Ruble slump won’t damage trade with China – ambassador
RT | February 2, 2015
Li Hui, Ambassador Extraordinary and Plenipotentiary of the People’s Republic of China to Russia (RIA Novosti/Andrey Stenin)
China’s ambassador to Moscow Li Hui says even though the ruble has lost more than 17 percent of its value this year it won’t significantly affect China-Russia trade and cooperation.
“It is understandable that the devaluation and volatility of the ruble have a certain influence on Chinese-Russian trade, especially with the considerable exchange rate risks for export companies that have signed agreements in Russian rubles, but the devaluation of the ruble doesn’t have much effect on the large-scale trade partnership between China and Russia,” Li Hui told RIA Novosti in an interview.
The value of the Russian ruble started to slide again after the Central Bank of Russia decided on Friday to cut the key rate by 200 basis points to 15 percent. The currency was trading at 70 against the US dollar on the Moscow Exchange at 2:00PM MSK Monday.
In 2014, the ruble lost almost a half its value against the dollar due to plummeting oil prices and Western economic sanctions.
According to Li, regardless of the devaluation of the ruble and falling oil prices, Russia and China still believe in “growth despite existing trends.”
“I believe that we can contain and increase the volume of our bilateral trade by using the joint efforts of our government organs and businesses,” Li added.
Russian Deputy Prime Minister Igor Shuvalov suggests that after the dramatic depreciation the Russian currency would start recovering soon.
The Chinese ambassador said that trading in yuan is very forward thinking, and Russian businessmen are ready to trade in the Chinese currency.
In late 2014, Russia and China agreed a national currency swap deal to shore up the depreciating ruble and said they are working to increase the number of mutual payments in rubles and yuan.
China is Russia’s second-biggest trading partner after the EU, which hit a record $59 billion in the first half of 2014. The two countries are planning to increase bilateral trade to $200 billion by 2020.
READ MORE:
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Ruble-yuan settlements will cut energy sales in US dollars – Putin
‘Ukraine is pretext for US lobby to go on with sanctions against Russia’
RT | January 30, 2015
Anti-Russian sanctions are imposed as a hard neo-conservative lobby in America puts pressure on some European countries to go along with these sanctions, and to persuade other countries to do the same, journalist Neil Clark, told RT.
RT: The EU has extended individual sanctions but refrained from new economic restrictions. Why haven’t they gone further do you think?
Neil Clark: Well, it’s interesting, isn’t it? I think this reveals to us the split that there is within the EU. Because what we’ve got really, we’ve got the hard-line countries led unfortunately by Britain, countries like Poland, Lithuania and some others who really want an extension of sanctions. And then we’ve got the more realistic members, the countries that actually want to see these sanctions lifted. Of course, we remember just three weeks ago Francois Hollande, the French President, said that the EU hoped that sanctions would soon be lifted. And of course that would have caused a lot of horror among the anti-Russian camp. So I think what we saw [on Thursday] is the evidence of a real split. We haven’t had these measures that some people wanted, for example some of the more anti-Russian elements have been calling for Russia to be banned from the SWIFT banking system. And what we’ve seen is an extension of the existing sanctions so I think that this reflects the split within the EU at the moment.
RT: Russia’s been under American and European sanctions since last March. How much has it helped resolve the Ukrainian crisis?
NC: Well I think it’s very important to realize…Ukraine is really a pretext for these sanctions. What we’ve got is an anti-Russian lobby, a neo-conservative lobby in America which has for years wanted to sanction Russia. You go back to 2003 and you got neocons calling for Russia to be sanctioned. …This campaign for Russia to be sanctioned stepped up after the events in Syria in 2013 when Russia blocked a war against Syria…And then the Ukrainian situation kicked off as it were.
So I think it’s very important to realize it really that it has really nothing to do with the situation in Ukraine. These sanctions are being imposed, I’m afraid, because of a hard anti-Russian lobby in America and pressure’s been put on certain European countries that are very close to America to go along with these sanctions and to persuade other countries to go along with these sanctions.
