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Thursday, January 26, 2012

One of World's Smallest Drones in Action

Are George Soros, The IMF And The World Bank Purposely Trying To Scare Us?

Over the past couple of weeks, George Soros, the IMF and the World Bank have all issued incredibly chilling warnings about the possibility of an impending economic collapse.  Considering the power and the influence that Soros, the IMF and the World Bank all have over the global financial system, this is very alarming.  So are they purposely trying to scare the living daylights out of us?  Soros is even warning of riots in the streets of America.  Unfortunately, way too often top global leaders say something in public because they want to "push" events in a certain direction.  Do George Soros and officials at the IMF and World Bank hope to prevent a worldwide financial collapse by making these statements, or are other agendas at work?  We may never know.  But one thing is for sure - many of the top financial officials in the world are using language that is downright "apocalyptic", and that is not a good sign for the rest of 2012.
Right now, George Soros is saying things that he has never said before.  Just check out what George Soros recently told Newsweek....
“I am not here to cheer you up. The situation is about as serious and difficult as I’ve experienced in my career,” Soros tells Newsweek. “We are facing an extremely difficult time, comparable in many ways to the 1930s, the Great Depression. We are facing now a general retrenchment in the developed world, which threatens to put us in a decade of more stagnation, or worse. The best-case scenario is a deflationary environment. The worst-case scenario is a collapse of the financial system.”
Later on in that same article, Soros is quoted as saying that we could soon see the U.S. government using "strong-arm tactics" to crack down on rioting in the streets of major U.S. cities....
As anger rises, riots on the streets of American cities are inevitable. “Yes, yes, yes,” he says, almost gleefully. The response to the unrest could be more damaging than the violence itself. “It will be an excuse for cracking down and using strong-arm tactics to maintain law and order, which, carried to an extreme, could bring about a repressive political system, a society where individual liberty is much more constrained, which would be a break with the tradition of the United States.”
It almost sounds like George Soros is anticipating the same kind of abreakdown of society that many survivalists and preppers are getting ready for.
So how bad are things going to get?
Well, George Soros is publicly warning that the coming financial crisis could end up being even worse than 2008.  Just check out the following quotes from him that appeared in a recent Businessweek article....
Billionaire investor George Soros said Europe’s sovereign-debt woes are “more serious” than the financial crisis of 2008 and that the world faces the prospect of a “vicious circle” of deflation.
“We have a more dangerous situation now than in 2008,” Soros, 81, said in response to a question at an event in the southern Indian city of Bangalore today. “The crisis in Europe is more serious than the crash of 2008.”
But George Soros is not the only one issuing these kinds of warnings.
Once again, the head of the IMF, Christine Lagarde, has made a speech in which she openly warned that we are heading for a repeat of the "1930s".
She told an audience in Berlin on Monday that the globe is facing "a 1930s moment, in which inaction, insularity and rigid ideology combine to cause a collapse in global demand".
During the speech she called for a trillion more dollars to support financially troubled governments, and she made the following statement....
"It is not about saving any one country or region. It is about saving the world from a downward economic spiral."
As I wrote about the other day, the World Bank has also been using apocalyptic language about the global financial situation.  In a shocking new report, the World Bank revised GDP growth estimates for 2012 downward very sharply, it warned that Europe could be facing financial collapse at any time, and it instructed the rest of the world to "prepare for the worst."
The lead author of the report, Andrew Burns, said that the "importance of contingency planning cannot be stressed enough" and that if there is a major financial crisis in Europe the entire globe will be deeply affected....
