Baltic Dry Index. 1175 +11
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money."
Daniel Webster
First the good news. At the G-20 meeting of finance
ministers and central banksters in faraway summery Sidney, all agreed to beat
their swords into ploughshares and to boost growth and jobs over the next five
years. Unfortunately they left out quite how this was to happen or who was to
take the lead. They also ordered America to ratify the new voting order agreed
in 2010, before their next meeting in April. A tall order with the changes
blocked by the Republicans in the US Congress.
"When paper money systems begin to crack at the seams, the run to gold could be explosive."
Harry Browne
G20 pledges £1.2 trillion boost and millions more jobs
Finance ministers and central bankers promise concrete action to boost global growth
The world’s largest economies
have set a target of adding more than $2 trillion (£1.2 trillion) to the global
economy over the next five years, signalling optimism following years of
crisis-era austerity.
Finance ministers and central
bankers said they would take concrete action to increase investment, boost
employment and promote competition in a joint communiqué following a two-day
G20 meeting in Sydney. The group accounts for around 85pc of the global
economy.
“We will develop ambitious but
realistic policies with the aim to lift our collective GDP by more than 2pc
above the trajectory implied by current policies over the coming five years,”
the statement said. “This is over $2tn more in real terms and will lead to
significant additional jobs.”
Australian Treasurer Joe Hockey,
who hosted the meeting, hailed the announcement as a new dawn for cooperation
in the G20.
There is no detail yet on how
reforms to promote economic growth will be implemented or repercussions if
targets are not met.
"What growth rates can be
achieved is a result of a very complicated process," Germany's Finance
Minister Wolfgang Schaeuble said after the meeting. "The results of this
process cannot be guaranteed by politicians."
The statement released on Sunday
said all central banks “maintain their commitment that monetary policy settings
will continue to be carefully calibrated and clearly communicated”.
More
Now the bad news. The new order in thoroughly
corrupt Ukraine needs that G-20 minus one, rescue ASAP. Having just been poked
in the eye, Glasgow kissed and kneed in the groin, Russia is hardly likely to
join in any US and EU rescue of a polarised nearly bankrupt Ukraine. But will
the west really fund corrupt Ukraine merely to bailout the Russian banks it
owes the debt to?
“Those who don't know history are destined to repeat it.”
Edmund Burke
Ukraine Interim Leader Warns of Economic Danger
Feb 23, 2014 10:19 PM GMT
Ukrainian parliament Speaker Oleksandr Turchynov, handed presidential powers
as lawmakers prepare to form a coalition government, warned that the economy
was in a “pre-default situation.” Lawmakers in Kiev worked on reshaping government after ousting Viktor Yanukovych from the presidency for a role in the violence that killed at least 82 people last week. The U.S. and the European Union pledged aid for a new cabinet. Border guards stopped Yanukovych at an airport in the eastern city of Donetsk two days ago. He wasn’t detained.
With protesters in control of the capital and Yanukovych denouncing events as a “coup d’etat,” his opponents face a contentious period after the release from prison of opposition leader Yulia Tymoshenko. Jailed more than two years ago for abuse of power, she vowed to return to the fractured political scene before presidential elections on May 25.
“Ukraine’s economy is spinning out of control,” Turchynov said on parliament’s website late yesterday. “The new government’s task is to stop the country’s slide, to stabilize the currency rate, to ensure timely salary and pension payments, to win back investors’ trust, and to create new jobs. Another priority is to return to the European integration path.”
----With western nations and Russia tussling for sway over the country of 45 million people, the International Monetary Fund is ready to help Ukraine “not only from a humanitarian point of view but also from an economic point of view,” Managing Director Christine Lagarde told reporters in Sydney following a meeting of Group of 20 officials yesterday.
Treasury Secretary Jacob J. Lew said the U.S. was prepared to help Ukraine return to a path of democracy, stability and growth.
