Fed insider exposes giant central bank “easing” swindle

A former Federal Reserve official who helped the Central Bank manage its bond buying program, dubbed QE, has admitted that the program is a fraud.

By: Mike Whitney, CounterPunch

Source: Press TV

http://www.presstv.ir/detail/2013/11/16/335041/fed-insider-easing-swindle-banks/

“This was a program (QE) that was devised to help mortgage lending in America…Instead, what we saw was massive Wall Street earnings.” Andrew Huszar, Bloomberg TV Interview

A former Federal Reserve official who helped the Central Bank manage its bond buying program, dubbed QE, has admitted that the program is a fraud. In a shocking op-ed in Monday’s Wall Street Journal, Andrew Huszar apologized for his role in the Fed’s $1.25 trillion asset purchase program which he described as “the greatest backdoor Wall Street bailout of all time.”

So far, no one at the Fed has responded to the charges, nor has Congress or the Department of Justice (DOJ) taken steps to investigate allegations that the multi-trillion dollar program was not intended to help Main Street as announced, but to shore up flagging bank balance sheets and zombie financial institutions that would have defaulted without the Fed’s stealth welfare program.

Surprisingly, Huszar’s credibility has not yet been challenged nor his claim that he played a pivotal role in overseeing the program. As he notes in his confession, he was “managing what was at the heart of QE’s bond-buying spree-a wild attempt to buy $1.25 trillion in mortgage bonds in 12 months.” He was asked “to quarterback” the largest giveaway to Big Finance on record. The fact that his allegations have not prompted an thorough investigation of criminal malfeasance at the Fed boggles the mind and points to a justice system that makes no pretense of operating in the interests of the people it is supposed to serve.

Huszar admits that he left the Fed -where he’d worked for seven years- because he’d “witnessed the institution deferring more and more to Wall Street”, that is, implementing policies which only benefited the banks.

“I had come to believe that the Fed’s independence was eroding,” says Huszar. These feelings were reinforced when Huszar was asked to purchase hundreds of billions of dollars of mortgage-backed securities, which according to him, put the system at risk of another crash.

“We constantly risked driving bond prices too high and crashing global confidence in key financial markets,” he said. “We were working feverishly to preserve the impression that the Fed knew what it was doing.” (“Andrew Huszar: Confessions of a Quantitative Easer“, Wall Street Journal)

The implication is clear, the Fed shrugged off its mandate of “price stability” and deliberately put the system at risk in order to assist its primary constituents, the banks.

It wasn’t long before Huszar figured out the program was a fake and that QE “wasn’t helping to make credit any more accessible for the average American. The banks were issuing fewer and fewer loans,” he said. “More insidiously, whatever credit they were extending wasn’t getting much cheaper. QE may have been driving down the wholesale cost for banks to make loans, but Wall Street was pocketing most of the extra cash.” (WSJ)

This column (Mike Whitney - CounterPunch) has been making this same point for more than two years, that all the profits on the interest rate spreads were going to the banks. QE has not led to a credit expansion nor was it designed to do so. It is a lavish subsidy to the financial elites and deep pocket bondholders who control the political-economic system. Huszar’s testimony further underscores that point.

Huszar again: “From the trenches, several other Fed managers also began voicing the concern that QE wasn’t working as planned. Our warnings fell on deaf ears. In the past, Fed leaders-even if they ultimately erred-would have worried obsessively about the costs versus the benefits of any major initiative. Now the only obsession seemed to be with the newest survey of financial-market expectations or the latest in-person feedback from Wall Street’s leading bankers and hedge-fund managers.” (WSJ)

No one cared that QE was not stimulating credit, because that was not the objective. The real goal was to boost profits at the banks so they could offset the massive losses on their trove of mortgage-backed assets which dropped precipitously following the Crash of ’08 leaving them exposed to potential restructuring and nationalization. The $700 billion from the TARP bailout merely provided enough operating capital for the banks to continue to run their businesses. In contrast, QE was a strategy to drain the ocean of red ink from bank balance sheets and restore them to profitability. What mattered was profits. Profits at the expense of employment, profits at the expense of growth, profits at the expense the nation’s economic future. Profits, profits, profits. How can anyone fail to see that now?

Huszar again: “Trading for the first round of QE ended on March 31, 2010. The final results confirmed that, while there had been only trivial relief for Main Street, the U.S. central bank’s bond purchases had been an absolute coup for Wall Street. The banks hadn’t just benefited from the lower cost of making loans. They’d also enjoyed huge capital gains on the rising values of their securities holdings and fat commissions from brokering most of the Fed’s QE transactions. Wall Street had experienced its most profitable year ever in 2009, and 2010 was starting off in much the same way.” (WSJ)

See? It was an “absolute coup for Wall Street”…the “most profitable year ever.” In other words, QE was a transparent ripoff from the get go, and the Bernanke Fed orchestrated the entire affair.

And it didn’t stop there either, because the Fed launched three more versions of QE increasing its balance sheet by nearly $4 trillion while inflating asset bubbles in US Treasuries, equities, junk bonds, farmland, housing and financial assets across-the-board. The Fed has created a gigantic bubble in long-term Treasuries which threatens the world’s biggest and most liquid bond market and puts the dollar at risk of losing its position as the world’s reserve currency.

Huszar admits that the Fed’s actions have dealt a blow to the so called “free market” calling QE “the largest financial-markets intervention by any government in world history.” He also dispels the illusion that QE spurred growth in the real economy. (“Even by the Fed’s sunniest calculations, aggressive QE over five years has generated only a few percentage points of U.S. growth.”) He also admits that the Wall Street banks are a cartel that’s been strengthened by the Fed’s actions. (“The biggest ones have only become more of a cartel: 0.2% of them now control more than 70% of the U.S. bank assets.”) And, he also suggests that the Fed suffers from “regulatory capture”, that is, that monetary policy is shaped in a way that best advances the interests of the banks. (“I had come to believe that the Fed’s independence was eroding.”)

Huszar’s testimony leaves little doubt that QE is a P.R. scam designed to pull the wool over the publics eyes. While the Fed’s critics have always said that that was the case, Huszar is the first insider to confirm those claims and to denounce the program as a blatant bailout for the banks.

So where are the regulators? Where are the investigations? Where is the DOJ or the US Congress?

Where is the outrage?

