Car Industry: VW plans huge investment to become electric cars leader

 Matthias Mueller, chief executive of VW, Europe's biggest carmaker, said huge investments would be needed as the firm moves beyond the "dieselgate" scandal.

He hopes that by 2025, all-electric cars would account for about 20-25% of the German carmaker's annual sales.

Latest figures show that sales growth of Volkswagen-branded cars continues to fall behind European rivals.

Outlining what he described as the "key building blocks in the new group strategy", Mr Mueller said VW aimed to "transform its core automotive business or, to put it another way, make a fundamental realignment in readiness for the new age of mobility".

VW will focus on "the most attractive and fastest-growing market segments", he said. "Special emphasis will be place on e-mobility. The group is planning a broad-based initiative in this area: it intends to launch more than 30 purely battery-powered electric vehicles over the next ten years," he said.

VW was plunged into crisis when it was revealed in the US last September that diesel engines had been fitted with software that could distort emissions tests. The company later revealed that some 11 million cars worldwide were affected.



Read more: VW plans huge investment to become electric cars leader - BBC News

European Economy: OECD: European Economy Is Slowly Recovering But New Challenges Are Emerg

The European economy is gradually recovering but further policy action will be required to address unresolved legacies of the global economic crisis that are weighing on growth and major new concerns that have emerged, according to two new OECD reports.

The latest OECD Economic Surveys of the European Union and of the Euro Area, presented today in Paris by OECD Secretary-General Angel Gurría, underline the challenges facing European policymakers. Although growth has gradually strengthened, unemployment in many countries is still high, investment remains below pre-crisis levels in most European countries, and credit growth is still sluggish.

The Surveys project EU GDP will grow by 1.8% this year and 1.9% in 2017, while GDP in the euro area will grow by 1.6% this year and 1.7% in 2017.

‘Europe has put the worst of the crisis behind it, but there is still much more to do to support a full robust recovery that benefits all Europeans,’ Mr Gurría said. ‘Most of the recommendations in these two Economic Surveys have one thing in common: they call for collective action by European countries. Cooperative solutions have enabled Europe to leave the worst of the crisis behind it. But continued cooperation is still needed to implement effective solutions to common problems.

The alternative to collective action is not the status quo, but something worse: the risk that Europe will move backwards. This would jeopardise what has been achieved to date by the Single Market and the rest of the EU acquis, decreasing growth and destroying jobs across Europe.’

The Surveys say that countries with fiscal space should use budgetary spending to boost growth. Given the deep cuts in public investment since the global financial crisis, the reports recommend increasing public support for key investment projects. Enacting broad reforms to tax structures and public spending would also favour growth.

Easing financial constraints would bring benefits across the economy, notably to private sector firms considering future investment plans. This will require addressing one of the legacies of the crisis – the resolution of non-performing loans in many countries, which threaten financial stability and act as a drag on bank credit.

 Waivers could be applied to the new Bank Recovery and Resolution Directive rules to help put in place government-supported schemes when non-performing loans are a serious economic disturbance, the Surveys said.

The Surveys discuss the need for additional steps to deepen the single European market, notably with regard to labour mobility, which can be a key tool to reduce unemployment and boost productivity.

Reducing administrative and regulatory barriers in the services sector and speeding up the recognition of professional qualifications from one country to another would encourage internal mobility, the Surveys said.

Read moreL OECD: European Economy Is Slowly Recovering But Legacies Of The Crisis Remain And New Challenges Are Emerging | Hellenic Shipping News Worldwide

US Presidential Campaign: Saudi Arabia Has Funded 20% Of Hillary's Presidential Campaign

Politics make starnge bedfellows

Deputy Crown Prince Mohammed bin Salman reportedly said Saudi has enthusiastically funded Hillary Clinton’s presidential campaign.  Saudi Arabia is a major funder of Hillary Clinton’s campaign to become the next president of the United States, according to a report published by Jordan’s official news agency.

The Petra News Agency published on Sunday what it described as exclusive comments from Saudi Deputy Crown Prince Mohammed bin Salman which included a claim that Riyadh has provided 20 percent of the total funding to the prospective Democratic candidate’s campaign.

