Baltic Dry Index. 886 -18
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
“This is crossing the Rubicon, after which there
will be no more sovereign states in Europe with fully-fledged governments and
parliaments which represent legitimate interests of their citizens, but only
one State will remain. Basic things will be decided by a remote ‘federal
government’ in Brussels and, for example, Czech citizens will be only a tiny
particle whose voice and influence will be almost zero. … We are against a
European superstate.”
Czech President Vaclav Klaus, 29-9-2003
Tired of covering the proxy war in the Ukraine, the
rise of fanatical moslem terror in the Middle East and Africa, and the Japan v
China coming clash over the Diaoyu Islands, today we return to the wealth
destroying embarrassment known as the EUSSR. This week’s EU summit promises to
hit a new all-time low, something not too hard to achieve in an organisation known
for serial lows. The horse trading before this summit, has been all entirely
political. Reform, who needs it? The party on the EUSSR Titanic is doing just
fine.
Except of course it isn’t. Without reform, France
is very likely to bring down the EMU. And not before time, most of us think, as
it would allow Club Med to begin the process of restructuring their economies
to finally tackle the problem of crippling youth unemployment.
Below, Europe on the Road to Reykjavik. The coming
summit, looks like it’s going to be fun.
“Experience
declares that man is the only animal which devours his own kind; for I can
apply no milder term to the governments of Europe, and to the general prey of
the rich on the poor.”
Thomas
Jefferson. (What’s changed?)
Euro-Area Survey Shows Weakening as French Woes Worsen: Economy
Jun 23, 2014 9:59 AM GMT
Euro-area manufacturing and services activity weakened in June amid a
further slowdown in France’s
economy, underscoring the fragility of the recovery in the 18-nation region. A Purchasing Managers Index for both industries slipped to 52.8 in June from 53.5, Markit Economics said today. That’s the 12th month the gauge has exceeded 50, the mark that signals expansion. Economists predicted a reading of 53.4, according to the median of 25 estimates in a Bloomberg News survey. A measure of Chinese manufacturing rose to a seven-month high.
The euro area is struggling to sustain a recovery that received a bleak assessment from the International Monetary Fund on June 20. Earlier this month, the European Central Bank introduced a negative deposit rate, announced targeted loans to stimulate lending and held out the prospect of asset purchases to stoke growth and inflation in the region.
“The pace of recovery is slowing down,” said Martin van Vliet, senior economist at ING Groep NV in Amsterdam. “The further weakening of the PMI vindicates the ECB’s recent decision to implement further monetary easing.”
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French Manufacturing, Services Reveal Risk for Europe’s Recovery
Jun 23, 2014 8:00 AM GMT
French manufacturing and services contracted for a second month in June,
highlighting the euro area’s struggle to sustain its economic recovery. A Purchasing Managers Index for both industries in the region’s second-largest economy decreased to 48.0 from 49.3 in May, Markit Economics said today in London. Economists had forecast an unchanged reading, according to a Bloomberg News survey. A reading of 50 or higher signals expansion.
The French economy has fared worse than that of the euro area for the past three quarters and added to concern of policy makers at the European Central Bank, who unveiled unprecedented stimulus earlier this month to rekindle growth and boost prices in the 18-nation region. The International Monetary Fund gave a bleak assessment of the euro economy last week, noting that output is still below pre-crisis levels, unemployment “unacceptably high” and inflation “worryingly low.”
“There remained little sign of any turnaround in the performance of France’s economy at the end of the second quarter,” said Paul Smith, senior economist at Markit. “On these trends, the economic underperformance of France seems set to persist well into” the second half of the year, he said.
The manufacturing PMI fell to 47.8 from 49.6 in May, the lowest level since December, while the one for services slipped to 48.2 from 49.1.
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French air traffic control strike: passengers face 14,000 hours of delays
Airlines forced to cancel dozens of flights and warn of potential delays to all flights crossing French airspace
Airline passengers across Europe
could face 14,000 hours of delays over the next week, aviation authorities have
warned, as a six-day French air traffic control strike begins on Tuesday.
Airlines were forced to cancel dozens
of flights and warned of potential delays to all flights crossing French
airspace.
