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The Daily IndigoStar7 / News Ticker

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Mon, Dec 24, 2012 - 9:29am
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Euro, China and America's drought drive raw prices

Euro, China and America's drought drive raw prices

It was an eventful year for commodities, as sentiment over global demand dramatically soured towards the middle of 2012.

It was an eventful year for commodities, as sentiment over global demand dramatically soured towards the middle of 2012. Europe was the headache. Commodity markets had been trading well for the first few months of the year, before the eurozone debt crisis flared up once more. By Emma Rowley, and Garry White

3:18PM GMT 23 Dec 2012

Europe was the headache. Commodity markets had been trading well for the first few months of the year, before the eurozone debt crisis flared up once more. Policy makers eventually settled on actions to calm fears that a break-up was imminent, but it made for a summer of fear.

That meant many commodity prices traced a V-shaped path over the year – but not all managed to recoup their losses in the final months of 2012.

Oil continued to be the subject of two opposing forces, caught between concerns about demand from the global economy and supply worries focused on tensions in the Middle East.

In 2011, the upwards pressure in the first half of the year had come from the Arab Spring; this time around it was the trade sanctions imposed on Iran over its nuclear programme. Worries about global demand then increasingly drove the oil price lower, before a rally on hopes that policy makers would offer stimulus measures.

But despite the US Federal Reserve confirming in September that QE3 – its third round of quantitative easing – was on the cards, prices have since been edging down. Brent, London's benchmark crude, will end the year bobbing around the $110 (£68) a barrel mark, close to its level back in January.

Gas also grabbed the headlines, as America's shale revolution and the resultant surge in supply pushed US prices to a low of around $3 per million British thermal units. As producers cut back, the US natural gas price saw some recovery, climbing closer to $4 – but was still far off the level needed to make many of America's shale projects profitable.

Closer to home, Britain made a push towards attempting its own dash to shale gas, as the Government signalled this month that fracking can resume.

Slowing growth in China, the world's biggest consumer of raw materials, weighed on prices for iron ore, making it one of the worst performers in the commodities market.

Benchmark prices went to a three-year low of below $90 a tonne in September, having been above $130 in July. Recent signs that Beijing's efforts to stimulate growth are taking effect helped push iron ore prices to five-month highs in December, nearing $130 again. However, that has not been enough to leave prices heading into 2013 down by around 12pc over the year.

Other industrial commodities have trodden a similar path, although copper has managed a 4pc rise, having fallen 23pc in 2011.

Since the metal is often known as "Doctor Copper" given its use in diagnosing the health of the global economy, optimists might see its performance as offering hope for conditions in 2013.

Platinum prices meanwhile have moved dramatically, rising around 17pc over the year as mines in South Africa, the biggest producer of the metal, became the backdrop for the country's worst spate of violence since the end of apartheid.

The less high-profile commodities also offered plenty of interest. Rare earths metals, essential components in items such as iPhones, were the battleground for a trade row between China and the US over Beijing's export restrictions – surely not the last, as demand grows.

Arabica coffee, the more expensive grade of coffee, is the year's biggest loser, trading down by more than a third following a record harvest in Brazil.....

https://www.telegraph.co.uk/finance/commodities/9763709/Euro-China-and-A...

An epic lack of foresight, accuracy and rationale... https://www.tfmetalsreport.com/comment/170246#comment-170246

Mon, Dec 24, 2012 - 9:31am
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Yen weakens, Bazooka Abe threatens to strip BOJ of independence

Yen weakens as Abe threatens to strip Bank of Japan of independence

Japan's yen fell on Monday, after incoming Japanese premier Shinzo Abe said he would try to pass laws to strip the Bank of Japan of its independence if it refused to set a 2pc inflation target.

Mr Abe, who is set to become prime minister on Wednesday after his opposition Liberal Democratic Party (LDP) won this month's lower house election, has put the BoJ at the centre of political debate, urging bolder monetary stimulus to beat deflation. 8:03AM GMT 24 Dec 2012 Sterling bought 136.5 yen in Monday morning trade from 136.2 yen on Friday, after Mr Abe threatened on Sunday to revise a law guaranteeing the BoJ's independence if it did not back his proposed inflation goal. The dollar fetched 84.5 yen from 84.24 yen.

"The yen is finding sellers, even in thin holiday trade," said Jason Hughes, head of premium client management for IG Markets Singapore.

"The changes in political circles in Japan mean we will see a more aggressive stance in weakening," he told AFP

.

Mr Abe has said that he will pick someone who agrees with his views on the need for bolder monetary easing to succeed governor Masaaki Shirakawa when his term expires in April next year.

"At this month's policy meeting, the BoJ said it would examine (setting an inflation target) at its next meeting" in January, he said on television on Sunday.

"If it doesn't, we'll revise the BoJ Law and set up a policy accord with the central bank to agree on an inflation target. We may also seek to have the BoJ held accountable for job growth."

The comments are the strongest warning to date on the possibility of revising the law guaranteeing the BOJ's independence from political interference. It is rare for a prime minister or a would-be premier to make explicit demands on what the BOJ should do at its policy-setting meetings.

