United Nations General Assembly resolution ES-10/L.22

From Wikipedia, the free encyclopedia
UN General Assembly
Resolution ES‑10/L.22
United Nations General Assembly resolution A ES 10 L 22 vote.png

  Voted in favor
  Voted against
  Abstained
  Not present
Date 21 December 2017
Meeting no. 10th Emergency Special Session (continuation)
Code A/RES/ES‑10/L.22 (Document)
Subject Status of Jerusalem
Voting summary
128 voted for
9 voted against
35 abstained
21 absent
Result Recognition of Jerusalem as Israel’s capital as “null and void”

United Nations General Assembly resolution ES‑10/L.22 is a emergency session resolution declaring the status of Jerusalem as Israel’s capital as “null and void.”.[1] It was adopted by the 37th Plenary meeting of the tenth emergency special session of the United Nations General Assembly[2] during the tenure of the seventy-second session of the United Nations General Assembly on 21 December 2017. The draft resolution was drafted by Yemen and Turkey.[3]Though strongly contested by the United States, it passed by 128 votes to nine against with 21 absentees and 35 abstentions.

Background[edit]

On 6 December 2017, US President Donald Trump said that he would recognise the status of Jerusalem as being Israel’s sovereign capital[4] in a departure from previous UNGA resolutions as well prevailing international norms where no state either recognises Jerusalem as a national capital nor has an embassy there. The move prompted protests from states and communities in many parts of the world.[5]

Following the failure of an United Nations Security Council resolution three days earlier, after an U.S. veto, to rescind the recognition by any states of Jerusalem as a national capital, Palestinian UN Ambassador Riyad Mansour said that the General Assembly would vote on a draft resolution calling for Trump’s declaration to be withdrawn. He sought to invoke Resolution 377, known as the “Uniting for Peace” resolution, to circumvent a veto. The resolution states that the General Assembly can call an Emergency Special Session to consider a matter “with a view to making appropriate recommendations to members for collective measures” if the Security Council fails to act.[6]

Campaign[edit]

On 20 December, US President Donald Trump threatened to cut US aid to countries voting against the US’ side.[7] The day before the vote, he said: “Let them vote against us…We don’t care…this isn’t like it used to be where they could vote against you and then you pay them hundreds of millions of dollars. We’re not going to be taken advantage of any longer.”[8]Ambassador Nikki Haley warned her country would remember and “take names” of every country that voted in favour of the resolution.[9][10][11][12] The governments of Turkey and Iran denounced USA’s threats as “anti-democratic” and “blackmail“.[13][14] She had sent to a letter to dozens of member states that warned Trump had asked her to “report back on those countries who voted against us.”[15] Turkish President Recep Tayyip Erdoğan warned Trump that “he cannot buy Turkey’s democratic will with petty dollars” and “that opposition of other countries will teach the United States a good lesson”.[16][17]

Israeli Prime Minister Benjamin Netanyahu stated that Israel rejects this vote before it passes and called the UN “house of lies”.[18]

Canada’s, which was seeking re-negotiations of the NAFTA, Foreign Affairs Minister Chrystia Freeland‘s spokesman confirmed its intention to abstain from the vote and that the resolution should not have come to the General Assembly.[19]

Content[edit]

The text of the resolution includes the following key statements:[20]

The General Assembly,

  • Bearing in mind the specific status of the Holy City of Jerusalem and, in particular, the need for the protection and preservation of the unique spiritual, religious and cultural dimensions of the City, as foreseen in the relevant United Nations resolutions,
  • Stressing that Jerusalem is a final status issue to be resolved through negotiations in line with relevant United Nations resolutions,
  • Expressing in this regard its deep regret at recent decisions concerning the status of Jerusalem,
  • Affirms that any decisions and actions which purport to have altered, the character, status or demographic composition of the Holy City of Jerusalem have no legal effect, are null and void and must be rescinded in compliance with relevant resolutions of the Security Council, and in this regard, calls upon all States to refrain from the establishment of diplomatic missions in the Holy City of Jerusalem, pursuant to resolution 478 (1980) of the Security Council;
  • Demands that all States comply with Security Council resolutions regarding the Holy City of Jerusalem, and not to recognize any actions or measures contrary to those resolutions;
  • Reiterates its call for the reversal of the negative trends on the ground that are imperiling the two-State solution and for the intensification and acceleration of international and regional efforts and support aimed at achieving, without delay, a comprehensive, just and lasting peace in the Middle East on the basis of the relevant United Nations resolutions, the Madrid terms of reference, including the principle of land for peace, the Arab Peace Initiative and the Quartet Roadmap and an end to the Israeli occupation that began in 1967.

