Archives for category: central banking independence results

Belatedly, as usual, European Union (EU)’s President warns against US President elect divisive tactics to the detriment of the EU’s stability.

US President elect decrees are mostly unacceptable to the civilized world and a (very bad) first in US’s “governmental” (sic) policies, especially the now nearly universally decried anti-immigration decree which this blog is denouncing for the fourth day in a row.

EU has not managed to construct a “working” political, social economic and not even even financial area (the latter beacuse of the erratic policies of ECB) because it has done mostly everything wrong from the beginning of the instauration of the Eurozone and has also accepted totally disparate membership of 28 member countries who do not ressemble each other in mentality and usus and were prone to be a fiasco, which it is, being unable to agree on practically any important topic and subjecting some nations to undue austerity instead of pushing for badly needed structural reforms .

In the 2000 posts I have written in my blog from April 2011 until October 2016 and my two books I have consistently proposed and described the change from the current EU “mammoth” to a radically new compact European Guidance Unit with a division between Northern countries and Southern ones who have nothing in common, with France somewhat in the middle, and due to huge past erroneous political expansion policies continuing with the inadequate integration of ex-satellite Communist countries which have created havoc with totally different remuneration, taxation and social protection “policies”.

I now, finally, feel that this renewed construction of Europe is also doomed and that it is preferable to go back to a customs’ union and abandon the euro, thus leaving each country to devise its own political and social economic systems, own deficit and indebteness ratios to GNP and be able to take its own eventual financial corrective actions.

If individual countries are having such a hard time governing themselves, blocs of countries will not be able to do their job plus a comprehensive “area” job with an umbrella as the euro which was devised far too early and totally unprepared with countries who had no harmony whatsoever in basic social economic policy structures.

The world has changed enormously and in a meteoric way technologically / innovationwise.

Governances need to adapt to these formidable changes which is very difficult for what seems to be a “lost political generation”.

Lets’count on and turn to the current young one who is in phase with these changes, it’s  a worthwhile bet I believe (as a “senior”…)

Please read below, under More,  NYT‘s 01/31/2017 article:”Trump Threatens Europe’s Stability, a Top Leader Warns”

Read the rest of this entry »

I have not been writing any posts since 9th February, 2016 because it became too monotonous to write all the time the same comments with nothing happening because of the Governments’ obsolescence in general and the  total inability of the Eurozone Governance (sic) to reform macro social-economics in this supposed “common interest” area.

This may seem an arrogant statement but I have written 2000 posts from April 2011 until October 2015 and (only) three posts since October 2015 and made a great number of concrete alternative proposals not limiting myself to criticism.

I have also written – 2014 / 2015 – in self-edition – Amazon – two books whose titles are self-explanatory: “Why Obsolete Macro Governance Is Killing the World Economy” and “Growth through Structural Reforms” (With Leadership and Competence Great Opportunities Exist).

I am now quoting entirely the UK’s 06/11/2016 article: “Eurozone heads towards its next monetary crisis” and showing it under MORE at the end of this post – you can also read it by clicking on above link.

This article, in a nutshell, relates to the incompetence of the EU and to the current domineering subject: Brexit or no Brexit, leaning heavily on the Brexit side.

My Comments

The only reason I am writing this short post is because of my continuous (5 years) largely repeated total disagreement with Central Banking dominant positions and “policies” (sic) in  the US, the Eurozone, to “limit” myself to these two huge areas.

The below cited article touches on the disgraceful “policies” of the ECB, which is trying to be  even worse than the FED (a real challenge!…) .

Last year I tried to be published by a traditional large and well known publisher in the UK / US and since they could not use the material in my two self-edited books with Amazon I wrote 100 pages of an eventual third book which I had entitled: “Structural Reforms Impeded by Central Banking”.

This was refused and the main reason was that it was not “classroom material” and that it was “iconoclastic”. I refuted the second point by arguing that there were no idols to be destroyed but that long awaited strong (not “reformettes”) social-economic structural reforms were not being achieved because of , in general, Governments ‘ ineffectiveness and Central Banking flooding markets with printed money at even negative interest rates by ECB, which made it easier for most ineffective Governments in the Eurozone to avoid implementing social-economic structural reforms, and by the same token to increase already huge indebtedness.

Now, Dragui, one of the big culprits that the Eurozone is not really getting out of recession, wants to initiate “helicopter” money flooding (see below article) to push demand (hopefully a joke?).

It suffices to observe the situations in Greece (the total absurdity, it should have been exited long ago), Spain (contaminated by the Greek situation and the popular new “Greek type” political parties’ expansion, with no Government since months), France (continuing going down the hill because of no capacity to reform itself), etc, etc…!

Conclusion: Nothing basically changes and if so it is for the worse – relatively.

Read the rest of this entry »


As repeated a”thousand” times (*) in this blog Central Banks work for Markets and to Save “Big Banks Too Big to Fail”.

Central Banks are “Independent”, they do what they want!

Point in case now among many others in Europe: Italy (Big talker Dragui’s home)

Italy is in the middle of a very severe Bank crisis due to “Bad Receivables” which produce “Bad Debts”, which will remain unpaid.? But, surely the ECB (European Central Bnk) will print some more  to “save them” (ECB always “saves” somebody, until they go under…).

