Euros Anyone?

Baltic Dry Index. 700  +02

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

"The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine, and to process; and that it cannot be created by political fiat or caprice."

Henry Hazlitt

The nightmare that is the fiat money euro just gets worse. For the millions trapped in the Club Med austerity zone, the euro isn’t working any more. Far from bringing prosperity as promised, it’s turned into a wealth and jobs destroying mechanism on par with the biblical plagues of Egypt. For the youth generation of Club Mad, 30 to 55 percent unemployment is a recipe for emigration or perpetual poverty. By missing out on a job 18-25, most will get on the upward ladder too late. They will become little more than a generational underclass unless they emigrate. Either the German block must exit the euro, or Club Dead must exit the euro for the betterment of their people. Now the rest of the world can see what’s coming next, even if Europe’s leaders and Eureaucrats can’t or deliberately won’t. Stay long physical precious metals. The euro’s borrowed time has just about run out.

"Sooner or later both the Greek population and international creditors will tire of fighting a losing battle, leading to a break-up of the currency union as Greece pulls out, probably followed by other countries"

Douglas McWilliams, chief executive of the Centre of Economics and Business Research.

Europe's dream of toppling dollar fades as Asian Tigers dump euro

The share of euros in the world’s rising powers’ reserve holdings has fallen to its lowest level since 2002, dashing hopes that the single currency will soon challenge the US dollar for global primacy.

By Ambrose Evans-Pritchard 7:57PM GMT 03 Jan 2013

International Monetary Fund data show that emerging nations have cut the weighting of EMU bonds in their reserves to 24.7pc from a peak of 30pc at the onset of Europe’s crisis three years ago, with a record drop in the third quarter of 2012.

“They have lost their appetite for peripheral EMU bonds, and some have simply cut Italy and other countries from their benchmarks,” said Jens Nordvik, currency chief at Nomura.

The IMF data also show a record $19bn (£12bn) surge in holdings of sterling by advanced central banks to $98bn, the biggest three-month jump ever recorded. Analysts say this is almost certainly caused by the Swiss National Bank as it takes extreme measures to hold down the franc. The SNB has already bought an estimated $80bn-worth of euro bonds and is increasingly switching to other assets.

“There aren’t many places to go in this 'ugly contest’ if you don’t like the euro, dollar or yen,” said HSBC’s David Bloom.

The effect has been to thwart the Bank of England’s efforts to weaken the pound. The Swiss and UK central banks are effectively in a “low intensity” battle against each other. “This is what happens in currency wars. Desperate times lead to desperate acts,” said Mr Bloom.

More

http://www.telegraph.co.uk/finance/financialcrisis/9778899/Europes-dream-of-toppling-dollar-fades-as-Asian-Tigers-dump-euro.html

In yet another sign that Europe is dying under the unloved euro regime, for the first time ever more new cars sales were registered in China then the Eurozone. According to an article in Der Spiegel “whereas 13.2 million cars were registered in China in 2012, in Europe, the total fell from the previous year's 13.6 million to just 12.5 million.” Continental Europe has a Bilderberger death wish called the euro.

Ferrari and Maserati domestic sales fall by more than half

Sales of Ferrari and Maserati fell by more than half in 2012 in Italy, as the luxury car market was hit by high taxes.

By Telegraph staff, and agencies 11:44AM GMT 03 Jan 2013

Ferrari sales fell by 56pc to 248 units in last year, according to the Italian auto industry trade body.

Maserati's fall was steeper, down by 72pc to 115 units, while Lamborghini sales dropped by 16.6pc as it sold 60 cars.

Overall Italy's car sales fell to their lowest level since 1979, falling 22.5pc in December and slumped 19.9pc for the full year to 1.4 million units, their lowest levels since 1979.

"The car market is suffering from an overdose of taxes aimed at hitting, if not criminalising, the acquisition, ownership and use of autos," said Filippo Pavan Bernacchi, the president of Italy's car dealers' trade group Federauto to Reuters.

He said he expected Italian car sales in 2013 to be close to 1.33 million units.

Italy was not alone, as car sales in France and Spain also dropped.

Automakers are facing a sustained slump in the European car market as the eurozone debt crisis and government austerity measures sap consumer demand.

French car registrations fell 15pc in December, leaving the full year down 14pc to 1.90 million vehicles - the lowest since 1997, French industry group CCFA said.

