Baltic Dry Index. 922 +05
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
FRANKFURT (MNI) - The purpose of the European Central Bank's two three-year longer-term refinancing operations was to address banks' short-term funding issues and "nothing else," ECB Vice President Vitor Constancio said on Wednesday.
"The sole aim of the LTRO was to cater to the funding stress of euro area banks in general," Constancio said at a colloquium on macro-prudential regulation here. "It never crossed our minds that we were solving the sovereign debt crisis" with these measures.
From more on “the Donald” and Murdoch media, scroll down to Crooks and Scoundrels Corner.
So the truth is finally out, the ECB’s Long Term Refinancing Operation, where the ECB issued low interest 3 year loans to banks against worthless collateral unsellable in the commercial market was just a disguised ECB QE program intended to fool (give cover) to German politicians that the ECB wasn’t breaking its mandate and the law. In the easy come easy go legal attitude that prevails now in Euroland, it doesn’t matter if the QE program worked. This morning it doesn’t look like it worked. In the upside down world that is now Europe, if it didn’t work twice better try it thrice.
While the USA seems to be setting up the stage for another round of backdoor QE around the middle of the year, the ECB must probably move sooner. The European crisis is accelerating again, with a general strike underway today in Spain, and the European voters flirting with punishing mainstream parties. The ECB will soon try another round of Italian magic. Stay long physical precious metals. We are awash in funny money with much more to come.
"Gold was not selected arbitrarily by governments to be the monetary standard. Gold had developed for many centuries on the free market as the best money; as the commodity providing the most stable and desirable monetary medium."
Murray N. Rothbard
ECB's LTRO plan flops as banks cut lending
European banks cut lending lines to companies last month, defying the central bank's grand plan to stem the crisis with a flood of more than €1 trillion (£838bn) of cheap loans.
The European Central Bank (ECB) said loans to the real economy fell in February, scotching claims that radical long-term refinancing operation (LTRO) would stem the crisis.
Open Europe's Raoul Ruparel said: "The LTRO has succeeded in avoiding a severe funding crunch...[But] it does not tackle the underlying lending risks which the banks are still keen to avoid, particularly with the looming recession in Europe."
As Spain faces a general strike on Thursday, economists called for the eurozone to use its bail-out funds to support the country's banks.
Finance ministers are under pressure to boost Europe's "firewalls" in Copenhagan on Friday. But Jens Weidmann, Bundesbank president, warned that "just like the 'Tower of Babel' the 'Wall of Money' will never reach heaven".
Italy's premier Mario Monti warned against blaming sinner states: "It was in fact Germany and France that were loose concerning the public deficits and debts," he said. "If the father and mother of the eurozone are violating the rules, you could not expect...[others] to be compliant."
Link.
"The history of paper money is an account of abuse, mismanagement, and financial disaster."
Richard M. Ebeling
EU Nears One-Year Boost in Rescue Fund to $1.3 Trillion
By James G. Neuger and Rebecca Christie - Mar 28, 2012 11:00 PM GMT
European governments are preparing for a one-year increase in the ceiling on rescue aid to 940 billion euros ($1.3 trillion) to keep the debt crisis at bay, according to a draft statement written for finance ministers.
The euro-area finance chiefs will probably decide at a meeting in Copenhagen tomorrow to run the 500 billion-euro permanent European Stability Mechanism alongside the 200 billion euros committed by the temporary fund, a European official told reporters in Brussels yesterday
Beyond that, they are also set to allow the temporary fund’s unused 240 billion euros to be tapped until mid-2013 “in exceptional circumstances following a unanimous decision of euro-area heads of state or government notably in case the ESM capacity would prove insufficient,” according to the draft dated March 23 and obtained by Bloomberg News.
The boost to the war chest would come after Chancellor Angela Merkel of Germany, the dominant power in two years of crisis fighting, this week warned of “fragility” in Portugal and Spain. It would also be designed to lure the rest of the world into putting more money into the International Monetary Fund’s arsenal.
Greece May Have to Restructure Debt Again, S&P’s Kraemer Says
By Jennifer Ryan - Mar 29, 2012 12:01 AM GMT
Greece will probably have to restructure its debt again and this may involve bailout partners such as the International Monetary Fund, said Moritz Kraemer, head of sovereign ratings at Standard & Poor’s.
There may be “down the road, I’m not predicting today when, another restructuring of the outstanding debt,” he said at an event in London late yesterday. “At that time maybe the official creditors need to come into the boat.”