Mr Dragui “interrogated” (!) Italian banks as to their Bad Debts’ situation (which is a record 17.5% – Eurozone’s average seemingly (?) is around 5% – and represents 200 Billion euros!)

ECB should have “known” way  ahead all the facts of this essential economic / financial data and taken appropriate action, several “gimmicky “remedies – like “bad banks”…had been considered.

Real  economic steps are to provision realistically bad debts (and tighten banks’operations and remunerations, like is done with private corporations), but ECB (and EU / EC) do not want this, they seemingly (?) prefer to increase banks’ capitalization, which would require more “money”, which ECB would print and “save ” the banks…

These would be the “normal procedures” (sic), those which have cost the Eurozone trillions, it is called “fleeing into the future” (“la fuite en avant”) and wait for “miracles”…

One really wonders what ECB does, apart from issuing trillion QEs?

The ECB is 200% responsible for the huge increase in Eurozone Indebtedness and wanting to “solve” all matters with Trillion QE’s. Pushing Indebtedness in a non controlled banking system is “asking for it”, and the result is pushing “bad loans” and getting “bad debts”.

ECB did “not care ” to make sure that the Banking System was Operating correctly (that is not “sensational” enough for Mr. Dragui!), not that strongly increasing Bad Debts might cause another “Bubble”.

ECB has not done their job in accelerating the Eurozone Banking Union and really Controlling private banks operations!

I will not even mention Brussels’ EU or EC, they do nothing!

(*) I have written 2000 posts since April 2011 and stopped (I write an occasional post like today when matters get out of hand) my blog in October 2015 because there was no purpose to continue writing.

I have written and published 2 books: “Why Obsolete Macro Governance is Killing the World Economy” (Amazon- September 2014) and “Growth through Structural Reforms” (Amazon – April 2015). I had written over 100 pages of a third book, temporarily called: “Central Banks Impede Structural Reforms”, sent this text to 5 big publishers and was refused because it was not a “text book” and also was considered “iconoclastic !

Nobody really want to know…



European “Non Governance” and tremendous and expensive Bureaucracy has done Nothing for Decades and needs to be Removed entirely, if not like Garcia Marquez said, it is: “An Announced Death”.

I only write sporadic posts here since it is useless to try to propose meaningful and significant changes….

I have been writing  on Football (Soccer) since October, 2015, more amusing, but only to some extent; due to all the problems related to now, Football’s “Governance”… – FIFA’ and its longstanding and huge Corruption, my blog being “”.

Photo – Prime Minister Matteo Renzi

Follows a translation made by me of Le Figaro’s Premium’s  01/22/2016 article on young and exceptionally “productive” Italian Prime Minister Mario Renzi declarations on Europe: “Fed up with Europe, Matteo Renzi denies arguing for the sake of politicking”.

I subscribe nearly completely to Renzi’s declarations, after having written 2000 posts and two books with self-explanatory titles: “Why Obsolete Macro Governance is Killing the World Economy (September 2014 -Amazon) and “Growth through Structural Reforms” (April 2015 – Amazon) on this subject since I created my blog in April 2011.

No serious and complete Structural Reforms were made (only “reformettes”), total real unemployment ( including under employment) is still huge, instead Indebtedness is astronomic thanks to totally erroneous accomodative (interest and quantitative wise) Central Banking “policies” (sic): ECB (plus FED, Bank of Japan, Bank of China, etc…), growth being far too slow and solely dependent on record low Oil prices (which are killing the oil related economy) and which will not last, the banking system is preparing is umptieth – Oil and Assets – bubble, the euro exchange rate is nearly at bottom and will not last, Migration problems are not tackled (Germany is totally wrong!), if this continues the UK will exit – “Anything Else” ? – Woody Allen‘s film.

Photo – Woody Allen in “Anything Else” – 2003

Quotes – My comments in italics – in the text

Budgetary flexibility, European investments, management of migrants, state aid, banking crises, EU funding for Turkey: the grievances accumulate between the Italian leader and Brussels.

Migration policies, review of the Dublin and Schengen agreements, state aid to banks in difficulty, flexibility of Public Accounts: the violent diatribe which set fire to the powder a week ago in the relations between Matteo Renzi and Jean-Claude Juncker has its origins in a variety of long-simmering grievances.

Paradox of a leader whose impeccable European credo gave his Democratic Party 8,000,000 votes in the elections of May 2014 in the Strasbourg Assembly, which now feels despised to the point of accusing the European Commission of “two weights, two measures”.

A reconciliation should profile his trip to Berlin on January 29, and then the arrival of Juncker in Rome. Inevitably, it will probably not be painless for Europe, nor especially for Italy.

The Italian prime minister denies being “an argumentative polemicist or politicking”: “Europe is in a crisis of identity, everything has failed. It must change. We have our proposals and our allies are not lacking. Brussels is not infallible, “he said. His Secretary of State for Europe Sandro Gozi adds: “Some in Brussels want to send the revision of institutions after 2019, with the future Commission. Such a long period is one that Europe cannot afford anymore. ”

The most heated debate concerns the € 3 billion promised by the EU (i.e. Germany – who continues to lead the Eurozone – My Comment) to Turkey for its help curb migration. Matteo Renzi threat to suspend the Italian contribution to this fund and asks that all aid to Turkey come from the regular budget of the Union.

