Baltic Dry Index. 872 -07
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
"When a President does it, that means that it is not
illegal."
Richard M. Nixon.
This morning we are spoiled for choice. In
our new lawless age, we seem to have emerged into the Golden Age of Scandal. In
America, someone set the IRS on to the Republicans and their Tea Party allies.
It’s a reverse 1968-1973 all over again. For possibly the biggest commodity scandal
of all time, scroll down to Crooks Corner. Here the suspicion not quite yet an
allegation, is that since 2002 the oil mafia has been rigging the oil market
higher. They wouldn’t do that would they? Coincident or not, 2002 is the year when
King George the lesser and his lightweight crew, began to implement their
conspiracy plan to invade Iraq in 2003.
While the Fed’s final bubble continues to
grow like Topsy instocks, greatly disconnected from the reality of Main Street,
our western world is rapidly heading towards the end of banking secrecy. The
EU, hard pressed by Germany and France, but supported by the UK and nearly all
the rest of the EU members, are leaning on Switzerland and Liechtenstein to
abandon bank secrecy and exchange data with the EU in its fight against tax
evasion.
It’s open season on Europe’s one percenters
and Bilderberg set, who are now under direct attack. But who needs to bank in
Switzerland or Liechtenstein if it wasn’t for bank secrecy? If a Zurich bank account is as open to German
tax authorities as a bank account in Berlin, why go to all the bother of
opening up a Swiss account at all. If
the Swiss and the Liechts cave in, a whole lot of Greek shipowners, among many
others, are sunk. Are Europe and America really ready for what will come
crawling out of the Swizz banks?
“The illegal we do immediately, the unconstitutional takes a
little longer.”
Henry Kissinger.
Europe pushes Switzerland to end bank secrecy
By John O'Donnell and Robin Emmott
BRUSSELS | (Reuters) - European Union finance ministers gave the green light on Tuesday to start talks with Switzerland and Liechtenstein about surrendering bank data, as Europe stepped up its fight against tax evasion.
The move, described as 'historic' by Germany's Finance Minister Wolfgang Schaeuble, redoubles pressure on Switzerland to open up account details and will likely pave the way for Austria to ditch its own bank secrecy for foreigners.
By giving the European Commission the go-ahead to negotiate with Switzerland, Liechtenstein, San Marino, Andorra and Monaco, EU finance ministers hope to push for the same rules to be applied to these countries as within the European Union.
The talks had long been opposed by EU members Luxembourg and Austria, which were seeking to defend their own bank secrecy, but on Tuesday their finance ministers dropped those objections.
"In the battle against tax evasion, what we achieved today was undoubtedly a step forward," Algirdas Semeta, the European commissioner in charge of tax policy, told reporters after the meeting of ministers.
The Swiss government gave a guarded response. A spokesman for Switzerland's department of finance underscored the country's willingness to cooperate and said it would now consider how to respond.
Austria's support is a symbolically important gesture that takes it closer to ending its own bank secrecy for foreigners, bringing it into line with the rest of the EU.
Most developed countries share information on taxpayers and depositors "on demand". But since this requires the authorities in the requesting jurisdiction to suspect wrongdoing, it only has limited impact in uncovering unlawful behavior.
Automatic exchange of information allows tax authorities to more easily spot tax evasion or illicit money flows.
Austria has been the last EU holdout on bank secrecy after Luxembourg changed tack last month.
"This is a huge step further for Austria," Finance Minister Maria Fekter told her peers in part of the meeting of EU ministers that was broadcast.
More
Another
scandal that continues to grow rapidly, is the great scandal at Bloomberg. By
intercepting and tracking private messages without a court order, the Bloomies
it seems, weren’t just acting unethically but were breaking the law on at least
two, probably three continents. Did anyone trade on the illegal edge? Did
anyone sell on or pass on the inside edge for gain? While this scandal is just
in the first innings, it seems highly probable to me that it ends in jail time
for some. It’s coming up to “let’s make a deal” time for some. Getting in first
is the name of that game. A few whistle-blowers can probably make a fortune
too.
Bank of England blasts 'reprehensible' spying scandal at Bloomberg
The Bank of England has branded Bloomberg’s abuse of user information as “reprehensible”, as it revealed it is launching a coordinated investigation into the spying scandal with other central banks.
In the past few days, the European Central Bank, Bundesbank, the US Treasury and the US Federal Reserve have all launched separate probes into claims that journalists at Bloomberg used the $20,000-a-year terminals to track officials.The Bank of England said on Tuesday that it was “in close contact with Bloomberg” to ensure there are no more security breaches” and will be “liaising with other central banks” as it investigates.
“The protection of confidential information is vital here at the bank. What seems to have happened at Bloomberg is reprehensible," a BoE spokesman said.