The report was later deleted and the news agency has not responded to requests for comment.

It is illegal in the United States for foreign countries to try to influence the outcome of elections by funding candidates.

The Washington-based Institute for Gulf Affairs has re-published the original Arabic Petra report, which quoted Prince Mohammed as having said Saudi Arabia had provided with “full enthusiasm” an undisclosed amount of money to Clinton.

“Saudi Arabia always has sponsored both Republican and Democratic Party of America and in America current election also provide with full enthusiasm 20 percent of the cost of Hillary Clinton’s election even though some events in the country don’t have a positive look to support the king of a woman (sic) for presidency,” the report quoted Prince Mohammed as having said.

The US Federal Election commission reports that over the past two years Clinton has raised a little more than $211.78m. Twenty percent of this sum is $42.35m.

The report was published on the eve of Prince Mohammed making an official visit to the United States. 

Read more: AhlulBayt News Agency - ABNA - Shia News

The Global Economy: Globalization's Gluttony - by Anatol Zukerman

Corporate Global Power

Globalization is gobble-isation
By the goblins of global gluttony.
While gullible workers of troubled world
Work in the sweat of their brows
Crass corporations grab the world’s wealth
And don’t even share it with its creators.
 
This pen-and-ink drawing captures the shifting mindset among American workers. For decades, they went along with the promises of their leading politicians that, despite all the harsh changes in the national economy, there would be a brighter tomorrow. But now, these voters are running out of hope.

As the biggest American corporations liberally shed jobs at home and have effectively abandoned America for cheap labor and tax havens abroad, working-class voters feel at the receiving end of the stick.

The fact that these companies at the same time have American government in their claws does not make working-class voters feel better. Social benefits, meager to begin with, have been further reduced. Yet, another, fairer social compact is possible, as corporations in Europe demonstrate.

Not so in the United States, where corporations are not only determined to ignore the will of American people in order to expand their power and increase their profits, but get away with it due to bought-off politicians.

It is a painful irony that the latter claim to protect the “public” interest. It only leads to more bitterness that nearly all major American politicians – including the current crop of candidates for President of the United States – have made critical statements about corporations many times over many years. But it was just words, never followed up with deeds.

This globalization for the rich continues. If it isn’t more inclusive, it will fail.

Read more: Globalization's Gluttony - by Anatol Zukerman

Deranged Mass Murderers strike in Orlando Florida

Islamic "State" group claims responsibility for Orlando shooting (news agency linked to IS group) More information to come...

Brexit: Michael Moore: "'Britain Is A Toxic Place... Should Vote To Stay In The EU'

Brexit: Watch your back Britain - 
Scotland will also take a slice of your pie

The Oscar-winning documentary-maker was promoting his new film, ‘Where to Invade Next’, which sees him visiting European countries to claim their best features for his home nation.

The UK does not feature in the film as it has nothing to offer against the likes of Italian holiday entitlement, Norwegian prisons and French school lunches. Michael Moore explained:

“It was a conscious and purposeful decision to not come to the UK. I mean this with respect, we didn’t feel like there was anything left to learn here. And that you had given up on yourselves.”

In particular, the Guardian reports, Mr. Moore cited Tony Blair’s support for allying Britain to the 2003 invasion of Iraq in the poisoning of the UK’s reputation, saying:

“You may be over Tony Blair. We’re not. We expected George W Bush to start that war. That wasn’t a surprise. But he was able to do it because you – the Brits, under Tony Blair – gave him back-up. You made it possible for him to say: ‘Hey, it’s not just me!’

“Honestly, if Blair hadn’t supported that war, I don’t know that [Bush] could have pulled it off. We’re not quite over the damage that this country has done to us and to the world by so-called liberals here voting and revoting for an individual who was anything but a liberal.

“This is a toxic place.
”
Mr. Moore did suggest that the election of Jeremy Corbyn as Labour Party leader atoned for some of the country’s sins, claiming: “that’s getting back to what Labour stood for, its roots. I wish Tony Benn were still around to see this.”

