There Is Just Too Much Oil Sloshing Around The World Right Now

By EconMatters

EIA Report
The weekly EIA report came out today and one of the noteworthy data points was the Cushing, Oklahoma storage numbers. Already at a record, Cushing added another 1.8 million barrels to storage sending total Cushing stocks to 51.9 million barrels of oil in storage facilities at the energy hub.
There has been 6.3 million barrels of oil added to Cushing during the last 6 weeks. To put these build numbers into perspective, Cushing oil inventories stood at 28.3 million barrels for this time a year ago, which is a build of 23.6 million barrels in a year.

Seaway Pipeline Expansion

The Seaway pipeline was recently expanded to 400,000 barrels per day from 100,000 barrels per day, and many analysts have predicted that this would solve the Cushing oil glut. But it is looking more and more that what the Seaway pipeline offers is a cheaper mode of delivery out of Cushing, and the real benefit is one of logistical optionality for transportation.
Further Reading – Keystone XL Pipeline: Economics, Idealism and Politics

However, it is shaping up due to the sheer size of these build in inventories at Cushing that the Seaway pipeline is not a magic solution for the supply and demand fundamentals at play in the oil industry in the United States, there is just more US production, than there is US infrastructure in place to deal with the trending upturn in this production.

Oil is Fungible
In short, the US and global oil model isn`t set up for the United States to be producing more than 7 million barrels of oil per day. Even if the Seaway pipeline could send 4 million barrels of oil out of Cushing, it wouldn`t make a difference because Oil is fungible, so without major cuts somewhere else in the global supply chain, then you’re going to have supply andstorage builds somewhere in the supply chain.

Saudi Arabia can only cut back production so much
The Saudi`s have already cut back production to fifteen month lows, how long is that going to continue as they need oil revenue just like everyone else? So Cushing is just a reflection and end point for the delivery of increasing US production, which ultimately is building more than there is demand from refiners for producing products, even with an increase in exporting of gasoline and other petroleum products.

Cushing never was landlocked
This should have been apparent to analysts as rail has been delivering Oil to refiners during this domestic boom, and so are barges taking oil out of Cushing, so large amounts of oil are getting to refiners. Some of it before it even gets to Cushing, and some after with the Seaway pipeline, and barges out of Cushing; and with the spread in 2012 of as much as 25 dollars, there were major incentives to get US oil to refiners in a myriad of ways.

Cushing builds reflective of bigger problem
Yet we have almost doubled Cushing`s inventories in a year. This points to a much bigger problem with analysts missing entirely, thinking this was just a Cushing log jam problem. This is seeing the trees, and missing the overall forest, Cushing is just a reflection of the bigger problem, there is just too damn much oil sloshing around the world right now with nowhere to go.

Further Reading – Cushion 50 Million, Boom & Bust Cycles, U.S. Debt & Recession
You see this in stories about Nigerian crude for February delivery being unsold and stuck on cargo ships because there are no buyers with the increase in US domestic production. Iraq is producing more oil, and they need the revenue so expect more oil coming out of Iraq for the next decade with each year producing more than the previous.

The world is producing more oil than is consumed each day
The world global supply chain is producing more oil than the world needs every day, and this means storage has to build somewhere, and whether it is Cushing, or Nigeria, or China it has to be stored somewhere.

In the US, Cushing has expanded storage facilities the past couple of years, and has been a default place to send the extra oil. But even Cushing is rapidly reaching capacity limits, and even if on the margin the Seaway pipeline takes out more oil, refiners can only handle so much more before they become the bottleneck in the equation.
Further Reading – Oil and Gas Markets End 2012 With Swollen Inventory Levels

US Refineries not easy to build
Remember, refiners are not easy to build, and the US has only relatively recently ramped up domestic production, so even with substantial increases in fuel exports, there just are not enough US refineries to handle the increase in US oil production. In short, the oil model of the last decade was not set up with the US being a major producer. The US production increases is throwing the global supply models a major curve ball.

