Baltic Dry Index. 1374 +04
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
“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
Below, doesn’t
anyone here know how to play this game?
Thanks to a US Treasury blunder, we now know China and Japan’s holdings
of Uncle Scam’s debt. China, the world’s biggest creditor now holds 1.3
trillion of the world’s largest debtor’s debt, plus their foreign exchange
holdings are a new record at 3.82
trillion, mostly in dollars. One third of the global total. The fiat dollar’s
fate lies more in Beijing’s hands than Washington’s. If the USA backs Japan in
the coming clash over China’s Diaoyu Islands, my guess is that dollar holders
are in for a very rude awakening. Stay long physical precious metals. Thanks to
the Great Nixonian Error of fiat money, our world is completely unstable.
This environment
redistributes wealth from savers to debtors on a scale of over $2 trillion per
annum or $55 billion per day. This must be the biggest legal robbery ever in
human history. But it is always coded in arcane academic lingos spoken by
respected central bankers with impeccable CVs. All that is just packaging; it
is robbery nevertheless.
Andy Xie
China’s Treasury Holdings Climb to Record in Government Data
Jan 16, 2014 12:57 AM GMT
China’s holdings of U.S.
Treasuries increased $12.2 billion to a record $1.317 trillion in November, data released on the
Treasury Department’s website showed. The figures, scheduled for release at 9 a.m. tomorrow in Washington, were inadvertently posted on the Treasury’s website. Japan’s holdings rose $12 billion to $1.186 trillion, the figures showed.
China’s swelling foreign-exchange reserves, reported today to have reached a world record $3.82 trillion at the end of December, may sustain the nation’s appetite for U.S. debt. Capital inflows and intervention to limit gains in the yuan have contributed to China building up currency holdings that are a third of the global total.
----A Treasury spokeswoman said that because of an error, limited amounts of data were posted on the department’s website ahead of the official release, and were removed as soon as it was discovered. The full November 2013 data will be released as previously scheduled at 9 a.m. tomorrow, she said.
The yuan this week reached 6.0406
per dollar, the strongest since the government unified the official and market
exchange rates at the end of 1993. The latest data on China’s foreign-currency
holdings contrasted with Yi Gang, a deputy governor at the central bank, saying
in November that it was “no longer in China’s favor to accumulate
foreign-exchange reserves.’
More
China urges IMF to give more power to emerging markets
BEIJING(Reuters) - China called on IMF member nations on Wednesday to stick to a commitment to give emerging markets more power at the global lender after U.S. lawmakers set back historic reforms that would give developing countries a greater say.
The remarks by Chinese Foreign Ministry spokesman Hong Lei were an indirect criticism of the United States, the biggest and most powerful IMF member, where lawmakers failed on Monday to agree on funding measures needed for the reforms to move forward, though Hong did not mention the United States by name.
The U.S. Congress must sign off on the IMF funding to complete 2010 reforms that would make China the IMF's third-largest member and revamp the IMF board to reduce the dominance of Western Europe.
The changes would also give greater say to nations such as Brazil and India to reflect their growing economic heft.
"The IMF quotas reform is an important decision made by the organization," Hong said at a daily news briefing.
"The relevant organization's
members should earnestly implement the decision, and honor and enhance the
voice and representation of developing countries within the IMF."
Speaking at the National Press
Club in Washington, IMF Managing Director Christine Lagarde said it was
"disconcerting" the IMF funding was not included in a spending bill
approved by the U.S. Congress on Monday.
More
In another
sign of rising instability in our Great Disconnect, some of the largest and
smartest players are heading for the exits on much of Uncle Scam’s debt. What
do they know that we don’t? Probably that the 30+ year US bond bubble is coming
to its end. Getting out early trumps all other strategies and beats the day
that China dumps.
Big investors like BlackRock bet against Bill Gross on Fed
January 15, 2014, 2:59 PM
Call it the anti-Bill Gross
trade.
