Baltic Dry Index. 629 +11 Brent Crude 64.86
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"When paper money systems begin to crack at the seams, the run to gold could be explosive."
Harry Browne
The IMF delegation to the Troika, flew “home,” presumably Washington, D.C. yesterday, as did the Greek delegation, presumably to Athens. One of three, EUSSR presidents gave Greece a final warning. Yes that’s right, the EUSSR has three junketeers on the taxpayer payroll, issuing diktats, strutting, preening and pouting, huffing and puffing all the way down to the bank, but achieving very little of use to man nor beast in Euroland, issued yet another warning to Greece that it is almost game over. Younger Greeks just yawned as they scavenged in dumpsters and trash piles for food and sustenance, or tried to hitch lifts with Syrian migrants headed for Berlin.
Greece has been ordered to come up with a miracle over the weekend for discussion next week at yet another Great Leaders gathering. The EUSSR heavyweights will run out of time soon, when all this bother will clash with the annual Wimbledon Tennis junket, June 29 – July 12. Keep in mind, practically the whole the bureaucratic EUSSR machine, plus 90 percent of continental European politicians, take the the whole of August off for their summer holiday, visiting the fleshpots and watering holes of the world, or merely seeking to spend more time with their family’s cash in Switzerland.
Below, Greece gets to the final, “final,” weekend. Given the chance of an “unexpected” systemic shock to the European financial system this weekend or early next week, it’s a good time for all prudent Brits and continental Europeans to take out extra cash ahead of the weekend.
Greece Ordered to Stop Gambling With its Future as Endgame Nears
June 11, 2015 — 1:02 PM BST Updated
on June 12, 2015 — 1:38 AM BST
Greece was told to stop fighting creditors’ demands and sign a deal that
will avert a default
and exit from the euro.Diplomatic niceties evaporated in Brussels as European Union President Donald Tusk rebuked Greek Prime Minister Alexis Tsipras for dragging his feet on a debt agreement and the International Monetary Fund’s team walked out of negotiations.
One official said after a four-hour meeting of EU government staffers that Greece was given less than 24 hours to come back with firm proposals to end the impasse.
“There is no more time for gambling,” Tusk told reporters in Brussels on Thursday. “The day is coming, I am afraid, that someone says the game is over.”
Standing on the brink of economic ruin, a reality check awaited Greece. The trio of lenders that hold the key to the country’s fate have run out of patience with what they see as delaying tactics and mixed messages of a leader elected to end an era of austerity.
“The ball is very much in Greece’s court,” IMF spokesman Gerry Rice told reporters in Washington. “There are major differences between us in most key areas. There has been no progress in narrowing these differences recently.”
Battle lines were drawn at a working dinner of EU finance officials that aimed to lay down the groundwork ahead of a likely showdown next week when their bosses meet in Luxembourg. At the meeting, the Greek representative was told his government had to come with a serious action plan that includes pension and tax reform, according to two people familiar with the discussions speaking on condition of anonymity because the talks were private.
More
IMF quits Greek talks; EU tells Tsipras to stop gambling
WASHINGTON/BRUSSELS |
The International Monetary Fund
dramatically raised the stakes in Greece's stalled debt talks on Thursday,
announcing that its delegation had left negotiations in Brussels and flown home
because of major differences with Athens.
The surprise IMF move came as the
European Union told Greek Prime Minister Alexis Tsipras to stop gambling with
his cash-strapped country's future and take the crucial decisions needed to
avert a devastating default.
A Greek source told Reuters that
the entire Greek delegation that had been negotiating a cash-for-reform deal
had also left for home on Thursday, citing continuing disagreements.
"There are major differences
between us in most key areas," IMF spokesman Gerry Rice said in
Washington. "There has been no progress in narrowing these differences
recently and thus we are well away from an agreement."
More
Asia shares, euro stifled by Greek drama
Asia share markets made guarded gains on Friday and the dollar held firm in the wake of reassuringly upbeat U.S. retail data, though the mood was cautious as Greek debt talks took yet another confusing turn.Activity was sparse with MSCI's index of Asia-Pacific shares outside Japan .MIAPJ0000PUS up 0.3 percent, but only just above three-month lows.
Japan's Nikkei .N225 barely budged, though it found some support in a dollar bounce against the yen. Shanghai shares .SSEC started higher but soon went flat.
