China’s Wobble Gets Worse.

Baltic Dry Index. 1067 -08

LIR Gold Target by 2019: $30,000.  Revised due to QE programs.

Debt to right of them,
Debt to left of them,
Debt in front of them
Volley'd and thunder'd;
Storm'd at with shot and shell,
Boldly they charged and well,
Into the jaws of Debt,
Into the mouth of Hell
Charged the six billion.

With apologies to The Light Brigade and Alfred, Lord Tennyson.

Whether China has a hard landing or not may be debatable. My guess is that after over 3 decades of rapid expansion at double digit or near double digit rates, any slowdown in the Chinese economy is going to feel like a hard landing in any case. What is less debatable is the impact that China’s wobble is having and will increasingly have on the global economy. An economy currently undergoing a great central bank fuelled, stock market disconnect from reality. China has massive over capacity in just about all areas of its economy. Adjusting that excess capacity is about to have a massive impact on the global economy in H2 13. Starting initially in the commodity exporting nations, but eventually impacting the great manufactured goods exporting nations like Germany and Japan, we are headed into a great economic reality reconnect H2 13 and H1 14, I believe.

While the Fed meets for day two of its mutual admiration session at the fantastic job that Bernocchio has done for banksters, let’s not talk about tapers or the end of QE forever or other silly ideas, the growing typhoon out in Asia is about to sink many great ships of state, eventually including the already sinking SS Europa. With “Obamacare” already starting to distort the US economy with far more to come at year end, viewed from my lifeboat station on the reviving, though not for long, RMS Great Britain, the great liner SS America looks all too likely to join the sinking SS Europa early next year. 

At that point the RMS Great Britain and the SS Nippon will probably get swamped as well. Stay long physical gold and silver as insurance. The Great Nixonian Error of fiat money, and the voodoo economic policies of the Fed and BOE have long passed their sell-by date. With no good options left, we are about to charge the guns of unrepayable debt.

Half a league, half a league,
Half a league onward,
All in the valley of Debt
Charged the six billion.
"Forward, the Flight Brigade!
"Charge for the guns!" B said:
Into the valley of Debt
Charged the six billion.

With apologies to The Light Brigade and Alfred, Lord Tennyson.

China underwhelms with salvo to slim bloated industry

SHANGHAI | Tue Jul 30, 2013 5:45pm EDT
(Reuters) - China's edict to more than 1,900 companies to shut excess production capacity by September is the latest effort to slim down bloated industries, but in the key steel, aluminum and cement sectors the cuts are just a fraction of their surpluses.

Broader efforts, including credit curbs, raising environmental standards and energy efficiency will help slow the expansion of these sectors, but Beijing's push towards industry consolidation will be slow to materialize, analysts said.

Premier Li Keqiang has vowed to curb overcapacity as part of efforts to shift the economy away from investment in heavy industries, a move that could dampen its appetite for raw material imports such as iron ore, coal, copper and bauxite.

China is the world's biggest producer of steel, aluminum and cement.

Beijing's latest orders suggest less than 1 percent of steel and aluminum production capacity will shut by September, which analysts said will still leave a significant surplus. In cement, the shutdown will cover about 3 percent of production capacity, also only denting the excess.

"Many of these plants that have overcapacity problems have actually idled their production line for a while," said Raymond Yeung, an economist with ANZ Banking Group. "So the actual impact of the cut on the rebalancing of supply will be pretty mild."

China has ordered about 7 million metric tons of excess steel output to be shut in a sector that the China steel association says has surplus capacity amounting to 300 million metric tons.

It has ordered 260,000 metric tons of excess aluminum output to be shut when smelting capacity is 27 million metric tons and demand is about 21 million metric tons.

Many smelters ordered to shut were already running at production rates as low as 20 percent and the impact of the shutdowns will be offset by some 2 million metric tons of new projects due to start by the end of 2013, analysts said.

China has said 92 million metric tons of excess cement production must be phased out. Capacity is now about 3 billion metric tons a year and demand is 2.2 billion metric tons.

"The expansion of aluminum smelting plants happening in the western regions like Xinjiang will have a cheaper production cost and that will again hit domestic prices further," said Liao Zhenyuan, an analyst at Minmetals Futures.

In base metals, China also plans to phase out 654,400 metric tons of copper production capacity.

The nonferrous metals association estimates there was more than 7 million metric tons of idle capacity last year and production capacity is expected to reach 40 million metric tons by 2015.

More

http://www.reuters.com/article/2013/07/30/us-china-industry-overcapacity-idUSBRE96T1BY20130730

China Stocks World’s Worst Losing $748 Billion on Slump

By Richard Frost & Weiyi Lim - Jul 31, 2013 3:33 AM GMT

Four years after China’s growth helped lead the global economy out of a recession and won the admiration of luminaries from billionaire George Soros to Nobel laureate Joseph Stiglitz, the nation’s stock market has lost more money for investors than any other in the world.

The Shanghai Composite Index (SHCOMP), which doubled in 10 months through August 2009 as the government poured $652 billion of stimulus into building roads, railways and housing, has tumbled 43 percent from its high, destroying $748 billion in market value. Only Greece’s ASE Index (ASE) has fallen more in percentage terms. The Standard & Poor’s 500 Index, the benchmark gauge of American equity, erased all of the losses from the worst recession since the Great Depression and has gained 68 percent since the China peak, reaching a record this month

China looked unbeatable in 2009, surpassing Germany as the world’s third-largest economy and growing 6 percent in the first quarter while the U.S. shrank 4 percent. Templeton Emerging Markets Group Executive Chairman Mark Mobius, who oversees about $53 billion, said in July 2009 that China’s stock market could be larger than America’s in three years. Now, China is poised for the weakest expansion since 1990 as the government orders more than 1,400 companies to close factories.

