Baltic Dry Index. 997 -11
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
All treaties between great states cease
to be binding when they come in conflict with the struggle for existence.
Count Otto von Bismarck.
Continental
Europe’s suicide has begun. Japanese investors are bolting from European bonds.
Ordered by America to commit economic suicide in useless attempt to save
America’s botched coup in Kiev, and America’s puppet government, European
politicians seem all too willing to slit their own throats. The USA has very
little to lose by imposing sanctions on Russia, not so continental Europe.
Europe should be telling America’s war party, “they got it wrong, they pay the price.” If
there are to be sanctions they should be against America for staging a half-cocked
coup that got usurped by neo-Nazis and anti-semites. The result is giant mess
that threatens to plunge the world economy back into the Great Recession,
plunge continental Europe into a depression, and greatly empower Russia and
China. To try to save the Kiev puppet government now, risks a war with Russia that’s
all too likely to go nuclear.
Below, the
latest news (spin) in the Greatest (so far) American blunder of the 21st
century. What were they thinking in Washington? Stay long fully paid up
physical gold and silver. The sickest inmates are now playing with the levers
of war.
….and, you know, Fuck the EU.
US Assistant Secretary of State Victoria Nuland. February 2014.
Japanese Dump Most Euro Bonds on Record Amid Ukraine Tension
May 12,
2014 4:00 AM GMT
Japanese investors sold a record amount of euro-denominated long and
medium-term bonds in March, Ministry of Finance data showed today. Money managers in Japan made net sales of 1.96 trillion yen ($19.2 billion), capping four months of reductions, the Tokyo-based Ministry of Finance said today. That’s the longest stretch of sales since the 10 months ended December 2011, during the euro region’s sovereign-debt crisis. Last year, Japanese investors bought a net 5.39 trillion yen of such bonds.
Europe’s economies may face headwinds after President Vladimir Putin annexed Crimea in March, setting off the most intense confrontation between Russia and the U.S., along with its European allies, since the Cold War. Tensions simmered after pro-Russian groups hailed a large majority in favor of secession in a referendum they organized yesterday in eastern Ukraine that the government in Kiev dismissed as illegitimate.
----Japanese investors sold 1.79 trillion yen of long-term German bunds in March, also the highest reported in data going back to 2005, the MOF report showed. They bought a net 536.3 billion yen of long-term U.S. Treasuries, the most since November, and snapped up 68.7 billion yen of Australian sovereign debt, adding to purchases in January and February.
Investors also sold 481.1 billion yen of Dutch sovereign bonds and 71.6 billion yen of Italian debt.
More
Ukraine crisis: Russia sanctions would hurt Germany's growth
Europe's biggest economy could be severely effected by future sanctions against Russia
By Justin Huggler in Berlin and
Bruno Waterfield in Brussels 5:15PM BST 09 May 2014
A secret European Union report has warned that economic and trade sanctions
being considered against Russia over the Ukraine crisis could have a severe
negative effect on Germany, the continent’s biggest economy. The classified report, prepared by the European Commission and leaked to a local magazine, warns that the sanctions could slash forecast growth for the German economy this year by almost one per cent, moving the country closer to a downturn, with grim implications for a weak eurozone.
The report is one of a series prepared by Brussels estimating the costs of “far-reaching” sanctions against Russia for each of the EU’s member states, and distributed to governments in secret just before Easter.
“Governments have since responded to help the commission draw up a balanced programme of sanctions to ensure that particular countries, such as Germany, do not take on a disproportionate burden. This is very sensitive information of great interest to Russia and is top secret,” said a European diplomat.
The report considered the impacts of three different scenarios on European economies. It found that the harshest, in which sanctions were imposed on the import of Russian gas and oil, would cut expected growth for Germany’s GDP by 0.9 percentage points this year, and 0.3 percentage points next year. The European Commission’s most recent forecast is for German growth of 1.6 per cent this year and 2 per cent in 2015 amid a weak recovery as the eurozone emerges from crisis.
