Baltic Dry Index. 873 Friday.
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
“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.
We open today with more in the way of China’s yuan
rising. With the Project for the New American Century long ago crashed into
irrelevance by President George W. Bush and the crash of 2007-2009, the yuan’s
rise will come at the expense of the still relatively strong dollar and the
soon to go out of business euro. Tomorrow will not be like today which was like
yesterday. Continental Europe seems determined one way or another to get into a
depression. The EU seems determined to see the UK leave before the end of the
decade. America seems determined to electronically print its way into dollar
inflation. Little wonder that China thinks it’s time to set out the case for
the Chinese yuan.
But as is so often the case with China, things are
never quite so simple. In China there seems to be two competing camps. For many,
until the Greatest Leader commits, it generally pays to keep sitting on the
fence. Still it’s yet another reason to keep acquiring physical gold. Would a
fiat reserve yuan be any improvement on the failing fiat dollar reserve
standard?
True, governments can reduce the rate of interest
in the short run, issue additional paper currency, open the way to credit
expansion by the banks. They can thus create an artificial boom and the
appearance of prosperity. But such a boom is bound to collapse soon or late and
to bring about a depression.
Ludwig von Mises.
China Names Yuan Convertibility Plan as Goal This Year
By Bloomberg News - May 7, 2013 5:08 AM GMT
China signaled it will
propose plans this year to allow freer flows of its currency in and out of the
nation as part of measures to loosen control over the yuan and interest rates.
The plan on yuan capital-account convertibility will also include a way to let individuals make overseas investments, the State Council said in a statement yesterday after a meeting led by Premier Li Keqiang on the focus of economic reforms in 2013. Other measures include improving controls on risks from local- government debt, expanding trials of value-added taxes on companies and pushing forward changes to the country’s household-registration system
Future
changes may include raising or removing quotas on foreign investment in the
nation’s bond and stock markets and giving Chinese companies more freedom to
borrow overseas, said Chen Bingcai, a former official with the nation’s
foreign- exchange regulator. Li in March pledged to open the economy to more
market forces and strip power from the government as part of efforts to
restructure growth.
----“It’s
a positive sign that the new government under Li Keqiang is trying to boost
growth by reform instead of launching fiscal stimulus,” Shen Jianguang, chief
Asia economist at Mizuho Securities Asia Ltd. in Hong Kong, said
by telephone. The goal of a feasible plan for capital-account convertibility
shows that the “reform ideas promoted by Zhou Xiaochuan have received
endorsement from the cabinet,” he said.
More
Policy battle rages in China as slowdown feeds 'sense of crisis'
Anti-reform hardliners in China's Communist Party have become seriously alarmed by the sharp slow-down in economic growth, creating a "task-force" to crank up production.
China's Caixin Magazine reports that there is a growing "sense of crisis" not felt since the depths of the global banking crash in 2008-2009.The State-owned Assets Supervision and Administration Commission (SASAC) has assembled a team to "protect economic growth" and pressure state companies to boost jobs at all costs.
SASAC is the bastion of vested interests and controller of 115 state behemoths with assets above $6 trillion and lock on much of the economy.
The move comes amid further signs that growth is faltering across all fronts. HSBC's gauge of Chinese services fell three points to 51.1 in April, the lowest in almost two years.
The broader composite index also dropped sharply to a six-month low of 51.1 and is now barely above the contraction line, with new orders trailing badly. The economy grew 7.7pc in the first quarter, slower than expected.
----China's downturn is rippling through commodity markets, led by a major sell-off of base metals this year. Credit Suisse said the short-covering rally over the last few days is likely to prove a "dead cat bounce" as China's structural slow-down and a weakening global economy overwhelm all else. It expects copper to "bite the dust", falling to 2009 levels near $6,000 a tonne.
China's authorities have been trying to stop property speculation with loan curbs but it is proving hard to pop the housing boom without popping the economy itself.
New so China's growth task-force comes amid reports that SASAC has ordered state firms to go for expansion and disregard other objectives such as investing in new technology.
The policy drive cuts across efforts by the reformist premier Li Keqiang to wean China off uber-growth and shift to a different development model. He has asked China's State Council to study ways to cut growth to 7pc next year, deemed the safe speed limit.
----President Xi Jinping has yet to tip his hand in what amounts to a civil war over policy and China's economic destiny. Experts say he tilts back and forth between the reformist and dirigiste wings of the party. The Standing Committee appears evenly split.
The International Monetary Fund warned last week that China is in danger of becoming "old before it is rich" as the demographic crisis hits. The work-force has already begun to shrink, contracting by 3.5m last year.
