Here it comes - what we have predicted for years. The New World Order - first, the global currency "solution."

TELEGRAPH 6.10.08 Where were you when Europe's leaders had their cosy little chat? By Janet Daley According to Nicolas Sarkozy, the leaders of the Big Four countries of Europe are "united" on the need to call all the leading nations of the globe together to "create a new financial world". Well, modesty has never been a big feature of European Union rhetoric. Mr Sarkozy's great world summit is to include, in addition to the G8, China, India, South Africa, Brazil and Mexico. This enormous gathering, encompassing countries with wildly differing economic conditions and directly conflicting competitive goals, is somehow to reach agreement on the creation of a New Financial World, even though the Big Four of the EU were unable to agree on anything last weekend except an emergency slush fund (to be dispensed by, and accountable to, whom?) and the need to call another meeting. They could not even agree in Paris on a bail-out package similar to the one that had just been approved in Washington, and the closest they got to co-operation on a new regulatory system for banks was Gordon Brown's proposal for something called a "college of regulators" - which, if it ever saw the light of day, would surely be one more job creation scheme for well-fed Eurocrats. And the leaders of Britain, France, Germany and Italy managed to achieve this stupendous failure to agree on anything much at all without even the hindrance that faced the US Congress: the manifest and noisy involvement of the electorate. Where were you and I during last weekend's Grand Day Out for the EU leaders? Who was listening to our views and arguments about the future of our savings and our investments, our employment prospects and our security? If the dear leaders had managed to carve out a deal that determined the financial possibilities and constraints of every citizen of their respective countries, what power would any of us have had to counter it, or even to register our objections? Where was the channel for public debate to influence their deliberations? In that bloody, partisan struggle that took place in America, which everybody in Europe is so anxious to avoid emulating, there was no question in anybody's mind whose opinion had to be won over before an agreement could be reached: it was the electorate, stupid. US legislators were simply not prepared to hand over the tax dollars of their furious constituents, who were besieging them with protests, without a damn good fight. (One Congressman reported that his telephone callers were running about "half and half": half of them said "no" and the other half said "hell no".) So in the US they fought themselves to an exhausted standstill and in the end they got a result which may or may not work - but at least it was a course of action. Even more important, the paralysis was a temporary, constructive phase that eventually guaranteed the complaints and the misgivings of voters would be taken into account. It was ugly and pig-headed, at times it was ludicrous, but it was also magnificent. And it was all played out in full view of the voters, and the world. But in Paris, behind closed doors, the negotiations failed (and make no mistake, they did fail) to produce anything of significance without any help from public outrage. France, Germany, Italy and the UK could not agree on a single course of action because - as Mr Sarkozy effectively admitted in a characteristically irritable press conference performance - they all have different economic circumstances and needs. He described this as having "different cultures", but it adds up to the same thing: France and Germany do not have property-owning traditions that produce house-price booms and busts, the UK population has much greater credit liabilities than the French, etc, etc. We are very different nations with very different economic habits and there will never be a one-size-fits-all solution to our economic problems. Which is what some of us have been saying all along about the impossibility (and danger) of imposing economic union on disparate countries. Mercifully, in a crisis, they could all see the impossibility of a unified solution: when the chips were down, they were not actually going to jeopardise their own national economies for the sake of some phantasm called economic union. But that didn't stop them talking a lot of blather about co-operation and joint action. The joint action they seemed to relish most was the threat of some fiendish punishment for Ireland and Greece who had had the temerity to behave "unco-operatively" by offering guarantees to savers which would have the effect of sucking capital out of the banks of their European partners. Well, whatever next? An elected government puts the needs of its own national economy first in a world crisis. The EU Four warmed themselves cosily with the prospect of preventing countries from "acting unilaterally" to guarantee bank deposits in a way that would hit their neighbours' economies - only for Germany to do exactly the same thing last night. And what is meant by acting unilaterally? Engaging in competition so that the would-be investor has a chance to protect himself? Rather than agreeing to plunge over the cliff in collective camaraderie with your neighbour states? Would you as a depositor like to have the option of moving your savings to a safer banking regime or would you prefer a deal to be done on your behalf by the Big Four that might or might not support your home banking industry? You might feel that there are arguments for both these possibilities, but nobody asked you before or during the Paris summit, did they? European co-operation in this case, as in so many, seems to amount to conspiracy between the political classes of EU countries to prevent individual citizens from making choices that might jeopardise - what? Why, European co-operation, of course - which is a good in itself, even if it works against the interests of the individual or even all the individuals of a nation. I cannot remember a time when the absurdity of the concept of economic union has been made so demonstrably clear, or when the democratic deficit of the EU - the way it does business with utter disregard for the opinions of its populations - has been so palpable if only by vivid contrast with the awkward, vulgar thrashing out of public policy that characterises the robust mass democracy across the pond. Within the foreseeable future, we will know which of these governing philosophies was able to produce the economic goods. But if neither of them produces an immediate working solution, I know which one is more likely to have the flexibility and the popular support to adapt and survive. ALAN FRANKLIN adds: Janet Daley's analysis is first class, as ever. However, the overal picture is that whatever the logic, a one world currency, one world government and one world dictator - the antichrist, are coming shortly. That's what the Bible says will