Baltic Dry Index. 1061 +21
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"The secret of life is honesty and fair dealing. If you can
fake that, you've got it made."
Groucho Marx
Groucho Marx
Up first news from China. So what would a hard landing
look like, and how would we recognise it?
China Manufacturing Gauge Drops as Growth Pickup Stalls: Economy
Aug 21, 2014 4:41 AM GMT
A Chinese manufacturing gauge fell more than analysts estimated in August as
a credit slowdown and property slump add to risks the world’s second-largest
economy will miss its growth target this year. The preliminary Purchasing Managers’ Index (MXAP) from HSBC Holdings Plc and Markit Economics was at 50.3, trailing all 22 estimates in a Bloomberg News survey of economists that had a median projection of 51.5. The measure dropped from July’s final reading of 51.7 and, if confirmed on Sept. 1, will be a three-month low. Numbers above 50 indicate expansion.
Stocks in China fell, the Australian dollar extended its decline and the yuan weakened the most since July. After a slump in credit expansion and slowing growth in investment spending in July, today’s report adds to pressure on the government to do more to support expansion that economists project will this year be the weakest since 1990.
More
Next news from the EUSSR, the land of one for
all and all for one, provided you do it the German paymaster’s way. Of course
the Bilderberger imposed one-size-fits-all Germanic euro fits no one but
Germany, Austria and Holland, (the nation not the love-struck teenager ruining
France.) Even without blowback from idiotic American imposed Russian sanctions,
continental Europe as we know it, is in danger of collapse and disintegration
of the unloved euro. With EU policy like this, whether the UK stays of exits
the EU looks likely to be moot. Without major EU reform and dropping idiotic
Russian sanctions, the EU will break apart as an ever increasing depression
sets in."Too bad ninety percent of the politicians give the other ten percent a bad reputation."
Henry Kissinger
Nobel economists say policy blunders pushing Europe into depression
German Chancellor Angela Merkel defends eurozone and says it is hard to manage a currency for 18 states
An array of Nobel economists have
launched a blistering attack on the eurozone's economic strategy, warning that
contractionary policies risk years of depression and a fresh eruption of the
debt crisis.
"Historians are going to tar
and feather Europe's central bankers," said Professor Peter Diamond, the
world's leading expert on unemployment.
"Young people in Spain and
Italy who hit the job market in this recession are going to be affected for
decades. It is a terrible outcome, and it is surprising how little uproar there
has been over policies that are so stunningly destructive," he told The
Telegraph at a gathering of Nobel laureates at Lake Constance.
"It could be avoided with
better use of stimulus, and spending on infrastructure. That would boost growth
and helped the debt to GDP ratio," Mr Diamond said, echoing a widely-heard
critique among the Nobel elites that Europe's policies have been
self-defeating.
Professor Joseph Stiglitz said
austerity policies had been a "disastrous failure" and are directly
responsible for the failed recovery over the first half of this year, with
Italy falling into a triple-dip recession, France registering zero growth and
even Germany contracting in the second quarter.
"There is a risk of a
depression lasting years, leaving even Japan's Lost Decade in the shade. The
eurozone economy is 20pc below its trend growth rate," he said.
Mr Stiglitz said the eurozone
authorities had massively underestimated the contractionary effects of
austerity and continue to persist in error despite claims that the crisis is
over. "I am very concerned about the future of monetary union, and they
haven't yet felt the impact of geopolitical tensions."
Worse than the 1930s: Europe’s recession is really a depression
There have been plenty of those lately. And it's not just the Great Recession. It's the way we've struggled to make up the ground we lost since. The United States, for one, has had its slowest postwar recovery. Britain has had its slowest one, period. But, six and a half years later, Europe has distinguished itself by not having much of a recovery at all. And, as you can see above, that's about to make it worse than the worst of the 1930s.
I've taken the chart above from Nicholas Crafts, and extended it a bit to put Europe's depression in, well, even more depressing perspective. Eurozone GDP still hasn't gotten back to its 2007 level, and doesn't look like it will anytime soon. Indeed, it already wasn't clear if its last recession was even over before we found out the eurozone had stopped growing again in the second quarter. And not even Germany has been immune: its GDP just fell 0.2 percent from the previous quarter.
It's a policy-induced disaster. Too much fiscal austerity and too little monetary stimulus have crippled growth like almost never before. Europe is doing worse than Japan during its "lost decade," worse than the sterling bloc during the Great Depression, and barely better than the gold bloc then—though even that silver lining isn't much of one. That's because, at this rate, it'll only be another year until the eurozone is well behind the gold bloc, too.
So how is Europe making the Great Depression look like the good old days of growth? Easy: by ignoring everything we learned from it.
