Baltic Dry Index. 513 +02 Brent Crude 60.32
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
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.
Last Friday, democracy died in Europe. Greece gave
in and buckled before German threats of instant bankruptcy and exit from the
dying, wealth destroying euro. In return for a pittance and an extra four
months of German cash and austerity, Greece must today submit its plan to the
troika for continued austerity and poverty. Tomorrow, Germany will announce if
they accept it, and if so, how much extra cash will be extended to Greece to
add to their unrepayable mountain of debt. Assuming that all goes to plan, the
hapless Greeks get to stumble forward to June. Stock markets get to rally
upwards to June, fuelled in 5 days time by the ECB’s attempt at QE constrained
and lite. But will the Trotsky Greek government deliver? By the end of today we
will know.
Stay long at the maximum, fully paid up physical
gold and silver. At best, the loveless, wealth destroying marriage of the EUSSR,
will stagger on until either Russian sanctions, or France or Italy cause it to
collapse. At worst, Greece will use the four month pause to plan its default
and exit from German debt slavery. The Great Nixonian Error of fiat money has
come to this.
"Sooner or later both the Greek population and international creditors will tire of fighting a losing battle, leading to a break-up of the currency union as Greece pulls out, probably followed by other countries"
Douglas McWilliams, chief executive of the Centre of Economics and Business Research.
Ten days that shook the euro; how Greece came to the brink
(Reuters) - The "rock star" took on the rock. And the rock won.Germany's Wolfgang Schaeuble, the "immovable object" in the words of one economist, stopped Greece's charismatic new finance minister Yanis Varoufakis in his tracks, forcing Athens to extend a bailout program on Friday on terms its government was just elected to get out of.
It was not just German opposition. The new Greek found itself without a single firm ally among 18 euro zone peers in its drive to reverse austerity and renegotiate its debt pile.
The 10 days it took to strike a
deal featured a shambolic round of U-turns, leaked drafts and personal
slights
while panicked savers withdrew money and pushed Greek banks close to failure,
forcing Prime Minister Alexis Tsipras to step in over Varoufakis's head.
More than that, the confusion
officials recounted from behind the scenes left mutual trust in such tatters
that it casts doubt on whether the four-month bailout extension will lead to an
agreement over how to keep Athens solvent.
So short had goodwill become that
when Varoufakis sent a letter on Thursday requesting an extension to the
bailout he had long resisted, in language that to non-lawyers sounded close to
total capitulation, German negotiators quickly shot it down as a "Trojan
horse", worded to wriggle out of conditions.
The principal actors played down
personal animosities during the talks; Varoufakis took pains to apologize to
Schaeuble for a Greek newspaper cartoon that depicted the 72-year-old former
tax lawyer as a Nazi demanding to boil Greeks down for soap.
But a series of trips to Brussels
to hear about the evils of austerity from the casually dressed left-wing
academic blogger - "a bit of a rock star" in the words of Ireland's
minister - stretched patience thin.
When Varoufakis, 53, strolled in an hour late with a cameraman in tow to last Monday's finance ministerial meeting, witnesses said Schaeuble's scowl and sharp words from Dutch chairman Jeroen Dijsselbloem set the tone.
At a previous meeting five days earlier, the wheelchair-bound German waited in an underground car park while the Greek minister phoned Tsipras for approval after Varoufakis had struck a deal that the other 18 thought was final.
Still believing an agreement was in the bag, Schaeuble flew home to Berlin, only to find on landing in the early hours that the Greeks had changed their minds and they were back at square one.
Even those who fretted Berlin was pushing Tsipras too far to renege on campaign promises concede the novice government in Athens did itself no favor by demanding World War Two reparations and not giving a clear account of its plans.
In a heresy against the "no Grexit" credo Schaeuble intoned in public, Maltese Finance Minister Edward Scicluna said of the Germans last week: "They’ve now reached a point where they will tell Greece 'if you really want to leave, leave'."
