Baltic Dry Index. 1115 +13
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
"When it becomes serious, you have to lie"
Jean-Claude Juncker. Ex-Luxembourg Prime Minister and ex-president of the Euro Group of Finance Ministers. Confessed liar.
One day at a time, the world of our comfortable
assumptions is increasingly unravelling. The best laid plans of central
banksters are collapsing before our disbelieving eyes. Far from getting
something from nothing, QE, socialism for banksters, has not returned us to the
capitalist’s paradise on earth. Now the Asian miracle that was going to save
America, Europe and the euro, is unravelling under the twin strains of a
deepening slowdown in China and a Japanese currency war to steal its neighbours
export markets. None of this was supposed to happen. None of it was in
Bernocchio’s master plan. He may be an expert on solving the 1930s Great
Depression, but our world has moved on
from the 1930s twilight of the Great Empires. As far as the 1930s were removed
from the 1850s and the run up to the American Civil War.
Stay long physical precious metals. Our new
Graphene Age will eventually reset the
global economy, but that more next decade than this, and in the case of
graphene based medical innovations, more 2030s than 2013. In the meantime,
Europe is dying under the Euro, America has a jobless recovery underway built
on the sands of QE and spying on everyone, Asia now seems ready to implode. Add
to that the retirement of the baby boom generation and Japan deliberately heading
for Yen suicide, and pretty much all of our cosy assumption about the future
are mis-founded. Tomorrow will not be like today which was like yesterday. The
Great Nixonian Error of fiat currency, like the former Soviet Union, is coming
towards its end.
It is not certain that everything is uncertain.
Blaisé Pascal.
Capital Flows Back to U.S. as Markets Slump Across Asia
By Shamim Adam & Kevin Hamlin - Aug 20, 2013 5:11 AM GMT
Asia’s role as the world’s growth engine
is waning as economies across the region weaken and investors pull out billions
of dollars.
The Indian rupee fell to a
record low today, Thailand is in recession and Indonesia’s widest
current-account deficit pushed the rupiah to the lowest level since 2009.
Chinese banks’ bad loans are rising and economists forecast Malaysia will post
its second straight quarter of sub-5 percent growth this week.
The clouds forming in Asia as liquidity tightens and China’s slowdown curbs demand for commodities and goods are fueling a selloff of emerging-market stocks, reversing a flow of money into the region in favor of nascent recoveries in the U.S. and Europe. Emerging markets from Brazil to Indonesia have raised borrowing costs in 2013 to try to aid their currencies as the prospect of reduced U.S. monetary stimulus curbs demand for assets in developing nations.
“The eye of the storm is directly above emerging markets now, two years after it hovered over Europe and four years after it hit the U.S.,” said Stephen Jen, co-founder of hedge fund SLJ Macro Partners LLP in London and former head of foreign-exchange strategy at Morgan Stanley. “This could be serious for Asia.”
More
Asian Stocks to Indian Bonds Decrease as Rupee Declines
By Pratish Narayanan & Emma O’Brien - Aug 20, 2013 6:01 AM GMT
Asian stocks fell for a
fourth day after U.S. Treasury yields reached a two-year high. Currencies from
India’s rupee to Indonesia’s rupiah declined amid an exodus that’s seen
investors withdraw $8.4 billion from emerging market exchange-traded funds this
year.
----India’s rupee is at a record low, Thailand is in recession and Indonesia’s widest current-account deficit pushed the rupiah to the weakest level since 2009. The data are fueling pessimism in markets already concerned the Federal Reserve, which publishes minutes of its July meeting tomorrow, will start reducing bond purchases in September. Australia’s central bank signaled further interest-rate cuts remain a possibility, according to minutes of its Aug. 6 meeting.
“It’s a very uncomfortable period,” Richard
Yetsenga,
the head of global markets research at Australia &
New Zealand Banking Group Ltd., told Bloomberg TV in Sydney. “Asia as
a whole, even though the data’s probably ok, isn’t going to feel like a great
place for a while as we adjust to the new world order where U.S. bond yields
are going up, not down.”
More
Back on the continent made for tanks, the
“Hammer of Club Med’s” re-election plans have hit a snag. Her favoured coalition
partner, like the Lib-Dems in Britain, looks set to be heading for a wipe-out
in the coming election. Incredibly, Deutsche Bank thinks an ECB interest rate
hike might be coming! Goodbye Greece and Club Med. All our assumptions about
Germany and Europe might be similarly misplaced.
