Baltic Dry Index. 1254 -08
LIR Gold Target by 2019: $30,000. Revised due to QE.
"Deficit spending is simply a scheme for the 'hidden' confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights."
Alan Greenspan
Stay long precious metals, food and fuel price inflation is starting to wrack China. Will today’s Shanghai meeting end the world’s biggest port’s truckers strike? Not yet a week long, the strike is already starting to hit China’s exports. With trouble in nearby Japan due to the continuing nuclear power crisis hitting production, our just in time inventory world is in danger of seizing up. Below, The Telegraph covers the story. For more of food and fuel price inflation scan down to Crooks and Scoundrels Corner.
"Increasingly, the wealth of the modern world has come to be represented by financial assets rather than real assets, and this to me is a very unhealthy situation, because financial assets are inherently unstable. Financial assets (currencies, bonds, mortgages, stocks, bank credit, etc.) can be quickly and violently reduced in value, or destroyed completely by either inflation or deflation."
Donald J. Hoppe
China strikers win concessions, as ugly protests underline inflation fears
Striking Chinese truck drivers have won concessions in their battle against rising costs that threatened to disrupt Shanghai, the world's biggest port.
By Roland Gribben 4:10PM BST 24 Apr 2011
The regional Government has intervened to reduce some of the increase in fees that triggered strike action in an attempt to take the heat out of an issue that has demonstrated China may be encountering growing social unrest as it wrestles with an inflationary surge.
Drivers were protesting against the increase in port service charges linked to dearer fuel. There were ugly scenes when some striking drivers threw stones at lorries driven by non-strikers.
The Shanghai Municipal Transport and Port Authority has also agreed to cancel a fuel surcharge and lower others in the container and road transport business.
Government officials are due to meet truck driver representatives on Monday to try to end the strike. Some drivers said they would continue to strike unless they were offered a better deal and there were reports that text messages threatening violence against non-strikers are still circulating.
No mention was made about the strikes in official announcements about the fee concession but the decision to defuse the situation reflects concern about the spread of industrial action as the increase in inflation starts to run through the economy.
A 12pc annual increase in the cost of food and an inflation rate now running at 5.4pc has led the Beijing administration to raise interest rates and pressure companies into delaying price rises.
More
APRIL 25, 2011
Shanghai Lowers Truck Fees
Concessions Signal Officials' Anxiety as Drivers Debate Returning to Work
SHANGHAI—Concessions by Shanghai authorities failed to end wildcat work stoppages by truck drivers who have disrupted the city's container ports, the world's busiest, in protests over rising fees.
The industrial action has brought to a head tensions over rising inflation that have been simmering across the country.
----City authorities said they would reduce some of the fees that triggered the stoppages, and acknowledged the validity of driver grievances. Their willingness to offer concessions, even at the risk of triggering copycat actions by other groups, appeared to indicate a high level of concern.
On Sunday, hundreds of trucks were jammed into parking lots as truckers consider their next steps.
Police officers were stationed around the entrances to port facilities in several sections of the city. In another reflection of official nervousness, scant mention of the industrial action was carried in China's government-controlled media or on the Internet until the fee reduction was announced.
Shanghai government spokespersons have declined all comment.
The government-owned port operator, meanwhile, predicts Shanghai will retain its title as the world's busiest container handling port in 2011, Monday's Shanghai Daily reported. Chen Xuyuan, president of Shanghai International Port (Group) Co., said volume will hit around 30 million twenty-foot equivalent units this year after activity rose 12% in the first quarter from 2010 levels, according to the newspaper report, which included a front-page photo of a sea-bound container being lifted off a truck on Sunday.
-----Truckers say they are in constant touch by telephone with other drivers who serve ports in the export-oriented region—raising the possibility that news of a settlement offer by authorities will prompt workers elsewhere to seek relief from inflation. Late last week. Shanghai's government, in what may have been a pre-emptive effort to ensure that doesn't happen, initiated new toll discounts for local taxi drivers.
In recent years, several labor disputes in China have spread far from their initial flashpoints.
After protesting taxi drivers in the southwestern city of Chonqing won concessions from the municipal government in November 2008, news of their success emboldened drivers from Hainan Island in the south; Guangdong, near Hong Kong; and Gansu in the north to seek relief; they won some concessions.
