Baltic Dry Index. 1269
LIR Gold Target by 2019: $30,000. Revised due to QE.
A Canadian is sort of like an American, but without the gun.
Anonymous
This morning we awake to Canada’s political world turned upside down. Where I can hear you say? Well Canada, that enormous continent sized, under stated great country that was near ruined in the 1960s and 70s, has undergone a transformation. For more on that scroll down to Crooks and Scoundrel’s corner, not that I’m suggesting Canada’s pols are crooks like the UK’s.
In European news, hard working, tax paying Germany is going from strength to strength, unsurprisingly, tax and work shy Greece is heading for bankruptcy and serfdom. Greek sovereign debt anyone? Euros? Pounds? Stay long precious metals, fiat currency will likely fail in our present decade.
"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
Eurozone manufacturing figures show Germany-Greece gap
European manufacturing grew faster than expected in April, boosted by demand for German exports, however the gap between the region's strongest and weakest economies was demonstrated by a decline in Greece's output.
1:52PM BST 02 May 2011
The Markit Eurozone Manufacturing Purchasing Managers' Index (PMI), which records manufacturing activity across all the major euro area economies, rose to 58.0 last month from March's 57.5.
The index hit a near-11 year high of 59.0 in February.
The figure was revised up from a flash reading of 57.7 and marked the index's 19th month above the 50 mark dividing growth from contraction.
"Eurozone manufacturers reported that the growth surge continued into April, meaning 2011 has so far seen the best start to a year since the dot-com boom of 2000," said Chris Williamson at Markit.
But the bounce was once again powered by Germany, Europe's largest economy, and France, whose growth overshadowed a continued slide to stagnation in Spain and a persistent contraction in Greece.
In Greece, the PMI index registered 46.8 points in April, up from 45.4 points in March, but staying below the 50 mark that signifies growth.
Austerity measures and plummeting consumer confidence stemming from Greece's efforts to tackle its debt burden are set to keep the economy in recession for a third year running.
"The two disappointments were the near-record increase in manufacturers' selling prices, which will fuel inflationary concerns among policymakers, and the growing divergence between the performances of the core and periphery," Mr Williamson said.
The output price index dropped from March's survey high of 61.5 to 61.0, revised up from a flash reading of 60.7.
The figures will bolster those policymakers at the European Central Bank who believe the strong recovery in Europe's core economies calls for more monetary tightening before price rises become entrenched, even while weaker euro zone states remain engulfed in the debt crisis.
In Her Majesty’s theatrical, pageantry and nostalgia obsessed homeland of Great Britain, we’re about to rerun the 1970s, according to one of the UK’s top economists. If interest rates rise, he thinks, British families will revisit 1952. And all because the Bank of England and the Financial Services Authority and the last government of Blair and Brown, shirked their responsibility, and turned the economy into to a derivatives gambling, casino economy of Goldmanite’s busy doing “God’s Work”. Another unintended consequence of the Great Nixonian Error of fiat currency.
Economics is extremely useful as a form of employment for economists.
J K Galbraith
Households face 'worst year for finances since 1977'
By David Prosser, Business Editor
Tuesday, 3 May 2011
The typical household will see its disposable income fall by 2 per cent this year, the equivalent of £780, one of Britain's best-known economists warned today, and will have to wait until 2015 to see its finances recover to the peak seen at the end of 2009.
Roger Bootle, a former government adviser who now works with Deloitte, the accountancy firm, predicted that 2011 would be the worst year for household finances since 1977 – and added that if interest rates were to rise, British families would not have seen conditions deteriorate so badly since 1952.
Mr Bootle's warning, published in Deloitte's latest economic review, reflects the impact of higher inflation and taxes on people's incomes, as well as increased joblessness, with the economist not optimistic that the private sector is capable of offering works to all those likely to be laid off by the public sector this year.
"Real incomes do not provide the definitive picture as to the health of households' finances, but taking a broader look at households' finances arguably leaves the position looking even worse," said Mr Bootle. "I think this year will see falling real earnings, falling real house prices and rising unemployment."
In addition to higher income taxes for most people in work, Deloitte pointed to the fact that inflation is running at 4 per cent, much faster than the rate at which pay rises are being awarded. While inflation is expected to fall back before the end of 2011, it may not be until 2012 that wage increases catch up.
The warning will worry already cash-strapped households, but also represents a headache for the economy, which continues to be highly reliant on consumer spending. The impact of the squeeze on household finances is already being felt on the high street, with retail sales having fallen back in recent months, prompting a string of retailers to issue profit warnings.
In total, Mr Bootle said he expected consumer spending to fall by 1 per cent this year – and he warned the decline could continue into 2012, with a further 0.5 per cent decline.
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Over on the other side of the world, in earthquake and tsunami hit Japan, auto sales have collapsed to the lowest level ever since figures were first collected in 1968. I suspect that Japan’s troubles will eventually spill over into the global economy.
There can be few fields of human endeavour in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present.
J K Galbraith
Japan car sales halve in wake of tsunami
Japan's domestic vehicle sales collapsed by more than 50pc last month as the impact of March's earthquake and tsunami crippled the supply chain, an industry group said yesterday.
By James Hurley 7:16PM BST 02 May 2011
Sales of new cars, buses and trucks plunged to their lowest ever monthly volume in April as a parts shortage affected vehicle production and hit dealerships' supplies, according to data from the Japan Automobile Dealers Association (Jada).
The 108, 824 vehicles sold last month represented a fall of 51pc compared to April last year. The decline was also markedly steeper than March's 37pc contraction and was the biggest drop in sales since the association started compiling data in 1968.