----As I've said before, the euro is the gold standard with moral authority. And that last part is the problem. Europeans don't think the euro represents civilization, but rather the defense of it. It's a paper monument to peace and prosperity that's made the latter impossible. So the eurocrats who have spent their lives building it are never going to tear it down, despite the fact that, as it's currently constructed, the euro is standing between them and recovery.
More
Angela Merkel scolds Italy and France over the faltering eurozone recovery
German chancellor claims stifled growth is due to countries
running high deficits and breaking fiscal rules set by Brussels
Angela Merkel has delivered
a sharp rebuke to Italy and France for hindering the
eurozone's recovery by breaking longstanding fiscal rules.The German chancellor, under pressure following a fall in GDP in the second quarter, said faltering growth was the direct result of the 18-member currency zone's inability to punish those countries that ran high deficits in contravention of limits set by Brussels.
She said Germany had shown it was possible to cut the government's annual spending deficit while at the same time improve the economic situation.
Speaking to an audience of Nobel prize-winning economists in the Bavarian town of Lindau, she said individual countries had ignored Brussels and the European Central Bank (ECB) to continue running larger deficits than allowed by the fiscal rules. "We have very little, if any, possibility of sanctioning those countries that break the rules," she said
Her comments echoed those of ECB president Mario Draghi, who last month
warned that without moves to strengthen the fiscal pact and impose punishments
on rule-breaking countries, the eurozone project could flounder. The two
speeches highlight the growing frustration among senior eurozone policymakers
at the failure of France and Italy to meet the 3% deficit target set by
Brussels with Germany's support.
----However, critics of Merkel and her finance minister Wolfgang Schaeuble, argue that Germany is the source of the currency zone's problems following its pursuit of balanced budgets while harder-hit countries have yet to rebuild their banking sectors and bolster consumer confidence.
Germany's persistent trade
surplus with other EU countries is also blamed for undermining the recovery
among the other 17 members, which import German goods but struggle to sell
inside the EU's largest economy.
More
We end for the day with the central banksters arguing
over the end of ZIRP. I don’t think that these geniuses who never saw the crash
of 2007-2009 coming, can ever end ZIRP without triggering the Great Final Crash
of the Great Nixonian Error of fiat money. On ZIRP Forever, the Fed’s Final
Bubble just keeps growing until one day out of the blue something bursts it.
Ending ZIRP Forever deliberately, ends the free lunch all have enjoyed since
the Lehman bust of 2008. Ending ZIRP Forever deliberately, will set off a
tsunami of new Lehmans everywhere. Mission accomplished, you’re doing a heck of
a job, central banksters and talking chairs.
"When it becomes serious, you have to lie"
Jean-Claude Juncker. Ex-Luxembourg Prime Minister and ex-president of the Euro Group of Finance Ministers. Confessed liar. EC President.
Fed Officials Said Job Gains May Bring Faster Rate Increase
Aug 20,
2014 9:56 PM GMT
Federal Reserve officials raised the possibility they might raise rates
sooner than anticipated, as they neared agreement on an exit strategy,
according to minutes of their July meeting. “Many participants noted that if convergence toward the committee’s objectives occurred more quickly than expected, it might become appropriate to begin removing monetary policy accommodation sooner than they currently anticipated,” the minutes, released today in Washington, read.
Fed Chair Janet Yellen has committed to use monetary policy to strengthen the labor market so long as inflation remains in check. “Many participants” at the meeting still also saw “a larger gap between current labor market conditions and those consistent with their assessments of normal levels of labor utilization,” the minutes showed.
The release of the minutes set the stage for Yellen’s speech on labor markets Aug. 22 at the Kansas City Fed’s annual symposium in Jackson Hole, Wyoming. She has focused on low labor-force participation, weak wage growth and elevated levels of long-term unemployment to emphasize continued slack.
More
Carney Seen Holding Sway as BOE Dissenters Pull Away From Pack
Aug 21,
2014 12:01 AM GMT
Mark Carney has come
through his first public argument on interest rates
with enough scope to contain dissent for now. While policy makers Martin Weale and Ian McCafferty voted for an increase this month, the gulf between their thinking and that of the governor’s seven-strong majority suggests his view will hold sway, according to economists at banks including Goldman Sachs Group Inc. and UniCredit SpA.
Investors share that outlook, with expectations for the first rate increase staying stuck in May even after the revelation of the first split in more than three years. Even though Carney has given some mixed signals on the potential timing of tightening, his warnings about risks to the recovery signal an entrenched position in his camp.
----Minutes of the bank’s Aug. 6-7 meeting published
yesterday showed Weale and McCafferty, both external members of the Monetary
Policy Committee, voted to raise the key rate by 25 basis points from a
record-low 0.5 percent. They said the drop in unemployment and signs of a tighter labor market signaled
wages are set to pick up, and so “economic circumstances were sufficient to
justify an immediate rise in bank rate.”
