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Why London, Too, Will Balk At Sanctions Against Russia (And Putin Knows It) | Zero Hedge

March 10, 2014 9:22 am / 1 Comment on Why London, Too, Will Balk At Sanctions Against Russia (And Putin Knows It) | Zero Hedge

Why London, Too, Will Balk At Sanctions Against Russia (And Putin Knows It) | Zero Hedge.

A week ago, when the idea of sanctions against Russia was first officially announced, we made a statement, which was obviously in jest yet which, as so often happens, was so rooted in reality:

How is this an indication of reality? Well, for one, as we reported previously, the one country that has the most to lose from Russian sanctions, Germany, and specifically its industrial superlobby has already said “Nein” to any truly crippling trade blockade of Moscow would backfire on Germany’s own economy and bottom line.

But what about London? Here, the NYT explains why, once again, it was all about the money, and why were right even when we were being humorous:

The White House has imposed visa restrictions on some Russian officials, and President Obama has issued an executive order enabling further sanctions. But Britain has already undermined any unified action by putting profit first.

It boils down to this: Britain is ready to betray the United States to protect the City of London’s hold on dirty Russian money. And forget about Ukraine.

At this point, in standing with the ideological framework of the host media outlet, the author takes a detour into naive idealism – a world in which it is not money that talks, but a declining global superpower, whose hypocrisy has been exposed time and again, and where extinct words like “mission” and “moral” are used with reckless abandon:

Britain, open for business, no longer has a “mission.” Any moralizing remnant of the British Empire is gone; it has turned back to the pirate England of Sir Walter Raleigh.Britain’s ruling class has decayed to the point where its first priority is protecting its cut of Russian money — even as Russian armored personnel carriers rumble around the streets of Sevastopol. But the establishment understands that, in the 21st century, what matters are banks, not tanks.

The Russians also understand this. They know that London is a center of Russian corruption, that their loot plunges into Britain’s empire of tax havens — from Gibraltar to Jersey, from the Cayman Islands to the British Virgin Islands — on which the sun never sets.

British residency is up for sale. “Investor visas” can be purchased, starting at £1 million ($1.6 million). London lawyers in the Commercial Court now get 60 percent of their work from Russian and Eastern European clients. More than 50 Russia-based companies swell the trade at London’s Stock Exchange. The planning regulations have been scrapped, and along the Thames, up go spires of steel and glass for the hedge-funding class.

Britain’s bright young things now become consultants, art dealers, private banker and hedge funders. Or, to put it another way, the oligarchs’ valets.

Russia’s president, Vladimir V. Putin, gets it: you pay them, you own them. Mr. Putin was absolutely certain that Britain’s managers — shuttling through the revolving door between cabinet posts and financial boards — would never give up their fees and commissions from the oligarchs’ billions. He was right.

So, let us get this straight? It is great when the Russian oligrachs “invest” their stolen money in luxury London real estate, the FTSE100, and various other inflating assets which are mistaken for an improvement in the broader “economy”, but when the alarm clock of realpolitick rings, it was all bad?

What we are more stunned by is that while London has at least figured out the quid pro quo, the US, and its leader, so far seem completely incapable of doing so. Perhaps someone should explain to Obama that with the Fed tapering, the only incremental buyer of high end real estate are precisely the oligarchs from Russia, whom he will soon alienate, as well as those from China, which also may decide it is too risky to park “hot money” in New York triplexes, and instead once again, like in 2011, park it all in gold and other precious metals.

But going back to the NYT article, the author does make the following accurate observation: “This is Britain’s growth business today: laundering oligarchs’ dirty billions, laundering their dirty reputations.”

His conclusion, too, is spot on:

The Shard encapsulates the new hierarchy of the city. On the top floors, “ultra high net worth individuals” entertain escorts in luxury apartments. By day, on floors below, investment bankers trade incomprehensible derivatives.

Come nightfall, the elevators are full of African cleaners, paid next to nothing and treated as nonexistent. The acres of glass windows are scrubbed by Polish laborers, who sleep four to a room in bedsit slums. And near the Shard are the immigrants from Lithuania and Romania, who broke their backs on construction sites, but are now destitute and whiling away their hours along the banks of the Thames.

The Shard is London, a symbol of a city where oligarchs are celebrated and migrants are exploited but that pretends to be a multicultural utopia. Here, in their capital city, the English are no longer calling the shots. They are hirelings.

Still think Putin is ready to “blink”?

Why London, Too, Will Balk At Sanctions Against Russia (And Putin Knows It) | Zero Hedge

March 10, 2014 9:22 am / 1 Comment on Why London, Too, Will Balk At Sanctions Against Russia (And Putin Knows It) | Zero Hedge

Why London, Too, Will Balk At Sanctions Against Russia (And Putin Knows It) | Zero Hedge.

A week ago, when the idea of sanctions against Russia was first officially announced, we made a statement, which was obviously in jest yet which, as so often happens, was so rooted in reality:

How is this an indication of reality? Well, for one, as we reported previously, the one country that has the most to lose from Russian sanctions, Germany, and specifically its industrial superlobby has already said “Nein” to any truly crippling trade blockade of Moscow would backfire on Germany’s own economy and bottom line.

But what about London? Here, the NYT explains why, once again, it was all about the money, and why were right even when we were being humorous:

The White House has imposed visa restrictions on some Russian officials, and President Obama has issued an executive order enabling further sanctions. But Britain has already undermined any unified action by putting profit first.

It boils down to this: Britain is ready to betray the United States to protect the City of London’s hold on dirty Russian money. And forget about Ukraine.

At this point, in standing with the ideological framework of the host media outlet, the author takes a detour into naive idealism – a world in which it is not money that talks, but a declining global superpower, whose hypocrisy has been exposed time and again, and where extinct words like “mission” and “moral” are used with reckless abandon:

Britain, open for business, no longer has a “mission.” Any moralizing remnant of the British Empire is gone; it has turned back to the pirate England of Sir Walter Raleigh.Britain’s ruling class has decayed to the point where its first priority is protecting its cut of Russian money — even as Russian armored personnel carriers rumble around the streets of Sevastopol. But the establishment understands that, in the 21st century, what matters are banks, not tanks.

The Russians also understand this. They know that London is a center of Russian corruption, that their loot plunges into Britain’s empire of tax havens — from Gibraltar to Jersey, from the Cayman Islands to the British Virgin Islands — on which the sun never sets.

British residency is up for sale. “Investor visas” can be purchased, starting at £1 million ($1.6 million). London lawyers in the Commercial Court now get 60 percent of their work from Russian and Eastern European clients. More than 50 Russia-based companies swell the trade at London’s Stock Exchange. The planning regulations have been scrapped, and along the Thames, up go spires of steel and glass for the hedge-funding class.

Britain’s bright young things now become consultants, art dealers, private banker and hedge funders. Or, to put it another way, the oligarchs’ valets.

Russia’s president, Vladimir V. Putin, gets it: you pay them, you own them. Mr. Putin was absolutely certain that Britain’s managers — shuttling through the revolving door between cabinet posts and financial boards — would never give up their fees and commissions from the oligarchs’ billions. He was right.

So, let us get this straight? It is great when the Russian oligrachs “invest” their stolen money in luxury London real estate, the FTSE100, and various other inflating assets which are mistaken for an improvement in the broader “economy”, but when the alarm clock of realpolitick rings, it was all bad?

What we are more stunned by is that while London has at least figured out the quid pro quo, the US, and its leader, so far seem completely incapable of doing so. Perhaps someone should explain to Obama that with the Fed tapering, the only incremental buyer of high end real estate are precisely the oligarchs from Russia, whom he will soon alienate, as well as those from China, which also may decide it is too risky to park “hot money” in New York triplexes, and instead once again, like in 2011, park it all in gold and other precious metals.

