Baltic Dry Index. 1507 -10
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
“We
have to understand that our economic system now is not capitalism in the sense
that it used to be in the 19th Century. Now the government is directing
the economy one way or another, either through budget deficits or fiat money
creation or a combination of both. And right now the Fed is in the driver’s
seat. And the Fed wants asset prices to go up.”
Richard
Duncan. Author, former specialist at the World Bank and consultant to the IMF.
For more on the thoughts of Richard Duncan, and the
new lawless age of Fedsterism, scroll down to Crooks Corner.
“The
boom can last only as long as the credit expansion progresses at an
ever-accelerated pace. The boom comes to an end as soon as additional
quantities of fiduciary media are no longer thrown upon the loan market.”
Ludwig von Mises.
Last week, Janet Yellen, the likely next Chairman
of the Federal Reserve taking over in February next year, essentially told us
all not to fight the Fed. A Yellen Fed has no intention of tapering or ending
ZIRP. Quite the contrary. Under Yellen, the Fed is more likely to supercharge
its QE policy. First there are the spoils of the US mid-term elections to be
fought over next November, after that comes the two year war to win the next
Presidency. No way is the new Fedster
about to take away the punchbowl before the end of 2016.
Still as the new Fedster is all too likely to find
out between now and then, neither the Fed, nor the President and the legions of
bent and dodgy politicians are really in control. As Prime Minister Harold
Macmillan remarked when asked what a prime minister most feared: 'Events, dear
boy, events'." Between November 2013 and November 2016, we are about to be
glutted with “events.” Stay long fully paid up physical gold and silver, using
the present dip as an entry opportunity. While stocks will rise until one day the
Yellen supercharger goes “boom,” QE Forever on steroids, “to infinity and
beyond,” can’t be forever without generating the era of a Giant Inflation as
all nations rush to swap paper for anything and everything of intrinsic long
term value. Unfortunately ending QE Forever or even tapering it, ends the Fed’s
final bubble in a massive Great Panic, as everyone tries to get out at the top.
Since the Fed will never intentionally do that, though an unintended
consequence might, the sensible thing now is to prepare to protect some long
term wealth for the coming age of inflation.
Up next, it’s an
ill wind and all that. Capital flight from Euroland and the middle east, among
others, has set off a boom in London and the greater south east. With President
Hollande of France determined to turn France into the Venezuela of Europe but
without oil, young and old established entrepreneurs of France are increasingly
willing to brave southern and eastern England’s dubious weather and foods and
lack of horsemeat, for the chance of prosperity and holding onto wealth. Now if
we could just get rid of the Scots.
London Lures Billionaires as Mansions Seen as Safe Haven
By Jeremy Kahn - Nov 18, 2013 12:00 AM GMT
“We’ve had offers of around 25 million pounds, but they aren’t quite high
enough,” says Noel de Keyzer, a veteran broker for Savills Plc,
a London-based real estate agency. We are standing in a surprisingly sunlit
subterranean family room beneath the garden of 29 Brompton Square in
Knightsbridge, on the market for £27.5 million. Damien Hirst butterfly prints
hang on the earth-tone walls of the recently renovated, fully furnished 1820s
house. “I would say that eight out of 10 buyers will take a house like this lock, stock and barrel, including the contents, and do very little in terms of altering the design,” de Keyzer says. By “a house like this,” de Keyzer means super-prime -- the designation given to properties asking in excess of £10 million ($16 million), Bloomberg Pursuits magazine will report in its Holiday 2013 issue
Despite
the global financial crisis -- or, more accurately, because of it -- prices in
the London neighborhoods of Belgravia, Chelsea, Kensington, Knightsbridge and
Mayfair have risen 23 percent from their previous peak in March 2008, according
to real estate brokerage Knight Frank LLP.
Since
2009, more super-prime properties have traded hands in London than in any other
city, including Hong Kong, New York and Singapore; last year, the city
accounted for about a third of the approximately 300 super-prime sales
globally, according to research from Savills.
Fear as
much as greed drives the super-prime market. Although a third of London’s
super-prime buyers are British, safety-seeking internationals predominate. Oil
sheiks want an Arab Spring insurance policy. Wealthy French have fled President
Francois Hollande’s new tax regime.
Ultra-high-net-worth
individuals from the periphery of the euro zone -- Cyprus, Greece, Italy,
Portugal -- have sought to shift assets out of the besieged currency and into
pounds. For Russians, de Keyzer says, “the Putin factor” -- the fear of a
sudden shift in political winds -- cannot be underestimated.
More
Reading, Aberdeen and Edinburgh top UK cities for 'good growth'
New index of success says bigger cities such as London lose out due to high house prices and transport congestion
London
may have been a powerhouse of growth in the last decade, but the capital is
amongst the UK's worst cities on one measure of economic success.
