Thursday, 14 November 2013

Say Nothing.

Baltic Dry Index. 1531 -12

LIR Gold Target by 2019: $30,000.  Revised due to QE programs.

I swear that the evidence that I shall give, shall be the truth, the whole truth and nothing but the truth, so help me God.

It’s fun and games time in America where President Obama’s choice to take over the Fed from Bernocchio at the end of January, gets to appear before the Senate confirmation committee. With so much animosity between the two Parties in Washington, fighting over the spoils of next year’s mid-term elections, a bad time is likely to be had by all. Realistically, Dr. Yellen can hardly come out repudiating “The Bernank’s” QE and ZIRP voodoo policies, still less tank the stock market by announcing a date for the Fed to taper QE. Nor can she state that QE Forever really must be forever, or else the calamity QE was started to avoid shows up, and the Fed’s final bubble bursts in the collapse of the Great Nixonian Error of fiat money. Sometimes it really is better to very little at all. In Washington, truth is a very rare commodity, believed last used by the man who cut down a cherry tree. Though not attending, the NSA and many others will be listening in.

“I was gratified to be able to answer promptly, and I did. I said I didn’t know.”

Mark Twain.

Nov. 13, 2013, 8:15 a.m. EST

Yellen’s style, if not substance, to be on display

Will get a view of how press conferences will be conducted

WASHINGTON (MarketWatch) — For the last three years as the Fed’s vice chairwoman, Janet Yellen has played the role of policy wonk to the hilt, often providing dizzyingly dry speeches on what the Bernanke Federal Reserve was thinking.

That approach will no longer work. As she nears the finish line to replace Ben Bernanke as Fed chairman, a new approach will be demanded of her, economists said.

----The hearing is likely to be a noisy affair, predicted Jaret Seiberg, a financial services industry analyst at Guggenheim Partners.

“Confirmation hearings are more about the senators on the committee than the person seeking confirmation,” Seiberg said in a research note.

The more the senators push Yellen to discuss the near-term outlook for policy, the less room Yellen will have to answer, Crandall said.

Like Supreme Court nominees in recent years, Yellen is likely to avoid providing any previews, hints or forecasts of how she might decide to move the committee.

“There remains a huge amount of uncertainty about the conditions necessary to begin winding down” the Fed’s bond-buying, said Zach Pandl, senior interest rate strategist at Columbia Management in Minneapolis.

When the Fed’s final bubble in bonds and stock markets eventually bursts, and everyone gets burnt to a cinder, the world’s banksters, speculators and gamblers can’t say that they weren’t warned what to expect.

“Never tell the truth to people who are not worthy of it.”

Mark Twain.

ECB’s Weidmann Says Low Interest Rates Come With Risks

By Stefan Riecher - Nov 13, 2013 1:46 PM GMT
European Central Bank Governing Council member Jens Weidmann said low interest rates come with risks that can’t be ignored, even though the current policy stance is appropriate.

“The expansive monetary policy is justified considering the outlook for price stability,” Weidmann, who heads Germany’s Bundesbank, said in a speech in Frankfurt today. At the same time, “one must not lose sight of the many challenges that come within an environment of low interest rates,” he said.

----“It is important to make sure that negative real interest rates won’t become a permanent state and that monetary policy isn’t captive to politics or financial markets,” Weidmann said. “Ultra-loose interest-rate policy is no substitute for structural adjustment programs, which are necessary in some euro-area member states.”

While Weidmann said he sympathizes with German savers, whose return on deposits may fall further after last week’s rate cut, he argued that investors across the euro area are affected by lower interest rates.

“There’s no specific discrimination aimed at German savers,” Weidmann said. “Every saver, who wants to invest his money with low risk, has to live with low and negative real interest rates, for example also in Italy and Spain.”

Higher-yielding investments carry higher risks, he said, adding that “one should be aware that interest rates won’t stay at this level permanently.”

Next, the EC delivers a deniable threat to the EUSSR’s paymaster. Chancellor Merkel will be laughing all the way to the bank. Euroland continues to be run by its inmates. Now even Germany is slowing. Stay long physical precious metals. How long before the ECB illegally adopts its own form of QE program? 

"Every individual is a potential gold buyer, although he may not need the gold. It may be added to the store of personal wealth, and passed from generation to generation as an object of family wealth. There is no other economic good as marketable as gold."

