It was nonsense then and remains so today. There is no Euro crisis, the end of the world as we know it is not imminent - unless Angela Merkel and Nicholas Sarkozy pull off their sinister scheme for full European fiscal union on the back of what is nothing more than an entirely contrived and artificial crisis. If Monti expected to walk on to the world stage and win the Oscar for fiscal probity, then he has been rudely disappointed.

Perhaps, but I have strong doubts if that is the real story. Something really big is cooking which may lead to A TOTAL REVOLUTION IN THE USE OF MONEY - first in Italy, then across Europe - buried away in the small print of the fabulous austerity project, which we examine in a moment. My impression is that the Monti cabinet is charged with nothing less than a massive laboratory experiment performed on real live people to see if it is actually possible to effectively demonetize an entire nation. Let me explain what I mean.

A few days back I put up a post warning that fiscal fascism might well take as its first priority THE ELIMINATION OF READY CASH FOR THE VAST MAJORITY OF ITALIANS. Behold, it has come to pass: The Monti administration proposes to outlaw any transactions in excess of 1,000 euros that are performed in cash. Well, it's not so much of a proposal as a diktat which comes into immediate effect. The prime minister is a former advisor to Goldman Sachs, which as we all know is to Bilderberg what the sun is to our solar system.

A constant goal of Goldman Sachs (aka Wall Street, the ECB and the City of London) IS TO CONTROL AS MUCH AS POSSIBLE OF ALL MONEY IN FREE CIRCULATION. Since banks circulate electronic money, this leaves only one alternative possibility for reflation. And that of course is the money in the form of notes and coins which passes between ordinary individuals and their daily activities. Capture that and there is no need for the bankers to bother with reflating their balance sheets by using money borrowed from the markets, or each other, at inordinate interest rates.

I have made the point already that the Monti administration looks very much like a trial run in itself for future outings in like style elsewhere in Europe, and possibly even the United States, Canada, Australia and New Zealand. For the moment we have an experiment in demonetization which as far as I can see has no modern precedents in the capitalist world. Demonetization, assuming that it survives the initial hurdles, has significant social consequences. IT EFFECTIVELY LICENSES ACCESS TO READY CASH. It acts as a form of social manipulation because of the intimacy between banks, the international financial oligarchy and large powerful bodies such as the European Union. It is part of the unfolding destruction of civil liberties and private freedoms that flowed from 9/11.

IT MEANS THAT THE BANKS CAN, EFFECTIVELY, OWN AND EVEN CONFISCATE PRIVATE EARNINGS AND DEPOSITS. Of course seizing control of cash transactions will also avoid the drastic run on the banks which is now occurring in the Bilderberg/Goldman Sachs province called Greece. What is happening in Italy, and will shortly be copied in Greece, is part and parcel of the Sarkozy-Merkel project of MANUFACTURING AN ARTIFICIAL CRISIS IN ORDER TO ENFORCE FULL FISCAL UNITY ON THE EUROPEAN CONTINENT.

In the end, that is all about the digitalization of money, the second kick-in from the demonetization process. Real money will cease to exist as a tangible presence in your pocket or purse. Instead you will have something like a pocket phone to make every transaction, no matter how small, like a beer or a coffee in a bar. YOU CAN RECHARGE - AS YOU ARE PERMITTED - BY THE CENTRALIZED COMPUTER.

Isaac Asimov (science fiction writer) must be looking down on all this with abject fascination.

US officials have acknowledged the loss of the unmanned plane, saying it had malfunctioned. However, Iranian officials say its forces electronically hijacked the drone and steered it to the ground. BBC security correspondent Frank Gardner says the intact condition of the Sentinel tends to support their claim. Iran's Press TV said that the Iranian army's "electronic warfare unit" brought down the drone on 4 December as it was flying over the city of Kashmar, about 140 miles (225km) from the Afghan border.

