Saturday 13 November 2010

Weekend Update – November 13 2010

"No nation should assume that their path to prosperity is paved simply with exports to the US"

President Obama. Seoul, 12-11.10.

Baltic Dry Index. 2313 -182
LIR Gold Target by 2019: $30,000. Revised.

The unhappy G-20 meeting over, some of the rogues headed over to Japan for the Annual APEC meeting. That’s the one where they all get to dress up in fanciful clothing for a photo op, pretending to be natives of the host country. With both America and China attending in China’s nemesis Japan, don’t expect to much from the APEC meeting either. President Obama took a pop at China and Germany on the way out. China said don’t let the door hit you in the rear as you go. And so ended the great non event in Seoul. Incoming G-20 host of the next meeting French President Sarkozy, wasted little time in bashing America’s failing fiat dollar reserve standard. Stay long precious metals. Below, the state of play this Saturday morning.

"The history of fiat money is little more than a register of monetary follies and inflations. Our present age merely affords another entry in this dismal register."

Hans F. Sennholz

Sarkozy Takes Over G-20 Aiming to ‘Update’ Monetary System

Nov. 12 (Bloomberg) -- French President Nicolas Sarkozy claimed his first victory as leader of the Group of 20 nations less than an hour after taking the reins from his South Korean counterpart, Lee Myung Bak.

The group’s final statement after a summit in Seoul today, which cited the dangers of competitive devaluations and volatile capital flows, underscored Sarkozy’s main goal as president of the group of “updating” the global monetary order, he said in a closing press conference.

“It’s already a success that the G-20 agrees that the international monetary system is a problem,” Sarkozy said. “That wasn’t always the case.”

While Sarkozy avoided castigating any country for unstable foreign-exchange markets, in the past he blamed the dollar’s dominant role as a reserve currency for helping fuel the financial crisis. French officials have been vague about what they’d suggest to replace it, partly because there aren’t any ready alternatives.

“Everyone agrees the international monetary system is not ideal, but the world is not ideal,” Charles Wyplosz, director of the International Centre for Monetary and Banking Studies in Geneva, said in an interview. “Sarkozy can criticize it all he wants, but it’s too complicated to find something better. There’s a deep cleavage between currency markets that are global and governance, which is based on nations. You have one market and 190 countries.”

Gold Standard

Sarkozy’s questioning of the dollar’s dominant role is part of a French tradition dating back to the 1960s, when President Charles de Gaulle converted much of France’s dollar reserves into gold, accelerating events that led the U.S. in 1971 to abandon the gold standard and usher in an era of floating rates.

Aides to Sarkozy say they’ve counted 42 currency crises since 1990.

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aUpazmrFMnRY

Barack Obama closes G20 with pop at China over trade

US president Barack Obama took a swipe at China's currency policy after G20 leaders failed to resolve tensions running high over global trade imbalances.

By Emma Rowley 7:10PM GMT 12 Nov 2010

The summit in South Korea ended as it had begun, dominated by the row over gaps and surpluses which sees China accused of keeping the yuan artificially low to boost its exports at the expense of US jobs.

"It (the yuan) is undervalued and China spends enormous amounts of money intervening in the market to keep it undervalued," Mr Obama said, adding that China must transition to a market-based system.

"No nation should assume that their path to prosperity is paved simply with exports to the US," he added.

However Beijing is, in turn, furious that the US recently decided to pump an extra $600bn (£370bn) into the US economy through quantitative easing, viewing it as a move to weaken the dollar. International support for Mr Obama's attempts to get tough on China was muted.

The final G20 document thrashed out in negotiations saw leaders agree various measures towards economic stability, including a commitment towards market-determined exchange rate systems.

But a pledge to refrain from "competitive undervaluation" – not allowing a currency to rise, as China is accused of – was ditched for "competitive devaluation" – the trickier task of pushing a currency down.

The subtle but telling difference was interpreted as putting less pressure on China. Meanwhile, commitments to "indicative guidelines" to rebalance trade between nations fell far short of US hopes for 4pc limits on surpluses and deficits, due to resistance from China and other big exporters.

----- The summit "successfully papered over the many cracks between the positions of participants, at least for a few hours", said Capital Economics analysts.

http://www.telegraph.co.uk/finance/financetopics/g20-summit/8130130/Barack-Obama-closes-G20-with-pop-at-China-over-trade.html

APEC leaders meet in Yokohama to ponder regional integration

YOKOHAMA, Japan, Nov. 13 (Xinhua) -- Leaders from 21 Pacific Rim economies began their annual meeting of the Asia-Pacific Economic Cooperation (APEC) forum in Yokohama on Saturday to set a vision for regional economic integration amid changing regional and global economic landscape.

