Tuesday, 8 July 2014

God’s Elephant.



Baltic Dry Index. 888  -05

LIR Gold Target in 2019: $30,000.  Revised due to QE programs.

All that is necessary for the triumph of evil is that good men do nothing.

Edmund Burke. Attributed.

Since I have to travel today as chauffer for my niece, today a slightly different, briefer, deeper LIR. A good news story that proves goodness always wins out over evil, for goodness comes from God, even for a humble, abused Indian elephant.. Something for the “Caliphate” to ponder on as they descend into medieval ignorance and barbarity, and for the perpetrators of Abu Ghraib, Bagram, and Guantanamo, and their enablers, to remember as well. They will one day, all too soon, have to give an account to God.

Below, Kipling’s Hathi and Toomai, it ain’t.

When bad men combine, the good must associate; else they will fall one by one, an unpitied sacrifice in a contemptible struggle.

Edmund Burke.

Elephant 'cries' while being rescued after 50 years of abuse in India

Monday 07 July 2014
An elephant that was kept in chains for 50 years and abused by a drug addict who used the animal beg in India has been freed.

Raju had been beaten and starved since being poached from the wild as a baby and resorted to eating paper and plastic to fill his stomach.

The chains and spikes wrapped around his legs had left him with chronic wounds and arthritis and he was in almost constant pain.

But now he is walking free for the first time after a daring rescue by conservationists with a court order by the Uttar Pradesh Forest Department to take the elephant from his abusive owner.

The charity took Raju in the middle of the night on Thursday, supported by police and state officials.

The elephant’s mahout and previous owner tried to stop him being taken by adding more chains and having people block the roads for the rescue lorry.

Experts worked for hours to gain the elephant’s trust with fruit and encouragement until they could get him into the van that would take him to a sanctuary.

When Raju was being rescued, volunteers said they saw tears rolling down his face.

Pooja Binepal, from Wildlife SOS UK, said: “The team were astounded to see tears roll down his face during the rescue. It was so incredibly emotional for all of us.

“We knew in our hearts he realised he was being freed.

“Elephants are not only majestic, but they are highly intelligent animals, who have been proven to have feelings of grief, so we can only imagine what torture half a century has been like for him.”

Kartick Satyanarayan, the charity’s co-founder, said the mahout tried to make the elephant charge by shouting commands.

He added: “We stood our ground and refused to back down – and as we did so, tears began to roll down Raju's face.

“Some no doubt were due to the pain being inflicted by the chains, but he also seemed to sense that change was coming.

“It was as if he felt hope for the first time in a very long time.”

Almost two days later and 350 miles away in Mathura, the chains were removed after 45 painstaking minutes.

A video showed the moment they cut the painful spikes and chains binding the animal’s legs so he could walk freely for the first time.

Mr Satyanarayan said: “We all had tears in our eyes as the last rope which held the final spike was cut and Raju took his first steps of freedom.”

Other elephants at the Conservation and Care Centre at Mathura came to watch the new arrival.

He is being fed to restore him to a healthy weight and vets are treating his many wounds and abscesses from beatings and chains.

Rescuers at Wildlife SOS believe Raju started life in the wild but was caught as a baby by poachers and sold as a working elephant.

Ms Binepal said: “The poachers either slaughter the mother, or they drive the herd into traps that are small enough only for the babies to fall into. The mother cries for her baby for days after he's been stolen – it is a sickening trade.

“The calves are then tied and beaten until they submit to their owners – their spirits are effectively broken.”

Pascal’s Wager.

But at least learn your inability to believe, since reason brings you to this, and yet you cannot believe. Endeavour then to convince yourself, not by increase of proofs of God, but by the abatement of your passions. You would like to attain faith, and do not know the way; you would like to cure yourself of unbelief, and ask the remedy for it. Learn of those who have been bound like you, and who now stake all their possessions. These are people who know the way which you would follow, and who are cured of an ill of which you would be cured. Follow the way by which they began; by acting as if they believed, taking the holy water, having masses said, etc. Even this will naturally make you believe, and deaden your acuteness.

