Baltic Dry Index. 1012 -12
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
"Sooner or later both the Greek population and international creditors will tire of fighting a losing battle, leading to a break-up of the currency union as Greece pulls out, probably followed by other countries"
Douglas McWilliams, chief executive of the Centre of Economics and Business Research.
Eventually we will all be Greece, due to our
insane new lawless age needed to prop up the Great Nixonian Error of fiat
money. The big lie begets a bigger lie, as the cheque is always in the mail. We
open today with 65% youth unemployment in Greece, an indictment of the folly of
the wealth destroying Euro, writ large. Staying in the euro is accomplishing
what even the Ottomans and Nazis couldn’t achieve, the destruction of the Greek
national society. Time for the Greeks to bill Berlin for
Kalavryta.
If at first you don't succeed, try again. Then quit. There's no use being a damn fool about it.
W.C. Fields
8 August 2013
Last updated at 22:29
Greek unemployment rate reaches record high in May
Greece's
unemployment rate hit another record high in May of 27.6%, according to the
country's statistics body.
The
figure, from the Hellenic Statistics Authority, compares with a jobless rate of
23.8% in May last year.
The
biggest age group without a job remains those aged between 15-24, where the
rate is 64.9%.
----Greece
is in its sixth year of recession, and has seen a 25% drop in output since
2007.
----The country was given another 6.8bn euros last month from the European Union, the International Monetary Fund (IMF) and the European Central Bank.
The money
has strict conditions attached which demand that government debt levels are
reduced.
That has
meant deep job cuts, tax increases, and reductions in wages and pensions.
However,
more austerity measures are being demanded.
At the
time the latest loan money was secured, the IMF said that Greece must deliver
"rapidly on structural reforms to unlock growth and create jobs".
More
Kalavryta.
On 13 December 1943, in what is commemorated as the Massacre of Kalavryta, allegedly in
retribution for the killing of 81 German soldiers captured by partisans during
the Nazi
occupation in World War II, German troops ordered all male residents
of Kalavryta, aged 14 years and up, to gather in a field just outside the
village. There, they machine-gunned down 696 of them. Only 13 survived. After
that they burnt down the town before they left and the next day they burnt down
the Monastery
of Agia
Lavra, birthplace of the Greek War of Independence. Post-war, the
federal Government of Germany offered gestures of atonement in the form of free
school books for the high school, scholarships for orphans of the massacre and
built an old peoples' home. No German commanders, (e.g. Major Ebersberger who
carried out the destruction of Kalavryta; Hauptmann Dohnert who led the firing
party), were ever brought to justice for these events
More
In Asian news, Japan’s voodoo Abenomics is already going awry. One way of getting to two percent inflation,
I suppose, is to keep raising sales tax, though not many think raising sales
tax will do anything to help Japan’s economy. In the midst of a beggar thy
neighbour exports trade war with South Korea, Taiwan, Germany and China, Japan
is about to slam into the wall this decade, of needing to sell some of its
sovereign debt outside of Japan. With no good options left, Japan also faces a final
clash this decade with rising China over the Diaoyu Islands. Japan has just
about reached the end of the road. Tomorrow will not be like today which was
like yesterday. Tomorrow looks closer to Greece’s future than China’s.
A quadrillion here, a quadrillion there, and pretty
soon you’d better skip town.
Anon.
Japan’s Debt Exceeds 1 Quadrillion Yen as Abe Mulls Tax Rise
By Mayumi Otsuma - Aug 9, 2013 6:51 AM GMT
Japan’s national debt
exceeded 1,000 trillion yen for the first time, underscoring the case for Prime
Minister Shinzo Abe to proceed with a sales-tax
increase to shore up government finances. The country’s outstanding public debt including borrowings reached a record 1,008.6 trillion yen ($10.46 trillion) as of June 30, up 1.7 percent from three months earlier, the finance ministry said in Tokyo today.
Larger than the economies of Germany, France and the U.K. combined, the amount includes 830.5 trillion yen in government bonds.
The
world’s heaviest debt burden will weigh on Abe when he decides next month
whether to implement a two-step plan to double the tax on consumers in a nation
with ballooning welfare costs. While boosting the levy would drag on growth,
Moody’s Investors Service yesterday warned that a worsening of finances would
erode confidence in government bonds.
