Baltic Dry Index. 930 -06
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
The global
economy is either reaching escape velocity from the Great Recession or it’s
reached stall velocity, and we all know what happens to aircraft in a stall.
This week we will likely get to know which version of reality it is. But how
could QE forever and ZIRP lead to a stall? Greenspan, Bernocchio, and Yellen
all promised us a free lunch. Dracula Draghi promised to do “whatever it takes”
to save Euroland from the German imposed fate of Greece and Cyprus. Central banksters
everywhere promised reaching the land of milk and honey, if we merely issued
unprecedented volumes of new debt. Five years into the new unlimited debt economics,
why is the issue still in doubt? Where is the promised land? While stock
markets just about everywhere have a one way ticket to the moon, why is the
real metal bashing and retail world teetering on the brink of relapse? Even
Starbuck is retrenching. Big Macs are hardly flying off the shelves.
Thankfully
the northern hemisphere is now headed into the seasonal boost from Spring and
Summer. Barring a civil war in the Ukraine, EU suicide by imposing meaningful
sanctions on Russia, or a war between China and Japan over some uninhabited
islands, that rightly should have been returned to China under the settlement
of World War Two, the global economy can probably just about muddle along into
the traditional crash season of Autumn. But the collapsing BDI shipping index
suggests that something has gone seriously wrong in the global economy. QE
forever and ZIRP, doesn’t seem to be working anymore, except for HFT scamsters.
If it wasn’t for capital flight from Club Med, the Arab Spring, and now Eastern
Europe and Russia, London wouldn’t be booming I suspect, dragging a reluctant
rest of the UK slowly up.
Below, a
snapshot of our angry world this Easter Monday 2014. Unusually this year, the
western Christian Churches and the Orthodox Christian Churches are celebrating
Easter at the same time. Possibly the only reason civil war in the Ukraine has
been delayed.
Manufacturing Gains in U.S. as China Stalls: Global Economy
Apr 20, 2014 1:08 PM GMT
Manufacturing will take center stage in the global economic watch this week,
with the U.S. projected to fare better than the rest. Orders (CGNOXAI%) for American-made capital equipment such as computers and machinery probably climbed in March by the most in four months, economist forecast an April 24 report will show. In the euro zone, a report may indicate factories are growing at a steady pace in April, while similar figures out of China will probably signal factories in the world’s second-biggest economy are pulling back, though not as severely as in March.
Elsewhere, German business confidence may have slipped in April, inflation in Australia at the start of 2014 probably approached the top of its central bank’s preferred range, and Brazil likely posted a current-account deficit in March.
----For Brett Ryan, an economist at Deutsche Bank Securities Inc. in New York, one of the most important investment drivers is that excess capacity, or the amount of unused factory space and equipment, is dwindling. The extent of potential being used at factories, mines and utilities in the U.S. reached 79.2 percent in March compared with an average 79.4 percent since 1980, the Federal Reserve reported last week. “The fact that capacity utilization rose to a new, post-recession high in March is a strong positive for faster business investment in the medium term,” Ryan wrote in an April 17 note
More
Japan’s Trade Deficit Widens as Export Growth Weakens: Economy
Apr 21,
2014 4:03 AM GMT
Japan’s weakest export
growth in a year spurred a wider-than-forecast trade deficit in March, adding
to challenges for Prime Minister Shinzo Abe in steering the economy through the
aftermath of an April 1 sales-tax rise. The 1.8 percent rise in the value of shipments overseas from a year earlier, reported today by the Ministry of Finance, compared with a 6.5 percent median estimate of 27 economists in a Bloomberg News survey. An 18.1 percent jump in imports helped widen the deficit to the biggest ever for the month.
Exports by volume fell the most
since June last year, suggesting external demand may fail to provide much
support for an economy set to contract this quarter. A spending spree ahead of
the tax increase boosted imports, already swollen by a surge in energy costs
due to the yen’s slide and nuclear shutdowns.
----The rush demand ahead of the tax increase could have prompted companies to divert shipments to the domestic market, rather than overseas, crimping export growth, said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo.
Abe’s drive to shake off more than a decade of deflation and economic drift helped drive down the yen, boosting profits of exporters such as Toyota Motor Corp. even as shipment volumes remain sluggish. Export volumes fell 2.5 percent in March from a year earlier.
At the same time, the Japanese currency’s 19 percent drop since Abe came to power in December 2012 has boosted import values, contributing to 21 straight monthly deficits -- the longest slide in comparable data back to 1979
More
Japan Begins Building Base Near Islands Disputed With China
Apr 19, 2014 2:46 PM GMT
A military base Japan is
building on its westernmost island, near an archipelago claimed by China, will
fill a gap in security, Defense Minister Itsunori Onodera said at a ceremony
marking the start of construction. Onodera today flew to remote Yonaguni, an island of about 1,500 residents that will be home to the surveillance center scheduled to begin operating by the end of March 2016. About 150 troops will be stationed there, public broadcaster NHK said.
