Baltic Dry Index. 822 -04
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
"Unemployment is reaching
unsupportable levels in a number of countries. Imagine all the hatred, the
anger. We’re talking about a complete breakdown of belief in Europe. What’s
really at stake here is that citizens are turning their backs on the European
project."
Francois Hollande
Today the case for the euro gets ugly. Like the
famous US “roach motel,” EU members can check in but they can’t check out. In a
sign of how panicked the bankster class and great vampire squids have become, some in the US attempt to bully Europe’s “untermenschen”
nations, in this case specifically Great Britain. This dangerous ploy is certain
to backfire and drive much of Europe into a Eurasian alliance, though probably
not Great Britain. Great Britain’s trade has always been internationalist.
Below, the EU debate descends into the gutter. Can
the end be far away?
Leaving the EU could cost the UK billions
By PRW
Staff Posted 28 May 2013
Leaving
the European Union (EU) could result in the UK being left out of a trade deal
with the US worth hundreds of billions of pounds.
Officials
in the US government have warned that if the UK decides to exit the EU it will
in all likelihood be excluded from the Obama administration's Transatlantic
Trade and Investment Partnership (TTIP).
Having
undergone lengthy negotiations with Brussels – and within the US Senate itself
– over the partnership observers in Washington told The Guardian that
there would be “very little appetite” to go through them all over again with
the UK, should the country decide to leave the EU.
The TTIP
is expected to remove trade barriers between the EU and the US which supporters
of the treaty believe could help lift Western economies – and subsequently the
rest of the world – out of the doldrums.
The
Guardian reported
that one of the greatest potential advantages of the TTIP for the EU, aside
from removing trade tariffs of between 3% and 5%, would be the opening up of
tenders at the US state level to European suppliers.
In
return, Europe would have to give up existing protections on its agriculture,
film industry and public services.
Elsewhere, some sanity enters the suicidal German
imposed austerity regimes. The serfs or worms are turning. Stay long physical
precious metals. When the elite have to play the nuke option on Europe’s
defeated youth underclass, the case for the disastrous euro is over. The euro
simply isn’t working for Europeans outside of Germany.
May 27, 2013, 10:53 p.m. ET
Idea of Euro Exit Finds Currency in Portugal
Book Urging a Return to the Escudo Is a Bestseller, as a Weak Economy Raises Doubts About Monetary Union
LISBON—A
book by a Portuguese economist achieved a small feat on its release last month:
It instantly topped Portugal's bestseller list, overtaking several diet books
and even the popular erotic novel "Fifty Shades of Grey."
The book,
"Why We Should Leave the Euro" by João Ferreira do Amaral, has helped
ignite a public debate in Portugal about the real cause of the country's
economic pain: Is it only the hated austerity needed to secure European bailout
loans, or is the euro?
Public
lectures, TV debates, newspaper columns and some politicians are starting to
explore a question that until recently was confined to university seminars:
whether the country has a realistic path to recovery inside the euro.
Portugal
"has no chance of growing fast within a monetary union with a currency
this strong," Mr. Ferreira do Amaral said in a recent interview.
"Thankfully, this issue has stopped being taboo, and there is now a lot of
discussion here and abroad." The book is in its fourth edition, selling
more than 7,000 copies so far—a lot for an economics tract in the small
Portuguese market.
Portugal adopted the euro in 1999. And most voters
and mainstream politicians in Portugal stand by euro membership, as in other
crisis-hit euro countries like Spain, Ireland and Greece. Prime Minister Pedro
Passos Coelho has insisted that leaving the common currency would be a
disaster, and he insists that if Portugal doesn't meet bailout obligations it
could be forced out of the euro. Portugal's most recent opinion poll on the
question was conducted a year ago and found only 20% of Portuguese wanted to
leave the euro, while 72% wanted to stay.
