Baltic
Dry Index. 2277 +30 (Dec. 24)
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"Those
entrapped by the herd instinct are drowned in the deluges of history. But there
are always the few who observe, reason, and take precautions, and thus escape
the flood. For these few gold has been the asset of last resort."
Antony
C. Sutton
As we end
2013 and look forward to 2014, today we take stock of our new lawless age of
rigged markets, QE Forever and ZIRP, and the Great Disconnect between central
bank rigged stock markets and the reality of everyday life. Tomorrow, what I
think is in store for us in 2014.
Below, how
our financial and economic world looks this morning. In our world of rising
fanatical moslem terrorism, we seem to be ending 2013 with an Islamic global
war against the secular and Christian west plus Africa. A development only likely
to get worse in 2014.
Dollar Touches 5-Year High
as U.S. Recovery Sustains Taper Pace
By Kristine Aquino Dec 30, 2013 6:41 AM GMT
The dollar touched a five-year high versus the yen and headed for an annual
gain against major peers amid optimism a sustained U.S. economic recovery will
allow the
Federal Reserve to cease bond purchases by the end of 2014.
The Bloomberg U.S. Dollar Index is set for its biggest annual advance in
five years before reports this week that may show improvements in housing and
manufacturing. The euro is poised for the strongest advance among major
developed currencies as European Central Bank officials damp prospects for
interest-rate cuts.
Japan’s
yen was poised for a yearly slide versus most major counterparts as Asian
stocks strengthened, curbing demand for haven assets.
“As long as the data flow continues to be positive and risk appetite is
positive, you get the dollar supported,” said Emma Lawson, a senior currency
strategist at National Australia Bank Ltd. in Sydney.
More
China Cash-for-Votes Scandal
Shows Xi’s Graft Challenge
By Bloomberg News Dec 30, 2013 4:36 AM GMT
A cash-for-votes scandal in
China’s southern city of Hengyang that snared more than 500
lawmakers underscores the challenges facing
Xi Jinping as
he enters his second year in charge of the world’s second-biggest economy.
The unprecedented electoral fraud, which led to the resignations of almost
the entire city People’s Congress, was disclosed on Dec. 28, less than a week
after the ruling Communist Party issued a new plan to fight corruption and
described the situation as “critical and complicated.”
Authorities are intensifying a graft crackdown a year after Xi took control
of the party with a warning the issue could lead to social unrest and end its
six-decade grip on power. Targeting both “tigers and flies” -- as Xi described
perpetrators of all ranks -- may bolster the party’s image as economic
expansion slows and public discontent over corruption spreads.
More
Chinese police shoot dead
eight after Xinjiang 'terrorist attack'
BEIJING Sun Dec 29, 2013
11:21pm EST
(Reuters) - Police in China's
restive far western region of Xinjiang shot dead eight people during a
"terrorist attack" on Monday, the regional government said, the
second outbreak of violent unrest this month in a region that has a substantial
Muslim population.
The attack happened in Yarkand
county close to the old Silk Road city of Kashgar in Xinjiang's far south, the
Xinjiang government said in a statement on its official news website
(www.ts.cn).
"At around 6:30 am, nine
thugs carrying knives attacked a police station in Kashgar's Yarkand county,
throwing explosive devices and setting police cars on fire," the brief
statement said.
"The police took decisive
measures, shooting dead eight and capturing one," it added, labeling the
incident a "violent terrorist attack" which was being investigated
further.
Earlier this month, police shot
and killed 14 people during a riot near Kashgar in which two policemen were
also killed.
More
Japan Consumer Prices Seen
Rising Five Times as Fast as Wages
By James Mayger and Cynthia Li Dec 30, 2013 1:33 AM GMT
Japanese employers will fail in the next fiscal year to heed Prime Minister
Shinzo Abe’s goal of wage increases that outpace inflation, highlighting risks
that the nation’s recovery will stall, surveys of economists show.
Labor cash earnings, the benchmark for wages, will increase 0.6 percent in
the year starting April 1, according to the median forecast in a poll of 16
economists by
Bloomberg News. Consumer prices will climb five times
faster, increasing 3 percent, as Japan raises a sales tax for the first time
since 1997, a separate Bloomberg survey shows.
The squeeze on consumers from higher prices risks undermining public support
for Abenomics and dragging on retail spending, unless Abe can convince
companies to boost wages to cushion the blow. At stake is sustaining a recovery
in the world’s third-biggest economy, set to expand this year at the fastest
pace since 2010 as Abe tries to drive an exit from 15 years of deflation.
----In an interview
in Tokyo this month, Abe urged companies to increase wages faster than gains in
the cost of living. “For us to escape deflation it is extremely important that
wages rise,” Abe said Dec. 6.
More
Special Report: Japan's
homeless recruited for murky Fukushima clean-up
By Mari Saito and Antoni Slodkowski SENDAI, Japan Mon Dec 30, 2013 12:44am
(Reuters) - Seiji Sasa hits the train station in this northern Japanese city
before dawn most mornings to prowl for homeless men.
