Refugee Crises: italy and Germany, announce tougher Migrant laws

Italy and Germany signal tougher EU stance on migrants http://f24.my/2bVWu6A

Politics :Coping with the politics of anger

Globalization and the West: Coping With the Politics of Anger By Holger Schmieding What happens when the need for economic adjustment moves from the global South to the North. What happens when the need for economic adjustment moves from the global South to the North. ©2015 The Globalist ALL RIGHTS RESERVED You can join the conversation about this story on the original post on theglobalist.com. http://www.theglobalist.com/globalization-politics-economy-europe-west/#noredirect Powered by Como: http://www.como.com

TAX EVASION: US backing Apple's TAX Evasion Scheme's

Apple's massive EU tax bill could irk the US http://dw.com/p/1JsBy

Transportation: High speed trains coming within ten years

Amtrak’s next-gen high-speed trains may arrive at the same time as the Hyperloop http://flip.it/cjjnLt

G20 : Is the West ganging up against China?

China Wants a Successful G20 But Suspects the West May Derail Its Agenda http://flip.it/1D0TuW

EU-US controversial trade deal on death bed

Germany's Vice Chancellor Gabriel: US-EU trade talks 'have failed' http://dw.com/p/1JrHl

EU Data Regulations: Five Things to Know About the New EU General Data Protection Regulation - by Don Aplin

The European Union has finally gotten around to updating its seriously old and outdated framework privacy regime. The old EU Data Protection Directive has been around since 1995—when Clinton was president … the dude, not his wife—the lady who might be living in the White House next year.

The new EU Data Protection Regulation (GDPR) is designed to bring things into the digital world and comes into effect in May 2018.

But you don’t have to read all of the 261-page regulation. In a recent video segment, Bloomberg BNA Privacy & Security News Managing Editor Don Aplin points to five things you should know about the GDPR.

First, it sets up one privacy and data security law for the EU rather than separate laws in the 28 EU member states—27 if the U.K. follows through on its Brexit divorce from the bloc.

Second, the GDPR has a right to be forgotten provision to allow individuals in the EU to ask search engines like Google to remove search links to stuff where privacy outweighs the public’s right to know.

Third, if a company gets busted for violating the GDPR they may face really big fines of up to 4 percent of their worldwide revenue.

Fourth, the two year delay until the GDPR takes effect gives companies a chance to get their privacy policies and practices into line before facing any risk of those mega-fines.

Fifth, even though the EU is moving to a one major privacy law regime, there will still be lots of room for interpretation. So privacy and data security attorneys will definitely be busy for the foreseeable future.

Read more: Five Things to Know About the New EU General Data Protection Regulation | Bloomberg BNA

US Presidential Race: Clinton now Leads Trump By only 5 Points In Latest Poll

U.S. Democratic presidential candidate Hillary Clinton leads her Republican rival Donald Trump by 5 percentage points among likely voters, down from a peak this month of 12 points, according to the Reuters/Ipsos daily tracking poll released on Friday.

The Aug. 22-25 opinion poll found that 41 percent of likely voters supported Clinton ahead of the Nov. 8 presidential election, while 36 percent supported Trump. Some 23 percent would not pick either candidate and answered “refused,” “other” or “wouldn’t vote.”

Clinton, a former secretary of state, has led real estate developer Trump in the poll since Democrats and Republicans ended their national conventions and formally nominated their presidential candidates in July. Her level of support has varied between 41 and 45 percent during that period, and her lead over Trump in the tracking poll peaked this month at 12 percentage points on Tuesday.

During the past week, Clinton has been dogged by accusations by Trump, which she has denied, that donations to her family’s charitable foundation influenced her actions while she was secretary of state from 2009 to 2013. Questions have also surfaced again about her use of a private email server and address rather than a government one during her period at the State Department.

Meanwhile, Trump and Clinton also sparred over who would be a better advocate for African Americans and other minorities, and Trump hinted he could soften his hard-line stance on immigration. [nL1N1B714Z]

In a separate Reuters/Ipsos poll that includes candidates from small, alternative parties, Clinton leads the field by a smaller margin. Some 39 percent of likely voters supported Clinton in the four-way poll, compared with 36 percent for Trump, 7 percent for Libertarian candidate Gary Johnson and 3 percent for Green Party nominee Jill Stein.

Read more: Clinton Leads Trump By 5 Points In Latest Poll

EU Taxation Policies: US warns EU over Apple’s tax case

Is Apple cutting corners when paying taxes?

The US government has threatened the European Commission (EC) with retaliation if the body decides to proceed with its plan to demand millions of dollars in unpaid taxes from technology giant Apple.

The US Treasury Department issued a rare warning on Wednesday, August 24, accusing the Brussels-based body of becoming a “supranational tax authority” that poses a threat to international agreements concerning tax reform.

“The US Treasury Department continues to consider potential responses should the Commission continue its present course,” the Treasury said in its strongest language to date.

“A strongly preferred and mutually beneficial outcome would be a return to the system and practice of international tax cooperation that has long fostered cross-border investment between the United States and EU member states,” the warning added.

The European Union (EU) has been investigating a series of tax deals between Apple and Ireland which allow the iPhone maker to pay little or no tax on income earned across Europe.

The EC is expected to rule on the case next month. This is the biggest corporate tax avoidance investigation ever undertaken by the commission.

The EC is the executive body of the EU, responsible for implementing decisions, proposing legislation, upholding the EU treaties and managing the day-to-day business of the bloc.

According to investment bank JP Morgan, if Apple is forced to retroactively pay the Irish corporate tax rate of 12.5 percent on its pre-tax profits, the company might need to cash out as much as $19 billion.

A 2013 report by US Senate confirmed that Apple has paid little to no taxes on at least $74 billion of the profit it earned by exploiting Irish and American tax laws.

Tim Cook, who became Apple’s CEO after the death of its founder Steve Jobs five years ago, has denounced the case as “political crap.”

“There is no truth behind it,” he said. “Apple pays every tax dollar we owe.”

The EU estimates that tax avoidance by multinational corporations costs member states anywhere between $50 million to $78 billion a year in lost taxes.

In addition to Apple, other American companies like Amazon and Starbucks are also suspected of tax evasion.

Note EU-Digest: Hopefully the EU Commission does not cave-in for these US misguided threats and intimidations and tells the US Treasury Department where to shove this warning, which is protective of US corporate tax evaders.   

Read more: PressTV-US warns EU over Apple’s tax case

Monetary Policies: Demystifying Monetary Finance by Adair Turner

Eight years after the 2008 crisis governments and central banks – despite a plethora of policies and approaches – have failed to stimulate enough demand to produce sustained and strong growth. In Japan, so-called Abenomics promised 2% inflation by 2015; instead, the Bank of Japan (BOJ) expects it to be close to zero in 2016, with GDP growth below 1%. Eurozone growth halved in the second quarter of 2016 and is dangerously dependent on external export demand. Even the US recovery seems tepid.

