Baltic Dry Index. 589 Brent Crude 64.85
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
If
people don't like Marxism, they should blame the British Museum.
Mikhail Gorbachev
From wet and windy London this morning, it looks to me that Germany is getting ready to surrender to the bankrupt Greeks. The Troika seem to be in a panic over where their own policy has led them, a default by Greece this coming Friday. Somehow they must make their surrender a “one-off” not applicable to all and sundry to the rest of the “PIGS” and certainly not decaying France. An impossible task I think. Continental Europe’s voters have had it with the establishment of the wealth and job destroying EUSSR. Europe’s panicked “leaders” are now desperately trying to put the toothpaste back in the tube. With predictable results I think. Greece is within an Ace of getting its free lunch.
“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
European Leaders Deciding On Greece's Fate Agree That Talks Must Intensify
June 1, 2015 — 6:51 PM BST Updated
on June 2, 2015 — 12:18 AM BST
European leaders and the head of
the International Monetary Fund agreed to step up the intensity of talks over
Greece’s fate after an extraordinary meeting in Berlin about ways to avert a
default.
The top-level huddle lasted past
midnight Tuesday morning at Germany’s government headquarters with Chancellor
Angela Merkel, IMF chief Christine Lagarde, European Central Bank President
Mario Draghi, French President Francois Hollande and European Commission
President Jean-Claude Juncker in attendance. The goal was to hammer out an
offer that Greece could consider in coming days, according to two people
familiar with the plan.
After Merkel left, her office put
out a statement saying the five leaders “agreed that work must now be continued
with greater intensity” and that “they have been in closest contact in recent
days and want to remain so in the coming days, both among themselves and
naturally also with the Greek government.”
Efforts to end an impasse over
funding have become urgent as the Mediterranean nation faces a debt repayment
to the IMF on Friday. While Greece says it can make the payment, it’s the
smallest of four totaling almost 1.6 billion euros ($1.78 billion) this month.
The timing coincides with the expiration of a euro-region bailout by the end of
June.
With talks dragging into their
fifth month, deadlines have come and gone with meetings, calls and summits
yielding little as disagreements over pensions and labor laws persisted.
“Even a mediocre agreement is much
better than the alternative for Greece, which is bankruptcy,” said Nicholas
Economides, professor of economics at New York University’s Stern School of
Business. “Bankruptcy within the euro would be very difficult to manage and
would require tremendous support from the ECB, which is unlikely.”
Morehttp://www.bloomberg.com/news/articles/2015-06-01/greece-s-creditors-said-to-meet-in-berlin-to-discuss-next-steps
Will Greece Join These Deadbeats That Missed Debt Payments to the IMF?
The country is at risk of being enshrined alongside Cuba, Cambodia, and Zimbabwe
June 1, 2015 — 8:25 PM BST
If cash-poor Greece fails to make any of its $1.7 billion in loan repayments
to the International Monetary Fund this month, starting with $334 million due
Friday, the country will be enshrined in history with a group of current and
former deadbeats that includes Cuba, Zimbabwe, and Sudan.What sets Greece apart from many other cases is that it wasn't done in by war, revolution, or violence—but rather by its own debt and spending, compounded by a financial crisis and austerity measures imposed by the IMF and other creditors. (IMF Managing Director Christine Lagarde was meeting in Berlin Monday night with creditors, including German Chancellor Angela Merkel and ECB President Mario Draghi, to discuss reaching an accord over the Greek crisis, according to three people familiar with the gathering.)
Here are some of the highlights—er, lowlights—of nations that have missed IMF debt payments in the lender's seven decades of existence, as recounted in large part in the 2001 book Silent Revolution by IMF historian James Boughton.
More
But the commentariat are getting
antsy. Bring this farce to an end, suggests the UK’s Telegraph. The EUSSR must
find a way to toss out Greece. But that’s the Troika’s nightmare. No one has
any idea about what happens next or how voters from Spain to Italy would react,
let alone in Britain in next year’s in-out EU referendum.
