Baltic Dry Index. 2515 -32
LIR Gold Target by 2019: $3,000.
As the fifteenth century drew to a close, coinage throughout Europe was in a shambles. The financing of ceaseless wars between dukes and kings over territorial disputes was largely done through the debasement of the silver coinage. The fact that the rate of debasement differed from country to country, from dukedom to dukedom, only made matters worse. Trade, investment, and progress were hampered by the lack of uniform, easily recognizable, and reliable means of payment.
Architecture for a New World Financial System. Antal E. Fekete
In the run up to tomorrow’s G-8 meeting and the weekend’s G-20 meeting, it looks like it’s now open season on Germany. The poor Germans make the mistake of working hard, paying their taxes, saving for the future, and wanting their national accounts balanced. They well remember having to bailout the former East Germany at the wrong exchange rate between the worthless Ossi Mark and the West German D-Mark. They do not want to repeat the experience bailing out Greece, Spain, Italy, and every other spendthrift wastrel country of the European Monetary Union. The world’s Keynesians are all up in arms. They want Germany to follow America’s lead and borrow and spend, spend, spend, their way out of debt. If America’s going down, they reason, we don’t want any Germany’s out there benefiting. Below, George Soros gets shrill over Germany’s sound money policy. Forget what EU treaties say, says Overlord George, do what I say, and do it fast. Using polite code words and guilt, Mr. Soros even raises the specter of 1930s Germany. Perhaps it’s time again for the Greeks to bring up the war and their stolen gold. Sounds like the coming G-20 meeting is going to be fun.
Soros tells Germany to step up to its responsibilities, or leave EMU
Legendary investor George Soros has called on Germany to leave the euro unless it willing to embrace a growth strategy, describing Berlin’s austerity doctrine as a threat to democracy and political stability in Europe.
By Ambrose Evans-Pritchard, International Business Editor
Published: 6:31PM BST 23 Jun 2010
"German policy is becoming a danger that could destroy the European Project. A collapse of the euro cannot be excluded," he told the German weekly Die Zeit.
"Unless Germany changes policy, its withdrawal from the currency union would be helpful for the rest of Europe. At the moment Germany is pushing its neighbours into deflation: this threatens a long phase of stagnation, leading to nationalism, social unrest, and zenophobia. It endangers democracy," he said.
-----His comments reflect growing alarm in influential circles on both sides of the Atlantic over the 1930s-style policies of wage cuts and debt-deflation being imposed up the Club Med bloc, Ireland, and parts of Eastern Europe by the EU authorities, at the behest of Berlin.
President Barack Obama clearly had Germany in mind when he wrote a letter to fellow leaders before the G20 summit in Canada this week that surplus countries should do more to shore up global demand. "Our highest priority must be to safeguard and strengthen the recovery: we cannot let it falter or lose strength now. Should confidence in the strength of our recoveries diminish, we should be prepared to respond again as quickly and as forcefully as needed," he wrote.
China has deflected G20 criticism by starting to free the yuan, leaving Germany facing the full wrath of Washington. While the German economy is not in itself large enough to shape global events, US officials fear that Berlin’s dominant influence over the European Central Bank and the fiscal machinery of monetary union is dragging most of Europe into an economic swamp. Germany has raised the bar for every eurozone country by announcing €80bn of belt-tightening from next year.
Nobel laureate Paul Krugman told the German press earlier this week that the country was committing the same error as the United States in 1936-1937, or Japan in the 1990s, by withdrawing stimulus before recovery has taken root.
If the Germans had any sense, they should take up George on his word. Announce today, “you’re right George, we’re leaving the Club Med cheater’s Euro.” That ought to make the weekend leaders meeting far more interesting. It’s not Germany’s policy that’s wrong, but America’s out of control, too big to fail, gambling bankster economy, that now exists on unrepayable debt solely for the benefit of the great vampire squids. Below, Chancellor Merkel fires back at the Keynesians and especially spendthrift President Obama.
JUNE 24, 2010
Merkel Rejects Obama's Call to Spend
German chancellor rebuffs pressure to boost domestic demand, not exports; warns Europe's crisis is far from over
BERLIN—Chancellor Angela Merkel roundly rebuffed U.S. President Barack Obama's call for Germans to aid the global recovery by spending more and relying less on exports, even as she warned that Europe's own financial crisis is far from over.
In an interview with The Wall Street Journal in her Berlin chancellery, an unapologetic Ms. Merkel said the nations that share the beleaguered euro have merely bought some time to fix the flaws in their monetary union. She called on the Group of 20 industrial and developing nations meeting in Toronto this weekend to send a signal that tougher financial-market regulation is on its way to dispel the impression that momentum is fading amid resistance by big banks.
