Greece 10 Germany 0

Baltic Dry Index. 2913 -09

LIR Gold Target by 2019: $3,000.

“America knows it has got to deal with its deficit problems so that it, too, can promise it is making its proper and best contributions to the world economy.”

Prime Minister Gordon Brown.

We open by extending our sympathies and condolences to the citizens of Poland following the terrible plane crash in Russia on Saturday. The loss is all the more poignant in that they were all on their way to commemorate the murder 70 years ago of most of Poland’s officer corps and much of its patriots, by the agents of Stalin’s criminal murderous communism.

“At Yalta again we lost an opportunity to stand firm. Perhaps the aid which the Soviet Union could contribute in winning the war was overestimated. I cannot pretend to judge. Yalta, however, was the deathblow to Poland's hopes for independence and for a democratic form of government....But the blame for appeasement cannot justly be placed entirely on Mr. Roosevelt. The Department of State must share the onus. The optimistic utterances of Secretary Stettinius in April 1945; the directive given orally to the United States delegates to the United Nations Conference in San Francisco--to take pains not to irritate the Soviet delegation--and the continued naive belief in Soviet good intentions, even during the first year of Mr. Byrnes' tenure as Secretary of State, were all factors of encouragement to the Soviet Government and its satellites to keep on flouting their international engagements.”

Arthur Bliss Lane, United States Ambassador to Poland, 1944-1947. From: I Saw Poland Betrayed: An American Ambassador reports to the American people. 1948

Break out the Ouzo, take Monday off, the Greek way of life has been saved by the EU finance ministers yesterday. Tax and work shy Greeks get a 30 billion Euro slush fund to cover against the day that Greece can’t borrow in the credit markets at 5% or lower. For good measure the IMF will also set aside another 15 billion Euro at 2.7%. So that’s all settled then, the only catch is that Greece is supposed to continue on with their unrealistic austerity campaign or they can’t get access to the subsidy fund. Plus, 45 billion Euro is likely to be about 30 billion Euro short of the total amount Greece needs, plus any German contribution is likely headed for the German courts. In short, it sounds like the typical EU botch job. Bash in a few nails, slap on a little duct tape, and give it a coat of paint. The new Greek Airbus is almost as good as new. All aboard for Greek bombs anyone, sorry bonds? The tricky part will be getting the Greeks to bring back the cash they’ve stashed away in Switzerland and to start showing up for work and paying taxes.

"Probable impossibilities are to be preferred to improbable possibilities."

Aristotle.

Eurozone agrees 30bn euro Greek rescue package at 5pc
Eurozone countries have agreed to offer Greece aid worth 30bn euros (£26.3bn) this year, at below commercial interest rates of 5pc, in order to prevent the Greek debt crisis further damaging the European single currency.
By Bruno Waterfield in Brussels Published: 11:20PM BST 11 Apr 2010

The rescue package would be further topped up by €15bn of even cheaper 2.7pc loans financed by the International Monetary Fund (IMF), said the European Commission following a decision by finance ministers yesterday. The European ministers agreed the detail of the borrowing plan in a bid to ease the mounting pressure on Greece's battered credit rating.

The cut-price loans, should they be called upon by Greece, will be raised by eurozone members according to the amount each puts into the European Central Bank, further increasing the debt burden for Ireland, Spain and Portugal – countries struggling with their own debt burdens. Under the plan, Germany, which had pushed for Greece to pay market-level borrowing interest rates, currently at 7pc, could be asked to make over €6.3bn available for the Greek loans.
The decision and the reduced borrowing rate is almost certain to generate further German controversy over support for Greek spending profligacy and could lead to a legal challenge in Germany's constitutional court.

Jean-Claude Juncker, Luxembourg's prime minister and chairman of the Eurogroup, insisted that the financial aid would not breach European Union treaty rules forbidding subsidised bail-outs to governments. "This does not contain any elements of subsidy. This is a mechanism that should encourage Greece to return to normal financing on the markets as soon as possible," he said. "No member states will make a loss."

