Friday, 27 February 2015

The Wobble Intensifies.

Baltic Dry Index. 533 +09    Brent Crude 60.82

LIR Gold Target in 2019: $30,000.  Revised due to QE programs.

Again, it may be said that we need not be alarmed at the magnitude of our credit system or at its refinement, for that we have learned by experience the way of controlling it, and always manage it with discretion. But we do not always manage it with discretion. There is the astounding instance of Overend, Gurney, and Co. to the contrary. Ten years ago that house stood next to the Bank of England in the City of London; it was better known abroad than any similar firm—known, perhaps, better than any purely English firm. The partners had great estates, which had mostly been made in the business. They still derived an immense income from it. Yet in six years they lost all their own wealth, sold the business to the company, and then lost a large part of the company's capital. And these losses were made in a manner so reckless and so foolish, that one would think a child who had lent money in the City of London would have lent it better.  After this example, we must not confide too surely in long-established credit, or in firmly-rooted traditions of business. We must examine the system on which these great masses of money are manipulated, and assure ourselves that it is safe and right.

Walter Bagehot. Lombard Street. 1873

The global wobble intensifies, from Australia, to Brazil, to China, to Europe, to Japan, to anywhere outside of the central bankster’s QE and ZIRP fuelled asset bubble. In my humble unimportant opinion, about the only thing left holding up the central banksters bubble, is the prospect that from next week the ECB is about to unleash QE Constrained, and join in the global currency wars to the bottom. 2015 is turning into a year without precedent. The chances of it all turning out well are close to nil. In the real world, we seem to be heading back into recession.

China's yuan slumps on growth worries

Published: Feb 26, 2015 11:40 p.m. ET By AnjaniTrivedi
China's yuan fell to its weakest level against the dollar in more than two years on Friday, extending a decline driven by the prospect of a slowdown in the world's second-largest economy.

Investors have been selling the yuan in recent months amid a flurry of disappointing economic indicators out of China, which have raised expectations that Beijing could devalue the tightly controlled currency to stoke growth. Meanwhile, money managers see a steady recovery and higher short-term interest rates in the U.S., bolstering the allure of the dollar.

Recently, the yuan traded as weak as 6.2699 against the dollar, the weakest level since October 2012, compared with 6.2589 on Thursday. A higher number against the dollar means a weaker yuan.

China's central bank helped guide the yuan lower on Friday. The People's Bank of China set the daily reference rate at 6.1475 to the dollar, the lowest fix since November 2014. The PBOC allows the yuan to trade 2% above or below the daily reference rate. In recent days, the yuan has flirted with the lower limit as pressure mounts.

On Thursday, the yuan came within the closest point of the lower edge of the trading band since March 2014, even as the PBOC has kept the official rate relatively steady before Friday.

China's Real Property Problem

As China slows down, leaders in Beijing are understandably turning to one of their favored growth stabilizers: housing. A record decline in new-home prices in January has, as my Bloomberg News colleagues reported this week, prompted Chinese officials to contemplate additional stimulus measures, including reducing the required down payments on second homes and eliminating sales tax after only two years of ownership instead of five.

And why not? To this point, various price-boosting schemes have helped China ward off the kind of downturn that befell America in the late 2000s and Japan two decades earlier. Unfortunately, though, they’re no longer likely to have the same impact today.

That’s because of a little-recognized shift in the nature of China’s property bust -- from the demand side to the supply side. As research done by Rosealea Yao of Gavekal Dragonomics shows, China’s real problem is that new construction is evaporating no matter what sales and prices do. That means the knock-on effects of additional stimulus -- on cement, steel and so on -- will necessarily be limited.

"This is a supply-side correction in property," Yao writes in a new report. "While housing sales will likely improve this year, construction and all the industrial activity that depends on it will not. Therefore an upturn in housing sales will not deliver as much of a boost to growth."

Oil's drop chills Asian stocks, inflation data boosts dollar

By Shinichi Saoshiro TOKYO Fri Feb 27, 2015 12:43am EST
(Reuters) - Asian shares were mostly lower on Friday as a sharp overnight pullback in crude oil prices dampened risk appetite, while the dollar was firm after upbeat U.S. data tilted expectations back toward an early interest rate hike by the Federal Reserve.

Strong factory output data and a weaker yen pushed Tokyo's Nikkei .N225 to a fresh 15-year high but the market was last flat as profit taking kicked in.

