Baltic Dry Index. 1093 -09
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
"The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine, and to process; and that it cannot be created by political fiat or caprice."
Henry Hazlitt
How much worse are events in China from the
official figures? That question takes on a new urgency today following the
remarks yesterday of China’s Prime Minister Wen Jaibao. No one believes the official
figure of China’s GDP expanding at 7.6%, but there’s no easy way of estimating
the real rate. On electricity usage, a rough measure of how a country’s economy
is doing, usage is just about flat year over last year, but China clearly isn’t
stagnant. Yesterday’s article suggests that China’s leadership clearly doesn’t
believe the 7.6% figure either. So just how bad is the Chinese economic
slowdown? My guess is that it’s bad enough to kill off the euro as we know it,
and relatively soon.
China's Wen vows job creation as growth slows – paper
BEIJING |(Reuters) - China's job market could turn for the worse and the government needs to step up efforts to create more jobs, Premier Wen Jiabao said in remarks published on Wednesday, underscoring official concerns about an economic slowdown.
"Currently and in the future, China's employment situation will become more complex and more severe," the official China Securities Journal quoted Wen as saying.
"The task of promoting full employment will be very heavy and we must make greater efforts to achieve it," he added.
Compared
with 2008/09 when a sudden collapse of exports sent some 20 million Chinese
migrant workers homebound, China's job market has remained relatively tight so
far this year, partly reflecting the country's demographic shifts.
But job
cuts could be on the rise as small- and mid-sized exporters are increasingly
struggling with slackening orders, rapid wage increases and higher raw material
costs.
Many
college graduates are struggling to find jobs.
Maintaining
social stability is crucial for Beijing as the country heads into a
once-in-a-decade leadership transition.
Wen
called for all levels of government to give top priority to job creation when
they formulate economic plans and more jobs should be created during the
process of economic restructuring and urbanisation.
"We
need to maintain steady and relatively fast economic growth to help create
jobs," Wen said.
More
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in Euroland, more of the same. Drift, dither, and yet more suicidal austerity generating
death spirals. After the Olympics the deluge?
"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.
July 17, 2012, 1:37 p.m. ET
Greece Seeks Bridge Loan
ATHENS—Greece
is seeking extra money from its international creditors to cover a coming bond
redemption in late August, as a deeper-than-expected recession drives the
country's fiscal-consolidation program off course for 2012.
Even as
Athens hopes to avoid introducing additional cutbacks for this year, which
would further weigh on economic activity, the government is putting together a
plan to save €11.5 billion ($14 billion) over the next two years in line with
demands from international creditors.
The extra
financing for Athens may come in the form of a bridge loan to cover a €3.1
billion bond entirely held by the European Central Bank, which matures Aug. 20,
as the country faces the risk of running out of money by mid-August. Euro-zone
officials have hinted that Greece would be prevented from defaulting on this
bond payment by receiving interim financing, but they haven't disclosed how the
extra cash may be channeled to Athens.
"We
are making an effort to secure financing until September and the [two-year]
extension of the bailout agreement," a senior Greek government official.
An ECB
spokeswoman declined to comment.
A second
Greek official and an official with one of Greece's creditors also said the
country would seek a bridge loan.
Earlier this month, Greek Finance Minister Yannis
Stournaras said he had been given assurances at a meeting of euro-zone and
European Union finance ministers that Greece would get "some kind" of
interim funding over the summer to cover the maturing bond.
As the economy stumbles through its
fifth year of recession, Greek government revenue has suffered from a drop in
personal income-tax payments due to wage cuts and record-high unemployment,
while soaring business bankruptcies have hurt collection of value-added and
other taxes. At the same time, contributions to Greece's deficit-ridden
pay-as-you-go pension system have slumped as the number of jobless workers
grows.
More
July 17, 2012, 10:20 p.m. ET
ECB Signals Support for Easing Irish Debt Terms
LONDON—The
European Central Bank signaled it is willing to support Ireland's request for
easier terms on its government-funded bank bailout, a sharp shift in the
central bank's long-standing position.
The move
represents another step in the direction of greater leniency toward debtors in
the euro crisis, especially those who have honored their commitments. It is
also further evidence of a potentially profound change of heart within the ECB
over bank debt, and whether nations should be forced to honor it.
