Baltic Dry Index. 600 Unch. Brent Crude 64.03
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
“The problem with fiat money is that it rewards the minority that can handle money, but fools the generation that has worked and saved money.”
“Adam Smith” aka George Goodman.
We open today with more on the havoc of ZIRP and NIRP. Massive
malinvestment and the death of capitalism. With free money for the central banksters
chosen cronies, and pay to play NIRP for the bond market front runners, what
exists now is nothing but the world’s biggest by far tulip mania. The central
banksters long ago lost control of the Frankenstein monster they created, and
are now powerless to reverse our relentless, ever more bizarre race to ultimate
disaster. Below, today’s latest instalment of central bankster madness. Stay
long fully paid up physical precious metals. That it all ends badly goes
without saying.
"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
Euro Plunge to Parity Derails as Draghi Cash Flows Into Equities
12:00 AM BST April 27, 2015
After its biggest slide since being created in 1999, the euro is finding a
floor.A torrent of money unleashed by the European Central Bank is fueling demand from U.S. and other international investors for the region’s stocks -- and the currency needed to buy them. Global mutual funds and exchange-traded funds that focus on European equities attracted $63.6 billion this year through April 22, up 70 percent over the same period in 2014, according to data compiled by EPFR Global.
Rather than being a referendum on the outlook for growth in the euro zone, demand for the 19-nation currency reflects appetite from investors who want a piece of this year’s 19 percent rally in the region’s stocks.
“European equities went from being an incredibly unloved asset class to very fashionable almost overnight,” David Donabedian, the Atlanta-based chief investment officer at Atlantic Trust Private Wealth Management, which oversees $26.2 billion, said April 23. “In the short term, the euro will probably firm a bit more.”
Demand for the region’s equities has driven the Stoxx Europe 600 Index to a record since ECB President Mario Draghi announced his quantitative-easing plan on Jan. 22. The gains mirror the reaction during the Federal Reserve’s third bond-buying program, which ran from September 2012 to October 2014 and sent U.S. stocks higher. The dollar strengthened about 10 percent in that time.
Some money managers are forgoing currency hedges on their European investments, Nomura Holdings Inc. analysts led by Jens Nordvig wrote in an April 17 note.
About 30 percent of the $25.5 billion channeled into U.S. exchange-traded funds focused on European equities went into unhedged strategies, according to data compiled by Bloomberg. That $8 billion is about comparable to the entire amount that was invested in the same period of 2014 across both hedged and unhedged ETFs with a similar focus.
“If you’re a North American investor, we finally have QE, we finally have policy makers responding,” Susanne Alexandor, a senior member of the investment team at Cougar Global Investments Ltd., a Toronto-based investor in ETFs with $1.3 billion under management, said April 21. “We like the market and we decided to take the currency unhedged because we don’t have huge conviction that the euro could go a lot lower from here.”
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China gold demand recovers in the first quarter
Published: Apr 28, 2015 12:09 a.m. ET
HONG
KONG (MarketWatch) -- China's gold demand rebounded in the first quarter after
a 25% plunge in 2014, Dow Jones Newswires cited data from the China Gold
Association as showing Tuesday. The nation's gold consumption rose 1.1%
year-on-year to 326.68 metric tons in the first three months of the year, the
association's president said at an industry conference, according to the
report. The previous plunge in gold demand was due to a number of factors,
including China's economic slowdown, the anti-corruption drive, and a
consumption surge in 2013 leading to a shrinkage in gold purchases for 2014,
the report said. In 2014, India replaced China as the world's biggest gold
buyer due to a jump in jewelry demand, even though both countries' total gold
demand shrank from a year earlier, a Bloomberg report said earlier this year,
quoting statistics from the World Gold Council. However, the China Gold
Association said in a statement earlier this year that the trend in Chinese
gold-demand growth hasn't changed despite a sharp decrease in last year's
consumption. The decrease in 2014 was preceded by a "blowout surge"
in 2013 triggered by a fall in gold prices, with the low prices
"restraining investment demand" to a certain degree in 2014, the
association said. Growing interest in gold and increasing awareness in gold as
an investment will continue to fuel the country's demand in the yellow metal,
the statement said, adding that China is the world's fastest-growing gold
market.
Opinion: China is about to come clean about how much gold it really owns
Published: Apr 27, 2015 8:00 p.m. ET
To join elite currency club, Beijing may agree to more transparency of its holdings
China may be ready to tone down its secrecy over state gold holdings — thanks to complicated maneuvering on the renminbi potentially joining the International Monetary Fund’s monetary reserve denominator, the special drawing right, later this year.
As part of diversification of reserve holdings, over the past five years China is widely believed to have amassed official gold reserves well above its officially reported total of 1,054 tons, a figure that Beijing has maintained unchanged since 2009 in data reported to the IMF. Gold mines in China — the world’s biggest bullion producer for the past eight years, with 2014 output of 452 tons — have been quietly selling some of their output to the state, possibly several hundred tons in some recent years.The mystery over Chinese gold purchases has deepened at a time when central banks from other emerging-market economies, including Russia, Iraq, Turkey and Kazakhstan, have been overtly buying significant quantities of gold, while those from the developed world have stopped selling, pushing annual reported net central bank gold purchases to around the highest for 50 years. This is an important reason why gold’s price GCM5, -0.28% has remained in the $1,200 to $1,400 an ounce range in the last two years despite the sharp revaluation of the dollar BUXX, +0.00% .
The link between gold and the SDR — the IMF’s composite currency unit, comprising the dollar, euro, yen and sterling — resides in China’s potential upgrading of its international statistical reporting as part of a deal under negotiation on becoming the first emerging-market economy to join the elite group of reserve currencies.
