Baltic Dry Index. 906 -33
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"Liberating
Iraq would be a cakewalk."
Kenneth Adelman, a member of the Pentagon's Defense Policy
Board, Feb. 13, 2002
The big news this morning comes from Iraq, Russia/Ukraine,
Kenya, and Norway. In brief, Iraq seems to have collapsed as a unitary state,
with big implications for the future price of oil. This morning there are
credible reports of the mass murder of captured Sunni soldiers, Christians, and
other non moslems by moslems. You can just imagine the outcry if Jews or
Christians were killing moslems in such fashion.
Russia’s deadline to cut-off natural gas to the
Ukraine over unpaid bills totalling billions, expired almost an hour ago, at
the time of writing. If implemented, continental Europe might see up to 15
percent of its natural gas supply cut-off as well. More news on this is
expected throughout the day.
In Kenya, moslem barbarian fanatics have attacked
hotels, bars, tourists and locals in a busy coastal resort , setting fire to
two hotels and killing at least 26. Fanatical barbarian moslems now seem to be
making war on everyone else from Nigeria/Cameroon in west Africa, to South
Sudan, to Kenya in East Africa, in a new semi coordinated medieval religious
war to impose an extreme backward
version of 14th century Islam.
In Norway, the oil workers have picked a very bad
week to go out on strike if mediation fails today.
It may not (yet) quite be the end of the world as
we knew it, but it is getting uncomfortably close, as seen from London this
morning. Stay long fully paid up physical gold and silver as insurance for what
comes next. And don’t blame this mess on Bush and Blair. No really, trust me,
it’s really not our fault.
"I
think most people who have dealt with me think I am a pretty straight sort of
guy, and I am."
Tony
Blair.
The Bush/Neocon Legacy In Iraq—The Mother Of All Messes
by Eric Margolis •
The late Saddam Hussein was
certainly right when he predicted that America’s invasion of Iraq would become
“the Mother of All Battles.” Eleven years later, it continues.
This week saw the collapse of two
divisions of Iraq’s government army, a full 30,000 men running like chickens
before the relentless advance of the fighters of ISIS – the Islamic State of
Iraq and Shams(Syria). The same puppet army trained and equipped for a decade
by the US at a cost of $14 billion. An evil portent of what awaits Afghanistan’s
US-led army and police.
Remember when President George W.
Bush boasted, “mission accomplished?” Was not the wicked Saddam Hussein lynched
by US Shia allies? Wasn’t the dreaded al-Qaida defeated and its leader, Osama
bin Laden, assassinated? Remember all that crowing from Washington about
“draining the swamp” in Iraq?
As soon as the US knocks down one
challenger to its domination of the Mideast – which I call the American Raj
- another rises up. The latest: ISIS, a fierce jihadist force that now
controls large parts of Syria and Iraq.
ISIS is a combination of Sunni
jihadist groups fighting the Shia-backed Damascus government of Bashar Assad (a
US enemy backed by Shia Iran), and resurgent units of Saddam’s old Ba’athist
army, led by Izzat Ibrahin al-Douri, the last surviving member of Saddam’s
inner circle, and a handful of al-Qaida in Iraq.
They are battling to overthrow
the US-installed Shia regime in Baghdad of Nuri al-Maliki, an Iranian ally.
There are suspicions ISIS may be secretly financed by Sunni Saudi Arabia, a US
ally.
More
Iraq crisis: anger at Tony Blair over Middle East conflict blame game
Tony Blair is heavily criticised for putting blame on the current generation of British political leaders for the renewed conflict in Iraq
Tony Blair has been criticised
over his claim that the current generation of political leaders is to blame for
the violence engulfing Iraq.
He said that the refusal last
year to intervene in Syria’s civil war had created the conditions for the
al-Qaeda aligned ISIS movement to flourish in that country before advancing
into Iraq’s major cities.
The former Prime Minister
insisted that his decision to intervene in Iraq in 2003 was not the cause of
the fresh wave of bloodshed. The turmoil across the region has been caused by
the Arab Spring, Mr Blair said, which would have swept Saddam from power and
caused chaos if Britain and the United States had not intervened in 2003.
He called for air strikes or
drone assaults, saying that the ISIS fighters posed a threat to British
national security. “They are going to pull us into this whether we like it or
not,” he said.
The claims were met with anger
and ridicule from former allies and from MPs who voted against last year’s
proposed strikes on Bashar al-Assad’s regime.