It concluded in reading that “any decisions and actions, which purport to have altered the character, status or demographic composition of the Holy City of Jerusalem have no legal effect, are null and void and must be rescinded in compliance with relevant resolutions of the Security Council.”[21]

Motion[edit]

The motion was proposed by Yemen and Turkey.[22]

Debate[edit]

In introducing the resolution as Chair of the Arab Group, Yemen’s Amabassador said the US decision was a “blatant violation of the rights of the Palestinian people, as well as those of all Christians and Muslims.” He emphasized that it constituted a “dangerous breach of the Charter of the United Nations and a serious threat to international peace and security, while also undermining the chances for a two‑State solution and fuelling the fires of violence and extremism.”[23]

Turkey, who was the co-sponsor of the draft resolution, also spoke as current Chair of the Organization of Islamic Cooperation(OIC).[23] Foreign Minister Mevlut Cavusoglu said that Trump’s decision was an outrageous assault to all universal values. “The Palestinians have the right to their own state based on 1967 borders with East Jerusalem as its capital. This is the main parameter and only hope for a just and lasting peace in the region. However, the recent decision of a UN Member State to recognise Jerusalem, or Al-Quds, as the capital of Israel, violates international law, including all relevant UN resolutions.”[22]

The General Assembly heard from Palestinian Foreign Minister Riad Al‑Malki, who said that the meeting was “not because of any animosity to the United States of America” but instead the sessions was “called to make the voice of the vast majority of the international community — and that of people around the world — heard on the question of Jerusalem/Al‑Quds Al‑Sharif.” He called the US decision to recognise Jerusalem as Israel’s capital and to move its embassy there “an aggressive and dangerous move” which could inflame tensions and lead to a religious war that “has no boundaries.” He added that though the decision would have no impact on the city’s status, it would nevertheless compromise the role of the United States in the Middle East peace process.[23] He urged member states to reject “blackmail and intimidation.”[5]

US Ambassador Nikki Haley then said that her country was “singled out for attack” because of its recognition of Jerusalem as the capital of Israel. She added that: “The United States will remember this day in which it was singled out for attack in the General Assembly for the very act of exercising our right as a sovereign nation,” Haley said. We will remember it when we are called upon to once again make the world’s largest contribution to the United Nations, and so many countries come calling on us, as they so often do, to pay even more and to use our influence for their benefit.”[15] She added that: “America will put our embassy in Jerusalem. That is what the American people want us to do, and it is the right thing to do. No vote in the United Nations will make any difference on that…this vote will make a difference in how Americans view the UN.”[22]

Israel’s Ambassador Danny Danon then told the assembly that the vowed that “no General Assembly resolution will ever drive us from Jerusalem.”[4]

Venezuela’s Ambassador, speaking for the Non‑Aligned Movement (NAM), expressed “grave concern about Israel’s ongoing violations in the Occupied Palestinian Territory, including attempts to alter the character, status and demographic composition of the City of Jerusalem. [It was] slso concerned about the decision to relocate the United States embassy [and] warned that such provocative actions would further heighten tensions, with potentially far‑reaching repercussions given the extremely volatile backdrop.[23]

Other speakers included, Pakistan, Indonesia, Maldives, Syria, Bangladesh, Cuba, Iran and China.[23]

Malaysia’s Ambassador Datuk Seri Mohammed Shahrul Ikram Yaakob said that, as a member of the OIC and NAM, “Malaysia joins the international community in expressing our deep concern and rejects the decision by the United States to recognise Jerusalem as the capital of Israel. It is also an infringement of the Palestinian people’s rights and their right to self determination.” He called for a peaceful two-state solution and that Malaysia is concerned the situation will only feed into the agenda of extremists.”[2]

Other speakers included, the Democratic People’s Republic of Korea and South Africa. The Permanent Observer for the Holy See, Tomasz Grysa, emphasised that Jerusalem was most sacred to the Abrahamic faiths and a symbol for millions of believers around the world who considered it their “spiritual capital.” Its significance went “beyond the question of borders, a reality that should be considered a priority in every negotiation for a political solution.” The Holy See, he said, called for a “peaceful resolution that would ensure respect for the sacred nature of Jerusalem and its universal value…reiterating that only international guarantee could preserve its unique character and status and provide assurance of dialogue and reconciliation for peace in the region.”[23]

After the motion was passed, more speeches continued with Estonia, who also spoke on behalf of other states. Australia’s Ambassador then explained her country’s government did “not support unilateral action that undermined the peace process [and] it did not believe today’s text would help to bring the parties back to the negotiating table.”[23]