He isn't a social worker. He's a recruiter.
The men in Sendai Station are potential laborers that Sasa can dispatch to
contractors in Japan's nuclear disaster zone for a bounty of $100 a head.
"This is how labor recruiters like me
come in every day," Sasa says, as he strides past men sleeping on
cardboard and clutching at their coats against the early winter cold
It's also how
Japan
finds people willing to accept minimum wage for one of the most undesirable
jobs in the industrialized world: working on the $35 billion, taxpayer-funded
effort to clean up radioactive fallout across an area of northern Japan larger
than Hong Kong.
Almost three years ago, a massive earthquake
and tsunami leveled villages across Japan's northeast coast and set off
multiple meltdowns at the Fukushima nuclear plant. Today, the most ambitious
radiation clean-up ever attempted is running behind schedule. The effort is
being dogged by both a lack of oversight and a shortage of workers, according
to a Reuters analysis of contracts and interviews with dozens of those
involved.
----Part of the problem in monitoring taxpayer money in Fukushima is the
sheer number of companies involved in decontamination, extending from the major
contractors at the top to tiny subcontractors many layers below them. The total
number has not been announced. But in the 10 most contaminated towns and a
highway that runs north past the gates of the wrecked plant in Fukushima,
Reuters found 733 companies were performing work for the Ministry of
Environment, according to partial contract terms released by the ministry in
August under Japan's information disclosure law.
Reuters found 56 subcontractors listed on
environment ministry contracts worth a total of $2.5 billion in the most
radiated areas of Fukushima that would have been barred from traditional public
works because they had not been vetted by the construction ministry.
More
Aussie Dollar Set for
Biggest Yearly Drop Since ’08 on Fed Taper
By Mariko Ishikawa Dec 30, 2013 6:32 AM GMT
Australia’s dollar
headed for its biggest yearly decline since 2008 as signs of improvement in
U.S. economy
boosted expectations the
Federal Reserve will continue to scale back stimulus that
has debased the greenback.
The Aussie dollar weakened today, extending the worst weekly run of losses
in more than three decades before data which may show expansion in Chinese
manufacturing slowed. Iron ore ports on Australia’s northwest coast began
shutting down over the weekend before Tropical Cyclone Christine hits land
tonight, after being upgraded to a Category 3 storm by Australia’s Bureau of
Meteorology. New Zealand’s dollar declined for a sixth day versus the U.S.
currency.
“The big theme has been Fed tapering,” said Janu Chan, economist at St.
George Bank Ltd. in Sydney. “With that set to continue into 2014, we’ll expect
the Aussie to come under some further pressure over the next year.”
More
France approves 75pc company
tax on €1m salaries
President Hollande's controversial measure receives the green-light from
France's highest court
By Ashley Armstrong 11:37AM GMT
29 Dec 2013
France’s highest court has
approved President Francois Hollande’s 75pc company “supertax” rate on annual
salaries exceeding €1m.
The decision is a step-change for
the Constitutional Council which last year ruled a measure to impose a 75pc tax
on individuals earning over €1m as “unconstitutional.”
The council said at the time the
tax band did not guarantee equality for taxpayers because two households with
the same total revenue could end up with different tax bills.
Mr Hollande’s redrafted proposal
instead makes companies pay for the high-earner salaries.
Mr Hollande, who once publicly
declared "I don't like the rich", had called for economic
"patriotism" from France's wealthiest citizens.
More
Insight: Italy's Chinese
garment workshops boom as workers suffer
By Silvia Aloisi PRATO, Italy Sun Dec 29, 2013 5:11pm EST
(Reuters) - Shen Jianhe lost both her job and home when Italian police shut
down her garment factory in the Tuscan city of Prato.
By day, the 38-year-old mother of four would
sew trousers at one of the nearly 5,000 workshops run by Chinese immigrants in
Prato, which largely turn out cheap clothing for fast-fashion companies in
Italy
and across Europe.
At night she slept in a plasterboard cubicle
hidden behind a wooden wardrobe at the Shen Wu factory - until the police
arrived one cold December morning. They sealed the doors and confiscated the 25
sewing machines under a crackdown on an industry that is booming but blighted
by illegality and sweatshop conditions.
----Prato, the historical capital of Italy's textile
business, has attracted the largest concentration of
Chinese-run industry in Europe within less than 20 years.
As many as 50,000 Chinese live and work in
the area, making clothes bearing the prized "Made in
Italy"
label which sets them apart from garments produced in
China itself, even at the lower end of the
fashion
business.
In some ways, the Chinese community of Prato
has succeeded where Italian companies have failed. Italy's
economy
has barely grown over the past decade and is only just emerging from recession,
partly due to the inability of many small manufacturers to keep up with global
competition.
Yet Prato, which lies 25 km (16 miles) from
the Renaissance jewel of Florence, is also a thriving hub of illegality
committed by both Italians and Chinese, a byproduct of globalization gone
wrong, many people in the city say.