More
New evidence of atrocities as Iraqi forces halt Islamist advance
The Islamic State of Iraq and al-Sham releases photos of mass executions of Iraqi soldiers taken during last week's lightning offensive
By Our Foreign Staff 12:42PM BST
15 Jun 2014
The radical Islamists who have
captured much of northern Iraq released new pictures on Sunday appearing to
show their fighters executing scores of prisoners.
The images on a website linked to
the Islamic State of Iraq and al-Sham (ISIS), an al-Qaeda affiliate, show young
men in civilian clothes - apparently captured Iraqi soldiers - being loaded
onto the backs of trucks, guarded by Islamist fighters wearing masks.
The next pictures show the men
being forced to lie down in a ditch beside a field, with their hands tied
behind their backs. Finally, the images show their bloodstained bodies,
apparently after they were shot by their captives.
The accompanying captions say the
men were executed in revenge for the death of Abdul Rahman al-Beilawy, an ISIS
commander who was killed during the movement’s lightning advance across
northern Iraq last week.
More
Iraqi Kurds seize their chance to build foundations of a new state
The crisis has allowed the Kurds to grab contested areas and seize the oil-rich city of Kirkuk - and there is nothing Iraq’s government can do
Iraq's
Kurds have seized the chance created by the current crisis to capture more
territory and build the foundations of a future independent state.
From their autonomous enclave in
northern Iraq, Kurdish “Peshmerga” fighters have advanced to take over disputed
areas, including the oil-rich city of Kirkuk, which they claim as their
capital.
The Iraqi army has been in no
position to resist thanks to the onslaught mounted by the Islamic State of Iraq
and al-Sham (ISIS), an al-Qaeda affiliate. The Peshmerga have even been able to
take over abandoned military bases.
Kurdish leaders view the sudden
collapse of the Iraqi state across the north of with barely concealed glee,
regarding this as a unique opportunity to strengthen their own hand.
Yousif Mohammed Sadiq, the
parliamentary speaker of the Kurdish Regional Government, told The Telegraph
that the capture of Kirkuk was justified and there was no question of the
Peshmerga relinquishing their gains.
“Since Kirkuk is considered
contested, any of the two parties has the right to control it,” he said. “We
believe that these lands are Kurdish and we are not going to give up on it.”
For centuries, Kurds have dreamed
of gaining full control of Kirkuk province, which was previously their capital.
In addition to its symbolic
importance, Kirkuk is now a hub for energy exploration, with some of Iraq’s
largest oilfields found within the province.
The Kurds view control of the
oilfields as the gateway to building a viable independent state.
Erbil, the capital of autonomous
Kurdistan, resembles a boom town, complete with towering five star hotels.
Since 2011, big oil companies,
including ExxonMobil and Total have signed exploration deals with Iraqi
Kurdistan
More
Suspected al-Shabaab Attack on Kenya Coastal Town Leaves 27 Dead
Jun 16, 2014 5:53 AM GMT
Suspected al-Shabaab gunmen
attacked the Kenyan coastal town of Mpeketoni, shooting people inside and
around the town and setting alight two hotels, the government said. At least 27
people died, Capital FM reported.
The assailants arrived in the
town, about 220 kilometers (137 miles) northeast of the port city of Mombasa,
at about 8 p.m. yesterday, the National Disaster Operations Centre said on its
Twitter account. Military surveillance aircraft were deployed to assist police
operations, it said, adding that an update will be provided when the situation
is contained. The dead include one policeman, Nairobi-based broadcaster Capital
FM said, citing Police Inspector-General David Kimaiyo.
The attackers are “likely” to be
al-Qaeda-linked al-Shabaab militants, military spokesman Major Emmanuel
Chirchir said on his Twitter account.
Kenya has faced a spate of
attacks by suspected Islamist militants since it deployed troops in neighboring
Somalia in October 2011 to fight al-Shabaab insurgents who are trying to
overthrow the government. Al-Shabaab claimed responsibility for the Sept. 21
attack on the Westgate Mall in the Kenyan capital, Nairobi, in which at least
67 civilians and members of security forces died.
In oil news, the world inches closer to an oil
spike.
"I
think they're in the last throes, if you will, of the insurgency."