Other speakers included, Paraguay, whose Ambassador said that the country would abstain because “the question of Jerusalem was a matter for the Security Council, as the primary body responsible for the maintenance of international peace and security.”[23] This was followed by El Salvador, Argentina and Romania.[23]

Canada’s Ambassador Marc-Andre Blanchard called the proposal “one-sided”[23] and said: “We are disappointed that this resolution is one sided and does not advance prospects for peace to which we aspire, which is why we have abstained on today’s vote.” He, however, added that Canada wanted to emphasise Jerusalem’s special significance to the Abrahamic religions of Jews, Muslims and Christians. “Denying the connection between Jerusalem and the Jewish, Muslim and Christian faiths undermines the integrity of the site for all. We also reiterate the need to maintain the status quo at Jerusalem’s Holy sites.[19]

Nicaragua’s explained its support of the resolution, as it “rebuffed recent unilateral attempts to modify the character and status of Jerusalem. Such unilateral actions were in blatant violation of resolution 2234 (2016) and others…unilateral actions jeopardised peace and stability in the Middle East and drew the international community further away from a solution.”[23]

Mexico’s Ambassador then explained the abstention and emphasised that convening an emergency session was a disproportionate response. “The United States must become part of the solution, not a stumbling block that would hamper progress…the international community was further than ever from agreement.”[23]

The Czech Republic then said that while it supported the European Union position, it had abstained because it “did not believe the draft resolution would contribute to the peace process.”[23]

Armenia said that is position “remained unchanged. The situation should be resolved through negotiations paving the way for lasting peace and security.”[23]

Hungary echoed Armenia’s stance and said it would not comment on the foreign relations of the United States.[23]

Latvia then spoke, before Estonia re-took the floor to say it had also spoken on behalf of Albania, Lithuania and the former Yugoslav Republic of Macedonia.[23]

Result[edit]

Vote[24] Quantity States
Approve 128 Afghanistan, Albania, Algeria, Andorra, Angola, Armenia, Austria, Azerbaijan, Bahrain, Bangladesh, Barbados, Belarus, Belgium, Belize, Bolivia, Botswana, Brazil, Brunei, Bulgaria, Burkina Faso, Burundi, Cape Verde, Cambodia, Chad, Chile, China, Comoros, Republic of the Congo, Costa Rica, Cuba, Cyprus, Democratic People’s Republic of Korea, Denmark, Djibouti, Dominica, Ecuador, Egypt, Eritrea, Estonia, Ethiopia, Finland, France, Gabon, Gambia, Germany, Ghana, Greece, Grenada, Guinea, Guyana, Iceland, India, Indonesia, Iran, Iraq, Ireland, Italy, Ivory Coast, Japan, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Laos, Lebanon, Liberia, Libya, Liechtenstein, Lithuania, Luxembourg, Madagascar, Malaysia, Maldives, Mali, Malta, Mauritania, Mauritius, Monaco, Montenegro, Morocco, Mozambique, Namibia, Nepal, Netherlands, New Zealand, Nicaragua, Niger, Nigeria, Norway, Oman, Pakistan, Papua New Guinea, Peru, Portugal, Qatar, Republic of Korea, Russia, Saint Vincent and the Grenadines, Saudi Arabia, Senegal, Serbia, Seychelles, Singapore, Slovakia, Slovenia, Somalia, South Africa, Spain, Sri Lanka, Sudan, Suriname, Sweden, Switzerland, Syria, Tajikistan, Thailand, Macedonia, Tunisia, Turkey, United Arab Emirates, United Kingdom, Tanzania, Uruguay, Uzbekistan, Venezuela, Vietnam, Yemen, Zimbabwe.
Reject 9 Guatemala, Honduras, Israel, Marshall Islands, Micronesia, Nauru, Palau, Togo, United States.
Abstain 35 Antigua and Barbuda, Argentina, Australia, Bahamas, Benin, Bhutan, Bosnia and Herzegovina, Cameroon, Canada, Colombia, Croatia, Czech Republic, Dominican Republic, Equatorial Guinea, Fiji, Haiti, Hungary, Jamaica, Kiribati, Latvia, Lesotho, Malawi, Mexico, Panama, Paraguay, Philippines, Poland, Romania, Rwanda, Solomon Islands, South Sudan, Trinidad and Tobago, Tuvalu, Uganda, Vanuatu.
Absent 21 Central African Republic, Democratic Republic of the Congo, East Timor, El Salvador, Georgia, Guinea-Bissau, Kenya, Mongolia, Myanmar, Moldova, Saint Kitts and Nevis, Saint Lucia, Samoa, San Marino, São Tomé and Príncipe, Sierra Leone, Swaziland, Tonga, Turkmenistan, Ukraine, Zambia.

