Baltic Dry Index. 838 -07 Brent Crude 59.34
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
Hans F. Sennholz
We are living on borrowed time in the Great Nixonian Error of fiat
money. A fiat currency is only as good as its manager’s ability to keep up people’s
faith in using it. It has no “store of value,” and can and is being issued in
unlimited quantities. Stay long fully
paid up physical precious metals. The
magic money printers in Washington, D.C., and the American War Party, have let loose
demons they can’t control.
Unbacked by anything more than lies and deceptions, and bogus government
figures, what is happening to the Rouble today is the fate that lies ahead for
a far more important and widely used fiat currency deception, the dollar. Later
today we get the latest spin from America’s famous talking chair at the Fed. It
is doubtful that she will touch on America’s ruthless fiat currency war with
Russia. When the dollar suffers the Rouble’s fate, today’s Russian difficulties
will look like the good old days.
"When paper money systems begin to crack at the seams, the run to gold could be explosive."
Harry Browne
Russia risks Soviet-style collapse as rouble defence fails
'What is happening is a nightmare that we could not even have imagined a year ago,' says Russia's central bank
Russia has lost control of its
economy and may be forced to impose Soviet-style exchange controls after
"shock and awe" action by the central bank failed to stem the
collapse of the rouble.
“The situation is critical,” said
the central bank’s vice-chairman, Sergei Shvetsov. “What is happening is a
nightmare that we could not even have imagined a year ago."
The currency crashed to 100
against the euro in the biggest one-day drop since the default crisis in 1998
as capital flight gathered pace, despite a drastic rise in interest rates to
17pc intended to crush speculators and show resolve.
Yields on two-year Russian bonds
spiralled to 15.36pc, while credit default swaps are pricing in a one-third
chance of a sovereign default. The shares of Russia’s biggest lender, Sberbank,
fell 18pc.
Neil Shearing, from Capital
Economics, said the spectacular failure of the rate shock may bring matters to
a head. “If a rise of 650 basis points won’t do the job, we are near the end.
That means stringent capital controls,” he said.
Michal
Dybula, from BNP Paribas, said the rouble plunges risk setting off a systemic
bank run. “A large-scale run on deposits, once under way, would make capital
controls pretty much unavoidable,” he said, adding that the authorities may
start by forcing state-controlled companies to sell foreign assets and
repatriate funds
----Sergei
Lavrov, Russia's foreign minister, said it is now clear that the US aim is to
topple Mr Putin through "regime change" but vowed that the Russian
people would rise in defiance. “We have been in much worse situations in our
history, and every time we have got out of our fix much stronger,” he said.
More
Russia Mess Spreads to Hong Kong as Investors Dump Dim Sum Debt
Dec 17, 2014 4:45 AM GMT
Russia’s crisis is being
felt as far as Hong Kong’s Dim Sum debt market with the average price of
yuan-denominated notes slumping to the lowest in 15 months. Notes issued by Russian lenders including OAO Gazprombank and VTB Group have tumbled 1.65 percent on average in December as the ruble plunged to an all-time low, Bank of America Merrill Lynch’s Dim Sum Corporate Index shows. That pushed losses on Russian Dim Sum debt for the year to 2 percent, the only negative return out of 22 countries tracked by the gauge.
A 6.5 percentage-point rate increase by the central bank earlier this week -- the most since the 1998 global financial crisis -- has failed to stem the run on the ruble, which sank below 80 per dollar yesterday and is down 29 percent this month. A 48 percent drop in oil prices this half is robbing President Vladimir Putin of dollars to support the economy amid sanctions after its annexation of Crimea and conflict with Ukraine.
“Oil is the spark for the big correction in credit markets and Dim Sum bonds are no exception,” said Steve Wang, the head of fixed-income research in Hong Kong at BOCI Securities Ltd. “There’s no quick solution for the Russian crisis.”