High-flying and hard to detect, America's RQ-170 Sentinel plane is the perfect stealth drone for peering into another country's secret sites without being caught. One was used in May to feed back live footage of the US Navy Seal raid on Osama Bin Laden's compound in Pakistan. So it is probably not the sort of hardware the CIA would ever like to fall into the hands of the Iranian Revolutionary Guards Corps.

Opinion is divided on how the drone fell into "the wrong hands" and indeed what it was doing inside Iran. But speculation is rife that this particular aircraft was flying deep inside Iran to gather intelligence and real-time video footage of Iran's nuclear sites. This affair is both a political embarrassment and an intelligence setback for Washington.

The Escudo and the Peseta would fall by 50%, and the Lira and the Punt by 25%. Germany would suffer a "deflationary shock". The whole eurozone would crash into depression, with a GDP contraction of around 9% in 2012 - Germany (-7.4), France (-9.1), Portugal (-12.7), Greece (-13.1). Outside: UK (-5), Poland (-6.6), US (-0.2), Japan (-1.1). The price of oil would drop to $55 a barrel. The US would flirt with deflation. The contraction would continue into 2013, before gradually stabilizing.

"Events of the past year have proved beyond doubt that the Eurozone is far from a textbook 'optimal currency area'. But this is an omelette that cannot readily be unscrambled ," said ING's Mark Cliffe. Oddly enough, I lunched with Mr Cliffe days before the ERM blew up in September 1992, so this all has a funny feel to me. His report is less dire than a UBS note predicting a 50% collapse in peripheral GDP, and 20% to 25% in the core, but it still begs the question:

If the intra-EMU currency misalignment is so extreme that free floats would cut Greece by 80%, and Spain by 50%, it surely validates the eurosceptic argument that monetary union has become a preposterous and unworkable arrangement. It will take hideous contortions to hold the system together for year after year if ING is close to right on these numbers, with perma-slump, endless austerity, and ever greater macro-economic absurdities, so why persist? Be that as it may, ING's Mr Cliffe does not agree with those who think the D-Mark will soar against the dollar after a break-up, mimicking the Swiss franc. It will be sucked down by depression and mayhem.

The report does not address the proposal of ex-BDI chief Hans-Olaf Henkel: that Germany and the Kaisertreu should leave EMU to the Latins, orchestrating an orderly North-South divorce. Many readers point out that this would be impossible to carry out. The moment anybody got whiff of such planning, there would be an instant run on the banks and sovereign debt of the southern bloc. So yes, those readers are right. Even German withdrawal would be absolutely bloody. There is no clean way out of this.

The question is which do you prefer: a horrible end, or endless horror?

Millions of Egyptians have flocked to the polls in recent days to elect parliamentary representatives, whose primary role is to appoint a special body tasked with drawing up Egypt's first post-Mubarak constitution. But after initial results indicated that political Islamists will form a majority in the new chamber, the military has moved swiftly to rein in their powers and ensure its own well entrenched political and economic privileges remain intact under any future civilian government.

In a rare interview with foreign media, Major General Mokhtar el-Mulla - a leading member of Scaf - said the upcoming parliament would not be representative of all Egyptian people, and that those appointed to write a fresh constitution must also be approved by the interim cabinet and a newly-created "advisory council" of intellectuals, civilian politicians and media personalities, both of which fall under the control of Scaf.

"This is the first stage in our democracy," said Mulla, who also insisted that details of the army budget must remain shielded from democratic oversight, even after the generals return to their barracks. "In the future, parliament may have the ability to do whatever it likes. However at the moment, given the unstable situation, parliament is not representing all the Egyptian people."

"This is not out of mistrust of the parliament," he continued. "What we are seeing is free and fair elections ...but they certainly don't represent all sectors of society."