Discussions of “helicopter money” – the direct injection of cash into the hands of consumers, or the permanent monetization of government debt – have, as a result, become more widespread. In principle, the case for such monetary finance is clear.

If the government cuts taxes, increases public expenditure, or distributes money directly to households, and if the central bank creates permanent new money to finance this stimulus, citizens’ nominal wealth will increase; and, unlike with debt-financed deficits, they will not face increased future taxes to pay off the debt incurred on their behalf. Some increase in aggregate nominal demand will inevitably occur, with the degree of stimulus broadly proportional to the amount of new money created.

But the debate about monetary finance is burdened by deep fears and unnecessary confusions. Some worry that helicopter money is bound to produce hyperinflation; others argue that, in terms of increasing demand and inflation, it would be no more effective than current policies. Both cannot be right.

One argument that it might be ineffective stems from the specter of a future “inflation tax.” In an economy at full employment and full potential output, a money-financed stimulus could produce only faster price growth, because no increase in real output would be possible. Any increase in private-sector nominal net worth would be offset by future inflation.

All of that is obviously true – and irrelevant. As I argue at greater length in a recent paper, no “inflation tax” can arise without increased inflation, which will result only if there is increased nominal demand. The idea that a future “inflation tax” can stymie the ability of money finance to stimulate aggregate nominal demand is a logical absurdity.

Accounts of how helicopter money works often implicitly assume a simple world in which all money is created by the monetary authority. But in the real world commercial banks can create new private deposit money and hold only a small fraction of those deposits as reserves at the central bank. In this world, another form of future tax becomes relevant.

To see why, it’s important to note that monetary finance is fundamentally different from debt finance only if the money created by the central bank is permanently non-interest bearing. Effective monetary finance therefore requires central banks to impose mandatory non-interest-bearing reserve requirements.

Doing so is entirely compatible with raising policy interest rates when appropriate, because the central bank can pay zero interest on mandatory reserves, while paying the policy interest rate on additional reserves. But if commercial banks are forced to hold non-interest-bearing reserves even when market interest rates have risen from zero, this imposes a tax on bank credit intermediation – a tax that is mathematically equivalent to the future tax burden that would result from a debt-financed stimulus. A recent paper by Claudio Borio, Piti Disyatat, and Anna Zabai argues that, as a result, monetary financing cannot be more stimulative than debt financing.

Read more: Demystifying Monetary Finance

Helicopter Money: Why Some Economists Are Talking About Dropping Money From the Sky - by Neil Erwin

For years, central banks have been doing everything they can think of to try to get higher inflation and stronger growth. The next step just may be a metaphorical helicopter, high above Tokyo. The Bank of Japan met Friday to decide on the next steps in its long battle against deflation, or falling prices, and analysts had thought it might pursue some coordinated effort with the Japanese government using an idea with a long historical lineage.

“Helicopter money” is the term economists and market-watchers use for an aggressive form of monetary stimulus — the government’s power to print money — to try to spur growth and get inflation higher. There had been buzz that the Bank of Japan could move in that direction, but it elected to take only a smaller action. The bank did say it would do a “comprehensive review” of policy in the months to come that could presage more coordination between the bank and the Japanese government.

It is an idea based on a metaphor used by the renowned economist Milton Friedman nearly five decades ago and given new life in this century by Ben Bernanke. It is also a policy that has echoes of some of the great catastrophes of economic history. And regardless of what, if anything, the Japanese central bank does this fall, if the global economy’s deflationary doldrums continue, expect the discussion around these metaphorical helicopters to get louder. They say desperate times demand desperate measures. Helicopter money is what monetary policy desperation looks like.

Read complete report  - click hrtr Helicopter Money: Why Some Economists Are Talking About Dropping Money From the Sky - The New York Times

Syria: There is no method to this tragic madness as the global political establishment "implodes"- by RM

Aleppo, Syria

On 23 April 2016, the United Nations and Arab League Envoy to Syria put out an estimate of 470,000 that had died in the war.  

These cold numbers are the first thing that hit you about Syria. Figures telling of a human catastrophe on a scale hard to compute. Suffering on a level to which any rational response seems inadequate – 470,000 people killed, according to the latest estimates; 11.5 percent of the population injured; 45 percent of a country of 22 million made homeless; 4 million refugees and 6.36 million internally displaced persons. Life expectancy is down from 70.5 years in 2010 to an estimated 55.4 years in 2015. Welcome to the Syrian civil war. 

The Syrian conflict has become worse than a nightmare, because after a nightmare you usually wake-up to some kind of normality, instead this is an ongoing nightmare, from which you never wake up.

In the meantime, the global political establishment, our political leaders, representing different so-called "power blocks", blame everything and everyone, except themselves, as they fuel this war with weapons from their weapons industry and that from around the world. 

Worse still, is that these weapons purchases are financed with money from mostly ignorant and misinformed taxpayers. 

Taxpayers usually are more interested in using an App on their smartphone, or in finding out on social media, like Facebook,what a friend is doing, or even why his or her dog prefers a certain type of dog food above another. Being concerned about whatever does not directly affect him or her is the last thing on the agenda. 

In Europe the war in Syria hardly ever is looked at as a human tragedy, or has anyone ask who the real culprits are of this tragedy, but sadly equated to what kind of impact the large number of refugees will have on European living standards.

Former US President Dwight Eisenhouwer once said about the weapons industry: "Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. The world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children… This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron ".   

Yes indeed, arms dealers and their government cabinet-level cronies always profit from a war.

On top of that there is now also a perverse logic that pervades restrictions. Military aid and arms sales by the US, but certainly not restricted to them alone, are now approved to formerly off-limits regimes.

Of the 67 countries which have received or are set to receive U.S. military aid, 32 were  previously identified by the State Department as having "poor" or worse human rights records.

Obviously, the central question is: does this make the world a safer place for anyone but arms manufacturers and the politicians who love and have them funded ?

Every academic in the world will tell you, Syria today is the most awful humanitarian catastrophic drama to hit the Levant since World War II. Do politicians realize that and make an effort to remedy it? No, not at all.

Whole families with small children ‒ some people terribly wounded by the bombings ‒ living in  olive groves under the elements, with neither shelter nor provisions.

And the drama continues. Russia used its Security Council veto at the UN to prevent any concerted action against the regime. Moscow also keeps the weapons and bombs coming.

Turkey, a NATO member, whose leader has his own aspirations for the area, supports whoever can help him diminish the Kurdish influence in the area, even ISIS. 

The Iranians use their expertise in crowd control to help Assad control the demonstrations against his regime, and the Americans are funding and supplying a Kurdish proxy army and different rebel groups to fight Assad forces, in addition to also bombing so-called "enemy targets".