The gains followed a slightly firmer close on Wall Street with the Dow .DJI up 0.22 percent, while the S&P 500 .SPX added 0.17 percent and the Nasdaq .IXIC 0.11 percent.
Sentiment was bolstered by a solid rise in U.S. retail sales which, combined with upward revisions, suggested the economy was warming nicely after a chilly start to the year. [TOP/CEN]
If the momentum is sustained, the Federal Reserve could begin to hike interest rates later in the year, with September increasingly seen by markets as the lift-off date.
All of which sets the scene for the Fed's meeting on June 16 and 17 will include a news conference from Chair Janet Yellen.
----Adding to the air of caution, German newspaper Bild reported Berlin was holding "concrete consultations" on what to do in the case of a bankruptcy of the Greek state, citing several people familiar with the matter.
This includes discussions about
introducing capital controls in Greece if the crisis-stricken country goes
bankrupt.
In commodity markets, oil prices
dipped after Saudi Arabia said it was ready to raise output further to meet
strong demand.
Brent crude oil for July LCOc1
fell 21 cents to $64.90 a barrel, while U.S. crude CLc1 lost 25 cents to
$60.52.
More
El-Erian sounds alarm over crisis in Greece
Published: June 11, 2015 11:26 a.m. ET
Greece’s
worrisome high unemployment rate is a stark reminder of the “alarming
situation” in the country, with the crisis increasingly threatening to hit the
European Central Bank’s reputation, Mohamed A. El-Erian, chief economic adviser
at Allianz, said on Thursday.
----In an interview with Bloomberg TV Thursday morning, El-Erian further elaborated on the risks involved for the ECB in continuing to support Greece.
”Don’t forget that not only does
the ECB have a huge payment coming from Greece in July, but the ECB has just
increased the amount of lending to Greece on its emergency lending assistance
(ELA),” he said.
“That is not an instrument you’re
supposed to use for propping up solvency, it’s supposed to be used for
liquidity and the deeper Greece goes into junk territory, the more it
highlights the reputational and financial risks the ECB is taking,” El-Erian.
Athens has been scrambling to
reach a bailout deal with international lenders since the Syriza-led
antiausterity government was elected in January. The uncertainty about Greece’s
finances have slammed Europe’s financial markets, but also hurt the country’s
economy and sent it back into recession.
If reports of talks stopping
without progress weren’t bad enough Thursday, Greece had already been stewing
over negative news from its statistics office, showing that the unemployment
rate in the Hellenic Republic rose to 26.6% in the first quarter of the year, up
from 26.1% in October-December and worse than the 25.4% forecast by economists
polled by Bloomberg.
----“Policy makers are losing control of the
situation on the ground and there’s still not a common view on what has
happened and let alone what needs to happen. So even if you come up with yet
another Band-Aid, this is not a problem that’s going to be solved anytime
soon,” he said.
More
EU issues final warning to Greece as last-ditch talks achieve nothing
The Greek interior ministry has ordered governors and mayors to transfer all cash reserves to the central bank as bankruptcy closes in
The European Union has warned Greece in the clearest
language to date that its patience is exhausted and the country will be
abandoned to its fate unless it accepts creditor demands in short order.
----Greek prime minister Alexis Tsipras failed to secure any substantive concessions during two days of stormy talks with key power-brokers in Brussels, including German Chancellor Angela Merkel and French president Francois Hollande.
Mrs Merkel tried to put the best
gloss on events, insisting that Greece had agreed to work “full steam ahead” to
break the impasse.
Yet her assurances belie the
reality that Syriza and Europe’s creditor powers are no closer to a deal as
bankruptcy looms. The Greek interior ministry has ordered regional governors
and mayors to transfer all cash reserves to the central bank as an emergency
measure.
The mounting worry is that the
government may not be able to meet its bill for salaries and pensions this
month. The economy is sliding deeper into recession and tax revenues are
falling short.
Bizarrely, the Athens stock
market soared 8.2pc in a wave of euphoria, swept by unsubstantiated rumours of
a breakthrough that left Greek officials scratching their heads.
The Piraeus Bank and Eurobank
both jumped 19pc, while yields on two-year Greek debt plummeted 135 basis
points to 23.8pc.
