Baltic Dry Index. 894 +44
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
“But it (the boom) could not last forever
even if inflation and credit expansion were to go on endlessly. It would then
encounter the barriers which prevent the boundless expansion of circulation
credit. It would lead to the crack-up boom and the breakdown of the whole monetary
system.”
Ludwig Von Mises
The Fed’s final bubble continues apace. This time
it’s different! Free money pouring out from the Fed plus ZIRP forever continues
to fuel the greatest ever disconnect from reality, in our ever more distorted
casino driven global stock markets. “People
feel like they’re missing the boat and they want to get on.” Stay long fully
paid up physical precious metals for the inevitable bust. Tulip mania always
ends in tears and 2012- 2014 and counting, will be no different. The Fed’s “one
way street” is only one way, until we reach the roundabout at the end of the
cul-de-sac. Deficits didn’t matter until one day they did. We are now all going
to get rich and prosperous forever, by reading each other’s social media.
Twits. There is a once in 500 years, mispricing of fiat money underway, thanks
to Keynesian Krazy central banksters, high on Kool Aid. When the day of
reckoning comes, 2007-2009 will drop to a mere footnote in the history of
financial follies.
Below, the manic
panic not to” miss the boat.”
There can be few
fields of human endeavour in which history counts for so little as in the world
of finance. Past experience, to the extent that it is part of memory at all, is
dismissed as the primitive refuge of those who do not have the insight to
appreciate the incredible wonders of the present.
J. K. Galbraith.
Dow Average Climbs Toward 17,000 as Small Caps Hit Record
Jul 1, 2014 9:45 PM GMT
Strength in manufacturing pushed the Dow Jones Industrial Average (INDU) to
within two points of 17,000 for the first time, joining small caps and
transportation stocks at records in a pattern that chart analysts consider
bullish. Netflix Inc. (NFLX), Amazon.com Inc. and Biogen Idec Inc., among the biggest losers during a two-month selloff earlier this year, rose at least 2.3 percent. International Business Machines Corp. climbed 2.8 percent, leading a rally among technology stocks. General Motors Co. jumped 3.6 percent after a surprise sales gain in the auto industry’s best month since July 2006.
The Dow increased 129.47 points, or 0.8 percent, to 16,956.07 at 4 p.m. in New York. The Standard & Poor’s 500 Index climbed 0.7 percent to 1,973.32. The Russell 2000 Index of smaller companies rallied 1.1 percent and the Dow Jones Transportation Average (TRAN) gained 0.7 percent. The Dow, S&P 500 and transport gauge all closed at records, while the Russell 2000 touched an intraday high.
Simultaneous gains in disparate sections of the market are sometimes cited by chart analysts who base predictions on charts as evidence economic growth is pervasive enough to fuel additional gains.
“The breadth sends a message about the strength of the bull,” Rex Macey, chief allocation officer at Wilmington Trust in Atlanta, said in a phone interview. The firm oversees $82 billion. “People are comfortable with the story of the economic backdrop that we’ve got going on. People feel like they’re missing the boat and they want to get on.”
more
U.S. Stocks Climb to Records, Bonds Slip on Factory Data
Jul 1,
2014 9:05 PM GMT
U.S. stocks rose to records, with the Dow Jones Industrial Average climbing
to within two points of 17,000, as gauges of factory output in major economies
signaled expansion. Gold advanced to a three-month high as the dollar sagged. The Standard & Poor’s 500 Index climbed 0.7 percent to an all-time high at 4 p.m. in New York. The Dow average jumped 0.8 percent to a record, rising as high as 16,998.70. The yield on 10-year Treasuries added four basis points to 2.57 percent. Gold rose 0.4 percent as the dollar fluctuated near a seven-week low against a basket of 10 major currencies. Corn dropped to a five-month low, while soybeans sank to the lowest since December 2011.
An index of U.S. factory output was little changed near a five-month high, boosting confidence in the world’s largest economy and fueling speculation growth is robust enough for the Federal Reserve to raise interest rates next year. General Motors Co. surprised investors with a U.S. sales gain in June, while Ford Motor Co., Chrysler Group LLC and Nissan Motor Co. all beat estimates. U.S. retail sales had their biggest weekly gain in almost three years, ICSC data showed. China’s manufacturing expanded in June at the fastest pace this year, while Euro-area output grew at a slower pace.
