Baltic Dry Index. 1036 +12
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
“Above
all, spending on the common agricultural policy must be preserved”.
French
President Hollande.
For once we get to lead with the USA, where
business investment “has fallen off a cliff,” according to the Wall Street
Journal. With
typical Yankee understatement, "The whole world is looking for stability
and clarity from the United States," said David Seaton, chief executive of
Fluor Corp. Actually the whole world probably isn’t. We all have preoccupation
with our own local problems, not that getting stability and clarity from
America’s two warring tribes wouldn’t be helpful. It’s just that as problems go
on this Monday before Thanksgiving in America, stability and clarity in the
United States is a little lower down the order of unsettling things this
November Monday morning. Topping the order is likely is Israel going to launch
a ground invasion of wretched Gaza, or not? And has President Obama already
become a lame duck president, ignored by all? Right behind that comes two wretched
Euro meetings this week. Tomorrow’s eurozone finance ministers pre-leaders
fight, punch up intended to cobble together some sort of new fix for Greece.
Then comes the Great EU Leaders summit on Thanksgiving Day in America, where
everyone is threatening to veto everyone else. A little clarity and stability
would be helpful there as well. Then there is the increasing likelihood of a
real clash between China and Japan next year over the Diaoyu Islands, each
country has successfully backed themselves into a corner.
Up first,
unsurprising news from America, until the two warring tribes declare a truce
and negotiate some sort of settlement. Stay long physical precious metals in
the interim.
November
18, 2012, 10:33 p.m. ET
Investment Falls Off a Cliff
U.S. Companies Cut Spending Plans Amid Fiscal and Economic Uncertainty
U.S.
companies are scaling back investment plans at the fastest pace since the
recession, signaling more trouble for the economic recovery.
Half of the nation's 40 biggest publicly traded
corporate spenders have announced plans to curtail capital expenditures this
year or next, according to a review by The Wall Street Journal of securities
filings and conference calls.
Nationwide, business investment in equipment and
software—a measure of economic vitality in the corporate sector—stalled in the
third quarter for the first time since early 2009. Corporate investment in new
buildings has declined.
At the same time, exports are slowing or falling to
such critical markets as China and the euro zone as the global economy
downshifts, creating another drag on firms' expansion plans.
Corporate
executives say they are slowing or delaying big projects to protect profits
amid easing demand and rising uncertainty. Uncertainty around the U.S.
elections and federal budget policies also appear among the factors driving the
investment pullback since midyear. It is unclear whether Washington will avert
the so-called fiscal cliff, tax increases and spending cuts scheduled to begin
Jan. 2.
Companies fear that failure to resolve the fiscal
cliff will tip the economy back into recession by sapping consumer spending,
damaging investor confidence and eating into corporate profits. A deal to avert
the cliff could include tax-code changes, such as revamping tax breaks or
rates, that hurt specific sectors.
----"The whole world is looking for stability and clarity from the United States," said David Seaton, chief executive of Fluor Corp., FLR -0.17% a large engineering and construction firm. If uncertainty isn't removed, he said, "people will sit on their war chests of cash and return it to shareholders. You'll have a retarded growth trajectory."
Should the White House and Congress strike a deal to avoid the fiscal cliff, the economy could get a boost. "You might very well get a burst of pent-up demand coming at the start of next year," said Paul Ashworth, chief U.S. economist at Capital Economics, a consultancy.
"Given the timing of the drop-off in business investment," he said, "you have to think it's not just a coincidence with the timing of the fiscal cliff."
Unless the business investment slowdown reverses quickly, it could weigh further on growth prospects and the stock market.
More
http://online.wsj.com/article/SB10001424127887324595904578123593211825394.html?mod=WSJUK_hpp_LEFTTopWhatNews
And so to Europe. Abandon hope all ye who enter here.
European Finance Chiefs Seek to Close Greek Gap Amid IMF
By Patrick Donahue - Nov 18, 2012 11:00 PM GMT
European finance ministers aim to stitch together Greece’s next aid payment
this week as a sputtering euro-area economy and a spat with the International
Monetary Fund cloud efforts to resolve the debt crisis. The finance chiefs are due to meet in Brussels tomorrow for the second time in a week after they agreed seven days ago to keep Greece’s bailout aid flowing. In addition to a disagreement between the European Union and IMF over softening Greece’s debt target, the ministers will attempt to re-engineer the current bailout without asking taxpayers to put up more money.
---- The meeting of the ministers from the 17-member euro area underscores continuing skirmishes among EU officials confronting rising unemployment and a slowing economy as they struggle with the three-year-old debt crisis. The finance chiefs’ talks will precede a Nov. 22-23 EU summit to resolve the bloc’s budget, a project threatened by a dispute with the U.K.
With tens of thousands of Europeans staging protests last week against austerity measures and unemployment, shifting dynamics in other European countries could foreshadow renewed conflict -- an early election in Italy, a regional vote in Spain and an approaching bailout package for Cyprus.
---- Greece will probably need another aid package for the period after 2014, European Central Bank Board Member Joerg Asmussen said in an interview with German broadcaster ZDF yesterday.
Even though European leaders have pledged to do all they can to avert a Greek exit from the single currency, they’ve refused to return to parliaments for more funding. Finnish Premier Jyrki Katainen, speaking on YLE Radio Suomi at the weekend, again rejected further funds to Greece.