Mr Abe, who is set to become prime minister on Wednesday after his opposition Liberal Democratic Party (LDP) won this month's lower house election, has put the BoJ at the centre of political debate, urging bolder monetary stimulus to beat deflation.

He wants the BoJ to share with the government a binding 2pc inflation target, double the central bank's current goal, and ease policy "unlimitedly" to achieve it. There is no specific time frame.

Under pressure, the central bank loosened policy on Thursday for the third time in four months by boosting asset purchases. It also said it would consider setting a higher inflation target at its next policy-setting meeting next month.

https://www.telegraph.co.uk/finance/currency/9764505/Yen-weakens-as-Abe-...

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Mon, Dec 24, 2012 - 9:34am
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Mali Islamists destroy Timbuktu's ancient mausoleums: Primative'

Mali: Islamists take pickaxes to Timbuktu's ancient mausoleums

Armed groups occupying Timbuktu in northern Mali have used pickaxes to smash up any remaining mausoleums in the ancient city.

Islamist and Tuareg rebels Tuareg rebels and other separatists and al-Qaeda linked militant groups took advantage of a coup in Mali in March to seize control of a vast chunk of territory where the Islamists have since imposed a brutal form of Islamic law Photo: AFP 1:48AM GMT 24 Dec 2012

The rebels' ruthless implementation of their version of Islamic law comes just days after the United Nations approved a military force to wrest back control of the conflict-ridden area.

"Not a single mausoleum will remain in Timbuktu, Allah doesn't like it," Abou Dardar, leader of the Islamist Ansar Dine group, told AFP. "We are in the process of smashing all the hidden mausoleums in the area."

Witnesses confirmed the claims.

Anything that doesn't fall under Islam "is not good. Man should only worship Allah," Mohamed Alfoul, a member of Al-Qaeda in the Islamic Maghreb (AQIM), said.

The vandalism of the Muslim saints' tombs in the UNESCO World Heritage site came a day after other Islamists in the northern city of Gao announced they had amputated two people's hands.

The continued strict application of sharia law is seen as a sign that the armed Islamist groups are unfazed by the UN's green light for the African-led military operation....

https://www.telegraph.co.uk/news/worldnews/africaandindianocean/mali/976...

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Mon, Dec 24, 2012 - 9:44am
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How Beijing Sees Abe’s Return: The Diplomat

How Beijing Sees Abe’s Return By Michael Auslin December 21, 2012 China EBG6NYSM4VCJ

An Xinhua editorial that also appeared in the U.S. edition of the China Daily asserts that the impending premiership of Japan’s Shinzo Abe would “destabilize” East Asia. Yet the piece in reality makes a case for why Abe’s next term in office would be a good thing. To quote from the article:

"…Abe has called for an increase in Japan's defense spending, easing constitutional restrictions on the military and even changing Japan's so-called Self Defense Forces into a full-fledged military.

Abe is likely to push through several changes with little opposition, including abolishing the requirement for a separate new law each time Japan wants to send peacekeepers abroad and establishing a National Security Council to streamline decision-making, which was a primary, though eventually unrealized, goal of Abe's previous administration."

The editorial also rightly notes that “for the first time in decades, national defense played a significant role in Japan's general election,” yet refrains from listing the reasons for this, namely North Korea’s renewed belligerence and the on-going crisis over the Senkaku (Diaoyu) Islands between China and Japan.

But Xinhua gets the big picture right, namely that Abe is likely to make Japan a more “normal” nation, to use a once-popular phrase. This means a more rational national security decision making process and a military that can be more easily dispatched abroad for collective self-defense (instead of the current cumbersome situation in which each overseas deployment requires a special law to be passed). He indeed may also attempt to increase the defense budget, which has been trending downward for nearly a decade.

Clearly, Beijing would not be amused by a stronger, less-constrained, more confident Japan. But much of the rest of Asia wouldn’t mind. There might be grumbling over Japan’s failure to fully account for its wartime atrocities (and Abe has been on the wrong side of this in the past), but most smaller nations are eager for Tokyo to become a counterweight to China. They may make this case quietly (or in the case of the Philippines, not so quietly), but a stronger Japan that remained closely wedded to the United States would likely be welcomed by states that have territorial disputes with China or worry about the growing presence of the PLA Navy in the region’s common waters.

Where Abe could make a real difference would be in proposing some significant public goods provisions by Japan, in addition to merely building up Japan’s military strength. Working more closely with regional coast guards on training or further revising the arms export law to allow for sales to Southeast Asian nations could help them build up their own capabilities. A greater maritime presence in the East China Sea and perhaps more partnering on training patrols in the South China Sea would answer many of the calls by Hanoi and Manila for a bigger Japanese presence.

