Berlusconi has refused to substantiate reports that he is to step down as Prime Minister to allow someone else to form government or to push for early elections. Berlusconi does not have enough confidence in the Italian Parliament to pass the reforms that are being called for by investors to increase growth and cut debt. The President can choose to let a government be formed by technocrats rather than call an election, although a political government can still be formed if a loss of confidence vote passes in Parliament.

A large part of the problem seems to be Berlusconi himself. After being rocked with a number of scandals, Berlusconi barely clings to power. His critics say that he puts his own business interests ahead of the interests of the country. His People of Freedom coalition has failed to produce any policies to try and combat the growing debt, which sits at €1.9 trillion.

The future in Italy looks dim. The European Central Bank has been buying government bonds to try and keep the Italian economy from going over the 7 per cent yield level, which is where both the Portugese and Irish governments were forced to accept bailouts. If the Italian economy succumbs to pressure it is big enough to bring down the entire Eurozone with it. With rumours that Fiat, Italy’s largest private sector employer, may be looking to vacate the country where it has been traditionally based, the Italian economy does not show any signs of looking up.

The new omnibus bill would institute stricter penalties for possession and trafficking of illiict drugs. Under the proposed bill someone growing more than 201 pot plants in a rental unit would receive a longer mandatory sentence than someone who had sexually assaulted a child.

This is comes in sharp contrast to the Supreme Court of Canada ruling this week in favor of keeping Insite, the group that runs a safe injection site in Vancouver, open. The 9-0 decision severely disappointed the federal government, but they have no choice but to comply. The Conservatives will most likely seek a review of the decision, despite the overwhelming evidence that safe injection sites help deal with addiction.

The ruling rejected the government’s stance that safe injection sites foster drug addiction. It also told the government to extend the exemption to Insite staff to protect them from possession and trafficking charges. The judges agreed that closing the facility would violate the rights of addicts living in one of the worst neighborhoods in Canada.

Justice Beverley McLachlin made clear in the ruling that the federal government has a right to set policy, but when policy is translated into state action and law the courts must determine their validity under the charter.

“The discretion vested in the minister of Health is not absolute; as with all exercises of discretion, the minister’s decisions must conform to the charter.”

The ruling could pave way for similar sites in other metropolitan areas.

Debt management companies know more than most how tough many families are finding the current economic climate. While it’s necessary for many households all over the country to cut back, it’s just as important to identify the things we shouldn’t cut back on - such as pensions.

With life expectancy increasing, many of us will have longer retirements. Paying into a pension offers some security of a comfortable lifestyle in retirement.

Think Money says people who aren’t paying into pensions because of debt may find debt management puts them “in a better position to give their pension the attention it deserves and get some advice from a qualified financial adviser.”

It started with a series of attacks along a shared border on the Sinai Peninsula that left eight Israelis dead. The five Egyptian officers were caught in the crossfire of the retaliation. Despite the expression by the Ehud Barak, Israel’s defence minister, the Egyptian cabinet feels that the sentiment does not go far enough. There has been an offer of a joint Egyptian-Israeli inquiry into the incident, which both sides seem eager to accept.

The revolution is Egypt which toppled Mubarak’s pro-Israel government has shifted the foundations of politics in the Middle East. The anger of Egyptians also stems from the poor treatment of Palestinians by Israel. The new regime has recently opened the Rafah border crossing with the Gaza Strip, which is currently the only way in and out of the area that is otherwise surrounded by Israel. The Israeli blockade has led to extreme conditions in both the Gaza Strip and the West Bank. The outbursts are also important because it is a show of legitimate public opinion in the once authoritarian country.

Israel has blamed Egypt for all but completely withdrawing its military from the border areas, which has led to several unexplained bombs attacking the natural gas lines which are a crucial part of Israel’s power supply. They maintain that the officers were killed on Egyptian soil in the crossfire, and that Palestinian fighters from the Gaza Strip slipped into Israel through the same territory. This accusation stung the Egyptian government, and they say that they have not lost control of the Sinai Peninsula.

The Camp David Accords limit Egyptian military presence in the area, but they have received Israeli permission to deploy 1,000 extra troops in the peninsula.

There have been protests in Cairo outside of the Israeli consulate. More than a thousand people have participated so far. One of the protestors climbed up the flagpole in the embassy and replaced the Israeli flag with an Egyptian one, prompting chants of “Long Live Egypt”. The protestors say they will continue until Egypt expels the Israeli ambassador.