Elsewhere, South Korean shares fell after a seven-day rally and Malaysian and Thai stocks declined modestly, though markets in China and Australia gained.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.1 percent after advancing to a five-month high on Wednesday.

Spreadbetters forecast Britain's FTSE .FTSE, France's CAC .FCHI and Germany's DAX .GDAXI, which hit a new record high overnight, to open slightly lower after recent rallies.

----Dollar bulls, disappointed earlier this week by perceived dovish signals from Fed Chair Janet Yellen, took heart again after data released on Thursday showed U.S. core inflation rose more than expected.

Robust U.S. durable goods orders also helped, with both sets of data driving Treasury yields higher and supporting the dollar.

Investors are now waiting on revised fourth quarter U.S. gross domestic product data due later on Friday for another health check of the world's largest economy.

Economists polled by Reuters expected U.S. growth in the fourth quarter to be revised down to 2.1 percent from a preliminary 2.6 percent. ECONUS

In continental European news, Germany continues spewing hate towards the hapless Greek serfs. The EUSSR is about anything but brotherly love. Will the Greeks breakout of Colditz this weekend? Below, Germany shows continental Europe who’s boss.

You will get nothing unless you honour our deal, Germany warns Greece

Germany expected to approve new eurozone bail-out deal for Greece on Friday

By Justin Huggler, in Berlin 9:29PM GMT 26 Feb 2015
Germany is expected to approve the new eurozone bail-out deal for Greece in a parliamentary vote on Friday but has warned that Athens will receive nothing unless it honours its commitments under the deal.

Wolfgang Schaeuble, the German finance minister, said he was “stunned” after his Greek counterpart, Yanis Varoufakis, spoke again of a debt restructuring on Greek radio, and the Athens government indicated it would block plans to privatise strategic assets.

“If the Greeks violate the agreements, then they have become obsolete," a visibly angry Mr Schaeuble said at a meeting to persuade German MPs to support the deal in today’s vote. The meeting in Berlin came after Germany’s biggest-selling newspaper launched a campaign against the Greece deal, printing “NEIN!” across an entire inside page, and encouraging readers to take selfies holding the page up and send them in for publication.

“No more billions for greedy Greeks,” the newspaper added, in only slightly smaller print. The page was printed in the blue and white of the Greek flag, instead of Bild’s more usual red and white.

Earlier, Mr Varoufakis said in an interview with Charlie Hebdo: “If you think you would do well to bring down progressive governments like our then prepare for the worst."

We close with David Stockman on the farce of “Fed Week” just past. Our central banksters are out of ammo, out of ideas and out of luck.

The Pathetic ‘Talk Therapy’ Of Janet Yellen

by David Stockman • 
What in god’s name does Janet Yellen think she is doing? Just a few weeks ago she established the ridiculous Fedspeak convention that “patient”  means money market rates will not rise from the zero bound for at least two meetings. Now she has modified that message into “not exactly”.

As her Wall Street Journal megaphone, Jon Hilsenrath, was quick to amplify:

Ms.. Yellen signaled the Fed is moving toward dropping the reference to being patient from its statement, but sought to dispel the notion it would mean rate increases were certain or imminent.

“It is important to emphasize that a modification of the [interest-rate] guidance should not be read as indicating that the [Fed] will necessarily increase the target rate in a couple of meetings,” Ms.. Yellen told the Senate panel.

So two meetings is no longer two meetings. That’s worse than Greenspan’s double talk at his worst, and here’s why. It’s all make believe!

After 74 months of ZIRP, a hairline increase in the money market rate to 25 bps or even 100 bps will have absolutely no impact on the main street economy—–nor on whether the “in-coming” data deviates up or down by a few decimal points from 5.7% on the U-3 unemployment rate or 1.7% on the CPI.

The Fed is absolutely incapable of impacting the short-run ticks on its so-called inflation and unemployment “mandates” because its “credit channel” of monetary transmission is broken and done. The household sector is still saturated by peak debt and the ZIRP fueled runaway stock market rewards corporate executives for share buybacks and M&A deals, not investment in productive assets—even with borrowed money.

So there is absolutely no reason to peg interest rates at freakishly low levels. It has manifestly not enabled household to supplement spending from their tepidly growing incomes by means of ratcheting up their leverage ratios. That Fed trick worked for about 45 years until households used up their balance sheet runway in 2007 and thereupon smacked straight into “peak debt”.

