Baltic Dry Index. 787 +05
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
“This sucker could go down,” famously lamented President George W. Bush, showing a grasp of economics available only by studying at Yale and Harvard Business School. He was rightly talking about the US economy, after twitcher Treasury Secretary Hank Paulson was tearing out his hair trying to get a US bankster bailout past the US Congress. He might as well be talking about German lead Euroland today. “The Americans of Europe” seem to have lead Europe over the abyss. Greece has become a serf state of Germany, and still it’s not enough to avoid default. Spain has gone off the reservation and has dared Germany to do anything about it. Portugal has gone silent, possibly secretly printing up a new currency somewhere for use later in the summer. Germany’s Sinn has just discovered how much more Germany is on the hook for, if a Greek default wipes out Europe’s PIIGS taking down the euro with them. Germany’s Great Greek Error of too much austerity too fast, together with too little money, has come home to roost. Ironic justice for the Bilderberger arrogance of a top down imposed United States of Europe.
“Death is the solution to all problems. No man - no problem.”
Stalin.
European markets plunge as Greece threatens to default
European stockmarkets plunged as Greece threatened its international creditors with a default.
Bourses across Europe shed more than 3pc each as Greece said it was ready to impose the €206bn restructuring on bondholders who do not vote for it by the 8pm GMT deadline on Thursday.
After a meeting in Frankfurt on Tuesday, the Greek Debt Management Agency "confirmed" that, if a majority of bondholders agree to the deal, it "intends... to declare the proposed amendments effective and binding on all holders".
Traders took the statement as a warning that Greece was expecting to use the Collect Action Clauses (CACs) to force through the deal. Rating agencies have warned that the retrospective measure, which was approved by Greek politicians last month, would constitute a sovereign default - the first in the eurozone's history.
A leaked document written by the International Institute of Finance (IIF), the body that negotiated with the Greek government on behalf of private bondholders, warned of "some important and damaging ramifications" from a Greek default. In the document, dated last month, the IIF said it was "difficult to add all these contingent liabilities up with any degree of precision, although it is hard to see how they would not exceed €1 trillion".
The fresh alarm was stark in the latest figures from the European Central Bank (ECB) that showed overnight deposits had hit yet another record level. Banks parked €827bn with the ECB rather than lend it to smaller banks.
Spain's sovereign thunderclap and the end of Merkel's Europe
Last updated: March 5th, 2012
The Spanish rebellion has begun, sooner and more dramatically than I expected.
As many readers will already have seen, Premier Mariano Rajoy has refused point blank to comply with the austerity demands of the European Commission and the European Council (hijacked by Merkozy).
Taking what he called a "sovereign decision", he simply announced that he intends to ignore the EU deficit target of 4.4pc of GDP for this year, setting his own target of 5.8pc instead (down from 8.5pc in 2011).
In the twenty years or so that I have been following EU affairs closely, I cannot remember such a bold and open act of defiance by any state. Usually such matters are fudged. Countries stretch the line, but do not actually cross it.
With condign symbolism, Mr Rajoy dropped his bombshell in Brussels after the EU summit, without first notifying the commission or fellow EU leaders. Indeed, he seemed to relish the fact that he was tearing up the rule book and disavowing the whole EU machinery of budgetary control.
He is surely right to seize the initiative. Spain’s economy will contract by 1.7pc this year under his modified plans and unemployment will reach 24pc (or 29pc under the 1990s method of counting). To compound this with manic fiscal tightening – and no offsetting devaluation – is intellectually indefensible.
There comes a point when a democracy can no longer sacrifice its citizens to please reactionary ideologues determined to impose 1930s scorched-earth policies. Ya basta.
What is striking is the wave of support for Mr Rajoy from the Spanish commentariat.
This one from Pablo Sebastián left me speechless.
My loose translation:
"Spain isn’t any old country that will allow itself to be humiliated by the German Chancellor."
"The behaviour of the European Commission towards Spain over recent days has been infamous and exceeds their treaty powers… these Eurocrats think they are the owners and masters of Spain."
"Spain and other nations in the EU are sick and tired of Chancellor Merkel’s meddling and Germany’s usurpation – with the help of Sarkozy’s France and their pretended "executive presidency" that does not in fact exist in EU treaties."
