Wednesday, June 20, 2012

With Italy Pushing, There Are Increasing Bets On Europe Settling On A Growth Plan B

Posted by Peter Quennell

[Above and below: the G20 meeting in Baja California and the Los Cabos resort]

At the G20 Summit now taking place on the Baja Peninsula Italy and France have just strongly pushed for the creation of Euro-bonds.

The rates for such bonds to be secured mostly by gold (mostly on deposit in the Federal Reserve Bank in New York - where a lot of Europe’s troubles began!) would reflect investors’ perceptions of the growth potential of all of Europe, not just Greece or Spain or Italy or Portugal or Ireland by themselves. 

A cheaper cost of capital across Europe would help to make the value equations start to come right. Far better than Germany’s imposed Plan A which is essentially austerity during a recession and nothing else.

In contrast the German economy is actually doing very nicely right now, with high growth and low unemployment and strong exports and huge swathes of capital moving into its rather strapped banks from the countries further south. Other things being equal, Germany could live with a “half pregnant” situation for quite a while.

But thankfully, there are two dark clouds on Germany’s horizon which may cause it to end its power trip.

First, Greece and Spain and Italy could all vote in radical-left governments within a year if austerity remains the entire mix. And second, the entire world could move into recession or even depression and then Germany would slow down along with everybody else.

Germany could do everyone a lot of good if it stopped the moralising and instead shared with all the other countries how its own extended growth came about.

It is worth reading the Wikipedia entry for Germany’s history of growth. Two post WWII concepts made a huge difference and still do.  Here they are in bold.

The Germans proudly label their economy a “soziale Marktwirtschaft,” or “social market economy,” to show that the system as it has developed after World War II has both a material and a social””or human””dimension. They stress the importance of the term “market” because after the Nazi experience they wanted an economy free of state intervention and domination. The only state role in the new West German economy was to protect the competitive environment from monopolistic or oligopolistic tendencies””including its own.

The term “social” is stressed because West Germans wanted an economy that would not only help the wealthy but also care for the workers and others who might not prove able to cope with the strenuous competitive demands of a market economy. The term “social” was chosen rather than “socialist” to distinguish their system from those in which the state claimed the right to direct the economy or to intervene in it.

Beyond these principles of the social market economy, but linked to it, comes a more traditional German concept, that of Ordnung, which can be directly translated to mean order but which really means an economy, society, and policy that are structured but not dictatorial. The founders of the social market economy insisted that Denken in Ordnungen””to think in terms of systems of order””was essential. They also spoke of Ordo-Liberalismus because the essence of the concept is that this must be a freely chosen order, not a command order.

This is in many ways the opposite of the tunnel-vision Washington Consensus which the IMF and World Bank and United States for far too long wrongly imposed on the world - and of which Euro-austerity is its devil spawn.

You can find a similar philosophy to Germany’s in Japan with the Keiretsu which saw it rocket up in the 60s and 70s, and which was picked up by the Little Dragons and China and finally all the middle-tier economies seeing recent strong growth.

Europe needs to further shore up and educate its manpower. That is a no-brainer. But its major growth breakout will only come if it tweaks and reinvents its millions of technical and managerial systems, just as Germany does. And if it demonstrates a very sharp nose for future value - as in fact Italy’s nimble entreprenuers already do.

It’s smart systems to create high value that you need, guys. Don’t let the over-intrusive and not-very-enlightened economists and central bankers and politicians tell you different. 

Posted by Peter Quennell on 06/20/12 at 03:41 PM in The wider contextsItalian context


If the US itself put the full model in motion as hinted at above, it could make both the Tea Party folks and the Occupy Wall Street folks very happy.

Simply throwing more money at problems is far from a good idea because it messes up the value equation and distorts incentives. A Plan B is needed here too.

At the same time, over-concentration of wealth among the cautious wealthiest in society is also not a good idea. They are NOT the job creators - it is the little guy who began in a garage who is. The record on that is very clear.

