Wednesday, 23 March 2016

More NIRP Coming.

Baltic Dry Index. 398 unch.        Brent Crude 41.36

LIR Gold Target in 2019: $30,000.  Revised due to QE programs.

Brexit odds checker.

Brexit Quote of the Day.
"I've made it clear that the United States has neither the capacity or the intention to impose change on Cuba. What changes come will depend on the Cuban people."
President Obama. 
Now if Obama will just extend the same courtesy to us Brits, and Brexit.
The big news of the day is of course yesterday’s murderous attacks in Brussels by moslem fanatics. Our sympathies go out to the dead and injured and their families. Well covered in MSM, I will only say that Donald Trump’s proposed ban on unvetted moslem travellers to America, doesn’t look quite so silly this morning. If only Europe had the advantage of two giant protecting oceans.

Ted Cruz calls for patrolling Muslim neighborhoods after Brussels attacks

Published: Mar 22, 2016 3:19 p.m. ET
Republican presidential candidate Ted Cruz is calling for patrolling Muslim neighborhoods in the wake of the deadly attacks in Brussels on Tuesday.

Cruz, a Texas senator, said in a statement that the U.S. should “immediately halt” refugee immigration from countries with significant al Qaeda or ISIS presences. He added: “We need to empower law enforcement to patrol and secure Muslim neighborhoods before they become radicalized.”

Cruz did not say in his statement where such patrols should be done. A message left with his campaign was not immediately returned.

Islamic State, also known as ISIS, claimed responsibility for the three explosions that rocked Brussels and left more than 30 people dead.

Brussels Attacks Add to Political Obstacles for Cameron, Merkel

March 22, 2016 — 6:16 PM GMT
If David Cameron and Angela Merkel thought they had earned a moment’s respite from their woes, the murderous attacks in Brussels only deepened their political turmoil.
The bombings at the heart of the European Union that killed at least 31 people were seized upon by proponents of Britain leaving the bloc to argue that EU membership puts the U.K. more at risk, rather than making it safer as the prime minister asserts. In Germany, an insurgent party that benefited from opposition to Chancellor Merkel’s open-door policy on refugees immediately warned of the threat of “political Islam.”
The Brussels attacks may increase xenophobic and anti-immigration sentiment across the EU, which has already been rising in light of the EU’s refugee crisis, said Mujtaba Rahman, director of European analysis at the Eurasia Group in London. That has implications both for the survival of the passport-free Schengen area championed by Merkel and the outcome of the U.K.’s in-out referendum on the EU in June, he said.
The blasts are a “nail in Schengen’s coffin,” and create the perception among the public that EU leaders are “not in control,” Rahman said in a Bloomberg Radio interview. Outside the Schengen zone in Britain, “Cameron has argued that the U.K. will be safer in the EU, but these events will make that narrative harder to sell.”

Islamic State militants claimed responsibility for the explosions, four days after Belgian authorities seized the chief suspect in the Paris terror attacks that killed 130 people in November. Those assaults were carried out by French and Belgian nationals at least some of whom who had joined Islamic State in Syria, and made their way back to Europe along routes used by Syrian refugees.
Yesterday the big financial news was the BOJ signalling yet more negative interest rates to come. Where the BOJ goes the ECB has already followed, along with Switzerland, Denmark and Sweden. It is only a matter of time for the Fed. Never mind that NIRP is voodoo economics on steroids and hopium. Deep enough and long enough NIRP will collapse pensions, insurers, annuities, and the banking system. Stay long fully paid up physical gold and silver held outside of the larcenous financial houses. You don’t want your precious metals to get “MF Globalled.” “Corzined” if you prefer. Avoid like the plague, the scam of “unallocated gold” specialised in London. A scandal awaiting its moment in the London sun.
"Gold would have value if for no other reason than that it enables a citizen to fashion his financial escape from the state."

