Greed, Fear and a $1 Quadrillion debt.

Max Keiser “On the Edge” interviews Nicole Foss from “the automatic earth” explain ‘austerity’ and the necessity for banks and governments to sell assets in a vain attempt to collateralise the existing $1 quadrillion derivative debt. The impossibility of this happening in a flatlining global economy will re-ignite the fear that stopped the world in 2008.

“They can’t get ahead of the curve; everything they’re doing is too little too late, and when fear is in control then you have a downward spiral and it won’t stop until deleveraging has run its course. Until the small amount of remaining debt is acceptably collateralized to the few remaining creditors, and we’re absolutely nowhere near that point at the moment, we’re far closer to a top than a bottom.”

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Nicole Foss has also presented a ‘book length’ article, one of the most comprehensive I have read explaining why a global transformation to renewables is not going to happen.

Renewable Energy: The Vision And A Dose Of Reality

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Friendly Fascism, Corruption and Bubbles. How Spanish banks survived the crash of 2008.

This article gives a short history of fascism and corruption in Spain before describing the current financial problems and their relationship with property and finance.

“Looking back, we probably should have known Spain’s banks would end up this way, and that their reported financial results bore no relation to reality.”

Spain is attracting a great deal of news coverage for all the right reasons lately, but the Spanish people have suffered enough.

It has a recently re-instated monarchy, On 22 November 1975, two days after fascist dictator General Francisco Franco’s death, the Bourbon heir Juan Carlos was designated King according to the law of succession promulgated by Franco. In 1969, when Franco named Juan Carlos as the next head of state, Spain had had no monarch for 38 years.

It has a King who,  as head of the Spanish “branch” of the World Wildlife Fund, thinks it appropriate to holiday in Botswana shooting elephants. That’s the King on the right (ahem)

The king’s daughter, la Infanta Christina Federica Victoria Antonia,  is married to Inaki Undangarin, Duke of Palma de Mallorca, who is currently facing charges of embezzlement of millions of euros.

It has a justice system in tatters, the Supreme Court suspended fellow Judge Baltasar Garzon from practicing for 11 years after investigating so called irregularities in Garzon’s investigation into wide scale corruption within the conservative Partido Popular. Up to 70 senior members were being investigated.

Supreme Court Chief Justice Carlos Dívar on Thursday resigned under pressure for charging 32 long weekend trips to Marbella and other Spanish destinations to the judiciary.

Carlos Divar had bi partisan support when appointed in 2008, the only candidate acceptable to the PP because of his “low profile”. This followed the appointments to the supreme court initiated by Jose Louis Aznar, ex- prime minister of Spain from 1996 – 2004. Aznar, now a very prominent member of Rupert Murdoch’s  News Ltd board, was a founder member of the “coalition of the willing” leading the “oil wars”, even before John Howard. The only natural resources Spain has is a small amount of coal in Asturia.

Aznar was “scholared” in politics by Manuel Fraga.  From 1951, Fraga served in various posts in the Franco regime, including minister for information and tourism.  He took part in the Transition (restoration of the Monarchy),  and formed the conservative People’s Alliance (AP), the precursor to the Popular Party (PP).

Fraga was known as a heavy-handed politician,  the drastic measures he took as chief of state security during the first days of the Spanish transition to democracy deeply damaged his popularity. The phrase “¡La calle es mía!” (“The streets are mine!”) was attributed to him. This phrase was his answer to complaints of police repression of street protests. He claimed that the streets did not belong to “people” but to the State.    

A certain sexual liberality in films was popularly summarized in the expression Con Fraga hasta la braga (“With Fraga [you can see] even the panties”).

Manuel Fraga with Gen Franco, “El Caudillo”, ‘the leader’.

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DEMOCRACY, ENVIRONMENT, GROWTH, which is the odd man out ?

The 3 concepts of Environment, Growth and Democracy cannot co exist. The false hope of having a healthy environment, exponential economic growth and a flourishing democracy has been exposed drammatically since the failure of the Copenhagen Climate Change Conference in December 2009. The final act of this tragi-comedy was played out during the G-20 summit in November 2011, when Prime Minister George Papandreou of Greece was told his idea of a referendum to decide the fate of the next  austerity measures would not be allowed. If he pursued the idea, an $8 billion bail out, essential for Greece to exist, which had been agreed, would be witheld.

Silvio Berlusconi, at the same conference, arrived without any extra proposals to rein in Italy’s $2 trillion debt, perhaps hoping for some “bunga bunga”. He was told EU commissioners would be installed in every Italian government department to ensure austerity measures were enacted. The next issue of Italian government bonds saw no purchases by the European Central Bank which had intervened when other PIIGS nations bond issues had been undersubscribed. The interest rate on Italian bond issues climed over 7%, Italy was facing financial collapse caused by the recently formed “Frankfurt Group” at the very same G-20 Summit that disposed of the elected Greek Prime Minister.

The European Union has always had problems with democracy, a messy process that can interfere with the grand designs of people at the top who know best. When Ireland voted no to the Nice Treaty, it was told to come up with the right result in a second ballot. The real decisions in Europe are now taken by the Frankfurt Group, an unelected cabal made of up eight people: Lagarde; Merkel; Sarkozy; Mario Draghi, the new president of the ECB; José Manuel Barroso, the president of the European Commission; Jean-Claude Juncker, chairman of the Eurogroup; Herman van Rompuy, the president of the European Council; and Olli Rehn, Europe’s economic and monetary affairs commissioner.

This group, which is accountable to no one, calls the shots in Europe. The cabal decides whether Greece should be allowed to hold a referendum and if and when Athens should get the next tranche of its bailout cash. What matters to this group is what the financial markets think not what voters might want.

To the extent that governments had any power, it has been removed and placed in the hands of the European Commission, the European Central Bank and the IMF. It is as if the democratic clock has been turned back to the days when France was ruled by the Bourbons. (Larry Elliot, Guardian, 9/11/2011).

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