Beijing would only see this as an attempt by Tokyo to contain China, which is fantasy, given the disparity in size between the two militaries. Yet it speaks volumes about Beijing’s assessment of its own isolation, and Japan’s potential strength, that it takes so seriously such modest attempts at reform. It would be refreshing if China welcomed Japan’s larger role as one that can contribute to regional stability, in part by reducing the chance of miscalculation by countries that believe they can intimidate smaller nations into surrendering their national claims. Of course, since that currently seems to apply mainly to China, there’s little chance Asia’s two giants will grope their way to a more productive relationship, even by accident.

https://thediplomat.com/china-power/how-beijing-sees-abes-return-to-power/

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Mon, Dec 24, 2012 - 1:57pm
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Just wait until JPM starts that copper ETF: Copper Steering

Who's Smarter? Dr. Copper Or Mr. Market

Submitted by Tyler Durden on 12/24/2012 - 11:46

Copper is often referred to as the PhD of commodities for, as JPMorgan's Ken Landon notes, "When companies ramp up production of various products, whether during or in anticipation of economic recovery, they demand more cooper." Gold, however, he adds, "is not sensitive at all to business-cycle demand. Its price is driven by the monetary environment." While Bloomberg's chart of the day prefers to take the short-term (last few weeks) view of the world to justify a bullish equity market call, we prefer to look at longer-term cycles and the message is extremely clear - manufacturers are anything but confident, are doing anything but buying copper in anticipation of demand, and despite gold's recent fluctuations it is anything but implying that the world's grand monetary policy experiment is slowing down. What we see from this chart is yet another clear fundamental divergence between Dr. Copper's take on the global economy and the US equity market's nominal recovery.

https://www.zerohedge.com/news/2012-12-24/whos-smarter-dr-copper-or-mr-m...

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DPH: Might JPM totally skew the copper market?

And will it be for China's advantage if the vital copper price is kept lower for them artificially (possibly like gold and silver is for them?) as some form of U.S. assisted market steering as some form of debt repayment negotiation because cheap copper for China is a big deal and worth lots of money to them? 

Is it debt repayment favor or is it just another CFTC unregulated JPM opportunity to mess with some other basic and vital global resource? 

Or is that a total hogwash thought and JPM will steer copper much higher in price and is going long or will they short the life out of copper (like silver) in anticipation (and by their own doing) that copper and other commodities are going to go nuts someday soon? 

How much will JPM leverage copper? 500-1,000 to 1? More?

Get ready for copper to do some funny things in 2013.

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Mon, Dec 24, 2012 - 2:30pm
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Fed Flummoxed by Mortgage Yield Gap Refusing to Shrink

Fed Flummoxed by Mortgage Yield Gap Refusing to Shrink: Economy

By Caroline Salas Gage, Jody Shenn & Heather Perlberg - Dec 24, 2012 8:43 AM ET

Record-low mortgage rates aren’t cheap enough for Federal Reserve Chairman Ben S. Bernanke as he tries to spur economic growth and create jobs.

Policy makers are disappointed that lower yields on mortgage-backed securities haven’t led to more savings on home loans after the Fed expanded its balance sheet to an all-time high of almost $3 trillion through bond purchases. Bernanke this month called the trend “unfortunate,” and the Federal Reserve Bank of New York held a workshop to examine the issue.

The gap between the bond yields and home-loan rates is blunting the economic benefits of the Fed’s record accommodation, New York Fed President William C. Dudley said in a speech in New York this month. Among the reasons for the spread: banks are reluctant to take on the expensive fixed costs of new staff to process the paperwork and tougher capital requirements are making it less attractive to service loans.

“The Fed is pushing really hard to try to get the mortgage rate down,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut. “There just doesn’t seem to be much of an inclination on the part of banks to get out there and beat the bushes.”

Central bankers have been examining how to reduce the spread to increase the impact of their existing stimulus as options for further easing dwindle.

The Fed has kept its benchmark interest rate near zero since 2008. The central bank eased policy this month by saying the rate would stay low “at least as long” as unemployment remains above 6.5 percent and inflation projections are for no more than 2.5 percent.

Fed Easing

At the same Dec. 11-12 meeting, the Fed expanded its quantitative easing program by adding $45 billion of Treasury security purchases each month to the $40 billion of monthly government-backed mortgage bond buying it began in September.

Bernanke’s latest steps have helped make it cheaper to buy a home. The average fixed rate on new 30-year loans was 3.37 percent in the week ended Dec. 20, down from 3.55 percent on Sept. 13, the day the Fed announced its third round of bond buying, according to Freddie Mac data....

https://www.bloomberg.com/news/2012-12-24/fed-flummoxed-by-mortgage-yiel...

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Mon, Dec 24, 2012 - 2:32pm
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Evans Won New Fed Consensus Linking Rates to Unemployment

Evans Won New Fed Consensus Linking Rates to Unemployment

By Aki Ito - Dec 24, 2012 12:00 AM ET

The Federal Reserve’s Charles Evansentered the lion’s den of monetary orthodoxy to make his pitch: unemployment must come down, even at the cost of temporarily higher inflation.

Among those at the March European Central Bank symposium in Frankfurt was Otmar Issing, the former top economist at the ECB and one of Europe’s fiercest inflation fighters. Some months before, the idea of tolerating rising prices had been branded“irresponsible” by Paul Volcker, who as Fed chairman in the 1980s induced a recession to protect the value of money.

