Conflict Over Eurobonds Becomes More Strident Ahead Of Merkel Sarkozy Meeting … Wolfgang Schäuble Implies He Will Accept Eurobonds If There Is Strong Centralized Eurozone Fiscal Authority …

European financial market report for Monday, August 15, 2011

1) … Italy Economy Minister And UK Chancellor Propose Common Bonds And Fiscal Union, And Wolfgang Schäuble Implies Of Such If There Is A Centralized Eurozone Fiscal Authority.
Reuters reports Italy calls for euro bonds as UK backs fiscal union. “Italian Economy Minister Giulio Tremonti stepped up calls for a more coordinated response to the euro zone debt crisis on Saturday ahead of a potentially vital summit between the leaders of France and Germany next week. Tremonti returned to proposals — rejected in the past by Berlin and Paris — for the creation of common euro zone bonds that would effectively make individual governments debt a common burden.

His British counterpart George Osborne, long a supporter from outside the euro zone of more fiscal integration within the currency bloc, went as far as to say that some form of outright fiscal union was now needed.

The austerity package (for Italy) unveiled on Friday, August 12, 2011, which contained a painful mix of spending cuts and tax increases, was demanded by the ECB in exchange for a commitment to protect Italian bonds but Tremonti said the problem risked spreading unless Europe ended its piecemeal approach to the crisis.

“We would not have arrived where we are if we had had the euro bond,” he said.

Osborne said deeper integration had been the inevitable conclusion from the start of the single currency project. Asked if the only answer for the euro zone was some kind of fiscal union, he told BBC radio: “The short answer is yes.”

Doug Noland has communicated that Neoliberalism was characterized by wildcat finance. I relate that Neoauthoritarianism is characterize by wildcat governance, where leaders claw, tear and bite one another. In Germany, the Free Democrats (FDP) and the Bavarian Christian Social Union (CSU), are dead-set against the idea of Eurobonds.

Bloomberg reports Wolfgang Schäuble, German finance minister, in an interview with Der Spiegel, remains opposed to a common Eurobond stating: “I rule out eurobonds for as long as member states conduct their own financial policies and we need different rates of interest in order that there are possible incentives and sanctions to enforce fiscal solidity,”  And Mike Mish Shedlock reports Spain pressured by letter from Trichet. It is important to reflect on Wolfgang Schäuble’s statement: He implies he will accept Eurobonds, if there is strong European fiscal governance, specifically a strong centralized Eurozone fiscal authority.

Der Spiegel provides Interview with George Soros. ‘You Need This Dirty Word, Euro Bonds’. In a SPIEGEL interview, billionaire investor George Soros criticizes Germany’s lack of leadership in the euro zone, arguing that Berlin must dictate to Europe the solution to the currency crisis. He also argues in favor of the creation of euro bonds as a way out of the turbulence.

Rex Nutting of MarketWatch reports on wildcat governance in the US: “Republicans have all the leverage in these negotiations, at least until the next election: They control the House utterly, and have a rock-solid veto in the Senate in the form of a filibuster. They’ve proven that they are willing to push the government to the brink of a shutdown or default, knowing that the weak-spined Democrats will blink because they actually care if the government can operate or pay its bills. And they know that any economic uncertainty created by the budget squabbles will hurt President Barack Obama politically in 2012.  As long-time budget observer Stan Collender said, “it’s absolutely certain Congress and the president, the House and Senate, and Democrats and Republicans will all be fighting constantly over the budget during the next 18 months.” Read Collender’s Roll Call column . The Republicans have the ability to recreate a budget crisis at will. It’s likely that any law to fund the government after Sept. 30 will be a short-term continuing resolution, probably a series of 30-day CRs, with more concessions extracted each month. Which means the fight over fiscal 2012 will be just another bargaining chip, along with the Super Congress’s deliberations, the expiration of the gas tax on Sept. 30, and the expiration of the payroll tax cut and extended unemployment benefits on Dec. 31.  Even if the Republicans get most of the blame in the short-term for the catfight in Washington, their long-term goals are advanced: To discredit completely and forever the notion that the government can even function, much less make a difference in the lives of the people.

2) … Italian Unions Threaten Strike Over New Austerity Program
Associate Press reports Italian unions threaten strike over new austerity.

3) … Spanish Municipalities Face Bankruptcy
Associated Press reports Spanish towns face funding crisis, rack up debts.