“The Beijing consensus as endorsed by some western observers as an alternative to the market economy is indeed a sham,” said Hao Hong, the Hong Kong-based head of China research at Bank of Communications Ltd., whose forecasts for stock losses have proved prescient. “Now we are all paying for it.”

More

http://www.bloomberg.com/news/2013-07-30/china-stocks-world-s-worst-losing-748-billion-on-slump.html

Back in the land of I-Spy on everyone between the shinning seas and beyond, it is day two of the meeting of the coven of Mammon. Will Bernocchio go out with a bang or a whimper? Will the bankster’s best friend resume talking about “tapers and the death of QE forever,” or will it be “QE will end, but only under my successor?” Either way, it looks like our central bankster world is to be lead down the garden path of unrepayable debt by newbies next year.  Hopefully some of them will have read more than just Harry Keynes and the Chamber of Secrets.  Is it too much to hope that at least one of them will have read and understood Hayek and his Road to Serfdom?

Theirs not to make reply,
Theirs not to reason why,
Theirs but to do and die:
Into the valley of Debt
Charged the six billion.

With apologies to The Light Brigade and Alfred, Lord Tennyson.

July 30, 2013, 7:46 a.m. EDT

Fed watchers debate timing of taper

WASHINGTON (MarketWatch) — A lively debate has broken out among economists about whether the Federal Reserve will decide to slow down the pace of its asset purchase plan in September or December.

Fed Chairman Ben Bernanke has suggested only that the slowdown of purchases is likely “later this year.”

Markets are expected to hang on every word change in the Fed statement on Wednesday to see whether the Fed adds more clarity to the timing. They are likely to be disappointed, analysts said.

While it is not certain, many Fed watchers think the central bank will keep mum and not insert any forward guidance about its quantitative easing program.

“At this point they will attempt not to create any additional ripples” in financial markets, said David Stockton, a former top Fed staffer and now a senior fellow at the Peterson Institute for International Economics.

“When push comes to shove, I expect an ambiguous message,” added Michael Hanson, U.S. economist at Bank of America Merrill Lynch.

More

http://www.marketwatch.com/story/fed-watchers-debate-timing-of-taper-2013-07-30?dist=lbeforebell

July 29, 2013, 7:45 a.m. EDT

Bernanke’s lame-duck status having policy impact

Bond purchase program seen continuing in July

WASHINGTON (MarketWatch) — Federal Reserve Chairman Ben Bernanke’s perceived lame-duck status adds a wild card for markets trying to understand monetary policy, as the central bank prepares to meet this week.

“We are entering a lame-duck period now through January,” said Nigel Gault, co-chief economist at Parthenon Group in Boston.

Scott Anderson, senior economist at Wells Fargo, said Bernanke’s expected departure is already having an impact, loosening his grip on his already fractious colleagues at the central bank.

----The big question at the July meeting is whether the central bank will mention its September tapering plan in the policy statement released on Wednesday at 2 p.m.

Supporters of a slowdown in purchases may push for including the plan in the statement.

Some economists think the Fed will make few changes to the statement.

----Although Bernanke has yet to address whether he wants to serve a third term, the choice to replace Bernanke appears to be down to Federal Reserve Vice Chair Janet Yellen and former Treasury Secretary Lawrence Summers.

With speculation running at a fever pitch this week, a White House official on Friday told reporters that no decision on the top Fed spot would be made until the fall.

Wall Street is facing the possibility of a many fresh faces at the Fed, with as many as four vacancies.

Fed. Gov Elizabeth Duke announced earlier this month she is stepping down in August. Fed Gov. Sarah Bloom Raskin has been mentioned as a possible candidate for the number-two spot at the Treasury Department. And Fed Gov. Jerome Powell’s term expires in early January.

More

http://www.marketwatch.com/story/bernankes-lame-duck-status-having-policy-impact-2013-07-29?link=MW_story_insert

Storm'd at with shot and shell,
While horse and hero fell,
They that had fought so well
Came thro' the jaws of Death
Back from the mouth of Hell,
All that was left of them,
Left of six billion.

With apologies to The Light Brigade and Alfred, Lord Tennyson.

At the Comex silver depositories Tuesday final figures were: Registered 46.36 Moz, Eligible 117.15 Moz, Total 163.51 Moz.  

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

With the bent, the seriously bent, and the totally doubled over, all meeting again today in Washington District of Crooks, it only remains today to offer a glimpse of the future.

When did their charge cards fade?
O the wild charges they made!
All the world wondered.
Dishonor the charges they made,
Dishonor the Flight Brigade,
Impoverished six billion.

With apologies to The Light Brigade and Alfred, Lord Tennyson.

'Emergencies' have always been the pretext on which the safeguards of individual liberty have been eroded.

Friedrich August von Hayek

I do not think it is an exaggeration to say history is largely a history of inflation, usually inflations engineered by governments for the gain of governments.

Friedrich August von Hayek

“Probably it is true enough that the great majority are rarely capable of thinking independently, that on most questions they accept views which they find ready-made, and that they will be equally content if born or coaxed into one set of beliefs or another. In any society freedom of thought will probably be of direct significance only for a small minority. But this does not mean that anyone is competent, or ought to have power, to select those to whom this freedom is to be reserved. It certainly does not justify the presumption of any group of people to claim the right to determine what people ought to think or believe.”

Friedrich August von Hayek, The Road to Serfdom

The monthly Coppock Indicators finished June:

DJIA: +145 Up. NASDAQ: +146 Up. SP500: +177 Unch