US banks bracing for Brexit

According to sources quoted by the Financial Times, three American banks — Bank of America, Citigroup and Morgan Stanley — are “drawing up plans to move some London-based activities to Ireland to address concerns” the UK would leave the European Union after a referendum on EU membership to be held possibly in 2017.

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De-Dollarization Accelerates – China/Russia Complete Currency Swap Agreement

The last 3 months have seen Russia’s “de-dollarization” plans accelerate. First Gazprom clients shift to Euros and Renminbi, then the UK signs currency swap agreements with China, then NATO ally Turkey cuts ties and mulls de-dollarization, Switzerland jumps in the currency swap agreements, and BRICS create their own non-US-based funding vehicle, and then finally this week, Russia’s oligarchs have shifted cash holdings to Hong Kong. But this week, as RT reports, Russian and Chinese central banks have agreed a draft currency swap agreement, which will allow them to increase trade in domestic currencies and cut the dependence on the US dollar in bilateral payments. ““The agreement will stimulate further development of direct trade in yuan and rubles on the domestic foreign exchange markets of Russia and China,” the Russian regulator said. Continue reading

Ethiopia’s Nile dam project signals its intention to become an African power

The 4×4 roars off, kicking up a cloud of dust. With one hand on the wheel, the other stifling a yawn, Semegnew Bekele could do this trip with his eyes shut. A construction engineer, he has driven down this track at every hour of the day or night over the past three years. “Ordinary people are building an extraordinary project,” he says. He is referring to the Grand Ethiopian Renaissance dam (Gerd), in the north-west corner of the country close to the border with Sudan. Four hours away from the town of Assosa more than 8,500 workers and engineers are labouring on a massive project to harness the waters of the Blue Nile.

The countdown has already started for Bekele: he has three years left to complete this concrete colossus. “I don’t feel like a special person,” he says, “just an engineer leading the project.” True enough, the driving force behind the dam is former prime minister Meles Zenawi, who ran the country for more than two decades. He was obsessed with the country’s rebirth. The structure will be built, whatever the cost, he asserted, upon laying the first stone in April 2011. He died the following year. Continue reading

Britain planned to train and equip 100,000 Syrian rebels

Secret initiative planned to train rebels to fight the Assad government a year later by marching on Damascus, a BBC Newsnight investigation discloses

Britain planned to train and equip 100,000 Syrian rebels for a shock and awe campaign to defeat President Bashar al-Assad.

General David Richards, who was then the UK’s most senior military officer, drew up the plans two years ago, according to the BBC’s Newsnight. Continue reading

UK edges closer to EU exit as David Cameron is crushed in bid to block Jean-Claude Juncker’s leadership

Britain took another step towards the EU exit door as David Cameron warned that Jean-Claude Juncker’s appointment to the top job in Brussels would make it harder to persuade the public to remain in the 28-nation bloc.

Mr Cameron’s stark warning came after he suffered a humiliating defeat in his lonely battle to stop the veteran federalist becoming president of the European Commission. At a Brussels summit, EU leaders voted 26-2 to nominate Mr Juncker after Mr Cameron demanded an unprecedented formal vote on a post traditionally settled by consensus. Hungary’s Viktor Orban was the only leader to back the Prime Minister.

Asked if the crushing setback had taken the UK closer to an EU exit, Mr Cameron told a press conference: “The job has got harder of keeping Britain in a reformed Europe. The stakes are higher. Do I think it is an impossible job? No.” Continue reading

EU states let NSA tap data cables, Danish media say

BRUSSELS – Classified files leaked to Danish media suggest some EU states are allowing US spies to install surveillance equipment on cables in order to intercept the emails, private phone calls, and Internet chats of their citizens.

Large amounts of data are said to be swept up via a programme codenamed “RAMPART-A”, according to documents disclosed by former US agent Edward Snowden and made public on Wednesday (18 June) by Dagbladet Information and The Intercept.

At least 15 member states have some sort of partnership with the NSA, according to former Guardian journalist Glenn Greenwald. Continue reading

EU is ‘sleepwalking into a crisis’ warns senior diplomat who believes appointment of arch-federalist as president will hasten Britain’s exit

The appointment of an arch-federalist as the European Commission president risks creating a ‘dramatic’ backlash that will hasten Britain’s exit from the EU, one of the country’s most senior diplomats has warned.

A leaked document said Ivan Rogers, the UK’s permanent representative to the EU, believes the ‘die is cast’ in favour of Jean-Claude Juncker, the former prime minister of Luxembourg.

His proposed elevation to Europe’s top job has been fiercely opposed by David Cameron, who says Britain rejects the founding EU principle of ‘ever closer union’, which Mr Juncker supports. Continue reading

Scottish independence will lead to ‘Balkanisation’ of Britain, warns Swedish foreign minister

A vote for independence in September’s referendum which would see Scotland leave the 307-year-old union would trigger “unforeseen chain reactions” in both the UK and Europe

Sweden’s Foreign Minister Carl Bildt warned on Wednesday that Scottish independence would lead to the “Balkanisation” of the United Kingdom that would have consequences for the rest of Europe.

