Baltic Dry Index. 1046 -12
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
"The first requisite of a sound monetary system is that it put the least possible power over the quantity or quality of money in the hands of the politicians."
Henry Hazlitt
We open with what ought to be the final nail
in the coffin of the nuclear power industry. Present technology and the
industry simply isn’t up to the job of providing safe nuclear power. According
to a Reuters newsflash citing the Japanese government, 300 tonnes a day of
radioactive water in now pouring into the Pacific Ocean.
Japan government to take bigger role in Fukushima clean-up
OKYO | Wed
Aug 7, 2013 3:05am EDT
(Reuters)
- The Japanese government will get directly involved in containing rising
levels of radioactive water at the crippled Fukushima nuclear plant instead of
relying solely on the operator, Prime Minister Shinzo Abe said on Wednesday,
calling it an "urgent issue".
Almost
2-1/2 years after an earthquake and tsunami caused reactor meltdowns at Tokyo
Electric Power Co's Fukushima Daiichi station, the toxic water that has plagued
the clean-up from the start now threatens to flood out of the plant's confines
Into the Pacific Ocean.
The
Fukushima disaster is the world's worst nuclear crisis since Chernobyl, and the
delays in getting to grips with the clean-up have caused global concern.
"The
contaminated water problem is one that the Japanese people have a high level of
interest in and is an urgent issue to deal with," Abe told reporters after
attending a meeting of the government's task force on the disaster.
"Rather
than relying on Tokyo Electric, the government will take measures," he
said.
Abe said
he ordered Minister of Economy, Trade and Industry Toshimitsu Motegi to
urgently deal with the water situation and ensure Tokyo Electric takes
appropriate action to deal with the clean-up, which is expected to take more
than 40 years and cost $11 billion.
More
Radioactive water emergency at Fukushima ‘beyond Tepco’s control’
06/08 10:56 CET
Japan’s
devastated nuclear plant at Fukushima is facing a new emergency due to
radioactive water underground that is threatening to rise to the surface.
The
operator Tepco (Tokyo Electric Power Company) is struggling to contain water
that is seeping into the Pacific Ocean.
It has
released a video of a probe from one of the reactors.
The
country’s Nuclear Regulatory Authority says a barrier has already been breached
and the leak could accelerate rapidly.
“The
situation is already beyond Tepco’s control. Otherwise they’d already have
taken proper measures.
They are doing everything they can but but there are no
perfect solutions,” said Masashi Goto, a retired nuclear engineer who worked on
several Tepco plants.
More
Next, the Great Fed Taper slammed back onto the
agenda again as yet more signs of “recovery” appeared on both sides of the
Atlantic, with bond holder’s fretting about future losses and stock market
longs nervously eyeing the coming traditional crash season. Having painted
itself into a corner, the Bernanke Fed can only talk itself into a confused
puzzle, having long ago run out of ammunition save for ever less effective QE.
If a Great Inflation is to be avoided the Fed needs to take action to start
ending its QE heroine. But my take is that like Japan, the Fed actually wants
the Great Inflation, merely that Bernanke wants it to occur on his successors
watch. We live in the lawless age of the Janus faced Fed.
"In the long run, the gold price has to go up in relation to paper money. There is no other way. To what price, that depends on the scale of the inflation - and we know that inflation will continue."
Nicholas L. Deak
Aug. 6, 2013, 4:20 p.m. EDT
U.S. stocks fall as Fed talks timing of taper
Analyst: Trade gap reduction may signal Europe recession near end
NEW YORK
(MarketWatch) — U.S. stocks extended losses into a second day Tuesday as
Federal Reserve official Charles Evans said the economy should be able to
shoulder reduced Fed asset purchases later this year.
“It’s
more of this taper tempest that we seem to go into. The market gets a little
confused; it seems fine as long as the talk around taper is around data, but it
gets flustered when you talk about the calendar,” said Jim Dunigan, managing
executive for investments at PNC Wealth Management.
“There
appears to be a lot on our plates as we get into fall season, with budget
talks, a new Fed chair and the debt ceiling, which might lead the market to
churn here a bit,” said Dunigan, who added that the market has reached an
inflection point, given its “fairly significant upside performance,” with the
S&P 500 up 19% so far this year.
More
'Rate rises threaten crash in every asset'
The value of almost all investments, including shares, bonds and property, could fall if investors believe that interest rates are about to return to normal, a senior fund manager has warned.
Ben
Inker, the co-head of asset allocation at GMO, a giant American asset manager,
said the US Federal Reserve's policy of low interest rates had boosted the
value of almost all assets and that any expectation that rates would rise
risked triggering a reversal.
When
returns on cash are low, investors switch to other assets in the search for
higher income. This increased demand pushes up prices.