Posted by Peter Quennell on 06/20/12 at 05:15 PM | #

The key point is here:

Europe needs to further shore up and educate its manpower. That is a no-brainer

It must be done by strengthening the education system, bringing more people under the system and, the last but not the least, making small and useful markets for quality. Europe can do it - but only thing that is lacking is the will.

I do not know what is the real contribution of the wealthiest people in the US to the society at large. The first name that comes to my mind is the bankers…

Some decoupling from the dollar will also pay back well: Euro should not be constantly living under the threat of the dollar.

Most people are not beggars: but they just need a breathing space. It appears that America does not care for the rest of the world!

If you wear our competitor’s shirt, people will say “hey, look at the shirt” but if you wear our shirts, people will say “hey, look at the man

Posted by chami on 06/21/12 at 08:15 PM | #

Posted by Miriam on 06/21/12 at 08:29 PM | #

The € bond concept is enticing but entirely irrelevant to the G20, which includes non-EuroZone entities.

The risk is that these bonds could be downgraded further still than individual national bonds.  How do you solve a borrowing crisis then?

Gold backing doesn’t really make these things any more stable.

Posted by Stilicho on 06/21/12 at 08:50 PM | #

Hi Chami and Stilicho.

Agreed the Euro should be allowed to go down. It was much lower 10 years ago. New news today is that even the German economy might be slowing, so a devalued Euro might be in the cards. (Two levels of Euro are also being talked about, but a massive growth program and fiscal correction should do the trick. )

There wasnt an implication here or via the link that the bonds would relate to the G20. The announcement was made at the G20 because all the global leaders are concerned. The value of Europe’s gold doesnt seem likely to go down any time soon.

Posted by Peter Quennell on 06/22/12 at 12:25 AM | #

It was quite a surprise to me when I handled a pan-European program run by the UN for all the countries to network to mutually develop and implement better systems in different sectors (which they loved doing) to find that there was no European Community level equivalent.

The EC countries mutually set some targets and accept some rules and regulations. But then each country is on its own in terms of developing and implementing any necessary systems. There is no central mechanism at all for this. Way to push up costs and inefficiencies. Seems loopy.

The European countries with stronger systems (Germany, UK, Netherlands, France, etc) seemed very pleased to offer a lot in-kind on these lines when asked (experts, consultants, fellowships, study tours of plants and institutes) to help say Greece and Rumania and Poland and Ukraine to catch up, but they had not usually been asked.

The US and Canada are both members of the Economic Commission for Europe in Geneva, which was the secretariat for the network-building program, so they saw the point and also put resources in too.

By the way, when you get institutes networked and industrial-sector groups networked and local-level support units networked and corporations networked, it takes a huge load off of central governments, and they can wind back their endless programmitis - well-meaning, maybe, but displacing of functions at the proper levels. Not to mention expensive.


Posted by Peter Quennell on 06/22/12 at 01:02 AM | #

Hi Miriam. Yes Sollecito quietly pursues his studies in Verona. That report does make clear that his legal troubles are not over.

If his book appears before they are, it will be interesting to see if it drops him in deeper. That seemed to be the promise or threat from his shadow writer who presumably is tearing his hair out right about now.

Posted by Peter Quennell on 06/22/12 at 01:07 AM | #

“The Mistral Blows” by Amanda Knox and rock group, HOT, is being discussed on PMFs. It skirts dangerously close to an artistic confession. Overweening pride is downfall of many a criminal.

Biggest tell: the Amanda character is the only person in entire story who has a face, other than the prison guard! (leaving the Band aside, as they swing long hair and sing her agonies with death and escape theme)

Scene opens with AK’s back to camera. She’s dressed all in red sitting at desk coloring in prison. She exits the open door to her cell touching the side of the door as you would a mezzuzah. She’s wearing black and gray striped hoodie top with skirt and boots, reminiscent of hoodie she first wore in court and the black/gray top in her first freedom interview.