“With Otmar in the audience, I was nervous,” Evans, president of the Chicago Fed, recalled later. Yet he pressed on, telling his audience, “monetary policy can and should take additional steps to facilitate a more robust economic expansion.”

Evans’s appearance in Frankfurt was one of 13 stops in a more than yearlong odyssey that took him from Detroit to Bangkok to push an untested policy tool: linking the outlook forinterest rates to unemployment and inflation. The Fed finally heeded his call on Dec. 12, deciding to keep rates near zero as long as unemployment remains above 6.5 percent, inflation is no more than 2.5 percent and long-term inflation expectations are well anchored.

It’s “a strategy that we believe will help support household and business confidence and spending,” Chairman Ben S. Bernanke said after a meeting of the Federal Open Market Committee that day.

Build Consensus

The decision was a testament to what former colleagues call Evans’s ability to build consensus. It also shows how one of the Fed’s 12 regional bank presidents can influence policy that is usually made by the central bank’s Washington-based board of governors, led by Bernanke.

“Through the power of his ideas and his powers of persuasion, President Evans was gradually able to gain some momentum behind this idea in the Fed,” said Carl Tannenbaum, chief economist at Northern Trust Corp. in Chicago, where he was an economist and supervisor for the central bank.

Evans’s campaign wasn’t the first time he has pushed against accepted economic ideas. Evans in his doctoral dissertation at Carnegie Mellon University argued that economists Edward Prescott and Finn Kydland had overstated the impact of technology in driving the business cycle, research that later won them the Nobel Prize in economics. Monetary policy also plays a part, Evans said.

“Even then, you could see that Charlie was struggling to get out of the mainstream view at Carnegie if not the world,”said Martin Eichenbaum, who was Evans’ thesis adviser and is now a professor at Northwestern University in Evanston, Illinois.“He was questioning conventional wisdom back then and that’s what he’s doing now.”.................

https://www.bloomberg.com/news/2012-12-24/evans-won-new-fed-consensus-li...

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Mon, Dec 24, 2012 - 6:00pm
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Sprott: Why Are Investors Buying 50X More Phyz Silver Than Gold?

Eric Sprott: Why Are Investors Buying 50 Times More Physical Silver Than Gold?

Submitted by Tyler Durden on 12/24/2012 - 16:37

For the time being, the silver price is essentially set in the paper market where the daily average trade on the Comex is approximately 300 million ounces. An outrageous number when you compare it to the daily mine production of about 2 million ounces. As Bart Chilton, Commissioner of the Commodity Futures Trading Commission stated on October 26, 2010, “I believe there have been repeated attempts to influence prices in silver markets. There have been fraudulent efforts to persuade and deviously control that price. Based on what I have been told and reviewed in publicly available documents, I believe violations to the Commodity Exchange Act have taken place in the silver market and any such violation of the law in this regard should be prosecuted.” Which brings us back to the phrase “Follow the money.” In our view, it is almost inconceivable that investors would allocate as many dollars to silver as they would to gold, but that is what the data shows. The silver investment market is very small. While the dollar value of gold in the world approaches $9 trillion, the value of silver in the forms of jewelry, coins, bars and silverware is estimated at around $150 billion (5 billion ounces at $30 per ounce).

This is a ratio of 60:1 in dollar terms. How long can investors continue to buy silver at the current ratios when the availability for investment is only 3:1? We are surprised that the price of silver has remained at such a depressed level compared to gold. Historically, the price ratio between gold and silver has been 16:1, when both were currencies.

Today the ratio is 55:1, so what are the numbers telling us? We believe this is one of those times when smart investors will be well rewarded to “Follow the money.”

Table1.gif
Source: US Mint (www.usmint.gov)

https://www.zerohedge.com/

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Tue, Dec 25, 2012 - 12:12am
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Yen Rises From 20-Month Low on Speculation Drop Overdone

Yen Rises From 20-Month Low on Speculation Drop Overdone

By Amina Mobley & Mariko Ishikawa - Dec 24, 2012 10:28 PM ET

Yen Touches 20-Month Low on Prospects CPI to Add Pressure on BOJ

The yen rallied from a 20-month low against the dollar on speculation that monetary easing bets had driven the Japanese currency down too rapidly.

The yen fell to the brink of 85 per dollar earlier after Japan’s incoming prime minister said he may change the law governing the central bank unless it boosts its inflation target. Demand for the dollar was supported as investors sought the safety of the world’s reserve currency amid concern that U.S. lawmakers will fail to avoid the so-called fiscal cliff. Japan reopened after a holiday yesterday while most other markets are closed for Christmas.

“Dollar-yen rose to try 85 on the back of Abe’s comments, but it was sold off in front of key resistance levels,” said Michiyoshi Kato, the senior vice president of foreign-currency sales at Mizuho Corporate Bank Ltd. in Tokyo. “The yen moves are probably caused by limited liquidity in the market.”

The Japanese currency touched 84.96 per dollar, the weakest since April 11, 2011, before trading at 84.71 at 12:17 p.m. inTokyo, 0.3 percent stronger than the New York close. It gained 0.3 percent to 111.67 per euro, following a 0.8 percent slide yesterday. The dollar was little changed at $1.3183.