It’s interesting, isn’t it, that when we talk about Ukraine the offenses launched by the Ukrainian government forces coincided with visits of high-ranking US officials. And I think that there would have been quite a lot of concern among this anti-Russian lobby in Washington when Francois Hollande did say three weeks ago that he would like to see sanctions lifted.And then what happens? American officials go to Ukraine and we get another offensive against the people in the East. Then the fighting there is used as a pretext for continuing on with the sanctions.
RT: There have been calls for the West to arm the Ukrainian army. Is that on the cards?
NC: It all really depends on what happens in Europe. It is actually crucial at the moment. We saw last night that vote at the Council of Europe – just how divided it was: 35 to 34. So I think there are certain countries in Europe… Poland has been called the 51st state of America, Poland is following the American line, and Britain unfortunately is. But there are other countries, Austria for example, who don’t really want to go down this road, who want to have a return to proper working relations with Russia, because Europe needs Russia. Europe needs a good working economic relationship with Russia. So it’s all a battle going on within the European Union now as to which fraction will actually prevail… So I think the hawks would love to see hard weaponry going to Ukraine, would love to see this conflict continue. But the more sensible countries in Europe want to see an end to it and get back to normal relations with Russia which is in Europe’s interest.
RT: On Wednesday two Russian bombers were detected flying over the Channel which provoked an outcry in the British media as they supposedly ‘disrupted UK aviation’, though these bombers didn’t violate other countries’ borders. What do you think about this situation?
NC: Well I think it’s very interesting, isn’t it, that this big news story happened when the EU was discussing the issue of sanctions with Russia. And I think it happened before, when we had…this debate about whether to extent or deepen sanctions, increase sanctions on Russia…And headlines that come up, you know “Russian bombers over the Channel”, but then we found out that it wasn’t exactly as it was first reported. So I think that in this anti-Russian climate we‘ve got to be careful when we look at the news headlines. There is an agenda going on, there is anti-Russian lobby in the West unfortunately which wants to keep this going and to keep more excuses and pretexts for the sanctions on Russia. So I think we have got to keep cool heads and you know look at bigger context of the stories and it seems quite interesting that every time we are getting these discussions about sanctions on Russia, that this sort of incidents seem to occur.
READ MORE:
UK fighter jets scrambled to intercept Russian bombers
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Follow Neil Clark on Twitter
America’s wealthiest families smash income ceiling, middle-class left far behind
By Robert Bridge | RT | December 18, 2014
Despite, or because of, the fallout from the 2007 Great Recession, annual earnings between the richest Americans and everybody else have exploded to record levels. Meanwhile middle- and lower-class wealth growth remains stagnant.
The median wealth for high-income families hit $639,400 last year, a whopping 7 percent jump from three years earlier and seven times greater than middle-class incomes, which stood at $96,500 according to Pew Research Center, citing data from the Federal Reserve.
Middle-class median wealth, which Pew defines as the difference between the value of a household’s total assets and debts, has not advanced since 2010.
The financial chasm now separating the rich and everybody else is the widest since the Fed began tracking earnings 30 years ago, which became even more pronounced following the 2008 global financial crisis.
“The latest data reinforces the larger story of America’s middle-class household wealth stagnation over the past three decades,” Pew said. “The Great Recession destroyed a significant amount of middle-income and lower-income families’ wealth, and the economic ‘recovery’ has yet to be felt for them.”
Pew defines middle-income households – a broad grouping – as those earning between two-thirds of and double the median income, after adjusting for the number of family members living under one roof.
For example, a single individual living alone was ranked as middle income if his/her earnings last year were between $22,000 and $66,000. For a family of four to qualify as middle-income, earnings would have to be between $44,000 and $132,000.
According to this standard, 46 percent of US households last year fell into the middle-income category, while about 33 percent were considered lower income, and 21 percent high income.
Perhaps the most shocking bit of information skimmed from the data is the poor performance of the American middle- and lower-class wealth accumulation over the last 30 years.
For middle-income families, Pew reported “practically no change in wealth over the 30-year period.” The median wealth for the middle class was $94,300 in 1983. That peaked at $158,400 in 2007 and has since fallen back to $96,500.
