Baltic Dry Index. 725 +44 Brent Crude 63.69
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood. For these few gold has been the asset of last resort."
Antony C. Sutton
Did the Fed just signal a meaningless quarter point hike in US interest rates in September and hint at another in probably December? Mainstream media seems to think so. I remain in the dwindling camp that thinks ending ZIRP forever brings on the calamity ZIRP and QE forever were introduced to prevent. After seven years of gargantuan mis- and malinvestment due to Voodoo Economics, this isn’t just taking away the punchbowl. It’s taking away the whole “hopium” that the now centrally planned US economy is hooked on. Of course the choice, thanks to our criminally deluded central banksters, long ago became “cold turkey” now voluntarily, or “cold turkey” later, involuntarily when events overwhelm our deluded central banksters, when they find out that despite popular belief, they can’t walk on water after all.
Below, the tiny starter’s pistol fired yesterday to try to get everyone aware of the risk of ZIRP ending this year. If higher interest rates really do lie directly ahead no matter what, it’s game over for Greece, and Club Med irrespective of how many sinking European bonds the hapless Draghi attempts to buy. The Fed is saying it’s about to put a full salvo of torpedoes into the sinking ECB euro Bismarck before year-end. As a 40 year bond bull markets heads into the sunset, precious metals purchasing power is now likely to rise for the rest of the century.
Fed says U.S. economy strong enough to handle rate hike
The U.S. economy is growing moderately after a winter swoon and likely
strong enough to support an interest rate increase by the end of the year, but
concerns remain over the recovery of the labor market, U.S. Federal Reserve
officials said on Wednesday.
With the economy still on track to grow as much as 2 percent for the
year, the central bank's latest policy statement keeps it on track for at least
one and perhaps a second rate increase later this year.
Fed Chair Janet Yellen, however, emphasized that the rate decision was
still up in the air and rested squarely on further improvement in the labor
market - renewing her focus on a longstanding concern.
"The
Fed has two criteria: labor market improvement, which we continue to see, and
confidence that inflation will move to its objectives. That's starting to
happen," said Wayne Kaufman, chief market analyst at Phoenix Financial
Services in New York.
More
Fed keeps rates unchanged as it still eyes hikes this year
Published: June 17, 2015 4:49 p.m. ET
WASHINGTON (MarketWatch)—The Federal Reserve on Wednesday held its benchmark
interest rate near zero, but central bankers believe improving U.S. economic
growth is likely to warrant one or two interest rate increases before the end
of the year.Fed Chairwoman Janet Yellen said economy has managed to escape the “soft patch” of the first quarter.
The labor market is improving and some of the downward pressure on inflation from energy prices is abating, Yellen said, but added that more progress is needed before the central bank would be ready to pull the trigger and raise rates.
In a statement at the end of two days of talks, Fed officials were cautiously optimist about the economy.
Read text of FOMC decision.
The overwhelming majority of Fed officials still want to raise interest rates this year, according to a survey released by the central bank. Only 2 of 17 officials think the bank should wait until 2016.
More
Who Wins, Who Loses When Fed Raises Rates
June 17,
2015 — 12:00 AM BST
The longest drumroll in the 102-year history of the Federal Reserve precedes
its next interest-rate increase. That doesn’t mean some of its effects won’t be
surprising.“This is a major inflection point,” said Erik Davidson, chief investment officer for Wells Fargo & Co.’s private bank. “The end of free money is in sight.”
----In preparation, here are some expected winners and losers and those whose fortunes are likely to stay steady after the Fed and its chair, Janet Yellen, raise the benchmark rate for the first time since 2006:
WIN: The greenback
The U.S. dollar will keep rallying after the rate increase, said Daniel Tenegauzer, head of emerging market and global foreign-exchange strategy at RBC Capital Markets in New York. Other central banks are cutting rates and expanding the money supply, weighing down their currencies.
“The Fed hikes, the dollar appreciates,” Tenegauzer said.
LOSE: Federal budget
The U.S. government could pay as much as $2.9 trillion more in interest over the next 10 years if rates slowly escalate, according to calculations by the Congressional Budget Office and Dean Baker, co-director of the Center for Economic and Policy Research in Washington.
DRAW: Savers
What Christopher Whalen, senior managing director at Kroll Bond Rating Agency Inc., called the “huge wealth transfer from savers to debtors” over the last six-plus years of near-zero rates will probably continue. Returns on money market funds, longtime havens for retirees and others on fixed incomes, have cratered to near-zero from 4.79 percent in October 2007, before the financial crisis, according to Crane Data LLC. Savers will likely be the last to benefit from higher rates.
More
Greece's future in EU in doubt if talks fail, central bank warns
Greece's leftist government faced a barrage of warnings on Wednesday
that it risked being forced out of the euro zone and left without support if it
failed to strike a swift aid-for-reforms deal with its creditors.
The Bank of Greece said the country's future in the European Union
itself could also be at risk without a deal, underlining the extent to which
officials who once refused any suggestion of "Grexit" are now openly
discussing the prospect.