Our global political establishment has had chance after chance to remedy the situation, but greed and hypocricy within a defunct political world order has made that impossible.

Syria and the surrounding region is now the epicenter of what is still to come - it is the beginning of cataclysmic developments around the world that will clarify to the world at large, "who was", "who is", and "who will come".

© this report can be copied only if its source is mentioned

EU-Digest 

Posted by EU-Digest at 11:50 PM

Climate change - alternative energy: Netherlands on brink of banning sale of petrol-fuelled cars - by J. Staufenberg

Europe appears poised to continue its move towards cutting fossil fuel use as the Netherlands joins a host of nations looking to pass innovative green energy laws.

The Dutch government has set a date for parliament to host a roundtable discussion that could see the sale of petrol- and diesel-fuelled cars banned by 2025.

If the measures proposed by the Labour Party in March are finally passed, it would join Norway and Denmark in making a concerted move to develop its electric car industry.

It comes after Germany saw all of its power supplied by renewable energies such as solar and wind power on one day in May as the economic powerhouse continues to phase out nuclear energy and fossil fuels.

And outside Europe, both India and China have demanded that citizens use their cars on alternate days only to reduce the exhaust fume production which is causing serious health problems for the populations of both nations.

The consensus-oriented parties of the Netherlands are set to consider a total ban on petrol and diesel cars in a debate on 13 October.

Richard Smokers, principle adviser in sustainable transport at the Dutch renewable technology company TNO, said the Dutch government was committed to meeting the Paris climate change agreement to reduce greenhouse emissions to 80 per cent less than the 1990 level. The plan requires the majority of passenger cars to be run on CO2-free energy by 2050.

"Dutch cities still have some problems to meet existing EU air quality standards and have formulated ambitions to improve air quality beyond these standards," he told The Independent, adding that the government had at the same time been reluctant to implement strict policies on the environment.

"The current government embraces long term targets and strives at meeting EU requirements, but is hesistant about proposing 'strong' policy measures.

"Instead it prefers to facilitate and stimulate initiatives from stakeholders in society."

If the law to ban the sale of new fossil-fuel cars by 2025 passes, a significant move will have been made towards phasing out all petrol and diesel cars by 2035, added Dr Smokers.

Read more: Climate change: Netherlands on brink of banning sale of petrol-fuelled cars | Climate Change | Environment | The Independent

Britain: Brexit damage to economy will outweigh modest wage gains, says study - by Anushka Asthana and Larry Elliott

Damage to the British economy caused by Brexit will more than offset the modest wage gains for British-born workers in low-paid jobs caused by cutting net migration to the tens of thousands a year, a study has found.

A report by the Resolution Foundation thinktank said there would be a small pay increase to native-born employees in sectors such as security and cleaning if there was a big cut in the number of workers arriving in Britain from overseas.

But it estimated that these benefits would fail to compensate for the reduction in real incomes caused in the short term by the higher inflation triggered by a falling pound, and in the long term by a slowdown in the economy’s growth rate.

The Resolution Foundation also warned that achieving the government’s target of cutting annual net migration from more than 300,000 to the tens of thousands would present serious challenges for companies that rely on low-paid migrant workers – and could force some of them out of business.

Immigration was a significant factor in the referendum campaign, with a sizeable number of those who voted to leave the EU citing it as reason for supporting Brexit. Early last month, Theresa May, then home secretary, said the government had received a clear message from the electorate and needed to control the numbers of people coming into the UK from the EU.

Read more: Brexit damage to economy will outweigh modest wage gains, says study | UK news | The Guardian

US Presidential Elections: Full Transcript of Donald Trump Foreign Policy Speech

Donald Trump

Republican presidential nominee Donald Trump delivered a speech from Youngstown, Ohio this afternoon, during which he discussed his plan for defeating ISIS.

During his remarks, Trump declared that the United States is at war with radical Islam and that any country that opposes ISIS should be considered an ally.

Trump also blamed the rise of ISIS on President Obama and on Hillary Clinton, saying that their policies allowed the terrorist organization to flourish. Finally, Trump expanded upon his controversial Muslim ban, proposing a suspension of visas to countries that he described as “exporters” of terrorism.

He also proposed an ideological test to ensure those entering the country adhere to certain principles.

Click on the link below for the full transcript of Donald Trump’s August 15th speech, via the campaign’s website.

READ: Full Transcript of Donald Trump Foreign Policy Speech | Heavy.com

The Netherlands: Efteling theme park in the Netherlands is like stepping back in time to magical world - by Anna Melville-james

The Netherlands: the Eftelink Theme Park

The thought of visiting a theme park on a busy national holiday is enough to turn most parents into a quivering wreck.

So I feared the worst when I headed across the North Sea with my five-year-old daughter to the Netherlands for a bank holiday Monday trip to the popular Efteling attraction.

But my luck was certainly in that day – unknown to me, the UK and the Netherlands do not share the same bank holiday dates, so Claudie and I had the park to ourselves.

Efteling is one of the world’s oldest theme parks and a place I had wanted to visit for a long time. 

It seemed different from the new breed of mega parks with their ever-faster rollercoasters, and instead harks back to a gentler age.

It was rumoured to have inspired Walt Disney to create Disneyland – although that is now largely relegated to myth. 

Efteling opened in 1952 and was entertaining families long before Mickey and Co – and it has maintained its popularity ever since.

Unlike Disney, Efteling, just to the north of Tilburg, is low-key, something that begins with actually finding that the park is located in a dense forest.

We had travelled first to Brussels by Eurostar before a quick connecting service dropped us outside the front gate.

From 2017, Eurostar’s new direct Amsterdam service means you could easily mix a city break with a day trip to the park.

Once inside Efteling, it all felt like a stroll through a beautiful park that just happens to have a rollercoaster in the middle.

First-time visitors should start with the pagoda, a chinoiserie folly that rises above the canopy to show you the whole park.

At ground level Claudie drew up her ride wishlist and commandeered one of the free trolleys for me to pull her in, as piped music floated over the boating lake.

We hit the 1950s miniature train, pedalling engines through the mock Dutch countryside, followed by the mini-waltzer and a toy car circuit.

We then toured the enchanted elf worlds on the Droomvlucht – the dreamflight ride – through a land of castles and fairy tales.

There are faster thrills too, including the new 60mph Baron 1898 ride and the Python rollercoaster.

By early afternoon it was time to stop and admire the park’s luxuriant tulips and leafy boughs, themselves a fairytale of red squirrels and bird boxes.

In the oldest area, the Marerijk, the forest frames a trail of classic tales such as Rapunzel, Pinocchio and Rumpelstiltskin reconstructed from the nostalgic drawings of illustrator Anton Pieck.

You won’t recognise all the characters: Mother Holle and Langnek are definitely aimed at the local crowds.

But there’s something soothing about their quirkiness.

