Thursday 7 June 2012

France and a Different Beat.


Baltic Dry Index. 878 -26

LIR Gold Target by 2019: $30,000.  Revised due to QE programs.

Pierre Moscovici, French finance minister, said the eurozone is ready to "mobilise very rapidly". Mario Draghi, president of the European Central Bank (ECB), admitted the markets were "rightly alarmed" in recent weeks but declared: "We stand ready to act."

Luis de Guindos, Spain's finance minister, said he had "absolutely not discussed any intervention in Spain's banks" and insisted that Madrid would unveil a rescue plan for the banks within two weeks.

Its stock market rally time again, as panicking central banksters drop hints of more and more monetisation to come. In the polite doublespeak language of the bailout boys, monetisation is referred to as anything but that, but quantitative easing or any other terminology spin employs, will never hide the fact that a rose is a rose is a rose.

Below, with the global economy stalling, crude oil prices dropping, Europe falling apart and in recession, unemployment rising again in America and the US economy hitting stall speed, in the USA the panicky Fed is getting ready to hit the nuke option. Stocks and precious metals soared in anticipation of the great flood of money coming this summer. Forget food price inflation for now. Collapsing oil prices suggest collapsing world economies, all too soon to be followed by collapsing banks. Collapsing banks will trigger a collapse in a quadrillion dollars of gambling derivatives contracts, with the large amount held by 4 US banks, especially JP Morgan.

It might be just “a storm in a teacup” to JPM’s out of touch officer corps, to the panicked gurus at the Federal Reserve in Washington, a quadrillion dollar derivatives disaster striking JP Morgan, is Hurricane Katrina wiping out New York, Chicago, Boston and Washington and every place in between at the same time. Q.E. anyone? Stay long precious metals, we haven’t seen anything yet. According to news reports this morning, Germany has blinked. Whether true or not, Europe’s finance ministers and ECB president are always ready to huff and puff.

"When it becomes serious, you have to lie"

Jean-Claude Juncker. Luxembourg Prime Minister and president of the Euro Group of Finance Ministers. Confessed liar.

June 6, 2012, 10:21 p.m. EDT

Fed’s Yellen keeps door open for more easing

WASHINGTON (MarketWatch) — A top Federal Reserve official said Wednesday that the door remains open for more easing of monetary policy, especially if central bankers are worried about the downside risks to the outlook.

Janet Yellen, the number-two Fed official behind Fed chairman Ben Bernanke, made the assertion in an evening speech to the Boston Economic Club.

“I am convinced that scope remains for the FOMC to provide further policy accommodation,” Yellen said.

There were three conditions under which the Fed might ease: if policymakers decided that the recovery was too sluggish, if downside risks to the outlook become “sufficiently great” or if there was a threat of deflation.
Yellen is considered one of three most-influential Fed officials along with Bernanke and William Dudley, the president of the New York Federal Reserve Bank.

In a question-and-answer session, Yellen noted that recent economic data, including weak jobs numbers last week, have been “pretty disappointing,” according to reports.

Investors will get an update on Bernanke’s views when he testifies Thursday morning on the economic outlook to the Joint Economic Committee of Congress.
More

Europe ready to rescue Spain's banks

European leaders are mustering resources to rescue Spanish banks, regardless of Madrid's protestations, amid intensifying pressure from markets and politicians around the world.

German and European Union officials are working on plans, it has emerged, to inject cash into the stricken sector, perhaps using the bail-out funds, the EFSF and ESM.

Officials in Brussels said the contingency strategy to support Spain could be "austerity-lite", rather than tied with conditions like the Greek and Portuguese bail-outs, to restore confidence more quickly. The bail out could be as much as €80bn(£65bn) rather than €40bn Madrid reckons its banks need.

Mario Draghi, president of the European Central Bank (ECB), said the ESM's current treaty "forbids direct recapitisation of the banks", but a shift in political rhetoric injected hope into fraught financial markets.

Shares jumped as traders bet that the Federal Reserve and even the Bank of England, were poised to act to stem the crisis and boost the global economy. Both Ben Bernanke, chairman of the Fed, and his deputy, are set to give speeches this week and could change tact in the wake of poor economic data.

June 6, 2012, 10:21 p.m. ET

New Risk to Europe's Growth: Banks Cut Lending to Cities

CHARTRES, France—For decades, when this medieval town wanted to borrow for a building project, officials just needed to walk into one of the many banks between city hall and the nearby 13th-century cathedral.

This year, they have had to look farther afield. Unable to raise the money to keep city construction projects on track, Mayor Jean-Pierre Gorges has dispatched aides to Beijing in hopes of negotiating a loan from China Development Bank.

As France's new president, François Hollande, tackles the many challenges posed by the deepening euro-zone crisis, from Spain's troubled banking system to Greece's potential exit from the currency union, here's the latest: Many municipalities can't fund their investment projects.

This is no small matter because local governments in Europe carry out the majority of public infrastructure investments, from roads to sewage to hospitals, including more than 70% of those in France. So at a time when governments across Europe are searching for sources of growth and employment, localities' funding squeeze is making their job harder.

"The impact on economic growth will be substantial," said Bernard Dreyfus, an academic who studies local-government finances.

Today's municipal funding squeeze stems from the financial crisis, which led European governments to adopt tougher solvency rules for banks. Implementation of these rules was accelerated late last year, as Europe's sovereign-debt problems unfolded.

European local governments rely on bank borrowing for projects, unlike in America, where they often sell bonds. But European banks are drastically reducing their municipal lending as they try to meet the tightened solvency rules. Their retreat leaves many local governments struggling with how to pay for their projects.

