Baltic Dry Index. 934 -06
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"There can be no doubt that the international gold standard, as it evolved in the 19th century, provided the growing industrial world with the most efficient system of adjustment for balance of payments which it was ever to have, either by accident or by conscious planning."
W. M. Scammell
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D-Day later. According to the official
figures, China is back to boom again. Unfortunately no one even in Beijing believes
the official figures. In a top down communist society, meeting the target is
everything, reality isn’t an option. I have my doubt’s because China this year
has been suffering all year from weather disruption, the latest being the
massive flooding in Southeast China. Even with the seasonal bounce as the
northern hemisphere heads into summer, it’s hard to believe in a manufacturing
recovery, with much of their export markets in the doldrums.
China Manufacturing Gauge Rises to Five-Month High
Jun 2, 2014 3:04 AM GMT
China’s manufacturing
expanded at the fastest pace in five months, in a sign the government’s
measures to counter an economic slowdown are gaining traction. The Purchasing Managers’ Index (CPMINDX) rose to 50.8 in May, the National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday in Beijing, compared with the 50.7 median estimate of analysts surveyed by Bloomberg News. April’s reading was 50.4, with numbers above 50 indicating expansion.
The Communist Party has stepped up the pace of stimulus measures, including faster spending from government budgets and increased railway investment, to help meet an official growth target of about 7.5 percent this year. The cabinet said last week it would cut reserve requirements for some lenders, as authorities contend with a property-market slump.
----The MSCI Asia Pacific Index climbed 0.4 percent to 142.30 at 10:55 a.m in Tokyo, the highest level since Nov. 19. Equity markets in China and Hong Kong are closed today for holidays.
A separate manufacturing PMI from HSBC Holdings Plc and Markit Economics rose to a five-month high of 49.7 in May, based on a preliminary reading released May 22. The final number is due June 3.
The government’s PMI is based on survey responses from purchasing executives at 3,000 companies, while the HSBC-Markit report comes from more than 420 enterprises.
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Asian Stocks Rise With Dollar as China Data Boosts Copper
Jun 2, 2014 6:16 AM GMT
Asian stocks advanced, with the regional benchmark index heading toward a
six-month high, and copper climbed with oil after a gauge of China’s manufacturing expanded at the fastest pace this year.
Australia’s currency led declines against the greenback while crops and rubber
fell. The MSCI Asia Pacific Index added 0.5 percent by 2 p.m. in Tokyo as Japan’s Topix index jumped 1.6 percent. Futures on the Standard & Poor’s 500 Index added 0.1 percent after the gauge closed at a record on May 30. Copper rose 0.6 percent in London while West Texas Intermediate crude climbed 0.6 percent.
The Aussie dropped 0.6 percent as the Bloomberg Dollar Spot Index increased for the first time in three days. Wheat slumped 1.5 percent and rubber touched the lowest since September 2009.
----Economists forecast the European Central Bank will cut the deposit rate to less than zero when policy makers meet on June 5, with a euro-area factory report today estimated to hold steady at the lowest level since November. Equity markets in China, Hong Kong and New Zealand are closed today for holidays.
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Staying with
Asia for now, the US and China just had a major falling out at the weekend. America’s
pot again called China’s kettle black, and tried to turn the clock back to the
1950s. I suspect that we will not have to wait too long for China’s more than
words response.
U.S. and China square off at Asia security forum
By David
Brunnstrom and Lee Chyen Yee
SINGAPORE (Reuters) - The United States and China squared off at an Asian security forum on Saturday, with the U.S. defense secretary accusing Beijing of destabilizing the region and a top Chinese general retorting that his comments were "threat and intimidation".
Using unusually strong language, U.S. Defense Secretary Chuck Hagel took aim at Beijing's handling of territorial disputes with its Asian neighbors.
"In recent months, China has undertaken destabilizing, unilateral actions asserting its claims in the South China Sea," Hagel said.