Spain's monthly sales shrank 23pc, after a 20pc fall in November. Its full-year total of 699,589 cars, down 13 percent, was the lowest since industry association Anfac began keeping records in 1989.

More

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9777684/Ferrari-and-Maserati-domestic-sales-fall-by-more-than-half.html

But on the other side of the Atlantic things are little better. While the next Lehman is busy ticking away in an unreformed casino bankster economy, inside the Fed there is despair that old Helicopter Ben is all but out of bullets. Stay long physical precious metals for the 2013 end game. The USA, Great Britain, the Eurozone and Japan, are all now on voodoo policies intended to weaken their fiat currencies against each other. We seem to be headed for a bigger version of 2007-2008.

“Those who don't know history are destined to repeat it.”

Edmund Burke

Jan. 3, 2013, 2:40 p.m. EST

Fed says it’s running out of bullets

Commentary: FOMC signals that bond purchases may stop

WASHINGTON (MarketWatch) — For the first time since the financial crisis started five years ago, the Federal Reserve has at last made its first signal that its extraordinary loose monetary policy will start to get tougher.

To be sure, the change isn’t gigantic. There’s no sense that interest rates will increase from the near zero levels that have lasted for over four years.

And the Fed only last month initiated a new bond-buying program, to top off a plan to add more mortgage-backed securities that had only been around since September.

But, the minutes show, the central bank is starting to say, enough is enough. Of the crowd that supported bond buys, a few say they should continue until the end of the year, and several said it could stop, or slow, well before then.

----To put it differently: the Fed thinks the economy isn’t that great and there’s very little inflation to worry about, but its primary program to improve the economy doesn’t do very much.

It’s a clear admission the Fed is running out of gun powder. And that’s quite a shot it has fired to the markets.

More

http://www.marketwatch.com/story/fed-says-its-running-out-of-bullets-2013-01-03?link=MW_story_popular

"The most puzzling development in politics during the last decade is the apparent determination of Western European leaders to re-create the Soviet Union in Western Europe."

Mikhail Gorbachev

At the Comex silver depositories Thursday final figures were: Registered 40.43 Moz, Eligible 108.37 Moz, Total 148.80 Moz.  

Crooks and Scoundrels Corner

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

Today, more on East Asia’s dialog of the deaf in their path to the next war. Japan clutches at straws in its effort to hold onto the spoils of war. What the Japanese media conveniently overlooks, is that  for whatever reason at the time Japan, never took up China’s olive branch in 1950. Our world is forever a place of missed opportunity. If Eamon de Valera had taken up Churchill’s 1940 offer of returning the north after the war in exchange for air and naval bases in the south to cover the western approaches, the north would be part of the republic now. He simply though that Britain was going to lose and the Germany would give him better terms. If Argentina had taken up Britain’s 1965 suggestion of a transfer and leaseback arrangement, the Falkland Islands reality would now be very different. As it is, Japan is now arguing with China over the Diaoyu’s, the exact opposite position it takes with Russia over the Kuril Islands. This vastly under estimated dispute will likely only end badly.

We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable.

Alexander Solzhenitsyn

1950 Chinese diplomatic draft sees Senkakus as part of Ryukyus

TOKYO, Dec. 28, Kyodo

A Chinese diplomatic draft in 1950 on a peace treaty with Japan indicated Chinese recognition of the Senkaku Islands as part of the Ryukyu Islands, sources familiar with the document said Friday.

The wording in the draft for the Chinese government uses the name Senkaku Islands and indicates China understood the islands to be under the government of what is now Okinawa Prefecture, the sources said.
The recognition that the islands were part of the Ryukyu Islands contradicts Beijing's current claim that the islands are part of Taiwan and belong to its own territory from ancient times.

The document, dated May 1950 and titled "Draft outline on issues and arguments on parts concerning territories in the peace treaty with Japan," is believed to be authentic, according to the sources who examined the copy of the draft.

The draft says there is a need to deliberate whether to incorporate the islands into Taiwan due to an extremely close distance, suggesting the Chinese government as of 1950 did not consider the islands part of Taiwan.

The document also uses the name "Senkaku Islands," a sign there was no practice of calling the islands "Diaoyu," the name currently used in China.