But going back to the NYT article, the author does make the following accurate observation: “This is Britain’s growth business today: laundering oligarchs’ dirty billions, laundering their dirty reputations.”

His conclusion, too, is spot on:

The Shard encapsulates the new hierarchy of the city. On the top floors, “ultra high net worth individuals” entertain escorts in luxury apartments. By day, on floors below, investment bankers trade incomprehensible derivatives.

Come nightfall, the elevators are full of African cleaners, paid next to nothing and treated as nonexistent. The acres of glass windows are scrubbed by Polish laborers, who sleep four to a room in bedsit slums. And near the Shard are the immigrants from Lithuania and Romania, who broke their backs on construction sites, but are now destitute and whiling away their hours along the banks of the Thames.

The Shard is London, a symbol of a city where oligarchs are celebrated and migrants are exploited but that pretends to be a multicultural utopia. Here, in their capital city, the English are no longer calling the shots. They are hirelings.

Still think Putin is ready to “blink”?

Mid-Century Heat Will Be Tough to Beat in U.K.,  Study Says – Bloomberg

February 6, 2014 8:04 am / 3 Comments on Mid-Century Heat Will Be Tough to Beat in U.K.,  Study Says – Bloomberg

Mid-Century Heat Will Be Tough to Beat in U.K.,  Study Says – Bloomberg.

By Eric Roston  Feb 5, 2014 6:34 PM ET
Photographer: Stefan Rousseau/Press Association via AP Images

Firefighters tackle a grass fire on the edge of Epping Forest near Wanstead in…Read More

Hot weather disruptions are projected to rise as decades pass — they already have — taking metropolitan areas dangerously past historic high temperatures, sometimes for days or weeks at a time.

A study of the U.K. this week in theJournal of Epidemiology and Community Health, sees a rising probability of dangerous heatwaves as the century progresses. Heat-related deaths could rise by more than 250 percent by mid-century, with some of the most dramatic increases occurring in London.

Researchers from two British institutions studied the relationship between weather and mortality between 1993 and 2006, then combined their findings with 21st century warming projections. The rising temperature and heightened variability, they conclude, “will be unprecedented since agricultural times, making it unlikely that future societal adaptation to hot weather will be as achievable as in the past.”

Heat-related deaths in London are projected to increase 39 percent by the 2020s, to 6.1 deaths for every 100,000 people. The estimate increases to 11.3 by the 2050s and 17.5 in the 2080s (assuming London hasn’t been evacuated by then to Norway or some kind of anti-heat syrum developed). Currently, about 2,000 people a year die from heat-related stress, and 41,000 from cold-related deaths.

There’s an upside to the coming heat bombs. Cold days were found to have a higher mortality rate than hot ones. The overall number of temperature-related deaths is projected to decline by the 2050s, as the increase in heat-stress deaths is offset by fewer lives lost in cold weather.

The study emphasizes that its projections occur “in the absence of any adaptation of the population” — an assumption already wearing away, as cities and companies reinvent themselves for a changing world.

Prosecutors drop case against men caught taking food from Iceland bins | UK news | theguardian.com

January 29, 2014 7:00 pm / 1 Comment on Prosecutors drop case against men caught taking food from Iceland bins | UK news | theguardian.com

Prosecutors drop case against men caught taking food from Iceland bins | UK news | theguardian.com.

Paul May outside Iceland

Paul May, one of three men caught taking cheese, tomatoes, mushrooms and Mr Kipling cakes from bins outside Iceland. Photograph: Martin Godwin

Three men caught taking discarded food from bins outside an Iceland store will not now be prosecuted after an explosion of criticism over the decision to bring charges against them, including from the company’s chief executive.

The Crown Prosecution Service said it would drop its case despite having previously said there was “significant public interest” in prosecuting the men. They were caught last year taking tomatoes, mushrooms, cheese and Mr Kipling cakes from the dustbins behind a branch of the high-street retailer.

Baljit Ubhey, the chief crown prosecutor for the CPS in London, said: “This case has been reviewed by a senior lawyer and it has been decided that a prosecution is not required in the public interest.”

The Guardian revealed on Tuesday that Paul May, Jason Chan and William James had been charged under the 1824 Vagrancy Act, after being discovered in “an enclosed area, namely Iceland, for an unlawful purpose, namely stealing food”.

On Wednesday, Malcolm Walker, the chief executive of Iceland,contacted the CPS to request that the case be dropped, stating that the company had not sought a prosecution.

The retailer took rapid steps to distance itself from the case, attempting to offset a damaging public relations storm as news of the prosecution triggered widespread criticism. Several online petitions were launched, calling on the CPS to reconsider its decision to prosecute.

Paul May, Jason Chan and William James, all residents of a squat in north London, were arrested on 25 October, just before midnight, after a member of the public called the police to report three men scaling a wall at the back of Iceland in Kentish Town. Police arrested the men as they left the area with a holdall and trolley containing food. The total value of the items taken from the bins allegedly amounted to £33.

May, 35, a freelance web designer, said he was relieved the case had been dropped. He said it was a ridiculous charge, and “crazy” to think that prosecution was in the public interest.

He said he had taken the food because he needed it to eat, and did not consider that he had done anything illegal or dishonest in removing food destined for landfill from a skip.

“Did we have dishonest intent when we jumped into the yard at Iceland to retrieve what was in the bins? No, we didn’t,” he said. “A dishonest action would be wandering into a store and filling your pockets with what is on the shelves. We didn’t do that.”

May said he was not ashamed of recovering binned food, to share, cook and eat with his housemates.

“It doesn’t feel like we are doing something criminal. We are taking food that they have thrown away so it can be eaten by people who appreciate it. I think it is more morally questionable that they are throwing away that much usable food than that people are diving in and recovering it. In some ways I am proud of what we do.”

Walker said his initial reaction to news of the prosecution had been “one of total bemusement”. Writing in the Guardian, he said: “Our store had not called the police, let alone asked for those concerned to be prosecuted. Waste food in our bins that cannot be sold is clearly of minimal value to us.”

He added: “We acted as soon as we could to ask the police and CPS to drop the case.”

The case has prompted new focus on the phenomenon of “skipping” – taking discarded supermarket waste to cook and eat – and reopened the debate over how much supermarket food is still discarded.

But although some supermarkets here are beginning to offer their unused stock to food banks, May says the quantity still found discarded in bins suggests there is much more that could be used constructively.

Explaining the decision to drop the case, Ubhey said: “In reconsidering this case, we have had particular regard to the seriousness of the alleged offence and the level of harm done. Both of these factors weigh against a prosecution. Additionally, further representations received today from Iceland Foods have affected our assessment of the public interest in prosecuting.”

“We hope this demonstrates our willingness to review decisions and take appropriate and swift action when necessary. The Crown Prosecution Service is committed to bringing the right charges to court when – and only when – it is proper to do so.”

The case was launched as attitudes towards excessive supermarket waste begin to harden. In the US, entrepreneurs are working on new models for recycling unsold produce.

May, who has regularly taken food from skips, argued that he has the right to take food which is being thrown away. “More and more people are using food banks than ever before but supermarkets are throwing away huge amounts of food, which will end up in landfill,” he said. “If supermarkets were giving as much as they could away, then their bins would be empty, or full of cardboard boxes and broken yoghurt pots – but they’re not. You’d be amazed at what you find.”

He and other residents at the squat regularly find large quantities of frozen chicken breasts. Last week they had quail. Most of the food May collects when he goes skipping has crossed the marked sell-by date, but is still edible.

The residents of the squat have a kitty where people contribute to basic necessities like teabags and milk, but the bulk of what residents eat comes from skips, May said.

May says he is squatting because he cannot afford to rent in London, and the alternative would be to move out of the city, making it hard to see his six-year-old son. Removing food from skips allows him to eat more healthily than he would if he was buying food on a low income, he claims. “If I relied on the little I have every day, I would eat very badly.”