She took aim at an idea voiced by France, the U.S. and others that Germany should help global producers by spurring its persistently weak consumer demand and ending its dependence on unsustainable spending elsewhere. The latest call came in a letter last Friday from Mr. Obama to the G-20, in which he asked big exporters—Germany, China and Japan—to rebalance global demand by boosting consumer spending.
Ms. Merkel countered that Germany's growth and employment are rising—and therefore the world's fourth-largest economy has no reason to rethink its dependence on its powerhouse industrial sector and large trade surplus. "German export successes reflect the high competitiveness and innovation strength of our companies," she said. "Artificially reducing Germany's competitiveness would be of no use to anyone."
The U.S. reiterated its stance Wednesday. "It is important for European growth in particular, and the world more generally, that advanced surplus economies in Europe strengthen the contribution of internal demand to growth," a senior administration official said.
Ms. Merkel's defense of Germany's export-heavy model marks Berlin's second rebuff to international demands in recent days. Early this week, Ms. Merkel rejected calls for Germany to prolong fiscal-stimulus measures in the short term.
The tragedy is that the captains of the world economy refuse to realize that runaway debt is the logical consequence of their having exiled gold from the international monetary system in 1971. They try to cure the bad effects of too much debt, or the presence of toxic debt in the system by introducing more of it. They have no idea how total debt could be decisively reduced and toxic debt safely eliminated.
They are playing a very dangerous game with the welfare of the people. When credit collapse finally comes, production disappears, employment shrinks, law and order break down. We are running into an unprecedented crisis with our eyes blindfolded. Wishful thinking will not coax out “green shoots”.
Architecture for a New World Financial System. Antal E. Fekete
In BP news it just goes from worse to worser. If it wasn’t for bad news BP wouldn’t have any news at all, as the saying goes. Below, BP doing its best to go out of business or bust!
BP oil flow increases after accident
Oil was gushing largely unchecked from BP’s stricken Gulf of Mexico well on Wednesday night – after an accident dramatically increased the flow.
By Rowena Mason, Energy Correspondent Published: 10:38PM BST 23 Jun 2010
The oil giant had to remove a cap that was channeling 16,000 barrels per day to the surface, after a robot crashed into the capturing equipment. The collision raised fears that ice-crystals could have formed on the device.
BP is still piping some oil to the surface and burning it, but it could not confirm when it expects to replace the cap – its largest and most successful containment device to date. The latest blow to BP came as Ken Salazar, the US Interior Secretary, said all preliminary evidence pointed to “reckless conduct” in the run-up to the accident on April 20 that killed 11 men.
It has also emerged that US authorities are not relying on BP’s promises that it will stop its leaking oil well by August.
Tony Hayward, BP’s chief executive, has insisted the company will try to stop the leak by drilling two relief wells to cut off the flow with heavy cement by August. In previous accidents it has taken more than four attempts for this method to work.
Admiral Thad Allen, the US official co-ordinating the response to the disaster, said the authorities have been investigating new emergency measures should the spill go on any longer.
Mr Salazar and Steven Chu, the US Energy Secretary, called an industry gathering to identify other platforms in the area that could take some of the oil through pipelines along the ocean floor. Then it could be brought to the surface or pumped back into a reservoir.
“We’re exploring that over the next couple of days,” said Mr Salazar. “If we’re able to do that, that would give us an option of controlling the flow without having any surface vessels there.
“That wouldn’t be the capacity we’re looking for, but that would be another risk mitigator to handle some of the oil.
“We’re in exploratory conversations, and again, that was just the result of a meeting that we held last week where we asked industry to basically unconstrain their thinking and see what they could do for us.”
A BP spokesman said the oil giant is still confident that two relief wells will stop the flow within two months, adding that it was “sensible” to look at back-up plans. In further developments:
New York’s pension fund said it plans to sue BP to recover losses on its 19m shares that have halved in value since the accident. Eleven other east coast states said on Monday that they are planning legal action. “BP misled investors about its safety procedures and its ability to respond to events like the ongoing oil spill and we’re going to hold it accountable,” said a spokesman.
JUNE 24, 2010
BP Relied on Faulty U.S. Data
BP PLC and other big oil companies based their plans for responding to a big oil spill in the Gulf of Mexico on U.S. government projections that gave very low odds of oil hitting shore, even in the case of a spill much larger than the current one.
The government models, which oil companies are required to use but have not been updated since 2004, assumed that most of the oil would rapidly evaporate or get broken up by waves or weather. In the weeks since the Deepwater Horizon caught fire and sank, real life has proven these models, prepared by the Interior Department's Mineral Management Service, wrong.
Oil has hit 171 miles of shoreline in southern Louisiana, Mississippi, Alabama and northern Florida. Further, government models don't address how oil released a mile below the surface would behave—despite years of concern among government scientists and oil companies about deep-water spills.
