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
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
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
(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
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
(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
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
(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
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.
“I am sure there will be more
charges against others,” said Mr Green in
an interview with The Sunday Telegraph in which he also acknowledged a
rift with the US over the handling of the investigation.
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
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.
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