"An escalation of the crisis would spare no-one. Developed- and developing-country growth rates could fall by as much or more than in 2008/09." 
So should we be alarmed that George Soros, the IMF and the World Bank are all proclaiming that a financial nightmare could be just around the corner?
Of course we should be.
Whether their motives are pure or not, they are telling the truth about the global financial situation in this case.  As I have written about so frequently, there are a whole host of signs that indicate that we could be on the verge of a majorglobal recession.
A lot of folks in the investment world are warning that hard times are about to hit us as well.  For example, the following is what legendary investor Joseph Granville recently told Bloomberg Television....
Joseph Granville, whose “sell everything” call in 1981 sparked a decline in U.S. stocks, said the Dow Jones Industrial Average (INDU) will drop toward 8,000 this year because of waning momentum and volume.
“Volume precedes prices,” Granville, 88, a technical analyst who has been publishing the Granville Market Letter from Kansas City, Missouri for about 50 years, said in an interview on “Street Smart” on Bloomberg Television. “You are seeing much lower volume. That tells you that prices are going to go much lower, much lower than most people think possible and very few people have projected.”
Considering all of the warnings out there, it only seems prudent to prepare for the worst.
But unfortunately, a lot of people are just going to leave their holdings sitting out there like a dead duck, and they are going to be absolutely devastated by the coming financial tsunami.
Those that believe that the United States can somehow escape the coming financial storm don't really know what they are talking about.
In fact, there was very troubling news for the U.S. dollar just the other day.  It was announced that India will start paying for its oil from Iran in a currency other than U.S. dollars.
But this is just another sign that the rest of the world is starting to reject the U.S. dollar.  For decades, the U.S. dollar has been the reserve currency of the world and this has given us a tremendous advantage.  Unfortunately for us, that is now changing.
U.S. newspapers are not talking about what is going on, but mainstream newspapers in Europe are.  Right now, some of the biggest countries in the world are working on plans to quit using U.S. dollars for the buying and selling of oil.
The following comes from a recent article in The Independent....
In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.
Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.
The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.
This is a very big deal, and if this gets pulled off it is going to have devastating consequences for the U.S. dollar and for the U.S. economy.
But of course when it comes to troubles for the U.S. financial system, there area whole host of issues that could be talked about.
An environment for a "perfect storm" is developing, and most Americans have absolutely no idea what is about to happen.
Fortunately, there are some researchers out there that are working hard to sound the alarm bells.  For example, the following quote comes from a recent interview with Gerald Celente....
I believe that we have to watch out for something along the lines of an economic martial law. The European system is in collapse. The financial system in the United States is just as tenuous, if not more, and I believe they will not admit there will be a financial crash but rather they will use a geo-political issue to get the people in a state of fear and hysteria whereby they'll then call a bank holiday or devaluation of the currency, or a hyperinflation of the currency, and blame it on somebody else.
It would be wise to listen to what experts such as Gerald Celente are saying.
Now is the time to take stock of where you are at and to make plans for the coming year.
Just because things have "always" been a certain way does not mean that they will continue to be that way.
Just because certain things have "always" worked in the past does not mean that they will continue to work in the future.
Our world is experiencing fundamental changes.  It is changing at a faster pace than we have ever seen before.  The way that we all live our lives five or ten years from now will be vastly different from how we live our lives today.
This will be a very challenging time to be alive, but it is also going to be a very exciting time to be alive.