Toyota sales slumped by 69pc, while Honda's dropped 49pc and Nissan's fell 37pc.
Hundreds of key vehicle parts suppliers have factories in north-east Japan, the region that was worst hit by the 9.0 magnitude earthquake on March 11 and the giant tsunami that followed. As a result, the industry's supply chain has experienced huge disruption, with semiconductors and plastic parts in particularly short supply.
While Toyota, Nissan and Honda – the country's top three car makers – managed to resume production by the middle of last month, production lines operated well below planned volumes, with many only at around 50pc capacity.
----The country's household spending fell by 8.5pc in March compared to 12 months earlier, according to separate data from the Japanese government, while its factory output also fell at a record pace in March.
We end for the day with the Beirut based, Middle East specialist, veteran reporter for The Independent. Things are never quite what they seem from Beirut to Bombay. Below, Mr Fisk’s coverage of the death of OBL.
Robert Fisk: Was he betrayed? Of course. Pakistan knew Bin Laden's hiding place all along
Tuesday, 3 May 2011
A middle-aged nonentity, a political failure outstripped by history – by the millions of Arabs demanding freedom and democracy in the Middle East – died in Pakistan yesterday. And then the world went mad.
----But the mass revolutions in the Arab world over the past four months mean that al-Qa'ida was already politically dead. Bin Laden told the world – indeed, he told me personally – that he wanted to destroy the pro-Western regimes in the Arab world, the dictatorships of the Mubaraks and the Ben Alis. He wanted to create a new Islamic Caliphate. But these past few months, millions of Arab Muslims rose up and were prepared for their own martyrdom – not for Islam but for freedom and liberty and democracy. Bin Laden didn't get rid of the tyrants. The people did. And they didn't want a caliph.
I met the man three times and have only one question left unasked: what did he think as he watched those revolutions unfold this year – under the flags of nations rather than Islam, Christians and Muslims together, the kind of people his own al-Qa'ida men were happy to butcher?
-----But talking of caves, Bin Laden's demise does bring Pakistan into grim focus. For months, President Ali Zardari has been telling us that Bin Laden was living in a cave in Afghanistan. Now it turns out he was living in a mansion in Pakistan. Betrayed? Of course he was. By the Pakistan military or the Pakistan Inter-Services Intelligence? Quite possibly both. Pakistan knew where he was.
Not only was Abbottabad the home of the country's military college – the town was founded by Major James Abbott of the British Army in 1853 – but it is headquarters of Pakistan's Northern Army Corps' 2nd Division. Scarcely a year ago, I sought an interview with another "most wanted man" – the leader of the group believed responsible for the Mumbai massacres. I found him in the Pakistani city of Lahore – guarded by uniformed Pakistani policemen holding machine guns.
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"Gold will be around, gold will be money when the dollar and the euro and the yuan and the ringgit are mere memories."
Richard Russell
At the Comex silver depositories Monday, final figures were: Registered 33.33 Moz, Eligible 68.98 Moz, Total 102.31 Moz.
+++++
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled over.
No crooks or scoundrels today, just the results of Canada’s general election that has remade politics in the great white wilderness to the north of the land between the shining seas. Seen from faraway London, it looks like Canada’s Liberal party is going the way of the UK Liberal Party in the 1930s. After looking at the fate of Iceland, Greece, Ireland and Portugal, Quebec’s voters seem to have fallen out of love with separation.
There are no limits to the majestic future which lies before the mighty expanse of Canada with its virile, aspiring, cultured, and generous-hearted people.
Winston Churchill
Tories sweep to majority, NDP to Opposition in historic election
PATRICK BRETHOUR Globe and Mail Last updated Tuesday, May. 03, 2011 2:30AM EDT
Canadian voters have radically redrawn the country’s political landscape, handing the Conservative Party its long-sought majority in an election that decimated the Bloc Québécois and humbled the Liberals.
For the first time in history, the New Democratic Party will form the Official Opposition after an extraordinary breakthrough that propelled the party to more than 100 seats.
The extent of the transformation is startling. The Liberals now hold just four seats west of Guelph, Ont. The Conservatives, formerly shunned by Toronto voters, won nearly half of the seats in that city, twice as many as the Liberals.
The Bloc Québécois, which defined Quebec federal politics for two decades, no longer qualifies for official party status. And Green Party Leader Elizabeth May won the party’s first seat, and the right to a place in the next election’s debates.
Bloc Leader Gilles Duceppe lost his seat and resigned. Liberal Leader Michael Ignatieff lost his riding. Both defeated leaders were squeezed, like many of their candidates, between growth in Conservative support and Jack Layton’s surging New Democrats.
----By early Tuesday, the Conservatives were elected in 167 ridings, and the NDP in 102, more than double its best historical tally. The Liberals were reduced to the lowest seat count in their history, elected in just 34 seats. The Bloc had just four.
----Jack Layton and his party saw support climb nationwide to 31 per cent in early results. The Conservatives' popular vote edged up to the 40-per-cent mark, continuing the steady growth of the last three elections. But the Liberals saw their popular vote plummet to just 19 per cent from 26 per cent.
Mr. Layton will have a large and inexperienced caucus to manage, including Ruth Ellen Brosseau of Berthier-Maskinongé, an assistant pub manager who barely speaks French, doesn’t live in the riding and vacationed in Las Vegas during the campaign – but still won by double digits over the Bloc candidate.
"There seems to be a correlation between the intensity of the official attacks on gold and the severity of monetary crises."
Hans F. Sennholz
The monthly Coppock Indicators finished April:
DJIA: +182 Up. NASDAQ: +236 Up. SP500: +185 Up.
The Dow and SP 500 and NASDAQ have all reversed from down to up. 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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