Baltic Dry Index. 877 -19
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
"NASDAQ, the stock market for the next 100 years."
For more on the Great Nixonian Error, what
David Stockman, Ronald Reagan’s budget director, calls “the abomination,”
scroll down to Crook’s Corner.
Stay long physical precious metals using current dips
as buying opportunities. Japan this morning has kicked off its blitzkrieg
currency war against the USA, Germany, South Korea, Taiwan and China. All under
the guise of ending deflation. Rest assured no one is fooled. Even as the
Baltic Dry Index signals a softening in global trade, Japan is setting out to beggar
its competing exporting nations. It doesn’t take a genius to know that this all
ends badly.
Assuming North Korea doesn’t in fact start a hot
war against the USA and all comers, be long precious metals if they do, the new
Japanese currency war threatens to sink the Euro, US manufacturers, incur the
wrath of China, and very likely blow up the Great Nixonian Error of fiat
currency. With all banks now the unsafe equivalent of MF Global, precious
metals are now one of the few safe havens left for the prudent. When a bank run
starts in a country unable to stand behind its bank guarantee, like say tiny
Luxembourg, getting out first is the only game in town.
"Anytime
you don't want anything, you get it."
Calvin
Coolidge, 30th President of the United States.
BOJ shocks with new base money target, boosts asset buying
TOKYO |(Reuters) - The Bank of Japan shocked markets on Thursday with a radical overhaul of its policymaking, adopting a new balance sheet target and pledging to double its government bond holdings in two years as it seeks to end nearly two decades of deflation.
At new Governor Haruhiko Kuroda's first policy-setting meeting, the central bank shifted its monetary policy target to the monetary base from the overnight call rate, which is set at a range of zero to 0.1 percent.
The unexpected scope of the changes Kuroda pushed through drove the yen lower and knocked the 10-year bond yield to its lowest in a decade.
"The BOJ will conduct money-market operations so that the monetary base will increase at an annual pace of about 60 trillion yen to 70 trillion yen ($645 billion to $755 billion)," the central bank said in a statement announcing the decision.
It also combined two bond-buying schemes, its asset-buying and lending program and the "rinban" bond-buying market operation, to buy government bonds across the yield curve including those with duration of 40 years.
The BOJ will revert to open-ended asset purchases and buy over 7 trillion yen ($75 billion) of long-term government bonds per month, so that the balance of its bond holdings increase at an annual pace of 50 trillion yen, the central bank said.
More
Next, Euroland prepares its own “shock and awe”
currency war counter attack. The race to the bottom has started in earnest.
The bankster in his mansion,
The taxpayer at his gate,
Draghi made them High or lowly,
He disordered their estate.
With apologies to All things bright and beautiful.
Draghi Considers Plan B as Sentiment Dims Post Cyprus Fumble
By Jeff Black, Jana Randow
& Stefan Riecher - Apr 4, 2013 7:51 AM GMT
European Central Bank President Mario Draghi
is under pressure to reveal Plan B. A botched attempt to rescue Cyprus last month sent bank shares tumbling across the euro area and rattled confidence in policy makers’ ability to tame the sovereign debt crisis. With doubts growing about Draghi’s forecast for a second-half economic recovery, he’s considering his options.
They range from an interest-rate cut to a new round of long-term loans to banks, to a plan to encourage lending to companies, three officials with knowledge of the deliberations said. They stressed that such action may not be announced today.
“They have to start thinking about a plan for unconventional measures if the recovery does not materialize,” said Martin van Vliet, senior euro-area economist at ING Bank NV in Amsterdam. “It may be too early for them to do that this month, but I’d expect Draghi to acknowledge that the economy is not improving and the chances of a surprise are bigger than they were.”
With Europe entering a second year of recession and fragmented financial markets preventing the ECB’s record-low borrowing costs from reaching the countries that need them most, Draghi may prefer to use so-called non-standard measures. He is particularly concerned about a lack of credit being extended to small and medium-sized companies in countries such as Italy and Spain, two of the officials said on condition of anonymity.
More
With Europe on ECB life support and a terminal
basket case due to bank deposit theft, and a new currency war starting
initiated by Japan, the last thing the central bank stock market bubbles needed
was bad news coming out of the badly misfiring lead locomotive of the global
economy.
“The
boom can last only as long as the credit expansion progresses at an
ever-accelerated pace. The boom comes to an end as soon as additional
quantities of fiduciary media are no longer thrown upon the loan market.”