Halt in Iran oil could push crude up by 30 percent

WASHINGTON - The International Monetary Fund warned on Wednesday that global crude prices could rise as much as 30 percent if Iran halts oil exports as a result of US and European Union sanctions.

If Iran halts exports to countries without offsets from othersources it would likely trigger an "initial" oil price jump of 20 to 30 percent, or about $20 to $30 a barrel, the IMF said in its first public comment on a possible Iranian oil supply disruption.

The IMF highlighted the risks of rising tensions over Iran sanctions in a note on Wednesday sent to deputies from G20 countries who met in Mexico City last week.

The price impact caused by a cut in Iranian exports could be exacerbated by below average oil stocks in many countries, the result of tight oil market conditions through much of last year, the IMF said.

The fund's comments add pressure to the Obama administration as it struggles to find a way to get countries to reduce shipments of Iranian oil without pushing prices higher ahead of the November US presidential election.

President Barack Obama is tightening sanctions on Iran in a move aimed to deprive its nuclear program of funds and technology. Western governments believe Iran is trying to build nuclear arms, a charge Tehran denies. The EU has slapped a ban on Iranian oil to take effect in six months.

Financial sanctions against Tehran may be "tantamount to an oil embargo" and would imply supply declines of about 1.5 million barrels per day from the world's fifth-largest oil producer, the IMF said.

That volume of supply disruption would be comparable to losses in output from Libya last year due to civil war that pushed oil prices over $100 a barrel. Iran exports about 2.6 million barrels per day of oil.

Iran has threatened to block the Strait of Hormuz shipping route, through which flows 20 percent of oil traded globally.

The IMF said in its global outlook on Tuesday that global oil prices would ease only slightly this year despite a sharp slowdown in world growth. The IMF projection of 2012 average oil price is $99 a barrel versus $100 it forecast three months ago.

The IMF's concerns about a large Iran-related oil supply shock or an actual disruption has risen in recent weeks as powers in the West increase pressure on Tehran. Its view is based on data that shows limited inventory and spare capacity, and projections that oil demand will not slow despite falling growth in advanced and emerging economies.

Jerusalem Post

Israeli Finance Minister: ‘Massive’ Blockade Needed to Stop Iran Threat

A “massive” aerial and naval blockade of Iran, reminiscent of the 1962 U.S. quarantine of Cuba, is needed to stop the Islamic regime from pursuing nuclear weapons, Israeli Finance Minister Yuval Steinitz said.

The European Union’s ban on imports of Iranian crude and other economic sanctions “might not be sufficient” to deter Iran’s nuclear ambitions, Steinitz, 53, said today in an interview at Bloomberg’s headquarters in New York.

The gravity of a potential nuclear-armed Iran is such that stronger action is needed, he said. A “massive blockade,” so that “no one can even go out,” stands some chance of success, he said.

Iran has threatened retaliation, such as blocking the Strait of Hormuz, transit point for about a fifth of the global oil supply, if its oil shipping is obstructed. Under international law, a blockade is an act of war unless authorized by the UN Security Council.

Steinitz said the U.S. had “good experiences in the past,” referring to the 1962 missile crisis when President John F. Kennedy declared that any ships carrying missiles to Cuba would be forced to turn back.

“It worked,” said Steinitz. “Sometimes it might work. You have to at least try.”

Steinitz, a member of the conservative Likud Party, has called repeatedly for tougher action to prevent Iran from acquiring nuclear weapons.
EU Oil Ban

The EU agreed on Jan. 23 to ban oil imports from Iran starting July 1 as part of measures to ratchet up pressure on the country to give up activities that Israel, the U.S. and EU say are directed at giving Iran nuclear weapons capability. Iran said its nuclear program is peaceful, for electricity and medical purposes.

Iran’s Oil Ministry has played down the effects of EU sanctions on its economy, saying the move may lead to “heavy economic loss and damages” for Europe and that it has “no concerns” about finding new customers for its oil.

Steinitz said economic sanctions have taken their toll on Iran and cracks have begun to appear among Iran’s rulers.

“We know there are some doubts and some kind of internal debate already going on within the leadership on what to do and how much they are paying because they insist on accelerating the nuclear project,” he said. “They are already in severe economic difficulties so they are not totally insensitive” to pressure.

The EU measures include freezing the European assets of the Iranian central bank and Bank Tejarat, the last Iranian bank financing major trade with the EU, and banning trade in petrochemicals from Iran.
Suspicious Activities

Tensions over Iran’s nuclear program have increased since the Nov. 8 release of a International Atomic Energy Agency report citing “credible” evidence showing Iran worked on bomb components to lift the yield of a nuclear explosion.

Army General Martin Dempsey, the chairman of the U.S. Joint Chiefs of Staff, discussed Iran during talks in Israel last week with Prime Minister Benjamin Netanyahu, Defense Minister Ehud Barak and other officials. Defense Secretary Leon Panetta and other U.S. officials have warned Israel not to strike Iran’s nuclear facilities, which might trigger retaliatory attacks as well as a naval confrontation in the Strait of Hormuz.

United Nations Secretary General Ban Ki-moon today called for a “peaceful resolution” to the dispute and for Iran to keep open a critical shipping lane.

