Baltic Dry Index. 1026 -17
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
“Adam Smith’s ‘invisible hand’ is not above sudden, disturbing,
movements. Since its inception, capitalism has known slumps and recessions,
bubble and froth; no one has yet dis-invented the business cycle, and probably
no one will; and what Schumpeter famously called the ‘gales of creative
destruction’ still roar mightily from time to time. To lament these things is
ultimately to lament the bracing blast of freedom itself.”
Margaret Thatcher
With bad news on either side of the Atlantic, we
lead this morning with better news from China. While one swallow doesn’t make a
summer, Asia ex. Japan, seems to be growing again. If so, the next commodity boom is about to get
underway. Even if not, a commodity boom-let will likely occur early next year
as America’s hurricane struck Northeast commences recovery and reconstruction.
Upgrading and modernising New York City’s subway system alone, is a massive and
long overdue project. Its builders in the early 1900s never intended it to run
virtually unchanged for a hundred years. Boom or boom-let or a combination of
both, 2013 might just not be the disaster Europe is leading us to. That is not
to say that wealth destroying natural disasters are good for the economy or
people. Just that life goes on, and that in most cases people and businesses
tend to rebuild. But there’s no free lunch with “acts of God.” Wealth was
destroyed, and someone somewhere is paying the cost of reconstruction.
Nov. 1, 2012, 1:24 a.m. EDT
China PMI surveys point to ongoing recovery
HONG KONG
(MarketWatch) – China’s manufacturing activity rose to a multi-month high in
October, according to rival business surveys released on Thursday, bolstering
the view that the world’s second largest economy has turned the corner.
Underscoring
the improvement, gauges of new orders tacked by the government and a rival
private sector survey both showed conditions were expansionary.
The
official Purchasing Managers’ Index, released by the National Bureau of
Statistics along with the China Federation of Logistics and Purchasing, printed
at 50.2 on a 100-point scale, compared to 49.8 in September, but slightly lower
than expectations of 50.3 in a Reuters poll of economists.
The
private-sector PMI released by HSBC, indicated activity firming to an
eight-month high of 49.5, up from a final reading of 47.9 in September, and
higher than an initial “flash” survey of 49.1 released last week.
More
With a generational power transfer about to occur
this month in the ruling Communist Party of China, the Society for Worldwide Interbank
Financial Telecommunication (SWIFT,) is preparing for a bigger international
role for China’s currency. Stay long
precious metals, for it inevitably means a diminished role ahead for the dollar
and dying euro. Even if they were to try, China couldn’t come up with a worse
fiasco than the euro.
Clearing the path for global currency
Updated: 2012-10-31 07:47
Report
highlights ways to boost renminbi's international role
A more
efficient system should be in place to facilitate the increasingly wide use of
the yuan in global transactions, according to a report by SWIFT, the
communication platform among international banks.
Global
use of the currency has surged. In August the renminbi rose to 14th in the
table of payment currencies, up from 35th in October 2010, according to a
report by the Society for Worldwide Interbank Financial Telecommunication.
Most
other currencies remained flat or moved marginally during that period.
Trade
finance is the primary driver behind the rise. Paying in yuan means domestic
companies will get lower borrowing costs and reduce foreign exchange risks.
In
addition, the report said, some Chinese buyers and suppliers prefer the
currency.
The
People's Bank of China estimates that overseas importers can save 2 to 3
percent on their invoice bills by paying in yuan.
"Currency
appreciation or depreciation might be irrelevant", in the rise in the
yuan's international use, the report said.
Yuan-denominated
trade accounted for about 10 percent of China's total foreign trade in July,
the report said.
In the
meantime, the currency's use has moved into a new stage, said Patrick de
Courcy, head of markets, Asia-Pacific, for the organization.
He said
the path of the yuan's further internationalization will involve three phases:
trade finance, investment and as a reserve currency.
However,
the increasing use of the yuan poses challenges. Banks said that offshore yuan
clearing is appropriate, the report said, but in the long term, improvement is
needed.
More
Now back to the Bilderberger serf’s paradise of the
European Monetary Union. From London its seems like each chaotic week European
self-deception just plumbs new depths. Below the reality of a death spiral
Greece headed for a long overdue EMU exit. Even a fudge that gives them their
next bailout money this month, merely traps them in the EMU until France blows
it all up via its socialist suicide policies.
“Socialists have always spent much of their time seeking new
titles for their beliefs, because the old versions so quickly become outdated
and discredited.”
Margaret Thatcher
The German bloc will have to take its bitter medicine in Greece
Last updated: October 31st, 2012
Every
detail of the Greek economy is worse than officially forecast just weeks ago.
The
budget unveiled this morning estimates that public debt will reach 189pc of GDP
next year (not 179pc).
