Baltic Dry Index. 739 +07
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
“It is difficult not to marvel at the imagination which was implicit in this gargantuan insanity. If there must be madness something may be said for having it on a heroic scale."
J. K. Galbraith. The Great Crash: 1929.
The world’s greatest bubble rolls on. Unstoppable,
like the Mongol Horde sweeping across Asia and deep into Europe. Completely
disconnected from a EUSSR about to commit economic suicide over America’s
insane botched coup in the Ukraine. Completely disconnected from the collapse
of Libya, Syria and Iraq into civil war. Completely disconnected from growing
signs that, doctored figures or not, the Chinese economy is in serious and
growing trouble. Toss in that the Fed’s ZIRP and QE Forever, can’t be forever,
and that ZIRP merely fuels the increasingly insane stock market feeding frenzy,
and it should be obvious to all that we have entered another stock market mania.
Yet it isn’t obvious to all, and many of
the Great Vampire Squids who perceive mania prefer to keep the mania alive. It’s
how to make rent seeking money, protected by the Yellen Put.
After sacking much of Eastern Europe and the Middle
East up to the gates of Cairo, the Mongol bubble burst in a retreat back to
their roots in east Asia. Reversion to norm, as we say in the markets. Below, the latest news in the Final Bubble of
the Great Nixonian Error of fiat money. Reversion to norm will likely be quite
traumatic.
China H-Shares Poised for Bull Market on Stimulus Wagers
Jul 28, 2014 6:10 AM GMT
Chinese stocks rose, lifting a gauge of mainland companies in Hong
Kong more than 20 percent from this year’s low, as government stimulus boosts
investor confidence in the world’s second-largest economy. The Hang Seng China Enterprises Index (HSCEI), known as the H-share index, climbed 0.9 percent to 11,094.72 as of 1:02 p.m. in Hong Kong, set to enter a bull market after surging from an eight-month low on March 20. PetroChina Co. (857), the nation’s largest energy company, and Industrial & Commercial Bank of China Ltd., the top lender by market value, rallied during the period as the government pledged to open state-run industries to private capital.
China cut reserve requirements for some banks, accelerated infrastructure spending and loosened property curbs as Premier Li Keqiang seeks to keep growth from falling below his 7.5 percent target. While bears such as Bank of America Corp.’s David Cui say stimulus is delaying the economy’s shift toward a more sustainable model driven by consumption and services, Templeton Emerging Markets Group’s Mark Mobius said last week the rally may extend another 20 percent.
“Sentiment has turned in favor of growth and cheap valuations in the Chinese market,” said Khiem Do, who helps oversee about $60 billion as Hong Kong-based head of Asian multi-asset strategy at Baring Asset Management Ltd. The shares have “been lagging for a long time so they’re catching up with world markets. The policy changes in China are favorable.”
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Not for nothing are those central banks not under
the thumb of the Fed buying up gold. They see a crash coming, and with it the
end of the Great Nixonian Error. The
Great Nixonian Error only brought endless wars and massive over consumption
from the future, by loading up the future with unrepayable debt. When the debt
fuelled party comes to a stop, gold they think, will be a big part of the
eventual recovery.
Central Banks in Russia to Kazakhstan Boost Gold Reserves
Jul 26, 2014 10:34 AM GMT
Central banks for Russia
to Kazakhstan and Mexico
increased gold reserves as Germany
trimmed its holdings, International Monetary Fund data show. Kyrgyzstan, Tajikistan, Serbia, Greece and Equador also showed higher gold reserves for June, according to figures published today on the IMF website. Central banks had lowered world gold reserves for a second month by May to 1.022 billion troy ounces, IMF data show.
Gold advanced the most in four months in June as fighting in Ukraine to Iraq and Israel boosted demand for a haven. Hedge funds almost doubled net-long position in gold during June, U.S. Commodity Futures Trading Commission data show.
