Baltic Dry Index. 1543 +63
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"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
Since under
QE forever and ZIRP, all new is good news in our disconnected global stock
markets, our week is getting off to the best start of all. In Asia the global
wobble is intensifying. Planes are falling out of the sky without trace. In
Europe, America and the EU, including the still for the moment United Kingdom,
are all still busy spinning a distorted view of recent events, to try to start
a new European war against Russia, over the Coup in the Ukraine. In the Middle
East, the Syrian civil war drags on threatening to spill into a regional war.
Now Libya is wanting to get in on a similar civil war. In Latin America,
Argentina and Venezuela are about ready to implode. Best of all, America and
Japan are meeting in Hawaii on how best to start a war with America’s leading
creditor, China. Food price inflation is surging everywhere.
Below, this
morning’s episode of Obama And Everyone in Wonderland.
“The world is a place that’s gone from being flat to round to crooked.”
Mad Magazine.
Japan’s Economy Expands Less Than Initially Estimated
Mar 10, 2014 1:11 AM GMT
Japan’s economy expanded less than estimated in the fourth quarter and the
current-account deficit widened to a record in January, highlighting risks to
Abenomics as a sales-tax
increase looms. Gross domestic product grew an annualized 0.7 percent from the previous quarter, the Cabinet Office said today in Tokyo, less than a preliminary estimate of 1 percent and a 0.9 percent median forecast in a Bloomberg News survey of 20 economists. The current-account deficit widened to 1.59 trillion yen ($15.4 billion), a record in data back to 1985, the finance ministry said.
While growth is set to surge this quarter before the bump in the sales tax next month, Prime Minister Shinzo Abe’s task is to steer the nation through a projected contraction in the April-June period. The prime minister is due to detail growth measures in June, while economists forecast the Bank of Japan will add to unprecedented easing to keep the world’s third-biggest economy on track for a 2 percent inflation target.
“Capital spending remains weak and exports are not coming back to strengthen the recovery, and without support in these areas, Japan’s economy is going to contract significantly in the second quarter,” said Yoshimasa Maruyama, chief economist at Itochu Corp. in Tokyo. “The negative effect from the sales tax rise could be worse than the BOJ and government expect.”
More
China Stocks Fall Most in 8 Months as Yuan Drops on Trade
Mar 10,
2014 5:35 AM GMT
China’s
stocks fell, with the benchmark index heading for its biggest loss
in eight months, while the yuan weakened as an unexpected
drop in exports spurred concern that the world’s second-largest economy is
slowing. The Shanghai Composite Index (SHCOMP) slid 2.1 percent to 2,015.34 at 1:25 p.m. local time, set for the largest decline since July 8, as Jiangxi Copper Co. and China Southern Airlines Co. retreated. The yuan fell as much as 0.5 percent against the dollar, which would be the steepest decline on a closing basis since December 2008, before paring its drop to 0.2 percent. Money-market rates slumped to a 21-month low amid speculation demand for cash is diminishing as economic growth weakens.
Overseas shipments plunged 18.1 percent in February, compared with analysts’ median estimate for a 7.5 percent increase, as distortions from the Lunar New Year holiday made forecasting more difficult. Investors are looking for policy guidance from this month’s National People’s Congress in Beijing amid concerns over slowing growth, a flood of new share sales and geopolitical tension between Russia and Ukraine.
“There’s a slew of bad news today -- lousy economic data, IPOs may be restarting, the policy meeting is ending soon with no surprises and the Ukraine situation isn’t helping,” said Xu Shengjun, an analyst at Jianghai Securities Co. in Shanghai. “The market is being dragged down by all these factors, I don’t see any positive stories today.”
More
Equities slide on disappointing China trade data, Ukraine crisis
By Shinichi Saoshiro TOKYO
(Reuters) - Asian stocks
slid on Monday and the dollar stepped back from its recent highs as
disappointing Chinese trade data and uncertainty over the crisis in Ukraine
kept risk appetite in check.Investors greeted the new week in Asia on a cautious note after data issued on Saturday showed China's exports unexpectedly tumbled in February, swinging the trade balance into deficit and adding to fears of a slowdown in the world's second-largest economy.
