Baltic Dry Index. 2482 -19
LIR Gold Target by 2019: $3,000.
The bastards murdered half my family.
Prince Philip
In room full of press agents, commenting on Russians in 1967, having been asked whether he would consider a visit there.
We start today with the world view from Berlin. What is the point of G-8 and G-20 meetings that cost the hosts a billion dollars, before adding in the damage from the violent anarchists and communists they attract? Below, Der Spiegel on the forgery in Toronto.
"But I don't want to go among mad people," Angela remarked.
"Oh, you can't help that," said Stephen Harper: "we're all mad here. I'm mad. You're mad."
"How do you know I'm mad?" said Angela.
"You must be," said Mr. Harper, "or you wouldn't have come here."
With apologies to Lewis Carroll.
G-20 Differences
Half-Hearted Promises and Mutual Blame
By Gregor Peter Schmitz and Philipp Wittrock in Toronto 06/28/2010
-----In reality, the results of the G-20 summit are much less impressive than Merkel would have the press believe. The expectations for the Toronto meeting had been low -- and they were not exceeded.
Another Weak Agreement
At first glance, the promises of the G-20 nations, which were meeting in this format for the fourth time, sounded impressive. National deficits will be "at least" halved by 2013, according to the summit's closing statement. But the agreement has no teeth, given that it does not foresee any binding mechanisms to make sure that the commitment is kept. Every country will manage its own cost-cutting efforts, with some taking action sooner, others later. The measures will be "tailored to national circumstances," the statement reads.
The discussion of possible new rules for the financial sector was postponed to the next summit in South Korea, which is scheduled for November. Merkel was not able to find sufficient allies to push through a worldwide bank levy or a global financial transaction tax. France and Germany are now working on a EU plan for a financial transaction tax.
The G-20 members may have been united during the crisis, but now they are diverging -- both in terms of regulation and their economic health. National interests have once again become more important than the big picture.
Merkel wants to economize. The British have no other choice but to do so. China is allowing its currency to slowly appreciate against the dollar. And the Americans are expected to continue with their strategy of racking up new debt, at least for the time being.
Divided on Economic Growth
Different countries have "differentiated responses," US President Barack Obama said Saturday. It's a formulation that is intended to save face. Obama insisted that countries shared the goal of "long-term sustainable growth" that creates more jobs.
In the run-up to the G-20 summit, the US and Germany had traded salvoes over their differing approaches to tackling the economic crisis. Obama wants more stimulus spending in Europe to ensure that the fragile economic recovery isn't jeopardized, while Merkel is adamant that austerity measures are the correct response to the European debt crisis.
Already on Friday, at the G-8 summit that preceded the G-20 meeting, Obama had made it clear that he did not want open confrontation over growth strategies, according to sources in the German delegation. Then, speaking at the start of the official G-20 dinner on Saturday evening, Obama praised European efforts to reduce their deficits, something that the German side interpreted as a signal of reconciliation.
He left the dirty work to others, such as US Treasury Secretary Timothy Geithner. "Without growth now, deficits will rise further and undermine future growth," Geithner said. History shows the devastating consequences of a premature end to state stimulus spending, he argued, citing the example of the Great Depression.
This line of argument did not, however, make much of an impact in Toronto.
http://www.spiegel.de/international/world/0,1518,703235,00.html#ref=nlint
Next, the NY Times covers where austerity Europe is heading, and Ireland is positively booming compared to deadbeat Iceland which still won’t/can’t agree to pay off its debts to Britain and Holland. Well actually, they aren’t strictly enforceable debts of the Icelandic people, who quite rightly are playing the modern game of fiat back against the EU bullies, but that is for another day. Below, Ireland in the poor house on the treadmill to nowhere, trapped in the unloved fiat currency Euro. At some point ahead, like the Greeks, the Irish will figure out the remedy of propping up the banks and a one size fits all German Euro, is worse than the disease.