“The free passage of any ships in open seas should be respected and protected,” Ban said. “At the same time, I have been urging the parties to first of all try to defuse the tension. These rhetorics are not helpful.”

Iran, the second-biggest producer in the Organization of Petroleum Exporting Countries afterSaudi Arabia, has threatened to close the Strait of Hormuz, the seaway linking the Persian Gulf with the Indian Ocean, if nations block its crude oil sales.


Cyber attacks & street protests over 'censorship' bill

National DNA database needed for personalised medicine drive

More control in the name of health.....

At the moment the health service is just starting to offer patients genetic testing, for example to tell if they will respond to certain cancer fighting drugs.

But in the future the technology is likely to be central to many areas of healthcare - from testing pregnant women's blood to check the foetus's risk of Down's syndrome, to tracking disease outbreaks.

Sir John Bell, chair of the Human Genomics Strategy Group, said to deliver 'genomic' based medicine in the future, a national database was necessary.

Speaking yesterday (Wednesday) to launch a report by the group to make this happen, he said: "It's almost impossible to go forward with the whole personalised medicine agenda, unless you have this database."

Such a database "benefits everybody" he said - the public, clinicians, the research community and pharmaceutical companies, who are likely to be given access to anonymised data to help develop new drugs.

In the future everybody's details could be included on it, although he said such a scenario was a very long way off.

"Will people at birth get their genome sequenced? I have absolutely no doubt that at some point in the future that will happen, but not in the foreseeable future," he said.

The cost of mapping an individual's whole genome, known as sequencing, was coming down so fast that he said it would soon be cheaper to do that rather than test for specific genetic anomalies.

He believed predictions that it would soon cost just $1,000 (£650) adding that it could soon fall to "practically nothing".

However, even if that becomes the case, the cost of building what the strategy group termed a "central repository for storing genomic and genetic data" could be considerable.

The Government recently pulled the £12 billion National Programme for IT, at its heart a project to computerise everybody's medical records, after Andrew Lansley, the Health Secretary, said it "wasted taxpayers' money".

Dame Sally Davies, the Chief Medical Officer for England, also a member of the group, said yesterday that it was likely the database would grow bit-by-bit, starting with the results of those who needed specific genetic tests.

The database idea is one a series recommendations made in the report,Building on our inheritance, Genomic technology in healthcare.

Mr Lansley welcomed the report, saying the promise of genomics was "immense". He also announced a new process for commissioning and funding genetic cancer tests, to ensure patients got the right drugs, to be in place by next April.

However, some experts believe the report hypes how the NHS is using genetic testing at the moment, and what can be achieved.

Dr Stuart Hogarth, a political economist at King's College London with a specialist interest in molecular diagnostics, said: "This report grossly exaggerates the current utility of testing for risk of common, complex diseases.

"For the most part, at the moment we can do no more than tell people that they are at slightly higher than average risk or slightly lower than average risk."

The Telegraph

Saudi Air Force to outnumber Israel's advanced US jet fleet

With its latest acquisitions from Washington and Europe, the Saudi Air Force will have more fighter-bombers of more advanced models that the Israeli Air Force. Deep concern over this was recently relayed by Prime Minister Binyamin Netanyahu and Defense Minister Ehud Barak to President Barack Obama, Secretary of State Hillary Clinton and Defense Secretary of Defense Leon Panetta.

DEBKAfile's Washington and military sources that Israel made its concern known with the utmost discretion so as not to be seen as hampering the expansion of the Saudi Royal Air Force as Riyadh gets set to tackle Tehran should Saudi oil exports be sabotaged by Iranian attacks on its oil production or the closure of the Strait of Hormuz, its primary export outlet.
Last month, the US agreed to sell Saudi Arabia 84 advanced F-15SA fighter-bombers worth $29.4 billion. First deliveries are due in 2015. The package included the upgrading of 70 F-15 planes of the Saudi air fleet. Riyadhis also buying 72 advanced Eurofighter Typhoon fighter bombers. All in all, the oil kingdom will have the largest and most sophisticated fighter-bomber fleet in the Middle East.
Israel leaders reminded the Obama administration of its standing pledge to maintain Israel's qualitative military edge in the region. The aircraft supplied to the Saudis will place that edge in doubt.
They voiced two additional causes for concern:

1. One fine day, Saudi Arabia, which has never agreed to peace relations with Israel, may be moved to attack the Jewish state from an air base very close to Israel's shores. That proximity and the size and quality of its air force will allow dozens of warplanes to penetrate Israel's air defenses and drop bombs on southern and central Israel.

