Baltic Dry Index. 727 +04
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
“Paper
money eventually returns to its intrinsic value – zero.”
Voltaire
The Great Nixonian Error of August 15th
1971, was the breaking of the dollar link to gold and the imposition on the
world of the fiat currency dollar reserve standard. Faced with murderous
communism in a third of the planet, all other western countries simply went
along. After all, the benefits of fiat currencies are all front loaded.
Politicians were to get a free lunch and re-election, paid for by those Muppets
as yet unborn. An asset boom was born as fiat money did what fiat money only
can do, i.e. drop in purchasing power over time. But those front loaded
benefits were quickly dissipated in wars, bribes to the voters, and most of all
casino gambling rent seeking on Wall Street, the City of London and every two
bit financial center on the planet.
It all blew up in the great crash of 1987, and the
panicky Greenspan rigged bailout. We have been in an increasing bubble financial
hell ever since. Each crisis comes along
faster, and bigger, until in 2007-2009 the whole rotten system collapsed. We
have been in central bankster voodoo fraud ever since. But now all the voodoo
rubbish isn’t working as before. Whatever the central bankster spin, eagerly
parroted by the one percent with first access to the free money pouring out of
the central banks, we seem to have finally run out of road and talent. As the
baby boom generation heads off into retirement, and QE forever and ZIRP lose
their magic, the bill is finally coming in for the Great Nixonian Error of fiat
money.
Below, when central banksters voodoo magic loses
its magic.
How
pale is the art of sorcerers, witches, and conjurors when compared with that of
the government's Treasury Department!
Ludwig
von Mises.
Skyscraper Mania Grips China as Ambitions Trump Economy
Jul 24, 2014 5:38 AM GMT
The eastern Chinese city of Suzhou isn’t even the biggest in Jiangsu
province, yet it’s joining a national rush for the sky with what’s slated to
become the world’s third-tallest building. By 2020, China may be home to six of the world’s 10 highest skyscrapers, including Suzhou’s 700-meter (2,297-foot) Zhongnan Center. Developers finished 37 structures higher than 200 meters, or about 50 stories, in China last year, the most in the world, according to the Chicago-based Council on Tall Buildings and Urban Habitat, a non-profit organization that maintains the world’s largest free database on tall buildings.
China is witnessing a skyscraper boom, with lesser-known cities like Suzhou vying to erect ever-bigger structures and counting on the prestige and potential commercial benefit those mega-buildings may bring. Construction has been fueled by a tripling in property values since 1998 and government policy that moved 300 million people -- almost the entire population of the U.S. -- into cities since 1995.
“What’s happening in China is similar to what happened in the U.S. 80 to 100 years ago, on a different scale,” Antony Wood, the council’s executive director, said in an interview in Shanghai. “Cities are competing both within China and also globally for attention and for the appearance that they are first-world.”
More
Japan Trade Deficit Expands After Exports Unexpectedly Drop
Jul 24,
2014 3:05 AM GMT
Japan’s exports unexpectedly fell in June to swell the trade deficit more
than forecast, dragging on an economy squeezed by a sales-tax increase in April.
Exports shrank 2 percent from a year earlier, the finance ministry said in Tokyo today, compared with a median forecast of a 1 percent rise in a Bloomberg News survey of 29 economists. Imports rose 8.4 percent to leave a shortfall of 822.2 billion yen ($8.1 billion), surpassing a 643 billion yen projection.
Exports fell 1.7 percent by volume, showing the yen’s 16 percent drop against the dollar since Prime Minister Shinzo Abe came to power in December 2012 has failed to boost outward shipments. They remain 23 percent lower by value than a peak in March 2008, in contrast to the U.S. where they grew 25 percent over the same period.
More
South Korea Unveils $11 Billion Growth Plan as Economy Weakens
Jul 24,
2014 5:28 AM GMT
South Korea unveiled
11.7 trillion won ($11.4 billion) in government initiatives to shore up Asia’s fourth-largest
economy after growth slumped to the weakest pace in more
than a year in the second quarter. President Park Geun Hye’s administration, contending with a drop in consumer spending in the aftermath of an April ferry disaster, will deploy funds from this year’s budget and step up deployment of cash from government-run programs, it said in a statement today. State-backed lenders will extend 26 trillion won in credit. The Bank of Korea expanded a cheap-loan program for small companies.