Speaking at the same event at the London School of Economics, Poul Thomsen, the IMF mission chief to Greece, said while the country has made an “aggressive” fiscal adjustment, it will take at least a decade to fully complete the country’s restructuring.
Caretaker Prime Minister Lucas Papademos won parliamentary approval on March 21 for a second 130 billion-euro ($173 billion) rescue program. Passage of the legislation moves the country a step closer to elections that may be held as early as next month. Greece pushed through the biggest sovereign debt restructuring in history earlier this month, paving the way for the bailout.
Espirito Santo Among Five Portugal Lenders Downgraded by Moody’s
By Patrick Clark - Mar 29, 2012 12:00 AM GMT
Banco Espirito Santo SA (BES) was among five banks in Portugal to have credit ratings cut by Moody’s Investors Service, which cited asset risks and a “poor economic outlook” in a nation whose own grade was reduced last month.
Espirito Santo, Portugal’s largest publicly traded bank by market value, had its debt rating lowered one level to Ba3, Moody’s said yesterday in a statement. It took the same action for Caixa Geral de Depositos SA and Banco BPI SA. (BPI) Banco Internacional do Funchal was downgraded to B1 from Ba3
Portugal was among six European nations, along with Spain and Italy, to have debt ratings cut by Moody’s Feb. 13 as the region’s government-debt crisis spurs austerity programs that may undermine growth. Yesterday’s moves give the four banks grades on par with or lower than Portugal’s, which fell to Ba3 from Ba2. Banco Santander Totta SA, the Portuguese unit of Spain’s largest lender, was cut two levels to Ba1 from Baa2.
Downgrades of the nation’s lenders were generally driven by “expected further deterioration of banks’ domestic asset quality” and firms’ prolonged difficulty accessing private wholesale funding sources, Moody’s said in the statement. “While none of these pressures are new, in Moody’s view they continue to mount against the backdrop of the ongoing euro debt crisis.”
Shock slowdown in UK growth as GDP contracts 0.3pc
Fears that the UK is double-dipping back into recession rose after statisticians whittled down the economy's growth over nine months of last year.
The UK economy shrank 0.3pc in the final quarter of 2011, rather than the 0.2pc thought, the Office for National Statistics (ONS) said. That meant gross domestic product (GDP) grew just 0.7pc in 2011, rather than the 0.8pc first estimated.
Growth figures for the first and second quarters of last year were also cut. While economists have been predicting the UK will avoid a return to recession – defined as two consecutive quarters in which the economy shrinks – the numbers raised fears that a double-dip will materialise.
"In combination with the poor production and retail sales data, it is more likely than not that the economy also contracted in the first three months of this year, which would put the UK in a technical recession," said Azad Zangana, European economist at Schroders.
The downwards revision to the UK's fourth-quarter figure was driven by transport, communication, business services and the financial sector. However, the downturn was broad based.
Manufacturing output fell 0.7pc, construction dropped 0.2pc and the services sector saw output fall 0.1pc.
Bank of China Seeks to Join World’s Biggest Metals Exchange
By Agnieszka Troszkiewicz - Mar 28, 2012 6:50 PM GMT
Bank of China Ltd. became the first Chinese company to apply for membership on the London Metal Exchange, the world’s biggest metals bourse.
BOCI Global Commodities (U.K.) Ltd. is seeking to become a category 2 member, giving it the right to trade by telephone and electronically, the LME said in a notice today. It won’t have access to the ring, London’s last open-outcry trading floor.
China accounts for about 39 percent of global copper usage, 42 percent of aluminum and 43 percent of nickel demand, according to Barclays Capital. The LME opened its first Asian office in Singapore in 2010 and introduced new contracts with the Singapore Exchange Ltd. last year to attract new investors. The LME is also considering takeover bids for the 135-year-old exchange after trading volume climbed to a record last year.
“China is such a big user of the LME,” said Herwig Schmidt, head of sales at Triland Metals Ltd., one of 12 companies trading on the floor of the LME and a unit of Tokyo- based Mitsubishi Corp. “It’s the first step that encourages others to follow.”
The LME’s board will review the application on April 23, said Chris Evans, the exchange’s head of business development.
Tim Price And Don Coxe: "We Have Entered The Most Favourable Era For Gold Prices In Our Lifetime”
-----In Don Coxe's latest and typically excellent letter, "All Clear?", he highlights the opportunity in precious metals mining companies:
"If there were one over-arching theme at the BMO Global Metals & Mining Conference, it was that the gold miners are upset and even embarrassed that their shares have so dramatically underperformed bullion...