----The EU’s foreign policy chief, Catherine
Ashton, will travel to Ukraine today to meet party leaders. Russia halted a
$15 billion bailout for its neighbor after the unrest and talks on resumed
financing may continue only after a new government is formed, RIA Novosti
reported yesterday, citing Russian Finance Minister Anton Siluanov in Sydney.
----In Ukraine, the political crisis polarized sentiment between its western and central regions bordering the EU and those in the south and east that are home to more Russian speakers and ethnic Russians.
While people toppled Vladimir Lenin’s statues across the county as protests, according to TV channel 5, more than 2,000 rallied for closer ties with Russia in the southern city of Odessa. In Kerch, also in the south, marchers replaced a Ukrainian flag at the mayor’s office with Russian and Crimean flags, the Unian news service reported.
More
As things stand, the austerity wracked EU, is proposing to join in a US led bailout
for the polarised and possibly soon to split Ukraine, in a way that it’s
unwilling to bailout its own members in impoverished, tax and work shy Club
Med. It will be interesting to see how that plays out with Club Med voters in
May’s European elections. But is the USA really going to bailout the Ukraine to
pay off Russia? I don’t think so either. The G-20’s brotherly love might not
survive the tediously long flight back from the back of beyond.
In other news, confirmation of gold’s drain from
west to east. How much or how little gold now really remains in London Paris
and the USA, and more importantly, how many nations think that they own it.
Stay long fully paid up physical precious metals.
"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
Switzerland sent most of its January gold exports to Asia
February 21, 2014, 4:34 PM
In case you needed more proof of what some analysts have been referring to
as a shift in physical gold demand from West to East, take a look at data
released this week from the Swiss customs office.Customs data Thursday showed that Hong Kong, India and Singapore were among the primary purchasers of Swiss gold and silver bullions and coins in January 2014, according to an article on Swissinfo, a branch of the Swiss Broadcasting Corp.
Around 85 tons of gold GCJ4 were exported to Hong Kong in January, accounting for almost half of Switzerland’s total gold exports, said analysts at Commerzbank. “The gold is likely to have been shipped on to China, which points to continuing high gold demand there,” they said.
Switzerland does not produce the gold itself, but imports it from other countries and then melts it down to sell to Asian buyers in smaller units, the Commerzbank analysts said.
“By far the largest quantity of gold (119 tons) was imported from Great Britain — part of this total is likely to have come from sold [exchange-traded fund] holdings,” they said. “This underpins the gold flow from west to east that has been underway for months now.”
----Dips are “being
viewed as entry points for buyers, as Asian demand seems to be in firm control
of the market at this point,” said Brien Lundin, editor of Gold Newsletter.
Away from all the bonhomie in Sydney, Uncle Sam and the Banzai Boys from the land of the rising sun, (coming soon to an Asian beach near you,) were intent on sending a very different sort of message to the Han of the Middle Kingdom. An old fashioned 19th century “know your place,” it seems. A very daring message for the world’s leading debtor by far, to send to its leading creditor by far.
Below, Uncle Sam
seems determined to bring about a clash between the old empire and the rising
new empire, later in 2014.
In Japan’s Drill With the U.S., a Message for Beijing
CAMP PENDLETON, Calif. — In the
early morning along a barren stretch of beach here last week, Japanese soldiers
and American Marines practiced how to invade and retake an island captured by
hostile forces.
Memo to Beijing: Be forewarned.
One Marine sergeant yelled for
his men, guns drawn, to push into the right building as they climbed through
the window of an empty house meant to simulate a seaside dwelling. The
Marines had poured out of four amphibious assault vehicles as another group of
smaller inflatable boats carrying soldiers of Japan’s Western Army Infantry Regiment
landed in an accompanying beachhead assault.
There were shouts in Japanese.
There were shouts in Marine English. There was air support, from Huey
and Cobra helicopters hovering above. Then larger Navy hovercrafts roared in,
spitting up a spray of seawater before burping out Humvees and more Japanese
troops, their faces blackened with camouflage paint.
American military officials,
viewing the cooperative action of the former World War II enemies from a nearby
hillside, insisted that the annual exercise, called Iron Fist, had nothing,
nothing to do with last fall’s game of chicken between Tokyo and Beijing
over islands that are largely piles of rocks in the East China Sea. But Lt.
