Baltic Dry Index. 3832 -50
LIR Gold Target by 2019: $3,000.
In Italy, for thirty years under the Borgias, they had warfare, terror, murder, and bloodshed, but they produced Michelangelo, Leonardo da Vinci, and the Renaissance. In Switzerland, they had brotherly love, five hundred years of democracy and peace and what did they produce? The cuckoo clock.
Orson Welles. The Third Man
After 39 years on fiat money, our just in time, global economy is wracked with social division. After years of profligate politicians buying votes and election by deficit finance, our G-7 - G-20 world has almost run out of options. Brought down by financial securitisation fraud, the collapse of ethics and banks in the casino economy, and a need for governments everywhere to cut back on the fiat based entitlement society. Stay long precious metals. Nothing backs up any of the fiat currencies. By definition they are fiat, non convertible into anything of value. One after another they are all doomed to fail. But modern society is not willing to undergo any meaningful government imposed austerity cutbacks. We didn’t create the problem, they aver, we shouldn’t have to pay for the bill. Tomorrow will not be like today which was like yesterday. For many newly downwardly mobile Europeans, “Pottersville” looms, according to the banksters. Still if Orson Welles movie script is right, we can all look forwards to some great new art.
We open with the extreme case of Thailand, where fiat has wrought a divided society of extreme wealth near the banksters and gainers from leveraged gambling and real estate speculation, and a left behind, largely rural society of hard working, but impoverished, feeling cheated mass of discontented “others.” Modern Thailand is only slightly further down the road of modern Greece.
Riots Erupt in Bangkok as Protest Leaders Surrender
May 19 (Bloomberg) -- Rioting erupted across Bangkok after Thai security forces backed by armored vehicles cleared an anti- government protest camp and forced its leaders to surrender.
“It’s going to be total lawlessness for another 48 hours,” Sanit Nakajitti, a director at PSA Asia, a Bangkok-based security and risk consulting firm, said by phone. “This is their retaliation. And gangsters, youngsters, drug dealers, anyone with a grievance will join them.”
Rioters set at least 25 buildings alight in Bangkok, a city of nine million people. One blaze substantially damaged the stock exchange, Thamon Onketpol, an adviser to the governor of the Bangkok Metropolitan Administration, told Thai PBS television. A fire in the building where Channel 3 TV is based had trapped “many people,” Thamon said.
Gunfire and explosions continued to rock the city as protest leaders were escorted from the camp’s main stage to a nearby police station. The Central World office complex was gutted by fire and the Siam Paragon shopping mall was still burning, fire official Narunart Boonkong said. The government called for volunteers to help tackle the flames, Panitan Wattanayagorn said.
Class Divide
The Red Shirt demonstrators, who view Prime Minister Abhisit Vejjajiva’s rule as illegitimate, drew thousands of mainly rural supporters to the encampment, underscoring a widening class divide. Reports of disturbances today in northeast Thailand, where many protesters came from, indicate that political reconciliation may be difficult to achieve.
“We will continue to fight for democracy; this is not our day,” Nattawut Saikuar, one of several Red Shirt leaders, said when he arrived at the police station in comments broadcast by TNN News. “We have been trying to do our best for the country to be truly owned by the people.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=awauQBZKQBfY&pos=8
Back in Europe, more than Greece is facing severe austerity. Can the Euro survive in anything like its present form. The benefits of fiat currency are all front loaded. We long ago dissipated away the benefit fiat currency brought. Will 2010-2011 be an updated version of Europe 1848-1849? Is a new “Year of Revolution” close at hand? Below, a partial list of Europe’s latest fixation with making “little people” pay.
“We don’t pay taxes. Only little people pay taxes.”
Leona Helmsley.
MAY 19, 2010, 8:40 A.M. ET
Romanian Workers Protest Wage Cuts
BUCHAREST—Tens of thousands of public workers gathered in the Romanian capital Wednesday to protest planned government wage cuts meant to shore up the country's ailing economy, threatening to call a general strike if the cuts went ahead.
About 40,000 public workers, teachers, doctors and retirees blew whistles and yelled "Down with the lying government!" and "You have pawned our future," as they protested outside the government offices in Bucharest. The two-hour protest blocked traffic in the city center.