In Ireland, a Picture of the High Cost of Austerity
By LIZ ALDERMAN Published: June 28, 2010
DUBLIN — As Europe’s major economies focus on belt-tightening, they are following the path of Ireland. But the once thriving nation is struggling, with no sign of a rapid turnaround in sight.
Nearly two years ago, an economic collapse forced Ireland to cut public spending and raise taxes, the type of austerity measures that financial markets are now pressing on most advanced industrial nations.
“When our public finance situation blew wide open, the dominant consideration was ensuring that there was international investor confidence in Ireland so we could continue to borrow,” said Alan Barrett, chief economist at the Economic and Social Research Institute of Ireland. “A lot of the argument was, ‘Let’s get this over with quickly.’ ”
Rather than being rewarded for its actions, though, Ireland is being penalized. Its downturn has certainly been sharper than if the government had spent more to keep people working. Lacking stimulus money, the Irish economy shrank 7.1 percent last year and remains in recession.
Joblessness in this country of 4.5 million is above 13 percent, and the ranks of the long-term unemployed — those out of work for a year or more — have more than doubled, to 5.3 percent.
Now, the Irish are being warned of more pain to come.
“The facts are that there is no easy way to cut deficits,” Prime Minister Brian Cowen said in an interview. “Those who claim there’s an easier way or a soft option — that’s not the real world.”
Despite its strenuous efforts, Ireland has been thrust into the same ignominious category as Portugal, Italy, Greece and Spain. It now pays a hefty three percentage points more than Germany on its benchmark bonds, in part because investors fear that the austerity program, by retarding growth and so far failing to reduce borrowing, will make it harder for Dublin to pay its bills rather than easier.
Other European nations, including Britain and Germany, are following Ireland’s lead, arguing that the only way to restore growth is to convince investors and their own people that government borrowing will shrink.
-----“Europe is in a tough bind,” said Kenneth S. Rogoff, a former chief economist at the International Monetary Fund and now a Harvard professor. “If you want to escape default, the Irish path is the only way to go. But the Ireland experience points to the profound challenges that the current strategy implies.”
Politicians here have raised taxes and cut salaries for nurses, professors and other public workers by up to 20 percent. About 30 billion euros ($37 billion) is being poured into zombie banks like Anglo Irish, which was nationalized after lavishing loans on developers.
The budget went from surpluses in 2006 and 2007 to a staggering deficit of 14.3 percent of gross domestic product last year — worse than Greece. It continues to deteriorate. Drained of cash after an American-style housing boom went bust, Ireland has had to borrow billions; its once ultralow debt could rise to 77 percent of G.D.P. this year.
“Everybody’s feeling quite sick at what happened because things were going so well for Ireland,” said Patrick Honohan, the Irish central bank governor. “But we don’t have the flexibility to do a spending stimulus now. There’s no one who is even arguing for it.”
Mr. Honohan predicts growth could revive to a rate of about 3 percent by 2012. But that may be optimistic: Ireland, as one of the 16 nations in Europe that has adopted the euro as its common currency, is trying to shrink the deficit to 3 percent of G.D.P. by 2014, a commitment that could weaken its hopes for recovery.
-----Wage cuts were easier to impose here because people remembered that leaders moved too slowly to overcome Ireland’s last recession. This time, Mr. Cowen struck accords swiftly with labor unions, which agreed that protests like those in Greece would only delay a recovery.
But pay cuts have spooked consumers into saving, weighing on the prospects for job creation and economic recovery. And after a decade-long boom that encouraged many from the previous years of diaspora to return, the country is facing a new threat: business leaders say thousands of skilled young Irish are now moving out, raising fears of a brain drain.
http://www.nytimes.com/2010/06/29/business/global/29austerity.html?hp
Below, the latest news from Greece, where austerity is just beginning to be implemented and hasn’t yet really hurt anyone yet, if one ignores the three murdered bank workers killed by arsonist anarchists and communists in an earlier union strike.