The
measures, including support for small businesses and the poor, were released
hours after a government report showed the economy expanded 0.6 percent in
April-to-June from the previous quarter, less than forecast. The slowdown
raises the stakes for Park’s longer-term plans to reduce South Korea’s reliance
on large conglomerates and boost the role of small and innovative enterprises.
More
Euro zone June inflation unchanged at low levels as expected
By Martin Santa BRUSSELS
(Reuters) - Euro
zone inflation stayed low as expected in what the European Central
Bank calls the "danger zone" in June as falling prices of food and
phone calls offset more expensive tobacco and restaurants, data showed on Thursday.Consumer prices in the 18 countries using the euro rose 0.1 percent on the month in June for a 0.5 percent year-on-year gain -- the same annual inflation rate as in May, data from the European Union's statistics office Eurostat showed.
The annual rate is well below the ECB's inflation target of close to, but below 2 percent. The central bank believes that price growth slower than 1 percent is a "danger zone" because of the risk of deflation. Price growth has been below 1 percent since last in October.
The ECB left interest rates unchanged in July, a month after cutting them to record lows and pushing the deposit rate into negative territory and it made clear it was ready to print money in the future if needed to prevent deflation.
Consumer prices fell in Greece, Portugal and Slovakia in June and 5 countries had inflation at or above 1 percent, including Germany where prices rose 1.0 percent on the year.
Core annual inflation - which excludes the volatile prices of energy and unprocessed food - stood at 0.8 percent in June, unchanged from May.
More
Stalled recovery leaves Europe defenceless against economic shock from Russia
Stagnation is automatically causing debt ratios to spiral upwards yet again across a large part of the currency bloc
Europe's economic recovery has
stalled. The EMU policy elites took a fateful gamble that global growth alone
would lift the eurozone off the reefs, without the need for serious monetary
stimulus or a reflation package to ensure take-off velocity.
Their strategy has failed. The
Bundesbank says German growth may have slumped to zero in the second quarter.
French industrial output has fallen for three months in a row. French business
surveys point to an outright contraction of GDP, with a high risk of a
triple-dip recession.
Stagnation is automatically
causing debt ratios to spiral upwards yet again across a large part of the
currency bloc. The situation is doubly delicate since the European Central Bank
is no longer able to serve as a lender-of last resort for Italy, Portugal and
Spain.
Germany's top court has ruled
that the ECB's back-stop plan (OMT) "manifestly violates" the EU
treaties, and is probably Ultra Vires. The political reality is that the OMT
cannot be deployed, whatever the European Court says when it issues its own
judgment long hence.
Any external economic shock at
this stage risks exposing the fundamental incoherence of the EMU system, and
therefore shattering the fragile truce in the markets. It is this fear - even
more than worries about gas supply - that is contaminating the crisis strategy
towards Russia.
More
Jobs Hold Sway Over Yellen and Carney as Central Banks Splinter
Jul 23,
2014 10:25 AM GMT
Before the Federal Reserve and
fellow central banks go to work raising interest rates, they first need others
to go to work.
That’s the signal from policy
makers worldwide, as even those whose mandates focus on inflation put the
health of labor markets at the heart of their decision making. The approach
leaves investors bracing for global monetary policies to diverge after the
post-crisis embrace of easy money.
Accelerating job creation -- and
the hope this will spur wages -- leaves the U.S. central bank and the Bank of
England preparing for higher rates by the end of 2015. At the other end of the
spectrum, double-digit unemployment in the euro area and stagnant pay in Japan
mean stimulus remains the only option.
----The forward
curves for the U.S. and U.K., which gauge investor expectations for rates, show
the most-pronounced steepening as unemployment in both countries has fallen to
the lowest levels in more than five years. By contrast, the euro-area’s 11.6
percent jobless rate remains close to a record 12 percent as investors bet
its benchmark will stay low until at least 2016.
More
Atlantic City’s Credit Rating Cut 2 Steps to Junk by Moody’s
Jul 24, 2014 3:50 AM GMT
Atlantic City, New Jersey,
the gambling hub that’s been pummeled by regional competition in the U.S.
Northeast, had its credit rating cut two levels to speculative grade by Moody’s
Investors Service. The reduction to Ba1 from Baa2 on the city’s $245 million of general-obligation debt reflects a weakened tax base resulting from anticipated casino closings, the New York-based ratings company said today in a statement. The outlook remains negative.
