Baltic Dry Index. 1878 -23
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
"The international monetary order is more precarious by far
today than it was in 1929. Then, gold was international money, incorruptible,
unmanageable, and unchangeable. Today, the U.S. dollar serves as the
international medium of exchange, managed by Washington politicians and Federal
Reserve officials, manipulated from day to day, and serving political goals and
ambitions. This difference alone sounds the alarm to all perceptive
observers."
Hans F. Sennholz
Who says American’s don’t get irony! At the
weekend, the New York Times favourite Keynesian corporate socialist economist Paul
Krugman, came out and declared fallen former guru “Bubbles” Greenspan the worst
ex-central bankster in the world. Poor “Bubbles” will soon be fighting to keep
that title once Bernocchio retires at the end of January, and once Japan’s Haruhiko Kuroda retires when Abenomics fails spectacularly
in the first national bankruptcy of a major economy. The title will probably
finally descend on the Fed’s incoming, first woman Governor, Janet Yellen, who
will probably be on watch as “QE Forever” fails, and with it The Great Nixonian
Error of fiat money. “Bubbles” and Bernocchio hope by then to be a long gone
footnote in history.
"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
Krugman calls Greenspan the worst ex-central banker in the world
October
21, 2013, 9:35 AM
It wasn’t too long ago that former Fed Chairman Alan Greenspan was the toast
of Washington, Wall Street and the ivy-covered halls of academia.No more.
Greenspan’s new book, “The Map and the Territory” is generally being received with a resounding thud.
Prominent economist, columnist and blogger Paul Krugman’s reaction on Monday was perhaps the most succinct. In a post on Sunday, Krugman called Greenspan “the worst ex-central banker in the world.”
Krugman notes that a Washington Post reviewer discovered that Greenspan takes no responsibility for the financial crisis and believes that less government is the best way forward.
Missing from the discussion is that Greenspan’s predictions have been wrong since the crisis, Krugman noted.
“The thing is, Greenspan isn’t just being a bad economist here, he’s being a bad person, refusing to accept responsibility for his errors in and out of office. And he’s still out there, doing his best to make the world a worse place,” Krugman said.
More
In other Fedster news, the Chicago Fedster Capo sees
no taper before next year given all the uncertainty of last week’s Washington
armistice. But can the Fed taper at all without bringing on the crash QE was
started to prevent? Stay long physical
gold and silver for the day the Fedster’s lose it and China and the emerging
world force the global economy back onto a gold based international settlement
system. The “exorbitant privilege” Uncle Scam gains under the dying US dollar
fiat currency reserve currency, is coming to its end. The events of October
2013, now mean that no one has faith anymore in its long term survival. Like
the nearly dead Euro, the dollar reserve system is no longer fit for purpose,
and America is headed to a default the moment interest rates rise when the Fed
can no longer enforce ZIRP and QE Forever.
"The gold standard sooner or
later will return with the force and inevitability of natural law, for it is
the money of freedom and honesty."
Hans F. Sennholz
Oct. 21, 2013, 8:48 a.m. EDT
Fed's Evans: Good reports needed for Dec. taper
WASHINGTON
(MarketWatch) - The Federal Reserve could begin to reduce the pace of its $85
billion a-month asset purchase program in December but would need several good
economic reports before acting, said Chicago Fed president Charles Evans on Monday. Evans all but ruled out a
move at the central bank's meeting later this month, calling it "a tough
one" given the lack of economic data from the federal government shutdown. Asked in an interview on CNBC
about a move at the next Fed policy meeting in December, Evans replied: "I
think we need a couple of good labor reports and evidence of increasing GDP
growth and it is probably going to take a few months to sort that one out."
More
"We are in a world of irredeemable paper money - a state of affairs unprecedented in history."