On the pretext that Ankara would not give sufficient guarantees on its allocation to migrants. Massimo Franco, a columnist for the Corriere della Sera, “this negation by Renzi for a Turkey fund is being used to relegate Matteo Renzi in a corner and shows a European exasperation against him that he should not underestimate (in other words: “Renzi, shut up!”- my comment).

Disagreement still on the destination of the 40,000 migrants landed in Greece and Italy and that should have been distributed in the rest of Europe. The July 20915 agreements remained unfulfilled.

Italy also calls for an urgent revision of the Dublin agreement to regulate migratory flows. Dutch Prime Minister Mark Rutte, who chairs Europe for six months (who is implicitly agreeing with Germany, so far… ,my comment) the fund immediately approved the Turkish funds and request to accelerate the implementation “too slow” in its discretion, also to do so with the “registration centers” (“hotspots”) which collect the fingerprints of migrants to their landing.

Other sticking points: the public wants assurances that Italy finances its troubled banks, despite the threat of infringing Brussels procedures…. Or, the absence of the distribution of the European investment program that Matteo Renzi despairs of seeing happen.

And, above all, the ‘flexibility’ public accounts (0.2% of GDP) that Italy asks Brussels as a “due” to address the additional expenditure incurred by Italy to host 180,000 migrants the last year and probably as much this year (This is where I diverge, if all countries want subsidies for Migration problem solving, Brussels needs to create a Special “Migration”fund with Savings made in Brussels – an impossibility for “immobile” Brussels! – Needless to say – My Comment).

These debates have revealed a certain isolation of Italy on the European stage. None of the major leaders has added its voice to the protests Matteo Renzi. Commissioner Pierre Moscovici (a “clown” – my comment) considers “unfair” to criticize Juncker. And (even – contaminated…, my comment…) Italian Federica Mogherini, High Representative for Foreign and Common Security Policy, “Ms CFSP” has quietly sided with the President of the Commission (Juncker).

The accused (Renzi…), however, as some in Europe to speak up for the purpose of domestic policy, to cut the grass under the feet of the M5S and populist Northern League, seems reductive. In Parliament (Italian), government reforms are all adopted one after the other with a comfortable majority.



As usual US government and FED hide Real US Unemployment situation which is not 5% of total labor force in December 2015 but 9.9% – re below BLS chart which shows only 1.2 points improvement versus December 2014 9.9% vs 11.1%, because Under Employment  where all the  Employment problems reside is still very high – 4.9% in December 2015 vs 5.7% on December 2014.

No wonder that still many voters continue to express widespread dissatisfaction with their own prospects and those of the larger economy. The main disrupting factor that has been impacting and still does latest monthly jobs reports is further evidence that wage growth for the typical worker remains sluggish. Average hourly earnings fell slightly in December 2015, leaving the overall yearly gain at a meager 2.5 percent.

This  comes close to stagnation in wages and is mainly due to the large increase of part-time jobs at, obviously, lower pay, and that in December 2015, year-over-year (yoy) growth in multiple jobholders was an 11-month high, while yoy growth in single jobholders wast a three-month low. Since May 2015 the number of multiple jobholders has increased by 752 000, while single jobholders have increased by 429 000. In other words, multiple jobholders have been responsible for 64% of the net job gains since last spring. The disproportionate importance of multiple jobholders – forced to “make a living” out of it – shows why the labor market is weaker than it seems.

NYT published a long article on 01/08/2015 entitled: “Robust Hiring in December Caps Solid Year for U.S. Jobs” (you can click on this link if you want to read the article) about 292 000 jobs created in December 2015 with not ONE word about Under Employment…

US Growth of 2.8% in 2015, whereas high comparatively to most Western countries  is still not sufficient to change significantly the Total unemployment situation in the US,

All of my posts on this critical social-economic subject since the creation of this blog in 2011 show reasons why and propose concrete approaches, but the press and the FED continue not showing the Under Employment situation and, accordingly, are falsely informing the US public.

Until the Central Banks, in this case the FED, are not restricted in their role which is to control the banking sector performances and control pricing / inflation, the REAL Unemployment situation will not improve significantly.

The US is lacking having a Minister of Economy whose role is to set social-economic policy, this NOT being the FED’s role 

 BLS – A-15 Chart – US Unemployment – December 2015

Not seasonally adjusted
Seasonally adjusted
U-1 Persons unemployed 15 weeks or longer, as a percent of the civilian labor force
U-2 Job losers and persons who completed temporary jobs, as a percent of the civilian labor force
U-3 Total unemployed, as a percent of the civilian labor force (official unemployment rate)
U-4 Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers
U-5 Total unemployed, plus discouraged workers, plus all other persons marginally attached to the labor force, as a percent of the civilian labor force plus all persons marginally attached to the labor force
U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force
NOTE: Persons marginally attached to the labor force are those who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule. Updated population controls are introduced annually with the release of January data.



Happy New Year!

This is my first post since a “one post only” I issued on December 16, 2015: “Eurozone Dead due to No Governance, Immobilism and No Reforms”.

I had decided since October 2015 to interrupt writing daily posts since whatever I wrote – constructively – did not make a difference.I  Seeing that I was repeating myself constantly I wrote and published in self-edition (Amazon) two books whose titles are self-explanatory and resume the content of the 2000 posts I had issued since I started this blog in April, 2011: “Why Obsolete Macro Governance is Killing the World Economy” (September, 2014) , “Growth through Structural Reforms” (April 2015),  plus the beginning  (over 100 pages) of a third book:“Central Banks Impede Structural Reforms”, which was refused by well known classic (not self-edition) publishing companies because they felt it was not a classic text subject and labelled it “iconoclastic” (truth based on facts is seemingly considered as such…).

