Baltic Dry Index. 1420 -18
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof.
John Kenneth Galbraith
While all attention is focused on Greece and the likelihood of a Greek default within two years, yesterday’s austerity vote is merely intended to buy time for Europe’s banks and delay the Greek default as long as possible, pouring good taxpayer money after bad, on the other side of the Atlantic a similar drama is in play. Partisan politics for the spoils of the next presidency risk Uncle Sam defaulting on its debts on August 2. Unlike a Greek default, which would trigger a slow motion rolling contagion across Europe’s PIIGS, and probably blow up Belgium as well, any US default would trigger an instantaneous contagion, right around the world, probably taking down the fiat currency financial system as we know it. You’ve got to think that US politicians couldn’t be that stupid. Even so, the IMF, now under new French feminine friendly management, is starting to panic that they might be. In a hard left v hard right fight, tinged with implicit racism for the spoils of the next presidency, all seem to have lost sight of the bigger picture. Dollar suicide is looming into view.
Stay long physical gold and silver. An 18 month guerilla war is underway in America for the presidency. Below, what panic looks like in the ever so diplomatic world of the banksters.
In central banking as in diplomacy, style, conservative tailoring, and an easy association with the affluent count greatly and results far much less.
J. K. Galbraith
US risks "severe shock" over debt talks
America will cause a "severe shock" to world financial markets should Congress fail to agree an increase in the country's debt ceiling in a month's time, the International Monetary Fund (IMF) has warned.
By Richard Blackden, US Business Editor 11:38PM BST 29 Jun 2011
The fund used its annual healthcheck on the world's biggest economy to spell out the dangers of failure, which would likely include the US government defaulting on its debt for the first time in its history.
"It should be self-evident a debt default by the US government would have very serious, far-reaching and dramatic repercussions," said John Lipsky, the IMF's acting managing director. "That's why were are confident it will be avoided."
Republicans and Democrats have been locked in tense negotiations for the past month on how to raise the country's $14.3 trillion (£8.9 trillion) debt ceiling, which the Treasury has said will be reached on August 2.
The talks, which Republicans walked out of last week, are widely seen as a forerunner of the battle over the deficit that will be central to next year's presidential election.
President Barack Obama, who stepped into the talks this week, said that "we don't know how capital markets will react" should an agreement not be struck. Ratings agency S&P said yesterday that the US would have its AAA credit rating slashed if it missed an interest payment on its debts after the deadline.
More
http://www.telegraph.co.uk/finance/economics/8607014/US-risks-severe-shock-over-debt-talks.html
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