In 1951, the San Francisco Peace Treaty was concluded and Japan considers the islands were returned from the United States together with subsequent agreements, but the Chinese government was not the party to the 1951 peace agreement.

The Japanese government denies the existence of a dispute over the Senkaku Islands, saying it was not until the 1970s that China started claiming the sovereignty over the islands.

http://english.kyodonews.jp/news/2012/12/202008.html

Another weekend, and the best that can be said is that America didn’t press the nuke button on the global economy during the week. But in the new civil war now ravaging America, nothing has been settled and neither side looks like giving up. From east to west, it’s all “double, double, toil and trouble,” at least as seen from a complacent London. Have a good weekend everyone.

 “The President may not want to have a fight about government spending over the next few months, but it’s the fight he is going to have, because it’s a debate the country needs.”

Senator McConnell

The monthly Coppock Indicators finished December:

DJIA: +100 Down. NASDAQ: +123 Unch. SP500: +129 Up.  All three indexes are giving different signals. A time for caution.

A Dodgy Relief Rally.

Baltic Dry Index. 698 -01

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

Patriotism is the last refuge of a scoundrel.

 Samuel Johnson.

After yesterday’s global stock markets relief rally that the USA wasn’t going to push the global economy into an instant man made recession, today it’s time for a more sober look at the real economic reality. The USA may not be entering a Republican Party made instant recession, but it’s still likely entering an ordinary trade recession in 2013, especially so if in two months time the USA actually implements any meaningful spending cuts. But a crushed Republican Party might just decide that fight is no longer worth the effort. Just let the Democrats keep taxing and spending the USA into oblivion, and try to make the case in two year’s time at the mid-term elections, when the US voters will likely be faced with the stark choice of real reform, or the decline and fall of the American Empire.

In Europe, despite the relief rally yesterday, stock should be falling not rallying. The Eurozone recession is deepening with Germany now joining in, and France off pursuing national suicide policies. Only China offers a glimmer of hope, assuming one believes the official statistics and assuming, a newly belligerent Japan doesn’t start a war with China over “the Chinese Falklands.” For more on that scroll down to Crooks Corner.

"Let us take a patriot, where we can meet him; and, that we may not flatter ourselves by false appearances, distinguish those marks which are certain, from those which may deceive; for a man may have the external appearance of a patriot, without the constituent qualities; as false coins have often lustre, though they want weight."

Samuel Johnson.

Euro zone factory slump deepens, U.S., Asia perk up

WASHINGTON/LONDON | Wed Jan 2, 2013 1:33pm EST
(Reuters) - Manufacturing in the United States and China grew in December, suggesting the global economy was on course for moderate growth this year, even as the euro zone looked set to sink deeper into recession.
U.S. factory activity rebounded last month after stumbling to a 40-month low in November, with new export orders growing for the first time since May. That mirrored growth in Chinese manufacturing reported earlier this week.

The Institute for Supply Management said its index of U.S. manufacturing activity rose to 50.7 from 49.5 in November.

The improvement came despite concerns over a wave of sharp government spending cuts and high taxes, the so-called fiscal cliff, that would have sucked $600 billion from the U.S. economy and push it into recession.
In much of Europe, the mood was downbeat. Purchasing managers' surveys in the 17-nation euro zone showed economic decline among some of its biggest member countries.

Markit's Eurozone Manufacturing Purchasing Managers' Index (PMI) edged down to 46.1 in December from November's 46.2, below a preliminary reading of 46.3.

It has been below the 50 mark that divides growth from contraction since August 2011.

----In China, a manufacturing survey by HSBC, which focuses more on smaller and mid-sized firms, suggested activity was at its strongest since May 2011. China's official manufacturing PMI, released on Tuesday held steady in December at 50.6, matching November's seven-month high.

The surveys add to signs economic activity in China picked up between October and December after growth slowed for seven consecutive quarters to 7.4 percent in the third quarter. That helped offset persistent weakness in Europe and Japan.

----While Congress and the Obama administration managed to steer the economy away from the worst of the so-called fiscal cliff, Americans face a higher tax burden this year and government spending cuts.
Analysts estimate that could cut as much as one percentage point from gross domestic product this year.

----Germany, Europe's largest economy, saw its crucial manufacturing sector shrink for the 10th straight month and at a faster pace, while French data showed a decline in all but one of the past 17 months.