I therefore opted to create a new blog in October, 2015 with a lighter subject :“” , where am writing about soccer, the tag line being: “The blog that welcomes all fans who have a passion for writing about football”, but even in this universal Sports’ area I encountered the same (and highly corrupt) Governance problems than those I had been writing about in my blog:The huge FIFA Mess!, I might start writing fairy stories (non violent ones…)

Coming back to my today’s post content and in line with content of my non published book (“Central Banks Impede Structural Growth”) I am referring to declarations made by the former Dallas FED governor Robert Fisher who admits We front loaded a tremendous market rally to create a wealth effectThe Federal Reserve is a giant weapon that has no ammunition left.

I am quoting  the text of his declarations and preceding Quotes with my own – short – Comments

My Comments

As I have been writing in my posts since practically the beginning (nearly 5 years ago) I think that Central Banks worldwide (mainly Eurozone’s ECB, Japan’s Central Bank, China’s dominated by Government Central Bank, etc…), following the (bad) example of the US FED have taken over setting social- economic policy at least for the last decade, longer in effect….

This has included ineffective moves to fight unemployment (which is not their domain), publishing only classic unemployment and not referring to / emphasizing the very damaging under employment situation now even bigger than classic unemployment.

All this instead of trying to regulate the banking system and make it more performing for smaller corporations who are the biggest employer in any advanced country, and control non existing inflation, well let us say badly informed inflation where oil pricing – as one big item among others – should be separated from consumption goods which actually do show inflation.

The current end result is known by those who accept looking at facts (real macro data): slow growth (in general), big under employment (in general) with highly and artificially (through Central Banks ‘ “motivational liquidity enforcing moves”) growing markets which might create another bubble, and last but not least backing even higher indebtedness, all this helping (mostly) inefficient Governance around the world to avoid making the badly needed Social-Economic Structural Reforms.

A very good “example” (sic) is given by the Eurozone (non) Governance which is not able to produce more significant, and necessary, growth (only 1.5% in 2015 – thanks to Germany and Spain) having had the benefit of exterior factors such as oil prices (Brent at 36 USD currently), a very low (again since the euro creation) euro exchange rate vs the USD of (currently) 1.08, and no interest rate charged by ECB (negative rates if banks park funds with ECB…).

Nothing has changed in the last three months, matters got worse with migration out of Syria, large terrorism attacks in Europe, also in US coupled with US made violence due to free guns’ sales, China’s to be expected economic’s decline, etc…

Nothing will change until Governance world wide changes its bureaucratic and “politicking”approach to a realistic one, immodestly please refer to my books with concrete and I believe, constructive “proposals”, basically meaning that Social Economic Structural Reforms Need to be Fully implemented.

Quotes a video was made with Fischer‘s declarations:

Fischer: What the Fed did, and I was part of that group, we frontloaded  a tremendous market rally starting in march of 2009. It was sort of a reverse Wimpy factor. Give me two hamburgers today for one tomorrow. We had a tremendous rally and I think there’s a great digestive period that’s likely to take place now. And it may continue. Once again, we frontloaded, at the federal reserve, an enormous rally in order to accomplish a wealth effect. I would not blame this [the 2016 selloff] on China. We are always looking for excuses. China is going through a transition that will take a while to correct itself. But what’s news there? There’s no news there.”

“Box”: I guess the question Richard is: How ugly will it get? If you do see this big unwind of Fed Policy which fueled a 6 and one-half year bull market, what does it look like on the way down?

Fisher: “Well, I was warning my colleagues, if we have a 10-20% correction at some point. … These markets are heavily priced. They are trading at 19 and a half time earnings without having top line growth you would like to have. We are late in the cycle. These are richly priced. They are not cheap. …. I could see a significant downside. I could also see a flat market for quite some time, digesting that enormous return the Fed engineered for six years.”

“Box”: Richard, this digestive period, does it usher in an era where assets can’t perform in the absence of accommodation?

Fisher: Well, first of all, I don’t think there can be much more accommodation. The Federal Reserve is a giant weapon that has no ammunition left. What I do worry about is: It was the Fed, the Fed, the Fed, the Fed for half of my tenure there, which is a decade. Everybody was looking for the Fed to float all boats. In my opinion, they got lazy. Now we go back to fundamental analysis, the kind of work that used to be done, analyzing whether or not a company truly on its own, going to grow its bottom line and be priced accordingly, not expect the Fed tide to lift all boats. When the tide recedes we’re going to see who’s wearing a bathing suit and who’s not. We are beginning to see that. You saw that in junk last year. You also saw it even in the midcaps, and the S&P stripped of its dividends. The only asset that really returned anything last year, again if you take away dividends, believe it or not, was cash at 0.1%. That’s a very unusual circumstance.

“Box”: Richard. This has been an absolutely extraordinary interview. For you to come on here and say “I was one of the central bankers who engineered the frontloading of the banks, we did it to create a wealth effect” and then you go on and tell us, with a big smile on your face that we are overpriced, which is the word that you used, and there would be some digestive problems,  are you going to take the rap if there is a serious correction in this market? Will you equally come on and say “I’m really sorry we overinflated the market”, which is a logical conclusion from what you’ve said so far in this interview.