Blaise Pascal. Pensées Section III note 233, Translation by W. F. Trotte

The possibilities defined by Pascal's Wager can be thought of as a decision under uncertainty with the values of the following decision matrix

Given these values, the option of living as if God exists (B) dominates the option of living as if God does not exist (~B), as long as one assumes a positive probability that God exists. In other words, the expected value gained by choosing B is greater than or equal to that of choosing ~B.

In fact, according to decision theory, the only value that matters in the above matrix is the +∞ (infinitely positive). Any matrix of the following type (where f1, f2, and f3 are all finite positive or negative numbers) results in (B) as being the only rational decision.

Toleration is good for all, or it is good for none.

Edmund Burke.

At the Comex silver depositories Monday final figures were: Registered 58.53 Moz, Eligible 118.18 Moz, Total 176.70 Moz.  

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

Something tells me all’s not well among Uncle Scam and the seven thieves. In our house of cards built on unrepayable debt, this doesn’t sound good. Stay long fully paid up physical precious metals. When thieves fall out, war breaks out.

Taxing is an easy business. Any projector can contrive new impositions, any bungler can add to the old.

Edmund Burke.

France Has Hissy Fit Over BNP Paribas Fine and Dollar Dominance

Posted on July 7, 2014 by Yves Smith
France appears to have taken its public relations strategy for dealing with $8.9 billion fine against BNP Paribas from an old saying among lawyers: “If you have the facts on your side, pound the facts. If you have the law on your side, pound the law. If you have neither on your side, pound the table.” Here’s the guts of the French compliant, which is that the US is abusing the power of dollar dominance, courtesy the Financial Times:

France’s political and business establishment has hit out against the hegemony of the dollar in international transactions after US authorities fined BNP Paribas $9bn for helping countries avoid sanctions.

Michel Sapin, the French finance minister, called for a “rebalancing” of the currencies used for global payments, saying the BNP Paribas case should “make us realise the necessity of using a variety of currencies”….

Mr Sapin said he would raise the need for a weightier alternative to the dollar with fellow eurozone finance ministers when they meet in Brussels on Monday, although he declined to go into detail about what practical steps might emerge.

This talk is a lot of hot air. Mind you, we’ve been critics of US foreign policy, particularly in the Middle East, but the French position is ridiculous.

First, BNP Paribas broke US laws. No and, ifs, or buts about it. BNP Paribas made itself subject to US laws by having operations in the US, which were necessary for the bank to have access to Fedwire, the Fed’s system for processing large transactions. Payment system experts like Perry Merhling point out that private inter-bank payment systems also depend on being backstopped by a central bank. Even though the transactions in question originated offshore, they were cleared through BNP’s New York branch. From the Department of Justice’s press release, emphasis ours:

According to court documents submitted today, BNP Paribas S.A. (BNPP), a global financial institution headquartered in Paris, agreed to enter a guilty plea to conspiring to violate the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA) by processing billions of dollars of transactions through the U.S. financial system on behalf of Sudanese, Iranian, and Cuban entities subject to U.S. economic sanctions. The agreement by the French bank to plead guilty is the first time a global bank has agreed to plead guilty to large-scale, systematic violations of U.S. economic sanctions…

According to documents released publicly today, over the course of eight years, BNPP knowingly and willfully moved more than $8.8 billion through the U.S. financial system on behalf of sanctioned entities, including more than $4.3 billion in transactions involving entities that were specifically designated by the U.S. Government as being cut off from the U.S. financial system. BNPP engaged in this criminal conduct through various sophisticated schemes designed to conceal from U.S. regulators the true nature of the illicit transactions. BNPP routed illegal payments through third party financial institutions to conceal not only the involvement of the sanctioned entities but also BNPP’s role in facilitating the transactions. BNPP instructed other financial institutions not to mention the names of sanctioned entities in payments sent through the United States and removed references to sanctioned entities from payment messages to enable the funds to pass through the U.S. financial system undetected.