The radar base will improve monitoring in an area covering uninhabited isles known as Senkaku in Japan and Diaoyu in China, and provide early warning of any “provocations,” according to the Defense Ministry’s website. The islands are claimed by both sides.
“This unit will play an extremely important role by filling a gap in the deployment of Self-Defense Forces in the southwestern region,” Onodera said in a video of the event posted on NHK’s website.
Ships and planes from the two nations have tailed each other around the disputed East China Sea islands since Japan bought three of them from a private owner in 2012. Dispatches of fighter jets to pursue Chinese aircraft rose by a third in the past year to a record 415 times, the Defense Ministry said April 9.
Tensions have soured Sino-Japanese relations at a time when both are increasing military spending and seeking a greater role in the region. Japanese Prime Minister Shinzo Abe hasn’t held a summit with his Chinese counterpart since taking office in December 2012 as resentment also simmers over Japan’s past invasion and occupation of much of China.
More
Japan Minister at Shrine Honoring War Criminals
TOKYO April 20, 2014 (AP) By YURI KAGEYAMA Associated Press
A Japanese Cabinet minister on
Sunday visited a Tokyo shrine that honors the dead including war criminals, in
what has repeatedly caused friction with Japan's neighbors.
Lawmaker Keiji Furuya, who chairs
the National Public Safety Commission, said on his website that he paid
respects Sunday morning at the Yasukuni shrine ahead of a festival that starts
Monday.
"I believe that to honor
those dead who gave up their lives for our country is the right thing for a
Japanese to do," he said.
He said he regularly visits
Yasukuni at spring and autumn festivals, and on Aug. 15 —the day Japan
surrendered in 1945. He chose to go over the weekend because he had duties to
attend to during the week.
Officials' visits to Yasukuni
have infuriated China and both Koreas. The 2.5 million Japanese war dead
enshrined there include 14 class A war criminals from World War II — national
leaders who were either executed, died in prison or during their trials.
This year's April 21-23 spring
festival at Yasukuni partially overlaps with President Barack Obama's trip to
Japan, part of an Asian tour that also includes South Korea, the Philippines
and Malaysia. Japan colonized Korea, and during World War II also brutally
occupied parts of China and other countries.
More
Putin Says Deadline to Pay for Gas Isn’t Linked to Ukraine Vote
Apr
19, 2014 9:24 AM GMT
Russia wasn’t considering
the date of planned elections in Ukraine when it set a deadline for its
neighbor to start paying for natural gas supplies, according to Russian
President Vladimir Putin. “We don’t tie economics to the political process in Ukraine,” Putin said in an interview on state-run television’s “Vesti With Sergey Brilev” program broadcast today, according to a transcript provided by the president’s office. “It’s just that we were supposed to be paid on April 7 for gas delivered in March. We weren’t, and I’ll say it again, that’s $525 million. We got nothing.”
Ukraine’s gas bill, which Putin says has reached $2.2 billion, threatens to undermine steps toward easing tensions agreed on by foreign ministers from Ukraine, Russia, the European Union and U.S. in Geneva this week. Putin set a one-month deadline on April 17 during a televised call-in show, where he took questions from the public. Ukraine’s presidential election is scheduled for May 25.
“We don’t want to undermine the Ukrainian economy or raise any questions about the reliability of transit supplies to Europe,” Putin said. “We’re calling on European countries, on all countries interested in supporting Ukraine’s economy, to help Ukraine take steps to finance its budget.”
Ukraine Separatists Hold Ground as U.S. Eyes Sanctions
Apr 20, 2014 11:04 PM GMT
Shootouts in eastern Ukraine over the weekend led to calls for more U.S. economic
sanctions against Russia, as a diplomatic accord aimed at defusing the crisis
showed little sign of taking hold. Ukrainian and Russian officials traded accusations over responsibility for tensions that escalated since last week’s signing of an agreement in Geneva that sought disarmament of all illegal groups and vacating of all seized buildings.
With separatists holding their ground in several eastern cities, the prospect for a small-scale civil war has increased, said Angela Stent, director of the Center for Eurasian, Russian and East European Studies at Georgetown University in Washington.
“I see this as a creeping destabilization,” Stent said in an interview yesterday. “I’m not sure it’s a civil war yet, but the pre-conditions for a civil war are there.”
At least three people were killed in a clash in Slovyansk in eastern Ukraine, the nation’s Interior Ministry said, as a top security official accused Russia of exploiting the violence to prepare grounds for an invasion.
More
We end for
the day with better news for Italy. But is it enough to stop America’s War
Party starting a third world war over usurping the Ukraine into NATO?
Canonization of popes John Paul II, John XXIII to draw millions to Rome
By Pedro
Oliveira Jr. and Post Wire Report April 20, 2014 | 1:25am
Easter services today are expected to kick off a record-breaking week at the
Vatican.Two beloved modern popes — John Paul II and John XXIII — are to be canonized at the Vatican next Sunday by Pope Francis.
There will be services all week, which could draw the most pilgrims ever to the Catholic capital.