"The government brought us to the streets. Shame on them!," trade union leader Ion Popescu told the crowd. "We are asking the government for the right to a decent life, jobs and a competitive education system."
In a sign of the anger, economy minister official Marcel Hoara was booed and pelted with water and stones after he took part in a live televised debate in the middle of the protest. Police escorted him from the area.
Union leader Iacob Baciu said a general strike will be called May 31 if the government goes ahead with the planned wage and pension cuts. Finance Minister Sebastian Vladescu has said the number of jobs in the state sector must be cut by 70,000 by 2011. There are 1.36 million state-paid workers.
"Our salaries are very small. They weren't good before, but with the cuts we don't see anything good coming," said Valentina Voinea, a 33-year-old nurse who earns 900 lei ($261) a month. "They have cut the number of jobs and medical care is suffering. I am sorry I haven't emigrated," she said.
----Unions have rejected the government's plan to slash public wages by one-fourth and pensions by 15%. Workers said they feared the government would raise taxes in the fall.
"We are aware that the government will not stop at these measures. In a few months they will increase VAT and the income tax," said Constantin Dragomir, a 64-year-old teacher. He said that young teachers would be severely affected, because their salaries are lower.
The government said the measures are necessary to reduce the budget deficit. Central bank governor Mugur Isarescu said earlier this week that the funds available in the state budget can cover only 20 days out of every month, for the other 10 the state must borrow money.
Romania took a €20 billion ($24.42 billion) loan from the International Monetary Fund, European Union and the World Bank last year to pay state wages when its economy shrunk by 7.1%
Simor Calls On Hungary’s New Rulers to Follow Strict Policy
May 19 (Bloomberg) -- Hungary’s central bank President Andras Simor, whose position was described as “questionable” by the ruling party, called on the new Cabinet to impose a strict fiscal policy as debt levels makes the nation vulnerable.
“High net external debt, high government debt, the banking system’s exceptional loan-to-deposit ratio and significant foreign-currency household loans are the main sources of vulnerability,” Simor said in a speech in Budapest yesterday.
The new government, expected to take office next week, wants to renegotiate the terms of the emergency bailout the country received in 2008 from the International Monetary Fund, the European Union and the World Bank. Investors at the time cited its external debt among reasons for selling Hungarian assets, pushing the country to the brink of default.
Members of incoming Prime Minister Viktor Orban’s Cabinet said this year’s budget deficit may be as wide as 6 percent of gross domestic product, compared with the target of 3.8 percent, approved by the country’s creditors.
http://www.bloomberg.com/apps/news?pid=20601095&sid=avrd1MKTvfC8
MAY 19, 2010, 9:34 A.M. ET
Spain to Raise Taxes for Wealthy
MADRID—Spain will raise taxes for high-income earners to help chip away at the country's outsized deficit, the prime minister said Wednesday.
José Luis Rodriguez Zapatero said most Spaniards agree with him that a special effort can be expected from those better off as the government enacts austerity measures like cutting the salaries of civil servants and freezing pensions.
Mr. Zapatero provided no details of his tax plans, but said any increase would be of a "limited" nature and not affect the middle class.
----As for when an increase might be approved, he said "it will be when the government deems it appropriate, in line with its program for deficit reduction."
Mr. Zapatero's government announced public-sector wage cuts and other spending reductions last week under pressure from the EU and jittery markets to get Spain's deficit down. It was the equivalent of 11.2% of gross domestic product last year, well above an EU limit of 3%.
The cuts—also affecting government investment, overseas aid and other spending—are designed to save €15 billion ($18.32 billion) this year and next.
The cabinet is expected to approve the spending cuts in a decree on Thursday.
Italy Investigates 7,000 HSBC Account Holders for Tax Evasion
May 19 (Bloomberg) -- Italian finance police are reviewing a list of more than 7,000 account holders from HSBC Holdings Plc’s Swiss private bank as they investigate possible tax evasion or money laundering, according to a police spokesman.
