Earlier this year, then German President Horst Kohler provoked a storm of controversy when he said that MILITARY DEPLOYMENTS WERE NECESSARY TO PROTECT GERMAN ECONOMIC INTERESTS. His remarks, made during a trip to Afghanistan, triggered consternation and sharp criticism in the media. Ultimately, he resigned as a result. Now German Defense Minister Karl-Theodor zu Guttenberg has echoed those sentiments.

Speaking at a security conference in Berlin on Tuesday, Guttenberg said that GERMANY SHOULD BE PREPARED TO USE ITS MILITARY TO SECURE TRADE ROUTES, for example against piracy. "We in our country must really do something to articulate the relationship between regional security and economic interests without coming to deadlock," Guttenberg said. COMMENTING ON KOHLER'S DECISION TO STEP DOWN IN MAY, THE MINISTER SAID: "I ASK MYSELF TO THIS DAY WHAT WAS SO AUDACIOUS ABOUT HIS COMMENTS."

Piracy around the Horn of Africa has posed a threat to the commercial interests of many nations, including Germany. Guttenberg described this as "not just a side note, but a serious challenge to our economic performance, one to be taken seriously."

The plan concocted by South Korean organizers of the G-20 summit is cunning. Anything negotiators fail to agree on before the start of the actual G-20 summit on Thursday night in Seoul will be left off the table when the world leaders assemble. Anything! But please don't be upset. This summit, after all, is the first of its kind in an Asian country, and from a South Korean perspective it needs to be a major success. For now, though, success looks very far off.

The global leaders are expected to finally pave the way for new equity capital rules for banks through the Basel III proposal and the reform of the International Monetary Fund. But the progress in the financial market regulations and the staged harmony won't be able to cover over the fact that a shadow is hanging over this summit.

At the height of the financial crisis, this club of the most powerful industrialized nations presented itself as a body that would close ranks and react swiftly to distortions in world markets. Now that the economy has recovered in many areas, though, the pressure to cooperate is sinking and egoism seems on the rise. Instead of unity and resolve, the order of the day is distrust and bickering. Disputes over issues like global disparities in trade balances, or alleged currency manipulation, or unfair competitive advantages have marked this year's summit, and at the heart of the conflict are the United States, China and Germany.

"If they don't consume, and they just bet on exports, the world will go into bankruptcy," he told reporters as leaders at the Group of 20 industrial and developing nations headed into a two-day summit in the South Korean capital.

He also called for continued dialogue between Christians and Muslims and said this should be accompanied by mutual recognition of "the freedom to practice one's religion in private and in public." The 83-year-old pontiff also praised Christians who stood up to their persecutors. "I express my gratitude to all the Christian Churches who do not capitulate before obstacles and persecutions because of the Gospel," he said.

The comments, contained in Benedict's written conclusions to a 2008 Synod of bishops in Rome, follow the recent targeting of Christians in attacks in Baghdad. Forty-four Christian worshippers and two priests were killed in an attack on a church service in Baghdad by Islamist gunmen on October 31 and the ensuing shootout when it was stormed by troops, while bombings killed six people and wounded 33 this week.

"All religions should encourage the correct use of reason and promote ethical values to build civil coexistence," Benedict said. "Religions can never justify intolerance and war." He called on political leaders to "guarantee to all the freedom of conscience and religion, and of being able to bear public witness to their own faith."

* Tory HQ attacked as demonstration spirals out of control

* 35 arrested and 14 injured in violent clashes at Millbank

* Police admit being caught out by scale of student action

Tonight both ministers and protesters acknowledged that the demonstration - by far the largest and most dramatic yet in response to the government's austerity measures - was "just the beginning" of public anger over cuts. Police, meanwhile, were criticised for failing to anticipate the scale of the disorder.

An estimated 52,000 people, according to the National Union of Students, marched through central London to display their anger over government plans to increase tuition fees while cutting state funding for university teaching. A wing of the protest turned violent as around 200 people stormed 30 Millbank, the central London building that is home to Tory HQ, where police wielding batons clashed with a crowd hurling placard sticks, eggs and some bottles. Demonstrators shattered windows and waved anarchist flags from the roof of the building, while masked activists traded punches with police to chants of "Tory scum".

Police conceded that they had failed to anticipate the level of violence from protesters who trashed the lobby of the Millbank building. Missiles including a fire extinguisher were thrown from the roof and clashes saw 14 people - a mix of officers and protesters - taken to hospital and 35 arrests. Sir Paul Stephenson, Met police commissioner, said the force should have anticipated the level ofviolence better. He said: "It's not acceptable. It's an embarrassment for London and for us."