More
Russia Crisis Hits Pimco Fund, Wipes Out Options
Dec 17, 2014 6:16 AM GMT
After the single worst day in Russia’s nine-month-old financial crisis, the fallout is
spreading across global markets. Pacific Investment Management Co. (PEBIX) is facing mounting losses on its Russian bond holdings; almost every bullish ruble option contract registered in the U.S. has been made worthless; and foreign-exchange brokers in New York and London told clients they’re no longer taking ruble trades. Sergey Shvetsov, a first deputy central bank governor, expressed astonishment at the scope of the collapse during a conference in Moscow.
----A Bloomberg gauge tracking the top developing nation currencies fell to the lowest since 2003, while the MSCI Emerging Market Index of shares slid 0.4 percent, bring its losses for this month to 9.7 percent. Indonesian policy makers have been propping up the rupiah after it sank to a 16-year low and the currency is down 0.4 percent today. Crude oil fell 2.1 percent in New York.
More
In oil news, the rout just gets worse. A massive wave of defaults and
lay-offs looms in America. Unlike the 1930s, this time round the US public is
armed and dangerous. Unlike the 1930s, this time round our western world is
locked in an ill thought out, Bush-Cheney-Rumsfeld-Obama generated war with
fanatical Islam.
If
all else fails, immortality can always be assured by spectacular error.
J. K.
Galbraith.
Oil Plunge Sets Stage for Energy Defaults: Credit Markets
Dec 16, 2014 11:58 PM GMT
Bond investors, already stung by the biggest losses from U.S. energy company
debt in six years, are facing more pain as the plunge in oil leads analysts to
predict defaults may more than double. While bond prices suggest traders see defaults rising to 5 percent to 6 percent, UBS AG said it may actually end up being as high 10 percent if prices of West Texas Intermediate crude approach $50 a barrel and stay there. Debt research firm CreditSights Inc. predicts a jump to 8 percent from 4 percent.
A borrowing binge by energy companies in recent years to finance new sources of oil has pushed a measure of leverage among the lowest-rated firms above its 2009 peak, according to CreditSights. The $203 billion of bonds outstanding have lost 14 percent this quarter and are poised for their worst performance since the end of 2008, Bank of America Merrill Lynch index data show. More than $40 billion of value already has been wiped out, Bloomberg index data show.
----Energy-sector bonds have delivered 14 percent losses to investors this quarter and are on track for the worst performance since the three months ended December 2008, Bank of America Merrill Lynch index data show.
The decline in the debt, which makes up 15 percent of the U.S. high-yield bond market, has pushed yields among all junk issues to 7.4 percent, up from a June low of 5.69 percent and the most in more than two years, the data show.
The yield premium investors demand to hold energy company debt rather than government securities has surged to 10.5 percentage points on average, past the 10-point limit considered distressed, according to data compiled by Bloomberg. About $300 billion of securities linked to 512 bonds across all industries trade as distressed, compared with about 150 six months ago.
More
Today, Christmas 2014 in the suicidal, snake bit,
EUSSR. In Spain, the crisis is officially “over.” Not for long, I suspect.
America’s currency attack on Russia is all too likely to bring crashing down
the EUSSR as collateral damage.
"Gold would have value if for no other reason than that it enables a citizen to fashion his financial escape from the state."
William F. Rickenbacker
Weidmann Rejects Sovereign-Bond Buying Even If Deflation Emerges
Dec 16, 2014 11:00 AM GMT
Jens Weidmann said there’s no need for the European Central Bank to expand
monetary stimulus, and argued that sovereign-debt purchases aren’t a solution
even if slumping oil prices cause deflation. “Such a development initially requires no monetary policy response, as long as no second round effects are to be seen,” the Bundesbank president said at an event late Monday in Frankfurt. “There’s a whole row of economic reasons that speak against government-bond purchases, even before you consider the legal question of whether they’re compatible with the ban on monetary financing.”
The acceleration of this year’s oil-price slump has sharpened the debate in the ECB over further policy measures to fend off deflation, with President Mario Draghi priming investors for more asset purchases as soon as next quarter. Weidmann, and up to five other Governing Council members, are against pre-announcing government-bond buying before the effects of existing programs can be judged.