Despite urgent pleas, including from the White House, there has been
little sign of movement since talks between officials from Greece, the European
Union, European Central Bank and International Monetary Fund collapsed on
Sunday.
More
Greek finance minister doesn't expect deal at Thursday Eurogroup meeting
Greek Finance Minister Yanis Varoufakis said on Wednesday he and his
euro zone counterparts were unlikely to reach a aid-for reforms deal at a
meeting on Thursday.
"Tomorrow we will set the scene for what we consider to be our
political and moral duty, and that is to reach an agreement very, very quickly
with our partners and the institutions," he said after talks in Paris at
the Organisation for Economic Cooperation and Development.
Asked if there could be an agreement at the meeting of eurozone finance
ministers in Luxembourg on Thursday, Varoufakis said: "I do not believe
so."
http://www.reuters.com/article/2015/06/17/us-eurozone-greece-varoufakis-idUSKBN0OX2AW20150617
Bookies not backing Greek 2015 euro exit yet
Growing nerves over Greece have been the talk of financial markets for
the past week, but online betting firms see only around a one-in-five chance it
will leave the euro zone this year -- a lower likelihood than earlier this
year.
British-based bookmakers Ladbrokes and William Hill ceased taking bets
on Greece becoming the first country to leave the euro weeks ago, but on
prediction markets sites, which allow punters to bet against each other, the
debate is in full swing.
Such sites, which aggregate the best guesses of punters putting money on
the line, have proved the best indicator of the outcome of a string of major
political events including last month's UK parliamentary election.
They show probabilities broadly ranging within 1-2 points of 20 percent
when the question is whether Greece will leave the euro this year. At one of
the biggest sites, Betfair, bets worth more than 120,000 pounds ($189,000) have
been laid on the issue.
Those contrast with the odds Betfair itself -- or competitor Paddy Power
-- will give punters on their sportsbook websites, which suggest a lot more
anxiety about the geopolitical risks they are exposing themselves to.
Paddy Power is offering odds of 2-to-1 on Greece leaving the euro, but that
is still down from 11/10, or almost even money, at one point earlier in the
year.
"This reflects a change in the percentage chance of Greece exiting
the euro zone from 48 percent to 33 percent," a Paddy Power spokesman
said. "But with the situation constantly evolving we wouldn't rule out
further fluctuation over the next few days. We can't see Greece lightening up
anytime soon."
The sums involved are insignificant compared to the trillions in play on
global financial markets daily.
But memories are still fresh of March's Israeli election and last year's
Scottish independence referendum, when the betting sites also proved right and
modeled opinion polls were way off.
More
If Greece can wreck it, how strong was euro in the first place?
Tuesday 16 June 2015
When economics and politics clash, economics invariably wins. But the
battle can take years and during that time, not only does deep economic misery
result, but the political aims are lost in the process. And so it is with
Greece.
Alexis Tsipras, the Prime Minister, accuses the International Monetary
Fund of “criminal” responsibility for what has happened to his country. He says
the European Central Bank has imposed what amounts to “financial asphyxiation”.
In using these terms, he is reflecting Greek public opinion now, but also the
attitude of many other electorates towards IMF programmes and central bank
orthodoxy.
----So it is easy to dismiss these attacks as a populist rant. Those at
the IMF are technicians following rules, not criminals, and the ECB has gone to
the limits of its mandate in supporting the Greek banking system. Easy, but
wrong. Strip out the inflammatory language and it is true that the successive
bailouts of Greece by the IMF, ECB and European Commission have not only
failed, but been bound to fail.
The IMF has a lot of experience of sovereign bailouts. These vary
depending on the situation of the country, but typically they have several
elements. Some debt is written off, often as much as half of it. The country
devalues its currency, usually by 20-25 per cent. It brings in a reform programme,
sorting out its internal finances. And it receives new loans to tide it over
until the reforms take effect. In the case of Greece, the first two elements
were not there. Some private debts were written down (the so-called “haircut”
imposed on bond holders) but the much larger public debts were not touched.
Nor
was there a devaluation, for Greece was in the eurozone. So all the burden was
placed on the reform programme, which imposed deep austerity on the people, in
return for which the country got some short-term loans.
Thus
the IMF’s tried and trusted economic solution could not be applied because of
politics. Sovereign debt in Europe could not be written down because to do so
would have undermined the eurozone system; and Greece could not devalue. The
result was a fudge, which we at this newspaper, along with many others, said at
the time could not work.
----So what happens next? There will be a
huge political commotion, and huge pressure for Greece to carry on with yet
deeper austerity. The conventional view is that it would be better for the
country to submit to this pressure and that it would be a catastrophe were it
to default and/or leave the eurozone. That is politics, and there are plenty of
politicians, officials, central bankers, academics and commentators who will
press this case.
But to accept this is to accept that Greece will spend the next 42 years
paying back an average of €10bn a year to its creditors. That cannot be right.
