Hungary far right demands exit from EU, burns flag at rally

Thousands protested against the EU Saturday at a rally of the far-right Jobbik party, calling for Hungary's exit from the bloc and adding pressure on the government which is seeking a funding deal with the EU and IMF to avert insolvency.

Two MPs of Jobbik, the second biggest opposition party in Hungarian parliament, set an European Union flag on fire at the protest in front of the European Commission offices in Budapest.

"This week the EU declared war on Hungary in a very harsh and open way," Csanad Szegedi, a Jobbik member of European Parliament told the crowd of around 2,000 demonstrators.

After talks with lenders were derailed last month over a set of disputed laws, a plunging forint currency and spiking bond yields forced Prime Minister Viktor Orban's conservative government to back down and try to seek a fast agreement. Orban is now reluctantly trying to make amends to lenders in order to secure a funding deal, which Hungary needs to be able to finance its debts from markets at a time when its economy is heading for a possible recession this year.The EU has piled pressure on the government to change controversial legislation on its central bank and judiciary, and even raised the prospect of suspending vital EU funds to the economy if Orban does not make budget deficit cuts sustainable. Orban also came under pressure from the United States which voiced concerns over democratic freedoms, after his Fidesz party pushed ahead to pass measures which critics say weaken public institutions such as the top court, and cement Fidesz' powers. Many supporters of nationalist Jobbik believe the government should not bow to international pressure.

"Since we joined the EU we have not seen any advantages from that, Hungary should go its own way and keep its national sovereignty," Attila Gyalog, 24, said at the rally. "Not only us, but many other countries believe now that they could be better off outside the EU," said Gyorgy Lillik, 63. Hungary will have to change course in a significant way for the Commission to give the green light to aid talks. The EU's executive is expected to announce its verdict on some key Hungarian laws next week when it finishes its legal analysis. Foreign Minister Janos Martonyi told daily Nepszabadsag on Saturday the government would examine the EU's concerns and will do its best to settle the disputed issues with an agreement. "For us the most important thing is that we should come to an agreement with the European Commission and IMF as soon as possible," Martonyi said, adding that once talks start, an agreement could be reached within one to three months.

POLITICAL BLOW

If Orban does not secure a deal with lenders, the punishment from financial markets will be severe and he wants to avoid a full-blown market crisis even though going cap in hands to the IMF is a major political defeat, analysts said. Public support for Fidesz dropped to 16 percent in January according to a poll by Ipsos. The party has lost nearly half of its 2.7 million voters since its sweeping election victory in 2010 which gave the party a two-thirds parliamentary majority. Jobbik had 8 percent support in January, while over half of Hungarians are so disheartened with politics that they would not want to vote for any party.

"If there is no agreement and the forint plummets, then Orban will lose his own core voter base as well," said Zoltan Kiszelly, a political analyst.

Orban has favoured his core middle class voters with a flat tax and family tax breaks, but the record weak forint erases some of those financial gains and scares people, who had seen Hungary go through the 2008 crisis which forced the Socialist government to seek a bailout from the IMF and EU. The Hungarian prime minister, who had previously declared that "Brussels is not Moscow" and having disputes with the EU was acceptable, has very little if any room of maneuver now.

If he strikes a deal with lenders, the forint firms and yields on Hungary's debt fall, Orban could win time to shore up public support. The next election is expected in 2014. Source

Court-martial and life in prison for Bradley Manning?

PFC Bradley Manning is on trial for being accused for leaking classified information to the website WikiLeaks. On Thursday, Manning was recommended by the US military officer presiding over Manning's pre-trial hearing to face a US court-martial for the 22 crimes charged against him. Many critics believe that the US military is making it more difficult for Manning's defense team to get a fair trial. Zack Pesavento, press liaison for the Bradley Manning Support Network, joins us to discuss the latest in Manning's case. Source

Where Is Ron Paul’s Gold?

Over the last few weeks, we’ve visited Congressman Ron Paul’s investment portfolio more than once.

According to his 2010 financial-disclosure form, the most recent one available, the Republican presidential candidate has most of his investments in the stock of gold-mining companies—in addition to other holdings in real estate, cash and “short” funds that rise in value as stock prices fall.

But the most peculiar thing might be what we didn’t find listed: holdings of gold bullion or coins. That would seem to contrast with Rep. Paul’s public statements on his investment strategy.

