Baltic Dry Index. 1489 unch
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
Sixty seven years ago today, approximately 73,000 Americans, 61,000 British, and 22,000 Canadians, stormed ashore in Normandy and with great skill, bravery and God’s help, began the process of liberating Western Europe from Nazis tyranny. In a little less than a year, Hitler’s 1000 year Reich imploded, but not before unleashing the vengeance weapons against London and later Antwerp, and not before senselessly slaughtering millions more across Europe, and almost totally wrecking German civilization. Regrettably, Stalin’s Godless alter-ego Nazi like communist tyranny of the USSR, took over Eastern Europe and clung on until 1989. But the Europe we see today, is a product of those brave people’s sacrifice. Britain, Canada and America, could all to easily have cut a deal with Hitler’s Germany, since only Britain faced an existential threat, and left Europe to Nazis Germany and Hitler’s existential war with the USSR. Today we take a look at modern Europe.
My policies are based not on some economics theory, but on things I and millions like me were brought up with: an honest day’s work for an honest day’s pay; live within your means; put by a nest egg for a rainy day; pay your bills on time; support the police.
Margaret Thatcher.
In modern day Europe, Portugal’s turkey’s just voted for Christmas. I suspect that when Christmas arrives the turkey’s will be truculent over the result. Europe’s Great Austerity experiment rolls on. Multi decades of excess and deception are to be rolled back in three or 4 year programs, many of them overlapping, from the Atlantic to the Baltic to the Med. New debt is piled on already unrepayable sovereign debt of the Club Med nations. And all just to bailout Europe’s mostly insolvent banksters. I have my doubts that the ending will be like anything Europe’s elitists expect. “They pretend to pay us, we pretend to work”, is the least that comes to mind.
The trouble with socialism is that eventually you run out of other people’s money.
Margaret Thatcher.
JUNE 6, 2011
Portugal Decisively Ends Leftist Rule
Prime Minister-Elect Vows to Speed Privatizations, Extend Austerity Plans Beyond Terms of Bailout
LISBON—Portugal on Sunday voted decisively to end six years of leftist rule, electing the country's main conservative party and boosting prospects for austerity measures tied to a €78 billion ($114 billion) aid package from the European Union and the International Monetary Fund.
With most of the votes tallied, the center-right Social Democratic Party led by Pedro Passos Coelho had more than 38% of the votes, compared with 28% for incumbent Prime Minister José Sócrates of the Socialist Party.
As the result became evident, Mr. Sócrates admitted defeat and said he would resign as Socialist leader.
Mr. Sócrates led the country to early elections when he resigned in March after legislators from the opposition rejected his plan to cut Portugal's hefty budget deficit. As the government's funding costs surged and its cash reserves were depleted, he was forced to request an international bailout in April.
In selecting Mr. Passos Coelho, 46 years old, as the country's next prime minister, voters have chosen a politician and businessman who aims to close the gap in public accounts by fast-tracking privatization programs and extending the country's existing austerity plans beyond those outlined in Portugal's bailout program.
Mr. Passos Coelho has never held a government post, but he says his experience as an entrepreneur makes him a good fit as prime minister at a time when Portugal's government faces budget cuts and limited alternatives to foster growth.
He has vowed to downsize ministries and state agencies and create a government that is able to implement an ambitious privatization program and revise current infrastructure projects, such as the high-speed train.
More.
In the other part of the Iberian Peninsula, Spain’s new incoming local governments are finding the bank accounts bare or deep in debt. Socialism always ends badly, mired in debt. Below, the FT covers Madrid well on its way to becoming the next Lisbon.
No one would remember the Good Samaritan if he'd only had good intentions - he had money, too.
Margaret Thatcher.
Bankrupt’ claim heightens Spanish debt fears
By Victor Mallet in Madrid Published: June 5 2011 17:49 | Last updated: June 5 2011 17:49
The central Spanish region of Castilla-La Mancha is “totally bankrupt”, according to the incoming administration of the rightwing Popular party (PP), an accusation that will deepen concerns about Spain’s budget deficit.
The claim has prompted angry denials from the Socialist government.
Spain’s 17 autonomous regions and its more than 8,000 municipalities, with €150bn ($220bn) of accumulated debt between them, have become the latest worry for investors in Spain and its sovereign bonds.
