Euros Anyone?

Baltic Dry Index. 700  +02

LIR Gold Target by 2019: $30,000.  Revised due to QE programs.

"The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine, and to process; and that it cannot be created by political fiat or caprice."

Henry Hazlitt

The nightmare that is the fiat money euro just gets worse. For the millions trapped in the Club Med austerity zone, the euro isn’t working any more. Far from bringing prosperity as promised, it’s turned into a wealth and jobs destroying mechanism on par with the biblical plagues of Egypt. For the youth generation of Club Mad, 30 to 55 percent unemployment is a recipe for emigration or perpetual poverty. By missing out on a job 18-25, most will get on the upward ladder too late. They will become little more than a generational underclass unless they emigrate. Either the German block must exit the euro, or Club Dead must exit the euro for the betterment of their people. Now the rest of the world can see what’s coming next, even if Europe’s leaders and Eureaucrats can’t or deliberately won’t. Stay long physical precious metals. The euro’s borrowed time has just about run out.

"Sooner or later both the Greek population and international creditors will tire of fighting a losing battle, leading to a break-up of the currency union as Greece pulls out, probably followed by other countries"

Douglas McWilliams, chief executive of the Centre of Economics and Business Research.

Europe's dream of toppling dollar fades as Asian Tigers dump euro

The share of euros in the world’s rising powers’ reserve holdings has fallen to its lowest level since 2002, dashing hopes that the single currency will soon challenge the US dollar for global primacy.

By Ambrose Evans-Pritchard 7:57PM GMT 03 Jan 2013

International Monetary Fund data show that emerging nations have cut the weighting of EMU bonds in their reserves to 24.7pc from a peak of 30pc at the onset of Europe’s crisis three years ago, with a record drop in the third quarter of 2012.

“They have lost their appetite for peripheral EMU bonds, and some have simply cut Italy and other countries from their benchmarks,” said Jens Nordvik, currency chief at Nomura.

The IMF data also show a record $19bn (£12bn) surge in holdings of sterling by advanced central banks to $98bn, the biggest three-month jump ever recorded. Analysts say this is almost certainly caused by the Swiss National Bank as it takes extreme measures to hold down the franc. The SNB has already bought an estimated $80bn-worth of euro bonds and is increasingly switching to other assets.

“There aren’t many places to go in this 'ugly contest’ if you don’t like the euro, dollar or yen,” said HSBC’s David Bloom.

The effect has been to thwart the Bank of England’s efforts to weaken the pound. The Swiss and UK central banks are effectively in a “low intensity” battle against each other. “This is what happens in currency wars. Desperate times lead to desperate acts,” said Mr Bloom.

More

http://www.telegraph.co.uk/finance/financialcrisis/9778899/Europes-dream-of-toppling-dollar-fades-as-Asian-Tigers-dump-euro.html

In yet another sign that Europe is dying under the unloved euro regime, for the first time ever more new cars sales were registered in China then the Eurozone. According to an article in Der Spiegel “whereas 13.2 million cars were registered in China in 2012, in Europe, the total fell from the previous year's 13.6 million to just 12.5 million.” Continental Europe has a Bilderberger death wish called the euro.

Ferrari and Maserati domestic sales fall by more than half

Sales of Ferrari and Maserati fell by more than half in 2012 in Italy, as the luxury car market was hit by high taxes.

By Telegraph staff, and agencies 11:44AM GMT 03 Jan 2013

Ferrari sales fell by 56pc to 248 units in last year, according to the Italian auto industry trade body.

Maserati's fall was steeper, down by 72pc to 115 units, while Lamborghini sales dropped by 16.6pc as it sold 60 cars.

Overall Italy's car sales fell to their lowest level since 1979, falling 22.5pc in December and slumped 19.9pc for the full year to 1.4 million units, their lowest levels since 1979.

"The car market is suffering from an overdose of taxes aimed at hitting, if not criminalising, the acquisition, ownership and use of autos," said Filippo Pavan Bernacchi, the president of Italy's car dealers' trade group Federauto to Reuters.

He said he expected Italian car sales in 2013 to be close to 1.33 million units.

Italy was not alone, as car sales in France and Spain also dropped.

Automakers are facing a sustained slump in the European car market as the eurozone debt crisis and government austerity measures sap consumer demand.

French car registrations fell 15pc in December, leaving the full year down 14pc to 1.90 million vehicles - the lowest since 1997, French industry group CCFA said.

Spain's monthly sales shrank 23pc, after a 20pc fall in November. Its full-year total of 699,589 cars, down 13 percent, was the lowest since industry association Anfac began keeping records in 1989.