Nevertheless he identified what he sees as a further blot on the UK’s record, namely people voting for “bonkers” Brexit in the upcoming referendum.

“Why would you do this? You saved Europe. Europe today is, in large part, because of you, the UK. Why would you want to leave?

“Because, see, what are the arguments I’ve had to listen to this morning already on the news?  ‘It costs too much money…it’s 50 billion pounds a day…immigrants, immigrants, immigrants, immigrants…’
“Really? You know, that’s not who you are.”

Mr. Moore went on to draw comparisons between the EU referendum and November’s U.S. Presidential Election. He believes it likely that Brexiteers are similar to Donald Trump supporters, being more dedicated to their cause and therefore more likely to vote.

“I’m guessing the majority of Brits don’t want to leave the European Union,” he said. “But on election day who’s going to be out there? The haters.”

Read more: Michael Moore: 'Britain Is A Toxic Place... Should Vote To Stay In The EU'

EU Parliament - Chemical Industry - Monsanto: Glyphosate -- Crushed it!! and Avaaz made it happen

Europe just took an extraordinary vote, refusing to grant Monsanto a license for its main product and cornerstone of its empire - the cancer-linked weed killer glyphosate.

Monsanto thought renewal of glyphosate was a done deal. But now, after over 2 million of us joined the biggest global petition against glyphosate ever and massive targeted public pressure, the future of the Monsanto model is more in question than ever before.

Together we forced this from a formality for a new 15-year license into a heated political debate that ended up as a vote on an 18-month emergency extension. This week, European nations rejected even that.

Leading EU parliamentarian Pavel Poc just said: “Avaaz is indisputably the driving force of the fight for glyphosate discontinuance." Here’s what we have done together to make what seemed impossible, possible:

When it came down to the final vote, all our work paid off - leaders representing half the EU population refused to authorise glyphosate, even for the trimmed down 18-month proposal we had helped reduce the license to!

All of this effort was funded by over 86,000 Avaazers worldwide who donated generously to make this campaign mega.

Throughout this fight, Avaaz was joined by great allies and partners who played invaluable roles. Our view is only partial, but here’s our top list to express gratitude to:

• The Socialists and Democrats, and Green parties in the EU Parliament were crucial in this fight. Particularly Bart Staes and Pavel Poc who were instrumental.
• French Environment Minister Ségolène Royal, who was a central leader in this fight.
• Pesticide Action Network, a great coalition of national action networks that has long campaigned on glyphosate and provided great advice and insight to Avaaz.
• Greenpeace, always a wonderful force on these issues, which did a lot of lobbying and media work on glyphosate.
• Campact ran a brilliant campaign in Germany, and matched massive open letters, polling and bird-dogging to play a key role in flipping the German government on glyphosate.
• And many others! Like HEAL, WeMove.eu, Global 2000, and a great coalition of Italian NGOs on this.

Note EU-DigestL Once again the above result shows that people, once they can get out of their comfort zone and join together in a common cause, can still make a difference and overcome just about any hurdle that is politically, economically ,industrially, environmentally dangerous to their health or lifestyle. 

EU-Digest supports Avaaz  and recommends AVAAZ  - a global web movement to bring people-powered politics to decision-making everywhere
 
Read more: Avaaz - Glyphosate -- Crushed it!!

Brexit - Japan: Toyota eyes legal action against Brexit camp's use of its log

Toyota Motor Corp. said Thursday it is considering legal action against the official campaign for Britain to leave the European Union for using its logo in the group's leaflets in a move implying the Japanese automaker backs Brexit.

Toyota said in a statement that the use of the Toyota logo in Vote Leave campaign flyers ahead of the June 23 referendum "could mislead the reader into thinking that Toyota endorses the Vote Leave campaign."

The automaker said it fully respects whether to remain or to leave the European Union is for the British people to decide, while repeating its belief that British membership of the European Union is "best" for Toyota's operations and long term competitiveness.

Read more: Toyota eyes legal action against Brexit camp's use of its logo | Kyodo News

ECB: Draghi asks for faster response of Eurozone governments to reforms

Mario Draghi, President of the European Central Bank (ECB) warns on lack of actions of Eurozone leaders at the Brussels Economic Forum.