Shinzo Abe said on Fuji Television on Dec. 23 that he’ll consider revising the BOJ law if the central bank fails to increase its inflation target to 2 percent from 1 percent at its January meeting.

Japan’s consumer prices excluding fresh food probably slid 0.1 percent in November from a year earlier, according to the median estimate of economists in a Bloomberg News survey before the statistics office’s data on Dec. 28. The so-called core inflation rate has fallen at an average of 0.2 percent every month in the past 10 years.

‘Means Business’

Abe is poised to become prime minister tomorrow after his Liberal Democratic Party’s coalition won a majority in parliamentary lower house elections on Dec. 16. He’s called for unlimited monetary easing from the BOJ to defeat deflation and spur growth.

“Japan’s Abe means business this time,” Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said in a Twitter post. “Trillions of yen to be printed. Weak yen, positive inflation.”

The yen’s 14-day relative strength index against the euro was at 23 yesterday and has been below the 30 level that suggests an asset is about to change direction since Dec. 12. The RSI against the U.S. currency fell to 22.

The dollar-yen rate “has been consolidating,” BNP Paribas SA’s currency strategy team led by Steven Saywell wrote in a research note yesterday. “Further gains for the pair are likely to slow considerably as the dovish BOJ view is...

https://www.bloomberg.com/news/2012-12-24/yen-touches-20-month-low-on-bo...

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BOJ’s $267 Billion JGB Buys Spur Record Win Streak

BOJ’s $267 Billion JGB Buys Spur Record Win Streak: Japan Credit

By Monami Yui & Shigeki Nozawa - Dec 24, 2012 10:09 PM ET

Japanese government bonds are headed for the longest run of annual gains on record, buoyed by central bank purchases almost equivalent to Malaysia’s economic output.

The bonds have returned 2.1 percent on an annualized basis in 2012, set for a ninth year of gains that’s the longest streak since at least 1986, a Bank of America Merrill Lynch index shows. Ten-year yields have declined 22 basis points to 0.76 percent. U.S. Treasuries are poised to post a third annual gain with a 2 percent return, while the benchmark rate has fallen 10 basis points.

The Bank of Japan (8301)’s JGB holdings increased 22.6 trillion yen ($267 billion) in 2012 as it sought to pump funds into a deflation-plagued economy that contracted for two quarters through Sept. 30. With incoming Prime Minister Shinzo Abe planning a “large-scale” extra budget to bolster growth, analysts forecast the 10-year yield will rise to 0.99 percent by the end of 2013, a Bloomberg survey shows, which would still be the third lowest globally.

“Public-works spending will kick-start the economy” under an Abe administration, said Koichi Kurose, chief economist inTokyo at Resona Bank Ltd., which oversees about $178 billion.“But the BOJ will increase asset purchases to keep a lid on borrowing costs.”

Abe, the leader of the Liberal Democratic Party, will become prime minister in a special session of the lower house of parliament tomorrow, after his party’s coalition won a majority in elections on Dec. 16. It will be his second time in the nation’s top office, the first ending in September 2007 when he resigned citing health reasons.

Inflation ‘Accord’

The world’s third-largest economy is likely to resume growth from the first three months of next year, while consumer prices will probably continue to fall at least through June, according to median estimates of economists surveyed by Bloomberg. The government will strike an “accord” with the central bank which will have a 2 percent inflation target, the LDP said in its election pledges.

The central bank, which set an inflation goal of 1 percent in February, will discuss “medium- to long-term price stability” at its next meeting in January, the BOJ said in astatement after a two-day policy meeting that concluded on Dec. 20. BOJ Governor Masaaki Shirakawa, who’s due to step down in April, and his board voted to add 10 trillion yen to its 66 trillion-yen program that buys securities, including government debt maturing in three years or less.

The BOJ owned 112.8 trillion yen of government securitiesas of Dec. 20. The holdings reached 113.7 trillion yen 10 days earlier, the most at least since 1997....

https://www.bloomberg.com/news/2012-12-25/boj-s-267-billion-jgb-buys-spu...

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Iran to conduct navy drill in Strait of Hormuz in December

Iran to conduct navy drill in Strait of Hormuz in December

DUBAI | Tue Dec 25, 2012 8:32am EST

DUBAI (Reuters) - Iran will begin six days of naval drills in the Strait of Hormuz at the end of this week, an Iranian naval commander said on Tuesday, an exercise meant to showcase its military capabilities in what is a vital oil and gas shipping route.

The "Velayat 91" drills will be held from Friday to Wednesday across an area of about 1 million square kilometers in the Strait of Hormuz, the Gulf of Oman and northern parts of the Indian Ocean, said Habibollah Sayyari, according to Iranian media.

Iranian officials have often said that Iran could block the strait - through which 40 percent of the world's sea-borne oil exports pass - if it came under military attack over its disputed nuclear program.

Iran held a similar 10-day drill last December and sent a submarine and a destroyer into the Gulf four months ago at the same time as U.S. and allied navies were conducting exercises in the same waters to practice keeping oil shipping lanes open.