“The Balkanisation of the British Isles is something we are not looking forward to. It opens up a lot, primarily in Scotland but also in the UK. What are the implications for the Irish question? What happens to Ulster?” Continue reading

Renminbi (RMB) Yuan Clearing Bank To Open In London

A RMB Yuan (CNY) clearing bank will be officially appointed in the United Kingdom (UK) in June, said Mark Boleat, policy chairman for the City of London Corp, in an interview at the weekend.

“There will be a clearing bank in London. In due course, there will be an announcement,” Mr. Boleat said. The news will be an endorsement for London’s efforts to become an offshore yuan center. Other European financial centers in the race to become a Yuan center include Frankfurt, Paris, Switzerland and Luxembourg.

An official clearing bank facilitates efficient clearing of offshore Renminbi transactions, achieved through the appointed bank’s direct cooperation with the People’s Bank of China (PBOC) , the country’s central bank. Continue reading

German spies want $400M to play catch-up with the NSA

Your new post-America superpower:

Süddeutsche Zeitung, NDR and WDR have turned up secret documents belonging to the Bundesnachrichtendienst (BND), Germany’s counterpart to the NSA. It seems the BND is jealous of the digital espionage capabilities of the NSA and the U.K.’s GCHQ, and wants to up its game.

The documents warn that, if the BND doesn’t get the €300 million ($409 million) it needs to run expanded surveillance activities until 2020, Germany will fall behind even Italy and Spain in the spook stakes. They also suggest the spies hope to get their funding in the coming weeks. Continue reading

How Britain Calculates Its Hooker “GDP Boost”: 60,879 Prostitutes x 25 Clients Per Week x £67.16 Per Visit

First it was Italy which, as we reported last week, had decided to “boost” its GDP by adding the estimated impact of cocaine and hookers. And now, riding on the coattails of this economics gimmick designed solely to make the economy appear more solvent, it is Britain’s turn, whose Office for National Statistics will also add add up the “contribution” made by prostitutes and drug dealers.

According to the Guardian “for the first time official statisticians are measuring the value to the UK economy of sex work and drug dealing – and they have discovered these unsavoury hidden-economy trades make roughly the same contribution as farming – and only slightly less than book and newspaper publishers added together.” Continue reading

Over-heating stock markets raise crash fears

The UK’s top professional investors think stock markets in the UK and US are over-valued raising fears of a crash

The number of investors who think the world’s leading stock markets such as the S&P 500 and the FTSE 100 are overvalued has reached its highest level yet, according to a survey of professional money managers completed by the CFA Society of the UK.

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Briton drafts ‘Brexit’ blueprint: UK can join EFTA

Britain’s economy could grow by 1.3 billion pounds if it left the European Union due to less regulation and more trade with emerging economies, acccording to a British diplomat who dreamt up a blueprint for the country’s EU exit.

Britain’s free market Institute of Economic Affairs on Tuesday awarded a 100,000-euro prize to Iain Mansfield, a British diplomat based in the Philippines, who it decided had come up with the best proposal for a ‘Brexit,’ a British departure from the EU. Continue reading

Top economists warn Germany that EMU crisis as dangerous as ever

Council on Foreign Relations compares Germany’s hardline stance with US policy towards Britain at the end of the Second World War

The eurozone debt crisis is deepening and threatens to re-erupt on a larger scale when the liquidity cycle turns, a leading panel of economists warned in a clash of views with German officials in Berlin.

“Debts above 130pc of GDP for Italy and 170pc for Greece are a recipe for disaster once we go into the next downturn,” said Professor Charles Wyplosz, from Geneva University.

“Today’s politicians believe the crisis is over and don’t want to hear any more about it, but they have not tackled the core issues of fiscal union and public debt,” he said, speaking at Euromoney’s annual Germany conference.

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Russia Raises Gold Holdings By 7.247 Tonnes To Over 1,040 Tonnes In February

Yesterday U.S. President Barack Obama warned Russian President Vladimir Putin that Russia would face more sanctions if it moved further into eastern Ukraine after its annexation of Crimea. Worryingly for residents of New York and for financial markets, Obama also warned that he was more worried about the risk of a nuclear bomb going off in Manhattan then he was about Russia.

Geopolitical risk in the form of terrorism, financial and economic war and actual war remains high and should support gold.

Russia has increased its gold holdings by 7.247 tonnes to 1,042 tonnes in February. Turkey and Kazakhstan also raised their bullion reserves, data from the International Monetary Fund showed today. Turkey’s gold holdings rose 9.292 tonnes to 497.869 tonnes, the data showed.

Many analysts are ignoring the important context of today’s new geopolitical backdrop. Russia alone has some $400 billion in foreign exchange reserves – mostly in U.S. dollars. If they were to diversify just 5%, worth some $20 billion, of those reserves into gold – it would be equal to nearly 500 tonnes of gold or nearly 25% of global annual production.

Russia bought another 7.247 tonnes of gold in February. It will be interesting to see what Russian demand is in March and indeed in the coming months. Sanctions could lead to materially higher demand from the Russian central bank, Bank Rossii.

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