Saturday, 20 November 2010

Will the Irish crisis lead to a Federal Europe?

The IMF´s managing director Dominique Strauss-Kahn (also a likely French presidential candidate) suggests that the EU should move towards a federal state in order to avoid future financial problems:
"The wheels of co-operation move too slowly. The centre must seize the initiative in all areas key to reaching the common destiny of the union, especially in financial, economic and social policy. Countries must be willing to cede more authority to the centre."

"The [eurozone] area's institutions were simply not up to the task – even setting up a temporary solution proved to be a drawn-out process. "One [solution] is to shift the main responsibility for enforcement of fiscal discipline and key structural reforms away from the Council. This would minimise the risk of narrow national interests interfering with effective implementation of the common rules."

This may have been part of the thinking already when the common currency was launched. Many experts knew - and said it - from the beginning that the EMU without a common financial and economic policy would sooner or later lead to serious problems. The euro was therefore mainly a political project., The "founding fathers" of the euro were fully aware of the risks, but thought they were worth taking. And in case of a crisis - like the one now in Ireland - the solution might actually help to move Europe many steps closer towards a federal state - not a bad thing from a federalist´s point of view.

But what will the ever more sceptical voters think?

Great news from Finland

Finrosforum reports that Finnish authorities have granted asylym to the Russian journalist and human rights defender Elena Maglevannaya. This is great news!

 She fled from Russia in May 2009 after receiving threats for her press reports about the abuse and torture of Chechens in Russian prisons. In a trial that was seen as heavily tilted in favour of the prosecution, Elena was convicted of libel because of her articles. While waiting for a decision on her asylum application in Finland, she continued her investigations into prison conditions in Russia.

Read more here:

Friday, 19 November 2010

The financial crisis in Ireland

The leading article in yesterday´s issue of the Irish Times is well worth reading:

Was it for this?

IT MAY seem strange to some that The Irish Times would ask whether this is what the men of 1916 died for: a bailout from the German chancellor with a few shillings of sympathy from the British chancellor on the side. There is the shame of it all. Having obtained our political independence from Britain to be the masters of our own affairs, we have now surrendered our sovereignty to the European Commission, the European Central Bank, and the International Monetary Fund. Their representatives ride into Merrion Street today.

Read the rest of the article here:

Forecasting global warming

One of the world´s foremost authorities of scientific forecasting, professor J. Scott Armstrong slams the alarmism of the IPCC global warming scenarios in a letter to the Wall Street Journal:

Bjorn Lomborg ("Can Anything Serious Happen in Cancun?", op-ed, Nov. 12) claims that government spending on global warming policies is wasted, but he assumes that global warming caused by carbon dioxide is a fact. It is not. We base this statement not on the opinions of 31,000 American scientists who signed a public statement rejecting this warming hypothesis (the "Oregon Petition"), but rather because the forecasts of global warming were derived from faulty procedures.
We published a peer-reviewed paper showing that the forecasting procedures used by the U.N.'s Intergovernmental Panel on Climate Change violated 72 of 89 relevant principles (e.g., "provide full disclosure of methods"). The IPCC has been unable to explain why it violated such principles. In response, we developed a model that follows the principles. Because the climate is complex and poorly understood, our model predicts that global average temperatures will not change.
In testing the models on global temperature data since 1850, we found that the long-range (91-to-100-years ahead) forecast errors from the IPCC's projection were 12 times larger than the errors from our simple model.
Mr. Lomborg concludes there are better ways for governments to spend the funds devoted to global warming. We suggest this money should instead be returned to taxpayers.

It will not be easy for the climate alarmists to ignore professor Armstrong´s opinion. His credentials are rather strong:

Professor Armstrong is internationally known for his pioneering work on forecasting methods. He is author of Long-Range Forecasting, the most frequently cited book on forecasting methods, and Principles of Forecasting, voted the “Favorite Book – First 25 Years” by researchers and practitioners associated with the International Institute of Forecasters.

Thursday, 18 November 2010

The Eurozone - a survival crisis?

Former UK diplomat Charles Crawford has some interesting observations about the current crisis of the eurozone:

The risk now as the political and financial contradictions accumulate is that the EU's political elites will make far-reaching policy blunders as they try to maintain the current wobbly arrangements - and their own reputations.
The fascinating policy challenge is this. Even if (say) some EU leaders think the current arrangemements will have to change radically and have a sense of what could be better instead, no-one will want to be first in calling the present system dead for fear of being blamed for prompting a crisis no-one can control.
However, maybe it's better to have a crisis under more or less controlled conditions?
And there will be potentially huge 'first mover advantage' for the leader(s) who first lays down a possible new model, thereby defining the issues in the nervous public eye.
So a febrile game of chicken could unfold, as EU leaders eye each other uneasily.
No-one wants to be the one blamed for shooting the EU.
No-one wants to be left holding the dead body.

Obama then - and now

Do you remember, back in 2008 when Barack Obama was welcomed in Berlin and Europe almost like a new redeemer? His speech in Berlin mesmerized most commentators and politicians in Germany and all over Europe.

How different things look now. Simon Tisdall of the left leaning Guardian summarizes it all:

Rebuffed in Asia and repudiated at home, Barack Obama's bent and battered bandwagon heads for Europe this week, looking for a change of political fortune, or at least a welcoming smile. But sulky, insecure Eurocrats, awaiting his arrival in Lisbon for Saturday's one-day EU-US summit, have not forgotten last May's Madrid debacle, when he failed to show up at all. Obama's "snub", they say, reflects a bigger problem: the US president does not care about Europe.