First encounter with another person in the video is a Meredith look alike hidden under a black umbrella. (The rain of England?, Meredith’s covering? the old supersition that it’s bad luck to open an umbrella in house?)

“Meredith” character has Long flowing black hair, rather curly. It’s shiny like Meredith’s, but when “AK” touches umbrella in fear and trepidation, “Meredith” turns to face her and of course has no face, just a linen wrap or fabric across her face, making her look like other zombies throughout the video. She’s wearing a long black gown with a red belt. She stands in front of a big glass window shaped like an arch.

“AK” flees from her and next meets a faceless large man wearing a white chef’s apron. He holds out an apple to her full of maggots. He’s holding a knife. She drops apple and runs toward stairs, looking upward. She enters a room to find a pitiful man (Raffaele? in all his intense and muted power) tied with ropes to a chair. He has a red cloth over his head, sorta like a torture scene in prison. She removes the veil from his head and he has no face, but he begins thrashing his head around in fierce effort to get loose. He frightens her with his primal energy. She flees again as he continues to wrestle futilely from his bonds. She now runs quickly down several winding flights of stairs reminiscent of Meredith in music video, past facelss folks trying to hold her back or grab her. She dashes out of the two-story duplex house and runs through the members of the band HOT and dashes past them.

Now we look back at ghouls and the woman in long black dress has her head spinning round and round like an exorcism. She’s wearing long red satin gloves and matching red triple strand long necklace.

End of video shows “AK” back in prison, the desk reveals her drawing. It’s a picture colored in black and blue showing four men.  4 colored crayons lie to the side. The amateur portrait is of the members of the band, HOT. To the left side are 2 red dice each showing the number 5. To the right of drawing placed near lead singer is a black die, diagonal dots of the number 3.

Final scene: “AK” is still in prison. She’s walking in prison garb with back to camera down a long hall (a long haul ahead?), her hands uselessly crammed in pockets and head with long brown hair bent forward, walking dejectedly toward distant corridor.

I wonder if the black die with three dots is emblem of the 3 persons involved in the death. This die is placed on top of the lead singer, if the drawing of the band is accurate.  The entire set of 3 dice adds up to Number 13, a traditionally unlucky number, representing Judas at the last supper?.

HOT lead singer may symbolize Amanda, he has the long hair, stars on his guitar, wears large hoop earrings in both ears like a female. His guitar strap has a yellow smiley face pin and beneath that a black and white ying yang pin, a symbol Amanda did once draw. He wears a red woven thread bracelet. “AK” in opening scene wears a thread bracelet, but of neutral color, and a necklace of silver balls, also a chain belt slung low over mini skirt. Sorta like chatelaine of castle, or to tie her image to “Meredith” figure who wore the red belt?

Entire color scheme of video is black, gray, and red. The handsome police guard has white bone on his desk alsong with a few red items including an apple like the maggotty apples from “cook”. Is the bone on his desk symbol of death and forensics, CSI? Also this bone was seen held in hand of “Meredith” in long red gloves.

A mostly black cat sits quietly in an earlier scene where “AK” runs past. Could the cat be the boys’ cat downstairs or like Artemis, Amanda’s real black and white cat or herself as she dressed as cat for Halloween? Black cats are traditional symbol of misfortune.

The Mistral Blows.

The guard wears a black jacket, cap, and enters swinging a cell key and whistling, content in his job and quite conservative. He views TV monitors of the cells from his desk. Naturally ‘AK’ is center of men’s attention. Meredith in the Christian Leontieux? video looked so much lovelier, and the theme was love and heaven, not death and hell.

Posted by Hopeful on 06/22/12 at 07:29 PM | #

Hi Hopeful,

Thanks for the elaborate analysis. I took a look at the video but I do not understand this business and therefore unable to comment much. However, the video is rich with symbolism. The broken window, the knife and the rotten apples.