Hans F. Sennholz

German trade surplus could threaten eurozone recovery, says EC

Commission says Germany’s large current account surplus could make it more difficult for Europe's struggling southern states to recover

Germany's status as Europe’s industrial powerhouse could be damaging the single-currency bloc, the European Commission has said, as it launched a probe into whether the country’s large trade surplus was hindering Europe’s recovery.

Europe’s biggest economy was one of three countries singled out for an “in-depth review” by the EC’s Alert Mechanism Report on Wednesday.

The Commission said Germany’s large current account surplus, which accounts for most of the eurozone’s positive balance, “may put pressure on the euro to appreciate vis-à-vis other currencies.

“In case such pressures materialise, this would make it more difficult for the peripheral countries to recover competitiveness through internal depreciation,” it said.

----Olli Rehn, commissioner for economic and monetary affairs, added: “Let’s be clear, we are not criticising Germany’s external economic competitiveness or its success in global markets, in fact that is what we want from all EU member states,”

However, Mr Rehn said Germany’s “persistent high surplus also means that Germans are persistently investing a large part of their savings abroad. The question is whether this is efficient, even from the German perspective.”

The EC also fired a warning shot at Britain, and said rising house prices would restrain households’ ability to cut debt. The Commission highlighted Britain’s unbalanced recovery. According to Eurostat, Britain’s share of world exports declined by 19pc between 2007 and 2012.

----Meanwhile, low-tax, banking-rich Luxembourg, and Croatia, which accepted a bailout this year, were also added to the EC’s watch list.

Euro Recovery Wanes as Germany Slows and France Contracts

By Stefan Riecher, Jeff Black & Mark Deen - Nov 14, 2013 7:37 AM GMT
Germany’s economy lost momentum in the third quarter and France unexpectedly contracted, adding to evidence that the euro region’s recovery is flagging.

German GDP rose 0.3 percent from the three months through June, when it increased by 0.7 percent. That’s in line with the median of 41 estimates in a Bloomberg News survey. The French economy unexpectedly contracted 0.1 percent. The European Union’s statistics office in Luxembourg is due to publish third-quarter data for the euro area at 11 a.m. Economists predict growth slowed to 0.1 percent from 0.3 percent in the second quarter.

French Economy Shrinks as Businesses Hold Off on Investment

By Mark Deen - Nov 14, 2013 6:35 AM GMT
The French economy unexpectedly shrank in the third quarter as President Francois Hollande failed to revive corporate investment in the face of one of the world’s heaviest tax burdens.

Gross domestic product fell 0.1 percent in the three months through September, national statistics office Insee said in an e-mailed statement. Economists forecast no growth, according to the median of 24 estimates in a Bloomberg News survey.

The figures, which follow France’s exit from recession in the second quarter, underline the issues Hollande is confronting as he tries to revive Europe’s second-largest economy and reverse an increase in unemployment that’s at a 14-year high. Facing taxes equivalent to 46 percent of GDP, companies such as Cie de Saint Gobain SA are cutting investment spending or holding off raising it.

----Standard & Poor’s, which last week cut France’s sovereign credit rating, estimates that government revenue amounts to 53 percent of GDP, the highest of any country outside Scandinavia. French state spending totals more than 56 percent of GDP, the highest in the euro area and second-highest among members of the Organization for Economic Cooperation and Development, according to S&P.

Across the French economy, corporate profit margins are at their lowest level since the mid-1980s. Operating margins at French companies have contracted almost 40 percent in the last decade, figures from the Groupe des Federations Industrielles show.

We end for today on the subject of gold and fiat money. There is nothing new under the sun. Politicians, lie, steal and cheat, central banksters are their fence and enablers.

“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.

Gold turns £27,800 into £1m

Gold has achieved a staggering 3,500pc return since 1970, a new report has found

If you were an early investor in gold and have stuck by the precious metal for the past 43 years you will have made a small fortune.

A new report, released today by the Centre for Economics & Business Research and CoinInvestDirect, an online precious metals dealer, has found that the gold price has soared by some 3,500pc since 1970. This means an investor who spent £27,800 on gold and retained their investment ever since will today be a millionaire.

An investor with more modest sums would still be sitting on incredible gains. For instance, an investment of £10,000 would be worth £360,000 today.

However, the price of gold has had a rocky ride over this period, particularly in more recent years. Since 2001 the gold price has risen from $260 to trade at $1,275 today.

According to the report one of the main drivers behind gold’s success over the past decade is increased demand from emerging market economies. Fast growing countries, such as Brazil, Russia, India and China, have doubled their gold reserves since 2003. Because there have been more buyers than sellers, the gold price has been well supported.