This lack of pressure also applies to merchandise – I only saw one toy store, and food kiosks sell chips with mayonnaise, rather than drinks in movie tie-in cups.

As Claudie and I sat in the sunshine, we giggled at an animatronic gnome. It was a simple pleasure. But at that moment the world was magical. 

Read more: Efteling theme park in the Netherlands is like stepping back in time to magical world | Daily Mail Online

Netherlands: Why the Dutch won’t rush to Nexit and follow Britain out of the EU - by Joris Luyendijk

 The Brexit referendum result puts the Dutch prime minister, Mark Rutte, and the mainstream political parties supporting him in an awkward position. After Ireland, no country in the eurozone has closer economic and financial ties to the UK, with both nations favouring free trade and close relations to Washington. The Netherlands has huge investments in the UK and followed Britain into its wars in Afghanistan and Iraq. Royal Dutch Shell, Unilever and Elsevier are all successful Anglo-Dutch multinationals.

The Dutch will want to protect these interests by giving the UK the best possible Brexit deal. Yet the sweeter that deal, the more attractive a departure from the EU is going to look to Dutch voters contemplating a Nexit. That is the Dutch dilemma: the better it protects its interests from the fallout of Brexit, the more likely a Nexit becomes.

The Europhobe Party for Freedom leader Geert Wilders was quick to claim the Brexit referendum for himself. “Hurray for the British! Now it is our turn. Time for a Dutch referendum,” he tweeted in English as soon as the result became clear. Currently leading the polls, Wilders will do everything he can to make the central theme of next year’s parliamentary elections his demand for a referendum.

Yet even if the EU were to make Brexit a relatively pain-free affair, the expectation that the Netherlands is next to leave ignores crucial differences between the two countries. The Netherlands is in the euro and if leaving the EU is a leap in the dark, what will the departure from a currency union mean? Rotterdam is Europe’s biggest port and Schiphol one of its major airports. The 17th economy by size globally, the Netherlands is among the world’s five biggest exporters, making it economic suicide to step out of the world’s biggest economic trading bloc. Germany alone accounts for more than a quarter of all Dutch exports.

Part of the appeal of leave in the UK was the indulgence in fantasies about “making Britain great again” and restoring the country as a global player in its own right. The Dutch stopped being a colonial superpower 300 years ahead of the Brits and no longer suffer from “lost empire complex”. Though the country is bigger in population and economic clout than its tiny place on the map suggests, nobody in the Netherlands will get away with claiming that other countries will rush to strike trade deals with it in the event of a Nexit. A US president would probably not even visit the place to warn it against Nexit.

The Dutch historical experience is different, too. The case for European cooperation rests on a recognition of one’s own country’s global irrelevance – making the pooling of sovereignty a logical step. In the UK this recognition is a national taboo. In the Netherlands it is a given, while the country has far fewer options outside the EU. Thanks to the spread of English the UK can align itself with the Anglosphere rather than with the EU. There is no Dutchosphere. The British empire resulted in the Commonwealth, another option outside Europe unavailable to the Netherlands. Finally, the Netherlands is not an island and people are acutely aware of the fact that you can drive a tank from Moscow all the way to Amsterdam.

All of this is not to say that Euroscepticism is not growing in the Netherlands. But apart from Wilders this is scepticism in the actual sense of the word: more and more Dutch voters are suspending judgment on whether the European project can actually work. This attitude could not be more different from the Brexiters who have firmly made up their minds on how terrible and hopeless the EU is. “Europhobes” would be a much better term for them.

To give a sense of the Dutch inclination for Europhobia: Wilders currently polls at less than 20% of the vote. The Netherlands has a real democracy rather than a first-past-the-post system so 20% really means just 20%. Every other Dutch party of any size wants to stay in the EU, though almost all of them want reform. Here too a crucial difference with the UK emerges. Reform in the Dutch context means that voters want to see their sovereignty being pooled in a more democratic, effective and accountable way. In the UK “reform” stands for a decrease in the pooling of sovereignty.

Perhaps the biggest and ultimately deciding difference between the UK and the Netherlands are the two countries’ media landscapes. In the UK a handful of Europhobe billionaires have been relentlessly pushing their anti-EU agenda through extremely powerful tabloids and broadsheets, spreading malicious lies and untruths and dominating the conversation with headlines about “EU rapists” and “broken, dying Europe”. In the Netherlands newspaper owners do not interfere with the editorial line, considerably increasing the chance of a rational conversation.

For a sense of how important this is, one might quote the most important Europhobe billionaire, Australian-born, US immigrant Rupert Murdoch. When asked why he opposed the EU, Murdoch was recently quoted as saying that this was “easy” to understand: “When I go into Downing Street they do what I say; when I go to Brussels they take no notice.”

That is British sovereignty for you. The Dutch will have a very different referendum, when and if it comes.

Read more: Why the Dutch won’t rush to Nexit and follow Britain out of the EU | Joris Luyendijk | Opinion | The Guardian

Chemical Industry: Dow-DuPont’s planned $130bn tie-up probed by Brussels - by Duncan Robinson and James Fontanella-Khan

Brussels has launched an in-depth investigation into whether a planned $130bn merger between US chemicals giants Dow Chemical and DuPont would limit competition for supplies that are crucial to Europe’s farmers.

The move raises the prospect of a dramatic unwinding of a series of megamergers that are under way. The potential deals would reshape the agrochemicals business and put control of nearly two-thirds of the industry in the hands of just three companies.

It could also exacerbate strained transatlantic relations over EU inquiries into corporate America’s business practices.

Past European Commission investigations into large-scale US deals, including scuppering GE’s attempt to acquire Honeywell in 2001 and complicating Boeing’s 1997 takeover of McDonnell Douglas, have sparked intense disputes between Washington and Brussels.

The new investigation by Margrethe Vestager, the hard-charging EU competition commissioner, comes as both the US and EU are reviewing ChemChina’s $44bn takeover of Swiss agribusiness Syngenta, which would be the biggest-ever overseas Chinese takeover.

German drugs and chemical group Bayer is also attempting to convince Monsanto, the leading US agribuinsess, to accept a $64bn all-cash offer, a merger that would further intensify regulatory scrutiny across the industry.

“The livelihood of farmers depends on access to seeds and crop protection at competitive prices,” Ms Vestager said of her decision to escalate her inquiry into the Dow-DuPont deal. “We need to make sure that the proposed merger does not lead to higher prices or less innovation for these products.”

Despite past differences over major US deals, the Obama administration in recent years has blocked or complicated several large mergers, earning a reputation as one of the most interventionist antitrust enforcers in recent American history.

In recent months, US regulators have moved to block a string of multibillion-dollar deals, including two health insurance mergers worth a combined $85bn and Halliburton’s $38bn takeover of oilfield services rival Baker Hughes. The US Department of Justice, which is also examining the Dow-DuPont deal, did not immediately respond to requests for comment.

