Baltic Dry Index. 2011 -114
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
"It is important to remember that government interference always means either violent action or the threat of such action.....taxes are paid because the taxpayers are afraid of offering resistance to the tax gatherers. They know that any disobedience or resistance is hopeless. As long as this is the state of affairs, the government is able to collect the money that it wants to spend. Government is in the last resort the employer of armed men, of policemen, gendarmes, soldiers, prison guards, and hangmen. The essential feature of government is the enforcement of its decrees by beating, killing, and imprisoning. Those who are asking for more government interference are asking ultimately for more compulsion and less freedom."
Ludwig von Mises
This time it wasn’t different either. In Washington
DC, the Republican Party finally blinked. There will be no need for President
Obama and the Democrats to start issuing scrip or Disney dollars before the end
of the month. Retirees, veterans, those on food stamps, Medicaid and Medicare, can
all breath a big sigh of relief. They probably know which way to vote in the
next election. Johnny Foreigner too, holding all those trillions of US
government debt, they go into the weekend secure in the knowledge that Uncle
Scam won’t become a deadbeat chiseller after all. The Republicans, like the Grand Old Duke of
York, marched their men up and down the hill several times but to no effect.
President Obama wins the day, but will allow some fig leaf of decorum to the
defeated Republican’s, much as General Washington did to Lord Cornwallis at
Yorktown. Stock markets rallied on the news. With QE forever and more ECB LTRO
to come, what’s not to like in our pre Great inflation lull. Stay long physical
precious metals for what comes next.
"We are in a world of irredeemable paper money - a state of affairs unprecedented in history."
John Exter
Republicans Enter Talks With Obama on Debt Limit Increase
By Roxana Tiron, Richard
Rubin & Terry Atlas - Oct 11, 2013 5:00 AM GMT
President Barack Obama and House Republican leaders were moving
toward an agreement to extend the nation’s borrowing authority even as they remained
at odds over terms for ending the partial government shutdown. They met for 90 minutes at the White House yesterday after House Speaker John Boehner of Ohio said he would offer a measure to postpone a potential U.S. default to Nov. 22 from Oct. 17, a step back from the brink that was enough to trigger the biggest rise in U.S. stocks in nine months.
The
developments were the first sign that the president and House Republican
leaders could resolve the fiscal impasse without negative economic consequences
from a default as the halt in government operations moved into its 11th day.
----Obama didn’t accept or reject House Republicans’ plan for a short-term increase in the debt limit, and the two sides planned further talks among their staff members last night to address the president’s insistence that Republicans agree to fund the government before starting broader fiscal talks.
“No specific determination was made,” the White House said in a statement. The two sides talked about “potential paths forward.”
Representative Eric Cantor of Virginia, the House majority leader, called the meeting “constructive” and that with talks continuing overnight “hopefully we will have a clearer way, path forward.”
Obama began the meeting by acknowledging that Republican leaders’ offer to extend the debt limit was a positive step while urging them to open the government, according to a Democratic official who asked not to be identified discussing the closed-door deliberations.
More
Euro Index Futures Rise With Asian Stocks as Gold Climbs
By Pratish Narayanan & Emma O’Brien - Oct 11, 2013 7:13 AM GMT
European index futures and Asian stocks rose as U.S. lawmakers continued
talks on raising the nation’s debt limit to avoid a default. Zinc and gold
climbed with emerging-market currencies. Euro Stoxx 50 contracts added 0.3 percent by 7:08 a.m. in London as the MSCI Asia Pacific Index was up 1.3 percent, rising for a fourth day in the longest rally in a month. Standard & Poor’s 500 Index futures were little changed. The cost of insuring Asia-Pacific bonds from non-payment declined to the lowest in about three weeks. South Korea’s won and Malaysian ringgit gained for a second day. Gold climbed 0.3 percent as zinc rose 0.5 percent. Crude fell 0.3 percent.
The
S&P 500 index jumped the most since Jan. 2 and Treasury bill rates
dropped yesterday on optimism an agreement will be reached to raise the U.S.
debt ceiling before an Oct. 17 deadline.
More
http://www.bloomberg.com/news/2013-10-10/u-s-futures-slip-amid-debt-talks-as-dollar-pares-gains.html
Meanwhile Europe got the green light to start bubbling
again. The banksters are to be refloated with tidal waves of new cash from
heaven, anytime market volatility resumes and the banksters lose their shirts
by betting wrong. Whatever “ism” this is, it certainly isn’t capitalism.
