City analysts are forecasting that Bank of England policymakers will print more electronic money next year after the minutes of last month's central bank meeting revealed deep concern at the deteriorating economy and the eurozone debt crisis.
A collapse in consumer confidence this month, as well as figures published showing that the public finances were hit by a fall in corporation tax receipts, will add to the pressure on the Bank's monetary policy committee (MPC) to boost the £275bn of quantitative easing due to be completed early in the new year.
Minutes of the MPC's meeting this month showed that all nine policymakers saw little merit in an immediate increase in the purchase of assets such as government and corporate bonds, given uncertainty about the eurozone and the impact of quantitative easing.
However, some MPC members signalled their readiness to boost the economy further.
"Some members continued to note that the balance of risks to inflation in the November Inflation Report projections meant that a further expansion of the asset purchases programme might well become warranted in due course," the minutes said.
"Of those members, some thought that the outlook had deteriorated somewhat on the month," they said.
Inflation is expected to fall next year as the economy slows and further government spending cuts begin to bite.
Other members of the committee continued to see a risk of inflation falling more slowly than expected, noting continued strength in import and goods inflation.
Analysts said the minutes confirmed the view in financial markets that another cash injection was likely in February.
"They still have a dovish tone but the chances of a policy change in January have receded a little bit further after this, and our forecast is for more QE in February," said RBS economist Ross Walker.
With the government's hands tied by its pledge to balance the books, the central bank remains under pressure to support the economy.
The public finances appeared to improve in November after current receipts were 7.1% higher than the same month a year ago. But the Institute for Fiscal Studies said that expectations of an undershoot on the estimates of the Office for Budget Responsibility (OBR) were exaggerated.
It said: "While so far overall tax receipts are in line with the OBR forecast, there are risks around this. For example, despite a large downwards revision to their expectations for corporation tax receipts this year in the autumn forecast, meeting the OBR's projection still depends on strong growth in these receipts over the next four months, which would be a turnaround from the fall in receipts seen so far this year."
The Guardian
Any 2012 outlook you read these days (and there are plenty) will tell you pretty much the same thing: it all hinges on Europe.
“A break-up could trigger another great depression. There can be no doubt that policymakers now recognize this risk,” economists Stephen King, Karen Ward and Madhur Jha with HSBC Global Research, said in their 2012 outlook. “That is good news. However, despite signs of greater urgency to deal with the problem, investors remain mostly unconvinced.”
The parallels between the present crisis and the one in 2008, when the “wheels came off the global economy” the first time, concern the group. Forecasters failed to recognize the warning signs until it was too late, and the same may be true this time, they said.
“There are still plenty of downside risks, even assuming the euro’s survival,” they said.
HSBC forecasts weak global GDP growth of 1.9%, weakest since 2009 when the global economy contracted. This includes a stagnant 0.6% for the developed world while the emerging markets are expected to post a comparatively stronger 5.3% advance.
The global economic outlook, such as it is, still faces three major risks.
The first is what the economists call the financial system’s “black box”: the mysterious relationships between financial concepts such as interest rates, bond yields, credit spreads, quantitative easing and fiscal policy.
If, as in 2008, the entire financial system itself is vulnerable, then the already nebulous (at the best of times) connections between these disparate concepts will begin to morph and react in unpredictable and damaging ways.
“If investors continue to hunt for safety, stuffing money under the proverbial mattress, a major credit crunch could result,” they said.
Speaking of interconnectedness, the risks of global contagion have also increased. Many countries in Asia, Latin America and parts of Europe will be vulnerable as European banks sell off assets and pull their funds home in a bid to shore up their own bottom lines.
The biggest concern, however, is the seemingly continued and tortured paralysis among policymakers in both the European Union and the United States. Certainly, any market observer will agree that equities in 2011 have risen and fallen on every missive coming out of Capitol Hill or E.U. crisis meeting.
“The ‘madness of crowds’ is an all-too-familiar problem, which is typically dealt with through strong policy actions,” they said.
Problem is, much of the ammunition available to policymakers — interest rates, budget deficits, quantitative easing — was spent in 2008. This time, options are more limited.
And in the eurozone, the popular opinion now with fiscal austerity at hand and sovereign debts at critical levels, is for policymakers to finally confront the fundamental flaws at the foundation of the European Union.
“Eurozone policymakers recognize the scale of the problem but their struggles towards a solution are set to continue well into 2012,” the report said.
The Financial Post
The new regulations take effect March 1, 2012, and seem to resume a plan that was issued--then abandoned--slightly more than a year ago. That proposal, focused on prime-time TV programming, sparked mass protests by Cantonese speakers which led to the plan's quiet retraction.
Yet the current regulation will go much farther, requiring specific permits for all media to broadcast in Cantonese. Some local media are expressing doubt that existing programs will be affected, while speculating that Party authorities' real goal is to supply an additional means of keeping track of and potentially shutting down new media organizations.