happen - and this is the only book of prophecy in the world that is always 100 per cent accurate. =-=-=-=-=-=-=-=-=-=-=-=-=-=-=- OTHER HEADLINES ----- TELEGRAPH FTSE 100 tumbles as banking crisis intensifies @9.37 am The FTSE 100 tumbled 5pc at the open in London as fears that the banking crisis is deepening sent shares of Royal Bank of Scotland, Barclays and HBOS lower. FINANCIAL TIMES at 10.36 am Banking stocks plummet across Europe European financial stocks suffered sharp losses as worries about the extent of the crisis in the sector deepened. The FTSE 100 fell 4.8%, with the Dax and CAC 40 also down nearly 5%. Oil dipped below $90 for the first time since February Darling plans ‘big steps’ to aid UK banks Taxpayer funds may be used for equity stakes - TIMES Iceland reels as bank rescues evaporate Credit rating agencies downgrade Iceland and its four biggest banks as government decides against 'special measures' BNP Paribas pays €14.5bn to control Fortis The deal means the French bank now becomes Europe's largest deposit taker and Belgium is its largest shareholder =========================== THE TIMES 6.10.08 Every country for itself as European unity collapses in an attack of jitters Germany became the latest EU member to put its national interest first by announcing its own guarantee for bank deposits Roger Boyes Germany shattered any semblance of European unity on the global credit crisis last night by announcing that it was ready to guarantee €568 billion of personal savings in domestic accounts. The move – which came as Berlin announced a new rescue package for an ailing mortgage bank – is sure to anger France, which, holding the European Union presidency, tried to create the illusion of a common front at a weekend summit in Paris. Instead, the message coming loud and clear from Berlin is that it is every man for himself. Or as President Nicolas Sarkozy would prefer not to say:sauve qui peut. The massive liquidity crisis in the banking system has already nudged the Irish Republic and Greece into unilateral – and probably illegal under EU law – action to guarantee the deposits in national banks. Faced with a choice between the possible collapse of their banking systems and violating EU competition rules, the two countries opted for what they saw as the lesser evil. Now Germany, which at the weekend rejected French plans for an EU lifeboat fund, has taken the decisive protective step, and it is said to be plain that other European states will have to follow suit. Early today the Danish Government guaranteed all bank deposits in Denmark as part of a deal with banks to set up a liquidation fund. There had been a ceiling on the guarantee. Yesterday Peer Steinbrück, the German Finance Minister, said of his own country’s move: “This is an important signal to calm the situation and head off disproportionate reactions, and which would make our crisis management or crisis prevention even more difficult.” Berlin insiders say that Angela Merkel, the German Chancellor, did not make a spur-of-the-moment decision but had been pondering the move since the Hypo Real Estate bank first ran into serious trouble. The Munich-based group is the second-largest commercial property lender in Germany and it seemed set to go down ten days ago, hit by the problems of its Irish subsidiary Depfa. Then the Government came up with €35 billion of liquidity to be provided by a consortium of banks and the Bundesbank, while banks and the Government would stump up €35 billion of credit guarantees. The alternative was to see the bank go down and suck the real economy into the maelstrom. The new deal announced last night gives Hypo Real Estate an additional €15 billion credit on top of the €35 billion. Of the extra credit €14 billion of that extra credit will be underwritten to 60 per cent by the commercial banks and 40 per cent by the Government. The hope is that this will be sufficient to head off a run on the bank. But even before she went to the Paris summit to argue against a “Euro-tarp” – a troubled asset relief programme – or bailout plan, Mrs Merkel knew that matters were unravelling at home. The original rescue plan for Hypo Real Estate was clinched in a phone call eight days ago between her and Josef Ackermann, head of Deutsche Bank. She persuaded him to tell Germany’s bankers to up their contribution to the rescue from €7 billion to €8.5 billion. She was determined that the Government should not shoulder all of the burden. But then Mr Ackermann reported back – the banks were willing to cough up only €3 billion for the rescue. Hypo Real Estate made matters worse by announcing that it had got its figures wrong – it could need as much as €100 billion by the end of next year and €20 billion by the end of the coming week. Since then – more specifically since an allnight session of the Bundesbank on Thursday – she has known that she has to come out on behalf of the savers, the taxpayers and even more important the voters. Germany faces a general election next year and they will tip out any Government that is seen to be throwing their money at sinking banks or bungling its handling of the economy. “We won’t allow the crisis in a single institution to become a crisis for the whole system,” the Chancellor said. The Germans will abolish the current limit guaranteeing 90 per cent of all bank deposits up to €20,000 per account – essentially the same measure taken by the Irish that triggered dismay from its partners, especially the British. The €20,000 sum is the lowest possible guarantee under EU law; other countries have higher limits. The scope of the guarantee is huge. “It covers all savings deposits and private giro accounts, a total value of €568 billion,” Torsten Albig, spokesman for the Finance Minister, said. The primary task of the Government is to stop a financial meltdown that destroys all consumer confidence in the economy. “People are asking: what is going to happen to my savings?” says Rüdiger Ditz, economics commentator of Der Spiegel. “Is an investment secure? And what is going to happen to us when there is no backbone to the system any more and the money just evaporates?” It is difficult to deal with the crisis using conventional political instruments, he says. “It is about the loss of confidence of ordinary people, the fear of fear itself,” he says, “and nothing is more irritating than the massive capital flight of the Germans to supposedly safe havens such as Ireland.” The underpinnings of Chancellor Merkel’s decision emerged in an interview with the Interior Minister, Wolfgang Schäuble. History had taught Germany, he said, that a sustained economic crisis created political havoc. “We learnt from the worldwide economic crisis of the 1920s and 1930s that an economic crisis can result in an incredible threat for all of society,” he said. “The consequence of that depression was Adolf Hitler.” Only one thing trumps German anger at the perceived abuse of taxpayers’ money: the fear that the 1930s will return.


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