Fisher: First of all I wouldn’t say that. I voted against QE3. But there’s a reason for doing this. Let’s be fair to the central banks. We had a horrible crisis. We had to pull it out. All of us unanimously supported that initial move under Ben Bernanke. But in my opinion we went  one step too far, which is QE3. By March 2009 we had already bought a trillion dollars of securities and the market turned that week. To me, personally, as a member of the FOMC, that was sufficient. We had launched a rocket.  And yet we piled on with QE3, but the majority understandably worried we might slide backwards. I think you have to be careful here and frank about what drove the markets. Look at all the interviews over the last many years since we started the QE program. It was the Fed, the Fed, the Fed, the European central bank, the Japanese central bank, and what are the Chinese doing?  All quantitative easing driven by central bank activity. That’s not the way markets should be working.  They should be working on their own animal spirits, but they were juiced up by the central banks, including the federal reserve,  even as some of us would not support QE3.




The text below is not by me, but is a 12/16/2015 article by Yves De Kedrel, one of the weekly Le Figaro’s main coeds:“Europe is dying – Europe is dead”, it took them a long time to “understand”…, still they do not offer any “revival” possibilities, are “tired” and resigned…

De Kedrel repeats what my blog has been commenting upon for 4  four and a half years with no results whatsoever, having offered concrete alternatives which is more than most economists and analysts do, reason why I decided to abandon my daily posts since 2 months precisely, because the EC, EU and most country Presidents will always find  (bad mainly) reasons for not doing …

Quotes – Le Figaro’s Yves De Kedrel’s 12/16/2015 article:“Europe is dying – Europe is dead”

Whether in industry, the economy, security, Europe no longer shines in the world. Blame it on a bureaucracy whose sole purpose is to impose standards.
There brutal disappearances like that of Henrietta of England, sister of Louis XIV, Bossuet has immortalized with these beautiful words: “O disastrous night! O dreadful night when suddenly sounded like a burst of thunder, this amazing news: Madame is dying! Madame is dead!

“There are also disappearances that nobody perceives overnight but are the result of successive cowardice of knife strokes and leadership loss.

This is the case in Europe. Like it or not, in the space of a year, the European Union has become a sort of headless duck continues to run, without knowing that it no longer exists.

The ayatollahs of competition were able to prevent the formation of large groups able to cope with the American giants.

Industrial Europe is dead, murdered by the Brussels antitrust officials. By dint of repeating that the European Union should be an area that benefit its 500 million consumers, the ayatollahs of competition were able to prevent the formation of large groups able to cope with the American giants. In the space of a month, no less than three mergers to over $ 100 billion have been announced and will lead to the creation of industrial titans. Meanwhile Brussels officials continue to review rapprochement projects with the alpha

Omega and the notion of “relevant market” exceeded at the time of globalization and emerging markets.
The European Energy and Transport which was however one that existed before the Treaty of Rome, with Ceca, is dead, too, murdered by Angela Merkel after the tragedy of Fukushima in March 2011.
In deciding brutally net halt the use of any nuclear power, German Chancellor killed in the bud any ability of Europe to implement a common energy policy. A policy all the more necessary to meet the climate challenge, the challenge with our geopolitical dependence on Russian gas and industrial challenge, since the energy costs were previously in Europe a competitive advantage undeniable.

Financial Europe is dead too. She died in Athens last June with the intention of imposing any cost to a bankrupt country a doxa in stone there over twenty years and can not be the same for each country in the euro zone. The rule of the 3% budget deficit to gross domestic product has no more meaning than the will of the European Central Bank to limit inflation to 2% at the time when Jean-Claude Trichet was the bagman. Only managed to get by countries that were beyond such standards. As Britain or Sweden. And having let slip its budget deficit does not prevent London today to anticipate 2020 a return to balance its public accounts.

Only remains today a political Europe, a parliament become a machine to produce standards.
Indeed the growth of Europe is dead. The wealth of the euro area is expected to grow this year by 1.6% on average, against 2.5% in Britain, and more than 3% in the United States. Since the introduction of the euro, the “Old Continent” is one that displayed fifteen year the lowest growth rate of the entire planet. While at the same time the European countries had implemented the Lisbon strategy to make Europe “the most competitive economic area in the world (sic).” And when there is no more growth factories are closing, businesses go elsewhere. So that Europe has more than 25 million … of unemployed, twice the population of Belgium and a double unemployment in the United States.

The internal security of Europe also died with the demise of Schengen. It is not France that killed Schengen and the free movement of European citizens. It is with this senseless Angela Merkel will which decided unilaterally to open the doors of Germany to all migrants. Result: by bringing into its territory 950,000 refugees since the start of the year, it has forced its neighbors to restore their borders.

It remains today a pseudo political Europe, a parliament that has become a machine for producing standards, which feeds 30,000 Commission officials, a starry flaghship everyone has forgotten the meaning of the fired Apocalypse of St. John – which is normal for Eurocrats who did not want to admit the Christian roots of Europe – and Ode to Joy should be quickly replaced by a funeral march. Especially if Britain takes its independence in June 2016. De Profundis!