In a brief statement after a meeting between ECB
President Mario Draghi and Irish Finance Minister Michael Noonan on Tuesday,
the ECB said Mr. Draghi "noted that the question of burden-sharing with
senior bond holders is evolving at the European level, through ongoing
discussions on an EU Resolution Directive."
The ECB
said Mr. Draghi "expects that these developments will be reflected in the
Irish adjustment program," acknowledging Ireland's success in implementing
the painful austerity prescribed for it.
"It's
good news for Irish hopes to secure a significant retrospective deal on its
bank debts," said Brian Devine, chief economist at NCB Stockbrokers.
With
Greece repeatedly missing the targets laid out in its rescue deal, and with
more and more of the euro area being forced to seek external assistance,
Ireland has become a rare success story that European authorities, including
the ECB, have been ever keener to talk up.
More
July 17,
2012, 10:34 p.m. ET
Who Needs the Euro When You Can Pay With Deutsche Marks?
Germans Hang On to Old Currency; Admiring Brothers Grimm, Clara Schumann
GAIBERG,
Germany—Shopping for pain reliever here on a recent sunny morning, Ulrike
Berger giddily counted her coins and approached the pharmacy counter. She had
just enough to make the purchase: 31.09 deutsche marks.
"They
just feel nice to hold again," the 55-year-old preschool teacher marveled,
cupping the grubby coins fished from the crevices of her castaway living room
sofa. "And they're still worth something."
Behind
the counter of Rolf-Dieter Schaetzle's pharmacy in this southern German village
lay a tray full of deutsche mark notes and coins—a month's worth of sales.
Germans
have yet to give up on the euro. But as Europe's debt crisis rages on, many are
indulging their nostalgia for the abandoned mark by shopping with it again—and
retailers are happily going along.
As
defunct currencies go, "die gute alte D-mark," or "the good old
D-mark," as it is still affectionately called, is far from dead. Germans
officially traded in the currency for euro bills and coins on Jan. 1, 2002, and
the mark immediately ceased to be legal tender. But 13.2 billion marks—worth
€6.75 billion ($8.3 billion)—remain tucked in mattresses, old prayer books,
coat pockets or otherwise in circulation, according to the Bundesbank, more lucre
than the euro bloc's 16 other ex-currencies combined.
Unlike neighbors such as Italy and France, which let their
liras and francs officially expire over the past year, Germany never set a
deadline for exchanging its old money for euros. So, if they decide to accept
marks, retailers and other businesses can still exchange them at German central
bank branches.
More
Banks told to test for countries leaving euro
By Huw Jones LONDON
|
(Reuters) - Britain's banks have been told to
test how they would cope if several euro zone countries exited the
single currency, the UK's Financial Services Authority watchdog said on
Tuesday.FSA Chairman Adair Turner said Britain's banks needed to think about problems arising from their assets and liabilities being redenominated into another currency, even though the likelihood of this happening was still small.
"We've certainly encouraged them to run those scenarios for Greece, Spain, Italy, Portugal and Ireland," Turner told parliament's Treasury Select Committee.
"I think we consider the chances very low, very very low for at least some of those countries on that list, but I think it is sensible to encourage people to run extreme risk scenarios," Turner added.
The committee was questioning Turner and the Bank officials who are members of the BoE's Financial Policy Committee which looks at risk affecting financial stability.
The FPC's meeting in June concluded that the euro zone debt crisis was the biggest challenge facing the UK economy, which is back in recession
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long physical precious metals, and sufficient local cash to ride out a Friday
night bank holiday, capital controls, a euro split, and the biggest European
crisis since WW2. Events on three continents continue spiralling away from
central bank control.
"The most puzzling development in politics during the last decade is the apparent determination of Western European leaders to re-create the Soviet Union in Western Europe."
Mikhail Gorbachev
At the Comex silver depositories Tuesday final figures were: Registered 40.40
Moz, Eligible 103.95 Moz, Total 143.35 Moz.
Crooks and
Scoundrels Corner
The bent,
the seriously bent, and the totally doubled over.
Today, an envious
German view of the London Olympics. A
coming Olympic sized fiasco, they hope. Judging by the lack of planning and
competence so far, they might be right. No one in Her Majesty’s government
seems to know who’s in charge. The taxis are banned from using the Olympic “Zil
lanes,” resulting in many London cabbies going on vacation during the games.