Elsewhere, the Arab League has spoken out against “the Israeli attack on Egyptian forces.” This announcement came Sunday after a meeting of permanent members of the League, as they feel that Israel “bears full responsibility for the attack.”

This is exactly what the largest shareholder, Carl Icahn, has been urging Motorola to do for some time. He wants the company to capitalize on the surge in interest for wireless technology and patents. Icahn holds 11.36% stake in the company.

Should it go through, the acquisition would put Google’s Android platform in direct competition with Apple’s iPhone, Microsoft and RIM’s Blackberry. This may scare other wireless hardware providers who use Android as the operating system on their phones. Google says that Android will remain free and accessible to all those who want to use it as a platform. This is a marked deviation from the general Google business plan which has in the past centred on the internet and social media. Android controls 43.4% of the market for smartphone platforms, with Nokia’s share at 22% and Apple’s at 18%.

Google will also acquire Motorola’s set-top box businesses, which will bolster its young television department.

Over the past several years the country has nationalized three mining operations, and currently has only one foreign run operation, Rusoro, a Russian owned venture. Two of the previous operations were Canadian-owned and the last was American

Venezuela is also repatriating gold reserves that are held in banks in foreign nations such as England, the United States, Canada and Switzerland. 211 of 365 tons, worth $11 billion, of the precious metal had previously been held outside of the country. The reserves will most likely be moved to banks in Brazil, India, China, Russia or South Africa.

The obvious story is that Venezuela is trying to diversify its holdings, as the country gathers 95% of its income from oil production. But this could also be to avoid assets getting frozen when mining operations are nationalized. There are 17 pending cases against Venezuela in the World Bank’s International Centre for Settlement of Investment Disputes, 3 of which involve mining.

This may also negatively affect Venezuela’s sovereign credit rating, based on the political motives that can be construed from the move. The country has accumulated $34 billion in debt in the last 16 months, and it could be that creditors want Venezuela to use the gold to guarantee the loans.

These leaders, such as German Chancellor Angela Merkel and French President Nicolas Sarkozy, want to create “a true European economic government” made up of European heads of state and headed by the president of the European Union. They would also seek to have the 17 countries incorporate a balanced budget into their constitutions.

The move hearkens back to the origins of the European Union, which started with the European Coal and Steel Community, which linked the steel and coal industries (industries which were fundamental to war materials production) in France, Germany, Belgium, Italy, Luxembourg, and the Netherlands. This union slowly morphed into the European Economic Community, which eventually gave way to the European Union.

For the United States to regain its top rating the country would have to reduce the national debt and stabilize the economy. This does not look likely in the near future as Washington has been in a deadlock over debt reduction policies. The Republicans want reductions in spending while the Democrats are unwilling to compromise without similar increases in taxes.

This downgrade has led to a lack of confidence in all areas of the economy. The Dow Jones fell 5.56% or 634.76 points, the NASDAQ dropped 6.9% or 174.72 points and the S&P 500 fell 79.92 or 6.66%. This was the biggest single day loss for the Dow since 2008. S&P also downgraded Fannie Mae, Freddie Mac, and Federal Home Loan Bank’s credit rating to AA+ from AAA. Berkshire, an insurance company owned by Warren Buffet, had its outlook downgraded from neutral to negative. Oil is at $81.31 a barrel and gold has surged to $1714.09.

This could be the beginning of the second part of a double dip recession that could completely rock the world economy. Many of the tools that countries used to get out of the recession in 2008, such as decreasing interest rates and stimulus spending, will not be available for another round. Interest rates are already almost zero in most OECD countries, and there is no one left to borrow money from.
Alan Greenspan, former Chair of the Federal Reserve, has suggested that the United States will never default, because they can simply print more money. If they were to do so it would devalue the American dollar, which would essentially result in losses for firms and countries holding on to American debt. For example, China holds $3.718 billion of the US debt. The yuan trades at 6.4263 per dollar. If the value of an American dollar were to be devalued, the Chinese would get less yuan per dollar of debt they owned. Theoretically they could go from having 23.89 trillion yuan at a rate of 6.4263 per dollar to 16.73 trillion yuan at a rate of 4.5 yuan to the dollar. I am not claiming that this is what the American dollar will fall to; it just demonstrates the impact of the move.