Reactions[edit]

States

Israel – Prime Minister Benjamin Netanyahu rejected the result shortly after it was announced in call it “preposterous,” while he also thanked the states that supported “the truth” by not participating in “the theatre of the absurd.” He added that: “Jerusalem is our capital. Always was, always will be…But I do appreciate the fact that a growing number of countries refused to participate in this theatre of the absurd. So I appreciate that, and especially I want to again express our thanks to [US] President (Donald) Trump and Ambassador [Nikki] Haley, for their stalwart defence of Israel and their stalwart defence of the truth.” Defence Minister Avigdor Liberman, reminded Israelis of the longstanding Israeli disdain for such votes. “Let us just remember that this is the same UN about which our first ambassador to the organisation, Abba Eban, once said: ‘If Algeria introduced a resolution declaring that the earth was flat and that Israel had flattened it, it would pass by a vote of 164 to 13 with 26 abstentions’. There is nothing new in what just happened at the UN.” He also praised the US as “the moral beacon shining out of the darkness.” Minister of Strategic Affairs and Public Security Gilad Erdan said: “The historic connection between Israel and Jerusalem is stronger than any vote by the ‘United Nations’ — nations who are united only by their fear and their refusal to recognise the simple truth that Jerusalem is the capital of Israel and the Jewish people.”

    • However, opposition Joint List Chairman and MK Ayman Odeh called the vote a wake-up call for Israel: “In the international arena, there still exists a large and definitive majority that believes that the Palestinian people, like all other nations, deserve a place in this world and the right to self-determination. This evening’s vote by the majority of the world’s nations against Trump’s announcement, in spite of the pressure and threats, flies in the face of Trump’s and Netanyahu’s diplomatic policy and is a clear statement by the international community in support of peace and the right of the Palestinians to an independent state, whose capital is East Jerusalem,”[8]
Media

Haaretz‘s Noa Landau, wrote, in citing unnamed diplomatic sourced, that Israel was particularly disappointed with countries like India that have enhanced bilateral relations with it recently. “The main disappointment in Israel was with the countries that have enhanced bilateral relations in recent years, especially those that share a particularly conservative worldview with the Netanyahu government. For example, India – whose Prime Minister, Narendra Modi, visited Israel in July, a tour that was memorable mainly for the pastoral photographs of him and Netanyahu embracing and wading in the waves – voted for the resolution against Israel and the United States.”[8]

Others

At a “Solidarity to Save Jerusalem” rally organised by the Barisan National government in Malaysia, one of the attendees Association of NextGen Christians of Malaysia President Joshua Hong said at the Putra Mosque: “We are here because we feel that the decision made by President Trump on announcing Jerusalem as the capital of Israel is merely a political decision. He added that the decision also hurts Christian and Arabic churches in Palestine and not just the Muslims. “To us as Christians, Jerusalem is a city of peace and after that announcement, we feel there is no more peace.I think it is not right and unjust. We believe we should continue pursuing the sustainable peace solution for Palestine and Israel, rather than just a single nation declaring it just like that.” He claimed that about 50 members of the group turned up in a show of support for the Palestinian people..[2]

National electoral calendar 2014

From Wikipedia, the free encyclopedia
For local elections, see Local electoral calendar 2014.

ContentsThis national electoral calendar for the year 2014 lists the national/federal direct elections to be held in 2014 in all sovereign states and their dependent territories. By-elections are excluded, though national referendumsare included. Specific dates are given where they have been announced.

National electoral calendar 2014

2014 elections.png

Countries with national elections or referendums:
Red – Presidential (or head of state)
purple  – Presidential and parliamentary/legislative
Blue  – Parliamentary/legislative
Green – Referendum and parliamentary/legislative
yellow – Referendum
orange  – Referendum and presidential
black  – Referendum, presidential and parliamentary/legislative
Gray – None

January

February

March

April

May

June

July

August

September

October

November

December

Later

The Biggest Economic Story Going Into 2015 Is Not Oil

Submitted by Raul Ilargi Meijer via The Automatic Earth blog,

Isn’t it fun to just watch the market numbers roll by from time to time as you go about your day, see Europe markets up 3%+, Dubai 13%, US over 2% (biggest two-day rally since 2011!), and you just know oil must get hit again? Well, it did. WTI down another 3%+. I tells ya, no Plunge Protection is going save this sucker.

And oil is not even the biggest story today. It’s plenty big enough by itself to bring down large swaths of the economy, but in the background there’s an even bigger tale a-waiting. Not entirely unconnected, but by no means the exact same story either. It’s like them tsunami waves as they come rolling in. It’s exactly like that.