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Germany plans counter-espionage against Britain and US

Germany announces it is planning "surveillance" of intelligence operations of allies including Britain, US and France after American "double agent" scandal uncovered

By Tony Paterson, Berlin 3:41PM BST 07 Jul 2014
Chancellor Angela Merkel’s government is planning surveillance of British and American intelligence gathering in Germany for the first time since 1945 in response to an embarrassing US-German “double agent” scandal which has damaged relations between Berlin and Washington.

The unprecedented change to Berlin’s counter-espionage policy was announced by Mrs Merkel’s Interior Minister, Thomas de Maiziere. He told the mass-circulation Bild newspaper that Berlin wanted “360 degree surveillance” of all intelligence gathering operations in Germany.

His announcement came as several MPs in Mrs Merkel’s government demanded the expulsion of the American agents in Germany who last week were found to have used the services of a German “double agent” to obtain secret German intelligence information in return for cash payments.

Hans Peter Uhl, a leading conservative MP told Spiegel online: “ It goes without saying that the [US] intelligence official responsible should leave Germany.”

The intelligence services of the United States, Britain and France had hitherto been regarded as “friendly” to Germany. Their diplomatic and information gathering activities were exempted from surveillance by Berlin’s equivalent of MI5 – the Bundesnachrichtendienst or BND.

But Mr de Maiziere told Bild that he was now not ruling out permanent German counter espionage surveillance of US, British and French intelligence operations His remarks were echoed by Stephan Mayer, a domestic security spokesman for Mrs Merkel’s ruling Christian Democrats: “We must focus more strongly on our so-called allies,” he said.

The plans for “friendly” power surveillance follow last week’s unmasking and arrest of a 31- year-old BND agent who sold top secret German intelligence documents to US officials in return for payments of £25,000.

The double agent is reported to have simply emailed Berlin’s American embassy and asked whether officials were interested in “cooperation”. He subsequently downloaded at least 300 secret documents on to USB sticks which he handed to his American spymasters at secret location in Austria.

Chancellor Merkel interrupted a current trade visit to China on Monday to describe the scandal as a “very serious development”. She added: “It is a clear contradiction of the notion of trustworthy cooperation”. German politicians have been shocked that the Americans not only failed to report the “double agent” but effectively recruited him.
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And on the wrong side of the Atlantic, the ECB’s “Mr Fixit” has fixed nothing.  Things are about to get much worse over the rest of the summer. Below, now Austria joins Hungary, Bulgaria, and Romania, in the Greece and Cyprus exit hospice. According to Berlin/Brussels, this lot plus Club Med are supposed to prop up the Ukraine now that Russia has pulled out of financing that bottomless pit. Welcome to the madhouse EU 2014. Can the UK  get out before the coming implosion?

Fixing the euro is going to require a lot more than a little banking therapy

Mario Draghi has so far failed to bring about a revival in bank lending, an important pre-requisite to any durable recovery in the eurozone economy

It is important not to get this latest flare-up in Europe’s financial crisis out of proportion; the historical precedents make everyone very nervous whenever Austria and banks are mentioned together in the same sentence, the more so in that we have already seen one quite significant Austrian banking insolvency so far this year – Hypo Alpe-Adria.

Both these banks – Hypo and Erste – are big lenders into the emerging market economies of eastern Europe, some of which are experiencing quite similar boom and bust cycles to those of the eurozone periphery. Bulgaria, for instance, is not yet a member of the euro but it might as well be, for it is irredeemably joined at the hip to the single currency through a Currency Board and has, therefore, found itself part of the same dynamic that has afflicted Greece and Ireland, only a bit later.

Even so, these latest banking mishaps appear at this stage quite unlikely to spark a repeat of the all-embracing, systemic crisis of two to three years ago, when doubts about European banking and sovereign solvency became dangerously interlinked.

