Baltic Dry Index. 777 +11
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
'Abandon
hope all ye who enter here'.
Through
me you pass into the city of woe:
Through me you pass into eternal pain:
Through me among the people lost for aye.
Through me you pass into eternal pain:
Through me among the people lost for aye.
Inscription at the European
Commission, Brussels. With apologies…
Yesterday Europe’s outlook went from black to
blacker, and French old socialist Hollande hasn’t hardly even got started on
wrecking France. Stay long physical precious metals. Europe now resembles one
of those Police Action car chases where the police are pursuing a car with four
burst tyres, running on its rims. I think we all know how this tragedy ends. In
Europe’s case the vehicle isn’t being driven by drunk teenagers, unaware of the
danger they’re in, but by elderly “Eurocrats, central banksters, and assorted
politicians of all stripes,” all too well aware of what they are doing. “Saving
the euro at all costs,” reminds me of America’s response to the Tet Offensive
in Ben Tre City in January 1968. "It became necessary to destroy the town to save
it.” Ireland, Greece and Portugal have been crushed.
Spain and Italy are next, followed by the grand finale, France. Time to swap
paper for tangible assets.
Below, Euroland, read on and weep.
"….the
Viet Cong has been defeated. He can't get food and he can't recruit. He has
been forced to change his strategy from trying to control the people on the
coast to trying to survive in the mountains."
General
Bruce Palmer, Jr. November 1967.
October
1, 2012, 3:51 p.m. ET
Europe's Economic Outlook Worsens
Euro-Zone Manufacturing Activity Shrinks and Unemployment Rises; Greece's Lenders See Flaws in Nation's Austerity Plan
LONDON—Euro-zone
manufacturing activity shrank for the 14th straight month in September and
unemployment hit a fresh record in August, suggesting prospects are worsening
for a quick return to growth in the currency bloc.
The reports indicate the euro bloc's economic
contraction deepened last quarter, making it even harder for countries such as
Spain and Italy to reduce government-debt levels amid mounting strains on
social spending.
It could take many years for southern Europe to
shake off the crippling economic effects of the debt crisis. Youth unemployment
has climbed to well above 50% in Spain and Greece, raising fears of a lost
generation of workers that will be unable to establish themselves in the
workforce.
Monday's data suggest that the European Central
Bank's earlier efforts to bolster the euro-zone economy, including injecting
more than €1 trillion ($1.3 trillion) of cheap money into the banking system
and reducing the main central bank rate to a record low, aren't reversing the
downturn.
Also hurting
the EU's outlook Monday, Greece's international lenders cast doubt on parts of
Athens's plans to save billions of euros through new cutbacks and tax measures,
potentially throwing a wrench into the government's efforts to reach a quick
deal to unlock new aid for the country.
The troika of Greece's international inspectors—the
European Commission, the International Monetary Fund and the ECB—rejected as
much as €2 billion ($2.57 billion) of austerity measures, a senior finance
ministry official said.
more
http://online.wsj.com/article/SB10000872396390444592404578029911112719112.html?mod=WSJEurope_hpp_LEFTTopStories
Spanish Banks Need More Capital Than Tests Find, Moody’s Says
By Dakin Campbell - Oct 1, 2012 11:46 PM GMT
Spain’s banks face a capital shortfall that could climb to 105 billion euros
($135 billion), almost double the estimate the government provided last week,
according to Moody’s Investors Service. The nation’s lenders may need infusions of 70 billion euros to 105 billion euros to absorb losses and still keep capital ratios above thresholds outlined in legislation last year, Moody’s analysts wrote yesterday in a report. That compares with the 53.7 billion euro shortfall found last week after officials commissioned a stress test designed to lift doubts about the financial industry’s ability to withstand losses.
“The recapitalization amounts published by Spain are below what we estimate are needed for Spanish banks to maintain stability in our adverse and highly adverse scenarios,” the analysts, Maria Jose Mori and Alberto Postigo, said in the report. “If market participants are skeptical about the stress test, negative sentiment could undercut the government’s efforts to fully restore confidence in the solvency of Spanish banks.”