More
Now back to the new German Empire of Euroland,
where all the bells, whistles, klaxons, and
red flags are sounding and waving frantically at the same time. “Don’t tread on
me,” say Italy, France and Spain to paymaster Germany. In many parts of
Euroland, the new German management is busy reviving old nationalist
animosities. “Whatever it takes” to get Chancellor Merkel re-elected in
September, is proving to be a slide into depression for most of Club Med. Now
that slide is threatening to take Germany along for the ride as well. Stay long
physical gold and silver held outside to the EU banking system. There is
nothing in past form that suggests The Grand Committee of 27 Great Leaders can
accomplish much other than bodge, botch, and fudge. June will likely bring us
yet another example in a long line of incompetent accomplishment.
There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.
Ludwig von Mises.
German service sector contraction sounds alert for recovery in eurozone
Fears that the recession in the crisis-hit eurozone could deepen accelerated on Monday after German service companies joined the other big-four euro nations in contraction territory.
Germany's services industry contracted in April for the first time in five months and a broader measure of the service industry in the 17-member eurozone remained in negative territory.The German PMI Services index, which is compiled by surveying about 1,000 German business leaders, shrank to 49.6 in April from 50.9 points in March, according to data from financial information company Markit.
Any reading below 50 indicates a contraction, but the figure was better than economists' expectations of 49.2.
Adding to the gloom, the eurozone service PMI reading remained below 50, but edged higher to 46.9 from March's four-month low of 46.5. "The PMI suggests that, having eased in the first quarter of the year, the eurozone's economic downturn is likely to have gathered momentum again in the second quarter," Chris Williamson, chief economist at Markit, said.
He added: "Strong downturns in France, Spain and Italy have broadened out to encompass Germany again, with slumping domestic demand exacerbated by export losses due to a weakening of economic growth in other countries, such as the US and China."
More
French industrial output drops in March
May 7, 2013, 7:52am by Peter Spence
French industrial output has dropped by 0.9 per cent in March, from 0.8
growth in the previous month. A shallower drop of 0.5 per cent was anticipated.http://www.cityam.com/live-blog#French-industrial-output-drops-in-March
Fresh Eurozone fears as output shrinks again
ANOTHER onslaught of gloomy data from the Eurozone raised fears yesterday that the single currency area will fall further into recession this quarter, as business activity shrank even in economic powerhouse Germany.Markit’s latest composite purchasing managers’ index edged up very slightly from 46.5 in March to 46.9 in April, but remained well below the crucial 50 level – scores need to be above 50 to indicate growth.
Overall output has now declined in every one of the last 15 months and is now significantly below the levels recorded just two months ago, when February’s figure was revised up to 47.9. Poor manufacturing and services data pushed the bloc’s largest economy, Germany, back into contraction for the first time since November last year, as new orders also slipped to a five-month low.
Though the speed of the slowdown eased in France, Italy and Spain, growth remained well out of reach, with all three countries stuck below the composite figure of 46.9.
“The survey does little to dilute suspicion that the Eurozone is headed for further GDP contraction in the second quarter after highly likely suffering a sixth successive quarter of contraction in the first quarter of 2013,” said Howard Archer at IHS Global Insight.
Meanwhile Eurostat said yesterday that retail sales across the single currency had fallen for the second consecutive month, with Spanish consumers leading the decline.
More
http://www.cityam.com/article/fresh-eurozone-fears-output-shrinks-again
After four years of misery and hell for ordinary
unconnected Greek workers, the IMF noticed on Monday that nothing had really
changed for the elite. Welcome to the dysfunctional world of Club Med that will
inexorably eventually bring down the euro as we know it. Apart from some euro
deniers, living high on the hog in the bureaucracy of Brussels and the
political elites of the Davos set, more and more Europeans are now well aware
that the euro hasn’t worked out as promised and is consigning Europe to become
an impoverished economic backwater of high unemployment and high emigration. With
UKIP on a roll in the UK, there is now a strong possibility that the UK will
have exited the EU before 2020. Unreformed the EU as we know it will fail. The
euro as we know it now works against Europe’s future instead of for it.
IMF tells Greece to step up fight on tax evasion
Greece must do more to fight its "notorious" tax evasion if the country is to remain on course to reduce its budget deficit, the International Monetary Fund (IMF) has warned.
Although the IMF praised the debt-laden nation for making "exceptional" progress in improving its finances, it added that "insufficient" structural reforms had meant deficit cutting had been achieved primarily through slashing jobs and wages, bringing "unequal distribution" of the burden of adjustment."Very little progress has been made in tackling Greece's notorious tax evasion," the IMF said in a report on Monday. "The rich and self-employed are simply not paying their fair share, which has forced an excessive reliance on across-the-board expenditure cuts and higher taxes on those earning a salary or a pension."