At the Comex silver depositories Thursday final figures were: Registered 67.51 Moz, Eligible 109.38 Moz, Total 176.89 Moz.  

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

Today, more on the American War Party’s botched coup in Kiev. By now, Putin was to be history, Russia in chaos, being sliced and diced for western companies seeking to exploit EurAsia’s resources. China was to be isolated. Belarus seeking to join the Ukraine in the EU and NATO.

Instead what we have is a Ukrainian Quisling President making war on his own people for the benefit of a foreign power. Ukraine’s economy and currency in collapse. It’s army and neo-fascist irregulars routed. Free speech suppressed, journalists imprisoned, hundreds of thousands fleeing Kiev imposed conscription. Ukraine’s gold reserves “disappeared” into America, possibly part delivered to Holland and Germany. Inflation bordering on hyperinflation. Western Ukraine all but a failed state.

Below, for once mainstream media drops most of the War Party’s propaganda.

Hybrid war: The real reason fighting stopped in Ukraine – for now

By Fiona Hill February 26, 2015
President Vladimir Putin understands how insurgencies work better than any other Russian leader. We are watching this play out right now in Ukraine.

Before Putin took power, Moscow had long struggled to suppress rebel movements. In the 1980s, for example, the Soviet Union grappled with the Muslim mujahedeen in Afghanistan. Moscow propped up the beleaguered Kabul government with an invasion and occupation — to little avail. After 10 years of grueling conflict, Moscow withdrew, just as the Soviet Union fell apart. A few years later, rebels inflicted another serious blow against the Russian military, in the Russian province of Chechnya. Chechen militants launched attacks deep into Russia. The Kremlin again withdrew its forces and essentially sued for peace.

Until Putin took the helm.

Putin succeeded where others had failed because he was skilled at fighting dirty. As a former KGB operative, he fused together intelligence and military measures. In Chechnya he relentlessly pursued the rebels, often using undercover operations that adopted terrorist tactics, until one Chechen leader switched sides and helped him defeat the rebels.

Now in Ukraine, Putin has turned the tables. He is with the insurgents, not the government. Putin is to Kiev what the mujahedeen and the Chechens were to Kabul and Moscow, respectively. Given Russia’s own simmering national minority troubles and territorial disputes, the Russian president is taking a huge risk in backing an armed rebellion in a neighboring country.

But the risk is well calculated because the stakes are high. Putin has a great deal riding on this.
He firmly believes, as he has laid out in many statements, that the battle for the Donbass region of eastern Ukraine is a proxy war with the West. The United States and Europe seek to weaken Russia, Putin’s argument goes, by pulling a key Russian ally, Ukraine, into their sphere of influence. Putin’s goal is to deny Kiev the chance of associating with the European Union and the North Atlantic Treaty Organization.

In Putin’s view, the West stoked regime change in Kiev in February 2014 for the same reasons that the United States supported the mujahedeen in Afghanistan in the 1980s — to undermine Moscow’s authority throughout the region. Putin also asserts that the West aided and abetted the Chechens throughout the 1990s and into the 2000s to destabilize the Russian Federation. So according to Putin’s logic, Afghanistan was the West’s proxy war with the Soviet Union. Ukraine is the West’s proxy war with Russia.

This being a proxy war, Putin is intent on helping the side that best serves Russia’s interests. In this case, that side is the “armed formations,” as the February Minsk agreement describes them,  of Ukraine’s Donetsk and Lugansk regions.

----Having fought off an insurgency himself, Putin knows a thing or two about insurgents’ methods. Putin and the Russian military have incorporated these tactics into a larger strategy of 21st-century hybrid war. Valery Gerasimov, chief of staff of the Russian armed forces, rolled this out in a January 2013 speech. He announced the Russian military would engage in a “new kind of war” fought with “nonmilitary methods to achieve political and strategic goals.”

These methods, Gerasimov explained, would involve fomenting popular protests, using covert military measures and deploying special operations forces, often under the guise of peacekeeping or crisis management. Such tactics, Gerasimov insisted, had been used by the United States for decades. Now Russia would fight back in the same way.

