Lew Rockwell interviews Jim Rogers
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Record numbers of companies will go bankrupt next year with 200,000 insolvencies in Europe alone and “an explosion” of failed businesses in the US, according to the world’s largest credit insurer.
The US will see 62,000 companies go bust next year, compared with 42,000 this year and 28,000 last year, says a report by Euler Hermes, part of German insurer Allianz.
The absolute numbers, however, pale in comparison with the figures from western Europe, where the larger number of small companies mean insolvencies are expected to rise by a third from 149,000 last year to 197,000 next.
“The financial crisis will increase the risk of bankruptcy dramatically, particularly next year,” said Romeo Grill, chief economist at Euler Hermes. “There will be an explosion in the US but also big rises in Europe and especially the UK.”
Mr Grill said he expected most company failures in Europe to be focused around the struggling car, retail and textile sectors as well as logistics.
The country with the highest number of insolvencies expected for next year is France with 63,000. But in Europe, Spain, Ireland and the UK are forecast to see the most dramatic rises.
Nearly four times as many Spanish companies will go bust next year as in 2007 while it will be nearly double in Ireland and the UK with 640 and 38,000 businesses respectively.
As many as a million American jobs could be lost every month by next spring as businesses struggle to raise capital in financial markets consumed by fear, according to a new analysis.
November was the worst month in the US labour market since the oil crisis of 1974, as more than 500,000 US workers were laid off, according to official figures released on Friday.
But Graham Turner, of consultancy GFC Economics, says the rising cost of corporate debt is now flashing a red warning signal that far worse is to come over the next few months and job losses are heading for levels last seen in the 1930s Great Depression.
Corporate bond yields have rocketed since the credit crisis began as investors flee risky assets in search of safe havens such as US Treasuries. That effectively means many firms are being forced to pay eye-watering interest rates to borrow funds.
Turner says when the gap between the yield on high-risk company bonds and US Treasuries widens sharply, unemployment tends to shoot up – and current credit conditions are pointing to a doubling in the pace of layoffs, to more than a million workers a month, by spring.
‘The correlation is holding up all too well,’ he said. ‘It’s very disconcerting.’ He added that the pace of layoffs already happening in the US ‘is indicative of panic’. During the 1970s oil crisis the panic was relatively short-lived, he says. ‘But the worry now is that this will just roll on and on.’
ALMOST all benefit claimants will be forced either to look for a job or prepare for work if they want to continue to receive state handouts, under a shake-up of the welfare state.
Single mothers of children as young as one and people registered unfit for work will be compelled to go on training courses and work experience or risk cuts to their benefits.
In an interview with The Sunday Times, James Purnell, the work and pensions secretary, said: “Virtually everyone will be doing something in return for their benefits.”
The fingerprints and DNA samples of more than 857,000 innocent citizens who have been arrested or charged but never convicted of a criminal offence now face deletion from the national DNA database after a landmark ruling by the European court of human rights in Strasbourg.
In one of their most strongly worded judgments in recent years, the unanimous ruling from the 17 judges, including a British judge, Nicolas Bratza, condemned the “blanket and indiscriminate” nature of the powers given to the police in England, Wales and Northern Ireland to retain the DNA samples and fingerprints of suspects who have been released or cleared.
The judges were highly critical of the fact that the DNA samples could be retained without time limit and regardless of the seriousness of the offence, or the age of the suspect.
The court said there was a particular risk that innocent people would be stigmatised because they were being treated in the same way as convicted criminals. The judges added that the fact DNA profiles could be used to identify family relationships between individuals, meant its indefinite retention also amounted to an interference with their right to respect for their private lives under the human rights convention.
The case provoked an expression of disappointment from the home secretary, Jacqui Smith, and the promise that a working party, including senior police officials, will report back to Strasbourg by next March on how the government will comply with the judgment.
“The government mounted a robust defence before the court and I strongly believe DNA and fingerprints play an invaluable role in fighting crime and bringing people to justice. The existing law will remain in place while we carefully consider the judgment.”
“No reasonable cause or suspicion is required, and checks can be carried out ‘in country’ – not just at borders.”
“A second clause says that people who are stopped ‘must produce a valid identity document if required to do so by the Secretary of State’. Failure to do so would be a criminal offence with a maximum penalty of 51 weeks in jail or a £5,000 fine.”
Wait until they introduce the microchip for you. It is already here:
Met Police officers to be ‘microchipped’ by top brass in Big Brother style tracking scheme:
Every single Metropolitan police officer to be be ‘microchipped’….
…there will not be any choice about wearing one.
And it causes cancer: CASPIAN RELEASES MICROCHIP CANCER REPORT
The following article is a must read.
Checks: Police will be able to demand ID from people at any time (file picture)
State officials are to be given powers previously reserved for times of war to demand a person’s proof of identity at any time.
Anybody who refuses the Big Brother demand could face arrest and a possible prison sentence.