He warned Beijing that the United States was committed to its geopolitical rebalance to the Asia-Pacific region and "will not look the other way when fundamental principles of the international order are being challenged".
Hagel said the United States took no position on the merits of rival territorial claims in the region, but added: "We firmly oppose any nation's use of intimidation, coercion, or the threat of force to assert these claims."
His speech at Singapore's Shangri-La Dialogue, Asia biggest security forum, provoked an angry reaction from the deputy chief of staff of the Chinese Army, Lieutenant-General Wang Guanzhong.
"I felt that Secretary Hagel's speech is full of hegemonism, threat and intimidation," he told reporters just after the speech.
----In Beijing, President Xi Jinping said China would not initiate aggressive action in the South China Sea but would respond if others did, the official Xinhua news agency reported.
"We will never stir up
trouble, but will react in the necessary way to the provocations of countries involved,"
Xinhua quoted Xi as saying in a meeting on Friday with Prime Minister Najib
Razak of Malaysia.
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U.S. Making 'Important' Mistakes, Chinese General Says
Treat China as an Enemy and It Will Become One, Warns Maj. Gen. Zhu Chenghu
By Trefor Moss
And Julian Barnes
Updated May 31, 2014 5:53 a.m. ET
SINGAPORE—Chinese defense officials reacted furiously to U.S. Defense
Secretary Chuck Hagel's assertion that China has undertaken destabilizing
actions as it pursues its territorial ambitions in the South China Sea.Rebutting Mr. Hagel's remarks, offered in a speech Saturday at the Shangri-La Dialogue, a regional security summit in Singapore, Maj. Gen. Zhu Chenghu told The Wall Street Journal
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http://online.wsj.com/articles/u-s-making-important-mistakes-chinese-general-says-1401526934
Not content merely mixing it with Uncle Scam, China boxed the ears of next door Japan. Our world gets more unstable by the week, but don’t let on to our global stock markets, or the Fed’s talking chair. Stay long fully paid up physical precious metals. With more and more of the world turning into a bull in a china shop, don’t expect an Oscar Wilde happy family ending.
China urges Abe not to stir up enmity
BEIJING, May 31 (Xinhua) -- China
on Saturday refuted Japanese Prime Minister Shinzo Abe's recent comments
regarding maritime disputes by urging the Japanese side to respect truth and
not to stir up enmity and mislead the public.
"We have taken note of
Japanese leader's recent comments in which he has insinuated other
countries," said Chinese Foreign Ministry spokesman Qin Gang.
Qin's comments came in response
to a question regarding Abe's speech at the Shangri-La Dialogue in Singapore on
Friday.
While saying that Asia is a
region with remarkable growth, the Japanese leader said Japan would give
"its utmost support" to some of the countries in their maritime
claims.
"We have decided to provide
ten patrol vessels to the Philippine Coast Guard," Abe said, adding that
Japan is also "moving forward with the necessary survey to enable us to
provide such vessels to Vietnam as well." "In fact, Japan should
clarify its recent moves in military security field to the international
community, and abide by international law and basic norms governing
international relations while addressing territorial and maritime disputes with
its neighbors," Qin said.
The spokesman urged the Japanese
side to face up to history and respect truth, and avoid stirring up enmity and
confusing the public.
Japan should
take more practical actions that help maintain regional peace and stability,
the spokesman added.
Elsewhere, though
there were red flags galore, Nelson style, most markets raised their telescopes
to their blind eye. Is it to be 1987 all over again?
BRIC Rally’s Weak Point Exposed in Brazilian Selloff
Jun 2,
2014 5:34 AM GMT
The selloff in Brazil’s
stocks and currency on the final trading day of May wiped out what was to be the first pan-market monthly advance
in the four biggest developing countries since 2010. The declines highlight a fundamental weakness in the rally that has spread across Brazil, Russia, India and China: Growth is slowing. It was a report showing Brazil’s economic expansion weakened in the first quarter that triggered the 1.9 percent plunge in the equity benchmark index and 0.8 percent slump in the real, erasing their monthly gains.