Greece must stop hoping for a miracle - it needs to leave the euro
The best way for Greece to relearn the importance of economic orthodoxy is for it to test to destruction its own monetary policy, its own tax system and its own-self imposed rules
It’s time for Greece to put itself out of its misery. It must stop hoping for a miracle, default on its debts and exit the euro. In the short term, this would probably precipitate another cataclysmic relapse into recession for Greece’s long-suffering people. But it is the only way out of the current logjam and has become a necessary, albeit not sufficient, condition for the country to make an eventual recovery.Ideally, the Greek government would choose to press the Grexit button itself. But if it decides instead to cling on indefinitely, the rest of the eurozone should find a way of forcing it out of the single currency as soon as possible. That would go against the EU’s imperialistic mindset, for sure, and would violate the infamous acquis communautaire rule: the view that EU integration should never be allowed to be reversed in any area and in any country. But it’s the only way to end the current nonsense, and the only hope for a country that has been suffering horrendously for years.
The most powerful arguments in favour of both default and Grexit relate to political economy and electoral psychology. Greece’s debt burden is too big: it can never be repaid. The sooner everybody accepts this, the better. Just as importantly, however, most Greek voters seem to agree with the current government’s ideology: they want, by and large, to remain in the euro but don’t want to have to abide by its broadly orthodox rules on tax, spending and markets. This is fatally inconsistent: the only way for the euro to work, in the absence of massive, permanent handouts from Germany and other rich countries, is for member states to embrace free markets and radical labour market flexibility.
More.
“We
had 10 years after the Cold War to build a new world order and yet we
squandered them. The United States cannot tolerate anyone acting independently.
Every US president has to have a war.”
Mikhail
Gorbachev
At the Comex silver
depositories Monday final figures were: Registered 58.30 Moz, Eligible 121.61
Moz, Total 179.91 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
David Stockman nails it again. Stay long physical
gold and silver.
From Whence Cometh Our Wealth—–The People’s Labor Or The Fed’s Printing Press?
by David Stockman •
It is hard to believe that in
these allegedly enlightened times this question even needs to be asked.
Are there really educated adults who believe that by dropping helicopter
money conjured from thin air, the central bank can actually make society
wealthier?
Well, yes there are. They spread
this lunacy from the most respectable MSM platforms. And, no, I’m not talking
about professor Krugman and his New York Times column. At least, he
pontificates from a Keynesian framework that has a respectable, if erroneous,
intellectual heritage.
What I am talking about
here is the mindless bunkum issued by so-called financial journalists who
swish around Wall Street and Washington exchanging knowing tidbits with
policy-makers, deal-makers and each other. Call it the bubble
finance “narrative”, and recognize that its gets more uncoupled from
economic facts, logic and plausibility with each passing day in the casino.
The estimable folks at The
Automatic Earth put a bright spotlight on this crucial matter this
morning, even if not by design. Their trademark daily vintage photo was a
1911 picture of a family including all the kids picking berries in the field;
they were making GDP the old fashioned way.
In the usual manner the
site’s “debt rattle” list of links to timely reads followed, and the first
was a Bloomberg View opinion piece called “QE For The People:
Monetary Policy For The Next Recession” by one Clive Crook. It was
actually a case for literally dropping central bank money from the skies
to enable policy-makers to better “support demand and keep their economies
running”.
In thoughtfully supplying a photo
of a helicopter in full flight to accompany Crook’s discourse, the Bloomberg
graphics department crystalized the essential economic issue of our times.
Namely, whether wealth is made by the Berry Pickers or the Money Printers.
Needless to say, The
Automatic Earth’s vintage photo reminds us how GDP is actually made:
----It used to be that “helicopter money” was a sort of metaphor—-certainly the great libertarian, Milton Friedman, did not mean that the state should engage in airborne redistribution through the aegis of the central bank when he famously coined the term. No longer. Here is what Bloomberg’s apparently lapsed Onion contributor said this morning:
Sooner rather than later, attention therefore needs to turn to a new kind of unconventional monetary policy: helicopter money…. (or) how about “QE for the people” instead? It has a nice populist ring to it — suggesting a convergence of financial excess and the Communist Manifesto…… “Overt monetary financing” is closer to what’s required, but something even duller would be better.
Whatever you call it, the idea is far from crazy. Lately, more economists have been advocating it, and they’re right.