The
budget deficit will be 5.2pc (not 4.2pc).
The
economy will shrink 4.5pc next year (not 3.8pc).
Unemployment
is already 25.1pc and 55.6pc for youth.
Just for
the record:
The
EU-IMF Troika originally said that the economy would contract by just 2.6pc in
2010, before growing by 1.1pc in 2011, and 2.1pc in 2012.
In fact
Greek GDP contracted by 4.5pc in 2010, 6.9pc in 2011, and will shrink 6.5pc
this year, and now 4.5pc next year.
The cumulative error is colossal.
The IMF's
former deputy chief John Lipsky told an HSBC forum in London earlier this month
that it was impossible for the Fund to make any accurate forecast, given the
crazy circumstances in Greece.
I don't
wish to be unduly harsh on the IMF – a superb organisation – but actually the
Greek Labour Institute and the think-tank IOVE did predict this level of
contraction.
The IMF
simply lost its political way in Greece. It knew – or should have known from
dozens on rescue operations around the world – that Greece would crash into a
self-feeding spiral without a rapid debt restructuring and a devaluation.
Both
channels were blocked because of the sanctity of the EMU Project. (Though
default would come later, in a capricious fashion, singling out pension funds,
insurers, and private creditors only).
The
policy never had any chance of working for Greece. The IMF under Strauss-Kahn
went along with the EMU agenda, pretending all was well, sacrificing the Greeks
to gain time for the European financial system to build up safety buffers.
Thomas
Wieser, the head of the European Working Group handling Greece, said today that
press reports of further debt restructuring and official "haircuts"
in the current Troika talks are pure fantasy.
If that
is so – and what he means is that Germany, Holland, Finland, and Austria will
not tolerate a haircut on their holdings of Greek debt – then the creditor
countries are trying to maintain a ridiculous illusion for their own internal
political reasons.
Greece
cannot claw its way out of a 190pc of GDP debt load. The official haircut is
coming sooner or later, and it will be an explosive political moment.
More
10/31/2012
Jobless in the Crisis Euro-Zone Unemployment Higher than Ever Before
The
European debt crisis and related austerity measures continue to drive up
unemployment across the euro zone. In September, according to statistics
released on Wednesday, fully 18.5 million people were without work in the
common currency area, more than ever before.
Global financial markets have, for the moment, been calmed.
The European Central Bank has embarked on its program to buy unlimited
sovereign bonds as needed from euro-zone countries suffering from high
borrowing costs and all of those countries have adopted strict austerity
programs to get their budgets in order.
That,
though, has not been good for economic growth -- and now the European Union has
released new figures highlighting a struggling euro-zone economy. According to
a report released on Wednesday by Eurostat, the European Union's statistical
office, unemployment in the 17-nation common-currency area stood at 11.6
percent in September, the highest it has ever been.
The
numbers represent an up-tick against the 11.5 percent rate reported for August.
In total, Eurostat estimates that 18.49 million people were out of work in the
euro zone, up 146,000 over August. The rate indicates a significant rise
against the euro-zone unemployment rate in September 2011, which was 10.3
percent.
The trend
toward spiking unemployment rates was particularly strong in those countries
suffering the most under the ongoing euro-zone debt crisis. Between September
2011 and the same month a year later, the unemployment rate in Spain rose from
22.4 percent to 25.8 percent and in Portugal from 13.1 to 15.7 percent. In
Greece, unemployment rose from 17.8 to 25.1 percent from July 2011 to July
2012, the last figures available for the country.
With the
euro-zone economy likely headed for a year of negative growth this year -- the
ECB is forecasting a 0.4 percent contraction -- it seems unlikely that
employment in the 17-country currency zone will improve any time soon.
More
We end on Europe for today with an unholy alliance
in the works. If austerity and balanced budgets are good for nations, how much
better are they good for Brussels bureaucrats. Does the EU really need two
parliament buildings in two cities, one used for a little over a month a year.?
Does it really need 3 unelected Presidents, each making more than the US
President. Does it really need to keep funding misanthropic Gordon Brown’s
Scots joke on the EU, Baroness Whatsit? If the bureaucrats in Club Med and
Ireland have suffered pay and pension cuts, why can’t the Eurorats in Brussels
do the same and set a good example?
“What we should grasp, however, from the lessons of European
history is that, first, there is nothing necessarily benevolent about programmes
of European integration; second, the desire to achieve grand utopian plans
often poses a grave threat to freedom; and third, European unity has been tried
before, and the outcome was far from happy.”
Margaret Thatcher
10/31/2012
London and Berlin Demand Cuts Sparring Expected over Next EU Budget
Only weeks ahead of the next
major European Union summit, negotiators in the member states are seeking to
draw lines in the sand over the club's next budget. Both London and Berlin are
demanding significant cuts, placing them on a collision course with the
European Commission and many Eastern European countries.