Rep. Paul’s advocacy of holding gold is well-documented, and it wouldn’t surprise anyone if he held a significant investment in the physical stuff.

If he does have gold, he’s not listing it on his financial-disclosure forms, which members of congress must file annually. It could be a simple oversight, or Rep. Paul might have indeed unloaded his entire bullion holding just in time to miss a huge runup in gold. Or, he might just think that he doesn’t have to disclose it. A spokeswoman for Rep. Paul didn’t respond to several requests seeking comment.

Rep. Paul has disclosed coin holdings in the past. His 2002 disclosure listed “Coins – Semi-numismatic” as one of his assets, though it didn’t specify their value. “Semi-numismatic” is generally parlance for coins whose value is derived partially from their collectible value but mostly from their bullion content.

The coins disappeared from his form the next year. An earlier look at Rep. Paul’s portfolio by Barron’s found that he reported he held semi-numismatic coins worth between $100,001 and $250,000 on his forms between 1994 and 2002.

Could he have sold them all? Sure. But even though Rep. Paul stopped reporting coin holdings in 2002, he continued to say he owned them in interviews. In an interview with Fox Business Network in 2010, for example, he had this exchange at about the 1:35 mark:

Host: Congressman, do you buy the coins or do you invest in gold-mining shares or do you put your money into a gold mutual fund? How do you do it?

Paul: I over the years have bought coins because I like to, you know, have possession, but no, I’ll buy some gold shares too. Now that’s closer to an investment, because you’re dealing with management and, you know, dealing with…maybe they hit a strike. So that’s an investment and you have to evaluate it. But coins and buying gold … I see it as not so much buying gold and betting on the price of gold going up but betting on our government ruining the value of our money.

That interview would seem to suggest that he still owned and bought coins in 2010.

Experts we spoke to said that it was their understanding that members of congress have to disclose gold and coin holdings.

“If someone just asked me that question, ‘Do I have to disclose gold bullion or something of numismatic value?’, I would say that they have to go on [the form],” says Kenneth Gross, who leads the political law practice at law firm Skadden Arps. He notes that it’s conceivable  Rep. Paul was advised otherwise by a lawyer or ethics committee, but adds, “It seems to me that it’s an investment.”

Another attorney whose practice includes ethics issues in the House of Representatives said that he would similarly expect a gold holding to appear on the form.

Incidentally, if Rep. Paul had had gold holdings worth $100,000 at the end of 2002, when gold traded at around $350 per ounce, it’d be worth around $476,000 now. An investment toward the upper end of the reporting range ($250,000) would be worth almost $1.2 million. Source

CIA Chief Endorses Ron Paul 2012

Dissecting Occupy Wall Street-On the Edge with Max Keiser

Max interviews Danny Schechter; media activist, author and filmmaker. The program starts with a precedent of Danny Schechter's book, "In Debt We Trust" which is about economic meltdown in America. Another book discussed by Schechter was "plunder" which was about Lemon Brothers' collapse. He said the financial story in America is not a business story, it's rather a crime story. Source

UK uses drones, mulls police states

Britain has spent considerable amounts of tax payers' money in the development and purchase of drone aircrafts. It has also entered into an agreement with France to jointly produce a drone in order to cut the costs. It is common knowledge that there is also a very high fail rate in drone accidents and despite the enormous costs involved they will remain in the forefront of military aircraft.......the British Government is now seriously considering the use of drones in the sky over the United Kingdom.......a clear indication of future police states. Source/full story

Everything You Need to Know About Wall Street, in One Brief Tale

Newspapers in Colorado today are reporting that the elegant Hotel Jerome in Aspen, Colorado,  will be closed to the public from today through Monday at noon.

If there was ever a news story that crystalized the moral dementia of modern Wall Street in one little vignette, this is it.

Why? Because a local squire has apparently decided to rent out all 94 rooms of the hotel for three-plus days for his daughter’s Bat Mitzvah.

The hotel’s general manager, Tony DiLucia, would say only that the party was being thrown by a "nice family," but newspapers are now reporting that the Daddy of the lucky little gal is one Jeffrey Verschleiser, currently an executive with Goldman, Sachs.

At first,  I couldn't remember how I knew that name. But then I looked it up and saw an explosive Atlantic magazine story, published last year, called, "E-mails Suggest Bear Stearns Cheated Clients Out Of Millions." And then I remembered that piece, and it hit me: Jeffrey Verschleiser is one of the biggest assholes in the entire world!