Mr Juncker said the eurozone financing would be "completed and co-financed by the IMF" after further talks between officials in Brussels this week.

A statement stressed that Greece had not yet requested financial assistance and that payments could only begin with the unanimous agreement of all eurozone countries.

George Papaconstantinou, the Greek finance minister, described the plan as a "very important" decision ahead of renewed efforts by Greece to raise money on the markets this week.

"The Greek government has not asked for the activation of the mechanism, although it is now immediately available. We believe that we will be able to continue to borrow on the markets in an unobstructed fashion," he said.
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7579177/Eurozone-agrees-30bn-euro-Greek-rescue-package-at-5pc.html

Default Swaps Drop to Three-Month Low on Greece: Credit Markets
April 12 (Bloomberg) -- The cost to protect Asian bonds against default fell to a three-month low after European nations offered a rescue plan to stem Greece’s budget crisis.

The Markit iTraxx Asia index of credit-default swaps on 50 investment-grade borrowers declined 7 basis points to 89 basis points as of 1:21 p.m. in Singapore, Citigroup Inc. prices show. That’s the biggest fall since Dec. 1 and the benchmark’s lowest level since Jan. 12, according to CMA DataVision in New York.

“The package provided some much-needed detail that the market was looking for, which has improved risk appetite,” Ken Hanton, senior credit analyst at National Australia Bank Ltd., said in a phone interview from Sydney. “Now attention will turn to whether Greece actually has to call on the support before its next bond deal.”

-----Should Greece draw on the three-year loans pledged by its European neighbors, it would pay interest of around 5 percent, less than the current three-year Greek bond yield of 6.98 percent. The country will sell 1.2 billion euros in six-month and one-year Treasury bills tomorrow in a test of investor confidence in the rescue package.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a1cuaJQ03nYo&pos=4

Below, why the EU finance ministers Greek rescue plan might not make much difference in the end. Trouble is surfacing everywhere in Eastern Europe, not just confined to the dodgy Eurozone, home of the spendthrift PIIGS and cash rich Germany.

The Looming European Debt Wars
By MICHAEL HUDSON
Government debt in Greece is just the first in a series of European debt bombs that are set to explode. The mortgage debts in post-Soviet economies and Iceland are more explosive. Although these countries are not in the Eurozone, most of their debts are denominated in euros. Some 87 per cent of Latvia’s debts are in euros or other foreign currencies, and are owed mainly to Swedish banks, while Hungary and Romania owe euro-debts mainly to Austrian banks. So their government borrowing by non-euro members has been to support exchange rates to pay these private-sector debts to foreign banks, not to finance a domestic budget deficit as in Greece.

All these debts are unpayably high because most of these countries are running deepening trade deficits and are sinking into depression. Now that real estate prices are plunging, trade deficits are no longer financed by an inflow of foreign-currency mortgage lending and property buyouts. There is no visible means of support to stabilize currencies (e.g., healthy economies).

For the past year these countries have supported their exchange rates by borrowing from the EU and IMF. The terms of this borrowing are politically unsustainable: sharp public sector budget cuts, higher tax rates on already over-taxed labor, and austerity plans that shrink economies and drive more labor to emigrate.

Bankers in Sweden and Austria, Germany and Britain are about to discover that extending credit to nations that can’t (or won’t) pay may be their problem, not that of their debtors. No one wants to accept the fact that debts that can’t be paid, won’t be. Someone must bear the cost as debts go into default or are written down, to be paid in sharply depreciated currencies, but many legal experts find debt agreements calling for repayment in euros unenforceable. Every sovereign nation has the right to legislate its own debt terms, and the coming currency re-alignments and debt write-downs will be much more than mere “haircuts.”

There is no point in devaluing, unless “to excess” – that is, by enough to actually change trade and production patterns. That is why Franklin Roosevelt devalued the US dollar by 41 per cent against gold in 1933, raising its official price from $20 to $35 an ounce. And to avoid raising the U.S. debt burden proportionally, he annulled the “gold clause” indexing payment of bank loans to the price of gold. This is where the political fight will occur today – over the payment of debt in currencies that are devalued.