A growing number of large
investors, including BlackRock and Pioneer Investments, are advising clients to
bail out of short- and intermediate-maturity bonds on bets that an accelerating
economy will raise questions about the Federal Reserve’s promise to keep rates
low. Doubts about the Fed’s benchmark rate could hammer intermediate bonds that
trade in part based on expectations of when the Fed will hike its key policy
rates, they say.
Such calls run counter to the
advice of other bond experts like Pimco’s Gross, who advise that moving toward
shorter-maturity debt is a beneficial way of alleviating interest rate
sensitivity in bond portfolios during a rising-rate environment.
The Federal Reserve has said it
will replace its bond-buying stimulus program, due to begin winding down this
month, with a promise to keep its target policy rate near zero until well after
the unemployment rate drops below 6.5%. But as signs emerge that the economy is
picking up steam, the market is beginning to question the length of time before
the Fed jacks up rates.
More
Up next, will
the coming oil glut drop the global economy into outright deflation? If it
does, say goodbye to the European Monetary Union in its present form.
Coming 'oil glut' may push global economy into deflation
OPEC spare capacity set to reach levels last seen in the depths of the financial crisis in 2009, analysts say
One piece of the jigsaw puzzle is
missing to complete the deflation landscape across the West: a slide in oil
prices. This is becoming more likely each month.
Turmoil across the Middle East
and parts of Africa has choked supply over the past two years, keeping Brent
crude near $110 a barrel despite a broader commodity slump. Cotton and corn
prices have halved, as has the UBS index of industrial metals. Such anomalies
rarely last.
"We estimate that crude oil
is now the mostly richly priced commodity in the world," says Deutsche
Bank in a fresh report.
Michael Lewis, the bank's
commodity strategist, said markets face an "new oil supply glut" as
three forces combine. US shale will add 1m barrels a day (b/d) to global supply
for the third year running; Libya will crank up shipments after a near collapse
in 2013; and Iran will come out of hibernation. "This will push OPEC spare
capacity to levels last seen in the depths of the financial crisis in
2009," he said.
America is on track to overtake
Saudi Arabia as the top global producer of oil by 2016. It will account for
more than half of non-OPEC world supply this year. The US Energy Department
says US oil imports will drop to 5.5m b/d by next year, half the level a decade
ago. This turns the world's 89m b/d market upside-down.
Deutsche Bank
said Saudi Arabia may have to slash its output by a quarter to 7.5m b/d this
year to stop the bottom falling out of the market. The Saudis no longer have
such money to spare. They are propping up an elephantine welfare nexus to keep
a lid on explosive tensions in the Eastern Province, home to Saudi oil and its
aggrieved Shia minority. A cut of this size would push the budget into deep
deficit.
More
We end for
the day with the biggest market rigging scandal widening again. It’s really not
their fault. Banksters can resist anything except temptation.
Banks are an almost irresistible attraction for that element of our society which seeks unearned money.
J. Edgar Hoover
Deutsche, Citi feel the heat of widening FX investigation
By Jamie McGeever
LONDON (Reuters) - Global investigations into alleged currency market manipulation intensified on Wednesday as U.S. regulators descended on Citigroup's London offices and Deutsche Bank suspended several traders in New York, sources told Reuters.
The presence of Federal Reserve and Office of the Comptroller of the Currency officials at Citi's Canary Wharf office in the east of London this week comes after Citi last week fired its head of European spot foreign exchange trading, Rohan Ramchandani, following a prolonged period on leave, one source familiar with the matter said.
The suspensions of staff at Deutsche Bank in New York and possibly elsewhere in the Americas followed investigations into "communications across number of currencies," a second source said.
These are the latest developments in the worldwide investigation into allegations that traders at some of the world's biggest banks colluded to manipulate the largely unregulated $5.3 trillion-a-day foreign exchange market, by far the world's biggest.
Deutsche and Citi are the two biggest players in that market, accounting for a combined 30 percent of that turnover, according to a Euromoney magazine poll. Deutsche has been the biggest FX bank for nine years running.
More
“The world is a place that’s gone from being flat to round to crooked.”
Mad Magazine.