More
Asian Stocks Trade at Six-Year High as Aussie Retreats
Jul 2,
2014 6:16 AM GMT
Asian
stocks climbed, with the regional index at a six-year high, and credit risk
in the region fell as expanding manufacturing in the largest economies buoys
the global outlook. Australia’s dollar dropped after worse-than-estimated trade
data, while platinum and copper slid. The MSCI Asia Pacific Index rose 0.6 percent by 2:16 p.m. in Tokyo, trading at the highest level since June 10, 2008, as most major regional indexes gained. Standard & Poor’s 500 Index futures were little changed after the measure surged to a record. A gauge of Asian credit-default swaps prices fell 2 basis points, the most since June 19. The Aussie lost 0.4 percent. Platinum snapped a three-day rally, sliding 0.6 percent. Copper fell 0.5 percent after touching the highest price since March.
Data yesterday showed Chinese manufacturing grew at the fastest pace this year in June, factory output in the U.K. unexpectedly strengthened, and U.S. activity held near a five-month high, fueling speculation the economy can bear higher interest rates from next year. Australia’s trade deficit was A$1.91 billion ($1.81 billion), more than nine times wider than the A$200 million shortfall estimated by economists
More
The Great Deformation Of Central Banking: Debt Burdens Have Never Been Higher; 500 Years Of Dutch Interest Rates Have Never Been Lower
by David Stockman •
Bond
market price discovery has been destroyed by the world’s central banks. But
phony, sub-economic interest rates on sovereign debt are a monumental
danger: They invite politicians to spend, borrow and kick the fiscal can
indefinitely. The Dutch are more fiscally responsible than most governments of
Europe, but even they have not earned their present rock-bottom
rates. They are a poisonous gift of Keynesian central bankers.
See
chart
‘Euphoric’ capital markets are out of step with reality, warns BIS
By Sam Fleming and Claire Jones June 29,
2014 10:05 pm
June 29, 2014 10:05 pm
The Bank for International Settlements has warned that “euphoric” financial
markets have become detached from the reality of a lingering post-crisis
malaise, as it called for governments to ditch policies that risk stoking
unsustainable asset booms.
While the global
economy is struggling to escape the shadow of the crisis of 2007-09, capital
markets are “extraordinarily buoyant”, the Basel-based bank said, in part
because of the ultra-low monetary policy being pursued around the world.
Leading central banks should not
fall into the trap of raising rates “too slowly and too late”, the BIS said,
calling for policy makers to halt the steady rise in debt burdens around the
world and embark on reforms to boost productivity.
In its annual
report, the BIS also warned of the risks brewing in emerging markets, setting
out early warning indicators of possible banking crises in a number of
jurisdictions, including most notably China.
---- The
BIS, the
bank for central banks, has been a longstanding sceptic about the benefits of
ultra-stimulative monetary and fiscal policies and its latest intervention
reflects mounting concern that the rebound in capital markets and real estate
is built on fragile foundations.
More
In other news stock markets ignore at their peril. The
collapse of Iraq deepens. The Caliphate
calls for wider war. America dithers and heads off to celebrate Independence
Day. Continental Europe prepares for economic suicide.
Sunnis, Kurds shun Iraq parliament
By Raheem Salman and Oliver
Holmes BAGHDAD
(Reuters) - Sunnis and Kurds walked out of the first session of Iraq's new
parliament on Tuesday after Shi'ites failed to name a prime minister to replace
Nuri al-Maliki, dimming any prospect of an early national unity government to
save Iraq
from collapse.The United States, United Nations, Iran and Iraq's own Shi'ite clergy have pushed hard for politicians to come up with an inclusive government to hold the fragmenting country together as Sunni insurgents bear down on Baghdad.
The leader of the al Qaeda offshoot spearheading the insurgency, the Islamic State, has declared a "caliphate" in the lands it has seized in Iraq and Syria. Its leader vowed on Tuesday to avenge what he said were wrongs committed against Muslims worldwide.
Despite the urgency, the
Iraqi parliament's first session since its election in April collapsed when
Sunnis and Kurds refused to return from a recess to the parliamentary chamber
after Shi'ites failed to name a prime minister.