2. Israel also fears that four or five Saudi pilots or hired Islamist fliers may one day form an al Qaeda cell inside the Saudi Air Force and conspire to carry out a suicide attack on Israeli cities on the model of al Qaeda's 9/11 attacks on New York and Washington, most of whose participants were Saudis.

Israeli intelligence officials in close touch with American counterparts asked them if Washington had asked for Saudi assurances about the reliability of the air crews who will man the new F-15SA planes. They were told that no such guarantees had been requested.
For now, Israel has brought its concerns to the notice of the Obama administration without making specific requests to hold up delivery. Israel is conscious that the Gulf region is on tenterhooks over its security and the Saudis are deep in military preparations to beat back potentially aggressive Iranian moves in the wake of the oil embargo approved by the US and the European Union against Tehran's nuclear program.
Jerusalem also takes into consideration the importance to the flagging American economy of the huge warplane transaction with the Saudis which will support 50,000 jobs in the US air industry and 600 American contractors of aircraft parts.
Obama will certainly not be approachable on this issue while running for re-election.
But none of these considerations allays the deep anxiety prevailing in the top echelons of Israel's high military and air command over the radical upgrade awarded Saudi air power providing it with the capacity to outclass and outgun Israel.


Hitler's steps

Researchers have made a 3D object invisible

Diagrams showing 'cloaking' effect (Courtesy A Alu)

Researchers have "cloaked" a three-dimensional object, making it invisible from all angles, for the first time.

However, the demonstration works only for waves in the microwave region of the electromagnetic spectrum.

It uses a shell of what are known as plasmonic materials; they present a "photo negative" of the object being cloaked, effectively cancelling it out.

The idea, outlined in New Journal of Physics, could find first application in high-resolution microscopes.

Most of the high-profile invisibility cloaking efforts have focused on the engineering of "metamaterials" - modifying materials to have properties that cannot be found in nature.

The modifications allow metamaterials to guide and channel light in unusual ways - specifically, to make the light rays arrive as if they had not passed over or been reflected by a cloaked object.

Previous efforts that have made 3-D objects disappear have relied upon a "carpet cloak" idea, in which the object to be cloaked is overlaid with a "carpet" of metamaterial that bends light so as to make the object invisible.

Now, Andrea Alu and colleagues at the University of Texas at Austin have pulled off the trick in "free space", making an 18cm-long cylinder invisible to incoming microwave light.Negative effects

Light of all types can be described in terms of electric and magnetic fields, and what gives an object its appearance is the way its constituent atoms absorb, transmit or reflect those fields.

If I had to bet in five years what kind of cloaking technique might be used for applications, then I would say plasmonic cloaking”Andrea AluUniversity of Texas at Austin

Prior metamaterial approaches sidestep these effects simply by channelling light around an object, using carefully designed structures that bounce light in prescribed way, like a pinball machine.

By contrast, plasmonic materials can be designed to have effects on the fields that are precisely opposed to those of the object.

"What we do is different; we realise a shell that scatters [light] by itself, but the interesting point is that if you combine the shell with the object inside, the two counter out and the object becomes completely invisible," Prof Alu told BBC News.

The plasmonic material shell is, in essence, a photo-negative of the object being cloaked.

As a result, the cloak has to be tailored to work for a given object. If one were to swap different objects within the same cloak, they would not be as effectively hidden.

But the success with the cylinder suggests further work with different wavelengths of light is worth pursuing: "It's a real object standing in our lab, and it basically disappears," Prof Alu said.

