But it’s supposed to be “independent”
from national politics.
from national politics.
By Don Quijones: Project Fear — the massive PR campaign aimed at sowing and watering the seeds of dread about the potential consequences of a YES vote in the upcoming referendum on a British exit from the EU — is in full bloom. In the event of a wrong answer, all manner of biblical disasters can be expected to befall the nation, the British public is constantly being warned.
The country’s national income will shrink, hundreds of thousands if not millions of jobs will vanish, the City of London’s core industry — financial engineering — will migrate across the channel, the currency will collapse, house prices will plummet, European firms will stop selling products to Brits, the U.S. government will impose massive tariffs on British imports, and even Britain’s already dismal climate will get worse.
Project Fear’s shrillest shills include the British government and institutions of State, the UK’s most powerful business lobby group The Confederation of British Industry, the City of London Corporation (and all the too-big-to-fail financial institutions whose interests it faithfully serves), the European Union, the International Monetary Fund, and the world’s biggest fund manager BlackRock.
Another prominent prophet of Brexit doom and gloom is the Bank of England, an institution that, according to its charter at least, is supposed to be “independent” from national politics, but which has done nothing but feed the fear. In testimony to the UK government’s Treasury Select Committee earlier this month, the central bank’s Canadian and former Goldmanite Chairman Mark Carney warned that Brexit is the “biggest domestic risk to financial stability,” with potentially dire consequences for Britain’s balance of payments, its housing market, foreign investment, and its banks.
It’s a shame no one bothered to ask Carney to identify the biggest non-domestic threat to Britain financial stability — he might have admitted that it was the euro, as his predecessor as Bank of England governor, Mervyn King, recently acknowledged.
“Put bluntly, monetary union has created a conflict between a centralized elite on the one hand, and the forces of democracy at the national level on the other,” King writes in his new book, The End of Alchemy. “This is extraordinarily dangerous.”
While King hasn’t explicitly come out in favor of Brexit, he hasn’t ruled it out either, and it doesn’t take much reading between the lines of his new book to divine more or less where he stands — i.e., as far away as possible from Carney.
This glaring difference of opinion between Britain’s former and current central bank governors leaves wavering British voters with a dilemma. Should they believe the words of a former central banker who’s desperately plugging his memoirs, or those of a current central banker who before dedicating his energies to central banking — first in Canada and now in the UK — spent 13 years with Goldman Sachs, which arguably holds more sway over Europe’s financial markets than any other systemically important global financial institution?
While the British public weighs up the potential benefits and drawbacks of life outside the EU, Bank of England officials are “agonizing,” as Bloomberg put it, over “the dangers” from the vote to leave. The central bank is already drawing up contingency plans for a British exit from the EU and will offer extra liquidity to the financial system around the referendum.
British banks are about to be offered billions of pounds of extra cash, just in case the markets seize up. Here’s more from The Daily Telegraph:
The process sees banks offer the Bank of England assets such as mortgage loans, in exchange for cash. The Bank of England offers this facility to banks once per month, but will give banks four chances to take extra cash in June.
Banks can use the scheme if the market for their own assets is very illiquid, giving banks more liquidity and so enabling them to carry on lending even when markets are stressed.
Similar action was allegedly considered during the Scottish referendum, but since the scheme was never required, it was not made public until after the event. This time, officials are “offering the scheme in advance,” presumably because: a) the Bank of England actually wants the people of Britain to think that they are preparing for an “extreme crisis”; and/or b) the banks could probably do with a little extra dose of liquidity anyway.
As the banks prepare for yet another free-money picnic, the Bank of England continues to jack up the fear factor.
In a speech to the OMFIF finance industry group in London, BoE Policy Maker Kristin Forbes said that Britain’s cross-border investments should offer some respite against a jump in uncertainty, but the relief would only be partial and would be “unlikely to fully counteract the many negative effects from increased uncertainty on the broader UK economy.”
For the moment the most visible negative economic consequence of Brexit uncertainty is the acute volatility in the UK currency. As the FT reported, the implied volatility on a three-month timeline — a measure of traders’ and investors’ perceived likelihood of big shakes in the currency over the next three months — is now higher than at any other time over the last six years, suggesting that the market sees bigger risks for Sterling now than it did over the 2014 Scottish referendum, and indeed bigger risks than at any time since the darkest days of the 2008 financial crisis.
With Project Fear now in full swing, that volatility is almost certainly here to stay, at least until the referendum. What happens after that depends on the outcome of the vote, and that will ultimately depend on the ability of the British and European establishment to convince voters that the preservation of the status quo is far more preferable than the risk of the unknown — at least for the establishment!
For now just about the only thing we can be sure of is that the banks on both sides of the English Channel will continue to wet their beaks in the fountain of unlimited, virtually free money.
_________
Monsanto Losing Its Grip?
By Don Quijones: Monsanto, the world’s largest seed manufacturer, is not having a good year. The company recently slashed its 2016 earnings forecast from the $5.10-$5.60 per share it had forecast in December to $4.40-$5.10, claiming that about 25-30 cents of the reduction was due to the stronger dollar. But judging by recent trends, a strong dollar could soon be the least of its concerns.
