Baltic Dry Index. 923 +11
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
I'll gladly pay you Tuesday for a hamburger today.
Joe Sixpack, with apologies to Popeye’s friend J. Wellington Wimpy.
We open today taking a break from insane Europe and
demanding Germans, turning instead to yet another sign of the rising disconnect
between stock markets and reality in the wider economy. While the Fed’s QE programs target the stock
market and bonds, hard pressed Americans have had to slim down their craving
for eating out. Some part of the downsizing will have been weather related, but
as anyone who’s watched Man v Food knows, for Americans to pass up eating out, over size portions of everything, the
situation on Main Street must be dire. Stay long precious metals. At some point
ahead lies the Great Inflation. Though we don’t know when it will start, all
the global QE programs make the ruination of the fiat currencies inevitable.
"In the long run, the gold price has to go up in relation to paper money. There is no other way. To what price, that depends on the scale of the inflation - and we know that inflation will continue."
Nicholas L. Deak
Americans Cut Restaurant Spending as Taxes Bite: EcoPulse
By Anna-Louise Jackson & Anthony Feld - Mar 20, 2013 4:01 AM GMT
Restaurants
are reeling from their worst three months since 2010, as American diners
spooked by higher payroll taxes cut back on eating out.
Sales at
casual-dining establishments fell 5.4 percent last month, after declining 0.6
percent in January and 1.6 percent in December, according to the Knapp-Track
Index of monthly restaurant sales. This was the first three months of
consecutive declines in almost three years, with consumers caught in a “very
emotional moment,” said Malcolm Knapp, a New York-based consultant who created
the index and has monitored the industry since 1970.
“February
was pretty ugly” for many chains -- and probably will be the worst month of the
year -- after January delivered an “initial blow” while Americans grappled with
increased payroll taxes and health-care premiums, rising gasoline prices and
budget debates in Washington, Knapp said. “It’s important to keep in mind that
companies also are facing unusually tough comparable sales because of favorable
weather in 2012,” so the result is an industry that’s been “a lot softer so far
this year.”
More
In other news, unlike
2009, it doesn’t look like the struggling west will be getting much lift from Asia.
At best China appears headed for its modest growth target of 7 to 8 percent. At
worst, China’s shadow banking system deepens its collapse. In Japan, Abeonomics
seems to be pushing on a string. Despite a falling Yen, imports continue to
rise.
China manufacturing rises but first-quarter momentum seen muted
BEIJING | Thu Mar 21, 2013 2:56am EDT
(Reuters)
- Growth in China's vast manufacturing sector picked up in March after a
holiday dip, a preliminary survey of factory managers showed on Thursday,
pointing towards solid but not spectacular first-quarter growth in the world's
second-largest economy.
The HSBC
Purchasing Managers' Index for March revived to 51.7 in March from 50.4 in
February, but remained below a two-year high of 52.3 reached at the beginning
of the year.
The
pullback in February had raised concerns in financial markets that China's
recovery was losing steam. Indeed, official data earlier in March suggested the
economy had started 2013 with only tepid growth after a burst in the fourth
quarter.
More
Japan Posts Longest Run of Trade Deficits in Three Decades
By Andy Sharp & Keiko Ujikane - Mar 21, 2013 2:53 AM GMT
Japan posted its longest
run of trade deficits in three decades as exports fell in February, underscoring
challenges for Bank of Japan (8301) Governor Haruhiko
Kuroda in reviving the world’s third-biggest economy. Shipments dropped 2.9 percent from a year earlier, the Finance Ministry said in Tokyo today. The median estimate of 22 economists surveyed by Bloomberg News was for a 1.7 percent decrease. Imports rose 11.9 percent, leaving a trade shortfall of 777.5 billion yen ($8.1 billion).
Kuroda, who will give his first press briefing at 6 p.m. in Tokyo today, is pledging more aggressive monetary easing that may further weaken a yen down about 10 percent against the dollar this year. While the currency’s decline boosts the outlook for exporters in coming months, it’s already swelling the nation’s import bill as nuclear-plant shutdowns force bigger imports of fossil fuels.
“There’s a time lag until the weakening yen will push up exports,” said Yoshimasa Maruyama, chief economist at Itochu Corp. in Tokyo, who said that imports of oil and liquefied natural gas drove the biggest gain in inbound shipments since October 2011.
February’s deficit was the eighth consecutive monthly trade shortfall, the longest stretch since 1980.
More
Now back to the
never ending crisis called the Eurozone. A crucial weekend is coming up. Be prepared
for a “Black Swan” event.
This ailing continent needs newer and better politicians. But where could we find them? There is no sign of a European Obama or anything remotely like him.
Der Spiegel.
Cyprus scrambles to avert meltdown, EU threatens cutoff
NICOSIA |(Reuters) - Cyprus considered nationalizing pension funds and ordered banks to stay shut till next week to avert financial chaos after it rejected the terms of a European Union bailout and turned to Russia for aid.
Crisis talks among the political leadership in Nicosia are set to resume on Thursday after late-night meetings to discuss a "Plan B" broke up on Wednesday without result.
EU officials voiced frustration but little sympathy for an ambitious but now bust banking system that extended itself well beyond the island; Russia, whose citizens have billions to lose in those Cypriot banks, called the EU a "bull in a china shop".
President Nicos Anastasiades, just a month in office and wrestling with his country's worst crisis since the Turkish invasion of 1974 that divided Greek- and Turkish-speaking Cypriots, is due to meet party leaders at 9:30 a.m. (2.30 a.m. EST).
The deputy leader of his Democratic Rally warned time was running out: "We don't have days or weeks, we have only hours to save our country," Averos Neophytou told reporters.