The new rules come in legislation unveiled in today’s Queen’s Speech.
They are presented as a crackdown on illegal immigration, but lawyers say they could be applied to anybody who has ever been outside the UK, even on holiday.
The civil rights group Liberty, which analysed clauses from the new Immigration and Citizenship Bill, called them an attempt to introduce compulsory ID cards by the back door.
The move would effectively take Britain back to the Second World War, when people were stopped and asked to ‘show their papers’.
Liberty said: ‘Powers to examine identity documents, previously thought to apply only at ports of entry, will be extended to criminalise anyone in Britain who has ever left the country and fails to produce identity papers upon demand.
‘We believe that the catch-all remit of this power is disproportionate and that its enactment would not only damage community relations but represent a fundamental shift in the relationship between the State and those present in the UK.’
One broadly-drafted clause would permit checks on anyone who has ever entered the UK – whether recently or years earlier.
Officials, who could be police or immigration officers, will be able to stop anyone to establish if they need permission to be here, if they have it, and whether it should be cancelled.
No reasonable cause or suspicion is required, and checks can be carried out ‘in country’ – not just at borders.
The law would apply to British citizens and foreign nationals, according to Liberty’s lawyers. The only people who would be exempt are the tiny minority who have never been abroad on holiday or business.
A second clause says that people who are stopped ‘must produce a valid identity document if required to do so by the Secretary of State’. Failure to do so would be a criminal offence with a maximum penalty of 51 weeks in jail or a £5,000 fine.
Opposed: Liberty director Shami Chakrabarti (left) and Tory MP Damian Green (right) both spoke out about the new powers
Three police officers are being investigated after a soldier claimed he was repeatedly beaten while being pinned to the ground.
CCTV footage shows Lance Corporal Mark Aspinall, who was praised for his bravery against the Taleban in Afghanistan earlier this year, being held down by two officers while a third appears to hit him on the back.
Mr Aspinall, 24, was later found guilty of of assaulting the police offices but the convictions have been quashed on appeal after a judge watched a video of the incident.
The nine-minute video, obtained by the Sunday Mirror, shows a drunken Mr Aspinall gesticulating at three police officers in Wigan, Lancashire, in July.
It is claimed that he was mistakenly identified by the officers who had been called to deal with a man causing a nuisance to paramedics in the centre of the town.
Mr Aspinall is then seen tripping as he attempts to run away from the police and then is then held down by three officers in fluorescent yellow jackets.
An officer, identified in court as PC Peter Lightfoot, appears to twice push Mr Aspinall’s head on the ground in the middle of the road.
Two colleagues – PC Richard Kelsall and another named only as Sergeant Russell – pin down his legs.
When Mr Aspinall bites one of the officers legs, PC Lightfoot appears to scrape his face on the road. He then hits Mr Aspinall eight times on the back before he is put in the back of a police van.
Some British politicians considering signing up to single currency in bid to beat effects of global economic crisis, according to José Manuel Barroso
The UK is “closer” to joining the euro than ever before, according to the president of the European commission.
José Manuel Barroso said some British politicians were considering signing up to the single currency in a bid to beat the effects of the global economic crisis.
He told French radio station RTL: “We are now closer than ever before.
“I’m not going to break the confidentiality of certain conversations, but some British politicians have already told me, ‘If we had the euro, we would have been better off.'”
Companies targeted as nervous high-street lenders introduce crippling fees
High-street banks are continuing to hit businesses with punitive interest rates for loans and overdrafts and are resorting to more severe measures to ensure they are paid.
Some are demanding that owners of small businesses put up personal assets as collateral in return for a business loan. Others are changing conditions of loans by sending emails rather than meeting in person, and giving borrowers just 48 hours to comply with unilaterally-rearranged overdraft and lending agreements.
The Business Secretary, Lord Mandelson, said he was alarmed by the banks’ behaviour: “That is not the sort of constructive relationship that is sustainable between banks and businesses.
“I want a constructive relationship with them, of course, but they have to know they are going to be tested and judged by what role they play to help Britain and British business get through this economic storm.”
The Prime Minister, Gordon Brown, also heaped the pressure on misbehaving banks. “There is a loss of confidence in the banking system and they are increasing that loss of confidence by not acting the way banks usually do,” he wrote in a Sunday newspaper.
Woolworths has always prided itself on its cheap deals. Photograph: Stephen Kelly / PA
For 30,000 Woolworths staff it may be a bleak Christmas as it became clear yesterday that the veteran high-street retailer could go under this week if management cannot clinch a fire sale.
Woolworths evokes nostalgia for precious pocket money spent on bottles of cola and ill-advised chart singles by Bucks Fizz. Last week it became clear that Woolworths itself was worth only pocket money, with management in talks to sell the 800-store chain for £1.
The collapse of Woolworths would be by far the largest retail failure this year, symbolising the high street’s woes.