Baltic Dry Index. 776 +19
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
"Gold was not selected arbitrarily by governments to be the monetary standard. Gold had developed for many centuries on the free market as the best money; as the commodity providing the most stable and desirable monetary medium."
Murray N. Rothbard
Stay long physical precious metals. One week
on from Italy’s comic opera general election, it is more apparent than ever
that the Eurozone is lurching towards breakup. The Bilderberger elitists
formerly in control are losing out to the populist mob. From Greece to Italy to
anti-EU bureaucratic Great Britain, the voters are shunning the old stream
parties of the previous century. Europe is revolting, led by the unemployed internet
savvy young, who feel that they have nothing to lose. The euro isn’t working for
most, and far from ushering in a promised land of milk and honey, has merely
turned into a bankster driven land of bankster socialism. Club Med is headed
for exit, default, devaluation, and a return to logical self interest. No one
owes the Germans and the subsidised banksters a living after all. Beppe Grillo’s
and UKIP are Europe’s future for the next few years. Unelected Herman van Who anyone?
But in typical EU Bilderberger top down
fashion, Italy will be ordered to vote and vote again until they come up with a
government acceptable to unelected Brussels. I suspect that unlike wimpy
Ireland, anarchic Italian voters will merely tell Europe where to go, and what to do
with their euro. In Beppe Grillo, Club Med may just have found its new
Spartacus.
Anger builds in Italy as old guard plots fresh technocrat take-over
Italy’s president Giorgio Napolitano is exploring the creation of a second technocrat government to break the political log-jam and calm markets after key parties failed to reach an accord, risking a serious popular backlash.
talian
officials say the Bank of Italy’s governor Ignazio Visco is front-runner to
take over as premier despite warnings that this will be seen as an elitist
ploy. It is far from clear whether the Democrats (Pd) in charge of the lower
house will back the idea.
The plans
amount to a near replica of the outgoing team of Mario Monti, though one
greatly weakened by the
earthquake upset in the elections a week ago. Almost 57pc of the
vote went to groups that vowed to tear up the EU-imposed austerity agenda.
Stefano
Fassina, the Pd economics chief, said his party is vehemently opposed to “any
form of technocrat government, new or old”, insisting that the election result
must be respected. Mr Fassina said 90pc of the country had rejected the Monti
agenda and warned that it would be a grave error to try to force through the
same reviled plans a second time.
Comedian
Beppe Grillo repeated his vow to “bring down the old system” and dismissed the
latest talks as cattle market trading by a depraved political class trying to
circumvent the will of the people. “I repeat for the umpteenth time, the Five
Star Movement will not back any government. It will vote law by law in keeping
with its platform,” he said.
“We’re
not a political party, we’re a civic revolution. This country is in ruins with
two trillion in debts and we have to rebuild it from scratch,” he told a scrum
of journalists. In a rhetorical play on the slogans of 1789 and 1917 he
exhorted “all citizens” to descend on parliament.
Mr Grillo
repeated his call for an
“online referendum” on the euro and vowed to buy back €600bn of Italian bonds
held by foreigners if his movement gains power, a de facto default and
withdrawal from the EMU system. He has in the past called for Argentine-style
“haircuts” for bondholders. “Within a year we won’t have enough money left to
pay the pensions and public sector wages,” he told told Bild am Sonntag.
His
newly-elected army of senators and deputies - fresh-faced idealists in their
20s or early-30s with no experience in public life - met for a “conclave” to
thrash out the party line. Most of the 163 “grillini” have never met their
leader, or each other.
They
crowded into a room at the Hotel Saint John, many sitting on the floor with
their napsacks as if it was opening day at university. Their first action was
to create a “Google group” to handle logistics.
“Nothing
like this has ever happened before in the history of the Italian Republic. We
are seeing a true crisis of the regime,” said Professor Luca Ricolfi from Turin
University.
----The EU policy elites are increasingly alert to the danger of losing popular consent for the EU Project. European Central Bank governor Benoit Coeure said Europe must pay more attention to the “social contract” if it is to avoid feeding “nationalist temptations”.
Mr Coeure
warned that record unemployment across much of Europe - reaching 59pc for Greek
youth -- was eroding the job skills of a generation and doing lasting damage to
future growth,
More
Analysis: EU needs "who lost Italy" debate on austerity
BRUSSELS |(Reuters) - European policymakers should be asking themselves "who lost Italy" after a grassroots revolt against austerity, unemployment and the political elite caused an electoral earthquake in the euro zone's number three economy.
Instead, most are insisting that their policy mix to fight the currency area's debt crisis is right, even though the latest EU forecasts have pushed any prospect of meaningful economic recovery in southern Europe back into the middle distance.
