Baltic Dry Index. 1250 -04
LIR Gold Target by 2019: $30,000. Revised due to QE.
“Our policy has been and will always be, as long as I will be in office, that a strong dollar is in the interest of the country.”
U.S. Treasury Secretary Geithner. N.Y. 26/04/2011.
Today, the end of the euro is nigh, and by nigh we mean one to two years at best. The Euro, as we know it, is in for a giant rendering. The Germanic Euro is about to shed its work and tax shy, party loving members of Club Med. It simply isn’t worth it to Club Med voters to stay in the euro, consigning themselves and their children to a lifestyle of sackcloth and ashes. Even the doziest, Club Med politician knows that default is a necessary part of solving Europe’s sovereign debt crisis. Even the doziest Finnish or German politician knows that trying to bailout Spain or Gadaffi’s Italy, will only drag them down with Club Med’s sinking yacht.
Nevertheless, despite the end being nigh for the euro, Uncle Sam’s dollar can’t manage even a half hearted rally against it. The Lira-isation of the dollar continues unchecked. Stay long precious metals ahead of the coming debacle. Western fiat money is in terminal decline.
Economics is haunted by more fallacies than any other study known to man. This is no accident. The inherent difficulties of the subject would be great enough in any case, but they are multiplied a thousandfold by a factor that is insignificant in, say, physics, mathematics or medicine - the special pleading of selfish interests.
Henry Hazlitt.
Geithner Vows to Defend Strong Dollar
April 26, 2011
The United States would never deliberately promote a weak dollar policy, U.S. Treasury Secretary Timothy Geithner vowed Tuesday.
“Our policy has been and will always be … that a strong dollar is in the interest of the country,” Geithner said at a New York conference. “We will never embrace a strategy to weaken the dollar.”
It was the first time this year that Geithner publicly prostituted his personal reputation defending a position that everyone knows is a lie. A U.S. strong-dollar policy has been the mantra of treasury secretaries for decades. However, over that time period the dollar has continually devalued. Members of Congress also frequently call on the Federal Reserve to devalue the dollar to temporarily aid exporters.
Conversely, if a strong dollar really is in the interest of America, the government has done a horrible job.
Breitbart reports that the dollar hit a new all-time low against the Swiss Franc Tuesday. Earlier this month the dollar hit all-time lows against gold. Today it also hit a 35-year low against coffee. In fact, the dollar has been cascading against virtually all commodities over the past decade and has even been plunging against other paper currencies—down 6.5 percent against a basket of currencies so far this year.
More.
http://www.thetrumpet.com/?q=8209.6867.0.0
APRIL 26, 2011
Timing of Bailout-State Restructuring Could Affect Survival of the Euro Zone
The timing of a debt restructuring by one of the three euro-zone members financially reliant upon the European Union and the International Monetary Fund is likely to have profound implications for the rest of the currency area, and its survival.
The earlier a restructuring occurs, the more it will hurt euro-zone banks. But the later it occurs, the more conscious taxpayers in creditor nations will be of giving help to another country. And that will provide a major test of the currency area's cohesiveness.
As time passes, the debts of the Greek, Irish and soon the Portuguese governments are being transferred to the public from the private sector. Private investors aren't willing to fund these governments, so as bonds mature, they are taking their money and putting it elsewhere. The EU and IMF are replacing those funds, with the result that as the months go by, their share of the three governments' overall debt rises.
What this means is that if any of the bailout three were to restructure now, private-sector investors could be asked for a write-down of around 50%—by no means a comfortable conversation.
But should one of the three instead seek to restructure from 2013, it would face two far nastier alternatives: defaulting on all its debt to private creditors, thereby shutting itself out of the financial markets for years to come, or asking other members of the euro zone for a write-down. And the latter would be politically difficult—perhaps impossible—for whoever is then in charge of Germany, France, Finland or any of the other countries providing funds through the bloc's bailout mechanisms.
By 2013, for example, Greece's government debt could be at an unsustainable 170% of its gross domestic product. But half of that will be held by the EU and the IMF, and the IMF has preferred-creditor status, which means it must always be repaid first.
