Baltic Dry Index. 1002 -27
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
People
never lie so much as after a hunt, during a war or before an election.
Otto
von Bismarck.
The USA botched Coup in Kiev, has led the west to the
worst of all worlds in the Ukraine. The illegitimate USA imposed government in
Kiev lacks the power to impose its reign in the eastern part of the Ukraine, where
any attempt to use force will likely get a Russian military response, probably termed a “temporary incursion” to
safeguard ethnic Russians. The USA must then either put up or shut up. Putting
up means matching the Russians military response by backing the illegal regime
in Kiev. With Kiev’s own military a dubious force of limited reliability, it
seems unlikely at this stage that the USA will commit its own troops in yet
another foreign escapade. To the USA,
the Ukraine is a mere pawn to be played against Russia. To Russia, a hostile Ukraine
is an existential threat to be stopped at all cost.
But the USA is not yet ready to shut up either. The most
likely next move is an attempt to force Europe into a disastrous sanctions
regime against Russia. Disastrous for Europe that is. Modern continental Europe
is intricately tied into modern Russia, in ways that most Americans don’t
comprehend, and that the offshore UK simply isn’t. Long before any change in
Russian policy, Europe is likely to buckle and increasingly descend into severe
social unrest.
If Europe follows America’s lead, whatever happens in
Russia, a continental depression lies ahead in 2014. But can Europe’s
politicians really break free from American dominance? I doubt that they can,
and expect a European tragedy about to unfold. Stay long fully paid up physical
precious metals held outside of the UK and USA. Next month’s EU elections are
all too likely to result in an extremist, increasingly anti-American
Parliament.
Below, Europe on the cusp of a new European war.
The secret
of politics? Make a good treaty with Russia.
Otto von Bismarck.
Eastern Ukraine Violence Brings ‘Crunch Time’ for U.S.,EU
Apr 14,
2014 5:55 AM GMT
The U.S. and European Union have reached “crunch time” to halt further
destabilization in Ukraine and curb any further Russian expansion in the
region. Prospects for a negotiated end to the crisis were set back after camouflaged gunmen fired on government forces near Slovyansk, about 240 kilometers (150 miles) from the Russian frontier in eastern Ukraine. One serviceman was killed and five were wounded, with an unknown number of casualties on the separatist side, Interior Minister Arsen Avakov said on Facebook.
“Henchmen” of the Kiev government with the backing of Western nations are organizing terror attacks, Russia’s Ambassador to the United Nations Vitaly Churkin said at an emergency session of the UN Security Council in New York.
Russia “is spreading fiction -- we must stop this tonight,” U.S. Ambassador to the United Nations Samantha Power said at the meeting. “Insecurity in Ukraine is written and choreographed by Russia,” she said.
The U.S. backed Ukraine’s accusation that Russia was behind the violence. Yet the repeated threat of additional sanctions directly targeting Russia’s economy hasn’t prevented such clashes and there’s little likelihood of a military response, according to analysts.
----Oil prices rose amid the increased tension, with Brent crude advancing for the first time in three days and West Texas Intermediate extending gains. Brent for May settlement gained as much as 71 cents to $108.04 a barrel on the London-based ICE Futures Europe exchange.
A new, broader set of economic sanctions would have an impact on European businesses and that’s prompted intense discussion among EU governments about the mechanics and timing, according to a German government official, who asked for anonymity to discuss the talks. Such sanctions may be modeled after those imposed on Iran, which included energy, ports, insurance, shipping and banking, the official said.
The question facing the U.S. and EU is how high can they make the price for Russia to prevail in Ukraine and can the allies unity be maintained given trade and energy ties between the U.S. and Europe, a U.S. official said.
