Baltic Dry Index. 892
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
"When it becomes serious, you have to lie"
Jean-Claude Juncker. Luxembourg Prime Minister and ex-president of the Euro Group of
Finance Ministers. Confessed liar.
For more on the new open season on global
bank deposits scroll down to Crooks’ Corner, where a new class of European
crooks have emerged, leaving the Italian Mafia, the Vatican Bank, and the
Madoff brothers stunned in admiration. Who knew that Euro crime does pay, and really
well after all. But not to worry, top German thief Merkel says that German
depositors are safe (for now.) After re-election in September, who knows. Stay
long physical precious metals held outside the UK and USA.
"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
Merkel guarantees for deposits in Germany
The
compulsory levy to pay the depositors in Cyprus, was a special case, says the
Chancellor. For
the first time since 2008 it promises: In Germany, bank deposits safe.
The solution there was "no parallels with other countries, and thus no effect on them," said Seibert. Unrest among depositors and savers in other euro area countries was therefore not justified.
We open today with an article that raises
more questions than provides answers. Just what is really going on here, and
for whose benefit? Is 4/5ths of the planet now in play, and at what ecological
cost? Even assuming the UK could get a £40 billion advantage over a 30 year
period, which seems like Madoff numbers to me, just why should the UK taxpayer
be fronting the cost or getting involved at all? If there’s any commercial advantage
in doing this sort of thing in an environmentally acceptable way, then capitalism
is quite capable of coming up with the funds. It seems to me that there is more
in this than meets the eye.
Cui bono?
Britain plunges into deep sea mineral rush with help of Howard Hughes
The Government has claimed the nascent seabed harvesting industry could boost the UK economy by approximately £40bn over a 30-year period.
----Sponsored by the Government, a company called UK Seabed Resources has won the first commercial exploration rights over a 58,000 square-kilometre area of the Pacific, he announced. The licence was granted by the International Seabed Authority, the body governing mining outside territorial waters.
Late this
summer, the company will start to hunt for those so-called polymetallic
nodules, potato-sized rocks rich in minerals which are found on the seabed,
some 4,000 metres under the Pacific waves. Also known as manganese nodules,
they were first discovered in 1868, in the Arctic ocean, but are found on ocean
floors around the world.
It seems
worms feeding on sediment drifting down onto the nodules keep them from being
buried. But much is still unknown about them, from what provides the metals
from which they are formed – some think dead plankton is involved – to how much
metal lies on the sea floor in this form.
The hope
is that, collected by a mechanical harvester, they will provide millions of
tonnes of copper, nickel, cobalt and manganese, as well as rare earth minerals.
If it sounds rather crackpot, note that a major name is behind the plan. UK
Seabed Resources is a unit of US group Lockheed Martin, the world’s biggest
defence contractor.
Although
it is better known for building jet fighters and missiles, the project is not
the departure it may sound. Lockheed already has data on the area in question,
after it was involved in tycoon Howard Hughes’ search there for manganese
nodules back in the 1970s. Bizarrely, that
scheme was really a cover story for the CIA’s secret retrieval of a lost Soviet
submarine.
Attempts
to mine nodules in earnest were judged uncommercial then, but a more recent
focus on the pressures on natural resources has revived interest. No doubt the
prospect of access to rare earths – used to make items from mobile phones to
precision-guided missiles – looks particularly attractive, as China’s monopoly
in this area has worried rival states.
Concerns
over the environmental impact of undersea mining meant Lockheed was careful to
stress that its seabed harvesting was “ecologically sound” and that it would
not focus on the manganese crusts found on hydrothermal vents, which are host
to rich natural life on the dark seafloor. But some disruption is inevitable.
Eyebrows
were also raised at the role of the US company, although the hope is to get
British companies involved, with around 100 potential suppliers said to have
been at a workshop focused on the opportunities.
We do
have form in this area, with the technologies used in underwater machinery for
the offshore oil industry – an area in which the UK is skilled, given its North
Sea expertise – key to making undersea mining workable.
More
Now
back to the criminal enterprise known as Europe. So much for European fraternity and unity. Time
for the UK to listen to UKIP and exit the society of thieves, aka the EU.
"The history of paper money is an account of abuse, mismanagement, and financial disaster."
Richard M. Ebeling
Insight: How Europe stumbled into scheme to punish Cyprus savers
BERLIN/BRUSSELS |(Reuters) - Just three weeks after being elected president of Cyprus, Nicos Anastasiades traveled to Brussels for his European debut last Thursday. His fellow leaders were all friendly enough.