At the Comex
silver depositories Tuesday
final figures were: Registered 48.34 Moz, Eligible 126.43 Moz, Total 174.77 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, time to cover next week’s meeting of the outsized egos of the Muppets, Banksters and Great Vampire Squids that got the world into the mess that it’s in today. They never saw 2007/08 coming, despite causing it, but now think that it’s all been fixed. Not to worry though, the NSA, GCHQ, and in all likelihood, Snowy, Wikileaks, President Putin and President Xi will all be listening in. Still with a briefcase size hidden NSA field station less than eight miles away, it might be a good idea to leave the smart electronics at home this year.
It's good to trust others but, not to do so is much betterBenito Mussolini
Davos prepares for annual parade of powerbrokers
By Tom Miles
GENEVA (Reuters) - The annual Davos gathering, which draws thousands of the world's most powerful people, will this year welcome more than 40 heads of state and government to focus on questions about the world's future, organizers said on Wednesday.
Among the participants at this year's event, which runs from Jan 22 to 25, are British Prime Minister David Cameron, Japanese Prime Minister Shinzo Abe and presidents including South Korea's Park Geun-hye, Ukraine's Viktor Yanukovich, Mexico's Enrique Pena Nieto and Nigeria's Goodluck Jonathan.
Iranian President Hassan Rouhani and Israeli Prime Minister Benjamin Netanyahu will both be speaking and it would be logistically possible for an encounter between the two leaders whose countries are traditional foes.
Central bankers Mark Carney, Mario Draghi and Haruhiko Kuroda and U.S. Treasury Secretary Jacob Lew are also taking part, as well as IMF chief Christine Lagarde and World Bank boss Jim Yong Kim.
The 2,500 participants include the heads of all major international organizations and more than half the chief executives of the 1,000 largest companies, including Goldman Sachs (GS.N) chairman and CEO Lloyd Blankfein and Coca-Cola (KO.N) chairman and CEO Muhtar Kent.
More high-level guests are expected to be announced in the next few days. Others who could drop by include U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov, who will be attending the opening of Syrian peace talks in Montreux, at the other end of Switzerland, on January 22.
Brazilian President Dilma Rousseff will be the only head of state from the BRIC nations to attend. India is sending a delegation including Finance Minister Palaniappan Chidambaram, while Russia will be represented by its finance minister and two deputy prime ministers.
China is sending Zhang Xiaoqiang, vice chairman of its National Development and Reform Commission, but Klaus Schwab, who heads the World Economic Forum that runs the event, said there would be a "senior leader" from China who was not yet on the published guest list.
---- Also missing from the line-up are new Federal Reserve chief Janet Yellen, and previous Davos fixtures such as Angela Merkel and Rupert Murdoch.
More
N.S.A. Devises Radio Pathway Into Computers
WASHINGTON — The National Security Agency has
implanted software in nearly 100,000 computers around the world that allows the
United States to conduct surveillance on those machines and can also create a
digital highway for launching cyberattacks.
While most of the software is inserted by gaining access
to computer networks, the N.S.A. has increasingly made use of a secret
technology that enables it to enter and alter data in computers even if they
are not connected to the Internet, according to N.S.A. documents, computer
experts and American officials.
The technology, which the agency has used since at least
2008, relies on a covert channel of radio waves that can be transmitted from
tiny circuit boards and USB cards inserted surreptitiously into the computers.
In some cases, they are sent to a briefcase-size relay station that
intelligence agencies can set up miles away from the target.
---- “What’s new here is the scale and the
sophistication of the intelligence agency’s ability to get into computers and
networks to which no one has ever had access before,” said James Andrew Lewis,
the cybersecurity expert at the Center for Strategic and International Studies
in Washington. “Some of these capabilities have been around for a while, but
the combination of learning how to penetrate systems to insert software and
learning how to do that using radio frequencies has given the U.S. a window
it’s never had before.”
More
“The
illegal we do immediately. The unconstitutional takes a little longer.”
Henry
Kissinger.
The monthly Coppock Indicators finished December and 2013.
DJIA: +204 Up. NASDAQ: +311 Up. SP500: +247 Up.
The new Fed bubble continues, but for how much longer?
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