Some locals are already speaking out, as did one freelance writer in Guangdong who spoke with NTD.
[Tian Li, Freelance Writer]:
"We can speak Mandarin outside, but will certainly speak Cantonese locally.
Their requirements are against people 's will, and simply unpopular. They will collapse faster this way."
NTDTV
Israel is moving forward with plans to hold the largest-ever missile defense exercise in its history this spring amid Iranian efforts to obtain nuclear weapons.
Last week, Lt.-Gen. Frank Gorenc, commander of the US’s Third Air Force based in Germany, visited Israel to finalize plans for the upcoming drill, expected to see the deployment of several thousand American soldiers in Israel.
The drill, which is unprecedented in its size, will include the establishment of US command posts in Israel and IDF command posts at EUCOM headquarters in Germany – with the ultimate goal of establishing joint task forces in the event of a large-scale conflict in the Middle East.
The US will also bring its THAAD (Terminal High Altitude Area Defense) and shipbased Aegis ballistic missile defense systems to Israel to simulate the interception of missile salvos against Israel.
The American systems will work in conjunction with Israel’s missile defense systems – the Arrow, Patriot and Iron Dome.
Gorenc came to Israel for talks with Brig.-Gen. Doron Gavish, commander of the Air Force’s Air Defense Division.
He toured one of the Iron Dome batteries in the South and the Israel Test Bed lab in Holon where the IAF holds its interception simulation exercises.
The IAF is planning to deploy a fourth battery of the Iron Dome counter-rocket system in the coming months and is mulling the possibility of stationing it in Haifa to protect oil refineries located there.
The Defense Ministry has allocated a budget to manufacture an additional three Iron Dome batteries by the end of 2012. IAF operational requirements call for the deployment of about a dozen batteries along Israel’s northern and southern borders.
The IAF is also moving forward with plans to deploy Rafael’s David’s Sling missile defense system, which is designed to defend against medium-range rockets and cruise missiles. Rafael recently completed a series of successful navigation and flight tests of the David’s Sling’s interceptor and plans to hold the first interception test by mid-2012.
Jerusalem Post
Restricting the number of calories you eat activates genes linked to longevity and keeps the brain functioning properly for longer, according to research on mice.
Low calorie diets have previously been shown by several animal studies to extend life, reduce the risk of dementia and disease and boost the memory but experts were unsure exactly how this happened.
Now a team of Italian scientists claims that eating fewer calories triggers a protein called CREB1, which turns on genes which are linked to a longer and healthier life.
The researchers, from the Catholic University of Sacred Heart in Rome, said their discovery could lead to new drugs which could keep the brain in a healthy, youthful state without the need for a restrictive diet.
Mice which are only permitted 70 per cent of the calories they would normally eat typically live a third longer than normal and demonstrate better memory and mental function.
They are also less likely to suffer from obesity or diabetes, slower to develop dementia and show less aggression.
In contrast having too rich a diet is thought to bring forward the brain ageing process and raise the risk of age-related diseases like Parkinson's and Alzheimer's.
According to the new study, published in the Proceedings of the National Academy of Sciences journal, eating fewer calories stimulates activates the CREB1 protein which in turn switches on sirtuins, molecules which are associated with longevity.
The finding backs up previous studies on CREB1, which is known to play a key role in a variety of processes in the brain including memory and learning.
Because CREB1 is weakened as we grow older, triggering it by eating less could help slow down the mental ageing process, scientists believe.
Researchers demonstrated that by limiting the amount of calories mice were able to eat, they could significantly boost the activity of CREB1 in the brain and reduce signs of ageing in the brain.
Genetically engineered mice in whom the molecule had been permanently deactivated did not get the same benefit from dieting, however.
Dr Giovambattista Pani, who led the research, said: "This discovery has important implications to develop future therapies to keep our brain young and prevent brain degeneration and the ageing process.
"Our hope is to find a way to activate CREB1, for example through new drugs, so to keep the brain young without the need of a strict diet."
The Telegraph
Russia will develop a new liquid-propellant intercontinental ballistic missile to overcome the U.S.’s prospective missile defense system, Strategic Missile Forces chief Lt. Gen. Sergei Karakayev said on Friday.
A decision has been made to create a new silo-launched heavy missile that will have “enhanced capability to breach a hypothetical US missile defense system,” he said.
The new missile will replace the Voyevoda R-36M2 Satan ICBM.
Russia’s solid-propellant ICBMs may be unable to penetrate missile defenses, the general said.
He also said the Strategic Missile Forces will test launch 11 ICBMs next year.
The United States is building a missile defense system in Europe to protect against possible attack from ‘rogue states’ such as Iran.
Karakayev said Iran has neither technology nor industrial potential to build ballistic missiles.
There have been media reports about test launches of Iranian intercontinental ballistic missiles but the SMF doubts these missiles will have the effective range to reach Europe, he said.
RIANOVOSTI