Meanwhile, Bloomberg is facing the threat of major legal battles with customers and regulators after its journalists admitted they had been using the terminals to keep tabs on City workers, by watching how often individual users logged on, and when they used certain functions such as its private messaging service.
US lawyers claim Bloomberg is likely to receive a slew of civil lawsuits, and could also face fines from America’s Department of Justice and the Securities and Exchange Commission if regulators got the bit between their teeth.
Bradley Simon, a white collar crime expert based in New York, told the Telegraph that Bloomberg could be sued under a number of federal laws, after it emerged that reporters have been routinely accessing private information about the traders and other City workers who use Bloomberg terminals.
“I don’t think that this is going to go away. It appears they knew about this for a while and took no steps to fix it so I could see big lawsuits and even some regulatory enforcement action,” Mr Simon said. He said the company could be pursued under a number of different federal criminal statutes outlawing the interception of electronic communications.
More
In a stealth scandal, still off the radar screen
for most, the ending of zero interest rate policies will bring on the next
Lehman fear those who ought to know. Yet if that policy doesn’t end as economic
recovery gains escape velocity, we are in for the Great Age of the Inflation of
all inflations. Stay long precious metals. There’s simply no appetite for
raising interest rates.
"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
Rate rise will trigger economic shock, former BoE policymakers warn
Raising interest rates and unwinding quantitative easing will cause an unavoidable economic “shock” even after the recovery is established, two former Bank of England policymakers have warned.
Kate Barker and Andrew Sentance, both of whom served on the rate-setting Monetary Policy Committee, raised their concerns yesterday amid further evidence that the economy may be starting to gather momentum.“The first stage of unwinding [QE] will potentially deliver a bit of a shock to the economy,” Ms Barker told MPs on the Treasury Select Committee (TSC). “As indeed will the first move away from 0.5pc bank rate.”
Interest rates have been at a historic low since March 2009, when QE was first launched, and the Bank has bought £375bn of gilts through QE – about a third of the UK’s national debt.
Ms Barker warned that mortgage borrowers on variable rate loans were “the most exposed” to the risk of rate rises and should prepare for them.
Mr Sentance went further, saying the time had come to prepare for higher interest rates and that 2pc was a more realistic “neutral” level at the moment than the 0.5pc crisis rate.
----Economists have warned that low rates are allowing unviable “zombie” households and businesses to limp on while starving promising new borrowers of cash.
Mark Carney, the Bank’s incoming Governor, starts in July and is expected to bring a radical new influence to policy that will drive growth. However, both former ratesetters said the Bank could do little to stimulate the economy now, despite the Chancellor’s policy of “monetary activism”.
Mr Sentance said he would have stopped QE at £200bn and Ms Barker accepted TSC chairman Andrew Tyrie’s observation that QE was suffering “diminishing returns – more coats on the same wall in the same colour”.
Asked about incoming Mr Carney’s ideas about “flexible” inflation targeting and “guidance”, Ms Barker added that guidance “may turn out to be helpful but we should not delude ourselves” and that she was “not sure Mark Carney is going to be any more flexible than the MPC has been”.
However, Ms Barker said she would keep policy loose for the moment rather than tighten policy and hurt growth.
More
We end for the day with more of the same in Euroland.
Cyprus was a template for bank theft. By the time a European bank goes bust,
there’s very little left of the shareholder or bondholders. This not so new
plan is just cover to steal from the bank accounts. At the first sign of
trouble the insiders and savvy depositors will run, the rest will take a large
hit to their lifestyle. Our new lawless age just gets more lawless.
"The paper standard is self-destructive."
Hans F. Sennholz
Divisions hamper Europe's plans to tackle failing banks
BRUSSELS |(Reuters) - The European Central Bank clashed with Germany on Tuesday over how quickly the euro zone should complete a system to deal with failing banks.
A separate rift also emerged at a European Union finance ministers meeting over whether or when big depositors should suffer losses, as they did in Cyprus's bailout.
ECB board member Joerg Asmussen called for a single scheme across the euro zone to close troubled banks. Such a unified mechanism should be in place by the time the ECB starts overseeing banks next year, he said ahead of the meeting.
Those views where in conflict with German Finance Minister Wolfgang Schaeuble, who has said the next step should be the coordination of national schemes to shut down problem banks, rather than a system with shared euro zone risk.
"We want a single European resolution regime, together with a single resolution agency and a single resolution fund that is financed by a levy from the banking industry," Asmussen said, underlining what EU leaders agreed to establish last June.
"This should come into place in parallel with the single supervisory mechanism, hopefully by the summer of next year."
The frank remarks reflect a growing sense of alarm in Frankfurt over government foot-dragging in completing the two-legged banking union - with a system of ECB-led bank supervision, on one hand, closely followed by a single agency to close troubled banks and a fund to cover the costs.
A third plank, which would involve a single system for guaranteeing deposits, already looks unlikely to be created and has largely been dropped.