Ukrainian Protesters Chant “Yankees Go Home”; Klitschko Warns Of “More Deaths” | Zero Hedge

January 24, 2014 3:06 pm / Leave a comment

Ukrainian Protesters Chant “Yankees Go Home”; Klitschko Warns Of “More Deaths” | Zero Hedge.

Ukrainian protesters erected more street barricades and occupied another government ministry building on Friday after the failure of crisis talks with President Yanukovich, as opposition leader Klitschko feared “more deaths” pointing to a weekend of increasingly violent protests. Reuters reports that Yanukovich’s party stated “the situation has grown sharper throughout the country,” and called on people to disregard the calls of “radical troublemakers” to turn out for protest rallies. Klitschko punched back, “Yanukovich has declared war on his own people. He is trying to hold on to power at the price of blood and de-stabilization of the situation in the country. He has to be stopped.” The international community is getting involved with Hollande calling for “dialogue” but it is Biden’s threat of “consequences” that spurred a different protest at the US embassy – “The US is behind everything that is happening in Kiev’s downtown right now.”

 

“Not A Step Back” – warns opposition:

 

Via Reuters,

The problem started…

Hundreds of thousands took to the streets in the capital after Yanukovich backed away from signing a free trade deal with the European Union, which many people saw as the key to a European future, in favor of financial aid from Ukraine’s old Soviet master Russia.

 

But the movement has since widened into broader protests against perceived misrule and corruption in the Yanukovich leadership.

 

Protesters have been enraged too by sweeping anti-protest legislation that was rammed through parliament last week by Yanukovich loyalists in the assembly.

and is spreading…

Yanukovich’s Party of the Regions confirmed reports that two months of anti-government protests were spreading to other parts of the country, particularly the west, where “extremists” had seized regional administration buildings.

And will get worse…

Opposition leader Vitaly Klitschko, who with two other opposition leaders failed to wring any concessions from Yanukovich late last night, said the only way out of the impasse lay with international mediation.

 

“Any discussion of how to settle the crisis in Ukraine must take place with the involvement of the international mediators of the highest level,” a statement from his Udar party quoted him as saying.

 

“Instead of shifting to solving the situation by common sense, Yanukovich has declared war on his own people. He is trying to hold on to power at the price of blood and de-stabilization of the situation in the country. He has to be stopped,” the boxer-turned-politician said.

 

…

 

Masked protesters, some carrying riot police shields seized as trophies, stood guard as others piled up sandbags packed with frozen snow to form new ramparts across the road leading down into the square.

 

…

 

Opposition leader Vitaly Klitschko, after leaving a second round of talks with Yanukovich empty handed, late on Thursday voiced fears the impasse could now lead to further bloodshed.

But at the US embassy, a different crowd is revolting…

As 21st Cetruy Wire reports:

…a new faction of intelligent Ukrainian protesters has sprung up this week.

They see right through the covert western operation:

“The US is behind everything that is happening in Kiev’s downtown right now.”


From yesterday afternoon, this new group have begun to encircle the US Embassy in Kiev. Their demand to the US:

‘Stop meddling in our affairs, and stop sponsoring unrest mobs in our country’. 

KIev-US-Embassy
Following John McCain’s recent trip to Kiev practicing his new brand of international racketeering by threatening the Ukraine if they did not join the EU, it seems that the real Ukrainians have finally figured out that the pro-EU mobs have been staged by a conclave of western NGO’s and ‘democracy foundations’ – the very same nest of hornets who brought on the fabled ‘Arab Spring’ to the Middle East three years ago.

The main goal for Washington and the City of London is to separate Kiev from Moscow, and thus weaken Russia’s hand in Eurasia.

For EU central bankers, the prospect of raping and privatising the Urkraine economy-  is also a big incentive.

It looks like the old tricks are no longer working. At last, the ‘colour revolution’ jig may finally be up…

RT.com
A huge crowd of demonstrators has surrounded the US embassy in the Ukrainian capital of Kiev, protesting against Washington’s meddling in the country’s internal affairs.

Follow RT’s live updates.

The event was organized by Kievans for Clean City, a new pro-government activist group which has spoken out against the rioters and violence in downtown Kiev.

Several thousand demonstrators are taking part, urging the US to “stop sponsoring” mass unrests, local media reported.

“The US is behind everything that is happening in Kiev’s downtown right now. The financing is coming from over there. This has to be stopped. That is what we came out here to say to the whole world: ‘US – stop! US – there needs to be peace in Ukraine,’” said Ivan Protsenko, one of the movement’s leaders.

Germany Has Recovered A Paltry 5 Tons Of Gold From The NY Fed After One Year | Zero Hedge

January 19, 2014 2:19 pm / Leave a comment

Germany Has Recovered A Paltry 5 Tons Of Gold From The NY Fed After One Year | Zero Hedge.

On December 24, we posted an update on Germany’s gold repatriation process: a year after the Bundesbank announced its stunning decision, driven by Zero Hedge revelations, to repatriate 674 tons of gold from the New York Fed and the French Central Bank, it had managed to transfer a paltry 37 tons. This amount represents just 5% of the stated target, and was well below the 84 tons that the Bundesbank would need to transport each year to collect the 674 tons ratably over the 8 year interval between 2013 and 2020. The release of these numbers promptly angered Germans, and led to the rise of numerous allegations that the reason why the transfer is taking so long is that the gold simply is not in the possession of the offshore custodians, having been leased, or worse, sold without any formal or informal announcement. However, what will certainly not help mute “conspiracy theorists” is today’s update from today’s edition of Die Welt, in which we learn that only a tiny 5 tons of gold were sent from the NY Fed. The rest came from Paris.

As Welt states, “Konnten die Amerikaner nicht mehr liefern, weil sie die bei der Federal Reserve of New York eingelagerten gut 1500 Tonnen längst verscherbelt haben?” Or, in English, did the US sell Germany’s gold? Maybe. The official explanation was as follows: “The Bundesbank explained [the low amount of US gold] by saying that the transports from Paris are simpler and therefore were able to start quickly.” Additionally, the Bundesbank had the “support” of the BIS “which has organized more gold shifts already for other central banks and has appropriate experience – only after months of preparation and safety could transports start with truck and plane.” That would be the same BIS that in 2011 lent out a record 632 tons of gold…

Going back to the main explanation, we wonder: how exactly is a gold transport “simpler” because it originates in Paris and not in New York? Or does the NY Fed gold travel by car along the bottom of the Atlantic, and is French gold transported by a Vespa scooter out of the country?

Supposedly, there was another reason: “The bullion stored in Paris already has the elongated shape with beveled edges of the “London Good Delivery” standard. The bars in the basement of the Fed on the other hand have a previously common form. They will need to be remelted [to LGD standard]. And the capacity of smelters are just limited.”

So… New York Fed-held gold is not London Good Delivery, and there is a bottleneck in remelting capacity? You don’t say…

Furthermore, Welt goes on to “debunk” various “conspiracy websites” that the reason why the gold is being melted is not to cover up some shortage (and to scrap serial numbers), but that the gold is exactly the same gold as before. Finally, to silences all skeptics, the Bundesbank says that “there is no reason for complaint – the weight and purity of the gold bars were consistent with the books match.” In conclusion, Welt reports that in 2014 “larger transport volumes” can be expected from New York: between 30 and 50 tons.

Here we would be remiss to not point out that the reason why the German people and the Bundesbank have every reason to be skeptical is that as Zero Hedge reported exclusively in November 2012, before the Buba’s shocking repatriation announcement and was the reason for the escalation in lack of faith between central banks, it was the Fed and the Bank of England who in 1968 knowingly sent Germany “bad delivery” gold.  Which is why we have a feeling that the pace of gold transportation will certainly not accelerate until such time as the German people much more vocally demand an immediate transit of all their gold held at the New York Fed: after all, it’s there right – surely the Bundesbank can be trusted to melt the gold (if any exists of course) into London Good Delivery or whatever format it wants.