That is, in the wake of the oil tsunami, which is a long way away from having finished washing down our shores, there’s the demise of emerging markets. And I’m not talking Putin, he’ll be fine, as he showed again today in his big press-op. It’s the other, smaller, emerging countries that will blow up in spectacular fashion, and then spread their mayhem around. And make no mistake: to be a contender for bigger story than oil going into 2015, you have to be major league large. This one is.

The US dollar will keep rising more or less in and of itself, simply because the Fed has ‘tapered QE’, and much of what happened in global credit markets, especially in emerging markets, was based on cheap and easily available dollars. There’s now $85 billion less of that each month than before the taper took it away in $10 billion monthly increments. The core is simple.

This is not primarily government debt, it’s corporate debt. But it’s still huge, and it has not just kept emerging economies alive since 2008, it’s given them the aura of growth. Which was temporary, and illusionary, all along. Just like in the rest of the world, Japan, EU, US. And, since countries can’t – or won’t – let their major companies fail, down the line it becomes public debt.

One major difference from the last emerging markets blow-up, in the late 20th century, is size: emerging markets today are half the world economy. And they’re about to be blown to smithereens. Sure, oil will play a part. But mostly it will be the greenback. And you know, we can all imagine what happens when you blow up half the global economy …

Erico Matias Tavares at Sinclair has a first set of details:

Emerging Markets In Danger

There are some signs of trouble in emerging markets. And the money at risk now is bigger than ever. The yield spread between high grade emerging markets and US AAA-rated corporate debt has jumped, almost doubling in less than three weeks to the highest level since mid-2012.


MSCI Emerging Markets Index and Yield Spread between High Grade Emerging Markets and US AAA Corporates: 14 March 2003 – Today. Source: US Federal Reserve.

This means that the best credit names in emerging markets have to pay a bigger premium over their US counterparts to GET FUNDING. When this spread spikes up and continues above its 200-day moving average for a sustained period of time, it is typically a bad sign for equity valuations in emerging markets, as shown in the graph above. One swallow does not a summer make, but it is worthwhile keeping an eye on this indicator.

 

As yields go up the value of these emerging market bonds goes down, resulting in losses for the investors holding them. The surge of the US dollar in recent months could magnify these losses: if the bonds are denominated in local currency they will be worth a lot less to US investors; otherwise, the borrowers will now have to work a lot harder to repay those US dollar debts, increasing their credit risk. Any losses could end up being very significant this time around, as demand for emerging markets bonds has literally exploded in recent years.


Average Annual Gross Debt Issuance ($ billions, percent): 2000 – Today. Source: Dealogic, US Treasury. Note: Data include private placements and publicly-issued bonds. 2014 data are through August 2014 and annualized.

As the graph above shows, the issuance of emerging market corporate debt has risen sharply since the depths of the 2008-09 financial crisis.These volumes are very large indeed, and now account for non-trivial portions of investors’ and pension funds’ portfolios worldwide.

 

As a result, emerging markets corporations are now leveraged to the hilt, easily exceeding the 2008 highs by almost a multiple to EBITDA. And why not? With foreign investors desperate for yield as a result of all the stimulus and money printing by their central banks, they were only too happy to oblige. And they were not alone. Governments in these countries were also busy doing some borrowing of their own, as their domestic capital markets deepened.

 

[..] foreign investors have also piled into locally denominated bonds of emerging markets governments. Countries like Peru and Latvia now have over 50% foreign ownership of their bonds. [..] But there are big speculative reasons behind the recent money flows going into these countries – which could reverse very quickly should the tide turn. [..]

 

If investors end up rushing for the emerging markets exit for whatever reason, with this unprecedented level of exposure they might be bringing home much more than a bruised ego and an empty wallet. For one, European banks are hugely exposed to emerging markets. Any impairment to their books would likely make any new lending even more difficult, at a time when there is already a dearth of non-government credit in Europe.

 

And if emerging economies falter, where will the growth needed to repair Western government and private balance sheets come from? It used to be said that when the US economy sneezes the rest of the world catches a cold. Now it seems all we need is a hiccup in emerging markets.

That’s what you get when emerging markets are both half the global economy AND they’ve accomplished that level off of ultra-low US Fed interest rates and ultra-high US Fed credit ‘accommodation’. All you have to do when you’re the Fed is to take both away at the same time, and you’re the feudal overlord.

