Fernando Fuster-Fabra's Blog

2012: ANNUS HORRIBILIS?

January 2, 2012
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Even the best theory is worthless while it isn’t tested and works.

–       Fernando Fuster-Fabra


Versión española: http://wp.me/pRlnf-5y

The recently concluded year should be considered a horrible year for this world in convulsion. We have not cleared through crisis nor has peace been attained the various live fronts nor were the promises made by the North American president each day more absorbed with his re-election bid been kept. On top of all, the developed and supposedly civilized world has permitted the savage hunt of the terrorist, Osama Bin Laden and the brutal beating of Muammar el Gaddafi, the dictator.

Could there be a worst year than last year?

I’m afraid yes. In the offing for 2012 is not only an economically difficult year but also a politically turbulent one.

World leaders insist on thinking in the same mode as when they created this problem; precisely what Albert Einstein advised against when he was forced to abandon his native Germany just before the outbreak of World War II.

Barack Obama no longer thinks about the rest of the world but only on how to hold on tight to his power seat at the White House Oval Office.

Nicholas Sarkozy is in a similar frame of mind, with his own dilemma of holding on to power in neighbouring France; so he may grow up his little daughter in the Élysée.

Angela Merkel has more time left till 2013 to manoeuvre. That is what she is precisely doing, plotting in the name of 27 states subjected to her whims and obsessions on the European public deficit to save the Euro.

For David Cameron, his tantrum at the last European Council did him very little good. Whilst in disagreement with the Merkozy tandem, he is condemned to remain in the EU fold if he does not wish to sail alone in the recession waters that threaten us today.

What can I say about the Brussels bureaucrats? Neither Durao Barroso nor Van Rompuy has sufficient power to challenge the water-downed German version of the “Iron Lady” of the ‘80s. In all probability, other un-elected top notches like Mario Draghi at the ECB or Mario Monti from Italia end up with more power. With Papademos, they form the ‘Goldman Sachs triumvirate’ in the power seats in the EU.

In Spain, in spite of Mariano Rajoy’s victory by majority, it seems evident that he who governs is far away from La Moncloa, instructions being dictated on what to do at each instant.

It is worth observing how the majority of those in power have decided rather theoretical actions, assuming these will be the panacea that will cure all world evil. Meanwhile, practice in the past century has demonstrated that they are rowing counter-current, and I would add, in the wrong direction of an unequivocal solution to the problem.

Not only is the effect of a recession being felt and announced without any qualms to what the market reactions may be but likewise we are forewarned from these seats of globalised power that “either the austerity sacrifices are accepted or watch out for the consequences”.

All in all, it sounds grisly but above all the situation lacks a democratic imprint.

Not even events such as the Olympic Games 2012 in London can make us think than we are in any year other than an annus horribilis.    

Fernando Fuster-Fabra

Barcelona    

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G-20 TORONTO SUMMIT: LAST CHANCE TO SEE THE CRISIS FROM ANOTHER ANGLE

June 23, 2010
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Spanish Version              http://wp.me/pRlnf-1a


After a futile Busan meeting of economic ministers earlier this month, hopes of progress and consensus amongst world leaders at the G-20 Summit are scarce.  One inevitable question crops up – Are these government leaders governing their nations and the world for the citizens that elected them or for the financial markets that sway their fragile decisions?

Just as Obama was about to take over at the White House and Spain was first invited into the group, the G-20 met in Washington D.C. under a retreating George Bush. Two other summits, London https://fernandofusterfabra.wordpress.com/2009/04/19/hello-world/ & Pittsburgh https://fernandofusterfabra.wordpress.com/2009/09/26/the-pittsburgh-summit-the-world’s-future/ , have been held since then with practically the same futile results. Chances are that the Toronto summit will be more along the same line.

