Baltic Dry Index. 843 +09
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
"The gold standard, in one form or another, will prevail long after the present rash of national fiats is forgotten or remembered only in currency museums."
Hans F. Sennholz
In the last few weeks the outcome for the dying,
unloved, disastrous, Euro has become clearer. Either Club Med including France
is headed out of the door marked “exit” from the monetary union, or paymaster
Germany will lead its own Hanseatic League out of the wealth destroying EMU,
recognising that the present EMU is a dead duck. Prime Minister U-turn Cameron,
looks unlikely to need a referendum on the UK’s EU membership in 2017. With 55%
of Italy’s voters voting for anti-euro political parties, Europe’s voters have
finally woken up to the wealth destroying damage the euro has done and is doing.
Below even the hard working, tax paying Germans
have woken up to the euro zone’s need for a “plan B.” Events in continental Europe
are now moving far faster than the statist politicians and Eurocrats can keep
up. Stay long physical gold and silver for the inevitable currency war and the
return of long term inflation. According to Bloomberg, the Bank of Japan might
start the new currency war as early as April 4th.
Germany's anti-euro party is a nasty shock for Angela Merkel
Political revolt against the euro construct has spread to Germany.
A new party led by economists, jurists, and Christian Democrat rebels will kick off this week, calling for the break-up of monetary union before it can do any more damage."An end to this euro," is the first line on the webpage of Alternative für Deutschland (AfD). "The introduction of the euro has proved to be a fatal mistake, that threatens the welfare of us all. The old parties are used up. They stubbornly refuse to admit their mistakes."
They propose German withdrawl from EMU and return to the D-Mark, or a breakaway currency with the Dutch, Austrians, Finns, and like-minded nations. The French are not among them. The borders run along the ancient line of cleavage dividing Latins from Germanic tribes.
The plans draw on work by Hans-Olaf Henkel, former head of Germany's industry federation (BDI) and a chastened europhile -- the "worst error of my professional life", he told me.
The appeal of German exit is obvious. It is the least traumatic way to end the 20pc to 30pc misalignment between North and South, the cancer eating Europe. Club Med keeps the euro. It enjoys instant devaluation, while still able to uphold euro debt contracts. The spectre of sovereign defaults recedes.
The party
hopes to contest the federal elections in September, winning enough votes to
scramble a tight race. Chancellor Angela Merkel suddenly has a "UKIP
problem" on the her right flank.
Should
she sign off on a bail-out out for Cyprus -- safeguarding the "dirty funds
of Russian oligarchs", as the AfD puts it -- she will be raked by heavy
fire.
----The AfD leader Bernd Lucke says Beppe Grillo's threat to default on Italy's external debt has demolished claims that Germany's rescue pledges will never be called.
"The
Italian election shows how dangerous the whole euro crisis really is. Whether
countries can and will pay back their debts is dependent on the unpredictable
voting choices of their peoples," he said.
Professor
Lucke, an expert on Real Business Cycle Theory, says German voters may not have
mastered EMU mechanics but they can see it is going off the rails.
"Everybody understands that 50pc youth unemployment in Greece and Spain is
a catastrophe," he said.
More
Kuroda Says Bank of Japan Will Consider Buying Derivatives
By Toru Fujioka - Mar 11, 2013 5:57 AM GMT
Bank of
Japan (8301) governor nominee Haruhiko Kuroda said that the central bank
will consider buying derivatives if he’s confirmed as governor and signaled a
readiness for a quick expansion in monetary stimulus. “We will carefully consider such a proposal,” Kuroda, the Asian Development Bank chief, said in response to a lawmaker’s question in his second Diet confirmation hearing today. Opinions vary on the merits of buying assets such as swaps, Kuroda said, adding that he wants to discuss easing “soon” and bond purchases are likely to remain the key tool.
Kuroda’s confidence that the BOJ can meet a 2 percent inflation target is yet to be reflected among economists, who predict a failure to achieve that goal within two years, according to a Bloomberg News survey this month. Extra stimulus may come as soon as April 4, according to Nomura Holdings Inc. and Mizuho Securities Co., after board member Sayuri Shirai failed last week to win support for a proposal to start open- ended asset purchases immediately.
