Baltic Dry Index. 1468 +15
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood. For these few gold has been the asset of last resort."
Antony C. Sutton
It is exit
day for drinkers in the Last Chance Saloon. For now, return of money beats
return on money. To this old dinosaur commodities trader, highly unpredictable forces
will come into play once Crimea votes on Sunday to re-join Russia. For this not
to happen, President Putin would have to unexpectedly blink, and somehow rig
the vote in favour of the Crimea voting to become the Ukraine’s Monaco. It isn’t
going to happen any more than President Obama is going to fudge yet another red
line, and impose itsy bitsy sanctions on Russia, when the Russian parliament
votes to admit the Crimea back into President Putin’s Russia next week. Though
it’s not in Europe’s best interest, the EU intends to slavishly follow the USA
lead on sanctions, and continental Europe will cut off its nose despite its
face. Such is the madness abroad in the asylum of the EUSSR.
But if
meaningful sanctions are imposed against Russia, Russia will retaliate, mostly
against continental European interests, and will be incentivised to go on to
partition the Russian speaking half of Ukraine. If a shooting war then breaks
out, American cities will not be immune to retaliation from the air via
conventional rockets at first, unlike World War Two. Russian cities will not be
attacked with impunity in the 21st century, though no one in
Manhattan, LA, Chicago, or Boston, let alone Washington seems to understand
this. Unfortunately history shows that there never was a weapon invented that
wasn’t eventually used. And so it was with the atom bomb. But now we have MIRV H
bombs on rockets as well. If a shooting war starts between America and Russia,
it is all too likely to escalate as in World War One.
For now we
are still in the early stage of our new game of Chicken Kiev. But it is a new 21st
century game quite different from 1945 through 2000. If push comes to shove
with Russia over America’s botched Coup in Kiev, I don’t think any in the complacent
west are aware of the risks. For one minor one, I doubt that the EBRD’s new
grain export port outside Odessa will operate. The mere threat of attack will
keep ships away.
But I think
by now you get my point. Unless America backs quickly away from its rhetoric on
sanctions, our world enters a white hot, new cold war, starting next week.
After that it’s only a hop, skip and a jump, into the return of the blitz. Stay long fully paid up physical precious
metals held outside of the system where they may be hypothecated MF Global
style, or simply stolen by government edict. Remember truth is the first
casualty of war, though no one in Washington or London can remember what truth
was. We live in a new lawless 21st century age.
"When paper money systems begin to crack at the seams, the run to gold could be explosive."
Harry Browne
Putin’s Ukraine Ambition Unimpeded by West as Crimea Looms
Mar 14, 2014 4:42 AM GMT
Western leaders are counting on the threat of wide-ranging sanctions to make
Vladimir Putin pause for breath after swallowing Crimea. If they can’t, the
Russian president may opt to move deeper into Ukraine. Putin has yet to blink after sending in Russian troops to seize control of the Crimean peninsula last month, triggering the worst confrontation since the Cold War. Even as the U.S. and European governments step up their threats of punitive action, pro-Russian protests that are happening in the east of Ukraine, including deadly clashes last night, give him the pretext for further incursions.
“I wouldn’t rule out a Russian military operation in eastern Ukraine, though it’s not on the agenda at the moment,” Fyodor Lukyanov, head of the Moscow-based Council on Foreign and Defense Policy, said by phone March 12. “If the Ukrainian authorities repress these protests, Russia will respond.”
More
Putin Deports Executives for Speeding as Sanctions Loom
Mar 13,
2014 8:00 PM GMT
Even before the Ukraine standoff, foreign companies in Russia say they
were alarmed by a surge in the number of executives being deported for minor
infractions. Now with the West preparing sanctions, they’re bracing for more. Almost 1,000 people from countries outside the former Soviet Union have had their work visas revoked for committing two or more “administrative violations” since the end of last year, when the migration service and traffic police linked their databases, according to immigration authorities. Such offenses can be as minor as a parking ticket, smoking in prohibited areas or even jaywalking.
“Individuals have been stopped on the border for having two speeding tickets and told their visa is no longer any good,” said Alexis Rodzianko, president of the American Chamber of Commerce in Moscow, which promotes the interests of Exxon Mobil Corp., PepsiCo Inc. (PEP) and 800 other companies.
Before the Kremlin-backed president of Ukraine, Viktor Yanukovych, was ousted last month, prompting President Vladimir Putin to pour troops into Crimea and prepare to annex the peninsula, officials said they were working with foreign businesses to resolve the deportation problem as quickly as possible. Now those talks have been shelved as lawmakers prepare legislation that would allow Russian authorities to seize assets of western companies in case of sanctions.
More
In lesser
news. Buy more, all news is good news on QE Forever and ZIRP. What could
possibly go wrong? Well for one, as Johnny Goes Marching Away From Home Again, to
sort out the Bear problems of the Tartars, Poles. Uke’s and Cossacks, China
might use the occasion to resolve the Diaoyu Island question once and for all.