Since April 2011 when I created my blog – (which has largely “earned” its name in the meantime…) – I have consistently constructively criticized the way the Eurozone was (not) construed as a “social-economic” area, not to talk about a “politically” integrated one, and not even having succeeded to be a “financially” integrated one.

Main reasons, those reflected in the self-explanatory  titles of the two books I have published – in self-edition – in the meantime: “Why Obsolete Macro Governance is Killing the World Economy” (September 2014 – Amazon) and “Growth through Structural Reforms” (April 2015 – Amazon).

I have been continuously referring throughout the 2000 posts I have published in my blog to date opinions of varied economists, analysts, and people who found space to express themselves, et al, which seemed of interest to me, independent on whether I agreed or not with them. 

I am today referring to what I personally consider as an interesting and well conceived article published by Bloomberg on 10/12/2015 article: “Growing Government Debt Will Test Euro-Zone Solidarity” by , which I will quote entirely and precede with my own – general – comments.

My Comments

I had been preparing since the beginning of 2015 a third book to be published through the regular classic publishers’ channels (not self-edition with Amazon anymore), to be entitled: Structural Reforms Impeded by Central Banking”, I had written 104 pages before stopping…

I have given up publishing it because well known publishers refuse it considering it is sort of iconoclastic (sic) – follows one of the comments I received (textual – italics): “Having reviewed the material you have sent me, and further considered the nature of the overall project, it is with regret that we do not feel we are the right fit for your book at this time. As I mentioned when we spoke by telephone, XXXXXXX is primarily an academic publisher whilst your book is clearly aimed at a wider audience. With sales channels and market positioning in mind it is my view that we would not be able to reach the primary audience you have in mind.”

This book was intended to break away from classic economic analysis because I believe that the world’s meteoric change in the last half century, and even more so in the last 30/40 years, has changed world economics fundamentally, with past milestones and concepts like “business cycles” becoming gradually obsolete.

It is not an iconoclastic book because I think that most icons do not really exist anymore.

This book was not about negativism, since all situations have built in solutions which need to be first recognized and then with great a priori and in-depth analysis adapted to the new circumstances.

This, in general, has not been the case and is at the origin of a very unsatisfactory world governance situation, where many political and social-economic factors need to be drastically reviewed first and revised accordingly.

The big 2008 and still continuing social-economic situation, not anymore a “crisis” but a social-economic moving situation, cannot be compared with 1929, 70s oil crises et al, because it relates to a different geo political world and to very different social-economic developments.

What happened in 2008 with the housing crisis was only a detonator, not an isolated event, since it had been developing without gaining awareness since many decades and finally broke into a “recognized” crisis.

This book would have concentrated on developing thoughts and concrete proposals for gradual implementation of changes in governance and necessary structural, not conjunctural, reforms.

It would have tried to demonstrate that the independence and predominance of Central Banking has been pernicious by flooding markets with huge liquidity which has fostered even higher indebtedness and helped weak governments to postpone necessary and urgent structural reforms.

It would have concentrated on most of the Western World, particularly on Europe and US, which still represent about half of world trade and are therefore representative.

The world has been and is changing at a meteoric pace and Governance has not adapted to this continuously new geo political and social-economic environment. More pragmatic views of some crucial and specific macro situations are necessary, since they are, in general, ignored.

It has been very difficult to find new social economic foundations to start developing new governance guidelines, but the current situation is one of reactivity and not basic change, and if this continues the world’s social economic performance will suffer continuously.

The two main subject matters in my book – leitmotivs – were crucial, not having been the object, generally speaking, of the concern they merit, because they have been, are and will continue to hinder world governance evolution if no real changes are adopted.

Governance – In order to be able to implement real and complete structural reforms, a drastic change in approach to Governance is essential, since without it, matters will not change, as has been the case now for various decades.

The two leitmotivs in my book were:

  • Social-economic structural reforms are indispensable to ensure that social-economic situations improve significantly in order to allow Western Governance to obtain largely improved employment situations and hence durable growth.

The successful implementation of these structural reforms will depend on the political will of country governments, and in the case of the Eurozone – a multi country area – a drastic change in governance style and approach on seizing opportunities and solving problems is required.

  • Central Banking has been, is and will continue being, if not drastically changed, the major impediment to Social-Economic positive evolution, since acting solely through monetary policies has proven to be a great “fiasco” worldwide.

Monetary policies need to complement economic ones and not precede them.

Proposed alternative solutions are based on the experience acquired in active international corporate and also entrepreneurial life, working “in situ” in 3 continents and 7 different countries, and speaking five languages, always trying to update myself in macro economics.

Quotes – Bloomberg‘s 10/12/2015 article: “Growing Government Debt Will Test Euro-Zone Solidarity” by .

The German chancellor and the French president stood side by side last Wednesday to address the European Parliament. But beneath that show of solidarity lies a story of two diverging economies at the heart of the euro zone. 

At the time the euro was born, Germany’s economy — bearing close to $2 trillion in reunification costs — looked not too dissimilar to France’s. Today, however, the gap between the two countries is the widest since the reunification. Not only is the debt-to-gross-domestic-product ratio of France and Germany the widest in 20 years, but — more importantly in a currency union without a federal state — the latter has a huge and increasing current surplus, while the former is in deficit.