We sail within a vast sphere, ever drifting in uncertainty,
driven from end to end.
Blaisé Pascal.
August
19, 2013, 6:53 a.m. ET
Euro-Skeptic Party Makes Election Waves in Germany
Political Upstart Has Merkel Supporters Worried About Renewal of Coalition
AACHEN, Germany—Political hopeful Bernd Lucke has a simple explanation for why his fellow Germans have so far agreed to pay billions of euros to keep Greece and other Southern European countries in the euro zone."Eighty percent, if not 90%, of the people have no knowledge of economics whatsoever," said Mr. Lucke, a professor of economics and head of upstart political party Alternative for Germany. "The situation is very dangerous for Germany and the European Union."
Such unvarnished talk has become a hallmark for the party, known as the AfD, which was founded early this year and is making waves as it stands for its first national election in September. The party is adding a wrinkle to Chancellor Angela Merkel's election plans by agitating for something virtually no mainstream politician has dared suggest: breaking up the euro zone by forcing financially troubled Southern European countries out.
"It
would be best if the entire 'Club Med' left the euro," Mr. Lucke told
supporters during a recent rally in this ancient Rhineland town, to cheers and
snickers.
Even
though polls suggest the AfD is unlikely to amass the 5% of the total vote
needed to enter Germany's parliament, the party has some of Ms. Merkel's
supporters worried for her junior coalition partner, the Free Democrats, or
FDP.
That is
because the FDP itself is polling around the 5% mark and the AfD is competing
for many of the same right-leaning voters who would naturally gravitate to the
FDP. The concern is that even if the anti-euro party garners just 2% of the
vote, it could rob enough support from the FDP to prevent a renewal of Ms.
Merkel's coalition.
More
ECB Guidance Doesn’t Rule Out Rate Hike, Bundesbank Says
By Stefan Riecher - 2013-08-19T12:25:42Z
The European Central Bank may raise rates if inflation pressure
increases, even after it pledged to keep borrowing costs low, according to Germany’s
Bundesbank. The ECB’s commitment “is not an imperative statement, and it doesn’t represent a change” in the monetary policy stance, the German central bank said today in its monthly report. “Forward guidance doesn’t rule out an increase in the benchmark rate if greater inflation pressure emerges.”
ECB President Mario Draghi said in July for the first time that the ECB will keep interest rates at current levels or lower for an extended period of time. He reiterated his statement this month, trying to assure investors that the Frankfurt-based central bank won’t tighten policy too soon after it cut its benchmark rate to a record low of 0.5 percent in May.
“It is decisive to note that this statement is conditional” upon the unchanged obligation to guarantee price stability, the Bundesbank said. “Therefore the euro system’s forward guidance doesn’t represent an unconditional promise about the future path of the benchmark rate.”
The euro rose more than a third of a cent against the dollar after the report was released and was trading at $1.3351 at 1:54 p.m. in Frankfurt.
More
In the Middle East, has the anarchy of Egypt played
out before? While Bernocchio skips this week’s fixers session at Jackson Hole
Wyoming, more and more of the master plan keeps going awry. Why didn’t the NSA
tell us this was about to happen?
Algeria's civil war is a dreadful precedent for Egypt
The parallels between the brutal civil war in Algeria and Egypt’s recent experience after the overthrow of Mohammed Morsi's Muslim Brotherhood government is startling
The generals are masters of Cairo and their footsoldiers are cannon fodder in the deserts of Sinai.Yesterday’s killing of 24 policemen near Egypt’s eastern frontier provides another vivid sign of how violence is taking hold across the Arab world’s most populous country.
But this incident also strikes an echo of the first stirrings of civil war in another Arab nation where the army seized power at the expense of radical Islamists. Just over two decades ago, the ambush and murder of policemen signalled the onset of armed revolt in Algeria. Often, busloads of officers were waylaid by gunmen and shot on the spot, which seems to be what happened in Egypt yesterday.
Before long, Algeria’s Islamist insurgents had graduated to attacking the army, planting bombs in the capital and, worst of all, carrying out night-time massacres in defenceless villages across the “bled”, as the country’s coastal landscape is known.
When this singularly brutal civil war finally subsided in the early years of this century, perhaps 100,000 people had been killed. A shadowy cabal of generals, impossible to dislodge and known to Algerians as “le pouvoir”, still pulled the strings of power. “Once again,” reads a history of Algeria’s conflict, “le pouvoir had exhibited its enduring dominance as it recaptured the instruments of authority through direct control of the state.”