----The report warns that the longer-term effects on the German economy could be more serious, as the impact on eastern European economies affected their trade with Germany.
The report underlines why
Chancellor Angela Merkel’s government has been reluctant to support harsher
sanctions over Ukraine, despite warning that the option of tougher sanctions
must be kept open.
More
Ukrainian Regions Vote in Referendums Rejected as Illegal
May 11, 2014 10:40 PM GMT
Pro-Russian groups hailed a large majority in favor of secession in a
referendum they organized in eastern Ukraine that was
dismissed as illegitimate by the government in Kiev and its U.S. and European
allies. Voters in Donetsk backed the breakaway plan by 90 percent to 10 percent, RIA Novosti reported late yesterday, citing Roman Liagin, head of the election committee. In Luhansk, the other region voting, turnout was 75 percent and the outcome wasn’t initially clear, RIA said. Final results are due later today.
The votes went ahead amid violent clashes between Ukrainian troops and pro-Russian rebels that continued in the region yesterday, and in the face of condemnation from Ukraine, the U.S. and the European Union, who all said the referendums were illegal. Russian President Vladimir Putin, accused by Kiev and its allies of stoking the separatist unrest, had also publicly called for a delay.
A similar vote preceded Putin’s seizure of Crimea in March, a month after his ally in Kiev, President Viktor Yanukovych, was ousted in a popular uprising. The growing tension in eastern Ukraine reflects concerns that Russia may be plotting another land grab.
More
Ukraine's pro-Russian separatists wait on Vladimir Putin as 'Yes' vote on self-rule in little doubt
The results of the vote on “self rule” for the self-styled “People’s Republic of Donetsk” in the east of Ukraine are in little doubt. All eyes are now on the Kremlin
Strangely for a movement that was on Sunday holding a referendum on independence, the rebels who have seized control of parts of Ukraine’s eastern regions do not like being called “separatists”.In Russia’s state-owned media, the politically correct name for the rebels is “supporters of federalisation” - even though they fly Russian flags, speak openly of wanting to join Russia, and have just organised a plebiscite that seems poised to split Ukraine in two.
Now, that pretence will have to dropped for good. For sometime this week - maybe Monday or Tuesday - the self-styled “People’s Republic of Donetsk” will almost certainly declare itself independent, and the prolonged crisis in Ukraine will enter a new and even more dangerous phase.
The results of Sunday’s vote on “self rule” for the nascent breakaway state in the east of the country are in little doubt.
Reports already suggest a large turnout for a “yes” vote, aided by the almost total boycott of the referendum by dissenters.
More
Ukraine's Leaky Border With Russia
Denis KazanskyMay 09, 2014
A real war continues in eastern
Ukraine. The Ukrainian army is fighting against armed groups of pro-Russian
separatists, who are supported by volunteers from Russia. These volunteers are
constantly crossing the Ukraine-Russia border.
East Ukraine is not like any
other Ukrainian region. One hundred and fifty years ago, this land was almost
empty and was called “the wild field.” Most of the towns here were built in the
late 19th century close to the factories and mines, which sprang up after the
tsarist government decided to develop the Donetsk coal basin. Industrialization
happened rapidly, and the workers who flocked to these towns for work hailed
mostly from the Russian provinces of the Russian Empire. In the Soviet period
this phenomenon of industrialization and immigration from Russia became even
more pronounced. The Donetsk region ended up having a predominantly Russian
population in the towns, while the villages were inhabited by Ukrainian
speakers.
In 2014, protesting westerners
chased President Viktor Yanukovych and his entourage to Russia, and the Donbass
(the common name for the Donetsk and Lugansk regions) rebelled. Residents of
pro-Russia eastern Ukraine opposed the idea of a national Ukrainian state that
operated completely out of Russia’s geopolitical orbit. Separatists quickly
armed themselves, while hundreds of saboteurs and provocateurs with weapons and
ammunition entered Ukraine from Russia. The government in Kiev now has little
control over the eastern border with Russia.
