Baltic Dry Index. 1370 -25
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"You
work three jobs? ... Uniquely American, isn't it? I mean, that is fantastic
that you're doing that."
George
W. Bush --to a divorced mother of three,
Omaha, Nebraska, Feb. 4, 2005
We open today with news that might just spell the end of
commodities market price manipulation and rigging. I say might, because the Fed
may yet do another of its famous U-turns under immense pressure from the giant
banks that own it. I use the word “might” also, because it’s highly likely that
the giant mega-banks that own the Fed will just spin off their commodities
units to the commodity managers, funding the new entities as specialist semi arm’s
length commodity hedge funds. Even so, there is still a chance that the
commodities manipulation and rigging of the last three decades might be coming
to an end. Is the Fed really proposing free market price discovery in commodities
at the same time as it’s rigging bonds, interest rates and gold?
"Wait
a minute. What did you just say? You're predicting $4-a-gallon gas? ... That's
interesting. I hadn't heard that."
George
W. Bush, Washington, D.C., Feb. 28, 2008
Fed Weighs Further Restrictions on Banks’ Commodities Units
Jan 14, 2014 9:25 PM GMT
The Federal Reserve is asking for public input on whether to put
restrictions on banks’ trading and warehousing of physical commodities amid
lawmaker scrutiny of potential conflicts of interest and market manipulation. The Fed’s request released today seeks comment on 24 questions, including some on the risks posed by bank ownership and trading of commodities such as oil, gas and aluminum by deposit-taking banks and the possible benefits of imposing additional capital standards.
“The Board is considering whether additional restrictions would help ensure that physical commodities activities authorized for financial holding companies are conducted in a safe and sound manner and do not pose a threat to financial stability,” the Fed said in a statement. The central bank said it will consider whether further rules are needed after the public comment period ends on March 15.
The Fed’s action could increase pressure on Goldman Sachs Group Inc. and Morgan Stanley to sell commodities businesses. Although the Fed generally forbids bank holding companies to own or trade physical commodities, the two Wall Street firms were permitted to retain units after they converted into banks during the 2008 financial crisis.
----Brown held his first hearing on banks’ ownership of physical commodities in July after the issue gained attention when beer distributors complained that companies such as Goldman Sachs were manipulating aluminum prices.
The Commodity Futures Trading Commission has issued subpoenas to Goldman Sachs, JPMorgan and other operators of metal warehouses after brewer MillerCoors LLC and others complained of long waits for materials.
JPMorgan Chase & Co. agreed to pay $410 million in July to settle Federal Energy Regulatory Commission allegations that the bank manipulated power markets in California and the Midwest from 2010 to 2012.
Michael Gibson, the Fed’s director of bank supervision, is set to testify on the issue at tomorrow’s Senate hearing.
More
Staying with
commodities for now. If Indonesia can make this resource nationalism stick, a
very big if, China will be forced to greatly change the way it deals in
commodities. Indonesia is trying to treat China the way China treated Japan in
the rare earths dispute over the Diaoyu Islands.
"In terms of the economy, look, I inherited a recession, I
am ending on a recession."
George W. Bush, Washington, D.C., Jan. 12, 2009
Indonesia to China: Stop Buying Our Stuff
Indonesian mines account for
about 20 percent of the world’s nickel supply and a hefty chunk of the bauxite
(used to make aluminum). China has been importing ever-larger amounts of these
and other minerals from its Asian neighbor. Ironically, the more the Chinese
buy, the angrier Indonesians become: Rather than purchasing refined minerals
from Indonesia, China imports the raw rocks and does the processing itself,
thus depriving Indonesians of jobs and tax revenue. Miners took more than
250,000 tons of nickel out of Indonesian mines last year but processed only
about 16,000 tons in-country, exporting the rest. Meanwhile, China refined more
than half a million tons.
To make matters worse, through
much of last year, China stockpiled Indonesian ore to hedge against any action
the government in Jakarta might take to encourage more of the value-added work
to stay home. The stockpiling makes Indonesian officials even more irritated.
“I just returned from China, and I saw with my own eyes there are 3 million
tons of bauxite and 20 million tons of nickel over there,” Industry Minister
M.S. Hidayat told reporters on Jan. 8. “That’s what we want to stop.”
Indonesian President Susilo
Bambang Yudhoyono is taking action do just that. On Jan. 12 a new rule took
effect prohibiting companies from exporting nickel ore and other raw
minerals—while allowing miners to ship minerals that first go through
processing or refining in Indonesia. The goal is simple: “No more ore exports,”
Energy and Mineral Resources Minister Jero Wacik said last month. “There should
be refining or smelting.”
The ban isn’t ironclad. Responding to
objections from multinationals such as Newmont Mining
(NEM) and Freeport-McMoRan
Copper & Gold (FCX), Yudhoyono’s administration is creating a
temporary loophole, permitting them to export copper concentrates, a mix of
copper and gold ores. But the government insists the exception won’t last long:
By 2017 there won’t be any exports of concentrates, either.