More
Oil Climbs With Gold on Ukraine Tensions as Euro Falls
Apr 14,
2014 6:25 AM GMT
Oil and gold advanced while palladium traded at the highest level since 2011
as the United Nations Security Council met to discuss worsening violence in
Ukraine. The euro dropped after the European Central Bank foreshadowed more
stimulus. Gold climbed as high as $1,329.20 an ounce and crude in New York rose 0.5 percent as of 2:18 p.m. in Tokyo. Palladium, for which Russia is the biggest producer, added 0.8 percent after clashes between Ukrainian forces and pro-Russian gunmen turned deadly. The euro fell 0.2 percent against the dollar. Equity indexes in China and Australia declined at least 0.4 percent, while Japan’s Topix rose for the first time in seven days. Futures on the Standard & Poor’s 500 Index slipped 0.2 percent and Treasuries increased.
----U.S. and Ukrainian officials accused Russia of being behind the violence as Russia’s UN Ambassador Vitaly Churkin said U.S. Vice-President Joe Biden should intervene to halt aggression by the government in Kiev or things may take an “irreversible turn for worse” within hours.
More
Ukraine crisis: Washington sees 'tell-tale signs' of Moscow involvement
US Ambassador to United Nations says apparently coordinated raids on police and security stations in eastern Ukraine appear to have been orchestrated by Russia.
Samantha Power told American television that the "outrageous" attacks which Kiev has blamed on "provocative activities of Russian special services" were similar to those which took place in the Crimea earlier this year, leading to Russia's annexation of the region.Asked about the latest events, she said: "It has all the tell-tale signs of what we saw in Crimea. It's professional, it's coordinated.
"There's nothing grass roots seeming about it. Forces are doing in each of the six or seven cities that they've been active in exactly the same thing, so certainly it bears the tell-tale signs of Moscow's involvement."
----John Kerry, the US Secretary of State, telephoned his Russian counterpart Sergei Lavrov last week to warn of the potential for "additional consequences" if Moscow continued to intervene in Ukraine.
Speaking on CNN, Mr Kerry described the latest attacks, in which masked gunmen raided a number of security outposts, as "orchestrated and synchronised."
The White House has announced that Vice President Joe Biden will travel to Kiev on April 22.
It refused to confirm or deny reports that John Brennan, the director of the CIA, had entered Ukraine under a false name to hold discussions with the Kiev government.
----Meanwhile, exiled former Ukrainian president Viktor Yanukovych warned Ukraine stood on the brink of "civil war."
Speaking at a press conference in Rostov-on-Don in southern Russia, Mr Yanukovych echoed statements from the Russian Foreign Ministry calling Kiev's threat use the army against armed separatists a "criminal order" and called on the security services to refuse such instructions.
""The United States have their share of responsibility for the outbreak of civil war in Ukraine," he said.
More
Over on the other side of the EurAsian land mass, armed
with a blank cheque from Uncle Sam, Japan and China move closer to a military
skirmish, though probably not before President Obama heads to Tokyo and Seoul. But
will Tokyo use his visit to stage a military “spectacular?” With the economy weakening, inflation rising
and the Fukushima nuclear disaster never ending, the temptation in Tokyo might
prove irresistible. Our world is a very dangerous place this April 2014.
“It is the destiny
of the weak to be devoured by the strong.”
Otto
von Bismarck.
Japanese Minister Visits Controversial Yasukuni Shrine
Cabinet Member Pays 'Private' Respects at What Some See as Symbol of Japanese Militarism
Updated April 13, 2014 8:54 a.m. ET
TOKYO—A Japanese cabinet minister visited a
shrine linked to Japan's militarist past Saturday, offering a reminder of the
tension in the region ahead of a visit by U.S. President Barack Obama. Yasukuni Shrine is viewed by China and South Korea as a symbol of Japanese militarism—in part because it honors some convicted World War II war criminals.
A surprise visit to the shrine on
Dec. 26 by Prime Minister Shinzo Abe prompted the U.S. to issue an unusual
public expression of disappointment. Mr. Abe has said he visited the shrine to
pay respect to those who died fighting for their country, and had no intention
of offending Japan's neighbors.
Yoshitaka Shindo, minister for internal
affairs and communications, described his own visit Saturday on Japanese
television as a private matter. He has visited the shrine several times over
the past year.
