Baltic Dry Index. 2502 -13
LIR Gold Target by 2019: $3,000.
If all else fails, immortality can always be assured by spectacular error.
J. K. Galbraith.
Today the G-8 meet for the Gospel according to Barak Obama, leader of the G-1 cult from Chicago, which features the feeding of the 5,000 great vampire squids with 1.5 trillion of food stolen from the masses of US taxpayers. More accurately, borrowed by US taxpayers from the People’s Bank of China, who bought into the great American real estate dream peddled by Greenspan and Paulson earlier in this new century. Oddly, China isn’t invited to meetings of the G-8 since that would make it a G-9 meeting, with China reading the riot act over the failings of the fiat dollar reserve standard, which doesn’t seem any longer to have any standards at all.
As it is, today, while the G-1 drones on about turning paper dollars into gold in Washington, and the need for all to keep electronically printing and spend, spend, spend our way out of debt, the European Apostles attending are undergoing a schism between the easy going, feckless, southern members of mostly bankrupt Club Med, who believe passionately in the Gospel of conspicuous consumption, believing that any bills can be sent round to Berlin for an economic miracle, and the dour, but flush northern Calvinists, who believe in hard work, paying taxes, and saving for the future, in case something might go wrong like the Mongols suddenly showing up out of nowhere. The northerners haven’t quite grasped that since President Nixon made the great heretical error of abandoning the dollar link to gold, the whole world has been operating in a Kafkaesque fiat money world, where saving for the future is irrelevant. If it all goes wrong, just borrow or print up trillions more, goes the heretical Nixonian theory, if we give it all to the banksters it will all work out like before. Don’t worry, be happy, what could possibly go wrong, remember this is change we can believe in. Below, Presidents Obama and Medvedev get to con each other in Washington, before heading up to Canada to play three card monte.
Meetings are indispensable when you don't want to do anything.
J. K. Galbraith.
Obama, Medvedev pledge stronger economic ties
By the CNN Wire Staff June 24, 2010 -- Updated 2048 GMT (0448 HKT)
Washington (CNN) -- President Barack Obama and visiting Russian President Dmitry Medvedev pledged cooperation on stronger economic ties Thursday, announcing a deal for Russia to again accept U.S. poultry exports and touting U.S. support for Russia's bid to join the World Trade Organization.
During a busy day that included White House talks, a joint news conference and participation in a U.S.-Russia business council meeting, the two presidents repeatedly cited strengthening relations between their countries after what Obama called a "drift" under the previous administration.
Faced with the continuing struggle to recover from the global economic recession, nuclear ambitions of Iran and North Korea, terrorism threats and other major issues, Obama and Medvedev said the world needed a strong U.S.-Russian relationship in the 21st century.
Obama called Medvedev a "solid and reliable partner" and repeated his commitment to "resetting, but also broadening" ties, while Medvedev called for a "level of economic cooperation in line with the potential" of the two nations' economies.
"We want this volume to grow" with each country investing in the other, Medvedev said. "It's not a one-way road."
Obama called for accelerated talks on Russia's membership in the WTO, a goal of the former communist country in its efforts to fully join the global economy. He noted agreements announced Thursday on energy technology trade and the readmittance of U.S. poultry exports to Russia as signals of Russia's serious intent to become a WTO member.
However, Obama offered no estimate of when the country would join the 153-nation group that sets rules for international trade. Russia currently is an observer nation.
http://edition.cnn.com/2010/POLITICS/06/24/obama.medvedev/index.html?hpt=T2&fbid=0ZR_3t_KNP9
Into the G-8 thieves’ conclave, Her Majesty’s Government is sending its neophyte Prime Minister, the leader of a strange UK coalition that seeks to straddle the great schism in Europe. Neither entirely sold on the spend, spend, spend Gospel of Washington, it doesn’t seem to really believe in the hair shirt austerity of Berlin. The suspicion is that when the austerity going gets tough, HMG will get going back to Quantitative Easing. Besides, the UK didn’t win the second world war just so some bunch of fanatical Berliners could start ordering around what HMG could spend on and when. Left to itself, the UK is a sort of closet member of Club Med. Except for the photo-op, most attending won’t even know he’s there. By universal agreement, 6 of the G-8 have agreed it’s time to gang up on Chancellor Merkel and her Bundesbank Thesis.