The soft Chinese data put a damper on risk sentiment, which had been temporarily boosted by stronger-than-expected U.S. nonfarm payrolls out on Friday showing employers had added 175,000 jobs to their payrolls last month, up from 129,000 new positions in January.
"While non-farm payrolls surprised significantly to the upside on Friday, disappointing China data, escalating Russia/Ukraine concerns and the missing Malaysian aircraft have all contributed to a somber mood," IG market strategist Stan Shamu wrote in a note to clients.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS lost 1.1 percent, and Tokyo's Nikkei stock average shed 1 percent, retreating from Friday's six-week high.
More
Li Target Challenged by China Exports, Producer Prices
Mar 10, 2014 2:26 AM GMT
China’s
biggest drop in exports since 2009 and deepening factory-gate deflation
highlight the challenges for Premier Li Keqiang in achieving this year’s
economic-growth target of 7.5 percent. Overseas shipments unexpectedly declined 18.1 percent in February from a year earlier, customs data showed March 8, compared with analysts’ median estimate for a 7.5 percent increase. Producer prices fell 2 percent, the most since July, according to a statistics bureau report yesterday, extending the longest decline since 1999.
Asian stocks fell and metals
including copper declined as the data stoked concern over the outlook for the
world’s second-biggest economy, while the central bank weakened the yuan’s
reference rate by the most since 2012. Distortions from the Lunar New Year
holiday and false invoices that inflated trade numbers last year, along with
larger-than-projected imports, make it harder to assess the true picture.
“There is an intrinsic
inconsistency in their policy target and the reality of the economy,” Liu
Li-Gang, head of Greater China economics at Australia & New Zealand Banking
Group Ltd. in Hong Kong, said in a phone interview.
More
In other
news, QE Forever and ZIRP has surged global debt to over 100 trillion US
dollars. In a world of roughly 320 million Americans, most of them legal
citizens, a roughly 7 billion global population approximately half enjoying a
first world lifestyle, and a global GDP of roughly 50 trillion, what could
possibly go wrong? And let’s not get started on a quadrillion dollars of global
derivatives gambling contracts, with the vast majority held at a handful of US
banks plus Deutsche Bank. Stay long fully paid up physical gold and silver held
outside of the world’s MF Globals’, Lehman’s, Bear Stearns’ and the LBMA.
Global Debt Exceeds $100 Trillion as Governments Binge, BIS Says
Mar 9, 2014 11:00 AM GMT
The amount of debt globally has soared more than 40 percent to $100 trillion
since the first signs of the financial crisis as governments borrowed to pull
their economies out of recession and companies took advantage of record low interest
rates, according to the Bank for International Settlements. The $30 trillion increase from $70 trillion between mid-2007 and mid-2013 compares with a $3.86 trillion decline in the value of equities to $53.8 trillion in the same period, according to data compiled by Bloomberg. The jump in debt as measured by the Basel, Switzerland-based BIS in its quarterly review is almost twice the U.S.’s gross domestic product.
Borrowing has soared as central banks suppress benchmark interest rates to spur growth after the U.S. subprime mortgage market collapsed and Lehman Brothers Holdings Inc.’s bankruptcy sent the world into its worst financial crisis since the Great Depression. Yields on all types of bonds, from governments to corporates and mortgages, average about 2 percent, down from more than 4.8 percent in 2007, according to the Bank of America Merrill Lynch Global Broad Market Index.
“Given the significant expansion in government spending in recent years, governments (including central, state and local governments) have been the largest debt issuers,” according to Branimir Gruic, an analyst, and Andreas Schrimpf, an economist at the BIS. The organization is owned by 60 central banks and hosts the Basel Committee on Banking Supervision, a group of regulators and central bankers that sets global capital standards.
More
As if
troubles in Asia and the Ukraine weren’t enough, now Libya is threatening to go
the way of Syria. Unfortunately for the west but especially Europe, unlike
Syria, Libya is a major oil exporter. Europe is picking a fine time to start
turning down Russian oil and gas.
Libyan rebels warn of 'war' if navy attacks oil tanker
By Ulf
Laessing and Ayman al-Warfalli
TRIPOLI/BENGHAZI, Libya (Reuters) - Armed protesters in eastern Libya traded threats with the government on Sunday in a tense stand-off over the unauthorized sale of oil from a rebel-held port.
