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Generational Dynamics Web Log for 7-Sep-2011
7-Sep-11 World View -- Turkey threatens military confrontation with Israel in Mediterranean

Web Log - September, 2011

7-Sep-11 World View -- Turkey threatens military confrontation with Israel in Mediterranean

Switzerland takes the nuclear option to devalue the franc

This morning's key headlines from GenerationalDynamics.com.

* Turkey threatens military confrontation with Israel in Mediterranean
* Turkey's Erdogan may be backing off on threat to visit Gaza
* Postal Service announces $10 billion loss
* Germany's political turmoil threatens Greece's next bailout payment
* Switzerland takes the nuclear option to devalue the franc
* CDC discovers new cases of mutated swine flu

Turkey threatens military confrontation with Israel in Mediterranean

Recep Tayyip Erdogan

Recep Tayyip Erdogan

Turkey's Prime Minister Recep Tayyip Erdogan on Tuesday stepped up his retaliation for Israel's refusal to apologize for last year's "Freedom Flotilla" confrontation. Turkey has already expelled Israel’s ambassador and most diplomats. On Monday, Israeli passengers traveling through Istanbul were singled out for particularly harsh security measures. "Trade ties, military ties, regarding defense industry ties, we are completely suspending them. This process will be followed by different measures," said Erdogan. Turkey will also step up navy patrols in the eastern Mediterranean, and naval ships will accompany any future "Freedom Flotilla," to prevent what one official described as an Israeli "atrocity." Jerusalem Post

Turkey's Erdogan may be backing off on threat to visit Gaza

Turkey's Prime Minister Recep Tayyip Erdogan says that he will wait "until the last moment" to make a decision whether to visit the Gaza Strip during his official visit to Egypt on September 12-13. Egypt is reluctant to allow to cross into Gaza from Egypt because it would violate Egypt's agreements with Israel, and because it would put Erdogan's life in danger. Hurriyet (Ankara)

Postal Service announces $10 billion loss

The Postal Service will lose $10 billion in the fiscal year ending Sept. 30, more than an earlier $9 billion loss estimate, as mail volume drops 2% from last year. Mail volume has dropped 22% since 2006. The Postal Service is asking Congress to allow it to break union contracts the prohibit firing workers, to loosen requirements to pay now for future retirees' health benefits, and to end mail delivery on Saturdays. The Postal Service is proposing curring 39% of its work force by 2015, and closing numerous post offices. Bloomberg

Germany's political turmoil threatens Greece's next bailout payment

Greece's 2 year bond yields at 52.314%, versus 50.376% a day earlier

Greece's 2 year bond yields at 52.314%, versus 50.376% a day earlier

German Chancellor Angela Merkel is facing a rebellion within her own Christian Democrats party, after 25 MPs from her coalition voted against Merkel's position in a test vote. In an attempt to undercut the opposition, her finance minister Wolfgang Schäuble has vowed to halt the next bailout tranche to Greece, unless the country complies totally with the austerity demands -- referring to the fact that the Greeks have already admitted that they're far from meeting their 2011 commitments. On Wednesday, Germany's constitutional court will rule on the constitutionality of the EU bailouts. Wall Street Journal (Access) and Telegraph

Switzerland takes the nuclear option to devalue the franc

We've been reporting for several weeks that Switzerland has been losing its international competitiveness because the Swiss franc has been getting stronger and stronger. The franc has become a "safe haven" for investors who want to park their money somewhere safe, after they sell their stock market holdings. Before the 2008 credit crisis, one euro could buy you 1.65 Swiss francs, but in recent weeks, one euro could buy you little more than one franc. This has done a great deal of harm to Switzerland's tourist and export businesses. The Swiss National Bank (SNB) has tried flooding the currency markets with hundreds of billions of Swiss francs, to try to deflate the currency, to little or no avail. On Tuesday, the SNB issued the following statement:

"Swiss National Bank sets minimum exchange rate at CHF [Swiss franc] 1.20 per euro
The current massive overvaluation of the Swiss franc poses an acute threat to the Swiss economy and carries the risk of a deflationary development.
The Swiss National Bank (SNB) is therefore aiming for a substantial and sustained weakening of the Swiss franc. With immediate effect, it will no longer tolerate a EUR/CHF exchange rate below the minimum rate of CHF 1.20. The SNB will enforce this minimum rate with the utmost determination and is prepared to buy foreign currency in unlimited quantities.
Even at a rate of CHF 1.20 per euro, the Swiss franc is still high and should continue to weaken over time. If the economic outlook and deflationary risks so require, the SNB will take further measures."

In other words, the SNB will "print" an unlimited number of francs and use them to purchase euros, in order to devalue the franc. This ought to be an interesting experiment. Bloomberg and Swiss National Bank (PDF)

CDC discovers new cases of mutated swine flu

New cases of swine flu with genes from the pandemic 2009 H1N1 swine flu have been reported. The new cases this year are similar to an outbreak of a new H1N1 virus in California in April 2009 that later became a pandemic flu. But that doesn’t mean that this virus will follow the same path, according to the CDC. Consumer Reports

(Comments: For reader comments, questions and discussion, see the 7-Sep-11 World View -- Turkey threatens military confrontation with Israel in Mediterranean thread of the Generational Dynamics forum. Comments may be posted anonymously.) (7-Sep-2011) Permanent Link
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Generational Dynamics Web Log for 7-Sep-2011 7-Sep-11 World View -- Turkey threatens military confrontation with Israel in Mediterranean

Turkey threatens military confrontation with Israel in Mediterranean

Turkey's Erdogan may be backing off on threat to visit Gaza

Postal Service announces $10 billion loss

Germany's political turmoil threatens Greece's next bailout payment

Switzerland takes the nuclear option to devalue the franc

CDC discovers new cases of mutated swine flu

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Generational Dynamics Web Log for 7-Sep-2011
7-Sep-11 World View -- Turkey threatens military confrontation with Israel in Mediterranean