Tuesday 22 January 2013

The Decline And Fall of Europe.



Baltic Dry Index. 838  +01

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

"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

Today we return to dying Europe, where corruption, scandal, incompetence, and self-delusion rules. Far from reforming their economies by scrapping Brussels imposed over bearing regulation. Far from telling either Germany or Club Med to exit the wealth destroying, austerity, currency union, the “Great Leaders” of Euroland are off trying to impose on each other, a one size fits all, even more bureaucratic, even more wealth destroying, fiscal union. With too big to fail or bail France heading off for old socialist economic suicide, why would anyone want to be in a monetary union or a fiscal union that can only end in disaster?

With the Bank of Japan confirming this morning that it’s kicking off another round of currency depreciation, Europe’s woes are about to get worse in the export markets. From Germany, where the ruling coalition just lost yet another state election, the twelfth in a row I think, but who’s counting, to Spain where a rapidly widening political slush fund scandal is threatening to bring down the government, the reality is of a Europe in serious self-imposed decline. Stay long physical precious metals. As the warmer weather of spring eventually arrives, the chances are high that much of Europe erupts like Paris in May 1968.

"The history of paper money is an account of abuse, mismanagement, and financial disaster."

Richard M. Ebeling

Jens Weidmann warns of currency war risk

Loading central banks with more tasks and pressing them to pursue more aggressive monetary policies could risk a round of competitive devaluations, European Central Bank policymaker Jens Weidmann said on Monday, citing pressure on the Bank of Japan.

9:23PM GMT 21 Jan 2013
Weidmann is the latest in a string of policymakers worldwide to warn of the threat of a "currency war" as central banks pump out cash to support their economies, reducing their value in the process.

He said the pressure that Japan's new government has put on the BOJ to deliver bolder monetary easing endangered the central bank's independence, as did the actions of Hungary's government.

"Already alarming violations can be observed, for example in Hungary or Japan, where the new government is interfering massively in the business of the central bank with pressure for a more aggressive monetary policy and threatening an end to central bank autonomy."

"A consequence, whether intentional or unintentional, could moreover be an increased politicisation of exchange rates," the Bundesbank chief, who also sits on the ECB's Governing Council, said in a speech at a Deutsche Boerse New Year's event.

-----Last Wednesday, Russian central banker Alexei Ulyukayev said Japan is acting to weaken its currency and there is a danger that others will follow suit and foster a round of destabilising devaluations.

Russia holds the G20 presidency this year, a forum at which currencies and their relative values is likely to surface.

Plans for the ECB to begin supervising banks were consistent with a trend outside the euro zone for central banks to be given more tasks that lie beyond their core mandate, Weidmann said.

"But the overburdening of central banks with tasks and expectations is definitely not the right way to overcome the crisis in a sustainable way," he added. "Central banks protect their independence best by interpreting their task narrowly."

"The key to handling the crisis does not lie with the central banks."
More

Germany, France paper over euro cracks in show of unity

BERLIN | Mon Jan 21, 2013 7:07pm EST
(Reuters) - German Chancellor Angela Merkel hosts French President Francois Hollande and his government on Tuesday for a celebration marking half a century of post-war partnership, even as their countries struggle to forge a common vision for crisis-hit Europe.

Fifty years after Konrad Adenauer and Charles de Gaulle signed the Elysee Treaty that sealed a reconciliation between the former adversaries, Berlin and Paris are determined to put on a rousing display of unity.

A meeting of both cabinets will be followed by a joint session of parliament in the Reichstag building where Adolf Hitler gave some of his most famous World War Two speeches. In the evening, the German and French leaders will attend a concert at the Berlin Philharmonic.

Merkel and Hollande, born less than a month apart in the summer of 1954, have overcome an awkward start to their relationship, complicated by her vocal support for the French president's rival in the 2012 election and his condemnation of the German chancellor's austerity policies during the campaign.

After six months of earnest handshakes, the two now kiss each other on the cheek when they meet. In recent months, Berlin and Paris have forged complex compromises on European bank supervision and reform of a politically-sensitive shareholder pact governing EADS, the parent of planemaker Airbus.

But on perhaps the biggest policy issue hanging over Europe as it struggles to emerge from its three-year old debt crisis - the drive for closer economic integration - the Franco-German motor is barely revving.

And at a time when Europe can ill afford it, both leaders are turning there attention elsewhere - Merkel to her re-election bid and Hollande to France's ailing economy and risky military intervention in Mali.
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Britain becomes Germany's biggest trade partner as Berlin-London pact deepens

Britain has overtaken France to become Germany’s biggest global trade partner for the first time in the modern era, solidifying the emergence of a “special relationship” between Europe’s two like-minded northern powers.

Fresh data from the Bundesbank show that Anglo-German trade in goods and services soared to €153bn in the first nine months of 2012, with both exports and imports booming at double-digit rates.

It is one of the fastest growing trade relationships in the developed world. France lagged behind at €150bn as trade stagnated, with the US at €149bn and China at €115bn.

David Marsh from the financial group OMFIF said the trade swing underlines a “sobering truth” that Germany’s fundamental interests are shifting away from the eurozone core as Berlin embraces the wider world. The EMU share of German trade has fallen from 46pc to 37pc since the launch of the euro, displaced by Asia, as well as Eastern Europe and the Anglo-sphere.

British goods exports to Germany rose 20pc over the first three quarters compared to a year earlier, despite the economic downturn. The surge was led by medical equipment, drugs, car components, and petroleum goods. The deficit with Germany narrowed slighty to €17bn, a sign that trade is becoming better-balanced.