Across a number of key markets, the company is facing growing resistance, not only from farmers and consumers but also, amazingly, governments.
In India, the world’s biggest cotton producer, the Ministry of Agriculture accuses Monsanto of price gouging. It even imposed a 70% cut in the royalties that the firm’s Indian subsidiary could charge farmers for their crop genes, prompting Monsanto to threaten that it would withdraw its biotech crop genes from the country.
All these years, the company has restrained us from using technologies other than the one developed by it. It forced the seed firms to sign the licence agreements that barred them from using other technologies.India’s government also seems unconcerned by the prospect of Monsanto’s withdrawal.“It’s now up to Monsanto to decide whether they want to accept this rate or not,” said Minister of state for agriculture and food processing, Sanjeev Balyan. “We’re not scared if Monsanto leaves the country, because our team of scientists are working to develop (an) indigenous variety of (GM) seeds.”
India’s pushback against Monsanto is part of a gathering global backlash against Monsanto and the GMO industry as a whole. Even in the U.S., where GMOs are estimated to represent more than 90% of corn, soybean, and cotton acres, the trend is no longer Monsanto’s friend. Earlier this year the company filed a lawsuit against the state of California for its intent to label glyphosate, the main chemical used in Monsanto’s flagship Roundup herbicide, as a probable carcinogen, in accordance with the World Health Organization’s recent findings.
There’s also growing pressure on major food outlets to stop using GMO ingredients. After the USDA’s 2015 approval of genetically modified apples and potatoes, companies including McDonald’s Corp. and Wendy’s Co. claimed they didn’t plan to use them, saying they were happy with non-GMO suppliers. Even more importantly, the Orwellian-titled Deny Americans the Right to Know (DARK) act, aimed at prohibiting mandatory GMO labelling, was defeated in the Senate last week.
Meanwhile, in Mexico, Monsanto’s fourth biggest market after the U.S., Brazil, and Argentina, a moratorium remains in place on the granting of licenses for GMO seed manufacturers like Monsanto, Dow, and Du Pont. In the face of growing public and judicial opposition, Monsanto & Friends have pinned their hopes on the Peña Nieto government’s upcoming agrarian reform act.
Manuel Bravo, Monsanto’s director for Latin America, recently told El País that he is confident that once the legal problems in the courts are “resolved,” the issue will become a central plank in the current administration’s agenda. “The Government has been very clear about the importance of these technologies,” he said.
Across the Atlantic, Monsanto’s problems are somewhat more intractable. Already more than half of EU countries have moved to bar GMO cultivation, while a last-minute mutiny by four EU states (France, Sweden, Italy, and the Netherlands) recently forced the postponement of a vote in Brussels on re-licensing glyphosate.
The reason for the postponement is simple: If the vote had gone ahead, there would have been no way of securing the 100% approval needed to renew the license for another 15 years. As a result, a herbicide that dominates crop cultivation in many European markets and which provided €4 billion of earnings and over €1 billion of profit for Monsanto alone last year, would have lost its license. And that is the last thing the European Commission and the massive agribusiness lobbies that generously line its pockets want.
In time-honored fashion, the Commission has promised to “renegotiate” the matter, while Jean-Charles Bocquet, the director of the European Crop Protection Agency, a front lobby organization for Monsanto & Friends, let his rage rip in a disarming display of frankness: “We are very upset that countries were influenced by significant political pressure from the environment committee of the European parliament, NGOs, and the precautionary principle.”
The precautionary principle states that if there is even a suspected risk of causing harm to the public or to the environment, then, in the absence of scientific consensus that the action or policy is not harmful, the burden of proof that it is not harmful falls on those taking an action, in this case, Monsanto and the agrochemical lobby. It’s even law in the EU.
Proving the unprovable could be a very difficult task, even for Monsanto & Friends — hence Bocquet’s public admission of the ECPA’s withering disdain for precaution regarding human health or safety. It’s also no coincidence that the agrichemical business lobby is the biggest lobbyist on the EU-US trade deal (TTIP), which is feared would significantly water down EU chemical safety standards, including the precautionary principle.
While Monsanto and friends struggle to preserve their markets in Europe, Russia, one of the world’s largest agricultural markets, has ruled out approving the use of any biotech crops in the cultivation or production of food, largely in retaliation to sanctions imposed by the U.S. and Europe in 2014. As for China, it allows cultivation of some GMOs but isn’t expected to approve new ones any time soon, at least until its own agrichemical businesses are on a more equal footing with their U.S. rivals.
As the global backlash against GMOs grows, the market’s once-spectacular growth is grinding to a halt. In 2014 sales grew 4.7% to $21 billion, compared with 8.7% growth in 2013 and average annual growth of 21% from 2007 through 2012. According to Mike Mack, the former CEO of Swiss-based (and now Chinese-owned) Syngenta, biotech seeds have nearly saturated major markets where approved:
Show me the new markets or the new crops that are going to bring the sort of wave that we saw in the last decade. I don’t see how it’s going to pick up in a material way anytime soon.And that is very bad news for a company that is already on the back foot in many of its key markets and which is waging what appears to be a losing battle for the hearts and minds not only of global consumers but also national governments.
No comments:
Post a Comment