IMF agrees $2.5bn for Belarus

Belarus has secured an emergency loan of $2.5bn (£1.74bn) from the International Monetary Fund.

It becomes the sixth country after Iceland, Hungary, Ukraine, Latvia, and Pakistan to need a rescue since the crisis began.

The ex-Soviet state – still run by strongman Alexander Lukashenko – has suffered a run on its foreign reserves as the economic downturn engulfs Eastern Europe. The country’s key exports are potash fertilizer and oil products, both hit hard by the commodity crash.

The IMF’s chief, Dominique Strauss-Kahn, said the tough terms of the bail-out include “strict public-sector wage restraint” and cuts in state spending. Russia has pledged a further $2bn.#

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Russia cuts gas to Ukraine over unpaid bills

Gazprom chief executive says full gas shipments to European Union will continue uninterrupted

Russia cut natural gas deliveries to Ukraine today after negotiations failed to resolve a dispute over unpaid bills and the price for supplies this year.

Gazprom, the Russian state-owned gas provider, lowered pressure at 7am GMT in pipelines to Ukraine which also carry in transit about 80% of Russian gas consumed by other countries in Europe.

Ukraine said yesterday that it had paid $1.5bn (£1bn) in debts for supplies in November and December but Gazprom said it had not received that money from RosUkrEnergo, an intermediary company. It is also demanding a further $600m in fines which Ukraine said it is not yet prepared to pay.

The last time exports were terminated – in January 2006 – there was an immediate impact elsewhere in Europe as Ukraine allegedly siphoned off gas meant for onward transit. But the Gazprom chief executive, Alexei Miller, said it would continue full shipments to the European Union, which gets about a quarter of its gas from the Russian company, most of it through pipelines that cross Ukraine.

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Cost for a single soldier to fight in Iraq or Afghanistan is about $775,000 per year

The U.S. military is now spending more – on a constant dollar basis – than it did in 1968, when the Defense Department had more than 500,000 soldiers stationed in South Vietnam. If you include the cost of the wars in Iraq and Afghanistan, then the U.S. military spent about $580 billion in 2007; that’s about 33 percent more – again, measured in constant (year 2000) dollars – than the United States spent in 1968. Even without the cost of those ongoing wars, America’s military spending is higher now than at any time since 1945.

A recent study by the Center for Strategic and Budgetary Analysis, a Washington-based think tank, provides yet more sobering numbers. The report, written by the CSBA’s Steven M. Kosiak, concludes that “since 2001, some $904 billion has been provided to cover the cost of US military operations. This includes some $687 billion for Iraq, $184 billion for Afghanistan and $33 billion for various homeland security activities.”

Read moreCost for a single soldier to fight in Iraq or Afghanistan is about $775,000 per year

Private firm may track all email and calls

‘Hellhouse’ of personal data will be created, warns former DPP

The private sector will be asked to manage and run a communications database that will keep track of everyone’s calls, emails, texts and internet use under a key option contained in a consultation paper to be published next month by Jacqui Smith, the home secretary.

A cabinet decision to put the management of the multibillion pound database of all UK communications traffic into private hands would be accompanied by tougher legal safeguards to guarantee against leaks and accidental data losses.

But in his strongest criticism yet of the superdatabase, Sir Ken Macdonald, the former director of public prosecutions, who has firsthand experience of working with intelligence and law enforcement agencies, told the Guardian such assurances would prove worthless in the long run and warned it would prove a “hellhouse” of personal private information.

“Authorisations for access might be written into statute. The most senior ministers and officials might be designated as scrutineers. But none of this means anything,” said Macdonald. “All history tells us that reassurances like these are worthless in the long run. In the first security crisis the locks would loosen.”

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Definitive proof that the Bank of England saw the financial crisis coming

Looking back in our archives this Christmas I came across a rather important article which I had half forgotten about. It dates from 2006, when the credit crisis was a mere apple in the financial system’s eye and the City was enjoying one of its biggest booms in history. The article, which can be found here, reveals that the Bank of England knew precisely what risk was posed by the dangerous build-up of debt which was brewing in the economy.

More strikingly, its Financial Stability Report from 2006 was as far as I can tell the first major institutional missive explicitly warning about the dangerous funding gap building up in the British banking system.

Read moreDefinitive proof that the Bank of England saw the financial crisis coming

Peter Schiff: US Dollar is on the verge of collapse; This is hyperinflation; This is Zimbabwe (12/17/2008)

Peter Schiff: “I am a 100% convinced that anybody who has their wealth in US Dollars will be just as broke as the people who had their money with Madoff.”

(All 6 parts are a must-see.)

Part 1 of 6

Source: YouTube

Read morePeter Schiff: US Dollar is on the verge of collapse; This is hyperinflation; This is Zimbabwe (12/17/2008)

Peter Schiff on CNBC: The government is pouring gasoline on a fire that it set (12/29/08)

“We are in the process of creating another Great Depression.” (Peter Schiff)

Part 1

Source: YouTube

Part 2

Source: YouTube

Peter Schiff: Our economy is broken and there is nothing the government can do to fix it

As recession fears cause the nation to embrace greater state control of the economy and unimaginable federal deficits, one searches in vain for debate worthy of the moment. Where there should be an historic clash of ideas, there is only blind resignation and an amorphous queasiness that we are simply sweeping the slouching beast under the rug.

With faith in the free markets now taking a back seat to fear and expediency, nearly the entire political spectrum agrees that the federal government must spend whatever amount is necessary to stabilize the housing market, bail out financial firms, liquefy the credit markets, create jobs and make the recession as shallow and brief as possible. The few who maintain free-market views have been largely marginalized.

Taking the theories of economist John Maynard Keynes as gospel, our most highly respected contemporary economists imagine a complex world in which economics at the personal, corporate and municipal levels are governed by laws far different from those in effect at the national level.

Read morePeter Schiff: Our economy is broken and there is nothing the government can do to fix it