Oil Tankers Squeezed as Rates Drop to Lowest Since ’97: Freight

By Alaric Nightingale and Rob Sheridan - Jun 5, 2012 12:00 AM GMT
Aframaxes, already this year’s worst- performing oil tankers, are poised for the lowest annual rates in at least 15 years as Europe’s economic stagnation curbs demand, the region’s most-accurate shipping analysts said.

The 800-foot vessels will make about $12,000 a day in 2012, the least since 1997, said Anders Karlsen, an analyst at Nordea Markets in Oslo. His recommendations on the industry returned 25 percent in the past year, more than any shipping analyst in Europe tracked by Bloomberg. The prediction is 37 percent less than the second-half average of $18,901 anticipated in forward freight agreements, traded by brokers and used to bet on future rates, for northwest Europe, the biggest market for Aframaxes.

I have tried to lift France out of the mud. But she will return to her errors and vomitings. I cannot prevent the French from being French.

Charles De Gaulle

French president Francois Hollande cuts retirement age

France's new socialist government cut the country’s retirement age in the face of the eurozone’s deepening crisis, citing “social justice” to explain a move that goes against austerity efforts across the region.

Workers who entered employment aged 18 will be able to retire at 60 rather than 62, under the decree agreed at a cabinet meeting on Wednesday.

The decision follows pre-election promises from the new president Francois Hollande to reverse the rise in the retirement age introduced by his predecessor Nicolas Sarkozy in 2010.

“We committed to put this measure in place quickly for social justice for those who started working early,” said Social Affairs Minister Marisol Touraine.

The reforms will cost the state billions of euros a year but can be afforded through higher worker and employer contributions, according to the government.
More

We close today wondering, have the French finally gotten over being liberated from the Germans by Anglo-Americans? Perhaps, but to this Scots-English-Irish, pro-American  dinosaur, it rather looks likes belatedly an ungrateful France  now ruled by an old-socialist, wealth-envy dinosaur, is desperate for allies against their paymaster, austerity imposing Germany. Good relations are one thing, and obviously this visit helps, but the crass motives might have been better subtly handled. President Bling-bling and some of his predecessors might have made some amends, now it all smacks of socialist PR cynicism.

How can anyone govern a nation that has two hundred and forty-six different kinds of cheese?

Charles De Gaulle

Francois Hollande becomes first French president to visit D-Day war graves

Francois Hollande has become the first French President in history to visit the graves of thousands of British soldiers who died liberating his country on D-Day.

By Peter Allen in Paris 3:33PM BST 06 Jun 2012
He paid a visit to the Ranville Cemetery to mark the 68th anniversary of the famous invasion.
It contains the graves of 2,564 British soldiers, many of whom were members of the 6th Airborne Division who died in the early hours of June 6 1944 after landing by glider and parachute.

Mr Hollande's decision to place a commemorative wreath in the village near Caen, Normandy, will help lay to rest past accusations that the French have underplayed the British contribution to victory in World War Two.

As rain poured down at the end of his visit, Mr Hollande said: "The rain doesn't matter, being here does."
He shook hands with Parachute Regiment veterans, as well as serving British and French Army soldiers.
In previous years, French D-Day commemorations have concentrated on American invasion beaches, and on the sacrifice of Free French and Resistance forces.

"The President is, like millions of French people, hugely indebted to the British,' said a source in Mr Hollande's ruling Socialist Party.

"Their airborne division was responsible for the first liberation of a town on D-Day, and that's why Mr Hollande wanted to be in Ranville to pay tribute."

Mr Hollande was joined in Ranville by Philip Hammond, the defence secretary, and the pair attended a commemorative service and laid wreaths.

In 1944, Britain's 6th Airborne Division took part in a daring raid to capture two heavily defended bridges across the River Orne and Caen Canal on D-Day.

An assault group made up of men from the Oxfordshire and Buckinghamshire Light Infantry landed in six gliders, earning themselves a place in military folklore which was immortalised in the classic war film The Longest Day.

Following liberation, the Ranville churchyard was immediately used to bury those who were killed, before an official cemetery was opened next to it after the war.

Jean-Luc Adelaide, the mayor of Ranville, said that French President Vincent Auriol had visited nearby Benouville in 1948, but that no head of state had ever visited the cemetery at Ranville, either on D-Day or on any other day.

As well as the thousands of British servicemen and 76 Canadians, those lying in Ranville also include 330 German soldiers.

There was controversy in 2009 when, on the 65th anniversary of D-Day, Buckingham Palace said there would be no members of the Royal Family at commemorations because they had not been invited by the French.

Instead, the then President Nicolas Sarkozy took part in commemorations at the US Omaha Beach.
Some French officials referred to the event as "primarily a Franco-American ceremony".
Link.

I have heard your views. They do not harmonize with mine. The decision is taken unanimously.

Charles De Gaulle

At the Comex silver depositories Wednesday final figures were: Registered 35.73 Moz, Eligible 107.19 Moz, Total 142.92 Moz.   

Crooks and Scoundrels Corner.

The bent, the seriously bent, and the totally doubled over.

Today, some of the thoughts of the last great French President, Charles De Gaulle.

In politics it is necessary either to betray one's country or the electorate. I prefer to betray the electorate.

No country without an atom bomb could properly consider itself independent.

Patriotism is when love of your own people comes first; nationalism, when hate for people other than your own comes first.

Since a politician never believes what he says, he is quite surprised to be taken at his word.

Treaties are like roses and young girls. They last while they last.

When I am right, I get angry. Churchill gets angry when he is wrong. We are angry at each other much of the time.

You may be sure that the Americans will commit all the stupidities they can think of, plus some that are beyond imagination.


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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