----The levy on consumption is due to be raised to 8 percent in April from the current 5 percent, followed by an increase to 10 percent in October 2015. Abe said he would make a final call on the plan after the release of revised second-quarter gross domestic product data on Sept. 9.
The sales-tax law enacted last year gives Abe the power to postpone the rise should he conclude that the economy is unable to weather the austerity measure.
The prime minister yesterday ordered the creation of a panel of experts to analyze the impact on the economy of a higher levy. Advocates of an increase including Bank of Japan Governor Haruhiko Kuroda and Finance Minister Taro Aso will stand in the committee.
More
Japan protests to China after ships linger near isles
TOKYO |(Reuters) - Four Chinese ships spent more than 24 hours in what Japan sees as its territorial waters, prompting a Japanese protest to China on Thursday at a time when Tokyo has been signaling its desire for a summit.
Relations between the world's second- and third-largest economies have been strained for months, largely because of a dispute over a group of islands in the East China Sea.
But Japanese Prime Minister Shinzo Abe is keen to improve relations and has called for dialogue with China, although he has rejected any conditions on talks.
Chinese ships have previously been in waters near the uninhabited East China Sea islands that are controlled by Japan but claimed by both countries, but they have usually left after several hours.
"This is extremely regrettable and totally unacceptable," Japan's chief cabinet secretary, Yoshihide Suga, told a news conference.
He said Japan had summoned an envoy from the Chinese embassy early on Thursday to protest "strongly" and demand the ships immediately leave.
The ships withdrew at around noon, Japan's coastguard said.
It was the longest stay by Chinese ships in waters near the islands since the dispute flared anew last September, after Japan bought several of the islands from a private owner, angering China.
China's Foreign Ministry said the Chinese vessels had taken action against a Japanese boat that had entered Chinese territorial waters. It said it had lodged a complaint with Tokyo.
More
In China
news the great economic slowdown might soon be getting a new government U-turn.
With QE forever set to run forever in
America, and China and Japan set to run their equivalent monetary policies
forever also, stay long physical precious metals for the day that fiat money
fails. If money creation out of nothing really worked, Zimbabwe would be heaven
on earth. Really big countries can run really big bubbles for far longer than most
naysayers expect. Eventually the bubble becomes the accepted norm. But the
Great Nixonian Error of fiat money remains an error nevertheless, no matter how
many Krugmanites get to dance on the head of a pin. The benefits of fiat money
were all front loaded and dissipated long ago in the 70s, 80s, and 90s. In our
new lawless age of the 21st century, the great fiat money bubble is
about to reconnect with underlying reality.
"The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine, and to process; and that it cannot be created by political fiat or caprice."
Henry Hazlitt
China July Industrial Output Growth Tops Estimates at 9.7%
By Bloomberg News - Aug 9, 2013 6:34 AM GMT
China’s industrial output rose 9.7 percent in July from a year earlier
and retail sales gained 13.2 percent, the National Bureau of Statistics said on
its website today. Fixed-asset investment excluding rural households in the first seven months of the year increased 20.1 percent, the Beijing-based agency said.
The advance in industrial production compared with the 8.9 percent median estimate in a Bloomberg News survey of 47 economists and an 8.9 percent increase in June. Retail sales compared with the median projection for a 13.5 percent advance and a 13.3 percent increase the previous month.
The median estimate for fixed-asset investment was a 20 percent increase after a 20.1 percent gain in the first half
More
China Inflation Muted Leaves Room for Extra Stimulus: Economy
By Bloomberg News - Aug 9, 2013 4:15 AM GMT
China’s inflation stayed subdued in July while factory-gate prices
fell for a 17th month, giving Premier Li Keqiang more room to boost stimulus
should an economic slowdown deepen. The consumer price index rose 2.7 percent in July from a year earlier, the National Bureau of Statistics said today in Beijing. That was less than the 2.8 percent median estimate in a Bloomberg News survey and the government’s full-year target of 3.5 percent. Producer prices fell 2.3 percent after a 2.7 percent drop the previous month.
