Month: April 2013

By Bill Bonner

Back in the USA, stocks rose again yesterday. The Dow finished up
128 points. Gold fell $25 per ounce yesterday… and everybody seems to
think it will be going down forever. (A word of caution: probably
not.)

Last week, we went to São Paulo, Brazil. There, too, we found taxi
drivers who knew a lot more about monetary crises than the typical US
economist. Said one:

I remember. I was just a kid. But my
father would call and tell us to run to the grocery store. He had just
been paid. We’d dash for the grocery story, meet him there and buy
everything we could. We spent every cent in just a few minutes.

Our friend was recalling what it was like in the late 1980s in
Brazil. The government had caused inflation… then hyperinflation.
Prices rose so fast that as soon as people got some cash they ran to
the grocery store to spend it.

Later, there was no point. In 1990, hyperinflation in Brazil reached
30,000%. What cost 1 real (the Brazilian currency) in 1980 cost 1
trillion in 1997. The hyperinflation wiped out the middle class… and
wiped the shelves clean.

“It’s hard to run a business when you don’t know what your money is
going to be worth,” said our friend. “Businesses tended to just stop.”

From Harare to Buenos Aires…

And here in Argentina, there came an announcement this week. The
government will freeze the price of gasoline for the next six months.

Price controls didn’t work for the Romans. They didn’t work for the
Germans. They didn’t work for the Zimbabweans… or any of the other
hundreds of governments that have tried them. But who knows? Maybe
they’ll work for the Argentines…

Or gasoline will begin to disappear from the filling stations.

But inflation is just getting started here. The rate is officially
about 10%. Unofficially, it’s about 30%. Officially, you can trade a
dollar for 5.4 pesos. Unofficially, you’d be a fool to do so. The black
market rate is eight pesos to the dollar — and more.

So what do we do? We stick with the “king of cash,” the US dollar.

Which explains why the dollar is so popular. Every time we come to
Argentina, we bring the maximum — $10,000 — in $100 bills. Then, when
we need to buy things, we trade our dollars on the black market.

Isn’t that illegal? We don’t know.

Criminal Cash?

We went to a money changer in Buenos Aires. At first, we couldn’t
find it; there are no big signs to tell you where it is. So we asked a
policeman for directions. Turned out, he was standing right in front of
the money-changing shop.

It may be illegal. But it’s certainly popular… and, apparently,
tolerated. If everyone were forced to use dollars and exchange them at
the official rate, the economy would probably collapse tomorrow.

Instead, there is a whole subterranean economy that functions on
dollars. Which explains this item in the US press, from former domestic
policy advisor to President Reagan Bruce Bartlett:

A new report from the Federal
Reserve Bank of San Francisco explains cash has not only held its own
against competitors but continues to grow in popularity. Measured in
dollar terms, there is 42% more cash in circulation today than five
years ago.

Many economists believe that the
rise in cash is strongly related to growth in the so-called underground
economy — criminal activity such as drug dealing, as well as tax
evasion by people working off the books for cash. Strong evidence for
this proposition comes from examining the distribution of cash holdings
by denomination.

Criminal? What’s he talking about? People are just trying to do
business in a world where you can’t trust the local paper money or the
people who control it.

Right now, many people trust the dollar more than their home currencies. So the foreigners suck up dollars created by the Fed.

The Great Money Migration

This explains why there is so little consumer price inflation in
America — even while the Fed aggressively increases the money supply.
They ship it overseas… in $100 bills. Bartlett continues:

As one can see, 84% of the increase
in cash since 1990 has been in the form of $100 bills, which have risen
to 77% of the value of cash outstanding in 2012 from 52% in 1990.
I seldom use $100 bills for anything except Christmas gifts to
nieces and nephews, nor do I ever see people use them in stores. I
suspect that most people have the same experience. For large purchases,
most law-abiding people use checks or credit cards.

