Baltic Dry Index. 948 +14
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
Anyone
who has ever looked into the glazed eyes of a soldier dying on the battlefield
will think hard before starting a war.
Count
Otto von Bismarck.
From London
this morning, it looks like America’s War Party has decided on war with Russia.
America’s puppet regime in Kiev has not only been given the green light to
attack the Russian patriots defending the mostly Russian supporters of the
Ukraine’s last legitimately elected president, they seem to have been offered
US military support, in addition to the US mercenaries previously reported in
German media. Stay long fully paid up physical precious metal held outside of
the reach of the UK and USA. Once the
D-Day commemoration has passed this Friday, a full scale civil war is likely to
break out next week, with Russian intervention to quickly follow. If the War
Party thinks this will be another repeat of Kosovo and Serbia, they are in for
a big surprise. M.A.D. means just that. Mutually Assured Destruction. Given
America’s overwhelming military advantage, Russia has to go nuclear almost from
the start. Who knew, discretionary nuclear war is the Obama version of the now globally
extended Monroe Doctrine.
Below,
Washington’s rush to war. It looks like they’re going after Russian Transnistria
next. Coming next, car bombs across eastern Europe? Manpads for the Taliban? Is
the Ukraine the European Syria?
The
great questions of the day will not be settled by means of speeches and
majority decisions but by iron and blood.
Count
Otto von Bismarck.
Ukraine Fortifies Russian Border as Death Toll Climbs
Jun 3, 2014 7:06 PM GMT
Ukraine said it’s
deploying heavy weaponry and armored vehicles to strengthen its border with Russia and halt an
influx of fighters after skirmishes with separatists claimed another dozen
lives. Government troops are starting to close the border with Russia in the easternmost Luhansk region, after driving the biggest rebel groups out of the northern part of neighboring Donetsk, acting President Oleksandr Turchynov said in a statement. Authorities are also moving personnel and equipment to the southwestern frontier with Transnistria, the breakaway Moldovan region where hundreds of Russian troops are stationed, according to State Border Service chief Mykola Lytvyn
“A large number of terrorists” were
“liquidated” in Luhansk, Turchynov told lawmakers in Kiev. The operation around
Slovyansk in Donestk is “in an active offensive phase” with “very active
exchanges of fire,” Interior Minister Arsen Avakov said on Facebook. Two
soldiers were killed and 42 wounded today in firefights with insurgents, who
also downed two helicopters, Vladyslav Seleznyov, a government spokesman, said
by phone. The crews survived.
----“Further Russian provocation will be met with further cost for Russia,” Obama said at a news conference in Warsaw today with Polish President Bronislaw Komorowski. He called on Putin to meet Poroshenko and to “engage constructively.”
Obama said Putin needs to use his influence with the insurgents to convince them to stop attacking Ukrainian forces, abandon seized buildings and lay down arms. The two leaders will cross paths this week in Paris and during 70th-anniversary commemorations of the allied landings in northern France during World War II.
Putin said during a meeting today with his human rights ombudsman, Ella Pamfilova, that he supports the creation of a “humanitarian corridor” to allow Russian aid to reach people in Ukraine affected by the fighting.
“I’m just amazed” that the “enlightened western world suddenly became deaf, dumb and blind all at once” to the tragedy unfolding in Ukraine, Pamfilova told Putin in Sochi.
----In Warsaw, Obama announced a $1 billion fund to bolster military training and assistance for NATO allies near Russia. More equipment will be positioned in Europe. The U.S. also will strengthen partnerships with allies such as Ukraine, Moldova and Georgia that aren’t part of the alliance, he said.
More
Russian Military Jet Intercepted U.S. Plane Near Japan
Jun 3, 2014 5:48 PM GMT
A Russian Su-27 Flanker fighter jet intercepted a U.S. surveillance plane
off Russia’s
east coast near Japan
in April, flying unusually close, as tensions rose over the Ukraine crisis. The U.S. RC-135U Combat Sent electronic intelligence plane made by Boeing Co. (BA) was conducting a routine mission over the Sea of Okhotsk north of Japan on April 23 when the Russian fighter flew within about 100 feet (30 meters) of its nose, Rear Admiral John Kirby, a Pentagon spokesman, said today.
Asked why the Pentagon didn’t disclose the incident until it was reported today by the Washington Free Beacon, spokesman Army Colonel Steve Warren said, “I don’t have a good answer for you.”
Warren said he wasn’t aware of any other close encounters since “this incident” between Russian and U.S. aircraft in the region.
Russian Air Force spokesman Igor Klimov said he couldn’t comment immediately when reached by phone today.
More
In yet
another Washington driven initiative, time to send in the lawyers. To
Washington’s armchair War Party warriors, the Ukraine is only a chess move to
take down and slice up Russia and Belarus. To Moscow it’s an existential fight,
with an Israeli v Egypt ending.