Devaluing the American dollar will destabilize the world economy and will destroy the wealth of anyone who holds their assets in dollars. It would also cement the downfall of the United States as the world economic hegemon.

In the 1990s Portugal had a huge social and economic problem with the volume of intravenous and ‘hard’ drug users, with the number of users estimated at 100,000 in a country of only 10 million. There were also high costs associated with the drug mortality rate, contraction of blood borne illnesses as well as the costs of catching and punishing users which was wasting resources that could be put to better use. Portugal is not a rich country by any means and as it stood they could no longer afford to pay the costs of the war on drugs.

In 2001 Portugal decriminalized all narcotics under heavy criticism from other Western nations. That is not to say that they legalized drugs, but it was no longer a criminal offense to possess a personal amount of any narcotic (a personal amount is defined as what one would use in a 10-day period). This also does not mean that producing or trafficking drugs is condoned. Instead of putting those who are reprimanded through the justice system they created panels composed of psychologists, judges and social workers to deal with users and provide the most effective method of treatment if it is necessary. Now, instead of having 100,000 criminals the system is concerned with about 40,000 patients to help them get their lives in order.

Although there was wide speculation about the effects that the change of laws would cause, there has been no spike in narco-tourism or drug use in the Portugal. In fact, drug use has declined in Portugal to the point where it is below the European average and significantly below its’ closest neighbour, Spain. The number of new HIV/AIDS and hepatitis infections has plummeted, along with other blood-borne illnesses. There has also been a dramatic reduction in drug-related crimes. It is estimated that intravenous drug use has fallen by half since the mid-1990s.

Portugal’s approach may be less Libertarian and more intervention by the state than some would like, but it appears to be working. It is more effective and costs less than hard line policies such as that in the United States. In these hard economic times it can only make sense to at least give programs such as that in Portugal a try.

The bill signed on August 2nd raised the debt limit $2.4 trillion dollars, which should be enough to last the country until 2013. It also cut spending $2.1 trillion in the next 10 years. $900 billion of the cuts were decided in this bill. A 12-member committee was also created to come up with $1.5 trillion more in cuts over the same time period. If the panel cannot come up with at least $1.2 trillion in cuts then spending cuts would happen all across the U.S. budget, targeting things like the Pentagon, domestic agencies, farm subsidies, and payments to doctors and other Medicare providers. However much the committee comes up with in cuts the same amount would be added to the debt ceiling. This all came without imposing any new taxes, a key Republican demand. This was a success for the Tea Party movement, and a complete failure for the Democrats.

Although he signed the bill that would raise the debt ceiling today, Obama criticized the Republicans for manufacturing this entire ordeal. Raising the debt ceiling has in the past been a ceremonial rubber stamp, and never a debate as was witnessed over the past month and a half. This will hinder the economic recovery of the United States and there is no telling what effects this will have on markets in the coming months and years. An estimate by members of a U.S. securities industry trade group believe that a downgrade would add 0.7 percentage points to Treasury debt yields, which would result in up to $100 billion in lost value.

The spending cuts were not enough for sovereign credit rating agencies, who were hoping that America would cut more than $4 trillion over the same 10 years to ensure their AAA credit rating. S&P went as far as to say that unless there is a more meaningful plan for the United States to cut the deficit in the next three months they would be forced to downgrade America’s rating. Moody’s and Fitch have not been as severe, but their outlooks are still negative.

Predictions by the IMF for the US debt for 2011 are at $15.5 trillion while predictions for GDP are $15.0 trillion. This would put the GDP of the United States lower than the national debt for the first time in the country’s history. There is no doubt that the United States needs to learn how to live within its means and start reducing its deficit.

Today alone the Dow Jones Industrial average fell 265.87 points, the TSX fell 193.31 points and the NASDAQ fell 75.37 points. The price of gold has risen to $1659.65 per ounce, up $40.65 in one day. The markets may continue in this free fall, as the passing of this bill has not restored any confidence in America’s ability to remain a financial world leader.

gIn Guatemala former general Hector Mario Lopez Fuentes has been charged with ordering the killing of more than 10,000 people of Mayan descent in the early 1980s. As the head of the army Fuentes would have signed the warrants that made up the heart of the ‘scorched earth’ policy mandated by Efrain Rios Montt, then president of the country. No effort was made to bring these criminals to justice during the 1990s and 2000s, so survivors applied to Spanish courts to have the crimes prosecuted. This battle is still on-going, but the one against Fuentes has begun to snowball.