Not here they don’t. They use stacks of $100 bills! In Argentina, even if you buy a fancy house, you come with a suitcase full of $100s. More Bartlett:

One consequence of the rising share
of US currency held abroad is that it may distort analyses of the
relationship between the money supply and economic activity.
Incidentally, exports of cash appear in the Commerce Department’s
data on international transactions (Line 67). It is recorded as an
increase in foreign-owned assets in the US but is better thought of as
an almost costless way of financing a good chunk of our current account
deficit. It’s like borrowing money from foreigners that most likely
will never have to be paid back, at zero interest.

We are proud to be a part of this great money migration…

But we fear the day when it comes home!

Regards,

Bill

To learn more about Bill visit his Google+ Page or Bill Bonner’s Diary

By www.CentralBankNews.info     Pakistan’s central bank left its benchmark discount rate steady at 9.50 percent given the risks to the balance of payments position from low financial inflows and high debt payments that will continue to put pressure on foreign exchange reserves in coming months.
    The State Bank of Pakistan (SBP), which has held rates steady this year after cutting by 250 basis points in 2012, said foreign exchange reserves had declined to $6.7 billion as of April 5 from $8.7 billion at the end of January, mainly due to debt payments.
     Net capital and financial inflow of $34 million from July-February was insufficient to finance the external current account deficit of $700 million for the same period. 
    The SBP also has to retire another $838 million of IMF loans during the remainder of the current fiscal year, which ends June 30, “thus the pressure on foreign exchange reserves is likely to remain in the coming months,” the SBP said.
    Interest rates play a key role in this context, the SBP said, aiming to “discourage speculative demand for dollars by keeping rupee denominated assets sufficiently lucrative.”
    Pakistan’s headline inflation rate dropped to 6.6 percent in March from February’s 7.4 percent, the lowest rate since April 2004, while core inflation dropped to 8.4 percent, the lowest level since October 2009.
    The decline in inflation is mainly because the government has kept check on administered prices, such as electricity, gas and some transportation while muted private sector investment expenditure is also having a dampening effect on aggregate demand and thus inflation.
    However, the SBP questioned the sustainability of these government subsidies and the fiscal position, saying any overdue fiscal consultation effort can affect the level of subsidies and thus change the current low inflationary expectations.
    “A prudent approach would be to gradually reduce the subsidy burden together with a credible and reform oriented medium term fiscal program,” the SBP said. This would include tax reforms to increase the tax base.
    The SBP targets inflation of 9.5 percent for the current fiscal year 2012/13.

    www.CentralBankNews.info

London Gold Market Report
from Ben Traynor
BullionVault
Friday 12 April 2013, 07:30 EST

U.S. DOLLAR gold prices fell below $1550 an ounce Friday morning, though they remained above last week’s low, as stocks and commodities also fell and the Dollar strengthened, with Eurozone finance ministers set to discuss Cyprus, Ireland and Portugal today.

“Current momentum favors a test to the downside,” say technical analysts at Scotia Mocatta, “but we would not expect significant liquidation until a break of $1500.”

Analysts at Barclays Capital meantime say gold should hit support around last week’s low of $1540 an ounce, but ad that there is tough resistance around $1590.

“It’s a thin market,” one dealer in Singapore told newswire Reuters this morning.

“Buying is not exceptionally high from India. I would say there isn’t anything unusual yet.”

Gold in Sterling meantime fell to its lowest level this year on the spot market at £1006 an ounce, only just above its December low and close to its lowest level since July last year.

Gold in Euros dropped to €1185 an ounce, a two-month low and nearly 15% off its all-time high set last September.

Heading into the weekend, the Dollar gold price looked set for its third straight weekly drop, down 2% on where it closed last Friday, the steepest drop since February.

Silver meantime fell back below $27.50 an ounce, though it remained slightly up on the week by Friday lunchtime in London.

On the currency markets, the Euro fell against the Dollar this morning, handing back all of yesterday’s gains, amid fears that Cyprus’s bailout may not be large enough.