That's really the key to understanding the German psychology on the euro. In America, we keep asking why they don't join with the European Central Bank to end the run on the European periphery. The answer is simple: they don't want to end the run on the European periphery. To them, the run on Italy and Greece and Portugal and Spain is a feature, not a bug. It's leverage, and they want to use it. Look how much it has already gotten them. Greece, Portugal, Italy and Ireland are working their way through stringent deficit-reduction plans.

The widely disliked governments of Greece and Italy, which proved unequal to the task of fiscal reform, have been toppled. There is a good chance that the euro zone might become what Germany has always wanted it to be: a fiscal union, in which the members meet their deficit targets and reform their labor markets. And none of this would have happened without the markets making their run at the European periphery.

So to understand the German position, look at it from their perspective: Why in the world would Germany let up the pressure now? When they're so close to amending the very treaty underlying the euro zone? When France has joined with them on a set of reforms? When the market is doing what the Germans never could? I worry this makes the Germans sound like puppetmasters. They're not. Many of their intended reforms are very sensible. The flaws they point to in the euro zone are, indeed, deep, structural flaws in the euro zone. They do envision a future that includes sacrifice on their part: eurobonds that raise Germany's cost of borrowing and a bailout fund - excuse me, a fiscal stabilization fund - that they contribute heavily to.

So my concern isn't that the Germans are selfish and calculating. It's that, without quite realizing it, they have become reckless. They are trying to time the market, betting that they can, in essence, manage the run - that they can do just enough to keep the pressure on without letting matters get totally out of hand. They are like a doctor who, faced with an unhealthy patient presenting signs of a heart attack, demands to see the patient lose weight before they will administer the life-saving treatment.

In almost all of their arguments, the Germans are right. The euro does need to be fixed. But first it needs to be saved. The Germans are betting that this is their opportunity to do both. If they're right, it will have been a remarkable play. If they're wrong, it will have been a disastrous one.

His sinister warning followed the emergence of a secret German plan to build a powerful new economic government for the eurozone and block an EU referendum in Britain. A leaked German foreign ministry memo detailed plans for a new European Monetary Fund. It also claimed the EU's treaty could be altered to centralise more power without triggering a vote. In a further sign of growing German supremacy within the EU, David Cameron was yesterday rebuffed by Chancellor Angela Merkel in talks over how to tackle the euro crisis.

Last night British opponents of the EU were horrified by the bellicose threat to Britain's economic independence. Tory MP Peter Bone said: "I would be happy to have a bet with the German finance minister that the euro will disappear before the pound. It is a completely absurd suggestion that will never happen." Fellow Tory backbencher Douglas Carswell said: "It is a tragedy that a continent of millions of hard-working people is run by clowns like this." And UK Independence Party leader Nigel Farage said: "This German bullying is deeply unpleasant and the sooner we leave the EU the better."

Dr Schauble, who has used a wheelchair since being shot in an assassination attempt in 1990, is nicknamed "Dr Strangelove" in diplomatic circles. In his astonishing outburst yesterday, he insisted he "respected" Britain's decision to remain outside the euro. But he claimed that the UK would ultimately not be able to resist the tide of history. His warning came amid a furious outpouring of anti-British sentiment in Berlin. Top-selling newspaper Bild asked: "What is England still doing in the EU?" while another paper branded Britain "the sick empire".

Dr Schauble's remarks came before the frosty meeting between Mr Cameron and Mrs Merkel in Berlin yesterday. The German Chancellor rejected outright Mr Cameron's opposition to a new EU-wide financial tax that would have a devastating impact on the City of London. And she refused to be persuaded by his call for the European Central Bank to support the euro. Money markets took a dip after their failure to agree.

Last night a YouGov poll for Prospect magazine showed 51 per cent of Britons would vote to leave the EU in a referendum while only 32 per cent would vote to stay in.

After meeting in Paris, they announced that an unprecedented bilateral agreement between the two countries will be sent to the President of the European Council, Herman Van Rompuy, on Wednesday. It will then be discussed at an EU-wide summit on Friday, with a view to officials drafting the new treaty and putting it to all the nations of Europe. But although both Mrs Merkel and Mr Sarkozy said they wanted all 27 European Union countries - including Britain - to sign up, they made clear the 17 eurozone members would simply go ahead on their own anyway.