A North Korean-flagged tanker, the Morning Glory, docked on Saturday at the port of Es Sider and local daily al-Wasat said it had loaded $36 million of crude oil. Prime Minister Ali Zeidan has said the military will bomb the 37,000-tonne vessel if it tries to leave.
Officials said on Sunday that the navy and pro-government militias had dispatched boats to stop it from getting out. The rebels said any attack on the tanker would be "a declaration of war."
The escalating conflict over the country's oil wealth is a sign of mounting chaos in Libya, where the government has failed to rein in fighters who helped oust veteran ruler Muammar Gaddafi in 2011 and who now defy state authority.
The protesters, who also include former soldiers and ex-oil guards led by a former anti-Gaddafi commander, Ibrahim Jathran, have seized three eastern ports in the OPEC member country.
The Defence Ministry issued orders to the chief of staff, air force and navy to deal with the tanker. "The order authorizes the use of force and puts the responsibility for any resulting damage on the ship owner," it said in a statement.
More
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable.
Alexander Solzhenitsyn
At the Comex
silver depositories Friday
final figures were: Registered 52.08 Moz, Eligible 130.24 Moz, Total 182.32 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Having given Japan a blank cheque last year, to start a war with China over Japan’s illegal claim of sovereignty rather than mere administration, over the disputed Diaoyu Islands in the East China Sea, Uncle Sam seems to be having second thoughts about going to war with China alongside an unrepentant war mongering Japan. Would America and the west tolerate a similarly unrepentant Germany? Or is it that Asian lives counted for less than European or American lives in World War Two, in 21st century America?
Japan, U.S. differ on China in talks on 'grey zone' military threats
By Nobuhiro Kubo, Linda
Sieg and Phil
Stewart
TOKYO/WASHINGTON (Reuters) - As Japan and the United States start talks on how to respond to armed incidents that fall short of a full-scale attack on Japan, officials in Tokyo worry that their ally is reluctant to send China a strong message of deterrence.
Military officials meet this week in Hawaii to review bilateral defense guidelines for the first time in 17 years. Tokyo hopes to zero in on specific perceived threats, notably China's claims to Japanese-held islands in the East China Sea, while Washington is emphasizing broader discussions, officials on both sides say.
Washington takes no position on the sovereignty of the islands, called the Senkaku by Japan and the Diaoyu by China, but recognizes that Japan administers them and says they fall under the U.S.-Japan Security Treaty, which obligates America to come to Japan's defense.
But even as Asia-Pacific security tensions mount, U.S. officials have made clear they do not want to get pulled into a conflict between the world's second- and third-biggest economies.
Prime Minister Shinzo Abe's government is alarmed at China's rapid military buildup. Beijing in turn accuses Tokyo of being a regional threat, citing Abe's more nationalist stance, his reversal of years of falling military spending and his visit to a shrine that Asian countries see as glorifying Japan's wartime past.
"Japan wants to prioritize discussions on China and clarify the respective U.S. and Japanese roles in the event of a 'grey zone' incident," said a Japanese government official, referring to less than full-scale, systematic military attacks backed by a state but still representing a threat to Japan's security.
Tokyo wants Washington to join in drafting scenarios for how the two allies would respond in specific cases, he said.
But Washington is worried about provoking China by being too specific, say Japanese officials and experts.
More
Germany's 'Blank Cheque' to Austria-Hungary, 6 July 1914
Below is the text of the telegram sent by the German Chancellor, Theobald von Bethmann-Hollweg, to the German Ambassador at Vienna.The telegram effectively offered Austria-Hungary a 'blank cheque' in terms of German support for whatever action Austria-Hungary chose to take in punishing Serbia for the assassination of Archduke Franz Ferdinand on 28 June 1914.
Confidential - For Your Excellency's personal information and guidance
----Finally, as far as concerns Serbia, His Majesty, of course, cannot interfere in the dispute now going on between Austria-Hungary and that country, as it is a matter not within his competence.
The Emperor Francis Joseph may,
however, rest assured that His Majesty will faithfully stand by
Austria-Hungary, as is required by the obligations of his alliance and of his
ancient friendship.
Bethmann-Hollweg
"When it becomes serious, you have to lie"
Jean-Claude Juncker. Ex-Luxembourg Prime Minister and ex-president of the Euro Group of Finance Ministers. Confessed liar.
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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