Asmussen's remarks set him sharply at odds with fellow German Schaeuble, who he previously worked for. Schaeuble has said a single agency to restructure or close failed banks can only be established if the EU's treaty is changed, a lengthy and complex process.
----On Tuesday, finance ministers discussed an EU proposal for a 'bail in', which would establish an order for how losses are distributed when banks are closed, with losses first handed to a bank's shareholders, then junior bondholders, then senior bondholders and, ultimately, large depositors.
Asmussen and Michel Barnier, the European commissioner in charge of financial regulation, argued in favor of making big depositors - those with more than 100,000 euros in accounts - the last in line for losses if a bank goes to the wall.
"They would only be called on ... after other creditors," Barnier told ministers in a part of the meeting that was broadcast to journalists.
More
"Until government administrators can so identify the interests of government with those of the people and refrain from defrauding the masses through the device of currency depreciation for the sake of remaining in office, the wiser ones will prefer to keep as much of their wealth in the most stable and marketable forms possible - forms which only the precious metals provide."
Elgin Groseclose
At the Comex silver depositories Monday final figures were: Registered 45.05
Moz, Eligible 119.95 Moz, Total 166.00 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
In our new lawless age, where central banksters impose unelected “leaders”
at will in Club Med, make up and then bend the rules as they go along, bailout crony banksters and great vampire
squids, while thieving the bank accounts of charities, the retired, and working
corporations, is anyone really surprised that the oil mafia is suspected of
engaging in a little wealth transfer? Besides, what’s a little illegal wealth
transfer compared to poisoning the Gulf of Mexico. In our new 21st
century age of too big to jail, will the oil mafia just get a walk?
Why did I take up stealing? To live better, to own things I couldn't afford, to acquire this good taste that you now enjoy and which I should be very reluctant to give up.
The Oil Mafia, with apologies to Cary Grant. To Catch A Thief.
Petrol price 'rigged for a decade'
Motorists may have paid thousands of pounds too much for their petrol over the last decade, after two of Britain’s biggest companies were raided on suspicion of manipulating oil prices.
By Rowena
Mason and Emily Gosden 9:57PM BST 14 May 2013
MPs and
energy experts tonight raised fears motorists have been “taken for a very
expensive ride”, after officials searched the offices of BP and Shell for
evidence of price-rigging.
The
companies are suspected of distorting the oil price since 2002, meaning drivers
have potentially been ripped off for more than 10 years.
Over that
time, petrol prices have risen dramatically by more than 80 per cent to around
135p per litre.
European
investigators, who raided the London offices of BP and Shell, said the alleged
price-rigging could have had a “huge impact” on the cost of oil, including the
price of fuel for consumers.
The
investigation into market-fixing already has echoes of the Libor scandal, which
saw the banks falsely report key interest rates used to calculate mortgages. It
cost several British banks hundreds of millions of pounds in fines.
The raids were part of an investigation across the continent by the European Commission’s competition authorities. Offices owned by Platts, a price-reporting agency, and Statoil, a Norwegian oil company, were also raided.
European officials said several companies may have colluded in manipulating the price of both oil and green “biofuels”.
This could have happened if the oil companies provided false information to Platts, the main reporting agency that collects and reports prices to the wider market.
“Any such behaviour, if established, may amount to violations of European antitrust rules that prohibit cartels and restrictive business practices and abuses of a dominant market position,” the European Commission said.
“Even small distortions of assessed prices may have a huge impact on the prices of crude oil, refined oil products and biofuels purchases and sales, potentially harming final consumers.”
It said the raids were a “preliminary step to investigate suspected anticompetitive practices” and “does not mean that the companies are guilty of anti-competitive behaviour nor does it prejudge the outcome of the investigation itself”.
The inquiry comes after The Daily Telegraph revealed growing concerns about the reliability of oil prices last year.
A study for G20 finance ministers, including George Osborne, said traders from banks oil companies and hedge funds have an “incentive” to distort the market and are likely to try to report wrong prices.
Scott O’Malia, a top official at the US Commodities Futures Commission, has also previously drawn attention to the “striking similarity” between the potential for manipulating oil and Libor. The price reporting agencies strongly deny any similarities between their methods and the way Libor was calculated.
The information published by Platts and other reporting agencies is used widely by companies as a guide for pricing their oil-related products, including petrol.
More
Yes,
gold doesn’t bear interest. Many, including Warren Buffett, belittle its
investment value. But, paintings or antiques don’t bear interest either. When
money supply is rising, anything scarce tends to rise in value. Gold is the
best scarce commodity in the world.
Andy
Xie.
The monthly Coppock Indicators finished April:
DJIA: +133 Up. NASDAQ: +139 Up. SP500: +170 Up. Another Fed bubble underway. But when to jump
off before it ends?
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