Baltic Dry Index. 1104 +07
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
“The
sans-culottes appear to have captured the government in Paris. I have no
hesitation in saying here, Venez à Londres, mes amis. Don’t wait to be persecuted
… and put in the tumbrils by the regime. Come to London.”
Boris
Johnson. Mayor of London.
Yes, it’s all
Germany’s fault, according to the faceless suits at the US Treasury. If it wasn’t
for Germany stealing Club Mad’s lunch, by trading with Club Med like Dutchmen
in Manhattan in 1626, all would be well in the world, and America wouldn’t be
falling off an acrimonious “fiscal cliff.” America’s
two warring tribes would be reconciled once again, and peace and harmony
restored in the land between the shining seas.
As Christmas pantomime’s go, this tall story is no worse than all the
others. Left out is the Great Nixonian Error of putting the world onto fiat
currency, enabling casino capitalism,
the rise of China and the bankruptcy of the west.
You can always reason with a German.
You can always reason with a barnyard animal, too, for all the good it does...
The larger the German body, the smaller the German bathing suit and the louder
the German voice issuing German demands and German orders to everybody who
doesn't speak German. For this, and several other reasons, Germany is known as
'the land where Israelis learned their manners'.
P. J. O’Rourke
Germany displaces China as US Treasury's currency villain
The US Treasury has issued a damning criticism of Germany’s chronic trade surplus in its annual report on worldwide exchange rate abuse, although it stopped short of labelling the country a currency manipulator.
Treasury
officials told Congress that internal balances within the eurozone are
disrupting the global trade structure, with almost nothing being done by north
Europeans states to curb their huge surpluses.
The
report said Germany’s current account surplus is running at 6.3pc of GDP, and
Holland is even worse at 9.5pc. Yet the countries still cleave to fiscal
austerity policies that constrict internal demand.
The EU’s
new tool for cracking down on intra-EMU imbalances is "asymmetric"
and does not give "sufficient attention to countries with large and
sustained external surpluses like Germany".
While the
eurozone as a whole is roughly in trade balance, the EMU regime of austerity in
the South without offsetting stimulus in the North is creating a contractinary
bias, holding back global recovery.
The US
Treasury said eurozone surplus states have "available room" for
fiscal stimulus but refuse to act, despite repeated pledges by EU leaders that
more must be done to foster growth. "They have not yet made any concrete
proposals capable of yielding meaningful near-term results."
Germany's
permanent surplus is in stark contrast to the shift under way in Asia. China
has "partially succeeded in shifting away from a reliance on exports for
growth", and has slashed its surplus to 2.6pc from 10.1pc in 2007
---- A chart published in the report shows that Germany has overtaken China to become the biggest single source of global trade imbalance, alone accounting for a large chunk of the US deficit.
Switzerland
is top sinner with a surplus of 13pc GDP, though the report says the country
faces unique circumstances as a safe-haven battling deflation.
The Swiss
National Bank has bought $230bn in foreign bonds since mid 2011 to hold the
franc, more than China, Russia, Saudi Arabia, Brazil and India combined.
Now back to the sans-culottes of today’s
France. Under “the Dutchman,” France rushes on towards national suicide.
“There’s danger in just shoveling out
money to people who say, ‘My life is a little harder than it used to be, at a
certain place you’ve got to say to the people, ‘Suck it in and cope, buddy.
Suck it in and cope.’”
Proper Charlie Munger.
French Jobless Total Hits 14-Year High
Published: Wednesday, 28 Nov 2012.
The number of people out of work in France soared again in
October to hit its highest level in 14-and-a-half years, piling pressure on
Socialist President Francois Hollande who has promised to halt the relentless
rise by the end of 2013.
Labor
Ministry data showed the number of jobseekers in mainland France rose by 45,400, or 1.5 percent, to hit 3.103
million, marking the 18th consecutive monthly increase and taking the total to
its highest level since April 1998.
The
increase was only slightly smaller than in October which saw the biggest jump
in jobless rolls since April 2009, showing the deterioration in the job market
is accelerating as recession in the broader euro zone hits demand.
France's
1.9 trillion euro ($2.46 trillion) economy has been virtually stagnant since
grinding to a halt at the end of last year, and many economists expect it to
contract in the months ahead despite a surprise 0.2 percent rise in the third
quarter.
With the
economy still struggling, the Labor Ministry said there was a risk the figures
could get even worse.
----Hollande
won power in May on a pledge to cut unemployment, but has since had to
grapple with a wave of layoff announcements that have damaged his popularity
and sapped public morale.
The
government unveiled a set of measures at the start of November, including
sweeping tax rebates for companies, aimed at boosting industrial
competitiveness and safeguarding jobs.
French
business newspaper Les Echos said Hollande was now
planning a faster rollout of the rebates so that they reach full speed within
two years instead of the three year build-up initially envisaged.