Draghi asked the governments to act in all policy areas in order for stabilisation of the economy to occur. “In the euro area, many structural reforms have been implemented in recent years, and especially in those countries worst-hit by the crisis. The benefits can now be seen. But there are many more benefits still to aim for, and so much more needs to be done,” stressed Draghi.

As consolidation after 2010 in the area was implemented in some countries mainly through tax rises rather than current spending cuts, the full burden of macroeconomic stabilisation was placed on monetary policy, as Draghi suggests. “This has led to a slower return of output to potential than if fiscal policy had been more supportive. This is why the ECB has said many times that fiscal policy should work with not against monetary policy,” underlined the man responsible for the Euro area’s monetary policy.

“Supporting demand is not just a question of the budget balance, but also of its composition, especially the tax burden and the share of public investment,” he adds. “We should not see fiscal policy as solely a macroeconomic tool, which is only available to countries with strong public finances. We should also see it as a microeconomic policy tool that can enhance growth even when public finances need to be consolidated.”

Read more: Draghi asks for faster response of Eurozone governments to reforms

EU-US Trade Conference: The TTIP trade deal is lost at sea "and has no Public support"

TTIP: No Public and only limited political support

The future of the Transatlantic Trade and Investment Partnership (TTIP) between the US and European Union seems bleak. Beset by doubts and stumbling alongside the UK’s referendum on EU membership, the TTIP is starting to look like an awful lot of effort for unremarkable gains.

US president Barack Obama may have given the negotiation process a shot in the arm in recent weeks, but there is a good possibility that a deal will not be struck during his administration. After that, all bets are off.

So why has such a major piece of international deal-making found it so hard to make headway, and what are the chances of a deal ever being done?

Well, the first reason for the impasse is that no one can agree on what it should cover. It is deeply complex, but there are essentially two choices: should TTIP only apply to the tariffs that countries place on imports, or should it also address other barriers to business, mostly technical regulations on things like car safety, or the procedures for testing new chemicals?

Estimates for the economic benefit to the EU from a tariffs-only deal come out at just 0.3% of GDP for the EU as a whole. If we abolish all non-tariff barriers, then we get a 4% boost.

That makes it seems like an easy decision from an economic point of view, but it’s highly contested.

The reason for the logjam is clear. Going far enough to make it economically valuable drags into play all sorts of political and social issues. Our reading of the draft texts is that it won’t, in fact, lead to significant harmonisation or even mutual recognition of existing rules.

There are procedures to make sure future regulations are as compatible as possible, but there is nothing explicit to say that regulatory decision making powers will be transferred. Indeed, it is hard to see the US Congress accepting anything else.

That might seem like an effective compromise, but of course, any weakening of the approach to non-tariff barriers may in turn dampen the economic advantages.

The less complicated route – a TTIP which only removes tariffs – would bring very limited gains. Both EU and US tariffs are generally very low, except for cars, chemicals and agriculture. Their removal would have only a small effect.

At its heart, the far more valuable non-tariff route drags up fears, founded or unfounded, of a regulatory race to the bottom on things like food safety, and objections from NGOs about the loss of domestic policy power on things like health or government procurement. Crucially, TTIP has also raised the (contested) possibility of major corporations suing states.

There is another obstacle. In short, governments love handing out contracts for public works to domestic companies; it keeps local industries happy, and maybe a few political donors too. No huge surprise then that after 13 rounds of negotiations the TTIP impasse on public procurement remains.

Both the EU and US are parties to the World Trade Organisation’s plurilateral agreement on government procurement but the EU’s big picture was for TTIP to trade access to European state agriculture spending for inroads into highly protected US procurement markets, particularly at the state level. But the US steadfastly refuses to concede to market access demands, due to its traditional and entrenched domestic lobby groups – the steel industry, small and medium-sized firms, and disadvantaged communities.

It’s a missed opportunity. We could have increased transparency with a standardised e-procurement system and tender forms. Much more could be gained through harmonising definitions of integrity and conflict of interest concepts, along with strengthening corruption control measures. It’s a win-win for improving the governance of public procurement markets – but negotiations have been dominated by intractable trade issues and the fears of ISDS.