John Paul II is remembered for helping to bring down communism and for inspiring a generation of Catholics. Many now call him “The Great,” only the fourth pope to have earned the moniker.
And while much of the crowd’s focus will be on the Polish pope’s remarkable achievements, Pope John XXIII — known as the “Good Pope” for his kindhearted nature — was no less revolutionary.
Pope Francis bypassed the second miracle typically required for canonization for John XXIII, declaring that he deserved the honor for having convened the Second Vatican Council.
Rome officials said they expected 3 million visitors in the city during the period from the Easter celebrations this weekend and the canonization next Sunday.
Nineteen heads of state and 24 prime ministers are expected to attend the canonization ceremony in St. Peter’s Square.
More
http://nypost.com/2014/04/20/canonization-of-popes-john-paul-ii-john-xxiii-to-draw-millions-to-rome/
"The
international monetary order is more precarious by far today than it was in
1929. Then, gold was international money, incorruptible, unmanageable, and
unchangeable. Today, the U.S. dollar serves as the international medium of
exchange, managed by Washington politicians and Federal Reserve officials,
manipulated from day to day, and serving political goals and ambitions. This
difference alone sounds the alarm to all perceptive observers."
Hans F. Sennholz
At the Comex
silver depositories Thursday
final figures were: Registered 53.40 Moz, Eligible 123.39 Moz, Total 176.79 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
No ordinary crooks today, just another red flag from China that this time it may be different. This time, bailouts might be much more limited. This time round, “sell in May, go away,” starts in April. When Premier Li starts to bring in deposit protection, it will probably be a good time to be safely sitting in cash and precious metals. When China sneezes the rest of the world, including John Bull and Uncle Sam will likely get a cold.
“The problem with fiat money is that it rewards the minority that can handle money, but fools the generation that has worked and saved money.”“Adam Smith” aka George Goodman.
Bank Defaults Seen as Dark Side of Deposit Vows: China Credit
Apr 20, 2014 5:00 PM GMT
Chinese Premier Li Keqiang’s plan to introduce deposit insurance is meant to
comfort the nation’s savers as bad loans mount. In the bond market,
it’s fueling speculation he’s preparing to let some banks collapse. Authorities may tolerate failures of smaller banks once depositor safeguards are in place, Kwong Li, chief executive officer of China Lianhe Credit Rating Co. said. Among lender bonds rated at or below AA, the extra yield investors demand to hold the 2022 securities of China Bohai Bank Co. in the northern city of Tianjin surged to an 11-month high of 245 basis points on April 17. The premium on the notes due 2019 of Harbin Bank Co., a lender near China’s border with Russia, has jumped 41 basis points in the past year to 217
“With the deposit insurance coming online, the government is signaling they may be willing to let some of the smaller banks default or be consolidated,” Li said in an interview in Shanghai on April 15. Bank defaults “probably won’t happen until deposit insurance is in place.” Lianhe Credit is Fitch Ratings Ltd.’s China joint venture.
Premier Li pledged last month to introduce protection for savers this year as he shifts toward letting the market set rates, a move that may push up borrowing costs for smaller lenders even as it forces them to pay higher interest to depositors. Almost 1,000 customers rushed to outlets of Jiangsu Sheyang Rural Commercial Bank on March 24 amid rumors the lender may go bankrupt, Xinhua News Agency reported March 26.
----Concern banks may face increasing difficulty collecting debts is mounting after the first default on an onshore yuan note last month when Shanghai Chaori Solar Energy Science & Technology Co. (002506) missed part of an interest payment. Slowing economic growth is adding to speculation more companies won’t be able to fulfill debt obligations.
Credit-default swaps insuring the nation’s debt against non-payment climbed 9.5 basis points this year to 89.5 basis points, after expansion in gross domestic product cooled to 7.4 percent in the first three months of the year, the least in six quarters.
More
http://www.bloomberg.com/news/2014-04-20/bank-defaults-seen-as-dark-side-of-deposit-vows-china-credit.html
First Shanghai Stock Designated for Delisting in 7 Years Plunges
Apr 21, 2014 2:42 AM GMT
CSC
Nanjing Tanker Corp. (600087), the first stock set to be delisted from
Shanghai’s exchange in seven years as China seeks to bolster
its markets, plunged as it began its final 30 days of trading. Shares of the oil-shipping company, which has posted four consecutive annual losses, fell 9.8 percent to 1.47 yuan as of 9:40 a.m., compared with a 0.3 percent decline for China’s benchmark Shanghai Composite Index. (SHCOMP) The stock, which had been suspended for a year until today, will move to an over-the-counter board for small- and medium-size enterprises after 30 trading days, according to the company.
“The delisting is kind of a warning to investors to keep away from these loss-making companies that don’t have restructuring prospects,” said Wu Kan, a fund manager at Shanghai-based Dragon Life Insurance Co., which oversees about $3.3 billion. “An improvement in the delisting rules may mean the start of expulsions of lots of unqualified companies.”
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
The monthly Coppock Indicators finished March
DJIA: +197 Down. NASDAQ: +357 Up. SP500: +254 Down.
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