The slump in Spain deepened and Italy's index, although improved, remained below 50 for the 17th month.
Ireland was the only member of the currency union to show manufacturing growth in December.

"It's pretty grim really," said Jonathan Loynes at Capital Economics. "These surveys are pointing to a pretty deep recession. If the German industrial sector is contracting quite sharply, it is pretty hard to see where growth across the euro zone as a whole is going to come from."

More

http://www.reuters.com/article/2013/01/02/us-global-economy-idUSBRE90103R20130102

Portugal warns EU-IMF troika to back off on austerity demands

Portugal's president has ordered a legal inquiry into the country’s austerity policies and threatened a showdown with creditors over the draconian terms of its EU-IMF bail-out.

By Ambrose Evans-Pritchard 7:23PM GMT 02 Jan 2013

President Anibal Cavaco Silva called for urgent action to halt the “recessionary spiral”, warning Europe’s leaders that the current course had become “socially unsustainable”.

In a speech to the nation, he said Portugal would “honour its international obligations”, but in the same breath called for a tough line with the European Union-International Monetary Fund Troika over the pace of fiscal tightening under Portugal’s €78bn (£63bn) loan package. “We have arguments, and we should use them firmly,” he said.

“Fiscal austerity is leading to declining output and lower tax revenue. We must stop this vicious circle,” he said, cautioning the Troika that there would be no way out of the crisis until policy was set in the interests of the “Portuguese people” as well as foreign creditors.

His sombre speech was a reminder that Europe’s crisis is far from over.

Portugal’s jobless rate has risen from 13.7pc to 16.3pc over the past year, reaching 39pc for youth, even before the full impact of austerity hits.

In a stinging rebuke to the country’s free market premier, Pedro Passos Coelho, the president asked the constitutional court to rule on the legality of tax rises that come into force this January as well as on further moves to dismantle the welfare state in the 2013 budget.

“There are well-founded doubts over whether the distribution of sacrifice is just,” he said. Mr Cavaco Silva’s broadside against ministers from his own centre-right Social Democrat party leaves the government starkly isolated, and increasingly in danger of losing its authority.

Popular anger is building over the over the Troika’s fiscal shock therapy, which will push up average income tax rates by 3.4 percentage points and bring in a plethora of surcharges and fees. It aims to cut the budget deficit to 4.5pc this year, largely through tax rises.

More

http://www.telegraph.co.uk/finance/financialcrisis/9776701/Portugal-warns-EU-IMF-troika-to-back-off-on-austerity-demands.html

At the Comex silver depositories Wednesday final figures were: Registered 40.30 Moz, Eligible 108.37 Moz, Total 148.81 Moz.  

Crooks and Scoundrels Corner

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

No crooks today, just scoundrels stumbling their way to a major Asian war that just might end in World War Three.  Stay long physical precious metals. Two Asia nations can’t back down without losing face, while Japan was just given last month, a blank cheque for war from the USA. One or all are going to lose out in this dispute, that looks certain to rapidly escalate as 2013 plays out.

"In a time of war the nation is always of one mind, eager to hear something good of themselves and ill of the enemy. At this time the task of the news-writer is easy; they have nothing to do but to tell that a battle is expected, and afterwards that a battle has been fought, in which we and our friends, whether conquering or conquered, did all, and our enemies did nothing."

Samuel Johnson.

Caught in a bind that threatens an Asian war nobody wants

Date December 26, 2012

Hugh White

Creative diplomacy is urgently needed for a face-saving solution.

THIS is how wars usually start: with a steadily escalating stand-off over something intrinsically worthless. So don't be too surprised if the US and Japan go to war with China next year over the uninhabited rocks that Japan calls the Senkakus and China calls the Diaoyu islands. And don't assume the war would be contained and short.

Of course we should all hope that common sense prevails.

------The analogy with Asia today is uncomfortably close and not at all reassuring. No one in 431BC really wanted a war, but when Athens threatened one of Sparta's allies over a disputed colony, the Spartans felt they had to intervene. They feared that to step back in the face of Athens' growing power would fatally compromise Sparta's position in the Greek world, and concede supremacy to Athens.