More
Spanish rent changes ‘could close 20,000 small businesses’
Abolition of rent controls this month have prompted some
landlords to increase fees by tens of thousands of euros
Monday 15 December 2014 17.36 GMT
Up to 20,000 small Spanish
businesses could be forced to close when rent controls are abolished at the end
of this month, according to the self-employed workers union. Many of the
closures will be emblematic shops that shape the urban landscape in cities such
as Madrid, Granada and Barcelona.
The Camisería Hernando has been
in business since 1857 and has occupied the same shop on Madrid’s Gran Vía for
50 years but is closing after the rent shot up from €3,000 to €30,000 a month.
Barcelona has already lost a toy
shop and a secondhand bookstore that have been a feature of the old part of the
city for more than a century. Both premises have been occupied by retail
clothing chains. Other gems such as the modernista Monge stamp shop and the
Quiles grocery are also under threat as the city succumbs to an influx of chain
stores.
Local government officials have
refused to intervene to preserve the city’s heritage but local artists and
intellectuals are taking the case of Monge to court. While some landlords have
been prepared to negotiate affordable rent hikes, many shops are in buildings
owned by banks and funds that simply notify the shopkeepers of the impending
rise.
An estimated 80% of Spanish
companies are family owned and they generate about 70% of GDP.
La Dolceria de La Colmena has
been satisfying Barcelona’s sweet tooth since 1849. Its owner, Josep María
Roig, is also president of the Barcelona Association of Emblematic
Establishments, and has been able to survive a rent rise from €1,100 to €7,500
because, as well as the shop, his business supplies other outlets in the city.
“About 60% of the 200,000
affected businesses have been able to negotiate a rise of around 35%,” César
García, of the self-employed workers union, said. “But most of the rest have
received a letter telling them the rent is going up by thousands of euros and that
it’s not negotiable.”
“We’re closing after 72 years,”
said Susana Esnarriega, owner of Así, a doll shop on Madrid’s Gran Via. “The
landlord is giving us till Epiphany to get out but he hasn’t even made us an
offer.”
Unemployment in Spain is running
at about 24%. Mariano Rajoy, the prime minister, said on Monday that “the
crisis is over, but not its consequences.”
German Economy at Risk of Downturn as Growth Seen Weak at Best
Dec
16, 2014 8:30 AM GMT
German private-sector growth slowed to the weakest in 18 months in December,
increasing the risk that a soft phase will turn into a more pronounced economic
downturn. Markit Economics said a Purchasing Managers Index for manufacturing and services fell to 51.4 this month from 51.7 in November. Economists forecast an increase to 52.3. A factory gauge rose to 51.2 from 49.5, crossing the 50 mark that divides expansion from contraction, while a measure for services fell to 51.4 from 52.1.
While German data showed this month that the economy, Europe’s largest, had a modest start into the last quarter of the year, the Bundesbank has pointed to signs that growth could strengthen.
----The German economy narrowly escaped recession in the third quarter, recording growth of 0.1 percent after shrinking by the same extent in the April-June period. Economists predict growth of 0.2 percent in the final three months of the year.
Companies signaled a second consecutive monthly decline in new business in December, citing a lack of investment and increased competition, according to today’s report.
In France, the manufacturing PMI unexpectedly declined to 47.9 from 48.4. Economists predicted an increase to 48.6.
More
Europe Car Sales Rise at Slowest Rate in Year on Economy
Dec 16, 2014 7:41 AM GMT
European car sales increased at the slowest pace in a year in November as
waning economic growth discouraged customers from making purchases, prompting
automakers including Fiat Chrysler Automobiles NV (FCA) to cut prices. Registrations rose 1.2 percent to 989,457 vehicles last month from 977,607 a year earlier, the Brussels-based European Automobile Manufacturers’ Association, or ACEA, said today. Eleven-month sales gained 5.5 percent to 12 million cars.
“It’s not very dynamic,” Thomas Besson, a Paris-based auto analyst at Kepler Cheuvreux, said by phone. “We’ll probably have growth of around 5 percent in 2014, which is higher than what was expected at the start of the year, but it’s no party time.”
A slowing European economy has taken the steam out of a rebound in the region’s auto market, which fell for six years to a two-decade low in 2013. The European Central Bank earlier this month reduced its growth forecast for the countries using the euro, and ECB President Mario Draghi said high unemployment is holding back a recovery.