Although the amount is less than a quarter of total public sector debt, regional debt has doubled since 2008. The 17 regions collectively exceeded official budget deficit limits in 2010, and appear likely to do so again this year despite repeated demands for compliance from the central government.
Catalonia, an economy the size of Portugal, says its deficit will be double the target.
Vicente Tirado, a senior PP politician in Castilla-La Mancha, said the region was “totally bankrupt”; owed suppliers such as pharmaceutical companies that provide drugs for hospitals a total of €2bn in unpaid bills; and would have trouble finding the money to pay the region’s 76,000 civil servants next month.
More
http://www.ft.com/cms/s/0/33ba454e-8f8f-11e0-954d-00144feab49a.html#axzz1OTRwMDWA
At the other end of the Med, the latest Greek tragedy just stumbles along, with no one seemingly able to bring it to its logical end. Inside or outside the euro, Greece needs to default, restructure its debt, and phase in austerity and a culture of paying taxes, and do it at a pace that brings the Greek public along. Instead a German imposed austerity, and French-ECB asset stripping straight jacket is being forced on Greece. Other than making Europe’s brain dead, insolvent banksters feel better, little good lies at the end of this one size fits all fiat European currency road.
JUNE 6, 2011
Plan Focuses on Rescheduling of Greek Debt
BRUSSELS—Support is building among senior European finance officials for a plan to press Greece's private-sector creditors into accepting a debt exchange that would result in delayed repayment to them, people familiar with the matter say.
But that aggressive course of action—which would probably trigger the euro zone's first-ever debt default—faces opposition from the European Central Bank, which would have to be a key player in the plan, and it will face tough battles at a series of meetings of politicians this month.
The latest plan was discussed at a meeting of euro-zone finance-ministry officials in Vienna last week, and senior euro-zone officials said Saturday that there was a tentative agreement to give Greece more financing—and that aid would likely come on condition that private-sector creditors bear some of the burden.
The Vienna meeting gathered the top civil servants in European finance ministries. They are central behind-the-scenes players, but it is their bosses and European leaders who will fight the political battles and make the final call.
The governments have concluded that Greece, propped up last year with a €110 billion ($161 billion) loan package, will need more cash as soon as next spring. The debt-exchange proposal, championed by Germany and with the strong support of several other euro-zone nations, would ease Greece's cash crunch—and also lessen the amount of extra money Germany and others must quickly put up, senior euro-zone officials say.
Under the plan proposed in Vienna, the 17 euro-zone governments would ask Greece's creditors to exchange their soon-to-mature debt for debt with a longer maturity, a process that could begin as early as July if finance ministers approve the new Greek aid package at their meeting June 20, officials said.
A German finance ministry paper, reported this weekend in German newspaper Die Welt and confirmed by a euro-zone official, proposes a seven-year extension on maturing debt.
More
The big fat Greek sell-off
Required to contribute €50bn towards its own bail-out, Greece is finally facing up to the sale of its most treasured assets.
By Helia Ebrahimi, Senior City Correspondent 8:00AM BST 05 Jun 2011
Roll up, roll up, roll up. Elgin Marbles, Acropolis, Mykonos. Anyone? You don't have to be an ancient Greek historian to understand the significance of it. But maybe it helps. For Thucydides, born back in 460 BC, the Port of Piraeus was the commercial heart of the Athenian democracy. "From all the lands, everything enters," wrote the author of the History of the Peloponnesian War.
But now the port is up for sale – alongside the sort of assets even Thucydides would never have envisaged – in the biggest and most controversial privatisation Greece has ever seen.
Under pressure to raise €50bn as the quid pro quo for its massive €110bn (£98bn) bail-out, Greece is being forced to hawk its industrial and commercial backbone to the highest bidder.
On the block, alongside the Government's 74pc stake in Piraeus, is a similar-sized holding in the country's other main gateway port – Thessaloniki. Then there are the government's stakes in a host of public and private companies – as well as tracts of land. Corporate assets include OTE, the largest telecommunications company in the Balkans; PPC, the country's biggest electricity producer; horse-racing organisation ODIE; the state's 34pc stake in Europe's biggest betting company OPAP; another 34pc stake in Hellenic Postbank and train operator TrainOSE.
