Geithner in China.

Baltic Dry Index. 2947 -34

LIR Gold Target by 2019: $3,000.

"Gold was not selected arbitrarily by governments to be the monetary standard. Gold had developed for many centuries on the free market as the best money; as the commodity providing the most stable and desirable monetary medium."

Murray N. Rothbard

We open this morning wondering how many more Kyrgyzstan’s are in our future as the global austerity bites. While Kyrgyzstan’s troubles may seem more geo-political than economic, at least as seen in the west, on the ground in Kyrgyzstan the rioters seem to have been responding to economic hardship and the failure of President Bakiyev to deliver on reforms and a better economy. President Bakiyev came to power after similar unrest 5 years ago. The current revolution seems to have quickly descended into looting and criminality. If a successful revolution results, how many more Kyrgyzstan’s lie ahead. Below, the NY Times takes up the geo-political aspect.

"The leaders of the French Revolution excited the poor against the rich; this made the rich poor, but it never made the poor rich."

Fisher Ames.

Upheaval in Kyrgyzstan Could Imperil Key U.S. Base

By CLIFFORD J. LEVY Published: April 8, 2010
MOSCOW — The bloody protests against the repressive rule of the president of Kyrgyzstan which forced him to flee the capital of Bishkek could pose a threat to a pivotal American military supply line into nearby Afghanistan.

Opposition politicians, speaking on state television after it was seized by protesters Wednesday, said they had taken control of the government after a day of violent clashes that left more than 40 people dead and more than 400 wounded. The instability called into question the fate of a critical American air base in the country.

Riot police officers fired rounds of live ammunition into angry crowds of demonstrators who gathered around government buildings to rally against what they termed the government’s brutality and corruption, as well as a recent decision to increase utility rates sharply. Witnesses said that the police seemed to panic, and that there was no sign of supervision. In several cases, demonstrators wrested their weapons away from them.

By early Thursday morning, opposition officials occupied many government buildings in Bishkek, and were demanding that the president, Kurmanbek Bakiyev, sign a formal letter of resignation. Mr. Bakiyev has issued no public remarks since the protests began. An official at the Bishkek airport said Mr. Bakiyev was flying to Osh, a major city in the southern part of the country.
A coalition of opposition parties said a transition government would be headed by a former foreign minister, Roza Otunbayeva. “Power is now in the hands of the people’s government,” she said in a televised address on Wednesday evening.

Those same opposition leaders were angered last spring when Obama administration officials courted Mr. Bakiyev — who they admitted was an autocrat — in an ultimately successful attempt to retain rights to the military base, Manas, used to supply troops in Afghanistan. President Obama even sent him a letter of praise.
http://www.nytimes.com/2010/04/09/world/asia/09bishkek.html?hp


While the world focuses on Kyrgyzstan and President Obama’s meeting with President Medvedev in Prague to sign the new nuclear arms limitation treaty, not that at present it is likely to pass in the Senate, we focus on the US Treasury Secretary quietly slipping in to China for what appears to be an unscheduled visit. Something is up, apparently, but is it China or America that’s just blinked? Below, Xinhua covers the surprise development. My guess is that it’s to provide cover for not naming China a currency manipulator and to deflect US Senators’ calls for tariffs on Chinese goods. But just possibly China is about to re-float the yuan. Stay long precious metals, our world in transition is “transiting” again apparently.

“It’s our yuan but it’s your problem.”

With apologies to US Treasury Secretary John Connally, 1971.


Geithner heads to Beijing for talks

BEIJING, April 8 -- U.S. Treasury Secretary Timothy Geithner will visit Beijing for talks on economic issues with Vice-Premier Wang Qishan on Thursday, Geithner's spokesman said, in a sign that the two sides are moving toward settling a dispute over China's currency.
"The secretary and the vice-premier have been working together to find an opportunity to meet for some time," spokesman Andrew Williams said on Wednesday, as Geithner ended a two-day visit to India.