Russia increased its gold holdings, the world’s sixth-biggest, to 35.197 million ounces in June from 34.656 million ounces in May the IMF data show. The country is locked in its worst political crisis with the U.S. and its allies since the end of the Cold War after its annexation of Crimea this year and as western countries blame it for support of separatist rebels in eastern Ukraine.
Russia’s foreign reserves fell $39 billion to $472 billion in June, data from the central bank show. Gold accounts for 9.3 percent of the country’s reserves, according to the World Gold Council.
Turkey increased its holdings to 16.491 million ounces from 16.172 million ounces in May as it accepts gold in its reserve requirements from commercial banks, the IMF data show. The country ranks 13th largest by gold reserves, according to the gold council.
Germany, the second-biggest gold holder, lowered its holdings to 108.805 million ounces from 108.806 million ounces, the data show. Central bank goldings for China, the world’s biggest consumer, haven’t been updated since March at 33.89 million ounces.
We end for this final week of European peace, 100
hundred years ago this week, with what may yet turn out to end up in a
generalised Eastern European war. If it does, we will be lucky for it not to go
global and nuclear. Below, both sides were active over the weekend in spin and
counterspin.
16 Considerations Which Debunk Washington’s Propaganda About Flight 17
by Contributor •
by Julie
Lévesque at Global ResearchIn establishing who was behind the shooting down of MH17, there are a number of central issues as well as factual evidence which cannot be overlooked:
1. Malaysian Airlines confirmed that the pilot was instructed to fly at a lower altitude by the Kiev air traffic control tower upon its entry into Ukraine airspace. (Malaysian Airlines MH17 Was Ordered to Fly over the East Ukraine Warzone)
2. The flight path was changed. We still don’t know who ordered it, but we know it was not Eurocontrol:
MH17 was diverted from the normal South Easterly route over the sea of Azov to a path over the Donetsk. Oblast. (The Flight Path of MH17 Was Changed. July 17 Plane Route was over the Ukraine Warzone)
According to Malaysian Airlines “The usual flight route [across the sea of Azov] was earlier declared safe by the International Civil Aviation Organisation. The International Air Transportation Association has stated that the airspace the aircraft was traversing was not subject to restrictions.”
…
The regular flight path of MH17 (and other international flights) over a period of ten days prior to July 17th ( day of the disaster), crossing Eastern Ukraine in a Southeasterly direction is across the Sea of Azov (click on the article link below to see the map). While the audio records of the MH17 flight have been confiscated by the Kiev government, the order to change the flight path did not come from Eurocontrol. Did this order to change the flight path come from the Ukrainian authorities? Was the pilot instructed to change course? (Malaysian Airlines MH17 Was Ordered to Fly over the East Ukraine Warzone)
3. The presence of the Ukrainian military jet was confirmed by Spanish air traffic controller “Carlos” at Kiev Borispol airport shortly after the plane was shot down, as well as eyewitnesses in Donetsk. (How American Propaganda Works: “Guilt By Insinuation”, Spanish Air Controller @ Kiev Borispol Airport: Ukraine Military Shot Down Boeing MH#17
The Spanish air traffic controller documented the event on Twitter as it happened. He claimed it was not an accident, that the Ukrainian authorities shot down MH17 and were trying to “make it look like an attack by pro-Russians” . His Twitter account was closed down shortly after the tragedy. Although his account has yet to be fully corroborated, some of his claims have been confirmed by Malaysian Airlines and the Russian authorities.
There have been some reports to the effect the Spanish Air controller is fake and that the twitter message were sent out of London. Upon further investigation, the Spanish Air Controller conducted several media interviews in the last 2-3 months, see his interview with RT (Spanish Air Controller @ Kiev Borispol Airport: Ukraine Military Shot Down Boeing MH#17)
4. Russia has made available public radar and satellite imagery as evidence. Its images suggest the following:
a) Kiev’s regime deployed anti-air missile systems in Donetsk in and around the area where flight MH17 crashed.