At the same time, the wealth of lower-income families jumped to a high of $19,100 in 2001, but has since plummeted to $9,300 last year. Median wealth for this group stood at just $11,400 in 1983.
It should perhaps come as no surprise that the wealthiest US families showed the smallest percentage drop of wealth from the outbreak of the 2007 crisis to 2010.
Due in large part to their “disproportionately large stock holdings,” the upper-income class recovered a “substantial part” of losses sustained during the crisis – primarily due to government bailout packages that injected trillions of dollars into the market to shore up the financial system – while lower-income families saw no recovery.
Over the longer period, the average wealth of upper-income families recorded last year was about double what it was in 1983, when it stood at $318,100 to $639,400 in 2013, it reported.
Pew ventured to speculate that the wide wealth disparity between the classes “could help explain why…the majority of Americans are not feeling the impact of the economic recovery, despite an improvement in the unemployment rate, stock market and housing prices.”
In October, just 20 percent of Americans rated the country’s economic conditions as ‘excellent’ or ‘good’, the polling agency said, an increase from the 8 percent who said that four years ago, but far from an optimistic outlook.
READ MORE: Wealth inequality in US not seen since Great Depression – study
American, Georgian & Lithuanian get key jobs in Ukraine’s new government
RT | December 2, 2014
Natives of the US, Georgia and Lithuania were hastily granted Ukrainian citizenship in order to become key ministers in the new government of Ukraine, which was approved by the country’s parliament on Tuesday.
President Poroshenko has also announced he will sign a decree to grant citizenship to foreigners fighting on Kiev’s side in the east of the country.
Natalie Jaresko of the US, who currently heads the Kiev-based Horizon Capital investment fund, will take reigns at the Ukrainian Finance Ministry.
In 1992-1995, Jaresko served as the first Chief of the Economic Section of the US Embassy in Ukraine.
Before that she occupied several economic positions in the US State Department, according to Horizon Capital’s website.
The position of health minister went to Aleksandr Kvitashvili, who occupied a similar post in the Georgian government in 2009-2012.
“Ukraine spends 8 per cent of its GDP on healthcare, but half of this money is being plundered. Aleksandr Kvitashvili must implement radical reforms as he has no ties with the Ukrainian pharmaceutical mafia,” Ukrainian PM, Arseny Yatsenuk, said as he presented the new minister to the deputies.
Alexander Kvitashvili, a candidate for head of the Ukrainian health ministry, at a session of Verkhovna Rada in Kiev (RIA Novosti / Mikhail Polinchak)
Lithuanian Aivaras Abromavicius has been approved as the economy minister by the new parliament, the Verkhovna Rada.
Abromavicius, who is a partner at the $3.6 billion-worth East Capital asset management group, conducts his operations from Kiev after marrying a Ukrainian.
“There’s hard work ahead of us because Ukraine is a very poor and corrupt country and we’ll have to use radical measures,” he told MPs from the Rada Tribune.
288 out of 450 deputies supported the cabinet proposed by Ukrainian president Petro Poroshenko, with the new ministers sworn in right after the vote.
“I congratulate the Ukrainians with the formation of the pro-European government,” Poroshenko wrote on his Twitter page.
He told the Rada that he views the foreigners as some kind of anti-crisis management need due to the difficult situation in economy, the fighting in Donbas, the necessity of radical reforms and large-scale corruption.
Earlier on the Tuesday, the president has signed special a decree granting Ukrainian citizenship to Jaresko, Kvitashvili and Abromavicius.
Aivars Abramovicus (Aivaras Abromavicius), a candidate for head of the Ukrainian economy ministry, at a session of Verkhovna Rada in Kiev (RIA Novosti / Mikhail Polinchak)
Dual nationality is forbidden in Ukraine and the trio has already written applications to give up the citizenship of foreign states, Yury Lutsenko, the head of the Petro Poroshenko Block (PPB), said.
Poroshenko said that there’ll be even more foreigners on administrative positions in Ukraine as the country “must attract the best international experience, which includes assigning positions in the government to representative of states friendly to Ukraine.”
