Baltic Dry Index. 792 -06
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
"When it becomes serious, you have to lie"
Jean-Claude Juncker. Luxembourg Prime Minister and president of the Euro Group of Finance Ministers. Confessed liar.
All of the recent spin and hype that the euro
crisis has been solved and gone away, crashed and burned yesterday, when Der
Spiegel carried an article about how panicked the head of the ECB became last
week, when German finance minister Schauble publicly declared Cyprus was not “systemically
relevant” to Euroland if they allowed Cyprus to go bankrupt. Super Mario, European Economic and Monetary
Affairs Commissioner Olli Rehn and the head of the European Stability
Mechanism, Klaus Regling, went ballistic in fear and panic. Herr Schauble may
be paymaster of the snake bit monetary union, but he needed to be put in his
place. The reality is, tiny Cyprus’ default would probably bring the whole
house of cards crashing down, and “would
undo the positive news that had recently helped to calm the euro crisis.” In
other words don’t believe what we say.
So there is the reality of 2013 Euroland. Don’t believe what they say
for public consumption, as poor old Mr. Schauble seems to have done, the
reality is that nothing has been fixed and things are now so bad that even a
tin pot backwater like Cyprus defaulting, will bring the whole Bilderberger
United States of Europe project crashing down. Stay long precious metals.
Russia’s criminals and dodgy oligarch’s who hold most of their money in bankrupt
Cypriot banks are now to get a bailout from hardworking Germans!
Every normal man must be tempted, at times, to spit on his hands, hoist the black flag, and begin slitting throats.
H. L. Mencken.
ECB Warns of Euro-Zone Risk: Draghi Clashes with Berlin Over Aid to Cyprus
The head of the European
Central Bank, Mario Draghi, warned German Finance Minister Wolfgang Schäuble
last week not to dismiss Cyprus as not being 'systemically relevant' and said a
failure to bail out the island nation could threaten the wider euro zone.
European Central Bank President Mario Draghi confronted
German Finance Minister Wolfgang Schäuble last week to criticize his stance on
Cyprus and said failure to bail out the island nation could threaten the euro
zone.
At a
meeting of EU finance ministers last week, Draghi contradicted Schäuble's view
that Cyprus was not "systemically relevant," a term that implied it
wouldn't endanger the euro zone if it went bankrupt.
Draghi
told Schäuble that he often heard that argument from lawyers, even though the
question of whether Cyprus was systemically relevant or not was not one that
lawyers could answer. That, said Draghi, was a matter for economists. Schäuble
is a trained lawyer.
Draghi
was backed by the European Economic and Monetary Affairs Commissioner Olli Rehn
as well as the head of the European Stability Mechanism, Klaus Regling.
The three
pointed out to Schäuble that the two biggest banks in Cyprus had a large
network of branches in Greece. If any doubt were cast on the safety of deposits
held with those banks, the uncertainty of Greek savers could quickly spread to
Greek banks, which would represent a major setback for Greece.
In
addition, they argued, a Cypriot bankruptcy would undo the positive news that
had recently helped to calm the euro crisis.
More
Next more on the reality of the worker’s paradise
of Euroland. Was the French foreign
escapade in Mali, a mere attempt to divert anger at rising unemployment into
French nationalism?
Before a man speaks it is always safe to assume that he is a fool. After he speaks, it is seldom necessary to assume it.
H. L. Mencken.
France 'totally bankrupt', says labour minister Michel Sapin
France's labour minister sent the country into a state of shock on Monday after he described the nation as “totally bankrupt”
Francois
Hollande battling to undo the potential reputational damage.
“There is
a state but it is a totally bankrupt state,” Mr Sapin said. “That is why we had
to put a deficit reduction plan in place, and nothing should make us turn away
from that objective.”
The
comments came as President Hollande attempts to improve the image of the French
economy after pledging to reduce the country’s deficit by cutting spending by
€60bn (£51.5bn) over the next five years and increasing taxes by €20bn.
Data from
Banque de France showed earlier this month that a flight of capital has already
left the country amid concerns that France’s Socialist leader intends to soak
the rich and businesses. The actor Gérard Depardieu has renounced his French
citizenship and decamped to Russia in protest, while David Cameron said Britain
will “roll out the red carpet” to attract wealthy individuals.
Pierre
Moscovici, the finance minister, said the comments by Mr Sapin were
“inappropriate”.
More
January 28, 2013 6:59 pm
L’austérité à la française: city sells prized wines
By Hugh Carnegy in Paris
Times must really be getting hard in France.The city of Dijon has just sold off half of its prized municipal wine cellar to help fund local social spending – including a bottle of 1999 Burgundy knocked down at auction for €4,800 to a Chinese buyer.
In total, the capital of the Burgundy region raised €151,620 from the “historic sale” of 3,500 bottles that were part of a collection built up since the 1960s, it announced in a statement on Monday.
François Rebsamen, the Socialist mayor who ordered Sunday’s auction, explained: “We have overall a good budget this year, but the social action spending of the city just keeps going up. There are more and more of our co-citizens who are appealing for social aid.”