More
Francois Hollande threatens to nationalise ArcelorMittal steel plant
Francois Hollande has threatened to nationalise a plant owned by steelmaker ArcelorMittal in an increasingly heated dispute in which a minister has said the multinational is no longer welcome in the country.
7:50AM
GMT 28 Nov 2012
Moments
before the meeting between the French president and steel tycoon Lakshmi
Mittal, Mr Hollande said that nationalising ArcelorMittal's plant in
northeastern France remained on the table.
"The
nationalisation is part [...] of the discussion," he said.
The talks
lasted an hour, and brought little progress. A presidential statement said that
"discussions between the state and the company [would] continue"
until Saturday, to try and find a new investor for the site.
Mr
Hollande's nationalisation warning came as forty MPs from his Socialist party
said they favoured a temporary takeover by the French state of ArcelorMittal's
plant in Florange.
"Mittal
does not respect our country," a joint statement by the parliamentarians
said, adding that his interests "were clearly not that of France, of its
industrial fabric and its workers."
----ArcelorMittal has said that two blast furnaces at Florange, which were damped down for 14 months prior to their full closure, were uncompetitive in a tough trading climate, partly because they are too far from ports for transportation.
The
company gave the government two months, which expires on Saturday, to find a
buyer for them. The government says it has two offers, but only for the entire
Florange site including other facilities which ArcelorMittal wants to retain
and keep operating.
It has
warned that nationalisation of the Florange facilities would threaten the
viability of all of its activities across France, where it employs 20,000
people.
More
http://www.telegraph.co.uk/finance/financialcrisis/9707659/Francois-Hollande-threatens-to-nationalise-ArcelorMittal-steel-plant.html
Below, more on Monday’s Greek “rescue” package.
Take pity on the hapless, unloved Greek serfs. After spending most of 2012 unrescued,
trapped by the American presidential election cycle, now the wretched serfs
find themselves trapped in the German general election cycle. Forget saving
Athens, saving Chancellor Merkel’s re-election comes first. More of the
insanity of the United States of Europe.
"I
would not join any club that would have someone like me for a member."
Groucho
Marx.
Euro Zone States Face Losses on Greek Debt
Published: Wednesday, 28 Nov 2012
Eurozone governments could be forced to accept losses on
their rescue loans to Greece after Monday’s late-night deal to overhaul its
bailout failed to agree how to reach new debt targets for the struggling
country, according to documents seen by the Financial Times.
After
three gatherings in two weeks, euro zone finance ministers agreed to
release a
long-delayed 34.4 billion euro ($44.4 billion) aid payment to Athens. But the
series of measures agreed, which could relieve Greece of billions of euros in
debt by the end of the decade, do not go far enough.
The
measures to be implemented immediately as part of the deal will only lower
Greece’s debt levels to 126.6 per cent of economic output by 2020, not the 124
per cent announced by euro zone leaders, according to the documents and senior
officials.
Instead,
euro zone governments postponed further debt relief — amounting to 2.7
percentage points of gross domestic product — to a later date, when Greece begins taking in more money than
it spends, not counting interest payments.
Officials
said Greece could reach such a “primary budget surplus” by the end of 2014,
pushing the additional debt relief to after next year’s German elections.
Because the deal already cuts interest on loans to just 50 basis points above
interbank lending rates, any further cuts would almost certainly force losses
on to euro zone creditors.
“That is
sort of gaining hold, but it’s not fully acknowledged because of the political
cycle in Germany,” one senior official involved in the discussions said of
losses on bailout loans. “It is there, but it’s there in a way [Angela] Merkel
cannot be pinned down that you’ve committed to it.”
Wolfgang
Schaeuble, Germany’s finance minister, on Tuesday acknowledged that he and his
euro zone counterparts had agreed to further debt relief when Greece reaches a
primary budget surplus.
More
The Fed is out of bullets says, Warren Buffet, the
sage of Omaha, and America is likely going over the “fiscal cliff.” Stay long
physical gold and silver. Mr. Buffet can buy in the best financial advice on
the planet, and is one of the few investors on earth with little reason to talk
up his book. If he thinks that the Fed is out of ammo, it probably is, with all
the bad things that will flow as a consequence in 2013.
"Let's make sure that there is
certainty during uncertain times in our economy."
President George W. Bush
Warren Buffet: Fed has no more bullets left to stimulate US economy
The Federal Reserve has "used up its bullets" to stimulate the US economy, Warren Buffet has said, as he warned that "D-Day" was here for politicians to strike a deal to solve the country's "fiscal cliff" problem.
10:52AM GMT 28 Nov 2012
The
billionaire investor said that it was now up to Congress to help boost
America's flagging recovery.
Speaking in an
interview broadcast on Radio 4's Today Programme, he said: "I think
[the Fed] has used up its bullets pretty much. When you drive interest rates to
zero and when you buy almost a trillion dollars worth of securities and how you
start buying longer-term securities -- you've done your part. I mean, Ben has
given up the office."
