Baltic Dry Index. 1580 +18
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
The
best laid schemes o' Mice an' Men,
Gang aft agley,
An' lea'e us nought but grief an' pain,
For promis'd joy!
Gang aft agley,
An' lea'e us nought but grief an' pain,
For promis'd joy!
Robert
Burns. To A Mouse, On Turning Her Up In Her Nest With The Plough.
Great
Britain is booming, says the OECD and the Bank of England. Higher interest
rates are coming by 2017, says the new immigrant, Goldmanite, manager running
the market rigging, Old Lady who lives on Threadneedle Street.
Interest rates could rise sixfold in three years
Bank of England issues warning as British economy grows faster than any other developed nation
Interest rates will rise six-fold
by 2017 as Britain’s economy becomes one of the fastest growing in the
developed world, the Bank of England Governor said on Tuesday.
The increase to more “normal”
levels will be welcomed by many savers who have faced record low rates for more
than six years, but is likely to plunge many borrowers into financial
difficulty.
Mark Carney said that Bank rate
could reach 3 per cent within three years, six times the current 0.5 per cent.
The comments come as millions of
Britons are deciding where to invest this year’s Isa savings, and the
traditional home-buying season is about to start.
Brokers are expecting a rush of
borrowers wanting to fix their mortgages, while savers face a dilemma over
where to put their money to take advantage of the future increases.
The Governor’s remarks came as
the Organisation for Economic Co-operation and Development said Britain was now
experiencing the fastest growth of the world’s major economies.
The UK will grow by 3.3 per cent
in the first half of this year, the OECD said, faster than any other G7 nation.
More
But, don’t
count your chickens Mr. Carney, before they’re hatched. And this is before
America, the EU and the UK are proposing to start a sanctions trade war with Russia,
and in America and Japan’s case a shooting war with China. And before Great
Britain may lose its northern kingdom of dour Scotland, or even vote to exit
the wealth and jobs destroying EUSSR. Rather than booming, there’s at least a
50:50 chance of Great Britain going “Boom” before 2017. Stay long fully paid up
physical precious metals.
Retail sales slow in February after wet weather
Sales fall in retail sector for first time in almost a year
Retail sales in the UK fell in
February for the first time in ten months as wet weather across the country
took its toll on the high street.
Like-for-like retail sales fell
by 1pc in February compared to the same month last year, the first time that
like-for-like sales have declined since last April.
The slide in sales follows a
strong January – when like-for-likes increased by 3.9pc – and retail experts
warned the figures are a “reminder that recovery is far from certain”.
Britain has endured its wettest
winter since records began in 1910, with parts of southern England receiving
two and a half times the monthly average rainfall in February.
Although overall like-for-like
sales were dragged down by the high street, online sales increased by 14.3pc in
February compared to last year. This compares to 12.3pc growth in the same
month last year, although it is slower than the 15.8pc monthly average recorded
over the last six months.
More
Industrial production growth slows
UK industrial production slowed more than expected in January, but the manufacturing is sector performed well
Industrial production growth fell
to near-flat levels in January as severe weather conditions slowed North Sea
oil and gas output.
UK industrial production, which
makes up slightly less than one sixth of the UK economy’s output, slowed to
0.1pc in January from December, below expectations of 0.2pc and down from a
0.5pc growth rate the previous month, according to the Office for National
Statistics.
But the manufacturing sector
performed well in January, with output up by a solid 0.4pc, pushing the year on
year pace of expansion up to 2.2pc.
The figures came as the
Organisation for Economic Co-operation and Development (OECD) upgraded UK’s
growth forecast to 3.3pc for the first two quarters of 2014, saying that “the
recovery is advancing well in the United States and the United Kingdom”.
The OECD said “unusually severe
weather” had slowed GDP growth.
More
Elsewhere it
was more of the Wobble and the Great Disconnect.