More
"We need only take our heads out of the sand to see clearly that interventionism not only has failed to provide the promised something-for-nothing, but has led to all sorts of undesirable consequences. Indeed, many are just beginning to realize that we are moving towards disaster even though we have been on a wrong heading for decades."
Leonard Read
At the Comex silver depositories
Wednesday final figures were: Registered 57.84 Moz, Eligible 122.85 Moz, Total
180.69 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Borrow and drill, borrow and drill, then what?
Oil and gas drillers may face wave of bankruptcies this year
Tom DiChristopher 16/06/2015
Oil
and gas firms face a crucial test of their health at the end of summer, making
the next two months crucial for some drillers on the brink.
Heading into the end of the year, experts say stubbornly high crude
production, coupled with eroding revenue, could start to force exploration and
production companies to enter bankruptcy, sell assets or embark on
mergers—especially if oil prices don't move higher.
A potential catalyst arrives in September, when banks will make one of
their periodic reassessments of drillers' reserves. If the companies' assets
are found to be less valuable than their outstanding debt, drillers will be
forced to come up with a way to cover the gap between their reserve value and
debt load. That could mean asset sales, restructurings and the like—or bankruptcies.
Capital from debt and new equity has been relatively easy to come by in
the year's first half, but a variety of factors indicate that may not last.
Moreover, banks have made accommodations to help drillers stave off default,
said Omar Samji, a partner in law firm Jones Day's energy practice.
Samji said banks had so far taken a "reasonable," short-term
view of oil and gas companies and commodity prices. "They'll have another
bite of the apple in a couple of months and will get to gauge whether they were
right or wrong," he said.
In the first quarter of 2015, upstream oil companies raised $10.9
billion through new equity offerings, according to data from Dealogic. In the
previous five years, total first-quarter equity issuances averaged only about $4
billion.
Meanwhile, oil and gas companies have raised $97 billion so far this
year in U.S. dollar-denominated bond markets, according to Dealogic data
compiled by Citigroup. At this time last year, that total stood at $86 billion.
Kim Brady, partner at private equity firm SOLIC Capital, said he expects
between five and 13 publicly traded, independent oil and gas exploration and
production companies with revenues in excess of $100 million to file for
bankruptcy between July this year and June of next year. In the following year,
he predicts another three to seven bankruptcies.
More
"Gold bears the confidence of the world's millions, who value it far above the promises of politicians, far above the unbacked paper issued by governments as money substitutes. It has been that way through all recorded history. There is no reason to believe it will lose the confidence of people in the future."
Oakley R. Bramble
Solar & Related Update.
With events
happening fast in the development of solar power, I’ve added this new section.
Updates as they get reported. Is converting sunlight to usable cheap AC energy
mankind’s future from the 21st century onwards? A quantum computer next?
Canadian Solar Supplies Modules for 42.9 MW Solar Plant in Japan
GUELPH, Ontario, June 17, 2015 /PRNewswire/ -- Canadian Solar Inc. (the "Company", or "Canadian Solar") (NASDAQ: CSIQ), one of the world's largest solar power companies, today announced that it served as the supplier of photovoltaic (PV) modules for the 42.9 MW Takataya Hibiki PV plant in Kitakyushu, Japan. In total, Canadian Solar provided 168,240 Canadian Solar CS6P-255P solar panels.The Takataya Hibiki solar power plant, located in the Fukuoka prefecture, is expected to reach commercial operation in August of 2015. While the independent power producer is Takataya Co. Ltd, JGC Corporation provided turnkey engineering, procurement, and construction services. Takataya Hibiki is expected to generate 49 million kWh annually, which is equivalent to powering 13,600 homes. Furthermore, the system will displace approximately 32,340 metric tons of carbon dioxide every year.
Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar commented, "Canadian Solar is proud to have been selected as the module supplier for this solar plant in Japan. We believe strongly in the plant's economic and environmental benefits, especially in reducing the carbon footprint in the country."
About Canadian Solar Inc.
Founded in 2001 in Canada, Canadian Solar is one of the world's largest and foremost solar power companies. As a leading manufacturer of solar photovoltaic modules and a provider of solar energy solutions, Canadian Solar has a geographically diversified pipeline of utility-scale power projects. In the past 14 years, Canadian Solar has successfully deployed over 10 GW of premium quality modules in over 70 countries around the world. Furthermore, Canadian Solar is one of the most bankable companies in the world, having been publically listed on NASDAQ since 2006. For additional information about the company, follow Canadian Solar on Facebook, Twitter, LinkedIn, or on the website.
http://www.solardaily.com/reports/prnewswire-solardaily-news.html?doc=201506170700PR_NEWS_USPR_____CN36458&showRelease=1&dir=0&categories=SOLAR-POWER&andorquestion=OR&&passDir=0,1,2,3,4,5,6,15,17,34
"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
The monthly Coppock Indicators finished May
DJIA: +107 Down. NASDAQ:
+195 Down. SP500: +139 Down.
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