Mrs Merkel said: "It's a historic choice. We had decades of terrible war and 70 years of peace - we need to understand each other and accept our differences. This is proof of our absolute determination that the stability of the euro is preserved. We have come to a close agreement, there is close cooperation between France and Germany."

"The objective is not that either country does better than the other but that the euro emerges stronger and that there is less unemployment. The future must be of convergence and co-operation. We need to be a solid union that will have its place in the world in the future." Mr Sarkozy added: "We want to make sure that the imbalances which led to the situation in the euro zone today cannot happen again. Therefore we want a new treaty, to make clear to the peoples of Europe, members of Europe and members of the eurozone, that things cannot continue as they are."

Owen Paterson, the Northern Ireland Secretary, broke ranks by declaring that backing a more integrated eurozone would make it "inevitable" that the Prime Minister would have to give voters a say. Boris Johnson, the London Mayor, said Mr Cameron would have "absolutely no choice" but to hold a referendum. EU leaders were "in danger of saving the cancer and not the patient", he said. Mr Cameron also suffered embarrassment in the Commons as his backbenchers repeatedly challenged his European strategy, telling him to fight harder to win back powers from Brussels. Ed Miliband, the Labour leader, mocked the Prime Minister for failing to deliver on promises.

Mr Cameron travels to Brussels on Thursday for a summit on plans to resolve the eurozone debt crisis with a treaty that further integrates the fiscal systems of countries using the single currency. Despite warnings that failure to agree a deal will lead to a catastrophic loss of confidence in financial markets, some European officials were pessimistic, suggesting that big decisions could be postponed. France and Germany have said a treaty should be finalised by March. Paris and Berlin yesterday circulated a proposal for fiscal union that also suggests a tax on financial transactions between banks within the eurozone.

The US government has called for a swift resolution to the crisis, and President Barack Obama is understood to have discussed the summit with Mr Cameron yesterday. Germany yesterday dismissed Mr Cameron's claim for concessions. A senior official insisted that non-eurozone countries had no grounds for concessions because the treaty changes would not affect them. "Nothing has been proposed that involves new treaty obligations for Britain so I cannot see what the big issue is," the official said. "We don't want a solution when that solution leads to demands from others to reopen treaties."

In a tactic designed to isolate Britain and split the 10 non-eurozone EU members, Angela Merkel and Nicolas Sarkozy yesterday invited the 23 members of a "Euro Plus" economic pact to monthly summits. The move, which splits non-euro countries such as Poland, Sweden and Denmark away from Britain, will lead to decisions on broader economic policy being taken without British involvement.

Former German finance minister Peer Steinbruck, also of the SPD, spoke of a "provocation" and urged the European Commission to subject the rating agencies to "far stricter regulation." The current German economics minister, Philipp Rosler of the ostensibly pro-free market Free Democratic Party (FDP), employed somewhat more measured tones, stiffly commenting, "Germany will not let itself to be impressed by the day-to-day and very short-lived judgment of a single ratings agency."

But it was Rosler's colleague Rainer Bruderle who had perhaps the most extreme reaction. Bruderle is the chair of the FDP group in the German Bundestag. "I am no fan of conspiracy theories," Bruderle told the German business daily Handelsblatt, "But sometimes it is hard to avoid the impression that some American ratings agencies and fund managers are working against the euro zone." The observation is particularly odd in the present circumstances, given that Standard and Poor's is the same ratings agency that in August of this year already did downgrade the credit rating of the United States from AAA to AA+.