As part of the original transation, DuPont and Dow had agreed to split the merged company into three parts following its completion, in an attempt to allay concerns of regulators both in the US and the EU, as well as in Brazil and Canada.

But those “commitments” to address the preliminary concerns of European regulators were dismissed as “insufficient” by Ms Vestager. Brussels has also expressed concerns about whether a merger would lead to a reduction in research and development.

Although both groups are based in the US, both have large European businesses and customer bases, giving the commission the freedom to investigate.

EU and American regulators were likely to take a different approach to the Dow-DuPont deal, said David Balto, a former US government antitrust enforcer. European authorities typically had lower market share thresholds and tested proposed solutions by asking farmers for their opinions. “The EU is a much tougher road to hoe,” Mr Balto said.

The EU’s treatment of US companies has been a source of strain between Brussels and Washington in recent months, with US giants such as Apple and Google both under long-running probes. Last year, Barack Obama accused the EU of protectionism, particularly in the way Brussels treated dominant internet groups in Silicon Valley.

Dow and DuPont said in a statement that both had expected a “thorough review” from Brussels and that the investigation would not delay the closing of the deal.

“Dow and DuPont continue to expect the transaction to close by year-end 2016,” they said. The commission has until December 20 to make a final decision.



Read more: Dow-DuPont’s planned $130bn tie-up probed by Brussels - FT.com

US Presidential Elecion: Is the air going out of Hillary Clinton’s Campaign Again

The latest Rasmussen Reports national telephone and online White House Watch survey of Likely U.S. Voters shows the Democratic nominee with 43% support to Donald Trump’s 40%.

Libertarian candidate Gary Johnson picks up eight percent (8%) of the vote, while Green Party nominee Jill Stein trails with two percent (2%). Four percent (4%) like some other candidate, and three percent (3%) are undecided. (To see survey question wording, click here.) 

Read more: White House Watch - Rasmussen Reports™

Is History Repeating itself?: End of History 2.0, beginning of gloom ?

The collapse of the Soviet Union and its allied Communist regimes in Europe was hailed as the ultimate triumph of Western liberal democracy and capitalism. Francis Fukuyama, the American academic, called it the “end of history” arguing that the West had finally—and for good—won the battle of ideologies. Scenes of joy swept Western capitals; darkness at noon had lifted! Hallelujah. Anyone caught expressing scepticism or urging humility risked ridicule and humiliation.

Twenty-five years later, we seem to be looking at another “end of history” episode. Except that this time it is playing out not in Moscow, Budapest and Warsaw but in the heartland of Western democracy and  capitalism – London, Washington, Paris, Rome and Berlin. The same remorseless cycle of ideological boom and bust that brought about the demise of Communism is now paying a visit to the capitalist West. Liberal democracy and capitalism—the two great pillars of self-proclaimed Western supremacy—are in deep crisis, spawning in its wake a politics of rage and hate on either side of the Atlantic.

It’s by far the gravest crisis since the Second World War, and threatens the post-War political and economic stability the West has come to take for granted. Economy is already in a tailspin and political and social stability hangs in the balance. There’s a worrying erosion of public confidence in the political class and democratically elected representatives—in effect in parliamentary democracy itself. Demagogues are taking over, prompting fears that power might be shifting from Parliament on to the streets, reminiscent of the 1930s Germany. That may be an exaggeration, but it’s hard to escape a growing sense of public contempt for mainstream politics and a desperate search for alternatives even if it means plunging into unchartered waters.

It is a culmination of years of pent-up grievances exacerbated by the fall-out of the 2008 financial crash whose worst victims were the poor. But what happened next was like rubbing salt into the wound. While millions of middle and working class people lost their jobs and had their homes repossessed, pushing them further into poverty for no fault of theirs, those responsible for the crash—bankers and their cronies in government and elsewhere—got away with it. There was much hand-wringing, mea culpas, and talk of market reforms. A new 21stcentury brand of “capitalism with a human face” was promised, but nearly a decade later it is pretty much business as usual with obscene salaries and bonuses still very much the norm in the corporate sector.

Meanwhile, globalisation has failed to work for the vast majority of lower, middle and working classes. Its promised benefits have bypassed them while benefitting big corporations and a small urban elite. Globalisation was sold to the public as a bold mission to bring the world closer to the mutual benefit of everyone, by breaking down trade barriers and promoting the idea of effectively a single world market. But it was really always about developed nations gaining access to lucrative new emerging markets in Asia and elsewhere. And about Western companies being able to save labour costs by outsourcing jobs to low-wage countries—India, China, Bangladeshi, Sri Lanka, etc. Even Britain's Labour Party’s ultra-Left  leader Jeremy Corbyn’s campaign T-shirts, which sell for up to £17 a piece, were made by “slave labour” in Bangladesh who were paid just 30 pence an hour.

Globalisation has also led to increased economic disparities and a widening of the rich-poor divide as its benefits have not been equitably distributed; and blue-collar workers especially find its gains outweighed by losses. This has got conflated with anger over other issues like racial discrimination, immigration (the Brexit vote was driven solely by concerns over large-scale immigration from other EU states), and corruption in high places completing the image of a system that is not working for ordinary people.

“A big factor in the anger and frustration that people are feeling today… is the realisation that regardless of who is formally elected, an insular ruling elite is actually in power, pursuing a technocratic agenda that serves the interests of rich and well-connected insiders rather than the public,’’ wrote  Steve Hilton, a former adviser to David Cameron, in The Times.

So, when an insurgent pretender promises to bring “our jobs back home”, bring down immigrant numbers, and crack down on corporate greed, people cheer them seduced by the idea that someone is “listening” to them and speaking their language. (We had a glimpse of it in India in the 2014 elections.) In Europe, the anti-establishment mood has been fuelled by European leaders’ strutting and confused response to the Eurozone and refugee crises—the former resulting in massive job losses and welfare cuts; and the latter igniting xenophobia. Like globalisation, the EU is also deemed as a failed project. Both have had the opposite effect of their intended aim. As Nobel Laureate Joseph Stiglitz has argued, the EU was intended to foster unity and a sense of shared interests but, instead, it has ended up causing distrust and grievances. Ironically, even its poorer constituents (the ex-Communist East European nations) which have benefited enormously from their EU membership by way of subsidies and the right their citizens enjoy to settle and work in other member states are not happy, accusing Brussels of bullying.

But to cut to the chase, trying to find specific causes for the crisis gripping the West is to miss the wood for the trees. The short point is that an exhausted West has run out of tricks in the face of a new emerging global order; and an increasingly assertive citizenry not willing to be taken for granted. There is a feel of decay that it cannot remain business as usual for too long. If someone, somewhere is contemplating an “End of History 2.0” thesis, time to rush it out.

