Baltic Dry Index. 1063 +50
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
"Europe exemplifies a situation unfavourable
to a common currency. It is composed of separate nations, speaking different
languages, with different customs, and having citizens feeling far greater
loyalty and attachment to their own country than to a common market or to the
idea of Europe".
Professor Milton Friedman, The Times
19 November 1997.
With Americans on holiday today celebrating their
overthrow of the tyrant King George III, and the rule of Lord North, British parliamentarians
today get to take their revenge by grilling, roasting, toasting, and burning at
the stake, the hapless American, former CEO of Barclays Bank, over how he came
to think it was just fine to trash Liebor, and with it turn the City of London
into a den of thieves. He is widely expected to say “the King made me do it, or
at least his deputy Mr. Tucker did.” All good sport for the parliamentarians, I
suppose, but it will do little to recover London’s reputation. Casino
banksterism and central bank cronyism, long ago replaced capitalism, the
logical outcome to the Great Nixonian Error of August 15 1971, when the USA
defaulted to the rest of the world, unilaterally breaking the dollars link to
gold for domestic political reasons, rather than devalue the dollar against
gold.
Once on fiat currency, everything is politics. Why
bailout banksters, and force austerity on nurses and policemen? If the Bank of
England with government encouragement, can create British Pounds out of nothing
for the Royal bank of Scotland to save it from its foolishness, why can’t it do
it for the poor and those on disability allowances? The argument varies
slightly from country to country, but lies at the heart of our present
predicament. Politicians in Greece abbeted by Goldman Sachs, cheated their way
into the euro. Why not, America cheated in 1971. Goldman abetted Greece for
fees and bonuses, but why not, it’s only fiat money after all, and there’s
plenty more where that comes from. Toytown money, began chasing assets and
financialised the west’s economies. The banksters and vampire squids effectively
took over the central banks and the politicians.
Now the euro is in meltdown, shortly to be followed
by the dollar, yen and yuan, and last week’s summit to save the euro, now turns
out to be mostly smoke and mirrors.
Below, today’s harsh reality away from the
comedy about to play out in Her Majesty’s parliamentary kangaroo committee.
Euroland is deeply split, making and breaking rules up as they stumble along.
China seems to have fallen into stagnation. America is building up its military
for a summer clash with Iran. For extra excitement, America the largest grain
exporter, id deep in the throes of a drought weather market, with the corn (maize) crop in its key pollination phase. If
the drought doesn’t end and if temperatures don’t moderate across the grain
belt, we are headed for a burst of food price inflation later in the year.
Finland Firm on Collateral as Spain Aid Terms Discussed
By Josiane Kremer - Jul 3, 2012 3:21 PM GMT
Finland underlined its determination to get collateral in exchange for loans
to Spain’s banks as the Nordic country targets similar terms to those won last
year on its contribution to Greece’s second bailout. “We have the requirements of collateral on the loans that are from the temporary vehicle,” Jukka Pekkarinen, director general at the Finnish Finance Ministry in Helsinki, said in an interview in Oslo yesterday. “The details are still open, but the principle standpoint is the same” as in the case of Greece, he said.
Euro-area nations agreed in Brussels last week to ease the terms of Spain’s bank bailout after the country’s borrowing costs soared above 7 percent. Finland is fighting its corner to reassure taxpayers they’re no worse off after euro-zone leaders decided Spain’s emergency loan of as much as 100 billion euros ($126 billion) won’t give preferred status to contributor countries. Finland has demanded collateral for any loans that don’t give taxpayers seniority.
----Finland, one of only four AAA rated
nations left in the euro area, threatened to hamper efforts to agree on a
second bailout for Greece by insisting on collateral last year. The Nordic
country was the only nation to negotiate security in exchange for loans from
the temporary fund, or the European Financial Stability Facility, because the
vehicle doesn’t give its creditors preferred status.
The Nordic country yesterday questioned the ability of the permanent rescue fund, the ESM, to purchase bonds through the secondary market. Finland, which opposes such purchases, argues the process would require unanimity inside the euro area to be possible.
There exists no unanimous agreement on the bond purchases because Finland and the Netherlands reject the model, the Finnish government said in a report dated June 29 and presented yesterday by Prime Minister Jyrki Katainen to the parliament’s Grand Committee in Helsinki. The government reiterated its opposition today, citing the rescue funds’ limited resources and the shown “ineffectiveness” of bond purchases.
----Spain’s Economy Minister Luis de Guindos said today that the two countries won’t be able to block Spain from receiving aid via the euro region’s permanent rescue fund.
“There is a fundamental point in the ESM and that is that decisions are taken with a qualified majority, not unanimously,” de Guindos told journalists in Madrid. “I don’t want to go into calculations but Holland and Finland won’t have the capacity to block an agreement.”
More
The “European Monster State”
July 4,
2012, 12:31 a.m. EDT
Wolf Richter www.testosteronepit.comRather than solving the Eurozone debt crisis once and for all, the EU summit last week gummed up the bailout process with controversy in the very country that everyone is counting on to save the Eurozone, Germany—but also elsewhere—and nothing has been resolved.
There is Greece, inexorably tottering towards its exit from the Eurozone. Once again, the despised Troika inspectors have arrived in Athens. Based on their findings, they’ll decide if Greece should get the next tranche of the bailout billions—default and/or conversion to the drachma being the alternatives.
Horst Reichenbach, the German head of the Troika inspectors, took one look at the numbers, and while he didn’t end up in the hospital nauseated and with knots in his gut—the fate that had befallen Finance Minister Vassilis Rapanos a couple of days after being appointed—he did see that Greeks have stopped paying their bills.
