Baltic Dry Index. 942 +71
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
“War
is peace.
Freedom is slavery.
Ignorance is strength.”
Freedom is slavery.
Ignorance is strength.”
President
Obama, with apologies to George Orwell, 1984.
For more on the possibility of a full scale war in
the Ukraine this weekend, scroll down to news from Russia. Did the Russian bear
just get tired of all the western bear baiting? Stay long fully paid up
physical gold and silver, and I suppose short euros and stocks. The euro has no
future in any war with Russia.
Up first today, stagnating aging Japan. With the
USA ally gun shy of committing ground troops against the new Caliphate in Syria
and Iraq, did Japan’s Abe just kow-tow to China’s Xi? From Beijing’s
perspective, China’s squeeze is starting to payoff. With Japan on the ropes,
what next for Vietnam and the Philippines?
BOJ Officials Said to Mull Cut to 2014 Growth Forecast
Aug 15, 2014 5:24 AM GMT
The Bank of Japan may cut its
growth forecast for this fiscal year for a fourth time, as exports fail to
bolster an economy weakened by April’s sales-tax increase, according to people
familiar with the central bank’s discussions.
The expansion for the 12 months
through March 2015 is likely to be lower than the 1 percent median forecast of
BOJ board members, said the people, who asked not to be named because the talks
are private. Growth is likely to be 0.4 percent, according to the median
estimate in a survey of 24 economists by Bloomberg News on Aug. 13-14.
Another downward revision when the board reviews its outlook in October would underscore waning momentum in the world’s third-biggest economy. Governor Haruhiko Kuroda faces increased pressure to boost his unprecedented stimulus after Japan’s deepest contraction in more than three years in the second quarter, according to economists at Citigroup Inc. and Morgan Stanley MUFG Securities Co.
“We think the BOJ will have no option but to revise down its projections again,” said Takeshi Yamaguchi, an economist at Morgan Stanley MUFG Securities Co. An additional stimulus package will probably be drawn up as early as the next parliamentary session, he said.
More
http://www.bloomberg.com/news/2014-08-15/boj-officials-said-to-mull-cut-to-2014-growth-forecast.html
Abe Stays Away From Tokyo War Shrine in Bid for Xi Summit
Aug 15, 2014 3:21 AM GMT
Japanese Prime Minister Shinzo Abe stayed away from a Tokyo war shrine on
the 69th anniversary of Japan’s World War II defeat today, instead sending a
donation as he seeks a summit with Chinese President Xi Jinping. Two cabinet members paid their respects today at Yasukuni shrine, which is seen by many as a symbol of Japan’s past aggression in Asia as 14 Class-A war criminals are enshrined there along with millions of war dead. Any visits by leading government officials rile China and South Korea, a country with a holiday today to mark the end of Japanese colonial rule.
Abe
hasn’t met Xi since taking office in December 2012 as ties between Asia’s two
largest economies frayed over territorial and historical issues. By staying
away, he may improve the odds of a meeting, while potentially sparking
criticism from his nationalist supporters.
----The
two nations’ foreign ministers met in Myanmar last week, the first such meeting
since Abe came to power, in a sign of progress toward a summit that Abe said
he’d welcome at a regional economic forum in Beijing in November.
----For Koreans, “the shrine symbolized the brutality of Japanese rule and military expansion to the Koreans forced to fight for the emperor,” said Lee Won Deog, a professor of Japanese studies at Seoul’s Kookmin University. “What Japanese leaders’ visits to the shrine mean to South Koreans is that Japan continues to overlook the pain it caused to its neighbors during its imperial expansion.”
Further straining ties, China and Japan are at odds over the sovereignty of a group of uninhabited islets in the East China Sea. Ships from both sides have been tailing one another around the islands since Japan bought three of them from a private landowner in September 2012.
Dong Wang, director of the Center for Northeast Asian Strategic Studies at Peking University, is pessimistic that Japan will take a “clear and correct” position on historical issues as Abe is a “staunch ultra-nationalist.”