Large swathes of middle-class Americans and Europeans are willing to take a punt on anyone who doesn’t sound like a conventional politician. The Trump-isation of American politics, the Brexit vote, and the increasing appeal of populist right-wing figures such as Marie Le Pen in France, Geert Wilders in the Netherlands, and groups like Alternative for Germany (APD) in Germany are a manifestation of this crisis. According to The Economist, “populist, authoritarian European parties of the right and left now enjoy nearly twice as much support as they did in 2000, and are in government or ruling coalition in nine countries”.  This is no mid-summer madness that has suddenly seized millions of people; nor is there a right or left-wing conspiracy to destabilise the West.

How did it happen?

It is a culmination of years of pent-up grievances exacerbated by the fall-out of the 2008 financial crash whose worst victims were the poor. But what happened next was like rubbing salt into the wound. While millions of middle and working class people lost their jobs and had their homes repossessed, pushing them further into poverty for no fault of theirs, those responsible for the crash—bankers and their cronies in government and elsewhere—got away with it. There was much hand-wringing, mea culpas, and talk of market reforms. A new 21stcentury brand of “capitalism with a human face” was promised, but nearly a decade later it is pretty much business as usual with obscene salaries and bonuses still very much the norm in the corporate sector.

Meanwhile, globalisation has failed to work for the vast majority of lower, middle and working classes. Its promised benefits have bypassed them while benefitting big corporations and a small urban elite. Globalisation was sold to the public as a bold mission to bring the world closer to the mutual benefit of everyone, by breaking down trade barriers and promoting the idea of effectively a single world market. But it was really always about developed nations gaining access to lucrative new emerging markets in Asia and elsewhere. And about Western companies being able to save labour costs by outsourcing jobs to low-wage countries—India, China, Bangladeshi, Sri Lanka, etc. Even Labour Party’s ultra-Left  leader Jeremy Corbyn’s campaign T-shirts, which sell for up to £17 a piece, were made by “slave labour” in Bangladesh who were paid just 30 pence an hour.

Globalisation has also led to increased economic disparities and a widening of the rich-poor divide as its benefits have not been equitably distributed; and blue-collar workers especially find its gains outweighed by losses. This has got conflated with anger over other issues like racial discrimination, immigration (the Brexit vote was driven solely by concerns over large-scale immigration from other EU states), and corruption in high places completing the image of a system that is not working for ordinary people.

“A big factor in the anger and frustration that people are feeling today… is the realisation that regardless of who is formally elected, an insular ruling elite is actually in power, pursuing a technocratic agenda that serves the interests of rich and well-connected insiders rather than the public,’’ wrote  Steve Hilton, a former adviser to David Cameron, in The Times.

So, when an insurgent pretender promises to bring “our jobs back home”, bring down immigrant numbers, and crack down on corporate greed, people cheer them seduced by the idea that someone is “listening” to them and speaking their language. (We had a glimpse of it in India in the 2014 elections.) In Europe, the anti-establishment mood has been fuelled by European leaders’ strutting and confused response to the Eurozone and refugee crises—the former resulting in massive job losses and welfare cuts; and the latter igniting xenophobia. Like globalisation, the EU is also deemed as a failed project. Both have had the opposite effect of their intended aim. As Nobel Laureate Joseph Stiglitz has argued, the EU was intended to foster unity and a sense of shared interests but, instead, it has ended up causing distrust and grievances. Ironically, even its poorer constituents (the ex-Communist East European nations) which have benefited enormously from their EU membership by way of subsidies and the right their citizens enjoy to settle and work in other member states are not happy, accusing Brussels of bullying.

But to cut to the chase, trying to find specific causes for the crisis gripping the West is to miss the wood for the trees. The short point is that an exhausted West has run out of tricks in the face of a new emerging global order; and an increasingly assertive citizenry not willing to be taken for granted. There is a feel of decay that it cannot remain business as usual for too long. If someone, somewhere is contemplating an “End of History 2.0” thesis, time to rush it out.

Read more: End of History 2.0, beginning of gloom

European Banking System: High Time for Europe to Shed its “Universal Banking Model” - by Paul Goldschmidt

Contradictions in the European banking sector are reaching a breaking point:

On the one hand, banks are loudly complaining about the difficulties of ensuring an adequate level of profitability. Bankers are also strongly resisting new requirements to reinforce their capital position.

On the other hand, many politicians and regulators are anxious to impose such measures. For all their past complicity with bankers, politicians in particular want to avoid future “taxpayer” funded bail-outs of financial institutions.

Enter the ECB. Its strategy to cope with the prevailing low growth environment is to pursue policies that are meant to encourage loans to the “real economy.” So far these measures have met with limited success.

Indeed, the combination of negative interest rates and the ECB’s recourse to quantitative easing on a massive scale, seems to yield outcomes that inhibit in part the smooth transmission of monetary policy.

Negative interest rates make deposit taking unprofitable, while “charging” customers for the service is strongly resisted, putting additional pressure on lending margins. Meanwhile, increasing QE drives interest rates down further, which creates new difficulties for pension funds and insurers, etc.

The universal banking model may have been adapted to the European scene prior to the introduction of the single currency because each national market was too small to sustain independent investment banks.

Within the framework of European Monetary Union (EMU), aiming at creating a “reserve currency” capable of competing with the US dollar, it is high time to recognize the fundamental “conflict of interest” imbedded within the “universal bank” structure:

Universal banks must constantly choose between either intermediating between “borrowers” and “depositors,” while retaining the credit risk on its own books (i.e., commercial bank loans) or between “issuers” and “investors” where the credit risk is passed on to the latter (i.e., capital market funding).

The potential for conflict is exacerbated when the “issuer” is also a “borrower” from the bank, or when the bank has an in house “asset management” arm. This problem was already recognized in the USA after the crash of 1929 and the depression of the 1930’s.

It lead to the separation of commercial and investment banking activities (Glass Steagall Act) as well as specific legislation to protect investors (Securities and Exchange Act).

This created the foundations on which the spectacular growth of the U.S. capital markets as distinct from its commercial banking sector was able to flourish. The separation created a sufficiently broad base for both sectors to operate profitably.

It is also true that the United States deviated from its previously virtuous path under the progressive “deregulation” of U.S. markets, initiated in the late 1970’s, including the repeal of the Glass Steagall Act (1998).

This triggered a chain of events which led to the uncontrolled expansion of the financial sector culminating in the crisis of 2007/8. 

Read more: High Time for Europe to Shed its “Universal Banking Model” - The Globalist

USA: Obama’s Warren Buffett foreign policy - by Derel Chollet

In his August 1 column, “A US retreat that feeds on itself,” Fred Hiatt rehearsed many of the familiar critiques of US President Barack Obama’s foreign policy, suggesting that if only the United States had kept substantial troops in Iraq, put forces into post-Gaddafi Libya, bombed Syria after it used chemical weapons and focused a little less on “nation-building at home,” the US — and the world — would be better off.