"All previous attempts to base money solely on intangibles such as credit or government edict or fiat have ended in inflationary panic and disaster."
Donald Hoppe
Draghi Says ECB Guidance Allows Rate Cuts on Volatility
By Jeff Black & Craig Stirling - Oct 11, 2013 7:25 AM GMT
European Central Bank President Mario Draghi said policy makers’ pledge to keep
interest rates low explicitly allows for cuts in borrowing costs if market
volatility resumes. “The Governing Council has unanimously agreed to incorporate an easing bias that explicitly provides for further rate reductions, should the volatility in money market conditions return to the levels observed in early summer,” Draghi said at the Economic Club of New York yesterday.
ECB policy makers are seeking to prevent volatility in market rates from derailing a euro-area economic recovery that Draghi said was subdued, uneven and fragile. To that end, they pledged in July to keep official interest rates at or below current levels for “an extended period.” Borrowing costs had risen after the U.S. Federal Reserve said it was considering tapering its stimulus later this year.
The overnight rate that banks expect to charge each other by the ECB’s October 2014 meeting, as measured by Eonia forward contracts, was at 0.24 percent in Frankfurt today. The measure was below 0.1 percent in May and climbed as high as 0.37 percent in June before the ECB announced its unprecedented forward guidance.
Unlike the Fed and the Bank of England, the ECB doesn’t give a specific time frame or a link to particular economic data for its rate pledge. Instead, Draghi reiterated that it depends on the outlook for prices.
More
IMF and Europe Part Ways Over Bailouts
Euro Zone and IMF Could Be Heading for a Divorce
Updated
Oct. 11, 2013 2:55 a.m. ET
The euro
zone and the International Monetary Fund were thrown into each other's arms
when Greece's debt crisis began early in 2010. Now, officials say, they could
be heading for a divorce.
As
representatives from both sides meet at the end of this week in Washington to
discuss Greece's need for extra cash and a lighter debt load, the clashes that
have built up over the past three years are coming to a head.
"The
divorce between Europe and the IMF is real," Antonio Borges , a former
European director at the IMF, said in an interview in June, just months before
he died of cancer at the age of 63. "The fund is going back to its normal
way of business. It is an institution used to being alone in calling the
shots," Mr. Borges said.
----The Washington-based IMF joined the European Commission and the European Central Bank as a "troika" of institutions in handling the Greek, and subsequently the Irish, Portuguese and Cypriot bailouts.
It
started well. When the IMF team arrived in Athens in April 2010, one European
official there described it as "almost like the U.S. Marine Corps arriving
in a war zone." The fund and its expertise, he said, were
"indispensable."
But it
wasn't long before tensions emerged. The fund, Mr. Borges said, pulled a
template program from the shelf, failing to consider that Greece's policy
options were severely limited by its membership of the euro. "Greece is
the saddest case of all," Mr. Borges said. "The program was wrong
from the start."
Three
years on, troika staffers now recount how they were involved in shouting
matches over Greek growth projections, bank restructurings and public
debt-to-output ratios.
More
From America through Europe to China and Japan, we
have gone from the sound money, free enterprise capitalism of pre-August 1971,
to the government run crony banksterism of the 21st century. The rot
set in fast on the Great Nixonian Error of fiat money. By 1987 it all collapsed
in the great stock market rout of October 19th 1987. Fallen former guru
“bubbles” Greenspan and his ilk, fixed that by a delayed stock market opening
and rigging the Major Market Index futures opening in Chicago which wasn’t
delayed. By tipping off the Fed’s
cronies in advance, by the time US stock markets reopened, index stocks were
hopelessly under-priced in relation to the MMI. It’s all so easy with
hindsight. The Greenspan put was born and serial bubbles and casino capitalism
was born with it. From Mexico to LTCM, every “glitch” was bubbled away by the new
free money pouring forth from the Fed. Bankster socialism began in earnest in
1987. By 2007, what could possibly go wrong?
Bad money had driven out good, that’s what, and bad
ethics or no ethics had ushered in our new lawless era. “Grab it and run,” had
replaced “my word is my bond” among the Great Vampire Squids and banksters.