More
Mitsubishi Aircraft Benefits From Weakening Yen on Orders
By Chris Cooper & Kiyotaka Matsuda - Mar 11, 2013 4:30 AM GMT
Mitsubishi
Heavy Industries Ltd. (7011)’s aircraft unit is set to reap the benefits of
a weakening yen after securing more than $4 billion of contracts for a new jet
when the currency was near a record high against the dollar. Mitsubishi Aircraft Corp., which is making Japan’s first regional passenger jet, pays for about 60 percent of the plane’s materials and other costs in dollars, Chief Executive Officer Hideo Egawa said in an interview in Tokyo on March 8. The planes are sold in dollars and profit is booked in yen
---- “We’re delighted with a weaker yen. We welcome it with open arms,” said Egawa. “We’d like the yen to get even cheaper.”
The yen traded at 96.18 to the dollar as of 1:18 p.m. in Tokyo. The Japanese currency has slid 21 percent from 79.76 yen since Mitsubishi Aircraft announced its SkyWest order.
Mitsubishi Heavy shares rose 0.4 percent to 546 yen in Tokyo trading today. They have gained 32 percent this year, compared with a 19 percent gain in the Nikkei 225 Stock Average.
The aircraft maker has won 325 orders, including options, for the plane, topping the company’s goal of up to 250 planes before the Mitsubishi Regional Jet’s first flight, set for as early as October, Egawa said. The carrier is outselling rival Bombardier Inc. (BBD/B), which had secured 148 orders for its new passenger jets by the end of December.
“When the yen was around 80 to the dollar we were constantly looking for ways to cut costs,” said Egawa. “When we convert our orders into yen it definitely gives us an edge.”
More
We end for the day with the Financial Times singing
the praise of Helicopter Ben Bernocchio. According to the hacks at the mostly UK
based FT, “The Bernank” is the greatest American since Nixon ended the
dollar-gold link. The FT also wanted to UK under the warrior Blair to join the
snake bit European Monetary Union.
If all else fails, immortality can
always be assured by spectacular error.
J. K. Galbraith.
March 10, 2013 7:27 pm
A good engineer who knows his own limits
The Federal Reserve under Ben Bernanke has been the only serious economic actor in Washington
At the start of this century the journalist Bob Woodward anointed Alan Greenspan as “the symbol of American economic pre-eminence”. Ben Bernanke must pray that he never attracts that kind of praise. As a student of business cycles, the current chairman of the US Federal Reserve knows all about reputational bubbles – and few have burst more convincingly than Mr Greenspan’s.With just seven Fed open market meetings before he completes his second term, Mr Bernanke is in no danger of emulating the maestro’s former heights. Last week, the Dow broke its historical record. There were no Greenspan-style celebrations. Conservatives dismissed the surge as a “sugar high” caused by quantitative easing. The left saw it as yet more Fed-fuelled froth that was bypassing Main Street.
Both contain some truth. The $85bn a month in QE3 is fuelling a “reach for yield” that is driving a mini equity boom. And America’s wealthiest 10 per cent are its main beneficiaries. But they ignore the big picture. Without the Fed’s easy money, the stock market would be languishing and unemployment would be rising. Instead of “helicopter Ben” dropping reserves from the sky it would be “lawnmower Ben” shredding the green shoots of the recovery.
More
"As fewer and fewer people have confidence in paper as a store of value, the price of gold will continue to rise. The history of fiat money is little more than a register of monetary follies and inflations. Our present age merely affords another entry in this dismal register."
Hans F. Sennholz
At the Comex silver depositories Friday final figures were: Registered 41.89
Moz, Eligible 120.70 Moz, Total 162.59 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, what is going
on in commodities? Is the great commodities super cycle led by China over, as
most hedge funds seem to be indicating or is Goldman correct and this pause is just
another buying opportunity, as China resumes expansion? In the 20th century
it was always wrong to bet against the United States of America. In the 21st
century will it be always wrong to bet against China? In both centuries it was
usually wrong to bet against Goldman Sachs. But then again, the Goldmanites
have a reputation of betting against their own Muppets! My guess is that GS
will probably be right in the long run, though in the short run I hope that no
one is short coffee.
“Call
it the Goldman Sachs test. If this is something Goldman would do to its
clients, don't do it."
Felix
Salmon.
Hedge Funds Cut Bets to ’09 Low as Goldman Says Buy: Commodities
By Debarati Roy - Mar 11, 2013 7:05 AM GMT
Hedge funds cut bets on a commodity rally to a four-year low on signs of
surplus supply in everything from coffee to zinc before Goldman Sachs Group
Inc. said prices had fallen too far and investors should buy. Speculators reduced net-long positions across 18 U.S. futures and options in the week ended March 5 by 9.2 percent to 405,885 contracts, the lowest since March 2009, U.S. Commodity Futures Trading Commission data show. They are the most bearish on copper in four years, and are also betting on declines for coffee, hogs, sugar, soybean oil, wheat and natural gas.