Our favorite friend-to-not-like Ambrose Evans-Pritchard does what he does well: provide numbers:

Fed Calls Time On $5.7 Trillion Of Emerging Market Dollar Debt

The US Federal Reserve has pulled the trigger. Emerging markets must now brace for their ordeal by fire. They have collectively borrowed $5.7 trillion in US dollars, a currency they cannot print and do not control. This hard-currency debt has tripled in a decade, split between $3.1 trillion in bank loans and $2.6 trillion in bonds. It is comparable in scale and ratio-terms to any of the biggest cross-border lending sprees of the past two centuries.

 

Much of the debt was taken out at real interest rates of 1% on the implicit assumption that the Fed would continue to flood the world with liquidity for years to come. The borrowers are “short dollars”, in trading parlance. They now face the margin call from Hell as the global monetary hegemon pivots. The Fed dashed all lingering hopes for leniency on Wednesday. The pledge to keep uber-stimulus for a “considerable time” has gone, and so has the market’s security blanket, or the Fed Put as it is called. Such tweaks of language have multiplied potency in a world of zero rates.

 

Officials from the BIS say privately that developing countries may be just as vulnerable to a dollar shock as they were in the Fed tightening cycle of the late 1990s, which culminated in Russia’s default and the East Asia Crisis. The difference this time is that emerging markets have grown to be half the world economy. Their aggregate debt levels have reached a record 175% of GDP, up 30 percentage points since 2009.

 

Most have already picked the low-hanging fruit of catch-up growth, and hit structural buffers. The second assumption was that China would continue to drive a commodity supercycle even after Premier Li Keqiang vowed to overthrow his country’s obsolete, 30-year model of industrial hyper-growth, and wean the economy off $26 trillion of credit leverage before it is too late. [..]

 

Stress is spreading beyond Russia, Nigeria, Venezuela and other petro-states to the rest of the emerging market nexus, as might be expected since this is a story of evaporating dollar liquidity as well as a US shale supply-glut.

 

[..[ the Turkish lira has fallen 12% since the end of November. The Borsa Istanbul 100 index is down 20% in dollar terms. Indonesia had to intervene on Wednesday to defend the rupiah. Brazil’s real has fallen to a 10-year low against the dollar, as has the index of emerging market currencies. Sao Paolo’s Bovespa index is down 23% in dollars in 3 weeks.

The slide can be self-feeding. Funds are forced to sell holdings if investors take fright and ask for their money back, shedding the good with the bad. Pimco’s Emerging Market Corporate Bond Fund bled $237m in November, and the pain is unlikely to stop as clients discover that 24% of its portfolio is in Russia.

 

One might rail against the injustice of indiscriminate selling. Such are the intertwined destinies of countries that have nothing in common. The Fed has already slashed its bond purchases to zero, withdrawing $85bn of net stimulus each month. It is clearly itching to raise rates for the first time in seven years. This is the reason why the dollar index has jumped 12% since May, smashing through its 30-year downtrend line, a “seismic change” in the words of HSBC. [..]

 

World finance is rotating on its axis, says Stephen Jen, from SLJ Macro Partners.The stronger the US boom, the worse it will be for those countries on the wrong side of the dollar.

 

“Emerging market currencies could melt down. There have been way too many cumulative capital flows into these markets in the past decade. Nothing they can do will stop potential outflows, as long as the US economy recovers.

Hold it there for a moment. I don’t think it’s the US economy (its recovery is fake), it’s the US dollar.

Will this trend lead to a 1997-1998-like crisis? I am starting to think that this is extremely probable for 2015,” he said.

 

This time the threat does not come from insolvent states. They have learned the lesson of the late 1990s. Few have dollar debts. But their companies and banks most certainly do, some 70% of GDP in Russia, for example. This amounts to much the same thing in macro-economic terms. Private debt morphs into state debt since governments cannot allow key pillars of their economies to collapse.

 

These countries have, of course, built $9 trillion of foreign reserves, often the side-effect of holding down their currencies to gain export share. This certainly provides a buffer. Yet the reserves cannot fruitfully be used in a recessionary crisis because sales of foreign bonds automatically entail monetary tightening. [..]

 

.. these reserves are a mirage. If you deploy them in such circumstances, you choke your own economy unless you can sterilize the effects. [..]

 

Investors are counting on the European Central Bank to keep the world supplied with largesse as the Fed pulls back. Yet the ECB could not pick up the baton even if it were to launch a blitz of quantitative easing, and there is no conceivable consensus for action on such a commensurate scale.

 

The world’s financial system is on a dollar standard, not a euro standard. Global loans are in dollars. The US Treasury bond is the benchmarks for global credit markets, not the German Bund. Contracts and derivatives are priced off dollar instruments. Bank of America says the combined monetary stimulus from Europe and Japan can offset only 30% of the lost stimulus from the US.

