Baltic Dry Index. 873 +11
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
"Austerity is finished. This is a decisive
turn in the history of the EU project since the euro. We're seeing the end of austerity dogma. It's
a victory of the French point of view."
French Finance Minister Pierre Moscovici.
Get ready for the
great unravelling. In America, if Friday’s employment figures are the start of
a trend, the great bond crash that Bank of America warned about in January,
will commence over the summer as the US economy gains escape speed into a
sustainable recovery, and the Fed must either commence resetting US interest
rates or of unleashing the great inflation.
If they are not the start of a trend but merely a statistical blip, the now noticeably
slowing global economy will drag the US economy down with it, and the great
disconnect between the real economy and the stock bubble will meet up with
another version of 1987.
In Euroland, the great unravelling is about to
commence in the monetary union. With both France and Italy in full retreat from
German imposed EU-wide austerity regimes, the rout of Germany is complete. EU paymaster
Germany, must now decide whether to keep on paying for Club Med “rescues,” or
adopt a more miserly approach reflecting its new loss of influence. While the
lesser nations of Ireland, Greece, Cyprus, Spain and Portugal were wrecked by
the German imposed austerity death spirals, when it came time to impose
austerity on the first nations of the increasingly bizarre monetary zone, Germany
found that it couldn’t get its way. France and Italy called Germany’s bluff.
Germany can continue to pay up for Club Med’s lifestyle, or take the heat for
breaking up the monetary union. Even in increasingly euro-sceptical Germany, it
would be hard to get re-elected Chancellor in September if one just blew up the
monetary union in May, June or July.
The hapless peoples of the ruined nations of
Greece, Cyprus, Ireland and Spain must be wondering this morning why their
politicians totally failed them and went along with the great German wrecking
machine. Next month’s coming EU “great leaders” summit promises to be more
acrimonious than usual. The lesser nations will probably want some sort of
explanation from the first nations. A desperate, UK weak coalition government,
will be looking for the summit to toss the UK a life preserver from the rise of
the UK Independence Party, that made a stunning 25% breakthrough in last week’s
local elections. Without serious concessions in the weeks and months ahead, the
Conservative Party looks like joining the Liberal Democrats as a spent force in
UK politics. Europe will get a UK government intent on leaving the European
Union.
"Member
states would be economically better off if they had never joined. European
monetary union was generally mis-sold to the population of the Europe."
UBS.
France Declares Austerity Over as Germany Offers Wiggle Room
By James
Hertling - May 5, 2013 11:01 PM GMT
French Finance Minister Pierre Moscovici declared the era of austerity over
after his German counterpart offered flexibility on deficit cutting, an
interpretation that portends renewed bickering between Europe’s two biggest
economies. “We’re witnessing the end of the dogma of austerity” as the only tool to fight the euro debt crisis, Moscovici said yesterday on Europe 1 radio. “We’ve been pleading for a growth policy for a year. Austerity on its own impedes growth.”
The gap between the French Socialist finance chief’s view and the election-year positioning of Germany’s Wolfgang Schaeuble underscores the divergence between their economies and the wrangling that has marked the crisis fight since Francois Hollande replaced Nicolas Sarkozy as French leader a year ago.
With German Chancellor Angela Merkel campaigning for a third term in a Sept. 22 vote, policy making among Europe’s elected leaders has ground to a crawl, with European Central Bank President Mario Draghi set to take the initiative. The risk is that they’ll back off policies needed to spur competitiveness and restore growth.
“Markets should be fine with” slowing austerity “as long as governments keep focusing on structural reforms,” Joachim Fels, co-global head of economics at Morgan Stanley (MS) in London, wrote in a note yesterday. “All fingers crossed.”
The task was underscored last week when the European
Commission predicted little relief through next year for the 17- nation euro area’s
record unemployment. Average joblessness, now 12.1 percent, will remain above
12 percent through 2014, according to the commission’s May 3 predictions.
----Moscovici’s declaration today amounts to an acknowledgment that France will avoid a sanction for missing 2012 budget- deficit targets and for failing to reach the European Union ceiling of 3 percent of GDP this year. The shortfall will amount to 3.9 percent of GDP this year and 4.2 percent next year with no policy change, the commission said.
There is a “certain flexibility” in allowing France, as well as Spain, to meet its deficit targets, Schaeuble told the Bild am Sonntag newspaper in an interview published yesterday. “This comes with clear conditions for the necessary reforms. The commission will make concrete proposals by the end of May which then will be discussed and decided upon among the euro area finance ministers.”
More
German euro founder calls for 'catastrophic' currency to be broken up
Oskar Lafontaine, the German finance minister who launched the euro, has called for a break-up of the single currency to let southern Europe recover, warning that the current course is "leading to disaster".