John Exter
When Hyman Minsky Runs For The Hills: Japan Central Bank To "Own" 100% Of GDP In 5 Years
Submitted by Tyler Durden on
10/19/2013 15:03 -0400
Over a year ago, in "Japan's
WTF Chart" we showed where Japan lies on the sovereign debt-to-tax
revenue continuum. The "where", with a WTF-inducing 1900%
sovereign debt/revenue, was essentially off the chart as it was nearly
5 times greater than the first runner up: Greece, with 400%. Naturally, that
ratio is absolutely unsustainable and the second rates begin creeping higher,
all bets are off, however the day of reckoning could be delayed if as we said
two years before Japan's berserko QE was unveiled, the BOJ
entered "hyprintspeed" and started monetizing debt at a pace that
would make Hyman Minsky and Rudy von Havenstein both
break out in a lunatic cackle. One look at the chart below, which shows JPM's estimate for various central bank holdings as a percent of host nation GDP, is enough to explain why that distant giggling is Hyman Minsky warming up... and he is running for the hills.
The reason: while as a result of its recent decision to double its monetary base in (every) two years Japan's central bank now holds about 40% of local GDP on its books, it has precommited to seeing this percentage hit 60% over the next two years. But that's jst the beginning.
As JPM's Mike Cembalest points out, the "contingent" line is where the BOJ's asset holdings as a % of GDP will rise to should Japan's 2% inflation goal prove elusive. Did we say "contingent" - we meant definite. And as the line shows, the Bank of Japan will, for the first time in history, "own" all of Japan's GDP on its balance sheet some time in 2018 when its "assets" as a percentage of GDP surpass 100%, and then proceed in linear fashion to add about 10% of GDP to its balance sheet with every passing year until everything inevitably comes crashing down.
More
In other under reported news yesterday, Brazil’s
great oil auction underwhelmed. There may be trouble ahead if the wold’s
leading oil mafia don’t see a QE Forever sustainable global boom.
"Gold is not going to fade away
and just become another useful metal."
Donald Hoppe
Petrobras-led group wins Brazil oil auction with minimum bid
RIO DE JANEIRO |(Reuters) - Brazilian state-run energy company Petrobras teamed up with European oil majors and Chinese rivals on Monday to buy the country's biggest-ever oil field with a lone bid at the minimum price, a disappointing outcome for a sale that was supposed to launch Brazil as a petroleum power.
The auction, which proceeded as hundreds of protestors criticized the sale to private companies of the country's natural resources, was notable because it sparked only a fraction of the appetite that was originally expected.
Rather than attract multiple bidders and the many global energy players who had long expressed interest in fast-growing Brazilian discoveries, the auction for the giant offshore Libra oil area drew just one tepid bid from a consortium offering the minimum price allowed.
Petroleo Brasileiro SA (PETR4.SA), as Petrobras is formally known, took 40 percent of the field in the auction, more than the minimum 30 percent that it was guaranteed by law. France's Total SA (TOTF.PA) and Anglo-Dutch Royal Dutch Shell Plc (RDSa.L) will each have 20 percent of the partnership, while China National Petroleum Corp CNPET.UL and China's CNOOC (0883.HK) took 10 percent a piece.
Highlighting the lackluster interest by most major oil companies in the auction, the companies agreed to give the government the minimum legal amount of so-called "profit oil" from the fields - or oil produced after initial investment costs are paid. Under the terms of a new production-sharing contract, that minimum was set at 41.65 percent of profit oil.
More
We note with growing concern that the Baltic Dry
(shipping) Index rally seems to have stalled if not reversed. Is the global
economies’ wobble getting worse? Is China applying the brakes again? Right now
it’s too soon to call. We also note with growing concern that crude oil inventories
seem to be building with the crude oil price dipping back below $100 again in
New York. Not a sign associated with
growing sustainable global recovery.
We end for the day with yet another property bubble
inflating in London. With all the global fiat cash creation, and “tapering” out of the question in America into the
spring, if at all, if the BDI an oil are merely blips in a world really in the
first phase of a breakout recovery, we are just about to venture out on
Inflation Street.
Sellers 'get what they want' in crazy London property market
Asking prices in one London borough are up 12pc in just four weeks - or an average £170,000 per property - but in the rest of Britain 70pc of homes don't even keep pace with inflation.
----In two London boroughs, Kensington and Chelsea and Westminster, asking prices are up by 12pc in just one month - and almost 30pc over the past year. These figures come from Rightmove, the property group.On average London asking prices for October were up by over 10pc on September's figure, Rightmove said. The average asking price in the capital was £493,700 in September rising to £544,200 in October - an increase of over £50,000 per property.