----There has been speculation that China could announce at least a doubling of gold reserves to above 2,000 tons, potentially putting it in the same league as the other large gold holders — Germany (No. 2 globally with 3,384 tons, well behind the world leader, the U.S., with 8,134 tons), the IMF with 2,814 tons, Italy with 2,451 tons, and France with 2,435 tons.
One factor that could embolden
the Chinese leadership on the timing of a higher bullion reserves announcement
reflects gold’s firmness against other currencies that Beijing also holds,
along with the dollar, in its foreign-exchange assets, especially the euro —
for China, a significant benchmark. As a result of the dollar’s general
international strength, gold has risen 28% in euro terms since the end of 2013,
strengthening the logic behind China’s behind-the-scenes gold diversification.
More
In Greece news, if you really must visit Greece take plenty of cash!
Better yet, head for next door and cheaper Turkey. Can the end be very far
away. Who in their right mind would want to take the risk of holidaying in a
country getting ready or forced to default?
Holidaymakers warned to take cash to Greece amid financial collapse fears
Holidaymakers to Greece are being advised to take euros in notes and coins in case the escalating debt crisis forces banks to switch off cash machines
By Dan Hyde, Consumer Affairs
Editor 9:22PM BST 27 Apr 2015
Holidaymakers to Greece are being
advised to take euros in notes and coins in case an escalating debt crisis
prompts the country's banks to switch off their cash machines.
The Greek tourist board in London
said that while it anticipated no immediate problems, visitors should avoid
relying solely on credit cards or local ATMs.
Travellers should take
"enough money to cover emergencies and any unexpected delays", the
Foreign & Commonwealth Office added. Travel experts recommended taking
around three to five days' worth of spending money in euros, alongside credit and
debit cards.
The Greek economy edged closer to
default yesterday [mon] when European finance ministers ruled out a
"big" bail-out programme in the vein of action taken in 2010 and
2012.
Talks with the country's radical
left-wing government have stalled because the Syriza party, elected in January,
has refused to implement further austerity measures.
Economists say that if it is
denied emergency funds to cover its summer debt repayments, Greece could opt to
exit the euro.
As well as causing chaos in the
financial markets, such a scenario might lead to a run on banks, which would
turn off their cash machines in response, experts said.
More
"The paper standard is self-destructive."
Hans F. Sennholz
At the Comex silver
depositories Monday final figures were: Registered 62.64 Moz, Eligible 112.59
Moz, Total 175.23 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today the world the Great Nixonian Error of fiat
money built, driven by the casino capitalism madness of “Bubbles,” Bernocchio,
and the Talking Chair.
"The first requisite of a sound monetary system is that it put the least possible power over the quantity or quality of money in the hands of the politicians."
Henry Hazlitt
Going The Way Of The Mayans——End Game Of Global Debt Addiction
by Marketwatch • By Satyajit Das at Marketwatch
Nowadays many countries’ social
and political structure relies on debt-driven consumption and increasing levels
of entitlements.
Blame the policy makers. To drive
economic growth, boost living standards, and manage growing inequality, policy
makers have used debt and monetary tools to create economic activity. This has
resulted in excessive borrowing and imbalances in global trade and capital.
Governments played a part, too,
allowing the buildup of social entitlements to win or maintain office. Private
companies also encouraged the growth of employee benefits to avoid immediate
pressure on wages as well as boost current earnings and share prices.
But such expensive commitments
were rarely fully funded.
Rather than deal with the fundamental issues, policy makers substituted public spending, financed by government debt or central banks, to boost demand. Strong growth and higher inflation, they hoped or believed, would correct the problems.
The current state of affairs echoes Archaeologist Arthur Demarest’s observation about the Mayan civilization: “Society had evolved too many elites, all demanding exotic baubles…all needed quetzal feathers, jade, obsidian, fine chert, and animal furs. Nobility is expensive, non-productive and parasitic, siphoning away too much of society’s energy to satisfy its frivolous cravings.”
Seven years into this crisis, the level of debt in major economies has increased. Global imbalances have decreased, but primarily as a result of slower economic growth. Countries such as China and Germany are reluctant to inflate their domestic economies, moving away from their export-driven model. Major borrowers, such as the U.S., refuse to reduce spending and bring their public finances into order. Enthusiasm for fundamental financial reform has dissipated, driven by concern that lower credit growth will decrease economic growth.
Policy makers refused to acknowledge that available fiscal and monetary policy tools cannot address the underlying problems. They repeatedly use complex jargon, obscure mathematics and tired ideologies to disguise their failures and limitations. Perhaps, as the writer G. K. Chesterton suggested: “It isn’t that they can’t see the solution. It is that they can’t see the problem.”
The policies, now centered around debt monetization entailing zero interest-rates and quantitative easing (QE), have potentially destructive side effects.
----The resultant loss of purchasing power effectively represents a tax on holders of money and sovereign debt. It redistributes real resources from savers to borrowers and the issuer of the currency, resulting in diminution of wealth over time.
Debt monetization also creates
moral hazards. Low rates and easy availability of credit reduces market
discipline. Borrowers face less pressure to cut back on their debts. Low
borrowing costs allow unproductive investment to be maintained. It reduces
incentives for governments to bring public finances under control.
Ultimately, the policies being
used to manage the debt crisis punish frugality and thrift, and reward
borrowing, profligacy, excess, and waste.
More
"If ever there was an area in which to do the exact opposite of that which government and the media urge you to do, that area is the purchasing of gold."
Robert Ringer
Solar & Related Update.
With events
happening fast in the development of solar power, I’ve added this new section.
Updates as they get reported.
No update today.
The monthly Coppock Indicators finished March
DJIA: +118 Down. NASDAQ: +209 Down. SP500: +161 Down.
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