Williams gave no details of the agenda, but the decision to hold such a high-level encounter suggested Washington and Beijing are moving toward resolving the currency dispute, which has threatened to overshadow cooperation on the global economy, Iran's nuclear program and other issues.

Speaking in India on Wednesday, Geithner said the yuan will take a broader international role, calling it a "healthy, necessary adjustment".

Washington is pressing Beijing to ease exchange rate controls that it says keep the yuan undervalued, allegedly giving China's exporters an unfair price advantage and swelling its trade surplus. Some U.S. lawmakers are calling for punitive tariffs on Chinese imports if Beijing does not act on the issue.

Mei Xinyu, a researcher at the Chinese Academy of International Trade and Economic Cooperation affiliated to the Ministry of Commerce, said the yuan issue could top the agenda of Geithner's meeting with Chinese officials.

"It is normal for the two countries to conduct exchanges given the many frictions between them," Mei said. "But the timing of the visit is very unusual."

"The purpose of the trip is to try to finalize the deal apparently reached over the exchange rate," said Heritage Foundation research fellow Derek Scissors.

"If successful, China can announce and implement changes at its preferred time, rather than being rushed due to political pressure and the schedule of bilateral and multilateral meetings."
"After a time of disturbance and unpleasantness, Chinese-U.S. relations are entering a track of getting closer to one another," said Liu Jiangyong, a professor at the institute of international studies at Beijing's Tsinghua University. "I hope the Geithner visit promotes understanding."
Philip Levy, a scholar at the American Enterprise Institute for Public Policy Research, said the Geithner visit to Beijing is a "very positive development".
http://news.xinhuanet.com/english2010/china/2010-04/08/c_13241903.htm

Who blinked first, doesn’t really matter, according to the Bank set up to handle Germany’s World War One reparations for starting WW1, it couldn’t come a moment too soon, says the BIS in sleepy idyllic Basel. The world’s sovereign debt crisis is about to make Greece out of all of US.

“I did math’s for a year at university. I don't think I was very good at it.”

Gordon Brown.

Sovereign debt crisis at 'boiling point', warns Bank for International Settlements
The Bank for International Settlements does not mince words. Sovereign debt is already starting to cross the danger threshold in the United States, Japan, Britain, and most of Western Europe, threatening to set off a bond crisis at the heart of the global economy.
By Ambrose Evans-Pritchard, International Business EditorPublished: 6:31AM BST 08 Apr 2010

"The aftermath of the financial crisis is poised to bring a simmering fiscal problem in industrial economies to the boiling point", said the Swiss-based bank for central bankers -- the oldest and most venerable of the world's financial watchdogs. Drastic austerity measures will be needed to head off a compound interest spiral, if it is not already too late for some.

The risk is an "abrupt rise in government bond yields" as investors choke on a surfeit of public debt. "Bond traders are notoriously short-sighted, assuming they can get out before the storm hits: their time horizons are days or weeks, not years or decade. We take a longer and less benign view of current developments," said the study, entitled "The Future of Public Debt", by the bank's chief economist Stephen Cecchetti.

"The question is when markets will start putting pressure on governments, not if. When will investors start demanding a much higher compensation for holding increasingly large amounts of public debt? In some countries, unstable debt dynamics -- in which higher debt levels lead to higher interest rates, which then lead to even higher debt levels -- are already clearly on the horizon."

Official debt figures in the West are "very misleading" since they fail to take in account the contingent liabilities and pension debts that have mushroomed over recent years. "Rapidly ageing populations present a number of countries with the prospect of enormous future costs that are not wholly recognised in current budget projections. The size of these future obligations is anybody's guess," said the report. The BIS lamented the lack of any systematic data on the scale of unfunded IOUs that care-free politicians have handed out like confetti.
Britain emerges in the BIS paper as an arch-sinner. The country may have entered the crisis with a low public debt but this shock absorber has already been used up, exposing the underlying rot in the UK's public accounts.