Every pickpocket on three continents has headed into over priced London.
Happily for the Germans, the anti-capitalist, anti-American, anti-British, BBC
is on the case, always happy to trash the establishment in the name of loony
left European socialism. Besides, no on the planet does fiasco as well as
Britain. Her Majesty’s “G” has elevated fiasco into an art form for at least
400 years. It’s how we accidentally got an Empire and accidentally lost it
after all.
This ailing continent needs newer and better politicians. But where could we find them? There is no sign of a European Obama or anything remotely like him.
Der Spiegel
London 2012 A Preview of an Olympic-Sized Fiasco
By Marco Evers in London 07/17/2012
It's
never easy to be a Londoner, not even on a perfectly normal workday in an
English summer.
Everyone,
whether rich or poor, experiences the same hardships of big-city life in
London. For Londoners, the day begins with aircraft noise -- which some never
get used to -- partly because double- or triple-paned windows are in short
supply, even in Europe's most expensive city.
In
London, cars, cabs and buses are inefficient forms of transportation for
medium- and long-distant trips. As a result, day after day, millions squeeze
into the clattering London Underground, the oldest, probably hottest and often
fullest subway system in the world. Then, after prolonged inhalation of the
melded odors of perspiration and perfume, the crowds pour into downtown
London's too-narrow sidewalks before disappearing into their offices. There,
they can finally do what some still do very well in this massive, sometimes
magnificent but often excessively wound-up city: make money.
The same
drama unfolds every evening, only in reverse. About half of London's workforce
commutes more than 45 minutes each way -- if all goes well, that is. Is it any
surprise that so many people there have a few drinks at a pub before heading
home, resorting to alcohol to cast the place where they live - and their lives
-- in a somewhat rosier light?
The Economist
claims that London "had the best infrastructure in the world" 100
years ago. But, today, the city is already being pushed to its limits on a
daily basis. And now this major city is about to host the world's most
challenging major spectacle, the Olympics, for the third time, after hosting it
in 1908 and 1948.
This time around, it's already clear that the London Olympics, which will run from July 27 to August 12, will be an arduous obstacle course for everyone.
Starting this week, the world's biggest financial center will be gripped by a special condition usually only seen in wartime. Its 7.8 million inhabitants are about to be joined by an average of 1 million additional visitors per day. The already overloaded public-transportation system will be burdened with an additional 3 million fares per day. A total of 175 kilometers (109 miles) of the city's streets will be closed off to normal traffic. Almost twice as many soldiers as Britain has in Afghanistan, a helicopter carrier and special forces units armed to the teeth will make the city look like it's under siege.
Transport for London (TfL), the city's bus and rail authority, is nervous -- so nervous, in fact, that it has issued an earnest appeal to Londoners to avoid using the Underground if at all possible during the games.
TfL is urging residents to stay at home, walk, bike, rollerblade or simply go on vacation during the Summer Games. It is also begging banks to set up home workstations for their traders, hoping to dissuade them from using their usual mode of transportation, the Tube. TfL knows that the success of the Olympics will be decided in the Tube's tunnels and stations, some built in the Victorian era, especially those on the Northern, Central and Jubilee lines.
----Even in good times, Western Europe's biggest and most colorful city is a place that demands a high tolerance for stress of its residents. Everything there is almost always simultaneously expensive and full, whether it's buses, restaurants, concerts, hotels or living spaces. As a result, London assumes only a modest spot, 38th place out of 221 cities worldwide, on the Mercer 2011 Quality of Living Survey, far behind Vienna (1st), Munich (4th), Toronto (15th), Hamburg (16th), Berlin (17th) and Singapore (25th).
The Olympics are not about to make life any easier for ordinary Londoners. "To inflict this on London was not kind," says well-known columnist Simon Jenkins.
London's ailing major airport, Heathrow, is already at 99 percent of its capacity during normal operations. But now it will have to handle hundreds of thousands of additional passengers arriving and departing within a short period of time.
A newspaper is a device for making the ignorant more ignorant and the crazy crazier.
H. L. Mencken.
The monthly
Coppock Indicators finished June:
DJIA: +63 Down. NASDAQ: +71 Down. SP500: +41 Down. All
three indicators remain down but downward momentum seems stalled.
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