Unless of course, the gold isn’t there…

From November 9, 2012:

Bank Of England To The Fed: “No Indication Should, Of Course, Be Given To The Bundesbank…”

Over the past several years, the German people, for a variety of justified reasons, have expressed a pressing desire to have their central bank perform a test, verification, validation or any other assay, of the official German gold inventory, which at 3,395 tonnes is the second highest in the world, second only to the US. We have italicized the word official because this representation is merely on paper: the problem arises because no member of the general population, or even elected individuals, have been given access to observe this gold. The problem is exacerbated when one considers that a majority of the German gold is held offshore, primarily in the vaults of the New York Fed, and at the Bank of England – the two historic centers of central banking activity in the post World War 2 world.

Recently, the topic of German gold resurfaced following the disclosure that early on in the Eurozone creation process, the Bundesbank secretly withdrew two-thirds of its gold, or 940 tons, from London in 2000, leaving just 500 tons with the Bank of England. As we made it very clear, what was most odd about this event, is that the Bundesbank did something it had every right to do fully in the open: i.e., repatriate what belongs to it for any number of its own reasons – after all the German central bank is only accountable to its people (or so the myth goes), in deep secrecy. The question was why it opted for this stealthy transfer.

This immediately prompted rampant speculation within various media outlets, the most fanciful of which, of course, being that the Bundesbank never had any gold to begin with and has been masking the absence all along. The problem with such speculation is that, while it may be 100% correct and accurate, there has been not a shred of hard evidence to prove it. As a result, it is merely relegated to the echo chamber periphery of “serious media” whose inhabitants are already by and large convinced that all gold in the world is tungsten, lack of actual evidence to validate such a claim be damned (just like a chart of gold spiking or plunging is not evidence that a central bank signed the trade ticket, ordering said move), and in the process delegitimizing any fact-basedinvestigations that attempt to debunk, using hard evidence, the traditional central banker narrative that the gold is there and accounted for.

And hard evidence, or better yet a paper trail of inconsistencies, is absolutely paramount when juxtaposing the two most powerful forces of our times: i) the central banking-led status quo (which isde facto the banker-led oligarchy whose primary purpose in the past several centuries has been to accumulate as much as possible of the hard asset-based fruits of people’s labor, who toil in exchange for “money” created out of thin air – a process which could be described as not quite voluntary slavery, but the phrase would certainly suffice), and ii) “everyone else”, especially when “everyone else” still believes in the supremacy of democratic forces, accountability, and an impartial legal system (three pillars of modern society which over the past 4 years we have experienced time and again have been nothing but mirages). Because without hard evidence, not only is the case of the people against central bankers non-existent, even if conducted in a kangaroo court co-opted by the banker-controlled status quo, it becomes laughable with every iteration of progressively more unsubstantiated accusations against the central banking cartels.

Finally, when it comes to cold, hard facts, which expose central banks in misdeed, even the great central banks have to be silent silent, as otherwise the overt perversion of justice will blow up the mirage that modern society lives in a democratic, laws-based world will be torn upside down.

And while others engage in click-baiting using grotesque hypotheses of grandure without any actual investigation, reporting or error and proof-checking to build up hype and speculation, which promptly fizzles and in the process desensitizes the general public and those actually undecided and/or on the fences about what truly goes on behind the scenes, Zero Hedge travelled (metaphorically) in space – to London, or specifically the Bank of England Archives – and in time, to May 1968 to be precise.

While there we dug up a certain memo, coded C43/323 in the BOE archives, official title “GOLD AND FOREIGN EXCHANGE OFFICE FILE: FEDERAL RESERVE BANK OF NEW YORK (FRBNY) – MISCELLANEOUS”, dated May 31, 1968, written by a certain Mr. Robeson addressed to the BOE’s Roy Bridge as well as its Chief Cashier, and whose ultimate recipient is Charles Coombs who at the time was the manager of the open market account at the Fed, responsible for Fed operations in the gold and FX markets.

This memo, more than any of the other spurious and speculative accusation about Buba’s golden hoard, should disturb German citizens, and of course the Bundesbank (assuming it was not already aware of its contents), as the memo lays out, without any shadow of doubt, that the BOE and the Fed, effectively conspired to feed the Bundesbank due gold bars that were of substantially subpar quality on at least one occasion in the period during the Bretton-Woods semi-gold standard (which ended with Nixon in August 1971).

The facts:  

At least two central banks have conspired on at least one occasion to provide the Bundesbank with what both banks knew was “bad delivery” gold – the convertible reserve currency under the Bretton Woods system, or in other words, to defraud – amounting to 172 bars. The “bad delivery” occured even as official gold refiners had warned that the quality of gold emanating from the US Assay Office was consistently below standard, and which both the BOE and the Fed were aware of. Instead of addressing the issue of declining gold quality and purity, the banks merely covered up the refiners’ complaints 

It is this that the Bundesbank, the German government, and the German people should be focusing on. If in the process this means completely ridiculing the Buba’s “she doth protest too much” defense strategy that what is happening in the media is a “phantom debate” as per Andreas Dobret’s recent words, so be it. In fact, one may be well advised to ignore anything Buba has said on this matter, because in attempting to hyperbolize the matter out of irrelevancy, the Buba is now cornered and will have no choice now but to explain just what the true gold content of the gold even in its possession is, let alone that which is allocated to the Buba account 50 feet below sea level, underneath the infamous building on Liberty 33.

Full May 1968 memo from the BOE to the NY Fed: highlights ours:

MR. BRIDGE

THE CHIEF CASHIER

U.S. Assay Office Gold Bars

1.  We have from time to time had occasion to draw the Americans’ attention of the poor standards of finish of U.S. Assay Office bars. In addition in 1961 we passed on to them comments from Johnson Matthey to the effect that spectrographic examination did not support the claimed assay on one bar they had so tested (although they would not by normal processes have challenged the assay) and that impurities in the bar included iron which caused some material to be retained on the sides of crucible after pouring.

2. Recently, Johnson Matthey have put 172 “bad delivery” U.S. Assay Office bars into good delivery form for account of the Deutsche Bundesbank. These bars formed part of recent shipments by the Federal Reserve Bank to provide gold in London in repayment of swaps with the Bundesbank. The out-turn of the re-melting showed a loss in fine ounces terms four times greater than the gross weight loss. Asked to comment Johnson Matthey have indicated verbally that:-

(a) the mixing of “melt” bars of differing assays in one “pot” could produce a result which might be a contributing factor to a heavier loss in fine weight but they did not think this would be substantial ;

(b) a variation of .0001 in assay between different assayers is an extremely common phenomenon;

(c) over a long period of years they had had experience of unsatisfactory U.S. assays

3. It is not, however, possible to say that the U.S. assays were at fault because Johnson Matthey did not test any of the individual bars before putting them into the pot.

4. The Federal Reserve Bank have informed the Bundesbank that adjustments for differences in weight and refining charges will be reimbursed by the U.S.Treasury.

5. No indication should, of course, be given to the Bundesbank, or any other central bank holder of U.S. bars, as to the refiner’s views on them. The peculiarity of the out-turn will be known to the Bundesbank: it has so far occasioned no comment.

6. We should draw the attention of the Federal to the discrepancy in this (and any similar subsequent such) result and add simply that the refiners have made no formal comment but have indicate that, although very small differences in assay are not uncommon, their experience with U.S. Assay Office bars has not been satisfactory.

7. We hold 3,909 U.S. Assay Office bars for H.M.T. in London (in addition to the New York holding of 8,630 bars). After the London gold market was reopened in 1954 we test assayed the bars of certain assayers to ensure that pre-war standards were being maintained. It might be premature to set up arrangements now for sample test assays of U.S. Assay Office bars but if it appeared likely that the present discontent of the refiners might crystalise into formal complain we should certainly need to do this.  In the meantime I would recommend no further action.