Therefore, the only way that Cushing inventories are going to go down substantially is if more US refineries are built, and that could take three to four years, if they are built at all given the regulatory and financial hurdles that have prevented progress in this area over the last decade.

Unintended Consequences
The bottom line is that the Seaway pipeline is no cure for what ails Cushing inventory builds. For what ails Cushing is the fact that nobody thought about the unintended consequences of a boom in US oil production due to high prices for the past decade.

The global economy has slowed down from the peak in 2007, but prices have remained high, this resulted in increased production projects globally, and the rise in US production just sent the supply levels over the edge.

Furthermore, nobody ever planned or expected that the US would start producing with these numbers ever again. This has thrown the whole supply chain on its back, Cushing is just a reflection of this fact, there is more oil than the world needs right now, and the world definitely didn`t need an increase in US production.

Cushing builds still a problem
As a result you get Cushing, the manifestation of what happens when the unexpected happens before the oil models know what to do with the extra supply. You do not get the kind of builds at Cushing, with a new pipeline in existence for six months, a hefty spread, and rails transporting oil at unheard of levels, unless there is a much bigger problem than just increasing the Seaway pipeline by 300,000 barrels per day.

The Seaway Pipeline just steals business from Railroads & Barges
So Seaway doesn`t solve the Cushing problem as many have hoped. All Seaway does is maybe take some business from barges and railroads in the transportation of the product.

But the problem was much bigger than these people ever realized, because Cushing never represented a landlocked, logistics equation.

Cushing builds represents the fact that right now there is just too damn much oil that is being produced versus consumption needs for that oil. So it has to be stored somewhere, and Cushing is one of the places.

Too many chefs in the kitchen
The real problem is that nobody ever planned for the US to be producing 7 million barrels of oil every day and rising, there is just not enough demand in the world for this extra oil, so it has to be stored because everyone needs the money these days. And until prices drop substantially, no one is going to cut back producing this black gold.

Source

A Brief History Of U.S. Dollar Debasement

January 8, 2013

by David Ziffer

On the 100th anniversary of the creation of the Federal Reserve, it seems fitting that we should present a brief history of US dollar debasement:

1787: U.S. Constitution ratified. “No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts.”

1792: U.S. Coinage Act ratified. Our first Coinage Act establishes a uniform standard of gold and silver content of U.S. coins, paving the way for over a century of trust in the U.S. dollar that will ultimately catapult the U.S. to world economic supremacy.

1861: Greenbacks and Greybacks: In desperation and in direct violation of the U.S. Constitution, both the north and south issue paper currency with no gold or silver backing. Following the war, the U.S. returns to its constitutional roots, ceasing production of Greenbacks and making efforts to retire them as the U.S. returns to the gold standard. A first-class postage stamp (introduced in 1863) costs two cents.

1913: Creation of the Fed: In the belief that a central bank will prevent future economic panics, the U.S. government forms a banking cartel called the Federal Reserve, a rather facetious name given that the Fed is not federal and it maintains no reserves. In so doing our government ignores the warning of Thomas Jefferson:

If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered.

The stage is now set for the collapse of the dollar. A first-class postage stamp still costs two cents.

1934: Gold Reserve Act: After 23 years of dollar debasement by the Fed, Franklin Roosevelt is forced to acknowledge the growing disparity between the century-old fixed price of gold ($20.67/oz.) and its market price. The rift is made painfully obvious by the outflow of U.S. gold into the coffers of foreign nations redeeming dollars for gold at the stated fixed price. In direct violation of the U.S. Constitution, Roosevelt and Congress not only remove gold from circulation but prohibit ownership of gold by U.S. citizens. With the stroke of a pen the dollar is devalued from $20.67/oz. to $35/oz. Despite massive improvements in delivery efficiency, a first-class postage stamp now costs three cents.