Whilst the USA has flirted with China in what was dubbed ‘G-2 formula’, the EU has been incapable of having a solid single stance towards international economic policies in the successive summits. Furthermore, the White House is cautious about withdrawing public expenditure hastily meanwhile recovery is hardly convincing. On the contrary, German chancellor, Angela Merkel, has whipped other EU leaders with French President Sarkozy’s consent towards drastic public debt cutbacks in the 27-member club. This opposed views will make it difficult to come to a common ground in the truly indispensible actions G-20 leaders must take without further delay.

Canada’s Prime Minister and summit host, Stephen Harper, is precisely against the only common point between US and European leaders – the levy on bank operations. His posture will probably be used by other leaders from emerging economies to delay any actions that may endanger their respective growth rates. However, this very growth may well be the cause of economic overheating in Brazil, China and India that could put any recovery in serious trouble. Harper, who boasts of Canada´s economy y banking solvency seems to forget that he heads a nations that has steadily lost relevance in worlds affairs and whose banks are too conservative to be a reference as institutions for the New Millennium.

Moreover, China may have apparently made a concession to the USA with regards the Yuan but it would prove naive to consider such tactical move as a definite trend towards Chinese permanent cooperation in all economic and political international issues. On the contrary, this move may well be countered by a rather steadfast stand against any of the US–EU proposal at the Toronto summit.

In a similar manner, Brazil’s outgoing President, Lula Da Silva, in an effort to impress Brazilian electors and assure his proposed successor’s victory will probably play a hard-line strategy against US proposals.

I feel that world leaders continue being incapable to think big https://fernandofusterfabra.wordpress.com/2009/12/29/world-leaders-uncapable-to-think-big/ nor are they creative enough to view the crisis issue from another angle. It is evident that the G-20 meet must start off by recognising the main cause of this sneaky situation. No solutions will ever be effective if free-trade and globalisation isn’t governed by global financial & investment regulations agreed by world leaders and implemented under strict authorized international supervisors. The care-free ways of liberal monetary flows has been unleashed for three decades to produce the existing crisis that may well pervade another decade or so.

Is any world leader brave enough to put the warning bell leash on the market’s unscrupulous misdoings?

Fernando Fuster-Fabra

Barcelona


ANGLO-SAXON BUCCANEER PRESS AIDS 21ST. CENTURY FINANCIAL PIRATES

February 28, 2010
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It is no paranoia but each day that passes it becomes a more established fact that vested interests acting as 21st. century pirates are behind all the attacks on the Euro.

Ever since The Economist, Financial Times & WSJ lambasted Spain’s Prime Minister Rodríguez Zapatero last January, the markets have been watchful of the Euro and those members of the Eurogroup (Portugal, Italy, Greece & Spain)  mentioned as “PIGS”; thus commenced a well planned offensive by no less than first-line hedge funds and CDS swap holders.

By comparing Spanish economy to that of Greece, the buccaneer British & American press were preparing the groundwork to link Greece’s dilemma with Spain. Further pressure was applied at Davos, with no less that Roubini making his interested statements to cast more than a shadow of a doubt upon the unemployment burdened Spanish economy.

In truth, it is unbelievable that markets can be so naive to fall for recommendations from economists like Roubini or investors such as Soros, who are directly implicated in investments schemes of their own or act as liaisons for influential investments funds. The investment advisors with such personal investment interests will never favour the small fry unless you play within their own investment funds. Even then, Soros (Soros Fund Management) and his sort reserve the best classified information only for their “select group of friends”.

Such seems to be what was brewing in that top-level New York dinner-meeting of hedge fund promoters a month ago (February 8th.). Availing of Greece’s possible public debt default, like vulgar scavengers, all set their eyes in weakening the Euro against the U.S. Dollar, in order to rake in fabulous profits in short-selling & CDS operations (practice that caused Lehman Brother’s bankruptcy)  that would not only alter currency exchange equilibrium but likewise destabilise stock exchange markets.

In spite of said attack, the bet of a 1 to 1 ratio rate between the Euro and the U.S. Dollar has not been reached. Expected profits fell short of expectations. This can only mean that the buccaneer American & British press must press on till these financial pirates can reach their profit goal in this first quarter of 2010.

Fernando Fuster-Fabra, Madrid


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