Up to two thirds of the Chinese in Prato are
illegal immigrants, according to local authorities. About 90 percent of the
Chinese factories - virtually all of which are rented out to Chinese
entrepreneurs by Italians who own the buildings -break the law in various ways,
says Aldo Milone, the city councilor in charge of security.
More
http://www.reuters.com/article/2013/12/29/us-italy-sweatshop-insight-idUSBRE9BS04D20131229
SFO plots charges over Libor
scandal
More bankers and traders to face action in new year as fraud office reveals
extent of rate inquiry
By
Harry Wilson 9:00PM GMT 28 Dec 2013
British authorities are preparing
charges against several more bankers and traders in connection with the
Libor-rigging scandal, the country’s top fraud investigator has revealed.
David Green, director-general of
the Serious Fraud Office, said the agency was in the process of an “enormous”
investigation into interest rate manipulation, with about a fifth of its staff
now working on the inquiry.
Three men have already been
charged by the SFO over allegations they were involved in attempts to rig the
benchmark index, including former Citigroup and UBS trader, Tom Hayes. The SFO
currently has a team of 60 working on the investigation, out of a total staff
of more than 300.
US prosecutors had wanted to try Mr
Hayes and two former brokers in America. But the SFO charges mean that the men
will now face trial in Britain.
More
Turkey Is Biggest Loser in
Stocks as Erdogan Crisis Persists
By Ye Xie and Katia Porzecanski Dec 30, 2013 5:09 AM GMT
The mounting power struggle between Turkish Prime Minister
Recep
Tayyip Erdogan and the judiciary is turning the stock market into the
world’s worst performer and driving the currency to unprecedented lows.
The
Borsa Istanbul 100 Index (XU100) has
slumped 21 percent in dollar terms this month, extending this year’s slide to
32 percent, as a corruption probe embroiled Erdogan’s cabinet and led to three
ministerial resignations. The declines were the worst among more than 90
benchmark gauges tracked by Bloomberg.
Turkey’s lira has
sunk 6.3 percent this month, the most among emerging-market currencies, and
traded at a record low of 2.1764 per dollar last week.
The crisis threatens to undo the economic gains Erdogan made in
orchestrating a decade of almost uninterrupted growth that earned Turkey its
first investment-grade credit ratings since the early 1990s. The investigation,
which Erdogan labeled a coup attempt, is deepening the conflict between the
government and followers of U.S.-based Islamic cleric Fethullah Gulen, who are
influential in the judiciary and police force.
More
"For
more than two thousand years gold's natural qualities made it man's universal
medium of exchange. In contrast to political money, gold is honest money that survived
the ages and will live on long after the political fiats of today have gone the
way of all paper."
Hans
F. Sennholz
At the Comex
silver depositories Friday
final figures were: Registered 51.21 Moz, Eligible 122.00 Moz, Total 173.21 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
More on our
new lawless age. Yes it’s the banksters again, too big to fail or jail.
It’s morally wrong to let a sucker keep his money.
Ebenezer Squid, with apologies to W. C. Fields.
DOJ declined to enforce
Bernie Madoff-related subpoena of J.P. Morgan: document
December 27, 2013, 10:36 AM
The Justice Department likes to brag about being tough on the banking
industry. But just how tough?
Not as tough as the Treasury Department would like, apparently, at least
when it comes to J.P. Morgan Chase & Co.
JPM
and Bernie Madoff.
The government has been looking into whether J.P. Morgan, which had a
two-decade relationship with Madoff, ignored warning signs that the operation
he was running was actually a giant Ponzi scheme. Banks are supposed to report
suspicious activity by clients.
But the Treasury Department, in its investigation, couldn’t seem to catch a
break: In May, the Treasury’s inspector-general office subpoenaed J.P. Morgan
for Madoff-related documents, but J.P. Morgan declined. Then Treasury asked the
Department of Justice to enforce the subpoena, but the Justice Department
declined that request in September.
The documents included internal interviews that J.P. Morgan conducted with
more than 90 employees after Madoff’s arrest in December 2008. And the Office
of the Comptroller of the Currency, which regulates national banks, had
originally asked for the documents in 2009. J.P. Morgan had argued that the
documents were protected by attorney-client privilege and “work product” immunity.
The behind-the-scenes development is from a letter from the Treasury’s
inspector general, stamped Oct. 8. It was posted on the website of
Government Attic,
which posts documents obtained through Freedom of Information Act requests, and
previously reported by Newsweek.
After the Justice Department declined to enforce the subpoena, the OCC and
the Treasury’s inspector-general office agreed that the latter“could not
undertake further actions regarding the matter,” according to the letter.
“As a result we are closing this matter accordingly,” a Treasury special
agent wrote. A Justice Department spokesman in Washington declined to comment.
A Treasury Department spokesman didn’t immediately return a call for comment.
"God, no, we don't club baby seals. We club babies."
Goldmanite, quoted in The Times of London. November 8 2009
The monthly
Coppock Indicators finished November:
DJIA: +190 Up. NASDAQ: +281 Up. SP500: +232 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.
