COMING ECONOMIC CRISIS: Western consumers give vote of no confidence, Eastern manufacturers give evidence of lower exports, Russian rouble shows resilience, Greek leader offers strong resistance

alexisMounting negative data suggests it’s nearly over for the neoliberal nonsense; Greek crisis gets closer to Call My Bluff.

Hopes that UK growth would rebound strongly in Q2 2015 were crushed today after new data showed Britain’s manufacturing sector growing more slowly “than expected”. I’d still like to know who these expectant folks are, but either way it’s just another piece slotting into the jigsaw I call Osborne’s Little Con.

More of these little signs contradicting the Big Lies have been leaking out over the last few days. For example, US wages are up more than expected month on month: but spending is less than expected. This tells us that the American consumer remains wary of the hype. And we also read that MOM price indices there show a drop from 0.2% to 0.0%. And what do two noughts mean? Two noughts mean deflation’s just around the corner.

Across the Pacific, these data are uncannily reflected by those from Japan. QE on amphetamines isn’t cutting it for the land of the Rising Sun: last Friday’s consumption data showed household spending slumped in April – and consumer inflation was roughly flat, casting doubt on the central bank’s forecast for a slow but steady economic recovery.

But other bigger signs are at the barrage-balloon Dayglo typeface size compared to such stuff. Activity in China’s manufacturing sector shrank for a third consecutive month as today’s latest data showed Beijing unable to break out of deceleration. In particular, the new exports index fell to 46.7, a low unseen since mid 2013….and way below April’s 50.3.

Qu Hongbin, an economist at HSBC in Hong Kong, said the data called for “more stimulus measures to stoke domestic demand and economic growth”. Qu must be another blind believer in QE. Maybe he should change his name by deed-poll to Qe Hongkong.

The fact is that China’s slowdown reflects the West’s still unexited slump. And in the West, the Greek debt saga remains the Cup Final with 22 replays. In the last 24 hours, however, my view is that this particular situation has worsened quite considerably….for the euro.

Out of his self-locked closet at last, Greek Prime Minister Alexis Tsipras is showing genuine signs of really wanting to tell it like it is. In a Le Monde article yesterday, no punches were pulled….as this extract shows:

‘The lack of agreement so far is not due to an alleged inexorable, intransigent and incomprehensible attitude from Greece but rather the persistence of certain institutional actors in continuing to submit absurd proposals showing no awareness of the recent democratic choice of the Greek people….this suggests a complete abolition of democracy in Europe. It means ultimately the authority to create a technocratic monster, leading to a Europe totally alien to its founding values….For those countries that refuse to bow to the new power the solution is simple: Harsh punishment. Mandatory austerity, even more restrictions on the movement of capital, disciplinary sanctions, fines, and even parallel currency. A new European power will be built at the expense of member States, and the first victim is to be Greece. If, however, anyone imagines that this decision concerns only Greece, they’re making a massive error. I would suggest such people reread Hemingway’s masterpiece: “For whom the bell tolls”’.

I agree with every word. We shall now see whether the Troikanauts will cave….or resort to some major calumny as per the Soviets in 1968 against Dubcek’s Czechoslovakia.

And talking of Russians, at 6.40 am CET today, the Russian Central Bank announced that it had decided to stop holding its one-year foreign exchange repo auctions. The Rouble slumped on the news – prety much what Moscow wanted, given that its policymakers have been concerned not to let the Rouble get out of control, and thus damage Russian exports.

With any currency, there’s a need to support it when its core credibility is in doubt, but then let it do its own thing once the crisis has passed in order to remain export-competitive.

But for me, there is a salutory tale for the West in this. Cast your minds back to a month ago, and the concerted effort by Anglo-Saxon media to suggest that Russia was about to buckle, and Putin’s position as its leader was in doubt. It simply didn’t happen: the US attempt to destroy Russia through oil-price manipulation has failed, its arms supplies to anti-Russian Ukraine forces have failed to stop a rout there, and the Rouble has come through without having to call upon Chinese support. The Russian economy is still far from healthy….but then, one can say the same about that of the eurozone.