----So where are we now in this giant war game? On Feb. 24, we appeared to enter what Moscow might term a “political-diplomatic phase.” This was the first full day without casualties since the Feb. 12 Minsk agreement. As Gerasimov asserted in his speeches, the goal of an asymmetric hybrid war is to achieve objectives without launching a full-blown conventional military war. Hybrid war has many weapons and many ways of fighting.

Deep mistrust threatens Ukraine's shaky ceasefire

Rebel soldiers have one thing in common with rank-and-file Ukrainians: an almost complete lack of faith in their enemy’s willingness to fulfil the Minsk peace agreement

From the narrow loop hole of a machine gun nest, a rebel fighter squinted towards no-man’s land and listened for the whump of artillery and the intermittent crackle of automatic weapon fire.

From these trenches, the war in eastern Ukraine is seen in almost exact mirror image to that in the west: it is the Ukrainians on the other side who started the war; it is they who are still violating the ceasefire; and it is the Americans, not the Russians, who are stoking the conflict by arming proxies.

But rebel soldiers here do have one thing in common with rank-and-file Ukrainians a few hundred meters away: an almost complete lack of faith in their enemy’s willingness to fulfil the Minsk peace agreement.

“The Ukrainians will not keep to the Minsk agreement, we are certain of it - Poroshenko does not want peace,” said the separatist commander in charge of this stretch of the front line.

It is that deep mistrust that threatens the success of what Angela Merekl called the “last chance” to end the war.

----But as far as the men of the ninth company are concerned, it is the Ukrainians getting foreign help, and it is America, not Russia, that is arming proxies.

“Look at that,” said Zhora, presenting the nose cone of some spent ordnance that he said had hit a nearby house. “It bears latin lettering. There is no way that is from Ukrainian or Russian stocks. So they are definitely getting arms from abroad,” he said. “We’ve seen them with American weapons - M-16 rifles. Where do you think they got that?”

Another weekend, and nothing’s really changed from last weekend. The never ending Greek crisis is never ending. The never ending moslem war of atrocity in Africa and the middle east just grows. Outside of the central bankster fiat fulled bubble the real world seems headed back towards recession. Politics in Britain and Europe is headed for a great storm. In Britain’s case now just over two months away from the general election. Time to enjoy the early approach of spring here in southern England. Have a great weekend everyone.

A large Bank is exactly the place where a vain and shallow person in authority, if he be a man of gravity and method, as such men often are, may do infinite evil in no long time, and before he is detected. If he is lucky enough to begin at a time of expansion in trade, he is nearly sure not to be found out till the time of contraction has arrived, and then very large figures will be required to reckon the evil he has done.

Walter Bagehot. Lombard Street. 1873

The monthly Coppock Indicators finished January

DJIA: +124 Down. NASDAQ: +220 Down. SP500: +178 Down.  

Thursday, 26 February 2015


Baltic Dry Index. 524 +08    Brent Crude 61.63

LIR Gold Target in 2019: $30,000.  Revised due to QE programs.

"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

Tired of writing about the fall of Greece, the wealth destroying, dying EUSSR, the Great (and increasing) Disconnect between the real world and central bankster fuelled global stock markets, today we focus on China where if it wasn’t for red flags China would have no flags at all.

Below, a slowing economy threatens to sink all boats. Yiwu seeks out new customers in Madrid.

China Drums Up Pro-Growth Moves as Disinflation Seen Deepening

3:24 AM WET February 26, 2015
(Bloomberg) -- China’s Premier called for more active fiscal policy and a central bank publication said additional monetary easing is needed, signaling more support is on the way for the world’s second-biggest economy.

Li Keqiang’s call to aid growth accompanied an announcement of tax breaks for small business, according to a government statement summarizing a cabinet meeting yesterday. Meanwhile, the central bank should cut bank’s required reserve ratios further to deal with deflation risks, said an article in the People’s Bank of China’s newspaper published today.

“To fend off possible deflation, the central bank should continue to adjust tools, from required reserve ratios and benchmark interest rates, at the right time,” the Financial News article said.

Highlighting the scope for further monetary easing, consumer inflation will moderate to 1.3 percent in the first quarter and 1.7 percent in full-year 2015, the latest Bloomberg News survey of economists showed. Further stimulus would see China joining Europe and Japan in accelerating pro-growth policies.

