Baltic Dry Index. 859 +03
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
As a
dog returns to its vomit, so fools repeat their folly.
Proverbs
26:11. New International Edition 2011. The EU 2013.
We open with yet more madness in Europe. With a lame duck
caretaker government lingering in office, a President coming to the end of his
term next month but with no successor in sight, and no sign of a new coalition
government ready to replace the failed technocrat lame duck administration, it’s
business as usual in downwardly mobile Italy. Italy will continue on with its
policy of borrow and spend. If Italy’s banks won’t buy up the sovereign debt,
the ECB will have to instead. But Italy’s banks can still post the new
sovereign debt with the ECB for fresh euros. One way or another, this Italian junk
will end up in the ECB’s books. Stay long physical precious metals.
"Amigo!
Amigo!"
George
W. Bush, calling out to Italian Prime Minister Silvio Berlusconi in Spanish at
the G-8 Summit, Rusutsu, Japan, July 10, 2008
Italy Sells Bonds With Debt Level Approaching Postwar Record
By Chiara Vasarri - Apr 11, 2013 12:00 AM GMT
One day after Prime Minister Mario Monti announced
Italy’s debt will reach a postwar record this year, the
Treasury is tapping investors with the sale of as much as 7.5 billion euros
($9.8 billion) of bonds. The Rome-based Treasury will offer as much as 4 billion euros of a new three-year bond, 2 billion euros of 15-year debt and 1.5 billion euros of floating-rate notes. The auction should get “strong support” from 16.7 billion euros in redemptions due April 15 that will leave investors with funds to reinvest, UniCredit analysts including Chiara Cremonesi wrote in a note yesterday.
Italy’s bond yields declined yesterday even after the government announced that its debt will rise to 130.4 percent of gross domestic product from 127 percent last year as the third- biggest economy borrows to contribute to bailouts and pay arrears to government suppliers. The government managed to keep its budget deficit within the EU’s limit of 3 percent of GDP, easing some of the concern over the debt level.
----Tackling
the debt has been complicated by political gridlock after February elections
failed to produce a parliamentary majority, leaving Monti as a caretaker until
a new administration can be formed. Undoing his economic reforms would be a
huge mistake and achievements in terms of fiscal consolidation and Italy’s improved
credibility “can be undermined quickly,” he said yesterday.
More
Italy center-left tensions rise as Renzi cries foul
ROME |(Reuters) - Italy's center-left alliance showed new signs of division on Wednesday after the chief rival to Democratic Party leader Pier Luigi Bersani denounced the party hierarchy as efforts to form a government enter a critical phase.
The deadlock has left the euro zone's third-largest economy with only a caretaker government in charge as it slides further into a recession that many analysts expect will last until at least next year.
Matteo Renzi, the 38-year-old mayor of Florence who challenged Bersani unsuccessfully in a party primary last year, has voiced increasingly open dissent as the long stalemate since February's inconclusive election has dragged on.
He has so far not attacked Bersani by name but has called for an end to the impasse since the vote, saying the center-left must either drop objections to dealing with Silvio Berlusconi's center-right bloc or accept the need for new elections.
"Personally I'm one of those who hopes we vote
as soon as possible because the elections did not produce a majority," he
said. "Every day we wait is a day wasted for Italy."
----Behind the backbiting is a potentially serious breach within the center-left, which has struggled to contain its divisions since Bersani failed to secure a viable majority in parliament despite a strong opinion poll lead before the vote.
More than
40 days after the election on February 25, the divided political parties are
still no closer to reaching an agreement which would allow a new government to
be formed
More
In other EU news, from a
Lady Thatcher distracted London, the EMU asylum looks set to blow up. Stay long
physical precious metals. Apart from creating a new stock market bubble, all
the world’s QE programs are building the base for a coming era of epic
inflation.
"I've
abandoned free market principles to save the free market system."
Mario
Draghi, with apologies to George W. Bush, Washington, D.C., Dec. 16, 2008
EU raises flag over French, Italian, Spanish economies
BRUSSELS |(Reuters) - The European Commission warned of deepening economic problems in France, Italy and Spain on Wednesday, and said Slovenia must take urgent steps to offset the risk of a wider destabilization across the euro zone.
