Baltic Dry Index. 978 unch
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable.
Alexander Solzhenitsyn
They came, they talked, she conquered. And to add injury
to insult Germany’s football team kicked Greece out of the euro. If only they
all would give up on impossible, unworkable, rescues and focus instead on the
only solution that will work, short of Europe abandoning too big to fail and
going back on to an internal gold settlement system. That solution, of course,
is the other Eurozone members forcing Germany and its tiny allies out of the existing
monetary union and establishing their own monetary union of the north. It won’t
happen of course, and so the never ending European monetary crisis will drift
along until it all falls apart in an epic European, wealth destroying, break
up.
Below, the latest failed mini summit in Rome. Not to worry
though, there’s yet another European summit coming up on June 29th.
"There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved."
Ludwig von Mises
Debt crisis: Angela Merkel defies Latin Europe and the IMF on bond rescue
German Chancellor Angela Merkel has shot down calls for full mobilisation of the eurozone's bail-out funds to halt the raging bond crisis in Spain and Italy, ignoring unprecedented pleas for action from the International Monetary Fund.
"Each
country wants to help but if I am going to call on taxpayers in Germany, I must
have guarantees that all is under control. Responsibility and control go hand
in hand," she said after a crucial summit of the eurozone's Big Four
powers in Rome.
Mrs
Merkel -- or La Signora No in Italy -- doused hopes of a break-through on
proposals by the "Latin Bloc" leaders of Italy, France, and Spain to
deploy the funds (EFSF and ESM) to cap the bond yields of "virtuous"
countries vulnerable to contagion, or to recapitalize banks directly to take
the strain off sovereign states.
"If
I give moneystriaght to Spanish banks, I can't control what they do. That is
how the treaties are written," she said, before racing off to Danzig to
tonight for Euro 2012 quarter final between Greece and German..
Christine
Lagarde, the head of the IMF, warned before the summit that the eurozone is
under "acute stress" and at risk of a downward spiral.
"The
viability of the European monetary system is questioned. There must be a
recapitalisation of the weak banks, with preferably a direct link between the
EFSF/ESM and the banks, in order to break the negative feedback loop that we
have between banks and sovereigns."
She
called on the European Central Bank to back-stop the financial system with
"creative and inventive" measures to fight the crisis.
Italy's
premier Mario Monti put the best face on events, insisting that the Big Four
leaders had come together at the birth place of the European Project to do
whatever it takes to shore up monetary union.
"The
euro is here to stay and we all mean it," he said, switching from Italian
into English to send an emphatic message to markets and Anglo-Saxon world.
For all
the rhetoric at Rome's Villa Madama -- a Rennaissance retreat of the Medici
family designed by Raphael -- the trio of Latin leaders seemingly failed to
shift German Merkel one inch in the direction of debt pooling or genuine fiscal
union.
The
contrast between pro-forma talk of "more Europe" in the Roman hills
and the festering reality on the ground in austerity Europe was not lost on
those at the summit. Across the Tiber, much of Rome was paralysed by a bus and
metro strike, evidence of the growing resitance to the harsh fiscal squeeze
imposed by Mr Monti's technocrat government.
French
president Francois Hollande did not hide his frustration, warning that France
would not accede to German demands for a step-change in EU integration until
Berlin puts the neuraligic issue of shared debts on the table. "There will
be no transfer of sovereignty without greater solidarity, " he said
acidly.
More
Bundesbank Swipes at Draghi as European Fault Lines Deepen
By John Fraher and Gabi
Thesing - Jun 23, 2012 12:01 AM GMT
The Bundesbank opposition to the European Central Bank’s plan to help ailing
financial institutions is its latest swipe at the crisis-fighting efforts of Mario
Draghi’s central bank. As Spanish banks scramble for collateral to use in the refinancing operations that are keeping them afloat, the Frankfurt-based ECB said it will cut the rating thresholds and amend eligibility requirements for some asset-backed securities. While the move will give stressed banks greater access to ECB liquidity, it may also increase the amount of risk on the central bank’s balance sheet.
“We’re
critical of this,” Bundesbank spokesman Michael Best said yesterday. In terms
of collateral, “we won’t accept what we don’t have to accept,” he said.
The
criticism highlights one of the fault lines dividing European officials as they
struggle to end a crisis threatening to rip the currency union apart. As
Draghi’s officials scramble to put together policies that will fight the latest
stage of the turmoil, German policy makers are emphasizing the dangers of pursuing
unorthodox policies that potentially put taxpayers on the hook for future
losses.
----Looser collateral is the latest issue to
divide Europeans days before a summit that Italian Prime Minister Mario Monti
said must succeed or risk a bond-market selloff.
----In February, Bundesbank President Jens Weidmann wrote
to Draghi warning of the risks the ECB is taking in lending more than 1
trillion euros ($1.3 trillion) to banks. The ECB’s Target2 system, which
calculates debts between the euro region’s central banks, shows that the amount
owed to the Bundesbank has soared as Germany helps fund the region’s most
indebted nations.
More
Below, yet another reason to think that the
European Monetary Union ends badly, and soon. With temperatures approaching 100
in Athens, more than just German tourists will be giving Greece a pass this season.
Risk of Greek blackouts increases as traders cut or halt power supplies
Power traders in at least four countries have reduced or halted electricity exports to Greece due to non-payments, helping to force market prices sharply higher in a potential blow to struggling industries and raising the risk of blackouts during the tourist season.
Reuters 5:18PM
BST 22 Jun 2012
With
Greece deep in crisis, power grid operator LAGHE owes foreign and domestic
suppliers 3 27 million euros ($410 million), a court document obtained by Reuters
showed, as its revenue falls due to the recession and a refusal by many Greeks
to pay their bills.
Trading
sources said that at least four trading companies in Switzerland, Italy,
Bulgaria and Germany have either lowered or cut off sales to Greece due to high
credit risk and delays in payments over the past 2-3 months for power they
sold.
"We
have stopped power sales to Greece," said Claus Urbanke, head of new
markets at Statkraft, a Nordic utility which trades electricity throughout
Europe.
"We
have quite considerably reduced volumes in order to control risk exposure in
Greece due to the delays of payments by the market operator," said a
Swiss-based trader.
The
traders asked not to be identified or their companies named as they are not
authorised to speak to the press.
More
"Sooner or later both the Greek population and international creditors will tire of fighting a losing battle, leading to a break-up of the currency union as Greece pulls out, probably followed by other countries"
Douglas McWilliams, chief executive of the Centre of Economics and Business Research.
At the Comex silver depositories Friday final figures were: Registered 35.88 Moz,
Eligible 110.49 Moz, Total 146.37 Moz.
Crooks and
Scoundrels Corner.
The bent,
the seriously bent, and the totally doubled over.
Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power.
Benito Mussolini.
The monthly
Coppock Indicators finished May:
DJIA: +71 Down. NASDAQ: +79 Down. SP500: +46 Down. All
three indicators remain down but downward momentum is accelerating again after
stalling earlier in the year.
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