b) Ukrainian warplanes trailing flight MH17
c) the report pointed to the possibility of an air-to-air attack on MH17
d) the report also pointed to inconsistencies pertaining to the reports of the Ukrainian air traffic control
The Russian authorities did not come to any conclusion regarding who was to blame for shooting down the plane. (MH17 Show & Tell: It’s the West’s Turn – Russian Satellites and Radars Contradict West’s Baseless Claims)
5. The U.S., despite its global spying apparatus, has not shown any radar or satellite imagery to back its claim that Russia and the Eastern-Ukrainian opposition are responsible for the downing of MH17. The evidence it has presented so far is weak and based on pro-Kiev documents consisting of YouTube videos and various social media – “all of which are admittedly unverifiable and some of which is veritably fabricated.”:
Is US intelligence simply reading blogs? Or are the blogs somehow a clearinghouse of US intelligence? Or are the blogs fabrications by US intelligence in an attempt to frame Russia? One in particular, “Ukraine at War,” is a definitive collection of fabrications, biased propaganda, and dubious claims that appear to precede “US intelligence” claims. (Assigning Blame to East Ukraine Rebels: US Appeals to “Law of the Jungle” in MH17 Case)
6. “The Russian Defense Ministry pointed out that at the moment of destruction of MH-17 an American satellite was flying over the area”:
The Russian government urges Washington to make available the photos and data captured by the satellite.(How American Propaganda Works: “Guilt By Insinuation”)
More
Photos Said to Show Russia Shelling of Ukraine Released
Jul 27,
2014 11:55 PM GMT
Satellite photos show that Russia has shelled across the border into Ukraine, the Obama
administration said, as Dutch Prime Minister Mark Rutte said signs of heavy
fighting prevented investigators from reaching the crash site of Malaysian Air Flight 17. “Russian forces have fired across the border at Ukrainian military forces,” the State Department said in a statement accompanying the photos released yesterday. The pictures also purportedly show “Russia-backed separatists have used heavy artillery, provided by Russia, in attacks on Ukrainian forces from inside Ukraine.”
Ukraine’s forces were attacked twice from Russian territory, the Ukrainian defense ministry said in a posting on Facebook, without giving further details.
The defense ministry also said Ukrainian forces have surrounded Horlivka, a city about 40 kilometers northeast of the regional capital of Donetsk, a city of 1 million people where insurgents retreated after abandoning other positions this month. Ukrainian forces also began operations near the city of Lutugino, about 20 kilometers from the regional capital of Luhansk, the defense ministry said.
Meanwhile, the European Union promised to consider its strongest sanctions yet against Russia over its involvement.
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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.
At the Comex silver depositories Friday final figures were: Registered 57.98 Moz,
Eligible 117.58 Moz, Total 176.52 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
More on our new lawless age. The price of silver
and gold have been artificially suppressed by the west’s central banks for
decades to prop up the fiat dollar reserve standard. In fact ever since Nixon
cheated the rest of the world with the Great Nixonian Error of fiat money.
Latin American’s, African’s and much of Asia, were the first victims of the
Nixonian fiat follies. Ever since the 1987 stock market crash, the
Greenspan/Bernanke/Yellen Put has made victims of all but the world’s banksters
and their favoured one percent. 43 years on and the Great Nixonian Error is
starting to crash under the burden of never ending war and unrepayable debt.
The fiat dollar reserve standard simply doesn’t for much of the world anymore.
If
all else fails, immortality can always be assured by spectacular error.
J. K.
Galbraith.
Deutsche Bank, HSBC Accused of Silver Fix Manipulation
Jul 26, 2014 5:01 AM GMT
Deutsche
Bank AG (DBK), HSBC Holdings Plc (HSBA) and Bank of Nova
Scotia were accused in a lawsuit of rigging the price of billions of
dollars in silver, an allegation similar to earlier suits involving the London gold fix. The banks unlawfully manipulated the price of the metal and its derivatives, an investor claims in a complaint filed yesterday in federal court in Manhattan. The banks abused their position of controlling the daily silver fix to reap illegitimate profit from trading, hurting other investors in the silver market who use the benchmark in billions of dollars of transactions, according to the suit.
