Baltic Dry Index. 699 -01
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
“Patriotism
is supporting your country all the time and your government when it deserves
it.”
Mark Twain.
Today, as we all
await America plunging over its self-imposed “fiscal cliff,” now less than a
week away, we turn to the heirs of the “Eight Immortals” of Mao’s murderous
communist run China. Who knew in the 1940s and 1950s that millions would die so
a privileged elite would get the spoils of the 21st century. Is this
what the Red-Blue war in Washington D.C. is really all about? Stay long
physical precious metals, fiscal cliff or not, 2013 is shaping up to be a
calamity on both sides of the Atlantic and in Japan. On present insane
policies, Japan has entered a race with France to see who can self-destruct
first.
But first this,
China and America trade warnings. Worse is to come in 2013, I think.
"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
Dec. 26,
2012, 12:00 a.m. EST
Chinese rating agency puts U.S. on negative watch
HONG KONG (MarketWatch) -- Chinese rating agency Dagong
Global Credit Rating Co. on Tuesday put U.S. sovereign debt on a negative watch
and highlighted what it said was a lack of political consensus on how to tackle
Washington's debt problem over the long term. In a statement on its website,
the rating agency said "each political party insists on the proposition
favorable for its own interest. Therefore, it is difficult to form a long-term
consensus on solving the debt problem ultimately, which leads to the
unceasingly fiscal deterioration of the government." Dagong said
outstanding U.S. federal debt will rise to 105% of GDP and 609% of fiscal
revenue by the end of 2012. It warned that the "solvency of the federal
government is on a descending trend." It also warned of a difficult 2013
if there was no resolution on how to avert the fiscal cliff of austerity
measures due to take effect at the start of the year. "The U.S. economy
will probably fall into recession in 2013, and stay weak in the long term,
which will further weaken the material basis for the government to repay
debt." In August 2011, Dagong cut U.S. Treasurys to A from A+, with a
negative outlook, saying growth in U.S. debt is still outpacing revenue growth.
US lambasts China for breaches of trade rules
Washington has issued a blistering attack on China for persistent breaches of world trade rules and abuse of industrial secrets, accusing Beijing of failing to abide by treaty obligations.
China is
still flouting World Trade Organisation rules 11 years after it first joined,
misusing the complaints machinery for tit-for-tat retaliation, said US Trade
Repesentative Ron Kirk.
"China's
trade policies and practices in several specific areas cause particular concern
for the United States," said Mr Kirk in his year-end report to Congress.
"China's
regulatory authorities at times seem to pursue anti-dumping and countervailing
duty investigations and impose duties for the purpose of striking back at
trading partners that have exercised their WTO rights in a way that displeases
China," said the report.
A range
of policies raised "increasing concerns that China has not yet fully
embraced the key WTO principles of market access, non-discrimination and
transparency. China's incomplete adoption of the rule of law has exacerbated
this situation."
The
report accused Chinese officials of running rough-shod over foreign firms,
forcing them to give up trade secrets in clear violation of WTO rules.
The harsh
language will infuriate Beijing at a time when tensions are already high over
maritime disputes on the Pacific Rim, where the US is increasingly embroiled as
the region's guarantor. Washington's so-called "Asian Pivot" is
viewed with deep mistrust by China's Politburo as the start of an encirclement
strategy.
The trade
frictions are in stark contrast with growing US support for a sweeping
trans-Atlantic trade deal with Europe, aimed at eliminating tariffs. It would
be the most ambitious deal of its kind ever attempted.
Talks are
expected to begin in early 2013 as the US warms to the theme on hopes that
Europe will lift curbs on US farm goods and genetically modified crops --
though France and Spain are certain to fight hard to defend their farmers.
U.S. Family of Mao’s General Assimilates, Votes for Obama
By Bloomberg
News - Dec 26, 2012 9:00 PM GMT
The middle-aged Chinese woman who answers the door apologizes for the wait
as she stands in the entryway, sporting leopard-print slippers. She’s been
exercising, she says. Two tiny dogs, fuzzy like the slippers, yap at her feet. The brick home has a well-tended lawn, a few shrubs dividing it from the neighbors. It’s a generous property, almost indistinguishable from the rest in this suburban development in Ann Arbor, Michigan.
Song Zhaozhao has a practical haircut and a quiet demeanor. A nurse at the University of Michigan’s hospital, she earns about $82,000 a year. She shares the house with her American husband, Alan, who used to work for Ford Motor Co.
Despite the trappings of middle-class America, she is anything but ordinary: She and her siblings are the closest thing China has to aristocracy.
Their father fought together with Mao Zedong in the Chinese revolution and was a top official until he fell from favor in 1968. Zhaozhao spent her teenage years with her parents in internal exile, sharing a mud-brick house on a labor farm in northern China. After Mao’s death in 1976, General Song Renqiong returned to the nation’s leadership, and is considered one of the “Eight Immortals” of the Communist Party who revived the shattered economy and society.
At least five of the general’s eight children have lived in the U.S., with three daughters becoming citizens and a son obtaining his green card. Their family is the most extreme example of the pull that the U.S. -- “beautiful country” in Chinese -- has on the Immortals’ descendants. The fortunes, family ties and business interests of 103 people, the Immortals’ direct descendants and their spouses, were mapped by Bloomberg News in a survey published today.
The siblings found opportunity in the U.S., not just to educate their children and themselves, they say, but to start businesses and leave behind the chaos and trauma of the Cultural Revolution. In the country held up as the antithesis of China’s ideals, they could lead anonymous and simple lives that adhered, ironically, more closely to the values of public service and egalitarianism espoused by their Communist parents. Their choices in many cases contrast with those of some other Immortal families, who pursued lives of privilege after Ivy-League educations and Wall Street training.