Which is logical. They’re hanging on to their euros under mattresses or in foreign accounts, assuming that they will soon be able to pay their bills with devalued drachmas. The deal of a lifetime. At least €6.5 billion is past due, owed to Greek industry, Reichenbach said. Everyone is doing it. Hospitals stopped paying for medication, individuals stopped paying for electricity, the government stopped paying for construction work.
“The patience of the public has been exhausted,” said Robert Fico, Prime Minister of Eurozone member Slovakia. His country would no longer be willing to help if recipients didn’t implement sufficient reforms. And the number of bailout candidates continues to grow: in addition to the five that have already requested aid—Greece, Portugal, Ireland, Spain, and Cyprus—Slovenia is now discussing it. And Italy is at the brink. Seven. Out of seventeen.
More
China services PMI points to stagnation
HONG KONG
(MarketWatch) – China’s services industry activity in June cooled to levels
bordering on stagnation, as a manufacturing slowdown helped put the brakes on
the wider economy, according to a business survey released Wednesday.
The China
Services Purchasing Managers’ Index fell to a three-month low of 50.6 in June
on a 100-point scale, down from 51.9 in May, according to a statement by HSBC.
A reading above 50 indicates expansion, while a sub-50 reading indicates
contraction.
Among
highlights of the report, new orders for the services industry fell from levels
in May, with the index signaling new work at a 10-month low.
HSBC chief China economist Hongbin Qu, noted that
conditions pointed to falling new business orders and a weakening job market.
He described the unfolding situation as “the last thing Beijing policy makers
want to see,” in a statement accompanying the survey results.
More
July 3, 2012, 3:11 p.m. EDT
Oil ends at highest since late May on Iran fears
After losses of 1% Monday, traders back at worrying about Iran
SAN FRANCISCO (MarketWatch) — Crude-oil futures on Tuesday
ended at their highest in five weeks on a flare-up of geopolitical concerns
about Iran.
Crude for August delivery CLQ2 gained $3.91, or 4.7%, to
$87.66 a barrel on the New York Mercantile Exchange, gathering steam as the
session drew to a close.
After
Monday’s losses of 1.4%, traders were back to worrying about a potential
disruption in oil markets as Iran chafed against Western sanctions.
Oil also got support from expectations of more central-bank action to
propel the global economy and modestly higher U.S. equities, which closed early
on holiday’s eve shortened session.
Iran‘s recent actions “gas got some fear back in the market,“ said David
Bouckhout with TD Securities in the Calgary area.
An army general in Iran was reported as saying the country wouldn’t “sit
idly” by as the U.S. and Europe built a missile-defense shield program that
could target Iran.
Iranian authorities staged missile drills late Monday to test weapons
reportedly capable of hitting targets as far away as Israel and announced
possible legislation aimed at closing the Strait of Hormuz.
The drills and news of the legislation came as U.S. and European
embargoes on Iranian oil recently took effect.
Iranian rhetoric was “likely just bluster, but it is the kind of noise
that has sparked price rallies in the past,” said Citi Futures Perspective
analyst Tim Evans in a note to clients.
----There’s
also some expectations recently weak macroeconomic reports will spur some
central banks to ease in the near term, Bouckhout said.
The
European Central Bank is expected to lower rates on Thursday, and China is
expected to relax the minimum reserve requirement ratio for banks again,
analysts at Commerzbank said in a note to clients Tuesday.
More
France Poised to Beat U.S. in Wheat Exports After Drought
By Rudy Ruitenberg and
Whitney McFerron - Jul 3, 2012 5:02 PM GMT
U.S.
farmers, the biggest wheat shippers, are poised to lose their advantage over
French growers in export markets after the worst Midwest drought in more than a
decade wilted grain crops and drove prices to a 10-month high.
Wheat traded in Chicago jumped 18 percent in the past two weeks as Paris grain rose 12 percent. French supply for delivery after the harvest traded at a premium of $2.44 a metric ton to the U.S. in Paris today, from a record $25.27 on May 2. That may flip to a $5 discount in the next several weeks, said Alexandre Marie, a Bourges, France-based analyst at Offre & Demande Agricole, which advises 5,000 farmers on crop sales.
Just four months ago, European crops were damaged by winter freezes and France, the world’s second-biggest exporter, shipped about 32 percent less grain outside the 27-nation European Union in the first 11 months of the crop year that ended last week. French output forecasts are now rising after ample rain as the U.S. government cut its ratings for domestic grain crops.
“U.S. wheat is going to be priced out of export bids,” said Nick Higgins, a commodities analyst at Rabobank International in London. “The EU is going to have to pick up more of the export burden.”
----September futures rose 13 percent to $7.9025 a bushel this year on the Chicago Board of Trade, as dry weather also damaged developing corn, threatening to cut U.S. feed grain supplies.
-----About 72 percent of France’s wheat crop was rated in good or excellent condition last month, up from 62 percent in April and 29 percent a year earlier, according to FranceAgriMer, the national crop office. Rainfall in the country’s main growing regions has been in line with the long-term average since March, U.S. Department of Agriculture satellite data show.
More
http://www.bloomberg.com/news/2012-07-02/france-poised-to-beat-u-s-in-wheat-exports-after-drought.html
Stay long physical precious metals. Our fiat currencies have never been under greater threat.
"The finance of the country is ultimately
associated with the liberties of the country. It is a powerful leverage by
which the English liberty has been gradually acquired. If the House of Commons
by any possibility loses the power of control of the grants of public money,
depend upon it, your very liberty will be worth very little in
comparison."
William Ewart Gladstone, British Liberal Prime Minister. Speech in the House of Commons, 1891.
At the Comex silver depositories Tuesday final figures were: Registered 37.10
Moz, Eligible 110.00 Moz, Total 147.00 Moz.
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