Hours before he was due to attend his first European summit, he met Germany's Chancellor Angela Merkel and other new colleagues at a cocktail reception.
At the meeting for center-right politicians in a swanky hall opposite the Belgian king's palace, Merkel congratulated him on his election victory. According to one person who attended, Anastasiades asked his new friends to make sure any bailout for Cyprus was fair.
Less than 48-hours later, when the deal was finally announced by exhausted officials in the pre-dawn hours of Saturday morning, it seemed anything but.
Cyprus was forced to announce a plan to claw back a levy on deposits from savers in its banks, including - most controversially - a big charge on those with small deposits that were supposed to be guaranteed by its deposit insurance scheme.
----According to insiders who attended the negotiations, the big hit to ordinary Cypriot savers was an outcome that nobody seemed to be seeking but no one could find a way to prevent.
Merkel's
government and EU officials were determined to make depositors pay.
Anastasiades was determined to cap the levy on the wealthiest depositors at no
more than 10 percent.
That
meant that small savers in Cyprus were forced to pay a levy as high as 6.75
percent of their deposits, a move that effectively rips up the protection
savers thought they enjoyed on insured deposits of up to 100,000 euros.
----Meanwhile, European and
Cypriot officials are trading blame for a decision which threatens to undermine
confidence in the financial system across the continent.
----From the outset, the Cypriot delegation seems to have misunderstood the determination of Merkel and other leaders to force Cypriot depositors to pay.
Merkel's Finance Minister Wolfgang Schaeuble had gone to Brussels with a firm mandate from Berlin: "no bail-in, no bailout", said a member of her government. That meant: unless depositors took a hit, there would be no agreement and Germany would not contribute towards a package for Cyprus.
More
A much better alternative for Cyprus
By Felix Salmon March 19, 2013
Andrew
Ross Sorkin defends the Cyprus deal today, on the grounds that (a) Cyprus
is “tiny”, and “largely irrelevant to the global economy”; (b) Cyprus is a
genuinely unique case; (c) it would be grossly unfair not to bail in
Russian depositors, who are generally losing less than they’ve made in interest
over the past few years; and (d) the Greek alternative “will not work in
Cyprus”, and that therefore (this last bit is only implied, never stated
outright) the current plan is really the only option.Notably, Sorkin doesn’t attempt to defend the most indefensible part of the plan — the confiscation of wealth from depositors with sovereign deposit guarantees. While hedge-fund bondholders will get paid their full $1.4 billion on June 3, the date of Cyprus’s next coupon payment, small depositors with just a few hundred or a few thousand euros in savings will lose money which the Cypriot government had promised them was safe. Why is the government’s promise to foreign hedge funds more important than its promise to its own citizens? Sorkin never attempts an answer to that one.
And even if Cyprus is tiny and irrelevant to Andrew Ross Sorkin, it most certainly isn’t tiny and irrelevant to the hundreds of thousands of people who live there, and deserve for their government to deliver the best possible plan it can.
----Here’s the short, three-page paper: it’s called Walking Back from Cyprus, and it’s authored by Buchheit and his frequent collaborator, Mitu Gulati of Duke University. Their plan is simple:
First, leave all deposits under €100,000 untouched. Hitting those deposits was by far the biggest mistake of the Cyprus plan as originally envisaged, and everybody would be extremely happy if guaranteed depositors could be kept whole.
Second, term out everybody else by five years, or ten if they prefer.
That’s it! That’s the whole plan, and it’s kinda genius. If you have bank deposits of more than €100,000, they will be converted into bank CDs, with a maturity of either five years or 10 years — your choice. If you pick the longer maturity, then your CD will be secured by future Cypriot gas revenues, which could amount to hundreds of billions of dollars.
And if you have sovereign bonds, they too will be termed out by five years, giving Cyprus a bit of breathing room to get its act together.
More
"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
At the Comex silver depositories Monday final figures were: Registered 42.47
Moz, Eligible 121.15 Moz, Total 163.62 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Next, more on the thieves running the Eurozone. For all their protestations
that Cyprus was a one-off, a unique rouge country fronting for Russian oligarchs
and Russian mafia, once legalised theft like this is legitimised, it’s only a
matter of time before it happens again, and again, and again. Does anyone
really think that a new British government under “Red Ed” Milliband and socialist
envy Chancellor Balls, wouldn’t jump at the chance to use a Sterling crisis to
redistribute the “capitalist’s wealth to their own supporters. Or a drowning old
socialist President Hollande, or a struggling Social Democrat government in
powerhouse Germany. As for Latin America
or a Clinton/Obama America, it would happen in a heartbeat. The 99 percent
getting even with the other 1 percent.