China's top court says no to West's model of judicial independence

BEIJING Wed Feb 25, 2015 10:35pm EST
(Reuters) - China's top court has urged officials from the ruling Communist Party to shun Western-style judicial independence and reject "erroneous Western thought", state media said on
Thursday, as controls over the media, dissent and the Internet are tightened.

The comments by China's Supreme Court, Beijing's latest attack on Western ideology, are also another sign of President Xi Jinping's conservative political agenda.

The party has signaled that it will not embark on political reform, despite hopes that Xi, the son of a former liberal-minded vice premier, might relax tight central controls.

A meeting of the Supreme Court's party committee on Wednesday said China would draw boundaries with the West's notion of "judicial independence" and "separation of powers", the state-run China News Service said.

"Resolutely resist the influence of the West's erroneous thought and mistaken viewpoints," it said on its website, citing the meeting.

China's top judge, Zhou Qiang, "stressed the need to unswervingly take the road of socialism with Chinese characteristics", it said, reiterating Beijing's stance that it is the best way to govern the world's most populous nation.

The party has long railed against Western values, including concepts like multi-party democracy and universal human rights.

In other China news, the world’s longest train ride links Madrid Spain, with Yiwu China. “Yiwu is also famous for being the centre of the world’s illegal counterfeiting industry.”  Great news for us cash strapped Brits. It’s a lot cheaper and quicker to get to Madrid for counterfeits, than to get to Yiwu China. Still, with only 82 containers, that’s not a lot of counterfeits for all of continental Europe.

China to Spain cargo train: Successful first 16,156-mile round trip on world's longest railway brings promise of increased trade

Tuesday 24 February 2015
The first train to complete a journey on the world’s longest railway line, connecting Spain and China, has returned home. The 16,156-mile round trip on the new Yixin’ou cargo line through China, Kazakhstan, Belarus, Poland, Germany, France and Spain took four months. The train arrived laden with cheap goods and returned to China with expensive olive oil.

The 82-container cargo train began its journey in November in the eastern Chinese city of Yiwu. Packed full of Christmas trinkets and decorations, stationery and craft products, it arrived in Madrid on 14 December, in time for the thousands of small shops and Christmas markets to stock up on the cheap Chinese goods.

Before the Yixin’ou line was opened, goods traded between Europe and China depended on inefficient sea or air transport, meaning higher prices in Europe.

“The cargo train will boost economic exchange between Yiwu, the world’s largest small commodity market, and Madrid, Europe’s largest small commodity market,” said Li Huihuan, manager of Yiwu CF International Logistics, which operates the train.

The train returned to Yiwu last weekend, carrying olive oil and other Spanish-made goods that are becoming popular in an increasingly affluent China.

The line is 450 miles longer than the previous record holder, the Trans-Siberian Railway, which connects Vladivostok in the east of Russia, to Moscow. State media in Russia greeted the opening of the Yixin’ou by pointing out that containers on the new line must be changed three times during the journey from China to Spain, because tracks in the seven countries are of different gauges.

Nonetheless, the line’s supporters hope that it will boost trade between the EU and China, which already stands at more than €1bn a day. Traders at both ends of the new track point out that the train provides a vastly faster service than seaborne goods and is substantially cheaper than air cargo.

Yiwu, a city of 1.2 million, is a booming example of modern China. The city’s small commodities market is growing at an exponential rate and in 2014 combined imports and exports were valued at $23.7bn, a 28.6 per cent increase on the previous 12 months.

According to the Chinese-state run news agency, Xinhua, 60 per cent of the world’s Christmas trinkets are originally bought and sold in Yiwu’s annual Christmas market. While traders in Madrid’s Plaza Mayor and elsewhere will welcome the opening of the Yixin’ou railway, which should see the prices they pay for nativity scenes and Christmas lights fall, Yiwu is also famous for being the centre of the world’s illegal counterfeiting industry.

Then again, maybe more on Greece. Is Syriza doing another u-turn again? Will the new drachma arrive on March 1?

Greece to stop privatisations as Syriza faces backlash on deal

The Syriza leadership risks falling between two stools as it tries chip away at the austerity regime without triggering Greece's ejection from the euro

Greece's Left-wing Syriza government has vowed to block plans to privatise strategic assets and called for sweeping changes to past deals, risking a fresh clash with the eurozone's creditor powers just days after a tense deal in Brussels.