Commodities
retreated 4.8 percent since reaching a four- month high Feb. 13, even as
optimism about the global economy drove the MSCI All-Country World Index of
equities to a 56-month peak. Supplies will outpace demand for 12 of 18 metals
and agriculture goods, according to Barclays Plc and Rabobank International.
Goldman raised its three-month outlook for raw materials to “overweight” from
“neutral” on March 7, saying accelerating Chinese growth will support prices.
----Investors pulled
$4.66 billion from commodities this year, according to EPFR Global, which
tracks money flows. That compares with an inflow of $5.05 billion a year
earlier, the researcher said. Commodity assets under management totaled $430
billion in January, from a record $451 billion in April, data from Barclays
show.
Crude-oil stockpiles in the U.S., the biggest consumer, are at the highest level since the end of June, a government report showed March 6. Copper supplies monitored by exchanges in New York, London and Shanghai have jumped to the highest since December 2003. Global inventories of wheat and soybeans will be higher than forecast a month earlier, the U.S. Department of Agriculture said March 8.
The slump in raw materials is “overdone” and prices will rebound in the next three months as China’s economy accelerates, Jeffrey Currie, Goldman’s head of commodities research in New York, said in the March 7 report. Copper will increase 16 percent to $9,000 a metric ton in six months, the bank said.
More
Goldman leads decline as Wall Street commodity revenues plummet
NEW YORK |(Reuters) - Wall Street commodity revenues crashed last year to their lowest on record, as tighter regulation and limited price swings squeezed the once dominant traders of Goldman Sachs Group Inc (GS.N), JPMorgan Chase & Co (JPM.N) and Morgan Stanley (MS.N).
All three firms reported double-digit percentage declines in revenues for oil, grains and copper trading in 2012, illustrating how the one-time 'Wall Street Refiners' have withered in the face of subdued markets and restrictions on proprietary trading.
The
decline is most stark at Goldman, where commodity revenues collapsed by more
than 60 percent year-on-year in 2012 to just $575 million, according to the
bank's annual report.
Long
considered the top commodity bank on Wall Street for its expertise in both
physical and financial markets, Goldman's revenues have now fallen by almost 90
percent since 2009 when they totaled more than $4.5 billion.
More
Vietnam Coffee Harvest May Drop 30% on Drought, Vicofa Says
By Bloomberg News - Mar 11, 2013 4:40 AM GMT
The coffee harvest in Vietnam, the biggest grower of robusta beans used by Nestle
SA (NESN) in instant drinks, may decline for second year because of drought
in the main growing regions, according to a producers’ group. Output may drop 30 percent in 2013-2014, Luong Van Tu, chairman of the Vietnam Coffee & Cocoa Association, or Vicofa, said yesterday, without giving a specific forecast. Production fell 25 percent in 2012-2013 from 1.5 million tons a year earlier, he said. A Bloomberg survey published on March 7 estimated the 2012-2013 crop at 1.43 million tons.
Reduced supplies from Asia may boost robusta prices for a second year. Exports from Indonesia, the third-largest shipper, are falling because of higher domestic consumption, a Bloomberg survey showed last month. Global usage of robusta has expanded as demand has dropped for the costlier arabica beans, brewed by Starbucks Corp. (SBUX), according to Macquarie Group Ltd.
“There are already tens of thousands of hectares that have no hope in the next coffee season,” Tu said at an industry conference in Buon Ma Thuot City. For other areas, the beans will likely be small, he said.
----Drought in the central region covering five coffee-growing provinces, including Dak Lak, will continue and may become more severe, the National Center for Hydro-Meteorological Forecasting said on its website March 5. Trees in Vietnam usually flower and form fruit between January and March, according to growers.
More
http://www.bloomberg.com/news/2013-03-11/vietnam-coffee-harvest-may-drop-30-on-drought-vicofa-says-1-.html
One of the queries Quakers are asked to consider, is: "Do
you maintain strict integrity in your business transactions and in your
relations with individuals and organizations? Are you personally scrupulous and
responsible in the use of money entrusted to you, and are you careful not to
defraud the public revenue?"
Probably why there a no Quakers on Wall Street.
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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