"On the one hand, they were delighted in 2011 when it was reported that since Nixon closed the gold window, a bar of bullion had delivered higher investment returns than the S&P 500 for forty years-- with dividends reinvested. But some gold mining CEOs find it an insult that what they mine is more respected than their companies' shares...
"In our view, we have entered the most favourable era for gold prices in our lifetime, and the share prices of the great mining companies will eventually outperform bullion prices."
Gold remains one of the most widely misunderstood assets in the investible world. Indeed, it may be better to refer to it as a means of saving that does not expose the saver to counterparty or credit risk or to the depredations of the monetary authorities.
As Don Coxe makes clear, governments are running deficits "beyond the forecasts of all but the hardiest goldbugs five years ago; central banks are printing money and creating liquidity beyond the forecasts of all but the most paranoid goldbugs a year ago."
The choice for the saver is essentially binary: hold money in ever-depreciating paper, or in a tangible vehicle that has the potential to rise dramatically as expressed in paper money terms.
Gold prices have now softened, offering investors yet another chance to get back on board what is perhaps the most compelling form of money- and portfolio insurance available.
More
"All of the government's monetary, economic and political power, as well as its extensive propaganda machinery, will be enlisted in a constant battle to drive down the price of gold - but in the absence of any fundamental change in the nation's monetary, fiscal, and economic direction, simply regard any major retreat in the price of gold as an unexpected buying opportunity."
Irwin A. Schiff
At the Comex silver depositories Wednesday final figures were: Registered 34.84 Moz, Eligible 101.67 Moz, Total 136.51 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today two of the best scoundrels, but did they over reach themselves and break the law? Are these two American Muppets too big to be subject to law? Time will tell in the weeks and months ahead.
“A rich man is either a scoundrel or the heir of a scoundrel”
Spanish Proverb.
Trump to be investigated by election watchdog over wind farm campaign
Published Mon 26 Mar 2012 14:38, Last updated: 2012-03-26
US tycoon Donald Trump is to be investigated by the UK election watchdog following a complaint over his apparent funding of an anti-wind farm campaign group.
The Trump Corporation last month agreed to finance and support protest organisation Communities Against Turbines Scotland (CATS) as it increased its efforts to derail the roll-out of clean, green energy.
The chair of CATS reportedly revealed that some of the cash would be used to target council election candidates who stand in favour of wind farm developments.
But because the funding is from an overseas donor, the Scottish Greens have now confirmed they have referred the matter to the Electoral Commission for investigation.
They believe the financial support from the US may be in breach of the complex and strict rules governing public elections.
Green MSP Patrick Harvie said: "It’s bad enough that Mr Trump has thrown a hissy fit about the chance that he might be able to see turbines from his golf resort, and has threatened to abuse the planning and legal systems to undermine Scotland’s energy industry.
“But the possibility that a foreign billionaire will seek to use his wealth to influence the local elections is outrageous.
"This is not America, and our political process is not for sale at any price."
New York-based Trump is opposing plans for 11 turbines off the Aberdeenshire coast, near his golf resort on the Menie Estate.
Link
Rupert Murdoch's News Corp faces police investigation in Australia
Rupert Murdoch's News Corporation is facing a police investigation in his native Australia, throwing his attempt to tighten his grip on its powerful regional media into jeopardy.
The Australian government has called for a police inquiry into corporate hacking by the media group, after a newspaper released more than 14,000 emails allegedly showing that the company used a secret unit to sabotage competitors.
The office of Stephen Conroy, Australia's communications minister, said the allegations were "serious" and "should be referred to the Australian Federal Police for investigation".
Experts said a police inquiry would be likely to derail the $2bn bid by Foxtel - the Australian pay-TV operation 25pc owned by News Corp - for rival network Austar.
Claims have been made that NDS, a technology company that was part-owned by News Corp, had a secret unit which encouraged the widespread hacking of competitors. The practice reportedly cost rivals $AUS50m (£33m) a year and helped put at least one out of business.
The Australian Financial Review made the claims this week, as it published thousands of emails from an archive held by Ray Adams, European chief of the unit called "Operational Security" between 1996 and 2002. Pay-TV operators worldwide, including ITV Digital in the UK and Austar in Australia, were subject to a major wave of piracy during the period.
"We are in a world of irredeemable paper money - a state of affairs unprecedented in history."
John Exter