More
Europe's 'new deal' for jobless dismissed as rhetoric
The Prado in Madrid has become the unlikely symbol of Europe’s unemployment curse. The museum recently advertised for 11 low-level jobs, mostly guarding paintings by Velasquez, El Greco and Picasso from enthusiastic tourists.
The starting salaries were just €13,000 (£11,100) a year yet, to the astonishment of the curators, 18,524 people applied. The print-out list of applicants runs for 357 pages.This is the “white heat” of a youth jobs crisis that has crept up on EU leaders and now threatens to set off a volcanic political eruption.
Francois Hollande, the French president, warned on Tuesday that failure to offer these people hope risks destroying the EU altogether. “We must act urgently. Six million youths are out of work in Europe,” he said.
---- Youth unemployment is in a class of its own in Spain (56pc) and Greece (58pc), but it has also reached depression-era levels in Italy (38pc) and is breaking fresh records in France (26.5pc).
---- While French and German officials have spoken of a “New Deal” to create jobs, the language is almost identical to pledges by EU leaders a year ago.
The latest jobs push involves €6bn of funding for small business over seven years through the European Investment Bank (EIB), but this is a tiny sum and such forms of credit have run into technical problems before.
Werner Hoyer, the EIB’s president, did not even try to disguise his scepticism on Tuesday. “Let’s be honest, there is no grand plan. The chance that the EIB can solve these problems is greatly exaggerated.”
---- “This jobs plan is just rhetoric and political cover for the fact that they are unable to engineer any kind of meaningful stimulus,” said sovereign debt strategist Nicholas Spiro. “For all the talk, there has been no real let-up in austerity. It is being enforced in a more lenient manner, but the damage from three years of internal devaluations on the periphery and fiscal tightening in the core has already been done. It would take a quasi-Marshall Plan at this point to make any meaningful inroads."
More
Staying with the madness of Europe, the EU’s crazy “Tobin
tax” will likely destroy jobs, banks, and damage the public finances. And so
says the head of the French central bank. Euroland has a death wish it seems.
Europe’s youth are being told to emigrate. Europe’s pensioners face a future of
penury.
France's central bank head warns FTT could 'destroy' jobs
France's central bank boss has warned that a planned financial transactions tax could “destroy” parts of the country’s banking industry, cost jobs, and damage the public finances.
Christian
Noyer, governor of the Bank of France, said the FTT posed a very real “risk” to
the economy if not implemented correctly. France was one of a splinter group of
11 European Union countries to decide to press forward independently with a
so-called Tobin tax earlier this year.
The UK
has opposed the move, which Sir Mervyn King, Bank of England Governor, said
earlier this month does not even have the unqualified backing of the 11 members
adopting the levy. He claimed there was “enormous scepticism” even among
politicians in countries signed up to it, adding that he could “not find anyone
within the central banking community who thinks it is a good idea”.
Mr
Noyer’s comments appeared to confirm Sir Mervyn’s analysis. Mr Noyer, who is
also on the European Central Bank board, said: “It will be essential to define
the base, interest rates and scope of a possible financial transaction tax in
order to prevent the risk of destroying entire segments of our financial
industry or the offshoring of jobs, as well as the highly counterproductive
effects on government borrowing and the financing of the economy.”
Under the
current plan, a 0.1pc levy would be charged on equity and debt transactions and
a 0.01pc tax on derivatives. Germany, France, Italy and Spain are among those
that have agreed to the plan, which the European Commission expects will raise
€35bn (£30bn) a year and hopes will be in force by 2014.
To
prevent business moving abroad, the FTT carries an “extra-territoriality”
clause that would see the levy imposed on any euro-denominated transaction,
even in countries that are not signed up to the FTT. The UK is challenging the
decision in the European courts, and the US and other countries have vowed to
block it – which would almost certainly make the FTT unworkable.
