Baltic Dry Index. 937 -29
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
“The problem with fiat money is that it rewards the minority that can handle money, but fools the generation that has worked and saved money.”
“Adam Smith” aka George Goodman.
With nothing new to report on America’s fiscal
cliff, or Europe’s slow euro suicide, we stay with Asia again today. China will
become the world’s largest economy 2025-2030, according to "Global Trends 2030: Alternative Worlds," a
report issued by the National
Intelligence Council, an analytical arm of the U.S. government's Office of the
Director of National Intelligence. Though China won’t take on the US role of
global super power, the report rather hopefully says. My reading of history
suggests that they will. My crystal ball
isn’t as clear as the National Intelligence Council’s, but I suspect that there
will be many a slip tween cusp and lip.
For one thing it
isn’t clear to me that our fiat currency world is able to continue on much
longer. The dollar, the euro, the Pound and the Yen, are all skating on thin
ice, living on borrowed time, and drinking in the last chance saloon. Any one
of them falling will take out the others. Only communist run China might just
be able to run the Chinese Empire with a fiat Yuan, but not with the current
level of imports. If the age of fiat currency does end before 2030, then all of
the assumptions of the NIC will become moot.
However, playing
devil’s advocate, and suggesting that they are right, the inhabitants of
America and Europe are in for a big downward lifestyle adjustment. We are on
the road to someplace between Athens and Reykjavik. Stay long physical precious
metals. Long before our Great Nixonian Error of fiat money empowers China to super-power status, my guess is that we will
come to our senses and return to a metallic monetary global clearing system. The
present derivatives gambling system is just one Lehman away from the biggest interlocked
crash of all. The US going over its
fiscal cliff, might be the trigger, as might the EU locking the Eurozone into a
depression prone, uncompetitive United
Austerity States of Europe. And then there is always Japan starting a war with
China over some islands that it doesn’t actually own but merely administers.
Food for thought today.
"Gold would have value if for no other reason than that it enables a citizen to fashion his financial escape from the state."
William F. Rickenbacker
U.S. intelligence sees Asia's global power rising by 2030
WASHINGTON |(Reuters) - China's economy is likely to surpass the United States in less than two decades but the Asian country is not expected to take on the superpower role of the United States in gathering coalitions to deal with global issues, U.S. intelligence analysts said on Monday.
By 2030 Asia will overtake North America and Europe combined in global power based on gross domestic product, population, military spending and technological investment, a new intelligence report said.
"China alone will probably have the largest economy, surpassing that of the United States a few years before 2030," it said. "Meanwhile, the economies of Europe, Japan, and Russia are likely to continue their slow relative declines."
The report, "Global Trends 2030: Alternative Worlds," was issued by the National Intelligence Council, an analytical arm of the U.S. government's Office of the Director of National Intelligence. In addition to U.S. intelligence analysts, the report includes the views of foreign and private experts and can be seen here www.dni.gov/nic/globaltrends.
More
Next, more from Reuters on China, where according to
them, a new plane will take to China’s skies “every other day for the next two
decades.” No wonder China is building up a stockpile of rare earth elements,
and other critical materials.
Air rage: Chinese screaming mad over delays
SHANGHAI |(Reuters) - Airline crews and ground staff are assaulted, passengers storm a runway, and a person yanks open an emergency exit door on a plane.
In China, angry passengers are resorting to extreme measures to protest delays as the country's restricted air corridors are becoming clogged with millions of new fliers each year -- a fact attributed to the fast rise of the middle class and cheap flights.
There have been dozens of incidents involving irate travelers on both domestic and international flights this year, as airlines struggle to stick to their schedules.
"When flights get delayed, passengers make a lot of trouble. Sometimes they even beat our staff," Wang Zhenghua, founder and chairman of Shanghai-based budget carrier Spring Airlines, told Reuters in an interview earlier this year.
"Airlines are actually the weaker party. With the government calling for a 'harmonious society', the only thing we can do is to give them compensation to calm them down."
With manufacturers predicting a new plane will take to China's skies every other day for the next two decades, industry officials say congestion is only going to get worse. And that means more delays.
Some 30 years ago, flying was a travel option only available to top government and company officials who needed to submit a special document from their employer to buy a plane ticket.