Col. John O’Neal, commander of the 15th Marine Expeditionary Unit, said that
this year, the Japanese team came with “a new sense of purpose.”
More
Obama’s Dalai Lama Meeting Shows Balancing Act With China
Feb 22, 2014 1:30 AM GMT
U.S. President Barack
Obama sought to keep up pressure for religious freedom on China as he met with the Dalai
Lama, balanced with a desire to maintain a working relationship with the Asian
superpower. With China protesting the Dalai Lama’s visit yesterday to the White House, Obama expressed support for the “unique” traditions of the Tibetan people and for human rights while affirming that the U.S. doesn’t support any attempt to separate Tibet from the rest of China.
“The United States recognizes Tibet to be a part of the People’s Republic of China,” White House Press Secretary Jay Carney said. “But the U.S. strongly supports human rights and religious freedom in China. We’re concerned about continuing tensions and that the deteriorating human rights situation in Tibetan areas of China.”
The Chinese government lodged a formal diplomatic protest, saying the meeting would undermine the U.S.-China relationship, and summoned the charge d’ affaires to a meeting last night.
Chinese officials expressed “strong indignation and firm opposition” to Obama’s meeting with the exiled Tibetan spiritual leader, the official Xinhua News Agency reported.
The relationship between the world’s two biggest economies is a focal point of Obama’s attempt to shift the focus of U.S. foreign policy toward the Pacific. China is asserting its military and economic clout in the region as Obama is looking to expand U.S. influence and trade. The U.S. president is scheduled to travel to Japan, South Korea, Malaysia and the Philippines in late April.
More
But all was not bonhomie in faraway Sydney in the battle of the Lew/Lou’s. It may be Lew’s dollar, but it’s certainly Lou’s problem. Stay long fully paid up physical gold and silver. After this momentous weekend, I have a feeling it’s about to become everyone’s problem.
China Rebuts Lew as Emerging Markets Keep Up Pressure on Fed
Feb 23, 2014 4:06 AM GMT
Feb.
23 (Bloomberg) -– China (CNGDPYOY) led developing markets in hitting back
at the U.S. as India and South
Africa kept up pressure on the Federal Reserve to
consider the spillover effects of tapering its bond-buying program.
A day after Treasury Secretary Jacob J. Lew questioned the pace of China’s economic opening, Chinese Finance Minister Lou Jiwei said yesterday the U.S. recovery had been buoyed by monetary policy rather than structural changes. Indian central bank Governor Raghuram Rajan said countries should ensure tightening doesn’t upset the global economy and is done in a measured way.
As Group of 20 finance ministers and central bank governors began their two-day meeting in Sydney yesterday trying to find common ground to support economic growth, officials are less unified on monetary policy. While the U.S. and fellow industrial countries have put the onus on their emerging counterparts to get their houses in order to withstand volatility, developing-market officials want policy calibration.
“The tension is likely to continue,” said Tomo Kinoshita, chief economist at Nomura Holdings Inc. in Tokyo. “China is on the side of the emerging economies rather than on the side of the advanced economies.”
----Lew, speaking in Sydney on Feb. 21, said while China wants “to move in the right direction” on opening its economy, “I have yet to see the signs that they are moving with the speed that we would want.”
Turning the tables yesterday, China’s Lou said while developed countries now seem very positive about their growth prospects, “that may not be totally true.”
“Take the U.S. for example: Its recovery is being helped by monetary policy and not much by structural adjustment,” he told Bloomberg News. “They have always been saying that China should boost its consumption ratio and the U.S. should boost its investment ratio, but that structural change is not happening in the United States.”
More
"If you don't trust gold, do you trust the logic of taking a beautiful pine tree, worth about $4,000 - $5,000, cutting it up, turning it into pulp and then paper, putting some ink on it and then calling it one billion dollars?"
Kenneth J. Gerbino.