Also on Tuesday, the MPs from Poroshenko’s ruling bloc have registered a draft law in the Rada on amending the Ukrainian legislation for it to allow citizens of other states in the government.
It had been announced by Poroshenko a week ago. This move has been dubbed “unprecedented” and attracted criticism from experts with some calling it “allegiance to the so-called European choice,” and others expressing concern that it can be a sign of Ukraine losing its sovereignty.
Poroshenko also promised to grant the citizenship of Ukraine to all foreigners fighting for Kiev against the militias in the country’s eastern Donetsk and Lugansk regions.
“I’m going to sign a decree conferring Ukrainian citizenship to those, who defended Ukraine with arms in their hands,” he wrote on Twitter.
However, not everybody in the parliament supported the inclusion of foreigners into the Ukrainian government.
Earlier, the MP from the Opposition Block said Aleksandr Vilkul suggested that by inviting people from abroad the Ukrainian authorities are trying to absolve themselves of responsibility for the state of things in the country.
Vilkul colleague, Yury Boyko, said he can’t understand how it wasn’t possible to find 10 candidates for the cabinet among Ukraine’s 40-million population.
Swiss, French call to bring home gold reserves as Dutch move 122 tons out of US
RT | November 28, 2014
The financial crisis in Europe is prompting some nations to repatriate their gold reserves to national vaults. The Netherlands has moved $5 billion worth of gold from New York, and some are calling for similar action from France, Switzerland, and Germany.
An unmatched pace of money printing by major central banks has boosted concerns in European countries over the safety of their gold reserves abroad.
The Dutch central bank – De Nederlandsche Bank – was one of the latest to make the move. The bank announced last Friday that it moved a fifth of its total 612.5-metric-ton gold reserve from New York to Amsterdam earlier in November.
It was done in an effort to redistribute the gold stock in “a more balanced way,” and to boost public confidence, the bank explained.
“With this adjustment the Dutch Central Bank joins other banks that are keeping a larger share of their gold supply in their own country,” the bank said in a statement. “In addition to a more balanced division of the gold reserves…this may also contribute to a positive confidence effect with the public.”
Dutch gold reserves are now divided as follows: 31 percent in Amsterdam, 31 percent in New York, 20 percent in Ottawa, Canada and 18 percent in London.
Meanwhile, Switzerland has organized the ‘Save Our Swiss Gold’ referendum, which is taking place on November 30. If passed, it would force the Swiss National Bank to convert a fifth of its assets into gold and repatriate all of its reserves from vaults in the UK and Canada.
“The Swiss initiative is merely part of an increasing global scramble towards gold and away from the endless printing of money. Huge movements of gold are going on right now,” Koos Jansen, an Amsterdam-based gold analyst for the Singaporean precious metal dealer BullionStar, told the Guardian.
France has also recently joined in on the trend, with the leader of the far-right National Front party Marine Le Pen calling on the central bank to repatriate the country’s gold reserves.
In an open letter to the governor of the Banque de France, Christian Noyer, Le Pen also demanded an audit of 2,435 tons of physical gold inventory.
Germany tried and failed to adopt a similar path in early 2013 by announcing a plan to repatriate some of its gold reserves back from the US and France.
The efforts fizzled out this summer, when it was announced that Germany decided to leave $635 billion worth of gold in US vaults.
Germany only keeps about a third of its gold at home. Forty-five percent is held in New York, 13 percent in London, 11 percent in Paris, and only 31 percent in the Bundesbank in Frankfurt.
Former head of Iceland’s Landsbanki jailed for role in 2008 crash
RT | November 20, 2014
Sigurjon Arnason, the ex- CEO of Landsbanki, one of the three Icelandic banks that crashed and ruined the economy in 2008, has been sentenced to 12 month in prison for manipulating the bank’s share price and deceiving investors in the bank’s dying days.
A court of Reykjavik found Arnason guilty, but nine months of his term will be suspended and served on probation.