4) … Both Spanish And French Farmers Destroy Imported Produce
Mike Mish Shedlock reports Border Attacks: Spanish Farmers Threaten to Block Border with France
In an “eye for eye, tooth for tooth” retaliation to French farmers throwing Spanish produce in the streets, Spanish farmers have threatened to “look for French interests and cause the most damage possible.” Courtesy of Google Translate and my friend “Bran” who emails nearly every day from Spain, please consider Spanish farmers threaten to block border with France.

Agrarian Association of Young Farmers in Catalonia announced Friday that blocked the return of French tourists to their country by cutting the road to La Jonquera response to the boycott of Gallic producers and recent attacks on trucks from transporting fruit Peninsula and vegetables.

Asaja coordinator in Catalonia, Albert Castelló, has said that already run out of patience, “eye for eye, tooth for tooth,” and said it is absurd to continue with good words and wait for action by governments.

It has also warned that if they attack at the border now and the end of the month “automatically go looking French interests and cause the most damage possible.” He called on the Catalan police to be “gatekeepers” and to defend the interests of Catalan and Spanish when these attacks occur, as has ensured that the security forces do Gauls.

Asaja has hit back against the Government for its “immobility” when taking concrete steps to defend the interests of local producers, which this week have been suffering more attacks on the border.

The European Commission has indicated it has not been formally informed of the latest attacks of French farmers against trucks carrying fruits and vegetables from Spain, but has made ​​clear that it condemns “all sorts of illegal and destructive action” and has reminded France that European Union countries should take steps to ensure the free movement of goods.”

And Mr Shedlock reports Agricultural Trade Wars Part Two. As a followup to Border Attacks: Spanish Farmers Threaten to Block Border with France; Global Trade Wars Yet Another Sign of Deflation here are more articles and images of the escalating agricultural trade wars between France and Spain. Angry French Farmers Dump Spanish Peaches, Burn Tires. Via French to English translation, please consider The anger of farmers. Big day mobilization fruit and vegetable department. Objective of the mobilization: to maintain pressure on the government Tuesday after an action in the Gard region, where several trucks carrying merchandise Spanish saw their cargo spilled on the road.

Angry farmers are then directed to the St. Charles market, where they dumped tons of peaches and then burned tires at the roundabout at the entrance of the platform.

“This is a Spanish enclave on French soil. They betrayed us under the pretext of winning even more. After the intervention of firefighters to put out different fires, farmers are directed to the toll of Perpignan Sud to control several trucks coming out of St. Charles. One of them took the road to Germany was emptied on the floor by young farmers, especially put together. “We’re not bandits and we have nothing against Spanish producers, but the merchandise that was found in the truck does not respect the rules especially for fisheries that are surcalibrées. Since the state does not respect the rules, they did their job.”

You know trade wars are intense when you see questions like this in French headline news: Should we nationalize supermarkets? Yesterday, at the toll Lancon, motorists could not believe their eyes. Fifty people brutally emptied the cargo trucks to foreign registrations. These people, it is the farmers of Vaucluse, Bouches-du-Rhône and Gard that have exploded in anger.

Low price for sale result of distortion of competition in their view by large retailers, more and more taxes to pay, and especially a flood of imported fruits and vegetables too important. These are the arguments of those farmers to explain the “unprecedented crisis” that they live this year.

“All agricultural sectors are affected, including fruits and vegetables. The retail products brought in from Spain and Italy among others. The labor is cheaper in these countries with low prices.

French farmers have to lower their prices by at least 20, 30 and even 40% to sell. Currently, the loss of gross turnover rises 25 to 50 according to the operation, “said Andre Bernard, president of the Departmental Federation of Farmers’ Unions of the Vaucluse.

Thus, to fight against the importation, the farmers of Vaucluse, Bouches-du-Rhône and Gard, framed by the police, conducted a blitz by immobilizing all foreign trucks trying to cross the toll of Lancon, creating a cap of more than 5 km.

Manuel, a Spanish driver, despite his resistance, has seen its 24 tons of crushed nectarines on the tar. “It’s incomprehensible, Manuel gets mad, I understand that the French production has problems, but why attack me? I do my job.”

Within 45 minutes, farmers have drained three-truck trailers full of peaches, oranges, figs and pears. “The loading of these trucks is one year of work for one local farmer. And it’s not for us we buy the products, carried away the chair 84 of the FNSEA. Now, that’s enough. We ask to meet with government to develop a structure plan to save the profession. ”

Constitution Times asks Has the crisis era begun?

