Baltic Dry Index. 747 +01
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
The G7 powers - the United States, Britain, France, Germany,
Japan, Canada and Italy - earlier on Tuesday had reiterated their commitment to
market-determined exchange rates and said they would consult closely to avoid
disorderly and volatile market moves that could hurt economic and financial
stability.
Stay long physical precious metals. Yesterday
the G-7 either authorised Japan to devalue the Yen in its new currency war
against the rest of the world or it didn’t. Currency dealers hadn’t a clue what
the G-7 statement actually meant! Not that it much matters what the G-7
actually meant, Japan immediately seized on the statement as an endorsement of
their policy in the new currency war. We will perhaps get a better idea when
the G-20 finance ministers meet in Moscow at the weekend. France wanted a
coordinated Eurozone approach, Germany didn’t. Germany and China want to stop
Japan’s devaluation stealing their export markets. Russia wants to stop any EU
bailout of Cyprus from imposing an involuntary haircut on Russian oligarch
deposits in Cypriot banks. America seems to just want the status quo to
continue until something turns up. The UK just hopes that nobody notices that
the UK keeps testing the EU door market “exit.”
Toss in all the usual alphabet soup financial agencies going to attend,
plus all the flunkies and self-important bureaucrats attending from the EU, and
we get the international version of a European Union “Great Leaders” summit,
one level down.
“All right everyone, line up alphabetically according to your
height.”
Casey Stengel.
G7 fires warning shot over currencies, markets confused
LONDON/WASHINGTON |(Reuters) - The Group of Seven rich nations sought on Tuesday to cool growing tension over exchange rates sparked by weakness in the Japanese yen, but currency markets found the effort lacking in clarity, triggering a second straight day of volatility.
The G7 declared that fiscal and monetary policies would not be directed at devaluing currencies, a statement meant to soothe nerves that Tokyo was aiming to guide the yen lower with its aggressive expansion of monetary policy.
Japan said the statement gave it a green light to continue efforts to reflate its economy but a G7 official said it was aimed squarely at Tokyo, prompting the yen to surge.
"Rather than calm the markets, the poorly communicated statement has significantly raised volatility," said Richard Gilhooly, fixed-income strategist at TD Securities in New York.
U.S. and European officials have been concerned about comments from Japanese officials that suggested Tokyo was targeting a specific level for the yen, which would run counter to the G7's official stance.
A day earlier, a senior U.S. official said competitive devaluations should be avoided, but that Washington supported Tokyo's efforts to reinvigorate growth and end deflation. The remark sent the yen sharply lower.
The G7 statement helped the yen solidify those losses, until a G7 official said markets had gotten the message wrong.
"The G7 statement signaled concern about excess moves in the yen," the official said. "The G7 is concerned about unilateral guidance on the yen. Japan will be in the spotlight at the G20 in Moscow this weekend."
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As the
G-7 gets itself in a muddle, Russia’s bad boy in western eyes, President Putin
takes the opposite bet in gold to Gordon Brown’s bottom. Since oil is traded in
US dollars, which “helicopter” Ben Bernoccio assured us on November 21, 2002, in “Deflation: Making
Sure "It" Doesn't Happen Here,” that “Like
gold, U.S. dollars have value only to the extent that they are strictly limited
in supply. But the U.S. government has a technology, called a printing press
(or, today, its electronic equivalent), that allows it to produce as many U.S.
dollars as it wishes at essentially no cost. By increasing the number of U.S.
dollars in circulation, or even by credibly threatening to do so, the U.S.
government can also reduce the value of a dollar in terms of goods and
services, which is equivalent to raising the prices in dollars of those goods
and services. We conclude that, under a paper-money system, a determined government
can always generate higher spending and hence positive inflation.”
President
Putin’s long term bet has time and history on its side. Is President Putin a hidden
reader of the London Irvine Report?
"For more than two thousand years gold's natural qualities made it man's universal medium of exchange. In contrast to political money, gold is honest money that survived the ages and will live on long after the political fiats of today have gone the way of all paper."
Hans F. Sennholz
Putin Turns Black Gold to Bullion as Russia Outbuys World
By Scott Rose & Olga Tanas - Feb 11, 2013 12:42 PM GMT
When Vladimir Putin says the U.S. is endangering the global
economy by abusing its dollar monopoly, he’s not just talking. He’s betting on
it. Not only has Putin made Russia the world’s largest oil producer, he’s also made it the biggest gold buyer. His central bank has added 570 metric tons of the metal in the past decade, a quarter more than runner-up China, according to IMF data compiled by Bloomberg. The added gold is also almost triple the weight of the Statue of Liberty.
“The more gold a country has, the more
sovereignty it will have if there’s a cataclysm with the dollar, the euro, the
pound or any other reserve currency,” Evgeny Fedorov, a lawmaker for Putin’s United Russia
party in the lower house of parliament, said in a telephone interview in
Moscow.
