Baltic Dry Index. 699 -01
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
'Venez Londres, mes amis!'
Boris Johnson, Mayor of London.
Stay long physical precious metals. From
America, a house divided at war with itself, and already fighting for the
spoils of the mid-term elections still two years away, to Asia where Japan and
China are set to clash over some disputed uninhabited islands in the East China
Sea, now that America has given Japan a “blank cheque” of military support if
Japan initiates a war with China over the islands, our world has rarely looked more
uncertain and dangerous entering into a
new year. Sandwiched in between, a European Monetary Union that seems
determined to undertake an insane “reformation,” reinventing itself as a slow/no
growth zone, a form of EUSSR without the KGB. Most of the Eurozone is
deliberately setting out to turn itself into an irrelevant global backwater.
France has adopted a suicidal death
wish, setting out to drive its rich and its entrepreneurial classes abroad.
As we end 2012 and enter 2013, behold the
state of our upside down dangerous world.
"The paper standard is self-destructive."
Hans F. Sennholz
China "highly vigilant" over Japanese fighters flying over disputed islands
BEIJING |(Reuters) - China is "highly vigilant" about Japanese jet fighter flights over islands claimed by both countries and Japan must bear responsibility for any consequences, Chinese military and maritime officials said on Thursday.
The officials, speaking a day after a new hawkish
Japanese prime minister took office, were responding to Japan sending jet
fighters several times in the past two weeks to intercept Chinese patrol planes
approaching airspace above the islands.
-----"The
Japanese side is using military aircraft to interfere with planes on normal
patrol in undisputed Chinese airspace," said Shi Qingfeng, director
general of the Administration Office of the State Oceanic Administration, the
agency whose ships patrol disputed waters in the South and East China Seas.
"This
is highly unreasonable conduct and the Japanese side is consciously trying to
escalate the situation," Shi said at a presentation for Chinese media and
diplomats. "The Japanese side must assume responsibility for the
consequences."
More
Japan Rebuke to G-20 Nations May Signal Moves to Weaken Yen
By Eunkyung Seo & Masaki Kondo - Dec 31, 2012 7:36 AM GMT
Japanese purchases of foreign bonds to weaken the yen may become more likely
as the nation rejects trading partners’ rights to criticize its currency
policies. “Foreign countries have no right to lecture us,” Finance Minister Taro Aso told reporters at a briefing in Tokyo on Dec. 28. He said that the U.S. should have a stronger dollar and questioned whether major Group of 20 nations had stuck to pledges from 2009 to avoid competitive currency devaluations.
Japan’s new Prime Minister Shinzo Abe may accept trade friction as a cost of spurring growth and countering deflation through a looser monetary policy and weaker yen. The currency is set to complete its biggest annual decline in seven years after Abe’s Liberal Democratic Party secured a landslide victory in this month’s lower-house election. During his campaign, Abe said foreign-bond purchases were a possible monetary tool.
“The LDP wants to boost stock prices before the upper- house election in July next year, and the easiest option for them is to weaken the currency,” said Satoshi Okagawa, a senior global-markets analyst in Singapore at Sumitomo Mitsui Banking Corp., a unit of Japan’s second-biggest bank by market value. “The explicit policy to weaken the yen is likely to upset the U.S. and China.”
More
http://www.bloomberg.com/news/2012-12-31/japan-rebuke-to-g-20-nations-may-signal-more-moves-to-weaken-yen.html
Merkel Calls for German Patience as Euro Crisis ‘Far From Over’
By Rainer Buergin - Dec 30, 2012 11:00 PM GMT
German Chancellor Angela Merkel said the economic environment will be more
difficult in 2013 than this year, and that Europe’s sovereign debt crisis is
“far from over,” though progress has been made. “The reforms that we’ve agreed on are starting to take effect,” Merkel, who faces federal elections in September, said in a New Year’s television speech to the nation, sent today in advance by e-mail.
“Nevertheless, we still need a lot of patience. The crisis is far from over.”
Financial-market tensions have abated after the European Central Bank unveiled its Outright Monetary Transactions bond- buying plan on Sept. 6, pledging to spend as much money as needed to restore confidence in bond markets. The program provides support to debt-strapped nations as long as they sign up to economic reforms.
The European Stability Mechanism, which is helping the Spanish government recapitalize the country’s banks, was established Sept. 27 after Germany ratified the agreement. About 200 of the 17-nation euro area’s biggest lenders will come under direct ECB oversight when the single supervisor becomes operational, targeted for March 2014.
In the meantime, the 500 billion-euro ($661 billion) ESM could aid banks directly using its own procedures and asking ECB supervisors to step in. The fund could act as a resolution mechanism as well as providing capital to ailing banks, as long as certain conditions are met, ECB Executive Board member Joerg Asmussen said Dec. 18 in Frankfurt.