31st May 1968

P.W.R.R.

To summarize: Bank of England discovers discrepancies with US Assay Office gold bars, notifies the NY Fed that its gold bars have major “bad delivery” issues, but, and this is the punchline, on this occasion, we’ll keep it quiet, because the Bundesbank got these bars. This is merely one documented assay occasion: one can imagine that of the hundreds of thousands of gold bars in official circulation, the “good delivery” quality of bars outside of the US, and perhaps BOE, official holdings has progressively declined over the decades of Bretton Woods. One can also only imagine what has happened to all those “good delivery” bars currently held by the Fed as custodian at the NY Fed. Literally: imagine. Because there is no way to check what the real gold consistency of these gold bars is, and whether the refiners found ongoing future inconsistencies with “good delivery” standards of bars handed off to other “non-core” central banks. And, yes, without further evidence the above is merely speculation.

As to the remaining relevant facts: the US ran out of good delivery gold in March 1968 and only had coin bars remaining. Which is why it closed the gold pool and went to a two-tier price system. The Bundesbank went on to cover some of the outstanding gold debts of the Fed to the gold pool. Subsequently, the US then did several deals with the BOC to get a substantial amount of gold to pay back the Bundesbank which was sent over to England from March until June 1968. One can, again, only speculate on the quality of said gold. The Fed then created unsettled accounts to account for these transfers between itself and the Buba.

In light of the above facts and evidence, one can see why the Buba is doing all in its power to avoid the spotlight being shone on the purity of its gold inventory: after all the last thing the German central banks would want is someone to go through the publicly available archived literature, to put two and two together, and figure out that it does not take one massive “rehypothecation” (see “to Corzine”) event for German gold credibility to be impaired: all it takes is death from a thousand micro dilutions over the decades to get the same end result. Because chipping away one ounce here, one ounce there for years and years and years, ultimately adds up to a lot.

We eagerly look forward to the Buba’s next iteration of self-defense. We can only hope that this one does not include a reference to a “phantom debate”, to “East German terrorist Simon Gruber” or toGoldfinger, as it will merely further destroy any remaining credibility the Bundesbank may have left in this, or any other, matter.

Met police want water cannon ready to use in Britain by summer | UK news | theguardian.com

January 8, 2014 10:03 am / 2 Comments on Met police want water cannon ready to use in Britain by summer | UK news | theguardian.com

Met police want water cannon ready to use in Britain by summer | UK news | theguardian.com.

Boris Johnson

Boris Johnson wrote to Theresa May about water cannon this week: ‘I am aware you have declined to make funds available.’ Photograph: Lam Yik Fei/Getty Images

Britain’s biggest police force wants water cannon ready to be used on the streets of mainland Britain by this summer, official letters reveal.

They also show that a request for the government to fund the controversial purchase has been rejected by the home secretary,Theresa May.

Public consultations on the deployment of water cannon will begin within weeks and a formal decision made next month.

Water cannon have not previously been available to police on mainland Britain, and their use has been limited to Northern Ireland.

In a letter sent on Monday by Johnson to May, the London mayor explains his reasoning, saying it is a direct result of the 2011 riots that started in London before spreading, becoming the most serious and widespread riots to hit England in decades.

Ultimately the home secretary will have to licence the acquisition of water cannon for use on the capital’s streets. Critics warn it is a step towards the militarisation of the police and could be used to stifle the democratic right to protest.

In his letter, dated 6 January 2014, Johnson writes: “Following the disorder in August 2011, both the Metropolitan police service and Her Majesty’s Inspectorate of Constabulary stated that there are some circumstances where water cannon may be of use in future.

“Following briefing by the [Met] commissioner I am broadly convinced of the value of having water cannon available to the MPS [Metropolitan police service] for those circumstances where its absence would lead to greater disorder or the use of more extreme force.”

The Met commissioner, Sir Bernard Hogan-Howe, has pledged that water cannon would be “rarely used and rarely seen”, the letter says.

His letter to May, his Conservative colleague, then discusses funding: “Finally, I am aware that you have declined to make funds available for purchasing the interim water cannon solution as a national asset.

“Subject to the public engagement process … I am happy to make the necessary funds available to the MPS for the most economical interim solution that allows the commissioner to meet his desire to prevent disorder on the streets. I would expect to do this in February, following the [public] engagement.”

In his letter London’s mayor says there is public support for the deployment of water cannon.

A further letter written on Tuesday by Stephen Greenhalgh, deputy mayor for policing, says a formal decision to go ahead with water cannon will be made next month.

Greenhalgh wants public consultation to begin within weeks, which will involve public meetings and talks with MPs, councillors and what he describes as “stakeholders”.

The mayor’s office says water cannon would only be used in “the most extreme circumstances”.

Greenhalgh’s letter was written to Labour’s Joanne McCartney, chair of the London assembly’s police and crime committee.

The letter says: “In order to ensure that water cannon is available by next summer, something which the commissioner has been calling for, it is important that the process of engagement starts soon.”

The Green party London assembly member Lady Jones said: “Allowing water cannon on the streets of London is a step in the wrong direction towards arming our police like a military force, and it goes against our great tradition of an unarmed police service.

“People have a democratic right to protest and my fear is that once the mayor allows these weapons on to our streets we will see them being used against people exercising their legal right to protest.”

It is believed the Met are in talks with German companies about supplying water cannon in time for this summer.

The Met has approached companies about hiring or buying second-hand water cannons from overseas to have the machines available as soon as possible.

The Met is interested in acquiring around three units.

In a letter to Jones, assistant commissioner Mark Rowley detailed the training required. Rowley wrote in July 2013 that no more than 20 staff would need to be trained in the use of water cannon and another 200 riot officers would need to be trained in how to quell disorder while working alongside water cannons.

Rowley’s letter said the use of water cannon would require authorisation by an officer of the rank of commander.

The home secretary must authorise the acquisition of water cannon for use on the mainland and May has already signalled her sympathy for the controversial tactic.

Some within the Met have privately told the Guardian they are sceptical about the need and effectiveness of water cannon on London’s streets. They say streets here are much narrower than in Europe, where water cannon are already in use, thus making them less effective and potentially vulnerable to capture. They also say water cannon fire jets that could prove indiscriminate and strike innocent members of a crowd.

The Trends to Watch For in 2014: Charles Hugh Smith | Peak Prosperity

January 1, 2014 9:56 am / Leave a comment

The Trends to Watch For in 2014: Charles Hugh Smith | Peak Prosperity.

At the beginning of this year (2013), I identified eight key dynamics that will play out over the next two to three years (2013-2015):

Trend #1:  Central Planning intervention in stock and bond markets will continue, despite diminishing returns on Central State/Bank intervention

Trend #2:  The omnipotence of the Federal Reserve will suffer a fatal erosion of confidence as recession voids Fed policy and pronouncements of “recovery”

Trend #3:  The Mainstream Media (MSM) will continue to lose credibility as it parrots Central Planners’ perception management

Trend #4:  The failure of what is effectively the “state religion,” Keynesianism, will leave policy makers in the Central State and Bank bereft of policy alternatives

Trend #5:  Economic Stagnation will fuel the rise of Permanent Adolescence

Trend #6:  Income, the foundation of real economic growth and wealth-distribution stability, will continue to stagnate

Trend #7:  Small business—the engine of growth—will continue to decline for structural reasons

Trend #8:  Territorial disputes will continue to be invoked to distract domestic audiences from domestic instability and inequality

I know it may strike some as “cheating” that my forecast is for these trends to be consequential within a three-year window rather than by a specific date, but note these are trends, not events, and trends tend not to matter until suddenly they do. This is the nature of Pareto Distributions, in which trends are inconsequential until they reach a critical mass of 4% of the populace, at which point the “vital few” exert outsized influence on 64% of the populace.