Occupation and a flash bash crash fight with Japan to settle old scores, might
look irresistible, especially if the Chinese shadow banking systems start to go
into meltdown. Everyone likes a good 19th century style foreign
escapade, and in this one China doesn’t even have to go abroad.
"Gold would have value if for no other reason than that it enables a citizen to fashion his financial escape from the state."
William F. Rickenbacker
China Bond Risk Exceeds Ireland as Defaults Unavoidable
Mar 14,
2014 3:31 AM GMT
China’s default risk has
risen beyond that of Ireland, having been on par with France and Japan a year ago, as
Premier Li Keqiang said financial leverage is making the economy’s outlook more
complex. Five-year contracts protecting against non-payment on government debt climbed to 99 from 63 a year earlier, almost double the 49 for Japan and 51 for France, CMA credit-default swap data show. That compares with 88 for lower-rated Ireland, which exited a bailout in December. The yuan has lost 1.3 percent in the past month, the most in Asia, while the Shanghai Stock Exchange Composite Index has declined 5.2 percent.
This year’s 7.5 percent economic expansion target is “flexible” and some financial product defaults may be unavoidable, Premier Li told a press conference at the National People’s Congress yesterday
More
China’s Big Four Banks See $70 Billion Vanish From Stocks
Mar 13,
2014 5:19 PM GMT
The world’s most-profitable banks have never been so unloved by stock
investors. China’s four-biggest lenders, which reported $126 billion of earnings in the 12 months through September, sank to the lowest valuations on record in Hong Kong trading yesterday. The MSCI China Financials Index dropped to an almost decade low versus the global industry benchmark while the market value of Industrial & Commercial Bank of China Ltd., the nation’s largest lender, fell below net assets for the first time on March 12.
The state-controlled banks known as China’s Big Four are getting squeezed by slower economic growth and rising bad debts just as policy makers open up the nation’s financial system to non-government competitors. Their shares have lost $70 billion of value this year, equivalent to the size of New Zealand’s entire stock market, even as U.S. and European peers rally. Wells Fargo & Co. and JPMorgan Chase & Co. have knocked ICBC from its ranking as the world’s biggest bank by market value.
“The market is concerned about future profitability” in China, Diana Choyleva, the head of macroeconomic research at Lombard Street Research, said by phone from London on March 11. “I would not be investing Chinese bank shares just yet. They have further to go.”
More
China H-Shares Poised for Bear Market on Economy Concerns
Mar 14,
2014 6:24 AM GMT
Chinese stocks fell, sending the Hang Seng China Enterprises Index (HSCEI)
down more than 20 percent from its Dec. 2 high, amid growing concern that
weaker economic growth will curb earnings and spur corporate defaults. The gauge of Chinese companies listed in Hong Kong dropped 1.2 percent to 9,215.88 at 1:17 p.m. local time, led by a 6.9 percent plunge in China Citic Bank Corp. (998) The gauge of so-called H shares extended its retreat from a closing level of 11,548.07 on Dec. 2 and has fallen 15 percent this year, the most worldwide after Russia’s Micex Index. (INDEXCF)
Yanzhou Coal Mining Co. (1171) and Great Wall Motor Co. (2333) have led the retreat since December with losses exceeding 30 percent amid data showing falling exports, weaker manufacturing and slower retail-sales growth. Agricultural Bank of China Ltd. paced declines among lenders as the nation’s first onshore corporate bond default last week spurred concern that more will follow.
“It looks like the market hasn’t fully priced in the economic slowdown,” said Wei Wei, an analyst at West China Securities Co. in Shanghai. “The market needs some time to digest the negative economic data and the risk of stocks further going down is still there.”
Developing-nation equity funds posted a 20th week of outflows in the period ended March 12, led by $878 million of withdrawals from China funds, Citigroup Inc. said in a report today, citing data compiled by EPFR Global.
More
China Stimulus Decision Looms as Investment Slows
Mar 14, 2014 3:49 AM GMT
China’s weakest start to a
year for investment growth since 2001 and unexpectedly slow industrial
production add pressure for economic stimulus, just as Premier Li Keqiang
signals he wants to avoid such a move. Li, at his annual press briefing in Beijing yesterday, indicated he’s confident that economic goals for 2014 are within reach. Two hours later, data showed factory output rose in January and February from a year earlier by the least since the global financial crisis, while retail sales grew at the slowest rate for the period since 2004.
The figures increase chances that China will take steps to boost growth including the first cut in almost two years to lenders’ reserve requirements, according to Societe Generale SA. Any threat to jobs, incomes and a 7.5 percent growth target could test the leadership’s resolve to curb pollution choking major cities, rein in shadow banking and control risks from a credit boom.