At the Comex silver depositories Friday final figures were: Registered 50.29 Moz,
Eligible 130.08 Moz, Total 180.37 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Yes it’s the central banksters again, turning a
blind eye to theft on a truly epic scale. Below, what did Bernocchio know about
Liebor rigging and when did he know it, and just why did he do nothing for
almost six years?
“The world is a place that’s gone from being flat to round to crooked.”
Mad Magazine.
Fed knew about Libor rigging in 2008
Senior Fed official first flagged Libor issue at a policy meeting in April 2008, newly released documents reveal
The US Federal Reserve knew about Libor rigging three years before the financial scandal exploded but did not take any firm action, documents have revealed.According to newly published transcripts of the central bank’s meetings in the run-up to and immediate aftermath of the collapse of Lehman Brothers, a senior Fed official first flagged the issue at a policy meeting in April 2008.
William Dudley expressed fears that banks were being dishonest in the way they were calculating the London interbank offered rate – a global benchmark interest rate used as the basis for trillions of pounds of loans and financial contracts.
“There is considerable evidence that the official Libor fixing understates the rates paid by many banks for funding,” he said.
He added that a newspaper report, which lifted the lid on some degree of manipulation, appeared to have triggered “an outbreak of veracity among at least some” bankers, who started reporting accurately the interest rates they offer each other, which are used to calculate Libor.
----The scandal impacted the finances of tens of millions of ordinary households and businesses, and dealt a devastating blow to the banking industry. Financial institutions have paid more than $5bn (£3bn) in fines to settle the matter with regulators in the US, UK and the European Union. A dozen individuals have been criminally charged, and many others lost their jobs – including Barclays’ chief executive Bob Diamond and chairman Marcus Agius, who both resigned over the issue.
The transcript of the Fed’s April 2008 meeting raises questions about why the central bank did not move to properly tackle the scandal.
More
Feb. 21, 2014, 2:53 p.m. EST
‘Fog of war’ surrounded Fed in 2008, transcripts show
Struggling with a crisis that stayed one step ahead of them
WASHINGTON (MarketWatch) — For the Federal Reserve, 2008 was a
grim year, transcripts of their policy deliberations released Friday reveal.
The
central bankers trudged though an ever-deepening crisis that remained shadowy
and illusive, while trying to show markets that they were on top of the situation.
The transcripts show central bankers consistently hampered by a lack of basic
information about the weak condition of the nation’s biggest financial firms,
whose excesses eventually led to a loss of basic confidence in the health of
the financial system.
This
caused credit -- the life-blood of the economy -- to freeze up, sending the
economy into the deepest downturn since the Great Depression.
Fed officials couldn’t see this.
At the outset of the year Fed
Chairman Ben Bernanke was hoping for a “garden variety recession.” As the year
went on, officials consistently hoped that the worst was behind them. To make
things more confusing, inflation spent almost the entire year higher than many
Fed officials could stomach.
The U.S. central bank had eight
regular meetings and six emergency meetings as they groped for the right policy
path.
----For
instance, at a March 10 meeting to set up an emergency lending facility to aid
the financial system, Fed officials had only heard “rumors” that Bear Stearns
might be in trouble. Five days later, the Fed was instrumental in selling the
collapsing investment bank to J.P. Morgan Chase
----Then in September, Fed officials briefly thought
that they and the Bush administration had done the right thing in refusing to
rescue Lehman Brothers.
“By denying funding to Lehman
suitors, the Fed has begun to re-establish the idea that markets should not
expect help at each difficult juncture. Changing rates today would confuse that
important signal and take out much of the positive part out of the previous
decision,” said St. Louis Fed President James Bullard.
Fed officials, including now Fed
Chairwoman Janet Yellen, were content to hold rates steady after Lehman
collapsed.
As happened time and time again
all year, officials quickly saw the error of their ways, and rushed to slash
interest rates to zero by the end of the year as the financial system froze up
and the economy cratered.
MoreBanks are an almost irresistible attraction for that element of our society which seeks unearned money.
J. Edgar Hoover
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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