The 2013
"good growth index", devised by PwC and the think tank Demos, lists
Reading, Aberdeen, Edinburgh and Southampton as the best performing cities.
The
report claims to give a wider measure of a city's success than just GDP, and
includes job opportunities, skills, transport and work-life balance.
Top 10
cities on Good Growth Index
1.
Reading and Bracknell
2. Aberdeen
3. Edinburgh
4. Southampton
5. Cambridge
6. Oxford
7. Preston
8. Bristol
9. Belfast
10. Norwich
2. Aberdeen
3. Edinburgh
4. Southampton
5. Cambridge
6. Oxford
7. Preston
8. Bristol
9. Belfast
10. Norwich
Big cities like London, Newcastle, Liverpool and Birmingham
fared less well due to congestion, high house prices, income inequality and
"other quality of life indicators", the report said.
More
In other news this morning, bubble’s are back in
favour again.
There can be few fields of human endeavour in which history counts for
so little as in the world of finance. Past experience, to the extent that it is
part of memory at all, is dismissed as the primitive refuge of those who do not
have the insight to appreciate the incredible wonders of the present.
J. K. Galbraith
Asia Stocks Gain on China as Europe Futures Drop With Oil
By Glenys Sim & Emma O’Brien - Nov 18, 2013 7:41 AM GMT
Asian
stocks rose after China vowed to carry out the broadest expansion of economic
freedoms since at least the 1990s, while India’s rupee headed
for its biggest gain in a month. European stock-index futures declined after
the longest rally in 15 months, and oil fell.
---- Chinese leaders pledged to allow more private investment in state-controlled industries and expand farmers’ land rights post the Communist Party plenum meeting. In Europe, European Central Bank executive board member Yves Mersch is among 14 officials speaking at Frankfurt’s biggest finance conference which starts today, while New York Federal Reserve Bank President William C. Dudley is scheduled to appear after Chairman nominee Janet Yellen said last week she wants to maintain the central bank’s record stimulus program until the U.S. economy improves.
“The initial reaction to the Chinese communication was a negative one but as we’re getting more detail, it looks like this is a revolutionary change,” Nader Naeimi, the Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages $131 billion, told Bloomberg Television. “We’re starting to get optimism coming through the market. The turnaround in sentiment and the improving macro data should push the equity market higher into 2014.”
More
“The U.S. government has a technology, called a printing press
(or, today, its electronic equivalent), that allows it to produce as many U.S.
dollars as it wishes at essentially no cost…We conclude that under a
paper-money system, a determined government can always generate higher spending
and hence positive inflation.”
Dr. Ben Bernanke
At the Comex silver depositories Friday final figures were: Registered 44.25 Moz,
Eligible 124.37 Moz, Total 168.62 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
It’s all about stocks, stupid. To misquote the US President that set off
a serial line of ever worse US Presidents.
In central
banking as in diplomacy, style, conservative tailoring, and an easy association
with the affluent count greatly and results far much less.
J. K. Galbraith
Richard Duncan: Fed Targeting 20,000 on the Dow
By FS Staff 11/15/2013
Richard
Duncan—author, former specialist at the World Bank and consultant to the
IMF—says the Federal Reserve plans to stimulate the stock market by 10-15% each
year for the next two years.
“My
opinion is that credit growth will remain insufficient to drive economic growth
and, therefore, the Fed is going to have to continue [its efforts] through fiat
money creation; and their goal is 10-15% appreciation of the stock market a
year in order to create a wealth effect and push up asset prices to create
consumption and to drive the U.S. and global economy,” he explained in a recent
interview with Financial Sense.
If
Richard’s analysis is correct, that means the Fed has a target of around 20,000
on the Dow before backing off its quantitative easing program.
----To understand how long the Fed can continue to monetize U.S. government debt and keep interest rates suppressed without major risks, Richard points to Japan, where debt to GDP is near 250%.
“Japanese
government debt increased from 60% of GDP in 1990 to now where it up to almost
250% of Japan’s GDP. U.S. government debt is only 100% of US GDP. So, the US
government has the potential to continue borrowing and spending easily for the
next decade before it’s anywhere near the levels of Japan’s government debt at
the moment. So, the government does have the ability to continue directing the
economy through fiscal spending and quantitative easing so long as inflation
doesn’t rear its ugly head.”
Although
many people think the Fed’s efforts are undermining capitalism and free market
forces, Richard says that once we severed the link between gold and the dollar
under Nixon, capitalism was no longer the force driving economic growth. Now,
he says, we have “Creditism.”
More
There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.
Ludwig von Mises.
The monthly Coppock Indicators finished October:
DJIA: +178 Up. NASDAQ: +238 Up. SP500: +217 Up. The
Fed’s final bubble continues to grow, until QE Forever isn’t forever. Up will
remain up, until one fine day out of the blue the Fed finally loses control, or
the next Lehman hits.
No comments:
Post a Comment