Germany’s government said Friday that the €10 billion figure for bailing out Cyprus is “not up for negotiation” following news that the country needs to find €23 billion to meet its financing needs over the next three years.

“We cannot do any more,” agreed Luxembourg finance minister Luc Frieden, attending today’s Eurogroup meeting of single currency finance ministers.

Eurogroup president Jeroen Dijsselbloem meantime said he was “very optimistic about helping Portugal and Ireland,” adding that an agreement will “hopefully” be reached to extend loans to those countries by seven years.

Dijsselbloem denied that the subject of bad loans in Slovenia’s banking sector was due to be discussed at the meeting.

Elsewhere in Europe, British prime minister David Cameron traveled to Berlin Friday to discuss European Union reform with German chancellor Angela Merkel.

The Bank of Japan meantime has taken “all necessary steps to achieve [its] 2% inflation [target] in two years,” BoJ governor Haruhiko Kuroda said Friday.

“But it’s not appropriate to limit our policy to two years…we will not hesitate to adjust policy in the future as the economy is like a living thing.”

The BoJ’s promise last week to spend $1.4 trillion of newly-created money on various assets “does not appear to have been bullish for Japanese gold demand” says a note from Credit Suisse this morning.

“Record prices of gold in yen have seen a marked increase in sales of both bars and scrap as investors realize gains…the BoJ’s efforts to displace Yen from JGBs [Japanese Government Bonds] and into other avenues are likely to exaggerate the global hunt for yield and real returns by Japanese individuals and institutions…we think it more likely that will be reflected in rising equity prices and falling bond yields abroad than in accelerating gold demand domestically.”

The Tokyo Stock Exchange suspended JGB futures trading Fridays following a sharp drop in prices.

Ben Traynor

BullionVault

Gold value calculator   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics. Ben can be found on Google+

(c) BullionVault 2013

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

By www.CentralBankNews.info

By WallStreetDaily.com

When Friday rolls around, we roll out the charts in the Wall Street Daily Nation.

After all, a picture is supposed to be worth a thousand words. So we figure, why not embrace it?

This week, we’re serving up some timely Japanese economic data.

We’re scoffing at all the bears. (Then we’re making sure we have good reason to be so brazen.)

And, last but not least, we’re revealing the single most encouraging data point we’ve seen all week.

Take a look and be sure to let us know what you think!

Buy, Buy, Japan?

Forget that the Nikkei 225 Index is up 23% over the last three months. (Can you say momentum?) Or that I was bullish on Japanese stocks way before it was cool.

The only “Japan talk” going on this week involves government bond yields.

They just experienced the “sharpest three-day steepening [spike]… since April 1995,” according to Nomura.

That has some folks fretting about a (gasp) default. But everyone needs to “simma down now.”

I know the spike was sudden and all. But yields didn’t break out into uncharted territory. In fact, they were much higher, relatively speaking, only a few weeks ago.

A Correction is Coming! A Correction is Coming!

The market is so, so, so overdue for a correction, right? Well, that’s what the talking heads keep telling us.

Riddle me this, though, Batman… Why isn’t anyone betting on it?!

The latest short interest report for the S&P 1500 Index reveals that bets against stock declines remain near all-time lows. The average short interest as a percentage of float checks in at 5.6%.

Now, the “smart money” has a pretty good track record of increasing their short bets ahead of stock market declines.

As you can see, short interest spiked ahead of the mid-year swoons in 2012 and 2011. And it shot to the moon leading up to the financial crisis.

So what gives this year?

Well, considering we’re so overdue for a correction, it must be that the smart money suddenly got stupid, right?

In all seriousness, I don’t have a crystal ball. But if a correction was so clearly in the cards, we should expect to see short interest creeping higher. And it’s not.

Sell in April and Go Away?

Now that I’ve chastised all the bears, I have a confession. I wouldn’t be surprised one bit if stocks took a breather soon. I mean, that’s exactly what they did right around this time last year.

