Baltic Dry Index. 583 -05 Brent Crude 58.26
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"The paper standard is self-destructive."
Hans F. Sennholz
For more on Grexit, scroll down to Crooks Corner.
We open today with the massive bubble in China’s stock market. As ever,
this greater fool bubble will end in tears. Welcome to the world of the Great
Nixonian Error of fiat money in its death throes.
"The history of paper money is an account of abuse, mismanagement, and financial disaster."
Richard M. Ebeling
U.S. Dot-Com Bubble Was Nothing Compared to Today’s China Prices
6:01 PM BST April 7, 2015
The world-beating surge in
Chinese technology stocks is making the heady days of the dot-com bubble look
tame by comparison.
The industry is leading gains in
China’s $6.9 trillion stock market, sending valuations to an average 220 times
reported profits, the most expensive level among global peers. When the Nasdaq
Composite Index peaked in March 2000, technology companies in the U.S. had a
mean price-to-earnings ratio of 156.
Like the rise of the Internet two
decades ago, China’s technology shares are being fueled by a compelling story:
the ruling Communist Party is promoting the industry to wean Asia’s biggest
economy from its reliance on heavy manufacturing and property development. In
an echo of the late 1990s, Chinese stocks are also gaining support from lower
interest rates, a boom in initial public offerings and an influx of money from
novice investors.
The good news is the technology
sector makes up a smaller portion of China’s equity market than it did in the
U.S. 15 years ago, limiting the potential fallout from a selloff. The bad news
is that any reversal in the industry will saddle individual investors with losses
and risk putting an end to the Shanghai Composite Index’s rally to a seven-year
high.
“Chinese technology stocks do
resemble the dot-com bubble,” Vincent Chan, the Hong Kong-based head of China
research at Credit Suisse Group AG, Switzerland’s second-biggest bank, said in
an interview on April 2. “Given stocks fell 50 to 70 percent when that bubble
burst in 2000, these small-cap Chinese shares may face big corrections when
this one deflates.”
China’s government is boosting
spending on science and technology as a faltering industrial sector drags down
economic growth to the weakest pace in 25 years. In March, Premier Li Keqiang
outlined an “Internet Plus” plan to link web companies with manufacturers.
Authorities also plan to give foreign investors access to Shenzhen’s stock
market, the hub for technology firms, through an exchange link with Hong Kong.
Among global technology companies
with a market value of at least $1 billion, all 50 of the top performers this
year are from China. The sector has the highest valuations among 10 industry
groups on mainland exchanges after the CSI 300 Technology Index climbed 69
percent in 2015 through Tuesday, more than three times faster than the broader
measure.
More
Elsewhere in Asia, Abenomics is fading fast. This wasn’t supposed to
happen under Abenomics. Nothing anywhere seems to be working anymore. Stay long
fully paid up physical gold and silver held outside of the larcenous reach of
John Bull and Uncle Scam. They have form, as the saying goes down at the Yard.
BOJ Keeps Record Stimulus After Inflation Data Drops to Zero
4:43 AM BST April 8, 2015
The Bank of Japan kept its policy unchanged as Governor Haruhiko Kuroda
tries to head off a drop in consumer prices two years after he began
unprecedented stimulus in the world’s third-biggest economy.The central bank maintained a plan to expand the monetary base at an annual pace of 80 trillion yen ($666 billion), as forecast by all 34 economists in a Bloomberg News survey.
Kuroda’s bid to spur 2 percent inflation is facing a test, with the BOJ’s main gauge sinking to zero because of cheaper oil and the weakness in Japan’s recovery from recession. While most economists forecast another boost in stimulus by October, policy makers are confident for now that a virtuous cycle of rising profits, wages and expectations for price gains will lift inflation to their goal.
“The BOJ appears to be confident about the outlook for the economy,” said Junko Nishioka, an economist at Sumitomo Mitsui Banking Corp. “It’s unlikely the BOJ will move later this month, even if they have to cut their inflation forecast because of oil.”