China Export Prowess Wanes in U.S., Europe
Mar 12, 2014 2:47 AM GMT
The Made in China
label is losing traction with its two biggest customers. After three decades of
gains, China’s share of U.S. imports has plateaued and in Europe it’s in
decline. The steepest losses are in the European Union, where China’s share of imports slumped to 16.5 percent in the first 11 months of last year, from a 2010 high of 18.5 percent, according to data compiled by Bloomberg News. In the U.S. the needle has barely moved in the past five years, holding around 19 percent.
China’s low-cost vantage has been blunted by rising wages and an appreciating currency, with cheaper nations including Vietnam and Bangladesh competing to sell products from T-shirts to shoes. With an unexpected drop in total exports in February compounding the challenges, the trends underscore the need for President Xi Jinping’s government to foster competitiveness in higher-technology items from semiconductor chips to medical-imaging equipment to airplanes.
“It’s a sea change,” said Andrew Tilton, chief Asia economist at Goldman Sachs Group Inc. in Hong Kong, who previously worked for the international office of the U.S. Treasury Department. “China’s period of unusually strong competitive advantage in exports may have run its course.”
More
Japan’s Topix Falls Most in Five Weeks on China Concern
Mar 12, 2014 6:33 AM GMT
Japanese shares fell, with the Topix (TPX) index capping its biggest
decline in five weeks, after the yen gained yesterday as investors weighed China’s economic
outlook. Shippers retreated. Toyota Motor Corp., the world’s biggest carmaker, slid 2 percent. Nippon Yusen K.K. led shipping lines to the biggest decline among the Topix’s 33 industry groups. Sumitomo Metal Mining Co., which counts copper as a primary product, sank 4 percent after the metal traded near a 44-month low on concern that demand in China will slow.
The Topix fell 2.1 percent to 1,206.94 at the close in Tokyo, its largest drop since Feb. 4, with all industry groups on the gauge declining. The Nikkei 225 Stock Average lost 2.6 percent to 14,830.39, with just two companies rising. The yen traded at 102.92 to the dollar after rising 0.2 percent yesterday, the most in more than a week.
“The concern about China is big,” said Ayako Sera, a Tokyo-based market strategist at Sumitomo Mitsui Trust Holdings Inc., which has the equivalent of $651 billion in assets. “The outlook is unclear at the moment. While continuing to watch how it develops, investors are also preparing for the economy to deteriorate.”
More
http://www.bloomberg.com/news/2014-03-12/japan-shares-fall-as-yen-advances-telecom-stocks-slide.html
Misery Index Rising to 33-Year High on Abenomics: Japan Credit
Mar 12, 2014 3:04 AM GMT
Japanese Prime Minister Shinzo Abe looks set to drive an indicator of
economic hardship to a 33-year high by increasing taxes and prices amid
stagnant wages. The misery index, which adds the jobless rate to the level of inflation, will climb to 7 percentage points in the three months starting April 1 when Japan raises its sales levy to 8 percent from 5 percent, based on the median estimates of economists in Bloomberg News surveys of unemployment and consumer prices. That would be the highest level for the measure since June 1981 when Japan was emerging out of depression after the oil shocks in the 1970s
More
Asian Stocks Slide With Crude as China Concern Spurs Gold
Mar 12,
2014 6:34 AM GMT
Asian
stocks fell, with the regional index headed for a three-week low, oil
dropped and emerging-market and commodity-linked currencies weakened amid concern
that China’s
economy may be faltering. Gold advanced and copper traded near its lowest
since July 2010. The MSCI Asia Pacific Index tumbled 1.5 percent by 3:31 p.m. in Tokyo, set for the lowest close since Feb. 20 as a gauge of Chinese stocks in Hong Kong slid 1.9 percent. Standard & Poor’s 500 Index futures were little changed. The yen traded at 102.87 a dollar after gaining versus major peers yesterday and gold rallied 0.9 percent. The Australian dollar fell with currencies from South Korea to Malaysia. Oil in New York slid 0.6 percent amid signs of rising U.S. inventories, while copper futures were little changed at $6,469.75 a ton.