And so after today’s G-8 meeting it’s on to the weekend’s G-20 meeting that has managed to shut down most of Toronto, Canada’s most important city of the Great White North. This being the northern hemisphere summer, it’s mostly a pleasant shade of green for the next few weeks, with unbelievably large swaths given over to gigantic herds of Caribou and even larger herds of midges. The G-20 allows in just about anyone who can afford the airfare. In two years of meetings and trying, no one can name any single thing that they’ve achieved. This time out, they’re unlikely to disturb they’re 100% record. The BRIC grouping hold the high ground, but are universally hated by the other 16. The EU grouping are widely seen as total lunatics, desperately trying to recreate the old Soviet Union in Western Europe. They are universally loathed and feared for creating a phony fiat currency that’s now in the process of going out of business. The UK will be largely irrelevant in the current meeting.
The North Americans, well what can one say. The Mexicans are all so desperate to become Americans they seem to be engaging in a reverse stealth takeover, aided and abetted by Washington DC. The Canadians try desperately to pretend not to be Americans at all, but all insist on living in a thousands of miles long 100 mile deep corridor attached to the northern extremity of the USA economy. The Americans themselves have crashed from western leadership after a run of 4 terrible presidents in a row, that allowed Wall Street’s great vampire squids to all but wreck the dysfunctional great Nixonian fiat currency experiment. For the moment, while the US president isn’t exactly a lame duck president, he does look likely to be another one-timer. Few in the G-20 are going to go out on a limb for an iffy US leader. All in all, it’s hard to see very much coming out of this weekend’s meetings.
Wealth is not without its advantages, and the case to the contrary, although it has often been made, has never proved widely persuasive.
J. K. Galbraith.
JUNE 25, 2010
Cameron Takes Skeptical Approach to G-20
HALIFAX, Nova Scotia—New U.K. Prime Minister David Cameron, making his debut on the global stage at this week's meetings of international leaders in Toronto, is striking a skeptical tone about the ability of leaders to carry out their lofty conference promises.
Mr. Cameron, in office for just six weeks, has emphasized domestic policy over foreign affairs during most of his political career. Arriving in Canada Thursday for meetings of the Group of 20 and Group of Eight economies, he took a low-key approach to the possible output of the sessions. He emphasized the potential for simple bilateral agreements with individual nations over the kind of broad, unified reform that such sessions typically aim to achieve.
In that way, he is striking a much different stance than his predecessor, Gordon Brown, who relished the role of statesman and used such meetings to push for sweeping action, such as pushing hard for the Doha global trade deal that Mr. Cameron says is unlikely to be sealed this weekend. Mr. Cameron, in his short time as prime minister, has shown himself as pragmatic rather than ideological on foreign policy, particularly in his Conservative Party's prickly dealings with the European Union. He has advocated pragmatic engagement rather than grandstanding rhetoric.
-----Speaking to reporters en route to Toronto, Mr. Cameron said the G-20 has "shown it has a role on the global economy." Nonetheless, he was critical of the inability of such gatherings—particularly the G-8—to deliver on stated pledges.
"The G-8 needs to demonstrate to the public that when we get together and sign up to these things, we mean it," he said. The U.K. has complained before that goals set to provide aid to the poorest nations at the 2005 G-8 summit in Gleneagles, Scotland, haven't been met by some of the countries that signed on.
"That is why I think there is an accountability issue, on aid delivery and promises made," he said.
Below, the US gets ready to blitz the economy with acres more of new cash. Could the Fed really be proposing to expand its balance sheet again, from $2.4 trillion to $5.0 trillion? Stay long precious metals, they probably will.
Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof.
J. K. Galbraith
Ben Bernanke needs fresh monetary blitz as US recovery falters
Federal Reserve chairman Ben Bernanke is waging an epochal battle behind the scenes for control of US monetary policy, struggling to overcome resistance from regional Fed hawks for further possible stimulus to prevent a deflationary spiral.
By Ambrose Evans-Pritchard, International Business Editor
Published: 9:44PM BST 24 Jun 2010
Fed watchers say Mr Bernanke and his close allies at the Board in Washington are worried by signs that the US recovery is running out of steam. The ECRI leading indicator published by the Economic Cycle Research Institute has collapsed to a 45-week low of -5.7 in the most precipitous slide for half a century. Such a reading typically portends contraction within three months or so.
Key members of the five-man Board are quietly mulling a fresh burst of asset purchases, if necessary by pushing the Fed's balance sheet from $2.4 trillion (£1.6 trillion) to uncharted levels of $5 trillion. But they are certain to face intense scepticism from regional hardliners. The dispute has echoes of the early 1930s when the Chicago Fed stymied rescue efforts.
