Baltic Dry Index. 794 Unch Brent Crude 61.92
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"Gold was not selected arbitrarily by governments to be the monetary standard. Gold had developed for many centuries on the free market as the best money; as the commodity providing the most stable and desirable monetary medium."
Murray N. Rothbard
As the USA parties away this weekend, celebrating George Washington’s
unlikely victory, with French help, over Lord Cornwallis, and his British,
German and American army, the hapless Greeks are preparing to vote in or out of
the euro. The actual referendum question is a fiendishly worded question about
accepting an austerity driven bailout package that’s no longer on offer, but
this is the EUSSR, and they might as well be voting on whether the moon is made
of Greek cheese. In street and media terms, a yes vote is a vote to stay in the
euro and grovel for more austerity from the troika. A no vote is a vote to
default on the debt exit the euro and return to a national currency in a few
weeks, most likely called the drachma. Bloomberg and other pollsters suggest
that the outcome is too close to call. However the pollsters said that about
May’s UK general election, when the real result turned out to be anything but.
Below, Bloomie on what passes for adult government in the EUSSR and the
dying monetary union. Whatever the outcome of the Greek vote, Greece is likely
to be internally split, and any new austerity bailout package that doesn’t
wipe-out some of the debt, merely sets up a return crisis somewhere between
August and year-end. Keep educating that troupe of monkeys in the Berlin Zoo.
Greeks Split Down Middle Before Bailout Referendum, Poll Shows
July 3, 2015 — 6:00 AM BST
Greece is divided right down the middle heading into Sunday’s referendum
on European bailout proposals, portending even more upheaval for the stricken
nation.
A poll commissioned by Bloomberg News showed 43 percent intend to vote
“no” to reject the austerity demanded by creditors in exchange for financial
aid; 42.5 percent back a “yes” to accept the conditions, the survey of 1,042
people by the University of Macedonia Research Institute of Applied Social and
Economic Studies showed. The margin of error was 3 percent.
The survey suggests that the plebiscite may not resolve anything as the nation’s economic and political crises deepen. While the poll showed more than four in five Greeks want to stay in the euro, the nation’s crippled banks and Premier Alexis Tsipras’s isolation from other European leaders have thrown into doubt the country’s future in the currency union.
Tsipras called the snap vote unexpectedly last weekend as talks with creditors broke down. He argues that Greeks can reject their proposals and still remain in the euro, winning better terms for its debt in the process — a claim disputed by almost everyone else.
A win for the “yes” camp, which is backed by the main opposition parties, could lead to the ouster of the Tsipras government while leading to continued aid. Finance Minister Yanis Varoufakis said in a Bloomberg Television interview Wednesday that he would resign after such an outcome, and that the composition of the government may change “because some of us will not be able to stomach it.”
More
Greek banks down to €500m in cash reserves as economy crashes
The daily allowance of cash from many ATM machines has already dropped from €60 to €50, purportedly because €20 notes are running out
Greece is sliding into a full-blown national crisis as the final cash reserves of the banking system evaporate by the hour and swathes of industry start to shut down, precipitating the near disintegration of the ruling coalition.Business leaders have been locked in talks with the Bank of Greece, pleading for the immediate release of emergency liquidity funds (ELA) to cover food imports and pharmaceutical goods before the tourist sector hits a brick wall.
---- The daily allowance of cash from many ATM machines has
already dropped from €60 to €50, purportedly because €20 notes are running out.
Large numbers are empty. The financial contagion is spreading fast as petrol
stations and small businesses stop accepting credit cards.
Constantine Michalos, head of the Hellenic Chambers of Commerce, said lenders are simply running out of money. "We are reliably informed that the cash reserves of the banks are down to €500m. Anybody who thinks they are going to open again on Tuesday is day-dreaming. The cash would not last an hour," he said.
"We are in an extremely dangerous situation. Greek companies have been excluded from the electronic transfers of Europe's Target2 system. The entire Greek business community is unable to import anything, and without raw materials they can't produce anything," he said.
More
Italy’s Grillo Flies Greek Flag to Push for Referendum at Home
July 3, 2015 — 5:00 AM BST
Italy’s comedian-turned-politician Beppe Grillo will be in Athens Sunday
to back Greek Premier Alexis Tsipras’s call for a “no” vote on more austerity.
Grillo is hoping to gain momentum for a referendum on the euro in Italy,
the second most indebted country in the euro area, after Greece.
“See you in Athens in Syntagma Square,” Grillo, who leads Italy’s Five
Star Movement, wrote on his blog. “In Italy too we want Italians to decide on
the Euro with a referendum.”
Italy, which is just emerging from its longest recession since World War
II, has a large component of anti-establishment and anti-euro parties and
movements. Italian parties supporting the “no” vote in Greece would beat the
“yes” front by 11 percentage points, according to Bloomberg calculations based
on party leader indications and June 29 election polls by Istituto Piepoli SpA.
In addition to Grillo’s party, which is the second biggest in Italy
after Premier Matteo Renzi’s Democratic Party, the anti-immigration Northern
League Party led by Matteo Salvini also supports a “no” vote in Greece. Like
Grillo, Salvini says he wants out of the single currency and hopes the Greek
crisis will help precipitate matters.