"By
pulling down both today’s cash [interest] rate and the market expectation of
future cash rates, the Fed has increased the relative attractiveness of pretty
much all assets other than cash and, as a consequence, their prices have
risen," Mr Inker wrote in a recent research note.
"Since
2009 it has been difficult to avoid making money in the financial markets.
Conventional bonds, inflation-linked bonds, commodities, credit, equities, real
estate – everything – has been bid up as a consequence of the very low expected
returns of cash."
But he
warned that this gave today’s markets "a vulnerability that has not
existed through most of history".
"Today’s
valuations only make sense in light of low expected cash rates. Remove that
expectation, and pretty much every asset across the board is vulnerable to a fall
in price, as the rising real discount rate plays no favourites," Mr Inker
said.
He added:
"We have known this for a while, but the trouble is that there is no easy
way to resolve this problem. There is no asset class you can hold that would be
expected to do well if the real discount rate rises from here."
In the UK at least, first signs of the onset of the
Great Inflation to come. Below the Telegraph’s top counter espionage man covers
rising prices in the UK’s leading supermarket chains. A repeat of the 1970s on
steroids lies ahead, if QE continues forever. Can kicking has reached the end
of the road.
"Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money."
Daniel Webster
Sainsbury's prices rising at more than twice the rate of Tesco, according to industry data
Sainsbury’s is increasing the price of its food ahead of rival Tesco, according to previously unseen industry data.
The data
add a new twist to the price row between Sainsbury’s and Tesco over Tesco’s
Price Promise scheme, which pledges to match the price of brand and own-brand
food at its rivals.
According
to industry data seen by The Telegraph, in the four weeks to July 7, the
average item price at Sainsbury’s increased by 5.2pc compared with the same
period a year ago, while prices at Tesco increased by 2.4pc.
During
this four-week period, Sainsbury’s sales growth of 3pc appears to have been
driven by the increase in prices, with volumes declining 2.1pc.
The
average item price at Morrisons also rose by 5.2pc during the period, while
Asda’s rose by just 1.9pc.
The price
increases have been calculated through a year-on-year comparison of the value
and number of items in customers’ baskets.
UK economic recovery gains pace in July, says NIESR
The UK's economic recovery gained pace in July, according to leading think-tank NIESR, as it judged that growth picked up to 0.7pc in the last three months.
The UK's
gross domestic product (GDP) grew by 0.7pc in the three months to the end of
July, according to the National Institute of Economic and Social Research
(NIESR), offering the latest evidence that the recovery is gaining strength.
The rate
estimated by the respected forecaster represents an increase in pace from the
0.6pc recorded by officials for the second quarter of 2013, which itself
doubled the 0.3pc growth seen in the first three months of the year.
"These
estimates suggest a narrowing of the UK’s large negative output gap,"
NIESR said, referring to the difference between its actual and potential
growth.
"Consumer
spending growth has underpinned the recent gains in economic momentum, in spite
of the continued decline of real consumer wages."
For the
year as a whole, NIESR predicts growth of 1.2 pc, rising to 1.8pc cent in 2014.
However, the think-tank does not expect the UK's economic output to pass its
early-2008 peak until 2015.
The
positive growth estimate followed upbeat economic figures earlier on Tuesday.
British
industrial output grew at the quickest pace in more than two years in June,
official figures showed. Within that, manufacturing posted the first rise
across all its sub-sectors since 1992.
"Deficit spending is simply a scheme for the 'hidden' confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights."
Alan Greenspan. 1966.
Green Price War Breaks Out to Spark Interest in Electrics
By Keith Naughton & Tim Higgins - Aug 7, 2013 5:01 AM GMT
As the auto
industry struggled to recover from the recession, it swore off the deep
discounting that destroyed profits and led to disaster. Now, a price war has
erupted in the industry’s smallest segment: electric cars. General Motors Co. (GM)’s $5,000 price cut yesterday on its Chevrolet Volt plug-in electric vehicle came in response to rapid-fire discounting on battery-powered models this year. It began with Nissan Motor Co. (7201) slicing $6,400 off the sticker of its Leaf electric car in January, followed by price cuts from Ford Motor Co. (F) and Honda Motor Co. on their EVs.
That left GM’s Volt alone atop the price ladder for mainstream plug-in electrics. Volt sales sagged 3.3 percent last month and its almost $40,000 sticker price made for a bad comparison on Internet searches of competitors such as the $25,010 Toyota Prius. So GM cut the price to $34,995 on a model on which it already loses money.
“It’s a competitive nightmare out there, so you have to play within the realm of what others are doing,” said Jeff Schuster, a Troy, Michigan-based analyst with researcher LMC Automotive. “The industry has gotten away from price wars in mass use, but in this area, it’s alive and well. You have to play the game.”