"We're heading towards a double-dip recession," said Chris Whalen, a former Fed official and now head of Institutional Risk Analystics. "The party is over from fiscal support. These hard-money men are fighting the last war: they don't recognise that money velocity has slowed and we are going into deflation. The only default option left is to crank up the printing presses again."
We end for the day with more on the wobble in China. Even in China, it seems, the front loaded benefits of fiat currency have passed. As in the increasingly dysfunctional gambling economy west, fiat currency has turned into a wealth destruction mechanism, fast gobbling up the world’s resources for projects of little or no economic value. Future generations will pay dearly for all our excess fuelled by Nixonian heresy.
China's chief auditor warns mounting local government debt a risk to economy
China's chief auditor has warned that high levels of local government debt could derail the country's economy, with some observers suggesting that a number of Chinese provinces are even more fiscally-troubled than Greece.
By Malcolm Moore in Shanghai Published: 1:20PM BST 24 Jun 2010
Liu Jiayi, the head of China's National Audit Office said the financial crisis had left some Chinese provinces with serious debt problems.
"The scale is large, and the burden is quite heavy," he said, in an annual report to the Chinese government.
Chinese provinces are, in some cases, equivalent in size to major European countries and run with a degree of fiscal autonomy. The southern province of Guangdong, for example, has the same population size as Germany.
However, provincial budgets have been classified as state secrets until now and this is the first time that China has disclosed the level of local government debt.
Mr Liu said the ratio of debt to disposable revenues at some local governments was over 100pc and in the highest case it was 365pc.
He said the audited debts of 18 of China's 22 provinces, together with 16 cities and 36 counties amounted to 2.79 trillion yuan (£279bn) in 2009.
Several observers believe the situation is far worse. The China Daily newspaper, which is run by the government, suggested that the total sum could add up to between 6 trillion and 11 trillion yuan (£590bn-£1.08 trillion).
Victor Shih, a professor at Northwestern University in the United States, believes the sum in 2009 was 11.4 trillion yuan, equivalent to 71pc of China's nominal GDP.
Mr Shih has warned that local governments have also succeeded in rapidly funnelling large amounts of debt off their balance sheet and into public-private investment vehicles.
China's banking regulator said outstanding loans from banks to local government financing vehicles was 7.38 trillion yuan at the end of 2009, rising 70pc year-on-year.
Mr Shih, who researched more than 8,000 of these "local investment companies", said that orders to ramp up spending on infrastructure after the financial crisis could leave China with widespread debt problems.
"I collected data from thousands of sources, including regulatory filings, bond-rating reports and press releases of government-bank agreements," he said, although he admitted that comprehensive data was difficult to track down.
Next year, he is forecasting government debt to hit 96pc of gross domestic product as infrastructure projects continue to eat up cash and produce negligible returns.
In central banking as in diplomacy, style, conservative tailoring, and an easy association with the affluent count greatly and results far much less.
J. K. Galbraith
At the Comex silver depositories Thursday, final figures were: Registered 51.12 Moz, Eligible 63.82 Moz, Total 114.94 Moz.
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Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled over.
Below, it’s almost game over for BP’s long suffering shareholders. Next comes every man for himself as BP’s managers start to jump ship and head for “let’s make a deal.” With billions at stake, whistle blowers will be the next shoe to fall. BP seems to have drilled itself into the history books.
BP oil spill was avoidable: IEA
PARIS Petroleumworld.com, June 24, 2010
The oil spill in the Gulf of Mexico is a catastrophy caused by human error which could have been avoided, the head of the International Energy Agency said here on Wednesday.
"This is a catastrophy that could have been avoided," IEA director general Nobuo Tanaka told a press conference on the occasion of publication of the agency's medium-term outlook for the oil market..
He said: "We have to wait until the investigation."
But from the information available, "there is an accumulation of human errors."
While awaiting the results of an enquiry into the accident, the moratorium on deepwater drilling decided by the US administration, "is a reasonable measure," he said.
On Tuesday, a judge in Louisiana annulled the six-month moratorium.
Referring to the effect of the spill on the oil market, Tanaka said that it had "so far has been minimum."
But he also said that the impact on new deepwater projects could reduce expected US oil output in the Mexican gulf by 100,000 to 300,000 barrels per day.