Ludwig Von Mises
ADP, other disappointing data raise specter of spring U.S. slowdown
April 3, 2013, 10:44 AM
The ADP
jobs report for March is the fifth economic indicator in the past week to
disappoint investors with a lower-than-expected reading. Is it a sign the U.S.
economy is going to slow down in the spring and early summer for the third year
in a row? Maybe, but it’s too soon to tell.The payroll-processing firm ADP on Wednesday said the private sector generated 158,000 jobs in March, well below the MarketWatch forecast of a 215,000 gain. The pace of hiring was revised up sharply in February, but that tells us little about where the economy is headed in the second quarter of the year.
Three other economic signposts have also suggested some potential trouble ahead. The consumer confidence index for March fell to 59.7% in March from 68.0% in February. Jobless claims shot up above the 350,000 mark last week for the first time in a month and a half. The ISM manufacturing index softened to 51.3% last month from a nearly two-year high of 54.2% in February. The ISM services index of 54.4% certainly wasn’t bad, but it was worse than consensus and the lowest reading since August.
More
We close for the day noting some double edged “good
news.” Is the west about to get a break from falling oil prices. Ever since the
disastrous Iraq war took the crude oil price from $10 a barrel up to the $100s,
the west has been systematically impoverished, drained of its wealth to support
an affluent lifestyle increasingly unsupportable. The west badly needs to get a
crude oil price back closer to $50. Sadly the “double edge” part of this oil price
drop is that it likely reflects a slowing US economy. That is not good for a wobbly
US recovery that was largely based on the Fed’s QE programs plus mostly smoke
and mirrors. The reality is that if the US economy is slowing, and China’s GDP
numbers are overstated, Japan’s new currency war is ill timed and will fail.
But it will likely take out the Euro and many European banks. It will also
burst the Fed’s stocks bubble.
Sadly also, if the US economy has turned sickly
again, get ready for a wave of bankruptcies in the US natural gas sector as the
chickens come home to roost in America’s nearly bust shale gas “fracking” industry.
2013 is shaping up to be one of those epic years.
Oil sinks nearly 3% to settle below $95 a barrel
U.S. supplies rise; ADP private-payrolls data weaken demand view
SAN FRANCISCO (MarketWatch) — Oil futures sank Wednesday, as a bigger-than-expected increase in last week’s U.S. crude supplies and a slowdown in private-payrolls growth combined to push prices below $95 a barrel to their lowest close in over a week.
“We
have the highest
stocks of crude oil since July 1990, and an uncertain economic environment
in Europe and the U.S.,” said James Williams, energy economist at WTRG
Economics.
The U.S. Energy Information Administration reported on Wednesday a climb
in crude supplies that was more than the market expected. Crude supplies rose
2.7 million barrels to 388.6 million for the week ended March 29. Analysts
polled by Platts expected a 2.5 million-barrel climb.
Prices for oil were already falling after the American
Petroleum Institute report late Tuesday that showed crude supplies jumped
4.7 million barrels last week.
More
http://www.marketwatch.com/story/oil-futures-pull-back-as-weekly-stockpiles-surge-2013-04-02?dist=tcountdown
"We need only take our heads out of the sand to see clearly that interventionism not only has failed to provide the promised something-for-nothing, but has led to all sorts of undesirable consequences. Indeed, many are just beginning to realize that we are moving towards disaster even though we have been on a wrong heading for decades."Leonard Read
At the Comex silver depositories Wednesday final figures were: Registered 43.75
Moz, Eligible 121.37 Moz, Total 165.12 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Now back to the Great Nixonian Error of fiat money. Socialism for too
big to fail banksters and their ilk. The wages of sin for casinos capitalists.
“The problem with fiat money is that it rewards the minority that can handle money, but fools the generation that has worked and saved money.”
“Adam Smith” aka George Goodman.
April 3, 2013, 7:48 p.m. EDT
Stockman fires back at Krugman, critics
WASHINGTON (MarketWatch) — Fresh
off an explosive essay in the
New York Times, a debate with former Obama
official Peter Orszag and a torrent of criticism, former Reagan budget
director David Stockman says the gold standard gets a bad rap and that the
Fed’s low interest rates spur Congress to spend.
Stockman,
speaking to MarketWatch here as part of a tour to promote his new book “The
Great Deformation.” perhaps to little surprise was critical of Paul Krugman,
the Nobel laureate and Times columnist who dismissed the ex-congressman as “a
cranky old man.” Perhaps more surprising, though, was Stockman’s disdain toward
Eric Rosengren, the president of the Boston Fed.