BP's efforts to contain the spill suffered a brief setback when an undersea robot hit the cap that's channeling oil to the surface. BP was able to reinstall the cap Wednesday night.
----- The government's optimistic forecasts reinforced the oil industry's confidence in its spill-prevention technology, leading to decisions that left both oil companies and the government ill-prepared for the disaster that has unfolded in the Gulf since April 20.
BP and government agencies responding to the spill have scrambled to assemble enough oil-containing boom and the ships and hardware needed to keep oil out of marshes and off beaches. Owen Kratz, chief executive officer of Helix Energy Solutions, one of the company's working to contain the spill for BP, said Wednesday that the industry needs to have more oil containment equipment positioned to handle a blowout – instead of building containment systems after an accident.
Pension fund in US latest claimant against BP
By Michael Peel and Carola Hoyos in London Published: June 23 2010 20:47
New York state’s pension fund plans to sue BP over the plunge in the company’s share price following the Gulf of Mexico oil disaster in the latest sign of the legal storm brewing for the company in the US.
The fund has hired Cohen Milstein Sellers & Toll, a leading law firm specialising in alleged securities fraud, to pursue claims that BP misled investors over its safety record and ability to deal with oil leaks.
The fund has a history of acting as lead plaintiff in actions in which investors club together to launch claims against companies that can run into billions of dollars.
“BP misled investors about its safety procedures and its ability to respond to events like the ongoing oil spill and we’re going to hold it accountable,” said Thomas DiNapoli, New York state comptroller and trustee of the $132.6bn (£88.8bn) pension fund.
US plaintiff lawyers have already filed more than 150 class actions against BP, with claimants ranging from shrimpers to stockholders who have seen the value of their investments slashed in the disaster.
http://www.ft.com/cms/s/0/76741e56-7eff-11df-8398-00144feabdc0.html
At the Comex silver depositories Wednesday, final figures were: Registered 51.88 Moz, Eligible 63.35 Moz, Total 115.23 Moz.
Maximilian I was crowned in Aachen on April 9, 1486. This important event was followed by the first issue of the Guldengroschen, struck from silver found in Schwaz near Hall, in 1487. The new coin was an instant and unqualified success. Indeed, it was a landmark in the monetary history of the world. The silver coin soon reached world-class status as its mintage beat all earlier records, and its circulation spread all over Europe. Naturally, the success of the guldiner soon attracted imitators in every dukedom of Europe with a silver mine.
The winner among these imitators was the Joachimsthaler nicknamed “thaler” (from which the English word “dollar” was derived). The silver came from the rich mines of Joachimsthal, or Joachim’s Valley, in Bohemia (today, the Czech Republic). Saint Joachim, the husband of Saint Anne and the father of the Blessed Virgin Mary, is commemorated by the first thaler struck 30 years after the inauguration of the guldiner in 1518. It was of similar physical size but had slightly lower fineness. It became the standard for silver coinage for almost four hundred years in Europe and, later, in America.
The market dropped the guldiner and embraced the thaler. The Mint in Hall had to turn to the production of thalers of which it struck 17 million specimens during the 20-year period from 1748 through 1768 alone.
Architecture for a New World Financial System. Antal E. Fekete
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Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled over.
No crooks today, just a good news story from the NY Times that’s too good not to share. The old America, and New York City, at it’s very best. The other side of America the Great, vs Wall Street’s great vampire squids. Well done, America, NY City, New Yorkers.
Descent Into Slavery, and a Ladder to Another Life
By JIM DWYER Published: June 22, 2010
He wore a satin suit onstage, so new that a tag was still fixed to the cuff. His 2-year-old daughter wiggled in his arms. The crowd cheered. Lifting his right hand to his lips, Jose Gutierrez seemed to blow a kiss to the audience. But it was more.
Mr. Gutierrez had gotten to the other side of slavery, climbing a ladder of second chances.
More than a decade ago, he was part of the nameless, unseen cast of a horror story. Lured from Mexico on promises of prosperity, he and 56 other people lived as prisoners in two row houses in Queens. By day, they sold key chains and miniature screwdriver kits in the subways, at airports, on roadsides. At night, they turned over every penny to the bosses of the houses.
All of the peddlers were deaf. Mr. Gutierrez, the youngest, had arrived in the United States at age 15, fluent only in Mexican Sign Language.
On Tuesday morning, 13 years after two of the deaf Mexican peddlers walked into a police station in Queens with a letter describing the conditions, Mr. Gutierrez was honored for his diligent work at a company that has cleaning contracts with federal agencies.
Mr. Gutierrez’s assignment: janitor at the Statue of Liberty and Ellis Island.