Links:

Andrew Huszar – Confessions of a Quantitative Easer – Wall Street Journal

http://online.wsj.com/news/articles/SB10001424052702303763804579183680751473884
Original Post by: Mike Whitney (CounterPunch)
http://www.counterpunch.org/2013/11/15/fed-insider-exposes-giant-central-bank-easing-swindle/

 

China and Russia are Acquiring Gold Dumping US Dollars

 

By: Prof. Michel Chossudovsky

Source: Global Research

http://www.globalresearch.ca/central-banks-are-acquiring-gold-dumping-us-dollars/22672

There is evidence that central banks in several regions of the World are building up their gold reserves. What is published are the official purchases.

A large part of these Central Bank purchases of gold bullion are not disclosed. They are undertaken through third party contracting companies, with utmost discretion.

US dollar holdings and US dollar denominated debt instruments are in effect being traded in for gold, which in turn puts pressure on the US dollar.

In turn, both China and Russia have boosted domestic production of gold, a large share of which is being purchased by their central banks:

It has long been assumed that China is surreptitiously building up its gold reserves through buying local production. Russia is another major gold miner where the Central bank has been purchasing gold from another state entity, Gokhran, which is the marketing arm and central repository for the country’s mined gold production. Now it has been reported by Bloomberg that the Venezuelan Central Bank director, Jose Khan, has said that country will boost its gold reserves through purchasing more than half the gold produced from its rapidly growing domestic gold mining industry.

In Russia, for example, Gokhran sold some 30 tonnes of gold to the Central Bank in an internal accounting exercise late last year. In part, so it was said at the time, the direct sale was made rather than placing the metal on the open market and perhaps adversely affecting the gold price.

China is currently the world’s largest gold producer and last year it confirmed it had raised its own Central Bank gold holdings by more than 450 tones over the previous six years. Mineweb.com – The world’s premier mining and mining investment website Venezuela taking own gold production into Central Bank reserves – GOLD NEWS | Mineweb

The 450 tons figure corresponds to an increase in the gold reserves of the central bank from 600 tons in 2003 to 1054 tons in 2009. If we go by official statements, China’s gold reserves are increasing by approximately 10 percent per annum.

China has risen to now be the largest gold producing nation in the world at around 270 tonnes. The amount bought in by the government initially looks like 90 tonnes per annum or just under, 2 tonnes a week. Before 2003 the announcement by the Chinese central bank that gold reserves had been doubled to 600 tonnes, accounted for similar purchases before that date. Why so small an amount you may well ask? We think local and national issues clouded the central bank’s view as it was the government that bought the gold since 2003 and have now placed it on the central bank’s Balance Sheet. So we would conclude that the government has ensured central bank gold purchasing must continue. “How will Chinese Central Bank Gold Buying affect the Gold Price short & Long-Term?” by Julian Phillips. FSO Editorial 05/07/2009

Russia

Russia’s Central bank holdings are in excess of 20 million troy ounces (January 2010)

 

Russia’s Central Bank reserves have increased markedly in recent years. The RCB reported in May 2010 purchasing 34.2 tons of gold in a single month. Russian Central Bank Gold Purchases Soar In May – China Too? | The Daily Gold

The diagram below shows a significant increase in monthly purchases by the the RCB since June 2009.

 

Central Banks in the Middle East are also building up their gold reserves, while reducing their dollar forex holding.

Gold reserves of GCC states is less than 5 percent:

Dubai International Financial Centre Authority economists released a report yesterday calling for local countries to build gold reserves, according to The National.

Despite a high interest in gold, GCC states maintain less than 5 percent of their total reserves in gold. Compared to the ECB, which holds 25 percent of reserves in gold, that leaves a lot of room for growth. http://www.businessinsider.com/gcc-boost-gold-holdings-2010-12#ixzz18FEqpTy3

GCC states should boost their foreign reserve holdings of gold to help shield their billions of dollars of assets from turbulence in global currency markets, say economists at the Dubai International Financial Centre Authority (DIFCA).

Diversifying more of their reserves from US dollars to the yellow metal would help to offer central banks in the region higher investment returns, said Dr Nasser Saidi, the chief economist of DIFCA, and Dr Fabio Scacciavillani, the director of macroeconomics and statistics at the authority.

“When you have a great deal of economic uncertainty, going into paper assets, whatever they may be – stocks, bonds, other types of equity – is not attractive,” said Dr Saidi. “That makes gold more attractive.”

Declines in the dollar during recent months have dented the value of GCC oil revenues, which are predominantly weighted in the greenback. GCC urged to boost gold reserves

According to a report in People`s Daily;

The latest rankings of gold reserves show that, as of mid-December, the United States remains the top country and the Chinese mainland is ranked sixth with 1,054 tons of reserves, the World Gold Council announced recently.

Russia climbed to eighth place because its gold reserves increased by 167.5 tons since December 2009. The top ten in 2010 remains the same compared to the rankings of the same period of last year. And Saudi Arabia squeezed to the top 20.

Developing countries and regions, including Saudi Arabia and South Africa, have become the main force driving the gold reserve increase. … .

The International Monetary Fund (IMF) and the European central bank are the major gold sellers, and the IMF’s gold reserves decreased by 158.6 tons. (China’s gold reserves rank 6th worldwide – People’s Daily Online

It should be understood that actual purchases of physical gold are not the only factor in explaining the movement of gold prices. The gold market is marked by organized speculation by large scale financial institutions.

The gold market is characterised by numerous paper instruments, gold index funds, gold certificates, OTC gold derivatives (including options, swaps and forwards), which play a strong role, particularly in short-term movement of gold prices. The recent increase and subsequent decline of gold prices are the result of manipulation by powerful financial actors.

 

China to pass US as top economic superpower by 2016

 

In this picture taken on June 21, 2012 shows workers building a car on the Geely Motors assembly line in Cixi, 50km from Ningbo in China's Zhejiang province. (AFP Photo/Peter Parks)

Source: Russia Today

http://rt.com/usa/news/china-us-economic-economy-373/

America’s days of economic dominance aren’t over just yet, but one international thinktank says it might come sooner than once thought. According to one group, China will have the biggest world economy by 2016.

The Organisation for Economic Co-operation and Development (OECD) out of Paris writes in a new report that China will be the world’s leading nation in terms of economy in just four years’ time, with other BRICs nations likely to usurp the current top dogs during the next few decades as well.

“The next 50 years will see major changes in country shares in world GDP,” the OECD report released this week reads. “On the basis of 2005 purchasing power parities (PPPs), China is projected to surpass the Euro Area in a year or so and the United States in a few more years, to become the largest economy in the world, and India is projected to surpass Japan in the next year or two and the Euro area in about 20 years.”

Additionally, the OECD predicts that China and India will together have a GDP that will beat out that of the G7 nations by as early as 2025, and by 2060 they expect Indian to out-perform the US on its own.