1944: Bretton Woods: In the belief that the world requires a unified monetary standard in order to eliminate trade wars that ultimately lead to shooting wars, leading nations establish a dollar-based monetary system in which currencies are valued in terms of the U.S. dollar, which still claims to be gold-backed. This unwarranted trust ironically gives the U.S. yet more license and incentive to continue its debasement, since the world’s citizens now accept newly printed dollars with the mistaken notion that they can be redeemed for a fixed amount of gold. A first-class postage stamp still costs three cents.

1965: Second Coinage Act. In order to finance two very expensive initiatives (the Vietnam War and moon walking) and in direct violation of the U.S. Constitution, Lyndon Johnson signs a new Coinage Act that removes all silver content from U.S. coins. In so doing he provides the following advice to the public, explicitly promising future federal precious metals market manipulation:

If anybody has any idea of hoarding our silver coins, let me say this. Treasury has a lot of silver on hand, and it can be, and it will be used to keep the price of silver in line with its value in our present silver coin. There will be no profit in holding them out of circulation for the value of their silver content. The new coins are not going to have a scarcity value either. The mint is geared to get into production quickly and to do it on a massive scale. We expect to produce not less than 3 1/2 billions of the new coins in the next year, and, if necessary, twice that amount in the following 12 months.

In this same speech Johnson states that scarcity of silver is the motivation for the change. Despite incredible improvements in delivery efficiency that should have dropped the price astronomically, a first-class postage stamp now costs five cents.

1971-75: Petrodollars replace the gold standard: In a repetition of the 1934 crisis, the U.S. gold supply is being decimated by foreign governments redeeming dollars for gold at the stated fixed price ($35/oz.), a completely untenable ratio after thirty more years of dollar debasement by the Fed. In direct violation of the U.S. Constitution, Richard Nixon and the Congress once again stop the outflow, but this time rather than set a new unmaintainable fixed rate they simply eliminate the fixed dollar/gold ratio. Realizing that the collapse of the gold standard will dramatically reduce demand for dollars worldwide, Nixon strikes a deal with OPEC: trade oil in dollars only in return for perpetual U.S. military support. By 1974 gold is irrelevant to the U.S. hegemony, and so as his final act of the year Gerald Ford signs a bill that once again allows U.S. citizens to own gold. The first-class postage stamp now costs ten cents.

2000: Iraq threatens the petrodollar: Shortly after the creation of the Euro, Saddam Hussein makes Iraq the first major oil exporting country to sell oil in a currency other than the dollar, thereby threatening the global petrodollar arrangement. Citing this “weapon of mass destruction” while misleading the public into a preposterous belief that he is really referring to conventional weapons that could somehow threaten the U.S., George W. Bush reacts swiftly by invading in 2003 and quickly reverting Iraq to dollar sales. To make our point exceptionally clear to world leaders, the U.S. (using proxies) hunts down Hussein and executes him in 2006. The first-class postage stamp now costs 33 cents.

2008: Beginning of the end: Under Barack Obama, Fed chairman Ben Bernanke begins a series of bailouts of banks (that are presumably Fed members) and of U.S. debt (both mortgage-backed securities and U.S. Treasurys). The first-class postage stamp now sells for 42 cents.

2013: 100th Anniversary: The master of dollar-printing is 100 years old. The Fed marks its birthday by engaging in the largest debt purchase program in history ($40 billion of mortgage-backed securities and $45 billion of Treasurys per month). Awaiting the collapse of the petrodollar arrangement and the subsequent radical reduction in the purchasing power of the dollar, the price of gold is bid up to over $1600 per ounce. And despite the fact that humans now expend a tiny fraction of the effort to deliver a letter in 2013 compared to what was required in 1863, the price of a first-class stamp is now 46 cents.