----The muted inflation reading will provide necessary room for implementing a mini fiscal stimulus and avoiding monetary tightening,” Lu Ting, Bank of America’s head of Greater China economics in Hong Kong, said in a note today. “Improving investment demand and inventory restocking” may help the producer price index (SHCOMP) turn positive on a month-over-month basis in the coming months, Lu said.
----Data are due from the statistics bureau at 1:30 p.m. today on July’s industrial production and retail sales and January-July fixed-asset investment. The central bank will publish credit and money supply numbers over the next week.
More
We end for the week with some weekend reading and a
very scary chart. Stay long physical gold and silver. Sooner or later but
probably too soon for most, we are all going to need it.
Reflections on "Paper Reserves" of Central Banks; Gold and the Tapering Disconnect
In Fed Balance Sheet vs. Stock Market; Will QE Cause Inflation?
I posted an interesting chart by reader Tim Wallace of the stock market vs. Fed
asset holding (repeated below for convenience).
----But what about
foreign central bank assets, especially China and Japan?
Reflections on "Paper Reserves" of Central Banks
Hugo Salinas Prices covers the topic in an excellent article Some Thoughts on 'International Reserves'
Reflections on "Paper Reserves" of Central Banks
Hugo Salinas Prices covers the topic in an excellent article Some Thoughts on 'International Reserves'
More
At the Comex silver depositories Thursday final figures were: Registered 41.10
Moz, Eligible 123.44 Moz, Total 164.54 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, what’s a few billion between friends?
You've
got a friend in me
You've got a friend in me
You got troubles and I got 'em too
There isn't anything I wouldn't do for you
We stick together, we can see it through
'Cause you've got a friend in me
You've got a friend in me
You've got a friend in me
You got troubles and I got 'em too
There isn't anything I wouldn't do for you
We stick together, we can see it through
'Cause you've got a friend in me
You've got a friend in me
Bernocchio
and the Federal Reserve Pixie Chorus.
London Whale 'won't face charges over $6.2bn loss at JPMorgan'
Bruno Iksil, the “London Whale” trader at the centre of JPMorgan’s largest ever trading loss, will not face charges over the incident, according to reports.
It comes
as the US bank is believed to be close to securing a deal with the Securities
and Exchange Commission to end the regulator’s investigation into last year’s
derivatives bet that lost the lender $6.2bn.
Any
agreement with the SEC could require JPMorgan to admit to wrongful conduct over
the incident, the Wall Street Journal claimed. This would be a break
from settlements in the past, in which companies have typically neither
admitted nor denied wrongdoing.
Talks
over any payment by JPMorgan to settle the SEC probe are ongoing, Bloomberg
reported.
As well
as the SEC, a criminal investigation led by the FBI is also investigating the
loss, which was announced by chief executive Jamie Dimon in May last year.
It was
revealed in January that the UK’s Financial Services Authority had also opened
a formal probe.
The huge
loss was incurred by traders, including Mr Iksil, who is co-operating with
investigators, in JPMorgan’s chief investment office in London.
In March,
a US Senate committee concluded from its own findings that JPMorgan ignored
risks, misled investors, fought with regulators and tried to work around rules.
JPMorgan
did not return calls for comment, but has previously said that executives never
deliberately misled investors.
The SEC
could not be reached for comment.
Another weekend, and our new lawless age just keeps
getting more lawless. The never ending crisis in Euroland just keeps on never
ending. Club Med’s latest solution is to export its youth generation. The 19th
century returns. Japan is so far along the road to perdition that it’s just
about reached perdition. China like
America is stuck on its own version of QE forever. QE and ZIRP, far from
solving the problems of the 2007-2009 crash, now seems to have set up the
biggest bust of all. At some point interest rates rise and the Great Nixonian
house of cards comes crashing down. The fictitious fiat currency economy ends.
But it won’t happen this weekend. Have a great weekend everyone.
“But
it (the boom) could not last forever even if inflation and credit expansion
were to go on endlessly. It would then encounter the barriers which prevent the
boundless expansion of circulation credit. It would lead to the crack-up boom
and the breakdown of the whole monetary system.”
Ludwig Von Mises
The monthly Coppock Indicators finished July:
DJIA: +164 Up. NASDAQ: +167 Up. SP500: +195 Up. The
Fed’s final bubble still inflates.
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