Glitnir, Kaupthing and Landsbanki – the three largest Icelandic banks – spectacularly crashed in the autumn of 2008 after gaining assets equivalent to 10 times the size of Iceland’s economy as they funded operations by local businessmen abroad. The former chief executives of the other major banks have already received jail sentences.
Ivar Gudjonsson, Landsbanki’s former director of proprietary trading, and Julius Heidarsson, a former broker, were sentenced to 9 months of which 6 months will be suspended. They were accused of manipulating the bank’s share price by lending funds to investors provided they buy shares.
All the accused pleaded not guilty.
“This sentence is a big surprise to me as I did nothing wrong,” Sigurjon Arnason told Reuters after the hearing. His attorney said he would appeal the verdict, according to Icelandic media.
Unlike other western countries Iceland is actively targeting the former top management of its banks as it investigates alleged financial crimes committed in the lead up to the crisis of 2008.
READ MORE: Icelandic ‘banksters’ get jail time over Kaupthing fraud
Economic isolation breach of international law: Putin
Top 5 takeaways from Putin ahead of G20
RT | November 14, 2014
Russian President Vladimir Putin (RIA Novosti/Mikhail Klementiev)
Vladimir Putin says the G20 must address global imbalances together, and economic isolation, especially in the case of sanctions, which not only leads nowhere but is a crude violation of international economic law.
Here are the Russian president’s top takeaways ahead of the G20 summit being held in Brisbane, Australia from November 14-15.
G20 great for ground work, but decisions often just hot air
Putin believes the G20 is still a good and relevant platform for world leaders, however, decisions at the summit are often nothing but words. Decisions made there are only carried out when they are in line with the interests of certain global players, like the US.
Decisions are neglected if they don’t fit the agenda of an individual power, Putin told TASS ahead of the summit.
An example is when US Congress blocked the IMF quota, which was intended to enhance the role of developing economies and redistribute quotes. That move was counterproductive, Putin said.
“The very fact that US Congress has refused to pass this law indicates that it is the United States that drops out of the general context of resolving the problems facing the international community,” the president said.
“Everyone must understand that the global economy and finance these days are exceptionally dependent on each other,” Putin said.
US sanctions violate the very system they created
Sanctions levied against Russia are against the norms of international trade and the core principles of the G20, as they can only be introduced via the United Nations, Putin said.
Sanctions are “against WTO principles and the General Agreement on Tariffs and Trade, the GATT. The United States itself created that organization at a certain point. Now it is crudely violating its principles,” Putin explained
Interconnected economy: What hurts us hurts you
Sanctions against Russia have targeted the finance, energy and weaponry sectors of the economy. Russia’s retaliatory sanctions to ban agricultural imports are having a colossal ripple effect on jobs, social sectors, and growth.
This is especially pertinent to Europe, which is feeling the squeeze of the agricultural export ban to Russia, one its biggest markets.
“Everyone must understand that the global economy and finance these days are exceptionally dependent on each other,” Putin said.
Germany’s economic growth is an example of financial blowback from sanctions with Russia.
US-led trade pacts will create global imbalance
Putin believes that the creation of the 2 US-led trade pacts – one Transatlantic and the other Transpacific – will only create more global imbalance. The US-led Trans-Pacific Partnership (TPP) doesn’t include China or Russia.
“Of course, we want to get rid of such imbalances, we want to work together, but this can be achieved only through joint efforts,” Putin said.
New economic associations should complement existing institutions
All new emerging economic blocks like BRICS and the so-called ‘new G7’, which in addition to Brazil, Russia, India and China also includes Indonesia, Turkey and Mexico, should come as something complementary to the existing groups, Putin said.
According to purchasing power parity (PPP) BRICS nations have a combined GDP $37.4 trillion, more than the G7’s at $34.7 trillion, Putin said. However, its economic girth doesn’t give it the right to start running its own policy.
“And if we go and say, ‘No, thank you, we are going to do this and that here on our own, and you can do it the way you want it,’ this will only add to the imbalances,” Putin warned.
The Russian president also said that all regional integrations like the Russia-led Eurasian Economic Union with Belarus and Kazakhstan shouldn’t isolate, but complement, global institutions.