The Senkakus issue is likewise a symptom of tensions whose cause lies elsewhere, in China's growing challenge to America's long-standing leadership in Asia, and America's response. In the past few years China has become both markedly stronger and notably more assertive. America has countered with the strategic pivot to Asia. Now, China is pushing back against President Barack Obama's pivot by targeting Japan in the Senkakus.

The Japanese themselves genuinely fear that China will become even more overbearing as its strength grows, and they depend on America to protect them. But they also worry whether they can rely on Washington as China becomes more formidable. China's ratcheting pressure over the Senkakus strikes at both these anxieties.

The push and shove over the islands has been escalating for months. Just before Japan's recent election, China flew surveillance aircraft over the islands for the first time, and since the election both sides have reiterated their tough talk.

Where will it end? The risk is that, without a clear circuit-breaker, the escalation will continue until at some point shots are exchanged, and a spiral to war begins that no one can stop. Neither side could win such a war, and it would be devastating not just for them but for the rest of us.

No one wants this, but the crisis will not stop by itself. One side or other, or both, will have to take positive steps to break the cycle of action and reaction. This will be difficult, because any concession by either side would so easily be seen as a backdown, with huge domestic political costs and international implications.

It would therefore need real political strength and skill, which is in short supply all round - especially in Tokyo and Beijing, which both have new and untested leaders. And each side apparently hopes that they will not have to face this test, because they expect the other side will back down first.

Beijing apparently believes that if it keeps pushing, Washington will persuade Tokyo to make concessions over the disputed islands in order to avoid being dragged into a war with China, which would be a big win for them. Tokyo on the other hand fervently hopes that, faced with firm US support for Japan, China will have no choice but to back down.

And in Washington, too, most people seem to think China will back off. They argue that China needs America more than America needs China, and that Beijing will back down rather than risk a break with the US which would devastate China's economy.

Unfortunately, the Chinese seem to see things differently. They believe America will not risk a break with China because America's economy would suffer so much.

These mutual misconceptions carry the seeds of a terrible miscalculation, as each side underestimates how much is at stake for the other. For Japan, bowing to Chinese pressure would feel like acknowledging China's right to push them around, and accepting that America can't help them. For Washington, not supporting Tokyo would not only fatally damage the alliance with Japan, it would amount to an acknowledgment America is no longer Asia's leading power, and that the ''pivot'' is just posturing. And for Beijing, a backdown would mean that instead of proving its growing power, its foray into the Senkakus would simply have demonstrated America's continued primacy. So for all of them, the largest issues of power and status are at stake. These are exactly the kind of issues that great powers have often gone to war over.

More

http://www.smh.com.au/opinion/politics/caught-in-a-bind-that-threatens-an-asian-war-nobody-wants-20121225-2bv38.html#ixzz2GAKA8VUy

"A man sometimes starts up a patriot, only by disseminating discontent, and propagating reports of secret influence, of dangerous counsels, of violated rights, and encroaching usurpation. This practice is no certain note of patriotism. To instigate the populace with rage beyond the provocation, is to suspend publick happiness, if not to destroy it. He is no lover of his country, that unnecessarily disturbs its peace. Few errours and few faults of government, can justify an appeal to the rabble; who ought not to judge of what they cannot understand, and whose opinions are not propagated by reason, but caught by contagion."

Samuel Johnson.

The monthly Coppock Indicators finished December:

DJIA: +100 Down. NASDAQ: +123 Unch. SP500: +129 Up.  All three indexes are giving different signals. A time for caution.

Risk On!!!

Baltic Dry Index. 699 

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

Suppose you were an idiot, and suppose you were a member of Congress; but I repeat myself.

Mark Twain.

The big news this morning is the total victory in the USA of America’s blue team over what turned out to be a wimpy red team. America is saved from going over its “fiscal cliff,” at least for now, with the can kicked safely down the road for another few weeks. Why this outcome couldn’t have happened in a civilised way in November or early December, is only known to the inmates running America’s Washington asylum, but America’s leadership role in the world diminishes as a result. Sadly there is no other viable leader to replace a divided America, so for at least the next four years we can expect more of the same. It’s “risk on” time again in the global markets, with equities, oil, and gold the likely early winners. With nothing fixed and a massive new round of monetisation again underway, in time all tangible assets will rise against the fiat currencies. The public isn’t fooled by monetisation as it was in the middle of the last century.

There is no distinctly American criminal class - except Congress.

Mark Twain.