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The Hundred-Billion-Euro Bomb
Euro-Zone Central Bank System Massively Imbalanced
By Stefan Kaiser 03/06/2012
The crucial clue came from the same man whose signature once adorned the deutsche mark: Helmut Schlesinger, former president of Germany's central bank, the Bundesbank. He was the one who pointed Hans-Werner Sinn, an economist in Munich, in the direction of a strange entry in the Bundesbank's statistics: In late 2010, records showed claims on other euro-zone central banks totaling over €300 billion ($400 billion). Curious, Sinn began to dig deeper. What he found exceeded his worst expectations.
"In the beginning, all I had was this number, and I didn't really know what it meant," says Sinn, who is president of the Munich-based Ifo Institute for Economic Research. "The Bundesbank told me those were irrelevant balances. But that didn't reassure me."
Sinn spoke with specialists at various central banks and with colleagues in his field. "Each person knew a little bit," Sinn explains, "and I had to fit the pieces of the puzzle together. It was real detective work."
After weeks of work, Sinn had assembled enough pieces to create a picture that would make any one shudder: Since the 2007 financial crisis, immense imbalances have formed within the otherwise harmless payment system that exists between the central banks of the 17 euro-zone member states. While Italy, Spain, Ireland, Portugal and Greece, all hit hard by the debt crisis, show deficits totaling over €600 billion, the claims owed the Bundesbank have climbed to €498 billion.
Euro Crisis Crucible
Rift Grows Between Germany's Bundesbank and ECB 03/06/2012
There are growing divisions among European Central Bank leadership about how to handle the euro crisis, not to mention between the ECB and the Bundesbank, Germany's central bank. While ECB head Mario Draghi is pleased with his recent decision to flood the markets with cheap money, Bundesbank President Jens Weidmann warns of the dangers.
----Only a few weeks ago, it looked as though Draghi's arrival in office would usher in an era of harmony at Frankfurt's Eurotower, the ECB headquarters. Germany's monetary policy hardliners had resigned, and even Germany's mass circulation Bild newspaper welcomed the former head of Italy's central bank as "quite German," and even as "very Prussian." But the conflict between Europe's two most important monetary policymakers has become increasingly apparent, and it's compounded almost on a weekly basis by contentious new issues. One day Weidmann votes against special conditions for the ECB with regard to the Greek debt haircut, the next day he objects to the long maturities on Draghi's loans to banks.
Last week, the conflict escalated to a new level. Weidmann complained in a letter to ECB President Draghi that the central bank was accepting increasingly lower-grade collateral in exchange for its cash injections. This poses a danger, he warned, as the central banks in the north of the euro zone are owed ever growing amounts of money by their counterparts in the south. If the euro zone broke apart, the Bundesbank would be left holding a good deal of its bad debt from so-called TARGET2 loans, which currently amount to some €500 billion ($660 billion), he warned.
This may sound somewhat technical to most laypeople, but among leading ECB officials the letter was seen as violating a taboo. TARGET2 refers to the central banks' internal payment system, which has accumulated massive imbalances during the course of the euro crisis. These inequalities aren't problematic as long as the monetary union remains intact. So far, the Bundesbank has always played down this risk. But Weidmann's about-face is a "disastrous signal," say ECB executives because, for the first time ever, the Bundesbank "is no longer ruling out a break-up of the euro zone."
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http://www.spiegel.de/international/germany/0%2c1518%2c819255%2c00.html
“Ideas are far more powerful than guns. We don't allow our enemies to have guns, why should we allow them to have ideas?”
Stalin.
At the Comex silver depositories Tuesday final figures were: Registered 36.77 Moz, Eligible 94.27 Moz, Total 131.04 Moz.
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled over.
The Goldmanites again today, in Saint Ebenezer Squid’s never ending pursuit of the filthy lucre.
A Morgan Stanley banker involved in the deal wrote in an e-mail at the time: “This is GS at its most shameless.”
As an Adviser, Goldman Guaranteed Its Payday
By ANDREW ROSS SORKIN March 5, 2012Lloyd C. Blankfein had a script for his phone call.
“Hello, Doug — it’s been a long time since we have had the chance to visit,” say the notes prepared for his call with Douglas L. Foshee, chief executive of the El Paso Corporation, the big energy company that last fall was in talks to be sold to Kinder Morgan. “I was very pleased you reached out to us on this most recent matter,” the script goes, thanking Mr. Foshee for using Goldman as El Paso’s adviser in the transaction. Mr. Blankfein added that he knew Mr. Foshee was aware of Goldman’s investment in Kinder Morgan “and that we are very sensitive to the appearance of conflict.”
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