Tucked away in the BIS report are charts and tables showing that Britain faces the highest structural deficit in the OECD club of rich states, with a mounting risk that public debt will explode out of control.

Interest payments on the UK's public debt will double from 5pc of GDP to 10pc within a decade under the bank's 'baseline scenario' before spiralling upwards to 27pc by 2040, the highest in the industrial world. Greece fares better, and Italy looks saintly by comparison.
http://www.telegraph.co.uk/finance/economics/7564748/Sovereign-debt-crisis-at-boiling-point-warns-Bank-for-International-Settlements.html

In “man-made global warming from CO2” news, the CO2 is late in arriving this year in the Arctic so the arctic ice will just have to stick around for longer. The polar bears get to spend another year in the ice before having to move south to eat Canadians and Russians. Not to worry though, the US National Snow and Ice Data Center, a fully signed up member of the global warming mob, still manages to spin it the politically correct UN IPCC way. All news is global warming news, to some on this planet it seems. Carbon futures anyone?

“The Arctic Monkeys really wake you up in the morning.”

Gordon Brown

Arctic Sea Ice Melting Season Posts Latest Start on Record
April 06, 2010, 1:52 PM EDT By Alex Morales
April 6 (Bloomberg) -- The extent of sea ice over the Arctic Ocean grew until the last day of March, the latest the annual melting season has begun in 31 years of satellite records, the U.S. National Snow and Ice Data Center said.

Cold weather and winds from the north over the Bering Sea and Barents Sea meant that the area of ocean covered by ice expanded through last month, the Boulder, Colorado-based center said today in a statement on its Web site. That’s two days later than in 1999, the previous latest start to a melting season since satellite monitoring began in 1979.

Scientists have highlighted declining Arctic sea ice as an indicator of global warming. The NSIDC has said the Arctic Ocean could be largely ice-free during the summer by 2030. While this year’s melting season has started late, it probably won’t have an impact on the extent of ice in the summer, the group said.

“The ice that formed late in the season is thin and will melt quickly when temperatures rise,” the NSIDC said.

The peak ice extent of 15.25 million square kilometers (5.89 million square miles) “approached” the average for the years 1979 to 2000. It was 670,000 square kilometers more than the record low ice peak of 2006, the center said.

Melting started in March then reversed during a cold snap, prolonging the annual freeze.
http://www.businessweek.com/news/2010-04-06/arctic-sea-ice-melting-season-posts-latest-start-on-record.html


We end for the day back in America. Is America as tax shy as Greece? Can Uncle Sam avoid the fate of Greece? Stay long precious metals. Tomorrow will not be like today which was like yesterday. The great Nixonian error of a fiat currency dollar reserve standard is coming to an end. While we don’t yet know what replaces it, it doesn’t take a genius to see that a fiat currency, euro, yen, or yuan standard is no improvement. My guess is that we will eventually end up back on some central global clearing method based on precious metals primarily gold.

"We don't pay taxes. Only the little people pay taxes"

Leona Helmsley.

Nearly half of US households escape fed income tax
Recession, new tax credits have nearly half of US households paying no federal income tax
WASHINGTON (AP) -- Tax Day is a dreaded deadline for millions, but for nearly half of U.S. households it's simply somebody else's problem.

About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. That's according to projections by the Tax Policy Center, a Washington research organization.
Most people still are required to file returns by the April 15 deadline. The penalty for skipping it is limited to the amount of taxes owed, but it's still almost always better to file: That's the only way to get a refund of all the income taxes withheld by employers.

In recent years, credits for low- and middle-income families have grown so much that a family of four making as much as $50,000 will owe no federal income tax for 2009, as long as there are two children younger than 17, according to a separate analysis by the consulting firm Deloitte Tax.
Tax cuts enacted in the past decade have been generous to wealthy taxpayers, too, making them a target for President Barack Obama and Democrats in Congress. Less noticed were tax cuts for low- and middle-income families, which were expanded when Obama signed the massive economic recovery package last year.