Routine market rigging was the name of the game. From the Fed’s rigging stocks
and gold, to everyone else rigging oil to, MBS, CDOs to Liebor. But this time
it isn’t different either. Nothing has been fixed in our new lawless age. The
now generation is stealing from the future, with the youth generation already
paying the price through dangerously high unemployment. On ZIRP, the thrifty and
prudent are robbed blind to support the feckless. The middle class and retirees
are squeezed out to support the bankster one percent. From Brazil to India food
and fuel price inflation is already wreaking havoc. It is only a matter of time
until it spreads into North America and Europe. QE and LTRO forever, aren’t a
free lunch. Goods and resources are finite. Free money from heaven isn’t.
Sooner or later the two clash in a Great War of inflation leading to fiat
currency revulsion.
For now we live on in the phony war lull. Time to
load up the larder with physical precious metals.
“The problem with fiat money is that it rewards the minority that can handle money, but fools the generation that has worked and saved money.”
“Adam Smith” aka George Goodman.
At the Comex silver depositories Thursday final figures were: Registered 43.15
Moz, Eligible 122.40 Moz, Total 165.55 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
We end for the week with more on our unravelling
American centric world. The 300 year old British Empire was replaced in 1945 by
the new American Empire. With Stalin in control of murderous communism, shortly
to be joined by murderous Mao, most of civilisation was only too happy to
become protected vassal states. How things have changed by 2013. Tomorrow will
not be like today which was like yesterday.
"The fate of the nation and the fate of the currency are one and the same."
Dr. Franz Pick
Photos From Asia Show Obama’s Absence Left U.S. Demoted
By Indira
A.R. Lakshmanan - Oct 11, 2013 1:15 AM GMT
If a picture is worth a thousand words, photos from two global summits in
Asia this week reveal all you need to know about how President Barack Obama’s
absence due to the budget fight in Washington has
marginalized the U.S. At the Asia-Pacific Economic Cooperation summit in Bali, the official photo of leaders in matching batik shirts shows a smiling Chinese President Xi Jinping and Russian President Vladimir Putin flanking the host, Indonesia’s president. In the far right corner of the back row, at the edge of the stage, is U.S. Secretary of State John Kerry, who’s been standing in for Obama all week at summits across Asia.
The picture from the East Asia Summit in Brunei on Oct. 9 was more of the same -- Kerry shunted to the far left, while Premier Li Keqiang, China’s second-ranking leader, basked center stage next to the host, Sultan Hassanal Bolkiah. At the gala dinner, Kerry was seated at one end of a long table, between the Malaysian prime minister’s wife and an empty chair.
For a White House that’s made Asia a second-term priority and sought to underscore America’s centrality to trade, growth and security in the fastest-growing region in the world, the optics haven’t been great, as they say in Washington.
Obama was to have occupied the place of honor to one side of the Sultan, but the U.S. was demoted in his absence, said one U.S. official. Protocol dictates that foreign ministers such as Kerry and his Russian counterpart, Sergei Lavrov, who represented Putin in Brunei, were relegated to the wings, said the official, who asked not to be named because of government policy.
Kerry, the
2004 Democratic presidential candidate, tried to make the best of his lot.
Addressing a CEO summit at the APEC forum in Bali, he joked that he’d “worked
very, very hard to replace a president.” After a theatrical pause, he added:
“This is not what I had in mind.”
He
repeated the same one-liner at another gathering, both times as a prelude to
apologizing for Obama’s absence and reassuring partners that the partial
government shutdown in Washington is “nothing more” than “a moment in
politics.”
----While Obama was stuck in Washington, China’s and Russia’s leaders grabbed the limelight and headlines.
Chinese state media practically gloated that Xi and Li were the main attractions, and newspaper commentaries in Indonesia, Singapore and Hong Kong wondered if the U.S., facing a looming threat to its government’s borrowing ability, could sustain its commitment to Asia -- or if China would displace the U.S.
The Jakarta Globe ran a picture of an embattled-looking Obama with the headline: “Diminished Superpower.”
More
http://www.bloomberg.com/news/2013-10-10/photos-from-asia-show-obama-s-absence-left-u-s-demoted.html
"If ever there was an area in which to do the exact opposite of that which government and the media urge you to do, that area is the purchasing of gold."
Robert Ringer
Another weekend, and time to finish off the Republicans in Washington, it looks like from faraway London. President Obama may look like a “diminished superpower” in Jakarta, in Washington he’s all too likely to become a President back from the intensive care ward. Have a great weekend everyone.
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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