“I remembered playing with a car when I was a little boy, and seeing a picture of her,” he said. “When I found out that I was going to work there, it moved me. Thrilled me.”
There are, it turns out, second acts in American lives. Mr. Gutierrez leaves his home in Astoria shortly after 5 a.m., catches a ferry at 6:30, lands on the island 15 minutes later. He cleans bathrooms, empties trash, dusts a giant globe that shows the journeys of people to the United States.
His own odyssey began in 1995, when he heard from a friend about opportunities for deaf people in the United States. He was the seventh child in a family of eight, the only one who was deaf. “My friend’s father drove us to San Diego,” Mr. Gutierrez said. “I was very awkward. I didn’t know anything. We were supposed to go around and sell things. The money we collected we had to give to the boss.”
After a year in Los Angeles, he moved to a house in New York City that ran under the same terms, led by the Paoletti family, many of whom were also deaf. They would order a box of novelties, like miniature balls and bats, paying $75. The items would be attached to cards explaining that the seller was deaf. The peddlers would spend 12 to 16 hours a day in subway cars, dropping the trinkets in the laps of riders. Each box would bring in $485 in revenue. The bosses would swap bundles of single dollars at Atlantic City casinos for $100 bills, making the money easier to smuggle into Mexico, where it was banked.
Mr. Gutierrez depended entirely on the bosses for a bed and food. They took his money. “We were like slaves,” he said. “It was very frustrating. We couldn’t talk to the cops. It was heartbreaking.”
One day in July 1997, two of the peddlers went into the 115th Precinct station house in Queens, bringing a letter they had composed with help from a couple they had met at Newark Airport. “The police brought interpreters in to get the story told,” said Maria V. Pardo, a job counselor for the deaf with Fedcap Rehabilitation Services. The police found $35,000 in cash in one of the houses and 57 imprisoned peddlers. Federal prosecutors indicted 20 people on charges that included slavery and smuggling, and ultimately, they all pleaded guilty to some wrongdoing.
The peddlers, who were in the country illegally, were subject to deportation, but the administration of Mayor Rudolph W. Giuliani stepped in; the era of zero tolerance for illegal immigrants had not yet begun. They were put up in a motel by the city, and slowly found places to live, schools to attend, jobs to go to. “They were given special permission to work,” Ms. Pardo said. Nearly 40 people decided to stay in the United States.
Mr. Gutierrez, 17 at the time that the slavery ring was broken up, went to the Lexington School for the Deaf. “The support I got there was wonderful,” he said, and he also fell in love with another student, Christina Gonzalez, who was born in the United States. “I had no family here; her family has been so good to me.”
She pointed him to Fedcap, which provides training and employment for people with disabilities. In 2007, Fedcap sent him to work on Liberty and Ellis Islands under a janitorial services contract administered by AbilityOne, a federal program. He makes $20 an hour plus benefits, and now has a green card.
So on Tuesday, Mr. Gutierrez was brought back to receive a special honor at the Fedcap graduation ceremony.
With him onstage were Ms. Gonzalez and their daughter, Gloria. He lifted his fingers to his mouth, as if he were blowing a kiss. His audience knew better: it was a symbol from American Sign Language, repeated over and over.
“Thank you,” he said. “Thank you.”
http://www.nytimes.com/2010/06/23/nyregion/23about.html?hp
The present Great Financial Crisis is far from over. In fact, it is getting worse. It can be described as a debt crisis or, at its roots, a belated gold crisis. The landmark year was 1971, when the United States defaulted on its international gold obligations. Now there have been many defaults in history, but the one forty years ago was unique in that it exiled gold from the international monetary system; thereby gold has been prevented from discharging its natural function as the ultimate extinguisher of debt ever since.
When you pay a debt of $100 by writing a cheque on your bank account, the debt is not extinguished, it is merely transferred to your bank. If you pay it by handing over a $100 Federal Reserve note, the debt is not extinguished either but is transferred to the Federal Reserve bank that has issued the note. Ultimately the U.S. Treasury is responsible for all the liabilities of the Federal Reserve. Under these monetary arrangements the total dollar debt outstanding can only grow, never contract, even if there is a net reduction of debt in the economy. All debt presumed to have been extinguished will ultimately show up as an increase in the indebtedness of the U.S. government. No matter how you look at it, the desire to retire debt is frustrated by the lack of an ultimate extinguisher in the system. The consequences are frightening. Continued.
Architecture for a New World Financial System. Antal E. Fekete
http://www.financialsense.com/editorials/fekete/2010/0622.html
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 23
Current Stretch:0 days
2010 total: 35 days (21%)
2009 total: 260 days (71%)
Since 2004: 803 days
Typical Solar Min: 485 days
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