United States avoids calamity in "fiscal cliff" drama

WASHINGTON | Wed Jan 2, 2013 1:58am EST
(Reuters) - The United States averted economic calamity on Tuesday when lawmakers approved a deal to prevent huge tax hikes and spending cuts that would have pushed the world's largest economy off a "fiscal cliff" and into recession.

The agreement hands a clear victory to President Barack Obama, who won re-election on a promise to address budget woes in part by raising taxes on the wealthiest Americans. His Republican antagonists were forced to vote against a core tenet of their anti-tax conservative faith.

The deal also resolves, for now, the question of whether Washington can overcome deep ideological differences to avoid harming an economy that is only now beginning to pick up steam after the deepest recession in 80 years.

Consumers, businesses and financial markets have been rattled by the months of budget brinkmanship. The crisis ended when dozens of Republicans in the House of Representatives buckled and backed tax hikes approved by the Democratic-controlled Senate.

More

http://www.reuters.com/article/2013/01/02/us-usa-fiscal-idUSBRE8A80WV20130102

Stocks to soar as world money catches fire, Calvinst Europe left behind

Bears beware. A monetary revolution is underway.

By Ambrose Evans-Pritchard 9:43AM GMT 01 Jan 2013

The US, Japan, Britain, as well as the Swiss, Scandies, and a string of states around the world, are actively driving down their currencies or imposing caps.

They are tearing up the script, embracing the new creed of nominal GDP targeting (NGDP), a licence for yet more radical action.

The side-effects of this currency warfare -- or "beggar-thy-neighbour’ policy as it was known in the 1930s -- is an escalating leakage of monetary stimulus into the global system.

So don’t fight the Fed, and never fight the world’s central banks on multiple fronts.

Stock markets have already sensed this, up to a point, lifting Tokyo’s Nikkei by 23pc and Wall Street by 10pc since June.

----The more that investors come to think another cycle of global growth is safely under way, the riskier it will be to hold corporate bonds, $8 trillion in the US alone. With yields priced for deflation, that bubble is dangerous to own on 10-year maturities. The money will rotate into equities and bullion, with China’s central bank driving gold through $2,000 at last.

As a polar bear, I doubt that such a happy cycle is upon us. We merely have a rally within a structural trade depression.

The headwinds of deleveraging will return with gale force. The glut of excess global savings that lay behind the great crisis of 2008-2009 -- and that has kept us stuck in the Long Slump ever since -- is still getting worse. The international trading system remains badly out of kilter.

There is chronic overcapacity across global industry and not enough demand to carry a full cycle of economic expansion, or to reach "escape velocity" as they say these days.

Until that changes, every global rebound is doomed to disappoint within a few quarters, and that includes the cyclical upswing of 2013.

More

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9773911/Stocks-to-soar-as-world-money-catches-fire-Calvinst-Europe-left-behind.html

Gold Extends Longest Streak Since 1920 on Central-Bank Stimulus

By Nicholas Larkin & Debarati Roy - Dec 31, 2012 8:08 PM GMT

Gold rose, capping the longest annual gain since at least 1920, on renewed concern that central banks from Europe to China will take steps to spur economic growth and as U.S. leaders near a budget deal.

Gold futures for February delivery gained 1.2 percent to settle at $1,675.80 at 1:41 p.m. on the Comex in New York, while prices for immediate delivery jumped as much as 1.5 percent. Through Dec. 28, the metal had slumped for five straight weeks as the deadline for the so-called fiscal cliff of automatic tax increases and spending cuts due to take effect tomorrow loomed. President Obama said today at a White House event that an agreement was “within sight.”

Investors from John Paulson to George Soros have a $140.6 billion bet via near-record holdings in gold-backed exchange- traded products after the Federal Reserve said Dec. 12 it would buy $45 billion of Treasury securities a month as of January, adding to $40 billion a month of mortgage-debt purchases. Gold will probably peak in 2013 because of improving U.S. growth, even as the Fed expands stimulus, Goldman Sachs Group Inc. said Dec. 5. Morgan Stanley said a day later bullion will be among next year’s best-performing commodities.

“All that money printing across the globe put a bid under gold,” Matt Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview. “There is overall optimism about the fiscal deal so we are seeing buying across the counter.”