The European Union has barely put its last difficult summit
behind it, and yet a fresh dispute is already brewing that threatens to divide
leaders in capitals across the Continent. It's a conflict that comes every
seven years -- the next EU budget, which is currently proposed to exceed €1
trillion.
Member
states of the European Union are currently arguing over the draft of the
upcoming budget for Brussels, and a compromise appears increasingly unlikely.
Germany, in particular, is unhappy with the latest proposal by Cyprus, which
holds the EU's current rotating presidency, to reduce the budget presented in
June by the European Commission, the EU's executive. Cyprus is calling for at
least €50 billion to be cut from the €1.033 trillion budget.
"The
suggestions made by the (EU) presidency to limit the EU budget fall markedly
short of those that are necessary," said Michael Link, a minister of state
within the German Foreign Ministry.
The
official said the figures named in the budget proposal for the period from 2014
to 2020 are "still very far" from the targets being sought by Germany
and other so-called net payers in the EU -- net contributors being the
countries that pay more into the EU's coffers than they get in return.
Germany
and other net contributors want to limit the EU's budget to 1 percent of the
member states' total gross domestic product (GDP). To achieve that, the
Commission's proposed budget would have to be slashed by as much as €130
billion.
London
Demands Radical Cuts
The
demands being made by Britain in the run-up to the EU budget summit on Nov. 22
and 23 in Brussels are even more radical. London wants the proposed budget cut
by €200 billion. British Prime Minister David Cameron has threatened to veto
any budget increase that exceeds inflation, and many have compared his stance
this time around to that of Margaret Thatcher in 1984, when she negotiated an
annual rebate for Britain in the EU budget in the double-digit billions,
ensuring that the country gets a large chunk of the money that it pays in back.
Cameron's
position is also far off from that of the European Parliament, the elected body
of the people, which has criticized the European Commission's budget proposal
as being too meager. On Nov. 7, German Chancellor Angela Merkel is expected to
travel to London to meet with Cameron and discuss how to proceed.
More
Cameron suffers stinging defeat over Europe
David Cameron suffered a stinging Commons defeat over Europe as Conservative backbenchers told him he must deliver real reductions in the European Union budget.
The
defeat came after more than 50 Conservative rebels were joined by Labour MPs in
supporting a demand for real-terms reductions in spending by Brussels.
The
Government was defeated by 307 votes to 294, a majority of 13. Commons sources
estimated that 51 Tories voted against the Government, with two more acting as
tellers.
The vote
was Mr Cameron’s second major Commons defeat over Europe and led to warnings
that division in the Conservative Party over Europe could hamstring him as it
did Sir John Major during the 1990s.
The vote is
not binding, but will put Mr Cameron under intense pressure to take a harder
line in talks on the EU budget at a summit in Brussels later this month.
---- Peter Bone, a Conservative rebel, said many MPs had defied the Government because their constituents will not accept a rise in EU spending.
“Parliament
spoke for the people,” Mr Bone said. “It was a very significant victory for the
people.”
Margaret Thatcher
At the Comex silver depositories Wednesday final figures were: Registered 37.01
Moz, Eligible 105.35 Moz, Total 142.36 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, what the
British really think of “All Hallow’s
Een.”
Trick-or-treaters seem to think this is America
31-10-12
THOUSANDS of costumed children and their parents are under the mistaken
impression that they live in America, it has emerged.
The
wrong-headed youngsters will dress up as witches and suchlike to indulge in the
American ritual of visiting houses for sweets, something that makes absolutely
no sense in the UK.
Professor
Henry Brubaker of the Institute for Studies said: “There is a growing mass
delusion involving something called ‘trick or treat’.
“It’s one
of those things like monster trucks, Twinkies and Hulk Hogan that they love in
the so-called ‘states’ but is in fact completely demented.
“Householders
are quite entitled to tell these children to piss off on the basis that they
are culturally irrelevant.”
Home
owner Bill McKay said: “I had these two little ones turn up dressed as orcs. I
held my ground and said, ‘This isn’t America – so fuck off’.
“They
went off crying, but sometimes life’s lessons come hard. I am proud of myself.”
Six-year
old Joseph Turner, who visited Bill McKay’s house, said: “I wanted to be a vet
when I grew up, but since having a traumatic experience on Halloween I’ve
decided to be a serial killer.”
Link
“During
my lifetime most of the problems the world has faced have come, in one fashion
or other, from mainland Europe, and the solutions from outside it.”
Margaret
Thatcher
The monthly
Coppock Indicators finished October:
DJIA: +92 Up. NASDAQ: +99 Up. SP500: +102 Up.
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