"As the largest and fastest-growing emerging countries fully assume a more prominent place in the global economy, we will face new challenges to ensure a prosperous and sustainable world for all. Education and productivity will be the main drivers of future growth, and should be policy priorities worldwide," said OECD Secretary-General Angel Gurria adds in an accompanying statement published with the report.

Asa Johansson, senior economist at the OECD, says, "It is quite a shift in the balance of economic power we are going to see in the future." According to projections published in the report, the United States’ share of the global gross domestic product will shrink to 18 percent in 2030, then 17 percent three decades later. Currently, the US is responsible for nearly a quarter, but by 2060, India is expected to have a slightly larger economy, generation 18 percent of the world’s GDP, as Japan and the Euro zone lose influence in international finances.

Last year, the US-China Economic and Security Review Commission predict that China’s yuan, or renminbi, could become the main reserve currency for the world economy within the next decade if it continues to rise up over the US dollar.

“Chinese economic dominance is more imminent and more broad-based – encompassing output, trade and currency – than is currently recognized,” economist Arvind Subramanian wrote last year. "By 2030, this dominance could resemble that of the United States in the 1970s and the United Kingdom around 1870. And this economic dominance will in turn elevate the renminbi to premier reserve currency status much sooner than currently expected.”

 

Will China Make the Yuan a Gold-Backed Currency?

Source: Global Research
http://www.globalresearch.ca/index.php?context=va&aid=30978

If China Backs Its Currency with Gold, It Could Have Profound Effects for Investors … and Consumers. - Larry Edelson – writes today:

I know for a fact that Beijing wants its yuan to eventually become a gold-backed currency, much like the Swiss franc was originally. Backing the yuan with some gold will certainly help it become a major international currency.

Edelson is a financial adviser who travels frequently to Asia, a former high-volume gold trader who is interviewed a lot in the mainstream financial media.

I have no idea whether Edelson is right or not. But he’s not the first to make the claim.

Doug Casey says that if one country – such as China – switches to a gold-backed currency, the dollar will be toast:

All it will take for the world to realize that U.S. dollars are nothing more than hot potatoes is for one country (Doug postulated that maybe China would be first) to introduce a gold-backed currency. If China introduced a gold-backed yuan, for example, who on earth would want anything to do with U.S. dollars?

Similarly, Safe Haven points out:

Suppose a large exporter, such as China, which undervalues its currency and runs a large trade surplus as a result, takes a huge radical step and goes all the way to a 100%-reserve gold currency. The ultimate hard currency. If this succeeds, China is the new England – the financial capital of the world, forever. Everyone else’s money? In a word: pesos. Hard currency is Chinese currency. China’s natural supremacy over the barbarian kingdoms of the West is restored.

Goldcore argues:

China is clearly trying to position the yuan or renminbi as the alternative global reserve currency. The Chinese likely realize that they will need to surpass the Federal Reserve’s official, but unaudited, gold holding of 8,133.5 tones.

World Bank President Robert Zoellick recently mooted the possibility of a return to some form of gold standard. It seems extremely likely that senior and influential Chinese policy makers, bankers and government officials may be having similar thoughts.

Simit Patel writes:

China’s central bank continues to aggressively accumulate gold. Is this a setup for making the renminbi a gold-backed currency? Many have speculated that this is the game plan. Certainly a currency that is gold-backed will have appeal as a reserve currency capable of storing wealth; indeed, the reason why the US was able to position itself as a reserve currency is largely because it was once pegged to gold.

MaxKeiser says:

China is clearly trying to position the yuan or renminbi as the alternative global reserve currency. The Chinese likely realize that they will need to surpass the Federal Reserve’s official, but unaudited, gold holding of 8,133.5 tones. China is the sixth largest holder of gold reserves in the world today and officially has reserves of 1054.1 tones which is less than half those of even Euro debtor nations France and Italy who are believed to have 2,435.4 and 2,451.8 tones respectively.

[This] game theory article is great because it points out that China does not need to amass a gold stock similar to the US, it can simply go to a gold standard now and effect a simultaneous devaluation against the dollar (as game theory dictates that the US and all other CB’s would be forced to follow China’s lead, or risk losing all their capital as investors buy the only gold backed currency in the world).

And Wikileaks noted several reasons for China’s stocking up on gold. ZeroHedge summarizes:

As the following leaked cable explains, gold is, to China at least, nothing but the opportunity cost of destroying the dollar’s reserve status. Putting that into dollar terms is, therefore, impractical at best, and illogical at worst. We have a suspicion that the following cable from the US embassy in China is about to go not viral but very much global, and prompt all those mutual fund managers who are on the golden sidelines to dip a toe in the 24-karat pool. The only thing that matters from China’s perspective is that “suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar’s role as the international reserve currency. China’s increased gold reserves will thus act as a model and lead other countries towards reserving more gold. Large gold reserves are also beneficial in promoting the internationalization of the RMB.” Now, what would happen if mutual and pension funds finally comprehend they are massively under invested in the one asset which China is without a trace of doubt massively accumulating behind the scenes is nothing short of a worldwide scramble, not so much for paper, but every last ounce of physical gold…

From Wikileaks:

3. CHINA’S GOLD RESERVES

“China increases its gold reserves in order to kill two birds with one stone”

“The China Radio International sponsored newspaper World News Journal (Shijie Xinwenbao)(04/28): “According to China’s National Foreign Exchanges Administration China ‘s gold reserves have recently increased. Currently, the majority of its gold reserves have been located in the U.S. and European countries. The U.S. and Europe have always suppressed the rising price of gold. They intend to weaken gold’s function as an international reserve currency. They don’t want to see other countries turning to gold reserves instead of the U.S. dollar or Euro. Therefore, suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar’s role as the international reserve currency. China’s increased gold reserves will thus act as a model and lead other countries towards reserving more gold. Large gold reserves are also beneficial in promoting the internationalization of the RMB”.

Recovery or Economic Collapse? Bet on Collapse

The Financial Crisis could Destroy Western Civilization

By: Dr. Paul Craig Roberts
http://www.paulcraigroberts.org/

Source: Global Research
http://www.globalresearch.ca/index.php?context=va&aid=30960

The US financial system and, probably, the financial system of Europe, like the police, no longer serves a useful social purpose.

In the US the police have proven themselves to be a greater threat to public safety than private sector criminals. I just googled “police brutality” and up came 183,000,000 results.