Markets may have misjudged the
political choreography of the talks in Brussels. It is understood that Mr
Tsipras chose to acquiesce in what insiders deem to be a "negotiating
charade" in order to show willingness and avoid blame at home if the
showdown ends in rupture, and even in Greece’s ejection from the euro.
It does not mean that Athens has
ditched its fundamental demand for debt restructuring, an end to austerity and
a comprehensive solution that puts Greece on a viable economic path.
----Syriza has proposed a debt swap that would let it borrow from the eurozone bail-out find (ESM) to repay €27bn of liabilities to the European Central Bank, a rotation from one creditor to another. This would have the effect of stretching maturities and averting a default to the ECB in July. The plan has so far been rejected out of hand by Brussels.
Jens Weidmann, chief of Germany’s
Bundesbank, warned that time is running out as Greek depositors withdraw an
estimated €2bn a week from local banks. “The risk of insolvency is increasing
by the day,” he said.
More
"The
international monetary order is more precarious by far today than it was in
1929. Then, gold was international money, incorruptible, unmanageable, and
unchangeable. Today, the U.S. dollar serves as the international medium of
exchange, managed by Washington politicians and Federal Reserve officials,
manipulated from day to day, and serving political goals and ambitions. This
difference alone sounds the alarm to all perceptive observers."
Hans F. Sennholz
At the Comex silver
depositories Thursday final figures were: Registered 57.84 Moz, Eligible 121.87
Moz, Total 179.71 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Below, the corner, “Bubbles” Greenspan, Bernocchio,
and the talking chair, got themselves into, eyes wide open. No one has a clue
how or when the Great Nixonian error of fiat money ends, just that it’s ending
and we’re deep into that end game. Stay long fully paid up physical gold and
silver held outside of the banksters, and the MF Global type mafia thieves.
"The paper standard is self-destructive."
Hans F. Sennholz
The Fed fears lifting interest rates, ex-insider says
Published: June 11, 2015 7:30 a.m. ET
Former Fed official, Cyprus central bank chief says FOMC moving too slow
WASHINGTON (MarketWatch) — An expert who’s been involved in internal debates at both the Federal Reserve and the European Central Bank says the U.S. central bank is already behind the curve in lifting interest rates.Athanasios Orphanides, now a professor of global economics and management at MIT, was head of the Central Bank of Cyprus for five years, ending in 2012. He started his career as an economist in the Fed’s monetary policy division and later became senior adviser to board of governors.
St. Louis Fed President James Bullard noted that Orphanides is probably the only person on the planet who has attended Fed monetary policy meetings as well as European Central Bank governing council meetings.
In a speech at the St. Louis Fed earlier this month, Orphanides discussed the Fed’s fear of liftoff and what the causes might be. MarketWatch talked to him about why the Fed seems reluctant to raise interest rates.
This conversation has been edited for length and clarity.
MarketWatch: Your academic career has focused on how monetary policy is made in real time, can you explain that a bit.
Orphanides: I started working on the difficulties associated with real time monetary-policy-making while I was at the Federal Reserve. I was one of the people who happened to be involved in policy rules work very early on, right after John Taylor’s famous rule came out and people started monitoring it. So it was in the process of trying to use monetary policy rules and try to identify how systematic policy can be formulated. I found it useful to try to do counterfactual historical experiments and I started asking questions such as “well, if we identify something that we believe today is a good framework, can we test whether this framework would have delivered good results had it been adopted in earlier episodes like the 1930s, 1960, 1970s, depending on the episode?” And to do that one needs to have detailed information about what is known and what is not known by the policymakers at the time when the decision is made. This is why being at the Federal Reserve was quite important because it allowed me to do this work. I had access to a lot of the information that was not that easy to get to for someone on the outside.
MarketWatch: And your research has led you to think the Fed is already late in raising interest rates?
Orphanides: Let me mention why I am worried about the current cycle. Monetary policy operates with a substantial lag and it is very important to be preemptive in policy action. What this means is the Federal Reserve should try to steer policy towards what is normal, meaning not excessively accommodative and not excessively contractionary, before the economy actually reaches the state of full strength. In the current environment, since we are now a few years after the end of the recession, what this means is that policy should have started being normalized long before we reached the situation where the economy is almost at full strength. And this is what hasn’t happened this time. On this occasion what is the striking difference is that the Fed has not done anything to start the process of normalization yet, and, indeed, until last year it was injecting additional monetary policy accommodation in the economy and the economy has reached a situation where it is very close to its full strength.