Source/full story/Matt Taibbi

The story begins at Bear Stearns, where Verschleiser used to work, up until the company exploded, in large part because of him personally.

Copyright gone too far! Richard O'Dwyer: No More Extraditions to USA

Cameron and Clegg should be ashamed of their disgusting betrayal of the British people. UK citizens should not be extradited to the US just because our lickspittle government wants to curry favour with the US. British people who reside in this country should be subject only to the laws of this country. Source

Eric Sprott calls for a silver cartel? SilverFuturist and JackieO

Eric Sprott on cartels: "OPEC... was right that the price of oil was ridiculously cheap. Coming together to control supply was probably one of the more responsible things oil producers did... I think that's what the silver industry should do" http://www.mineweb.com/mineweb/view/mineweb/en/page32?oid=142113&sn=Detail

Any conflict on Iran is a direct threat to Russia’s security – Rogozin

The escalating conflict around Iran should be contained by common effort, otherwise the promising Arab Spring will grow into a “scorching Arab Summer,” says Dmitry Rogozin, Russia’s former envoy to NATO. “Iran is our close neighbor, just south of the Caucasus. Should anything happen to Iran, should Iran get drawn into any political or military hardships, this will be a direct threat to our national security,” stressed Rogozin.

Dmitry Rogozin, who served as Russia’s special envoy to NATO in 2008-2011, was appointed deputy prime minister by Vladimir Putin in December. On Friday he was bidding farewell to his NATO colleagues in the alliance’s headquarters in Brussels.

As for Syria, if NATO persists in interfering in its affairs, a catastrophe will be hard to avoid, said Rogozin, talking to journalists on the premises of the Russian mission to the alliance.

“The example of Libya should have cooled everybody down in matters dealing with foreign civil wars,” he said, stressing that this is his personal point of view.

“Syria must be left alone and the sides to the conflict must be assisted in breaking the stand-off and starting negotiations. No one must interfere with Syria. This is dangerous,” added Rogozin. The West’s attempts to improve democracy in the Middle East and North Africa have resulted in Islamists coming to power. It is now up to the West to decide how comfortable they feel with neighbors who determine their politics with Sharia law, says Rogozin. “If we add the escalating tensions around Iran to the situation in Syria and the consequences of the Libyan war, then the upcoming 'scorching' Arab Summer, which is following the Arab Spring, will hardly be to anyone’s taste.”

Russia’s response will make AMD ‘a waste of money’

Despite his recent promotion, Rogozin is still in charge of Russia-NATO discussions on anti-missile defense (AMD) issues. A legal binding that the European and American missile defense systems will not target Russia has not been taken off the table, Rogozin pointed out. “It seems strange that it is Russia who is required to show flexibility. This is not our project. If an architect is building a house, it is up to him to offer a design which would not violate property rights, area design and neighbors’ interests. So it is our US colleagues who should demonstrate miraculous flexibility to ensure that their AMD system does not violate the interests of other countries if it is to be located in Europe.” Rogozin also called on European leaders to stop being “political puppets” in the AMD game, adding that everyone should stand for their own interests, not for some “Atlantic solidarity.” If Moscow’s position is ignored and the range of the US anti-missile defense system covers the European part of Russia, this will be considered a situation requiring defensive action. “I will certainly ensure Russia will give a corresponding technical response if the AMD system endangers our national interests. This will result in the American AMD being considered a waste of money,” said Rogozin. Russia has everything needed to annihilate any attempt “to strip” its strategic potential, he added. This also means the era of imported weapons is coming to an end. In a farewell gesture, Rogozin said he was considering planting a tree in the alliance’s headquarters. Symbolically enough, this would be a poplar, or “topol” in Russian, which brings up associations with Russia’s modern intercontinental ballistic missiles Topol-M. But NATO replied that planting a tree within the headquarters perimeter “is not possible,” so the tree will have to be planted nearby. Source

