Sunday, 23 January 2011

Weekend Update January 23, 2011

Baltic Dry Index. 1370 -46

LIR Gold Target by 2019: $30,000. Revised due to QE.

Society is like a stew. If you don't stir it up every once in a while a layer of scum floats to the top.”

Edward Abbey.

This weekend, more on the joke of the European Union. With 3 European Presidents, and a gadzillion useless bureaucrats all time watching until they can collect their bankster-like pensions, we open with the scandal of Europe’s “carbon trading” plan to save the world. Time to wind up this useless scam called carbon trading.

“Well, fancy giving money to the Government! Might as well have put it down the drain.”

A.P. Herbert. Misleading Cases.

Traders condemn EU's 'Mickey Mouse' carbon market after botched trading statement

• Regulatory mistake causes carbon price to soar then plunge
• Concern over cyber security of spot market

Friday 21 January 2011 17.53 GMT

A city trader accused the European commission tonight of running a "Mickey Mouse" carbon-trading scheme after some traders lost heavily on the market owing to a botched trading statement.

The commission is already under fire over an entirely separate fraud inquiry that has closed parts of the EU's emissions trading scheme, which is seen by many as crucial to tackling climate change.

The commission said on its website this morning that the EU's climate change committee had voted to ban the most common type of carbon "offsets" from 1 January 2013, amid concerns that these offsets were being abused.

Half an hour later the EC rescinded the statement, but not before the price of carbon had risen to a three-month high at €11.84 a unit, with more than 1.5m units traded. A huge sell-off then followed that bought the price back to €10.56.

Three hours after that, the commission put out a third statement which said that offset credits for the substances in question, which include HFC 23 and nitrous oxide – both potent greenhouse gases – would be banned from 2013, but not until May of that year.

"This is a significant mistake on the part of the European commission. Some traders have lost a lot of money today. If I want a Mickey Mouse market, I'll go to Disneyland," one trader told Reuters.

Another said: "The European commission is as terrible as they were in 2006 …they still can't release [market-moving data] properly."

The setback is not just a problem for the ETS; it is also an embarrassment for European governments that have been encouraging a sceptical US and other countries to follow their lead.

The mistake compounds errors with market information such as leaked data five years ago showing that the market was oversupplied, causing the carbon price to plummet. It comes on the back of a wider scandal under which "spot" trading of carbon has been halted at least until Wednesday next week owing to a cyber attack on ETS accounts in the Czech Republic, Austria and other countries.


Meanwhile, one of the 3 EU presidents has it in for the hapless Irish Euro-serfs. What did the poor Irish ever do to Portugal to deserve treatment like this. I can only hope that when Irish voters send Fianna Fail to the ash heap of history, the incoming government will play hardball back, to Barroso and his ilk, sticking the banksters losses back to those dumb enough to have lent the Irish banks money. If that creates problems for Europe’s bank, there’s a remedy for that in the ECB and the individual nations central banks. Would De Gaulle have stood for treatment of France like this from Brussels, I don’t think so either.

When you have no basis for an argument, abuse the plaintiff.


Europe’s shoddy attempt to vilify Ireland

By Ambrose Evans-Pritchard Last updated: January 21st, 2011

So we blame the victims the now.

José Manuel Barroso, the ex-Maoist President of the European Commission, has told Ireland that it is entirely and alone responsible for the disaster that has befallen the Irish people.

“The problems of Ireland were created by irresponsible financial behaviour of financial institutions and a lack of supervision in the Irish market. It was not Europe that created this fiscally irresponsible situation and this financially irresponsible behaviour,” he said.

“Europe is now part of the solution.”

Once a Maoist, always a Maoist, I suppose. Mr Barroso misrepresents what happened, falsely denies any EU culpability, and equally falsely misclaims a “solution” – unless you count the solution of the economic graveyard.

The IMF’s Article IV report on Ireland published in September 2007 begins:

Economic performance remains very strong, supported by SOUND policies. Given the Irish economy’s strong fundamentals and the authorities’ commitment to sound policies, Directors expected economic growth to remain robust over the medium term.”

The IMF said Ireland was in fiscal SURPLUS of 3pc of GDP and total public debt had fallen to just 12pc. Ireland had almost entirely eliminated its public debt.

Mr Barroso’s own staff signed off happily on Ireland’s accounts in their Stability Update report December 2007, discerning risks but agreeing that the country was “operating responsible fiscal policy”.

For Mr Barroso to talk now about Ireland’s ” fiscally irresponsible situation” is to rewrite history.

Yes, we all know that the bubble and fair weather property taxes masked the horrible vulnerability of Ireland’s economy (a few of us were ridiculed at the time for suggesting this), but that is not what the EU authorities said in the crucial period from 2004 to 2007 when Ireland crossed the line.

Mr Barroso was provoked. Speaking on the floor of the European Parliament, Irish MEP Joe Higgins accused Brussels of ruinous and vindictive treatment under the terms of the €68bn bail-out.

“Far from being a bailout, your IMF and EU mechanism makes vassals of Irish taxpayers to European banks and enslaves the working people of Europe to the markets, who lead you around by the nose.”

“It is a vicious weapon dictated by markets masquerading as benign.”

So this is what it has come to: MEPs from states now reduced to EU protectorates are protesting with venom and hatred against their oppressors.


Looks to me like something is afoot in precious metals. Stay long gold and silver. What do they know is about to happen this year that we don’t? Why now? The fiat currency crisis, the race to the bottom, is probably about to go up another gear. Things like this don’t happen by accident.

"Gold bears the confidence of the world's millions, who value it far above the promises of politicians, far above the unbacked paper issued by governments as money substitutes. It has been that way through all recorded history. There is no reason to believe it will lose the confidence of people in the future."

Oakley R. Bramble

Gold miners remove 2,16Moz from global hedge book

By: Loni Prinsloo 21st January 2011

JOHANNESBURG ( − Gold producers reduced their hedges by almost a third during the three months ended September 30, 2010, GFMS and Société Générale said in the third-quarter 'Global Hedge Book' report.

Nearly 2,16-million ounces, or 67 t, of gold were removed from the global book, which left the outstanding delta-adjusted hedge book at just 5,11-million ounces. Of this, 3,44-million ounces were forward sales.

“The third-quarter dehedging story was very much to do with AngloGold Ashanti,” stated the report.

The world’s third-largest gold miner removed a large portion of its hedge book during the three-months, realising its objective to become an unhedged producer early in the fourth quarter.

“This was heralded by some as ‘the end of gold producer hedging’, as AngloGold’s book was the last of the ‘great’ hedge books, which at end-2009 amounted to 46% of the global total.”

However, the analysis also showed that the first nine months of 2010 saw a continued stream of hedgers emerge, such as Sumitomo Metal Mining, Jaguar Mining, Petaquilla Minerals and Perseus Mining.

The GFMS/Société Générale report said that the mark-to-market liability of the producer hedge book improved to a negative $1,81-billion, mainly owing to the cut in AngloGold’s hedge position.

This represented an almost halving of the global hedge book’s collective liability, which was further reduced in the fourth quarter, when AngloGold Ashanti completed its hedge elimination.

“The Constitution is not an instrument for the government to restrain the people, it is an instrument for the people to restrain the government - lest it come to dominate our lives and interests.”

Patrick Henry.


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