More

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9777684/Ferrari-and-Maserati-domestic-sales-fall-by-more-than-half.html

But on the other side of the Atlantic things are little better. While the next Lehman is busy ticking away in an unreformed casino bankster economy, inside the Fed there is despair that old Helicopter Ben is all but out of bullets. Stay long physical precious metals for the 2013 end game. The USA, Great Britain, the Eurozone and Japan, are all now on voodoo policies intended to weaken their fiat currencies against each other. We seem to be headed for a bigger version of 2007-2008.

“Those who don't know history are destined to repeat it.”

Edmund Burke

Jan. 3, 2013, 2:40 p.m. EST

Fed says it’s running out of bullets

Commentary: FOMC signals that bond purchases may stop

WASHINGTON (MarketWatch) — For the first time since the financial crisis started five years ago, the Federal Reserve has at last made its first signal that its extraordinary loose monetary policy will start to get tougher.

To be sure, the change isn’t gigantic. There’s no sense that interest rates will increase from the near zero levels that have lasted for over four years.

And the Fed only last month initiated a new bond-buying program, to top off a plan to add more mortgage-backed securities that had only been around since September.

But, the minutes show, the central bank is starting to say, enough is enough. Of the crowd that supported bond buys, a few say they should continue until the end of the year, and several said it could stop, or slow, well before then.

----To put it differently: the Fed thinks the economy isn’t that great and there’s very little inflation to worry about, but its primary program to improve the economy doesn’t do very much.

It’s a clear admission the Fed is running out of gun powder. And that’s quite a shot it has fired to the markets.

More

http://www.marketwatch.com/story/fed-says-its-running-out-of-bullets-2013-01-03?link=MW_story_popular

"The most puzzling development in politics during the last decade is the apparent determination of Western European leaders to re-create the Soviet Union in Western Europe."

Mikhail Gorbachev

At the Comex silver depositories Thursday final figures were: Registered 40.43 Moz, Eligible 108.37 Moz, Total 148.80 Moz.  

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over. 

Today, more on East Asia’s dialog of the deaf in their path to the next war. Japan clutches at straws in its effort to hold onto the spoils of war. What the Japanese media conveniently overlooks, is that  for whatever reason at the time Japan, never took up China’s olive branch in 1950. Our world is forever a place of missed opportunity. If Eamon de Valera had taken up Churchill’s 1940 offer of returning the north after the war in exchange for air and naval bases in the south to cover the western approaches, the north would be part of the republic now. He simply though that Britain was going to lose and the Germany would give him better terms. If Argentina had taken up Britain’s 1965 suggestion of a transfer and leaseback arrangement, the Falkland Islands reality would now be very different. As it is, Japan is now arguing with China over the Diaoyu’s, the exact opposite position it takes with Russia over the Kuril Islands. This vastly under estimated dispute will likely only end badly.

We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable.

Alexander Solzhenitsyn

1950 Chinese diplomatic draft sees Senkakus as part of Ryukyus

TOKYO, Dec. 28, Kyodo

A Chinese diplomatic draft in 1950 on a peace treaty with Japan indicated Chinese recognition of the Senkaku Islands as part of the Ryukyu Islands, sources familiar with the document said Friday.

The wording in the draft for the Chinese government uses the name Senkaku Islands and indicates China understood the islands to be under the government of what is now Okinawa Prefecture, the sources said.
The recognition that the islands were part of the Ryukyu Islands contradicts Beijing's current claim that the islands are part of Taiwan and belong to its own territory from ancient times.

The document, dated May 1950 and titled "Draft outline on issues and arguments on parts concerning territories in the peace treaty with Japan," is believed to be authentic, according to the sources who examined the copy of the draft.

The draft says there is a need to deliberate whether to incorporate the islands into Taiwan due to an extremely close distance, suggesting the Chinese government as of 1950 did not consider the islands part of Taiwan.

The document also uses the name "Senkaku Islands," a sign there was no practice of calling the islands "Diaoyu," the name currently used in China.

In 1951, the San Francisco Peace Treaty was concluded and Japan considers the islands were returned from the United States together with subsequent agreements, but the Chinese government was not the party to the 1951 peace agreement.

The Japanese government denies the existence of a dispute over the Senkaku Islands, saying it was not until the 1970s that China started claiming the sovereignty over the islands.

http://english.kyodonews.jp/news/2012/12/202008.html

Another weekend, and the best that can be said is that America didn’t press the nuke button on the global economy during the week. But in the new civil war now ravaging America, nothing has been settled and neither side looks like giving up. From east to west, it’s all “double, double, toil and trouble,” at least as seen from a complacent London. Have a good weekend everyone.

 “The President may not want to have a fight about government spending over the next few months, but it’s the fight he is going to have, because it’s a debate the country needs.”

Senator McConnell

The monthly Coppock Indicators finished December:

DJIA: +100 Down. NASDAQ: +123 Unch. SP500: +129 Up.  All three indexes are giving different signals. A time for caution.