Baltic Dry Index. 2114 +84
LIR Gold Target by 2019: $3,000.
It would be a hard government that should tax its people one-tenth part of their income.
Benjamin Franklin.
Later today, the Board of America’s Federal Reserve bank meets to set the key US interest rate and to issue clues as to their policy for the rest of the year. No one expects any change from their zero interest rate policy, but many economists, lead by the Keynesians, expect them to announce a return to Quantitative Easing. All supposedly part of a three year leaked plan to boost the US economy by 5 trillion of new money out of thin air. Since it’s only fiat dollars, the theory goes, creating new money really doesn’t matter providing you don’t do it to the point where the public lose trust in their money. I think that there’s a whole lot wrong with that theory, but that’s is a story for another day. For now, like it or not, the Anglo-American capitalist model is wedded to the idea of fiat dollar reserve dominance. It allows America, and to a lesser extent Britain, to live the life of Riley like Greece until recently, by issuing irredeemable money (debt) without having to face up to any consequence. Stay long precious metals. Like all follies, this one too will come to its bad end. We open with one consequence of the Fed’s fiat folly.
“The tendency of taxation is to create a class of persons who do not labour, to take from those who do labor the produce of that labour, and to give it to those who do not labour”
William Cobbett. 1763-1835.
China trade surplus widens to $28.7 billion on export surge
Aug. 10, 2010, 12:35 a.m. EDT
HONG KONG (MarketWatch) -- China's trade surplus in July widened to $28.7 billion from June's $20.02 billion, outpacing consensus forecasts by a third, as exports surged to a record for the month, Chinese customs authorities reported Tuesday.
Surveys of economists by Reuters and Dow Jones Newswires had projected the surplus at $19 billion and $19.6 billion, respectively.
July's monthly surplus, the highest since January 2009, brought China's cumulative surplus for the first seven months of the year to $83.93 billion.
Exports rose 38.1% to $145.5 billion, while imports grew a more muted 22.7% to $116.8 billion.
---- Analysts said July's trade surplus will likely place China under additional pressure to allow its currency to appreciate at a faster pace in coming months.
Data due out later this week are likely to show a U.S. trade deficit of $40 billion for the month, according to RBC Capital Markets.
"This contrast in the trade position of the two most important economies in the world will likely increase the pressure from Washington for Beijing to allow further currency appreciation, particularly in the lead-up to midterm election in November," RBC Capital Markets strategist Brian Jackson wrote in a note.
The Chinese currency has weakened against the yen and the euro in recent weeks, suggesting that "Beijing has more scope to allow gains against the dollar while still maintaining overall competitiveness," Jackson said.
China's exports to the European Union accelerated, even as the yuan lost ground to the single currency, the data showed.
Exports to the E.U. totaled $28.7 billion in July, up 38.3% from a year earlier, and up 5.4% from levels in June
http://www.marketwatch.com/story/chinas-july-trade-surplus-at-287-billion-2010-08-09
German rise in exports signals strong growth
BERLIN – Germany's recovery is gaining pace as the country leads Europe out of this year's debt crisis turmoil, with exports rising in June to their highest level since late 2008.
Germany, the world's No. 2 exporter after China, exported goods and services worth euro86.5 billion ($115 billion) in June, up 3.8 percent from the previous month, the Federal Statistical Office said Monday.
That was a 29 percent increase compared with June 2009 and the highest level since October 2008, in the wake of the bankruptcy of investment bank Lehman Brothers which precipitated the global credit crunch.
Imports rose 1.9 percent on the month to euro72.4 billion — a 31.7 percent increase on the year and the highest level reported since West Germany started compiling statistics in 1950.
----The German economy, Europe's biggest, has settled back into growth over the past year as an improving global economy, and strong demand from emerging economies such as China, has boosted its exports — its traditional strength.
Second-quarter gross domestic product figures are due on Friday, and they "should be a cracker," said Carsten Brzeski, an economist at ING in Brussels.
Exports are the main driver, while "industrial production has shown an impressive performance and even private consumption seems to have stabilized," he added.
The June foreign trade figures were less spectacular than May's, when exports rose 7.9 percent on the month and imports surged 13.7 percent, but that followed declines in April.
Exports "will eventually slow down," Brzeski said. But strong demand, particularly from Asia, and a weaker euro this year mean that "German manufacturers are looking into a bright near-term future," he added.
http://news.yahoo.com/s/ap/20100809/ap_on_bi_ge/eu_germany_economy
With “the next Lehman” out there, and “too big to fail” still the order of the day, plus everyone expecting 5 trillion of new dollars to pump up the failing US economy, a new gold rush is getting underway in mining stocks. With gold in demand as a hedge against the demise of the fiat currencies, it’s cheaper and easier for the majors to start taking over smaller existing gold mining companies, than find new reserves and put them into production.
“Nothing is so well calculated to produce a death-like torpor in the country as an extended system of taxation and a great national debt.”
William Cobbett.
More gold M&A to come after Kinross, bankers say
Mon Aug 9, 2010 10:59am EDT
* Potential buyers include Canada's top gold producers
* Potential targets include nearly a dozen midcaps
* Cheaper to buy than to build new mines (Figures in U.S. dollars, unless noted)
By Pav Jordan and Euan Rocha
TORONTO, Aug 9 (Reuters) - A $7.1 billion bid for Red Back Mining (RBI.TO), a Canadian-based company active in Africa, has a stable of other mid-tiered gold miners dreaming of similar takeover approaches from larger rivals.