Greece hit by fresh 24-hour strike over austerity plans
Tuesday, 29 June 2010 07:38 UK
Another 24-hour general strike is under way in Greece in protest at planned pension and labour reforms.
Trade unions say ferry services and international flights will be disrupted, leaving tourists stranded.
The industrial action comes as the parliament is due to debate austerity measures demanded by the International Monetary Fund and European Union.
They include cutting pensions, raising the retirement age and making it easier for companies to dismiss employees.
Greece has been suffering a severe economic crisis, and the government is imposing a swathe of austerity measures in return for a 110bn-euro (£89bn) bail-out from the EU and IMF.
Blockade threat
After more than six months of austerity measures and industrial strife, the confrontation between the government and the trade unions is reaching a climax, says the BBC's Malcolm Brabant in Athens.
Parliament is to start discussing the proposed reforms on Tuesday, in a debate expected to last more than a week.
The challenge for the trade unions is to get as many people on the streets as possible to convince potentially rebellious Socialist MPs to vote against their own party and defeat the bill, our correspondent says.
He adds that much attention will be focused on the port of Piraeus, where Communist-affiliated unionists plan to prevent ferries from sailing to the Greek islands.
Their strike has been declared illegal, as was a similar blockade last week. Then the government did not enforce the court order, and thousands of tourists had their travel plans disrupted.
The holiday industry was in uproar, claiming that such confrontations did irreparable damage to Greek tourism, which generates almost 20% of national income.
The big question is whether the government will try to break the blockade in order to help the tourists, or do nothing, for fear of aggravating the unions during the period of this crucial debate, our correspondent adds.
Strikes against austerity measures have brought the country to a standstill on several occasions, closing airports, roads and railways.
http://news.bbc.co.uk/1/hi/world/europe/10443630.stm
In other trans-Atlantic news, Canada looks to be heading to get a US style President! After 4 bad presidents in a row south of the border, and with a surfeit of EU Presidents having just strutted their stuff around Toronto, I’d have thought Canadians were smarter than that. Talk about a dumbed down world. Not that Tone Blair and Gordon Brown didn’t do their best to get that result in the UK too. UK’s class war hating socialists just can’t wait to occupy Buck Pal as president on the Zimbabwe model. Thoughtfully, the ever hospitable generous Canadians, laid on lashings of rain to make the Royal couple feel right at home, even if no one knew she was coming and don’t really know why she is there. Ominously for monarchy supporting Brits, Her Majesty said she was glad "to be home." Is the UK Royal Family about to move west from austerity Britain? What does she know that we don’t?
It's a pleasant change to be in a country that isn't ruled by its people.
Prince Philip
To Alfredo Stroessner, the Paraguayan dictator.
Canadians apathetic about visit from the Queen
Almost half of all Canadians believe that the Queen is "a relic" of the country's colonial past and has no role in the country's future.
Published: 7:00AM BST 29 Jun 2010
The poll on Canadian attitudes to the monarchy comes as the Queen and Duke of Edinburgh arrived for a nine-day tour of the country.
"It is very good to be home," the Queen told hundreds of Canadians standing in blustery rain.
However, a Canadian Press Harris-Decima survey of 1,000 Canadians found that 45 per cent of respondents didn't know that the Royal couple were coming and 44 per cent said they would support a referendum on cutting ties to the monarchy.
Tom Freda, director of Citizens for a Canadian Republic, told Canadian Press that the poll showed Canadians were apathetic about the Queen.
"Most Canadians just don't care about the monarchy," he said.
"It doesn't make sense in the 21st century for a country of Canada's stature to share its head of state with another country.
"It's a symbol of Canada's subservience. It's a symbol of Canada's lack of ability to stand alone in the world as an independent nation."
During her 22nd official tour of Canada, the queen will preside over a parade of naval warships in Nova Scotia. The Canadian vessels still bear the initials HMCS - Her Majesty's Canadian Ship. Her visit coincides in part with the centennial of Canada's Navy.