(Here are two recent brutal assaults, one deadly, by police on hapless individuals:

http://latimesblogs.latimes.com/lanow/2012/05/kelly-thomas-video-dad-they-are-killing-me-.html
 and http://www.informationclearinghouse.info/article31364.htm )

The cost to society of the private financial system is even higher. Writing in CounterPunch (May 18), Rob Urie reports that two years ago Andrew Haldane, executive Director for Financial Stability at the Bank of England (the UK’s version of the Federal Reserve) said that the financial crisis, now four years old, will in the end cost the world economy between $60 trillion and $200 trillion in lost GDP. If Urie’s report is correct, this is an astonishing admission from a member of the ruling elite.

http://www.counterpunch.org/2012/05/18/the-true-costs-of-bank-crises/print

Try to get your mind around these figures. The US GDP, the largest in the world, is about 15 trillion. What Haldane is telling us is that the financial crisis will end up costing the world lost real income between 4 and 13 times the size of the current Gross Domestic Product of the United States. This could turn out to be an optimistic forecast.

In the end, the financial crisis could destroy Western civilization.

Even if Urie’s report, or Haldane’s calculation, is incorrect, the obvious large economic loss from the financial crisis is still unprecedented. The enormous cost of the financial crisis has one single source--financial deregulation. Financial deregulation is likely to prove to be the mistake that destroys Western civilization. While we quake in our boots from fear of “Muslim terrorists,” it is financial deregulation that is destroying us, with help from jobs offshoring. Keep in mind that Haldane is a member of the ruling elite, not a critic of the system like myself, Gerald Celente, Michael Hudson, Pam Martins, and Nomi Prins. (This is not meant to be an exhaustive list of critics.)

Financial deregulation has had dangerous and adverse consequences. Deregulation permitted financial concentration that produced “banks too big to fail,” thus requiring the general public to absorb the costs of the banks’ mistakes and reckless gambling.

Deregulation permitted banks to leverage a small amount of capital with enormous debt in order to maximize return on equity, thereby maximizing the instability of the financial system and the cost to society of the banks’ bad bets.

Deregulation allowed financial institutions to sweep aside the position limits on speculators and to dominate commodity markets, turning them into a gambling casino and driving up the prices of energy and food.

Deregulation permits financial institutions to sell naked shorts, which means to sell a company’s stock or gold and silver bullion that the seller does not possess into the market in order to drive down the price.

http://www.rollingstone.com/politics/blogs/taibblog/accidentally-released-and-incredibly-embarrassing-documents-show-how-goldman-et-al-engaged-in-naked-short-selling-20120515

The informed reader can add more items to this list.

The dollar in its role as world reserve currency is the source of Washington’s power. It allows Washington to control the international payments system and to exclude from the financial system those countries that do not do Washington’s bidding. It allows Washington to print money with which to pay its bills and to purchase the cooperation of foreign governments or to fund opposition within those countries whose governments Washington is unable to purchase, such as Iran, Russia, and China. If the dollar was not the world reserve currency and actually reflected its true depreciated value from the mounting US debt and running of the printing press, Washington’s power would be dramatically curtailed.

The US dollar has come close to its demise several times recently. In 2011 the dollar’s value fall as low as 72 Swiss cents. Investors seeking safety for the value of their money flooded into Swiss francs, pushing the value of the franc so high that Switzerland’s exports began to suffer. The Swiss government responded to the inflow of dollars and euros seeking refuge in the franc by declaring that it would in the future print new francs to offset the inflows of foreign currency in order to prevent the rise in the value of the franc. In other words, currency flight from the US and Europe forced the Swiss to inflate in order to prevent the continuous rise in the exchange value of the Swiss currency.

Prior to the sovereign debt crisis in Europe, the dollar was also faced with a run-up in the value of the euro as foreign central banks and OPEC members shifted their reserves into euros from dollars. The euro was on its way to becoming an alternative reserve currency. However, Goldman Sachs, whose former employees dominate the US Treasury and financial regulatory agencies and also the European Central Bank and governments of Italy and, indirectly, Greece, helped the Greek government to disguise its true deficit, thus deceiving the private European banks who were purchasing the bonds of the Greek government. Once the European sovereign debt crisis was launched, Washington had an interest in keeping it going, as it sends holders of euros fleeing into “safe” dollars, thus boosting the exchange value of the dollar, despite the enormous rise in Washington’s own debt and the doubling of the US money supply.

Last year gold and silver were rapidly rising in price (measured in US dollars), with gold hitting $1,900 an ounce and on its way to $2,000 when suddenly short sales began dominating the bullion markets. The naked shorts of gold and silver bullion succeeded in driving the price of gold down $350 per ounce from its peak. Many informed observers believe that the reason Washington has not prosecuted the banksters for their known financial crimes is that the banksters serve as an auxiliary to Washington by protecting the value of the dollar by shorting bullion and rival currencies.

What happens if Greece exits the EU on its own or by the German boot? What happens if the other EU members reject German Chancellor Merkel’s austerity, as the new president of France promised to do? If Europe breaks apart, do more investors flee to the doomed US dollar?

Will a dollar bubble become the largest bubble in economic history?

When the dollar goes, interest rates will escalate, and bond prices will collapse. Everyone who sought safety in US Treasuries will be wiped out.

We should all be aware that such outcomes are not part of the public debate.

Recently Bill Moyers interviewed Simon Johnson, formerly chief economist of the International Monetary Fund and currently professor at MIT. It turns out that deregulation, which abolished the separation of investment banks from commercial banks, permitted Jamie Dimon’s JPMorganChase to gamble with federally insured deposits. http://www.informationclearinghouse.info/article31356.htm Despite this, Moyers reports that Republicans remain determined to kill the weak Dodd-Frank law and restore full deregulation.

Simon Johnson says: “I think it [deregulation] is a recipe for disaster.” The problem is, Johnson says, that correct economic policy is blocked by the enormous donations banks make to political campaigns. This means Wall Street’s attitudes and faulty risk models will result in an even bigger financial crisis than the one from which we are still suffering. And it will happen prior to recovery from the current crisis.

Johnson warns that the Republicans will distract everyone from the real crisis by concocting another “crisis” over the debt ceiling.

Johnson says that “a few people, particularly in and around the financial system, have become too powerful. They were allowed to take a lot of risk, and they did massive damage to the economy -- more than eight million jobs lost. We're still struggling to get back anywhere close to employment levels where we were before 2008. And they've done massive damage to the budget. This damage to the budget is long lasting; it undermines the budget when we need it to be stronger because the society is aging. We need to support Social Security and support Medicare on a fair basis. We need to restore and rebuild revenue, revenue that was absolutely devastated by the financial crisis. People need to understand the link between what the banks did and the budget. And too many people fail to do that.”

Consequently, Johnson says, the banksters continue to receive mega-benefits while imposing enormous social costs on society.