William F. Rickenbacker

Bank of Japan adds negative-interest backer to board

Published: Mar 22, 2016 10:39 p.m. ET
TOKYO — Japan officially selected Makoto Sakurai, a supporter of negative interest rates, as a new Bank of Japan board member Wednesday, a move likely to tip the balance of opinion on the board more in favor of Gov. Haruhiko Kuroda.
The upper house of Japan’s parliament approved Sakurai to take the post, following a similar decision in the lower house the previous day.
The addition of another reflationist to the central bank’s policy-setting board will likely strengthen Kuroda’s grip on decision making by the central bank. The policy board was split 5-4 in deciding on the introduction of negative interest rates at its January meeting.
Sakurai, the head of a financial research institute named after him, will replace Sayuri Shirai, whose term is set to expire on March 31. Shirai voted against the BOJ’s decision to push interest rates into negative territory.
Unlike his predecessor, Sakurai, 70, sees negative rates as a powerful tool for spurring lending, according to a recent economic report that he wrote.

Buying gold in 2016 is like buying stocks in 1941

Published: Mar 18, 2016 7:23 a.m. ET
The last four years have seen a significant correction in the metals market. Gold has corrected almost 46% from its highs, whereas silver has corrected over 70%. One cannot view the mining stocks as being anything less than absolutely decimated.

Several weeks ago, I read a column on MarketWatch, which suggested that buying gold today is like buying stocks in 2009. While it is an interesting analogy, I think it is actually underestimating the potential appreciation for gold and mining stocks within the larger-degree perspective.

As some of you who have read my analysis of the metals market before may know, I view the larger-degree pattern in the metals and mining stocks as about to begin third-wave rally. Basically, that means that I am expecting the metals to begin a multi-decade rally.

So, rather than viewing the market as being at the same position of the equity markets back in 2009, I actually view the pattern as being more analogous to where the equity market was back in 1941. Yes, you heard me right.

I would like to begin by presenting to you the following prediction made by Ralph Nelson Elliott in August of 1941:
"[1941] should mark the final correction of the 13-year pattern of defeatism. This termination will also mark the beginning of a new Supercylce wave (V), comparable in many respects with the long [advance] from 1857 to 1929. Supercycle (V) is not expected to culminate until about 2012."

For those of you who do not understand this quote, Elliott was predicting the start of a 70-year bull market in the face of World War II raging around him. Quite an amazing prediction, no?

Now, does anyone know what the price range of the Dow was in 1941 when Elliott called for a long-term bull market? Well, the Dow dropped to as low as the 100 region in 1941. In 2015, the Dow was right around the 18,000 region. That represents a 150-180 multiple in the Dow in a little over the 70 years that Elliott expected back in 1941.

Right now, I view the pattern in the metals and mining stocks as being analogous to the pattern Elliott saw in the equity markets back in 1941. In fact, if you look at the Gold Bugs Index HUI, +0.22%  chart linked at the end of this piece, you will see that our projections are calling for an almost tenfold increase in this index over the next decade or so, which will likely increase to a fiftyfold increase in the index over the next 20 or so years, and well beyond that in 50 years. The HUI has finally struck our ideal correction target in the 100 region, in similar fashion as to the Dow striking its low region of 100 in 1941.

Billions From Heaven? ‘Helicopter Money’ Option Wins Fans

March 22, 2016 — 10:01 PM GMT
After more than 600 interest-rate cuts and $12 trillion of asset purchases since the financial crisis failed to move the inflation needle enough, central banks may need to head even deeper into uncharted territory.

The way to get the world out of its disinflationary rut could lie in them directly financing government stimulus -- a strategy known as deploying “helicopter money” after a 1969 proposal from Nobel laureate Milton Friedman.

Economists at Citigroup Inc., HSBC Holdings Plc and Commerzbank AG all published reports to investors on the topic in the past two weeks, while hedge fund titan Ray Dalio sees potential in the idea. European Central Bank officials are already squabbling about what President Mario Draghi calls a “very interesting concept.”

“We don’t know for certain that ‘helicopter money’ will be the next attempted silver bullet, however the topic is receiving considerably more attention,” said Gabriel Stein, an economist at Oxford Economics Ltd. in London. “The likelihood is reasonably high of some form being implemented somewhere.”