“There’s enough oil to supply the world’s needs as far as anyone can see.”

The world will not be running out of energy anytime soon. The New York Times has interviewed several leading energy experts, who predict decades of residential and commercial power at reasonable prices.
This gives us lot of time to develop other energy sources. There is no need for governments to force still highly questionable, underdeveloped and expensive wind and solar power on the consumers, neither to subsidize the kind of primitive electric cars that are offered today.

There Will Be Fuel

No matter what finally plays out, energy experts expect there will be plenty, perhaps even an abundance, of oil and gas. IHS CERA, which monitors oil and gas fields around the world, projects that productive capacity for liquid fuels could rise to 112 million barrels a day in 2030 (including 2.75 million barrels in biofuels), from 92.6 million barrels a day this year.

“The estimates for how much oil there is in the world continue to increase,” said William M. Colton, Exxon Mobil’s vice president for corporate strategic planning. “There’s enough oil to supply the world’s needs as far as anyone can see.”

More promising still is that the growing oil production comes from a variety of sources — making the world less vulnerable to a price war with the Organization of the Petroleum Exporting Countries or an outbreak of violence in a major producing country like Nigeria. As IHS CERA and other oil analysts see it, new oil is going to come from both conventional and unconventional sources — from anticipated expansions of fields in Iraq and Saudi Arabia and from a continued expansion of deepwater drilling off Africa and Brazil, in the Gulf of Mexico and across the Arctic, where hopes are high in the oil world, although little exploration has yet been done.

The vast oil sands fields in western Canada, deemed uneconomical by many oil companies as few as 15 years ago, are now as important to global supply growth as the continuing expansions of fields in Saudi Arabia, the current No. 1 producer.

Wednesday, 17 November 2010

Václav Klaus - a lonely voice of reason among EU leaders

The Czech president Václav Klaus is often a lonely voice of reason among leading politicians. His brief speech about global governance at the recent Asia-Europe meeting is worth reading. Here is a quote from the speech:

Let us not delude ourselves that business cycles and their consequences can be prevented by more extensive government regulation or by aiming at global governance of the world economy. 
Government regulation is more a problem, than a solution. We should be more afraid of some of the recently implemented measures than of the crisis itself. In the declaration we are to adopt at this summit, the word “governance” is more prominent than the word “market”. This is worrisome because the belief in the government’s omnipotence is evidently outdated, mistaken, unavoidably undemocratic and discriminatory, and – above all – it is condemned to fail.

The political system of Russia - "an enrichment scheme for Kremlin officials"

The New York Times journalist Joe Nocera has written an excellent article on the Khodorkovsky trial - and the state of Russia (EU`s "strategic partner") today:

There are tragedies within tragedies in the story of Mikhail Khodorkovsky. There is the personal tragedy, of course, of a man tried and convicted of crimes he never committed. There is the tragedy of the Russian political system, once on the verge of real democracy, now little more than an enrichment scheme for Kremlin officials, a mind-set that accelerated once Mr. Khodorkovsky was disposed of.

Good reading about politicians, democracy and public virtues

This article by professor Angelo Codevilla is thought-provoking reading. Highly recommended!

America's Ruling Class -- And the Perils of Revolution

Another excellent article, written by professor Kenneth Minogue 

Morals & the servile mind
On the diminishing moral life of our democratic age.

Professor Frank Furedi´s column is also recommended reading:

It’s time to stand up for courage and conviction
Machiavelli and other humanists would have been appalled by today’s bureaucratisation of everyday life that threatens vital public virtues.

Tuesday, 16 November 2010

China will implode

It seems quite obvious that the Chinese economy will implode in the near future due to a huge property bubble. This implosion will later be followed by the collapse of the present, corrupt one party system.

NNoN believes that James Chanos is right:

The builder of one of the largest fortunes on Wall Street is warning that China's economy is heading for a crash rather than sustained growth as most economists predict.
Superstar short-seller James Chanos is betting that China's economy, now the envy of the world will soon crash, and badly at that.
Chanos built his fortune on his ability to see the future collapse of companies whose stories were too good to be true, such as Enron.

Germany will continue as EU:s paymaster - but for how long?

Angela Merkel has accepted that Germany will continue to be the paymaster of the euro-area:

Deutschland wird zum Zahlmeister der Eurozone

Ein Ausstieg aus dem Euro kommt für die Kanzlerin nicht infrage. Jetzt wetten die Finanzmärkte auf eine Transferunion. Das wird teuer.

Deutschland wird zum Zahlmeister der Eurozone. Diese Botschaft senden nicht populistische EU-Skeptiker, sondern die nüchternen Kapitalmärkte. Seit Zuspitzung der Irland-Krise hat sich ausgerechnet die Bonität der Bundesrepublik verschlechtert, obwohl die hiesige Wirtschaft boomt.

But the question is, for how long? NNoN sees the paymastership ending in the not too distant future.

The EU soft power

Finland´s europhile foreign minister Alexander Stubb recently defined EU´s soft power in a speech in London:

Speak softly and carry a big carrot

This definition is very much to the point - China, Russia and and most third world countries are pleased to see a stickless Europe. They all warmly welcome the heaps of carrots (e.g. aid for "mitigation of climate change") provided by EU tax payers .....

Revelation number one

The main raison d'être of the present day European Union often seems to be
combating (imaginary) global warming.

The new European External Action Service will be an important tool in
carrying out this policy on a global scale. This is the famous EU soft
power, which - along with the EMU - will greatly contribute to the
self-destruction of the Union in its present form.