“The extreme level of secrecy creates an environment that is ripe for manipulation,” according to the complaint. “Defendants have a strong financial incentive to establish positions in both physical silver and silver derivatives prior to the public release of silver fixing results, allowing them to reap large illegitimate profits.”
The lawsuit is the latest to be brought against banks alleging manipulation of a benchmark. Suits have been filed against Deutsche Bank and Bank of Nova Scotia, HSBC and other banks in federal court in New York over allegations involving the London gold fix.
“We intend to vigorously defend ourselves against this suit,” Diane Flanagan, a spokeswoman for the Bank of Nova Scotia, said in an e-mail. Juanita Gutierrez, a spokeswoman for HSBC, and Amanda Williams, a representative for Deutsche Bank, declined to comment.
J. Scott Nicholson, a Washington state resident who filed the case, is seeking to represent a class of investors who have bought silver future contracts since Jan. 1, 2007.
The suit includes claims of aiding and abetting manipulation, as well as violation of antitrust laws and the Commodity Exchange Act. Nicholson seeks unspecified damages.
The 117-year-old system of fixing prices for the $5 trillion silver market is set to change next month.
London Silver Market Fixing Ltd. said in May it would stop administering the benchmark, used by everyone from mining companies to central banks to trade or value metal, once Deutsche Bank ends its participation on Aug. 14.
----Deutsche Bank, Germany’s biggest lender, said in January that it would withdraw from participating in setting gold and silver benchmarks in London, a month after announcing that it would cut about 200 jobs in commodities and exit dedicated energy, agriculture, dry-bulk and base-metals trading. JPMorgan Chase & Co., Morgan Stanley and Bank of America Corp. also are retreating from raw materials.
Precious metals are getting more attention from regulators after price rigging in everything from interbank lending rates to currencies led to fines and overhauled financial benchmarks.
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How Free Central Bank Money Destroys Price Discovery And Promotes Momentum Driven Anti-Price Discovery (i.e. Indexing)
by Contributor •
Authored by Charles Gave of
Evergreen Gavekal
The role of financial markets is
to evaluate in real time the marginal return on capital of different assets. This is done through a ‘price
discovery mechanism’, with the ‘right price’ found out through a system of
constant trial and error. To discover this price calls for a community of
active money managers, each doing his or her due diligence before buying and
selling. This price is a function of the return on capital and of the expected
growth rate of this return. It has nothing at all to do with the size of the
investment under consideration. What’s more, if the price of an asset has been
going down for the ‘wrong’ reasons, then active money managers should buy more
of it. Over time this process will help to stabilize the system.
Active money management is
essentially a ‘mean reversion’ strategy. That’s not so for indexation. In the indexation
process, there is no attempt at price discovery. The only thing that matters is
the relative size of the asset: the bigger the market capitalization, the more
an investor should own. This means if the price of a large asset goes up more
than the market as a whole, indexers have to buy even more of it.
Thus indexation is a
momentum-based strategy. Worse, it is a form of socialism, since new money is allocated not
according to the expected return on capital but rather according to the current
price of an asset relative to other assets. The bigger an asset, the more one
should own…
In a true capitalist system, the
rule is the higher the price, the lower the demand. With indexation, the higher
the price, the higher the demand. This is insane.
Where it becomes really
ridiculous is in the bond markets. Over time, the government bond market of a very
badly managed country (like France) will become much bigger than the bond
market of a well managed country (like Sweden). As a result, over time indexers
have to buy more French bonds than Swedish bonds. The bond vigilantes of
yesteryear are now condoning the very crimes they once condemned… and they have
no choice about it.
Any economic system based on
momentum must be extremely unstable, moving relentlessly from boom to bust and
back again, which over time will cause a massive waste of capital. The swings will only be
reinforced by zero interest rate policies, since these suppress the cost of
capital against which returns on capital should be measured.
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In central banking as in diplomacy,
style, conservative tailoring, and an easy association with the affluent count
greatly and results far much less.
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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