The next step in the US/State Department/CIA/Pentagon destabilisation process may well come in Macedonia, where both European and Russian leaders are monitoring ongoing American interference very closely. And the reasoning behind such a move remains the same: to break any chance of Russian oil pipelines holding Western Europe to ransom. Once again, the geopolitics of energy remain paramount in the Washington mindset.

Earlier at The Slog: BANKS DISHONEST, GOVERNMENTS DESPICABLE, US MIDEAST POLICIES DISLOYAL

24 thoughts on “COMING ECONOMIC CRISIS: Western consumers give vote of no confidence, Eastern manufacturers give evidence of lower exports, Russian rouble shows resilience, Greek leader offers strong resistance

  1. The Troikanauts won’t cave, Goldman Sachs is already touting the concept of a new Government in Greece. If the Troikanauts were to cave then they would have to cave for Spain, Portugal, Italy et al. Thought for a small minute that this time it might get exciting but, it won’t..

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  2. Tsipras is about to have an ‘Admiral Byng’ moment, though the German for ‘pour encourager les autres’ escapes me. Then all hell will break loose.

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  3. www,informationclearinghouse.info

    Many articles, including Putin bluntly says US has boosted ISIS.

    We live in truly interesting times.

    John Doran.

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  4. ‘Call My Bluff’ – that was a great show. Are stammers allowed on TV these days? I don’t know, never watch the box these days:

    He’s bluffing … it’s a cross between zebu and yak, bred to provide meat and milk. Of course, to Da Yoof! of today, it could have several meanings, from peacenik to homeless zombie, to the sound of bouncing boobs on a trick turning circus cat:

    http://www.urbandictionary.com/define.php?term=Zobo

    Couldn’t find the Zobo Funn Band, unfortunately. Did find this …

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  5. I thought that Tsipras was more like that lad in the tale of The Emperor’s New Clothes. He’s doing a good job of pointing out that the Emperor, as well as being naked, is not very well blessed … it being uncommon cold and all.

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  6. How, as I posted earlier, is it possible that Germany can now deny Greece the very same relief from austerity which they themselves were granted under the London Agreement back in 1953, i.e. 50% of their debt totally cancelled with extended payments on the remainder? That Greece was a party to the the original debt forgiveness only compounds Merkel’s absolute hypocrisy. Can she not see that Greece can never pay back its debts under the present conditions and that it is better to give it the chance to pay something rather than force it into bankruptcy and get nothing, never mind the utterly intolerable and immoral burden that they are imposing on the general Greek population?

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  7. This piece has “suggested” mentioned a few times,neoliberal guessing & when it fails again it will be didn’t hit expected target,all pie in the sky guess work,but if you fall foul of these bad guesses,your harassed for the false payment or bag the riches of these bad guesswork.that’s all flat earth economics is

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  8. Italy just gave the Northern League a record vote. just who do you think these troika nauts are?? there is already a rift between the IMF and Brussels And If Merkel is not now quietly but firmly pushing the Idea of a German Exit from the Euro then she is sitiing on the fence waiting for someone else to do it. And it seems like Drahgi has not opened his mouth in a week? So Tsiparis can afford to play brinksmanship because who is gonna dare call him??

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  9. ZeroHedge printed the costs of Greek Default (from Barclays, I think):

    Now I calculate with 45M voters, that is €2000 per German voter – and similar amounts for France etc. Fudge is cheaper.

    As for “pour encourager les autres” – I think that if a Grexit were to occur, and Euro membership were to be shown no longer to be a one way street, then the markets would turn on the other PIIGS long before any anti-austerity party looks like being elected. It will all be academic.

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  10. Something like ‘um den anderen zu ermutigen’ – though I’m not convinced the average Hermann could really get his head around the concept. Over here, tradition tends more towards direct personal Zwingenhaft (force detetention) and other forms of liberty deprivation. So, in whose pokey are they likely to put him – does the Trika even have access to one?