Let’s see how the trends developed in 2013:

Trend #1:  Intervention yielded outstanding returns on corporate profits and stocks, but diminishing returns on employment, household incomes for the bottom 80%, and growth, all of which are historically subpar:

Trend #2:  The Fed’s members are still regarded as heroic demigods who benignly manage the Earth’s economy. When (not if) the stock market rolls over in 2014-15, Fed omnipotence will suffer.

Trend #3:  This one is difficult to track, but anecdotal evidence (declining circulation of many mainstream print media, declining viewership in some cable news channels, etc.) may reflect rising disenchantment with the media’s coverage of key issues.

Trend #4:  I think it is quite clear that the Fed and its posse of experts have no alternatives to ZIRP (zero interest rate policy) and QE (quantitative easing).

Trend #5:  This one is difficult to monitor. If we use the percentage of young people still living at home and the rise of “selfies” (photos taken of oneself), then perhaps a case can be made that this trend is already visible.

Trend #6:  Median household income has edged up, but I suspect this is the result of higher incomes for the top 10% rather than widely distributed gains. Since the top 10% collect 51% of all income, it stands to reason that increases flowing to the top will boost median income even if the bottom 90% sees declines in income:

Trend #7:  The unintended consequences of the Affordable Care Act have yet to fully play out.

Trend #8:  China’s recent invocation of a “defense zone” that includes the Senkaku Islands suggests this trend is definitely in play.

I also listed eight outcomes:

Outcome #1:  The counterfeiting of risk-free assets will continue to be a primary policy of the Status Quo.

Outcome #2:  Risk will continue to be transferred en masse to the public.

Outcome #3:  Democracy in America is officially dysfunctional.

Outcome #4:  Incentives will continue to be structurally perverse, and the rule of law will continue to be bent by individuals, enterprises, and the government.

Outcome #5:  Health care (a.k.a. sick care) will continue to be an enormous drag on the economy as diminishing returns, fraud, complexity, and defensive medicine add costs without equivalent improvements in health.

Outcome #6:  The costs of complying with Obamacare will act as an inflection point in the decline of small business

Outcome #7:  The trend of the Status Quo “solving” perceived problems by adding layers of immense complexity to systems already suffering from marginal returns will continue.

Outcome #8:  The informal cash economy will continue expanding, as those who choose to opt out of the Status Quo and those who must opt out as a survival mechanism do so.

Without going into detail, I think a self-evident case can be made that each of these outcomes is already visible at the end of 2013.

Additional Trends to Watch in 2014

Since the trends listed above are still operant, these eight are additional rather than replacement trends:

Trend #1:  The Number One growth industry in the private sector will increasingly be lobbying the government for favors.  When the State selects the winners and losers throughout the economy, then companies are essentially forced to make their case for special dispensations via campaign contributions and unrelenting lobbying. Elected officials benefit from their centralized powers as the line of corporations anxiously pressing campaign cash on them lengthens in direct proportion to the expansion of State power.

This is the essence of what some call the Corporatocracy that effectively governs the U.S.A. and what I call the Neofeudal Cartel/State system, as the State and its chosen cartels dominate the economy and society in a fashion that can only be described as neofeudal.

Since organic growth from increases in wages and purchasing power are limited to the top 10%, the only sectors that can possibly gain growth from rising sales are Porsche dealerships and other luxury outlets that cater to the top 10%.  But since the number of households adding income is a thin 10 million out of 121 million households, moving more luxury goods offers little growth opportunities for the rest of the economy, which is stagnant at best.

As a result, lobbying the central State for favors is the default “growth industry.”

Trend #2:  The difference between anemic growth and recession will increasingly be semantic. This is another “How many angels can dance on the head of a pin?” debate in which Ivory Tower/State economists parse juiced or manipulated data to conclude the economy is “growing slowly” or slipping into negative growth; i.e., recession.

Experientially, if purchasing power and discretionary income (what’s left after paying taxes, rent, mortgages, food, utilities, etc.) are both declining for 90% of households, the “growth” in inventories, exports, and other factors that feed into gross domestic product (GDP) are not reflecting the economy we actually inhabit.

Trumpeting what amounts to signal noise as “steady growth” is adept perception management (i.e., propaganda), but if it doesn’t include increases in purchasing power and discretionary income for the bottom 90%, it’s a propaganda embarrassment, like the Fed official hyping the declining cost of tablet computers while someone in the audience shouts, I can’t eat an iPad!

Trend #3:  The decline in local government services will accelerate as rising pension/healthcare costs squeeze budgets.  Local governments (city, county, state) have avoided the politically combustible collision of rising pension/healthcare costs and angry taxpayers tired of service cuts by accounting trickery and jacking up fees and taxes. Crunch-time has also been put off by rising home values that pushed property tax revenues higher.

These solutions are running out of rope: Property values have topped out, and accounting trickery hasn’t solved the fiscal impossibility of maintaining services and meeting pension obligations in a stagnant economy. When push comes to shove, services must be cut, either by bankruptcy or by negotiation. Since the likelihood that taxes will drop is zero, taxpayers will get fewer services for their taxes.

Trend #4:  Middle-class income, purchasing power, and discretionary income will all continue to stagnate.  Unless you define “middle class” as those households earning $150,000 and up (9.1% of households)—and if you define the top 9% as “middle” class, your definition has lost all meaning—what’s left of the middle class will see real and discretionary income continue to stagnate. The causes of this decline in labor’s share of the economy are structural and cannot be remedied by lowering interest rates to zero or jacking up the stock market: Zero-interest rates have deprived households of income, and few in the bottom 90% own enough stock to affect their wealth. (Source: The Distribution of Household Income and the Middle Class)

Trend #5:  Junk fees will continue to replace legitimate taxes.  Fearful of blowback from ever-rising taxes, local governments have turned to junk fees as the preferred method of “revenue enhancement.”  These include sharply higher fees for recreation, parking tickets, permits, etc., and a multitude of add-ons to property taxes and other existing tax structures. Local authorities are counting on the taxpayers to sigh but do nothing as long as the fee increases are small enough to avoid triggering political resistance.

In our small California town, the city has raised the fees for trash pickup by more than 100% in recent years—ironically, their reason is that recycling (which they encourage) has reduced the amount of trash being collected.  This sort of nonsensical rationalization for radically higher fees will join the usual justifications; i.e.,We can no longer fill potholes and pave streets unless we raise your taxes.

How did they manage to perform these basic services 10 or 20 years ago with much smaller budgets? The answer: See Trend #3, skyrocketing pension and healthcare costs.

Trend #6:  The African oil exporting nations will move from the back burner to the front ranks of geopolitical flashpoints, joining the South China Sea, the Mid-East, and North Korea. I recently discussedThe Scramble for Africa’s Oil and the “resource curse” that is fueling the potential for conflict over Africa’s untapped oil wealth:

Trend #7:  Americans will continue to passively accept the rise of the Police/National Security State. This may eventually change, but for the next few years the existing motivations for passive acceptance of increasing centralization of power will continue to hold sway.

The first is complicity: The 49% of all Americans—156 million out of 317 million—who receive direct transfers/benefits from the Federal government see little reason to rock the boat or put their cash from the government at risk.  (Source)

The second reason is a rational fear of State power: fear of getting tear-gassed and arrested should you join a protest, for example, and a generalized fear of putting whatever you still have at risk by confronting a government given to secrecy and retribution against whistleblowers, protesters, etc.

Trend #8:  The Federal government will quietly absorb the rising losses from defaulting student loans rather than reveal the bankruptcy of the entire Higher Education/Student Loan Cartel.  There are myriad ways to quash the recognition that the Higher Education/Student Loan Cartel is failing to provide useful education while it burdens younger generations with $1+ trillion in high-interest debt: quietly forgive some defaulted loans, stop enforcing collection of defaulted loans, etc.  The Federal government doesn’t want to call attention to its management of this powder keg, as widespread recognition that the system is broken will unleash calls for a general debt amnesty that will blow the big-debt-for-worthless-degrees system wide apart.