Kinross Gold Corp (K.TO) made the all-stock offer on Aug. 2, saying Red Back's two mines would help propel its annual output to about 2.6 million ounces by the end of 2010 and about 3.9 million ounces by 2015, making it a comfortable top-tier gold producer.
The expected output acquired in the deal, though well below the nearly 7.5 million ounces a year produced by No.1 Barrick Gold (ABX.TO), would put Kinross closer to rivals like Newmont Mining (NEM.N), with more than 5 million ounces, and Goldcorp Inc (G.TO), at around 2.4 million ounces.
"Certainly the others have to be asking themselves: 'Have I constructed the list of companies that I want? Have I done sufficient due diligence and am I ready to go out and make a purchase here?'" said Adam Graf, an analyst with Dahlman Rose in New York. "And: 'If I wait any longer are the prices going to be bid up, or am I going to lose my opportunity?'"
---- For Peter Marrone, chief executive at Yamana Gold, more consolidation will likely occur as stock valuations at larger companies improve.
"What we've seen over the past year is a significant share price appreciation of the smaller companies, the juniors and development stage companies, but not yet for the more senior companies," he told Reuters. "As that paradigm shifts, and it will shift, I believe there will be a buying opportunity and consolidation in the industry."
The sweet spot?
The main players say keep your eye out for takeovers in the $500 million to $2.5 billion range
http://www.reuters.com/article/idAFN0925390820100809?rpc=44
And so for the rest of the day we second guess the bunch of elderly white men meeting in Washington. They never saw a US real estate bubble nor sign of any trouble in the US casino system. To them, the US casino was always humming along just right. They never saw a derivatives gamble that they didn’t think the market was up for. They never saw a modern bet that wouldn’t pay off in spades to all parties to the bet. Sadly now all they can do is print and trash the currency, any other policy crashes the economy though the resurrection is better off sooner rather than later. Unlike most, today I think the Fed will disappoint the Keynesians and dither.
“Taxing is an easy business. Any projector can contrive new compositions, any bungler can add to the old.”
Edmund Burke. 1729-1797.
At the Comex silver depositories Monday, final figures were: Registered 51.30 Moz, Eligible 58.66 Moz, Total 109.96 Moz.
+++++
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled over.
Today it’s the crooks and scoundrels of Brussels once again, this time seeking to tax directly the once free born serfs of Europe. Give them an inch and they’ll take a country mile, I think. Time to repatriate powers from work shy, overpaid Brussels’ bureaucrats, and to refuse to supply new cash until they can account for the previous cash with regular audited accounts.
“When a new source of taxation is found it never means, in practice, that the old source is abandoned. It merely means that the politicians have two ways of milking the taxpayer where they had one before.”
H. L. Mencken.
European Union pushes for right to levy taxes directly on British
The European Union is to push for the right to levy direct taxes on Britons and the citizens of other member countries, the EU Budget Commissioner has disclosed.
By Robert Winnett and Bruno Waterfield in Brussels Published: 9:00PM BST 09 Aug 2010
The EU hopes that the plan, to be unveiled next month, which could see new taxes on air travel and financial transactions, will give it more independence and fund controversial expansion proposals.
The direct taxes would reduce each country's annual payment to the EU.
The proposal has sparked fierce reaction from Britain the Treasury has said it would veto any proposal, which would lead to the loss of the budget rebate negotiated by Margaret Thatcher.
Lord Sassoon, the Commercial Secretary, said the Treasury would block any plans. “The Government is opposed to direct taxes financing the EU budget,” he said. “The UK believes that taxation is a matter for Member States to determine at a national level and would have a veto over any plans for such taxes."
It is understood that the scheme will be backed by some of the EU's most influential members, including Germany – providing the reduction in the annual country payments matches the extra levies raised in direct taxes.
However, it will be fiercely resisted by David Cameron and George Osborne and could spark a showdown between the Coalition and other European leaders in the autumn.
Janusz Lewandowski, the EU budget commissioner, said: "If the EU had more of its own revenues, then transfers from national budgets could be reduced. I hear from several capitals, including important ones like Berlin, that they would like to reduce their contribution." He indicated that possible tax sources for Brussels could include an aviation tax and a financial transaction tax. Mr Lewandowski is also thought to wish to raise EU taxes from the sale of carbon dioxide emissions rights – which could lead to higher utility bills and petrol prices.
---- The EU is seeking to increase its budget by 5.9 per cent to more than €130 billion, including a 4.5 per cent rise in the costs of running the EU's many institutions. National governments are seeking to limit the rise to three per cent.
----- Open Europe, a British-based think tank, said: "The Commission seems to think that because of the tough economic climate, national governments would be keen to let Brussels collect money for the EU budget directly, rather than handing it over from national budgets.
But what about the ordinary citizens who would be forced to pay?
Imposing an EU tax would be an unmistakable move to a federal Europe, which, time and again, the public has said it doesn't want."
The avoidance of taxes is the only intellectual pursuit that carries any reward.
John Maynard Keynes
The monthly Coppock Indicators finished July:
DJIA: +264 Down. NASDAQ: +427 Down. SP500: +275 Down.
The bull market (or bear market rally) that commenced on Nasdaq on 30/4/09 at 1717 has ended. (30/5/09 SP 500 at 919, 30/5/09 DJIA 8500.) While the indicators can flip flop at market turns, this action is rare on the slow monthly indicators. July seems to have confirmed June’s reversal and end of the bull market.
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