More
In non-commodity
USA news, in our new age of socialism for banksters, ZIRP, and QE Forever,
seven leading Nobel economists are calling for the US minimum wage to jump from
$7.25 an hour to $10.10. Since in a fiat currency system all monetary decisions
are political, the voters come November are highly likely to vote in those
advocating radical income redistribution. In the Great Nixonian Error of fiat
money, the Fed is busy printing up almost a trillion a year of new money for
the banksters. We want ours too, say the metal bashers and hamburger flippers,
now joined by the economic elite. Stay long physical precious metals.
"I've abandoned free market principles to save the free
market system."
George W. Bush, Washington, D.C., Dec. 16, 2008
Seven Nobel Economists Endorse a $10.10 Minimum Wage
It’s getting
harder and harder to argue that economists oppose a higher minimum wage.
Certainly many do. But seven Nobel prize-winning economists and eight former
presidents of the American Economic Association have signed a new letter,
released today, urging Congress to raise the federal minimum from its current
level of $7.25 an hour to $10.10 by 2016.
Says the letter: “At a time when persistent high unemployment is putting enormous downward pressure on wages, such a minimum-wage increase would provide a much-needed boost to the earnings of low-wage workers.”
Addressing the concern that employers would lay off their least-productive workers rather than raise their pay, the letter says, “the weight of evidence now show[s] that increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market.” It goes on to say that “a minimum-wage increase could have a small stimulative effect on the economy as low-wage workers spend their additional earnings, raising demand and job growth, and providing some help on the jobs front.”
This isn’t the final word, of course.
Those opposed to raising the minimum wage will argue that many of the
signatories to the new letter are more liberal than the average of the
profession. The Nobel economists who signed are Kenneth Arrow, Peter Diamond,
Eric Maskin, Thomas Schelling, Robert Solow, A. Michael Spence, and Joseph
Stiglitz.
More
We end today
with the proposed Great French U-turn in France. But can a leopard really
change its spots? Can a man juggling a bitter ex-wife, and two competing
mistresses, really force France closer to the Anglo-American economic model?
Will the French socialist population let him? Stay long physical precious
metals. If France fails to reform and restore growth, the European Monetary
Union in its present form is dead.
“The thing that's wrong with the French is that they don't have a word for entrepreneur”
George W. Bush
Francois Hollande vows 'supply-side' assault on French state, doubles down on EMU austerity agenda
French leader Francois Hollande stuns left-wing of his own Socialist Party by calling for a new economic strategy based on “supply-side” policies
French president François
Hollande has vowed an “electro-shock” to lift the French economy out of deep
slump, promising to shrink the elephantine state and push through a raft of
pro-business reforms.
The embattled French leader
stunned the left-wing of his own Socialist Party by calling for a new economic
strategy based on “supply-side” policies, accompanied by €30bn of fresh
spending cuts by 2017 to pave the way for lower taxes and charges on companies.
The shift has been widely
compared with Tony Blair's New Labour policies and the reform drive by German
Chancellor Gerhard Schröder in 2004, though Mr Hollande vehemently denied any
infection from market “liberalism” in a televised press conference.
----Mr Hollande's
plan is based on a “responsibility pact” with the employers federation Medef.
The group’s chief, Pierre Gattaz, said he is willing to “play ball”, praising
Mr Hollande for a genuine shift in strategy after 18 months of half-measures,
false-starts and back-sliding. Medef has pledged 1m jobs by 2020 in exchange
for a shake-up of labour laws and a €100bn cut in labour costs over five years,
split between tax cuts and lower social security contributions.
----Yet he is sticking to demands from Berlin and Brussels for further austerity to meet EU deficit targets, despite the risk of a triple-dip recession. Spending cuts will come first, followed by tax cuts later. The policy is not neutral.
Fiscal cuts equal to 1.8pc of GDP
last year were the key reason why the French economy relapsed, driving
unemployment to a 16-year high of 10.9pc and inflicting grave damage on Mr
Hollande's governing credibility. A leaked report based on surveys by
“prefects” in each of the 101 departments said the situation was becoming
dangerous, describing a "society that is angry, exasperated and on edge. A
mix of latent discontent and resignation is being expressed through sudden
eruptions of fury, almost spontaneously.”
----French
economists are deeply split over the reforms. Marc Touati, from the economic
consultants ACDEFI in Paris, said the measures are too vague to pull the
country out of its downward slide. “It’s a bluff intended to buy time and
soften up the rating agencies. It won’t be followed by concrete action,” he
said.
----Alain Bokobza, from Société Générale, said the reforms amount to a “radical policy shift” comparable with the ideological U-turn in 1983 by President François Mitterrand, when he made his peace with French employers and ditched his hard-Left policy of "socialism in one country".