That led car dealers in Germany, Europe’s biggest economy, to deepen price cuts last month, with FCA’s Italian brand Fiat offering 18 percent average discounts, according to trade magazine Autohaus PulsSchlag. The average industrywide incentive jumped to 12.7 percent off the sticker price from 11.8 percent in October.
More
http://www.bloomberg.com/news/2014-12-16/europe-car-sales-rise-at-slowest-rate-in-year-on-economy.html
“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
At the Comex silver
depositories Tuesday final figures were: Registered 64.59 Moz, Eligible 110.97
Moz, Total 175.56 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
No crooks and banksters today, just a rare good
news story from France.
The world's most valuable barn find: 60 rare cars untouched for 50 years
By Mike Hanlon December 14, 2014Proof that priceless barn finds are still possible emerged from France this week when elite auction house Artcurial disclosed it had discovered the automotive equivalent of Tutankhamun’s tomb.
Earlier this year, Artcurial's
Matthieu Lamoure and Pierre Novikoff came across the remarkable treasure trove
of rare automobiles on a provincial farm in the West of France.
Novikoff had fielded a phone call
from the representative of a deceased estate, which in turn had been inherited
by the deceased from his father a decade prior. Several children had been
bequeathed the estate, which included a collection of old cars that had lain
untouched for nearly half a century. In an effort to discover the value of the
cars, they called Artcurial, best known as France's leading auctioneer of art
and antiques.
"On the phone, I gathered
from the information I was given, that this could turn out to be something
important," said Novikoff (above left), a specialist in the automotive
side of Artcurial's business. "Without realizing the scale, I spoke to
Matthieu immediately and we arranged to go there, to find out what it
was."
Lamoure takes up the story:
"On entering the gates of this property, we had no idea what we would
find. We had to go in through the gardens at the rear of the property, to get a
first look."
"Across three hectares, we
could see different makeshift structures. Low shelters covered with corrugated
iron. From there, we realised that this was something big. We still didn’t know
what we were looking at, but could make out coachwork, weathered by time and
the elements. Some modern shapes and others that were older."
"We continued our
exploration at a second site, at the bottom of a field, then in one of the
property’s outbuildings, an old barn that had been converted into an improvised
garage."
As Lamoure and Novikoff moved
around the farm, they found more and more cars under makeshift structures,
often open to the elements and almost all of them were rare ... extremely rare.
As the Managing Director of Artcurial's automotive department, Lamoure has the acuity of immense collectible car knowledge, and as the pair of historic car aficionados walked around the farm, they recognized they had found something very special.
"You go into this profession for discoveries like this ... this really is a treasure ... a once-in-a-lifetime discovery," said Lamoure. “When we arrived here, we found ourselves overcome with emotion. Probably much like Lord Carrington and Howard Carter, on being the first person for centuries to enter Tutankhamun’s tomb.”
As the pair explored the site, they came across significant models from many of the legendary marques in automotive history: Bugatti, Hispano-Suiza, Talbot-Lago, Panhard-Levassor, Maserati, Ferrari, Delahaye, Delage. Along with the famous manufacturers, many of the bodies were built by the most celebrated coachbuilders of the period, such as Million & Guiet, Frua, Chapron and Saoutchik. No less than three Saoutchik-bodied Talbot Lago T26s were found among the sheds, including a very rare Grand Sport Aérodynamique and a Talbot Lago T26 Cabriolet once owned by King Farouk.
More
http://www.gizmag.com/worlds-most-valuable-barnfind/35178/?utm_source=Gizmag+Subscribers&utm_campaign=9e994d9090-UA-2235360-4&utm_medium=email&utm_term=0_65b67362bd-9e994d9090-90625829
“The
U.S. government has a technology, called a printing press (or, today, its
electronic equivalent), that allows it to produce as many U.S. dollars as it
wishes at essentially no cost…We conclude that under a paper-money system, a
determined government can always generate higher spending and hence positive
inflation.”
Dr.
Ben Bernanke 2001.
The monthly Coppock Indicators finished November.
DJIA: +136 Down. NASDAQ: +262 Down. SP500: +204 Down.
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