Although rarely acclaimed, British suppliers and manufacturers are deeply integrated into the German industrial machine and enjoy the follow-through benefits of German exports to the rest of the world.
More
http://www.telegraph.co.uk/finance/newsbysector/industry/9816643/Britain-becomes-Germanys-biggest-trade-partner-as-Berlin-London-pact-deepens.html

Protests become way of life in Spanish recession

MADRID | Mon Jan 21, 2013 9:16am EST
(Reuters) - Spanish workers are increasingly walking off the job to protest wage reductions and privatizations by the government as it tackles a steep public deficit that last year threatened to bankrupt the country.

Judges, garbage workers, doctors and bus drivers are among those involved in a wave of disruptive strikes and demonstrations as workers lose patience with the centre-right government's spending cuts after four years of economic crisis.

Demonstrations have become a daily event in the capital and other major cities in the biggest social upheaval Spain has seen since the transition to democracy in the 1970s.

"The government has put the country on the path to ruin. They are taking away all of our benefits and our purchasing power," said Francisco Garcia, a cleaner and union leader at the General Hospital of Alicante on the Mediterranean coast.

Garcia and his co-workers went on strike for 17 days in January to protest two months of not being paid by the Valencia regional government. The strike - which led to reports of unsanitary conditions - was just one of many recent walk-outs.

In the southern city of Granada, garbage haulers were on strike for two weeks in January to protest cuts in their hours and pay. The strike ended on Sunday, but only a quarter of the accumulated trash has been picked up.

----Adding to the outrage is the up-to 100 billion euros in public funds going to bail out banks that loaned recklessly during the property boom while tens of thousands of Spaniards have been evicted from their homes after bank foreclosure.

----Public outrage over tens of thousands of bank foreclosures on mortgage defaulters - including a reports of suicides by desperate homeowners - forced the government to put a moratorium on evictions of poor families.
More

Spain's bankers to strike as job cuts loom

Mon Jan 21, 2013 12:02pm EST
(Reuters) - Workers at three of Spain's bailed-out banks will stage strikes in coming weeks as they fight mass layoffs, unions said on Monday, spreading industrial unrest to a sector where walkouts have so far been rare.

Spain was forced to ask Europe for up to 100 billion euros ($132.9 billion) to help its weakest banks last year and four of the lenders it took over, including Bankia (BKIA.MC), have to cut thousands of jobs and shrink their balance sheets as a condition of their rescue.

While the banks, crippled by a property bubble that burst five years ago, have hogged headlines, employees have so far mostly kept a low profile even as protests become a way of life elsewhere in Spain.

But about 20,000 layoffs planned for 2013, almost 10 percent of the total, could reduce the workforce to levels last seen in 1975, data from the unions showed - the year dictator General Francisco Franco died, marking the start of the country's transition to democracy.

Alarmed at the scale of cuts, employees from across the industry will demonstrate on January 23, while workers from Bankia, Banco de Valencia and NovaGalicia Banco will strike on February 6 and hold partial strikes before then.
More

January 21, 2013 8:10 pm

Party accounts scandal rocks Spanish PM

By Miles Johnson in Madrid
Mariano Rajoy, Spain’s prime minister, has ordered an investigation into his own party’s accounts as he scrambles to distance himself from allegations that its former treasurer presided over a system of paying cash kickbacks to top officials.

Spain’s ruling Popular party has been rocked by the allegations of cash payments to party members, which follow prosecutors revealing that Luis Bárcenas, former treasurer of the party, amassed a fortune of as much as €22m in a Swiss bank account, prompting protests outside the PP’s central Madrid headquarters.

The escalating scandal threatens to damage the credibility of the Rajoy government at a time when it is pushing through a series of swingeing public spending cuts as unemployment stands at 25 per cent, and anger mounts at successive corruption cases within Spain’s political and business elite.

Ongoing high-profile corruption investigations include a case against Iñaki Urdangarin, son-in-law of King Juan Carlos, who was last year charged with embezzling millions of euros from charitable organisations.
There are at least a further 200 open cases against politicians across Spain.
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 37.97 Moz, Eligible 114.12 Moz, Total 152.09 Moz.  


Crooks and Scoundrels Corner

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

Today, nuclear power’s other side. How do you put a value on the hidden subsidy nuclear power gets by not having to pay for tragedy’s like this?

Fish caught close to the Fukushima nuclear plant was 2,500 times over the legal safe radiation limit

The murasoi fish, which is comparable to a rockfish, was found in the area surrounding the now-closed power plant

Monday 21 January 2013
A murasoi fish, caught close the the Fukushima nuclear plant in Japan, is over 2,500 times the legal safe radiation limit for seafood, the plant's operator Tokyo Electric has revealed.

The murasoi fish, which is comparable to a rockfish, was found in the area surrounding the now-closed power plant.

It was found to contain 254,000 becquerels per kilogram of cesium more than 2540 times the limit of 100 becquerels/kg set for seafood by the government.

A Becquerel is the basic unit of radioactivity used in the international measure of radiation units, the maximum level of radiation allowed in food for human consumption is 100 becquerels/kilogram.

According to the magazine, Science, levels of cesium in seafood in the area around Fukushima have not really decreased since 2011.

The company Tokyo Electric Power (Tepco) caught the fish in the bay close to the Fukukshima Daiichi  main reactor.

Samples collected last August indicate cesium levels that were 250 times what is considered safe by the Japanese government.

There is concern in the region that other fish may be feeding off the murasoi and other contaminated species.
Around 40 per cent of other bottom-dwelling fish in the area showed high levels of radiation that were 134 and 137 levels above the legal limit.

The article by Ken O. Buesseler, a leading marine chemistry expert, is once again likely to raise fears over the safety of fish caught in the area as the two year anniversary of the nuclear disaster approaches
More

 “All the waste in a year from a nuclear power plant can be stored under a desk.”

President Ronald Reagan.

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.

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