Technically the U.S. left the gold standard in 1971, but in reality we abandoned it in 1913 with the creation of the Fed. The two publicly visible gold-standard slippages of the past century (FDR’s repricing and Nixon’s cancellation) were merely necessary adjustments following decades of gradually increasing gold-price inconsistency caused by continuous inflation. Given this, it seems hard to imagine that the Fed was created for any purpose other to create this inflation, i.e. to effectively raise our taxes under the table.

This has enormous implications for today’s long-term investor. Our most constant and predictable financial reality is the continued inflationary policy of the Fed. Given this, and assuming the U.S. is unlikely to pull another rabbit out of the global hat as Nixon and Ford did with the petrodollar in the early 70s, the dollar will almost certainly continue losing purchasing power indefinitely, in terms of both commodities and other currencies. And when the oil-producing nations finally agree to accept payment in currencies other than the dollar, expect a precipitous drop. Invest accordingly.

Source

INFLATION On The Way

J. D. Longstreet

A Commentary by J. D. Longstreet

Let me be clear. I am not an economist. Heck, I’m not even a CPA. Frankly, I know squat about finance short of running a business and having the good sense to hire someone to handle the financial end of the business — extremely well.

Here, at the Longstreet Manor, my lovely and gracious (and long-suffering!) spouse is the financier. She is my “Personal Banker.” No, I MEAN IT! She has kept me out of jail, debtor’s prison, or wherever they place men like me (who spend all the money they can lay their hands on.)

See, I view money as having been made for one purpose — to spend! And yes, I have been told all my life that one cannot take it with them when one departs this world. Although, I did meet a hearse once, out on the interstate, towing a U-Haul trailer behind it. I remarked to my wife at the time, that, perhaps, someone HAD figured out a way to take it with them, after all!

I distinctly remember a member of my board of directors insisting once, many years ago, that if he couldn’t take it with him, the he wasn’t going! Today’s he’s gone — and so is his money. Oh, he didn’t take it with him. No, after he passed from the scene, the family spent the heck out of it until, it, too, was gone!

This may seem strange and even alien to some of you, but I never sought wealth. It was never important to me. Having ample funds to stay fed, clothed, housed, and out of jail was sufficient. So far, I have managed to do that.

I think an aunt made such an impression on me, as a child, that it bent me in a way one might even describe as fear of wealth.

See, my aunt ,was the daughter of a share cropper. (I’m the first generation off the farm, myself.) She was fortunate. She married a man on the way up in one of the most powerful labor unions in the country at the time. They became wealthy. But it affected my aunt in a strange way. She was always afraid — afraid of losing her wealth and returning, I suppose, to the poverty she knew growing up as a hard scrabble sharecropper. She invested wisely, had plenty of money, real estate, stocks, bonds, all of it. But what she lacked was happiness.

I decided then and there, I did not want that. I chose an occupation that I loved, was, indeed, suited for and I stayed with it for thirty years.

Now that I have established my bona fides — which is to say that I am dumb as a post when it comes to high finance, I am about to tell you why Ben Bernanke blew the US economy to hell recently with QE-3.

In a word: INFLATION.

The money you had before QE-3 is now worth less — and the more money Ben and his cronies order printed — the less your money will be worth.

Bernanke, a Jew and a Republican, was born in Augusta, Georgia and raised just thirty miles, or so, from where I sit as I write this piece. It’s a small country town in the coastal plain of South Carolina. So, we are both “Sandlappers.” And as much as I would like to agree with, and support, a fellow son of the Palmetto State, and a fellow Republican, I cannot. He’s wrong on this and, unfortunately, all Americans are going to pay for it, dearly, in the not too distant future.

Ben Bernanke

It pains me to say this, but I am of the mind that Ben really wants Obama to win the coming election. See, Mr. Romney has already said he intends to replace Mr. Bernanke if he is elected. So, it stands to reason that if Bernanke can make the President look good, or even better, in the few weeks left ’til election day, Obama may be reelected and — guess what — Ben gets to keep his cushy job!

See? Politics ain’t all that hard, now, is it?