Ryanair has said 26 flights to
and from France will be cancelled on Tuesday, while Easy Jet said 28 flights
had been cancelled, although none from UK airports. British Airways has
cancelled three flights from Heathrow to Lyon, Toulouse and Marseille.
All three airlines said they
would be making decisions day by day on the need for additional cancellations.
Eurocontrol, a European air
safety organisation, estimated the action would cause 830,000 minutes, or
almost 14,000 hours, of delays.
A similar walkout last year led to the cancellation of
around 1,800 flights a day across Europe including scores of services to and
from the UK.
----Members of the two biggest air traffic controllers’ unions in France originally voted for a six-day strike from Tuesday in protest at budget cuts.
However, the scale of the
disruption is expected to be less than originally feared, with one of the
unions deciding to drop strike action.
The action has been timed ahead
of a deadline on June 30 for France to present its five-year budget plans for
aviation to Brussels.
More
Merkel ally criticizes French over Alstom deal
BERLIN(Reuters) - A conservative ally of Chancellor Angela Merkel accused France on Monday of showing "ice-cold" national interests in choosing GE over Siemens for an alliance with Alstom, and also questioned whether Paris had the fiscal leeway to buy a large stake in the French firm.
France on Friday rejected an offer from Siemens and Mitsubishi Heavy Industries (7011.T) for Alstom's energy arm, instead choosing U.S. firm General Electric.
In announcing its choice, Paris made additional demands on the U.S. conglomerate and announced it would buy a 20 percent stake in the French maker of turbines and high-speed trains.
Peter Ramsauer, chairman of the German parliament's economics committee and a member of the Christian Social Union (CSU), the Bavarian sister party to Merkel's conservatives, said France had put national interests over European interests.
----He added however, that he would have liked to see the German government provide the same support to Siemens that the French did for Alstom. Siemens is based in Bavaria, the state where Ramsauer's CSU governs.
Ramsauer, a former transport
minister, criticized France for announcing plans to buy a 20 percent stake in
Alstom despite its heavy debts and budget deficit.
The purchase, likely to cost a
couple billion euros, would be made by the French agency that manages
government share holdings is not expected to affect French deficit
calculations.
"On the one side, France is
on the brink in terms of its indebtedness, but on the other side seems able to
afford to buy a 20 percent stake in Alstom."
Be it ever so slowly at first, interest rates are
starting to rise. Unreformed, the EU is steaming for the icebergs.
Denmark Pledges End to Stimulus as Economic Expansion Gains Pace
Jun 23, 2014 11:01 PM GMT
Danish Finance Minister Bjarne Corydon is preparing to scale back stimulus
as consumer optimism stokes an expansion in Scandinavia’s weakest economy. “We can slowly take the foot off the accelerator,” Corydon said last week in an interview in Copenhagen. “The economy is approaching being self-sustaining.”
Reports last week showed retail sales are at the highest in two years and consumers the most optimistic since before the financial crisis erupted in 2008. The central bank last week raised growth estimates for the $340 billion economy, home to toymaker Lego A/S, and warned it’s monitoring declining unemployment that for some professions is at the same level as when the economy was “overheating” in 2006.
The Social Democratic-led government, which faces an election before September 2015, has raised spending to the limit to drag the country out of a slump triggered by a 2007-2008 housing crash. The deficit will reach 3 percent of gross domestic product next year, testing the limit under European Union rules, the Finance Ministry said last month.
Budget talks, due to start after the summer holiday, will concern “specific target policies,” rather than the complete framework, according to Corydon.
In the first quarter, the economy expanded 0.9 percent, the most since the third quarter of 2010. Danish unemployment at 3.9 percent is close to pre-crisis levels and the central bank last week raised growth forecasts, predicting an expansion of 1.5 percent in 2014, 1.8 percent in 2015 and 2 percent in 2016
More
We end for today on Europe, with Germany getting
increasingly tetchy on the issue of Uncle Scam holding on to Germany’s gold.
Along with most Germans, I think that Uncle Scam long ago sold it, sorry that’s
“leased” it in polite circles. Uncle Scam doesn’t have it so Germany can’t get
it, but they won’t find out, because Washington will strong arm Germany into
dropping its claim. What happened in Kiev can happen in Berlin. Below, so who
fed the wrong line to Bloomberg and why? Stay long fully paid up physical gold
and silver. Soon the only gold left will all be east of Suez or in Russia.