In Part II: Outcomes to Bet On in 2014, we’ll forecast the most likely consequences of these trends. With such understanding comes the opportunity to position ourselves in front of them for protection and/or profit.

Click here to access Part II of this report (free executive summary; enrollment required for full access).

 

2013 Greatest Hits: Presenting The Most Popular Posts Of The Past Year | Zero Hedge

January 1, 2014 9:41 am / Leave a comment

2013 Greatest Hits: Presenting The Most Popular Posts Of The Past Year | Zero Hedge.

The fifth anniversary of Zero Hedge is just around the corner, and so, for the fifth year in a row we continue our tradition of summarizing what you, our readers, found to be the most relevant, exciting, and actionable news of the year, determined objectively by the number of page views. Those eager for a brief stroll down memory lane of prior years can do so at their leisure, by going back in time to our top articles of 2009, 2010, 2011 and 2012. For everyone else, without further ado, these are the articles that readers found to be the most popular posts of the past 365 days.

  • In 25th place, with just over 100k reads, was the extended profile of the puppetmaster of the biggest geopolitical event of 2013, the false flag-driven Syran conflict which nearly escalated into the world’s first YouTube “justified” world war pitching the US-led west against the Russia-led east, the Saudi intelligence chief: Prince Bandar, exposed in “Meet Saudi Arabia’s Bandar bin Sultan: The Puppetmaster Behind The Syrian War.” The war was avoided with a last minute gambit by Putin, which lead to a historic detente between the US and Iran, as well as an unprecedented breakdown in US relations with its long-time middle east allies Saudi Arabia and Israel. Look for the Middle East to make geopolitical headlines in the new year since the underlying issue – Europe’s dependence on Gazprom – remains entirely unresolved.
  • The 24th most popular article hardly needs an explanation: “The Chinese Don’t Want Dollars Anymore, They Want Gold” – London’s Gold Vaults Are Empty: This Is Why.” The only comment here is that like above, the trend of gold’s transfer from West to East, started in earnest in late 2012, and peaking in 2013, is sure to continue in 2014 when the liquidation of paper gold in Western capital markets will afford Chinese buyers with ever more attractive prices at which to purchase physical gold
  • In 23rd spot an “Unidentified Navy Officer summed it all up” when he said that “I didn’t join the navy to fight for Al Qaeda in a Syrian civil war.” It is understandable why over 106,000 people agreed with the message
  • The 22nd most popular article looked at “What Happened The Last Time We Saw Gold Drop Like This?” which compared the fall in the price of gold in 2013 to previous historic occasions, most notably the months just before the collapse of Lehman. For now, courtesy of the $170 billion in liquidity injected by the Fed and the BOJ, “this time has proven different.” But with the Fed now tapering, how much longer will the illusion persist? We, like everyone else, look to 2014 for the answer.
  • With 108k views, the 21st most read post of 2013 revealed the “Photos And Video Of the Boston Bombing Suspects“, culminating the most violent terrorist event in years, and one which brought back vivid memories of the events from September 11
  • It may seem like a distant memory now, but the shocking announcement from mid-March in which Cypriot deposits were confiscated without a warning, reverberated across Europe and all insolvent banking systems, especially since it is now the blueprint of how banks will impair depositors going forward. Then again, with over 112k reads of our summary “For Everyone Shocked By What Just Happened… And Why This Is Just The Beginning” we reminded our readers that the deposit confiscation event of 2013 was predicted on these pages nearly two years earlier, and explained why, indeed, this is just the beginning of the great balance sheet rebalancing. For now Europe has managed to hide its hundreds of billions in bad loans under the couch; 2014 will be a different story. Look for the Cyprus “blueprint” to see a much wider acceptance in the coming year.
  • In 19th spot, mother nature reminded everyone with a “Stunning Time-Lapse Video Of 2-Mile Wide Oklahoma Tornado” that despite their sense of omnipotence, the central planners better pray each and every day that in a world priced to beyond perfection, that there are no material natural disasters. Because 10 out of 10 times, a liquidity tsunami generated from a central bank’s printer is powerless to withstand a natural one, as the Fukushima catastrophe reminds us each and every day with headlines of its ever deteriorating radiation “containment.”
  • A long-time favorite of readers, Kyle Bass’ Japan thesis came one step closer to fruition when earlier this year Japan went all in on its great reflation experiment, described in “Kyle Bass Warns The ‘AIG’ Of The World Is Back“, a presentation seen by over 114K readers. So far Abenomics has been a failure with wages contracting, import food and energy prices soaring, a record trade deficit (yes, Abenomics was supposed to boost net exports), and of course Fukushima in the background, but for now everyone has a rampaging Nikkei to be easily distracted by. With Abe’s popularity finally tumbling, will his second tenure as Prime Minister be cut short, and would his departure finally force Japan to cross the event horizon of no return? This is but another question which we hope 2014 will answer.
  • In 17th spot, we revealed some very disturbing trends in US energy consumption with “These Charts Better Not Reflect The True State Of The US Economy.” Because while the shale revolution may have revealed a (transitory) marginal source of oil, what remains unknown is why demand for energy in the US economy is tumbling in parallel. Unless, of course, the narrative about a US recovery has been a lie from the beginning…
  • With 121k reads, in the 16th top spot another post that needs no explanation was “Stunning Images From China: Ten Thousand People Waiting In Line To Buy Gold“. Perhaps the only article that could beat this one is “Ten thousand hedge fund managers waiting in line to sell GLD”
  • There are stereotypes about others, and then there are stereotypes about America. Which perhaps explains why over 121k people eagerly read “10 Things Most Americans Don’t Know About America.” We can only hope they learned something.
  • It may be forgotten now, but the biggest story of early 2013 was the Bundesbank’s shocking announcement in mid-January that it would proceed to repatriate some 700 tons of its gold held in central bank vaults in New York and Paris. Of course, the events described in “It Begins: Bundesbank To Commence Repatriating Gold From New York Fed” and read by 127k people, could be seen coming by Zero Hedge readers from a mile away: after all it was this website that repeatedly warned in late 2012 about the trials and tribulations that had surrounded the official German gold hoard. We can only hope that we were in some part responsible for the Buba’s correct decision to repatriate its gold. Then again, as we updated last week, having collected only 37 tons of gold in one year (out of 700), Germany will really have to pick up the pace if it hopes to have recourse to its hard currency before it is no longer a matter of convenience but one of survival.
  • The 13th top article of the year was the release of the list with “132 Names Who Pulled Cyprus Deposits Ahead Of “Confiscation Day.” It appeared the Cyprus deposit confiscation was not a complete secret to everyone, but then again the Animal Farm “new normal” justice in which some are more equal than others is hardly a surprise to anyone these days.
  • And speaking of confiscation, the 12th most read article of 2013, with 131k views was “Poland Confiscates Half Of Private Pension Funds To “Cut” Sovereign Debt Load.” It would appear that wealth transfer, first voluntary and then, not so much, will be an increasingly prevalent theme of the “recovery”…
  • But the biggest stunner in this category was the impromptu announcement itself when on March 16, “Europe Does It Again: Cyprus Depositor Haircut “Bailout” Turns Into Saver “Panic”, Frozen Assets, Bank Runs, Broken ATMs.” Don’t worry though: Europe is now fixed, it is recovering, and, if one believes the continent’s unelected leaders, all shall forever be well. We are confident 2014 will show otherwise.
  • The 10th most read article in 2013 dealt with the bedrock of the New Normal – the dollar’s reserve currency status, and rather, its gradual disintegration as China increasingly makes itself heard. It made itself heard loud and clear to the 142k readers who clicked on “Thanks, World Reserve Currency, But No Thanks: Australia And China To Enable Direct Currency Convertibility.” The loss of USD-reserve status will be yet another theme to keep a close eye on in 2014 and onward.
  • Showing just how reliant on welfare the US has become was top article #9 in which a leaked USDA memo hinted of a “Foodstamp Program Shutdown Imminent” which grabbed the attention of 148k readers. For now SNAP as it is better known has been merely “tapered”, not fully shut down, although ensuing Walmart stampedes driven by EBT card glitches provided a glimpse of just had bad things could be if indeed nearly 50 million Americans suddenly found themselves without government backstops
  • The troubles of the poor were hardly an issue for the 8th most popular article of 2013 in which we asked if “The Russians Have Already Quietly Withdrawn All Their Cash From Cyprus?” Once again it was the middle class that got shafted, while those who could fly in and out on private jets appear to have gotten away unscathed. This is certainly the prevailing theme of the past five years and one which will accelerate into the future.
  • 152k people read the breaking news from April when “Large Explosions Reported At Boston Marathon; Numerous Injuries And Casualties.” The focal point of all watercooler talk for the next several weeks, the analogies to terrorist attacks in the past were unavoidable even if the motivations behind the attacks turned out to be far less nefarious and organized than initially feared.
  • 2013 was the year in which the largest US city (to date) filed bankruptcy. However it was “25 Facts About The Fall Of Detroit That Will Leave You Shaking Your Head” that was read by 154k people, that made this the 6th most popular article of 2013.
  • 2013 was also the year in which the stock market finally took out its previous, 2007 highs, driven entirely by the unprecedented expansion of both the Fed’s and the Bank of Japan’s balance sheets. What over 163k found curious, however, were the other economic comparisons to “The Last Time The Dow Was Here…” Needless to say, there is nothing in the economy that would justify a market at the current levels, or even levels far lower, if it were only up to the economy. Luckily, there Fed is always there to lend a helping hand. And what can possibly go wrong…
  • 2013 was not only the year of the Fed’s QEternity: it was also the year in which Japan went all in with its own reflation experiment. However, all will be for nothing unless the troubling facts revealed in “Why Have Young People In Japan Stopped Having Sex?” remain unresolved. Because at its core, Japan’s crisis is a demographic one, and at the current pace of social aging, there will be no Japan left in several decades. Unfortunately for Kuroda, he can’t print babies.
  • The third most popular article of 2013 was posted almost exactly a year ago, when it “Put America’s Tax Hike In Perspective.” Over 171k people realized just how meaningless in the grand scheme of things was America’s grand bargain achieved last year at this time, over much stock market huffing and puffing. Then again, the fact that all major decisions in the US are put in the can that is later kicked down the street is also no news to anyone. The only thing in the here and now is theatrics, theatrics and more theatrics…
  • The second most popular post of 2013, with nearly 200k reads, was our succinct summary of the US “recovery” laid out in “People Not In Labor Force Soar By 663,000 To 90 Million, Labor Force Participation Rate At 1979 Levels.” We are happy that by now everyone has finally understood that plunging unemployment at the expense of a collapsing work force is nothing to be proud about.
  • And in the top spot, with nearly 300k reads, our most read article was the satirical, sarcastic look at the Egyptian counterrevolution titled “Egyptians Love Us For Our Freedom.” Turns out…they don’t. But they certainly appreciate the irony of two-faced, hypocritical US foreign policy which was humiliated and left in tatters both in Egypt and in every other place around the globe where either Hillary Clinton or John Kerry came, saw and promptly departed in the past year.

