Get Ready the Euro Printing Press

Mike Shedlock
Posted: Aug 22, 2012 12:01 AM

Every day I get links from Spain, Italy, Germany, and Australia. The first three frequently cause problems. Translation from German is particularly difficult.

For example, a Google-translated headline on Welt Online reads ECB chief demonstrates German banker.

A cyberspace friend, "EM" writes Google has a tough time with much in this one - title boils down roughly to "Draghi holds Bundesbank President Weidmann Up To Ridicule".

Clearly that is an entirely different meaning.

Also from the same article, a Google-translated paragraph reads "Thus, the investor inclined saw with great astonishment, as at the last ECB press conference Jens Weidmann by Mario Draghi and the Portuguese Vitor Constancio, the vice president of the ECB, namely the ridiculousness was abandoned. An absolute rarity in the history of the ECB."

Here is a better translation from "EM".

"Thus, the willing investor saw with great astonishment at the last ECB press conference Jens Weidmann was held up to ridicule by Mario Draghi and the Portuguese Vitor Constancio, the vice president of the ECB. An absolute rarity in the history of the ECB."

The point of the article was the increasing isolation of Weidmann, up to the point of open ridicule by the president and vice-president of the ECB.

With the help of Bran from Spain, Andrea from Italy, and "EM" from Germany I can frequently provide much better translations of foreign articles than I could otherwise. Of course, articles from Tony and others from Australia and Canada are appreciated but require no translation.

Official Denial

The key point of the Welt Online story is the increasing isolation of Weidmann, including an official denial by the Bundesbank.

Consider this quote from yesterday as reported by Bloomberg. ...

“Nobody should try to create the impression that the Bundesbank or its president are isolated,” German ECB Executive Board member Joerg Asmussen told the Frankfurter Rundschau in today’s edition.

Mish Translation: "The Bundesbank and its president Jens Weidmann are without a doubt isolated and essentially ignored. The printing press door is open and the presses ready for operation."

However, there are a few open questions as follows.

Open Questions

  1. When Draghi fires up the presses
  2. Speed at which he prints
  3. How much gold and silver rise in response

Spain Predicts 4.3% Increase in Tax Revenues, Actual Results are 3.5% Drop; Proposed "Solution" is More Tax Hikes

Spain has been devastated by round after round of tax hikes. Another one is on the way. Via Google-translate, please consider this non-modified translation of government shuffles new tax increases to reduce the deficit

Never two without three. The brutal tax increases approved by the Government of Mariano Rajoy in late 2011, increasing the income tax and the tax on savings , among other figures, and the recent increase launched last July, with the increase in VAT , Taxes -special rate you could add soon a new tax hike to reach the deficit target of 6.3% of GDP set for this exercise. This, with an eye on a country's total bailout, whose application could occur next September.

Before formalizing the request for assistance, the government wants to make sure you are ready to meet the deficit target, and for that "is likely to take much more drastic measures they currently have," reveals a member of the Government, on Monday reported the newspaper El Pais. Among these, it weighs a new tax increases and a freeze on state pensions.

"The evolution of expenditure, with the cuts we have made, we have more or less clear, we do not know is how the revenues are going to go," admitted to the Government. In the first half of the year things did not go well: overall, tax revenues fell by 3.5% annual rate, far from expected for 2012 (increase of 4.3% per year).

The Ministry of Finance will report to the Executive on the development of tax collection during the summer months, and "if revenues continue to fall, probably will have to return to raise taxes and cut spending again, although here and can hardly play more ", added the sources. Specifically, in its editorial, the paper notes that Prisa Economy Minister Luis de Guindos, thinks "there is no room for further cuts in spending," which means that additional adjustments would have to come from the side of income.

Thus, the government may choose to remove the shelter deduction retroactively (about 6,000 million euros) or relief for contributions to private pension plans (2,000 million); impose verd penny and not only gas, but also to fuels; Excise reraise (alcohol, snuff ...) or implement new environmental taxes, and more. It is not ruled out anything.

Spain's economy minister says "there is no room for further cuts in spending", a position I believe is preposterous. However, my position does not matter.

What does matter is Spain is in an economic downward spiral and tax hikes will make matters worse. Sadly that is the primary option on the table. 

Mike "Mish" Shedlock