The result is a tax system that exempts almost half the country from paying for programs that benefit everyone, including national defense, public safety, infrastructure and education. It is a system in which the top 10 percent of earners -- households making an average of $366,400 in 2006 -- paid about 73 percent of the income taxes collected by the federal government.
The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment.

-----The vast majority of people who escape federal income taxes still pay other taxes, including federal payroll taxes that fund Social Security and Medicare, and excise taxes on gasoline, aviation, alcohol and cigarettes. Many also pay state or local taxes on sales, income and property.
That helps explain the country's aversion to taxes, said Clint Stretch, a tax policy expert Deloitte Tax. He said many people simply look at the difference between their gross pay and their take-home pay and blame the government for the disparity.
http://finance.yahoo.com/news/Nearly-half-of-US-households-apf-1105567323.html?x=0&.v=1

"MacBroon’s clever," said Pooh thoughtfully. "Yes," said Piglet, "MacBroon’s clever." "And he has Brain." "Yes," said Piglet, "MacBroon has Brain." There was a long silence. "I suppose," said Pooh, "that that's why he never understands anything."

With Apologies to The House at Pooh Corner


At the Comex silver depositories Wednesday, final figures were: Registered 53.78 Moz, Eligible 62.56 Moz, Total 116.34 Moz.


+++++

Crooks & Scoundrels Corner.

The bent, the seriously bent, and the totally doubled over.

Toyota again today. What did they know and when did they know it. Below, a smoking gun, or merely an email from a retiring US executive reading the writing on the wall in January? Not that it much matters. America’s “whiplash Willie’s” the US tort bar, will spin the email in the worst possible light for Toyota, leaving Toyota the unenviable task of spinning that the sticking accelerator problem only seems to happen to American drivers. “Are American drivers thick or what.” Not a PR approach many would recommend to a company hoping to sell its cars once again to American motorists. Rather like the PR challenged Vatican, Toyota is in a no-win position. Defending means victimizing the alleged victims, not defending probably invalidates any insurance cover they carry.

You know, somebody actually complimented me on my driving today. They left a little note on the windscreen, it said Parking Fine.

Tommy Cooper.

April 8, 2010
Toyota executive urged board ‘to come clean’

Toyota’s bid to present itself as a company that puts customers first has been shattered by an internal memo in which a senior American executive begged Japanese management to stop concealing safety issues from the general public.

“The time to hide on this one is over,” warned the email, “We need to come clean.”
The emergence of the email follows the decision by US safety regulators earlier this week to issue Toyota with the maximum possible fine of $16.4 million. That judgment, which punishes the Japanese giant for its slow response to safety issues, has left the company in a difficult position: appeal and prolong its public grilling or accept the decision and risk admitting liability in scores of class-action lawsuits.

Written in mid-January, just days before the company was plunged into its most damaging vehicle recall ever, the email refers directly to company efforts to cover-up mechanical problems with accelerator pedals.

Before January, Toyota had only acknowledged publicly that accelerator pedals could become stuck by becoming entangled in loose floor-mats.

But the internal emails now in the hands of US investigators reveal a tussle within Toyota over whether or not to inform the public over more fundamental flaws in the pedal mechanism – problems that had not at the time been fully understood by Toyota’s engineers and to which there was no clear “fix” available.

Irv Miller, who has since retired but was then Toyota’s vice president for public affairs, sent the email in response to comments by his Japanese colleague, Katsuhiko Koganei – a senior executive who had been dispatched from Toyota’s Japanese headquarters to co-ordinate with his US colleagues.

Mr Koganei argued in a previous email that the company “should not mention about the mechanical failures of the pedal”, because the cause of the fault had not yet been identified and that a statement by Toyota would unsettle motorists.

“We are not protecting our customers by keeping this quiet,” replied Mr Miller, who then used capital letters to stress his concern, “…WE HAVE a tendency for MECHANICAL failure in accelerator pedals of a certain manufacturer on certain models.”

