Baltic Dry Index. 1106 +09
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"The first requisite of a sound monetary system is that it put the least possible power over the quantity or quality of money in the hands of the politicians."
Henry Hazlitt
Another Monday, and a holiday one in the land of
Uncle Scam, and another red flag from faraway Asia. Bunker time, I think in two
days rain free southern England. Just how much of a drag on the economy all
this UK and western European rain is going to cost, is still unquantifiable at
present, but cost it will.
Up first, Japan’s GDP grows but at a far slower
rate than expected. Suddenly the glass is looking half full once again. Time to
prime the pumps?
Japan Growth Trails Forecasts as Sales-Tax Increase Looms
Feb 17, 2014 3:11 AM GMT
Japan’s economy grew at less than half the forecast pace in the fourth
quarter, underscoring risks to the nation’s recovery as a sales-tax
increase looms in April. Gross domestic product expanded an annualized 1 percent from the previous quarter, the Cabinet Office said today in Tokyo, less than the median projection of 2.8 percent in a Bloomberg News survey of 37 economists where the lowest estimate was 1.1 percent.
While capital spending rose by the most in two years and consumption picked up, trade deficits from surging imports and limited gains in exports dragged on the expansion. Weaker-than-forecast growth may fuel speculation that the Bank of Japan will expand stimulus in coming months and add pressure on Prime Minister Shinzo Abe to flesh out his policies to make the nation more competitive.
“This weak export performance gives us a sense of risk that the Japanese economy may significantly stall after April,” Takuji Okubo, chief economist at Japan Macro Advisors in Tokyo, told Bloomberg Television. “Prime Minister Abe really needs to be quick in showing to the market that he can deliver reform.”
More
Deflation Threat Unsettles G-20 Roiled by Emerging-Market Losses
Feb 17,
2014 12:00 AM GMT
Janet Yellen and Mario Draghi
have a new reason to consider what International Monetary Fund chief Christine
Lagarde calls the “ogre” of deflation: eroding confidence in emerging
markets. Weaker growth from Brazil to South Africa risks unleashing a “disinflationary impulse through the global economy,” said Bruce Kasman, chief economist at JPMorgan Chase & Co. in New York. Cheaper commodities, slower trade and sliding exchange rates in developing markets all could soften price pressures internationally.
That in turn could force Federal Reserve Chair Yellen and European Central Bank President Draghi to keep monetary policy loose for longer, increasing the attractiveness of their financial assets even at the threat of creating asset bubbles.
“Emerging market volatility is likely to continue,” said Roberto Perli, a former Fed economist and now a partner at Cornerstone Macro LP in Washington. That “over time could lead to easier monetary policies than large central banks would have otherwise preferred, mainly through potential disinflationary effects.”
----The dynamics of the world economy will be debated this week when central bankers and finance ministers from the Group of 20 gather in Sydney. For the first time since the G-20 became the premier forum for economic policy discussion in September 2009, it is officials from developing nations who are on the defensive as growth fades and markets tumble.
More
President summons center-left's Renzi as Italy seeks new government
By Steve Scherer ROME
(Reuters) - Italian President Giorgio Napolitano summoned Matteo Renzi to a
meeting on Monday at which he is expected to ask the center-left leader to form
a government that must overhaul one of the most troubled economies in the euro
zone.Napolitano is likely to ask the slick-talking mayor of Florence to form the country's 65th government since World War Two in the meeting, which a statement from the president's office said was scheduled for 10.30 a.m. (0930 GMT) in Rome.
Enrico Letta resigned as prime minister on Friday after his Democratic Party (PD) forced him to make way for Renzi, 39, who is promising radical reforms to the euro zone's third-biggest economy and a government that can survive until 2018.
Renzi would become the youngest prime minister in Italian history.
But to take power he will need the support of a center-right rival, and if he gets it, he will become the third premier in a row picked by the president and not by popular vote.
This process is not widely welcomed in a country where a long-entrenched political elite, resistant to reform, has grown unpopular due to systemic corruption and mismanagement.
More
Up next, the joke of the week. Euroland’s banks
have never been in better shape to pass the twice watered down ECB stress tests. It is believed that Mr.
Regling also has a bridge for sale in Brooklyn.
"We finished the year, and we reported that we had $17 billion of cash sitting at the bank's parent company as a liquidity cushion. As the year has gone on, that liquidity cushion has been virtually unchanged."
Bear Stearns CEO Alan Schwartz. March 12, 2008. Bust March 17, 2008
Regling: euro-zone banks in good shape before stress test: newspaper
BERLIN(Reuters) - The head of the euro zone's bailout funds, Klaus Regling, said that he believes banks in Spain, Portugal, Cyprus, Greece and Ireland are in good shape and that there will not be any surprises in European Central Bank stress tests due later in 2014.
In an interview to appear in Monday's Sueddeutsche Zeitung newspaper, the head of the European Stability Mechanism (ESM) said the five countries were benefiting from rising exports and economic growth was returning. He said it was important that the reforms continue.
"The banks in the program countries are in quite good shape," Regling is quoted as saying. "I expect that there won't be any big surprises in Spain, Portugal and Cyprus. The same is the case for Greece and Ireland."
The ECB's asset quality review, an assessment of the balance sheets of more than 120 banks due to be completed next autumn, should bring transparency on the quality of banks' loans and other assets.
More
http://www.reuters.com/article/2014/02/16/us-eurozone-banks-stresstest-regling-idUSBREA1F0W720140216
With Europe’s banks “thriving,” and Chinese Trusts
now guaranteed once again by the PBC, and the G-20 banksters and finance
ministers about to meet to press on with their currency wars and urge the G-3
to keep up QE programs and ZIRP, gold and silver are surging again as safe
haven instruments of last resort. Still, if Europe’s banks are in such good
health, why is the EU making plans to steal some pension money to lend to EU
banks? Stay long fully paid up physical precious metals.