Unveiling its second review of economic imbalances in 13 European Union countries, the Commission flagged concerns about France and Italy, while including Spain and Slovenia among countries that could face fines if they do not correct course.
The early warning system was set up after problems in Greece, Ireland and Portugal triggered the euro zone sovereign debt crisis and forced the bailing out of four member states.
"(In) Spain and Slovenia, imbalances can be considered excessive," said the Commission, mentioning problems with high deficits and public debt levels, imbalances in the banking system and in labor market structure and costs.
In Spain, which had to borrow 40 billion euros from the euro zone last year to recapitalize its shattered banks, it said very high domestic and external debt levels posed serious risks for growth and financial stability.
----Perhaps more concerning are growing signs of imbalance in France and Italy, the euro zone's second and third largest economies, even if they are not yet deemed "excessive".
If those problems were to worsen, it would signify that almost no EU economy, save perhaps Germany, is immune from the impact of the debt crisis, and borrowing costs across the region would be likely to rise in reflection of that risk.
More
April 10, 2013, 7:31 a.m. EDT
Euro crisis poised for new, more dangerous phase
Commentary: Portugal adds to EU pattern of political instability
WASHINGTON (MarketWatch) — The euro crisis has long since gone
from being a currency and debt crisis to becoming a full-fledged economic
crisis, and now it is poised to become a political crisis as it destabilizes
governments throughout Europe.
The
flawed construction of the euro EURUSD
-0.03% and
the bungled response to the crisis by European leaders has created a rift
across the continent that is toppling political leaders and undermining the
European Union itself.
As
new crises arise in individual countries, they are becoming part of a pattern
of political instability that carries new risks for European integration and
its common currency.
The
decision of Portugal’s constitutional court last week to roll back some
provisions of the country’s bailout accord leaves Prime Minister Pedro Passos
Coelho with a gaping hole in his budget and may lead to his resignation.
----In
France, the scandal involving former Budget Minister Jerome Cahuzac’s secret
foreign bank account and suspected tax evasion has engulfed
a Socialist government weakened by its ineffectiveness in righting that
country’s economy.
In
Spain, the government of Prime Minister Mariano Rajoy remains under a cloud of
suspected corruption while a separate corruption scandal has rocked
the royal family, the country’s anchor of political stability since Franco
died in 1975.
In
Greece and Cyprus, new conservative governments are hanging on a thread amid
waves of austerity measures and bankruptcies.
This
is taking place against a backdrop of galloping unemployment, recession, and a
deflationary spiral with no end in sight as Brussels officials, on the
insistence of the German government in Berlin, impose austerity measures
dictated by a narrow neoliberal ideology that have proven unequivocally
disastrous.
All
this just so Germany’s conservative chancellor Angela Merkel can win a third
term in office in national elections this fall.
More
We end for the day with China. Have the authorities
there lost control of the economy or of just lost control of China’s
statistics? Either way, stay long
physical precious metals.
"Anyone
engaging in illegal financial transactions will be caught and persecuted."
George
W. Bush, Washington, D.C., Sept. 19, 2008
China Lending Tops Forecasts While Adding to Financial Risks
By Bloomberg News - Apr 11, 2013 5:32 AM GMT
China’s new yuan loans and money supply exceeded analyst estimates
last month, aiding the nation’s recovery from the slowest growth in 13 years
while adding to financial risks that may presage tighter credit. New local-currency lending in March was 1.06 trillion yuan ($171 billion), the People’s Bank of China said
today in Beijing. That compares with the 900 billion yuan median estimate in a Bloomberg News survey of 34 economists and 620 billion yuan in February. M2, China’s broadest measure of money supply, rose 15.7 percent, compared with the median forecast for 14.6 percent.
New Premier Li Keqiang is trying to keep credit flowing to sustain an economic rebound without creating asset bubbles or excessive risks in the banking system. While inflation eased more than forecast last month, Fitch Ratings Ltd. cut the nation’s long-term local-currency debt rating this week, citing dangers to financial stability.
----Aggregate
financing, a broader measure of credit that includes non-bank lending such
as trust loans, bond and stock sales, was 2.54 trillion yuan in March, close to
a record, compared with the median analyst estimate of 1.8 trillion yuan
----China’s foreign exchange reserves rose to a record $3.44 trillion at the end of March from $3.31 trillion in December. The median estimate in a Bloomberg survey was for $3.36 trillion.