The idea that the US has retreated defies reality. Today the US is more engaged, in more places and in more ways, than it was eight years ago. In fact, on the issues that matter most — how and where the country uses military force, how it approaches its enemies and works with its partners, and how it should conceive of its power and exert its leadership — Obama’s mark will be enduring and largely positive. Instead of allowing the consensus for the America’s global leadership to fray, the president has worked to strengthen and sustain it.

That’s because Obama plays a “long game.” The defining element of his global strategy is that it reflects the totality of US interests — foreign and domestic — to project leadership in an era of finite resources and seemingly infinite demands.

Obama’s fundamental challenge has been to implement such a strategy within a debate that has become overwhelmed by manufactured drama and the illusion of silver bullet, black-and-white solutions. For too many critics, the answer is almost always for the US to do more of something and show “strength” by acting “tough,” though usually what that something is remains very vague. And doing more of everything is not a strategy.

Think of it this way: Obama has been like a foreign policy version of Warren Buffett, a proudly pragmatic value investor less concerned with appearances and the whims of the moment, focused instead on making solid investments with an eye to long-term success. The foreign policy debate, on the other hand, tends to be dominated by policy day traders — or flashy real estate developers — whose incentives are the opposite: achieving quick results by making a big splash, getting rewarded with instant judgments and reacting to every blip in the market.

Of course, today’s geopolitical turbulence feels like more than the usual market ups and downs. It is understandable that when looking out at the world, Americans are frustrated, pessimistic and scared. But think back to 2008, with the US economy shedding as many as 500,000 jobs a month and on the cusp of a second Great Depression, the US military was stretched to the breaking point through fighting two wars, and many parts of the world associated the US with militarism, Guantanamo Bay and torture. The picture looks very different today.

History reminds us that the question is not whether the world presents challenges but rather how the US is positioned to deal with them. Considering the extent of today’s global disorder, it is tempting to succumb to a narrative of grievance and fear — sharpening the divisions between “us” and “them,” building walls longer and higher, and lashing out at enemies with force. Or to think it better that, to reduce exposure to such geopolitical risk, the US should divest from its alliances. Despite all the talk of “strength,” what these impulses reflect is a core lack of confidence.

We cannot submit to such pessimism. As Obama’s presidency nears its end, the state of the world is indeed tumultuous and ever changing, but we have good reason to be confident. The United States’ global position is sound.

The US has restored a sense of strategic solvency. Countries look to it for guidance, ideas, support and protection.

It is again admired and inspiring, not just for what it can do abroad but also for its economic vitality and strong society at home. Or as Buffett — who last Monday spoke at a rally in support of Hillary Clinton for president — recently declared in his more folksy way, “The babies being born in America today are the luckiest crop in history.”

When it comes to being in a position to solve problems and give people an opportunity to improve their lives, the US is far better off than it was a decade ago. The question is whether it will continue to make the choices necessary to stay that way.

Read more: Obama’s Warren Buffett foreign policy | GulfNews.com

US economy posts largest job gains in eight months in June

U.S. job growth surged in June as factories and retailers boosted hiring, confirming the economy has regained speed after a first-quarter lull, but tepid wage growth could see the Federal Reserve still cautious about hiking interest rates.

Non-farm payrolls increased by 287,000 jobs last month, the largest gain since last October, the Labor Department said on Friday. May payrolls were revised down to show them rising 11,000 rather than the previously reported 38,000.

”It’s a great number. This affirms the economy is still on decent footing but it doesn’t change the Fed’s path,” said Darrell Cronk, chief investment officer at Wells Fargo Wealth and Investment in New York.Last month’s tally beat economists’ expectations for an increase of only 175,000 jobs.

While the unemployment rate rose two-tenths of a percentage point to 4.9 percent, that was because more people entered the labor force, a sign of confidence in the jobs market.Wage growth remains sluggish even as the labor market tightens.

Average hourly earnings increased only two cents or 0.1 percent in June. The year-on-year gain in earnings rose to 2.6 percent after advancing 2.5 percent in May.The strong rebound in June payrolls added to data on consumer spending and housing in suggesting that economic growth accelerated from the first-quarter’s anemic 1.1 percent annualized rate.

The Atlanta Fed is currently forecasting the economy growing at a 2.4 percent pace in the second quarter.But the signs of strength in the economy precede Britain’s stunning vote last month to leave the European Union.Given the U.S. central bank’s desire to wait on more data to assess the economic impact of the so-called Brexit, the employment report probably has little impact on the near-term outlook for interest rates.

The Brexit referendum on June 23 roiled financial markets, raising fears that sustained volatility might negatively impact companies’ hiring and investment decisions.

Economists have also warned that slower growth in Europe and a stronger dollar could weigh on the U.S. economy.Minutes of the Fed’s June 14-15 meeting published on Wednesday showed that officials “agreed that … it was prudent to wait for additional data on the consequences of the UK vote.

”The Fed raised rates in December for the first time in nearly a decade, but markets now expect no further increase this year.U.S. stock futures rose sharply after the report.

The dollar raced to a two-week high against the euro while U.S. Treasuries pared losses.Manufacturing employment increased 14,000 last month after shedding 16,000 jobs in May. The retail sector added 29,900 jobs, and the leisure and hospitality sector gained 59,000…

Read more: US economy posts largest job gains in eight months in June | info-europa

Britain: BOE cuts its key interest rate to historic low

The Bank of England has announced that it has reduced its benchmark interest rate to as low as 0.25 percent – the lowest level in its history of 322 years.  The rate had been at 0.5 percent since March 2009, the media reported on Thursday.

The Bank has also announced measures to bolster Britain’s economy to address concerns that the country’s decision to leave the European Union could weigh on growth in the coming months.

Two key measures include one to buy £10 billion of high-grade corporate bonds and another - potentially worth up to £100 billion - to ensure banks keep lending even after the cut in interest rates.

A further injection of £60 billion in electronic cash into the economy has also been devised – a measure which is meant to buy government bonds, extending the existing quantitative easing (QE) program to £435bn in total.

These are parts of a four-point plan to mitigate the impact of leaving the EU.

The BoE has also added that it expects little growth in the second half of this year and that economic growth would decline sharply next year compared with its earlier forecast for 2017.

In 2017, the Bank said, there will be a sharp downgrade to growth of just 0.8 percent from a previous estimate of 2.3 percent.  This will be the biggest downgrade in growth from one Inflation Report to the next, exceeding what was seen in the financial crisis, Reuters reported. The growth outlook for 2018 was cut to 1.8 percent. 