In such a confrontational atmosphere, it is doubtful that a meaningful TTIP can be concluded. Sceptics’ doubts may be exaggerated, but they still reflect genuine public alarm.

The general confusion is highlighted by supporters of a UK exit from the EU, who argue both that the UK could sign a TTIP deal very quickly after Brexit, and that that leaving the EU is the only way to stop it. In any case, unless a deal is rushed through before the end of 2016, prospects for a deal are bleak.

Of the likely presidential candidates, neither Hillary Clinton nor Donald Trump are likely to make TTIP a top priority in a future US administration.

Meanwhile, public opinion – and crucially the German government – move closer to outright opposition.

Read more: The TTIP trade deal is lost at sea

The Dollar Peg: Russia and China to release world from dollar peg saysa "PravdaReport"

Russia has outmaneuvered the Saudis in fight for the Chinese oil market despite Western states' unity in sanctions opposition with Russia and conspiracy theory on the US oil deal with Saudi Arabia. In April China increased oil import from Russia 52%, while import from Saudi Arabia dropped 22%.

Record-high import volumes from Russia are most probably grounded on payments in yuans, which Russia agreed on.

It should be the main achievement of Russia-China economic partnership. Tectonic shifts in global economy will allow the countries to reject dollars.

Yuriy Gromyko, Director of the Anticipatory Researches Institute named after Schiffers, Professor at the British School for Social and Economic Studies, commented Pravda.Ru on the situation.

"Dedollarisation process is going on by leaps and bounds, and the Chinese Central Bank has the key point here. As China started shifting to swaps, mutual currency exchange rates, long ago, Gromyko noted.

However, Russia is to do a lot of things to reach significant results along with China.

"This victory was achieved due to hydrocarbon supplies. There is no doubt that Russia should develop air, space and oil industries. What is underestimated most of all in Russia that is engineering science, and China is waiting for possibility to make deals and work with Russia on creation of ultimately new technologies.

Creation of joint innovative industry is a key to fall beyond the dollars system," the expert told Pravda.Ru.

He also pointed out that Russia already has experience of shifting to payments in national currencies and swaps with Vietnam.

"We have actively started offering swaps to a whole range of states via the Shanghai Cooperation Organisation. India is also ready to join these negotiations. And we can also try involve Malaysia in the cooperation," the expert claimed.

Yuriy Gromyko also highlighted fruitful results of the ASEAN countries forum in Sochi. He believes that Association of Southeast Asian Nations may become a ground for equal cooperation between Russia and China opposing Trans-Pacific Partnership.

As Pravda.Ru reported, the Trans-Pacific Partnership is promoted by the United States to suppress China economically in the Pacific region.

The Pravda.Ru expert noted, that here Russia faces extensive opportunities for economic cooperation.

Russia has outmaneuvered the Saudis in fight for the Chinese oil market despite Western states' unity in sanctions opposition with Russia and conspiracy theory on the US oil deal with Saudi Arabia. In April China increased oil import from Russia 52%, while import from Saudi Arabia dropped 22%.

Record-high import volumes from Russia are most probably grounded on payments in yuans, which Russia agreed on.

It should be the main achievement of Russia-China economic partnership. Tectonic shifts in global economy will allow the countries to reject dollars.

Yuriy Gromyko, Director of the Anticipatory Researches Institute named after Schiffers, Professor at the British School for Social and Economic Studies, commented Pravda.Ru on the situation.

"Dedollarisation process is going on by leaps and bounds, and the Chinese Central Bank has the key point here. As China started shifting to swaps, mutual currency exchange rates, long ago, Gromyko noted.

However, Russia is to do a lot of things to reach significant results along with China.

"This victory was achieved due to hydrocarbon supplies. There is no doubt that Russia should develop air, space and oil industries. What is underestimated most of all in Russia that is engineering science, and China is waiting for possibility to make deals and work with Russia on creation of ultimately new technologies.

Creation of joint innovative industry is a key to fall beyond the dollars system," the expert told Pravda.Ru.