Sayyari was quoted as saying the new drill would test the navy's missile systems, combat ships, submarines and patrol and reconnaissance methods.

"In this exercise we will use the navy's newest weapons and tactics," Sayyari said. "Certainly we will observe the marine borders of neighboring states and will carry out our exercises according to international laws and regulations."

A heavy Western naval presence in the Gulf is meant to deter any attempt to block the waterway.

https://www.reuters.com/article/2012/12/25/us-iran-military-idUSBRE8BO04...

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Fuuny things gong on in the FX market / GBPUSD

When Only The Machines Are Stirring - GBP Goes Bidless

Submitted by Tyler Durden on 12/25/2012 - 09:25

UPDATE: GBP -160pips now

It seems that while all the good boys and girls of the world are opening gifts and starting to drink heavily on this festive day, something is afoot in the GBPUSD FX pair. With not a creature stirring apart from a few algos, the transatlantic cross has gone steadily bidless - now down 90 pips in a well coordinated dribble-down algo battering. Happy Christmas Johhny-5...

https://www.zerohedge.com/

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DPH: Check out the 1 day chart... Pound

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Tue, Dec 25, 2012 - 10:36am
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Iran Launches Week Long Hormuz Drill Next To CVN-74 Stennis

Iran Launches Week-Long Straits Of Hormuz Naval Drill On Friday, Next To US Aircraft Carrier Tyler Durden's picture Submitted by Tyler Durden on 12/25/2012 09:48 -0500

With the market still hopeful of some deus ex resolution to the Fiscal Cliff will take place in the last few trading sessions of the year (one where the market itself will not have to be the catalyst for such a resolution, because once the selling starts in earnest, who knows if and when it stops, hence the loading up on prodigious amounts of puts), here is Iran out of left field, adding yet another known unknown to the inequality, announcing that it will begin six days of naval drills in the Straits of Hormuz on Friday. In other words a one year flashback deja vu, as Iran held a similar 10-day drill last December, when everyone was expecting an imminent escalation out of the endless Israel-Iran foreplay and was analyzing which were the new moon days allowing Israel unobstructed access to the greatest distraction of all - Iran's nuclear facility being moved under a mountain: a catalyst which Israel repeatedly said is the only reason to attack a weaponizing, nuclear Iran, and which took place some time in 2012. Now that the official window of opportunity is closed, will Israel tone back on the aggressive rhetoric? Hardly: after all that is precisely why the Syrian "outlet valve" has been put in play over the past 6 months.

From Reuters:

Iran will begin six days of naval drills in the Strait of Hormuz at the end of this week, an Iranian naval commander said on Tuesday, an exercise meant to showcase its military capabilities in what is a vital oil and gas shipping route.

The "Velayat 91" drills will be held from Friday to Wednesday across an area of about 1 million square kilometres in the Strait of Hormuz, the Gulf of Oman and northern parts of the Indian Ocean, said Habibollah Sayyari, according to Iranian media.

Iranian officials have often said that Iran could block the strait - through which 40 percent of the world's sea-borne oil exports pass - if it came under military attack over its disputed nuclear programme.

Sayyari was quoted as saying the new drill would test the navy's missile systems, combat ships, submarines and patrol and reconnaissance methods.

"In this exercise we will use the navy's newest weapons and tactics," Sayyari said. "Certainly we will observe the marine borders of neighbouring states and will carry out our exercises according to international laws and regulations."

A heavy Western naval presence in the Gulf is meant to deter any attempt to block the waterway.

And making sure there is no chance of escalation, the aircraft carrier Stennis, CVN-74, as shown in the US naval update map courtesy of Stratforwill be right there, quietly watching every move of the Iranian navy, often times smack in the middle of the drills.

And just to get the blood really going, Iran media has reported that there has been another Stuxnet-based attempt to cripple Iranian infrastructure. As a reminder, Stuxnet is the computer "virus" which crippled the Iranian nuclear power plant and set back the project by months. Via AP:

An Iranian semi-official news agency says there has been another cyberattack by the sophisticated computer worm Stuxnet, this time on the industries in the country's south.

Tuesday's report by ISNA quotes provincial civil defense chief Ali Akbar Akhavan as saying the virus targeted a power plant and some other industries in Hormozgan province in recent months. Akhavan says Iranian computer experts were able to "successfully stop" the worm.

Iran has repeatedly claimed defusing cyber worms and malware, including Stuxnet and Flame viruses that targeted the vital oil sector, which provides 80 percent of the country's foreign revenue.

Tehran has said both worms are part of a secret U.S.-Israeli program that seeks to destabilize Iran's nuclear program. The West suspects Iran is pursuing a nuclear weapons program, a charge Tehran denies.

Has the time come for perfectly inexplicable bid-hitting attacks (thanks BIS) to start targeting the Brent complex just as geopolitical tensions threaten to push it far higher once more? The good news is that at least silver may be allowed to crawl out above $30 now that central banks are certain to not pump about $2 trillion in 2013. Oh wait...

https://www.zerohedge.com/news/2012-12-25/iran-launches-week-long-strait...