“The 15th of August anniversary is a very important time, a hallmark for us to observe and to watch and assess which direction Abe wants to take,” Wang said. The best we can hope for is a short, informal meeting between Xi and Abe, though this depends on Abe’s actions, he said.
The neighbors have economic motives for trying to improve ties, Peking University’s Liang said. China is Japan’s largest trading partner, with a total shipments between the countries last year reaching $343 billion.
More
In better news for both Asian countries, the
current oil glut will provide both with a short term boost. The losers are the
big western oil companies in Canada’s oil sands or involved in deep water plays
off Brazil and Africa.
Oil Sands are Biggest Losers From Low Crude Prices: Study
Aug 15, 2014 12:00 AM GMT
ConocoPhillips
(COP) and Royal Dutch Shell Plc (RDSA) are among global oil
companies needing crude prices as high as $150 a barrel to turn a profit from
Canada’s oil sands, the costliest petroleum projects in the world, according to
a study. The next most-expensive crude projects are in the deep waters off the coasts of Africa and Brazil, with each venture needing prices between $115 and $127 a barrel, said Carbon Tracker Initiative, a London-based think tank and environmental advocacy group, in a report today.
As the U.S. shale drilling boom floods the world’s biggest crude market with supply, explorers are at greater risk of a price collapse that would turn some investments into money losers.
“In order to sustain shareholder returns, companies should focus on low-cost projects, deferring or cancelling projects with high breakeven costs,” the report’s authors wrote. “Capital should be redeployed to share buybacks or increased dividends.”
After four straight years of gains, Brent crude, the benchmark price for most of the world’s oil, declined 0.3 percent last year to an annual average of $108.70. Brent for September delivery slumped as low as $102.10, a 13-month low, on the London-based ICE Futures Europe exchange yesterday.
Carbon Tracker said it derived its projects list and cost estimates from a database compiled by Rystad Energy AS, an Oslo-based oil-industry consultancy.
In May, Carbon Tracker released a report that said the oil industry was at risk of wasting $1.1 trillion of investors’ cash on expensive developments in the Arctic, oil sands and deep oceans. That figure represents the amount explorers may spend on oilfields that need crude prices of $95 a barrel or more, the group said three months ago.
Oil companies face growing pressure from shareholders to rein in costs after two decades of bigger spending have failed to boost production or profitability, said Steven Rees, who helps oversee $992 billion as global head of equity strategy at JPMorgan Chase Bank.
The projects most at-risk from lower prices are ConocoPhillips’s Foster Creek development and Shell’s Carmon Creek, oil-sands developments in Alberta that respectively need $159 and $157 a barrel oil to be profitable, Carbon Tracker said.
More
http://www.bloomberg.com/news/2014-08-14/oil-sands-are-biggest-losers-from-low-crude-prices-study.html
We end for the week with what may or may not prove
to be pivot point in the Ukraine. With little left to lose, and Finland
wobbling, is President Putin ready to go all in, and call America’s War Party
bluff?
“Never
send a battalion to take a hill if a regiment is available.”
Dwight
D. Eisenhower.
Russian armoured vehicles and military trucks cross border into Ukraine
Exclusive: Telegraph witnesses Russian armoured vehicles and military trucks cross the border from Russia into Ukraine
A column of armoured vehicles and
military trucks crossed the border from Russia into Ukraine on Thursday night,
in the first confirmed sighting of such an incident by Western journalists.
A separate, larger convoy of
around 270 Russian trucks, which Moscow claims is carrying aid, rumbled to a
halt just short of the border on Thursday night, while in east Ukraine, shells
hit the centre of rebel-held Donetsk for the first time.
The Telegraph witnessed a column
of vehicles including both armoured personal carriers and soft-skinned lorries
crossing into Ukraine at an obscure border crossing near the Russian town of
Donetsk shortly before 10pm local time.
The Ukrainian and Western
governments have long accused Russia of filtering arms and men across the
border to fuel the separatist insurgency in Ukraine's Donetsk and Luhansk
regions, but such an incident has never before been witnessed by Western
journalists.