All
treaties between great states cease to be binding when they come in conflict
with the struggle for existence.
Count
Otto von Bismarck.
Will Putin Pay $90 Billion for Crimea?
Ukraine has hit on a good way to keep Russia's annexation of Crimea on the world agenda: Sue for compensation.Russian President Vladimir Putin is trying to play a mind trick on Western leaders: Get them so worked up about the armed conflict in eastern Ukraine that they forget about Crimea. On Monday, acting Ukrainian Justice Minister Pavlo Petrenko offered a reminder in the form of a 17-volume calculation that values the territory, including such items as the 300 kilograms of gold kept at the Crimea branch of the Ukrainian central bank, at 1.08 trillion hryvnias ($89.6 billion). Acting Prime Minister Arseniy Yatsenyuk says his government intends to seek the court rulings required to seize Russian property in Ukraine and abroad as compensation. It has already filed suit with the European Court for Human Rights, and, according to Yatsenyuk, it will even use Russian courts.
The Ukrainians are probably aware that their chances are slim. International arbitration rarely succeeds in resolving territorial disputes, and then it requires at least some goodwill on both sides.
----
No international court has the authority to handle Ukraine's monetary claims.
Ukraine has said it would try international
arbitration in Stockholm to litigate against Russia's seizure of the oil
and gas company Chernomorneftegaz CJSC, but the Stockholm tribunal's
jurisdiction in this case is not obvious. When the European Court for Human
Rights ruled last month that Turkey should
pay $124 million in damages to victims of its 1974 invasion of Northern Cyprus,
the ruling concerned damages to specific people -- the families of Greeks who
disappeared during the invasion and the residents of the Karpas peninsula, cut
off from the rest of the island by the Turkish forces. Even so, Turkey refuses
to pay.
More
Meanwhile America’s
War Party risks splitting NATO and Europe apart. No American’s face a
depression if real economic sanctions are applied to Russia, only continental
Europeans. No Americans will suffer in a European war, so the mad dogs of the
Washington War Party think. The War Party is willing to fight to the last Pole
or Ukrainian pawn of the installed oligarch “Chocolate King,” the Somoza of
western Ukraine.
NATO Struggles With Defense Stance as U.S. Raises Pressure
Jun 3,
2014 6:36 PM GMT
NATO defense ministers struggled to find a response to Russia’s Ukraine incursion,
hemmed in by financial constraints, U.S. demands that Europe raise defense
spending and a desire not to provoke the Kremlin. “I am troubled that many nations appear content for their defense spending to continue declining,” U.S. Secretary of Defense Chuck Hagel told his counterparts from the North Atlantic Treaty Organization’s 28 member states in Brussels today, according to an e-mailed text of his comments.
NATO is preparing a Sept. 4-5 summit in Wales as it grapples with differences on how to reassure its eastern members and prepares to draw down its Afghanistan mission by the end of this year.
The alliance is divided with Poland and the three Baltic states, all of which share borders with Russia, seeking a bigger NATO military presence on their territory. Germany and France are leading opposition to any swift moves to create permanent bases in former Soviet satellites. NATO has beefed up Baltic air policing, yet much military assistance to the alliance’s eastern flank has been bilateral.
The U.S. in April deployed 600 paratroopers for that it termed “training rotations” in Estonia, Latvia, Lithuania and Poland. It also sent F-16 warplanes and crews to Poland to “provide a persistent presence” in the country and training for Poland’s air force, a U.S. government statement said.
NATO Secretary General Anders Fogh Rasmussen told reporters today that Russia’s “illegal aggression against Ukraine” shows the alliance faces a growing array of unpredictable security threats.
More
Below,
America puts pressure on the G-7 in their undeclared war to slice and dice up Russia.
Below that, the reality of modern jobless Europe. Will continental Europe
commit economic suicide for booming America? How long before America demands
the First Russian Grand Prix be cancelled?
G-7 Leaders Seen Discussing Intensified Russian Sanctions
Jun 4, 2014 12:01 AM GMT
The world’s top industrial powers may discuss imposing additional sanctions
on Russia when they meet in Brussels today amid continuing fighting in eastern
Ukraine. President Barack Obama will talk with Group of Seven counterparts, including leaders of France, Germany, the U.K. and Japan, about the prospect of extending penalties against Russian individuals and companies and broader economic sanctions, according to the European Union.
The G-7 leaders will “discuss the continued work to support Ukraine’s economic and political reforms as well as their continued readiness to intensify targeted sanctions and to impose further costs on Russia should events so require,” the EU said yesterday.
Highlighting the tension stoked by Russia’s annexation of Crimea in March, this week’s gathering replaces a scheduled summit of Group of Eight leaders -- including Russian President Vladimir Putin -- that was due to take place in Sochi, the Russian site of the Winter Olympics.