"The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine, and to process; and that it cannot be created by political fiat or caprice."
Henry Hazlitt
Gold Rises to Three-Month High on Haven Demand as Silver Rallies
Feb 17, 2014 5:36 AM GMT
Gold advanced to the highest level in more than three months as demand for
haven assets increased on speculation that the U.S. economic recovery will
slow. Silver headed for the longest run of gains since at least 1968. Bullion for immediate delivery rose as much as 0.9 percent to $1,330.03 an ounce, the highest since Oct. 31, and traded at $1,325.78 by 1:34 p.m. in Singapore. Prices climbed 4.1 percent last week, the biggest increase since the period ended Aug. 16.
Gold rebounded 10 percent in 2014 amid expanding demand for coins and bars as signs of faltering U.S. growth boosted investor appetite for a haven. U.S. factory output unexpectedly fell in January by the most since May 2009, Federal Reserve figures showed on Feb. 14. Billionaire John Paulson kept his holdings of the metal unchanged in the fourth quarter, while hedge funds raised bullish bets to a three-month high.
“We’ve seen a significant turn in exchange-traded fund holdings,” said Victor Thianpiriya, an analyst at Australia & New Zealand Banking Group Ltd. in Singapore. “People are starting to look at it and think that sentiment amongst the longer-term investors is holding or turning for the positive.”
More
We end for the day with yet another radiation scare, this time in
America. This needs watching like a hawk.
Possible radiation leak at New Mexico military nuclear waste site
(Reuters) - Unusually high levels of radioactive particles were found at an underground nuclear waste site in New Mexico on Saturday in what a spokesman said looked like the first real alarm since the plant opened in 1999.
U.S. officials were testing for radiation in air samples at the site where radioactive waste, such as plutonium used in defense research and nuclear weapon making, is dumped half a mile below ground in an ancient salt formation.
"They (air monitors) have alarmed in the past as a false positive because of malfunctions, or because of fluctuations in levels of radon (a naturally occurring radioactive gas)," Department of Energy spokesman Roger Nelson said.
"But I believe it's safe to say we've never seen a level like we are seeing. We just don't know if it's a real event, but it looks like one," he said.
It was not yet clear what caused the air-monitoring system to indicate that radioactive particles were present at unsafe levels, Nelson said.
More
"The history of paper money is an account of abuse, mismanagement, and financial disaster."
Richard M. Ebeling
At the Comex silver depositories Friday final figures were: Registered 50.77 Moz,
Eligible 130.75 Moz, Total 181.52 Moz. (???)
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, modern Italy. Would you really want to belong to a monetary union that includes modern Italy? Italy’s youth unemployment problem at 41.6% is all down to their not wanting a job, says the man running Fiat and Chrysler. His Marie Antoinette-Charlie Munger moment in the spotlight.
“There’s
danger in just shoveling out money to people who say, ‘My life is a little
harder than it used to be. At a certain
place you’ve got to say to the people, ‘Suck it in and cope, buddy. Suck it in
and cope.’”
Proper
Charlie Munger.
Tycoons quarrel over Italy’s young jobless
Two of Italy’s business heavyweights have gone to war over the country’s soaring levels of youth unemployment
By Josephine McKenna, in Rome 11:04PM
GMT 16 Feb 2014
Two of Italy’s business
heavyweights have gone to war over the country’s soaring levels of youth
unemployment.
Diego Della Valle, head of the
Tod’s luxury leather goods empire, launched a blistering attack on John Elkann,
the president of the Fiat auto giant, after Mr Elkann said Italy’s young
unemployed had no desire to look for work.
Mr Della Valle, the colourful
entrepreneur known for his exuberant ties and gold-tinted spectacles, labelled
Mr Elkann an “imbecile” after a week of bitter exchanges between the two.
Mr Elkann, 37, is the grandson of
the late Gianni Agnelli, who groomed him to take over the Fiat empire that also
now controls Ferrari, Maserati and Chrysler.
“There is work, but young people
are not so determined to find it. If I look at the opportunities that exist, I
don’t see in them the desire to take up these opportunities,” said Mr Elkann,
who comes from one of Italy’s richest dynasties, and also owns Juventus FC.
Italy’s youth unemployment
reached a record 41.6pc in January, and at the weekend Mr Della Valle responded
to Mr Elkann’s comments.
“One who says young kids stay at
home because they don’t want to work [although] there is work is an imbecile,”
he said. “They should keep him at home or he should go skiing.”
The dispute between the two men
appears to be part of a broader rivalry over the operations of RCS MediaGroup,
an international publishing group in which each holds a stake.
“John Elkann belongs to a family
that has destroyed a large number of industrial jobs and as a consequence the
hopes of many young people,” Mr Della Valle said.
Mr Della Valle, who is funding
the €25m (£20m) restoration of Rome’s Colosseum, has a reputation for being
blunt and outspoken. In September last year, he accused fashion designer
Giorgio Armani of failing to play his part in saving Italy’s cultural heritage
and urged him to save Milan’s Sforza Castle
http://www.telegraph.co.uk/finance/financialcrisis/10642904/Tycoons-quarrel-over-Italys-young-jobless.html
“You
should thank God” for bank bailouts.”
Proper
Charlie Munger.
The monthly Coppock Indicators finished January.
DJIA: +202 Down. NASDAQ: +330 Up. SP500: +249 Up. The new Fed bubble continues, but seems to be running out
of momentum.
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