The convoy, which included at
least 23 vehicles, appeared to be waiting until sunset near a refugee camp just
outside Donetsk, before moving towards the crossing without turning off
headlights or making any other attempt to conceal itself.
---- While the force did not seem to be a substantial invasion force, it confirms that military supplies are moving across the border. While the APCs carried no visible markings the fuel tankers and soft-skinned trucks in the convoy bore black Russian military number plates.
The vehicles do not appear to be
associated with the Russian aid convoy that is camped 20 miles further down the
same road.
Russia Truce Plan at Odds With Reports on APC Movements
Aug 15, 2014 1:56 AM GMT
Russia proposed a
cease-fire for humanitarian aid deliveries to war-torn parts of southeastern Ukraine as a
convoy of aid trucks from Moscow waited near the border with rebel-held areas. Even as Russia struck a conciliatory note, news outlets including Novoye Vremya and Hromadske TV reported seeing armored personnel vehicles crossing into Ukraine. The government in Kiev has been saying for months that the separatist rebels are receiving reinforcements from Russian territory. The government in Moscow has repeatedly denied any involvement in the unrest.
The dispute over the Russian convoy, which the leadership in Moscow says is carrying emergency supplies, has stoked tensions between the two countries and has prompted the U.S. and the European Union to warn Russia against using aid as a pretext for a military intervention. Russia says the supplies are needed to help citizens of Luhansk and Donetsk, where fighting has cut off water and power connections.
“The extremely difficult situation in southeastern Ukraine demands a cease-fire,” the Russian Foreign Ministry said on its website yesterday in its proposal to separatists and the Ukrainian government. The ministry said such a suspension was “necessary to guarantee the safety of the humanitarian operation.”
Russian President Vladimir Putin, whose country has been under increasing international pressure for supporting separatists in Ukraine, pledged during a visit to Crimea that he would work to halt the conflict.
Even so, a column of a “few dozen” APCs and other military vehicles crossed into Ukraine’s rebel-held territory from Russia last night, according to a correspondent with Novoye Vremya, or New Times, in the border region.
More
Putin to Meet With Finnish President as Threat of Cold War Grows
Aug 14,
2014 11:00 PM GMT
Finnish President Sauli Niinistoe will meet with Russia’s Vladimir Putin
today in an effort to defuse tensions he said risk dragging the world into a
new cold war.
The two will meet in the southern Russian town of Sochi following an invitation from Putin first made a year ago, Niinistoe told reporters in Helsinki yesterday. The encounter will mark Putin’s first bilateral talks with a European leader or head of state since he met with German ChancellorAngela Merkel in Brazil during the World Cup in July.
“I have a feeling that we’re on the brink of cold war,” Niinistoe said. He plans to use the meeting with Putin to find a way “to bring this terrible spiral of mistrust to an end,” he said.
Finland, which unlike its Baltic neighbors never joined the North Atlantic Treaty Organization, has a longer border with Russia than the other 27 European Union members combined. Its economy is more exposed to the fallout of Russian tensions than that of any other euro member, trade figures show. Prime Minister Alexander Stubb has hinted at the need for economic compensation should Finland be hit disproportionately.
More
“Never,
never, never believe any war will be smooth and easy, or that anyone who
embarks on the strange voyage can measure the tides and hurricanes he will
encounter. The statesman who yields to war fever must realize that once the
signal is given, he is no longer the master of policy but the slave of
unforeseeable and uncontrollable events. ”
Winston
Churchill
At the Comex silver depositories Thursday final figures were: Registered 59.83
Moz, Eligible 115.89 Moz, Total 175.72 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Not the usual suspects today, today we take note of
the rising war of words between China and America aster President Obama called
China “free riders” late last week. From faraway safe thundery London, it seems
to me, better to have China remain peaceful “free riders,” than to have them start
emulating America staging neo-Nazi coups, and invasions on pretext of weapons
of mass destruction.
“I
think war is a dangerous place.”