The BOJ’s effort to reflate the economy is running into a number of challenges, from steeper-than-forecast declines in retail sales and industrial production to signs that companies aren’t convinced Japan’s economic prospects are looking up.
More
In oil news, is there more to
this bounce than just squeezing the bears? Does someone know more than the rest
of us?
Oil posts best close of 2015 ahead of supply report
Published: Apr 7, 2015 3:18 p.m. ET
NEW YORK (MarketWatch)—The U.S. oil benchmark soared for a second straight
session Tuesday to close at its highest level of 2015 a day ahead of weekly
data that is expected to show a decline in domestic crude output.On the New York Mercantile Exchange, light, sweet crude futures for delivery in May CLK5, -1.98% rose $1.84, or 3.5%, to close at $53.98 a barrel—the highest settlement since Dec. 30. Over the past two sessions, May crude has gained nearly 10%
Brent crude for May delivery LCOK5, -1.42% on London’s ICE Futures rose 98 cents, or 1.7%, to $59.10 a barrel, contributing to a 7.6% two-day rise.
Bulls “are really running with it right now,” said Robert Yawger, director of energy futures at Mizuho Securities, in a phone interview.
Investors expect crude-oil data from the U.S. Energy Information Administration on Wednesday to show a second consecutive weekly decline in oil production and for supplies at the Nymex futures delivery hub in Cushing, Okla., to show a drop or only a very small increase, Yawger said.
Analysts surveyed by The Wall Street Journal forecast total U.S. oil inventories to show a rise of 3.4 million barrels, on average, in the week ended April 3. The EIA report is due at 10:30 a.m. Eastern on Wednesday.
Less influential inventories data from the American Petroleum Institute is expected later Wednesday.
Oil data last week showed U.S. oil production fell by a 36,000 barrels a day in the week ended March 27—a small decline but the first since mid-January.
Meanwhile, technical factors are also positive as Nymex oil futures trade within sight of the 2015 intraday high of $54.24 a barrel set on Feb. 3, and the 100-day moving average at $54.95, Yawger said.
More
And in America, the wheels are flying off the Great Nixonian Error. The
benefits of fiat money were all front loaded. Forty four years on from that
August 15, 1971 Camp David error, we are rushing towards the bone crushing end
of that fiat money error. The collapse of the fiat currency USSR comes to mind.
15 Years Of Stimulus—–Nothing To Show
by David Stockman • April 7, 2015
At some point 15 years ought
to count for something. After all, it does amount to one-seventh of a century.
And during that span we have encompassed several
business cycles, two financial crises/meltdowns and nearly
a non-stop blitz of “extraordinary” policy interventions. To
wit, a $700 billion TARP, an $800 billion fiscal stimulus, upwards of $4.0
trillion of money printing and 165 months out of 180 months in which
interests rates were being cut or held at rock bottom levels.
You’d think with all that help
from Washington that American capitalism would be booming with prosperity.
No it’s not. On the measures which count when it comes to sustainable growth
and real wealth creation, the trends are slipping backwards—– not leaping
higher.
So here’s the tally after another
“Jobs Friday”. The number of breadwinner jobs in the US economy is still
2 million below where it was when Bill Clinton still had his hands
on matters in the Oval Office. Since then we have had two
Presidents boasting about how many millions of jobs the have created and three
Fed chairman taking bows for deftly guiding the US economy toward the nirvana
of “full employment”.
When you look under the hood
its actually worse. These “breadwinner jobs” are important because its the only
sector of the payroll employment report where jobs generate
enough annual wage income—about $50k—- to actually support a family
without public assistance.
Moreover, within the 70 million
breadwinner jobs category, the highest paying jobs which add the most to
national productivity and growth——goods production—-have slipped backwards even
more dramatically. As shown below, there were actually 21% fewer jobs in
manufacturing, construction and mining/energy production reported last
Friday than existed in early 2000.
More
We end for today with Greece.
Will Greece default tomorrow, leave the EUSSR and NATO, and join Russia
and China in the SCO?