----As China’s Communist Party was anointing new leaders last month in a once-in-a-decade transition decided behind closed doors, Zhaozhao says she voted for U.S. President Barack Obama for a second time.
The youngest Song child, she is clearly uncomfortable that a reporter has come to find her in Ann Arbor. She relents enough to spend a few minutes answering questions. She says their father didn’t tell them what to do.
“He let us make our own decisions,” Zhaozhao says. “He wanted us to choose our own life.”
More
http://www.bloomberg.com/news/2012-12-26/chinese-in-ann-arbor-voted-obama-in-elite-family-of-mao-s-rulers.html
Heirs of Mao’s Comrades Rise as New Capitalist Nobility
By Bloomberg News - Dec 26, 2012 9:00 PM GMT
Lying in
a Beijing military hospital in 1990, General Wang Zhen told a visitor he felt
betrayed. Decades after he risked his life fighting for an egalitarian utopia,
the ideals he held as one of Communist China’s founding fathers were being
undermined by the capitalist ways of his children -- business leaders in
finance, aviation and computers.
“Turtle
eggs,” he said to the visiting well-wisher, using a slang term for bastards. “I
don’t acknowledge them as my sons.”
Two of the sons now are planning to turn a valley in northwestern China where their father once saved Mao Zedong’s army from starvation into a $1.6 billion tourist attraction. The resort in Nanniwan would have a revolution-era theme and tourist-friendly versions of the cave homes in which cadres once sheltered from the cold.
One son behind the project, Wang Jun, helped build two of the country’s biggest state-owned empires: Citic (6030) Group Corp., the state-run investment behemoth that was the first company to sell bonds abroad since the revolution; and China Poly Group Corp., once an arm of the military, that sold weapons and drilled for oil in Africa.
----The family’s wealth traces back to a gamble taken by General Wang and a group of battle-hardened revolutionaries, who are revered in China as the “Eight Immortals.” Backing Deng Xiaoping two years after Mao’s death in 1976, they wagered that opening China to the outside world would raise living standards, while avoiding social upheaval that would threaten the Communist Party’s grip on power.
In three decades, they and their successors lifted more than 600 million people out of poverty and created a home-owning middle class as China rose to become the world’s second-biggest economy. Chinese on average now eat six times more meat than they did in 1976, and 100 million people have traded in their bicycles for automobiles.
More
http://www.bloomberg.com/news/2012-12-26/immortals-beget-china-capitalism-from-citic-to-godfather-of-golf.html
"We are in a world of irredeemable paper money - a state of affairs unprecedented in history."
John Exter
At the Comex silver depositories Wednesday final figures were: Registered 42.70
Moz, Eligible 104.39 Moz, Total 147.09 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Day two of Japan’s
new hard line nationalist government, and new Prime Minister Abe is betting the
farm on Voodoo economics ECB style, and drawing America into its coming clash
with China over the disputed Diaoyu/Senkaku Islands in the East China Sea.
Japan’s currency now enters the race to the bottom as a front runner alongside
the Euro, the dollar, and the Pound. Stay long physical precious metals. Our
unstable world led by economic idiots, continues to get more unstable with each
passing month.
“Sometimes
I wonder whether the world is being run by smart people who are putting us on
or by imbeciles who really mean it.”
Mark
Twain.
Japan signals rise in borrowing
By Michiyo Nakamoto in Tokyo Last updated: December
26, 2012 7:17 pm
Japan’s new finance minister has signalled that the government will borrow
to boost the struggling economy, as Prime Minister Shinzo Abe unveiled a
“crisis beating” cabinet on Wednesday.At a press conference following his appointment as finance chief, Taro Aso announced he would issue bonds and lift a cap on new debt for the 2012 fiscal year.
---- The
yen fell to a two-year low against the dollar on Wednesday, in anticipation of
inflationary steps by Mr Abe’s government and potential monetary easing by the
Bank of Japan.
As prime minister himself from 2008-09, Mr Aso launched huge economic
stimulus packages to combat fallout from the global financial crisis before he
lost power.Mr Abe on Wednesday unveiled a cabinet of close allies and policy experts to push his agenda of economic recovery, just hours after being formally appointed as the country’s seventh prime minister in six years.
He has vowed to create a “crisis-beating government” to tackle the deflation that has dogged Japan for more than a decade and also the strong yen. Mr Abe said he had instructed his cabinet to do their utmost to achieve economic recovery and reconstruction after last year’s devastating earthquake, and to ensure national security.
----Mr Abe selected Fumio Kishida, 55, as foreign minister, and Itsunori Onodera, 52, as defence minister. The appointments were widely seen as a surprise as both men are completely unknown to the Japanese public. Mr Toshikawa said these appointments indicated that foreign and defence policy – along with economic policy – would be run out of the prime minister’s office.
Mr Abe’s government faces mounting tensions with China over territorial issues, and pressure to rebuild its relationship with the US amid growing security threats in the region, notably from North Korea.
Mr Abe said “restoring trust with the US is of utmost priority, and the first step towards rebuilding Japan’s diplomacy and national security is to strengthen the US-Japan alliance, which is the basis of Japan’s diplomacy.”
More
“I
was gratified to be able to answer promptly, and I did. I said I didn’t know.”
Mark
Twain.
The monthly
Coppock Indicators finished November:
DJIA: +103 Up. NASDAQ: +123 Up. SP500: +125 Up.