----The Ukrainian-Russian border is now completely open to such groups. Think of a national border in a tense area, such as Ukraine, and you’d probably imagine roadblocks, fences mounted with barbed wire, or a three-meter-tall wall, like the border of Mexico and the U.S. But nothing on the border of Ukraine and Russia in the Luhansk region is similar. The Ukrainian-Russian border in the east today is a poorly controlled strip of land that can be easily crossed.
The Lugansk region shares a few
hundred kilometers of border with Russia. In some places, you can cross it as
simply as going to your home. The regional center of Milove, for example, is
situated quite close to the border and has merged with the Russian settlement
Chertkovo. The state border runs right through the streets and courtyards of
private houses. People there tell jokes about houses where the kitchen is in
Ukraine and the toilet in Russia. A third of the buildings are in Russia, while
two-thirds are in Ukraine. Over the 23 years of Ukraine’s independence, no one
has solved this problem. The inhabitants still live as if there were no
boundary at all. They usually go shopping in Ukrainian shops but prefer buying
gasoline on the Russian side. Most people have relations on both sides of the
border.
More
In other EU
news, Europe’s in deep trouble even before blowback from Russian sanctions
starts to hit. And just wait until the wave of refugees starts flowing west if
a real shooting civil war starts in the Ukraine. What part of madness isn’t understood
in Washington?
Europe Deflation Risk Seen by 74% in Global Investor Poll
May 11, 2014 10:00 PM GMT
Financial professionals are optimistic
about the global economy, just not as fervent about it as they were at the
start of the year. That’s the message from the latest Bloomberg Markets Global
Investor Poll, which shows concern about risks ranging from the turmoil in
Ukraine to the threat of deflation in Europe.
Forty percent of respondents in the
survey of Bloomberg customers say the global economy is improving, another 43
percent say it’s stable, and only 12 percent say it’s deteriorating. Still, the
enthusiasm has cooled: 59 percent thought the economy was improving in the last edition of the poll, in January;
that was the highest reading since the world emerged from recession in 2009.
----Poll respondents, however, are
overwhelmingly concerned about deflation in the euro zone. About three-quarters
of them say it’s a greater threat to the region than inflation. Some individual
countries such as Portugal (PLCPYOY) have
already experienced deflation this year, and the inflation rate in the
18-nation bloc as a whole was 0.7 percent in April, which is about a third of
the European Central Bank target of just under 2 percent.
More
We close
today with China and Asian news. Ominously China’s wobble is intensifying.
China’s “new normal” means slamming into a brick wall for mant emerging markets
and export economies.
Xi Says China Must Adapt to ‘New Normal’ of Slower Growth
May 12, 2014 3:39 AM GMT
Chinese President Xi Jinping said the nation needs to adapt to a “new
normal” in the pace of economic growth and remain “cool-minded” amid a slowdown
that analysts forecast will lead to the weakest expansion since 1990. China’s growth fundamentals haven’t changed and the country is still in a “significant period of strategic opportunity,” Xi said, according to a Xinhua News Agency report on the central government website on May 10. At the same time, the government must prevent risks and take “timely countermeasures to reduce potential negative effects,” he said.
Policy makers are trying to keep economic expansion from slipping below Premier Li Keqiang’s 2014 target of about 7.5 percent while reining in a credit boom that a central bank official said threatens to undermine the financial system. The government has so far limited its support to tax breaks, and speeding up infrastructure and social housing investment, with Li saying last week the focus remains on the quality of growth and on changing the structure of the economy.
More
Chinese developers pull back as property downturn hits economy
By Clare Jim SHANGHAI
(Reuters) - China's efforts to cool its property sector look to have been
more effective than intended, as a sharp drop in construction
activity and falling prices threaten what had been one of few firing engines of
the world's second-largest economy.Developers know the market is struggling -- their inventory is rising and prices are falling -- but expect that authorities will relax their tight grip on the sector in coming months.
The government has long made it clear that economic growth would moderate as it tries to reform the economy. But by keeping the pressure on property too long, analysts fear the fallout will be more severe than anyone had expected.