Parliament is not likely to meet
again for at least a week, leaving Iraq in political limbo and Maliki clinging
to power as a caretaker, rejected by Sunnis and Kurds.
More
Rome will be conquered next, says leader of Islamic State
Muslims have been called to flock to the Islamic State to gather for a battle against non-believers throughout the world
Abu Bakr al-Baghdadi, the
self-proclaimed leader of the Islamic State stretching across Iraq and Syria,
has vowed to lead the conquest of Rome as he called on Muslims to immigrate to
his new land to fight under its banner around the globe.
Baghdadi, who holds a PhD in
Islamic studies, said Muslims were being targetted and killed from China to
Indonesia. Speaking as the first Caliph, or commander of the Islamic faithful
since the dissolution of the Ottoman empire, he called on Muslims to rally to
his pan-Islamic state.
"Those who can immigrate to
the Islamic State should immigrate, as immigration to the house of Islam is a
duty," he said in an audio recording released on a website used by the
group formerly known as the Islamic State of Iraq and al-Sham.
"Rush O Muslims to your
state. It is your state. Syria is not for Syrians and Iraq is not for Iraqis.
The land is for the Muslims, all Muslims.
"This is my advice to you.
If you hold to it you will conquer Rome and own the world, if Allah wills.
Having claimed the title of
"caliph", Baghdadi appealed to "judges and those who have
military and managerial and service skills, and doctors and engineers in all
fields."
He also called on jihadi fighters
to escalate fighting in the holy month of Ramadan, which began on Sunday.
"In this virtuous month or in any other month, there is no deed better
than jihad in the path of Allah, so take advantage of this opportunity and walk
the path of you righteous predecessors," he said. "So to arms, to
arms, soldiers of the Islamic s, fight, fight."
More
Sale of 4,000 U.S. Missiles to Iraq Is Readied
Jul 2, 2014 5:00 AM GMT
The State Department has told lawmakers informally that the Obama
administration wants to sell Iraq more than 4,000 additional Hellfire missiles for the
government’s fight against Islamic insurgents, according to people familiar
with the plan. Sale of the laser-guided missiles made by Lockheed Martin Corp. (LMT) would be in addition to 500 previously purchased, of which about 400 have been delivered.
The U.S. has pledged military aid to Iraq in its fight against the Islamic State, an extremist Sunni group that’s seized a swath of territory north and west of Baghdad. Iraq’s ambassador to the U.S., Lukman Faily, said yesterday in Washington that weapons have been too slow in coming and “further delay only benefits the terrorists.”
More
No Good Iraq Options for Obama as Russia, Iran Jump In
Jul 1, 2014 6:55 PM GMT
As Russia and
Iran step in to
bolster the government in Baghdad, U.S. President Barack Obama
has no good options to help defeat the al-Qaeda splinter group that’s
proclaimed an Islamic caliphate in Iraq and Syria. The White House has offered limited military assistance to Shiite Prime Minister Nouri al-Maliki and is pushing for a coalition government to unite Iraqis as Sunni fighters from the Islamic State and their allies pose what Secretary of State John Kerry calls “an existential threat” to Iraq.
While it’s in the U.S. interest to prevent one of the largest Arab states -- the second-biggest crude oil producer in OPEC that’s bordered by Syria and Iran -- from falling into the hands of the Sunni militants, it’s not clear what Obama can do to vanquish a militant group that may control 10,000 fighters and $2 billion in assets.
More
Russia's economic crisis deepens as EU readies fresh sanctions over Ukraine
New sanctions against Russian companies could be imposed after the collapse of the Ukraine ceasefire
The collapse of Ukraine’s
ceasefire has shattered hopes for a quick end to the crisis in the Donbass,
setting off fresh capital flight from Russia and raising the spectre of further
Western sanctions against Russian companies.
Markets were caught off guard as
Ukrainian leader Petro Poroshenko launched air strikes and an artillery barrage
against rebels, pleading that he had no choice after they killed 27 Ukrainian
servicemen. “We will attack and we will liberate our land. The end of the
ceasefire is our response to terrorists, rebels, looters,” he said.