The email is among a massive collection of over 70,000 documents currently held by US government safety investigators as they continues their probe into Toyota’s handing of its “sticky” accelerator problems. The paper trail includes a large number of internal emails and memos.
http://business.timesonline.co.uk/tol/business/industry_sectors/engineering/article7091326.ece


"I couldn't repair your brakes, so I made your horn louder."

Anon.


The monthly Coppock Indicators finished March:

DJIA: +168 UP. NASDAQ: +370 UP. SP500: +196 UP. The great Bull market goes on with the all three continuing higher in positive numbers.

+++++

Help the LIR fight Banksterism, the EU, and for sound money.
If you can, help the LIR stay around and make a difference. Please make a donation at the PayPal link on the website or better still become a sponsor for what looks like an exciting 2010. Capitalism not banksterism. Many thanks to all who have helped.

+++++

Sunspots – A 22 year colder world? (From 2004?)

Spotless Days April 07
Current Stretch: 0 days
2010 total: 6 days (6%)
2009 total: 260 days (71%)
Since 2004: 776 days
Typical Solar Min: 485 days
http://www.spaceweather.com

The long minimum seems to have ended.

New Solar Cycle Prediction
http://science.nasa.gov/headlines/y2009/29may_noaaprediction.htm

Is the Sun Missing Its Spots?
http://www.nytimes.com/2009/07/21/science/space/21sunspot.html?8dpc

Are Sunspots Different During This Solar Minimum?
-----But something is unusual about the current sunspot cycle. The current solar minimum has been unusually long, and with more than 670 days without sunspots through June 2009, the number of spotless days has not been equaled since 1933.

----During the period from 1645 to 1715, the Sun entered a period of low activity now known as the Maunder Minimum, when through several 11- year periods the Sun displayed few if any sunspots. Models of the Sun's irradiance suggest that the solar energy input to the Earth decreased during that time and that this change in solar activity could explain the low temperatures recorded in Europe during the Little Ice Age.

----The same data were later published [Penn and Livingston, 2006], and the observations showed that the magnetic field strength in sunspots were decreasing with time, independent of the sunspot cycle. A simple linear extrapolation of those data suggested that sunspots might completely vanish by 2015.These observations caused researchers to wonder whether the characteristics of sunspots are different now than in other solar cycles.http://www.leif.org/EOS/2009EO300001.pdf

Big freeze could signal global warming 'pause'
The Arctic conditions which have brought Britain to a standstill over the past week could be the start of a "pause" in global warming, some scientists believe.
Published: 9:20AM GMT 11 Jan 2010
http://www.telegraph.co.uk/earth/environment/globalwarming/6965342/Big-freeze-could-signal-global-warming-pause.html

Sunspot cycle 24: Together with sunspot cycle 25, the next two global cooling cycles. The new “Dalton Minimum?” Twenty Nine months now with low sunspots numbers, and counting. March was the 29th month of yet another low number of 15.4 http://en.wikipedia.org/wiki/Dalton_Minimum
Smoothed sunspot numbers (SSN). 2007, Oct. 0.9. The end of cycle 23.

Sunspot cycle 24: Nov 1.7. Dec 10.1. Jan 3.4. Feb 2.2. Mar 9.3 April 2.9. May: 2.9. June 3.1. July 0.5. August 0.5. Sep 1.1 Oct. 2.9. Nov. 4.1 Dec 0.8. Jan 1.5. Feb 1.4. Mar 0.7. Apr 1.2. May 2.9. June 2.6. July 3.5. Aug. 0.0. Sep 4.2. Oct 4.6. Nov 4.2. Dec 10.6 Jan 13.1 Feb 18.6 Mar 15.4.

Sunspots. http://solarscience.msfc.nasa.gov/SunspotCycle.shtml

The count. http://sidc.oma.be/products/ri_hemispheric/

Why a New Minimum. http://sesfoundation.org/dalton_minimum.pdf

The “Carrington Event,” September 1, 1859.
http://science.nasa.gov/headlines/y2008/06may_carringtonflare.htm

Current Space Weather.
http://www.swpc.noaa.gov/

What happened to global warming?
http://news.bbc.co.uk/1/hi/sci/tech/8299079.st

++++

This week’s featured links: Silver & Gold Miners + Rare Metals.