More
Taxes to Rise for Workers as Budget Deal Still Elusive
By Kathleen Hunter & Roxana Tiron - Dec 31, 2012 5:01 AM GMT
With taxes set to increase for almost every U.S.
worker at midnight, Congress hasn’t reached a budget deal that Democrats and
Republicans say is necessary to prevent a blow to the U.S. economy.
Private talks between Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell that began Dec. 28 stalled yesterday because of disputes over income tax rates, the estate tax and other issues.
McConnell, a Kentucky Republican, reached out to Vice President Joe Biden in an effort to break the impasse, while staffers worked into the night trading and reviewing offers.
“There’s still significant differences between the two sides but negotiations continue,” Reid, a Nevada Democrat, said on the Senate floor. The Senate will reconvene today at 11 a.m. Washington time and “perhaps” have further announcements then, he said. “I certainly hope so.”
Congress is working to avert more than $600 billion in tax increases and federal spending cuts, the so-called fiscal cliff, set to start taking effect tomorrow. Allowing those changes to take effect would cause a recession in the first half of 2013, according to the Congressional Budget Office.
More
The only good news: China. But scroll down to
Crooks Corner.
China Manufacturing Pickup Shows Rebound Gains Traction: Economy
By Bloomberg News - Dec 31, 2012 7:24 AM GMT
China’s manufacturing unexpectedly expanded at the fastest pace in 19 months
in December, boosting optimism that a recovery in the world’s second-biggest
economy is gaining traction. The final reading of a Purchasing Managers’ Index was 51.5 in December, according to a statement from HSBC Holdings Plc and Markit Economics today. That compares with the 50.9 preliminary reading on Dec. 14 and a final 50.5 in November. A level above 50 indicates expansion.
China’s economy may have rebounded after a
seven-quarter slowdown as the government increased spending on infrastructure
and accelerated investment-project approvals.
----“Momentum is likely to be sustained in the
coming months when infrastructure construction runs into full speed and
property market conditions stabilize,” Qu Hongbin, chief China economist at
HSBC in Hong Kong, said in the statement. Manufacturing output and purchasing
accelerated this month, even as new export orders showed a “slight fall” on
weak demand in Europe, Japan and the U.S., HSBC said.
More
"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
At the Comex silver depositories Friday final figures were: Registered 42.06
Moz, Eligible 105.02 Moz, Total 147.08 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, we
present the modern miracle of the worker’s paradise of China.
“The
Master said, “The gentleman understands what is right, whereas the petty man
understands profit.”
Confucius.
Billionaire Princelings Ruin a Chinese Vision
By William Pesek Dec 27, 2012 10:00 PM GMT
----This week’s
Bloomberg News expose on the so-called Eight Immortals is a case in point.
Building on a June article tracing the accumulated wealth of the family of Xi
Jinping, China’s next president, it described the vast fortunes being amassed
by the offspring of the founding fathers who were instrumental in Mao Zedong’s
rise to power in 1949. Mao changed the world by meeting U.S. President Richard
Nixon, and Immortals such as Deng Xiaoping engineered the economic boom that
has unfolded since then.
----What the Immortals hadn’t counted on was how their children would foul things up. By harnessing the trust of the state and top-level political connections, these princelings are reaping outsized benefits from China’s growth. It is an outcome that would shock Deng: After 30 years of explosive growth, opening markets and reducing poverty, inequality levels now echo the pre-Communist era.
Wealth Grab
One of modern history’s greatest wealth grabs isn’t just exacerbating the rich-poor divide, but delaying the reforms needed to roll back the state control that masks underlying economic inefficiency. There is lots of money in the status quo -- an unfathomable amount, in fact. Just three of the Immortals’ dozens of children and their spouses -- among them Deng’s son-in-law and the son of Mao’s economic czar -- founded or run companies with combined assets of $1.6 trillion as of last year. That is equivalent to almost a fifth of China’s gross domestic product.More than a third of the Immortals’ children and their spouses hold top positions in state-owned enterprises. And then there’s princeling Xi, who will run China for the next 10 years and have the final say over whether his pledge to root out corruption is real or hollow rhetoric. Bloomberg documented how his family accumulated a fortune estimated at $376 million.
The New York Times also had a busy year following the money and connecting the financial dots. The Times reported that the family of current Premier Wen Jiabao has made billions of dollars during his tenure. That’s quite a blow to the carefully honed image of the modest and simple “Grandpa Wen” of the people.
The government’s response has been indignation. It accused the Times, for example, of harboring political motives to destabilize the regime. Yet China has a growing corruption problem on its hands, one that must be addressed in a transparent manner.
----Yet the one that China’s leaders are
probably most loath to confront is the sight of Communist Party officials
becoming modern-day Rockefellers and Vanderbilts. It surely never occurred to
Deng that finding wealth would be China’s undoing. When you follow the money,
it’s hard to conclude otherwise.
More
A
happy, healthy and prosperous 2013 to all.
The monthly
Coppock Indicators finished November:
DJIA: +103 Up. NASDAQ: +123 Up. SP500: +125 Up.