To return to sustainability, the Greek government would need to write down as much as half of its debt. To that end, Greece could renege on all its debt to the private sector, but governments that do that are excluded from the bond markets for a very long time.
The alternative would be to restructure some of its debt to other European Union nations. But how would that go down with German or French taxpayers?
More
APRIL 26, 2011, 8:31 A.M. ET
Greece's Budget Deficit Wider Than Expected
BRUSSELS—Greece's budget deficit in 2010 was 10.5% of gross domestic product, significantly larger than forecast by either the Greek government or the European Union authorities, Eurostat, the EU's official statistics agency, said Tuesday.
Lower-than-expected government revenue was the main culprit behind the higher deficit number. Greece has struggled to meet its goals for tax revenue under the rescue program overseen by the EU and the International Monetary Fund since last May. Economic growth has fallen short of forecasts, while the government has faced problems cracking down on tax evasion.
Greek government bonds continued to come under growing pressure Tuesday, when bonds yields soared alongside the rising cost of insuring Greek debt against default with credit default swaps.
The Greek government was targeting a 2010 deficit of 9.4% of GDP, although the European Commission in February said it expected the deficit to be 9.6% of GDP.
The missed target was "mainly the result of the deeper-than-anticipated recession of the Greek economy that affected tax revenue and social security contributions," the Greek government said in a statement after the Eurostat announcement.
The new deficit figure will add further pressure on Greece to raise taxes and cut spending this year to meet its targets.
More.
UK has third biggest budget deficit in Europe
The UK has the third biggest budget deficit in Europe, the EU’s official league table showed, placing it alongside the struggling nations engulfed in the eurozone’s debt crisis
By Emma Rowley 12:01PM BST 26 Apr 2011
Britain’s shortfall in its finances amounted to 10.4pc of gross domestic product (GDP) in 2010, according to data for each of the EU’s 27 member states from the statistics agency Eurostat.
That meant the UK had a bigger deficit, or annual shortfall, than the recently bailed-out Portugal and also Spain, which is viewed as the next euro-using nation to potentially need international aid.
The largest deficit in proportion to the size of the country’s economy was seen in Ireland, where the extra borrowing needed to shore up the banks left its deficit at 32.4pc of GDP.
Greece, which received a €110bn bail-out last year, was second with a deficit of 10.5pc, followed by the UK. Spain, at 9.2pc, and Portugal, at 9.1pc, were in fourth and fifth place.
In terms of total debt, the UK fared much better, although it was still among the 14 EU member states burdened with a debt higher than 60pc of GDP last year. EU member states are supposed to keep their debt under the 60pc level.
The debt figures, which refer to a government’s total borrowing over time, rather than the latest yearly shortfall, showed Greece was again in the worst position with a debt equivalent to 142.8pc of its GDP, followed by Italy at 119pc and Belgium at 96.8pc.
The UK was in the ninth weakest position with a debt standing at 80pc of GDP, which was worse than Spain’s 60.1pc. The average debt across the 16 members that use the euro hit a record 85.1pc, up from 79.3pc the previous year.
More.
We end for the day with Amazon. Is this what happened in last year’s stock market flash crash? Without reform, when will it happen again?
Amazon seller lists book at $23,698,655.93 -- plus shipping
By John D. Sutter, CNN April 25, 2011 -- Updated 2212 GMT (0612 HKT)
(CNN) -- Lots of normal people would pay $23 for a book.
But $23.7 million (plus $3.99 shipping) for a scientific book about flies!?
This unthinkable sticker price for "The Making of a Fly" on Amazon.com was spotted on April 18 by Michael Eisen, an evolutionary biologist and blogger.
The market-blind book listing was not the result of uncontrollable demand for Peter Lawrence's "classic work in developmental biology," Eisen writes.
Instead, it appears it was sparked by a robot price war.
"What's fascinating about all this is both the seemingly endless possibilities for both chaos and mischief," writes Eisen, who works at the University of California at Berkeley and blogs at a site called "it is NOT junk." "It seems impossible that we stumbled onto the only example of this kind of upward pricing spiral."
Eisen watched the robot price war from April 8 to 18 and calculated that two booksellers were automatically adjusting their prices against each other.