German officials said reaching a deal would be "difficult" as US Treasury Secretary Timothy Geithner pressed Europe for decisive action to tackle the crisis and US President Barack Obama spoke to German Chancellor Angela Merkel. "Europe is not out of the crisis. The risk of an explosion abounds as long as the decisions taken with Angela Merkel are not implemented," Sarkozy told lawmakers from his ruling UMP party, according to a participant in the meeting. US stocks erased losses in the last hour of trade Wednesday to end mostly higher, but European stocks and the euro slid as pessimism set in.

On Monday, Sarkozy and the German chancellor announced comprehensive reform plans for the eurozone, having called for changes to the 27-member EU treaty to improve a eurozone framework generally seen as defective almost 10 years after the common currency was introduced. Merkel and Sarkozy sent a letter to EU president Herman Van Rompuy on Wednesday to outline their plans for "reinforced governance" of the eurozone "to ensure budget discipline as well as stronger growth and increased competitiveness."

They proposed a "new, common legal framework" to boost financial and labour market regulation, the harmonisation of the corporate tax base and the imposition of a tax on financial transactions. In London, Prime Minister David Cameron said in parliament Wednesday that if Britain is asked to back a new EU treaty to breathe new life into the euro, he intended to exact a high price in return. "The more that countries in the eurozone ask for, the more we will ask for in return," he said.

Cameron also repeated his threat to veto any treaty change if Britain fails to receive "safeguards" from its European partners, particularly for the City of London financial services hub.

This week's summit, where leaders will consider ways to improve budget discipline and tighten economic union, is seen as crucial to efforts to stop the debt contagion threatening the eurozone and to salvage the embattled single currency.

The remains of hundreds of Los Angeles County residents whose bodies were never claimed by family or friends were buried in a mass burial Wednesday. He said the 1,639 people designated for the mass interment at the Los Angeles County Crematory and Cemetery "are individuals that, for one reason or another, have no one but the county to provide them with a respectful and dignified burial."

Knabe described some of the deceased as homeless or poor, many of whom with "no families to grieve for them". "Regardless of what their status in life was, each one of their lives matters," he said. "It matters to us, their county family."

Two years on, Van Rompuy is still a conundrum to many. But as the continent gropes this week for a solution to its worst economic crisis since World War Two, the unassuming Belgian has been thrust into one of the most demanding diplomatic missions of recent decades. While many expected his office to be largely ceremonial, he has been charged with brokering a grand bargain among those who hold the bloc's fate in their hands: the 27 countries of the European Union and in particular the 17 that share the single currency.

To his critics, Van Rompuy is a grey intellectual, lacking in the kind of take-charge dynamism the moment demands, a symbol of all that is wrong with Europe. To his admirers, he is reason to hope: a smart and thoughtful leader who grasps the gravity of the crisis and is perfectly placed to smooth egos and negotiate a solution.

Van Rompuy, 64, said he sees his role as "neither a spectator, nor a dictator, but a facilitator". To some ears, that may sound like a parody of eurospeak. But in an institution whose very existence was built on compromise, his role is crucial. Van Rompuy faces what is probably his most challenging test this Thursday and Friday, December 8-9, when EU leaders gather for a summit on the sovereign debt crisis that in the past two years has consumed Greece, Ireland and Portugal, cast a shadow over far larger economies and now threatens the very survival of the currency union.

For many years, until his workload became too heavy, Van Rompuy spent a day or two every year on retreat at Affligem Abbey, an 11th-century Benedictine monastery northwest of Brussels. There he would read, write and pray with the monks, 17 of whom still reside inside its imposing red-brick walls. Brother George, the monk in charge of visitors and the nearby gift shop, describes Van Rompuy as someone who fit naturally into the pastoral surroundings, enjoying the calm of the monastery's library and eating in silence in the austere, vaulted-ceiling refectory. "He's almost a monk," said Brother George with a shrug. "It's special to have him, but he is himself. He's a very calm, down-to-earth man."