The slowest growth in the so-called BRIC nations since 2009 will undercut gains that have been predicated on record low interest rates in the U.S. and Europe and markets that remain cheap relative to their developed peers, according to UBS AG and Deutsche Bank AG. Stocks from the four countries added $260 billion in market value last month as Russia’s Micex (INDEXCF) index erased its losses since President Vladimir Putin’s incursion into Crimea. India’s rupee climbed to an 11-month high, while China’s government bonds posted the biggest gain since 2008.
“I don’t see why non-EM dedicated investors would want to have much in the way of exposure to EM equities at present,” John-Paul Smith, a London-based emerging-market strategist at Deutsche Bank who cut his recommendation on Indian stocks to neutral last month and said the other three BRIC markets are even less attractive, wrote in an e-mail on May 28. “The secular underperformance story is still unfinished business.”
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While
Presidents, future Kings and Prime Ministers, all head off to Normandy France,
this Friday, for the D-Day anniversary commemoration, don’t anyone call Mr
Putin Adolf unless they want a black eye in return, it’s make or break week for
the Ukraine v Russia natural gas talks, that will determine the fate of much of
continental Europe next winter. So it’s no Russian invasion until at least some
time next week. Possibly later, if the EU keeps coming up with Danegeld on the
Ukraine’s debts. It’s a funny old world when insane coups go wrong. It’s time
to relax and enjoy the arriving summer. 2014 twinned with 1914, what could
possibly go wrong?
Russia-Ukraine Gas Talks Open Week of Engagement
Jun 1, 2014 11:45 PM GMT
Russia and Ukraine are set
to resume talks in Brussels today on a deal that would keep natural gas flowing
between the countries amid their conflict over separatists trying to break away
from the government in Kiev. After the talks brokered by the European Union began in Berlin last week, Ukraine made its first payment in months to Russia’s OAO Gazprom (OGZD), transferring $786 million for gas received in February and March.
The gas negotiations open a week of
international engagement over Ukraine that will include meetings in Brussels of
NATO defense ministers and of the Group of Seven nations. Russian President
Vladimir Putin and French President Francois Hollande are scheduled to meet in France before
ceremonies marking the 70th anniversary of D-Day, where U.S. President Barack Obama
may cross paths with Putin.
Russian natural gas that flows to Ukraine and on to other countries in Europe remains an economic flash point. Ukraine carries about 15 percent of Europe’s annual demand through its Soviet-era pipelines and accuses Russia of using gas as a political weapon by ramping up prices. Moscow-based Gazprom says Ukraine has run up $5.2 billion in debt and must pay $1.7 billion in advance for next month’s gas or risk a shutdown.
NAK Naftogaz Ukrainy, Ukraine’s state-run gas company, said it has sent a draft agreement before today’s talks “to settle all disputed issues” in a move “aimed at constructive talks with Gazprom.” The proposal includes changes to “the price, volume and conditions of gas supply,” Naftogaz said in an e-mailed statement.
In Ukraine, rebels armed with rifles and grenades damaged military telecommunications equipment in eastern Luhansk and seized more than 40 weapons, the newswire Unian reported, citing the press office of the regional prosecutor’s office. Another group took over an ammunition plant in Luhansk, Ostrov newswire said, citing regional police.
A group of about 300 “self-defense forces” joined government troops near the eastern Ukrainian town of Slovyansk to fight the insurgents, National Security Council chief Andriy Parubiy said on Facebook
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At the Comex
silver depositories Friday
final figures were: Registered 56.08 Moz, Eligible 118.65 Moz, Total 174.73 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
It’s war in banksterland. Love rat President Hollande, reeling from the
success of the National Front in the European elections, now has to act to protect
BNP, the largest bank in France, from a dubious bank attack by NSA run America.
Add another country to the list of those wanting to end the hegemonic rule of
the fiat reserve dollar standard. Who are these Russians that work in
Washington, so successfully in Moscow’s interests?