The US Government Is Bankrupt

By Doug Casey, Casey Research

Everyone knows that the US government is bankrupt and has been for many years. But I thought it might be instructive to see what its current cash-flow situation actually is. At least insofar as it's possible to get a clear picture.
As you know, the so-called Super Committee recently tried to come up with a plan to cut the deficit by $1.5 trillion and failed completely. To anyone who understands the nature of the political process, the failure was, of course, as predictable as it was shameful. What's even more shameful, though, is that the sought-after $1.5 trillion cut wasn't meant to apply to the annual budget but to the total budget of the next 10 years – a fact that is rarely mentioned.
Now whenever the chattering classes talk about cuts, it's always about cuts over the course of 10 years. Which is a dodge, partly because most of the supposed cuts will be scheduled for the end of the period, but also because new programs, new emergencies and hidden contingencies will creep in to offset any announced cuts. So the numbers below aren't a worst case; they're the rosiest possible scenario. People have thought I was joking when, asked how bad the Greater Depression was going to be, I answered that it would be worse than even I thought it would be. But I haven't been joking.
To sum up the situation, given its financial condition and the political forces working to worsen it, the US government is facing a completely impossible and irremediable situation. I'm going to try to illustrate that here. But because I'm a perpetual optimist, not a gloom-and-doomer, I'm also going to give you solutions to the purely financial problems – albeit with some good news and some bad news. The good news is, there actually are solutions. The bad news is that there is zero chance that any of them will be put into effect.
The problems are one hundred percent caused by the US government, not by bankers, brokers or the real estate industry – although they have been complicit. Recall what government is: an organization with a monopoly of force within a certain geographical area. Its purpose is, ostensibly, to protect the inhabitants of its bailiwick from the initiation of force. That implies three functions: an army to protect against aggressors coming from outside of its borders; police to protect citizens from aggressors inside its borders; and a court system to allow citizens to adjudicate disputes without resorting to force. Assuming you're going to have a government, it's important to limit it strictly, lest it get completely out of control – it's got a monopoly of force, after all – and overwhelm the society it's supposed to protect.
Here I want you to distinguish government from society. They are not only two totally different things, but are potentially antithetical to each other. This is because the essence of government is force, not voluntary cooperation. Everything that people think the government provides (beyond some forms of protection) is really provided by society or with resources the government has taken from society. It's critical to understand this, or you won't see the slippery slope the US is now sliding on.
Is there any chance that the US government can reform and go back to a sustainable basis at this point? I'd say no. Its descent started in earnest with the Spanish-American War in 1898, when it acquired its first foreign possessions (Cuba, the Philippines, Puerto Rico, etc). It accelerated with the advent of the income tax and the Federal Reserve in 1913. It accelerated further with World War I, when the government took over the economy for 18 months. The New Deal and World War II made the state into a permanent major feature in the average American's life. The Great Society made free food, housing and medical care a feature. The final elimination of any link of the dollar to gold in 1971 ensured ever-increasing levels of currency inflation. The Cold War and a series of undeclared wars (Korea, Viet Nam, Afghanistan and Iraq) cemented the military in place as a permanent focus of the government. And since 9/11, the curve has gone hyperbolic with the War on Terror. It's been said that war is the health of the state. We have lots more war on the way, and that will expand the state's spending. But the Greater Depression will be an even bigger drain, and it will likely destroy the middle class as an unwelcome bonus.
In all that time, from 1898 to today, there have been no substantial retrenchments of the US government, and the situation is getting worse, on a hyperbolic curve. Trends in motion tend to stay in motion until a genuine crisis changes them, and this trend has been gaining momentum for over a century.
Let's divide people into three classes – rich, poor and middle class. Rich people are going to be okay. They can bribe the politicians to change the laws, hire the lawyers to interpret the laws, the accountants to limit their liabilities, advisors to help them profit from distortions and travel agents to get them out of Dodge. They may get eaten later, but for the moment, don't worry about them.
The poor don't have much to lose, and the government is going to keep throwing benefits at them to keep them happy. That's a shame because it cements them to the bottom as poor people – but that's a topic for another day.
The real danger is to the middle class, and it's a serious matter because the US is a middle-class society. These are people who try to produce more than they consume and save the difference in order to grow wealthier. That formula has worked well up to now – but almost everybody saves dollars. What happens, however, if the dollars are destroyed? It means that most of what they saved disappears, and most of the middle class will disappear with it, at least for that generation. They'll be very unhappy, and they'll be up for some serious changes. I'll come back to those later.
The Budget
Take a look at the following pie chart of US government spending. It's cut into 10 slices, by function. The government used to break down and report its spending according to agencies – Defense Department, so much; Department of Agriculture, this much; FTC, that much. They've de-emphasized that and now seem to prefer reporting by function, because most of the agencies do many things. Actually, with thousands of agencies, departments, divisions, bureaus, units and contractors, it's impossible to figure out exactly who does what in the government. It's so large, so irresponsible and so unmanageable that the only solution is to abolish things wholesale. Bureaucracy naturally grows unless it's pulled out by the roots; reform, or pruning it back, is doomed to failure.

