Baltic Dry Index. 1156 +11
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
A dark
cave. In the middle of Washington.
Thunder.
Enter the three Stooges.
Thunder.
Enter the three Stooges.
It is all as
clear as mud this morning, thanks to the latest minutes of the Federal Reserve’s
last meeting. The Fed has agreed to taper but dither on the timing, or it might
be that they’ve agreed to dither and taper at some time off in the distant
future, possibly when President Milhouse Obama finally closes the American
gulag at Guantanamo. In our new lawless era of the 21st century,
this is what passes for central planning in our new bankster derivatives
gambling, casino economy.
Below the world
interprets Dr. Bernanke’s Gospel of Mammon.
“Contrariwise,' continued Bernocchio, 'if it was so, it might
be; and if it were so, it would be; but as it isn't, it ain't. That's logic.”
Bernocchio,
with apologies to Lewis Carroll and Alice.
Aug. 21,
2013, 3:49 p.m. EDT
Fed says taper on track by the end of the year
No hints which month taper will come; new tool being weighed
WASHINGTON
(MarketWatch) — Federal Reserve officials agreed with their leader Ben
Bernanke’s view that the economy will pick up later this year and allow the
central bank to taper its asset purchase plan before the end of the year,
according to minutes released Wednesday. But they shied away from signalling
when a move might come.
The
central bankers did not signal as to whether such a taper of the $85
billion-per-month bond purchase plan would come in September, October or
December, the three remaining meeting dates for 2013.
There
were few signs that a majority was poised to pull the trigger at the September
meeting but also there were no strong arguments against a quick move.
There
were conflicting views expressed, with neither in the majority.
Economists
on opposite sides of the issue found their views reflected in the discussion.
“The lack
of a strong emerging consensus in July does not take September off the table,”
said Millan Mulraine, director of U.S. research at strategy at TD Securities,
who has long predicted a move next month.
----While
a “few” argued that “it might soon be time to slow somewhat” the pace of asset
purchases, another “few” counseled patience. It is often hard from the minutes
to judge whether a view is in the ascendancy.
More
Aug. 21, 2013, 2:59 p.m. EDT
Fed weighs new tool to help with exit
WASHINGTON
(MarketWatch) — The Federal Reserve is considering creating a new tool to sell
securities to the market overnight to drain extra cash from the financial
system.
According
to the minutes of the Fed’s July policy committee meeting, the central bankers
were briefed on the new program by central bank staffers and concluded that it
would be helpful.
Draining
excess cash from the market will help keep short-term interest
rates from falling as more liquidity can push overnight interest
rates lower.
Under
the proposal, the Fed would set up an overnight, risk-free instrument, known as
a overnight reverse repurchase agreement, or reverse repo facility.
Using
this facility, the Fed would sell Treasurys to market participants that it
would buy back the next day.
The
minutes indicate the Fed wants to enlarge the number of firms that could access
the program beyond the traditional money-market mutual funds and bond dealers
that often participate in existing Fed repo transactions.
Fed
officials sent the staff back to the drawing board to do more work on the technical
details of the facility.
Below, why I think that the Fed will never dare to
taper. Washington’s white men speak with forked tongue, as they say in
Hollywood. Tapering, apart from blowing up the US bond and stock markets, will
blow up countries all around the planet, leading to calls to end dollar
hegemony. The markets are already
skittish just on talk of scaling back QE forever and ending Zirp. The moment
the Fed actually tries to taper in the market, the Fed’s final bubble comes to
a spectacular and violent end. My guess is that the charlatan Bernanke will try
to duck the issue and leave any spectacular ending to his successor. My guess
is that we end up with the Great Inflation of all inflations.
Stay long physical precious metals. The Greenspan-Bernanke
Fed has finally run out of road. Taper, and bring on the crash QE was started
to prevent. Stay on QE forever, and the Great Nixonian Error of fiat money
comes to its end via the Great Inflation and fiat currency revulsion. Little
surprise Bernocchio is hiding from this year’s Jackson Hole junket.
“If I
had a world of my own, everything would be nonsense. Nothing would be what it
is, because everything would be what it isn't. And contrary wise, what is, it
wouldn't be. And what it wouldn't be, it would. You see?”
Bernocchio,
with apologies to Lewis Carroll and Alice.
Fed plan to taper slams India, Turkey, other countries
August 21, 2013, 3:32 PM
Is a Ben
Bernanke backlash coming? The Federal Reserve is preparing to curtail a low-interest rate strategy in the
U.S. and already economies of developing nations such as India, Thailand and
Turkey appear to be getting crunched.Interest rates are rising, currencies are weakening and foreign loans are becoming harder to obtain in other parts of the world, according to a spate of new stories this week. (See here and here.) And these trends could cause considerable pain overseas if they do not abate, experts say.