Although Rightmove's index is closely followed by property pundits it differs from other indices in that it captures asking prices - what vendors hope to achieve at a sale - rather than actual values at transaction. As such it is regarded as a predictive measure of prices and sentiment.
Over short periods it is highly volatile - rising sharply as sentiment improves and then falling back when vendors are more downbeat.
But because it takes into account prices of almost all properties advertised via the UK's 10,000-odd estate agents it is viewed as more comprhensive than data from Halifax or Nationwide, which is based on the mortgages these repective lenders agree to advance to customers. These lender indices exclude transactions where no mortgages are involved.
More
"The gold standard makes the money's purchasing power independent of the changing, ambitions and doctrines of political parties and pressure groups. This is not a defect of the gold standard; it is its main excellence."
Ludwig von Mises
At the Comex silver depositories Monday final figures were: Registered 43.87 Moz,
Eligible 121.40 Moz, Total 165.27 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Below, more on the fall of Brazil’s richest man
that might have something to do with Brazil’s underwhelming oil auction. Loaded
up on leveraged debt, mostly to banks, Eike Batista bet the ranch on an
offshore oil play that’s turned into the equivalent of a dry hole. Latin
America and many of the world’s banks are about to experience their very own “Lehman
moment.” Stay long physical gold and silver. Our new lawless age is starting to
fall apart on every continent.
Insight: As Brazil's Batista falters, Rio dream does too
RIO DE JANEIRO |(Reuters) - Investors who bet on Eike Batista have lost billions over the past year as the Brazilian's ephemeral business empire imploded.
But they haven't been the only losers - the onetime Amazon gold trader and former speedboat racer's hometown of Rio de Janeiro has also been shaken by his rapid decline.
Beginning in 2006, Batista floated a series of mining, energy and shipping companies through share offers that by 2012 made him the world's seventh richest man, valued by Forbes magazine at $30 billion. All the companies' names, including that of his EBX conglomerate, ended in X, a letter he said symbolized the multiplication of wealth.
With the same verve he used to woo investors, Batista also became the biggest booster of a hoped-for revival in Rio, the verdant, seaside metropolis whose glorious past as Brazil's capital and cultural center had in recent decades given way to crime, violence and the unfettered sprawl of slums.
At his peak, Eike, as the 56-year-old is known locally, bankrolled the campaign that lured the 2016 Olympics to Rio. He paid for police vehicles in poor neighborhoods and partially decontaminated a popular local lagoon.
He bought a landmark waterfront hotel and nearby marina and vowed to make natives of rival São Paulo, the country's business capital, "die with envy." Along with some progress by local officials against crime, litter and other urban blight, Batista's efforts helped fuel a sense that a rebound was indeed underway, at least in wealthier parts of town.
"I don't know where we would be without him," says Rosa Celia Barbosa, a Rio cardiologist who received a 30 million real ($13.9 million) donation from Batista in 2011 for a charity hospital for children. After struggling for more than a decade with funding, she finally had enough to pay for final construction and equipment costs.
But now, as creditors pick over what's left of Batista's holdings, his dream for Rio is all but bankrupt.
His star is burning out just as the city readies for the Olympics and next year's World Cup soccer tournament, two events he hoped would showcase his role as Rio's self-styled benefactor.
"People here believed in this patron, this tycoon who would finance a transformation that not even the government could," says Fernando Gabeira, a former national Congressman and mayoral and gubernatorial candidate. "He meant well, but reality took over."
Batista, through a spokeswoman, declined to comment on his derailed Rio plans.
More
"Whenever an overall breakdown of a monetary or financial system occurs, return to gold always restores order, revives confidence and brings back prosperity.”
Donald Hoppe
The monthly Coppock Indicators finished September:
DJIA: +167 Up. NASDAQ: +213 Up. SP500: +203 Up. All
three are back positive again, thanks to continued Fed QE. High risk speculators will now use any stocks
sell-off to go long. After the last Fed meeting and QE U-turn, the Bernocchio
put is back on.
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