Russia ready to offer Greeks cash in return for assets
Kremlin could provide cash-strapped Greeks a credit line and discounted energy supplies as Alexis Tsipras meets with Putin
Russia could offer debt-ridden
Greece controversial loans and discounts on supplies of natural gas in exchange
for the country's "assets", according to reports in Moscow.
Alexis Tsipras, Greece’s prime
minister, is due to
arrive in the city on Tuesday and will meet Vladimir Putin, Russia’s president, on
Wednesday.
Athens
overtures to Moscow have raised fears the Leftist government is pivoting east in search
of alternatives sources of finance as it bids to avoid bankruptcy. Ahead
of his visit, Mr Tsipras condemned economic sanctions on Moscow as “a road to
nowhere”.
Greece's
dalliance with the Kremlin has also attracted criticism for potentially
undermining the EU's united front against Russia's military intervention in
Ukraine.
Martin Schulz, the president of
the European Parliament, said on Saturday that it would be "unacceptable”
if Mr Tsipras “jeopardised Europe's common policy on Russia” in return for
Kremlin aid.
But Kommersant newspaper
quoted an anonymous Russian government source on Tuesday saying that lines of
credit were on the table.
“We’re ready to consider the
question of providing Greece discounts on gas: the price for it is tied to the
cost of oil which has significantly fallen in recent months,” the source said.
“We are also ready to discuss the
possibility of granting Greece new loans. But here we, in turn, are interested
in reciprocal moves – in particular, in Russia receiving particular assets in
Greece.”
More
"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
At the Comex silver
depositories Tuesday final figures were: Registered 63.19 Moz, Eligible 113.49
Moz, Total 176.68 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, Grexit Minus One,(?) the EUSSR, the (German)
worker’s paradise. Euros anyone, even those marked with a German “X”? Will Greece send in the tanks when Germany
doesn’t pay?
Greece demands €279bn from Germany in Nazi war reparations
Parliamentary committee puts figure on cost of Second World War occupation and demands investigation into 2010 bail-out
Greece has demanded nearly €279bn
in reparations from Germany, more than the value of its current bail-out, as
the cash-strapped country continues to pursue compensation
for crimes carried out by the Third Reich.
A parliamentary committee
established by Prime Minister Alexis Tsipras put an official number on the
claim, which includes the cost of a forced Nazi loan made by the Bank of Greece
and the return of archaeological treasures.
Greece suffered a brutal
occupation at the hands of the Third Reich in 1941, with over 40,000 people
starving to death in Athens alone.
Previous Greek calculations for
the cost of the country's occupation have stood at around €160bn.
Mr Tsipras has called the
reparations question a "moral and ethical" issue for his country, repeating
his demands during a visit to Berlin last month.
Greek ministers have also touted
the idea of seizing German assets in the country to compensate the families of
victims of Nazi war crimes.
A poll carried for Greek radio
found more than 80pc of Greeks agreed with the pusuit of Nazi war debt claims.
The Germany finance ministry
moved quickly to reject the fresh claims. Chancellor Angela Merkel has resisted
re-opening old wounds, insisting Berlin has honoured its obligations during a
compensatory accord signed in 1960.
In a further sign of the hardened
attitudes in the debtor country, Greek lawmakers also voted to establish a
committee examining the circumstances of its 2010 bail-out by eurozone
creditors and the IMF to the tune of €240bn.
"After
five years of parliamentary silence on the major issues that caused the bailout
catastrophe, today we commence a procedure that will give answers to the
questions concerning the Greek people," Mr Tsipras said to
parliamentarians on Tuesday.
Finance minister Yanis Varoufakis has claimed the economy was unfairly lumbered with the liabilities that it is now struggling to pay off as its coffers run empty.
Mr Varoufakis has claimed Europe dealt with his country's bankruptcy by "loading the largest loan in human history on the weakest of shoulders - the Greek taxpayer."
A poll carried for Greek radio found more than 80pc of Greeks agreed with the pusuit of Nazi war debt claims.
"Were we to be directed from Washington when to sow and when to reap, we should soon want bread."
Thomas Jefferson
The monthly Coppock Indicators finished March
DJIA: +118 Down. NASDAQ: +209 Down. SP500: +161 Down.
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