What more can I say? This is the lead story as we go into 2015 two weeks from today. Oil will help it along, and complicate as well as deepen the whole thing to a huge degree, but the essence is what it is: the punchbowl that has kept world economies in a zombie state of virtual health and growth has been taken away on the premise of US recovery as Janet Yellen has declared it.

It doesn’t even matter whether this is a preconceived plan or not, as some people allege, it still works the same way. The US gets to be in control, for a while, until it realizes, Wile E. shuffle style, that you shouldn’t do unto others what you don’t want to be done unto you. But by then it’ll be too late. Way too late.

As I wrote just a few days ago in We’re Not In Kansas Anymore, there’s a major reset underway. We’re watching, in real time, the end of the fake reality created by the central banks. And it’s not going to be nice or feel nice. It’s going to hurt, and the lower you are on the ladder, the more painful it will be. Be that globally, if you live in poorer countries, or domestically, if you belong to a poorer segment of the population where you are. In both senses, the poorest will be hit hardest.

It’s the new model along which the clowns we allow to run the show, do so. Unless ‘we the people’ take back control, it’s pretty easy to see how this will go down.

*  *  *

Still not convinced… Barclays notes this is already one of the worst sell-offs in EM credit since the crisis…

Average:

List of Banks owned by the Rothschild Family

“Give me control over a nations currency, and I care not who makes its laws” – Baron M.A. Rothschild

rothcrest

ROTHSCHILD OWNED BANKS:
Afghanistan, Bank of Afghanistan,
Albania, Bank of Albania,
Algeria, Bank of Algeria,
Argentina, Central Bank of Argentina,
Armenia, Central Bank of Armenia,
Aruba, Central Bank of Aruba,
Australia, Reserve Bank of Australia,
Austria, Austrian National Bank,
Azerbaijan, Central Bank of Azerbaijan Republic,
Bahamas, Central Bank of The Bahamas,
Bahrain, Central Bank of Bahrain,
Bangladesh, Bangladesh Bank,
Barbados, Central Bank of Barbados,
Belarus, National Bank of the Republic of Belarus,
Belgium, National Bank of Belgium,
Belize, Central Bank of Belize,
Benin, Central Bank of West African States, (BCEAO),
Bermuda, Bermuda Monetary Authority,
Bhutan, Royal Monetary Authority of Bhutan,
Bolivia, Central Bank of Bolivia,
Bosnia, Central Bank of Bosnia and Herzegovina,
Botswana, Bank of Botswana,
Brazil, Central Bank of Brazil,
Bulgaria, Bulgarian National Bank,
Burkina Faso, Central Bank of West African States, (BCEAO),
Burundi, Bank of the Republic of Burundi,
Cambodia, National Bank of Cambodia,
Came Roon, Bank of Central African States,
Canada, Bank of Canada – Banque du Canada,
Cayman Islands, Cayman Islands Monetary Authority,
Central African Republic, Bank of Central African States,
Chad, Bank of Central African States,
Chile, Central Bank of Chile,

China, The People’s Bank of China,

Colombia, Bank of the Republic,
Comoros, Central Bank of Comoros,
Congo, Bank of Central African States,
Costa Rica, Central Bank of Costa Rica,
Côte d’Ivoire, Central Bank of West African States, (BCEAO),
Croatia, Croatian National Bank,
Cuba, Central Bank of Cuba,
Cyprus, Central Bank of Cyprus,
Czech Republic, Czech National Bank,
Denmark, National Bank of Denmark,
Dominican Republic, Central Bank of the Dominican Republic,
East Caribbean area, Eastern Caribbean Central Bank,
Ecuador, Central Bank of Ecuador,
Egypt, Central Bank of Egypt ,
El Salvador, Central Reserve Bank of El Salvador,
Equatorial Guinea, Bank of Central African States,
Estonia, Bank of Estonia,
Ethiopia, National Bank of Ethiopia,
European Union, European Central Bank,

money-world-

Fiji, Reserve Bank of Fiji,
Finland, Bank of Finland,
France, Bank of France,
Gabon, Bank of Central African States,
The Gambia, Central Bank of The Gambia,
Georgia, National Bank of Georgia,
Germany, Deutsche Bundesbank,
Ghana, Bank of Ghana,
Greece, Bank of Greece,
Guatemala, Bank of Guatemala,

Guinea Bissau, Central Bank of West African States, (BCEAO),
Guyana, Bank of Guyana,
Haiti, Central Bank of Haiti ,
Honduras, Central Bank of Honduras,
Hong Kong, Hong Kong Monetary Authority,
Hungary, Magyar Nemzeti Bank,
Iceland, Central Bank of Iceland,
India, Reserve Bank of India,
Indonesia, Bank Indonesia,
Iran, The Central Bank of the Islamic Republic of Iran,