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  11. John, oh dear, reference “anglo saxon” not good, you have been in France too long………home to a all new record unemployment (as of today), can you not report on the dire state of the state of France? When slagging off everyone but la France it really is difficult to take you seriously. Even Greece is more productive.
    I love France, its socialist system to take care of people, like the sdf’s in Paris, the beggars outside nearly every Lidl, like the poor sods who’s faces no longer fit and as such are deported at the drop of a hat, like its over priced toll roads, like its xenophobic institutions, the overpaid civil servants, the bankrupt banks, the overbearing business taxes, the charming gendarmes, URSAFF, your favourite CPAM, etc etc etc…..you see I have been there done that and got the tee-shirt. When slagging off Britain, live in Britain.
    I am currently in Britain and yes its a shit hole, greed around each and every corner, But its a shit hole that works, the Anglo Saxons work, they are inventors, not lazy sods who take two hours for lunch every day, close on a Sunday, close on a Monday, sometimes close on a Wednesday afternoon, because the kids don’t have school and sometimes just for the sod of it close on a Friday afternoon too. Where estate agents take up to 8% commission on a sale, where the pharmacies are state controlled to make sure the cost of everyday drugs are overpriced to maintain their beautiful premises, where the best building in town is the mayors…….sod the rest. Its a socialist wet dream that is slowly becoming a night of incontinence on a bed pan.
    Tell it how it is, do not be suppressed by the French system, it is virtually communism in flow.

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  12. ‘How, as I posted earlier, is it possible that Germany can now deny Greece the very same relief from austerity which they themselves were granted under the London Agreement back in 1953’

    You think the Germans are behind it all? Are you aware that Germany has not been a sovereign nation since 08 May 1945? The so-called 2+4 treaty from the early 90s changed nothing on that status. The guilty ones are the puppeteers pulling the strings of Merkel, Schäuble et.al. When we take into account the mineral and oil deposits the Greeks have in their part of the Med you may have one guess at who the perpetrators are.

    Bearing in mind that the German media is still under control of the Allies, and expected to remain so until 2099, the Hermanns, being the simple folk they are, tend to believe whatever is dished up in them. This is slowly changing (the PEGIDA battlecry of ‘Lügenpresse’, for example, sales figures for newspapers and periodicals in free-fall), but it will be a while until it goes mainstream. Actually, for as long as bier & wurst is readily available, not a lot will happen – and then watch out!

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  13. Viking Jack

    America hasn’t been a sovereign country since the Fed was privatized in 1913. Nathan Rothschild: I care not, what puppet monarch runs.the Empire. I control the money. I control the Empire. He still does, or his spawn does.

    Head of the Zionists. But first to be gobbled up when the Reptillians get peckish! .

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  14. America started a rumble with the rouble but it was all rhubarb; now, as Europe rumbas with the numbers, we wait to see if the jig’s up in Berlin. Strictly Gone Printing meets The Ministry of Silly Walks. (As far as the euro goes, is QE friend or enema?)

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  15. Speaking of attempts to destabilse Russia …..

    I see the United Wahhabi Americans have now taken direct military control of ISIS (CIASIS?). http://www.zerohedge.com/news/2015-05-29/us-trained-special-forces-chief-joins-isis-vows-bring-jihad-russia-america

    They have sent in one of their pet, wahhabi terrorists, an elite special forces commander from Tajikistan, to organise terrorist attacks against Russia. Probable the Caucasus.

    Hopefully this will destroy any business Britain had, or was planning, with the whole of Asia, BRICS, UNASUR, ALBA or the entire middle east.

    Ably assisted by the usual clique of british traitors who have assisted our ‘speshul friends’ in asset stripping everything of value in this country.

    For a price.

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  16. The economy is certainly not recovering. In fact, it’s going backwards, and quite rapidly. I live in a northern semi-rural area with a very high number of small firms and self-employed. About 10 years ago, hourly rates for gardeners sky-rocketed and for some time you could not get a gardener for under around £20 / hour. Two years ago I employed a gardener for a full days’ work for all the jobs I can no longer do and he charged £12.50 / hour. Just this week I’ve had a leaflet through the door offering basic gardening work at £6.50 / hour. I can’t speak for the quality of his / her work, but if enough people are prepared to work at National Minimum Wage levels, it will certainly further depress the economy.

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  17. RAW
    Type ‘FRance’ into the Slog search engine, and there’s enough reading there to keep you going until Christmas about what a mess France is in.

    I wish people wouldn’t assume, read my mind, and think the search engine is there for ME to use.

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