Goran Hadzic was captured on July 20, 2011 in a small village in northern Serbia and now stands before the United Nation’s Yugoslav war crimes tribunal. Hadzic was the last of the 161 military and political leaders of the war in the Balkans indicted by the tribunal to be seized. He has not pled in court in response to the 14 counts against him. His alleged crimes include destruction of the town of Vukovar and the seizure of 260 patients of the hospital there, who were taken to a farm close by to be tortured and killed. Hadzic was the last person that needed to be tried by the UN tribunal, but many more still need to be prosecuted by national courts.

The Ivory Coast is setting up a commission of inquiry to deal with war crimes that occurred in the wake of the most recent election. Violence erupted in the African nation when the former president, Laurent Gbagbo, refused to accept his loss to Alassane Ouattara. This commission will have six months to discover the truth of the violence and who perpetrated it, and take action where necessary to bring criminals to justice. The International Criminal Court has also started preliminary work on the same subject.

Three suspected war criminals have been arrested in Canada, where the federal government has launched a website listing information and pictures of 30 suspects who they say are in Canada illegally. Manuel de la Torre Herrera has followed Arshad Muhammad and Cristobal Gonzalez-Ramirez into custody on July 25, 2011. The website has come under fire itself, as it states that “It has been determined that [these suspects] violated human or international rights under the Crimes Against Humanity and War Crimes Act or under international law.” This statement presumes each suspect is guilty while none have ever stood before a court on these charges.

The name of the movement was taken from the Boston tea party, which occurred on December 16, 1773. Colonists in the British colony of Massachusetts were upset about the continuing rise of taxes being imposed on the colonies by the crown without any consultation. Specifically, it was in opposition to the Tea Act, which expanded the British East India Company’s monopoly on trade in the Empire and gave them the ability to sell excess tea at a reduced rate. In a few colonies the protestors successfully blocked the unloading of tea from several ships which were then turned around and sent back to Britain. However, the Royal Governor in Boston would not allow the ship to leave. Eventually protestors boarded the ship and tossed all of the tea aboard into the harbour. This was one of the contributing actions that led to the American Revolution.

This Tea Party opposes the same things that the original one did. The group opposes all forms of taxation. This is accompanied by a commitment to fiscal responsibility, and is against excess government spending and debt. They believe in constitutionally limiting the size of government, and would have it so that any power not explicitly set out in the constitution of the United States as the province of the individual. The last main tenet of the movement is the freedom of markets so as not to impede the individual. Generally the group focuses on domestic issues, as they feel that the United States should end all foreign commitments.

The movement coalesced from a number of protests against taxes and tax reform through 2008 and 2009.
There exist thousands of affiliated grassroots groups across the United States that group themselves together as the Tea Party Patriots, FreedomWorks, and Americans for Prosperity. Tea Party Nation is for-profit group that hosted the very memorable Tea Party National Convention. There is also the Tea Party Caucus in the House of Representatives led by Michelle Bachmann. It boasts membership of 60 congress-people, all Republicans. This translates to a seventh of the total House and a quarter of the Republican’s majority. They are committed to upholding the tenets of the tea party movements, but do not speak for the movement itself.

The movement itself has endorsed a number of candidates for the Republican primary race. These contenders include Ron Paul and Michelle Bachmann who have declared their candidacy. Of course, the figurehead of the movement is none other than Sarah Palin. The candidates share similar views, banding together on points such as deficit reduction, spending cuts, opposition to minimum wage increases, opposition to universal healthcare, and support for domestic oil drilling as well as nuclear energy.

The Tea Party movement seems to be gaining momentum ahead of the primaries and the potential default of the United States on its national debt. It could be that by this time next year the whole Republican Party’s cup will be filled to the brim with tea, but we will have to wait to see if it goes bitter from sitting too long.

The Republicans had proposed the Cut, Cap and Balance bill into the Senate, where it failed today as predicted. The Act would have cut federal spending $111 billion in 2012, capped spending at 18 per cent of GDP by 2021 and would also have authorize a $2.4 trillion increase to the debt limit after Congress passes a balanced budget amendment. The Senate cannot originate any bill regarding revenue or taxes, and thus any new proposal would start in the House of Representatives. Any such bill would have to be passed in the House by next Wednesday to give it enough time to go through the Senate.