However, the idea is unlikely to work at the visible light part of the spectrum.

Prof Alu explained that the approach could be applied to the tips of scanning microscopes - the most high-resolution microscopes science has - to yield an improved view of even smaller wavelengths of light.

Ortwin Hess, professor of metamaterials at Imperial College London, said the work was a "very nice verification that this approach works".

"There are some limits on where these things can be applied, but nevertheless it's really, really interesting and fundamental indeed," he told BBC News.

Prof Hess explained that for future applications, plasmonic materials could be combined with the structured metamaterials idea already in development elsewhere. Light can be channelled where it needs to go, or its effects undone, as need be.

Cloaking in visible light, hiding more complex shapes and materials - that is, a cloak of Harry Potter qualities - remains distant, but Prof Alu pointed out that the steps in the meantime will be put to use.

"There is still a lot of work to do," he said. "Our goal was just to show this plasmonic technique can reduce scattering from an object in free space.

"But if I had to bet in five years what kind of cloaking technique might be used for applications, for practical purposes, then I would say plasmonic cloaking is a good bet."


Gold Proves Safest as Goldman Forecasts Record

Gold provided the best returns of all commodities in the past five years when adjusted for volatility, and Goldman Sachs Group Inc. says the rally will continue as options traders signal no change in the metal’s relatively low risk.

The BLOOMBERG RISKLESS RETURN RANKING shows the Standard & Poor’s GSCI Gold Total Return Index produced a 6.5 percent risk- adjusted return in the five years ended yesterday, the highest among 24 commodities tracked by S&P, data compiled by Bloomberg show. Silver, the next-best performer, yielded a risk-adjusted gain of 3.1 percent, while a total-return index for all raw materials slipped 0.2 percent.

Bullion, which has seen 11 years of gains as investors sought a haven amid two bear markets in stocks and a sovereign debt crisis, also posted the safest return in the past 12 months, even as it fell from a record high to a five-month low in the second half of last year and gold investors led by John Paulson suffered losses. Goldman Sachs forecasts gold will reach a record this year, and a gauge of future price swings is near a five-month low.

“Economic problems increased globally, and gold emerged as a safe-haven investment,” Walter ‘Bucky’ Hellwig, who helps manage $17 billion of assets at BB&T Wealth Management in Birmingham, Alabama. “Monetary easing by China and quantitative easing in Europe and the U.S. will help it remain a store of value.”

The risk-adjusted return is calculated by dividing total return by volatility, or the degree of daily price-swing variation, giving a measure of income per unit of risk. The returns are not annualized.
Longest Rally

A higher volatility means the price of an asset can swing dramatically in a short period of time, increasing the potential for unexpected losses compared with a security whose price moves at a steady rate.

Gold’s longest rally since at least 1920 in London has attracted investors worldwide seeking protection from some of the most violent market swings in stock markets on record. The Dow Jones Industrial Average posted four consecutive days of 400-point swings last year, the longest streak since data began in 1896. The S&P 500’s average daily price move since its 2011 high in April was 1.8 percentage points, compared with an average of 1.1 percentage points in the five years before Lehman Brothers Holdings Inc. collapsed in September 2008.
Goldman’s Forecast

The risks that spurred market volatility last year will keep swaying asset prices and the global economy, Nouriel Roubini, the economist who predicted the 2008 financial crisis, said in a talk at Bloomberg’s headquarters in New York on Jan. 19. Rising commodity prices, uncertainty in the Middle East, the spreading European debt crisis, increased frequency of “extreme weather events” and U.S. fiscal issues are “persistent” problems, he said.

That’s good news for havens such as gold. Goldman Sachs said in a Jan. 13 report that futures will advance to $1,940 an ounce in 12 months. Morgan Stanley forecasts the metal will climb to a record average $2,175 in 2013, analysts Peter Richardson and Joel Crane said in a Jan. 17 report.

Futures for February delivery jumped 2.1 percent to settle at $1,700.10 today on the Comex in New York. That’s the highest closing price since Dec. 9.


