Baltic Dry Index. 1024 -22
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
A permanent Governor of the Bank of England would be one of the
greatest men in England. He would be a little 'monarch' in the City; he would
be far greater than the 'Lord Mayor.' He would be the personal embodiment of
the Bank of England; he would be constantly clothed with an almost indefinite prestige.
Everybody in business would bow down before him and try to stand well with him,
for he might in a panic be able to save almost anyone he liked, and to ruin
almost anyone he liked. A day might come when his favour might mean prosperity,
and his distrust might mean ruin. A position with so much real power and so
much apparent dignity would be intensely coveted.
Walter Bagehot. Lombard Street 1873.
With Europe ex Germany and the UK dying, and
America on QE forever and beyond life support, we have moved on from “As goes
America so goes the world” to “As goes China so goes the world.” But China’s
economic statistics are about as discredited as Uncle Sam’s monthly fabulous
fantasy figures. In our new lawless age, it’s harder and harder to tell truth
from fiction. To use sound past experience to gage our financial future is
useless in our new lawless age. In our new lawless age Walter Bagehot’s
nightmare has come true on both sides of the Atlantic and across Eur-Asia all
the way out to Japan. Unless you’re a central bankster crony insider your just
an expendable modern day serf. Welcome to the Nixon-Bush-Obama version of Putin’s
Russia.
We open with Reuters trying to figure out what is
really happening in China. Is Beijing really in control anymore or has China’s
shadow banking system put China on a path to the hard landing? Yet more reason
to stay long physical precious metals held far outside of the 21st
century bankster system or the MF Global’s masquerading as brokerages.
New economic signposts needed as China targets consumer-led growth
BEIJING/SYDNEY |(Reuters) - Forget electricity production and iron ore imports. China watchers today pore over box office receipts or furniture sales to judge where the country is heading as Beijing plots a course toward consumption-led growth.
Incidentally, both gauges are holding up reasonably well, economists say, backing the official line that the world's second-largest economy is slowing, but not as dramatically as feared by pessimists.
Economists have long suspected that official figures are about as useful as astrology, even if they have a wide range of data to choose from covering the likes of manufacturing, exports, credit and investment.
But in gauging consumption and services, they even lack the stars as a guide, with reliable data rarer than Giant Pandas.
"Some figures, any figures, on expenditures would be really welcome as the markets are going to be watching that more and more closely as China heads for a consumer economy," said Alvin Pontoh, Asia-Pacific strategist at TD Securities in Singapore.
"Everybody grapples with the data. The only comfort is that we're all in the same boat."
Everything from salt consumption to Audi sales are used to get a handle on the economy, in which the service sector is already the biggest employer and accounts for about 45 percent of activity.
Yet China's long reliance on investment and manufacturing to drive growth is reflected in how it measures its gross domestic product, essentially counting everything supplied to the economy while most developed nations measure everything consumed. This production bias has led to a dearth of data on spending.
Take, for instance, the official measure of retail sales. This counts a sale from when the good is shipped to a retailer, rather than when it is actually sold. Goods could be piling up on store shelves but they still count as sales.
More
In other East Asian news, war between China and
Japan gets a step closer. In the dispute over the Diaoyu Islands that Nixon
handed administration over to the Japanese back in 1972 though not sovereignty,
China has the Cairo Declaration of 1943, the Potsdam Declaration on 1945, and the
disputed Treaty of San Francisco 1951, on its side. Japan has America in our
new lawless age. Stay long physical precious metals. This dispute is likely to
be settled later this decade.
China Escalates Islands Challenge to Japan on Philippine Success
By Isabel Reynolds - Aug 8, 2013 4:37 AM GMT
China escalated tensions
with Japan by
sending ships into waters near islands claimed by both sides for more than 24
hours, drawing a formal diplomatic protest from the Japanese government. Ships from China’s newly formed coast guard remained in the Japanese-controlled waters for the longest time since Japan bought the islands last year, Cabinet Secretary Yoshihide Suga said at a briefing in Tokyo today. Japan’s Foreign Ministry summoned a Chinese diplomat and “sternly protested,” he said.
The Chinese move mirrors the approach it has taken in asserting its sovereignty claims in a dispute with the Philippines over the Scarborough Shoal area of the South China Sea. That strategy signals a more aggressive stance amid a broader push by President Xi Jinping to make China a maritime power in the region.
“The tempo of China’s presence appears to be increasing, but remains below high levels since last September,” Taylor Fravel, an associate professor of political science at the Massachusetts Institute of Technology, said in an e-mail. “Like Scarborough, China is trying to create a new status quo.”