The IMF also said that Greece had also made "a significant dent in its competitiveness gap" but stressed that "restoring growth remains the overarching precondition for whether Greece succeeds" in its bailout programme with the international lenders.
In a speech last month, Poul Thomsen, the IMF official in charge of the Greek programme, pointed to tacit corruption in a tax service that "has too many employees who have gotten their jobs because of political connections."
Greece also suffers from too many closed professions, the Fund said, a reality that it believed also unfairly hits salary earners not protected by special regimes that limit hiring and firing.
More
“The U.S. government has a technology, called a printing press
(or, today, its electronic equivalent), that allows it to produce as many U.S. dollars
as it wishes at essentially no cost…We conclude that under a paper-money
system, a determined government can always generate higher spending and hence
positive inflation.”
Dr.
Ben Boomer Bernanke
At the Comex silver depositories Monday final figures were: Registered 45.41
Moz, Eligible 119.84 Moz, Total 165.25 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
It isn’t only European banksters that are trying to
steal bank depositors hard earned cash, cyber attackers are getting far more
skilled at stealing from the west’s banks. Not to worry, it’s only fiat money
and there’s plenty more where that comes from at the central banks. Still it is
yet another reason to keep swapping some of the pictures of dead US presidents,
UK Darwins and Adam Smiths, or pictures of fictitious European buildings and
bridges, for something tangible like physical gold and silver held outside of
the local banking system. When the next Lehman hits as it will, your not so
friendly local bankster will likely try
to Cyprus everything not nailed down in their bank.
"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
Cheapest Way to Rob Bank Seen in Cyber Attack Like Hustle
By Jordan
Robertson - May 6, 2013 5:00 AM GMT
The hackers
often struck late on Fridays, starting about a year ago, sending skeleton crews
at more than a dozen European banks rushing to keep bombardments of digital
gibberish from crashing their websites.
Damaging as the bandwidth-choking attacks were, they were merely smokescreens. Once employees dropped their guard to fight one attack, hackers struck again, exploiting the openings to steal account information and create counterfeit debit cards.
One attack was so fast that, within two hours, $9 million was withdrawn from automated teller machines in 46 cities, according to Francis deSouza, president of products and services for Symantec Corp (SYMC)., the Mountain View, California-based information security company that investigated the incidents.
Symantec’s findings show that the attacks, which have been around for years, have evolved from nuisances causing temporary website outages into one of the cheapest and most effective ways to rob banks. They’ve become the online equivalent of a common street hustle, with the initial assault being the shiny object that distracts bank security teams long enough to pick customers’ pockets.
Tens of millions of dollars were stolen in the past year in two-pronged attacks that banks didn’t notice until customers complained or investigators later uncovered the breaches, said Samir Kapuria, a Symantec vice president who led the research.
“The problem is everyone is focusing on the fact someone has set fire to your front yard, and while you’re staring at the front yard someone is coming in through the back door,” said Tom Kellermann, a former security specialist with the World Bank and now vice president of cybersecurity for Trend Micro Inc., a Tokyo-based security software maker.
ING Assault
The attacks targeting banks are known as distributed denial-of-service, or DDoS, in which hackers flood a computer system with information to shut it down. While some banks have acknowledged the attacks have damaged their websites, Symantec’s research shows hackers have reached deeper than institutions have been willing to acknowledge.The websites of U.S. banks were down a record 249 hours in six weeks in February and March, when they were being heavily attacked, according to Keynote Systems Inc (KEYN)., a San Mateo, California-based company that measures websites’ response times.
The U.S. Comptroller of the Currency, in an alert in December, said DDoS attacks previously regarded as political statements have become part of broader invasions aimed at compromising customer accounts. It didn’t give examples and Stephanie Collins, an agency spokeswoman, declined to comment beyond the alert.
Symantec’s research focused on European banks, which the company wouldn’t name, and it’s not clear what losses U.S. banks and their customers have sustained in similar attacks.
Only Citigroup among the largest U.S. banks has disclosed losses from DDoS and other cyber attacks to investors this year, and it characterized them only as “certain limited losses in some instances.”
In one recent combination attack, hackers temporarily knocked out online banking at Amsterdam-based ING Groep NV (INGA) and iDEAL, a Dutch e-commerce system that includes the Netherlands’ biggest banks, on April 5 and sent a wave of e-mails to ING customers during the attack trying to get them to reveal personal information.
Carolien van der Giessen, a bank spokeswoman, confirmed the attacks while declining to say whether ING experienced data- theft attacks at the same time.
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
The monthly Coppock Indicators finished April:
DJIA: +133 Up. NASDAQ: +139 Up. SP500: +170 Up. Another Fed bubble underway. But how high is
high enough?
No comments:
Post a Comment