"The Atlantic is getting wider," said Anton Boerner, head of Germany's Foreign Trade Association, who spoke of a "creeping alienation" between America and Europe, which has been exacerbated by the global financial crisis. Germany and the United States often criticize each other's approaches to aiding economic recovery, with US calls for more expansive policy falling on deaf ears in fiscally disciplined Germany. But Berlin has taken the rhetoric to a new level.

Finance Minister Wolfgang Schauble, 68, said last week that the US Federal Reserve decision to buy $600 billion of government bonds undermined US credibility and was "clueless." There was no point, he said, in pumping money into the markets.

China and Brazil were among those echoing his comments but US officials were particularly stung by Schauble and German Economy Minister Rainer Bruederle saying the Fed move amounted to "indirect manipulation" of the dollar to boost exports; this at a time when Washington is criticizing China for exactly the same kind of strategy. "It's not acceptable for the Americans to criticize China for currency manipulation then slyly help the dollar by printing at the Federal Reserve," Schauble told Der Spiegel magazine.

Simon Green, a history professor at Aston University in Britain, said the Americans' quantitative easing was a "red flag" to the Germans with their historic fear of inflation. Germany has made a painful effort to get competitive in the past decade of slow growth and stagnant wages and is unhappy to see "the Americans saying 'let's throw on the press, print money and get competitive that way,'" said Green.

For two years, Ireland had poured money on a raging banking crisis, to no avail. Each estimate of the rising price of rescuing Ireland's banks turned out too low. Mr Lenihan needed to halt the drip-drip of bad news that was leading his country to ruin. "I want a final figure ASAP," he told the group. Two weeks later, the estimate came in: Up to 50 billion euros - nearly $50,000 for every household in the Emerald Isle.

But now, investors are betting the bill could be higher still and could reignite Europe's sovereign-debt crisis. The unpopular government is bracing for collapse, and on Tuesday, Irish government bonds continued a week-long slide to a fresh record low. The debt is judged as risky as Greece's was this spring just before that nation begged for a European Union bailout.

Mr Lenihan, racing to ease those fears, proposed Thursday shrinking the country's 2011 budget by 6 billion euros. Proportionally, that's as if the US suddenly eliminated the Defense Department. Ireland's troubles are Europe's. The 16 euro-zone countries have agreed to guarantee up to 440 billion euros in loans if any among them is unable to borrow from private markets.

Clinton made the announcement in a joint video conference with Palestinian Prime Minister Salam Fayyad, who has been scrambling to fill a huge projected budget hole as his government expands services in expectation of full eventual statehood.

Ahead of the meeting US President Barack Obama urged leaders to work together for global economic recovery. He earlier said the US would seek to create jobs and reduce global trade imbalances. Washington has blamed these in part on Beijing's alleged manipulation of its currency to help boost Chinese exports, which has led to Beijing amassing huge foreign reserves.

Others, however, say America's economic policies, specifically creating new money to pursue quantitative easing (QE), could also be a form of currency manipulation for its own ends. Speaking to the BBC, the president of the World Bank, Robert Zoellick, said there were "definitely tensions" over currency. "One has to be wary of the tensions because you don't want them to slip into PROTECTIONISM," he said.

Accused of forcing the dollar down to trade its way back to prosperity, Mr Obama is due to hold one-on-one talks with two of the strongest critics of his administration's economic direction - Chinese President Hu Jintao and German Chancellor Angela Merkel. "We all now recognize that the foundation for a strong and durable recovery will not materialize if American households stop saving and go back to spending based on borrowing."

During and after the financial crisis, world leaders huddled close, staring together over the precipice. With the danger of an immediate plunge over, they began jostling, and are now pushing. But the cliff edge is still there. Critics, especially in the US, have called for tariffs on Chinese imports unless the yuan is allowed to appreciate. It is feared that other countries will rush to allow currency devaluation to also make their exports more competitive.

Even before the Federal Reserve announced the latest round of quantitative easing, the price of oil has been going up and the price of food has been going up. Now that the Federal Reserve has announced plans to flood the economy with hundreds of billions more dollars, the inflation monster is going to get even hungrier. The household budgets of scores of American families are going to be stretched beyond the breaking point as prices rise.

Meanwhile, the vast majority of US employers will not be giving their workers raises to keep up with inflation. After all, why should they? If someone wants to quit there are hordes of unemployed Americans out there who would just love to take that job in a second.

Quantitative easing is being heralded as the solution to America's economic problems, but for hard working middle class Americans it is only going to make things worse. Inflation is going to soar while wages are going to stagnate at best. This will mean a lower standard of living for average Americans. The kind of "trickle down" economics that the Federal Reserve is trying to play does not work in 2010.