Detroit has been worried the price-war game will play on a grander stage ever since the yen began plunging last year. That 18 percent drop since October, encouraged by Prime Minister Shinzo Abe, enables Japanese automakers to reduce prices while protecting profits. Nissan has cut prices on seven models in the U.S., while Toyota Motor Corp. (7203) is offering no-interest auto loans and earned a record quarterly profit of $5.7 billion, the most ever by a nonfinancial Japanese company.
So far, the green-car price war amounts to more of a skirmish than an all-out assault because sales of the battery powered cars are so small. Even with all the deals on these high-tech marvels, battery-powered cars will remain a slender slice of the U.S. auto market, according to LMC.
More
At the Comex silver depositories Tuesday final figures were: Registered 41.83 Moz,
Eligible 122.08 Moz, Total 163.91 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Still think the stock markets not rigged, think
again. Below the Journal on one of the best known secrets on Wall Street, some
traders are more equal than others. So tell me again, who really won the disputes US elections in the electronic
lawless noughties?
"Increasingly, the wealth of the modern world has come to be represented by financial assets rather than real assets, and this to me is a very unhealthy situation, because financial assets are inherently unstable. Financial assets (currencies, bonds, mortgages, stocks, bank credit, etc.) can be quickly and violently reduced in value, or destroyed completely by either inflation or deflation."
Donald J. Hoppe
August 5,
2013, 10:35 p.m. ET
FBI Finds Holes in System Protecting Economic Data
FBI finds 'operational vulnerabilities' involving 'black boxes' used to control the release of sensitive economic data
The
Federal Bureau of Investigation has discovered vulnerabilities in the
government's system for preventing market-moving economic reports from leaking
to traders before public release.
Law-enforcement officials found "a number of
operational vulnerabilities" involving "black boxes" used by
several departments to control the release of sensitive economic data such as
the monthly unemployment rate, according to a report by the inspector general
at the Commerce Department.
The
report said it was possible to subvert the system, which was designed to
prevent media companies from sending economic data to traders early.
The
report, which was reviewed by The Wall Street Journal, is part of a broad
law-enforcement inquiry into whether media firms or any of their employees are
sending government data to traders before the agreed-upon embargoes expire,
which could violate insider-trading laws.
The FBI
has long been concerned about what investigators view as suspicious trading
activity that occurs just before some government releases of sensitive economic
data, according to people familiar with the investigation. Federal agents have
spent years trying to determine if that activity is due to misconduct during
the formal release period, which is known as a lockup.
The black
boxes are key to the government's control of the data. Media firms in the
business of reporting economic data are required to connect their computers to
the black boxes, which operate like a trapdoor, releasing articles and data
streams when the embargoes lift. In theory, all the data should be released at
the
same time.
The
investigative report, which was completed in May and obtained through an
open-records request, indicates that the FBI's concerns are based on testing of
black boxes at its Quantico, Va. facilities. The report didn't say whether the
FBI knows of any specific instance in which anyone knowingly exploited the
weaknesses. Many of the technical flaws involve different ways in which the
black boxes can be bypassed.
The report focused primarily on a short-lived probe
of Bloomberg L.P., which was exonerated of any wrongdoing. The Bloomberg issue
began in May 2012 when the media firm installed new devices in the Commerce
Department to speed up delivery of data to subscribers, according to the
Commerce report.
In its
own testing, Bloomberg found it could get around the black box in several ways,
such as sending data using different electrical current.
Bloomberg
reported the flaws to the Commerce Department last summer and didn't use the
devices in any data releases, Bloomberg told investigators, according to the
report. After Bloomberg alerted the department, the FBI conducted a
"consensual seizure" of its computers for testing.
----The FBI's testing led it to discover other methods to get around the black boxes in ways that could "adversely impact the timed release of sensitive economic data," according to the report.
For one,
media firms, if unobserved, could simply turn off the power on the black boxes,
the FBI cautioned. Data also could be surreptitiously routed around the black
boxes using concealed wireless devices or even a phone line or cable.
Such
"concealed IT devices may still be in use" in lockup rooms across the
government, according to a summary of the investigative report.
The fact
that these devices could be "concealed to intentionally disguise their
presence…should be made known to the proper personnel," the FBI said,
according to the report.
More
Lenin
was certainly right. There is no subtler, no surer means of overturning the
existing basis of society than to debauch the currency. The process engages all
the hidden forces of economic law on the side of destruction, and does it in a
manner which not one man in a million is able to diagnose.”
J. M.
Keynes
The monthly Coppock Indicators finished July:
DJIA: +164 Up. NASDAQ: +167 Up. SP500: +195 Up. The
Fed’s final bubble still inflates.
No comments:
Post a Comment