Is it blood on the apron of the cook? What he is cooking? The fellow in the uniform is the prison warden (written warder in the credits)?

I got a feeling that she is trying to run away from herself- which is tricky for her at this time- she is trying to say something but is unable to communicate with any- as you have pointed out correctly that none others have a face.

Why there are so many censored labels? Or it is part of the video?

The number of worms in the video is equal to the number of men she had sex with…

Posted by chami on 06/24/12 at 02:26 PM | #


The problem is very serious- believe me. I just returned from Germany yesterday after a conference and felt that the health of whole of Europe is not good. It is just a matter of time. Excuse me for my casual and visual analysis of the health of the continent from a short visit and I am not an economist. But conventional medicine is not going to work any more.

The real problem, if I understand the problem correctly at all, is there there are too many countries with too many economists working at cross purposes. I would also love to add the UN and IMF to this broth…

I also believe that localization is a good solution AND we must try to balance the budget at the local level. One good solution is to invest heavily on the infrastructure projects (in the US this means only defense but I digress) that create jobs for the middle level directly.

10 years ago 1 dollar was approximately 1 euro. Today it is closer to 0.8- not really worrisome. Dollar has sunk, not euro. Comparing dollar vs euro can be dangerous in some ways. I would love to see the ECB take some stand on this…

Only country that is doing well in this mess is China. They do not listen to UN or IMF advices…

Way to go? Invest in infrastructures and improve efficiencies slowly but steadily.

Posted by chami on 06/24/12 at 03:16 PM | #

Sadly it would seem to be true. I was advised to use a less risky portfolio in view of what’s going to happen within the next months. Mind you the Republican mind set in the US seems to be stop Obama at any cost at all and therefore the arguing going on is counter productive. Fox news for example is very strange. For example they seem to be totally on the side of Zimmerman as opposed to Tryvon Martin. The same thing holds true with AK of course because they appear to only provide the red meat the public want’s. I don’t wish to open a can of worms here but the bias shown because of race is paramount and still is a major part of the American psyche. The xenophobia is obvious as is the lack of education. It’s a shame that the US news media has in general become just another show concerned with the ratings rather than unbiased news. As to the financial situation I fear that come November nothing will change.

Posted by Grahame Rhodes on 06/24/12 at 07:57 PM | #

Hi Hopeful

Great analysis of the video. As you know there will soon be a main post building on this. Shades of OK Simpson.

Posted by Peter Quennell on 06/25/12 at 03:17 PM | #

Hi Chami and Grahame. Thanks for the spot-on comments.

I dont have a REASON to think a new appeal trial wont happen because Italy cant afford the costs.

But there are pressures on the entire justice system budget and a couple of posts on whats wrong with growth at core and how Italy can get beyond that are coming up.

Posted by Peter Quennell on 06/25/12 at 03:23 PM | #

I suppose “The Mistral Blows” for which Amanda Knox wrote the script offers yet another glimpse into the murderess´s twisted mind and grisly thoughts. Although it may at first glance appear like a second-rate horror flick whilst the band H.O.T are blaring their monotonous melody in the background , it remains an unsettling array of symbolism clearly pointing to Amanda´s guilt, as Hopeful correctly discerned in her detailed analysis.

Still I disagree with her take on some aspects : I believe that the blood-stained butcher waiving the knife, not the mute man bound to the chair, was the one supposed to represent a reference to Sollecito, on whom Amanda is foisting off blame by casting him as the one who inflicted the fatal blow on Meredith´s neck, thus trying to diminish her own involvement in the murder. She clearly once again attempts to portray herself as the victim, especially when confronted with the “Meredith-persona”  it seems as if Knox is the one being haunted or terrorized, while Meredith, the true victim, reappears as a demon scaring her.An odd reversal.

The actress playing Knox in the video is constantly on the run, wishing to dodge the demonic, faceless figures clawing at her, which I hope allude to the nightmares visiting the actual Knox, emblems of her guilty conscience. Amanda is trying to escape her conscience which is turning her life into an earthly hell. The rotten, maggoty apples may therefore also symbolize the moral degradation into which her soul has plunged, the nausea, stench and dirt infesting her sick mind, her gradual descent into insanity perhaps?