Seriously, inflation brings the mighty low… quickly! To get a better understanding of what inflation, especially hyperinflation can do to a country just Google “Weimar Republic” or “Hyperinflation in the Weimar Republic.”

During the Gerald Ford Administration the US had a fight with inflation. I can still see, in my mind’s eye, those big red WIN buttons — “Whip Inflation Now!” It took a toll on the country that lasted the remainder of Ford’s Administration, through the Carter Administration, and right up until Ronald Reagan came into office. It was an anvil around the neck of the US economy.

As I said, I don’t know diddly-squat about high finance so I can’t dazzle you with great gobs of numbers with dollar signs and percentage signs, etc., but take it from a guy who was trying to run a business during those years and believe me when I tell you it was “hunker down” and “tread water” time during those years. Reagan tossed the country a life-preserver and we got through it — vowing never to make the same mistake again.

But Americans have extremely short memories. As a result, we are making the same mistakes over and we are inflicting unnecessary pain on ourselves.

The MSM was touting the skyrocket in the stock markets after Bernanke made the announcement. And, yes, it DID look good. But, believe me — it is a bubble and IT WILL BURST — and we will be far worse for it in the end.

J. D. Longstreet

INFLATION On The Way … J. D. Longstreet.

Other articles

• A President Romney Should Shutter Dept. Of Homeland Security … J. D. Longstreet
• We’ve Had It With Obama’s Socialism … J. D. Longstret
• The Evidence Of A Coming Recession Is Overwhelming
• Oil Forever!
• The Un-American Vision of Barack Obama – Thomas Sowell
• The Mother of All Hoaxes
• A Complete History Of The $20 Bill
• ICE agents sue own agency over deferred deportations

• Bernanke keeps pushing failed policy (mysanantonio.com)
• QE3: Quantitatively Easing America Further Into Inflation (conservativeread.com)

A Complete History Of The $20 Bill

by Rob Wile

There’s been a lot of debate recently about the value of U.S. currency, with the GOP now including an exploratory gold standard committee in its platform.

But it’s only the latest such argument in a debate that’s rated almost since the nation was first settled.

The San Francisco Federal Reserve and Doug Mudd, the curator of The American Numismatic Association’s  Money Museum, have helped guide us through the history of the $20 bill, from the colonial era to the present.

We were able to find $20 notes from every era of the country’s banking history, from the colonial era to the present Federal Reserve system. We also included Confederate bills and notes issued by obscure local banks. We discuss what prompted the new bill to be issued — and whose portrait is on the cover.

Click Here:  History of the $20 Dollar Bill

Source  A Complete History Of The $20 Bill – Business Insider.

Related articles

• This Video Of Harry Reid Demanding A Federal Reserve Audit Will Blow Your Mind (businessinsider.com)
• How to End the Fed, and How Not To (txwclp.org)
• First Audit Results in Federal Reserve’s Near 100 Year History Posted Today; Startling! (2012thebigpicture.wordpress.com)
• Audit of the Federal Reserve Reveals $16 Trillion in Secret Bailouts (sott.net)

GL to Provide DP Services to Hornbeck Offshore (USA)

USA’s Hornbeck Offshore Services (HOS) has selected GL Noble Denton to undertake dynamic positioning (DP) assurance services across the company’s technologically advanced fleet of vessels.

GL Noble Denton’s team of DP engineers will support HOS to further develop internal dynamic positioning operating standards across 55 DP-capable offshore service vessels and a fleet of new-build platform services vessels that HOS has announced will be delivered in the second quarter of 2013.

Dynamic Positioning (DP) is a computer-controlled system that automatically maintains a vessel’s position and heading. GL Noble Denton offers DP testing and assurance services to operators across the global offshore industry ensuring the safety, upkeep and proper function of this state-of-the-art technology and the application of the procedures necessary to support safe DP operations.