More
http://www.ft.com/cms/s/0/69421ef8-696d-11e2-9246-00144feab49a.html#axzz2JG2XnjLz
We end this morning in the land between the shining seas. As the Fed prepares to meet later in the day in their two day session, it looks like QE forever to Bloomberg’s survey of economists. Exactly. Stay long physical precious metals. Watch what they do, not what they say.
Bernanke Seen Buying $1.14 Trillion in Assets in 2014
By Joshua
Zumbrun, Jeff Kearns & Catarina Saraiva - Jan 29, 2013 5:00 AM GMT
Federal
Reserve Chairman Ben S. Bernanke’s latest round of bond buying will reach $1.14
trillion before he ends the program in the first quarter of 2014, according to
median estimates in a Bloomberg survey of economists.
Bernanke
will push on with purchases of $40 billion a month of mortgage bonds and $45
billion a month of Treasuries, according to the survey of 44 economists, even
as some Fed officials warn his unprecedented balance-sheet expansion will
impair efforts to tighten policy when necessary.
“To get
to the point where Bernanke would be comfortable letting up, you have to have a
good solid string of economic reports that you’re just not going to get” this
year, said Eric Green, global head of rates and FX research at TD Securities
Inc. in New York and a former New York Fed economist.
The
Federal Open Market Committee will renew its commitment to asset buying during
a two-day meeting starting today after determining the benefits from the
program exceed any risk of inflation or financial instability, according to
economists surveyed Jan. 24-25. Bernanke has said the policy will continue
until there are “substantial” gains in employment.
Fed
officials have a brighter outlook for the economy than many private economists.
FOMC participants forecast growth this year ranging from 2.3 percent to 3
percent, while economists in a separate Bloomberg survey have a median estimate
of 2 percent.
More
“Egol and Fabrice were way ahead of their time,” said one of the former Goldman workers.
“They saw the writing on the wall in this market as early as 2005.”
At the Comex silver depositories Monday final figures were: Registered 38.05
Moz, Eligible 115.10 Moz, Total 153.15 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, the Journal
takes a look at the deficiencies in France’s new African war in Mali. Titled “Why
France Can’t Fight,” it could just as easily been titled “Why Europe Can’t
Fight.” All of Europe, the UK included, have short changed their military for years, if not decades. In our new era of
mass austerity, we’re still disarming, the height of folly in our ever more dangerous
world.
January 27, 2013, 1:41 p.m. ET
Why France Can't Fight
Years of shortchanging defense are showing up in its Africa campaign.
The
French armed forces field some of the world's most sophisticated fighter jets,
nuclear submarines, attack helicopters and armored vehicles. The country spent
$52 billion last year on defense, which puts it in the world's top league in
total military spending. That's more than twice what such robust middle powers
as South Korea, Turkey and Israel spend.
Yet in
its commendable efforts to fight terrorists in Mali, Paris is all but begging
for logistical and military support and has come up short on everything from
refuelling to surveillance to heavy transport. Independently deploying a
brigade-sized force to a country a mere five hours flight-time away is proving
a bridge too far. How did that happen?
The
question is worth asking because it tells us something about the nature of
current European militaries—and perhaps the future of the U.S. military, too.
Consider
personnel costs. In the U.S., military planners fret that the Pentagon spends
$107 billion of its roughly $600 billion budget on salaries, another $53
billion or so on health care, and another $50 billion on retirement costs. In
France, the Defense Ministry spends an astounding 50% of its total budget on
personnel costs.
Some of
that is the result of moving to an all-volunteer force, as France did in 1996,
which has made the military smaller but more professional. But the bulk of the
problem is that the Defense Ministry spends €7.6 billion ($10.2 billion) on
retirees—roughly 20% of its budget, euros that are effectively taken away from
war-fighting needs.
The
result is an increasingly hollow military. On paper France has 230,000 men and
women in uniform, but only 30,000 are estimated to be deployable on six months
notice.
----But militaries need the not-so-sexy stuff, too, and here Paris has been shortchanging its soldiers for years. French infantrymen must now deploy with barely half the number of logistical transport vehicles the military had planned four years ago. French diplomats spent the first week of the Malian intervention haggling with the U.S., Canada and Britain for American-made C-17s to transport soldiers and gear to Mali.
France has no C-17s, though for nearly a decade it
has had an order in for 50 A400-M cargo planes. The A400-M (aka the Airbus
"Atlas") is a joint project of several European governments, whose
inability to pay for it has delayed the program repeatedly. The A400-M can
handle only about half the payload of a C-17.
France is
also still hunting for more air-refueling tankers to back up its small fleet of
aging KC-135s, which are the only way its Rafales can carry out attacks
throughout northern Mali. The U.S. hasn't agreed to help on that one. Again,
Paris has an order in for 14 new Airbus 330s to replace its tankers, but this
purchase was postponed in 2010.
More
http://online.wsj.com/article/SB10001424127887324624404578257672194671036.html?mod=WSJ_hp_us_mostpop_read
In Paris they simply stared when I spoke to them in French; I never did succeed in making those idiots understand their language.
Mark Twain.
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.