The meeting, the second of two back-on-back meetings, opened around noon with Japanese Prime Minister Naoto Kan's welcome banquet for the leaders, many of whom flew into this bustling port city just south of Tokyo after attending a Group of 20 summit in South Korea.

After the first retreat session in the afternoon, the leaders will have a dialogue with APEC's business advisory body, the APEC Business Advisory Council.

The APEC region has been the world's leading growth center, although the global economic recovery remains weak in the aftermath of the global financial crisis. Trade and foreign ministers meeting ahead of the summit acknowledged in their statement that APEC member economies "are now facing challenges, in particular, of addressing volatility, creating employment and reconsolidating finance, and continuing to keep a balance between recovery and the exit strategies of fiscal and monetary policies."

Under the theme of "Change and Action," the leaders will ponder the future direction for regional economic integration and formulate a new economic growth strategy to sustain economic recovery and lay the foundation for future prosperity.

Since its inception 21 years ago, APEC has worked actively in promoting regional economic integration, with a long-term vision of creating a Free Trade Area of the Asia-Pacific (FTAAP).

The leaders are expected to discuss possible pathways to achieving the FTAAP, including existing frameworks like the ASEAN+ 3 and the Trans-Pacific Partnership.

The leaders will also discuss an assessment of the achievement of the Bogor Goals of free and open trade and investment, adopted at a 1994 APEC leaders' meeting in Indonesia.

http://news.xinhuanet.com/english2010/world/2010-11/13/c_13604815.htm

But dollar bashing is the easy part, everyone agrees that America’s debts are out of control and that recklessly gambling US banks very nearly smashed the whole western casino capitalist system and likely will once the next Lehman hits, putting something in place of it that isn’t worse is the problem, and no one so far can agree on the answer. Gold is the logical answer, but no one yet is willing to admit it, so our snake bit leaders and banksters rush from one temporary crony bailout fix to another, all the while stoking up an even bigger crisis when the next crisis hits. Eventually, even this crooked bunch will be forced by circumstance into admitting the obvious, and remonetising gold as an anchor to the new system, but first they will try just about every wealth destroying voodoo economic scam first.

Below, the growing scandal in America that will bring down the dollar reserve system. Fraudclosuregate is exposing just how criminal fallen guru Greenspan’s US real estate bubble was. Just how criminal were the Wall Street banksters who peddled triple-A trash securities to the world, and then in many instances bet against them knowing that they had to fail. The whole colourfully worded 8 page article is worth the read. Fraudclosuregate is part of the bankster cover up, writes Rolling Stone’s Matt Taibbi.

Matt Taibbi: Courts Helping Banks Screw Over Homeowners

Retired judges are rushing through complex cases to speed foreclosures in Florida
Nov 10, 2010 2:25 PM EST
The foreclosure lawyers down in Jacksonville had warned me, but I was skeptical. They told me the state of Florida had created a special super-high-speed housing court with a specific mandate to rubber-stamp the legally dicey foreclosures by corporate mortgage pushers like Deutsche Bank and JP Morgan Chase. This "rocket docket," as it is called in town, is presided over by retired judges who seem to have no clue about the insanely complex financial instruments they are ruling on — securitized mortgages and laby­rinthine derivative deals of a type that didn't even exist when most of them were active members of the bench. Their stated mission isn't to decide right and wrong, but to clear cases and blast human beings out of their homes with ultimate velocity. They certainly have no incentive to penetrate the profound criminal mysteries of the great American mortgage bubble of the 2000s, perhaps the most complex Ponzi scheme in human history — an epic mountain range of corporate fraud in which Wall Street megabanks conspired first to collect huge numbers of subprime mortgages, then to unload them on unsuspecting third parties like pensions, trade unions and insurance companies (and, ultimately, you and me, as taxpayers) in the guise of AAA-rated investments. Selling lead as gold, shit as Chanel No. 5, was the essence of the booming international fraud scheme that created most all of these now-failing home mortgages.

More.

http://www.rollingstone.com/politics/news/17390/232611

"Until government administrators can so identify the interests of government with those of the people and refrain from defrauding the masses through the device of currency depreciation for the sake of remaining in office, the wiser ones will prefer to keep as much of their wealth in the most stable and marketable forms possible - forms which only the precious metals provide."

Elgin Groseclose

Have a great weekend everyone.

GI.

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