More
In Asian news, the IMF plays catch up to the new reality. The IMF belatedly has cut its growth forecast for China in 2013 and 2014. Still overly optimistic compared to many of the other experts forecasts. “Japan's exchange rate has fallen, and that has created issues for trade competitors, but the IMF doesn't see it as an issue for China now,” posits the French run IMF. I suppose it all comes down to the operative word “now.” I doubt that Beijing is as relaxed as the Washington based IMF is about Japan’s new currency war. Nor Berlin either where the prospect of half price Lexus’s to Benzes and Beamers is viewed with growing alarm.
May 29, 2013, 1:18 a.m. EDTIMF cuts growth forecast for China
BEIJING--International
Monetary Fund First Deputy Managing Director David Lipton said Wednesday the
IMF has cut its estimate for China's economic growth in 2013 and 2014 to 7.75%.
The IMF
had previously estimated growth of 8% for 2013 and 8.2% for 2014.
Speaking
to reporters in Beijing, Mr. Lipton also said that China's yuan currency is
"moderately undervalued" against a basket of currencies, a phrase the
IMF has used in the past.
He added
that China has room to maintain stability "even in the face of adverse
economic shocks, but the margins of safety are narrowing."
He also
told reporters that the IMF estimates "augmented government debt", or
debt that includes borrowing in China's local governments, at 50% of China's
GDP in 2012.
Mr.
Lipton said Japan's monetary easing policies have created some unease in other
countries that fear liquidity creation in Japan could create liquidity
elsewhere. But he added that the IMF doesn't see significant problems from this
so far.
Japan's
exchange rate has fallen, and that has created issues for trade competitors,
but the IMF doesn't see it as an issue for China now, the IMF official said.
http://www.marketwatch.com/story/imf-cuts-growth-forecast-for-china-2013-05-29-14851810?dist=lbeforebellMeanwhile in Japan itself, the Bank of Japan may have already shot its bolt to little effect. Japan stands on the edge of the abyss and seems all too prone to topple over.
BOJ Seen Failing to Tame Volatility as Sale Slumps
By Masaki Kondo, Mariko
Ishikawa & Shigeki Nozawa - May 29, 2013 2:57 AM GMT
Expectations for the widest bond price swings in more than four years and
the weakest demand at an auction in nine months added to signs of waning debt market
confidence in Bank of Japan Governor Haruhiko Kuroda. Implied volatility of Japan’s 10-year note futures, a measure of expected moves used to price options, climbed to 7.23 percent yesterday, the highest since November 2008, according to data compiled by Bloomberg. A sale of 20-year debt yesterday drew the lowest demand since August 2012. Expected price fluctuations for U.S. Treasury futures rose to 5.06 percent from 3.61 percent on April 30.
“Confidence in the BOJ’s monetary policy is starting to be shaken,” said Toru Suehiro, a market economist in Tokyo at Mizuho Securities Co., one of the 24 primary dealers obliged to bid at government debt auctions. “Doubt is the biggest enemy for monetary policy.”
More
http://www.bloomberg.com/news/2013-05-29/boj-seen-failing-to-tame-volatility-as-sale-slumps.html
The 2008 crisis didn’t. It may take another crisis
to elevate a generation of leaders with the right medicine for nation states to
fit into the world of globalization. Until then, people must survive
stagflation as best they can.
The real interest rate is probably minus 2% in the
world today. It should be in line with the per capita income growth rate or 1%.
The difference is 3%.
This environment redistributes wealth from savers
to debtors on a scale of over $2 trillion per annum or $55 billion per day.
This must be the biggest legal robbery ever in human history. But it is always
coded in arcane academic lingos spoken by respected central bankers with
impeccable CVs. All that is just packaging; it is robbery nevertheless.
Andy
Xie
At the Comex silver depositories Tuesday final figures were: Registered 43.48 Moz,
Eligible 123.24 Moz, Total 166.72 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, the bankster elite fight back against via
their control of the alphabet soup agencies against private currencies. Is “Bitcoin”
next up in the ever more desperate attempt to keep the Great Nixonian Error of
fiat currency lurching on to its eventual demise?