Similar restrictions worldwide, although very unlikely, "could ramp the number up to 800,000 to 900,000 bpd."
The International Energy Agency is the oil policy arm of the 31-member Organisation for Economic Cooperation and Development.
http://www.petroleumworld.com/storyt10062401.htm
AP check: Shoddy disposal work mars oil cleanup
By JAY REEVES, Associated Press Writer Jay Reeves, Associated Press Writer – Thu Jun 24, 6:21 am ET
ORANGE BEACH, Ala. – A leaky truck filled with oil-stained sand and absorbent boom soaked in crude pulls away from the beach, leaving tar balls in a public parking lot and a messy trail of sand and water on the main beach road. A few miles away, brown liquid drips out of a disposal bin filled with polluted sand.
BP PLC's work to clean up the mess from the worst offshore oil spill in U.S. history already has generated more than 1,300 tons of solid waste, and companies it hired to dispose of the material say debris is being handled professionally and carefully.
A spot check of several container sites by The Associated Press, however, found that's not always the case.
Along the northern Gulf coast, where miles of beaches have been coated with oil intermittently for two weeks, the check showed the handling and disposal of oily materials was haphazard at best.
A mound of oily sand sits in an uncovered waste container in a parking lot at the crown jewel of Alabama's park system, Gulf State Park. Water from the previous night's storm drips out of the bin into a brown pool on the asphalt.
----- Cleaning up a spill is an undeniably messy job, particularly when crude oil or tar balls are washing ashore in varying amounts in four states. The debris isn't classified as hazardous waste, so it can be placed in landfills that accept ordinary household garbage, including table scraps.
Yet Jerry Kidd, doing maintenance work at a condominium, couldn't believe it when he saw a Waste Management Inc. truck pull away from a collection site in Orange Beach piled with loose sand, oil-smeared protective gear and oily boom pulled out of the water. It was trailing pollution of its own.
The company says it is using 535 containers lined with what amount to huge black trash bags to collect debris from Mississippi, Alabama and part of the Florida Panhandle under a contract with BP. But not all of the bins really are lined, and liners have failed in others.
"They're going down the road leading to the landfill; they take the same route every day. They're leaking onto the roads, into the storm sewers," said Kidd. "There's no telling where it's going."
http://news.yahoo.com/s/ap/20100624/ap_on_bi_ge/us_gulf_oil_spill_waste_disposal_4
Another weekend, and the G-20 elite get to compete for coverage with the World Cup, Wimbledon, and Formula 1 from Valencia Spain, to say nothing of those headed off the beaches and countryside to enjoy another of God’s summer weekends. More on the blog as the G-20 unfolds. For England football supporters, Sunday becomes another do or die mission against Germany, though both teams are two more of Europe’s under performing teams this year. Have a great weekend everyone. The lucky citizens of Toronto can leave their fine city to the Lords of the Universe, instead they can get to spend time in God’s country. I know where I’d rather be this weekend.
"In economics, hope and faith coexist with great scientific pretension."
J. K. Galbraith.
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.
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 June 24
Current Stretch:0 days
2010 total: 35 days (20%)
2009 total: 260 days (71%)
Since 2004: 803 days
Typical Solar Min: 485 days
The long minimum seems to have ended, or has it?
Absence of sunspots make scientists wonder if they're seeing a calm before a storm of energy
by Stuart Clark New Scientist Tuesday, June 22, 2010
Sunspots come and go, but recently they have mostly gone.
----- As 2009 arrived, solar physicists looked for some action. They didn't get it. The sun continued to languish until mid-December, when the largest group of sunspots to emerge in several years appeared. Even with the solar cycle finally underway again, the number of sunspots has so far been well below expectations. Something appears to have changed inside the sun, something the models did not predict. But what?
----- Michael Lockwood, a professor of space environment physics at the University of Reading in England, may already have identified one response: the unusually frigid European winter of 2009-10. He has studied records back to 1650 and found that severe European winters are much more likely during periods of low solar activity. This fits an idea of solar activity's giving rise to small changes in the global climate overall but large regional effects.
---- What the sun will do next is beyond our ability to predict. Most astronomers think that the solar cycle will proceed but at significantly depressed levels of activity, similar to those last seen in the 19th century. However, there is also evidence that the sun is inexorably losing its ability to produce sunspots. By 2015, they could be gone altogether, plunging us into a new Maunder minimum -- and perhaps a new Little Ice Age.
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