The
following is an edited transcript of his remarks.
MarketWatch : One of the criticisms of your
essay is during the gold standard, they had plenty of ups and downs including
more frequent recessions, so that’s not a cure-all.
Stockman : We don’t want to get into a
discussion of 19th century economic history, but frankly the whole idea of too
many recessions and too much instability is a Keynesian myth. If you look at
the real history, the problem that they did have in the period from 1870 let’s
say to 1914, was the National Banking Act. The national banking system was
fundamentally unstable. It was set up during the Civil War to finance the war,
and it put state banks out of existence as currency issuers. It said national
banks could issue currency if it was backed by government bonds.
The
problem was massive amount of debt was issued to finance the Civil War. When
the war was over, there was still fiscal rectitude at large in the land, and in
the next 40 years they paid down large amounts of the public debt. As a result
of that, there was an inelastic currency, but it was the inelastic currency,
not the gold standard, that caused the problem.
Secondly,
the economy performed brilliantly during that period. Real GDP growth, it was
nearly 4% continuously without inflation. Now there were periodic panics,
mostly those happened in Wall Street. They didn’t spill over into Main Street
and the middle and western sections of the country. For instance, the panic of
1884 had no effect on the economy of Ohio. Therefore, that was a period of good
economic performance.
They had
this silly chart created, who knows, 40 years ago by the National Bureau of
Economic Research that shows all these periods of recession, without telling
you that one, they couldn’t even measure GDP in those days. It’s all guesses,
they didn’t have quarterly GDP and we can hardly trust what we have today.
Those numbers were a lot of noise.
But you
can tell the living standard rose over time, real income rose consistently and
substantially, and the real GDP growth is unquestionably the best we ever had.
Stop
beating up on the gold standard. I’m not talking about necessarily that now.
What am I saying is, we didn’t have a Fed that was printing money like there is
no tomorrow hand over fist. We didn’t have a Fed that was trying to
micromanage, macromanage, adjust, manipulate, every aspect of the financial
market and the national economy. That’s the problem.
MarketWatch : Since Nixon’s “abomination” as
you call it, we have had some periods where government spending to GDP actually
went down, like during the Clinton era. Doesn’t that show it’s just the choices
made by Congress rather than the Fed to blame [for rising debt]?
Stockman : There is the issue that Congress
ultimately is the fiscal authority. But my argument is, when the Fed becomes a
massive buyer of bonds and debt and artificially suppresses interest rate below
market-clearing levels, it’s a terrible signal to the Congress that debt is
cheap, that running deficits is a viable strategy. So therefore they are
induced to kick the can, to let it drift and avoid hard choices. Who wants to
tell the public you are going to take your broccoli of higher taxes and lower
benefits and spending if you can issue debt on a three-year basis for 40 basis
points. That’s free. I was in Congress, they don’t do decimal math, OK? And
they think the money is free, it’s a bad problem philosophically, we shouldn’t
be doing this for the great long run, but it’s no harm today.
Then
they have professors like Krugman who give them the disingenuous advice that
the bond vigilantes don’t care. The market is saying, “fine with us, we don’t
care, keep piling the debt on, we love it.” That is so much baloney. The reason
the interest rate on the 10-year bond 10_YEAR
+0.11% today
is 1.8% or whatever it happened to settle today, is the market knows the Fed is
buying half of the debt and is front running the Fed. And it is renting the
bond on repo, 98 cents on the dollar, based on overnight money that’s free
thanks to Bubbles Ben as well.
For
a so-called Nobel laureate to claim the vigilantes are validating this crazy
deficit expansion through the fact the interest rate is 1.8% is the height of
disingenuous.
MarketWatch :
But Bernanke did a recent speech on this, and he pointed out the bond yields of
every industrialized nation, including Germany, have dropped.
Stockman : You know why? Because every
central bank in the world is putting out the same heroin, the same monetary
policy poison. Because the Fed is doing this, and this is part of my theme in
the book, that once we started going into the massive balance sheet expansion,
other central banks had to reciprocate or otherwise their currencies would be
disadvantaged.
The whole
world of central banks is now administering the same bad medicine. To say it
works because everyone is doing the same thing, again, I think is utterly
disingenuous.
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
The monthly Coppock Indicators finished March:
DJIA: +119 Up. NASDAQ: +132 Up. SP500: +157 Up. Another Fed bubble grows.
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