In addition to developing a robust set of DP operating standards in conjunction with HOS, GL Noble Denton’s Houston-based marine warranty engineers and assurance team will deliver a major package of failure mode and effects analyses (FMEA), proving trials, annual DP trials, and capability analyses to the Hornbeck fleet.

Carl Annessa, Hornbeck Offshore Services’ Chief Operating Officer, said: “Hornbeck Offshore Services has a clear vision to remain at the forefront of the dynamic positioning quality assurance sector. GL Noble Denton is widely regarded as a thought leader in this sector, and we are pleased to partner with them to maintain our position as the premier operator of DP-equipped offshore petroleum support and service vessels.”

Craig Reid, GL Noble Denton’s Dynamic Positioning Services Manager for the Americas, added: “Hornbeck Offshore Services has taken a proactive approach to ensuring its fleet sets the benchmark for operational best practice in dynamic positioning. We are delighted that GL Noble Denton has been selected to help them achieve this.

“By sharing our expertise in this rapidly-developing sector, we will help to ensure that the DP systems onboard the company’s fleet of vessels adhere to industry-leading standards in safety, integrity and performance.”

GL to Provide DP Services to Hornbeck Offshore (USA)| Offshore Energy Today.

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Rebounding US Oil Production: The Historical View

Excitement continues to run at very high levels, over the rebound in US crude oil production. Coming out of the new, historic low of 4.95 mbpd (million barrel per day) in 2008, the annual average of US production in the first 4 months of 2012 is currently on pace at 6.156 mbpd. This new production has largely been made possible by the price revolution in crude oil, which finally broke through the long-term, $25 ceiling during 2003-2004, and which is now mostly sustaining marginal production around the $90 level. A question: has the US, since its own production peaked near 10 mbpd in 1971, seen this kind of production rebound before? Let’s first take a look at the past decade. | see: US Average Annual Oil Production mbpd 2001 -2012

If maintained, the current rebound would add back a little more than a million barrels a day to US production, compared to the 2008 low. Some analysts fervently believe that, despite ongoing declines from existing US fields, that production will go even higher into the end of this decade. Well, just leaving that issue aside for now, given that so much of this new production depends on sustained high prices, let’s briefly take a look at a previous rebound in US oil production. | see: US Average Annual Oil Production mbpd 1972 -1985

Coming out of the 1976 low, at 8.136 mbpd, US production rebounded over the following 9 years by 800 kbpd–not quite a million barrels per day. However, a volume comparable to the current rebound. Afterwards, the 40 year decline in US production resumed its decline.

The course of US production into 2020 will be more dependent than usual on price. An increasing portion of total global production is crowded into the marginal price band of $80-$100 a barrel, and yet the world economy appears to struggle–on the demand side–at that very same level. Thus, new marginal production in the US and elsewhere is fated to continually pass back and forth, in and out of the domain of economic viability, as the world economy chokes, recovers, and chokes on high oil prices.

Source -Gregor

Related articles

• The Supply Side Of Oil (seekingalpha.com)
• Gasoline prices rise as crude oil rebounds (fuelfix.com)

Independence Day

Posted by Erick Erickson (Diary)

Wednesday, July 4th at 6:00AM EDT

IN CONGRESS, JULY 4, 1776

The unanimous Declaration of the thirteen united States of America

When in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. — Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

He has refused his Assent to Laws, the most wholesome and necessary for the public good.

He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.

He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.

He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their Public Records, for the sole purpose of fatiguing them into compliance with his measures.

He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.

He has refused for a long time, after such dissolutions, to cause others to be elected, whereby the Legislative Powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.

He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.

He has obstructed the Administration of Justice by refusing his Assent to Laws for establishing Judiciary Powers.

He has made Judges dependent on his Will alone for the tenure of their offices, and the amount and payment of their salaries.

He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people and eat out their substance.

He has kept among us, in times of peace, Standing Armies without the Consent of our legislatures.

He has affected to render the Military independent of and superior to the Civil Power.