Few Americans and no Washington policymakers understand the dire situation. They are too busy hyping a non-existent recovery and the next war. Statistician John Williams reports that when correctly measured as a cost of living indicator, which the CPI no longer is, the current inflation rate in the US is 5 to 7 percentage points higher than the officially reported rate, as every consumer knows. The unemployment rate falls because, and only because, people unable to find jobs drop out of the labor force and are no longer counted as unemployed. Every informed person knows that the official inflation and unemployment rates are fictions; yet, the presstitute media continue to report the rates with a straight face as fact.

The way the government has rigged the measure of unemployment, it is possible for the US to have a zero rate of unemployment and not a single person employed or in the work force.

The way the government has the measure of inflation rigged, it is possible for your living standing to fall while the government reports that you are better off.

Financial deregulation raises the returns from speculative schemes above the returns from productive activity. The highly leveraged debt and derivatives that gave us the financial crisis have nothing to do with financing businesses. The banks are not only risking their customers’ deposits on gambling bets but also jeopardizing the country’s financial stability and economic future.

With an eye on the approaching dollar crisis, which will wreck the international financial system, the presidents of China, Russia, Brazil, South Africa, and the prime minister of India met last month to discuss forming a new bank that would shield their economies and commerce from mistakes made by Washington and the European Union. The five countries, known as the BRICS, intend to settle their trade with one another in their own currencies and cease relying on the dollar. The fact that Russia, the two Asian giants, and the largest economies in Africa and South America are leaving the dollar’s orbit sends a powerful message of lack of confidence in Washington’s handling of financial matters.

It is ironic that the outcome of financial deregulation in the US is the opposite of what its free market advocates promised. In place of highly competitive financial firms that live or die by their wits alone without government intervention, we have unprecedented financial concentration. Massive banks, “too big to fail,” now send their multi-trillion dollar losses to Washington to be paid by heavily indebted US taxpayers whose real incomes have not risen in 20 years. The banksters take home fortunes in annual bonuses for their success in socializing the “free market” banks’ losses and privatizing profits to the point of not even paying income taxes.

In the US free market economists unleashed avarice and permitted it to run amuck. Will the disastrous consequences discredit capitalism to the extent that the Soviet collapse discredited socialism?

Will Western civilization itself survive the financial tsunami that deregulated Wall Street has produced?

Ironic, isn’t it, that the United States, the home of the “indispensable people,” stands before us as the likely candidate whose government will be responsible for the collapse of the West.

Asian tigers move away from dollar

South Korea's President Lee Myung-bak (L), China's Premier Wen Jiabao (C) and Japan's Prime Minister Yoshihiko Noda pose for photographs in front of their national flags ahead of the fifth trilateral summit among the three nations at the Great Hall of the People in Beijing on May 13, 2012 (AFP Photo/Pool/Petar Kujundzic)

Source: Russia Today
http://rt.com/business/news/asia-currencies-trade-union-279/

China, Japan and South Korea are taking further steps to replace the dollar in trade between them as the countries start negotiations on a free trade agreement, Vladimir Rozhankovsky, Head of Research at Nord Capital told RT.

The deal would be signed by the end of the year, Chinese Premier Wen Jiabao with Japan's Prime Minister Yoshihiko Noda and South Korean President Lee Myung-bak announced during their Fifth Trilateral Summit in Beijing on May 13.

The countries have been mulling the idea of the union for several years. “China started negotiations on using national currencies in the region’s trade as early as in 2008, during the crisis as the country wanted to secure itself from probable default of the US dollar,” Rozhankovsky told RT.

In 2010 China and Japan agreed on trading some commodities in the yen and the yuan. “It took about two years to trial the idea of trade in the local currencies and now it’s time to follow up a success,” Rozhankovsky said.

The agreement is seen as a further step to ease off dollar dependency in international trade. This idea has been promoted by many countries and organizations in the recent years. In March BRICS countries agreed to provide credit to each other in local currencies. China has already agreed to switch to the local currencies in trade with Russia, although a memorandum on this has not yet been issued.

“The idea is in line with many interests and economic exigencies in the world economy,” Yaroslav Lissovolik, chief economist at Deutsche Bank told RT. “The euro and dollar are no longer seen as unquestionable monopolies in the role of reserve currencies. Clearly the world needs more reserve currencies.”

The agreement between China, Japan and South Korea won’t significantly influence global trade, but will bring advantages to the countries concerned, according to Rozhankovsky.

“The union will contribute to the growth of turnover of commodities and would also secure risks and cut exchange brokerages with the US dollar. The brokerage is usually less than 1% but it accounts for huge sums in international trade”.

The new union will be able to compete with the world's largest free-trade zones as China, Japan and South Korea account for 90% of the East Asian GDP and about 20% of the world’s GDP, following North America and the EU, the Chinese Foreign Ministry reports. Trade between the three countries amounted to $690 billion in 2011, which is 70% of East Asia’s total trade and 20% of world trade

Iran, Russia dump dollar for rial, ruble

Russian ruble notes (file photo)

Source: Press TV
http://www.presstv.ir/detail/220020.html

Iranian Ambassador to Moscow Seyyed Reza Sajjadi says Iran and Russia have turned to their national hard currencies instead of the American dollar in reciprocal trade exchanges.

Sajjadi said on Saturday that the proposal for the replacement of the US dollar with the Iranian rial and Russian ruble was raised during a meeting between Russia's President Dmitry Medvedev and his Iranian counterpart Mahmoud Ahmadinejad on the sidelines of the 11th meeting of the Shanghai Cooperation Organization (SCO) last June.

Permanent SCO members include China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Iran, along with India, Mongolia and Pakistan, is an observer state to the intergovernmental mutual-security organization.

The Iranian envoy said Tehran and Moscow switched to their national currencies in preference after the meeting between their presidents.

Sajjadi also pointed to Russia' strong opposition to sanctions against Iran over its nuclear program, saying Russians have clearly announced that they will not accept fresh anti-Iran bids that target the country's Central Bank and financial institutions.

He also described new US sanctions against Iran as “illegal and unilateral”, stressing that Russia has at times called for a peaceful solution to Iran's atomic case through negotiations.

On December 31, US President Barack Obama signed into law fresh economic sanctions against Iran's Central Bank in an apparent bid to punish foreign companies and banks that do business with the Iranian financial institution.

The bill requires foreign financial firms to make a choice between doing business with Iran's Central Bank and oil sector or with the US financial sector.

The legislation will not take effect for six months in a bid to provide oil markets with time to adjust.

Meanwhile, energy experts say sanctions could lead to a major hike in crude oil prices and disrupt the interests of the US and its allies that depend on oil imports from Iran.

Facing major economic troubles, the United States is reportedly the world's largest debtor nation.