The probe is being conducted after a Turin-based court requested the Italian names on a list obtained by French prosecutor Eric de Montgolfier, said Gian Carlo Caselli, Turin’s chief prosecutor. He declined to comment further.
The Italian names are on a list of 127,000 accounts belonging to 80,000 people that Herve Falciani, a former computer technician at HSBC’s branch in Geneva, turned over to a court in Nice, France, according to a police spokesman who confirmed articles published today in newspapers including il Sole 24 Ore.
HSBC said in March that French authorities had obtained details on about 24,000 accounts that were stolen by Falciani. While that posed a threat to client privacy, the bank said it didn’t believe the stolen data would allow third parties to access the accounts.
The willingness of governments to pay for stolen data is fanning tensions with France and Germany as Switzerland seeks to negotiate treaties implementing its commitment to cooperate with international tax probes. Following talks in January, France agreed not to ask for assistance from Swiss authorities based on the stolen information. French authorities will continue to use the data to pursue tax evaders at home.
-----The Turin probe involves Italians who had accounts at the bank between 2006 and 2008, police said. French, British and German names are included on the overall list provided by the former HSBC employee, il Messaggero newspaper said.
Swiss secrecy laws, which threaten bank employees with as much as five years in jail if they divulge client information, have failed to stop workers from stealing data.
http://www.bloomberg.com/apps/news?pid=20601092&sid=a6j.Od8GvgTU
Sarkozy Grapples With ‘Politically Unacceptable’ Deficit Cuts
May 20 (Bloomberg) -- French President Nicolas Sarkozy’s popularity fell to its lowest since his 2007 election last month. Worse may lie ahead as he cuts spending and raises taxes in the wake of Europe’s financial crisis.
Sarkozy risks increasing voters’ ire two years ahead of presidential elections as he strives to meet promised deficit- reduction targets and pacify investors. The choices include the politically sensitive areas of lifting the top tax rate and tightening pension requirements.
“Austerity is economically necessary but politically unacceptable,” said Laurent Dubois, a professor at Paris’s Institute of Political Studies. “But he has no choice, the debts are too heavy.”
The dilemma facing the French leader, who took office three years ago this week, underscores the bind facing European Union politicians, whose response to the Greek debt crisis prompted them to pledge reductions in their deficits and public debt.
Sarkozy has said he will cut France’s deficit to 3 percent of economic output in 2013 from 8 percent now. His reliance on a spending freeze, economic growth and a pension overhaul will get him only partway there, according to Samuel-Frederic Serviere, a researcher at Ifrap, a Paris-based group that monitors government spending
“With just the measures that have been announced, at best we’ll get the deficit down to 5 percent by 2013, and that’s in the best of cases,” Serviere said. “What they’ve announced so far just isn’t sufficient given our European engagements.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=ahLyVLQ4Ox2g&pos=9
German ban turmoil fuels global sell-off, Greece prepares for general strike
The global stock market sell-off triggered by Germany's surprise short-selling ban continued as Asian shares fell again and a second general strike in Greece set the scene for another day of turmoil in Europe.
Published: 7:33AM BST 20 May 2010
Germany's unexpected announcement on Tuesday banning naked short selling, where traders bet against investments they don't hold, was seen as another example of the disarray in Europe's financial system. Slower-than-expected growth in Japan also weighed on sentiment.
The euro edged lower to $1.2349 after climbing strongly yesterday from fresh four-year lows on the ban after the Swiss central bank intervened to buy euros to cope with a flood for money from eurozone investors.
China's Shanghai Composite Index fell just 0.3pc as investors bet that Europe's woes could mean China may not have to raise interest rates too aggressively to slow its economy.
Today's second general strike in Greece will once again highlight the eurozone's plight and police are braced for violence with more protest marches planned to express anger at painful austerity measures.
Much of the country's public sector and country's ferries, trains and public transport will be shut down. Protest marches are planned and police are braced for violence.
----- Markets have reacted with a mixture of disbelief and anger to the Germany's unilateral move to prohibit shorting of of European Union government debt and banks.
Billions of pounds were wiped off the value of shares as the main European indices on Wednesday dropped on the back of large-scale selling by institutions shocked and spooked by Germany's actions.