While most Chinese people still use trains for long-distance travel because of the lower cost, rising income and cheaper flights as a result of increased competition means more are now using planes.
Over 270 million passengers flew on domestic routes in China last year, up nearly 10 percent from 2010 and over 70 percent from 2003, according to government data. The International Air Transport Association projects 379 million will be flying domestically by 2014.
Airlines have been adding planes to keep pace with the increased demand. Boeing predicts China will need to add 5,260 new airliners worth $670 billion over the next 20 years.
More
http://www.reuters.com/article/2012/12/10/us-china-airtravel-idUKBRE8B915E20121210
Move Over, Michigan, China Is The World's Next Rust Belt
12/09/2012 @ 5:35PM
Six cities in Liaoning province, including Shenyang and Anshan, recently announced they are converting abandoned industrial sites to farmland. Dongguan, once a booming factory center, is on the verge of bankruptcy as companies close, leaving the local government severely cash-strapped.Just two years after China overtook the U.S. to become the world’s largest manufacturer, the country faces the prospect of decades of de-industrialization. And there is little Beijing can do to arrest the slide.
Globalization once propelled China. Hong Kong manufacturers flocked to that country’s coastal regions in the early 1980s largely because labor costs were low and regulation lax. Later, companies had little choice but to move to China because their competitors had already located there, and soon suppliers congregated around assemblers, forming efficient industrial communities. The country became an integral link in the production plans of manufacturers, large and small.
As a result, China made itself the
manufacturing powerhouse. From nowhere, it became the world’s biggest
producer of steel, cameras, toys, sporting goods, shoes, garments, textiles,
televisions, cell phones, pens, you name it.
----But as the Chinese say, “no feast lasts forever.” Various trends coincided to erode their country’s competitive advantages. First, Chinese authorities started enforcing environmental rules as citizens took to the streets to complain about metals in the soil, pollutants in the water, and soot in the air. Now, no one in China wants to live in a “cancer village,” and people are routinely blocking projects, especially in the prosperous coastal regions of the country.
Second,
smaller foreign investors began to pull back as they realized that
manufacturing in China substantially increased the risk of loss of their
intellectual property. Beijing did little to stop rampant theft.
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 Monday final figures were: Registered 40.92
Moz, Eligible 105.71 Moz, Total 146.63 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, the Bank of
England’s King warns of a fiat currency race to the bottom. The next Lehman is
probably closer than we think.
BoE's King warns of growing currency competition
NEW YORK |(Reuters) - The head of the Bank of England warned on Monday that too many countries were trying to weaken their currencies to offset the impact of the slow global economy and the trend could grow next year.
"You can see, month by month, the addition to the number of countries who feel that active exchange rate management, always to push their exchange rate down, is growing," Mervyn King said in a speech.
"My concern is that in 2013, what we will see is the growth of actively managed exchange rates as an alternative to the use of domestic monetary policy," he told the Economic Club of New York. King did not identify any countries.
He also criticized what he said was backtracking by the Group of 20 leading economies to fix the imbalance between countries with trade surpluses and those with deficits, despite vows by the group to make rebalancing the world economy a priority after the financial crisis erupted.
Central banks, including the Bank of England, have kept interest rates very low and used unprecedented policies such as massive asset purchases to try to stir growth.
Pumping so much money into developed economies, however, can put upward pressure on currencies of emerging economies, hurting those countries' exports.
Brazil and China, as well as more economically developed Japan and Switzerland, have taken steps to push down the value of their respective currencies in recent years.
The BoE has so far bought 375 billion pounds ($603 billion) mostly in government bonds to help lift the British economy out of the doldrums.
Countries with trade surpluses are often reluctant to boost domestic spending that would allow deficit countries to rebalance by exporting more.
"This is a problem which has to be tackled," King said, citing a divide between some surplus and deficit countries within the euro zone.
More
"When paper money systems begin to crack at the seams, the run to gold could be explosive."
Harry Browne
The monthly
Coppock Indicators finished November:
DJIA: +103 Up. NASDAQ: +123 Up. SP500: +125 Up. Time
is running out for the Santa Clause rally, unless there is a fiscal cliff
agreement.
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