This is not surprising. Germany, while benefiting greatly from the opened markets of its fixed exchange rate partners, undertook a series of reforms to improve its economic position. France was not only unable to reform but indulged in the 35-hour workweek. If we were still living under the European Monetary System that predated the euro, France would simply have had to devalue, as it did many times before the euro. Under the euro, helped by its trade surplus, Germany kept a tighter budget, while the French state kept spending an ever-higher percentage of its GDP in repeated attempts to support its faltering economy. As a result, its debt is now close to the symbolic 100 percent of GDP level, not accounting for unfunded pension liabilities, and the rating agencies have stripped it of its AAA rating and continue to downgrade it. The European Commission, in its last assessment, speaks of France facing “high sustainability risk” in the medium term.


This is not just a French problem though; it’s a euro-zone one. According to Eurostat, in the first quarter of 2015, the euro-zone debt-to-GDP ratio was 92.9 percent — the highest it has been since the creation of the euro. Never has the zone been so far away from its own Maastricht fiscal sustainability criteria. Huge differences between countries exist, but the only country of the original 12 euro-zone members still respecting the debt and deficit levels is tiny Luxembourg. What does this say for the future of the euro?


By 2014, after the financial crisis, only five of the 19 eurozone countries (Luxembourg, Slovakia and the Baltic countries) were compliant with the Maastricht fiscal sustainability criteria. In truth, it’s a select club anywhere: Looking at the OECD economies today, only a handful would make the grade. They tend to be well-run smaller states with a propensity toward external trade surplus. During the financial crisis, in the absence of fiscal support from a federal Europe, one euro-zone country after another fell short of the criteria. There was good reason for this: Global fiscal stimulus was much-needed and could not have been achieved by the United States alone. But the debt has consequences Europe has not yet faced.

The criteria themselves — in particular, limits on debt at 60 percent of GDP, budget deficit at 3 percent of GDP, and inflation — were the price Germany extracted for sacrificing the deutsche mark at the altar of European integration. They have always been honored more in the breach. In the years leading up to the euro’s introduction, European finance ministers launched an accounts-fudging exercise that would have made Enron’s chief executive officer blush. Greece may have been in a category of its own, but the competition was fierce. France raided its telecoms pension fund and Belgium the cash of its public companies on New Year’s Eve, while Italy entered into large derivatives trades.

The goal was to gain entry into the promised euro zone, where lower interest rates would solve fiscal problems for ever after. European authorities ignored the fudges, while Germany was deeply absorbed by its reunification.

Symbolically, the euro notes were themselves a fudge of sorts, too. The historic-looking windows and bridges on euro notes are fictional; member states could not reach an agreement on which actual historical monuments to feature on their currency, so they made them up. The European monetary union’s most potent daily symbol is in fact a stark reminder of the lack of a commonly accepted cultural and historical reference.

There is more than symbolism at stake here, though. The European Central Bank purchase of government bonds won’t be able to keep the rates of affected countries stable forever. To correct for a fixed exchange rate framework with its main trading partner, these countries desperately need to lower their cost base relative to Germany — that is, to internally deflate. But this is politically untenable at a time of already-severe social discontent. Large transfers from the European Commission or Germany are also unthinkable. Not only is there no mechanism in place to achieve this rebalancing, but if France is too big to fail, it is also too big to be bailed out. It’s hard to see a way out. It is therefore little surprise that France was one of the staunchest supporters of the Greek bailout; it may well be next in line. (This would seem to be the opinion of Greece’s former finance minister, Yanis Varoufakis.)

Bismarck did not need the Maastricht criteria to impose the deutsche mark. Helmut Kohl did not hesitate, despite the costs, to offer the deutsche mark to East Germany. Sustainable monetary unions are not based on technical criteria that states will try to fudge or circumvent, no matter how well or badly designed. They work either by dint of the economic hegemony of a dominant partner, or through a sense of common identity.

How much debt the euro zone can handle (Japan manages with 250 percent of GDP) is a question on which we can only speculate. But if one needs a test to know if the EMU will survive the inescapable forthcoming adjustments, a simpler and more relevant question might be whether today’s ECB can print banknotes bearing real historical symbols that the people of Europe can relate to.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Jean-Michel Paul at

To contact the editor responsible for this story:
Therese Raphael at


These so called “top macro executives” (Dragui, Lagarde et al) are unbelievable how they contradict themselves .

Lagarde – who declared some days ago that growth was far too slow in Europe  – mainly Eurozone.

Dragui  – who is satisfied with Eurozone growth and “sells” that it is the result of “his” QE (1.14 Billion euros over 19 months – 60 billion per month average) and now wants to make a second QE issue of at least of the same amount!

All this to Re Boost markets, who are declining!

WSJ‘s 10/01/2015 short article: “ECB President Mario Draghi Says Eurozone Returning to Growth After Policy Moves”, which I quote entirely, and precede with my own comments.

My Comments

Below are the statistics which both Dragui and Lagarde seemingly “forgot”. If they are satisfied with 03 -0.4% per quarter Eurozone growth, so far, they are “wrong” (not to use another word…)

Anyhow,the last thing to do is another QE, the first one having failed miserably because Dragui put the cart before the horses – higher indebtedness does not create growth nor demand, structural reforms do, gradually, but nobody” stresses” them – actively!

Both ECB and IMF “work” to Boost Markets.