----- "The fact that the ban was announced after the European market closed and was implemented only a few hours later is nothing short of reckless and has the market speculating about larger, unknown problems."
----- Even experienced bond traders were left uncertain how to react and several major investment banks opted to delay opening their market making desks until some sort of order returned.
"Nobody has a clue what is going to happen next," said Anthony Peters, a strategist at Swissinvest.
"Politicians have shown they have no understanding of markets. They are firing the wrong calibre gun, at the wrong target and they are missing."
Mr. Potter: [to George Bailey] Look at you. You used to be so cocky. You were going to go out and conquer the world. You once called me "a warped, frustrated, old man!" What are you but a warped, frustrated young man? A miserable little clerk crawling in here on your hands and knees and begging for help. No securities, no stocks, no bonds. Nothin' but a miserable little $500 equity in a life insurance policy.
[Potter chuckles]
Mr. Potter: You're worth more dead than alive!
It’s a Wonderful Life 1946.
At the Comex silver depositories Wednesday, final figures were: Registered 53.02 Moz, Eligible 64.20 Moz, Total 117.22 Moz.
Day 11 of Hitler’s attack in the west that almost brought down western civilization. We continue our daily update on the “Dunkirk” page.
Dunkirk & the Battle of France – Day by day 70 years on.
http://londonirvinereport.blogspot.com/p/dunkirk-battle-of-france.html
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Crooks & Scoundrels Corner.
The bent, the seriously bent, and the totally doubled over.
Today, no Wall Street squids, just sad news on BP’s Deepwater disaster. BP’s shareholders will soon be turning over the profits for years to come.
First signs of thick oil found in Plaquemines marshlands
By Chris Kirkham, The Times-Picayune May 19, 2010, 7:54PM
After weeks of estimates, countless models and hundreds of boat excursions seeking hints of oil in Louisiana's marshes, a bleak picture began to emerge this week as the first signs of thick, dark oil from the Gulf of Mexico oil spill could be seen blanketing a patch of marsh grass near the mouth of the Mississippi River.
At the eastern reaches of the delta, where Pass a Loutre meets open water, dark brown oil was covering an entire patch of cane grass on Wednesday. On the open water, a dark-brown tint could be seen on grasses just above the water's surface.
A few feet inside the marsh grass, where the currents move the water less, there was a thick coating of oil -- much different from the random, smaller clumps of oil or thin sheens seen during the past two weeks across Louisiana's coastline.
"This is a small area," said Plaquemines Parish President Billy Nungesser. "If this comes in in waves and goes farther inland into the marsh, we'll be 25 to 30 years, if ever, recovering from this."
Nungesser and Gov. Bobby Jindal were at the site Wednesday as part of a continued push to get the Army Corps of Engineers to approve -- and BP to pay for -- the construction of barrier islands offshore to intercept the oil before it moves into the state's fragile wetland ecosystems
Jindal said that within seven to 10 days, the thick oil standing in marshes like Pass a Loutre will eventually lead to discoloration of the marsh grass and, potentially, lead to its death. Cleaning the marshes once oil gets inside is also a challenge, because heavy-duty equipment could do more long-term damage to the habitat than just letting the oil dissipate on its own.
"A lot of this oil, I suspect they'll end up leaving it back in there, and over time hoping that it degrades," Jindal said. "The problem for us, though, is that those species don't have time, those young Gulf species don't have time. They've got nowhere else to go. The damage has already been done."
Nungesser had an even more stern assessment.
"Everything that that blanket of oil is covering today will die," he said. "All of the bugs that the fish come in to eat, all of the critters in the marsh will die. And that marsh will die. There's no way to clean it up."
Oil has also washed up on the sandy shoreline west of South Pass in Plaquemines Parish.
http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/05/first_signs_of_thick_oil_found.html
The monthly Coppock Indicators finished April:
DJIA: +245 UP. NASDAQ: +448 UP. SP500: +276 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 May 19
Current Stretch:11 days
2010 total: 32 days (22%)
2009 total: 260 days (71%)
Since 2004: 801 days
Typical Solar Min: 485 days
The long minimum seems to have ended, or has it?
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