Click here for source, full story and more on Justice, Defence, Social, Security, Income security, Medicare, Health, Education, training and social services, Transportation, General government and Interest.


Denouement
My point is to make it very apparent that there really is no conventional solution to the US government's financial crisis. It's reached a stage where the government will have to start defaulting on some of its obligations. You decide which. The only questions are political; the economics are quite clear. Nothing will be done, as the Super Committee showed. I believe they would have done something if they thought it possible and knew how.

Actually, the situation is much more serious than what I've briefly illustrated. We've only discussed one aspect of the income statement, which itself is enough to bring down the whole structure, and soon. We haven't discussed the government's balance sheet. Estimates vary, but the US government has direct and contingent obligations that go far beyond its $15 trillion in accumulated borrowing. The present value of its Medicaid, Medicare, Social Security, veterans, financial insurance and numerous unfunded liabilities might be another $200 trillion. Nobody knows, and it's probably impossible to calculate.
So, the US government will go bankrupt. That's not the end of the world. Lots of governments have gone bankrupt, some of them numerous times – like almost all of them here in South America, where I am at the moment.
In fact, there's a temptation to look forward to it eagerly. After all, the state is the enemy of any decent human. One might hope that when they bankrupt themselves, maybe we will get to live in a libertarian paradise. But that's not likely the way things will come down; rather, just the opposite. Not all state bankruptcies are just temporary upsets. Most of the great revolutions in history have financial roots. Great revolutions are more than just unpleasant and inconvenient; they're extremely dangerous.
The French Revolution of 1789 was brought on by the financial collapse of the French government. It was a good thing to depose Louis XVI, but things didn't get better – they got much, much worse with Robespierre and then Napoleon. In Germany, the destruction of the German mark in 1923 set the stage for the Nazis – and then the Depression ushered them in. The collapse of the Czar's regime in Russia in 1917 seemed to be good news at first – but then things got worse, and they stayed worse for a long time.
The fact is that when a government collapses, especially when the government is providing all the things the US government does today, people want somebody to fix it; they want their goodies back. It's well known that over 50% of the US population are net recipients of state largess. And the degree of state support and involvement in the US is far, far greater than it was in France, Russia or Germany. After a period of chaos, it's always the people who are most political, who have the most rabid statist ideas who get the public's attention and rise to the top.
It seems highly likely that the US will get a savior, someone full of bravado, who assures the booboisie that he can straighten things out – if he is given sufficient power. Perhaps it will be an arrogant windbag like Gingrich, perhaps some general. The government won't wither away; it will reassert itself. I don't see any way around it, actually. We are already moving into a police state (evidenced most recently by the Senate's Nov. 2 vote allowing the military to indefinitely incarcerate anyone they accuse of terrorism). But at least it's a police state with a fairly high standard of living, one with Walmarts, McDonalds, and SUVs – at least for the time being.
But rest assured that if the situation evolves the way I expect, the standard of living will drop steeply, financial markets are going to become chaotic and the US will become a quite repressive place for some time – at least as long as the War on Terror lasts. I will bet you money on this. In fact, I am betting money on it.
So what can you do about it? Well, actually, there is nothing you can do about it. At least as far as changing the course of history is concerned. The best you can do is to speculate intelligently on further, new distortions that will be cranked into the system, as well as others that are inevitably going to be liquidated.
It seems to me that this is a trend that can no longer be turned around. The US government's budget is, in fact, the biggest thing in the world; it won't be turned around, because it is like a gigantic snowball rolling down a hill. It will only stop when it smashes into the village at the bottom of the valley. The best thing you can do is capitalize on it as well as you can and get out of its way while you do.
[If Doug is right and this trend cannot be reversed, the time to start preparing for what's ahead is right now. This free investor briefing will help you get started.]


Angelo: oops. I have added the link above.

Syria: The Iraqi stereotype?

The Arab League has declared it has given its observers in Syria more time for their mission. Head of the mission, General Mohammed Ahmed Mustafa al-Dabi, is to give a report on the League on January 19 on Syria's compliance of the plan, as the ministers in Cairo said. Is this mission merely a pretext for foreign intervention? Will Syria witness more instability and haphazard bombings in the coming days, and transform into a new Iraq? Source