One equation kept setting the price of the first book at 1.27059 times the price of the second book, according to Eisen's analysis, which is posted in detail on his blog.
The other equation automatically set its price at 0.9983 times the price of the other book. So the prices of the two books escalated in tandem into the millions, with the second book always selling for slightly less than the first. (Not that that matters much when you're selling a book about flies for millions of dollars).
The incident highlights a little-known fact about e-commerce sites such as Amazon: Often, people don't create and update prices; computer algorithms do.
Individual booksellers on Amazon and other sites pay third-party companies for algorithm services that automatically update prices. Some of these computer programs purportedly work very well, getting sellers up to 60% more sales because they underbid the competition automatically and repeatedly.
The advantages are clear: If you're managing dozens of sale items on Amazon or eBay, it's difficult if not impossible to keep up with all of them.
More.
http://edition.cnn.com/2011/TECH/web/04/25/amazon.price.algorithm/index.html?hpt=C2
"Every individual is a potential gold buyer, although he may not need the gold. It may be added to the store of personal wealth, and passed from generation to generation as an object of family wealth. There is no other economic good as marketable as gold."
Hans F. Sennholz
At the Comex silver depositories Tuesday, final figures were: Registered 35.72 Moz, Eligible 66.03 Moz, Total 101.75 Moz.
+++++
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled over.
Madoff again. Was the great fraudster being sophisticatedly blackmailed?
“The first requisite of a sound monetary system is that it put the least possible power over the quantity or quality of money in the hands of the politicians.”
Henry Hazlitt.
Madoff Said Picower May Have Suspected Fraud, Henriques Writes
By David Voreacos - Apr 26, 2011 5:01 AM GMT+0100
Bernard L. Madoff believed that one of his billionaire investors, Jeffry Picower, may have suspected him of running a Ponzi scheme, according to a book by Diana B. Henriques.
Madoff, serving a 150-year term for the largest Ponzi scheme in history, said in a prison interview that Picower could have figured out the fraud at Bernard L. Madoff Investment Securities LLC, according to the book. Picower invested $620 million and withdrew $7.8 billion before Madoff confessed to his brother and two sons in December 2008. Henriques asked Madoff who knew of the fraud.
“Picower was the only one that might have,” Madoff said. “I mean how could he not?”
In “The Wizard of Lies: Bernard Madoff and the Death of Trust,” Henriques chronicles how Madoff stole from thousands of investors around the world while fooling regulators, banks and hedge funds about his investment returns. She analyzes Madoff’s deceptive powers, the market forces propelling him, and dozens of key investors such as Picower.
Picower, a lawyer and accountant, “had a genius for making money in the stock market, a passion for privacy, and a willingness to take big risks in pursuit of big rewards,” Henriques writes.
Picower also had been victimized by a Ponzi scheme in the 1970s, she said. He began investing with Madoff in the late 1970s, controlling dozens of accounts. By the late 1990s, Picower’s separate trading account at Goldman Sachs Group Inc. was worth $10 billion, she writes.
“Was he now astute enough to realize what Madoff was doing and devious enough to exploit the leverage that knowledge gave him?,” Henriques writes. “Madoff often suspected that the answer was yes.”
More.
“The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine, and to process; and that it cannot be created by political fiat or caprice.”
Henry Hazlitt.
The monthly Coppock Indicators finished March:
DJIA: +160 UP 06. NASDAQ: +216 Down 01. SP500: +163 UP 6.
The Dow and SP 500 have reversed albeit by tiny margins, while the NASDAQ barely moved down. The Fed’s rigging of the indicators seems to have worked. Note: like all indicators, they were devised for normal markets not markets where the central bank is flooding the economy with new cash. In current conditions where risk is suspended by too big to fail, I doubt any indicators are showing more that where the Fed’s new cash is flowing in our world of casino capitalism.
Today we are adding Canadian junior gold mining company Trade Wind Ventures Inc., TSX.V TWD to our list of mostly NAFTA based gold mining companies. TWD has a very interesting prospect and a very sound JV partner in Detour Gold. http://www.tradewindsventures.com/
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