"The emergence of Asia, Latin America, and the Middle East into the global economy has played a significant role in this dramatic price growth," the report said.

Gold Seen Flowing East as Refiners Recasting Bars for Asia

By Glenys Sim - Nov 14, 2013 7:46 AM GMT
Gold demand in China, India and the Middle East surged in the 12 months to September while European sales contracted, underscoring a shift in the global bullion market from west to east, according to the World Gold Council.

China’s demand for jewelry, bars and coins rose 30 percent to 996.3 metric tons, while usage in India gained 24 percent to 977.6 tons, WGC data showed. European demand fell 11 percent, with drops in France, Switzerland and the U.K. Asia and the Middle East’s share of global sales grew to 68 percent in the 12 months from 65 percent, while Europe’s fell to 8.3 percent from 11 percent, according to data compiled by Bloomberg.

----In Europe, gold is being refined from larger bars suitable for local users into smaller sizes preferred in Asia, the council said. Exports of bullion from the U.K. to Switzerland -- where refineries are sited -- rose more than 10-fold to 1,016.3 tons in the first eight months, it said, citing data from Eurostat, the European Union’s statistics agency.

Asian bullion demand will keep expanding as elevated inflation spurs purchases, HSBC Holdings Plc economists including Frederic Neumann wrote last month in a report that said the region is “going for gold.” A vault that can hold 2,000 tons was opened in Shanghai by Malca-Amit Global Ltd. this month to target increased demand for storage space.

"Gold was not selected arbitrarily by governments to be the monetary standard. Gold had developed for many centuries on the free market as the best money; as the commodity providing the most stable and desirable monetary medium."

Murray N. Rothbard

At the Comex silver depositories Wednesday final figures were: Registered 44.18 Moz, Eligible 124.69 Moz, Total 168.87 Moz.  

Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.

Yes we’re back to the banksters again. They all know that the Great Nixonian Error ends in a calamitous depression or a great global runaway inflation. With QE forever and ZIRP everywhere, my bet is on a great unstoppable runaway inflation.

“Get your facts first, and then you can distort them as much as you please.”

Mark Twain.

Central Banks Risk Asset Bubbles in Battle With Deflation Danger

By Rich Miller, Simon Kennedy & Michelle Jamrisko - Nov 13, 2013 3:53 AM GMT
Central banks are finding it’s easier to push up stock and home prices than it is to prevent inflation from falling short of their targets.

While declining costs for everything from gasoline to coffee can be good news for consumers, disinflation makes it harder for borrowers to pay off debts and businesses to boost profits. The greater danger comes when disinflation turns into deflation, which leads households to delay purchases in anticipation of even lower prices and companies to postpone investment and hiring as demand for their products dries up.

“There is definitely a whiff of disinflation again taking hold globally,” Robert Sinche, global strategist at Pierpont Securities Holdings LLC in Stamford, Connecticut, said Nov. 5 on Bloomberg Radio’s “Bloomberg Surveillance.”

Federal Reserve Chairman Ben S. Bernanke and his central-bank counterparts are trying to avert the deflationary danger by pumping up their economies with lower interest rates and monetary stimulus. They have bet the run-up in stock and home prices they’ve engineered would boost consumer and corporate confidence and spur faster growth and higher inflation. Now they’re having to maintain or intensify their aid -- running the risk those efforts do more harm than good by boosting equity and property prices to unsustainable levels.

“You have a wall of liquidity” that’s “leading to asset inflation and eventually to bubbles,” Nouriel Roubini, chairman of Roubini Global Economics LLC, said Nov. 7 on Bloomberg Television’s “Street Smart.”

Global inflation will be about 2.8 percent this year, the second-lowest since World War II, amid high unemployment in developed nations and slowdowns in emerging markets, according to Bruce Kasman, chief economist at JPMorgan Chase & Co. in New York. Even after policy makers slashed interest rates and bought bonds, about two-thirds of 27 inflation-targeting central banks tracked by Morgan Stanley still are undershooting their goals or watching prices rise in the lower end of preferred ranges.

“We have seen, in the last months, deflationary tensions building up,” Laurent Freixe, executive vice president of Nestle SA, the world’s biggest food company, said in an Oct. 17 conference call. “There is no growth in the marketplace, so everyone is fighting for a share of a shrinking pie.”

"Paper money has had the effect in your state [Rhode Island] that it will ever have, to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice.”

George Washington 1787

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.

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