Banks, shut since the weekend, are to stay closed for the rest of the week and so not reopen till Tuesday after a holiday weekend, a government official told Reuters, extending the misery of Cypriot businesses already feeling the pinch.
Without a resolution, the fate of the small nation of just 1.1 million has shaken confidence in the single-currency euro zone and raised geopolitical tension between the EU and Russia.
---- Russian Prime Minister Dmitry Medvedev, who was preparing to meet an EU Commission delegation in Moscow on Thursday, said the bloc had behaved "like a bull in a china shop" and likened its proposals, which would force Russian customers to contribute to the rescue of Cypriot banks, to Soviet-era confiscations.
More
Does anyone really
believe Cyprus’ banks will reopen on Tuesday setting off massive bank runs as
outraged depositors act rationally to preserve their money from further
predation? More likely is a Saturday night massacre, with Cyprus fleeing the
Eurozone in favour of reintroducing the Cypriot Pound, with draconian capital
controls. Chancellor Merkel, Mario Draghi, and Christine LaGarde have broken
the Eurozone banking system.
If Cyprus
bolts this weekend, all hell breaks out nest week for the rest of Club Med. It
might be as well for most Europeans to get plenty of cash out of the banks
prior to Saturday. Next week it might be more than just the Cypriot banks
staying closed.
"The history of paper money is an account of abuse, mismanagement, and financial disaster."
Richard M. Ebeling
At the Comex silver depositories Tuesday final figures were: Registered 42.50
Moz, Eligible 120.36 Moz, Total 162.86 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, more on the
crooked central banksters running what’s left of the Great Nixonian Error of
fiat money into the ground. Gold is now forever
transferring from west to east. A great global fiat money revulsion lies ahead.
"Gold bears the confidence of the world's millions, who value it far above the promises of politicians, far above the unbacked paper issued by governments as money substitutes. It has been that way through all recorded history. There is no reason to believe it will lose the confidence of people in the future."
Oakley R. Bramble
Sprott: Do Western Central Banks Have Any Gold Left? Part II
By: Eric Sprott & Shree
Kargutkar of Sprott
Asset Management
The past
few months have been difficult for the gold investor as selling pressure in the
gold futures market has set a decidedly negative direction for the price of the
yellow metal. As fundamental investors, we always pay special attention to the
supply and demand dynamics of gold and, recently, we have found it very
difficult to reconcile lower prices with continued strong demand for physical
gold.
While the
supply of gold has remained largely static, we have seen a steady increase in
demand for the yellow metal. India and China have emerged as strong buyers,
consuming over half of the mine supply in recent years. Central banks have
switched from being sellers of gold to being net buyers, with their gold
purchases in 2012 increasing by 17% to almost 535 tonnes. Exchange traded
products (ETPs) around the world have continued to add to their gold hoards, as
have institutions and private investors. Furthermore, central banks, such as
South Korea and Russia, have added to their bullion reserves early in 2013,
which points to sustained strength in demand. These facts are important
because, over the past decade, the annual supply of gold has stayed flat at
approximately 4,000 tonnes.
---- In our September 2012 MAAG, titled, “Do Western Central Banks Have Any Gold Left???”, we reconciled the annual change in demand for gold between 2000 and 2012 to be almost 2,300 tonnes. We went on to hypothesize that given the massive change in demand, the only suppliers large enough to fill the gap between supply and demand were the Central Banks. Now, our long search for the “smoking gun” to prove our hypothesis appears to have finally materialized.
Every
month, the US Census Bureau releases the FT900 document, which outlines US
International Trade Data. Going through this document, we were intrigued to see
that in December 2012 the US exported over $4B worth of gold and imported
around $1.5B worth of gold, representing a net export of $2.5B or almost 50
tonnes1. This surprising number led us to look at the previous releases
of US International Trade Data which go as far back as 1991 – what we found was
truly shocking. Not only has the US been consistently exporting large
quantities of gold on a net basis, the amount of gold the US has been exporting
is above and beyond what the US should be capable of exporting.
---- We used this framework to analyze supply and demand in
the US going all the way back to 1991, which is as far back as the FT900
documents go. Over the span of 22 years, the total amount of gold that the US has
exported – above and beyond its supply capability – is almost 4,500 tonnes! A
truly stunning figure. (See Table 3).
---- In September 2012, we espoused that the Western Central Banks have been surreptitiously selling/ leasing their gold through private channels in an effort to increase the available supply and in turn suppress prices. This new analysis using official US agency numbers seems to provide the strongest validation of our hypothesis to date. It is worth noting that our data only covers two decades and that the export ‘gap’ could in fact be significantly larger if earlier numbers were included or the real private investor demand for gold was known.
We are
currently in an environment where policy makers are intent on devaluing their
currencies in an effort to create growth. Real rates continue to stay negative
in most of the developed world. Every marginal dollar of debt that is created
is producing lower and lower amounts of growth. In a world overwhelmed by
mountains of debt and economic growth which is sub-par at best, precious metals
and real assets can act as insurance against the stupidity of policy makers.
The evidence pointing towards the suppression of the gold price is becoming
increasingly apparent. Don’t be the last person to figure this out! The current
sell-off in gold should be viewed not with extreme trepidation but as an
unbelievable opportunity to buy the metal at an artificially low value.
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
The monthly Coppock Indicators finished February:
DJIA: +111 Up. NASDAQ: +129 Up. SP500: +148 Up. All three indexes are giving the same signal since
January, up, but surprisingly February’s
move in all three was weak, suggesting that the indicators are topping
out. Will sequestration turn March into a
down month? So far so good.
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