Baltic Dry Index. 2237 +54
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
“The
Euro was dead, to begin with ... This must be distinctly understood, or nothing
wonderful can come of the story I am going to relate.”
With
apologies to Charles Dickens, A
Christmas Carol
Remember
when the Euro was going to change the life of those lying, cheating, work and
tax shy modern Europeans forever. Club Med were all going to live high on the
hog, like modern model Germans but without the sweat. Going to eat the lunch of
those nasty rich Americans with their “exorbitant privilege.” Getting even with them for liberating
continental Europe twice in half a century! Well it’s not going to happen, says
the often wrong IMF. Still under French control, albeit no longer deviant, the
IMF thinks that the Euro is about to self-destruct yet again because nothing
has been fixed.
But this
being the EU, with three competing presidents and “Foreign Service” that
competes directly against the interests of nation states, why on earth would
the Washington based IMF have expected anything in Europe to have been fixed?
French run they have only to look to Paris (or Rome or Madrid or Brussels) to
see why nothing can get fixed. Europe lives in a fantasy of past (accidental) glories
never to be repeated. While Europe staggers under the burden of green taxes to
sort out the fictional problem of man-made global warming from carbon, poor
modern Europeans face a future of eating or heating if over 60, or if under 25,
emigrating.
“If they would rather die, . . . they had better do it, and
decrease the surplus population.”
Jose B. Scrooge, with apologies to Charles Dickens.
IMF's Largarde says euro crisis not solved, demands pre-emptive action from ECB
Christine Lagarde, the IMF's managing director, says it is premature to declare the eurozone crisis over
The International Monetary Fund
has poured cold water over claims that the eurozone is safely recovering,
calling on the European Central Bank to take pre-emptive action to alleviate
the credit crunch for small business and head off the risk of deflation.
Christine Lagarde, the IMF's
managing director, said it is "premature to declare victory", warning
that EU governments may have to ditch austerity policies and switch to fiscal
stimulus to kick-start growth and avert lasting damage to the underlying
economy.
"Looking past the headlines,
there are clearly signs that not all is well," she told a forum in
Brussels, highlighting the risk of a "vicious cycle" in which
depressed demand and stagnant investment feed on each other.
The warning came as fresh data
showed Greece's recovery may be stalling again, with mounting risks of a
relapse into recession over the winter. The Greek statistics office said
industrial output had fallen 5.2pc in October, a sharp deterioration from minus
1.3pc in September.
Mrs Lagarde said mass
unemployment in large parts of the eurozone is eroding jobs skills and
undermining the long-term productive capacity of the economy, a process known
as hysteresis.
"Can a crisis really be over
when 12pc of the labor force is without a job? When unemployment among the
youth is in very high double digits, reaching more than 50pc in Greece and
Spain?" she said.
"Growth has not been
balanced across Europe and, therefore, may not be sustainable. There are
pockets of stronger growth and high employment, for example in Germany, but
growth is low or declining elsewhere.
Most of the demand for European goods and
services comes from abroad, not from within, leaving the economy at the mercy
of the ups and downs of global trade," she said.
"The only durable solution
lies in jump-starting growth. This means growth not only from stronger exports
but also from a robust recovery in domestic demand."
More
French industrial output drops unexpectedly
Dec. 10, 2013, 3:43 a.m. EST
PARIS--French industrial output
dropped unexpectedly in October for the second month in a row, data from
national statistics bureau Insee showed Tuesday, providing a further indication
of a weak start to the final quarter of 2013 in the euro zone.
Industrial production in the
currency bloc's second largest economy fell 0.3% in October from September,
when it also fell 0.3%, Insee said. Analysts polled by Dow Jones Newswires had
expected a 0.2% rise in October.
The October decline confirms a
steady shrinking of output in industry. Over the three months through October,
industrial production was 0.6% below the previous three months, Insee said.
The disappointment comes after
separate data showed Monday that German industrial production dropped 1.2% in
October from the previous month.
More
EU States Move Toward Clash With Lawmakers on Bank Plan
Dec 11, 2013 1:32 AM GMT
European Union finance ministers
moved to take the lead in creating a planned bank-resolution fund, risking a
clash with parliament that may stymie the bloc’s efforts to contain future
financial crises.