So what to make of the world as we enter 2014?

With nearly $2 trillion in emergency liquidity pumped by the world’s two largest central banks – more than has been injected ever before – the entire world is floating on an ocean of excess liquidity, which for now has succeeded in masking just how ugly the truth beneath the calm surface is. Sooner or later, the tide comes out, as it always does, and the naked are revealed for all to see. However, this time it will be the very final backstoppers of the status quo regime, the central banking emperors of the New Normal, who are finally exposed as wearing absolutely nothing. What happens then, and when that happens, is anyone’s guess. We, however, will be there to document every aspect of it.

Finally, and as always, we wish all our readers the best of luck and success in 2014, and leave everyone with a promise of what we can be 100% sure of: Zero Hedge will be there each and every day helping readers expose, unravel and comprehend the fallacy, fiction, fraud and farce that the system is reduced to (ab)using each and every day just to keep the grand tragicomedy going for at least one more day.

 

WTI Trades Near Two-Month High Above $100 on Stockpiles – Bloomberg

December 30, 2013 7:43 am / Leave a comment

WTI Trades Near Two-Month High Above $100 on Stockpiles – Bloomberg.

West Texas Intermediate traded near a two-month high above $100 a barrel after U.S. crude and distillate stockpiles fell more than forecast, while exports from Libya remained curbed by port closures.

Futures were little changed near the highest settlement since Oct. 18. Crude inventoriesdropped by 4.73 million barrels to the lowest level since September last week amid an increase in refinery operations, while distillate supplies, including diesel and heating fuel, fell by 1.85 million barrels to 114.1 million, the Energy Information Administration reported Dec. 27. A possible agreement with rebels to reopen the Libyan port of Hariga collapsed, the oil ministry said Dec. 28.

“The recovery of the U.S. economy is fueling expectations of higher oil demand in the U.S.,” saidOlivier Jakob, managing director at Petromatrix GmbH in Zug, Switzerland. “Distillate stocks will end 2013 at a multi-year low for the season and that should translate into very low stocks by spring.”

WTI for February dropped 7 cents to $100.25 a barrel in electronic trading on the New York Mercantile Exchange as of 11:43 a.m. London time. It closed at $100.32 on Dec. 27, settling above $100 a barrel for the first time since October. The volume of all contracts traded was about 56 percent below the 100-day average. Prices have climbed 9.2 percent in 2013, set for a fourth annual gain in five years.

Brent for February settlement was down 2 cents at $112.16 a barrel on the London-based ICE Futures Europe exchange. Prices have advanced 1 percent this year. The European benchmark crude was at a premium of $11.91 to WTI. The spread closed at $11.96 on Dec. 27, narrowing for a third day.

Oil Supplies

While there is currently no deal to reopen the port of Hariga, negotiations with rebels holding the terminal continue, Ibrahim Al Awami, head of measurement and inspection at Libya’s oil ministry, said by phone Dec. 28. The country is pumping 233,889 barrels of crude a day, compared with a daily capacity of about 1.6 million, the oil ministry said Dec. 21.

WTI has increased 8.2 percent in December amid reduced crude stockpiles in the U.S., the world’s biggest oil consumer. The country will account for about 21 percent of global demand this year, according to the International Energy Agency.

Inventory Drop

Crude inventories slid for a fourth week to 367.6 million barrels, according to the EIA, the Energy Department’s statistical arm. A median decline of 2.65 million barrels was forecast by analysts in a Bloomberg News survey. Refineries operated at an average 92.7 percent of capacity, the highest rate since July 12. Consumption of distillates climbed 2 percent to 4.17 million barrels a day.

“We saw some strength on West Texas based on the better-than-expected figures” from the EIA, Ric Spooner, a chief analyst at CMC Markets in Sydney, said by phone today. “There’s potential for the market to rally further if it gets more good news. The U.S. may see further improvement in economic statistics in the next few weeks.”

The EIA will next report weekly data on inventories and demand levels on Jan. 3, two days later than normal because of the New Year holiday.

Brent will drop for a second year in 2014 as U.S. oil production expands and supply threats ease in the Middle East and North Africa, a separate Bloomberg survey showed. Futures will decline to $105, down from $108.70 in 2013, according to the median estimate of the seven analysts who most accurately predicted this year’s level. Prices averaged $111.68 in 2012.

To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

 

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