---- An EU official, speaking on condition of anonymity, told reporters in Brussels yesterday that while the G-7 might push ahead with further sanctions, a decision was unlikely this week and governments favored a diplomatic solution.
The official said leaders may
also discuss Russia’s future membership of the G-8 club, which has reverted to
its Cold War-era format since Putin’s suspension.
The second day of the summit will
be devoted to economic and trade matters, energy and climate change, and
development issues. The meeting will give Obama and EU leaders an opportunity
to discuss the state of negotiations on the proposed U.S.-EU free trade
arrangement, the official said.
More
Europe remains a jobless swamp, despite the Spanish miracle
Economics Last updated: June 3rd, 2014
Congratulations to Spain.
King Phillip VI will take over a
country that created 198,000 jobs in April, the best single month since the
glory days of the property boom in 2005.
There is a very long way to go.
The jobless rate is still 25.1pc, rising to 53.5pc for youth. Yet if this jobs
miracle continues for a few more months it will be one of the great turnaround
stories of modern times.
(I am assuming that the data is
true, a necessary caveat given the stream of articles recently in Le
Confidencial accusing the government of cooking figures).
Unfortunately, the apparent
recovery in jobs in the rest of southern Europe and Holland is largely a
mirage, while in Finland it is getting steadily worse.
Pan-EMU unemployment fell to
11.7pc in April but that is largely because workers are still dropping out of
the workforce or fleeing as EMU refugees to reflationary economies.
Italy lost 68,000 jobs in April,
according to the country’s data agency ISTAT. The total employed fell to
22,295,000.
Italian unemployment rose to 13.6pc. For
youth it has climbed to a modern-era high of 43.3pc, implying very serious
damage to Italy’s long-term economic dynamism due to labour hysteresis.
France saw a rise in its key jobless
gauge by 14,800 in April. INSEE says the number who want to work but are not
included in the jobless figures has jumped to 1.3m.
More
But not all
Americans agree with Obama’s War Party. But does anyone in America get real news
anymore? Are Americans still capable of independent thought? In a vast land
where massacres happen almost weekly, has blood lust replaced rule of law?
Admonishment To Obama: Stop The Sanctimonious Kidstuff; Let Europe Fund Its Own Security
by David Stockman •
The EU has a GDP of $17
trillion—-a figure approximately 9X that of Russia. If there is any one over
there who actually believes that Putin is about to mobilize
his troops on a reverse of Hitler’s march through the Ukraine and back
into central Europe, let them make their case and take up a collection from the
purportedly threatened states.
Quite obviously no one is making
that case in Berlin, Brussels or any other
significant European capital—for the simple reason that such a
scenario is purely a figment of the Washington War Party’s
imagination. So what we actually have is an American president
on a photo op tour of Europe being importuned by local dignitaries for
more Washington largesse. And the result will be more
kidstuff maneuvers that are laughable in there own terms, but still another
irritant in America’s utterly unnecessary confrontation with Russia.
In that regard, we have
already witnessed the President of Poland, Bronislaw Komorowski, making
this hideous remark as he stood with Obama alongside F-16s employed in joint
training exercises between the two nations:
Mr. Komorowski said the U.S. and
Poland are a “brotherhood in arms.”
Well, not at all. We are actually
two nations at peace, and Poland is a fortunate nation that has been born
again solely because of the sacrifices American taxpayers made for 50
years to first defeat its German occupiers and then
to outlast its Soviet overlords.
So Poland is no longer a “captive
nation” and is free to prosper as a burgeoning capitalist economy at peace.
Its president, therefore, should have the good graces to
dispense with cold war politics. He might have even asked how
Poland should repay America for its steadfast support against real enemies
in times past, not indulge in a saber-rattling shake-down
for Washington dollars to enable it to engage in petty war game
maneuvers for domestic political consumption. And that’s exactly what all this
military dress parade stuff is all about: The US now has exactly 150 soldiers
on temporary “rotational assignment” in Poland!
That should be an embarrassment
that adult policy-makers would not dare even report publicly. Instead, far more
than 150 diplomats, military advisers, and national security apparatchiks from
the two nations are at this very moment haggling over how to slightly
increase the size and deployment tempos of this ridiculously
irrelevant token force.
---- The combined defense and security budgets of the US and NATO exceed $1 trillion—-or 12X more than Russia’s military spending. Yet the machinery of the Warfare State is relentless: Put an American President on the road and he must come bearing arms and bribes to the locals, no matter how trivial and pointlessly redundant.
Given the Washington caused
tensions in Europe, Obama should have never gone on this grand tour in the
first place; and, instead, he should have made a brief, quiet and
dignified appearance on June 6 in commemoration of Normandy and then returned
home for a far more important and urgent undertaking.