With US trillion dollar deficits stretching as far as the eye can see, and voodoo economics the order of the day at the central banks, I think it is now time to begin selectively scaling into precious metals companies that mostly meet the following criteria:

Adequate cash reserves. Good management. Strong in-ground reserves or prospects. NAFTA based, or else located in countries with strong rule of law.

Endeavour Silver Corp. TSX: EDR. http://www.edrsilver.com/s/Home.asp

Semafo TSX: SMF http://www.semafo.com/home_company_intro.php

ATW Gold Corp. TSX.V: ATW. http://www.atwgold.com/

US Silver Corp. TSX.V: USA. http://www.us-silver.com/s/Home.asp

Excellon Resources Inc. TSX: EXN. http://www.excellonresources.com/

First Majestic Silver Corp. TSX: FR http://www.firstmajestic.com/s/Home.asp

New Jersey Mining Company. OTCBB: NJMC
http://www.newjerseymining.com/index.html

Atna Resources Ltd. TSX: ATN. http://www.atna.com/s/Home.asp

Barkerville Gold Mines TSX.V: BGM. Formerly International Wayside Gold Mines Ltd.
http://www.barkervillegold.com/s/Home.asp

Shoreham Resources Ltd. TSX-V: SMH
http://www.shoreham.ca/

ATAC Resources Ltd, TSX.V: ATC. http://www.atacresources.com/s/home.asp

Evolving Gold Corp. TSX.V: EVG http://www.evolvinggold.com/

Lydian International Ltd. TSX: LYD. Note: LYD operates in Armenia, a region carrying higher risk than our usual safer picks in NAFTA lands. http://www.lydianinternational.co.uk/

The story of rare earths and metals is mostly one of China producing and exporting, Japan, America and everyone else importing. Vital to our new technologies, and lifestyle, and critical to hybrid and electric cars, Rare Earth Elements and Heavy Rare Earths, are a strategic choke point held in China’s hands. Lately China has been squeezing that choke point. I think that AVL at Thor Lake Canada, has a property of global importance. A property with the ability to offer NAFTA access to REEs and HREs for the decades ahead. As America and the west move to reduce over dependence on oil from unstable regions, we will see demand for rare metals take off.

Avalon Rare Metals Inc. TSX: AVL. www.avalonraremetals.com

We will be adding more REEs as appropriate.

Warning.

Sadly we are all in unexplored territory. The world has never before suffered a severe recession/depression while operating on fiat currency. As is widely apparent, the central banks haven’t a clue and are making up the rules as the flounder along. They never saw it coming they claim, although it was obvious to many fine writers though not unfortunately in the mainstream media, that a giant financialised derivatives gambling economy would always end badly. There are no experts now, for the simple reason that we have never before faced such a sudden synchronised and deep collapse in the global economies.

The unfortunate fact that we are operating on fraudulent currencies is highly likely to mean it all ends many months from now, in a fiat currency revulsion, but only after the monetary authorities have first tried pouring in endless amounts of newly created money. A derivatives gambling world with an estimated quadrillion dollars of face value has to be unwound and the losses absorbed. In this sort of investing environment, cash, gold and silver and tangible assets are favoured over stocks and intangible assets.

As always if thinking about making an investment, it’s important to do one’s own due diligence. No one has more at risk in an investment than you do yourself. In these difficult economic times, there will likely be several false bottoms before the real one arrives and hindsight allows us to confirm that the bottom is in. Even then, a “V” shaped rebound is highly improbable. A double dip recession seems likely. Beware the false "statistical" government subsidised "recovery." It is a "recovery" bought from a future of fiat currency collapse.

Graeme Irvine

London Irvine Report: www.londonirvinereport.com/
Graeme@londonirvinereport.com