The bloodshed began after an Islamist party called the Islamic Salvation Front won the first round of Algeria’s parliamentary election in December 1991. Instead of allowing it to take power, the army mounted a coup in January 1992, cancelling the second round of elections and seizing control of the government. The Islamists, denied the chance to win office via the ballot box, decided that force was the only way.
More
We end for today with ever more bad news from
Japan. Who told humanity we were ready for nuclear power? What if this happened
outside New York or Paris? What about Bombay or Beijing? We have less than 100
years of the benefits of nuclear power. Its benign legacy will be with us for
thousands of years. It’s less benign legacy….?
Fukushima Springs Another Leak in Battle With Radioactive Water
By Jacob Adelman & Yuji Okada - Aug 20, 2013 5:08 AM GMT
Tokyo
Electric Power Co. (9501) reported another breach of the defenses it has
built at the Fukushima nuclear plant in its more than two-year struggle to stop
leaks of radioactive water into the soil and sea. Just weeks after the utility backtracked from earlier statements and admitted radiated water was flowing into the Pacific Ocean at a rate of 300 tons a day, it has found another leak from a storage tank
----Shinichi Tanaka, the chairman of Japan’s Nuclear Regulation Authority, has said the water leaks are getting out of control and creating a state of emergency, according to Shinji Kinjo, who leads a task force for the regulator.
In the latest incident, the company said about 300 tons of contaminated water probably leaked into the soil from a tank due to an open valve in a containment barrier surrounding the storage vessel.
The leak was discovered after crews found a drop in the water level of the 1,000-ton capacity tank, Mayumi Yoshida, a spokeswoman for the company known as Tepco, said today in a phone interview. She wasn’t able to say why the valve in the containment barrier was open
More
"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.
At the Comex silver depositories Monday final figures were: Registered 39.23 Moz,
Eligible 125.91 Moz, Total 165.14 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
JP Morgan, UBS, BOA, Barclays, Deutsche Bank, Banca
Monte dei Paschi de Siena, who said that the Mafia was dead? Just why is the
Fed using bankster socialism to revive it?
Banks are an almost irresistible attraction for that element of our society which seeks unearned money.
J. Edgar Hoover.
JPMorgan China probe sends chill through investment banks
HONG KONG |(Reuters) - A U.S. banking regulator's probe into JPMorgan's hiring practices in China will have rival banks scrambling to review their own records, lawyers say, in a market where ties to political and business leaders can be key to winning big deals.
Banks around the world commonly hire people with government connections, but this is especially prevalent in China due to the role the ruling Communist Party plays in the country's business.
Offering a job to one of China's so-called princelings - the offspring of China's political elite - is now a potential liability, with the U.S. Securities and Exchange Commission (SEC) investigating whether JPMorgan's Hong Kong office hired the children of China's state-owned company executives with the express purpose of winning underwriting business and other contracts, said a person familiar with the matter.
U.S. law does not stop companies from hiring politically connected executives. But hiring people in order to win business from relatives can be bribery, and the SEC is investigating JPMorgan's actions under the U.S. Foreign Corrupt Practices Act (FCPA), the person added.
"If I were a competitor of JPMorgan, I would definitely start to do some internal investigations looking into the relationships with princelings," said a China-based lawyer who works with financial institutions.
Bank of America, Citigroup, Credit Suisse, Goldman Sachs and Macquarie are just a few of the banks to have employed relatives of top Chinese officials in the past five years. The banks declined to comment or did not respond to requests for comment.
----The distinction between hiring a relative of a foreign official who may be well connected, and offering employment to such a person in the express hope of winning specific business is key to proving FCPA violations, according to a report on the FCPA published last October by law firm Gibson, Dunn & Crutcher.
"DOJ and the SEC will examine the circumstances of the engagement to determine whether the purpose of the relative's hiring is to improperly influence the foreign official," the report noted, adding that in such cases FCPA violations may occur even if the employee is otherwise qualified for the job.
"If JPMorgan put the person down in their books as a legitimate hire, and then it turns out that the person is there just to get certain connections, then anything you pay can be considered a bribe," said the China-based lawyer, who was not authorized to speak publicly about the issue.
More
“The world is a place that’s gone from being flat to round to crooked.”
Mad Magazine.
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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