Most major equity indexes in Asia
declined as the suspension of a Shanghai-listed company’s bonds from trading
underscored risks in China’s financial markets less than a week after the
country’s first onshore default. At the same time, disappointing data on the
world’s second-largest economy has fueled a rout in base metals this week as
lawmakers discuss policy in Beijing.
----“The concern is that Chinese growth is
still slowing,” said Shane Oliver, the Sydney-based head of investment strategy at
AMP Capital Investors Ltd. in Sydney, which oversees $131 billion. “The risk is
this little correction could linger a little bit longer. The markets remain
vulnerable to bad news regarding China and the Ukraine.”
More
http://www.bloomberg.com/news/2014-03-11/yen-holds-jump-as-nikkei-futures-fall-oil-extends-drop.html
And speaking
of the Ukraine, it’s time to head for the bunker. After Sunday’s exit vote in
the Crimea, all hell breaks out next week. Time to be in cash and gold ahead of
Mutual Assured Destruction. Germany, it seems, is about to cut Mercedes off
from its fastest growing market.
Russia Calls U.S. Aid to Ukraine Illegal Amid Standoff
Mar 12, 2014 4:51 AM GMT
Russia stood by deposed
Ukrainian President Viktor Yanukovych and called possible U.S. aid to the new
government in Kiev
illegal, as the standoff with Western governments over Crimea intensified. Financial support sought by the U.S. for Ukraine’s interim leadership would violate American law barring aid to any regime that uses force to take power, the Russian Foreign Ministry said in a statement yesterday. Russia considers the ouster of Moscow-backed Yanukovych a coup, a claim rejected by the U.S.
Russia is wresting control of Crimea, sparking the worst crisis between Russia and the West since the Cold War. Ukraine says its neighbor has put as many as 19,000 troops in the region.
There’s a danger Russia’s
incursions may eventually spread to Ukraine’s east, according to Amanda Paul, a
policy analyst and program executive at the European Policy Centre.
“With Crimea apparently well
under Russia’s control, it can now play around with the east,” she said by
e-mail from Brussels. “Ukraine seems to be doing its best not to be provoked by
Russian aggression. But it’s like having your house robbed and having to stand
and watch without doing anything.”
More
Russia Gets Crimea Deadline as Yanukovych Warns of Civil War
Mar 11, 2014 6:51 PM GMT
Germany told Russia it must
switch course in Crimea by next week or risk more sanctions as Ukraine’s deposed
president warned of a possible civil war. The European Union will discuss harsher penalties on March 17 barring “obvious changes in Russia’s actions,” German Foreign Minister Frank-Walter Steinmeier said today in Estonia. A planned March 16 referendum in Crimea on whether to join Russia should be halted, he said. Toppled President Viktor Yanukovych told reporters in Russia that lawlessness is spreading in Ukraine, fomented by the “fascists and ultranationalists” who are in charge in Kiev.
----The EU announced a three-stage sanctions process against Russia last week, starting with the suspension of trade and visa-liberalization talks. Stage two includes asset freezes and travel bans for as-yet unidentified officials and would be imposed if Russia boycotts international talks on a settlement with Ukraine. Stage three envisages “additional and far-reaching consequences” if Russia further destabilizes Ukraine.
Britain hosted a meeting today to
compile a list of people who could be hit by sanctions.
The U.S. banned visas for Russian
officials and others it said were complicit in violating Ukraine’s sovereignty,
while President Barack Obama also authorized financial measures.
More
Thy wee bit housie, too, in ruin!
It's silly wa's the win's are strewin!
An' naething, now, to big a new ane,
O' foggage green!
An' bleak December's winds ensuin,
Baith snell an' keen!
It's silly wa's the win's are strewin!
An' naething, now, to big a new ane,
O' foggage green!
An' bleak December's winds ensuin,
Baith snell an' keen!
Robert
Burns. To A Mouse, On Turning Her Up In Her Nest With The Plough.