In June, the Philippines protested what it called “the massive presence of Chinese military and paramilitary ships” around land features it claims in the South China Sea. The Philippines asked the United Nations in January to rule on its dispute with China, which moved to take control of the Scarborough Shoal a year after a standoff between Philippine and Chinese ships.
More
China warns of Japanese ‘remilitarization’ following the incorporation of a ‘quasi-aircraft carrier’
Media in China are warning against Japan's “remilitarisation” after the country unveiled its biggest warship since World War II on Tuesday. The huge Japanese flat-top destroyer, Izumo, has a flight deck nearly 250m long and can reportedly carry more than nine helicopters.
The
Liberation Army Daily and many Chinese military experts are calling the
new-generation 22DDH helicopter carrier a “quasi-aircraft carrier” in disguise.
They believe that it could be refitted to support fighter jets if Japan's
post-war pacifist constitution is changed in the future.
The
vessel is also raising eyebrows in China Daily since it is the “same name as
the flagship of the Japanese fleet that invaded China in the 1930s”.
“This is
yet another 'edge ball' played by the Japanese government... China can only
respond to 'Izumo', this light aircraft carrier dressed as an 'escort vessel',
by developing a real aircraft carrier,” stresses the Global Times.
Despite
Japanese Prime Minister Shinzo Abe's decision not to visit the Yasukuni Shrine
on 15 August - the day of Japan's surrender in World War II - some media
criticise him for not stopping politicians from paying visits.
The Tokyo
shrine honours Japan's war dead, including military leaders convicted of war
crimes in WWII.
“Japanese
politicians should lay the 'ghost worship' farce to rest! 15 August is the
anniversary of the people of Asia getting rid of the ravages of Japanese
militarism,” says the People’s Daily.
----
Technically
the Izumo is a destroyer, but some experts believe the new Japanese ship could
potentially be used to launch fighter jets or other aircraft that have the
ability to take off vertically.
More
Below, on the Great Nixonian Error of fiat money, how
we went from capitalism to central bank central planning and socialism for casino
banksters and MBS, CDO, derivatives fraudsters. Central banksters as is all too
painfully apparent, have no better view of the future than the postman in
Podunk Iowa, although that may be unfair to postmen in Iowa. The really sad
part in our dumbed down lawless age, is that thanks to moronic modern TV news,
the public has been conditioned to believe that these Lords of Mammon’s
Universe actually can walk on water and having spent decades getting us into
our bankrupt system, can actually get us solvent and wealthy again.
The only function of economic forecasting is to make astrology
look respectable.
J. K. Galbraith.
August 7, 2013
Tapering views emerge from Fed speeches
It is a
crucial time for the Federal Reserve.
Officials
at the U.S. central bank seem eager to pull back some of their extraordinary
support for the economy, but are unsure whether the economy is strong enough to
thrive without it.
And
markets are watching the central bank hawks and doves closely.
The Fed
expects the economy to improve markedly between now and the end of the year
after a few fairly dismal quarters.
But so
far the data has been mixed, leading to honest disagreements among economists
and Fed officials over whether an expected pickup will materialize.
One key
question is will the Fed start to pull back, or taper, its $85 billion-a-year
asset purchase plan at the next policy meeting in September.
How each
of the 19 top Fed officials views the outlook will be important to whether the
central bank slows down the pace of its purchases next month or waits for
subsequent meetings in October and December.
While it
is fashionable on CNBC to complain about all the chatter, there is something to
learn from every Fed speaker.
Here is
what the central bankers have said about tapering over the last few days.
— Greg
Robb
More
http://www.marketwatch.com/story/tapering-views-emerge-from-fed-speeches-2013-08-07?dist=lbeforebell
Your guide to Fedspeak: Part II
August 7, 2013, 2:51 PM
In our first installment on Fedspeak last week, we referred to this
period in U.S. monetary and economic policy as “extraordinary”. (Hey, those
were Bernanke’s words, not mine!)But what exactly does that mean?
By late 2008, the Fed had already reduced the federal funds rate to near zero, ushering in a period of low rates, or what is known as zero interest rate policy (ZIRP). This primarily only affects short-term interest rates, and the Fed was looking to have a more direct impact on consumers and businesses.
So, the Fed took a few steps that went beyond its traditional approach to policy, starting with what is known as quantitative easing (QE).
---- Over the past five years, the Fed has initiated three different rounds of QE, known as QE 1, QE 2 and QE 3 (QE3 is ongoing). Basically, the central bank buys a certain amount of mortgage-backed securities and Treasurys every month, putting more money in the banks’ reserves in the hopes that they will lend it to consumers and businesses.