In more than 15 hours of talks
that ended inconclusively early today, ministers in Brussels moved toward
creating the fund using an agreement among participating states, not EU law,
effectively cutting the European Parliament out of the process. Legislators
made clear that they’ll retaliate if the ministers persist in this approach.
The EU assembly “has all the
tools in its hands to stop such an intergovernmental approach, which would
weaken the democratic control rights of the European Parliament,” Sven Giegold,
a German lawmaker who deals with banking union issues, said by telephone.
Ministers should remember that the parliament’s approval is needed on a range
of related laws intended to increase financial stability, giving lawmakers
leverage, he said.
The intergovernmental approach,
which was also used to create the European Stability Mechanism, the euro area’s
firewall fund, would also require unanimity among the euro states, handing each
a veto.
EU leaders made the plan for a
Single Resolution Mechanism a top priority for a Dec. 19-20 summit meeting,
with the goal of getting the law on the books before the European Parliament
goes into recess for elections in May.
More
Fiat money
Fiat money has been defined variously as:- any money declared by a government to be legal tender.[1]
- state-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard.[2]
- money without intrinsic value.[3][4]
While gold- or silver-backed representative money entails the legal requirement that the bank of issue redeem it in fixed weights of gold or silver, fiat money's value is unrelated to the value of any physical quantity. Even a coin containing valuable metal may be considered fiat currency if its face value is higher than its market value as metal.
The Nixon Shock of 1971 ended the direct convertibility of the United States dollar to gold. Since then, all reserve currencies have been fiat currencies, including the U.S. dollar and the Euro.[6]
---- Europe
In 1661, Johan Palmstruch issued the first regular paper money in the West (although Washington Irving records an earlier emergency use of it, by the Spanish in a siege during the Conquest of Granada), under royal charter from the Kingdom of Sweden, through a new institution, the Bank of Stockholm. While this private paper currency was largely a failure, the Swedish parliament eventually took over the issue of paper money in that country. By 1745, its paper money was inconvertible to specie, but acceptance was mandated by the government.[12] This fiat currency depreciated so rapidly that by 1776 it returned to a silver standard. Fiat money also has other roots in 17th-century Europe, having been introduced by the Bank of Amsterdam in 1683.
More
Elsewhere,
the Santa Clause rally needs more QE. Though it’s probably not going to happen
today, the Fed’s final bubble will end badly like all bubbles before it.
China’s Stocks Retreat Most in Month on Economic Target Concern
Dec 11, 2013 7:08 AM GMT
China’s
stocks fell, dragging the benchmark index to its biggest loss in a
month, as coal producers retreated and investors speculated the government may
cut growth targets at an economic policy meeting this week. China Shenhua Energy Co. (601088) and China Coal Energy Co., the nation’s biggest coal producers, dropped more than 1.5 percent as worsening air pollution spurred government plans to curb coal consumption.
---- The Shanghai Composite Index (SHCOMP) dropped 1.5 percent to 2,204.17 at the close, the biggest loss since Nov. 13. The Hang Seng China Enterprises Index (HSCEI) sank 2.6 percent in Hong Kong. China’s government may cut its 2014 economic growth target to 7 percent from 7.5 percent at the conference which ends tomorrow, the Economic Information Daily reported Dec. 4. Policy makers should phase out proactive fiscal stimulus, the China Securities Journal said in a front page commentary today.
“There’s concern that the government will set a lower economic growth target,” said Wang Zheng, the Shanghai-based chief investment officer at Jingxi Investment Management Co. “That’s triggered a sell-off of big-cap cyclical stocks, which have dominated the broader market recently.”
More
Topix Snaps Three-Day Advance on Yen; Paper Makers Drop
Dec 11, 2013 6:25 AM GMT
Japanese stocks fell, with the Topix (TPX) index snapping a
three-day advance, as exporters dropped after the yen extended yesterday’s
gains. Mazda Motor Corp., a carmaker that gets 30 percent of sales in North America, slipped 1 percent. Nippon Paper Industries Co. sank the most on the Nikkei 225 Stock Average after its rating was cut at SMBC Nikko Securities Inc., with the sector leading declines among the 33 Topix industry groups. Gree Inc. climbed 2.3 percent, paring gains of as much as 20 percent after Goldman Sachs Group Inc. raised its outlook on the mobile-gaming company on wider-than-expected cost cuts.