More
http://www.bloomberg.com/news/2012-10-01/spanish-banks-need-more-capital-than-tests-find-moody-s-says.html
Another domino falls as Hollande pushes France into depression
If French President François Hollande thinks he can assuage the bond markets by dishing out tax-heavy austerity instead of genuine reform, he has been given very bad advice.
His tragically-misguided budget offers no strategic plan to reverse -- or even to stop -- thirty years of slow national decline. He offers no worthwhile measures to slim the Leviathan state, now a Nordic-sized 55pc of GDP, without Nordic labour flexibility or Nordic free markets.He does not tell us how he will stem the slide in France’s share of eurozone exports over the last decade, down from 17pc to 13pc, or what he will do about the disastrous swing in France’s trade balance from a surplus of 2.5pc of GDP to a deficit of 2.4pc since 1999.
He proposes nothing credible to restore France’s viability within EMU, or to stop public debt spiralling beyond 90pc of GDP. Instead he has served up the most drastic retrenchment in forty years, at the worst possible time, and in the worst possible way. And markets are supposed to applaud?
The budget will tighten discretionary fiscal policy by 2pc of GDP next year into the teeth of deepening depression, without offsetting monetary stimulus or exchange rate relief.
----His budget is pro-cylical error of the first order, carried out to meet an EU deficit target of 3pc of GDP that has no economic logic and is plucked out of thin air to meet bureaucratic tidiness and enshrined like so much other idiocy into EU treaty law. The certain result will be hundreds of thousands of lost jobs.
"To
save the dogma of single currency, they are imposing absurd hyper-austerity on
France," said Marine Le Pen from the National Front, France’s unlikely
apostle of Keynesian doctrine.
France
now joins Italy, Spain, Portugal, Greece, Ireland, and parts of Eastern Europe
in synchronized tightening, with the Netherlands and Belgium cutting too, all
dragging each other down in a 1930s slide into the political swamp.
----The French economy has already been in quasi-slump for five quarters. Dominique Barbet from BNP Paribas says the latest crash in the manufacturing PMI index to 42.6 -- the lowest since April 2009, and lower that at any time in the dotcom bust -- is "potentially alarming".
Indeed it
is. Data collected by Simon Ward at Henderson Global Investors shows that a key
leading indicator of the money supply --`six-month real M1 money’ -- is now
contracting even faster in France than in Spain. The shock will hit over the
winter.
So
while Europe heads off towards national suicide and mass wealth destruction, what
is the burning issue of the day in the “European Parliament?” Cutting taxes,
ending wealth crushing bureaucracy, slashing red tape, promoting European
growth? Well no. The big issue of the day, is sexism. There aren’t enough women
on the ECB’s board. In fact there aren’t any women on the ECB’s board. So while
the sinking SS Euroland smashes up on the rocks, Eurolanders are supposed to feel
proud that their undistinguished, overpaid, expense cheating, parliamentarians
are busy rearranging the deck chairs and debating how many female angels can dance
on the head of an ECB pin. Who would want to be a member of such a ludicrous
club? The sooner Great Britain holds an EU referendum on leaving the better for
all. If Germany wants to pay for all of Europe’s idlers that’s entirely up to
them.
Women in the Boardroom
Europe Battles over Gender Equality at the ECB
10/01/2012
For
weeks, the European Council and the European Parliament have been facing off
over the lack of women on the European Central Bank's governing council. Now,
that conflict is nearing a crucial deadline that may force a legal battle.
October 9
will mark three months since Luxembourg's Yves Mersch was appointed to the
European Central Bank Executive Board at the last European Union summit. That
appointment was delayed by the European Parliament in a push for a woman on the
23-member governing council of the ECB. The governing council consists of six people
on the Executive Board in addition to the leaders of the 17 central bank heads
from euro-zone member states.