Japan, India sign currency swap deal

Japanese PM Yoshihiko Noda (L) and Indian PM Manmohan Singh in New Delhi on December 28, 2011

Source: Press TV
http://www.presstv.ir/detail/218210.html

Japanese Prime Minister Yoshihiko Noda has signed a 15-billion-dollar currency swap agreement with India to shore up Indian rupees.

"I am convinced we need to strengthen the economic partnership," Noda said during his visit to New Delhi on Wednesday.

"Japan and India will expand their currency swap from a current USD3 billion to USD15 billion," the Japanese premier announced.

Indian Prime Minister Manmohan Singh said he was "extremely happy" with the outcome of his talks with Noda.

Under the currency swap, Tokyo could lend New Delhi dollars to defend the ailing rupee. The deal is an expansion of a USD3 billion accord that expired earlier this year.

With USD1.2 trillion in foreign currency reserves, Japan has been moving to enhance its global financial role and struck a similar swap deal with South Korea in October.

The currency agreement is an extra weapon for India, which has USD300 billion in reserves, to use for propping up the rupee.

The rupee has slid 15 percent against the dollar this year as overseas investors have withdrawn funds as they hunt for safe havens in the midst of the global financial turmoil.

China-Japan pact to sideline dollar

Japan's Prime Minister Yoshihiko Noda (R) reviews an honor guard with China's Premier Wen Jiabao during a welcoming ceremony in Beijing on December. 25, 2011

Source: Press TV
http://www.presstv.ir/detail/218084.html

Chinese Prime Minister Wen Jiabao and his Japanese counterpart Yoshihiko Noda have reached an agreement to promote direct use of their currencies in bilateral trade, limiting the use of dollar in Asia.

The announcement was made in a statement by the Japanese government on Monday after the Asian leaders met in China's capital Beijing.

Both sides also agreed that Japan will hold Chinese currency, yuan, in its foreign-exchange reserves, now largely denominated in dollars.

Chinese Foreign Ministry spokesman Hong Lei said after the meeting that the agreement “benefits the ease of trade and investments between the two countries.”

“It strengthens the region's ability to protect against risks and deal with challenges,” Lei added.

The direct currency swap between the world's second- and third-largest economies reflects efforts to reduce risks stemming from fluctuations of foreign exchange rates and transaction costs.

"As implications from the current global financial crisis continue to spread and the complexity and severity of the world and regional situations are worse than expected, it is necessary and possible that China and Japan join efforts to address the challenges and deepen strategic reciprocal ties," the Chinese premier said.

China is Japan's biggest trading partner, with transactions between the two amounting to $340 billion in 2010, from $120 billion a decade earlier.

China also forged a deal with Thailand for a direct currency swap worth $11 billion last week as part of a plan outlined in October to promote the use of the yuan in the Association of Southeast Asian Nations and establish free trade zones.

Iran nuclear reactor gets more fuel

Iran nuclear reactor receives second lot of fuel

Source: Press TV
http://www.presstv.ir/detail/179436.html

The second consignment of fuel for Iran's sole nuclear power plant has been delivered from Russia to the southern Iranian city of Bushehr.

“This consignment was shipped, taking into account all safety measures and legal procedures, and has been transported to its designated area in the nuclear reactor,” Speaker of the Atomic Energy Organization of Iran (AEOI) Hamid Khadem-Qaemi said, according to a statement released by the organization on Wednesday.

Qaemi said the fuel, which has been prepared in advance for the reactor's second year of operation, was air couriered to Iran from Russia on three separate flights.

The reactor's first consignment of fuel weighed 86 tons and was delivered to the reactor in eight portions.

In October 2010, Iran started injecting fuel into the core of the reactor at the Bushehr nuclear power plant in the initial phase of its launch. However, engineers began removing the fuel rods in late February for safety reasons.

The unloading of the fuel delayed the plant's joining the national grid, initially scheduled for the beginning of 2011.

Bushehr, which is Iran's first nuclear power plant, operates under the full supervision of the International Atomic Energy Agency.

The Atomic Energy Organization of Iran (AEOI) has already announced that the facility is quake-proof and will never experience a situation similar to the crippled Fukushima Daiichi nuclear power plant

Russia stresses nuclear pledges to Iran

Russian Foreign Minister Sergei Lavrov (L) with his Iraqi counterpart Hoshyar Zebari at a Press Conference in Baghdad on May 10, 2011

Source: Press TV
http://www.presstv.ir/detail/179348.html

Russian Foreign Minister Sergei Lavrov says his country will remain committed to all its commitments towards Iran's nuclear program.

Moscow will abide by all its [nuclear] commitments and agreements with Iran, within the framework of International law, Lavrov said at a press conference with his Iraqi counterpart in the Iraqi capital city of Baghdad on Tuesday.

The Russian foreign minister underscored the necessity of observance of international law by all world nations, including Iran, Fars news agency reported.

Iran signed a deal with Russia in 1995, under which the Bushehr nuclear power plant in southern Iran was originally scheduled for completion in 1999.

However, the project was repeatedly delayed by the Russian side due to intense pressures exerted by the United States and its Western allies against the move.

On May 9, Iranian and Russian experts completed loading fuel into the reactor at the Bushehr plant, officially putting it into service. It will start generating electricity in two months' time.

In October 2010, Iran started injecting fuel into the core of the reactor at the Bushehr nuclear power plant in the initial phase of its launch. However, engineers began removing the fuel rods in late February for safety reasons.

The unloading of the fuel delayed the plant's joining the national grid, initially scheduled for the beginning of 2011.

Bushehr, which is Iran's first nuclear power plant, operates under the full supervision of the International Atomic Energy Agency.

The Atomic Energy Organization of Iran (AEOI) has already announced that the facility is quake-proof and will never experience a situation similar to the crippled Fukushima Daiichi nuclear power plant.

According to the AEOI, the safety systems used at Bushehr meet the latest international standards, but the safety systems at the Fukushima plant belonged to the 1960s and 70s.

'World needs new reserve currency'

Nobel Prize winning economist Joseph Stiglitz

Source: Press TV
http://www.presstv.ir/detail/174296.html

A prominent American economist says the world needs a new global reserve currency to avert trade imbalances that are reflected in the US national debt.

In an interview with Bloomberg on Sunday, Nobel Prize winning economist Joseph Stiglitz said that a “global system” is needed to replace the dollar as a reserve currency and help avoid a weakening of US credit quality.

“By taking off the burden of any single country, we don't have to have trade deficits,” the Columbia University professor pointed out.

“Things would be much worse if it were not the case that Europe was having even more of a problem, but winning a negative beauty pageant is not the way to create a strong economy.”