----The prospect of higher U.S. interest rates, however, is drawing money away from developing countries and causing their currencies to plunge. That makes the cost of imports higher, especially oil, and threatens to boost inflation.
To prop
up their currencies, India and other countries may have to raise interest rates
even higher, but that could further dampen growth and trigger a downward
economic spiral.
The
situation in India and Turkey are just the latest in a long list of examples of
how the Fed’s actions to steer the U.S. economy can cause large aftershocks in
foreign nations.
The 1997
Asian financial crisis, for example, was ignited by a prolonged period of
rising interest rates in the U.S. orchestrated by the Fed.
More
India Rupee Drops to Record as Fed Minutes Signal Stimulus Taper
By Jeanette Rodrigues - Aug 22, 2013 6:44 AM GMT
India’s rupee slumped to an
all-time low after Federal Reserve minutes showed the U.S. is getting closer to
reducing stimulus that has fueled demand for emerging-market assets. Fed policy makers were “broadly comfortable” with Chairman Ben S. Bernanke’s plan to start reducing bond buying later this year if the world’s largest economy improves, with a few saying tapering might be needed soon, according to the minutes of their July meeting released yesterday. Global funds have cut holdings of Indian debt by $10.1 billion since Bernanke first flagged the paring on May 22, leaving the rupee vulnerable to the nation’s current-account deficit.
“Some of the reasons for the rupee’s fall are out of India’s control, which is probably why policy makers have stepped back a bit and let the rupee find it’s own equilibrium,” said Jonathan Cavenagh, a strategist at Westpac Banking Corp. (WBC) in Singapore.
More
Baht Falls to Three-Year Low on Fed Minutes, Growth Concern
By Yumi Teso - Aug 22, 2013 2:11 AM GMT
Thailand’s baht fell to the weakest level since August 2010 after Federal
Reserve minutes showed officials support a cut in stimulus this year if the U.S. economy
improves. The baht slipped beyond 32 per dollar for the first time since July 2012 as official data showed global funds sold $582 million more Thai bonds than they bought this month through yesterday and pulled a net 30.6 billion baht ($954 million) from equities. A government report this week showed Southeast Asia’s second-largest economy entered a recession for the first time since 2009.
More
Taiwan Bonds Fall Most in Three Weeks on Fed Tapering Concern
By Justina Lee - Aug 22, 2013 3:42 AM GMT
Taiwan’s
five-year bonds fell the most in almost three weeks on speculation the Federal
Reserve will begin tapering asset purchases as early as next month. The local
dollar rose.
Fed
policy makers were “broadly comfortable” with scaling back stimulus policies
known as quantitative easing later this year if the economy improves, according
to minutes of their last meeting released yesterday. Ten-year U.S. Treasury
yields reached a two-year high following the report.
“Taiwan
bonds have been mainly affected by Treasuries,” said James Wang, a Taipei-based
trader at Yuanta Securities Co. “Before we know the exact timing of QE
tapering, the markets will continue to reflect this factor.”
More
Emerging Stocks Decline After Fed Minutes as Real Tumbles
By Julia Leite & Maria Levitov - Aug 21, 2013 10:43 PM GMT
Emerging-market stocks dropped for a fifth day after Federal
Reserve’s minutes showed officials support Chairman Ben S.
Bernanke’s plan for trimming stimulus. Brazil’s real sank
to the lowest level since December 2008. The MSCI Emerging Markets Index retreated 0.9 percent to 924.19. The Borsa Istanbul National 100 Index declined to the lowest level since October after Turkey’s central bank kept its benchmark unchanged. Brazil’s Ibovespa fell a second day, erasing an earlier advance of as much as 1.3 percent, while the real slid 2.5 percent, pacing losses among 19 of the 24 developing-nation currencies tracked by Bloomberg.
More
We end for the day with Japan. Faced with a new
nationalist government intent on trashing the Yen in its trade war with the
rest of the world, Japanese savers have a urgent need to save in something
other than Yen.
Tanaka Plans Silver Saving Account for Japan as Prices Rebound
By Jae Hur & Ichiro Suzuki - Aug 22, 2013 4:19 AM GMT
Tanaka Kikinzoku Kogyo K.K., Japan’s biggest gold retailer, will add silver to its online
trading products for individual investors as prices trade near a three-month
high. Tanaka will offer accounts that require saving a minimum of 3,000 yen ($31) a month to trade silver, said Naoto Mizuki, a marketing executive at parent Tanaka Holdings Co. Clients will be able to sell the metal via the Internet or take physical delivery, Mizuki said yesterday. Applications will open Sept. 2 and trading will begin in November.
Silver, about half of which is consumed by industry to make everything from solar panels to batteries, rebounded 25 percent since reaching the lowest in almost three years in June as improving economic climate boosted demand outlook. The metal entered a bear market in April as investors lost faith in precious metals as a store of value and amid concern the Federal Reserve would taper stimulus.