More
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 Wednesday final figures were: Registered 59.96
Moz, Eligible 117.37 Moz, Total 177.33 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Below, the price and who pays for President Obama’s
botched coup in Kiev. In addition to dead Russians and Ukrainians, Europe’s
farmers and poorest paid workers are going to pick up the cost of America’s War
Party’s reckless misadventure.
This ailing continent needs newer and better politicians. But where could we find them? There is no sign of a European Obama or anything remotely like him.
Der Spiegel
No Brie for Moscow as Cheese Stacks Up in France on Ban
Aug 21, 2014 12:01 AM GMT
At Alexander Krupetskov’s one-window cheese store in central Moscow, sales
of products from France have tripled in the past two weeks. Shoppers are stocking up on foods set to become scarce after Russia banned a range of products from the European Union and the U.S. in retaliation for sanctions over Ukraine. The nation of 143 million has been one of the fastest-growing export markets for French cheesemakers as Moscovites acquire a taste for creamy brie, pungent camembert and spicy Roquefort.
“The very foundation of the shop has been cast into major doubt,” said Krupetskov, who has four weeks of inventory left.
French cheese exports to Russia climbed 29 percent to 49.5 million euros ($66 million) last year, beating a 4.4 percent increase in total exports to 3 billion euros. Brie shipments to Russia rose 37 percent, while sales of stronger-tasting Roquefort advanced 13 percent, Eurostat trade data show.
At the Rungis food market outside Paris, a 30-hour drive west of Moscow, Nicolas Medard, deputy director of Thomas Export, says 100,000 rounds of brie headed for Russia are stranded after the ban announced on Aug. 7, with no new destination for now.
“All these cases were for Russia,” Medard says, pulling a tin of Pere Toinou brie from one of 2,000 plastic-wrapped cardboard boxes. “We’ll lose about 120,000 euros.”
Thomas Export may lose around 1.3 million euros in total sales due to Russia’s ban, around 4 percent of the company’s revenue, according to Medard. Sales to Ukraine are also in decline, he said.
----Swiss exporter Intercheese AG said last week it’s been contacted by Russian buyers looking for cheeses they can no longer get from the EU, such as mozzarella, Gouda and Edam.
Krupetskov, who says he panicked
when he heard about the import ban, is looking to sample cheese from Latin
America or Israel that might help restock his shelves.
The EU exported 257,000 tons of
cheese to Russia last year, accounting for 33 percent of shipments outside the
bloc and 2.6 percent of production. Cheese and curd shipments to Russia had a
value of 985 million euros, with the Netherlands, Germany and Lithuania the
biggest suppliers
More
Could McDonald's Be the Latest Victim of Russian Retaliation?
McDonald’s
may be the most visible face of U.S. capitalism in Russia, with 438 restaurants
spanning the country, from Moscow to eastern Siberia. Still, it looked set to
ride out Russia’s new ban on Western agricultural imports, since all the
ingredients it serves Russian customers are locally sourced.
Today, though, Russia’s national consumer-safety regulator ordered the closure of at least four McDonald’s outlets, including its flagship Pushkin Square location, for alleged violations of sanitary rules. The watchdog agency didn’t mention President Vladimir Putin’s battle of sanctions with the U.S. and European Union in ordering the closures, but Russian authorities have wielded consumer-protection enforcement in other political controversies, as when they shut down a candy factory owned by Ukraine’s President Petro Poroshenko. McDonald’s (MCD) says it is studying the regulator’s claims.
In the meantime, it’s already clear that the EU, Russia’s biggest trading partner, is going to feel real pain from the sanction showdown. From Polish apple growers to Dutch cheese makers, EU food exporters could lose some €6.7 billion ($9 billion) in sales after Putin banned most Western agricultural imports in retaliation for EU and U.S. sanctions, analysts at Dutch bank ING (ING)say in a report today. The figure, which includes losses by companies that supply agricultural producers, far exceeds the $167 million in aid the EU has offered to fruit and vegetable growers to offset the Russian ban.
The
analysts predict the ban could lead to the loss of 130,000 jobs across the
28-nation bloc, led by Poland with 23,000 jobs lost. By contrast, the U.S. is
forecast to lose only 12,000 jobs, with an estimated $1.7 billion in lost sales
to Russia. U.S. producers have largely shrugged
off the Russian retaliation.
More
Russia conducts checks at McDonald's restaurants in Urals region: Itar-Tass
MOSCOW(Reuters) - Russian food safety watchdog Rospotrebnadzor is conducting unscheduled checks at McDonald's restaurants in Sverdlovsk region, Itar-Tass news agency reported, citing local watchdog official Natalya Lukyantseva.
On Wednesday, Rospotrebnadzor ordered the suspension of operations at four McDonald's restaurants in Moscow over what it said were "numerous" sanitary law breaches.
"Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood. For these few gold has been the asset of last resort."
Antony C. Sutton
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