George
W. Bush.
China Outsources Dirty Work to U.S. Military
25
By Adam
Minter
There’s very little that the Chinese government likes less than the
projection of U.S. military power. The reasons range widely -- from a general
distaste for the U.S. meddling outside its borders to Beijing’s frequent
support for autocratic regimes. China steadfastly opposed the idea of U.S. intervention in Syria, for
instance, and in 2011, it refused to back military action in Libya (though it abstained from the Security Council vote to authorize
strikes).So last Friday, when the state-owned China Daily newspaper reached out to the Ministry of Foreign Affairs for a comment on President Barack Obama’s authorization of airstrikes in Iraq, it might well have expected a stock condemnation of U.S. imperialism. It received something quite different. “China supports safeguarding Iraqi sovereignty, independence, territorial integrity, and efforts to combat terrorism,” the paper said, paraphrasing the Ministry of Foreign Affairs. “And keeping an open mind about operations that preserve security and stability in Iraq.”
The response, though unusual, should not have been entirely unexpected. China has a great deal at stake in ensuring that the jihadists of the Islamic State do not continue to destabilize the Middle East. A day after the China Daily story, the popular and influential state-owned Global Times newspaper acknowledged as much in a widely circulated editorial:
ISIS’s rise, combined with the American airstrikes, have a
limited impact on China. China’s disadvantage is that our dependence on Middle
Eastern oil is increasing, and much faster than any other developed country.
In other words: Unless the Islamic State is dealt with sooner rather than later, its impact on China won’t be so limited.
As with Libya, though, the most help that China seems ready to offer is a tacit willingness not to complain about the U.S. and others intervening in Iraq. This reluctance to defend its own Mideast energy supplies more forcefully has not gone unnoticed by the Obama administration. During an interview on Saturday, Obama smiled ironically when the New York Times’s Tom Friedman referred to China as “the biggest energy investor in Iraq.”
“They are free riders,” Obama said. “And then they’ve been free riders for the last 30 years, and it’s worked really well for them.”
Even if, as seems likely, China's leadership quietly agrees with this sentiment, they certainly don't like hearing it broadcast by the president of the United States. After a couple of days, their propagandists struck back in the People’s Daily, the official mouthpiece of the Communist Party. The tit-for-tat headline nicely summed up the tone: “Experts say the United States is the real ‘free rider.’” In the article, Shi Yinhong, director of the Center for American Studies at Renmin University, hailed the geopolitical benefits that China’s resurgence has supposedly brought the world, then asked:
Obama says that China has been a ‘free rider’ for three
decades, but didn’t the United States enjoy benefits from China’s economic boom
and peaceful foreign policy?
On Wednesday, the People’s Daily weighed in again, this time with an editorial (its editorials are official statements of policy on behalf of the Communist Party) that suggested how much Obama’s criticism had irked Chinese leaders. The piece notes the “unmistakable” relationship between the current chaos in Iraq and the U.S.'s decision in 2003 to “launch a brutal war in Iraq to overthrow its regime.” Then, in a passage that’s subsequently been published in part in the state media’s English-language news sites (under the inexplicably off-message headline “Leading newspaper denies China’s exploitation of Iraq”), it offers this unsubtle poke in the ribs:
If the Americans want to compare themselves with China on
Iraq, they’ll only embarrass themselves further. America is obviously the
‘invader’ and ‘deserter’ while China has always played the peaceful role of
‘partner’ and ‘builder.’
More
http://www.bloombergview.com/articles/2014-08-14/china-outsources-dirty-work-to-u-s-military
“Only
the dead have seen the end of war.”
Plato.
And now we await far off developments in the Ukraine,
this weekend. Will sanity prevail and America’s War Party blink or will the
Russian bear send in the humanitarian convoy daring Washington’s puppets in
Kiev to attack it triggering war. Stay tuned, but if it is war, expect
unallocated gold and silver bullion defaults in London, as holders of paper
gold and silver find out the hard way why paper isn’t gold. Have a great
weekend everyone.
The monthly Coppock Indicators finished July.
DJIA: +157 Down. NASDAQ: +318 Down. SP500: +232 Down. The Fed’s final bubble has taken on a
very scary wobble, but this is nothing compared to the return of real interest
rates at some point ahead.
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