At the Comex
silver depositories Tuesday
final figures were: Registered 52.08 Moz, Eligible 131.58 Moz, Total 183.46 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, step forward the central banksters at the Old Lady of Threadneedle Street. Below, the Telegraph’s AEP posits that the Bank of England has got away with a “free lunch.” Will the Fed try the same trick? But what if he’s wrong and after reaching escape velocity in the global economy, all that free money tries chasing scarce commodities and tangible assets? After a lost decade in the teens, we get the roaring twenties of the Great Inflation? What if the onset of “MAD” next week turns into a Black Swan?
Thou saw the fields laid bare an' waste,
An' weary winter comin fast,
An' cozie here, beneath the blast,
Thou thought to dwell-
Till crash! the cruel coulter past
Out thro' thy cell.
Robert Burns. To A Mouse, On Turning Her Up In Her Nest With The Plough.
An' weary winter comin fast,
An' cozie here, beneath the blast,
Thou thought to dwell-
Till crash! the cruel coulter past
Out thro' thy cell.
Robert Burns. To A Mouse, On Turning Her Up In Her Nest With The Plough.
The Bank of England will never unwind QE, nor should it
Economics Last updated: March 11th, 2014
Britain has just carried out one
of the greatest victimless crimes in modern financial history. It is in effect
wiping out public debt worth 20pc to 25pc of GDP – on the sly – without
inflicting serious macroeconomic damage or frightening global bond markets.
Governor Mark Carney more or less
acknowledged this morning that the Bank of England will never reverse its
£375bn of Gilts purchases. Quite right too.
“Any unwinding of QE should come
after several adjustments to rates,” he told the Treasury Select Committee. The
word “any” tells us what we need to know.
This follows comments by Deputy
Governor Charlie Bean yesterday that the Bank will “only contemplate selling
back Gilts once the recovery is on a firm path.” He admitted that some holdings
may never be sold.
The Bank has come a long way from
the early days of QE when any such suggestion was treated as an outrageous
smear. There was a mantra that helicopter money requires a hoover afterwards to
vacuum it up.
But in a deflationary world there
is no clear imperative to do so. The Bank can sit on its Gilts forever. These
can be switched in zero-coupon bonds in perpetuity. The certificates can be put
in a drawer and left to rot. The debt is eliminated in all but name.
If and when inflation starts to
pick up again – not imminent – the Bank can raise interest rates to prevent
overheating. Indeed, it is better to do this than unwind QE because this
restores rates quicker to equilibrium levels, a boon to savers and a healthy
brake on property speculation.
Foreign investors who sold their
Gilts in 2009 or thereabouts lost 20pc (now below 15pc) on sterling’s
devaluation, but made a lot back from the rising nominal value of the bonds
when rates collapsed to near zero. They didn’t do too badly.
There has been a social cost
within the UK. QE has been a huge net transfer from savers to borrowers. This
is unjust, but ultimately a better outcome for society than driving borrowers
to the wall in a replay of the early 1930s (or as the eurozone has done over
the last five years). Governments should act in the interests of creditors
alone. Britain has ended up with a rough balance between the competing
interests of savers and borrowers. Unemployment has been much lower than it
might have been.
Puritans and Calvinists are
certain that there must be sting in the QE tail for Britain in the end. Perhaps
so, perhaps the expanded money base will come back to haunt us, but such
arguments mostly smack of religion, dogma, and psychological obsession. There
is no such determinist force at work.
Can there really be such a thing
as a free lunch in economics? We will never be able to prove it either way, but
on balance it looks like the answer is yes.
More
Still
thou art blest, compar'd wi' me
The present only toucheth thee:
But, Och! I backward cast my e'e.
On prospects drear!
An' forward, tho' I canna see,
I guess an' fear!
The present only toucheth thee:
But, Och! I backward cast my e'e.
On prospects drear!
An' forward, tho' I canna see,
I guess an' fear!
Robert
Burns. To A Mouse, On Turning Her Up In Her Nest With The Plough.
The monthly Coppock Indicators finished February.
DJIA: +203 Up. NASDAQ: +353 Up. SP500: +255 Up.
The new Fed bubble continues, but the DJIA and S&P seem to be running out
of momentum.
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