Roubini: Europe Needs 'Massive Monetary Easing'

Europe needs "massive monetary easing" to get out of its debt crisis, otherwise Greece will likely abandon the euro in a year and a half, famous economist Nouriel Roubini told CNBC on Wednesday.

Private creditors who lent Greece money, such as banks and investment funds, are meeting in Paris after talks on a debt swap that would change shorter maturity Greek bonds for longer maturity ones to give the country more chances to reduce its debt were inconclusive last week and earlier this week.

"Greece is going to be the first country to restructure its debt, I don't think it's going to be the last one," Roubini told CNBC in an interview at the World Economic Forum in Davos.

Without swift measures, Greece may be the first country to leave the euro zone, the economist, who has the reputation of correctly predicting the financial crisis that hit in 2007, said.

The European Central Bank needs to act swiftly with "massive monetary easing" to prevent the crisis from deepening and austerity measures must be reined in, according to Roubini, in whose opinion the euro needs to be 20 percent or even 30 percent weaker to help the euro zone economies.

"There's a severe recession in the periphery of the euro zone," he said. "Less austerity, more growth, that's what the euro zone needs today."

'No Real Decoupling'

The issue of whether or not to raise taxes in the U.S. will be an important one in the presidential election campaign as the American economy is threatened by slowing world growth and recession in parts, Roubini also said.

"There is no real decoupling… there is a recession right now in the periphery euro zone," he said.

"There's a recession throughout Europe, US growth is very anemic. There is a slowdown right now in China," Roubini added.


Peter Schiff The Real State of the Union

Soros: Germany’s austerity push could destroy EU

Germany’s role as the fiscal taskmaster for Europe will create tensions that could destroy the eurozone, billionaire investor George Soros said Wednesday.

Soros said the European Central Bank’s efforts to boost liquidity has helped the banking system, but did little for the highly-indebted members of the union.

“It leaves the weaker members of the eurozone relegated to the status of third world countries that became highly indebted in a foreign currency,” Soros said in remarks at the World Economic Forum in Davos, Switzerland.

But ‘instead of the IMF, Germany is acting as the taskmaster imposing fiscal discipline,” he said. “This will generate tensions that could destroy the European Union.”

Earlier Wednesday German Chancellor Angela Merkel urged the eurozone to reject “unfounded” stereotypes about a domineering, dogmatic Germany.

She has been lampooned as a Nazi and a dominatrix in newspaper cartoons and protest banners across Europe, but above all in Greece, for demanding fiscal discipline as a condition for international aid during the two-year-old euro debt crisis.

“There are lazy Germans and hard-working Germans, left-wing Germans and conservative ones. There are those who support competitiveness and those who want redistribution. Germany is just as varied as the rest of Europe. We should bury the old stereotypes,” said the conservative German leader.

But Merkel also stressed that Berlin does not have unlimited resources to bail out the debt-ridden eurozone.

Soros’s idea is to allow Italy and Spain to refinance their debt by issuing treasury bills at around 1%, a plan he calls complicated, but “legally and technically sound.”

He said he is not accusing Germans of acting in bad faith, but it is impossible for all countries in the union to be like them. “In a closed system like the euro-clearing system, creditors must always be balanced by debtors.”

“It is Germany that dictates European policy because at times of crisis the creditors are in the driver’s seat. The trouble is that the austerity that Germany wants to impose will push Europe into a deflationary debt spiral. Reducing the budget deficit will put both wages and profits under downward pressure, the economy will contract and tax revenues will fall. So the debt burden, which is a ratio of the accumulated debt to the GDP, will actually rise, requiring further budget cuts, and setting in motion a vicious circle.

“The fact that an unattainable target is being imposed creates a very dangerous political dynamic. Instead of bringing the member countries closer together it will drive them to mutual recriminations. There is a real danger that the euro will undermine the political cohesion of the European Union.”

Financial Post

Bernanke has "finger on trigger" for money-pumping

(Reuters) - The Federal Reserve has moved closer to embarking on a new round of its controversial money-pumping after the central bank and its chairman Ben Bernanke highlighted a grim outlook for the U.S. economy.