German Finance Minister Wolfgang Schaeuble told reporters last week that the current package could be re-jigged by cutting rates on loans or giving Greece extra time. In an interview on ARD television yesterday, he reiterated his rejection of a third option: write-offs of the country’s debt held by public institutions.
More
http://www.bloomberg.com/news/2012-11-18/european-finance-chiefs-seek-to-close-greek-gap-amid-imf-spat.html
18
November 2012 - 14H42
EU in fresh trouble as budget summit faces collapse
AFP - The European Union looks set for
fresh trouble this week as an extraordinary summit called to agree a long-term
trillion-euro budget heads for an ugly showdown, possibly even failure.
Already
weakened by three years of economic crisis, the 27-nation bloc of half a
billion people faces new trauma at the two-day summit starting Thursday after
weeks of talks that have exposed stark divisions between pro- and
anti-austerity nations, as well as between the haves and have-nots.
"It's
a lose-lose summit," said a senior EU diplomat. "Absolutely no one
will leave this summit content if by chance we reach a solution."
"We
don't exclude a breakdown," another diplomat told AFP on condition of
anonymity.
Europe's
leaders begin the talks on the EU's next seven-year budget at 1900 GMT
Thursday, with Britain's premier David Cameron in the role of leading spoiler
though most governments are putting national interest well above shared
concerns.
"Cameron
will come with a big knife to get spending cuts and to defend the British
rebate," said an EU diplomat.
In the
face of Britain's austerity-minded determination to secure a cut of up to 200
billion euros in the 2014-2020 budget, EU president Herman Van Rompuy, who will
broker the talks, last week suggested a 75-billion-euro cut to the proposed
1.047 trillion euro ($1.3 trillion) budget.
But that
made no one happy.
Spain
said it would lose 20 billion euros of EU aid, Italy complained of losing 10
billion euros.
And a
group of Nobel laureates flew to Brussels waving a petition signed by dozens of
Nobel winners urging Van Rompuy and other EU officials not to strip funds for
research and innovation.
"Fortunately,
we only have these summits every seven years," Van Rompuy said Friday
after coming under fire from all sides.
His plan
left Britain having to pay in part for its cherished yearly rebate of 3.6
billion euros, while diminishing Sweden's rebate, and failing to address
Denmark's demand to have a discount too.
----Eight of the net contributors -- Austria, Britain, Denmark, France, Finland, Germany, Netherlands and Sweden -- have banded together to demand spending cuts, though they are far from being on the same page on what should go or by how much.
France
for instance, along with Italy, is refusing any decrease whatsoever in the
budget's biggest item, the subsidies paid to farmers, big and small.
More
http://www.france24.com/en/20121118-eu-fresh-trouble-budget-summit-faces-collapse
We end for today on the Disunited States of Europe, with the fawning pro-EU, pro-euro, elitist Financial Times, talking up a European nightmare. Suppose the EU were to pass a budget without the UK? Go ahead and try, would be my response. No UK money until they come back and stick to the rules. We can use our withheld contribution to improve the economy, help the poor and reverse some of the military spending cuts. If Euroland wants to operate on a yearly basis of no UK financial contribution, most in Britain would see that as a massive plus. Only the Financial Times would go into mourning over it.
"The paper standard is self-destructive."Hans F. Sennholz
November 18, 2012 9:30 pm
EU makes budget plans without UK
By Joshua Chaffin in Brussels and George Parker in London
EU officials have begun
work on a plan to create a long-term
budget without the UK in a move that reflects
mounting frustration that Britain’s demand for a spending freeze cannot be
reconciled with the rest of the bloc.
Both EU officials and
national diplomats have been studying the legal and technical feasibility of
devising such a budget, according to people familiar with the discussions,
ahead of a two-day summit beginning on Thursday in Brussels, where the EU’s 27
heads of government will try to reach an agreement on the long-term budget.
The
prospects for that meeting have darkened in recent days as several diplomats
have come to the conclusion that it will be impossible to accommodate the UK’s
demands, and are now predicting failure.
---- The
plan may be a negotiating ploy to try to put more pressure on David Cameron,
the UK prime minister, to compromise. The budget talks will resume on Monday
evening when Herman Van Rompuy, the European Council president, hosts a dinner
of European ministers.
----The alternative budget being considered in Brussels
would be done on an annual basis, which – under EU rules – requires qualified
majority votes. By contrast, the traditional long-term budget, which covers
seven years, requires unanimity.
It would involve passing
a raft of legislation on this basis to authorise hundreds of billions of euros
in EU development funds, according to diplomats. But one problem is that the
revenue component of the budget requires unanimous approval of members states.
Without it, budget
rebates for Germany, the Netherlands and Sweden would be put at risk, as well
as the system used to collect customs duties and other sources of EU funding.
“It would be a technical nightmare,” one diplomat said.
More
"With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people."
F.A. von Hayek
At the Comex silver depositories Friday final figures were: Registered 35.87
Moz, Eligible 106.11 Moz, Total 141.98 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
No crooks
today, the Ali Baba’s are all assembling in Europe later in the week.
"Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood. For these few gold has been the asset of last resort."
Antony C. Sutton
The monthly
Coppock Indicators finished October:
DJIA: +92 Up. NASDAQ: +99 Up. SP500: +102 Up.
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