Interestingly ,the H.O.T. video contains horror conventions which appear familiar, some elements, particularly the heroine on the run from scary figures and the maggoty apples, remind me of the work of the technical band Oomph and their song “Labyrinth” :

It too focuses on dark topics, some argue it deals with child abuse. Amanda Knox inflicted abuse on another human being, and seemingly cannot safely escape the labyrinth of her own guilt either.

Posted by aethelred23 on 06/26/12 at 04:45 PM | #


aethelred23, thanks for your thoughts on “Mistral Blows”. You are probably right about the “chef” with knife being Sollecito. I watched it again and that fits with the timing: first person AK character encounters is the MK figure, just like she first met Meredith Kercher on arrival in Perugia, then later met Raffaele at a MUSIC CONCERT (like this music video?). Raf was the guy who had the knife collection, the knife over his bed.

Someone suggested the chef guy could be a symbol for Mignini. I’m not sure, now I’m more convinced the man in chair rather than being Raf is really Amanda who was tied up in prison and hating every minute of it, longing and wrestling to be free from her bonds. As she removes the red headcovering of guy in chair, she is frightened by her own violent energy that bursts to escape, she hates that chair. Also the AK figure is seen in chair as video begins. She did a lot of sitting, tied down feeling. This video represents the long slow slog of prison hours to an impatient rock climber and cartwheel turner.

You’re right, “Labyrinth” mirrors this H.O.T. video completely, even the Alice in Wonderland mad tea party of horror, with underlying menace of child abuse, maybe the apples are symbol of apples for teacher’s pet, apples are the gift to teachers in the U.S, apples reflect days of youth and school days, the apple fell and Newton discovered gravity.

I got a lot of new symbolism from looking again at the HOT video, and the tech band of horror’s Labyrinth. Both are reminders of how glorious innocence and kindness are compared to stench like that.

I agree with you this screenplay is the outpouring of a very guilty mind, and the AK character just wants to run away from all the other characters, the MK woman in black, the butcher, chef, or cook, and then the man in chair, and all the ghouls and zombies along the way, back to the safety of prison.

I noticed the chef is sitting near a tall ladder, the kind used to repaint high ceilings. He seems to be seated on a stool but is there a saw-horse nearby? Interior paint of walls is peeling. Walls look moldy.

Also, the words to the song are hard to understand, I got these:

‘Sometimes clouds turn to dust, and I feel alive’
‘There’s times the skies seem to rust’
‘Sometimes I fall upon the walls…’
‘I’m so far from you…’
‘I’ve been waiting so long…’
‘When you go, you go forever.’

Theme: agony of the endlessness of an ordeal.

Posted by Hopeful on 06/27/12 at 06:24 PM | #

Quite aside from the terrible song it’s an appalling piece of filmmaking. The script is woeful - amateur, self indulgent, derivative. We knew it already but it’s nice to have it confirmed - AMANDA KNOX IS A TALENTLESS HACK – and if this is her best attempt at scriptwriting, then the book should be diabolical.

Posted by Spencer on 06/27/12 at 09:11 PM | #

I agree, Spencer. Symbolic or not,this video and the script are the worst I have seen in a long, long time. Just a bunch of people trying to look deep, like they are some great modern artists. If this is what her “talent” is, I shudder to think of her book, which is bound to be far more torturous and self indulgent.

Posted by Sara on 06/27/12 at 11:28 PM | #
Commenting is not available in this channel entry.

Where next:

Click here to return to The Top Of The Front Page

Or to next entry Italian Police Long Known As Among Europe’s Coolest, Now Also Being Remarked Upon As…

Or to previous entry Today And Tomorrow Are Really Key Days For The Italian Economy If Future Sums Are To Work