----Nonetheless, Austrian worries raise a number of wider questions about the ongoing weakness of the European banking system and accompanying malaise in the eurozone economy. By promising to “do whatever it takes” to save the euro, Mario Draghi, president of the European Central Bank, deftly managed to break the link between Europe’s banking and sovereign debt crises. Full marks for that. What he has not so far managed to do is bring about a revival in bank lending, an important pre-requisite to any durable recovery in the eurozone economy.

----Even the ECB doesn’t appear optimistic about its efforts to restart growth, to judge by its forecasts for the next two years and the pledge to keep interest rates on hold for . . . well, almost ever, an extreme, almost desperate, form of forward guidance if ever there was one.
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Italy's Renzi warns Bundesbank president to stop political meddling

By Alvise Armellini and Andrew McCathie, Europe 04.07.2014
Rome/Berlin (dpa) - Less than a week into his six-month stint as EU president, Italian Prime Minister Matteo Renzi found himself in a war of words with Germany‘s top banker about the direction and leadership of Europe‘s struggle to escape from economic doldrums.

Friday‘s salvo came from Renzi, as he called upon Bundesbank chief Jens Weidmann to stop meddling in national political affairs.

"Europe belongs to European citizens, not to German or Italian bankers," he said.

It was prompted by Weidmann‘s own comments a day before, in which he questioned a deal by EU leaders a week earlier to make more flexible key agreements about members‘ budget stability.

That put him in direct disagreement with key aspects of Renzi‘s maiden speech as EU president on Wednesday, during which the Italian premier reiterated some of the principles of the EU agreement, with a focus on softening eurozone budget discipline rules in the interest of stimulating growth.

"I think the role of the Bundesbank is to achieve its own statutory objectives, not to take part in the Italian political debate," Renzi said in Rome Friday while hosting a meeting with the European Union‘s executive arm, the European Commission.
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Euro’s Reserve Appeal Fades as ECB Prompts Decline

Jul 8, 2014 5:47 AM GMT
The European Central Bank’s unprecedented stimulus measures are starting to dim the euro’s allure among the managers of foreign-exchange reserves.

After climbing for three straight quarters, the currency’s share of central-bank reserves identified by the International Monetary Fund in a June 30 report was unchanged at 24.5 percent from January through March, down from a record 28 percent in 2009. The euro was less attractive than a year earlier for 62 percent of central banks that took part in a private survey by Central Banking Publications released on June 23.

The interest-rate cuts, charge on deposits and liquidity programs that the Frankfurt-based central bank has implemented since early June to avoid deflation have made the 18-nation euro less attractive. Banks from JPMorgan Chase & Co. to Societe Generale SA predict the euro will lose out to currencies such as South Korea’s won and the Australian dollar, favored for the higher yields paid by their fixed-income markets.

“Reserve managers are moving out of Europe into Asia,” Sebastien Galy, a senior currency strategist at SocGen in New York, said in a July 3 phone interview. The ECB is engaged in “competitive devaluation.”
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Greece Resists Troika on Third Bailout as Draghi Protests Delays

Jul 7, 2014 11:01 PM GMT
Greece fought off calls to consider a third bailout as European Central Bank President Mario Draghi warned that the pace of economic fixes is slowing, officials said after euro-area finance ministers met yesterday.

Greece has ruled out further aid -- which would come with another raft of conditions -- after its current rescue ends, a Greek official told reporters in Brussels. According to the so-called troika of International Monetary Fund, ECB and euro-area authorities, Greece may need one anyway, an EU official said.

Further emergency aid will probably be needed as the government still faces a funding shortfall, can’t count on financial-market support and is slipping further behind on its commitments to overhaul the economy, the EU official said. The troika’s concerns were underlined by Draghi’s warning to Greek Finance Minister Gikas Hardouvelis that Greece should not assume its reforms have been completed
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All persons possessing any portion of power ought to be strongly and awfully impressed with an idea that they act in trust and that they are to account for their conduct in that trust to the one great Master, Author, and Founder of society.

Edmund Burke.

The monthly Coppock Indicators finished June

DJIA: +169 Down. NASDAQ: +332 Down. SP500: +241 Down.  The Fed’s final bubble still grows, but …..

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