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Tue, Dec 25, 2012 - 10:40am
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Vultures Cash in on Africa’s Mineral Wealth

Vultures Cash in on Africa’s Mineral Wealth

In 2010, Guinea alone represented over eight percent of total world bauxite production, Zambia and the Democratic Republic of Congo have a combined share of 6.7 percent of the total world copper production, and Ghana and Mali together account for 5.8 percent of the total world gold production, while Ethiopia also accounts for one-sixth of the world’s tantalum production.

A World Bank report issued in October claimed consistent high commodity prices and strong export growth show that African countries need to value the economic importance of their unexploited natural resources.

Read More

https://stratrisks.com/geostrat/10018

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Tue, Dec 25, 2012 - 5:42pm
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Central African Repub. rebels seize town,defying foreign troops

Central African Republic rebels seize central town, defying foreign troops

BANGUI | Tue Dec 25, 2012 5:29pm EST

BANGUI (Reuters) - Rebels in Central African Republic seized the central town of Kaga Bandoro on Tuesday despite the presence of foreign troops meant to support the government, a government official said.

The fall of the town, 333 km (207 miles) north of the capital Bangui, came hours after the Seleka rebel alliance said they would suspend their push and means they now have a firm grip on the north and east of the fragile nation.

"They took the town after a short battle despite the surprising lack of action from the Chadian (soldiers)," Rigobert Enza, who works in Kaga Bandoro's mayor's office, told Reuters after he fled to Sibut, the next town to the south.

Foreign soldiers in Kaga Bandoro include Chadians dispatched in the last few weeks to help Bangui tackle the latest rebellion as well as members of a regional stabilization force made up of soldiers from across Central Africa.

Neither rebel nor government officials were available for comment. But the daughter of a second local government official in the town said she had received a call from her father confirming the town had been occupied by rebels.

CAR, a mineral-rich but land-locked former French colony, has been plagued by insecurity since independence in 1960.

President Francois Bozize came to power in 2003 after a brief war and has won two elections since then.

But facing several internal rebellions and the spill-over from conflicts in neighboring Chad and Sudan, he has struggled to stabilize the nation.

"The situation has become very serious," a senior official in the president's camp told Reuters, asking not to be named.

The rebels are made up of fighters from several previous rebel groups and complain that Bozize has failed to stick to the terms of a 2007 peace deal.

https://www.reuters.com/article/2012/12/25/us-car-rebels-idUSBRE8BO06P20...

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Tue, Dec 25, 2012 - 7:17pm
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U.S. moves to sell advanced spy drones to South Korea

WASHINGTON | Tue Dec 25, 2012 2:54pm EST

WASHINGTON (Reuters) - The Obama administration formally proposed a controversial sale of advanced spy drones to help South Korea bear more of its defense from any attack by the heavily armed North.

Seoul has requested a possible $1.2 billion sale of four Northrop Grumman Corp RQ-4 "Global Hawk" remotely piloted aircraft with enhanced surveillance capabilities, the Pentagon's Defense Security Cooperation Agency said in a statement dated on Monday and distributed on Tuesday.

South Korea needs such systems to assume top responsibility for intelligence-gathering from the U.S.-led Combined Forces Command as scheduled in 2015, the security agency said in releasing a notice to U.S. lawmakers.

"The proposed sale of the RQ-4 will maintain adequate intelligence, surveillance, and reconnaissance capabilities and will ensure the alliance is able to monitor and deter regional threats in 2015 and beyond," the notice said.

The United States has agreed with Seoul to turn over the wartime command of Korean troops later this decade. Current arrangements grew from the U.S. role in the 1950-1953 Korean War that repelled a North Korean takeover of the South.

Seoul has shown interest in the high-altitude, long-endurance Global Hawk platform for at least four years. The system, akin to Lockheed Martin Corp's U-2 spy plane, may be optimized to scan large areas for stationary and moving targets by day or night and despite cloud cover.

It transmits imagery and other data from 60,000 feet at near real-time speed, using electro-optical, infrared and radar-imaging sensors built by Raytheon Co.

The possible sale has been held up by discussions involving price, aircraft configuration and a go-slow on release of such technology subject to a voluntary 34-nation arms control pact...

https://www.reuters.com/article/2012/12/25/us-usa-korea-drones-idUSBRE8B...

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Wed, Dec 26, 2012 - 9:39am
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China Proposes Full Name Registration For Every Internet User

China Proposes Full Name Registration For Every User To Make Its Internet "Healthier, More Cultured And Safer"

Submitted by Tyler Durden on 12/26/2012 - 08:55

With various "gun control" proposals flying fast and furious (precisely the reactionary kneejerk reaction Ron Paul warned would happen), some of which as brilliant as RFIDing every gun in existence, supposedly including the tens of millions of illegal and unregistered ones, it is perhaps appropriate to see how another authoritarian government - China - deals with its own equivalent of the touchy Second Amendment, its "First", or the right to free speech in a society which for decades has had none, and where the internet makes free speech regulation impossible (very much any gun control in a nation in which there is one gun for every person is impossible). China's solution, according to Reuters, the requirement of a real name registration for internet access for every person, "extending a policy already in force with microblogs in a bid to curb what officials call rumors and vulgarity...A law being discussed this week would mean people would have to present their government-issued identity cards when signing contracts for fixed line and mobile internet access, state-run newspapers said."