Cameron writes that: "Clearly, we will need to look at the right safeguards for Britain in the light of what is proposed. Our colleagues in the EU need to know that we will not agree to a treaty change that fails to protect our interests". He adds that "Our requirements will be practical and focused. But eurozone countries should not mistake this for any lack of steel."

Cameron acknowledges that the result might be that the 17 eurozone countries may opt for a separate agreement, adding that: "Some have argued that a treaty of the 17 would be more effective if it were applied through the various institutions of the EU such as the European Court of Justice and the Commission. But these institutions belong to all EU states and their use outside the treaty of the 27 would clearly require safeguards." He concludes by arguing that: "I have spoken about a Europe that has the flexibility of a network, not the rigidity of a bloc... A Europe that cherishes its national identities as a source of strength."

FTD notes that Cameron's stance means that tomorrow's summit could be marked by a "violent dispute" over the issue, given that the German government considers such demands to be "unaccomplishable", quoting a member of the negotiating team as saying that: "If the British were to find an exit clause from the regulation of financial markets, then proper regulation in Europe would no longer be possible". Le Monde reports that in case it is not possible to reach an agreement at 27, Merkel and Sarkozy will push for an inter-governmental agreement among the 17 eurozone states to be ratified by mid-March.

The federal government, the state governments and local governments are cramming thousands upon thousands of new ridiculous regulations down our throats each year. It would take a full team of lawyers just to even try to stay informed about all of these new regulations. Small business in the United States is literally being suffocated by red tape. We like to think that we live in "the land of the free", but the truth is that our lives and our businesses are actually tightly constrained by millions of rules and regulations. Today there is a "license" for just about every business activity. In fact, in some areas of the country today you need a "degree" and multiple "licenses" before you can even submit an application for permission to start certain businesses. And if you want to actually hire some people for your business, the paperwork nightmare gets far worse.

It is a wonder that anyone in America is still willing to start a business from scratch and hire employees. The truth is that the business environment in the United States is now so incredibly toxic that millions of Americans have simply given up and don't even try to work within the system anymore. Today, the US government has an "alphabet agency" for just about everything. The nanny state feels like it has to watch, track and tightly control virtually everything that we do. The Federal Register is the main source of regulations for US government agencies. In 1936, the number of pages in the Federal Register was about 2,600. Today, the Federal Register is over 80,000 pages long. That is just one example of how bad things have gotten.

But it is not just the federal government that is ramming thousands of ridiculous regulations down our throats. The truth is that in many cases state and local governments are far worse. We have become a nation that is run and dominated by bureaucrats. Yes, there always must be rules in a society, but we have gotten to the point where there are so many millions of rules that the game has become unplayable.

The following are 12 examples of ridiculous regulations that are almost too bizarre to believe....

http://www.businessinsider.com/ridiculous-regulations-big-government-2010-11?slop=1#1-private-investigators-license-1

Treasury Secretary Timothy Geithner, on a whistle-stop tour of Europe to lobby for action, voiced confidence in a Franco-German plan to overhaul the European Union's treaty to tighten budget discipline. "I have a lot of confidence in what the president of France and the minister are doing, working with Germany to build a stronger Europe," Geithner told reporters after talks with French Finance Minister Francois Baroin.

French President Nicolas Sarkozy and German Chancellor Angela Merkel will lay out their plan at Friday's EU summit to impose mandatory penalties on euro states that exceed deficit targets, with the aim of restoring market trust and preventing the region's debt crisis spiraling out of control. Figures released on Wednesday showed just how urgently some European banks need help.

Italian banks had to borrow 153.2 billion euros in emergency liquidity from the ECB in November, up from 111.3 billion euros at the end of October, Bank of Italy data showed, another big leap in reliance on the central bank which has almost quadrupled since June, when Italian lenders took 41.3 billion euros. Euro zone banks took more than $50 billion in the ECB's first dollar funding operation since the world's leading central banks agreed last week to cut their cost, five times the $10 billion forecast in a Reuters poll of money market traders.