Bernanke on Wednesday opened the door a bit wider for the Fed to return to buying securities in the months ahead to buttress a weak recovery and keep inflation from slipping too far below its newly adopted 2-percent target.

"It sounds like the finger is on the trigger," said Thomas Simons, a money market economist at Jefferies & Co.

The Fed's announcement that it was unlikely to raise interest rates until at least late 2014, more than a year beyond its previous guidance, immediately pushed down Treasury bond yields and Bernanke's comments to the media raised expectations of a further round of so-called quantitative easing, or QE3.

It remains to be seen if the potential political backlash proves too daunting.

The prospect of the Fed pumping yet more money into the U.S. economy was seized upon by Republican hopeful Newt Gingrich to slam President Barack Obama's record. That highlighted the political pitfalls for the Fed in an election year.

Barring an unexpected pick-up in inflation or the U.S. economy suddenly kicking into a higher gear, Bernanke said it was logical that the Fed should look at ways to do more to help.

"The framework makes very clear that we need to be thinking about ways to provide further stimulus if we don't get improvement in the pace of recovery and a normalization of inflation," he told a quarterly news conference.

"Probably the main take-away from the press conference is the sense conveyed by Bernanke that it would not take much of a disappointment in growth or inflation to get the Fed to start another round of QE," said Michael Feroli, chief U.S. economist at J.P. Morgan.

"In fact, from his answers it's not even clear any disappointment would be necessary to see more QE," Feroli wrote in a note, adding he was not forecasting another round of asset purchases even if the bar for action was low.

The Fed in late 2008 slashed interest rates to near zero and has since bought $2.3 trillion (1.46 trillion pounds) in long-term securities in an unprecedented drive to spur growth and revive the economy after the worst recession in decades.

Yet the recovery has been slow and the outlook issued by the Fed on Wednesday was bleak.

Merkel deflects calls for bigger euro zone rescue fund

(Reuters) - German Chancellor Angela Merkel deflected pressure on Wednesday to increase the euro zone's rescue fund, saying the key to reassuring markets was to restore lost trust in governments' policies.

Delivering the keynote address to the annual World Economic Forum meeting in Davos, Merkel questioned the rationale of those in financial markets, governments and the IMF who were pressing Berlin to put more money on the table, but did not rule it out.

International Monetary Fund Managing Director Christine Lagarde called in Berlin this week for the 17-nation currency bloc's financial firewall to be effectively doubled by combining a temporary and a permanent rescue fund to reach 1 trillion euros.

"Now they say... 'it should be twice as big'," Merkel said.

"'If it were twice as big, we'd believe you'. Some say 'it should even be three times as big, then we'd really believe you.' And I always ask myself how long is that credible and when is that no longer credible.

"What we don't want (in Germany) is a situation in which we promise something we can't back up in the end because if Germany... promises something that can't be kept if markets attack it hard, then Europe is really vulnerable."

EU officials say they expect Berlin to agree in March to let the existing European Financial Stability Facility, which still has about 250 billion euros in uncommitted funds, and the future 500 billion euro European Stability Mechanism to run in parallel.

Merkel did not comment on that idea but said Europe had to work to rebuild market trust through stricter enforcement of more binding fiscal rules and reforms to make their economies more competitive.

"Confidence has been lost because one said 'they've promised something that they didn't deliver on'," she said. "Confidence is the most important currency that one can have worldwide at the moment."

She said she was convinced the euro zone would overcome the two-year-old sovereign debt crisis and emerge as a more attractive place to invest.

The German leader set out a long-term vision of a more federal European Union, in which she said she expected almost all member states to join the euro.

"We will have to get used to the fact that the European Commission, which already has lots of competences, will become more and more like a government," Merkel said.

This was already a familiar pattern to Germans, who had a division of labour between federal and regional state powers.

"We will have a rather stronger European Parliament, the heads of state and government will function a bit like a second chamber, and the European Court of Justice will be uphold the rule of law," she added.