Baltic Dry Index. 712 - +06
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
"We are two very good tailors and after many
years of research we have invented an extraordinary method to weave a cloth so
light and fine that it looks invisible. As a matter of fact it is invisible to
anyone who is too stupid and incompetent to appreciate its quality."
"Besides being invisible, your Highness, this cloth will be woven in
colors and patterns created especially for you." The emperor gave the two
men a bag of gold coins in exchange for their promise to begin working on the
fabric immediately.
Get long physical gold and silver,
desperation and panic are now taking over in our post Lehman, bankrupt, crony
casino capitalism, western world. In America, a house divided, the latest wheeze
is one we’ve covered before, only now it is getting taken seriously. In this
version of voodoo economics, the US Treasury gets to mint a coin containing
maybe a troy ounce of platinum worth roughly 1,500 US dollars, but mints it
with a face value of one trillion dollars. It then deposits it with its treasury
account at the Fed, and writes down the Federal debt by a trillion. Suddenly
the debt ceiling issue has gone away allowing Uncle Sam to spend another
trillion in 2013. But why stop there? Why not mint 16 of the coins and wipe out
most of the federal debt of 16.7 trillion, really kicking the can far down the road? While at it we could rename
Washington, Wiemar.
For more on what’s really happening in the
Decline and Fall of the Anglo-American financial system, scroll down to Crooks
Corner. The Great Nixonian Error of fiat money is coming towards its end.
"If you don't trust gold, do you trust the logic of taking a beautiful pine tree, worth about $4,000 - $5,000, cutting it up, turning it into pulp and then paper, putting some ink on it and then calling it one billion dollars?"
Kenneth J. Gerbino
US 'seriously' considering $1 trillion coin to pay off debt
The US is "seriously" considering creating a $1 trillion platinum coin to write down part of its debt to stop the world's largest economy defaulting as early as next month, according to financial analyst Cullen Roche.
Speaking
to the BBC's Today programme, Mr Roche, founder of Orcam Financial Group and blogger at
Pragmatic Capitalism, said the idea was being taken "somewhat
seriously" in Washington.
"I
know it’s been spoken about at the White House and a number of prominent
people, including congressman, are talking about it," he said.
In theory
the US Treasury would mint the coin and deposit it into its own account at the
Federal Reserve, which would allow the government to write down or cancel $1
trillion of its $16.4 trillion debt pile.
The
Treasury began shuffling funds in order to pay government bills after the
country hit its $16 trillion debt limit on December 31. However, the Treasury's
accounting maneouvres will last only until around the end of February as the
latest fiscal
cliff deal gives US
politicians two months to raise the debt limit before the country
defaults.
The idea,
which was raised last year, has been floated by several financial analysts in
the States over recent days as Congress and the government approach the key
fiscal vote.
Mr Roche
said the idea was an "accounting gimmick", but noted it was just
"one really silly idea [being used] to fight another silly idea".
"The
idea of the US willingly defaulting on debt is beyond crazy," he said.
"We
started kicking the idea around a year ago and it was really a joke and the
fact it’s become something sort of serious, well it’s a sad state of affairs
that it’s become so dysfunctional in Congress that this is something we’re
having to resort to."
Writing
in his New
York Times blog, economist Paul Krugman, said that while he did not expect the Treasury
to go ahead with this "gimmick", there could be a case for it.
"This
is all a gimmick — but since the debt ceiling itself is crazy, allowing
Congress to tell the president to spend money then tell him that he can’t raise
the money he’s supposed to spend, there’s a pretty good case for using whatever
gimmicks come to hand," he said.
Mr Roche
also did not expect the Treasury to go ahead and mint a $1trillion coin, but
said President Obama could use it as threat.
More
Next, Japan sets out to borrow and print its way
back to prosperity, if it doesn’t decide to fight a new war with China first.
"Yes, this is a beautiful suit and it looks
very good on me," the Emperor said trying to look comfortable.
"You've done a fine job."
"Your
Majesty," the prime minister said, "we have a request for you. The
people have found out about this extraordinary fabric and they are anxious to
see you in your new suit."
Japan stimulus plans include $4.9 billion business support: draft
TOKYO |(Reuters) - Japan's new government will set up schemes worth nearly $5 billion to boost businesses, including helping them buy foreign companies, according to a draft economic stimulus package seen by Reuters on Monday that could be approved this month.
Prime Minister Shinzo Abe has made reviving the economy his top priority after his Liberal Democratic Party (LDP) won elections last month, combining aggressive monetary easing with fiscal spending to encourage investment and spur growth.
His spending promises have raised concerns that Japan's public debt burden, already the worst among major economies, could deteriorate further. Some economists say structural reforms might have a bigger impact after years of stop-start growth.
The Development Bank of Japan (DBJ), a state-backed lender, will administer a 150 billion yen ($1.7 billion) lending scheme to encourage firms to develop new technologies and collaborate on new business lines, the draft showed.
The stimulus package would also establish a 200 billion yen fund with the Japan Bank for International Cooperation (JBIC), another state-sponsored lender, to encourage foreign mergers and takeovers.
It also includes 83 billion yen in loan guarantees and low-interest-rate loans for small firms, the draft showed.
A LDP sub-committee approved the draft on Monday, and it could be approved by the Cabinet as soon as this week.
MORE DEBT
The government will set aside 100 billion yen for the lending scheme with the DBJ in an extra budget, and the state-backed lender will use its own capital for the remaining 50 billion yen, according to the draft policy .