A surge in support for anti-euro populist Beppe Grillo and the surprise resurrection of former Prime Minister Silvio Berlusconi on an anti-austerity platform in last week's election have plunged Rome into political deadlock.
Italy, which had been governed by respected technocrat Mario Monti for 15 months since Berlusconi's last government fell, is far from the worst affected by the three-year-old debt crisis.
Unemployment there stands at 11.7 percent, less than half the rate of Greece and Spain, where one of every two young people is without a job.
If a milder recession and less severe spending cuts and tax rises can cause such a social and electoral revolt in Italy, the risks of an explosion in Greece and Spain ought to be greater.
Yet the official reaction from Brussels and Frankfurt is to act as if nothing, or almost nothing, had happened.
----While the European Central Bank removed the danger of a financial meltdown of the euro zone with its bond-buying plan, there is now a growing risk of a social crisis that could lead to one or more southern countries leaving the currency area.
"I
absolutely think it can get a lot worse," said Clemens Fuest, the incoming
chief of Germany's respected ZEW economic research institute.
"There
is really the current plausible scenario for a break-up of the currency union.
It may very well be that in these countries at some point the population will
say 'we don't believe things will get better'," he told the Reuters
Summit.
More
This election shows why Italy remains Europe's most dangerous basket case
Italy's latest bizarre election result is part of a long tradition, born of frustration with corruption and appeal to the common man.
8:00AM GMT 03 Mar 2013
There's
an old saying that in most countries the political situation is serious, but
not desperate; whereas in Italy it's desperate, but not serious.
Now that
a comedian, Beppe Grillo, has won more votes than any other politician, the
saying seems more apt than ever. The country is in crisis, and a joker is the
only person who can stop it from becoming a laughing stock.
----The result would have been inconceivable without the Italian economy being stagnant for a decade. By next year, the country's economy will have contracted by a tenth from its peak. Youth unemployment is at a staggering 37 per cent. Last year, disposable income fell by 4 per cent. The country is in a depression, and with the previous PM, Mario Monti, appearing to deepen that depression through the increase and introduction of taxes, the time was ripe for revolution.
-----That anarchism was especially apparent with regard to Europe. The more German politicians and European bureaucrats urged Italians to swallow the medicine of austerity offered by Mario Monti - nicknamed "Rigor Montis" by Grillo - the more Italians became determined to put up two fingers to foreign interference.
The
reason 55 per cent of Italians voted for either Grillo or Berlusconi, dubbed
the two "clowns" by last week's Economist, was that, bluntly, they
don't like being told what to do by Berlin or Brussels.
There is, as they say, history here. The
last time Italy had a technocratic government, under Carlo Azeglio Ciampi in
the early 1990s, acute austerity was introduced in order to squeeze it inside
the economic requirements for joining the single currency. That austerity was
sold with the line that, once inside, it would all be milk and honey. There has
been an economic slump ever since. And now, for the last year, Italians have
once again endured austerity introduced by an unelected technocrat who they
perceive is remote-controlled from abroad. It simply doesn't make sense to
them.
More
Greece reclassified to 'emerging market' from developed
A major fund manager has reclassified Greece from a developed to an emerging market, in an unprecedented move reflecting the "unfortunate economic tailspin" of the Greek economy, which has threatened the future of the euro.
Russell
Investments, which advises funds with $2.4 trillion (£1.6 trillion) in assets,
said the Greek economy has been a "world concern" since it revealed
unsustainable levels of public debt in 2009.
The
American-based company said Greece, which Russell designated as a developed
market in 2001, has been on a path towards reclassification as an emerging
market since 2010, having failed Russell's operational and macro risk tests,
including per-capita income, total market capitalisation and the level of trading
volume, which determine the economic health and status of countries.
Managers
at Russell will be forced to buy and sell shares to align holdings with their
funds' criteria, following the reclassification.
In a 10-page note on the relegation of
Greece, Mat Lystra, Russell's senior research analyst, said:
"Since the country began revealing unsustainable levels of public debt in
2009, it has been in an unfortunate economic tailspin that at times has
threatened to pull apart the entire European Monetary Union."
He added
that despite several bailouts and efforts to stem an outright Greek default,
"any opportunities in the Greek economy have become inherently riskier
exposures for global investors".
"During
our 2013 global market risk reviews, when we again evaluated the two risk
profiles, Greece failed both tests," the note said.
The news
comes as officials from the European Union and the International Monetary Fund
return to Athens on Sunday to assess Greece's performance under a bailout plan
as the government plays down the prospect of public sector job cuts.
More
While Euroland zigs, America zags. It’s QE to
infinity and beyond, says the Fed’s Bernanke. We’re all out of ammo and ideas,
says Bernocchio. It’s even worse than that says Stanley Druckenmiller, the man
who made George Soros into a top global financier. Unsustainable generational
theft has broken out. The Great Nixonian Error of fiat money is coming to its
overdue end. Stay long physical precious metals against that day.