At issue
is "discrimination," as European member of parliament Sylvie Goulard
put it in a letter to Herman Van Rompuy, president of the European Council,
requesting "that at least one woman is immediately appointed to the ECB
Governing Council." Goulard initiated the challenge to Mersch's
appointment.
Parliament
does not have veto power on the appointment, but it does question candidates at
a public hearing and holds a floor debate on such appointments.
Parliamentarians, however, have refused to schedule a hearing for Mersch. The
European Commission and lawmakers at the European Parliament have been pushing
for a woman on the ECB executive board since 2010, when Austria's Gertrude
Tumpel-Gugerell stepped down.
AngloGold CEO warns strikes could lead to premature downsizing
1st October 2012
JOHANNESBURG
(miningweekly.com) – AngloGold Ashanti CEO Mark Cutifani has taken a
firm stand against striking employees, stating that the company did not intend
to “reward broken commitments, violence and threats of intimidation”.
He said
AngloGold Ashanti was “deeply” disappointed that its employees had chosen to
break their commitment to the current wage agreement and collective bargaining
structures.
The
majority of the group’s 35 000 workers in South Africa are participating in the
unprotected strike, which started at its Kopanang mine on September 20 and
spread to the rest of its operations five days later.
Cutifani
said South Africa had to convince investors, local and international, banks and
rating agencies that it was still an attractive investment destination. “The
blunt truth of it is, if we cannot convince the world at large to invest in the
future of South Africa, then our future looks grim and certainly in both the
medium and long term, the job prospects for us as a country look grim.”
He warned
that the wave of mining strikes could result in job losses and said that it
could lead to “premature downsizing” of AngloGold Ashanti’s operations in South
Africa.
The company
was unlikely to return to closed down operations in the short to medium term,
as the costs incurred to restart these operations would be too high.
“In a
country where one in four people do not have reasonable work, it is
incomprehensible to be threatening job losses in our most important sectors,
which is an important building block for South Africa’s growth path,” Cutifani
said.
The gold
producer warned that it would not hesitate to take action against striking
workers, and that there could be potential dismissals. “We certainly hope it
doesn’t get to that, but clearly if we have to do something we will. We have to
protect the long-term viability of the company.”
Meanwhile,
the AngloGold Ashanti CEO stressed that if employees were to return to work and
engage in constructive discussion, they would find a way for a sustainable and
shared future.
More
Now Bokoni workers down tools in unprotected strike
1st October 2012
JOHANNESBURG
(miningweekly.com) – Workers at Atlatsa Resources and Anglo American Platinum’s
joint venture Bokoni platinum mine, in Limpopo, embarked on an unprotected wage
strike on Monday.
COO Joel
Kesler told Mining Weekly Online that no formal demands had been
received, but that a group of between 80 and 100 workers were parading on the
premises, some displaying placards demanding R16 500 a month.
In
addition to those protesting, most of the mine’s about 5 400 employees did not
report for their shifts, bringing attendance to below 20%.
Kelser
indicated that although no violence or damages had occurred, reports of
intimidation had been received.
He said
the mine’s recognised representative unions, including the National Union of
Mineworkers, the Transport and Allied Workers Union of South Africa's and the
United Association of South Africa’s attempts to address their members were
unsuccessful.
“The
union leaders have now distanced themselves from the situation, as the strike is
not union led. A sort of splinter group has been formed. It is not a specific
group of workers, we are trying to establish what is going on,” he noted.
However,
Kelser said Bokoni management would not negotiate any issues outside formal
bargaining structures. Bokoni had an existing agreement in place regarding
conditions of employment, including wages, which was effective until the end of
June, 2013.
The
operation’s ‘no work, no pay’ principle would apply for as long as the
unprotected industrial action continued, with about 300 platinum ounces in
production lost each day.
