	Generational Dynamics
	Forecasting America's Destiny ... and the World's

\| HOME \| WEB LOG \| COUNTRY WIKI \| COMMENT \| FORUM \| DOWNLOADS \| ABOUT \|

Generational Dynamics Web Log for 1-Nov-2011
1-Nov-11 World View -- China seeks to set up military bases in Pakistan

Web Log - November, 2011

1-Nov-11 World View -- China seeks to set up military bases in Pakistan

Euro bailout deal unravels as Italy's bond yields soar

This morning's key headlines from GenerationalDynamics.com.

* Euro bailout deal unravels as Italy's bond yields soar
* Greece will hold a referendum on the euro bailout deal
* Greece's opposition parties accuse Papandreou of blackmail
* Italy's bond yields (interest rates) rise above 6%
* Financial crisis is creating two conflicting Europes
* FAQ on Europe's EFSF bailout fund
* Islamic Jihad threatens Hamas in Gaza
* China seeks to set up military bases in Pakistan

Euro bailout deal unravels as Italy's bond yields soar

Italy's Finance Minister Giulio Tremonti, left, and Prime Minister Silvio Berlusconi (AFP)

Italy's Finance Minister Giulio Tremonti, left, and Prime Minister Silvio Berlusconi (AFP)

A major union rally is planned for Saturday in Rome to protest the austerity measures of Italy's Premier Silvio Berlusconi, including measures to raise the retirement age, and to allow union members to be fired more easily. Berlusconi is scheduled to go before Parliament on Nov. 9 and Nov. 10 to present "the commitments made with Europe and the measures for growth." The fate of these measures is crucial to the entire eurozone and the bailout plan, because Italy has the eurozone's third largest economy, and there's not enough money available to bail Italy out. AP

Greece will hold a referendum on the euro bailout deal

Greece's Prime Minister George Papandreou surprised European officials on Monday by announcing a national referendum on whether to accept the euro bailout deal. Papandreou, apparently disgusted by the fact that Greeks have the contradictory desires of rejecting the deal but remaining on the euro currency, said "The command of the Greek people will bind us. Do they want to adopt the new deal, or reject it? If the Greek people do not want it, it will not be adopted." The referendum announcement has caused European officials to be concerned, because a rejection of the euro deal would mean that Greece would go into default, and the euro bailout plan would collapse. Telegraph

Greece's opposition parties accuse Papandreou of blackmail

Opponents of the Socialist party's Prime Minister George Papandreou are rejecting the call for a Greek referendum on accepting the bailout deal. The opposition at both ends of the spectrum -- the conservatives and the communists -- are demanding that Papandreou call for new elections, rather than a referendum. According to the conservative New Democracy leader, "Mr Papandreou is dangerous. He has tossed Greece’s future in Europe in the air like a coin." According to the Communist party leader, "No to the blatant blackmail and the ideological terrorization of the people." If this referendum goes through, it's going to be very interesting. Kathimerini

Italy's bond yields (interest rates) rise above 6%

Italy's 10-year bond yield at 6.129%

Italy's 10-year bond yield at 6.129%

Long time readers have seen many graphs like the one on the right -- except that those were for Greece. So if you remember those graphs, then you know the drill. Italy's 10-year bond yields went above 6% on Monday, meaning that if Italy wants to borrow money, then they have to agree to pay over 6% interest, which is not sustainable. And it's even worse than that, because you'll recall from the graphs for Greece that the yields keep rising, month after month. Each increase in interest rate makes it less and less likely that the country will avoid default, which means that investors will demand even higher interest rates, so a vicious spiral occurs. It's not an exaggeration to say that Italy was foremost in the minds of the politicians last week, as they came up with their crazy Rube Goldberg bailout scheme that they announced at 4 am. Usually when they announce one of these screwy plans, the euphoria lasts a few weeks. But now, only four days later, the markets are saying that the euphoria is already over. According to one analyst, "The latest deal to resolve the euro-debt crisis is grandiose in its scope but limited in its details. Italian bond yields are telling us that the market is not confident that the summit will draw a line under the crisis. They are saying the market still sees scope for bailout contagion and Italy is the next" in line. Bloomberg

Financial crisis is creating two conflicting Europes

The recent negotiations over the euro bailout plan were bitter for many reasons, not the least of which is that the 10 non-euro EU nations, led by Britain, are complaining that they're excluded from participating in decisions by the 17 eurozone nations, even though those decisions affect all 27 EU nations. The split between the non-euro and euro nations is growing, and Germany, the country that pays most of the money, is making most of the decisions. However, the eurozone itself is bitterly divided. In particularly Germany has to live with the Mediterranean counties -- which have a strong presence in the euro zone -- which have a tendency to favor state-run industrial policy and protectionism, unlike Germany. Spiegel

FAQ on Europe's EFSF bailout fund

For those who want to delve more deeply into the €440 billion European Financial Stability Facility (EFSF), this PDF file from the EFSF organization itself will provide answers. efsf.europa.eu

Islamic Jihad threatens Hamas in Gaza

The flare-up in violence between Gaza and Israel for the last few days is part of the general destabilization of Gaza and southern Israel brought about by the chaos in the Sinai Peninsula following the Arab Spring, partly as an effect of internal Egyptian instability and partly due to a massive inflow of arms from Libya. Islamic Jihad, which was responsible for the barrage of missiles from Gaza into Israel, is displacing Hamas as the dominant militant group in Gaza especially given the fact that dozens of disgruntled Hamas members are reported to have defected to Islamic Jihad. Asia Times

China seeks to set up military bases in Pakistan

China is demanding that Pakistan allow China to build military bases in the Pakistan tribal areas, where they would be facing U.S. forces, and in the disputed Kashmir/Jammu regions, where they would be facing Indian forces. China is placing a higher priority on these bases over a Pakistan request that China build a naval base in the strategically important Gwadar port, where it would undermine Indian naval dominance in the region. Chinese troops also took part in a Pakistani military exercise which was held along the Indian border in August. Memri

(Comments: For reader comments, questions and discussion, see the 1-Nov-11 World View -- China seeks to set up military bases in Pakistan thread of the Generational Dynamics forum. Comments may be posted anonymously.) (1-Nov-2011) Permanent Link
Receive daily World View columns by e-mail
Donate to Generational Dynamics via PayPal

Web Log Pages

Current Web Log

Generational Dynamics Web Log for 1-Nov-2011 1-Nov-11 World View -- China seeks to set up military bases in Pakistan

Euro bailout deal unravels as Italy's bond yields soar

Greece will hold a referendum on the euro bailout deal

Greece's opposition parties accuse Papandreou of blackmail

Italy's bond yields (interest rates) rise above 6%

Financial crisis is creating two conflicting Europes

FAQ on Europe's EFSF bailout fund

Islamic Jihad threatens Hamas in Gaza

China seeks to set up military bases in Pakistan

Web Log Pages

Generational Dynamics Web Log for 1-Nov-2011
1-Nov-11 World View -- China seeks to set up military bases in Pakistan