He also pointed out that Russia already has experience of shifting to payments in national currencies and swaps with Vietnam.

"We have actively started offering swaps to a whole range of states via the Shanghai Cooperation Organisation. India is also ready to join these negotiations. And we can also try involve Malaysia in the cooperation," the expert claimed.

Yuriy Gromyko also highlighted fruitful results of the ASEAN countries forum in Sochi. He believes that Association of Southeast Asian Nations may become a ground for equal cooperation between Russia and China opposing Trans-Pacific Partnership.

As Pravda.Ru reported, the Trans-Pacific Partnership is promoted by the United States to suppress China economically in the Pacific region.

The Pravda.Ru expert noted, that here Russia faces extensive opportunities for economic cooperation.

Read more: Russia and China to release world from dollar peg - PravdaReport

US newspaper industry hollowed out by job losses

The US newspaper industry has shed more than half its jobs since 1990, losses which have only been partly offset by gains in online media.

Official US Labor Department data showed the newspaper sector lost 271,800 jobs in the period from January 1990 to March 2016, or 59.7 percent of the total over the past 26 years.

The numbers, first cited in a report by the news website Engadget, confirm the massive shift to digital media that has hammered traditional newspapers.

Magazines fared only slightly better, losing 36 percent of their jobs in the same period.

Employment in Internet publishing and broadcasting, meanwhile, rose from about 30,000 to nearly 198,000, the Bureau of Labor Statistics data showed.

The growth in digital has coincided with a drop of some 27 percent of the jobs in radio, according to the figures.

But motion picture employment grew nearly 162 percent to 239,000, according to the report released last week.

The latest statistics come against a backdrop of a troubled print media industry marked by shutdowns of newspapers and sharp declines in circulation and advertising revenue.

Read more Flash - US newspaper industry hollowed out by job losses - France 24

U.S. to Press China to Curb Industrial Output - by C. Buckley and J. Perlez

The Obama administration plans to use annual talks with leaders in Beijing to push for cuts in excess Chinese industrial output, which has inundated foreign markets with discounted steel, aluminum and other products, Treasury Secretary Jacob J. Lew said in Beijing on Sunday ahead of the meeting.

The talks, known as the U.S.-China Strategic and Economic Dialogue, bring together senior American and Chinese officials every year to discuss a broad range of economic, foreign policy and security concerns.

On the economic side of the talks, China’s exchange rate controls and intellectual property violations will be high on the American agenda, while North Korea and the South China Sea are expected to dominate the security talks.

But Mr. Lew said the economic track of the meeting in the Chinese capital this year would also take up China’s flood of exports of steel and other products, which have spilled into the international marketplace, provoking anger from producers, unions and politicians.

“Excess capacity is not just a domestic issue,” Mr. Lew told an audience of students and academics at Tsinghua University ahead of the start of the dialogue on Monday.

“The question of excess capacity is one that really has an enormous effect on global markets for things like steel and aluminum,” he said. “We’re seeing distortions in global markets because of excess capacity.”

A senior Chinese official said last week that his side was prepared to discuss excess capacity but was vague about how China would respond.

“We do not shy away from problems,” the official, Zhu Guangyao, a vice minister of finance, told reporters at a briefing. “Anything can be discussed in the economic dialogue.”

Chinese leaders, including President Xi Jinping, have said they will cut back production at steel mills, coal mines and other plants, where capacity far exceeds domestic demand, especially as the economy slows and shifts away from smokestack industries. Mr. Xi has made that part of a program of shifting investment to more rewarding areas that he calls “supply-side structural reform.”

“We cannot wait just because the burden is heavy, or fail to act just because there are many hardships,” Mr. Xi said at a meeting of policy makers in May in which the program for cutting excess capacity was discussed, according to an official summary.

But the Chinese government’s plans remain opaque, and, meanwhile, much of that excess output is being sold on foreign markets where other manufacturers are struggling to compete with China’s much cheaper production.

Read more: U.S. to Press China to Curb Industrial Output - The New York Times

US Presidential elections High time US joins majority of world’s democracies and gives multi-party system a chance

USA: The Two Party System Has failed And Is Corrupt

Former Republican governor of New Mexico, who has just been nominated for president on the Libertarian Party ticket. He also  ran four years ago and got 1 percent of the popular vote.