“The likelihood of the US government failing to honor its financial obligations and in particular make due and full payments on US Treasury securities is extremely low,” according to the international Fitch Ratings agency.

Americans appear to be growing nervous, and that unease could take an economic toll.

Consumer sentiment fell in March to its lowest level since November 2009. With oil prices rising, Americans' confidence in the economic recovery has taken a sudden plunge.

The financial and psychological strains appear to be encouraging Americans to cut back. Already, one in every three consumers has cut spending due to rising prices.

G20 seeks indicator deal in Paris

Finance ministers and central bank heads meet in France to decide common indicators to measure nations' economic health.


Sarkozy, whose country heads the G20 this year, has told ministers to put national concerns aside [EPA]

Source: Al Jazeera
http://english.aljazeera.net/news/europe/2011/02/201121982516550310.html

Members of the G20 are striving to reach a deal on a set of indicators to measure the economic health of member states, in a bid to avoid another global financial crisis.

The G20 has been seeking to avoid another major financial crisis by increasing economic co-operation between member states, but in order to do so it is essential the countries agree on a set of economic metrics.

Finance ministers and central bankers from the 20 developed and developing countries are holding a second day of talks in Paris on Saturday to try to finalise the details of any agreement.

In welcoming remarks on Friday, Nicolas Sarkozy, the French president, warned participants that they would have to put national interests aside for the greater good of the group.

"The temptation to give priority to national interests is great. But let me tell you clearly - that would be the death of the G20," said Sarkozy.

A diplomatic source told the AFP news agency that no agreement emerged during a working dinner for finance ministers on Friday.

The source said that China remained reluctant to agree to certain indicators that were under consideration, and there was no united front among emerging economies on the issue.

However, speaking on Saturday, Wolfgang Schaeuble, the German finance minister, said there was a "good chance" of breaking the current deadlock on the indicators.

He also said that Germany would back French proposals to work on increasing transparency in commodity markets and for implementing a controversial financial transaction tax.

Four indicators

France says that it wants an agreement as soon as possible so that the International Monetary Fund can make policy recommendations in the second half of the year.

"We need a thermometer that works so we can examine the imbalances in all their aspects to make as useful a diagnosis as possible," said one negotiator.

A series of four indicators are under discussion. Two measure imbalances within countries: the public deficit and debt, plus the level of private savings.

The other two measure external imbalances: the current account balance or trade balance, or foreign currency reserves or real exchange rates.

Sarkozy, whose country holds the G20 presidency this year, has vowed to reform the world monetary system and commodities market.

He said that he aims to defend poorer countries from trade and currency turbulence.

Some member states, including France, have also also discussed the option of curbing the dollar's supremacy as the world reference currency.

The US delegation, however, has said that it wants to focus on the effect of volatility in capital flows between countries

Wars to go on until US economy busts

Senior fellow of the Nation Institute, Chris Hedges

Source: Press TV
http://www.presstv.ir/detail/161041.html


The economy-damaging US wars are thought to continue as long as giant American corporations supporting Washington politicians profit from them.

The US economy “will fail because we're paying for it through debt, through borrowing,” a senior fellow at the Nation Institute, Chris Hedges, said in an interview with Press TV on Wednesday.

"The continuation of these conflicts is good for their bottom-line. That's why we're seeing very little reticence on the part of the government which knows how drastic the situation is in Afghanistan to pull back because the people who hold the ultimate power in the United States, which are corporations, want these wars to continue," Hedges continued.

“There are huge corporations whose profits have swollen four by four," Hedges went on to say, also referring to the unwinnable situation of the Afghan war, as covered by popular US news sources such as the New York Times.

In regards to the Iraq war, he mentioned US President Barack Obama's tactical but unpromising words that “he would withdraw the combat troops from Iraq,” only when was there acknowledgement of occupation troops' stay in the war-torn country for years to come.

According to official statistics, 48,000 American troops are currently based in war-wrecked Iraq as a result of which about 4.7 million Iraqis have been displaced.

The United States' invasion of Iraq took place in 2003, without the authorization of the United Nations Security Council, under the pretext that Iraq owns weapons of mass destruction. Later George W. Bush, the then US president, admitted that no such weapons were found there and said he was 'sorry' for those who died in the war.

It is estimated that over 1,300,000 Iraqi civilians have been killed during the war in Iraq. Though combat operations have officially ended, about 50,000 US troops will remain in the war-ravaged country until the end of 2011 to "advise Iraqi forces and protect US interests."

There are currently about 97,000 US troops in Afghanistan. Statistics reveal that there have been over 34,000 Afghan civilian deaths and 1,445 US fatalities since the start of the war in Afghanistan in 2003.

President Obama had previously promised that US forces would begin withdrawing from Afghanistan in July 2011. At the Lisbon Summit though, an agreement was merely reached to start the withdrawal in 2014.

China economic growth worries US

China 's President Hu Jin Tao is to visit US President Barack Obama next week

Source: Press TV
http://www.presstv.ir/detail/159765.html


The United States has expressed concern over China's economic policies and called on the Chinese government to distance itself from an export-based economic growth.

The US wants a “real demonstrative commitment” from China to accelerate the rise of its currency, yuan, and to shift the focus of its economy from the outside to the inside, and thus increase domestic demand and rebalance the economy, Reuters quoted a US official as saying on Tuesday.

"It's both the pace in which they do it and the conviction with which they demonstrate they're going to do it," the senior Obama administration official went on to say.

Currency strategists maintain that China is gradually giving up the firm grip and the control of trading in order to internationalize yuan and this strategy is essential for easing the capital control and the reform of foreign exchange.

China, however, has blamed the United States for the trade gap and the imbalances and has called on Washington to take action to resolve its fiscal house problem to prevent the world economy from further instability.

The remarks come just days ahead of Chinese President Hu Jin Tao's official visit to the United States during which economic as well as military issues will be the highlight of the negotiations.

US dollar 'unstable' reserve currency

French President Nicolas Sarkozy has visited his US counterpart Barack Obama, discussing several issues including the reduction of the influence of the US dollar.


As France is hosting G8 and the G20 this year, the Monday meeting was focused on reforming the world economy and preventing another global recession, particularly on the US dollar.

Sarkozy considered the current model which uses the US dollar as the primary reserve currency as "unstable" and stressed that it "makes part of the world dependent on American monetary policy."

However, Sarkozy assured Obama that France still considers the dollar as the number one global currency reserve.

Obama echoed Sarkozy's concern for serious monetary reforms, saying that he and his French counterpart are negotiating the exact reforms needed to be put before the world's industrialized and emerging nations at the upcoming G8 and G20 meetings.