"To us, it is no longer a
question of 'if' but rather 'how severe' the property market correction will
be," Nomura analysts said in a report.
New housing starts in the first
quarter fell 25.2 percent compared to a year ago, Nomura calculated, as tighter
credit conditions, oversupply and falling prices undermined the market.
They estimated the property slump
could take a full percentage point off China's economic growth this year,
knocking it below 7 percent for the first time since 1990. The government is
targeting growth of about 7.5 percent.
More
IMF May Cut China 2014 Growth Forecast, Fund Official Says
May 9, 2014 8:03 PM GMT
The International
Monetary Fund, which currently expects growth of 7.5 percent this year in China, may lower its forecast for
the world’s second-largest economy, according to Changyong Rhee, director of
the fund’s Asia and Pacific Department. First-quarter data indicated “maybe we have to revise this growth rate slightly down,” Rhee said today at the Peterson Institute for International Economics in Washington.
“Our forecast at this moment is 7.5, and the market trend at this moment is slightly lower than that,” he later told reporters. “So we have to look at whether we have to do it or not.”
China’s National Bureau of Statistics in Beijing last month said that economic growth slowed to 7.4 percent in the first quarter from a year earlier, as the government tries to curb a credit boom while sustaining enough expansion to support employment.
Japan Posts Record Low Current-Account Surplus in Fiscal ’13
May 12, 2014 4:41 AM GMT
Japan’s current-account surplus shrank last fiscal year to the smallest on
record, highlighting challenges for Prime Minister Shinzo Abe in driving a
recovery in the world’s third-largest economy. The surplus of 789.9 billion yen ($7.74 billion) in the year ended March was the smallest in data back to 1985, the Ministry of Finance said in Tokyo today. A 14 percent surge in primary income from overseas investments helped make up for a shortfall in the balance of trade and services that suffered from weak exports and a higher import bill.
A slide into sustained deficits in Japan’s widest gauge of trade could make the government more reliant on foreign funding to service the world’s biggest debt burden. Keeping the balance in the black depends on how successful Japanese companies are in boosting exports following the yen’s slide and their ability to generate higher returns on overseas investments, according to economist Izumi Devalier.
More
Southeast Asia Ministers Urge Self-Restraint on Sea Spat
May 12, 2014 5:17 AM GMT
Southeast Asian nations called for self-restraint on territorial disputes in
the South
China Sea as tensions escalate over China’s pursuit of
its claims to large swaths of the resource-rich region. Leaders called on all parties to “refrain from taking actions that would further escalate tension,” in a statement issued at the end of the 10-member Association of Southeast Asian Nations meeting yesterday in Naypyidaw in Myanmar. They called for progress on a code of conduct that would seek to preserve freedom of navigation in the area, through which some of the world’s busiest shipping lanes run.
Disputes are mounting as Asian neighbors push back against Chinese moves to assert control over the maritime areas. Its placement of an oil rig near the disputed Paracel Islands led last week to clashes between Vietnamese and Chinese boats, while the Philippines detained 11 Chinese fisherman in a contested area. Vietnamese protested in several cities yesterday against China’s actions.
The escalation risks spilling over to separate territorial disputes between Japan and China in the East China Sea. Russia has recently stepped up air patrols around parts of North Asia, adding to the pressure.
“Japan will surely take advantage of the South China Sea tensions to advocate its ‘China Threat Theory’,” according to Liu Jiangyong, a professor at the Institute of International Studies at Tsinghua University in Beijing. “Japan will likely support or aid Vietnam and the Philippines in challenging China and make the situation even worse,” Liu said by phone.
More
“The Ukraine isn't worth
the life of a single Pomeranian grenadier.”
With
apologies to Count Otto von Bismarck.
In Washington they’re not thinking of singles. They’re
too busy turning President Putin into Russia’s Churchill.