Vice President Dick
Cheney, on the Iraq insurgency, June 20, 2005
Oil Topping $116 Seen Possible as Iraq Conflict Widens
Jun 16, 2014 6:31 AM GMT
Brent crude was
projected by Wall Street analysts to average as much as $116 a barrel by the
end of the year. Now, with violence escalating in Iraq, how far the
price will rise has become anyone’s guess. The international benchmark surged above $114 on June 13 for the first time in nine months as militants routed the Iraqi army in the north and advanced toward Baghdad, threatening to ignite a civil war. The Islamic State in Iraq and the Levant, known as ISIL, has halted repairs to the pipeline from the Kirkuk oil field to the Mediterranean port of Ceyhan in Turkey.
The conflict threatens output in OPEC’s second-biggest crude producer. The Persian Gulf country is forecast to provide 60 percent of the group’s growth for the rest of this decade, the International Energy Agency said June 13. Global consumption will “increase sharply” in the last quarter of this year and OPEC will need to pump more oil to help meet the demand, according to forecasts from the Paris-based IEA.
“We’ve been waiting for the other shoe to drop in this tightly balanced market and now it’s happened,” Katherine Spector, a commodities strategist at CIBC World Markets Inc. in New York, said June 13 by phone. “There have been lurking risks but nobody was projecting how quickly things would turn worse.”
----ISIL has control of the pipeline to the 310,000 barrel-a-day Baiji refinery, the country’s biggest. The insurgents also took Mosul, the country’s second-largest city. Kurdish forces moved into Kirkuk to protect the northern oil fields from the militants. The main pipeline from that field to Turkey hasn’t operated since early March because of attacks.
More
Norway strike could cut output by 100,000 barrels
A threatened strike could cut
Norway’s oil production by 100,0000 from the middle of this week if oil worker
trade unions don’t agree on a new wage deal.
Two Norwegian trade unions will
meet for mandatory mediation with industry representatives Monday.
A strike deadline of Tuesday
midnight hangs over the talks.
The unions plan to shut down
several platforms on the Norwegian continental shelf operated by ExxonMobil and
GDF Suez, Reuters said.
“That could initially cut
Norwegian oil production by about 100,000 barrels per day and gas production by
15 million cubic meters (mcm) per day, and may also be expanded at a later
stage,” the report said.
That would be a production cut of
about 7%.
“So far this year, daily
production has averaged 1.5 million barrels of oil, while current gas
production is 240 mcm,” Reuters said.
More
In non new religious war news, Abenomics in Japan, isn’t
working out as forecast. The BOJ is now the only “player” in the JGB market.
Soon, it will be the only player in some of the other markets too.
BOJ’s Bond Paralysis Seen Spreading Across Markets: Japan Credit
Jun 16, 2014 5:05 AM GMT
The Bank of Japan’s
unprecedented asset purchase program has released a creeping
paralysis that is freezing government bond trading, constricting the yen to the
tightest range on record and braking stock-market activity. Historical price volatility on Japanese bonds slid to a 1 1/2-year low of 0.913 percent on June 13 and a lack of activity delayed trading at least four days last week. The yen has traded in a range of 4.68 per dollar since Jan. 1, the tightest since Japan ended currency controls four decades ago. Average trading on the Topix index is near its lowest level in more than a year.
Asset purchases have not only made BOJ Governor Haruhiko Kuroda the biggest player in Japan’s $9.6 trillion bond market, they have also given him the most leverage over currency and equity markets in the world’s third-largest economy. Kuroda last week refrained from either expanding or reducing monetary easing that drove the yen to its biggest annual loss in more than three decades, pushed yields to a record low and boosted the Topix index to its highest since 2008.
“All the markets have been quiet,” said Daisuke Uno, the Tokyo-based chief strategist at Sumitomo Mitsui Banking Corp. “We’ve already seen the BOJ dominance of JGBs since last year, but recently participants in currency and stock markets are also decreasing as those assets have traded in narrow ranges.”
----Benchmark 10-year bonds failed to trade on April 14 for the first time since December 2000 and didn’t change hands during two morning sessions last week. The 12-month moving average of JGB trading volume dropped to a record 39.6 trillion yen ($388 billion) in April, according to Japan Securities Dealers Association figures going back to September 2004.
“The flows on both the buying side and selling side continue to fall,” said Takehito Yoshino, the chief fund manager at Mizuho Trust & Banking Co., a unit of Japan’s third-biggest financial group by market value.
“Falling volatility is a very serious problem for traders and dealers who are unable to get capital gains.”
----Japan’s government bond market is becoming increasingly reliant on BOJ easing, leaving it vulnerable to shocks, according to Deutsche Securities Inc.
More
“We're
leaving behind a sovereign, stable and self-reliant Iraq with a representative
government that was elected by its people. We're building a new partnership
between our nations and we are ending a war not with a final battle but with a
final march toward home. This is an extraordinary achievement."