The Economist’s data – Quote

After perking up a bit in late 2014 and earlier this year, the recovery in the 19-strong euro area lost momentum in the second quarter of 2015. The quarterly pace of growth slowed from 0.4% in each of the previous two quarters to 0.3%. As throughout the rather feeble recovery (which started in the spring of 2013) a poor performance by France and Italy, the euro zone’s second- and third-largest economies respectively, let the side down. French GDP stagnated while Italian output grew by just 0.2%.


In speech at Global Citizen Awards, European Central Bank president says eurozone has returned to ‘sustained growth’

European Central Bank President Mario Draghi, shown on Sept. 3, said in a speech Thursday the eurozone had returned to ’sustained growth, under the impulse of our monetary policy.’

European Central Bank President Mario Draghi, shown on Sept. 3, said in a speech Thursday the eurozone had returned to ’sustained growth, under the impulse of our monetary policy.’ PHOTO: BLOOMBERG NEWS

European Central Bank President Mario Draghi said in a speech Thursday the eurozone has become more resilient and growth is picking up, the latest indication he thinks the central bank’s accommodative monetary policy is working.

In prepared remarks for an acceptance speech at the Global Citizen Awards in New York City, hosted by foreign policy think tank the Atlantic Council, Mr. Draghi said the eurozone had returned to “sustained growth, under the impulse of our monetary policy.” The results were “good news for everybody, everywhere,” he said.

Mr. Draghi’s comments, at New York’s American Museum of Natural History, come as the ECB is still easing monetary policy, while the U.S. Federal Reserve is drawing closer to raising interest rates for the first time in nearly a decade.

The ECB has been buying €60 billion ($67 billion) of bonds each month under a program set to run until at least September 2016, but Mr. Draghi has said the central bank would do more if inflation weakens further.

Christine Lagarde, managing director at the International Monetary Fund, in introducing Mr. Draghi, said he had done everything in his power to “uphold Europe,” as well as its unity and “defend the stability of its [single] currency.”

In the past, Mr. Draghi has said the ECB would do “whatever it takes” to address weakness in the eurozone. Ms. Lagarde called those words the three most successful words in central banking history.

On Wednesday, new data released by Eurostat showed annual inflation for September was running at negative 0.1%, below the ECB’s target of just under 2%, a development that may threaten the effectiveness of that bond-buying program.

Mr. Draghi said the eurozone accounts for 17% of global GDP and 16% of global trade, so the strength of the eurozone was critical to maintain at a time of uneven global growth.

“The progress achieved over the past three years to stabilize and strengthen the euro area is real,” he said. “Growth is returning. The way forward is well identified. And we will not rest until our monetary union is complete.”

He thanked those who have helped in the integration of the European Union and said, “Further integration is necessary to extract all the economies of scale and scope that our union brings.”


The FED continues plunging investors into uncertainty with all the declarations made –  on a practically daily basis – by various FOMC members.

The China situation, where slow (relatively speaking) growth is not entirely reported in China’s official statitics, is the source of major worries (Japan’s Nikkei just lost 4% in one day) and the FED ‘s confused declarations about eventual rates’ hikes and inflation worsen the situation.

The latest statements by officials of the FED again plunge investors into uncertainty regarding the timing of raising interest rates in the United States while Janet Yellen, FED’s president, had clearly hinted last week that tightening would occur this year.

On one hand, William Dudley, president of the New York FED, and John Williams, president of the San Francisco FED, on Monday – 09/28/2015 – went in the direction of Janet Yellen, declaring they supported monetary tightening before the end of 2015 particularly in view of the rise in inflation to the 2% target set by the FED.

On the other, Charles Evans, head of the Chicago FED, has instead estimated that inflation might not bounce back as quickly as anticipated, thereby advocating patience on rates – maintained at a level near zero since December 2008 – and a standstill until mid-2016.

The 17 members of the Monetary Policy Council of the FED have scheduled this week a total of 16 speeches or public appearances across the country, two weeks after the Fed took short market players by not raising its rates interest.

The FED had then explained hits decision particularly by concerns about the global economy and volatile financial markets, both of which have exacerbated since.

Thursday – 09/24/2015 – Janet Yellen, who has yet to speak this week (sic), had said she expected that the FED would raise interest rates this year, provided inflation remains stable and the economy of the United United still remains dynamic enough to lower the unemployment rate.

But for investors, the FED’s mixed messages complicates an already “dicey” situation made by the Chinese concern economic downturn and the collapse of commodity prices.

“Many investors believe the FED is a little lost,” said Mohammed Amana, director of Beam Capital Management. “The FED is placed in a difficult position by saying it isprepared to raise rates by the end of the year when every day the economy calls for the opposite.”

Charles Evans took note of frustration among market participants, stressing that this was due in particular to the decentralized structure of the FED, where each manager makes his own analysis of the situation.

In addition to the interventions of various members of the FED, also including Stanley Fischer, Vice-President, the week will also be marked by the employment figures of September 2015, essential data for a central bank whose dual mandate is full employment and price stability.

The FED always “ignores” Under  Employment, which is as large as “officially” published unemployment – about 5% each – as a ratio of non farm civilian working population, giving a totally wrong and fallacious assessment of the job situation in the US. 

The Monetary Policy Committee of the FED will meet twice before the end of the year, on 27 and 28 October and on 15 and 16 December…