Baltic Dry Index. 1398 +29
LIR Gold Target by 2019: $30,000. Revised due to QE.
Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.
The Bernank. 2002.
The end is nigh for Greece. Yesterday, even H.M.G. ministers were openly stating the obvious. Greece, and Ireland, Portugal, Spain and probably Italy, can’t magically solve their sovereign debt problems simply by austerity programs that destitute their populations. All the more so since the whole exercise is merely to bailout (mostly) Europe’s banks. Their populations are rapidly wising up to the bankster’s con. A debt default (restructuring) is coming, and it makes more sense to begin planning for it in an organized timely fashion. The individual central banks plus the ECB, can deal with the problem of recapitalizing any European banks in danger of failing. It’s only fiat money after all, but we are getting very close to resetting the failing fiat currency regime. Fiat currency was a gigantic error imposed on the free world by a panicked Republican President Nixon government that couldn’t bring itself to devalue the dollar against gold.
In effect they adopted the unconvertible fiat currency regimes of the USSR and China. Now chaos and the end game is in sight. Stay long precious metals. The world will not go on forever, passing over valuable intrinsic value commodities like oil, ores and foodstuffs, for electronic US fiat dollars (or euros, Pounds, Yuan,) that can be produced in unlimited quantity “at essentially no cost”.
"Borrowers will default. Markets will collapse. Gold (the ultimate form of safe money) will skyrocket."
Michael Belkin
Greece crisis worsens amid political stalemate
A damaging political stalemate is threatening to plunge Greece deeper into crisis as hopes of cross-party support for further austerity measures were dashed on Tuesday by the main opposition leader.
7:23PM BST 24 May 2011
Antonis Samaras, head of New Democracy, the conservative party that earlier this month called for a renegotiation of the original €110bn (£95bn) bail-out, said he would not support additional austerity measures, totalling €6bn, to reduce the country's budget deficit.
His refusal to back the government could jeopardise both payment of the rescue package's next instalment, of €12bn due in June, as well as ongoing talks over a second bail-out, of as much as €60bn.
The political wrangling came as Vince Cable, the Business Secretary, became the first UK politician to admit openly that Greece has no option but to restructure its €330bn of public debt.
"What they are going to have to do is to have a rescheduling of their debt and it can be done in a soft way or a hard way, and that's what the current debate is about," he said in a newspaper interview. "I think in practice what will happen, people are already discussing this, is a negotiated rescheduling.
"You can't just deal with this by cutting, cutting, cutting – it does not work."
Greece's debts are expected to hit 150pc of GDP this year, the highest in Europe, on top of a 10.5pc budget deficit. It has already begun retrenchment to reduce the deficit to 7.5pc this year, including €50bn of privatisations.
However, officials from the European Union and the International Monetary Fund (IMF), which put up the original €110bn loan, fear the country will miss its fiscal consolidation targets. The government has proposed a further €6bn of measures to bring the deficit down, but Mr Samaras said on Tuesday: "To this demonstrably mistaken recipe, I will not agree."
He has previously backed privatisations but warned that increasing taxes would only push the country deeper into recession.
Cross-party support is vital if Greece is to receive further loan instalments and a second bail-out. Brussels and the IMF have made it clear that "political groups set their disagreements aside".
Mr Samaras may be angling for a debt restructuring as Greek politicians have acknowledged it may be unavoidable. But some European officials fear a restructuring could trigger panic in the markets for all peripheral euro sovereign debt and spark a second credit crunch.
A second bail-out is expected to comprise of a fresh loan, further austerity, a fresh commitment on earlier agreements and a "soft restructuring" – or lengthening of the terms of the existing debt.
Insurance on Greek debt soared on Tuesday, implying a 71pc chance of default within five years.
We are living in a historical aberration that is fast heading to its end. On a fiat currency, buy now pay tomorrow system, we are rapidly using up the world’s scarce resources but leaving behind the bill for tomorrow’s generation. In a world headed to a 9 billion population just 40 years away, buy now pay tomorrow doesn’t work. Stay long precious metals. Fiat currency was always a stop gap quick fix for a USA that had gone bust in 1971. Forty years on, the fiat currencies’ derivatives gambling chickens are all coming home to roost. Sadly, an unprepared global public, is about to live through the collision of the age of austerity with the age of scarcity. Stay long precious metals for the unpleasant journey ahead.
"There can be no other criterion, no other standard than gold. Yes, gold which never changes, which can be shaped into ingots, bars, coins, which has no nationality and which is eternally and universally accepted as the unalterable fiduciary value par excellence."
Charles De Gaulle
Below, what the unstable decade ahead holds before we finally abandon the Great Nixonian Error of fiat money. Typically, right up to the end Belarus denied it was going to devalue at all. Wiser Belarussians have been swapping fiat Belarus rubles for petrol, foodstuffs, and anything of intrinsic tangible value all year. For the record, America continues on its “strong dollar” good as gold policy.
"The history of fiat money is little more than a register of monetary follies and inflations. Our present age merely affords another entry in this dismal register."
Hans F. Sennholz
Devaluation of Belarus Beats World Record
24-05-2011
According to the World Bank, the official devaluation of the Belarusian ruble, held by the National Bank of Belarus on May 24, was the largest in the world for the past 20 years. The official rate of Belarusian ruble against a basket of currencies has fallen by 54.4%. A similar situation in the currency market was observed in Argentina in 2002 and Ethiopia in 1992, when the national currency of these countries depreciated by 54%.
The devaluation of 1998 in Russia ranks 4th in the World Bank ranking. The Russian ruble devalued by 38% against the basket of currencies then.
Belarusian ruble devaluation in 1999 was also insignificant, compared with the current situation, - 37%.
According to Telegraf, as of May 24 devaluation of Belarusian ruble to the currency basket has amounted to 71.62% since January 1, 2011.
http://telegraf.by/2011/05/devaluation-of-belarus-beats-world-record.html
"The desire for gold is the most universal and deeply rooted commercial instinct of the human race."
Gerald M. Loeb
At the Comex silver depositories Tuesday, final figures were: Registered 32.13 Moz, Eligible 69.17 Moz, Total 101.30 Moz.
+++++
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled over.
No crooks or scoundrels today, just a re-emphasis of our Belarussian fate that awaits unless we change current EU and USA policies. There is absolutely no sign of any change in either entity. Nor in China or Japan, where equally fiat currencies are headed for the same fate. Japan will just try to “print” the new Yen for reconstruction. We are at one of the very few points in history, where every person of substance needs 10% of their wealth in physical gold and silver bullion.
"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
"To prefer paper to gold is to prefer high risk to lower risk, instability to stability, inflation to steady long term values, a system of very low grade performance to a system of higher, though not perfect performance."
William Rees-Mogg
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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