Mr
Buffett also warned that the deadlock between Republicans and Democrats over a
package of tax rises and spending cuts that will take effect in January if
politicians fail to reach a deal could go on until the eleventh hour.
"We've
kicked it down the road for a long time," said Mr Buffett, "but D-Day
is here and that doesn't mean we'll get the fiscal cliff problem solved by
December 31.
"I
hope we do, but it may go over into January. But we are going to have to
address important policy questions. I think Congress knows it, I think the
president knows it, and certainly the American public knows it.
More
Germans are flummoxed by humor, the
Swiss have no concept of fun, the Spanish think there is nothing at all
ridiculous about eating dinner at midnight, and the Italians should never, ever
have been let in on the invention of the motor car.
Bill Bryson
At the Comex silver depositories Wednesday final figures were: Registered 33.90
Moz, Eligible 106.45 Moz, Total 140.35 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, the scoundrels of Argentina getting set to default yet again, and the dangerous crooks of modern Russia.
“It's strange that men should take up
crime when there are so many legal ways to be dishonest.”
Al Capone
Fitch downgrades Argentina and predicts default
Credit rating agency Fitch has downgraded Argentina, which is locked in a court battle in New York over its debt, and said the country would probably default.
11:55PM GMT 27 Nov 2012
Fitch cut
its long-term rating for Argentina to "CC" from "B," a
downgrade of five notches, and cut its short-term rating to "C" from
"B". A rating of "C" is one step above default, AP
reported.
US judge
Thomas Griesa of Manhattan federal court last week ordered Argentina to set
aside $1.3bn for certain investors in its bonds by December 15, even as
Argentina pursues appeals.
Those
investors don't want to go along with a debt restructuring that followed an
Argentine default in 2002. If Argentina is forced to pay in full, other holders
of debt totaling more than $11bn are expected to demand immediate payment as
well.
Argentine
politicians, even those opposed to President Cristina Fernandez, have nearly
unanimously criticized the judge's ruling as threatening the success of the
debt relief that enabled Argentina to grow again.
----Argentina is in a deepening recession and is grappling with social unrest. Besides the court case, Fitch cited a "tense and polarized political climate" and public dissatisfaction with high inflation, weak infrastructure and currency.
Fitch
also said that Argentina's economy has slowed sharply this year.
More
Swiss prosecutors say death of Russian whistle blower will not derail huge fraud investigation
Alexander Perepilichnyy, a 44-year-old businessman who left Russia three years ago, was found dead outside his luxury mansion on an exclusive private estate in Surrey two weeks ago
Wednesday
28 November 2012
Prosecutors
in Switzerland say the sudden death of a Russian whistle blower who was helping
them uncover a money laundering network will not derail their investigation.
Alexander
Perepilichnyy, a 44-year-old businessman who left Russia three years ago, was
found dead outside his luxury mansion on an exclusive private estate in Surrey
two weeks ago.
The
Independent revealed
today that he was helping investigators uncover a network of Swiss bank
accounts that were used by Moscow tax officials who became incredibly wealthy
in the immediate aftermath of an enormous fraud that cost Russian tax payers
£230m.
In a
statement the Swiss Attorney General’s office told The Independent that the
investigation remained on-going and that prosecutors were “still hearing [from]
different witnesses”.
----Mr Perepilichnyy brought Swiss prosecutors a treasure trove of information earlier this year which is showed how a number of tax officials in Moscow used shell corporations and Swiss bank accounts to move millions of dollars and pay for luxury properties in Dubai and Montenegro.
Months
earlier the same officials approved of a £230m tax rebate for a company that
was once owned by Hermitage Capital Management, a British investment fund.
Ownership of the subsidiaries of Hermitage had been illegally transferred using
stolen corporate seals months before the tax rebate was applied for. The money
disappeared into a little known Moscow bank which was liquidated soon
afterwards.
Sergei
Magnitsky, a Russian lawyer, was hired by Hermitage to investigate the scam.
After months of forensic examinations he publicly pointed the finger of blame
at a network of Russian Interior Ministry officials and underworld figures.
Rather than investigate the fraud, police arrested Magnitsky and handed him
over to the very men he had accused. He died nine months later in November 2009
after months of brutal treatment and deliberately withdrawn medication.
More
http://www.independent.co.uk/news/uk/home-news/swiss-prosecutors-say-death-of-russian-whistle-blower-will-not-derail-huge-fraud-investigation-8364446.html
O’ Reilly went to trial for armed robbery. The jury foreman came out and announced, "Not guilty." "That's grand!" shouted O’ Reilly. "Does that mean I can keep the money?"
The monthly
Coppock Indicators finished October:
DJIA: +92 Up. NASDAQ: +99 Up. SP500: +102 Up. Still time for the
Santa Clause rally?
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