Britain 'might not cope with another bank emergency'
By Sean O'Grady and James Moore</AUTHOR itxtvisited="1"> Tuesday, 29 June 2010
Britain's mountain of debt could leave the country powerless to launch another rescue bid in the wake of a fresh financial crisis, the world's central bankers warned yesterday. Their "club" - the Bank of International Settlements - presented in its annual report a frightening picture of the impact of a second banking emergency on heavily indebted nations such as Britain.
The Bank of England's Governor, Mervyn King, has estimated that the Government has pumped as much as £1trillion of taxpayers' money into the banking system. Billions of pounds were spent part-nationalising the Royal Bank of Scotland and Lloyds Banking Group, as well as fully nationalising Northern Rock, in an attempt to stave off collapse. Measures such as the "special liquidity" scheme propped up other lenders and prevented the system from freezing up.
But a BIS report warned yesterday that repeating these measures could be impossible. It said: "Events coming out of Greece highlight the possibility that highly indebted governments may not be able to act as a buyer of last resort to save banks in a crisis. That is, in late 2008 and early 2009, governments provided the backstop when banks began to fail. But if the debts of the government itself become unmarketable, any future bailout of the banking systemwould have to rely on external help." Central bankers fear Europe is running out of "external backstops" that could step in, other than the US and the International Monetary Fund. This has unnerved capital markets in the EU, prompting some sharp swings in the value of shares and other financial instruments in recent days.
The BIS has previously said that the ultimate calamity - payments systems freezing and cash machines running out of money - was only narrowly avoided when the US investment bank Lehman Brothers collapsed in 2008. A deeper economic slump was averted by nationalising other banks and making loans amounting to $10trn (£6,620bn).
But the BIS report implies that governments may not be able to repeat such a bailout in the event of a second crisis, which some commentators fear could be triggered by another economic shock.
Despite the warnings, the G20 nations significantly eased the pressure on banks this week by delaying the introduction of tougher rules on the amount of capital they must hold to deal with potential crises. The new regulations were planned for the end of this year but are not now due until 2012. Countries will also be given far more leeway inhow the rules must be applied. Critics say this amounts to a watering down of the reforms needed to stave off the sort of disaster the BIS fears.
Stay long precious metals. The last thing our upside down, bankster world needs, is yet another Carter, Bush, Clinton, Bush, Obama, Putin, Mugabe style Presidency in the world. Given the warning from the BIS, destitution lies ahead after the next Lehman. With Spain needing to borrow another 24 billion Euro next month, the next Lehman may be closer than we think.
We end for the day with a trailer sent in by a reader in California. Is getting natural gas from shale using current “fracking” technology, another deep water drilling disaster in slow motion? I have no idea from far away London, but the issues raised need addressing at the highest levels, and fast. Polluting the aquifers risks making much of world short of drinking water, in an age when we are already stretching water resources to the limit.
http://www.silverbearcafe.com/private/06.10/gasland.html
"Would you tell me, please, which way I ought to go from here?"
"That depends a good deal on where you want to get to," said the BIS.
"I don’t much care where--" said the BOE.
"Then it doesn’t matter which way you go," said the BIS.
With apologies…..
At the Comex silver depositories Monday, final figures were: Registered 50.71 Moz, Eligible 64.22 Moz, Total 114.93 Moz.
+++++
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled over.
No crooks today, just Britain’s former Prime Minister at Heathrow, hired by Scottish Football supporters and a baked bean outfit to welcome home Fabio Capello and the England World Cup football team.
RBS tells clients to prepare for 'monster' money-printing by the Federal Reserv
http://londonirvinereport.blogspot.com/p/intraday-news.html
How do you keep the natives off the booze long enough to pass the test.
Prince Philip
To a Scottish driving instructor, 1995.
The monthly Coppock Indicators finished May:
DJIA: +276 UP. NASDAQ: +499 UP. SP500: +304 UP. The great Bull market goes on with the all three continuing higher in positive numbers, but is now under serious pressure.
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