“The downgrade to Ba1 reflects the city’s significantly weakened tax base, revenue-raising ability and broader economic outlook,” analysts Vito Galluccio and Julie Beglin said in the statement. “These result from ongoing casino revenue declines, expected near-term casino closures, and the impact of sizable casino tax appeals, all of which has stemmed from increased competition from casinos in neighboring states.”
More
We end for the day with the US controlled, French
fronted, IMF panicking and urging all to print more. Stay long fully paid up precious metals held
outside of the UK and USA, for the final act. Eventually the new Graphene
Carbon Age will kick in to refocus the global economy in a new sort of
industrial revolution. Unfortunately, that is still the better part of a decade
away.
IMF Says Fed May Have Scope for Zero Rate Past Mid-2015
Jul 23, 2014 5:24 PM GMT
The Federal
Reserve may have scope to keep interest rates
at zero for longer than investors anticipate as inflation stays muted and a
2014 slowdown prolongs the labor-market recovery, the International
Monetary Fund said. The IMF cut its U.S. growth forecast for this year to 1.7 percent from 2 percent predicted in June, citing a first-quarter contraction, after a 1.9 percent advance last year. The fund left its 2015 forecast at 3 percent, the fastest expansion since 2005.
“Even with that relatively good growth outlook, we still see there’s a lot of slack in the economy,” Nigel Chalk, deputy director of the IMF’s western hemisphere department, said today on a conference call.
The nation’s jobless rate fell to 6.1 percent in June, down from 6.6 percent in January, even as harsh winter weather contributed to a 2.9 percent contraction in gross domestic product from January through March. While the job market is weaker than the unemployment rate implies, there’s “meaningful rebound” under way, the staff report said.
“With better growth prospects, the U.S. should see steady progress in job creation but headline unemployment is expected to decline only slowly,” the report said.
More
It is
impossible to grasp the meaning of the idea of sound money if one does not
realize that it was devised as an instrument for the protection of civil
liberties against despotic inroads on the part of governments. Ideologically it
belongs in the same class with political constitutions and bills of rights.
Ludwig
von Mises.
At the Comex silver depositories Tuesday final figures were: Registered 58.15 Moz,
Eligible 118.11 Moz, Total 176.26 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, more on our new lawless age, Chinese style.Depression is the aftermath of credit expansion.
Ludwig
von Mises.
Morning Agenda: Chinese Elite Tied to Alibaba I.P.O.
By SYDNEY EMBER July 21, 2014
When the Chinese Internet giant Alibaba Group completed a $7.6 billion deal in 2012 to buy back half of Yahoo’s stake in the company, it raised part of the money by selling shares to select investors, notably China’s sovereign wealth fund and three prominent Chinese investment firms, Michael Forsythe writes in DealBook. What it did not detail was the deep political connections of the investment firms, Boyu Capital, Citic Capital Holdings and CDB Capital, the China Development Bank’s private investment arm.According to an analysis by The New York Times, the firms’ senior executive ranks included sons or grandsons of the most powerful members of the ruling Communist Party. Documents also show that a fourth investor bought Alibaba shares that month: New Horizon Capital, a private equity firm co-founded by the son of China’s prime minister at the time, Wen Jiabao. Such politically connected investors will most likely reap a bonanza when Alibaba goes public, an offering that analysts estimate could value the company at more than $200 billion.
As part of its regular filings for the offering, Alibaba disclosed the owners of about 70 percent of its shares, which include foreign investors like Yahoo, as well as top executives such as Alibaba’s chairman, Jack Ma.
But less is known about other shareholders, whose sway may be significant even if their stakes are not. Mr. Forsythe writes: “The fact that four Chinese companies investing in Alibaba have had executives who are either sons or grandsons of the two dozen men who have since 2002 served on the Politburo Standing Committee, the most elite group of leaders, speaks to how deeply China’s political class has attached itself to the highest echelons of finance.”
http://mobile.nytimes.com/blogs/dealbook/2014/07/21/morning-agenda-chinese-elite-tied-to-alibaba-i-p-o/
"By
a continuing process of inflation, governments can confiscate, secretly and
unobserved, an important part of the wealth of their citizens. There is no
subtler, no surer means of overturning the existing basis of society than to
debauch the currency. The process engages all the hidden forces of economic law
on the side of destruction, and does it in a manner which not one man in a
million is able to diagnose."
John
Maynard Keynes.
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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