Another byproduct of the Great Depression in the United States and Canada was to free mortgage debtors from personal liability, making it possible to recover from bankruptcy. Foreclosing banks can take possession of collateral real estate, but do not have any further claim on the mortgagees. This practice – grounded in common law – shows how North America has freed itself from the legacy of feudal-style creditor power and the debtors’ prisons that made earlier European debt laws so harsh.
More.
http://www.counterpunch.org/hudson04092010.html

With the UK apparently headed for a hung Parliament, and all three main parties telling the dumbed down electorate that they can fix the UK economy without any pain or cutbacks of any consequence, let alone seriously raise any taxes, the UK price of gold has been soaring against the UK’s ever more depreciating currency. We haven’t seen anything yet, is my guess once all hell breaks out when the deceived voters find out that they were conned, and that taxes have to be raised and public sector workers fired and benefits cut. Stay long physical gold and silver, but preferably outside of the jurisdiction of Her Majesty’s larcenous government. For more jump to Crooks Corner.

"A weak currency arises from a weak economy, which in turn is the result of a weak government."

Gordon Brown. 1992.

Gold hits record high for British investors
The price of gold has risen to an all-time high in sterling and euro terms.
By Richard Evans Published: 11:55AM BST 09 Apr 2010

In dollar terms the gold price is about 5pc below its record, but the weakness of the pound and the euro against the American currency means that for investors in Britain and the eurozone the precious metal has never been so valuable.

The price of an ounce of gold has reached record levels of £754 and €865 in recent trading, and the dollar price has reached a three-month high of $1,157.

In August last year the gold price in sterling terms was £562, so British gold investors have made a profit of 34pc, compared with a rise in the dollar price of 23pc over the same period.

---- Nicholas Brooks of ETF Securities, which runs a gold exchange-traded fund, said: "The strong performance of gold, despite the strength of the US dollar, indicates that investors are increasingly viewing it as an alternative store of value, not just to the US dollar but to fiat [paper] currencies more broadly, as sovereign risks continues to rise.

"Traditionally, investors concerned about the structural outlook for the US dollar would buy euros, British pounds or yen. However, with policy and debt risks rising in all of these countries, investors – as well as central banks and sovereign wealth funds – are increasingly looking to gold as an alternative 'hard asset' store of value."
http://www.telegraph.co.uk/finance/personalfinance/investing/gold/7570991/Gold-hits-record-high-for-British-investors.html

“When a person has no need to borrow they find multitudes willing to lend.”

Oliver Goldsmith.

At the Comex silver depositories Friday, final figures were: Registered 54.17 Moz, Eligible 61.22 Moz, Total 115.39 Moz.

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Crooks & Scoundrels Corner.

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

Today, more on the UK phony general election. “Everything’s fine, really it is. Trust me, I’m a politician.”

“Sometimes I wonder whether the world is being run by smart people who are putting us on or by imbeciles who really mean it.”

Mark Twain.

Don't let the voters know we face bankruptcy
Britain's truly momentous challenges will not even appear in the election campaign, says Christopher Booker
By Christopher Booker Published: 7:37PM BST 10 Apr 2010

Four huge shadows hang over this claustrophobic election, about which the three main parties will be trying to say as little as possible. The first, obviously, as part of the catastrophic legacy of 13 years of Labour misrule, is the barely imaginable scale of the deficit in public spending.
This is now growing so fast that it is difficult to find ways of bringing home how stupendous it has become. The Taxpayers' Alliance has tried to do it by pointing out that public debt is rising by £447,575,342 – virtually half a billion pounds – every day. With the Government's own projections showing that within four years the National Debt will have doubled to £1.4 trillion, I recently used figures from the Institute for Fiscal Studies to show that by 2014, in only four years' time, it will be costing us the equivalent of £60 a week for every household in the land just to pay the interest on the debt - let alone paying off the debt itself.