Sovereign Man asks What are you teaching your kids?

New York Times reports Bond brush fires spreading in Europe

Cato Institutes relates The next Greece

The Age of Neoauthoritarianism is characterized by a Spirits of Wiling, The Associated Press reports Cameron Says Riot-hit UK Must Reverse ‘Moral Collapse’ reports Fluke wind blamed for Indiana State Fair stage collapse

5) … Are Both Germany And Europe On The Path To A Federal And Feudal Europe?
Does Germany face a terrible choice as Justice Little of Taipan Journal suggests, or is it on a fated path to be part of a One Euro Government, that is a federal and feudal Europe.

A European Chancellor, having great fierceness, like that of Charlemagne, will rise to rule Europe in a type of Revived Roman Empire. The Sovereign will be accompanied by the Seignior, meaning top dog banker who takes a cut. Regional framework agreements and the announcements of European Leaders are waiving national sovereignty. There are no longer sovereign individuals in Europe; there are now leaders.

Seigniorage in Neoliberalism came from floating world currencies, DBV, and emerging market currencies, CEW, the collapse of the banking, KBE, and financial sector, XLF, the failure of he leverage of securitization of GSE debt into Mortgage Backed Bonds, MBB, by Mortgage Finance, KME, Mortgage REITS, REM, the underwriting of investments by Investment Bankers, KCE, and the Too Big To Fail Banks, RWW, the selling of insurance policies by Insurance Companies, KIE, the stimulus of quantitative easing to generate Automobile sales, CARZ, and global economic growth in Networking, IGN, Natural Resource Companies, URA, CHIM, OIH, COPX, GDX, and HAP, Steel, SLX, Metal Manufacturing, XME, Small Cap Value, RZV, as well as Alternative Energy, GEX.

Seigniorage, that is moneyness, in Neoauthoritarianism, will be more political than economic with the word, will and way of the Sovereign in Europe, and the diktat of sovereign leaders in regional trade groups underwriting both political governance and economic activity in the Age of Deleveraging.        

6) … And to add to the stir-pot, a Global Eurasia War Is Coming. Michel Chossudovsky provides some background asking A “Humanitarian War” on Syria? Military Escalation. Towards a Broader Middle East-Central Asian War?

7) … Tyler Durden reports “The Ames Straw Vote Results Out Of Iowa Are In, and Michelle Bachmann appears to have won with 29% of the votes, or 4,823 of the 16,892 votes cast. Bernanke nemesis Ron Paul placed second, just 150 votes behind Bachmann, at 4,671, or taking down 28% of the total.“

8) … Washington Examiner relates Why 11th Circuit Struck Down Obamacare’s Mandate.
It’s important to reflect on how far we’ve come. When the legal challenges against the health care law were first launched, liberals dismissed them as “frivolous.” Now, a Clinton-appointed federal appeals judge has struck down the individual mandate, agreeing that: “The federal government’s assertion of power, under the Commerce Clause, to issue an economic mandate for Americans to purchase insurance from a private company for the entire duration of their lives is unprecedented, lacks cognizable limits, and imperils our federalist structure.”

9) … Tyler Durden writes on the now defunct Free To Choose regime engineered by Milton Friedman known as Neoliberalism stating “On this day, August 15th, 40 years ago, President Nixon announced the end of the Gold Standard and the end of the Bretton Woods international monetary system. One can see the video of Nixon’s dramatic announcement here. This was one of the most important decisions in modern financial, economic and monetary history and is a seminal moment in the creation of the global debt crisis confronting the U.S., Europe and the world today.  Nixon ushered in an era of floating fiat currencies not backed by gold but rather deriving value through government “fiat” or diktat.  While Nixon justified the move was that the U.S. , then as today, was living way beyond its means with the Vietnam war and growing military industrial complex leading to large budget deficits and inflation. Governments internationally including the French and their President Charles de Gaulle were concerned about the debasement of the dollar and began to exchange their dollar reserves for gold bullion bars. Subsequent to Nixon’s decision 40 years ago, the U.S. dollar has fallen from 1/35th of an ounce of gold to 1/1750th of an ounce of gold today. This is not the fault of “speculators”, rather it is the fault of profligate governments and central bankers debasing the U.S. dollar since 1971 (except for Federal Reserve Chairman Paul Volcker).


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