Of course, they then proceeded to rally back in a big way. So bring on the déjà vu, Mr. Market! We can handle a brief selloff – followed by a monster rally. I promise that you’ll get no complaints here.

Good News for Earnings, Bad News for the Government

I’ve featured the NFIB Small Business Optimism Index here before. The latest reading reveals that Washington is still a major problem.

The good news is, only 17% of survey respondents cited poor sales as their biggest problem. Could it be that the economy is actually recovering? Say it ain’t so!

All kidding aside, that’s encouraging news in relation to the two metrics we talked about on Wednesday. It could point to a much better quarter for sales than anyone’s expecting.

That’s it for today. Before you sign off, though, do us a favor. Let us know what you think about this weekly column – or any of our recent work at Wall Street Daily – by sending an email to [email protected] or leaving a comment on our website.

Thanks, and enjoy the weekend!

Ahead of the tape,

Louis Basenese

Article By WallStreetDaily.com

Original Article: Friday Charts: Panic in Japan and Why Businesses Hate Government, Too

USDJPY’s upward movement from 92.56 extends to as high as 99.94. Further rise is still possible, and next target would be at 101.00 area. Support is at 98.35, as long as this level holds, the uptrend will continue. However, a breakdown below 98.35 will suggest that a cycle top is being formed on 4-hour chart, then deeper decline to 97.50 to complete the consolidation could be seen.

Daily Forex Forecast

By www.CentralBankNews.info     Singapore’s central bank held its policy stance steady, saying the current “modest and gradual appreciation of the S$NEER policy band” is appropriate to contain inflationary pressures, anchor expectations and facilitate the restructuring of the economy toward sustainable growth.
    The Monetary Authority of Singapore (MAS), which targets the Singapore dollar against a basket of undisclosed foreign currencies rather than inflation, said the country’s economy should expand modestly in 2013 with a tight labor market exerting some upward pressure on core inflation in the latter half of this year as higher wage costs are passed through to consumers.
    In 2013 Singapore’s Gross Domestic Product is expected to expand by 1-3 percent, with growth gradually improving during the year on the back of a recovery in external demand.
    Consumer price inflation is forecast at 3-4 percent with average core inflation forecast at 1.5-2.5 percent, but rising moderately in the second half of the year through “persistent tightness in the labour market.”
    Singapore’s GDP shrank by 1.4 percent in the first quarter of 2013 from the fourth quarter, according estimates by the Ministry of Trade and Industry, following a quarterly rise of 3.3 percent in the fourth quarter.
    Singapore’s core inflation rate, which excludes private road transport and accommodation costs, eased to an annual rate of 1.5 percent in January-February from 2.0 percent in the fourth quarter and 2.4 percent in the third quarter of 2012, the MAS said, helped by favourable supply conditions in commodity markets and the impact of the currency’s appreciation.
    During the same period, the all-items inflation rate averaged 4.0 percent.
    For 2013, MAS is lowering its core inflation forecast to 1.5-2.5 percent from a previous forecast of 2.0-3.0 percent due to lower-than-expected price rises over the past few months, it said.
    The all-items inflation rate is forecast at 3-4 percent, down from a previous forecast of 3.5-4.5 percent.
    “The outlook for the world economy has improved since late last year, although uncertainties remain, particularly with regard to Europe,” MAS said, with economic recovery underpinned by the gradual pickup in the U.S. housing market and private demand, as well as fiscal stimulus in Japan.
    Economic activity in China should be sustained on the back of robust domestic demand and the rest of Asia will see continued moderate growth, giving a modest lift to the global IT industry following a contraction in 2012.
    Singapore’s manufacturing sector and export-oriented industries should improve gradually over the year with the economy’s level of output converging to its underlying potential and the labour market remaining a full employment, partially reflecting supply-side constraints, it said.
    MAS, which previously issued a monetary policy statement in October 2012, said the Singapore dollar’s nominal effective exchange rate (S$NEER) had fluctuated in the upper half of its policy band over the last six months with the broad-based decline in the Japanese yen leading to upward pressure.
    But this was countered by “bouts of domestic currency weakness” due to a strengthening of the U.S. dollar on speculation over an early exit from quantitative easing by the Federal Reserve and renewed uncertainty over the European debt crises, MAS said.
    Economists had expected the MAS to hold its policy stance steady.
    The MAS adjusts the rate of appreciation of the Singapore dollar against a basket of currencies by changing the slope, width and center of the trading band.