https://www.zerohedge.com/

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Blogger's death stirs political storm in Iran: Internet Safety

Customers use computers at an internet cafe in Tehran May 9, 2011. REUTERS/Raheb Homavandi Iran

Blogger's death stirs political storm in Iran

By Babak Dehghanpisheh

BEIRUT - There was little about Sattar Beheshti that made him stand out. But his life changed when he started a blog called "My Life for Iran" last year. Months later, his battered body was handed to his family. Full Article

https://www.reuters.com/

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Govt. contingency plan for Zombie attacks?: My commentary

Britain is well prepared to fight apocalyptic zombie invasion

A zombie invasion is a problem that may seem to belong in a horror film rather than to real life, but, none the less, the British government believes it has worked out the best way to cope with one.

Shaun Of The Dead The Cabinet Office would lead Britain's response to a zombie apocalypse, according to an official response to a Freedom of Information request

8:02AM GMT 26 Dec 2012

In the event of an apocalypse brought about by an army of the undead, civil servants would co-ordinate the military's efforts to "return England to its pre-attack glory", according to a Freedom of Information request that has revealed the country's contingency plans.

The MoD would not lead efforts to plan for such a zombie attack or deal with the aftermath because that role rests with the Cabinet Office, which co-ordinates emergency planning for the Government.

Details about the authorities' surprising level of readiness for a zombie onslaught emerged in a response to an inquiry from a member of the public.

The MoD replied: "In the event of an apocalyptic incident (eg zombies), any plans to rebuild and return England to its pre-attack glory would be led by the Cabinet Office, and thus any pre-planning activity would also taken place there.

"The Ministry of Defence's role in any such event would be to provide military support to the civil authorities, not take the lead. Consequently, the Ministry of Defence holds no information on this matter.".........

https://www.telegraph.co.uk/news/newstopics/howaboutthat/9721072/Britain...

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

DPH: My postulation many moons ago about how society (and govt. also) can not separate itself from even considering outrageous scenario's (and solutions) to things that will never happen. Zombies???

The creative and distorted MSM/Hollywood imagery over the years has left man/woman and their societies (and their govt.'s) with an unshakeable abstract mind set that is spilling over into reality and it's problems/solutions etc.

To the extent that the UK military (and probably US) and the US CDC is even spending time or money studying these things and providing guidance etc. is proof to me that man/woman is having a hard time differentiating between what real and what's relevant.

Man's ability to problem solve in a rational manner has been impaired by many things including greed and desperation and much of it is born from the fantasia of the MSM/Hollywood messaging that has gone on for too long.

Just remember the saying...life imitates art.

But what if the "art" is a complete abstract of rational thought and is based in fear or magical thinking and beliefs....hence solutions?

Man/woman on all levels of society have been brainwashed not so much for a desired effect but it has had a effect and consequence because of their continual exposure and absorption of abstract crap being presented to them 24/7/365 to the point that the abstract concepts have resulted in abstract and irrational thinking....and problem solving.

That's how I see it.

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Geithner moves to avoid Dec. 31 debt ceiling

Dec. 26, 2012, 4:54 p.m. EST

Geithner moves to avoid Dec. 31 debt ceiling

By grobb[at]marketwatch[dot]com (Greg Robb), MarketWatch

WASHINGTON (MarketWatch) — The Treasury Department soon will begin making accounting moves so that the United States can put off hitting its debt ceiling at the end of the month, Treasury Secretary Timothy Geithner said Wednesday.

In a letter to congressional leaders, Geithner said the government would hit the $16.4 trillion debt ceiling on Dec. 31 unless he authorized the extraordinary measures.

The temporary measures would create $200 billion in “headroom,” according to Geithner. Under normal circumstances, that amount of headroom would last approximately two months.

However, it was unclear how long such measures would last, because tax and spending policies for 2013 are still under negotiation as part of the talks to avert the fiscal cliff, he said.

President Barack Obama and Senate leaders are returning to Washington seeking to avert the spending cuts and tax increases that are set to take effect in the new year.

Geithner said if lawmakers failed to act, this could add some more time before the debt ceiling is reached. “If left unresolved, the expiring tax provisions and automatic spending cuts, as well as the attendant delays in filing of tax returns, would have the effect of adding some additional time to the duration of the extraordinary measures.”

Analysts said tax refunds for 2012 may be delayed if the budget standoff is not avoided.

Geithner promised to update the leaders on the duration of the extraordinary measures when the policy outlook becomes clearer.

Ultimately, Congress must act to raise the debt limit or the United States would default on its legal obligations.

Republicans have said they want to use the debt-ceiling approval to win concessions on spending from the White House. Obama has said he would not give in to any Republican demands to obtain an increase in the debt limit.... (DPH: An executive order can accomplish the same thing.)

https://www.marketwatch.com/story/geithner-moves-to-avoid-dec-31-debt-ce...

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