More
"We need only take our heads out of the sand to see clearly that interventionism not only has failed to provide the promised something-for-nothing, but has led to all sorts of undesirable consequences. Indeed, many are just beginning to realize that we are moving towards disaster even though we have been on a wrong heading for decades."
Leonard Read
At the Comex
silver depositories Thursday
final figures were: Registered 52.35 Moz, Eligible 130.92 Moz, Total 183.27 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, even Germany’s “Greens” get on the train to
war bandwagon, to mangle metaphors needlessly. Yesterday’s men Schroeder and
Kohl apart, all in the west expect a repeat of Operation Barbarossa starting
sometime this spring.
"With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people."
F. A. von Hayek
Pipe It, Gerhard: EU Parliamentarians Shun Ex-Chancellor
By Gregor Peter Schmitz in Brussels March 13, 2014 – 04:35
PM
Members of the conservatives
and the Green Party in the European Parliament want to muzzle Gerhard Schröder.
As the executive of a Russian pipeline company, they say, he should keep quiet
about his views on the Ukraine conflict.
Conservative members of the EU's
legislative body enthusiastically sent around a draft of a joint resolution
drafted by, among others, Rebecca Harms, the leading candidate for the Green
Party heading into May's European elections. As part of a resolution parliament
is preparing on the Crimea crisis, the politicians wanted to insert language taking
a swipe at the former German chancellor's recent EU-critical remarks concerning
the situation in Ukraine.
"The European Parliament
regrets statements made by former German Chancellor Gerhard Schröder about the
crisis in Ukraine," the paper reads, "and suggests he should make no
public statements about Russia because his relationship with Gazprom, a company
that is one of Russia's most important foreign policy instruments, creates a
clear conflict of interest."
Of course, the former chancellor
is no stranger to controversy, given his post-Berlin career in pipeline
politics. He's now the chairman of the board of Nord Stream, the company
operating a gas pipeline between Russia and Germany that is majority owned by
Gazprom, and is a friend of Russian President Vladimir Putin as well. In his
recent comments, Schröder claimed that serious crisis management errors and a
general lack of understanding of the region on the EU's part have exacerbated
the Ukrainian conflict.
At an event on Sunday organized
by the German weekly newspaper Die Zeit, Schröder said the European
Commission in Brussels hadn't "understood in the least … that it is a
culturally divided country and that one cannot deal with such a country in this
way." "I ask myself if it was correct to force a culturally divided
country like Ukraine to choose between two alternatives -- an association
agreement with the EU or a customs agreement with Russia." He accused the
EU of "initial mistakes" that later fueled the conflict between
Russia and Ukraine. In an interview given to SPIEGEL ONLINE in mid-February,
Schröder also accused the EU of one-sidedness in its support for the opposition
in Kiev.
----On
Thursday morning, a spirited debate took place over whether such a resolution
would even be permissible given its potential to impede on Schröder's rights as
a private citizen. (It wasn't.) Schröder also has plenty of friends in the
European Parliament, including Martin Schulz, president of the law-making body,
who is, like Schröder, a member of the center-left Social Democrats.
----But
perhaps Schröder's detractors shouldn't get too carried away. The
mass-circulation daily Bild on Thursday quoted conservative former
longtime German chancellor Helmut Kohl of Merkel's Christian Democrats accusing
the West, including the EU, of lacking sensitivity in its dealings with Putin.
Addressing the crisis in Ukraine, the elderly statesman said there had been
"major lapses" by the West in recent years. He added that the
"atmosphere of departure in Ukraine is no longer being accompanied by
prudence" on the part of the West.
Another spring like weekend, and 1961 aside, probably the
most interesting one of my 64 years. Were Korea, Vietnam, Lebanon, Panama,
Grenada, the Falklands, Afghanistan and Iraq, all just practise for the big
one, chastising Orthodox Mother Russia. Stay tuned for events next week. Have a
great weekend every one. Now where’s my manual on building air raid shelters in
parks.
"Were we to be directed from Washington when to sow and when to reap, we should soon want bread."
Thomas Jefferson
Determining optimal fallout shelter times following a nuclear detonation
In the event of a single, low-yield nuclear detonation in a
major urban area, rapidly providing adequate shelter to affected populations
could save 10 000–100 000 individuals from a fatal exposure to fallout
radiation. However, poorly sheltered individuals may remain at risk. Current guidance
and prior studies are not consistent as to the timing and conditions under
which poorly sheltered individuals should leave their shelters to evacuate or
obtain better shelter. This study proposes methods to determine the optimal
shelter time based on information potentially available following a nuclear
detonation. For the case in which individuals move to an adequate shelter that
can be reached within 15 min, individuals should stay in a poor-quality shelter
for at most 30 min after the detonation. If adequate shelter is available
nearby (within 5 min), then poorly sheltered individuals should immediately
proceed to the better shelter.
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