“Silver is cheaper than gold and platinum and it can be bought with less money,” said Kate Harada, general manager at Tanaka Kikinzoku’s precious metals team. “Individual investors have been searching for a tool to hedge their yen-based assets.”
More
“Bernocchio:
“Why is a raven like a writing-desk?”
“Have you guessed the riddle yet?” Bernocchio said, turning to Alice again.
“No, I give it up,” Alice replied: “What’s the answer?”
“I haven’t the slightest idea,” said Bernocchio”
“Have you guessed the riddle yet?” Bernocchio said, turning to Alice again.
“No, I give it up,” Alice replied: “What’s the answer?”
“I haven’t the slightest idea,” said Bernocchio”
Bernocchio,
with apologies to Lewis Carroll and Alice.
At the Comex silver depositories Wednesday final figures were: Registered 39.23
Moz, Eligible 125.50 Moz, Total 164.73 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, who put the Keystone Kops in charge of
remediating the worst nuclear disaster since Chernobyl? Below why mankind isn’t
yet ready for nuclear power.
“If
you drink much from a bottle marked 'poison' it is certain to disagree with you
sooner or later.”
Tepco,
with apologies to Lewis Carroll and Alice.
Tepco Urged to Manage Water Weeks Before Recent Leak
By Brian Wingfield - Aug 22, 2013 5:00 AM GMT
An advisory panel to Tokyo Electric Power Co. (9501) urged the
utility to tighten water-management procedures at its crippled Fukushima
Dai-Ichi plant weeks before 300 metric tons of radioactive water seeped out,
the panel’s chairman said. The advisory group in late July held a “less than friendly” meeting with Tepco officials including the company’s chairman and chief executive officer to inform of the need to establish a plan to deal with radioactive water at the facility, according to Dale Klein, the panel’s chairman and a former head of the U.S. Nuclear Regulatory Commission.
“We were disappointed that they weren’t more forthcoming in communication” about an earlier leak of contaminated water from a tunnel at the site, Klein said yesterday in a phone interview. “They really do need to stop going from crisis to crisis and have a systematic approach to water management.”
Tepco officials said yesterday that the company is losing its battle to contain leaks of radioactive water from the plant, where an earthquake and tsunami triggered a triple meltdown in March 2011. Storage tanks at the plant are now holding enough radioactive water to cover an area equal to 37 football fields.
Leaks from the plant have probably run into the Pacific Ocean, the company said yesterday, citing high radiation readings in a drainage ditch.
----“We will revamp contaminated-water management to tackle the issue at the Fukushima Dai-Ichi plant and seek expertise from within and outside of the country,” said Zengo Aizawa, a Tepco vice president. “There is much experience in decommissioning reactors outside of Japan. We need that knowledge and support.”
In Vienna, the International Atomic Energy Agency said it’s prepared to help. Besides radiated water, the site north of Tokyo has more than 73,000 cubic meters of contaminated concrete, 58,000 cubic meters of irradiated trees and undergrowth, and 157,710 gallons of toxic sludge, according to the utility.
More
Nagasaki Bomb Maker Offers Lessons for Fukushima Cleanup
By Shigeru Sato & Yuji Okada - Aug 15, 2013 10:00 PM GMT
Hanford Engineer Works produced the 20 pounds of plutonium for the bomb
dropped on Nagasaki. It’s among the most toxic nuclear waste sites and the
place Japan is turning to for help dealing with melted reactors in Fukushima. Tokyo Electric Power Co. (9501) has sent engineers on visits to the Hanford site in Washington state this year to learn from decades of work treating millions of gallons of radioactive waste. Hanford also has a method to seal off reactors known as concrete cocooning that could reduce the 11 trillion yen ($112 billion) estimated cost for cleaning up Fukushima.
Hanford stretches over 586 square miles of scrubland southeast of Seattle where thousands of technicians are decommissioning the nine reactors in operation from 1944 to 1987. Its laboratories and plutonium facilities were integral to the Manhattan Project to make the first atomic bomb.
“The U.S. has vast experience in nuclear technology with their military activity, including decontaminating soil and managing river contamination,” Masumi Ishikawa, general manager of Tokyo Electric’s radioactive waste management, said in an interview. “There’s a lot we can learn from them.”
Japan Prime Minister Shinzo Abe agreed with that last week when he told his fellow citizens for the first time that Tokyo Electric alone isn’t able to handle the disaster at the Dai-Ichi plant. He promised more government funds for the cleanup without saying how they’d be used.
More
"Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood. For these few gold has been the asset of last resort."
Antony C. Sutton
The monthly Coppock Indicators finished July:
DJIA: +164 Up. NASDAQ: +167 Up. SP500: +195 Up. The
Fed’s final bubble still inflates but for how much longer?
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