March 1,
2013, 10:01 p.m. EST
Bernanke says hasty end to easing could backfire
Fed chairman’s remarks suggest central bank on hold
WASHINGTON
(MarketWatch) — A premature exit from the Federal Reserve’s current aggressive
monetary easing campaign could backfire, Fed Chairman Ben Bernanke said Friday,
dampening speculation the nation’s central bank will scale back its asset
purchase program.
“A
premature removal of accommodation could, by slowing the economy, perversely
serve to extend the period of low long-term rates,” Bernanke said in a speech
to a Fed research conference in San Francisco.
Bernanke’s
comments throw cold water on the idea that the Fed will alter its policy of
keeping interest rates near zero — a tactic first deployed in December 2008 in
the depths of the financial crisis.
At the
end of 2012, the Fed initiated a new, open-ended, round of quantitative easing.
The central bank is buying $85 billion of Treasurys and mortgage-backed
securities each month.
Bernanke
defended the Fed’s quantitative easing program during two days of testimony
before Congress this week
His remarks Friday were a more pointed and technical than his
testimony.
More
Druckenmiller Sees Storm Worse Than ’08 as Seniors Steal
By Katherine Burton - Mar 1, 2013 8:39 PM GMT
Stan Druckenmiller, one of the best- performing hedge fund
managers of the past three decades, has a warning for the youth of America:
Don’t let your grandparents steal your money.
Druckenmiller, 59, said the mushrooming costs of Social Security, Medicare and Medicaid, with unfunded liabilities as high as $211 trillion, will bankrupt the nation’s youth and pose a much greater danger than the country’s $16 trillion of debt currently being debated in Congress.
“While everybody is focusing on the here and now, there’s a much, much bigger storm that’s about to hit,” Druckenmiller said in an hour-long interview with Stephanie Ruhle on Bloomberg Television’s Market Makers. “I am not against seniors. What I am against is current seniors stealing from future seniors.”
Druckenmiller said unsustainable spending will eventually result in a crisis worse than the financial meltdown of 2008, when $29 trillion was erased from global equity markets. What’s particularly troubling, he said, is that government expenditures related to programs for the elderly rocketed in the past two decades, even before the first baby boomers, those born in 1946, started turning 65.
Druckenmiller stopped managing money for outside clients in 2010 after three decades in the business, including more than a decade as chief strategist for billionaire George Soros. From 1986 through 2010 he produced average annual returns of 30 percent, one of the best long-term track records in the industry.
More
"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
At the Comex silver depositories Friday final figures were: Registered 40.63
Moz, Eligible 122.79 Moz, Total 163.42 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, it’s back to
business as usual in the easy come, easy go, USA. Despite incomes declining
from a new payroll tax, US consumers racked up consumption by borrowing once
again from the future. Why not, with QE forever from the Fed. A massive fiat
currency default lies ahead, and everyone knows it. Better to get yours now,
while the getting’s good.
Consumer Spending in U.S. Climbs Even as Taxes Hurt Incomes
By Michelle Jamrisko - Mar 1, 2013 2:18 PM GMT
Consumer spending in the U.S. rose in January even as incomes dropped by the
most in 20 years, showing households were weathering the payroll-tax increase
by socking away less money in the bank. Household purchases, which account for about 70 percent of the economy, climbed 0.2 percent after a 0.1 percent gain the prior month, a Commerce Department report showed today in Washington. The median estimate in a Bloomberg survey of 76 economists called for a 0.2 percent advance. Incomes slumped 3.6 percent, sending the saving rate down to the lowest level since November 2007.
Employment gains, the rebound in housing and growing demand for autos will probably keep supporting consumer spending in the first quarter as the world’s largest economy picks up from an end-of-year slowdown. Even so, rising gasoline prices and the need to rebuild nest eggs may make it difficult for households to match last quarter’s performance.
“It’s going to be touch and go for the consumer for the next few months,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania, who correctly projected the 3.6 percent drop in income. “The consumer is going to be able to support the recovery, but they’re not going to be able to take it” to a higher level, he said.
---- The slump in incomes in January was the biggest since January 1993 and followed a 2.6 percent jump in December. Some companies paid dividends and employee bonuses earlier than usual before tax rates went up this year, removing a gain usually seen in January. The Commerce Department estimated the January level of wages was reduced by about $15 billion and December was boosted by about $30 billion, reflecting the timing of the bonuses.
The saving rate dropped to 2.4 percent from 6.4 percent.
---- Disposable income, or the money left over after taxes, dropped 4 percent after adjusting for inflation, the biggest plunge since monthly records began in 1959.
More
"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
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?
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