Ignored in all this theft is that bank deposits are just that, deposits.
Savings not investments. Other peoples capital needed to run businesses, employ
people, protect children and parents. The EU elitists and bureaucrats have
voided rule of law, and done it merely to avoid following existing rule of law.
The correct course was to wipe out the shareholders, then the bondholders, then
protect deposits up to the statutory maximum, letting the chips after that fall
on the depositors above the statutory maximum. Europe’s banks are now a very
risky place to hold deposits. Needing only a one-off 17 billion euro bailout,
why didn’t Cyprus simply ask Bernocchio to add it to the 85 billion a month of QE
to infinity, spread out over the coming year?
"Sooner or later both the Greek population and international creditors will tire of fighting a losing battle, leading to a break-up of the currency union as Greece pulls out, probably followed by other countries"
Douglas McWilliams, chief executive of the Centre of Economics and Business Research.
Daylight robbery in Cyprus will come to haunt EMU
Last updated: March 18th, 2013One's first reflex is to gasp at the stupidity of the EU policy elites, but truth is that most EU officials handling the Cyprus crisis know perfectly well that their masters have just set the slow fuse on a powder keg – and they can only pray that it is slow.
The decision to expropriate Cypriot savers – even the poorest – was imposed by Germany, Holland, Finland, Austria, and Slovakia, whose only care at this stage is to assuage bail-out fatigue at home and avoid their own political crises.
----The EU creditor states have at a single stroke violated the principle that insured EU bank deposits of up $100,000 will be guaranteed come what may, and in doing so they have more or less thrown Portugal under a bus.
They
appear poised to seize large sums from Russian banks – €1.3bn from state-owned
VTB alone, and therefore from the Kremlin – prompting the condign riposte from
Vladimir Putin that the action is "unfair, unprofessional and
dangerous."
They have
demonstrated that the rhetoric of EMU solidarity is just hot air, that they
will not force their own taxpayers to share a single cent of clean-up costs for
the great joint venture of monetary union – in which northern banks, insurers,
pension funds, and indeed governments, were complicit.
Their
refusal to pay is entirely understandable in one sense – and if I were a German
taxpayer, I would not care to swallow these losses either – but then the
leaders of these creditor countries can hardly expect the world to believe that
they will in fact do whatever it takes to hold EMU together. Quite obviously,
they will not.
The
sooner this is made clear, the better. The sooner they take the proper course
of withdrawing from EMU and organise the break-up the euro in the least
disruptive way, the sooner Europe can recover.
We have
already seen the EU solidarity mask slip a few times, not least in the repeated
retreats over Greece, and again when German-led quartet resiled from last
year's summit deal to let the ESM bail-out fund take some of the weight of
recapitalising banks off the shoulders of the Irish and Spanish states.
What is
clear is that Angela Merkel will not risk defeat in the elections in September
by ceding a single vote to Social Democrats determined to hold her feet to the
fire over a bail-out for "Russian oligarchs, money-launderers, and tax
evaders" in Cyprus, or by ceding votes to the new anti-euro party
Alternative fur Deutschland. She will look after her own political interests,
and all the rest is humbug.
----It is far from clear that the ECB backstop for Italy still exists, given that there is no compliant government in Rome able to meet the rescue conditions.
Portugal
is not safely out of the woods. Its slump has been deeper than expected. Its
debt dynamics are nearing the danger zone faster than feared. Citigroup,
Nomura, and many others think it almost certain that Portugal will need a
second rescue, and probably debt-restructuring. What happens then? Are savers
going to wait patiently for their own scalping as this becomes clearer?
As for
Spain, we learn from leaks in the Spanish press that officials from the ECB and
the Commission warned Eurogroup ministers that the raid on Cypriot savers posed
a grave contagion risk to Spanish banks, threatening to set off deposit runs.
More
"No man in the country is under
the smallest obligation, moral or other, so to arrange his legal relations to
his business or property as to enable the Inland Revenue to put the largest
possible shovel in his stores. The Inland Revenue is not slow, and quite
rightly, to take every advantage which is open to it under the Taxing Statutes
for the purposes of depleting the taxpayer's pocket. And the taxpayer is in
like manner entitled to be astute to prevent, so far as he honestly can, the
depletion of his means by the Inland Revenue"
Lord Clyde, Lord President of the Court of Session. Ayrshire
Pullman Motor Services v Inland Revenue (1929)
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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