"We will cancel the privatisation of the Piraeus Port," said George Stathakis, the economy minister. "It will remain permanently under state majority holding. There is no good reason to turn it into a private monopoly, as we made clear from the first day.

"The deal for the sale of the Greek airports will have to be drastically revised. It all goes to one company. There is no way it will get through the Greek parliament."

The new energy minister, Panagiotis Lafazanis, warned that Syriza will not sell the Greek state's 51pc holding of the electricity utility PPC, power grid ADMIE or state gas company DEPA. "There will be no energy privatisations," he said.

It is already becoming clear that Syriza's leadership does not accept a strict, minimalist reading of the Eurogroup text, and is relying on quiet assurances from Brussels and Paris that it has friends in the EU.

The defiant signals are making it harder for the German government to dampen criticism over the deal in the Bundestag before it votes on Friday. "Greece will not get a single penny until it complies with its obligations," said Germany's finance minister, Wolfgang Schauble.

Both the International Monetary Fund and the European Central Bank say the deal is too loose to pin down Syriza, allowing it to unpick elements of the EU-IMF Troika Memorandum. Mr Stathakis gave strong hints that this is indeed Syriza's intention. "The Eurogroup meetings went very well," he said, with a conspiratorial smile.

Yet the Syriza leadership risks falling between two stools as it tries chip away at the austerity regime without triggering Greece's ejection from the euro. A closed-door crisis meeting of the party at the Greek parliament erupted in an emotional storm, running for 12 hours as the group's Left Platform voiced their anger over the retreat in Brussels.

---- Diplomats in Athens have some sympathy for the Syriza view, confirming that many of the past deals were corrupt or tailored to the interests of powerful oligarchs. "These people 'own' the energy industry. The property sales and airports are a stitch-up, all going to the same small circle," said one veteran.

"We know exactly who the biggest smuggler of shipping fuel is, and why nothing has been done. He is very close to the previous government. Syriza are not part of this system and don't have 'cheques to pay back'."

"In economics, hope and faith coexist with great scientific pretension."

J. K. Galbraith.

At the Comex silver depositories Wednesday final figures were: Registered 67.51 Moz, Eligible 109.38 Moz, Total 176.89 Moz.  

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

With America’s NSA backdooring US technology products from Apple to Cisco to Google, to spy on everyone and everything under the sun, unsurprisingly it’s generated a reluctance to buy American technology products. Below, China leads the way.

Exclusive: China drops leading tech brands for state purchases

By Paul Carsten BEIJING Wed Feb 25, 2015 11:26pm EST
(Reuters) - China has dropped some of the world's leading technology brands from its approved state purchase lists, while approving thousands more locally made products, in what some say is a response to revelations of widespread Western cybersurveillance.

Others put the shift down to a protectionist impulse to shield China's domestic technology industry from competition.

Chief casualty is U.S. network equipment maker Cisco Systems Inc (CSCO.O), which in 2012 counted 60 products on the Central Government Procurement Center's (CGPC) list, but by late 2014 had none, a Reuters analysis of official data shows.

Smartphone and PC maker Apple Inc (AAPL.O) has also been dropped over the period, along with Intel Corp's (INTC.O) security software firm McAfee and network and server software firm Citrix Systems (CTXS.O).

The number of products on the list, which covers regular spending by central ministries, jumped by more than 2,000 in two years to just under 5,000, but the increase is almost entirely due to local makers.

The number of approved foreign tech brands fell by a third, while less than half of those with security-related products survived the cull.

An official at the procurement agency said there were many reasons why local makers might be preferred, including sheer weight of numbers and the fact that domestic security technology firms offered more product guarantees than overseas rivals.

China's change of tack coincided with leaks by former U.S. National Security Agency (NSA) contractor Edward Snowden in mid-2013 that exposed several global surveillance programs, many of them run by the NSA with the cooperation of telecom companies and European governments.

"The Snowden incident, it's become a real concern, especially for top leaders," said Tu Xinquan, Associate Director of the China Institute of WTO Studies at the University of International Business and Economics in Beijing. "In some sense the American government has some responsibility for that; (China's) concerns have some legitimacy."

Cybersecurity has been a significant irritant in U.S.-China ties, with both sides accusing the other of abuses.

"With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people."

F. A. von Hayek

The monthly Coppock Indicators finished January

DJIA: +124 Down. NASDAQ: +220 Down. SP500: +178 Down.