It is a gut-wrenching moment for a nation, whose heavily unionised workers are unlikely to be forced into accepting such privatisations without a fight.
-----That it has come to this goes right to the heart of the eurozone bail-out programme, highlighting the political tensions between the main provider of funds – Germany – and the weaker southern nations taking the money. That German companies are likely to wind up as the owners of many of the assets only adds to the controversy.
In addition to the €110bn of rescue aid already promised in last year's bail-out orchestrated by the International Monetary Fund, European Union officials reckon Greece will need around €30bn more in each of 2012 and 2013.
Privately angry that Greece has so far done too little after last year's bail-out to put its own debt-bloated house in order, officials from Germany's finance ministry last week pressed for the holders of Greek bonds to share some of the pain.
More
http://www.telegraph.co.uk/finance/financialcrisis/8556698/The-big-fat-Greek-sell-off.html
In Great Britain, in an attempt to recreate Dublin in London, but without the German and Brussels bureaucrats having to sign off on HMG’s policies, a weak coalition government is imposing shock therapy on an already weak economy. Time for “plan B” scream half Britain’s dismal scientists. Stick with “plan A” yell the others. For now a largely indifferent population hasn’t yet felt much of the effect of the Great Austerity, but that is just about to start to change. With its own fiat currency still largely under HMG’s control, a bout of competitive Sterling-EU devaluation seems set for the UK in H2 11. Stay long physical precious metals. Once again I suspect that end result will not turn out be what was expected or intended.
Unless we change our ways and our direction, our greatness as a nation will soon be a footnote in the history books, a distant memory of an offshore island, lost in the mists of time like Camelot, remembered kindly for its noble past.
Margaret Thatcher.
Economists urge ministers to stand firm on austerity programme as IMF verdict on Britain looms
The Chancellor faces a crucial test on Monday as the International Monetary Fund (IMF) gives its verdict on the British economy, amid a chorus of calls for the Government to adopt a "plan B" to safeguard fragile-looking growth.
By Emma Rowley 10:47PM BST 05 Jun 2011
The IMF judgment loomed as top economists leapt to the defence of the Coalition's austerity plans after some 50 academics signed a letter over the weekend calling for the urgent adoption of an alternative economic plan.
The supportive economists argued that abandoning the fiscal plan now would lead to even greater economic damage. Their intervention came after academics said that the "breakneck deficit-reduction plan, based largely on spending cuts, is self-defeating even on its own terms". The doubters voiced fears that attempts to shrink the hole in the budget will fail, as weaker growth as a result of the cuts will undermine the Government's tax revenues.
If the IMF, which last year backed the Coalition's "strong and credible" plan to shrink the budget deficit, follows suit, it will intensify calls for the George Osborne to change economic tack.
Britain's growth prospects have been repeatedly downgraded in recent months, by bodies including the Bank of England, the Organisation for Economic Co-operation and Development and the Government's own fiscal watchdog.
However, leading economists argued that the UK is still in growth mode and that the risks around reducing the fiscal consolidation efforts - including £81bn of cuts over four years - outweigh any benefits of changing tack.
"The damage that would be caused by abandoning the fiscal plan would be much bigger than any damage that might be caused by persevering with it," said David Kern, chief economist at the British Chambers of Commerce. Swerving off course would leave the UK's credibility "totally eroded", he feared, causing a fall in the pound.
Ruth Lea, economic adviser to the Arbuthnot Banking Group and a former Treasury economist, saw drawing up a plan B as "incredibly unwise". She said: "It's far too early to change course."
There is "no case" for cutting more slowly, said Douglas McWilliams, chief executive of the Centre for Economic and Business Research. Although he questioned the wisdom of raising VAT at a time of already climbing prices, he judged the overall scale of the fiscal tightening as "about right".
The letter which sparked the debate was signed by academics including Prof Sir Tony Atkinson of Oxford and organised by the centre-left pressure group Compass.
High-profile economists such as Jonathan Portes, director of the National Institute of Economic and Social Research, and Vicky Pryce, a former government adviser now at FTI Consulting, also questioned the Government's plans, although they were not signatories.