The theory -- never attempted by a modern major economy -- is to fuse monetary and fiscal policies now both running out of room. Cash-strapped governments sell short-term debt straight to their central bank for newly printed money that is then injected straight into the economy via tax cuts or spending programs. The usual and currently-constrained intermediaries, like banks, are bypassed.

The idea is to spur spending and investment directly rather than influence bond yields or sentiment. Central banks can be saved from permanently underwriting governments by establishing growth or inflation limits.

In a 2002 speech that earned him the nickname “Helicopter Ben,” then-Federal Reserve Governor Ben S.
Bernanke said taking to the skies would “almost certainly be an effective stimulant to consumption and hence to prices.”
We close for the day with a special service to our LIR American readers, who might wish to flee from a Trump (or Clinton) Presidency. Irish remote islands are calling you, and that’s not remote as with the TV. One downside for Americans, there’s no golf, McDonalds, or KFC, or any of a million kinds of US barbecue joints. Getting a bottle of Bourbon, might prove a little challenging too. Still for any brave Catholic Americans attempting it, they will have spared themselves a visit to Purgatory later. After all they will just have gone through Hell.

Remote Irish island seeks Americans fleeing Donald Trump presidency

Nick Bramhill @irishcentral March 21,2016 02:32 AM
American citizens, who are terrified at the prospect of Donald Trump becoming the next President, have been urged to consider relocating to one of Ireland's remotest islands.

Inishturk, off Co. Mayo, has seen its once thriving population plummet to just 58, with only three pupils attending the local primary school.

The dwindling community's leaders are desperately trying to entice families to move over to breathe new life into the isolated outpost and secure its future.

And they stressed their tranquil isle, located nine miles off the coast, could make the ideal permanent refuge for those who cannot face life in a United States headed by Donald Trump.

Mary Heanue, Inishturk development officer, said: "Our big concern is employment and trying to encourage families to move over here because the population is declining.

"The island featured on an Irish TV documentary last year which gave us great publicity and a good few extra bookings. But we ended up having a terrible summer and a lot of people canceled.

"I've heard there are quite a few people in America looking to move to Ireland and other countries if Donald Trump becomes president. I'd like them to know that we'd love to see them consider moving over here.

Read more: A guide on moving to Ireland in case Donald Trump is elected

"They'd be given a huge welcome and they'd find this is a fantastic place to live and to bring up children. Their kids would probably get the best education anywhere in the country too, because the teacher to pupil ratio is nearly one-on-one.

"Although winters can be hard and it's the kind of life that wouldn't necessarily suit everyone, they'd find it very peaceful here and they'd soon find out there's nowhere as nice in the world on a summer's day than here."

According to leading media website Mashable, Ireland represents one of the best options for US citizens looking to flee from a country run by President Trump.
And according to another report, applications for Irish passports from British nationals are also on the rise, as fears grow about the UK leaving the European Union after the June EU membership referendum..
A recent report in The Guardian found that the number of British-born people applying for Irish passports based on their ancestry has risen sharply in the past year amid concerns of a Euro exit.

“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.
At the Comex silver depositories Tuesday final figures were: Registered 31.70 Moz, Eligible 123.71 Moz, Total 155.41 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

New York Fed Had `Major Lapse' in Robbery, Bangladesh Says

March 22, 2016 — 6:43 AM GMT Updated on March 22, 2016 — 9:15 AM GMT
Bangladesh’s central bank has suggested the Federal Reserve Bank of New York had a “major lapse" in allowing hackers to transfer $101 million in transactions that it later flagged as suspicious, according to an internal document seen by Bloomberg.

The document, dated March 13, sheds new light on Bangladesh Bank’s interpretation of a cyber heist in which hackers tried to steal nearly $1 billion last month. It outlines the strategy for recouping the stolen cash, including possible legal measures, and doesn’t appear to include input from anyone outside the central bank.

It also shows the New York Fed and Bangladesh put in place greater security measures on transfers immediately after the theft.

In early February, the Federal Reserve Bank of New York blocked 30 transactions from Bangladesh’s account valued at $850 million because of a lack of beneficiary details, according to the Bangladesh Bank document. However, the New York Fed allowed another five transactions to go through “which they subsequently flagged for due diligence review," it says.

