Baltic Dry Index. 763 -09
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
The race is not always to the swift nor the battle to the
strong, but that's the way to bet.
Damon Runyon.
Due to travel, the next update will be on
Monday.
It is now very late in the day for the dying
euro. In an attempt to keep the snake bit euro alive, Portugal, Ireland, Greece
and Spain, have all been forced to commit economic suicide by a crash austerity
driven German paymaster. Italy is next followed by Belgium then France,
although on nutty old socialist policies, France might need a bailout before
Belgium. But now Club Med’s population are revolting.
There is a limit to how much foreign imposed
austerity a population is willing to take, just to bailout French and German
banks. In Greece, Spain and Portugal, we seem to have reached that limit. Italy
seems to have reached it even without trying austerity. There is a growing
realisation that leaving the one size fits all Germanic monetary union, is less
wealth destructive than staying in it. Since World War Two, Club Med always
functioned on weak, fiat, devaluing currencies, with a large black economy
acting as a safety valve preventing high unemployment. Even then there were
severe social strains in France, Italy and Greece in the 1960s and 1970s. On
present Germanic austerity programs, Club Med is heading back to those dark
times. Present austerity regimes seem to just about have reached the end of the
road.
According to media stories, that road runs
out after the US election in early November. The Fed on behalf of the Obama
government has been leaning heavily of the ECB and other European central banks
to do whatever it takes to get Europe’s PIIGS past that election. After that,
the deluge I presume. Stay long physical precious metals, though don’t take any
Swiss made 10 oz gold bars. Club Med’s
wealthier citizens still have roughly another 30 days to take protection. But
better early than late, in case of bank holidays, currency controls, or
unexpected outside crises such as Argentina or China.
If you must play, decide upon three things at the start: the
rules of the game, the stakes, and the quitting time.
Chinese Proverb
It's time to break up the Euro
September 25, 2012
Don't believe the politicians. The common currency can't survive as is. Here's the right way to handle a split.
FORTUNE – Roger Bootle prides himself on being something of a modern-day Nostradamus -- with good reason. In 1999 the British economist predicted a bursting of the dotcom bubble, and in his 2003 book, Money for Nothing, he forecast a worldwide crash in housing that would prove dire for the financial system. A rigorous student of markets, Bootle, 60, is a onetime Oxford don and chief economist for HSBC (HBC) who now runs Capital Economics, a London consulting firm. Operating out of a 19th-century Victorian townhouse near Buckingham Palace, the bald, bespectacled son of a civil servant confidently advises major banks and hedge funds from New York to Beijing. But away from the office he isn't much of a risk-taker. Bootle likes to unwind at England's famous Ascot Racecourse, where he wagers no more than "five or 10 quid just so I have a horse to cheer home."Today Bootle is betting his professional reputation on another bold contrarian call, one with long-term ramifications for the world economy and global stock markets: He strongly believes that at least a partial breakup of the eurozone is inevitable and that massive changes are coming for the euro, the currency now shared by 17 nations accounting for one-eighth of world GDP.
In July, Bootle and his team won the prestigious Wolfson Economics Prize for providing the best answer to the following question: "If member states leave the Economic and Monetary Union, what is the best way for the economic process to be managed?" In a 114-page report, "Leaving the Euro: A Practical Guide," Bootle delivered a blueprint for the steps a nation should take in exiting the common currency. He also went further, summoning a powerful argument for why an exodus of weak countries is the only solution for Europe's deep malaise.
More
Protesters rage against austerity cutbacks and tax hikes in Spain
Spain's government was hit by the country's financial crisis on two fronts on Tuesday as protestors enraged with austerity cutbacks and tax hikes clashed with police near Parliament while the nation's borrowing costs increased in an auction of its debt.
9:49PM BST 25 Sep 2012
More than
1,000 riot police blocked off access to the Parliament building in the heart of
Madrid, forcing most protesters to crowd nearby avenues and shutting down
traffic at the height of the evening rush hour.
Police
used batons to push back some protesters at the front of the march attended by
an estimated 6,000 people as tempers flared, and some demonstrators broke down
barricades and threw rocks and bottles toward authorities.
Television
images showed officers beating protesters in response, and an Associated Press
television producer saw several people dragged away by police and one protester
with his head bloodied. Spain's state TV said at least nine people were
injured, including one officer, and that 15 were detained.