Federal prosecutors accuse a digital currency of money laundering; What does it mean for Bitcoin?
May 28, 2013, 3:15 PM
Federal prosecutors just dealt a major blow to the world of digital
currencies, leaving many wondering about the implications for Bitcoin, the most
well-known instrument of its kind. One of the biggest questions
surrounding digital currencies has been their anonymous nature, which could be
exploited to conduct criminal activity. That was addressed in
Tuesday’s take down of Liberty Reserve, a digital currency operator
that called itself the “largest payment processor and money transfer system,”
according to the indictment.U.S. Attorney for the Southern District of New York Preet Bharara on Tuesday unveiled the indictment against Liberty Reserve and seven employees for alleged money laundering. Prosecutors said five have been arrested and charged for money laundering and operating a money-transmitting company without a license. The Liberty Reserve domain name was seized by authorities.
---- What’s interesting is that this is the second strike on the so-called chief enablers of the early Bitcoin economy in May. A Dwolla account linked to Bitcoin exchange Mt. Gox was seized earlier this month by the Department of Homeland Security.
More
Bad News for Bitcoin? Feds Shut Down 'Paypal for Criminals'
In what could be a bad sign for the future of Bitcoin, the feds have shut down Liberty Reserve, a virtual currency exchange system that prosecutors claim was a $6-billion money-laundering scheme designed to help criminals and hackers conceal the origin of their illicit money.Liberty Reserve is a Costa Rica-based online payment network that U.S. authorities dubbed the "financial hub of the cyber-crime world." According to the indictment (.PDF) unsealed on Tuesday, the service was one of the world's largest digital currency systems with more than 1 million users and more than 12 million transactions.
For the feds, Liberty Reserve facilitated "a broad range of online criminal activity, including credit card fraud, identity theft, investment fraud, computer hacking, child pornography, and narcotics trafficking," and "was in fact used extensively for illegal purposes, functioning in effect as the bank of choice for the criminal underworld."
The indictment, first reported on by Internet security reporter Brian Krebs, and filed in the U.S. District Court for the Southern District of New York, accused Liberty Reserve's founder Arthur Budovsky, 39, and five alleged co-conspirators, of running the illegal money-laundering service.
The five were arrested on Friday in Spain, Costa Rica and Brooklyn, N.Y. The arrests culminated an operation that involved law enforcement agencies form 17 different countries, making it possibly the largest money laundering prosecution ever.
Liberty Reserve's unregulated nature and almost complete anonymity attracted the likes of hackers and criminals.
Even two of the defendants charged in the indictment published today admitted Liberty Reserve's nature in an online chat. In a conversation intercepted by the authorities between Vladimir Kats and Ahmed Yasine Abdelghani, Kats wrote that "everyone in the USA," including the "DOJ," knows that Liberty Reserve is a "money-laundering operation that hackers use."
Even though Liberty Reserve was used by at least 200,000 American customers, it never registered in the U.S. as a money transmitting service, remaining on the edge of legality as an almost completely unregulated money transfer business. To use the service, a user had to provide name, address, and date of birth, but these were never verified.
----As indicated by Tymothy B. Lee at the Washington Post, Liberty Reserve's anonymity features resemble those of Bitcoin, and it's thus not completely far-fetched to imagine the feds going after Bitcoin.
The main difference between the two is that even though Bitcoin potentially allows users to be anonymous, every transaction is unique and traceable, even years after it was made. Moreover, there's no one to charge if the feds decide that Bitcoin is illegal. Bitcoin's creator, the mysterious Satoshi Nakamoto, has completely disappeared since 2011, and it's widely believed that his name is just a pseudonym. And nobody really knows who hides behind it.
More
http://mashable.com/2013/05/28/bad-news-bitcoin-liberty-reserve-shutdown/
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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