Government expenditure for the scheme with JBIC will total 70 billion yen. Lending from JBIC and private-sector banks will account for the remaining 130 billion yen, the draft showed.
Abe had earlier instructed the finance minister to disregard limits set by the previous government that capped new debt issuance at 44 trillion yen, which has raised concerns about fiscal discipline.
The government will sell more than 5 trillion yen in new bonds for the stimulus, sources told Reuters, which would push issuance above the 44 trillion yen cap.
The remaining funds will come from unspent money from last fiscal year's budget and money originally allocated to servicing existing debt, the sources said.
The government in coming days will compile a 12 trillion yen extra budget with up to 10 trillion yen for stimulus and public works, the sources said. The lending schemes with DBJ and JBIC would be included in the 10 trillion yen.
More
We end for today with a warning on Sterling from
the money launderer’s favourite bank, HSBC.
"The pound looks set to lose the contest of the uglies,"
suggests the bank. Who am I to disagree?
The incoming new Governor of the Bank of England has all but outright
said that he intends to devalue Sterling as a policy tool. Her Majesty’s weak
coalition, U-turn friendly, shambles prone, anything but Conservative
government, should have no problem in 2013 in getting the ratings agencies to
lower the UK’s undeserved triple-A rating. Even so, the UK may still finish
second to Japan, or third if France successfully blows up the Eurozone with its
old socialist suicidal policies. Yet another reason to stay long physical gold.
A child, however, who had no important job and
could only see things as his eyes showed them to him, went up to the carriage.
"The Emperor is
naked," he said.
Sterling faces destructive 'triple cocktail' in 2013 – HSBC
Sterling will weaken this year as Britain faces a potentially testing triple cocktail of destructive factors, says HSBC.
2:35PM GMT 07 Jan 2013
"The
pound's fiscal credibility is under threat as a sovereign downgrade
looms," the bank said in its 2013 HSBC View published on Monday.
Alongside
that, the bank says austerity is now kicking in at a time when the MPC appears
less activist which could see a 'what's wrong with a weaker currency' attitude
prevail.
And the
UK's failings will start to "grab attention" as the US steps back
from the fiscal cliff, momentum grows in China, and eurozone break-up fears
diminish.
"The
pound looks set to lose the contest of the uglies," the HSBC report said,
as its "frailties emerge from the shadows".
HSBC
forecasts the pound will be trading around $1.52 against the US dollar by the
end of the year, down 5pc from $1.60 at present.
While
a falling currency will help boost exports and is good for big British
companies that do most of their business abroad, it increases the cost of
imports and makes holidays abroad more expensive.
More
"Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money."
Daniel Webster
At the Comex silver depositories Monday final figures were: Registered 39.52
Moz, Eligible 109.83 Moz, Total 149.35 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, thanks to
Zerohedge, an expose of how the corrupt US Federal Reserve, uses crony
capitalism to support the bankrupt US banks and indirectly goose the stock
market and commodities speculation. And thanks to that last part, fuel food and
energy price inflation that directly hurts the world’s poorest. Under
fractional reserve banksterism 21st century style, “Robin Hood”
Bernanke robs from the poor to give to the 1% elite. Stay long physical gold
and silver, our current system will self-destruct. The whole article is well
worth taking the time to read.
“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, author.
Dear Steve Liesman: Here Is How The US Financial System Really Works
Submitted by Tyler
Durden on 01/07/2013 16:45 -0500
Earlier today, Bill Frezza of the
Competitive Enterprise Institute and CNBC's Steve Liesman got into a heated
exchange over a recent
Frezza article, based on some of the key points we made in a prior post "A
Record $2 Trillion In Deposits Over Loans - The Fed's Indirect Market Propping
Pathway Exposed" in which, as the title implies, we showed how it was
that the Fed was indirectly intervening in the stock market by way of banks
using excess deposits to chase risky returns and generally push the market
higher. We urge readers to spend the few minutes of this clip to familiarize
themselves with Frezza's point which is essentially what Zero Hedge suggested,
and Liesman's objection that "this is something the banks don't do and
can't do."
-----So
to summarize what we know:
- We know that historically banks have created money (both low and high powered) and specifically, deposits, via loan creation. This process broke down in September 2008 when loan creation by commercial banks effectively ceased.
- We know that in the aftermath of Lehman, the Fed's reserves were the source of the money used by banks to boost their deposits, either by traditional or shadow bank transformation pathways, even as loans remained stagnant, and are now, nearly 4 years after Lehman, at a lower level than they were in late September 2008.
- We know that, as JPM has explicitly admitted, at least one bank has used the excess deposits over loans to engage in risky activity, and to trade on its own prop account, on at least one occasion, with a loss potential as large as $5 billion, and potentially far greater.
What We
don't know how many other banks are using excess deposits to engage in risky
activity, which may range from selling credit CDS (single name or index), to
buying equity ETFs and REITs (like the Bank of Japan openly does), to buying
outright stocks, to even buying real estate, or any other activity which
obviously continues to be unsupervised by the Fed, especially in offshore
jurisdictions (London).
More! Much, much more!
"The international monetary order is more precarious by far
today than it was in 1929.
Then, gold was international money, incorruptible,
unmanageable, and unchangeable. Today, the U.S. dollar serves as the
international medium of exchange, managed by Washington politicians and Federal
Reserve officials, manipulated from day to day, and serving political goals and
ambitions. This difference alone sounds the alarm to all perceptive
observers."
Hans F. Sennholz
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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