More
Amplats says to fire wildcat strikers
1st October 2012
JOHANNESBURG –
South African platinum producer Anglo American Platinum (Amplats) said on
Monday it would fire all strikers who did not attend disciplinary hearings the
following day after only 20% of staff showed up for work at its Rustenburg
mines.
The
world's top producer of the white metal and a unit of global mining group Anglo
American would begin disciplinary action against illegal strikers on Tuesday,
it said.
"The
company will also be left with no alternative but to dismiss, in their absence,
all employees who do not present themselves," it said in a statement.
Link
"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
At the Comex silver depositories Monday final figures were: Registered 41.42 Moz,
Eligible 100.62 Moz, Total 142.04 Moz.
Crooks and
Scoundrels Corner
The bent,
the seriously bent, and the totally doubled over.
Today,
welcome to modern Europe, home of the modern drunk who gets so drunk as to lose
his children. No further comment needed by me, but bring back the stocks and
the pillory. When was the western world turned over to the brewers and
distillers, by politicians pandering to the lowest common vote, paid for by banksters
using fiat money? Another unintended consequence of the Great Nixonian Error of
fiat money.
“The world is a place that’s gone from being flat to round to crooked.”
Mad Magazine.
Oktoberfest
Record Beer Consumption -- And It's Only Half Over
10/01/2012
The Munich Oktoberfest may be
heading for a new beer-guzzling record this year after 3.6 million liters were
downed in the first week alone. But the number of people passing out or losing
their children is up as well.
The first week of this year's Oktoberfest is over, and as ever, the half-time statistics are almost as overpowering as the high-octane Munich beer served in the tents.
A clear picture is already emerging: there are more
visitors, and they're drinking a lot more beer, and that is having predictable
consequences.
The number of Bierleichen, or "beer corpses" -- a term referring to people who have drunk themselves into a state of unconsciousness -- jumped by almost 20 percent to 445, most of them aged 30 or under, according to the Red Cross.
Visitor numbers to the famous folk festival have increased to 3.6 million from 3.5 million at the same time last year, thanks to sunnier weather, the organizers said. And the all-important statistic -- the number of one-liter Mass glasses of beer guzzled -- rose by almost six percent to 3.6 million, up from 3.4 million last year, the Bavarian capital of Munich said on Sunday.
At this rate, the festival could top last year's all-time record beer consumption of 7.5 million liters -- which would be an impressive feat given that the 2012 Oktoberfest has a fifth less space than usual due to an adjacent agricultural fair which ended on Sunday.
A total of 60 oxen and 26 calves have been devoured, and the sale of fried chicken portions is up five percent. The number of children lost and handed over to staff also rose significantly, to 93 from 56. By Saturday evening, a total of 2,600 lost items had been handed in, including a French horn, a hearing aid, two wedding rings, a pair of suit trousers and two pairs of Lederhosen.
Watchful security guards also confiscated a total of 63,000 empty beer glasses that visitors had tried to smuggle out of the tents as free souvenirs.
----"Happily, there were no attempted killings during the first half of the festival, and no extremely serious injuries," the Munich police said in a statement. That's despite the increased use of the heavy beer glasses in tent brawls.
Glasses
were used in 38 assaults, up from 26 in 2011. "Striking people with Mass
glasses or throwing them is an extremely dangerous offense. That is why it
was very important that we are able to arrest 25 attackers on the spot,"
said Robert Kopp, deputy president of the Munich police.
Police
also logged an incident last Friday in which one 18-year-old man clambered onto
the roof of one of the large Oktoberfest tents. Passers by alerted the police.
"He explained that he had wanted to scan the festival site for a
friend," police said.
More
"Deficit spending is simply a scheme for the 'hidden' confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights."
Alan Greenspan
The monthly
Coppock Indicators finished September:
DJIA: +66 Up. NASDAQ: +88 DOWN. SP500: +85 Up. All
three indicators had reversed from down to up, but now the NASDAQ has reversed
again to down. While not unprecedented, it is a warning sign a that the July
reversal from up to down is about to fail.
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