At the Comex
silver depositories Friday
final figures were: Registered 54.96 Moz, Eligible 119.94 Moz, Total 175.90 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
So you really, really want to fly to Florida [your US destination here.] Make a will, take out insurance, and say a prayer. In America you might just make the history books by becoming the first collision between plane and drone. America’s skies are getting awfully crowded. As they used to say in the old cowboy movies, spread out they’re sure to get one of us.
Drone Almost Hit Airliner in Recent Weeks: FAA Official
May
10, 2014 12:33 AM GMT
An unmanned aircraft almost struck a US Airways flight over Florida in March, a pilot told
the Federal
Aviation Administration, highlighting safety concerns as U.S. regulators
develop rules for civilian drone use. The Bombardier Inc. CRJ2 regional jet was about 5 miles from Tallahassee Regional Airport at an altitude of 2,300 feet (701 meters) when it passed by what appeared to be a remote-controlled aircraft, the FAA said in a statement today.
American Airlines Group Inc. (AAL), which includes US Airways, is aware of media reports about the incident and is investigating, Casey Norton, a spokesman, said in an e-mail.
There have been at at least six other incidents since September 2011 in which pilots have reported close calls with what they believed were small unmanned aircraft, according to NASA’s Aviation Safety Reporting System, which logs safety issues. The FAA doesn’t allow drone flights, other than by hobbyists, unless it has granted a special permit.
The drone in March came so close to the airliner that the pilot “was sure he had collided with it,” said James Williams, chief of the FAA’s unmanned aircraft office, said in a speech yesterday at the Small Unmanned Systems Business Exposition in San Francisco. “Thankfully inspection to the airliner after landing found no damage, but this may not always be the case.”
The pilot said it appeared the drone was a high-end model built to look like a fighter jet and powered with a small turbine engine, according to the FAA. Such model planes are capable of reaching higher altitudes than drone copters and may cost thousands of dollars.
The FAA investigated the Tallahassee incident and couldn’t locate the unmanned aircraft or the pilot, according to the statement.
The FAA has said it plans to propose rules by the end of the year governing civilian drones weighing less than 55 pounds (25 kilograms), which have grown in popularity as prices fall and the crafts become more widely available.
An industry committee assisting the FAA on the rule has proposed these small drones be kept away from airports and populated areas and limited to no higher than 400 feet.
Williams, whose speech was posted to YouTube.com, compared the Florida incident to the Jan. 15, 2009, water landing in the Hudson River of a US Airways Group Inc. aircraft that struck a flock of geese. No one died in the accident known as the “Miracle on the Hudson.”
“Imagine a metal and plastic object, especially that big lithium battery, going into a high-speed turbine engine,” Williams said. “The results could be catastrophic.”
Williams’ speech was reported earlier by the Wall Street Journal.
Williams also cited drone accidents, including a small helicopter that struck a woman participating in a triathlon in Australia this year.
The March incident highlights the need for FAA to move slowly as it develops rules to ensure the safety of unmanned flight, he said. The current rules for pilots and air-traffic controllers preventing mid-air collisions become more difficult when the person flying the plane is on the ground, he said.
The FAA and law enforcement have investigated other cases in which drones got too close to traditional aircraft.
Pilots on an Alitalia SpA Boeing Co. (BA) 777 nearing New York’s John F. Kennedy International Airport reported a drone helicopter came within about 200 feet on March 4, 2013. The Federal Bureau of Investigation opened an investigation.
An unidentified airline flight into LaGuardia Airport in New York flew about 500 feet (152 meters) above a small black drone in July 2013, according to an Aviation Safety Reporting System report. The plane’s mid-air collision warning system didn’t alert them to the danger, the pilot reported. The other five incidents reported to NASA involved private aircraft.
http://www.bloomberg.com/news/2014-05-09/drone-almost-hit-airliner-in-recent-weeks-faa-official.html
“People
never lie so much as after a putsch, during a war or before an election.”
With apologies to Count Otto von Bismarck.
The monthly Coppock Indicators finished April
DJIA: +189 Down. NASDAQ: +347 Down. SP500: +249 Down. Sell in May, go away.
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