The metal averaged a record $1,670.71 this year in New York even as it slid 6 percent since September, the biggest quarterly drop since 2004. The run of annual gains in the immediate delivery market is the longest since at least 1920.

More

http://www.bloomberg.com/news/2012-12-31/gold-poised-for-12th-annual-climb-as-u-s-budget-deadline-nears.html

Japan plans 'nationalisation' of factories to save industry

Japan's government is to take the unprecedented step of buying factories and machinery directly with taxpayer funds, the latest in a series of radical steps to lift the country out of its deep slump.

By Ambrose Evans–Pritchard 9:02AM GMT 01 Jan 2013

Premier Shenzo Abe is to spend up to one trillion yen (£7.1bn) buying plant in the electronics, equipment, and carbon fibre industries to force the pace of investment, according to Nikkei news.

The disclosure came just a day after Mr Abe vowed to revive Japan's nuclear industry with a fresh generation of reactors, insisting that they would be "completely different" from the Fukishima Daiichi technology.

The industrial shake–up shows the ferment of fresh thinking in the third–largest economy after years of paralysis. Output shrank 0.9pc in the third quarter and industrial production has fallen 3.3pc over the past two months, made worse by a boycott of Japanese goods in China over the Diaoyu/Senkaku islands row. Exports to China fell 38pc in November.

Mr Abe's Liberal Democrats have already lambasted the central bank, threatening a new bank law unless it adopts radical measures to pull Japan out of deflation – including a growth target of 3pc for nominal GDP, implying massive monetary stimulus.

He has set an implicit exchange range target of 90 yen to the dollar, instructing the Bank of Japan to drive down the yen with mass purchases of foreign bonds along lines pioneered by the Swiss.

Finance minister Taro Aso brushed aside warnings that naked intervention would anger trade partners and damage Japan's strategic alliance with the US. "Foreign countries have no right to lecture us," he said, accusing the West of failing to abide by a G20 pledge in 2009 to forgo competitive devaluations.

More

http://www.telegraph.co.uk/finance/newsbysector/industry/9773883/Japan-plans-nationalisation-of-factories-to-save-industry.html

Sometimes too much to drink is barely enough.

Mark Twain.

At the Comex silver depositories Monday final figures were: Registered 40.30 Moz, Eligible 107.92 Moz, Total 148.20 Moz.  

Crooks and Scoundrels Corner

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

Today, more on the real China. Would you really want the Yuan to replace the Yankee dollar at the core of our casino banksterism system?

Visa Issue in China Forces Out Times Reporter

By THE NEW YORK TIMES Published: December 31, 2012

BEIJING — A correspondent for The New York Times was forced to leave mainland China on Monday after the authorities declined to issue him a visa for 2013 by year’s end.

Chris Buckley, a 45-year-old Australian who has worked as a correspondent in China since 2000, rejoined The Times in September after working for Reuters. The Times applied for Mr. Buckley to be accredited to replace a correspondent who was reassigned, but the authorities did not act before Dec. 31, despite numerous requests. That forced Mr. Buckley, his partner and their daughter to fly to Hong Kong on Monday.

Normally, requests to transfer visas are processed in a matter of weeks or a couple of months.

The Times is also waiting for its new Beijing bureau chief, Philip P. Pan, to be accredited. Mr. Pan applied in March, but his visa has not been processed.

The visa troubles come amid government pressure on the foreign news media over investigations into the finances of senior Chinese leaders, a delicate subject. Corruption is widely reported in China, but top leaders are considered off limits.

On the day that The Times published a long investigation into the riches of the family of Prime Minister Wen Jiabao, both its English-language Web site and its new Chinese-language site were blocked within China, and they remain so.

In June, the authorities blocked the English-language site of Bloomberg News after it published a detailed investigation into the family riches of China’s new top leader, Xi Jinping. Chinese financial institutions say they have been instructed by officials not to buy Bloomberg’s computer terminals, a lucrative source of income for the company.

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http://www.nytimes.com/2013/01/01/world/asia/times-reporter-in-china-is-forced-to-leave-over-visa-issue.html?hp&_r=0

"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

The monthly Coppock Indicators finished December:

DJIA: +100 Down. NASDAQ: +123 Unch. SP500: +129 Up.  All three indexes are giving different signals, but with global monetisation the order of the day now that America has pulled back from its fiscal cliff, equities and bullion are likely to be the early winners in 2013.