Head Of German Gold Repatriation Initiative Responds To Bloomberg Story About Repatriation Halt
Just hours
after we noted Bloomberg's story of Germany's decision to halt its repatriation
of gold from the NY Fed, the gentleman at the center of the story, who
Bloomberg quoted as saying his 'Repatriate Our Gold' campaign was "on
hold" - Peter Boehringer - has come out swinging... The Bloomberg
story is "a 'non-news' article with a
wrong headline, strange interviewees, old news, and with a clearly apologetic
ideological approach." and that's just the start...
a) BusinessWeek/Bloomberg uncritically cites statements of politicians and BuBa-bankers who have or give no proof whatsoever re the untouched whereabouts of the german Gold.
b) Re our campaign "Repatriate our Gold": "On hold" does of course NOT mean that we are in any way satisfied with the current status of BuBa´s ongoing repatriation (far too slow and too little - only 5 tons came from NY in 2013! Not exactly a proof for the untouched existence of 1500 tons in a NY vault unaudited since 1950...). Our public campaign will therefore have to continue.
c) Almost no info in the article can be considered in any way "news". Simply because there has not been any material news in this context since early 2013.
d) Especially the headline is plainly false, because there has not been any change in BuBa´s (too slow) repatriation plans: at least 300+ tonnes will come from NY by end 2020. It is not much - but contrary to the headline, BuBa has NOT stopped the ongoing partial repatriation - enforced solely by public pressure!
More
“Are we all clear that we want to build something that can aspire to be
a world power? In other words, not just a trading bloc but a political entity.
Do we realise that our nation states, taken individually, would find it far
more difficult to assert their existence and their identity on the world
stage.”
Commission President Romano Prodi, European
Parliament, February 13, 2001
At the Comex silver depositories Monday final figures were: Registered 57.04 Moz,
Eligible 118.42 Moz, Total 175.46 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today it’s the seriously bent and totally doubled
over Eurorat crony system of jobs for the usual suspects. Welcome to the
decline and decline of failing Euroland. The EUSSR, this week is poised to
appoint a self-confessed liar as EU President. If they do, when Europe’s mouse
squeaks, who’ll listen? Worse, Jean-Claude Juncker comes beholden to dishing out
goodies to France and Italy, to be paid for, of course, by paymaster Germany. It
will be interesting to see how he serves two masters as his term plays out.
This EUSSR stitch-up will do much to hasten the UK’s exit from a sinking EUSSR.
“We must go back
to teach Europeans to love Europe.”
Jean-Claude Juncker.
The Last Post in Europe
Daniel Hannan Last updated: June 22nd, 2014
EU leaders meeting in the
Flanders town of Ypres this week are about to give the most important job in
Brussels to someone they know isn’t up to it – largely to spite David Cameron.
Remember this episode the next time you hear claims about “reforming” the EU.
I haven’t met one leading
European politician or official who thinks that Jean-Claude Juncker (sacked as
prime minister of Luxembourg at the end of last year) is the best man for the
job. Abrupt and abrasive, he left office following a scandal that turned on his
inability to get on with Luxembourg’s intelligence services. Even his closest
friends don’t argue that he is a natural administrator. Indeed, when he put
himself forward for the Commission job, he wasn’t expecting to get it. The
assumption was that the Socialists would win the largest number of MEPs and
claim the Commission presidency, allowing Juncker to be compensated with the
office he really craved, namely Herman Van Rompuy’s post as president of the
European Council. The two jobs are comparable in terms of prestige and perks –
the net income is around four times what a national prime minister gets – but
the Council job doesn’t involve managing a massive bureaucracy.
Juncker rose to prominence by
chairing the group of Eurozone states. Given the way that worked out, you might
not think it much of a recommendation. Before every bail‑out, Luxembourg’s
premier would pop up to insist that there was no problem, that the banks were
rock solid. “When it gets serious,” he explained, “you have to lie.”