Read more: PressTV-BoE cuts its key interest rate to historic low

Why Goldman Sachs Remains Bullish On Russian Oil - by Rakesh Upadhyay

A deeply troubled global oil industry is cutting production but Russians are defying the trend. Goldman Sachs has forecast Russian crude production to rise to 11.7 million barrels per day (b/d) in 2018, which is an increase of almost 600,000 b/d from 2015.

“We remain positive on Russian oil industry production,” Goldman analysts led by Geydar Mamedov said. “At current oil prices, Russian oils are among the few global majors that can maintain their growth plans and dividends,” reports World Oil.

Goldman believes that the largest Russian producer Rosneft, which produces more than a third of the nation’s output, will be a major contributor to the increase in production. However, Rosneft’s output has been declining steadily and its current production is 3 percent below the peak achieved in late 2013. The giant Vankor field, which had boosted Rosneft’s production, has also declined by around 5 percent, from the highs of 447,000 b/d in the third quarter of 2015.

Goldman believes that new projects in Suzun, Tagul, Yurubcheno-Tokhomskoye and Messoyakha will be the major driver of growth. It expects oil from these new projects to push up overall output from 470,000 b/d in 2015 to 850,000 b/d in 2018, reports Bloomberg. However, the current available pipeline capacity is not adequate to transport the oil from the producers to the export network. So, new projects need to be matched by an expansion in the pipeline network.

Considering these challenges, the International Energy Agency expects Russian production to decline to 10.94 million b/d from 11.06 million b/d in 2016.


Read more: Why Goldman Sachs Remains Bullish On Russian Oil | OilPrice.com

Global Economy: With a global economy in serious trouble, something's got to give - by Ian Verrender

Economic growth is faltering and increasingly desperate measures by central banks are proving ineffective. Meanwhile, both stocks and bonds are hitting record highs. It's an each way bet on boom and bust and it's unheard of, writes Ian Verrender.

John Maynard Keynes reputedly once said that markets could remain irrational longer than you could remain solvent after losing a substantial amount of dosh on a trade gone wrong.

While there's no direct evidence of him ever mouthing those exact words, he was pretty clued up on just how irrational the world and markets could be.

Just consider the past month. Any rational investor would pull their cash out of the market right now as economic growth continues to falter and as governments fret about deflation.

But it is not to be. Wall Street finished the month on a tear, close to an all time record, just as America revealed second quarter annual growth of just 1.2 per cent, well below the expected 2.6 per cent.

It was a result that almost certainly derails the US Federal Reserve's plans to hike interest rates next month and came just hours after the European Union reported a similarly tepid economic performance.

Eurozone growth slowed in the second quarter with an annual rise of 1.6 per cent.

Meanwhile, stress tests of European banks again revealed massive problems in Italy's banking system while two major UK banks, Royal Bank of Scotland and Barclays, performed poorly.

The world's oldest bank, Italy's Bank Monte dei Paschi di Siena, was the worst performer, and was bailed out over the weekend. It's no minnow, by the way. As Italy's third biggest deposit taker, it's a too-big-to-fail operation.

Germany's Deutsche Bank passed the stress test but so far this year has seen its market value decline more than 43 per cent. It is a similar tale across much of Europe and it indicates the Continent's banking system is ill-equipped to handle another crisis.

Meanwhile in Japan, the central bank on Friday developed a severe case of cold feet, with a decision to not push even further into the monetary policy unknown.

It was expected to embrace a new round of radical policy known as Helicopter Money. While it did announce an extra round of stimulus, with a policy to pump even more cash into the economy, it opted not to board the chopper.

Helicopter Money is a process where the government rains cash down on the country with direct deposits into citizens' and company accounts.

The idea is that this would be financed by the central bank buying government bonds. That, however, is a policy that ultimately destroys the concept of an independent central bank, as monetary policy is employed to finance government largesse.

The fact that it was a close call tells you that not only is it being considered but that the global economy is in serious trouble.

After decades of poor performance, Japan has embraced the most radical monetary policies the world has ever witnessed and on a scale that could never have been imagined.

It has ramped up its Quantitative Easing program - a euphemism for money printing - to never before seen levels and hacked interest rates to below zero, a policy it swore it would never embrace.

On Friday, Bank of Japan governor Haruhiko Kuroda merely tinkered around the edges with some modest extra spending. More importantly, he raised questions about whether the central bank had gone far enough and said it was time to assess the impact of their policies.

On Tuesday, our very own central bank gathers to ponder the very same questions. It will be Glenn Stevens last meeting as governor.

Pressure is mounting for the Reserve Bank of Australia to apply pressure to the currency, to deflate the Australian dollar in a bid to boost inflation and lift global competitiveness.

At 1.75 per cent, our rates are the lowest on record. But they are still well above those in most of the developed world, attracting cash from the globe and pushing the currency higher. While last week's inflation numbers were weak enough to allow another cut, it won't be an easy decision.

Having deliberately fired up the already inflated east coast housing market to promote a construction boom, the central bank can ill afford for prices to head further into la la land.

Stopping that will require it to restrict lending for housing, a policy it has been reluctant to implement and even more hesitant to enforce.

Then there is the point Kuroda made on Friday. Would another cut have any beneficial impact? Would it encourage greater consumption or ignite business investment?

The answer is probably no. Australians have the highest household debt in the world and the rate cuts have prompted many to merely pay down their loans quicker. There is nothing wrong with that. But the point is, it comes at the expense of boosting consumption and business turnover.

When it comes to business, lower rates have had the perverse effect of inhibiting investment. Shareholders, unable to secure a decent return on bonds or cash, have demanded ever greater dividends from corporations.

Rather than reinvest profits into the business, most corporations have succumbed to shareholder pressure, paying out an ever greater proportion of their earnings in dividends. Similarly, given the global uncertainty, they have shied away from taking on massive amounts of new debt.

In another indication of just how nervous our business leaders have become, takeover activity, which normally runs hot when markets are in overdrive, has all but dried up.

When the takeover for logistics group Asciano last week was wrapped up, it left a deathly quiet in the mergers and acquisitions departments of our big investment banks. There's now officially nothing happening.

Meanwhile, the tension between those betting on calamity and boom continues.

US 10 year bond prices rose Friday, slicing the yield to just 1.45 per cent, after the lacklustre economic growth figures were released.

While that is not as low as the 1.31 per cent record of a month back, it indicates the incredible demand for those seeking the shelter of a safe haven.

Similarly, gold prices continued to push higher. With interest rates close to or even below zero, gold once again has become the choice for those seeking a safe harbour.

For more than two years, bonds and stocks have been heading in the same direction. Both have been hitting record highs. It's an each way bet on boom and bust and it's unheard of.

Something has to give at some stage. Either the global economy will recover, rates will rise and those holding bonds or overpriced real estate will do their shirts. Or stock market investors will wake up one day and discover that central banks have run out of ammunition causing a stampede for the exits.

Either way it won't be pretty.

Read more click here