    www.CentralBankNews.info

By MoneyMorning.com.au

Watching the markets is more like a geography lesson these days.

Last week it was Cyprus. This week it’s Japan.

What’s next? If the press is right, it’s Luxembourg.

Apparently the country’s financial system is too big relative to the size of the economy.

What should you do to prepare for the coming ‘Luxembourg-ageddon’?

We’re surprised you asked. Do what we are. Buy stocks before this rally really takes off…

If you wonder how we can back stocks with the world in never-ending turmoil, give us a moment to explain.

On Wednesday we went to the Bloomberg Australia Economic Summit in Sydney. Keynote speakers were Treasurer Wayne Swan, Shadow Treasurer Joe Hockey, and New South Wales Premier Barry O’Farrell.

Other speakers included Coca-Cola Amatil CEO Terry Davis, former Reserve Bank of Australia board member Warwick McKibbin, and housing bear Professor Steve Keen.

The big message I took away was that for all the talk about letting ‘free markets’ work, the reality is they’ve got no intention of letting that happen.

Every time someone said they believed in free markets, they quickly followed it with a ‘but’.

That tells us there’s not a chance in heck of an end to the meddling and money printing.

More Proof Money Printing Boosts Stocks

And while speakers at the Bloomberg summit didn’t commit Australia down the same path, they certainly didn’t object to it going on elsewhere.

In short, if the Australian economy doesn’t get into shape soon, the money printing you’ve seen overseas will happen here.

But even if it doesn’t, the international flow of new money has already hit the Australian share market. That will only increase as foreign central banks churn out more printed money.

And if you believe that money printing is only good for gold, not stocks, think again. The next chart proves a point we’ve made for some time:

Source: Business Insider

This chart only goes until the end of 2012. It doesn’t include the recent reaction to Japan’s money printing plans.

This has helped spur the US S&P 500 to an all-time record high:

Source: Google Finance

It has even helped push the Australian stock market back above 5,000 points after more than a month of painful falls.

But even so, for most stocks the falls weren’t that bad. The benchmark index only fell 4.9% from the early March peak to the early April trough. That’s hardly what you’d call ‘crash’ territory.

As we said all along, it was and still is the time to buy stocks. We’ll show you another chart that explains our point further…

Still Something Left for Yield Hunters

The Reserve Bank of Australia recently released its latest chart pack showing key data on the Aussie and world stock markets. The chart that interested us the most was this one:

Source: Reserve Bank of Australia

The chart shows you the dividend yield for Aussie stocks compared to world stocks. As you can see, despite the recent Aussie stock rally, dividend yields are still much higher than non-Australian stock dividend yields.

Foreign investors can get nearly twice as good a yield in Australian dividend stocks as they can in stocks anywhere else.

This is a key point for big institutional investors. It won’t mean that they’ll invest every cent in Australia, but they will invest more than they have in the past.

The relatively stable Australian dollar helps the case for Aussie stocks. Since late 2010, the Aussie dollar has traded in a fairly tight range. The range has consolidated further since mid-2012.

Seeing as currency movements can have a big impact on stock returns, it’s important for foreign investors to know they’re dealing with a stable currency.

Don’t Miss the Money ‘Torrent’

But make no mistake, this stability won’t last forever. As long as central banks hold interest rates at record lows, and print money at a non-stop rate, investors here and overseas should take advantage of market dips in order to buy good dividend stocks.