The implications of Gordon Brown's doubling of public spending in the past decade are so hard to grasp that it is hardly surprising the parties don't want to talk about it, because none of them really has the faintest idea what to do about it. The utter unreality of this debate was illustrated last week by the Tories' claim that they could cut spending by £12 billion, when it is now rising by that figure every month. Meanwhile Labours boasts that, having trebled spending on the NHS, to no great effect, it could save half a billion a year by cutting out NHS waste – when our public debt is now increasing by that amount every day.

The second shadow over this election is the unprecedented damage done to our politics by the expenses scandal, which has degraded the standing of Parliament to its lowest point in history. More than anything, these revelations have reinforced the realisation that we are ruled by a political class in which the three main parties are blurred indistinguishably together, almost wholly divorced from the concerns of the rest of us. Never have MPs or peers been so diminished in stature, at the very time when the bloated apparatus of the state has been intruding on our lives more obviously than at any time before.
A third, closely related shadow which the political class has been only too keen to hide away has been the still barely understood extent to which it has handed over the running of our country and the making of our laws to that vast and mysterious new system of government centred on Brussels and Strasbourg.

-----Farming and the countryside, the fate of our fishing industry, our immigration rules, our laws on employment and how businesses are run, on the environment, on food safety, the regulating of our financial services, including the operations of the City of London – the key decisions in all these areas, and many more, have been handed over to a form of government which is unconcerned with our national interests and almost wholly unaccountable, with consequences which in almost every case have proved disastrous for Britain.
Yet on all these hugely important issues our political class remains virtually silent, because it no longer has any power to decide what happens.

-----A final huge shadow which will barely be discussed at this election, because the main parties are all but unanimous on it, is the way our politics has become permeated by everything which can be related to global warming, from soaring taxes to the propaganda dished out in our schools, from the wishful thinking that we can spend £100 billion on building thousands more useless wind turbines, to the disastrous distortion of our national energy policy by the "green" obsessions of both the EU and our own political class, which threaten within a few years to turn Britain's lights out. (Although next week I hope to reveal an unexpected way in which this might be averted.)

This flight from reality was never better exemplified than by the 2008 Climate Change Act, committing Britain, uniquely in the world, to reducing its carbon emissions by more than four fifths. Even the Government admits that this will cost us up to £18 billion every year for four decades, making it by far the most costly law in our history. Though its target could only be met by virtually closing down our economy, such is the bubble of unreality in which our political class lives that our MPs voted for this insane law almost unanimously, without having any idea of its practical implications.

The real tragedy of what has happened to Britain in the past 20 years is that we no longer have an opposition worthy of the name. It is almost impossible to measure the damage done by 13 years of rule by Blair and Brown. They have left the country effectively bankrupt, its manufacturing industry halved, the City tottering and under threat. They have allowed the United Kingdom to splinter, debauched the House of Lords and brought politics into contempt.

-----Yet, as the worst Government in our history has presided over this catastrophe, we have had an Opposition so hypnotised by the devilry of the "Blair revolution" that in fundamental respects it has scarcely been an opposition at all. Having had the stuffing knocked out of it by the way it got rid of Mrs Thatcher, the Tory party has never really recovered its identity, leaving millions of voters in effect disfranchised. Three virtually indistinguishable parties squabble over trivia, leaving the electorate without any clear alternative – so that on May 6 almost half the voters may well stay apathetically or sullenly at home.

By the time of the next election the scale of the disaster which has befallen us will be apparent. This election, meanwhile, is little more than a painfully empty charade – while our national debt continues to increase by half a billion pounds a day.
http://www.telegraph.co.uk/comment/columnists/christopherbooker/7575673/Dont-let-the-voters-know-we-face-bankruptcy.html

“Denial ain't just a river in Egypt.”

Mark Twain.

Odds Checker. UK General Election Betting Odds.
http://www.oddschecker.com/specials/politics-and-election/next-uk-general-election/most-seats

“People never lie so much as after a hunt, during a war or before an election.”

Count Otto von Bismarck.

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.

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

Spotless Days April 11
Current Stretch: 1 days
2010 total: 7 days (7%)
2009 total: 260 days (71%)
Since 2004: 777 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
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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