He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:

For quartering large bodies of armed troops among us:

For protecting them, by a mock Trial from punishment for any Murders which they should commit on the Inhabitants of these States:

For cutting off our Trade with all parts of the world:

For imposing Taxes on us without our Consent:

For depriving us in many cases, of the benefit of Trial by Jury:

For transporting us beyond Seas to be tried for pretended offences:

For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies

For taking away our Charters, abolishing our most valuable Laws and altering fundamentally the Forms of our Governments:

For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.

He has abdicated Government here, by declaring us out of his Protection and waging War against us.

He has plundered our seas, ravaged our coasts, burnt our towns, and destroyed the lives of our people.

He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation, and tyranny, already begun with circumstances of Cruelty & Perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.

He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.

He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.

In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince, whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.

Nor have We been wanting in attentions to our British brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.

We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by Authority of the good People of these Colonies, solemnly publish and declare, That these united Colonies are, and of Right ought to be Free and Independent States, that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do. — And for the support of this Declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other our Lives, our Fortunes, and our sacred Honor.

— John Hancock

New Hampshire:
Josiah Bartlett, William Whipple, Matthew Thornton

Massachusetts:
John Hancock, Samuel Adams, John Adams, Robert Treat Paine, Elbridge Gerry

Rhode Island:
Stephen Hopkins, William Ellery

Connecticut:
Roger Sherman, Samuel Huntington, William Williams, Oliver Wolcott

New York:
William Floyd, Philip Livingston, Francis Lewis, Lewis Morris

New Jersey:
Richard Stockton, John Witherspoon, Francis Hopkinson, John Hart, Abraham Clark

Pennsylvania:
Robert Morris, Benjamin Rush, Benjamin Franklin, John Morton, George Clymer, James Smith, George Taylor, James Wilson, George Ross

Delaware:
Caesar Rodney, George Read, Thomas McKean

Maryland:
Samuel Chase, William Paca, Thomas Stone, Charles Carroll of Carrollton

Virginia:
George Wythe, Richard Henry Lee, Thomas Jefferson, Benjamin Harrison, Thomas Nelson, Jr., Francis Lightfoot Lee, Carter Braxton

North Carolina:
William Hooper, Joseph Hewes, John Penn

South Carolina:
Edward Rutledge, Thomas Heyward, Jr., Thomas Lynch, Jr., Arthur Middleton

Georgia:
Button Gwinnett, Lyman Hall, George Walton

Source

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DYLAN GRICE: The Next Crisis Will Be Born Out Of The US Treasury Market

SocGen investment strategist Dylan Grice does not think “safe-haven” assets are very safe.

In Grice’s latest note to clients, he compares the illusion of safety created by faulty regulation before the 2008 financial crisis to the new, impending wave of financial regulation on the table like Dodd-Frank in the U.S. and Basel requirements on a global scale.

Grice warns “madness is going on in the government bond markets” today, furnishing this long term chart of US Treasury yields going back to 1800:

From the note:

The regulations which told banks that AAA-rated bonds were “risk free” were designed to make markets safer. But they created an artificial demand for such bonds, which created an incentive for issuers to dress up bonds as “risk free” when they were anything but. The regulations effectively incentivized ratings agencies to rate them as “risk free” when they clearly weren’’t. And today, the same madness is going on in the government bond markets.

It’s very difficult to see how government bonds are anything other than “risk assets” (let’s face it, all assets are). Yet insurers are buying them because they’’ve been told to “take less risk” (whatever that means) by the regulators. So they are taking more risk, and they will one day suffer the consequences. Banks in the eurozone are bust because they own so much of their local sovereigns’’ debt. But they were told it was OK to do that by the regulators. So they let their guard down.

Indeed, having told banks that they were of sound balance sheet before the crises (Lehman Brothers Tier 1 risk-weighted capital ratio was 11% five days before bankruptcy), those same regulators today scratch their heads and wonder how banks became too big to fail. It’’s all embarrassing really.

Source

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