More.
Staying with Asia, Mongolia is moving to try to break free from China’s embrace. Out of the Chinese frying pan and into the Russian fire? In Japan, it’s the same old TEPCO story.
Mongolia Rail Boom Seen Breaking China's Rare Earths Grip: Freight Markets
By Yuriy Humber and Daniel Ten Kate - Apr 21, 2011
Mongolia’s aim of quadrupling its rail network will send coal, copper and rare earths to nations such as Japan and South Korea under a plan to reduce reliance on the Chinese market and boost economic development.
The landlocked nation’s drive to lay 5,700 kilometers (3,542 miles) of track across the country and to Russia’s Far Eastern ports stands to benefit such companies as Australia- listed Aspire Mining Ltd. (AKM) and Canada’s Prophecy Resource Corp. (PCY), said Richard Harris, chief executive officer of Hong Kong-based Quam Asset Management. Quam raised $20 million for a Mongolia- focused fund that is due to start investing in a few months.
“The missing link in the Mongolian gold rush now is transportation infrastructure,” said Roland Nash, who helps manage about $150 million of Russian stocks at Moscow-based hedge fund Verno Investment Management Ltd. “The key for the Mongolians is to attract investments from as many different countries as possible to lessen their dependence on China.”
A mining boom in the world’s most sparsely populated nation promises the greatest influx of wealth for Mongolia since Genghis Khan conquered much of the known world in the 13th century. Mongolia’s benchmark MSE Top 20 Index is the world’s best performer in the past 12 months and its currency, the tugrik, the fifth-biggest gainer against the dollar.
Economic growth may surge to 23 percent in 2013, more than twice the forecast expansion in China, as large mining projects begin production, the International Monetary Fund says.
----Mongolia has grown increasingly dependent on commerce with China’s 1.3 billion people since the 1991 breakup of the Soviet Union: More than 75 percent of exports went to its giant neighbor in 2009, according to European Union figures.
The relationship hasn’t always been easy. During a 2002 Mongolia visit by the exiled Tibetan leader, the Dalai Lama, trains were held up near the China-Mongolia border, a reminder of the country’s vulnerability to pressure from the rulers of the world’s second-biggest economy.
“Using the Russia route, Mongolia will have better access to a global market rather than just dealing with China,” said Chris Weafer, Moscow-based chief strategist at UralSib Financial Corp. “You need that to maximize the commercial value of its goods. Otherwise China dictates prices.”
----Mongolia this year is to start building a 400-kilometer link from the Tavan Tolgoi coal basin and Oyu Tolgoi copper deposit, two of the world’s biggest untapped resources, joining with an existing rail line north to Russia and south to China.
An expanded rail network eventually will stretch directly from Tavan Tolgoi to China and Russia. Extended train routes to the west and the north will link with untapped silver, iron and coal deposits, according to Eurasia Capital, Mongolia’s biggest investment bank.
More.
APRIL 25, 2011, 12:24 A.M. ET
No Radioactive Water Leaking From Plant
TOKYO—Japan's Nuclear and Industrial Safety Agency said Monday there are no data indicating that highly radioactive water is leaking from the quake-damaged Fukushima Daiichi nuclear complex, a sign that efforts to contain the radiation are working.
However, the absence of leakage may indicate that radioactive water is rapidly accumulating inside the plant, raising the urgency to find a way to process and store such water, the byproduct of a spraying operation to keep damaged reactors from overheating.
Plant operator Tokyo Electric Power Co. announced Thursday that a total of 520 tons of highly radioactive water may have been released into the ocean between April 1 and April 6 through a crack in a concrete pit near the ocean.
The crack was discovered April 2 and was plugged April 6.
----The water is believed to be leaking from Reactor No. 2 and flooding the basement of the turbine building and the utility trench holding a seawater pipe. More than 20,000 tons of water is believed to remain in the basement and the trench.
An operation to drain these facilities has been under way since April 19. A total of 1,410 tons of water had been transferred to a storage facility as of 7 a.m. Monday (2200 GMT Sunday).