Plenty of EU leaders lie to their
electorates about European integration, of course. A whole vocabulary has grown
up in Brussels to excuse the phenomenon: “showing leadership”, “displaying
maturity”, etc. But Juncker, representing an electorate no larger than
Sheffield city council’s, hasn’t had to learn to be subtle about it. During the
French and Dutch referendums on the European Constitution, he cheerfully
announced: “If it’s a Yes, we will say 'on we go’, and if it’s a No we will say
'we continue.” Nor is it, by any stretch of the imagination, Luxembourg’s turn
to get the top slot. There have been 12 presidents of the European Commission,
and two have already come from the Grand Duchy, which accounts for just
0.1 per cent of the EU’s population.
As Brussels wags point out,
Juncker has only one key recommendation for the job: like so many
Commissioners, including our own Chris Patten and Neil Kinnock, he has
just been rejected by his voters.
Why, then, are the 28 leaders about to
elevate a man whom many of them disdain, and a fair few despise? In theory,
it’s because Juncker was the designated “leading candidate” of the faction that
won the largest number of seats at last month’s European election, the European
People’s Party.
In reality, no one believes such
piffle. There were 28 separate national campaigns, each fought on its own
issues. It’s hard to imagine a single voter in Europe saying: “I had planned to
vote for Guy Verhofstadt, the Liberal leader, but that Juncker fellow really
impressed me in the debates.”
Immediately after the election,
the Alliance of European Conservatives and Reformists, of which I am
secretary-general, commissioned a major poll of 12,000 voters across the EU.
The survey found that 91.8 per cent of people had no idea who Jean-Claude
Juncker was, and 91.2 per cent could not name a single one of the
pan-European parties now laying claim to their ballots.
Even when the system was
explained to them, only 10.1 per cent of respondents thought that the
president of the European Commission should be chosen in this fashion.
Jean-Claude Juncker’s supposed mandate, in other words, has no basis either in
law or in public opinion. Even the most committed Euro-integrationists – even
The Economist, even Nick Clegg – admit as much. So why are EU premiers so keen
on him?
More
Berlin is playing with fire over the EU's top job
Last updated: June 23rd, 2014
The fight over the appointment of the next European Commission President has
reached
fever pitch and left David Cameron facing the prospect of being the first
EU leader ever to be outright outvoted on the matter. It would set a range of
unfortunate precedents for the UK – as a new Open Europe briefing explains here.However, it would also set a very worrying precedent – and be a big gamble – for Berlin.
----Now, it’s Europe’s worst kept secret that Italy’s Matteo Renzi and France’s Francois Hollande are looking for a horse-trade: their votes for Juncker are conditional on greater flexibility in the eurozone’s rules on budget deficits, the very opposite of what Merkel and most Germans want. This has led mega-tabloid Bild – that backed Juncker a few weeks ago – to blast the "shabby haggling" over Juncker's candidacy. It argued: "Juncker should be warned and be made aware that he must not be a chief at the mercy of Southern Europe.”
The irony of a process intended to boost transparency now being concluded via various backroom deals should not be lost on anyone. However, for Germany it also poses two huge risks going forward. First, this may set a troublesome anti-Ordnungspolitik precedent. A candidate to head the European Commission with an alleged "public mandate" who promised the Mediterranean block goodies in return for support under Qualified Majority Voting (meaning that Germany, like the UK, has no veto) surely must be Berlin’s worst nightmare. What if the next Commission President chosen by the Eurobond friendly European Parliament campaigns on a platform of debt pooling and laxer fiscal rules (on the latter, the Commission does have a key role). Berlin is just about to give away even more control over one of its key post-World War pillars.
Secondly, Juncker’s appointment would substantially boost the risk of the UK leaving the EU, with senior Government figures now considering whether Cameron should threaten to recommend a “No” vote in the promised 2017 EU referendum. As the Economics Editor of Frankfurter Allgemaine Zeitung, Holger Steltzner, has argued, Britain leaving “would be permanent catastrophe for Germany. Without London, Berlin would lack a strong partner against Brussels’ mantra of centralisation." Merkel constantly relies on Cameron to do her dirty work, and without the UK, the ‘Northern’ block would lose its blocking minority (see graph) when decisions are made through majority voting, on a range of issues including annual EU spending, regulation and trade.
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“There
are two kinds of Europeans: The smart ones, and those who stayed behind.”
H. L. Mencken
The monthly Coppock Indicators finished May
DJIA: +181 Down. NASDAQ: +340 Down. SP500: +246 Down. Crisis? What crisis?
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