The Topix decreased 0.5 percent to 1,250.45 at the close in Tokyo, after ending yesterday within 1.5 percent of this year’s peak reached on May 22. All but two of the gauge’s subsectors declined. The Nikkei 225 lost 0.6 percent today to 15,515.06. The yen rose 0.1 percent to trade at 102.75 per dollar after gaining 0.4 percent yesterday. Nikkei 225 futures dropped 0.5 percent in Osaka
More
“I wear the chain I forged in life....I made it link by link,
and yard by yard; I girded it on of my own free will, and of my own free will I
wore it.”
Herman Van W. Mitty with apologies to Charles Dickens.
At the Comex
silver depositories Tuesday
final figures were: Registered 53.26 Moz, Eligible 116.44 Moz, Total 169.70 Moz. Someone seems to be expecting a massive
December delivery.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
No crooks today, just advance notice of big trouble ahead for
South Africa’s mines in 2014. With the western central banks suppressing
precious metals prices to try to prop up the failing fiat dollar reserve
standard, under attack from the disastrous QE forever policy, the unintended collateral
damage are poor black South African miners. Wall Street’s Great Vampire Squids
may be laughing all the way to the bank, but in the real world there’s no free
lunch. Impoverished black South African precious metals miners are the one’s
paying the price of the Fed’s ever more desperate attempt at keeping the Great
Nixonian Error of fiat money running.
But the death of the Great Nixonian Error
gets closer with each passing day. The fiat currency reserve standard gets more
dysfunctional with each passing month. The breakup of the European Monetary
Union looms for 2014. Stay long physical
precious metals. It will come as a great shock for mainstream media and the loony
left BBC Labour Party but not to reaers of the LIR.
Lonmin Union Gets Permission to Strike Over Miners’ Wages
Dec 10, 2013 10:00 PM GMT
The largest union at Lonmin Plc (LMI)’s South
African mines got permission to strike after a mediator failed to resolve a
deadlock over wages between the labor group and the world’s third-biggest
producer of the metal. The Commission for Conciliation, Mediation and Arbitration yesterday issued a certificate of non-resolution over the dispute after the Association of Mineworkers and Construction Union rejected Lonmin’s wage-increase proposals for the year through September, AMCU National Treasurer Jimmy Gama said by phone. The certificate allows workers to strike without the risk of dismissal from their jobs.
“Whether a strike will happen depends on what our members say,” Gama said. The CCMA permit allows the AMCU’s members to stop work within 48 hours of giving the company notice. A decision on a strike would only be made next year, Gama said.
The AMCU usurped the National Union of Mineworkers in the past year as the biggest representative of employees at the world’s three largest platinum producers. The union is demanding that basic monthly wages for the lowest paid underground workers be more than doubled to 12,500 rand ($1,211). South Africa’s annual inflation rate was 5.5 percent in October.
Sue Vey, a spokeswoman for Lonmin, declined to comment.
The AMCU has already received permission to strike at Anglo American Platinum Ltd. (AMS), the largest producer, and Impala. The union’s members on Oct. 28 voted to strike at Impala, without setting a date. Impala and AMCU will again meet for talks on Dec. 12 after the union lowered its demand for a basic monthly wage to 8,668 rand on Nov. 12.
The producer that day revised its offer for the lowest-paid below-surface workers to an increase of 8.5 percent for the first year of a three-year deal. Impala employees currently earn 5,500 rand per month, excluding benefits.
The AMCU will ask members to decide on a possible strike at Anglo Platinum once they return in January from a two-week break, Gama said Nov. 26. Amplats has offered increases of 7 percent.
A strike led by the NUM at Northam Platinum Ltd. (NHM), owner of the world’s deepest platinum mine, remains unresolved, the union’s chief negotiator, Ecliff Tantsi, said yesterday by phone. The strike started Nov. 3.
More
“He was conscious of a thousand odours floating in the air, each
one connected with a thousand thoughts of real money, and hopes, and joys, and
cares, long, long, forgotten.”
With apologies to Charles Dickens and A Christmas Carol.
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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