The logic is simple. If central banks need to expand demand — and interest rates can’t be cut any further — let them send a check to every citizen. Much of this money would be spent, boosting demand just as Friedman said.
Uncle Milton must be rolling in his grave.
----But at least until the Greenspan era, the primary tool of state intervention to purportedly keep the macro economy off the shoals and on the path toward “full employment” was fiscal—–that is, deficit
spending and tax cuts.
And that kind of state action to
improve upon the alleged inferior performance of producers,
consumers, investors, entrepreneurs and speculators on the free
market entailed at least some outer boundaries. To wit, hereditary fear of
too much national debt kept the politicians from outright free lunch
economics—even after the Reagan era destroyed the will of the old
guard GOP budget balancers.
As it happened, it was Greenspan
who confected the bridge from fiscal stimulus by the unruly and inconstant processes
of political democracy to central bank based monetary stimulus based
on the purported wisdom of an unelected monetary elite. Slowly at first,
and then with a rush during his post dotcom interest rate slashing campaign,
Greenspan converted the old counter-cyclical doctrines of the first
generation Keynesians, who made a stagflationary hash out of the
US economy during the late 1960s and 1970s, into the bubble finance
economy which prevails today.
More
Solar & Related Update.
With events
happening fast in the development of solar power, I’ve added this new section.
Updates as they get reported.
June 1, 2015
Graphene layer could quadruple rate of condensation heat transfer in generating plants
Most of the world's electricity-producing power plants—whether powered by coal, natural gas, or nuclear fission—make electricity by generating steam that turns a turbine. That steam then is condensed back to water, and the cycle begins again.But the condensers that collect the steam are quite inefficient, and improving them could make a big difference in overall power plant efficiency.
Now, a team of researchers at MIT has developed a way of coating these condenser surfaces with a layer of graphene, just one atom thick, and found that this can improve the rate of heat transfer by a factor of four—and potentially even more than that, with further work. And unlike polymer coatings, the graphene coatings have proven to be highly durable in laboratory tests.
The findings are reported in the journal Nano Letters by MIT graduate student Daniel Preston, professors Evelyn Wang and Jing Kong, and two others. The improvement in condenser heat transfer, which is just one step in the power-production cycle, could lead to an overall improvement in power plant efficiency of 2 to 3 percent based on figures from the Electric Power Research Institute, Preston says—enough to make a significant dent in global carbon emissions, since such plants represent the vast majority of the world's electricity generation. "That translates into millions of dollars per power plant per year," he explains.
More
EU investigating adding Malaysia and Taiwan to solar trade case
By John Parnell 29 May 2015, 15:36
The EU has opened an investigation into Malaysian and Taiwanese solar imports
that could see the countries added to the scope of the Commission’s trade
tariffs on Chinese modules.German firm SolarWorld requested the investigation and presented the Commission with sufficient evidence of a “change in the pattern of trade” and that the existing trade measures are being “undermined”, according to a document published today in the Official Journal of the European Union.
The development tracks that of the US-China trade case where the use of cells from countries other than China was targeted in a fresh trade case last year. That case, in which SolarWorld was again the chief agitator, resulted in additional tariffs on modules using cells from Taiwan. The rule of thumb prior to that case saw the country of origin of a solar module determined by the origin of the cell as this is the process where the most value is added.
Under those terms, Chinese manufacturers using cells from Malaysia and Taiwan could import modules that would not be subject to existing trade tariffs or the restrictions on minimum pricing set out in the agreement between the EU and China.
SolarWorld-led trade group EU ProSun triggered a separate investigation earlier this year regarding how the minimum price agreement is calculated.
"Chinese solar manufacturers circumvent the EU's anti-dumping measures by first exporting to third countries like Malaysia and Taiwan before they are imported into the EU, thereby falsifying their genuine origin. Such circumvention is customs fraud and must be stopped,” claimed Milan Nitzschke, president of EU ProSun and VP of SolarWorld.
More
“The
market is not an invention of capitalism. It has existed for centuries. It is
an invention of civilization.”
Mikhail
Gorbachev
The monthly Coppock Indicators finished May
DJIA: +107 Down. NASDAQ: +195 Down. SP500: +139 Down.