The 56-year-old is a relatively
junior minister in the Abe cabinet and has promoted Japan's claims in
territorial disputes—including its assertion of sovereignty over an outcropping
of rocks controlled by South Korea halfway between the Korean Peninsula and
Japan.
In the past, South Korean and
Chinese ire has mainly been directed at visits by senior Japanese leaders. Mr.
Abe's was the first by a prime minister since 2006.
Nevertheless, South Korea
criticized Mr. Shindo's visit as anachronistic and called on Japanese
politicians to work toward a "trust-based relationship."
"Having a Japanese minister
visit the Yasukuni shrine—which glorifies past aggression by Japan—is an action
that, outright, challenges the international community and neighboring
countries that have suffered from Japan's past imperialism," the South
Korean foreign affairs ministry said.
----Mr. Obama is set
to make a state visit to Japan later this month and meet Mr. Abe as part of an
Asia tour that will also take him to South Korea.
More
China ships enter waters off disputed islands: Japan coastguard
Updated
Three Chinese government ships
have sailed through disputed waters in the East China Sea on Saturday, the
Japanese coastguard said.
The Chinese coastguard ships
entered the waters off one of the Japanese-controlled islands, known as Senkaku
in Tokyo and Diaoyu by Beijing, at around 9:00am local time and left about two
hours later.
Chinese vessels and aircraft have
regularly approached the East China Sea archipelago which are thought to
harbour vast natural resources.
Japan nationalised some of the
islands in September 2012, setting off the latest spate of incidents in a
long-running territorial dispute.
Fears of conflict rose in
November when China imposed an air defence identification zone over the East
China Sea and said it required notification from planes crossing the area.
Washington was angered by the
move, saying it could lead to confusion in the skies.
More
Japan Risks Public Souring on Abenomics as Prices Surge: Economy
Apr 14,
2014 3:39 AM GMT
Prime Minister Shinzo Abe’s bid to vault Japan out of 15
years of deflation risks losing public support by spurring too much inflation
too quickly as companies add extra price increases to this month’s sales-tax
bump. Businesses from Suntory Beverage and Food Ltd. to beef bowl chain Yoshinoya Holdings Co. have raised costs more than the 3 percentage point levy increase. This month’s inflation rate could be 3.5 percent, the fastest since 1982, according to Yoshiki Shinke, the most accurate forecaster of Japan’s economy for two years running in data compiled by Bloomberg.
The challenge for Abe and the Bank of Japan is to keep the public focused on the long-term benefits of exiting deflation when wages are yet to pick up and, according to BOJ board member Sayuri Shirai, most people still see price gains as “unfavorable.” Any jump in inflation that’s perceived as excessive by a population more used to prices falling could worsen consumer confidence and make it harder to boost growth.
“Households are already seeing their real incomes eroding and it will get worse with faster inflation,” said Taro Saito, director of economic research at NLI Research Institute, who says he’s seen prices of Chinese food and coffee rising more than the sales levy. “Consumer spending will weaken and a rebound in the economy will lack strength, putting Abe in a difficult position.”
More
We end for
the day with why Uncle Sam may be willing to take on yet another foreign
escapade in the run up to Easter. Stay long physical precious metals.
“Hounds follow
those who feed them.”
Otto
von Bismarck.
Stocks face earnings blues after tech slide
By Caroline
Valetkevitch NEW YORK
(Reuters) - The wrenching selloff in U.S. high-growth technology and biotech
shares could leave investors braced for more than a minor pullback when earnings pick up speed this week.First-quarter earnings estimates have fallen sharply as many companies have blamed the brutal winter for weak outlooks.
With high-valuation stocks under pressure, earnings could be subjected to even more investor scrutiny than usual.
"There's skepticism among investors about the outlook, and we're getting into the first-quarter earnings season, so you're going to see some positioning," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.
Profit growth for Standard & Poor's 500 companies now is projected at just 0.9 percent in the first quarter from a year ago, down from a January 1 forecast for 6.5 percent growth, Thomson Reuters data showed.