Both leaders pledged to cooperate and coordinate what they called new ideas about reorganizing the world economy.

After meeting in private for two hours, the two leaders invited the press into the Oval Office for comments.

Obama said he and Sarkozy -- the most pro-American French President in years - were slated to hold talks on Afghanistan, Iran, Ivory Coast, Sudan, the Middle East and Lebanon.

Britain fuel price rises risk protests

Source: Press TV
http://www.presstv.ir/detail/158364.html


New tax rises in Britain, which could see petrol prices jump by over 3p a liter, have drawn condemnation by British MPs as activists are warning of protests against the move.

A cross-party group of MPs in London joined by Scottish and Welsh Assembly governments has demanded that Downing Street cut fuel duty to help those whose jobs are affected by the fuel prices rise.

The government announced a 0.76p a liter increase in fuel duty on Saturday, which will be coupled by a VAT rise from 17.5% to 20% on Tuesday to raise the cost of unleaded petrol by an average 3.5p a liter.

This comes as unleaded petrol prices are already at a record high level of 124.16p, which is a 14% rise year on year.

The price hikes will not stop at that as the government is set to further increase fuel duties in April.

The prospect of record high prices for fuel has led farmers, carrier companies and taxi drivers to begin talks on a joint protest campaign.

The options on the table are causing disruption by blockades and rallies at refineries similar to the demonstrations in 2000 and 2005.

"The cost of fuel which sparked the protests in 2000 pales in comparison to what it is now," said David Handley who was among those launching the earlier protests.

This comes as Tory MP David Morris along with several Labour MPs have presented a motion on fuel price cuts to help the “hard-pressed haulage industry”.

Meanwhile Wales' rural affairs minister Elin Jones complained about the move damaging Welsh businesses “particularly in the farming and haulage sectors”.

"People are rightly asking why the recovery is being stifled by the UK government's short-sighted actions. Fuel pricing in rural areas continues to be an utter scandal. This tax hike will only make that situation worse," she said.

Also the Scottish government called for action “to deal with the impact of rising petrol prices” as well as a discount on fuel duty especially in the rural and island communities which will be “hardest hit by rising fuel prices”.

Number of homeless on the rise in Britain

Source: Press TV
http://www.presstv.ir/detail/157914.html


A coalition of charities has warned that homelessness will soar across Britain after the coalition government enforced housing benefit cuts.

Seventeen charities said the government's cuts to housing benefits could double the number of people sleeping on the streets within a year, British media reported.

The government announced, as part of its public spending review plan, it will no longer pay for 25-34 year-olds from 2012 to live in a one-bedroom flat, but it could instead only cover the costs of a room in a shared property.

According to the government's own figures, the reform will see 88,000 people lose an average of £47 a week with many whose benefits will be halved.

The coalition of charities said in a statement last month that the number of the “visibly homeless people” could surge unless the government reverses its plan to cut welfare.

"Vulnerable people who have been homeless, are leaving care or prison … sharing is often inappropriate and can be particularly detrimental to well being", said the statement.

"We have about 8,000 rough sleepers in the country and the government's reforms could easily put another 8,000 on the streets," said Howard Sinclair, the chief executive of the homeless charity Broadway and a signatory to the letter.

The problem is that local authorities have no legal duty to help house young single people. "They do not have family, no real social networks … they are outsiders and they will have nowhere but the streets to go," he said.

London, where roughly half of the country's rough sleepers live, has seen a rise in homelessness in recent years as the financial crisis hit.

Britons fear hard economic times

Source: Press TV
http://www.presstv.ir/detail/157650.html


A majority of Britons are viewing the new year with trepidation due to concerns about the economy as the coalition government's public spending cuts leave their impact on society, a new poll has shown.

The survey, conducted at the behest of the Timesnewspaper, shows that two-thirds of Britons are pessimistic about improved economic conditions in 2011, and one in five has decided to revolt against the spending cuts introduced by the government.

Cities across the UK witnessed violent protests these past two months. Tens of thousands of student protesters poured into the London streets on December 9 as the House of Commons voted into law a decision to triple university tuition fees to almost £9,000.

The protests turned violent after police “kettled” protesters as young as 12 for several hours and at least 50 people were injured in the day of the vote, alone, including 12 police officers.

The coalition government, formed after inconclusive general elections in May, inherited an insolvent government with a record budget deficit of 154.7-billion-pounds. It was forced in October, soon after formation, to unveil the harshest spending cuts in decades.

Most government departments were forced to carry out at least a 20 percent cut in spending as part of the coalition plan, while almost half a million public sector jobs are waiting to be slashed over the next four years.

The survey carried out by the pollster, Populus, showed two-thirds of those, who asked, believe they will have less spending money in the coming year and a high number of people expect to fall behind with some bills.

Thirty-eight percent of the people quizzed predicted they would struggle to pay all their household bills on time, according to the poll, and around 20 percent said they were prepared to take to the streets, while seven out of 10 people said they believed public protests "can be effective."

Populus interviewed 1,003 adults aged 18 and over by telephone between December 17 and 19 for the poll.

Fuel costs 'on the rise' in Britain

Source: Press TV
http://www.presstv.ir/detail/157655.html


The British consumers will have to pay higher costs for fuel in 2011 as world markets prices of crude oil increase to their highest level in more than two years.

The rise in the price of crude oil is partly linked to a recent meeting of the Organization of the Petroleum Exporting Countries (OPEC) in which the members decided to keep the quotas unchanged until June, the daily Belfast Telegraph reported.

“Even without any increase driven by world markets, UK motorists face a 0.76 percent rise in fuel duty - upon which they also pay VAT - on January 1”, said an AA spokesman.

“Three days later, petrol prices will rise higher when the actual rate of VAT goes up from 17.5 percent to 20 percent”, added the spokesman.

Oil prices are up by almost 30 percent since September, pushing up both pump prices and wholesale gas costs.

This development comes after the prices hit a low of around $40 a barrel at the end of 2008.

The worry among economists is that higher oil prices -- which hit both the fuel industry and the household gas and electricity sectors -- will further drive up inflation and hamper the global economic recovery.

According to the AA, the cost of unleaded petrol is now at a new record high of 123.26 pence per liter -- up 14 percent on a year ago.

Soaring petrol prices come at a bad time for UK consumers, who are battling inflation of 3.3 per- cent.

Three weeks ago, Npower became the latest of the "big six" energy providers to increase its prices - taking electricity and gas tariffs up by an average of 5 percent in the new year - following similar increases from British Gas, ScottishPower, and Scottish and Southern Energy in recent weeks.