More
Greece readies list of reforms to dodge bankruptcy
Yanis Varoufakis says a bail-out extension will be "dead and buried" if international creditors do not ratify Athens' proposals
The Greek government will put
forward plans to root out tax evasion and overhaul the country's labour laws in
a bid to convince creditors it should be granted a vital extension of its
bail-out programme on Monday.
Athens is due to present a series
of proposals to its international lenders, formerly known as the Troika, in return
for a four-month bail-out reprieve which will help avert bankruptcy in the
stricken country.
They are likely to include
measures to shrink the civil service and combat tax evasion, according to
Greece's minister of state, Nikos Pappas.
The European Central Bank,
International Monetary Fund and the European Commission will decide whether the
proposals are sufficient to release the €7.2bn in financial aid that would
allow the embattled country to complete the rest of its bail-out programme.
However, even if approved the
first tranches of the bail-out are not expected to be released to Athens before
April, squeezing the country's public finances and likely putting on hold
Syriza's pre-election promises to raise the minimum wage and re-hire government
workers.
The extension, which was agreed in principle at deadline day talks on Friday evening, will also need to be ratified by the parliaments of the 18 other member states of the euroone, including the Germany Bundestag, if Greece is to remain solvent.
A failure to extend the programme could see the country run out of money before the end of next month, as it faces repayments of over €1.5bn to the IMF in March.
Data from January showed tax revenues had collapsed, while Greek banks suffered deposit flight of more than €1bn a day at the end of last week.
Yanis Varoufakis, the country's finance minister, said a failure to rubber stamp the proposals would mean the agreement would be "dead and buried."
Eurozone finance ministers could convene an emergency meeting on Tuesday if the institutions reject the reforms.
The Syriza-led government also faces a domestic battle to convince voters they have not gone back on their pre-election pledges to reflate the economy.
In a defiant address on Greek television over the weekend, Prime Minister Alexis Tsipras said his country would no longer be "asphyxiated" by austerity.
"Yesterday's agreement with the Eurogroup cancels the commitments of the previous government for cuts to wages and pensions, for firings in the public sector, for VAT rises on food, medicine," the prime minister said on Saturday.
"We averted plans by blind conservative powers, within and outside the country, to asphyxiate Greece on February 28," he said.
But dissent within Syriza's party ranks began to emerge over the weekend.
More
Asian shares flat as investors digest Greek deal
By Hideyuki
Sano and Lisa Twaronite TOKYO
(Reuters) - An index of Asian shares got off to a lackluster start on Monday
as many countries in the region returned from Lunar New Year holidays, with
sentiment supported by relief that Greece
reached a deal to avert an immediate fiscal crisis.Euro zone ministers late on Friday agreed to extend Greece's financial rescue package by four months, a shorter extension that the six months the country had sought. Although an initial relief over the last-minute deal boosted Wall Street shares to record highs late on Friday, Asian markets as a whole saw little follow-up buying.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was flat from its Friday close, after earlier drifting lower.
U.S. stock futures ESc1 were nearly flat in Asian trading but Japan's Nikkei .N225 took a cue from Wall Street's gains to rise 0.8 percent and scale another 15-year high.
"The debt deal is giving comfort to the market," said Masashi Oda, chief investment officer at Sumitomo Mitsui Trust Bank, but added that investors' risk appetite is mainly due to Japanese shares' attractive valuations.
Activity in Asia is likely to pick up this week as many market players return from Lunar New Year holidays, though the mainland Chinese markets will remain closed until Wednesday.
Oil prices edged up after early falls on Monday as parts of Asia returned from the holiday and investors were cautiously optimistic about the Greek debt deal. Brent LCOc1 rose about 0.2 percent to $60.36 a barrel, while U.S. WTI crude CLc1 also added about 0.2 percent to $50.87.
Greece has to provide a list of reform measures to euro zone by Monday to secure financing but domestically it came under attack for selling "illusions" to voters after failing to keep a promise to extract the country from its international bailout.
More
"In
economics, hope and faith coexist with great scientific pretension."
