Baltic Dry Index. 661 -01
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
The good times too of high price almost always engender much
fraud. All people are most credulous when they are most happy; and when much
money has just been made, when some people are really making it, when most
people think they are making it, there is a happy opportunity for ingenious
mendacity. Almost everything will be believed for a little while, and long
before discovery the worst and most adroit deceivers are geographically or
legally beyond the reach of punishment.
Walter Bagehot. Lombard Street 1873.
We’re saved, saved! Thanks to the German wise
men of the Constitutional Court who came down from Olympus to deliver their
verdict yesterday, Euroland’s serfs were
given a few more months to continue using the existing euro. In their ruling
they declared the European Stability Mechanism legal, they “limited” the German
contribution to a maximum of 190 billion euro unless both houses of the German
parliament agree to an increase, they declared that the ESM isn’t a bank and
therefore cannot have a banking licence, and in passing removed the trigger
from Super Mario’s bazooka, declaring that Super Mario’s plan for buying up
Club Med’s debt in the secondary market is an illegal back door financing
mechanism specifically banned by ECB treaty. If this is a victory I’d hate to
see an ESM defeat.
Assuming that the 190 billion limit actually
holds, letting euro paymaster Germany off the hook, the other 17 nations using
the Euro will have to make up any difference. But we already know that Finland
won’t. Holland probably won’t. Greece, Cyprus, Ireland and Portugal can’t.
Spain and Italy probably can’t. Step up France, now busy trying to recreate Mitterrand’s
socialist paradise of the 1960s and 1970s. France in reality will get stuck
with the bill that the German’s won’t pay. All of this of course does nothing to diminish
Germany’s Target 2 problem now about 700 billion Euro, which is the amount
mostly Club Med banks have deposited in German banks and likely to evaporate as
club Med scrambles out of the euro.
"When paper money systems begin to crack at the seams, the run to gold could be explosive."
Harry Browne
German court backs ESM rescue fund in double-edged ruling
Germany's highest court has cleared the way for ratification of the eurozone bail-out fund but capped German contributions and fired a cannon shot across the bows of the European Central Bank.
Markets
breathed a sigh of relief across the world after the Constitutional Court in
Karlsruhe ruled that the European Stability Mechanism (ESM) and the EU’s Fiscal
Compact are compatible with the country’s Basic Law. The euro surged to a
four-month high of €1.29 to the dollar.
“This is
a good day for Germany and a good day for Europe,” said Chancellor Angela
Merkel. “Germany is fulfilling its full responsibilities as the biggest economy
and a trusted partner in Europe.”
----Yet it was a double-edged ruling, with plenty of cheer for the 37,000 citizens who had filed complaints in an outpouring of civic protest, including the neo-Marxist Left Party, the More Democracy movement and a core of eurosceptic professors.
In
keeping with rulings on the Lisbon Treaty and earlier rescues, the eight judges
issued a “Yes, but” verdict, imposing constraints that greatly reduce Berlin’s
room for manoeuvre in the future.
----The court capped Germany’s ESM share at €190bn and ordered the government to “express clearly that it cannot be bound by the Treaty” if the limit is breached. This stops the ESM increasing Germany’s share if Spain and Italy seek top-up funding.
“The cap could prove a real obstacle,” said Raoul Ruparel from Open Europe.
Volker Beck from the German Greens said the court had crippled the ESM, while Leipzig law professor Christophe Degenhardt said the eurosceptics had pulled off a coup. “Their main objective has been achieved,” he told Der Spiegel.
The ruling kills off hopes of a banking licence for the fund so that it can boost its firepower by tapping the ECB, calling this “incompatible with the prohibition of monetary financing”. Italian premier Mario Monti, the International Monetary Fund and Washington all argue that an ESM banking licence is crucial.
September 12, 2012, 9:28 p.m. ET
Dutch Vote Shows Pro-Europe Trend
THE
HAGUE—Dutch voters gave a ringing endorsement to centrist parties, as early
results suggested the likely formation of a broadly pro-European coalition
government.
The results dispel earlier fears that radical
euro-skeptic parties could gain sway in a relatively strong economy at the core
of the euro zone and could accelerate the usually prolonged process of forming
a governing coalition.
In an
unexpectedly strong showing, the Liberal Party of Prime Minister Mark Rutte is
set to win 41 seats in the 150-seat parliament, with 92% of the municipalities
reporting, according to the Associated Press. The center-left Labor Party of
Diederik Samsom is forecast to take 39 seats, the AP said.
Early on
Thursday, Mr. Rutte claimed victory and Mr. Samsom conceded defeat.
While Europe staggers off to the left,
confident that the ECB has been saved by Germany’s constitutional court ruling,
we are following events in South Africa. From London South Africa seems to be
heading towards anarchy, at least as far as the mining industry is concerned. There is a very real potential for this to
spiral into a violent national strike, with big implications for the supply of
gold and platinum. Whipped up by populist politicians, anarchy could easily turn
into something worse.
Malema calls for national mining strike
11th September 2012
CARLETONVILLE
– Expelled ANC Youth League president Julius Malema called for a
national strike at all mines on Tuesday until the National Union of Mineworkers
(NUM) leadership steps down.
"There
must be a national strike at all the mines until Frans Baleni and the
NUM leadership step down with immediate effect," Malema told a packed
stadium at the Gold Fields KDC West gold mine near
Carletonville, where 15 000
workers are on strike.
"The
problem is not NUM. The problem is the leadership who take money from mlungu
(whites)."
Malema
said the R12 500 salary workers wanted "is a reality".
Baleni,
NUM's general secretary, read about their demands in newspapers.