More
I have also to announce to the House that during the night and the early hours of this morning the first of the series of landings in force upon the European Continent has taken place. In this case the liberating assault fell upon the coast of France. An immense armada of upwards of 4,000 ships, together with several thousand smaller craft, crossed the Channel. Massed airborne landings have been successfully effected behind the enemy lines, and landings on the beaches are proceeding at various points at the present time. The fire of the shore batteries has been largely quelled. The obstacles that were constructed in the sea have not proved so difficult as was apprehended. The Anglo-American Allies are sustained by about 11,000 firstline aircraft, which can be drawn upon as may be needed for the purposes of the battle. I cannot, of course, commit myself to any particular details. Reports are coming in in rapid succession. So far the Commanders who are engaged report that everything is proceeding according to plan. And what a plan! This vast operation is undoubtedly the most complicated and difficult that has ever taken place. It involves tides, wind, waves, visibility, both from the air and the sea standpoint, and the combined employment of land, air and sea forces in the highest degree of intimacy and in contact with conditions which could not and cannot be fully foreseen.
There are already hopes that actual tactical surprise has been attained, and we hope to furnish the enemy with a succession of surprises during the course of the fighting. The battle that has now begun will grow constantly in scale and in intensity for many weeks to come, and I shall not attempt to speculate upon its course. This I may say, however. Complete unity prevails throughout the Allied Armies. There is a brotherhood in arms between us and our friends of the United States. There is complete confidence in the supreme commander, General Eisenhower, and his lieutenants, and also in the commander of the Expeditionary Force, General Montgomery. The ardour and spirit of the troops, as I saw myself, embarking in these last few days was splendid to witness. Nothing that equipment, science or forethought could do has been neglected, and the whole process of opening this great new front will be pursued with the utmost resolution both by the commanders and by the United States and British Governments whom they serve…..
Winston Churchill. Speech to the Commons 06.06.1944.
http://www.winston-churchill-leadership.com/speech-d-day.html
At the Comex silver depositories Friday, final figures were: Registered 29.63 Moz, Eligible 71.48 Moz, Total 101.12 Moz.
+++++
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled over.
Today, three months on from the earthquake and tsunami which triggered the world’s worst nuclear accident since Chernobyl in 1985, the latest figures from the Fukushima number one reactor show it far from closed down, and in fact getting worse. Scientists track the ratio between the radioactive iodine isotope to radioactive cesium isotope, since with a 8 day half life for iodine vs 30 years for cesium, a shut down reactor will quickly see the proportion of iodine fall. Sadly and dangerously, Japan still seems to be covering up the true state of the reactors at Fukushima.
Tepco Slumps to Record Low on Radiation Spike
By Jason Clenfield and Norie Kuboyama - Jun 6, 2011 5:31 AM GMT+0100
Tokyo Electric Power Co. declined the most on record after reports that radiation surged at its Fukushima plant and the head of Japan’s largest stock exchange said the utility should be put in bankruptcy protection.
The owner of the crippled Fukushima Dai-Ichi nuclear plant plunged as much as 28 percent to 206 yen, the most since at least September 1974. The utility known as Tepco was the biggest decliner on the MSCI Asia Pacific Index.
Radiation readings inside the plant’s No. 1 reactor building rose to the highest level yet, almost three months after the disaster started, Kyodo News reported June 4, citing data from Tepco. In a separate report, the Asahi newspaper cited Tokyo Stock Exchange President Atsushi Saito as saying that the utility should undergo restructuring similar to Japan Airlines Co., which filed for bankruptcy protection in 2010.
----Tepco, which posted the biggest loss on record for a non- financial Japanese company, last week had its long-term credit rating cut to junk status by Standard & Poor’s Ratings Services. The utility may post a full-year net loss of about 570 billion yen on a parent basis, the Tokyo Shimbun reported today, citing an internal document from the company. Tepco said it wasn’t the source of the newspaper report.
http://www.bloomberg.com/news/2011-06-06/tepco-slumps-to-record-low-on-radiation-spike.html
Of course, our vision and our aims go far beyond the complex arguments of economics, but unless we get the economy right we shall deny our people the opportunity to share that vision and to see beyond the narrow horizons of economic necessity. Without a healthy economy we cannot have a healthy society. Without a healthy society the economy will not stay healthy for long.
Margaret Thatcher.
The monthly Coppock Indicators finished May:
DJIA: +196 Up. NASDAQ: +249 Up. SP500: +200 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. But the Fed’s QE program is supposed to end this month!!!
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