Full speech: Putin on G20: Russia sanctions contradict club principles
Russia to launch alternative to SWIFT bank transaction system in spring 2015
RT | November 11, 2014
Russia intends to have its own international inter-bank system up and running by May 2015. The Central Bank of Russia says it needs to speed up preparations for its version of SWIFT in case of possible ”challenges” from the West.
“Given the challenges, Bank of Russia is creating its own system for transmitting financial messaging… It’s time to hurry up, so in the next few months we will have certain work done. The entire project for transmitting financial messages will be completed in May 2015,” said Ramilya Kanafina, deputy head of the national payment system department at the Central Bank of Russia (CBR).
Calls not to use the SWIFT (Society for Worldwide Interbank Financial Telecommunication) system in Russian banks began to grow as relations between Russia and the West deteriorated over sanctions. So far, SWIFT says despite pressure from some Western countries to join the anti-Russian sanctions, it has no intention of doing so.
Ramilya Kanafina says the system will meet all the market requirements due to its security. A center for processing messages in SWIFT format is in the process of development. It is expected that all messaging options will be operating by December 2014, she added.
The National Payments Council, a non-profit partnership comprising members of the Russian national payment system, proposed establishing a Russian version of SWIFT 100 percent owned by Bank of Russia in September.
SWIFT, is currently one of Russia’s main connections to the international banking system, and if turned off, could hurt the Russian economy, in the short-term. Globally it transmits orders for transactions worth more than $6 trillion, and involves more than 10,000 financial institutions in 210 countries. According to SWIFT’s statute, the system has national groups of members and users in each country. In Russia it’s ROSSWIFT – the second biggest worldwide SWIFT association after the US.
Ukraine and Russia agree on $385 gas price for 5 months
RT | October 20, 2014
Moscow and Kiev have confirmed the price of Russian gas to Ukraine until the end of March at $385 per 1,000 cubic meters, according to both Ukrainian President Petro Poroshenko and Russian Foreign Minister Sergey Lavrov.
“We have agreed on a price for the next 5 months, and Ukraine will be able to buy as much gas as it needs, and Gazprom is ready to be flexible on the terms,” Lavrov said Monday at a public lecture.
Russia’s foreign minister dispelled rumors of two separate prices, one for winter and one for summer.
“At the Europe-Asia summit in Milan, there was no talk of summer or winter gas prices, but just about the next 5 months,” the foreign minister said.
Included in the $385 price is a $100 discount by Russia. Ukraine is still insisting on a further discount, asking for $325 for ‘summer prices’ after the 5-month winter period.
“We talked about how there should be two prices, like how the European spot market has two prices, a winter price when demand is high, and summer when demand is low. Our joint proposal with the EU was the following: $325 per thousand cubic meters in the summer and $385 per thousand cubic meters in the winter,“ Poroshenko said in an interview on Ukrainian television Saturday.
President Poroshenko and Russian President Vladimir Putin reached a preliminary agreement in Milan on Friday for the winter period, but Russia won’t deliver any gas to its neighbor without prepayment.
Gas talks are expected to continue Tuesday in Berlin between the energy ministers of Russia, Ukraine, and the EU. On September 26, the three energy ministers agreed to provide 5 billion cubic meters to Ukraine on a “take-or-pay” contract, to help the country survive the winter months.
The so-called winter plan is contingent on Ukraine starting to repay at least $3.1 billion worth of debt to Gazprom.
Ukraine is still looking for funding to pay for the gas supplies as well as its $4.5 billion arrears to Russia’s state-owned gas company. Moscow reduced the debt from $5.5 billion to $4.5 billion, calculating in the discount of gas, Putin said on Friday.
Moscow believes the European Commission or the International Monetary Fund should provide loans for this purpose.
Russia turned off the gas to Europe via Ukraine in 2006 and in 2009, over similar pricing disputes with Kiev. This poses a risk to Europe, which receives 15 percent of its gas through Ukraine.