The International Monetary Fund
said the conflict risks deep damage to Russia’s economy, starving it of foreign
funds and knowhow. “Geopolitical tensions have brought the Russian economy to a
standstill.
"Russia’s actions in Crimea
have increased the uncertainty of doing business in Russia and are having a
chilling effect on investment. Capital outflows could reach $100bn (£58.3bn) in
2014.
"This comes at a crucial
moment when the old growth model based on energy has been exhausted,” it said.
----The EU is holding the Kremlin accountable for the failed ceasefire. Its ambassadors agreed yesterday to “intensified preparations” for new sanctions, effectively cocking the gun.
German finance minister Wolfgang
Schäuble said further measures would hurt Europe but insisted that violations
of international law cannot stand
More
“Those who don't know history are destined to repeat it.”
Edmund Burke
At the Comex silver depositories Tuesday final figures were: Registered 58.52 Moz,
Eligible 117.71 Moz, Total 176.23 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today poor France. With allies like this, who needs
enemies? How quickly Uncle Scam forgets that it was the French who really made
the American Revolution succeed. Without the French Navy there would be no
United States of America today. Conversely, without the US Navy, the Royal
Navy, the American, British, and Russian Armies and Airforces, there would be
no recognisable France today.
Putin Says U.S Blackmailed France Over Warship With BNP Fine
Jul 1, 2014 4:07 PM GMT
President Vladimir
Putin accused the U.S. of seeking to blackmail France into scrapping a contract
to sell Mistral warships to Russia by offering to cut a record $8.97 billion
fine against BNP
Paribas SA. (BNP) “We know about the pressure which our U.S. partners are applying on France not to supply the Mistrals to Russia,” Putin told Russian diplomats in Moscow today. “And we even know they hinted that if the French don’t deliver the Mistrals, they would quietly get rid of the sanctions against the bank, or at least minimize them,” he said without naming BNP Paribas.
“What is that if not blackmail?” Putin said.
With the European Union considering expanding sanctions against Russia, Ukraine ended a 10-day cease-fire yesterday, rejecting pressure from Putin to extend it. Ukraine has renewed an offensive against fighters in the east that its U.S. and EU allies say are backed by Russia. Putin has blamed the crisis on foreign interference, after failing to halt closer integration between Ukraine and the EU.
French President Francois Hollande has defied U.S. criticism and refused to cancel a contract to sell two Mistral-class helicopter carriers to Russia. Hollande, who took part in talks yesterday with Ukrainian President Petro Poroshenko, German Chancellor Angela Merkel and Putin, had supported an extension of the cease-fire.
Russian President Vladimir Putin said, “We know about the pressure which our U.S.... Read More
Putin has “no evidence” to support his claims, which appear aimed at his domestic audience as well as public opinion in Europe, said Dmitry Oreshkin, an independent political analyst in Moscow.
“A responsible political leader wouldn’t usually allow himself to say something like this,” Oreshkin said by phone. “But Putin knows that the French aren’t particularly well-disposed toward the U.S. right now and he is trying to exploit that.”
Hollande’s office didn’t immediately reply to a phone message requesting comment.
BNP, France’s largest bank, agreed to plead guilty in court documents yesterday to processing almost $9 billion in banned transactions involving Sudan, Iran and Cuba from 2004 to 2012. The company will be temporarily barred from handling some U.S. dollar transactions.
Navy Training
U.S. President Barack Obama, who rebuffed Hollande’s plea to intervene in the BNP affair, earlier this month criticized France for “continuing significant defense deals with Russia at a time when they have violated basic international law and the territorial integrity and sovereignty of their neighbors.”Russia annexed Ukraine’s Crimea peninsula in March after the overthrow of Kremlin-backed President Viktor Yanukovych. The U.S. and the EU responded by imposing sanctions on Russia and have widened them to punish Putin for Russia’s alleged role in the unrest in eastern Ukraine.
Four hundred Russian sailors arrived in France today to train on the two warships the French government is selling to the Russian navy, under a contract that Le Monde newspaper has reported is worth 1.2 billion euros ($1.6 billion). There is an option for another two ships to be built in Russia by state-run OAO United Shipbuilding Corp.
More
"In
economics, hope and faith coexist with great scientific pretension."
J. K.
Galbraith.
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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