For the first quarter, aggregate financing surged about 58 percent from a year earlier to 6.16 trillion yuan, according to central bank data. New local-currency loans in the first three months were 2.76 trillion yuan, the most for a first quarter since the global financial crisis, and 12 percent higher than the same period last year. Money-supply growth exceeded the government’s 2013 target of 13 percent.
More
Jump in China's imports casts doubt on statistics
11 April 2013
CHINESE
imports rose sharply in March but exports were below expectations for the first
time in four months, as some analysts suggested that previous figures had been
inflated.
Foreign
shipments into the world's second-largest economy increased by 10pc last month
on the previous year, according to Beijing customs administrators.
Imports
rose by an unexpected 14pc, leaving a trade deficit of close to $880m (€673m).
Only a 5.2pc increase in imports had been forecast and a trade surplus of
$15.4bn.
The
growth in imports is a possible signal that domestic Chinese demand will gather
the steam needed for the country's economic recovery.
However,
sales to both the US and Europe fell for the first time since November. Exports
to Japan, South Korea and Canada were also down.
But
exports to Hong Kong almost doubled, raising suspicions on the quality of data.
Some analysts said this leap was strange, given that a lot of exports to Hong
Kong are re-exported to the EU and US as final destinations.
"The
breakdown of exports by destination veers towards the absurd," IHS
economists Xianfang Ren and Alistair Thornton said yesterday.
"There
is plenty of anecdotal evidence to suggest exporters are faking orders" to
obtain export-tax rebates, IHS said.
More
"One
of the very difficult parts of the decision I made on the financial crisis was
to use hardworking people's money to help prevent there to be a crisis."
George
W. Bush, Washington, D.C., Jan. 12, 2009
At the Comex silver depositories Wednesday final figures were: Registered 41.00
Moz, Eligible 122.09 Moz, Total 163.09 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, some
sensible advice for Germany from the man who “broke the Bank of England,” John
Major’s inept Conservative government, and unintentionally saved the UK from
joining the ill-fated euro.
"I'm
oftentimes asked, What difference does it make to America if people are dying
of malaria in a place like Ghana? It means a lot. It means a lot morally, it
means a lot from a -- it's in our national interest."
George
W. Bush, Accra, Ghana, Feb. 20, 2008
George Soros urges Angela Merkel to consider quitting euro
Billionaire
speculator says single currency's prospects would be better without Germany,
the eurozone's most dominant member
Tuesday 9 April 2013 17.40 BST
George Soros, the billionaire speculator best known as "the man who broke the Bank of England" in 1992, has launched a stinging critique of Germany's role in the euro crisis and suggested the single currency's prospects would be improved if its most dominant member were to quit.
In an incendiary speech made on Tuesday afternoon in Germany's financial centre of Frankfurt, the hedge fund trader told Europe's richest country it had gone too far during the bailout of Cyprus, was itself heading for recession and should either leave the euro or reverse its long held opposition to eurobonds – a form of sovereign debt that would mean each member country's borrowings were guaranteed by the whole eurozone
"My first preference is eurobonds; my second is Germany leaving the euro," he said in his lecture, entitled: How to save the European Union from the euro crisis.
"It is up to Germany to decide whether it is willing to authorise eurobonds or not," he said at Frankfurt's centre for financial studies.
"But it has no right to prevent the heavily indebted countries from escaping their misery by banding together and issuing eurobonds.
"In other words, if Germany is opposed to eurobonds it should consider leaving the euro and letting others introduce them."
In an address which appealed over German chancellor Angela Merkel and directly to German voters, who go to the polls in federal elections later this year, Soros implored the country to change course.
"I
hope that by offering you a different perspective I may get you to reconsider
your position before more damage is done," he said. "That is my goal
in coming here."
He added:
"The financial problem is that Germany is imposing the wrong policies on
the eurozone. Austerity doesn't work. You cannot shrink the debt burden by
shrinking the deficit.
More
"Wait a minute. What did you just say? You're predicting
$4-a-gallon gas? ... That's interesting. I hadn't heard that."
George W. Bush, Washington, D.C., Feb. 28, 2008
The monthly Coppock Indicators finished March:
DJIA: +119 Up. NASDAQ: +132 Up. SP500: +157 Up. Another Fed bubble grows.
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