"The modern mind dislikes gold because it blurts out unpleasant truths."
Joseph Schumpeter
BNP Fine Stirs French Anger, Putting Pressure on Hollande to Act
Jun 1, 2014 11:01 PM GMT
The French are crying foul. A potential $10 billion U.S. penalty against France’s largest bank BNP Paribas SA (BNP) for its alleged dealings with Iran and other sanctioned nations, is stirring outrage in the country. It is putting pressure on President Francois Hollande, who hosts Barack Obama this week to mark the 70th anniversary of D-Day, to protect the bank from the American onslaught.
Le Monde in its May 31 edition called the possible fine a “masterful slap.” Le Figaro newspaper said the U.S. was making an example of BNP to deflect criticism it had been “lenient with the American banks responsible for the financial crisis.” The weekly L’Express said that banks involved in money laundering and tax evasion paid much-lower penalties. “Is the U.S. hitting too hard?” it asked.
U.S. authorities are seeking to impose the fine to settle allegations that BNP transferred funds for clients in violation of sanctions against Sudan, Iran, and Cuba, according to people familiar with the investigation. The fine could be the largest criminal penalty in the U.S., eclipsing BP Plc’s $4 billion accord with the Justice Department last year.
“If this results in a guilty plea, it is likely to increase debate in France and the rest of Europe about the essential fairness of U.S. criminal procedures,” said Frederick T. Davis, a lawyer at Debevoise & Plimpton LLP in Paris and a former U.S. prosecutor.
Hollande, who during his 2012 campaign described the world of finance as “my real enemy,” is now under pressure to seek leniency for BNP Paribas. The right-wing National Front, which beat France’s two mainstream political parties in the May 25 European parliamentary elections, on May 30 called on the government to “defend the national interest” in the case.
In a statement on its website, the National Front accused the U.S. of “racketeering,” in an effort to weaken BNP and aid its American rivals. “We demand that the French government not stay idle,” the statement said.
France’s central bank has said the transactions did not violate French or European laws. The U.S. is claiming jurisdiction because the transactions were processed in dollars.
“This affair is part of Washington’s hegemonic ambition in law and commerce,” said Jacques Myard, a lawmaker from Former President Nicolas Sarkozy’s UMP Party. “Washington has the annoying habit of trying to apply its laws outside its jurisdiction and use its strength for commercial ends.”
The French government hasn’t been involved in the U.S. discussions over Paris-based BNP and views the case as a legal matter that must follow its own course, three people familiar with the government’s position have said. The French Finance Ministry and BNP have declined to comment on the case.
Bank of France Governor Christian Noyer said last month that all of BNP Paribas’s transactions “conformed with European and French laws and rules.”
The fine against BNP would make it the first French bank to be penalized for doing business with sanctioned countries since President Obama took office. The largest settlement for such a case was in 2012, when the U.K.’s HSBC Holdings Plc agreed to pay $1.9 billion.
“There is just one way and one way only to deal with this type of investigation, it’s maximum cooperation from day one, anything else is an error,” said Simon Maughan, head of research at financial-analysis firm OTAS Technologies in London. “The point is that if you use dollars and make dollar transfers, you’ve got to play by U.S. rules.”
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A permanent Governor of the European Central Bank would be one of the greatest men in Euroland. He would be a little `monarch` in every City; he would be far greater than the Elected Leaders. He would be the personal embodiment of the ECB; he would be constantly clothed with an almost indefinite prestige. Every nation in business would bow down before him and try to stand well with him, for he might in a panic be able to save almost anyone he liked, and to ruin almost anyone he liked. A day might come when his favour might mean prosperity, and his distrust might mean ruin. A position with so much real power and so much apparent dignity would be intensely coveted.
With Apologies to Walter Bagehot. Lombard Street. 1873.
The monthly Coppock Indicators finished May
DJIA: +181 Down. NASDAQ: +340 Down. SP500: +246 Down. Crisis? What crisis?
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