Friday, 18 March 2011

One Week On.

Baltic Dry Index. 1533 -05

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

"As fewer and fewer people have confidence in paper as a store of value, the price of gold will continue to rise."

Jerome F. Smith

Up first today, the good news from the nuclear crisis in Japan. Hopefully TEPCO will manage to restore some electric power today, and hopefully water pumping can resume over the weekend on all of the stricken reactors.

Workers Prepare to Connect Power to Stricken Nuclear Plant

By Shigeru Sato and Tsuyoshi Inajima - Mar 18, 2011 7:40 AM GMT

Power may be restored to one of the crippled reactors at Japan’s damaged Fukushima Dai-Ichi power plant, possibly today, improving the odds that workers can prevent a meltdown and further radiation leaks.

Japanese soldiers and firefighters from Tokyo, using dozens of fire engines, doused sea water on reactor No. 3, site of an explosion earlier this week. Tokyo Electric Power Co. said it may finish reconnecting a power line to the No. 2 reactor. The power link would be used to restart pumps needed to pour cooling water on overheating fuel rods.

The U.S. military, which is flying unmanned surveillance drones over the 40-year-old power station about 135 miles (220 kilometers) north of Tokyo at Japan’s request, said it is “cautiously optimistic” that the damage to the reactors can be contained. The risk of a meltdown has lessened after water was dumped on the site yesterday , said Thomas Graham, chairman of Lightbridge Corp., a McLean, Va.-based nuclear fuel developer, said in a Bloomberg Television interview.

----The possibility of a meltdown is “not off the table, but the more water that goes in there,” the less the risk of a meltdown becomes,” Graham said. “The reactor situation is definitely not deteriorating as it was and seemingly becoming stable and perhaps becoming more under control.”

Engineers had finished laying a new 1-kilometer power line to Unit 2 at the plant, the UN’s International Atomic Energy Agency said in a statement on its website. Power will be restored to that unit once the spraying of water on Unit 3 ends today, the agency said. There is a potential risk of a explosion if the power is reconnected to the reactor, Japan’s Nuclear and Industrial Safety Agency said.

If the cable can be linked successfully, power may be restored to reactors 3 and 4 on Sunday, Tepco spokesman Kaoru Yoshida said. Radioactivity has declined to safe levels for workers at the site, Japan’s government said.

Unfortunately, TEPCO’s record of honesty is not good, and American officials have been advocating an 80 Km exclusion zone rather than the 20 Km zone currently in place. Supposedly based on spy satellite data backed up by the US unmanned military drones now monitoring Fukushima at the request of the Japanese government. We await the weekend developments with great interest. Below, the rest of the Fukushima news.

Frantic Repairs Go On at Plant; Little Progress in Cooling Fuel

By DAVID E. SANGER and WILLIAM J. BROAD Published: March 18, 2011

WASHINGTON — The first readings from American data-collection flights over the stricken Fukushima Daiichi nuclear plant in northeastern Japan show that the worst contamination has not spread beyond the 19-mile range of highest concern established by Japanese authorities.

But another day of frantic efforts to cool nuclear fuel in the troubled reactors and in the plant’s spent-fuel pools resulted in little or no progress, according to United States government officials.

Japanese officials said that they would continue those efforts — including spraying one of the reactors with water cannons on Friday afternoon — but that they were also racing to restore electric power to the site to get equipment going again, leaving open the question of why that effort did not begin days ago, at the first signs that the critical backup cooling systems for the reactors had failed.

Water cannons sprayed the stricken Reactor No. 3 on Friday afternoon, live video on the public broadcaster NHK suggested. The footage showed a stream of water aimed at the damaged reactor building, which was rocked by an explosion on Monday, and occasional clouds of steam rising into the air. The Defense Ministry said soldiers of the Japan Self-Defense Force were manning seven trucks that would approach the No. 3 building one after the other, staying near the reactor for only a short period to minimize soldiers’ exposure to radiation.


MARCH 18, 2011

Japan Reassures, Others Flee

The U.S. government, signaling distrust of reports from Japan about the nuclear crisis there, moved Thursday to evacuate U.S. citizens and set up its own channels of information—a step echoed by some American companies that laid plans to trim their operations in the stricken country.

In the latest sign of international skepticism about progress at Japan's crippled Fukushima Daiichi nuclear facility, the U.S. embassy in Tokyo said Thursday that the government would arrange to fly U.S. citizens out of Japan to safe havens elsewhere in Asia, using military aircraft if necessary. The U.S. also moved aggressively to assert control over information about the scope of the nuclear disaster by flying a military drone aircraft and a U2 spy plane over the plant to get a first-hand assessment of the damage.

As dawn broke Friday, a week after a massive earthquake and tsunami devastated Japan, live television showed white steam billowing from several of the severely damaged nuclear reactors at the crippled nuclear plant, suggesting water continues to evaporate from a dangerously overheating pool used to store spent nuclear fuel.

Cooling operations resumed at the nuclear plant midmorning Friday, with water cannons and fire truck hoses trained on Reactor No. 3, which is thought to present the greatest immediate risk.

The Defense Ministry said no water would be dropped from helicopters Friday.

Earlier in the day, reconnecting power to the reactors was the main focus of work to stabilize the situation. Restoring electricity to the reactor's cooling systems could represent the major breakthrough needed for bringing the crisis at the plant under control. But a nuclear safety agency official said Reactors No. 1 and No. 2 would be reconnected first, within the day, while Reactor No. 3 would not get power until as late as Sunday.

Japan's top government official reiterated that cooling Reactor No. 3 remained the main priority, since it is believed that spent fuel in a tank at the reactor is exposed, presenting a high radiation risk.