"The
economic situation is worsening from month to month, and unemployment has
reached a level that puts democratic structures ever more in doubt," he
said.
"The
Germans have not yet realised that southern Europe, including France, will be
forced by their current misery to fight back against German hegemony sooner or
later," he said, blaming much of the crisis on Germany's wage squeeze to
gain export share.
Mr
Lafontaine said on the parliamentary website of Germany's Left Party that
Chancellor Angela Merkel will "awake from her self-righteous slumber"
once the countries in trouble unite to force a change in crisis policy at
Germany's expense.
---- Mr Moscovici's comments follow a deal with Brussels to give France and Spain two extra years to meet a deficit target of 3pc of GDP. The triumphalist tone may enrage hard-liners in Berlin and confirm fears that concessions will lead to a slippery slope towards fiscal chaos.
German
Vice-Chancellor Philipp Rösler lashed out at the European Commission over the
weekend, calling it "irresponsible" for undermining the
belt-tightening agenda.
The
Franco-German alliance that has driven EU politics for half a century is in
ruins after France's Socialist Party hit out at the "selfish
intransigence" of Mrs Merkel, accusing her thinking only of the
"German savers, her trade balance, and her electoral future".
---- Mr Lafontaine said he backed EMU
but no longer believes it is sustainable. "Hopes that the creation of the
euro would force rational economic behaviour on all sides were in vain,"
he said, adding that the policy of forcing Spain, Portugal, and Greece to carry
out internal devaluations was a "catastrophe".
More
China services growth slows sharply, adds to recovery risk
BEIJING |(Reuters) - Growth in China's services sector slowed sharply in April to its lowest point since August 2011, a private sector survey showed on Monday - fresh evidence of rising risks to a revival in the world's No.2 economy.
The HSBC services Purchasing Managers' Index (PMI) fell to 51.1 in April from 54.3 in March, with new order expansion the slowest in 20 months and staffing levels in the service sector decreasing for the first time since January 2009.
Two separate PMIs last week had already shown that China's manufacturing sector growth slowed, With the weakness spreading to services, which make up almost half of gross domestic product, the risk to the recovery may be increasing.
"The weak HSBC service PMI figure provides further evidence of a slowdown not only in the factory sector but also in the service sector," said Zhang Zhiwei, chief China economist at Nomura Securities in Hong Kong.
"This confirms our worries about insufficient growth momentum in the economy, which we expect to slow to 7.5 percent in the second quarter."
More
"European
elites, including German elites, must decide if they want the euro to survive -
even at a high price - or not. If not, we should prepare for a controlled
dismantling of the currency zone."
Polish
finance minister Jacek Rostowski. August 2011.
At the Comex silver depositories Friday final figures were: Registered 45.67
Moz, Eligible 119.97 Moz, Total 165.64 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Last month we all got to learn about the bent
French Cabinet Minister with an illegal tax evading Swiss Bank account, who
switched the money to a similar tax evading Singapore bank account, once the
heat got too hot in Switzerland. Now Singapore is about to crack down on tax evaders
too. What’s a dishonest wealthy tax
cheat to do? I mean really, start paying taxes to governments in Italy, Greece
or France who’ll just squander it! Launder it in Cyprus, Malta and Luxembourg
who might liberate it Cyprus style? Pity the 21st century dilemma of
the world’s billionaires, squids and one percenters. Surely God only intended the little people to
pay taxes.
"We
don't pay taxes. Only the little people pay taxes"
Starbucks,
with apologies to Leona Helmsley.
Banks in Singapore agonize over rich clients in tax evasion clampdown
SINGAPORE |(Reuters) - Banks in Singapore are urgently scrutinizing their account holders as an imminent deadline on stricter tax evasion measures forces them to decide whether to send some of their wealthiest clients packing.
The Southeast Asian city-state has grown into the world's fourth-biggest offshore financial center but, with U.S. and European regulators on the hunt for tax cheats, the government is clamping down to forestall the kind of onslaught from foreign authorities that is now hitting Switzerland's banks.
Before July 1, all financial institutions in Singapore must identify accounts they strongly suspect hold proceeds of fraudulent or wilful tax evasion and, where necessary, close them. After that, handling the proceeds of tax crimes will be a criminal offence under changes to the city-state's anti-money laundering law.
"Because of banking secrecy, Singapore used to be an attractive place to put money if you didn't want the authorities back home to know about it," said Erik Wilgenhof Plante, head of compliance at Germany's DZ Privatbank in Singapore.
"That has left legacy problems for some banks."
Singapore officials have said the city-state's secrecy rules were aimed at safeguarding investors' legitimate interest in privacy and did not mean it was a haven for illicit funds. The tighter rules are intended to fall in line with new global standards announced last year that treat tax crimes as a money-laundering offence.
More
The absence of alternatives clears the mind marvelously.
Henry Kissinger.
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?
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