Ukraine will need extra funding to stay afloat – IMF head
RT | October 10, 2014
The Ukrainian economy, weakened by war, needs additional funding from sources beyond the International Monetary Fund (IMF) to stay afloat, the fund’s head Christine Lagarde has said.
The IMF’s December estimate of the cash needed has turned out to be insufficient following the continued conflict in the country.
“Additional funding will have to come” after the IMF reviews the current bailout strategy, Lagarde said at a Bretton Woods Committee event on the sidelines of the annual IMF and World Bank meetings of finance ministers and central bankers.
“To assume that the additional funding will have to come from the IMF, I think is rather far-fetched,” she said. “If the economy has to be restored and stability maintained, money will have to come from multiple sources.”
Initially it was planned that $30 billion in aid, of which the IMF pledged to allocate $17 billion, would be enough to restore the economy. The April bailout was predicated on the expectation that the conflict in eastern Ukraine would end in the early autumn.
The IMF’s review updated last month, showed that the country’s financing needs could rise by $19 billion if the civil war continues.
Despite the World Bank’s forecast that country will likely be in a deep recession until at least 2016, the IMF projects the economy expanding next year.
Record global debt risks new crisis – Geneva report
RT | September 30, 2014
A record level of $158.8 trillion in global debt, together with low economic growth is creating a serious threat of a new financial crisis, says the sixteenth annual Geneva Report.
Total world debt, excluding the financial sector, has risen from 180 percent of global output in 2008 to 212 percent last year, according to the report written by a panel of senior economists including three former senior central bankers.
“Contrary to widely held beliefs, the world has not yet begun to deliver, and the global debt to GDP ratio is still growing, breaking new highs,” the report said.
The World Bank data showed that in 2013 global GDP was $74.909 trillion.
At a world level, there was acceleration in real growth from the mid-1990s until the mid-2000s, largely driven by the impressive performance of emerging markets over this period.
However, output growth in advanced economies has been declining for decades, which accelerated after the crisis. The developed economies enjoyed only a temporary improvement in real output growth in the late 1990s which had already started gradually eroding by the mid-2000s.
A “poisonous combination of high and rising global debt and slowing gross domestic product, driven by both slowing real growth and falling inflation,” may cause a crisis, warns the report.
Despite the modest decrease in household debt in the UK and the rest of Europe, the credit binge in Asia has offset the improvements, pushing the global private and public debt to a new high in 2013.
Until 2008, the leveraging up was being led by developed markets, but since then emerging economies led by China have been the driving force in the process, thus becoming the most vulnerable to the next crisis.
“Although the level of leverage is higher in developed markets, the speed of the recent leverage process in emerging economies, and especially in Asia, is indeed an increasing concern,” says the report.
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From the Archives
The lies about the 1967 war are still more powerful than the truth
By Alan Hart | June 4, 2012
In retrospect it can be seen that the 1967 war, the Six Days War, was the turning point in the relationship between the Zionist state of Israel and the Jews of the world (the majority of Jews who prefer to live not in Israel but as citizens of many other nations). Until the 1967 war, and with the exception of a minority of who were politically active, most non-Israeli Jews did not have – how can I put it? – a great empathy with Zionism’s child. Israel was there and, in the sub-consciousness, a refuge of last resort; but the Jewish nationalism it represented had not generated the overtly enthusiastic support of the Jews of the world. The Jews of Israel were in their chosen place and the Jews of the world were in their chosen places. There was not, so to speak, a great feeling of togetherness. At a point David Ben-Gurion, Israel’s founding father and first prime minister, was so disillusioned by the indifference of world Jewry that he went public with his criticism – not enough Jews were coming to live in Israel.
So how and why did the 1967 war transform the relationship between the Jews of the world and Israel? … continue
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- Greenland Petermann Glacier Has Grown 30 Kilometers Since 2012!
- New Study: Temperature-Driven CO2 Outgassing Explains 83 Percent Of CO2 Rise Since 1959
- Climate Extremists Ordered By Hamburg Court To Pay €400,000 In Damages
- More Evidence NE China Is Not Cooperating With The Alarmist Global Warming Narrative
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