One possible problem with work to restore power to the reactors is the danger of contact with water while handling power equipment.


Tokyo Passengers Trigger U.S. Airport Detectors, N.Y. Post Says

By Alan Purkiss - Mar 17, 2011 6:08 AM GMT

Radiation detectors at Dallas-Fort Worth and Chicago O’Hare airports were triggered when passengers from flights that started in Tokyo passed through customs, the New York Post reported.

Tests at Dallas-Fort Worth indicated low radiation levels in travelers’ luggage and in the aircraft’s cabin filtration system; no passengers were quarantined, the newspaper said.

Details of the incident at O’Hare weren’t immediately clear, the Post said.

Scientists Project Path of Radiation Plume

By WILLIAM J. BROAD Published: March 16, 2011

A United Nations forecast of the possible movement of the radioactive plume coming from crippled Japanese reactors shows it churning across the Pacific, and touching the Aleutian Islands on Thursday before hitting Southern California late Friday.

Health and nuclear experts emphasize that radiation in the plume will be diluted as it travels and, at worst, would have extremely minor health consequences in the United States, even if hints of it are ultimately detectable. In a similar way, radiation from the Chernobyl disaster in 1986 spread around the globe and reached the West Coast of the United States in 10 days, its levels measurable but minuscule.


March 17, 2011, 3:55 PM ET

Quake-Related Shortage Idles GM Plant

General Motors Co. says it suspended production at its Shreveport, La., plant for the week of March 21 because of a parts shortage stemming from last week’s earthquake in Japan. Damage to parts suppliers and transportation networks in Japan have brought that country’s auto industry to a halt.

GM, which builds Chevrolet Colorado and GMC Canyon pickup trucks at the plant, says it currently has enough of the vehicles to meet consumer demand. But the Shreveport production stoppage could be one of many to come across the industry in the U.S. and elsewhere as car companies inevitably run short of certain components made in Japan.

GM declined to reveal which part or parts are in short supply, citing competitive reasons. The car maker said all its other plants in North America continue to run normally and it plans to resume building vehicles at Shreveport as soon as possible.

The other big news today is the UN imposing a no fly zone over Libya. The price of oil responded with a $5 jump. Below, the Libyan response. Bluster certainly, but Libya has scuds and chemical weapons. Add in Bahrain, and the Middle East North Africa region looks thoroughly unstable.

Libya: I’ll attack passenger jets, warns Gaddafi, as US air strikes loom

Western forces could launch bombing raids against the Libyan regime as early as Friday after the UN backed international military action.

By Robert Winnett,, Deputy Political Editor, Jon Swaine in New York and Richard Spencer in Tripoli 6:45AM GMT 18 Mar 2011

Colonel Gaddafi threatened retaliatory attacks on passenger aircraft in the Mediterranean last night if foreign countries launched air strikes against Libya.

“Any foreign military act” would expose “all air and maritime traffic in the Mediterranean Sea” as targets for a counter attack, the Libyan regime said.

The warning was issued after America formally backed a joint British and French initiative for a no-fly zone over Libya and other military action against Col Gaddafi’s regime.

Amid growing international concern at the deteriorating situation in the country, the first bombing raids, possibly by unmanned drones, could happen as early as today. There were reports last night that the first attacks would be unilateral actions by British and French air forces with logistical support from Arab states.

The United Nations was meeting to discuss the plan as Col Gaddafi’s troops massed on the outskirts of Benghazi, the last stronghold of rebel fighters.

Hillary Clinton, the US Secretary of State, said that a no-fly zone would involve bombing ground targets.

“A no-fly zone requires certain actions taken to protect the planes and the pilots, including bombing targets like the Libyan defence systems,” she said during a visit to Tunisia.

“Gaddafi must go,” she added, calling him “a ruthless dictator that has no conscience and will destroy anyone or anything in his way.”

In a statement, the Libyan defence ministry warned of swift retaliation against foreign intervention.

“Any foreign military act against Libya will expose all air and maritime traffic in the Mediterranean Sea to danger and civilian and military [facilities] will become targets of Libya’s counter-attack,” it said.

Speaking to state television, Col Gaddafi also urged rebels in Benghazi to surrender, warning: “We are coming tonight . . . there won’t be any mercy.” He said every house in the city would be searched.


At the Comex silver depositories Thursday, final figures were: Registered 41.55 Moz, Eligible 62.41 Moz, Total 103.96 Moz.


Crooks and Scoundrels Corner.

The bent, the seriously bent, and the totally doubled over.

No crooks today just a warning about complacency in our increasingly disturbed world order. The nuclear crisis aside, Japan has taken a terrible hit to its economy. In the year ahead it must swing from exporter of capital into an importer. It must learn to get by on less than adequate electric power. The world’s third largest economy will act as a drag on the global economy. In the middle east, a generational governance crisis is unfolding. The old entrenched order is being challenged. In Libya and Bahrain, they are determined to ruthlessly cling on to power. In Bahrain, it’s hard to see repression winning. Some 70% of the population want the same rights as the other 30%. In Libya, an unstable regime is cornered and fighting to avoid a fate like Saddam Hussein’s. A new wave of economic refugees looks almost certain. Stay long precious metals and prepare for another oil spike. An unstable MENA region looks set to be with us for a long time.

Another weekend, and one that hopefully brings an end to the nuclear crisis in Japan, or at least a start to the end of that crisis. Check with the weekend blog for updates. Have a great weekend everyone.

"When paper money systems begin to crack at the seams, the run to gold could be explosive."

Harry Browne

The monthly Coppock Indicators finished February:

DJIA: +156 Down 05. NASDAQ: +217 Down 11. SP500: +157 Down 4.

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