More
In other disturbing news, the bursting of China’s Communist Party driven stock market bubble, now seems to be taking on a very dark xenophobic Anti-American twist. If I were a Morgan Stanley stock pundit in China, I think now would be a very good time to head home to celebrate Independence Day. With the Shanghai Composite down 24 percent in less than a month, and everyone and his dog having followed Communist Party advice to invest in the stock bubble, mostly on margin leverage, this wipe-out is doing very unpredictable damage. “At the same time, China’s stock regulators said Friday they would look into possible “market manipulation” helping fuel the move lower.” It sounds to me that China’s Communist Party is looking for scapegoats with none of them in the Chinese Communist Party.
As China stocks sink, some accuse Morgan Stanley, other foreign forces
Published: July 3, 2015 1:04 a.m. ET
HONG KONG (MarketWatch) — The recent, drastic stock-market meltdown in China
seems to have freaked out the country’s government and central bank, as their
repeated efforts to stabilize the markets have failed, at least so far. And now, some segments of Chinese society are now raising the possibility that “evil” market forces going short to ruin the economy, and even suspecting investment “predators” of lurking behind the turmoil, with Morgan Stanley MS, -0.91% among the names mentioned.
Mainland China’s benchmark Shanghai Composite Index SHCOMP, -1.13% had plunged more than 24% from its June 12 peak as of Thursday’s close, despite a raft of stimulative measures by authorities, including rate cuts, reduction in stock-transaction fees, and an easing of margin rules.
At the same time, China’s stock regulators said Friday they would look into possible “market manipulation” helping fuel the move lower.
Against this backdrop, the Financial News, a newspaper run by the People’s Bank of China, said in an editorial Friday that predatory forces were playing up the risks for the Chinese markets, specifically mentioning Morgan Stanley for having withdrawn a previously bullish forecast for the Shanghai Composite Index after a sharp drop for the benchmark on June 26.
The newspaper cited Morgan Stanley as suggesting that the Shanghai Composite may have topped out at the beginning of June, and it accused the U.S. investment bank or either making “a malicious remark carelessly” or harboring “ulterior motives.”
The editorial also said other banks which had similarly soured on Chinese equities were seeking to “go short on China on purpose and disturb China’s economic reforms.”
Similarly, five professors from China’s top universities issued a widely distributed public letter Thursday, alleging sinister market forces were exploiting weaknesses in China’s financial system for profit, comparing the situation to when financier George Soros and others bet against East Asian currencies during the 1997-98 Asia Financial Crisis.
The professors also urged authorities to closely monitor the stock transactions of large investors and slash the stamp duty by half in order to stabilize the markets and avoid any potential social turmoil.
Also Friday, a group of the first 28 companies to be listed on the more speculative Shenzhen Enterprise Board issued a joint statement on Friday, vowing they would use “any possible means,” including stock buybacks and other share purchases, to support their stock prices and protect the stability of that market.
This followed a similar move by group of 24 listed companies from the eastern province of Zhejiang, also jointly pledging to “protect the prosperity of capital markets” by buying more of their own shares, according to state media reports earlier this week.
"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
Thursday final figures were: Registered 60.11 Moz, Eligible 123.57 Moz, Total
183.68 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, the increasingly dodgy, unsustainable EUSSR.
Extend and pretend has its limits.
Did The IMF Just Open Pandora's Box?
Submitted by Tyler Durden on
07/02/2015 15:33 -0400
By now it should be clear to all that the only reason why Germany has been
so steadfast in its negotiating stance with Greece is because it knows very
well that if it concedes to a public debt reduction (as opposed to haircut on
debt held mostly by private entities such as hedge funds which already happened
in 2012), then the rest of the PIIGS will come pouring in: first Italy, then
Spain, then Portugal, then Ireland. The problem is that while it took Europe some 5 years to transfer a little over €200 billion in Greek private debt exposure to the public balance sheet (by way of the ECB, EFSF, ESM and countless other ad hoc acronyms) at a cost of countless summits and endless negotiations, which may or may not result with the first casualty of the common currency which may prove to be reversible as soon as next week, nobody in Europe harbors any doubt that the same exercise can be repeated with Italy, or Spain, or even Portugal. They are just too big (and their nonperforming loans are in the hundreds of billions).
And yet, today, in a stunning display of the schism within the Troika, it was the IMF itself which explicitly stated that Greece is no longer viable unless there is both additional funding provided to the country, which can only happen if there is another massive debt haircut.
This is what the IMF said:
Even with concessional financing through 2018, debt would remain very high for decades and highly vulnerable to shocks. Assuming official (concessional) financing through end–2018, the debt-to-GDP ratio is projected at about 150 percent in 2020, and close to 140 percent in 2022 (see Figure 4ii). Using the thresholds agreed in November 2012, a haircut that yields a reduction in debt of over 30 percent of GDP would be required to meet the November 2012 debt targets. With debt remaining very high, any further deterioration in growth rates or in the mediumterm primary surplus relative to the revised baseline scenario discussed here would result in significant increases in debt and gross financing needs (see robustness tests in the next section below). This points to the high vulnerability of the debt dynamics.
And the kicker:
- "these new financing needs render the debt dynamics unsustainable."
"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?
No update today. We’re off celebrating a combined this week's Canada Day and US Independence Day, as we await Monday’s news from Greece. Have a great weekend.
"Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money."Daniel Webster
The monthly Coppock Indicators finished June
DJIA: +98 Down. NASDAQ:
+192 Down. SP500: +127 Down.
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