The sad fact of modern
history is that the temporary war machine which saved the future
of mankind at Normandy—-has since morphed into its opposite. That is, it
has become a permanent Warfare State that drains America’s economic
lifeblood and promotes aggression and misguided interventions all over the
planet.
If Obama really understood
the mandate on which he was first elected as the “peace candidate”
in 2008 he would not be strutting around Europe with a cast of
thousands sowing mischief, tensions and unreasonable expectations among
local politicians kow-towing to a visiting emperor.
Instead, he would have motorcaded
out to the Pentagon to crack the budget books, as did another
accidental president in the movie called ‘Dave”; and to crack
the whip of massive fiscal shrinkage including sweeping weapon systems
cancellations and force structure reductions as did the last real commander-in-chief
to occupy the White House—Dwight David Eisenhower.
More
"Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood. For these few gold has been the asset of last resort."
Antony C. Sutton
At the Comex
silver depositories Tuesday
final figures were: Registered 57.02 Moz, Eligible 118.82 Moz, Total 175.84 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Below, MarketWatch on the ECB going all in, in
pursuit of the insanity of fiat money. The Great Nixonian Error, that funds
unlimited wars and now flirts with discretionary nuclear war, is about to take
a giant leap towards its end via the ECB. On Thursday, the ECB is expected to
trump Japan in the beggar thy neighbour
currency wars. A different kind of MAD is about to get unleashed.
"For more than two thousand years gold's natural qualities made it man's universal medium of exchange. In contrast to political money, gold is honest money that survived the ages and will live on long after the political fiats of today have gone the way of all paper."
Hans F. Sennholz
How to invest if the ECB cuts rates below 0%
June 3, 2014, 5:37 PM ET
Even before those nasty inflation figures on Tuesday, negative interest rates
in the euro zone were considered a done deal.As the central bank for a region struggling to fight off deflation risks, lackluster growth and weak bank lending, the European Central Bank has for weeks been widely forecast to at least do something at its meeting on Thursday.
And for good reason — ECB boss Draghi already hinted at more easing at the May meeting and several other council members have since reinforced expectations of looser monetary policy. Comments from Yves Mersch were a giveaway: in mid-May he boasted that the Governing Council was working on a broader range of instruments that “might even strike the most fertile imagination.”
Whatever that is, we’ll have to wait until Thursday to find out, but at least one thing seems like a definite: negative interest rates. For the first time in the euro zone. Ever.
While no one knows if this will actually force banks to boost lending and thus bolster the economy, some regions and sectors should benefit in the medium term. Think banks, southern European bonds and stocks, but stay far, far from the euro EURUSD -0.09% .
Here’s a run-down of some of the best investments if the ECB yanks the deposit rate below zero:
Banks: The banking sector is a bit of a two-edged sword in this context. If the ECB chooses to only cut rates and nothing else, the banks might actually end up as the loser in this game. By having to pay money to deposit cash with the central bank overnight, the banks could see the extra expense eat into their earnings.
“To compensate for this, banks might increase loan margins, which in isolation will be negative for the economic activity,” Pernille Bomholdt Nielsen, analyst at Danske Bank in Copenhagen, explained in a note.
The Danish example confirms this theory. As one of the only countries that has experimented with negative rates, the Danish national bank kept rates below zero from July 2012 to April this year. While the central bank took several measures to limit the impact on the domestic banks, the negative rates still came with a cost for the lenders as households, and corporates weren’t charged.
However, it’s worth keeping in mind that Denmark didn’t cut rates below zero to boost the economy, but rather to safe-guard the currency peg to the euro.
But back to the euro-zone banks. Most economists expect the supposed negative interest rates to go hand-in-hand with a package of liquidity measures. Nick Beecroft, chairman and senior market analyst at Saxo Capital Markets, stressed there are few benefits to a rate change alone, raising calls for a liquidity injection.
And here’s why: The excess
liquidity in the euro-zone financial system has recently fallen to €100
billion from a peak of €800 billion before the banks started to repay the
money borrowed from the ECB in the long-term refinancing operations. That
effectively means that the maximum benefit of a negative interest rate would
only be €100 billion, not nearly enough to really boost bank lending and
growth and bring down inflation.
But by adding lots of extra funds
to the financial system, the euro-zone banks would have a stronger incentive to
increase lending to corporations and households, rather than paying the ECB to
deposit the extra cash. Economists predict that part of this stimulus package will
be introducing another round of LTROs, ceasing to drain money from the SMP and
launch a kind of asset-backed securities package. And the math is quite simple:
More
"Gold would have value if for no other reason than that it enables a citizen to fashion his financial escape from the state."
William F. Rickenbacker
The monthly Coppock Indicators finished May
DJIA: +181 Down. NASDAQ: +340 Down. SP500: +246 Down. Crisis? What crisis?
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