President Barack Obama in
a speech at Fort Bragg, North Carolina, Dec. 14, 2011
At the Comex silver depositories Friday final figures were: Registered 57.06 Moz,
Eligible 119.10 Moz, Total 176.16 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today the shabby truth behind the wealth destroying
euro that has pushed millions of continentals into unemployment and outright
poverty. And right from the horse’s mouth,
Laszlo Andor, the European Commissioner for Employment and Social
Affairs. Since after last month’s European elections, a United States of Europe
is no longer possible, not even the Bilderberger imposed EUSSR, it’s impossible
to make the euro into a functioning wealth creating currency, it can only
remain for growing millions of Europe’s continentals, a permanent wealth
destroying millstone forever dragging them, their children, and grandchildren,
into grinding relentless poverty. Mr. Barroso, tear down this useless euro
wall.
We
welcome change and openness; for we believe that freedom and security go
together, that the advance of human liberty can only strengthen the cause of
world peace. There is one sign the EC can make that would be unmistakable, that
would advance dramatically the cause of freedom and peace. General Secretary
Barroso, if you seek peace, if you seek prosperity for the European Union and
all of Europe, if you seek liberalization, come here to this euro. Mr. Barroso,
end this misery generating euro. Mr Barroso, tear down this euro!
With
apologies to Ronald Reagan.
European Commission endorses Telegraph view of the euro
Ambrose Evans-Pritchard Economics Last updated: June 13th, 2014I never thought I would live to see a serving European Commissioner suggest that it was "reckless" to launch the euro without a lender-of-last resort or fiscal union to back it up.
Or that EMU policies have led to a vicious cycle and a catastrophic double-dip recession that is entirely due to the dysfunctional character of the project.
Or that the Greek debt crisis was botched because Germany’s leaders were playing politics with the North-Rhine Westphalia elections.
Or that that the internal devaluation policies forced on the victim states are cruel and inherently self defeating.
Or that EMU's stabilisation regime has not come close to putting monetary union on a viable footing, able to
command political consent over time.
But we have one today from László Andor, and it is a corker, delivered in Berlin of all places. The European Commissioner for Employment and Social Affairs is very close to outright revolt, not surprisingly since his job is to deal with the terrible consequences of these policies.
At least someone is speaking for the moderate Left in this Europe of Omerta, where the code of silence stifles criticism from those whose political values are most injured. His proposal – for starters – is a pan-EMU unemployment scheme to act as a fiscal stabiliser and to share the burden of asymmetric shocks.
He is entirely right, on one level. The pro-cyclical policies of austerity cuts (beyond the therapeutic dose) in those countries already in the most trouble – without any offsetting cushion from intra-EMU devaluation or monetary stimulus – is intellectually criminal and will be judged in the harshest fashion by historians. It sets in motion a horrible spiral of labour hysteresis, investment droughts, and technological decline.
But his romantic proposal creates a different problem, one that is equally intractable. Mr Andor does not address the issue, and I can see why, since the implication is that EMU can never be made to work, and should therefore be dismantled in the least traumatic way possible before it does any more damage.
If there is to be a fiscal union with at least 5pc to 7pc of GDP going to a central budget, this automatically alienates the budgetary powers of the Bundestag and other sovereign parliaments to a transnational EU body. It eviscerates the core power of the national legislatures: the power tax and spend, (the principle on which the English Civil War and the American Revolution were fought).
It implies a full-blown political union under a higher sovereign parliament (or an authoritarian priesthood regime), with both the substance and the machinery of a unitary state. It means that the historic nation states must abolish themselves, becoming linguistic or cultural provinces of a federal union.
None of this is remotely possible. The German Constitutional Court has ruled in crystal clear language that any such move is a violation of the Grundgesetz and will be prohibited (unless the constitution itself is changed). You can perhaps read the European elections in many ways, but to suggest that the French people – for example – are clamouring for a further erosion of sovereignty takes a heroic willingness to overlook the facts.
But let us not quibble. Here are a few extracts:
More
"Major combat operations in Iraq have
ended. In the battle of Iraq, the United States and our allies have
prevailed."
President Bush, standing under a "Mission
Accomplished" banner during a speech on the USS Lincoln aircraft carrier,
May 2, 2003
The monthly Coppock Indicators finished May
DJIA: +181 Down. NASDAQ: +340 Down. SP500: +246 Down. Crisis? What crisis?
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