The advocates of quantitative easing believe that by flooding the financial system with massive amounts of new money, banks will eventually start lending it out to average Americans and that will spark an increase in economic activity. But that is not the way the game is played in 2010. What happened with the bailouts and what happened with the last round of quantitative easing is that the big financial institutions took most of that cash and used it to pump up speculative bubbles all over the globe.

We are entering a time that is going to be very difficult on most American families. Many are going to really have to tighten their belts to make it through this. Many others are simply not going to make it and will need our help.

The "good times" that we have been experiencing in America for decades are about to come to an end. All of the debt and all of the greed are catching up with us. A devastating financial collapse is coming and you had better get ready.

Full article:- http://endoftheamericandream.com/archives/the-price-of-oil-is-going-up-the-price-of-food-is-going-up-and-now-here-comes-quantitative-easing

Outside, a crowd of thousands surged as placards and banners were set on fire and missiles were thrown. Student leaders condemned the violence as "despicable". They say about 50,000 people took part in a march through Westminster earlier. A stand-off is still taking place between about two dozen demonstrators and the police, with 32 people having been arrested so far.

One of the protesters who got on to the roof was Manchester student Emily Parks. "It shows how angry people are," she told BBC News. "Why is our education being cut? Why are tuition fees going up here when in other parts people have free education? People have felt the need to take matters into their own hands."

Among the crowds at the rally in London were about 400 students from Oxford. Oxford University Student Union President David Barclay said: "This is the day a generation of politicians learn that though they might forget their promises, students won't.

The figure has come to light in a study by the German finance ministry to uncover its crimes while the Nazis were in power, from 1933 until 1945. Hans-Peter Ullmann, a Cologne University history professor who is heading the three-year investigation, said that under the Nazis the tax authorities 'actively worked to destroy Jews financially'.

Tax laws discriminated against Jews from 1934, while some who managed to leave Germany before the Holocaust had much of their wealth confiscated through an 'exit tax'. Nazi officials seized and sold the property of Jews who left or were sent to extermination camps, both in Germany and in the nations conquered during the Second World War.

Professor Ullmann said: 'Conservatively, their money financed at least 30 per cent of the German war effort.'

And it coincides with a rebellion on the Tory backbenches, expected tonight, over controversial changes to the Lisbon Treaty - signed up to by Mr Cameron. The European Court of Auditors yesterday challenged the EU to get a grip on its spending after finding 'material errors' in last year's 88 billion pounds budget. Its president, Vitor Manuel da Silva Caldeira, said about 5 per cent of the budget - some 4 billion pounds - was spent wrongly.

The biggest examples of waste were in agriculture, development aid and fisheries. Auditors found that EU farm subsidies had been handed over to subsidise crops without any proof they were being grown. They visited farmland and found no evidence of cultivation at all. Stephen Booth, analyst at the Open Europe think tank, said: 'This is a hugely embarrassing annual tradition and it remains absolutely unacceptable.'

Deputies drafting a final statement to be released after the Group of 20 summit concludes on Friday remained far apart on pivotal issues, including currency exchange rates, G20 spokesman Kim Yoon Kyung said on Wednesday. "We had to open the door because the debate was so animated and the room was getting hot," he said.

G20 leaders had hoped this week's gathering, the fifth since the financial crisis exploded in 2008, would mark the beginning of a new era of global cooperation. Hosts South Korea printed banners proclaiming a slogan of "Shared Growth Beyond Crisis." But the unity forged in crisis has given way to sometimes-competing national policies that reflect a multi-speed recovery from the recession, prompting critics to question the effectiveness of the G20 grouping itself.

The US Federal Reserve's decision last week to spend another $600 billion on government bond purchases has drawn reproaches from four continents and intensified the G20 debate over how best to bolster the global economic recovery and avoid another financial crisis. Critics charge that the Fed ignored global repercussions - namely a weaker dollar and a flood of cheap cash that could find its way into emerging markets - and violated the cooperative spirit the G20 has worked hard to sustain.

Kim, the G20 spokesman, said 40 to 50 deputies were crammed into a small room for a 14-hour session on Tuesday, and voices were raised when they discussed a framework for balanced growth that G20 leaders hope will be a cornerstone of the summit.

The nonpartisan Legislative Analyst's Office, in a recent report titled "California's Other Budget Deficit," said the state will probably need to raise unemployment taxes on employers as well as reduce benefits to bring the fund back in balance.

But pressure is growing on Sacramento to fix the system soon - whether it wants to or not. California has borrowed about $8.5 billion from the federal government to keep benefits flowing, and the repayment obligations are coming due.

"The longer we go without a fix, the bigger the hole becomes," said Loree Levy, a spokeswoman for the Employment Development Department, which doles out the benefits. She said the US government is scheduled to bill the state about $362 million in interest next year. The Legislature would have to find the money somewhere to pay it; it wouldn't be allowed to dip into the unemployment fund, she said.