The President and the Speaker of the House John Boehner have been in talks, but have come to another standstill. The Republicans want reductions in spending, but the Democrats are unwilling to agree to that without also increasing taxes and ending tax breaks for wealthy Americans. Democrats are worried that massive cuts to spending would gouge social programs that they have championed and hurt the elderly. The Republican Party seems that it is being guided by the Tea Party faction, which of course is opposed to any
taxes at all.

To make matters worse, those seeking re-election are trying to win over voters as the primaries loom on the horizon. No one on either side wants to sacrifice their ideals this close to re-election and risk it being easily recalled by those who refused to be swayed. If moderate Republicans give in to the Democrats it could spell the complete takeover of the GOP by the Tea Party faction. This stubbornness may be the cause of the next global recession.

The buildings attacked were close to where the prime minister’s administration resides. The area was rather empty as it is a public holiday in the country. The prime minister was working from home and was unharmed by the attack. The windows were blasted out of several buildings around the blast site. It is suspected that a car bomb was used to light the explosion. As well, a man in a police uniform was seen loitering around the area, similar to the one reported in the subsequent attack on Utoya. This man is suspected to be 32 year old Norwegian Anders Behring Breivik. TV 2, a Norwegian broadcaster, was shut down after a suspicious package was found outside its studios.

The camp, an annual trip held for the youth wing of the Labour Party, was being held on Utoya Island. Hundreds of youth attended the camp. The suspect who opened fire on the camp was wearing a police uniform, but it is as yet unconfirmed if he was in fact an officer. Some youths swam for the mainland, which is far from the island. Most hid in trees and in buildings. Emergency crews had a tough time getting to the island through the continued gunfire.

A group called Ansar al-Jihad al-Alami has taken responsibility for the attacks. The statement said that the attacks were in retaliation for Norwegian forces present in Afghanistan and insults to Muhammad made by reprinting the Dutch cartoon depicting the prophet. Norway has been grappling with domestic terrorist activities linked to al-Qaeda. Just last week charges were filed against Mullah Krekar, founder and former leader of the group Ansar al-Islam (which is listed as a terrorist organization by the United States and the United Nations). He is accused of making death threats against the leader of the Conservative Party. As well, three men were arrested a year ago in connection to al-Qaeda.

Despite these claims the attack was most likely committed by Breivik, a right-wing Christian. He wrote a 1,500 page manifesto railing against Islam and multiculturalism as well as made his views known on Christian websites. The suspect had access to fertilizer to make the bomb.

What once was a rubber stamp motion in the past is now being held hostage by the Republican Party to try and force President Obama to sway the Democrats to pass the Cut, Cap and Balance Act. The Act would cut federal spending $111 billion in 2012, cap spending at 18 per cent of GDP by 2021 and would also authorize a $2.4 trillion increase to the debt limit after Congress passes a balanced budget amendment. The bill will likely pass the Republican controlled House of Representatives, but will not make it through the Democrat heavy Senate without some help.

Moody’s has announced that if the United States does not raise its debt ceiling and meet its payments it will be forced to downgrade the country’s AAA credit rating. They also suggested getting rid of the law fixing the debt ceiling, as it creates uncertain periods that heighten the event risk of a default. The ratings agency has been criticized along with Fitch and S&P for being slow to make this call while quickly downgrading European countries during their debt crises.

If the Act is not passed and the Republicans hold true to their game of Chicken, this could spell the end of American economic dominance. A downgraded credit rating would lead to skyrocketing interest rates for the American government. This would exacerbate the debt crisis, and would force lawmakers to severely rein in spending. This would mean cutting social programs as well as reductions in federal department spending and salaries for federal workers. There are well over 2 million federal employees, making the government the country’s single largest employer. During the recession there has been an extreme increase in the wages of federal employees. They risk losing not only their wage increases but their jobs as the American government looks set to have to come up with creative ways to save money in the coming fiscal year.

Gold has become the investment du jour as the American dollar and everything tied to it are looking shakier by the day. Adjusted for inflation gold’s highest trading price was $2300 in 1980. Along with gold other precious metals have soared, with silver rising $4 to settle at $40.20, platinum rising to $1766.24 from $1748, and palladium rising to $788.22 from $771. The metals are seen as safer investments than currencies, as the American dollar, Euro and pound sterling are falling in relation to stronger currencies such as those in Canada, Australia, Norway and Switzerland.