Gold, coveted by Russian rulers including Tsar Nicholas II and the Bolshevik leader whose forces assassinated him, Vladimir Lenin, has soared almost 400 percent in the period of Putin’s purchases. Central banks around the world have printed money to escape the global financial crisis, sapping investor appetite for dollars and euros and setting off a scramble for safety.
In 1998, the year Russia defaulted on $40 billion of domestic debt, it took as many as 28 barrels of crude to buy an ounce of gold, data compiled by Bloomberg show. That ratio tumbled to 11.5 by the time Putin first came to power a year later and in 2005, after it touched 6.5 -- less than half what it is now -- the president told the central bank to buy.
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Next, US hedge funds and US Iranian policy, have Russia’s
President Putin laughing all the way to the bank. As both force oil prices
higher, US consumers help subsidise Russia’s, and everyone else’s purchases of gold. It’s a funny old world on
fiat money, although we may not be on fiat money in a matter of years. Stay
long physical gold. Sooner or later an era of a Giant Inflation lies ahead.
"When paper money systems begin to crack at the seams, the run to gold could be explosive."
Harry Browne
Analysis: As U.S. gasoline prices soar, hedge fund oil bets near record
NEW YORK |(Reuters) - U.S. motorists searching for someone to blame for the highest gasoline prices ever at this time of year have an easy target: hedge funds who have been quietly amassing winning bets on hundreds of millions of barrels of oil.
At a filling station in Midtown New York last week, several people were prepared to blame traders on Wall Street as they paid more than $4 per gallon to fill up their cars.
"It really is not supply and demand. It's definitely speculation," said John Keegan, an exterminator with pest control company Terminate Control, who was filling up his van. A cab driver said he was convinced the price would be just $1 a gallon if the government "stopped Wall Street trading oil."
It is all very reminiscent of the anger in 2008 when gasoline prices were sent surging by a massive oil spike - also a time when there was a lot of speculative interest from investors.
And yet five years on, there is still no consensus among traders, analysts, and regulators over how big of an impact speculators have on the market - and what, if anything, should be done to limit their participation in oil trading.
----Hedge funds have almost doubled their bets on higher oil prices since December 11, regulatory and exchange data in New York and London show, taking their total position close to the highest level ever reported.
As of last week, speculative traders held paper contracts equivalent to almost 420 million barrels of oil. That's more crude than the United States consumes in three weeks.
At the same time, lower oil production from Saudi Arabia and stronger Chinese demand are just two factors that have boosted the price of the world's most important commodity. U.S. sanctions targeting Iran's disputed nuclear program have further cut supplies.
The way things are going, Americans could spend more on gasoline this year than ever before.
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And so we await this Friday and Saturday’s
G-20 meeting. There was little more than aspirational wishes in last night’s State
of the Union address by President Obama. It would be helpful if both parties
adopted cooperation, putting national interest first, but from faraway London
there’s little sign that “The wolf shall dwell with the
lamb, and the leopard shall lie down with the young goat, and the calf and the
lion and the fattened calf together; and a little child shall lead them.” [ Isaiah
11:6] in the US Congress. On to the rabble in Moscow.
At the Comex silver depositories Tuesday final figures were: Registered 36.86
Moz, Eligible 121.90 Moz, Total 158.76 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
No crooks or
scoundrels today, just the first real indication that Syria’s dictatorship
might be close to imploding, Anastasia Somoza style. America/Israel might soon need
to act fast to seize Syria’s chemical weapons and missiles.
Syrian air base falls, Assad forces under pressure
AMMAN | Tue
Feb 12, 2013 5:59pm EST
(Reuters)
- Syrian opposition fighters captured a military airport near the northern city
of Aleppo on Tuesday in another military setback for President Bashar
al-Assad's forces which have come under intensifying attack across the country.
The
airport is the latest military facility to fall under rebel control in a
strategic region situated between Syria's industrial and commercial center and
the country's oil- and wheat-producing heartland to the east.
The
opposition said an army base situated near Aleppo Airport, which is both
civilian and military, was overrun by rebels seeking to neutralize Assad's air
power, which has been instrumental in preventing the rebels from taking over
major urban centers.
The
Syrian authorities have banned most independent media from the country, making
verification of events on the ground difficult.
A Middle
East-based diplomat following the military situation said the opposition
"appears to be making significant advances" in Aleppo and along the
Euphrates River to the east.
The
diplomat said opposition fighting units have encroached on central Damascus by
breaking through the ring road and establishing footholds in areas near the
historic heart of the city of 2 million people.
More
"With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people."
F.A. von Hayek
The monthly Coppock Indicators finished January:
DJIA: +106 Up. NASDAQ: +126 Up. SP500: +140 Up. All three indexes are giving the same signal,
up.
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