Iraq, Central Bank of Iraq,

Ireland, Central Bank and Financial Services Authority of Ireland,
Israel, Bank of Israel,
Italy, Bank of Italy,
Jamaica, Bank of Jamaica,
Japan, Bank of Japan,
Jordan, Central Bank of Jordan,
Kazakhstan, National Bank of Kazakhstan,
Kenya, Central Bank of Kenya,
Korea, Bank of Korea,
Kuwait, Central Bank of Kuwait,
Kyrgyzstan, National Bank of the Kyrgyz Republic,
Latvia, Bank of Latvia,
Lebanon, Central Bank of Lebanon,
Lesotho, Central Bank of Lesotho,

Libya, Central Bank of Libya,

us-homeland-security-seal-plaque_m-747261

Uruguay, Central Bank of Uruguay,
Lithuania, Bank of Lithuania,
Luxembourg, Central Bank of Luxembourg,
Macao, Monetary Authority of Macao,
Macedonia, National Bank of the Republic of Macedonia,
Madagascar, Central Bank of Madagascar,
Malawi, Reserve Bank of Malawi,
Malaysia, Central Bank of Malaysia,
Mali, Central Bank of West African States, (BCEAO),
Malta, Central Bank of Malta,
Mauritius, Bank of Mauritius,
Mexico, Bank of Mexico,
Moldova, National Bank of Moldova,
Mongolia, Bank of Mongolia,
Montenegro, Central Bank of Montenegro,
Morocco, Bank of Morocco,
Mozambique, Bank of Mozambique,
Namibia, Bank of Namibia,
Nepal, Central Bank of Nepal,
Netherlands, Netherlands Bank,
Netherlands Antilles, Bank of the Netherlands Antilles,
New Zealand, Reserve Bank of New Zealand,
Nicaragua, Central Bank of Nicaragua,
Niger, Central Bank of West African States, (BCEAO),
Nigeria, Central Bank of Nigeria,
Norway, Central Bank of Norway,
Oman, Central Bank of Oman,
Pakistan, State Bank of Pakistan,
Papua New Guinea, Bank of Papua New Guinea,
Paraguay, Central Bank of Paraguay,
Peru, Central Reserve Bank of Peru,
Philip Pines, Bangko Sentralng Pilipinas,
Poland, National Bank of Poland,
Portugal, Bank of Portugal,
Qatar, Qatar Central Bank,
Romania, National Bank of Romania,
Russia, Central Bank of Russia,

Rwanda, National Bank of Rwanda,
San Marino, Central Bank of the Republic of San Marino,
Samoa, Central Bank of Samoa,
Saudi Arabia, Saudi Arabian Monetary Agency,

Senegal, Central Bank of West African States, (BCEAO),
Serbia, National Bank of Serbia,
Seychelles, Central Bank of Seychelles,
Sierra Leone, Bank of Sierra Leone,
Singapore, Monetary Authority of Singapore,
Slovakia, National Bank of Slovakia,
Slovenia, Bank of Slovenia,
Solomon Islands, Central Bank of Solomon Islands,
South Africa, South African Reserve Bank,
Spain, Bank of Spain,
Sri Lanka, Central Bank of Sri Lanka,
Sudan, Bank of Sudan,
Surinam, Central Bank of Suriname,
Swaziland, The Central Bank of Swaziland,
Sweden, Sveriges Riksbank,
Switzerland, Swiss National Bank,

Tajikistan, National Bank of Tajikistan,
Tanzania, Bank of Tanzania,
Thailand, Bank of Thailand,
Togo, Central Bank of West African States, (BCEAO),
Tonga, National Reserve Bank of Tonga,
Trinidad and Tobago, Central Bank of Trinidad and Tobago,
Tunisia, Central Bank of Tunisia,
Turkey, Central Bank of the Republic of Turkey,

Uganda, Bank of Uganda,
Ukraine, National Bank of Ukraine,
United Arab Emirates, Central Bank of United Arab Emirates,

United Kingdom, Bank of England,

United States, Federal Reserve, Federal Reserve Bank of New York,

US-FederalReserveSystem-Seal_svg_

Vanuatu, Reserve Bank of Vanuatu,
Venezuela, Central Bank of Venezuela,

Vietnam, The State Bank of Vietnam,
Yemen, Central Bank of Yemen,
Zambia, Bank of Zambia,
Zimbabwe, Reserve Bank of Zimbabwe,
Bank For International Settlements, (BIS),

Felines animals

Jaguar

Leopard

Lion

Tiger