“We view this as a major lapse on the part of FRB NY," the document says, referring to the New York Fed. Bangladesh is engaging legal counsel in New York City “to establish precise grounds of initiating lawsuit claiming recompense," it says.

Fed Response

New York Fed spokeswoman Andrea Priest said they aren’t commenting beyond a statement earlier this month. The instructions to make the payments from the account of Bangladesh’s central bank followed standard protocols and were authenticated by the SWIFT message system used by financial institutions, a Fed spokeswoman said on March 8.

Subhankar Saha, spokesman for Bangladesh Bank, said he won’t comment on any internal document or any part of the investigation.

Investigators are still trying to determine the masterminds of the heist. Earlier this month Bangladesh Finance Minister Abul Maal Abdul Muhith said the Fed was responsible for the stolen funds.

Brexit Quote of the week.

Damn your principles! Stick to your party.

D. Cameron, with apologies to Benjamin Disraeli.

Solar  & Related Update.

With events happening fast in the development of solar power and graphene, I’ve added this new section. Updates as they get reported. Is converting sunlight to usable cheap AC or DC energy mankind’s future from the 21st century onwards? DC? A quantum computer next?

Tesla Discontinues 10-Kilowatt-Hour Powerwall Home Battery

The economics for backup power alone just aren’t that attractive.
by Julia Pyper March 18, 2016
Tesla has quietly removed all references to its 10-kilowatt-hour residential battery from the Powerwall website, as well as the company’s press kit. The company's smaller battery designed for daily cycling is all that remains.

The change was initially made without explanation, which prompted industry insiders to speculate. Today, a Tesla representative confirmed the 10-kilowatt-hour option has been discontinued.

"We have seen enormous interest in the Daily Powerwall worldwide," according to an emailed statement to GTM. "The Daily Powerwall supports daily use applications like solar self-consumption plus backup power applications, and can offer backup simply by modifying the way it is installed in a home. Due to the interest, we have decided to focus entirely on building and deploying the 7-kilowatt-hour Daily Powerwall at this time."

The 10-kilowatt-hour option was marketed as a backup power supply capable of 500 cycles, at a price to installers of $3,500. Tesla was angling to sell the battery to consumers that want peace of mind in the event the grid goes down, like during another Superstorm Sandy. The problem is that the economics for a lithium-ion backup battery just aren’t that attractive.

Even at Tesla’s low wholesale price, a 500-cycle battery just doesn’t pencil out against the alternatives, especially once the inverter and other system costs are included. State-of-the-art backup generators from companies like Generac and Cummins sell for $5,000 or less. These companies also offer financing, which removes any advantage Tesla might claim with that tactic, as GTM’s Jeff St. John pointed out last spring.

“Even some of the deep cycling lead acid batteries offer 1,000 cycles and cost less than half of the $3,500 price tag for Tesla Powerwall,” said Ravi Manghani, senior energy storage analyst at GTM Research. “For pure backup applications only providing 500 cycles, lead acid batteries or gensets are way more economical.”

In California, batteries can benefit from the state's Self-Generation Incentive Program (SGIP). But California regulators have indicated that battery systems need to be able to cycle five times a week in order to be eligible, which would exclude Tesla's bigger battery.

“In current discussions on SGIP program overhaul, it is very likely that stronger performance requirements may get added, which will make a 10-kilowatt-hour/500 cycles product outright ineligible (if cycled only once a week), or last only 2 years (if cycled every weekday for about 500 cycles over 2 years),” said Manghani. “In short, the market's expectation is that for a $3,500 price tag, the product needs to have more than just 500 cycles (i.e., only backup capabilities).”

Backup power alone simply doesn’t have as strong a case as using a battery for self-consumption. That said, the opportunities for self-consumption are still few and far between.

"As fewer and fewer people have confidence in paper as a store of value, the price of gold will continue to rise. The history of fiat money is little more than a register of monetary follies and inflations. Our present age merely affords another entry in this dismal register."

Hans F. Sennholz

The monthly Coppock Indicators finished February

DJIA: 16517 -23 Down. NASDAQ:  4558 +45 Down. SP500: 1932 -17 Down. 

No comments:

Post a Comment