The ultimate goal of QE is to encourage businesses and consumers to borrow and spend more money. This is sometimes referred to as the wealth effect. If consumers feel like they are richer, whether it’s from buying a house or making money in the stock market, they will go out and spend more. After all, consumer spending is the main engine of the economy.
More
Central-bank methadone is still bad for capital markets: BlackRock
BlackRock’s BLK chief fixed-income strategist has found an unlikely analogy for central bank intervention in the capital markets: methadone.Jeffrey Rosenberg, in his May fixed-income strategy outlook, educated us in the ways of global central banks, and in the process, taught us about the underbelly of drug rehabilitation. If the global credit crisis is heroin, he posits, central bank easing policies are methadone replacement. (For those unfamiliar, that is a heroin addiction treatment that involves giving the addict a less harmful drug in its place.)
If it’s good enough for drug addicts, it’s good enough for markets, right? Though methadone might not be as bad as heroin, it still leads to unhealthy behavior, Rosenberg says. And that’s where the capital markets are right now: addicted to central bank liquidity to the point where they’re pricing securities based on potential changes to easing policies
More
The keystone of the Fascist doctrine is its conception of the State, of its essence, its functions, and its aims. For Fascism the State is absolute, individuals and groups relative.
Benito Mussolini.
At the Comex silver depositories Tuesday final figures were: Registered 41.11 Moz,
Eligible 122.80 Moz, Total 163.91 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, more on our lawless age. Today it’s America
once an admired “City on the Hill,” today more and more like Papa Doc’s 1950s Haiti.
Think you get a fair shot in America’s courts under a rule of law constitution?
Think again. Big brother has ways of stacking the deck against you, after all
we all know that you’re guilty even before the trial. Poor Snowy was right
after all.
"The secret of life is
honesty and fair dealing. If you can fake that, you've got it made."
Groucho Marx
Groucho Marx
Exclusive: IRS manual detailed DEA's use of hidden intel evidence
WASHINGTON
| Wed Aug 7, 2013 9:23pm EDT
(Reuters)
- Details of a U.S. Drug Enforcement Administration program that feeds tips to
federal agents and then instructs them to alter the investigative trail were
published in a manual used by agents of the Internal Revenue Service for two
years.
The
practice of recreating the investigative trail, highly criticized by former
prosecutors and defense lawyers after Reuters reported it this week, is now
under review by the Justice Department. Two high-profile Republicans have also
raised questions about the procedure.
A
350-word entry in the Internal Revenue Manual instructed agents of the U.S. tax
agency to omit any reference to tips supplied by the DEA's Special Operations
Division, especially from affidavits, court proceedings or investigative files.
The entry was published and posted online in 2005 and 2006, and was removed in
early 2007. The IRS is among two dozen arms of the government working with the
Special Operations Division, including the Federal Bureau of Investigation, the
National Security Agency and the Central Intelligence Agency.
An IRS
spokesman had no comment on the entry or on why it was removed from the manual.
Reuters recovered the previous editions from the archives of the Westlaw legal
database, which is owned by Thomson Reuters Corp, the parent of this news
agency.
----Monday's Reuters report cited internal government documents that show that law enforcement agents have been trained to conceal how such investigations truly begin - to "recreate" the investigative trail to effectively cover up the original source of the information.
DEA officials said the practice is legal and has been in near-daily use since the 1990s. They have said that its purpose is to protect sources and methods, not to withhold evidence.
Defense attorneys and some former judges and prosecutors say that systematically hiding potential evidence from defendants violates the U.S. Constitution. According to documents and interviews, agents use a procedure they call "parallel construction" to recreate the investigative trail, stating in affidavits or in court, for example, that an investigation began with a traffic infraction rather than an SOD tip.
The IRS document offers further detail on the parallel construction program.
"Special Operations Division has the ability to collect, collate, analyze, evaluate, and disseminate information and intelligence derived from worldwide multi-agency sources, including classified projects," the IRS document says. "SOD converts extremely sensitive information into usable leads and tips which are then passed to the field offices for real-time enforcement activity against major international drug trafficking organizations."
----House Intelligence Committee Chairman Mike Rogers, R-Michigan, expressed concern with the concept of parallel construction as a method to hide the origin of an investigation. His comments came on the Mike Huckabee Show radio program.
"If
they're recreating a trail, that's wrong and we're going to have to do
something about it," said Rogers, a former FBI agent. "We're working
with the DEA and intelligence organizations to try to find out exactly what
that story is."
Spokespeople
for the DEA and the Department of Justice declined to comment.
More
“The
Americans outside looked from America to Russia, and from Russia to America,
and from America to Russia again; but already it was impossible to say which
was which.”
With apologies
to George Orwell and Animal Farm.
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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