In other Japanese news, the economic toll from the Japanese earthquake and tsunami continues to mount.
25 April 2011 Last updated at 06:32
Toyota's Japanese output down 63% due to parts shortage
Toyota Motors has said that its Japanese production fell by 63% in March compared with the same month last year, as its production cuts continued.
The company has been facing shortages in supplies of parts as production has been disrupted because of last month's earthquake and tsunami.
While it has restarted production in Japan, its factories have been working at a reduced output.
The firm has said output would return to normal only by the end of 2011.
The world's biggest car manufacturer also announced more cuts in production at its factories in Asia.
The automaker said plants in eight Asian countries, including Thailand and India, will operate at 50% capacity from 25 April to 4 June.
It also said that factories in these countries will operate for just three days a week during the period.
The company had already announced that its factories in China will operate at 30-50% of capacity until 3 June.
Meanwhile, another Japanese automaker, Nissan Motors also announced that output at its Japanese plants had slumped by 52% in March compared with last year.
More.
http://www.bbc.co.uk/news/13184575
We end for the bank holiday partying UK, with the satirical website The Onion, covering BP’s one year anniversary of their Gulf of Mexico oil spill.
BP Ready To Resume Oil Spilling
April 20, 2011 | ISSUE 47•16
LONDON—A year after the tragic explosion and oil spill that caused petroleum giant BP to cease operations in the Gulf of Mexico, the company announced Wednesday that it was once again ready to begin oil spilling. "People said this company might never rebound from last year, but we're here and ready to do what we do best," said BP chief executive Robert Dudley, who confirmed that the company had already successfully conducted small test spills and that full-scale spilling operations could resume as early as July. "We've reorganized and regrouped, and now we're ready to put the faulty blowout preventers on the wellheads and watch them pump raw crude petroleum right into the environment." BP stock jumped $14 a share following the announcement
http://www.theonion.com/articles/bp-ready-to-resume-oil-spilling,20089/
"If ever there was an area in which to do the exact opposite of that which government and the media urge you to do, that area is the purchasing of gold."
Robert Ringer
At the Comex silver depositories Thursday, final figures were: Registered 35.72 Moz, Eligible 66.79 Moz, Total 102.51 Moz.
+++++
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled over.
No scoundrels today, just worrying developments in much of western Europe’s grain crops. Much of Europe’s grain areas are headed to the driest, warmest, March and April in a century. While it’s still too early to write off the crop, the next few weeks are critical. No rain means no harvest come August. With large parts of the US grain belt similarly lack of rain challenged, and a drought happening over a large swath of China, the northern hemisphere grain crop is already under severe stress. Food price inflation seems set to continue, with all the unrest that usually brings.
Europe prays for Easter rain in worst drought for a century
23/04/2011
The Dutch have banned barbecues, camp fires and outdoor smoking this Easter, while the Swiss are forecasting potentially the worst drought in Europe for more than a century.
Either way, prayers in Europe this Easter holiday weekend are as likely to call for rain as anything else -- with serious fears over the wheat harvest, its impact on already sky-high global food prices and, of course, devastating brush fires.
A year ago, it was Russia that bore the brunt of global warming, and with the price of benchmark wheat futures jumping by more than a fifth since the spring in the global market hub of Chicago, farmers everywhere are busy scanning the skies for soothing signs.
Traditional Easter fairs in the east and the north of the Netherlands have been cancelled because of the risk of fires posed by the extraordinarily dry weather affecting northern Europe, Dutch news agency ANP said.
In the eastern half of the country, one of Europe's biggest traders, outdoor family barbecues, smoking and camp fires are a strict no-no.
In the Swiss canton of Zurich, officials began moving trout this week from the river Toess before their habitat dried up.
This year threatens to bring "one of the most significant droughts since 1864," the year when records began in Switzerland, said Olivier Duding, a climatologist from Swiss weather service Meteosuisse.
The drought in western Switzerland over the last 12 months is as severe as those recorded in 1884 and 1921, Meteosuisse said.
Several cantons have also imposed bans on lighting fire in and close to forests.
Urs Vogt, who manages an association which champions keeping calves with their mothers after birth, warned that once the cows have fed on this spring's first greens, there may be little left for coming months.