----Angry Madrid marchers who got as close as they could to Parliament, 250 meters (yards) away, yelled "Get out!, Get out! They don't represent us! Fire them!"
"The
only solution is that we should put everyone in Parliament out on the street so
they know what it's like," said Maria Pilar Lopez, a 60-year-old
government secretary.
Lopez and
others called for fresh elections, claiming the government's hard-hitting
austerity measures are proof that the ruling Popular Party misled voters when
it won power last November in a landslide.
More
Be Very Careful, Beloved Spain
Last updated: September 25th, 2012----Two weeks ago I was interviewed by the Catalan newspaper El Punt Avui. I said it would be unthinkable for the Spanish state to stop Catalan secession by military force.
Such action would violate EU Treaties and lead to Spain’s suspension from the European Union. You do not do such things in the early 21st Century.
"No pots ser membre de la UE si utilitzes la força" was the headline.
I may have underestimated the vigour of the Spanish officer corps.
First we have the robust comments of Colonel Francisco Alaman comparing the crisis to 1936 and vowing to crush Catalan nationalists, described as "vultures".
"Independence for Catalonia? Over my dead body. Spain is not Yugoslavia or Belgium. Even if the lion is sleeping, don’t provoke the lion, because he will show the ferocity proven over centuries," he said.
----Yet Col Alaman is in a sense correct. The mood is becoming dangerous.
Is case you think he is an isolated case, former army chief Lt-Gen Pedro Pitarch said his views reflect "deeply-rooted thinking in large parts of the armed forces".
Gen Pitarch said Catalan independence is out of the question, though he also said Madrid had bungled the crisis of the regions disastrously. "Are we looking at a failed state?" he asked.
Now we have an explicit threat from the Asociación de Militares Españoles (AME), an organisation of retired army officers, warning that anybody promoting the break-up of Spain ("fractura de España") will face treason trials in military courts.
This from El Mundo:
The attitude of the Catalan government and members of its parliament is inadmissible.
The Armed Forces are guardians of the Spanish state and its territorial integrity under Article 8 of the
Constitution.
They will carry out this role "scrupulously and strictly" to defend the sovereignty and Carta Magna of the Spanish nation.
AME said any flicker of secession "must be suppressed". Violators must bear in mind that they "will have to respond with all rigour to the grave accusation of high treason under the jurisdiction of military tribunals".
----Events in Europe are now moving fast. Portugal has been in havoc for the last week. Spain is in ever greater havoc. Much of southern Europe has become unpredictable.
Is it the fault of the monetary union and the euro? Yes, of course it is. While large parts of the world are in deep economic crisis – including Britain – the damage is concentrated with lethal intensity in the EMU victim states. Spain’s unemployment rates is already 25pc, and the full austerity has yet to bite.
It is made much worse by the unpleasant discovery that elected governments can do nothing to escape the trap. They have lost control over their own destinies.
----The Draghi bond plan can certainly put off the day of reckoning. It can lower borrowing costs across the board and cushion the slump. But it cannot in itself stop the slow asphyxiation of these societies.
We are moving from the financial phase of this crisis to the full-blown political phase. It really is playing out like the 1930s.
More
http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100020330/be-very-careful-beloved-spain/
Swiss central bank fuels Europe's North-South debt crisis
Switzerland’s central bank has become a conduit for vast flows of capital into German Bunds and other safe-haven bonds, exacerbating the eurozone’s North-South divide.
A report
by Standard & Poor’s claimed the Swiss National Bank (SNB) had bought €80bn
(£64bn) of German, Dutch, French, Finnish and Austrian bonds this year to counter a
flood of money entering the country and hold the franc at 1.20 to the
euro.
The scale
is vast. The SNB has effectively financed almost 90pc of the combined budget
deficits of five core countries over the same period. The bank’s total reserves
have soared to 79pc of GDP.
Some
inflows into Switzerland are funds repatriated by Swiss citizens seeking
shelter from the global storm. But a large part is either capital flight from
Italy, Spain and Greece, or money withdrawn by Swiss banks from the Club Med
bloc as they cut exposure.
The
effect has caused the North-South yield spread to widen further, fuelling the
eurozone’s vicious cycle. “We think this 'euro-recycling’ is exacerbating the
trend of diverging market conditions for sovereign bonds in the eurozone,” said
the agency.