This week, 54 S&P 500 companies are scheduled to report first-quarter earnings, compared with 29 last week.
----The economic calendar will include retail sales on Monday, the Consumer Price Index on Tuesday, U.S. housing starts and industrial output on Wednesday and the Federal Reserve Bank of Philadelphia's business activity index on Thursday. The latest weekly initial jobless claims will also come out on Thursday.
Wall Street will face this flurry of numbers during a four-day week. The U.S. stock market will be closed for Good Friday.
Volume is likely to be lighter than usual with some participants away for the observance of Passover, which will begin at sundown on Monday.
More
“A conquering army on the border will not be stopped by
eloquence.”
Otto von Bismarck.
At the Comex
silver depositories Friday
final figures were: Registered 53.43 Moz, Eligible 123.74 Moz, Total 177.17 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, more on the collapse of Brazil’s Grupo EBX.
Increasingly it’s looking like it was a gigantic fraud all along. But will the EBX scandal take down emerging
market Brazil?
"All previous attempts to base money solely on intangibles such as credit or government edict or fiat have ended in inflationary panic and disaster."
Donald Hoppe
Brazilian tycoon Batista faces insider trading probes
By Jeb Blount and Juliana Schincariol RIO
DE JANEIRO
(Reuters) - Eike Batista, who was Brazil's
richest man for most of the past decade, is under investigation for allegedly
engaging in insider trading while he chaired his now-bankrupt oil-producing and
shipbuilding firms, securities industry watchdog CVM said on Friday.In a statement sent to Reuters, Rio de Janeiro-based CVM confirmed that Batista is a respondent in six of nine probes that executives of his Grupo EBX conglomerate are facing for breaching securities rules. In two of them, regulators are examining whether Batista allegedly took advantage of his access to privileged information.
CVM also listed a dozen probes questioning financial and other data unveiled by oil company Óleo and Gás Participações SA, formerly known as OGX, and four more firms he controlled through EBX. If the probes lead to criminal charges against Batista, it would be yet another major blow to a businessman once hailed as Brazil's model entrepreneur and a symbol of its economic success.
"If this turns out to be true it will be excellent news for investors who lost so much with OGX," said Rodrigo Bornholdt, a partner with Bornholdt Advogados in Joinville, Brazil, which has been organizing minority shareholders for a lawsuit against OGX. "This would make it much easier for them to sue Batista, the corporate directors and the company."
The demise of his energy, logistics and mining empire, which two years ago was valued at about $60 billion (35.8 billion pounds), ended up in OGX filing in October for Latin America's largest bankruptcy.
Under CVM regulations, Batista could face fines and be banned from running a listed company. But he could also face criminal prosecution - which could put him in jail for as many as five years - and separate civil penalties if individual investors and companies sue him for damages, Bornholdt added.
EBX, speaking on behalf of Batista, issued a statement denying any wrongdoing. Batista did not make use of privileged information or act in bad faith, the statement said, adding that he will explain his decisions to the CVM.
Representatives for Oleo and Gas and OSX declined to comment.
According to a Valor Econômico newspaper report on Friday, CVM wants to determine whether Batista also withheld information that was unfavourable to some of his business while encouraging investors to buy more stock in his companies. During that time, Batista sold shares of OGX, as well as its sister company and shipbuilder OSX Brasil SA.
Valor, which had access to the content of the probes, also said Óleo e Gás waited at least 10 months to inform shareholders that four oil fields were not commercially viable.
Some of the lustre that helped bring hundreds of billions of dollars into Brazil in the past decade, partly because of Batista's meteoric rise, is gone. Like his promises of fast and "idiotproof" returns in his various commodity and logistic ventures, Brazil's economic boom has since fizzled into four consecutive years of mediocre growth.
More
"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
The monthly Coppock Indicators finished March
DJIA: +197 Down. NASDAQ: +357 Up. SP500: +254 Down.
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