You could wait and hope stocks will fall so you can bag an even bigger yield. But that’s a big risk. You risk missing out on a decent yield and capital growth if the central bank money ‘torrent’ pushes stocks higher.

You shouldn’t bet your house on the market (it’s still risky), but you could miss out on the best stock rally  in years if you stay on the sidelines.

Cheers,
Kris
Join me on Google+

From the Port Phillip Publishing Library

Special Report: TORRENT SIGNAL 3

Daily Reckoning: The Market Is High

Money Morning: Investors: Ignore Japan’s Yen Devaluation Game

Pursuit of Happiness: Why the NBN is Dead Before it’s Begun

Australian Small-Cap Investigator:
How to Make Money From Small-Cap Stocks

By MoneyMorning.com.au

So the jobs report came out and rattled the market a bit. But there is a different perspective to this whole thing that I think is far more important. It also fingers a much more sinister trend afoot.

First, the conventional view: The unemployment rate fell to a new four-year low of 7.6%. Everybody knew that was bogus. It fell because half a million Americans left the job market. The unemployment figure the government publishes is a fiction anyway. It’s a government-manufactured number. I never really pay any attention to it, except to make fun of it, like I am now.

A somewhat less conventional view is to focus on job participation. This number is harder to fudge than the unemployment figure. It just shows you how many people are working or seeking work as a percentage of the civilian population (minus some adjustments for kids under 16, people in prisons, etc.).

Some people like this better and cite this chart as troubling:

I still don’t like this number.

The reason is that both figures are based on implicit assumptions that I find repulsive and evil. The idea is that the government should manage the economy to maximize employment. The idea is that higher is better. I don’t think any of these ideas are good ideas.

The Problem with the Economy (and Society)

Employment should be a residual, the end result of a free people making their own choices about how much or how little they want to work. Counting jobs misses the point entirely. It’s like people who say the economy needs to ‘grow faster’. Why? The growth rate should be a residual, the end result of many choices consumers make. It should not be something managed to hit a target.

People forget that the economy does not exist to create numbers for economists and taxes for governments. It exists as a result of people cooperating with each other and making trades to satisfy needs and wants.

The problem is that we live in a society riddled with government intervention at every level. What these interventions do is discourage people from working. Most commentators focus on the number of Americans on some kind of federal assistance. That’s only part of it.

The other part of it is that government regulations (created in partnership with big business) keep a lot of people from creating their own work. You can’t open a restaurant in your own kitchen, for instance, without a lot of hassle — if you can do so at all.

In fact, you could get in big trouble if you started serving meals to the public out of your house or back porch on a commercial basis. The government would shut you down and fine you at a minimum. It would do so under the guise of guarding the public’s health. (As if your incentive were to poison your neighbours.)

And if you believe that, you are a fool. What it is really doing is protecting the establishment. This is just one tiny example, but I could on for pages about how government discourages people from making their own living.

I’ve always liked this passage from Professor Roderick Long, from a piece back in 2008:

‘In the absence of licensure, zoning and other regulations, how many people would start a restaurant today if all they needed was their living room and their kitchen? How many people would start a beauty salon today if all they needed was a chair and some scissors, combs, gels and so on? How many people would start a taxi service today if all they needed was a car and a cellphone?

‘How many people would start a day care service today if a bunch of working parents could simply get together and pool their resources to pay a few of their number to take care of the children of the rest?

‘These are not the sorts of small businesses that receive SBIR awards; they are the sorts of small businesses that get hammered down by the full strength of the state whenever they dare to make an appearance without threading the lengthy and costly maze of the state’s permission process.

The assistance that small firms receive comes largely at the expense, not of larger firms, but of still smaller firms — or of those who would start such smaller firms if they could.’

But the government is opposed to such anarchic job creation. It always has been. The work of Professor James C. Scott is a particularly valuable aid in seeing why this is so. Scott is no scholar stuck in his ivory tower.