Simon
Derrick from BNY Mellon said the Swiss central bank was more or less forced to
only buy top-notch bonds as it struggles to defend its euro peg. “The golden
rule for reserve managers across the world is that you don’t lose taxpayers’ money.
But the truth is that this has become a conduit for capital flight from South
to North,” he said.
Ford to Cut ‘a Few Hundred’ as European Sales Fall
By Christian Wuestner - Sep 25, 2012 9:02 PM GMT
Ford Motor Co. (F) plans to cut “a few hundred” jobs in Europe because of
falling sales in the region. “Our goal is to adapt the production to the shrinking demand,” Ute Mundolf, a spokeswoman at Ford in Germany, said in a telephone interview.
Ford, the second-biggest U.S. automaker, expects to lose more than $1 billion in Europe this year while wanting to invest to increase its market share. Ford earlier this month announced new models that will be introduced over the next five years, including more sport-utility vehicles.
---- ACEA forecasts that European deliveries will hit a 17-year low in 2012. German car registrations fell 4.7 percent in August, pushing the eight-month sales figure to a 0.6 percent decline.
PSA Peugeot Citroen (UG) agreed last week to sell 75 percent of the Gefco trucking unit to OAO Russian Railways to reduce debt. Fiat SpA (F)’s volume brands are eliminating 20 percent of management jobs in Europe, according to a person familiar with the matter.
Toyota to Nissan Say Deeper China Output Cuts Loom on Protests
By Ma Jie and Yuki Hagiwara -
Sep 26, 2012 7:03 AM GMT
Toyota Motor Corp. (7203), Nissan Motor Co. (7201) and Honda Motor Co.
(7267) signaled Chinese production cuts may deepen this month as anti-Japanese
protests flare in the world’s largest vehicle market. Nissan reduced August output in China, its largest market by volume, 8.9 percent from a year earlier to 86,488 units, the Japanese carmaker said today. Chinese production at Toyota, Asia’s biggest automaker, fell 18 percent to 67,625 vehicles and declined 10 percent at Honda.
---- Toyota’s sales dropped
mainly because demand being unusually high last year as production recovered
from the March 2011 earthquake-triggered tsunami, Yurika Motoyoshi, a
spokeswoman for the automaker, told reporters in Tokyo today. The anti-Japan
protests in China aren’t likely to have affected August sales and the impact
will become apparent in September’s numbers, she said.
---- A similar dispute over sovereignty of islands known as Dokdo in South Korea and Takeshima in Japan has drawn more attention since South Korean President Lee Myung Bak visited the islands on Aug. 10. Japanese auto sales also fell in South Korea last month.
Total sales of Japanese carmakers in South Korea dropped 12 percent and importers attributed the decline to the dispute, according to a statement e-mailed from the Korea Chamber of Commerce and Industry.
Japanese car makers had been increasingly reliant on China as the end of a government subsidy for fuel-efficient cars in Japan stymied domestic demand growth.
Nissan generates about 30 percent of its profit in China, compared with 17 percent at Toyota and 15 percent at Honda, Goldman Sachs Group Inc. estimates.
More
Time for the safety of cash gold and silver. Time
to leave the pro’s trying to steal each other’s dollar.
"As fewer and fewer people have confidence in paper as a store of value, the price of gold will continue to rise." "The history of fiat money is little more than a register of monetary follies and inflations. Our present age merely affords another entry in this dismal register."
Hans F. Sennholz
At the Comex silver depositories Tuesday final figures were: Registered 40.64 Moz,
Eligible 100.26 Moz, Total 140.90 Moz.
Crooks and
Scoundrels Corner
The bent,
the seriously bent, and the totally doubled over.
The more things
change, the more they stay the same, at least in the world of a bankster. Below
the wisdom of America’s top bankster, from about 110 years ago.
"Anybody
has the right to evade taxes if he can get away with it. No citizen has a moral
obligation to assist in maintaining the government.”
J. P.
Morgan.
"The history of paper money is an account of abuse, mismanagement, and financial disaster."
Richard M. Ebeling
The monthly
Coppock Indicators finished August:
DJIA: +76 Up. NASDAQ: +97 Up. SP500: +69 Up. All
three indicators have reversed from down to up.
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