J. K.
Galbraith.
At the Comex silver depositories Friday final figures were: Registered 68.10
Moz, Eligible 107.43 Moz, Total 175.53 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, the top down Bilderberger, elitist, EUSSR.
Why would Great Britain, or any nation not named Italy, want to remain in a club like this and be
charged like GB over £10 billion a year for the apparatchiks to rip us all off.
"The most puzzling development in politics during the last decade is the apparent determination of Western European leaders to re-create the Soviet Union in Western Europe."
Mikhail Gorbachev
Sex pest cases, fraud or porn but Eurocrats keep their jobs
Inside the glittering buildings that line Brussels' Rue de la Loi, unseemly behaviour is often met with little more than a slap on the wrist
European Commission officials
have fiddled their expenses, sexually harassed colleagues and watched hundreds
of hours of pornography in the office – yet kept their jobs.
Disciplinary records obtained by
the Sunday Telegraph show how dozens of senior officials at the European
Commission accused of serious misconduct have escaped with little more than a
slap on the wrist.
They include officials who
submitted false invoices and attempted to secure jobs for family members on
contracts they managed.
In two years, the Investigatory
and Disciplinary Office of the Commission (IDOC) investigated 84 cases of
suspected misconduct among officials. Some 43 staff were sanctioned, and six
dismissed.
Life at the Commission is
frequently well rewarded. One in five staff take home more than David Cameron
does from his £142,000 a year salary, thanks to generous living allowances and
a special 13 per cent tax rate.
Yet some employees regard it as a
gilded cage, with staff underworked and bored yet unable to find comparable
remuneration elsewhere.
Those found to have flouted the
rules and yet kept their jobs included four officials who failed to declare the
family allowances paid to them by their home countries while working for the
commission – meaning they received more allowances than they were entitled to
from the commission.
The “grossly negligent” act
resulted in a “significant financial loss” and was only discovered by chance.
They were demoted, two temporarily.
In another case, an official lied
about their home nationality during the recruitment process, “and then produced
documents which had been tampered with”. They were demoted for one year.
Another official who lied about
his nationality in order to receive a higher expatriation allowance was
demoted. It was a second offence, but the official allowed to remain in post
after showing “remorse”.
In a further case, a “very
senior” commission official who wrongly received “substantial” sums of rental
allowances over several years had his pension docked for three years.
Another bureaucrat received
family, education and medical allowances for his son for four years in a
“persistent and deliberate” fraud – when the young man was in fact in work. The
official had his pension docked for three years after a criminal conviction.
One official was reprimanded
after presenting the administration with an “altered” medical certificate after
his doctor refused a diagnosis.
In another case, an official
requested a period of leave “on personal grounds” while “at the same time,
without requesting prior permission, offered his services to the Commission as
a remunerated external consultant.” They were reprimanded.
The records reveals how one
official was dismissed for “embezzlement” – while others accused of attempting
to secure jobs or contracts for their family members kept their jobs.
“A staff member who recommended
some people he knew, including his sister-in-law to a contracting party of the
Commission with a view to obtaining employment for them, received a reprimand.
As he was responsible for the execution of the contract, he placed himself in a
situation of conflict of interest liable to adversely reflect upon the
reputation of the Institution,” the records reveal.
In another case: “A caution was
given to another staff member who requested a false invoice for a member of his
family under a contract he was responsible for. The isolated nature of the
incident was taken into consideration in not opening a disciplinary procedure.”
Another official was cautioned
after they “made use of a vehicle owned by a contracting party to the
Commission for the transportation of his personal belongings. Although he was
responsible for the execution of the contract with the party in question, the
very limited nature of the service rendered and the isolated nature of the
incident meant that the opening of a disciplinary procedure was not justified
in this case.”
The records reveal a number of
cases of lewd and violent behaviour in the European Commission’s Brussels
offices.
MoreHenry Hazlitt
The monthly Coppock Indicators finished January
DJIA: +124 Down. NASDAQ: +220 Down. SP500: +178 Down.
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