He lives in an 1826 Connecticut farmhouse. The 76-year-old raises chickens, shears sheep and keeps bees. He lived for two years in a Malaysian village and hiked all over the hills of northern Burma (Myanmar). He also writes terrific books. I highly recommend his Two Cheers for Anarchism.

Anyway, his work makes plain that the state from the beginning wants people organized in ways that make them easier to tax, keep track of and subdue. You can’t have a free people running unlicensed businesses out of their homes!

What the government wants is for people to take jobs with big companies. The government wants cows to milk. And it’s easier to milk them when they all hang out in the same spots. Federal assistance programs are there to quell rebellion and create dependency.

Too many unemployed people means a lot of time for meeting in coffeehouses plotting revolution. Better to give the sops something to keep them quiet, government thinks, while we dream up ways to create more tax-paying jobs that we approve of.

I recall a classic and much quoted passage from the anarchist Pierre-Joseph Proudhon (1809–1865):

‘To be governed is to be watched over, inspected, spied on, directed, legislated at, regulated, docketed, indoctrinated, preached at, controlled, assessed, weighed, censored, ordered about, by men who have neither the right, nor the knowledge, nor the virtue…

‘To be governed is to be at every operation, at every transaction, noted, registered, enrolled, taxed, stamped, measured, numbered, assessed, licensed, authorized, admonished, forbidden, reformed, corrected, punished.

‘It is, under the pretext of public utility, and in the name of the general interest, to be placed under contribution, trained, ransomed, exploited, monopolized, extorted, squeezed, mystified, robbed; then, at the slightest resistance, the first word of complaint, to be repressed, fined, despised, harassed, tracked, abused, clubbed, disarmed, choked, imprisoned, judged, condemned, shot, deported, sacrificed, sold, betrayed; and, to crown all, mocked, ridiculed, outraged, dishonored. That is government; that is its justice; that is its morality.’

Government will always fail in its efforts to make society into some kind of abstract image, to fit it into some preconceived plan of what it should look like. That’s why the economy reels from one crisis to the next. And that’s why there is so much unhappiness and angst in the employment market today.

Chris Mayer
Contributing Editor, Money Morning

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From the Archives…

Only Lunatics Need Apply for This Stock Market Rally
5-04-2013 – Kris Sayce

The Run-on Effect of Aussie Housing on the Australian Stock Market
4-04-2013 – Murray Dawes

Good News in China’s Economy? Put This Date in Your Diary…
3-04-2013 – Dr Alex Cowie

‘Gold Only Rises During the Bad Times’ and other Fairy Tales
2-04-2013 – Dr Alex Cowie 

On Gold — Billionaire Investor Eric Sprott Says : ‘I’m in Alex Cowie’s Camp’
1-04-2013 – Dr. Alex Cowie

By www.CentralBankNews.info     Peru’s central bank maintained its policy rate at 4.25 percent, as expected, saying inflation is still in its target range and the economy is growing at a pace that is close to its potential.
   The Central Reserve Bank of Peru (BCRP), which has held rates steady for two years since April 2011, said economic growth has stabilized around its long-term sustainable level even though the sectors that are linked to markets abroad show weak performance.
    “Inflation is expected to coverage to the 2 percent target in the next months due to the improvement observed in the food supply conditions, due to a pace of growth of economic activity close to the economy’s level of potential output, and due to inflation expectations anchored to the target range in a context in which weak production indicators persist in the global economy,” the board of BCRP said.
    Peru’s inflation rate was 2.59 percent in March, slightly up from February’s 2.45 percent but down from January’s 2.87 percent, and within the central bank’s target range of 1.0-3.0 percent.
    Peru’s economy expanded by 6.3 percent in 2012 and in the fourth quarter Gross Domestic Product was up by 0.6 percent from the third quarter for annual growth of 5.9 percent, down from the third quarter’s rate of 6.8 percent.

  www.CentralBankNews.info