Mr Hollande was intimately
involved in the episode as a member of President Mitterrand’s political staff,
and watched his mentor come back from near political death with a Rightward
shift.
----It is a highly optimistic view. Huw Pill, from Goldman Sachs, said the French people must brace for a 40pc cut in relative living standards compared with Germany over coming years to bring the eurozone’s two biggest economies back into alignment - a daunting prospect.
Patrick Artus, from the French
brokers Natixis, says the French economy is in deeper trouble than Mr Hollande
and his advisers dare to recognise. The fiscal shock will not be enough to stop
the chronic “deindustrialisation” of France. Mr Artus said it will take a 14pc
cut in French wages to restore competitiveness within EMU.
More
"I
am here to make an announcement that this Thursday, ticket counters and
airplanes will fly out of Ronald Reagan Airport."
George
W. Bush. Washington, D.C., Oct. 3, 2001
At the Comex
silver depositories Tuesday
final figures were: Registered 48.56 Moz, Eligible 126.31 Moz, Total 174.87 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, a very French press conference.
Francois Hollande conference: with the greatest respect, there was un éléphant dans la salle
François Hollande's media conference at the Elysée Palace brought great anticipation, but no satisfaction
If François Hollande treats his
women the way he treats his press conferences, I feel rather sorry for them.
He
starts slowly. Excitement builds and builds. Steadily, he keeps going. And
going. And going. For what feels like ages. Until … hang on a minute. All of a
sudden it seems to be over.
And as far as you can see, he is
the only one who got anything out of it. You, in fact, nodded off several
minutes ago.
Over the weekend it emerged that
the French president has allegedly been cheating on his girlfriend – Valérie
Trierweiler, France’s “First Lady” – with a glamorous actress called Julie
Gayet. I say “allegedly” because he still hasn’t either confirmed or denied it.
Indeed by Tuesday, rumours were
circulating in Paris that Madamoiselle Gayet is four months pregnant, although
their truth or otherwise could not be established.
----On Tuesday afternoon, in the Elysée Palace in Paris, Monsieur le Président held a press conference. Not, of course, because he was desperate to unburden his soul about his clandestine passion; the event had been planned long before the scandal broke.
It was intended to be about the
president’s plans to revive France’s sagging economy. Surely now, though, the
interrogation would be dominated by another matter.
Five minutes late, the president
entered, walking in a purposeful little trot, as if he were a small dog
carrying an important message from its owner. Then, in that long-suffering pair of shoes, he
stood behind the lectern and began. Conventionally what happens at a political
press conference, at any rate in Britain, is that the politician says a few
words of welcome and then invites questions.
Not, it would seem, in France.
Monsieur Hollande started by talking about his plans for the economy. A minute
passed. Then a second. Soon five had gone, then 10, then 20, then half an hour.
On and on he talked, without possibility of interruption, about his plans for
the economy. Throughout this lecture, the French journalists remained politely
silent. They didn’t so much as raise a hand.
How odd it all felt. Of course
the economy was important. Monsieur Hollande’s top priority was to tackle it.
All the same, it was hard to help feeling that – comment dit-on en Français? –
il y avait un éléphant dans la salle.
Thirty-five minutes. Forty.
Surely to goodness he couldn’t put it off for much — Aha! At last! Monsieur le
Président was drawing his grand oration to a close. Time, finally, for
questions. Come on, French press. Give him all you’ve got.
The first journalist opened his
mouth – and then did something that, in the same circumstances, no Fleet Street
hack would have done. He told the president it was an honour to ask him a
question. He thanked him for his speech. He wished him a happy and successful
2014, and sent his best wishes to “all those close to you”.
I started to wonder whether this
man was the president’s valet.
The question, or vote of thanks,
had been going on for almost two minutes before it got to the point. An
article, the president may have noticed, had recently been published concerning
his private life. Would he be so kind as to clarify whether Mademoiselle
Trierweiler remained the republic’s “First Lady”?
----After another 10 minutes or so of questions about banking and taxation, a journalist hesitantly returned the president to the matter of the affair – or rather, not the affair, but the manner in which it was reported. “My indignation is total,” replied Monsieur Hollande. The story was “a violation that touches personal liberty”. France must “maintain the principle of respect”.
A journalist reminded him that
next month he was due to visit Washington DC. Would he be accompanied by his
“First Lady”? And if so … which one was she? As soberly as before – and thus,
somehow, all the more amusingly – the president replied that he could not
comment at this stage, but pledged to clarify in due course which woman would
have the honour of performing this key role.
More
"Goodbye
from the world's biggest polluter."
George
W. Bush. --in parting words to world leaders at his final G-8 Summit, punching
the air and grinning widely as those present looked on in shock, Rusutsu,
Japan, July 10, 2008
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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