This year his running mate is William Weld, a former Republican governor of Massachusetts. Jill is Jill Stein, a Massachusetts physician who ran for president four years ago and got about half a percent of the vote as the Green Party candidate.

Johnson and Weld want more personal freedom, less government and no foreign entanglements. Stein sounds a lot like Bernie Sanders in her dislike of the two-party system and like Sanders and consumer advocate Ralph Nader in her disdain for corporate power and worry over climate change. 

With Donald Trump and Hillary Clinton seemingly locked in a battle to be the most hated presidential candidate in history, and Bernie Sanders fighting the system for the Democratic nomination, many voters are feeling.

America is stepping in to fill the void that the major parties ‒ and the mainstream media ‒ have created this election season. 

The grass is always greener on the other side, and Americans often denounce our polarized two-party system in favor of three or more parties, with good reason. Our current arrangement deters us from voting for third-party candidates, as we are loath to waste a vote.

Crossing the aisle is a political liability for lawmakers, who are forced to vote in lockstep with their party. Consensus is admittedly difficult with many opposing coalitions in countries with multi-party structures, and the formation of too many parties must be prevented; this could easily by achieved by requiring parties to maintain a percentage of the vote in order to remain active.

The US could have the best of both worlds by establishing a proportional system in order to give minority parties a fighting chance, which would in turn keep the majority parties on their toes.

Perhaps it would motivate them to work harder for their constituents, lest they be voted out in favor of a third party contender.

It’s high time for America to join the majority of the world’s democracies by giving a multi-party system a chance.

EU-Digest

ECB: forecast confused

ECB raises growth, inflation forecasts but warns of risks http://www.cnbc.com/id/103683099

Read more: click here

Central Banks: Helicopter Money: A Disguise For debt Financing - by John Kay

The term “helicopter money” is derived from a vivid image created by the US economist Milton Friedman in which a central banker showers notes on a grateful populace.

 More recently, the notion has been promoted by Adair Turner, the former chairman of the UK financial regulator, in his book, Between Debt and the Devil. It has also won some favour from bond king Bill Gross and even real central bankers such as Ben Bernanke, formerly chairman of the US Federal Reserve, and Mario Draghi, president of the European Central Bank.

 No one really envisages that money would be dropped from a helicopter. What they have in mind is that in a recession government would increase expenditure in a manner that would directly stimulate private sector spending. The ideal format in which to undertake the borrowing required is bank notes, which pay no interest and need never be repaid. That is why the idea of dropping currency from a helicopter has appeal.

 But, of course, even if the lucky recipients of the helicopter drop went straight down to the pub to celebrate their good fortune, the publican would return the cash to the banking system by the end of the day, and the notes would end up back in the vaults of the central bank. The helicopter drop does not give households reason to hold additional notes in their wallets, shops to keep more cash in their tills, or banks to hold more currency in their branches.

 Proponents of helicopter money seem to think government borrowing undertaken in this way does not really count — whether because it is irredeemable, and not really anyone’s liability; or because it is channelled through the central bank. The so-called Maastricht figure for EU government indebtedness, collated by the European Commission, does not consolidate the balance sheets of the zone’s central banks.

 By contrast, the official figure for overall UK government debt does include the assets and liabilities of the Bank of England (as well as the asset purchase scheme, which holds the £375bn of UK government debt that the BoE has purchased in the name of “quantitative easing”).

 If you are not already bewildered, you will be if you want an explanation of how the various negative and positive balances that central banks in the eurozone have with the ECB fit into this picture — or if you want an explanation of how losses the ECB will eventually incur on the doubtful collateral it has taken on to its books will finally be accounted for.

 The mystery of all this arises from the belief that central banks can never be insolvent because they can always print money and that bank notes are not exchangeable for anything but another bank note. But in fact you can redeem them by using them to pay your taxes; and if the central bank prints enough of them they lose their value.

Read more: Helicopter Money: A Disguise For debt Financin