----So we are in that sense behind the curve. Why do I stay that? In order to understand where we should be, we need to assess where we think a normal level of policy accommodation would be. In the current environment, if we take guidance from the FOMC’s own assessment, the FOMC is telling us they need to raise the federal funds rate by a few hundred basis points to reach what they consider to be an appropriate level for the long term. But what is missing from that is that, in addition to easing with interest rates in the current recessionary episode, the Fed has injected additional massive policy accommodation with quantitative easing. This will also have to be undone. And since the Fed has communicated that it does not intend to reduce the size of the balance sheet, interest rates will have to be raised even more than they would have to be raised in a normal recovery in order to normalize monetary policy. So the monetary policy tightening that needs to be engineered is quite substantial and this is why I believe they are already behind the curve.
More
"All previous attempts to base money solely on intangibles such as credit or government edict or fiat have ended in inflationary panic and disaster."
Donald Hoppe
Solar & Related Update.
With events
happening fast in the development of solar power, I’ve added this new section.
Updates as they get reported.
Can Solar Panels Help Solve California's Drought?
From a distance, they almost look like a massive mosaic swimming-pool cover. They are photovoltaic panels, half-millimeter thick silicon wafers that are erected over reservoirs. Their function: Generate power while also conserving water.For years, the technology was just a niche product. Now, with drought concerns growing in many places across the planet, it’s showing signs of taking off.
In parched parts of California and Australia, as well as in Japan, where cramped living conditions put land at a premium, the panels can increasingly be seen dotting the water. According to Infratech Industries Inc., a Sydney-based developer of the technology, they can produce almost 60 percent more electricity than land-based solar farms and they reduce evaporation by 90 percent.
While still representing less than 1 percent of the power generated by all solar installations today, up from about zero a few years ago, Infratech anticipates much more growth in demand for the floating panels -- on reservoirs and even above hydro dams -- as global temperatures rise.
“Water is a commodity that is only going to increase in value,” Felicia Whiting, an Infratech director, said in a telephone interview.
For the technology to keep gaining market share, though, producers will have to overcome what could be their biggest obstacle: The higher cost of installing and maintaining the panels relative to conventional units, which could limit their spread to drought-stricken or crowded areas.
“Making the system float has to be more expensive than putting a solar panel on a roof, or in a field,” Paul Meredith, a materials physicist at The University of Queensland who is investigating the efficient production of solar energy, said by phone. “Operating and maintenance is difficult enough on land without having to get into a row boat.”
Kyocera Corp. and Century Tokyo Leasing Corp. have built three plants in Japan’s Hyogo Prefecture, with combined capacity of 5.2 megawatts, according to a May statement. One megawatt is enough to power 357 Japanese homes, Kyocera said.
The Japanese plants are being developed on water in regions that lack available land for utility-scale generation, Hina Morioka, a Kyoto-based spokeswoman for Kyocera, said May 28 in an e-mailed response to questions. There are projects planned on about 30 reservoirs in Japan to generate about 60 megawatts. There are at least 5 operating plants in Japan with a combined capacity of 7.4 megawatts, less than 1 percent of the country’s 23.3 gigawatts of installed solar.
More
Another weekend,
and in the Greece v Germany standoff, nothing is different to last weekend
except another 7 days have drifted by. No one in Germany seems to understand
that right or wrong, Greece simply cannot pay back its accumulated debt. Much
of it wrongly imposed on Greece back in 2010 by the Troika, simply to bailout
continental, brain dead European banksters, who were holding masses of Greek
debt while pretending it was the equivalent of German debt. Even if Greece does
what its German persecutors want, It doesn’t solve very much. Greece simply
adds on more debt and goes bust a few weeks or months later. Stay long physical
gold and silver, against an eventual default, and the end of the Great EUSSR
project to replace the US dollar. Have a great weekend everyone.
"The gold standard makes the money's purchasing power independent of the changing, ambitions and doctrines of political parties and pressure groups. This is not a defect of the gold standard; it is its main excellence."
Ludwig von Mises
The monthly Coppock Indicators finished May
DJIA: +107 Down. NASDAQ: +195 Down. SP500: +139 Down.
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