A grass shortage could also lead to a fodder shortfall for next winter.
While the Czech Republic, Slovakia and the Baltic states of northeastern Europe are not reporting drought, the British Met Office warns it has been "incredibly dry in many parts in March and April."
Rainfall is at 40 percent of normal levels, and England and Wales had the driest March in more than a century. Beware the ides, as they say.
Soon, if the hot, dry spell continues, water use restrictions will be forced on residents and companies there.
Six out of 10 French reservoirs are holding water levels far below what is normal, meaning similar irrigation controls are likely there.
March was already extremely volatile for grains, largely due to growing economic uncertainties and the turmoil in North Africa and parts of the Near East -- as well as the Japanese earthquake and tsunami, the Food and Agriculture Organization said after logging a first, slight drop in raw food prices for eight months.
Prices hit record highs at the beginning of the year, and while the main focus for specialist traders is in the United States, a deteriorating drought in Europe could yet spark deep concern.
While European Commission agriculture spokesman Roger Waite acknowledges a "slight" rise in the prices of maize and wheat, he maintained that winter crops remain "generally in good condition."
A spokeswoman for European farmers federation Copa-Cogeca said it was too soon to draw conclusions, but Belgian farmer Guy Franck, who heads a dairy collective in French-speaking Wallonia, says gut instinct tells him worse is yet to come.
"I've been in this game for 30 years, I've never seen a month of April like this one," he said.
"Everything with short roots is seriously dehydrated," he warned.
http://uk.news.yahoo.com/18/20110422/tsc-europe-prays-for-easter-rain-in-wors-4de741d.html
April 20, 2011, 11:09 a.m. EDT
Next weeks key for European and U.S. wheat harvest
LONDON (MarketWatch) -- The coming weeks will be crucial for the development of next season's crop in the world's two largest wheat exporters, analysts said Wednesday, helping to determine the outlook for a grain market that has hit near-record high prices this year.
Wheat futures have surged this week as fears have mounted over the outlook for world supplies in the 2011-12 season. Chicago soft red winter wheat for May delivery has gained more than 9% from last Friday's lows, while May milling wheat traded in Paris hit early April's highs of EUR256 a metric ton Wednesday.
Leading prices higher were forecasts for continued dryness in key producers the U.S. and Europe. A good harvest in the 2011-12 season is vital to stabilize world supplies after poor weather cut into production last year and sent prices to near-record highs.
Analysts warn that the next fortnight will be crucial in determining whether Europe's upcoming crop will be able to replenish stock levels. Dryness in top producers France, Germany and the U.K. is already stressing crops during the initial growing period.
"Further moisture deficits could see Western Europe emerge as a major issue in May," said Australia and New Zealand Bank.
Dealers are particularly nervous as near-record European exports have eaten into stocks this season. Strategie Grains, an influential French forecaster, pegs inventories at the end of the 2010-11 season at 8.6 million tons--2 million tons less than the minimum needed to supply the market until next harvest.
"In Europe, consequences could be seen on the crop in the next 10 days with the really early start of vegetative state," said risk-manager Agritel
In top exporter, the U.S., the situation is similarly uncertain. The outlook for hard red winter wheat, grown in the Plains states such as Kansas and Oklahoma, is poor as it has struggled with dryness since it was sown last autumn. The crop will be harvested late this spring and summer.
The U.S. Department of Agriculture Monday rated 36% of the U.S. winter wheat crop as good-to-excellent, unchanged from last week. Although the estimate was above analysts' pessimistic expectations, it is well below 69% a year ago.
Yet wheat is one of the best-supplied markets in the grain complex. Corn and soybeans, also used as animal feed, both have critically low stock levels this year and analysts warn that even a record world harvest will not be enough to build up a buffer into 2011-12.
http://www.marketwatch.com/story/next-weeks-key-for-european-and-us-wheat-harvest-2011-04-20
"We need only take our heads out of the sand to see clearly that interventionism not only has failed to provide the promised something-for-nothing, but has led to all sorts of undesirable consequences. Indeed, many are just beginning to realize that we are moving towards disaster even though we have been on a wrong heading for decades."
Leonard Read
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.
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