"Comrades,
you don't have leaders. You are leaderless. You are not alone. We are
encouraged by what you are doing," Malema said.
Making
mines ungovernable did not mean violence, "it means downing tools".
Malema
said he and his companions had travelled to the mine to meet "the real
revolutionaries". "This is a serious revolution. Don't give up."
The mine
obtained an interdict on Monday for workers to return to their posts after they
suddenly went on an unprotected strike on Sunday.
Malema
said people had been stealing gold from the workers.
"Now
you want a piece of gold. You want R12 500."
He said
workers should strike for five days a month "until they listen".
More
Amplats shuts Rustenburg operations, Gold Fields strike continues
12th September 2012
JOHANNESBURG
(miningweekly.com) – Platinum major Anglo American Platinum (Amplats) shares
fell 4% on Wednesday after shutting down its Rustenburg operations as labour
unrest enveloped the region.
The
world-number-one platinum producer said it had suspended operations with
immediate effect for an undetermined period to protect its employees from
outside intimidation in an increasingly volatile situation.
CEO Chris
Griffith stressed that the employees were not on strike, but were being
threatened with violence.
Chairperson
Cynthia Carroll added that the employees were facing a considerable amount
of intimidation and the company was working with the authorities, government
and the recognised labour unions to resolve the issues.
More
"Gold would have value if for no other reason than that it enables a citizen to fashion his financial escape from the state."
William F. Rickenbacker
At the Comex silver depositories Wednesday final figures were: Registered 39.44
Moz, Eligible 101.75 Moz, Total 141.19 Moz.
Crooks and
Scoundrels Corner
The bent,
the seriously bent, and the totally doubled over.
Today China. As
rumours swirl around what happened to Xi Jinping, China’s assumed next
President, take your pick from heart attack, stroke, car crash, fall from
favour, China’s shadow banking system has gone into increasing collapse. Events
in the rest of the world are rapidly making Europe’s Club Med rescue moot.
“There are some bored
foreigners, with full stomachs, who have nothing better to do than point
fingers at us [China]. First, China doesn’t export revolution; second, China
doesn’t export hunger and poverty; third, China doesn’t come and cause you headaches,
what more is there to be said?”
First Secretary of Secretariat of the Communist
Party, Xi Jinping
China's next leader Xi Jinping 'suffered heart attack'
China's next leader has not been seen in public for 11 days because he suffered a heart attack, a source has told The Daily Telegraph.
Xi
Jinping is expected to be unveiled as the leader of the Communist party in the
coming weeks, but his disappearance from the public eye has sparked increasing
speculation.
"Although
people have said he suffered a back injury, he actually had a heart attack, a
myocardial infarction," said Li Weidong, a political commentator in
Beijing and the former editor of China Reform.
The
magazine is influential among Chinese policymakers and under the aegis of
the National Development and Reform Commission.
Other
unnamed sources have also suggested that Mr Xi, 59, suffered a heart attack,
while Willy Lam, the former editor of the South China Morning Post, believes
China's president-in-waiting had a stroke and is currently unable to show his
face in public.
Mr Xi has
not been spotted since September 1 and cancelled a series of meetings with foreign
leaders, including one with Hillary Clinton, the US secretary of State, on
September 4.
The
Communist party has remained tight-lipped about his situation. For the third
day in a row, the foreign ministry batted away repeated questions at its daily
press conference. A spokesman merely said: "I have no information."
For the
second day in a row, almost all of China's other top leaders were featured on
the country's evening news bulletins, but Mr Xi was absent.
Mr Li
said that Mr Xi's illness was not severe enough to disrupt the 18th Party
Congress, at which China will unveil its first set of new leaders in ten years.
The date of the Congress has not been announced, but most observers believe it
will occur in mid-October.
"I
heard the agenda for the Congress will not be changed, which means that Mr Xi
will have recovered beforehand," he said. Other sources have also
indicated that, so far, plans for the Congress have not been affected.
However,
since the 1990s, the Communist party has typically given at least a month's
notice before a Congress. If there is no announcement this week, that could
indicate that this year's event has been postponed.
One of
the five main hotels in Beijing booked out by delegates also reportedly
suggested yesterday that there may be a delay, but the other four said they had
been block-booked from the end of September to the beginning of November and
that no date had yet been set.
Shadow Bankers Vanishing Leave China Victims Seeing Scams
By Bloomberg News - Sep 13, 2012 1:58 AM GMT
To live out his retirement years, He Zhongkui was counting on steady income
from an investment that promised interest payments five times higher than what
he could earn in a Chinese bank. Now He, a 62-year-old former municipal official in Wenzhou who rides a rusty bicycle, is cutting back on food and gasoline, having found himself one of a growing number of victims of China’s nebulous world of shadow banking. A “friend,” who he said had been paying him 2,400 yuan ($379) a month after He gave him one-third of his 600,000-yuan life savings to invest in real estate, suddenly disappeared. So did the payments and principal.
The shadow bankers are now disappearing, committing suicide or reneging on agreements, leaving thousands of victims in their wake. In the first half of the year, more than 58,000 lawsuits involving disputes over 28.4 billion yuan in private lending were filed in Zhejiang province, where Wenzhou is located, up 27 percent from the same period in 2011 and the most in five years, according to the provincial supreme court. One-fifth of the cases were in Wenzhou, where authorities have set up a special court to handle the surge.
Private-lending victims nationwide filed more than 600,000 lawsuits valued at 110 billion yuan in 2011, an increase of 38 percent from the previous year. In the first half of 2012, the number of filings rose 25 percent to 376,000, according to People’s Court, a newspaper run by China’s Supreme Court.
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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