As IF Times

link WikiLeaks cables reveal how US manipulated climate accord | Environment | The Guardian.

Setting aside the indignation and embarrassment of the Wikileaks ‘cables’ into the public space, are there really any revealing tidbits from this avalanche of ‘top secret’ documents?   While no one wants to have their dirty laundry exposed in public, some of the earthshaking revelations are hardly shockers unless your birthday happened to be last week.  Let’s assess some of the ‘shocking’ exposees…

“U.S. manipulated climate accord”.  What!!?? Do you mean to say that the  merits of proposed climate change policies weren’t immediately obvious to all participants?  They had to be bribed and cajoled to agree to them?  Weren’t photos of Polar Bears with suntans enough evidence?

“Saudi Arabia a cash machine for Terrorists”.   Whoda thunkit?  Hmm, let’s see, Bin Laden is from there…the dysfunctional Saudi Royal family of 5000 princes have unlimited access to capital…bombs and rocket launchers cost money….it’s either Cuba or Saudi Arabia…hmmm…

“China Leaders order hacking on Google”.  Well given that the Chinese hack into every other industrial process, why would tinkering with a few bits of code be out of the realm of possibility?

“Meddling by neighbors adds to Iraq’s woes”.  Like any domestic squabble, the in-laws and friends are bound to take sides and stir up the pot.  In this case, where a political vacuum appears to exist, everyone wants to get a seat at the controls.

“U.S. embarrassing assessment of foreign leaders”  Like Berlusconi who’s proud to be a non- gay man?  Like rabbit ears Sarkozy whose most frequent utterance is, “who said that??”  Like always bad Ahmedinejad?  Like David “lightweight” Cameron of Britain?  That the U.S. thinks lots of world leaders are schmucks? Well, there goes all the diplomatic leverage.

As the police chief in the classic movie,  Casablanca,  exclaimed, “I’m shocked, shocked to find that gambling is going on in here!”

The disclosures of names of those who have been siding with the U.S. is the real tragedy of course.  What the world calls diplomacy is essentially lying through your teeth to orchestrate a desired outcome from other countries.  Or, as someone famously remarked, it’s the art of saying “good dog” until you can find a big enough stick to hit him with.  The only big mystery is how such an enormous cache of ‘sensitive’ information could have been accessed by Wikileaks.  From watching enough spy movies, we are led to believe that governments, especially the U.S. government, has the use of all sorts of high tech and mystical tools for security and espionage.  The big shock for everyone is that this is false.  That would be the real scandal.

link Mystery trader captures 80pc of Londons copper market – Telegraph.

Sometimes the comments to the articles are as interesting as the article itself.  Having some interest in what goes on in the world, I tend to keep an eye on supply demand issues.  Any hint that someone may be trying to corner a commodity means we should be paying attention.  One of the comments to this article touches on the irony of metal coins eventually retaining their value over paper currency since there is a value to the metal.  The possibility that the meltdown value can be greater than the numismatic value is intriguing.  Even the lowly and disparaged penny.  How funny would that be if a penny wound up being worth more than a paper dollar?

While this appears to be an extremely unlikely probability at the moment, some reflection on the value of much of today’s assets is in order.  As we all observed during the recent mortgage and banking fiascoes, wealth can just disappear overnight.  Not in the zero sum game way, but in a way where it just vaporizes.  Consider the circumstances of the recent real estate bubble.  For simplicity, imagine that there are only 100 homes in a subdivision.  Anyone wishing to purchase a home in this area has to pay the going price.  If the homes were all valued at $100,000 and the buyer was willing to pay $110,000 dollars for a home, then all of a sudden, the nominal value of all the  homes went up by $10,000 apiece resulting in an aggregate wealth benefit of  $990,000.  Voila, money from nothing.  The flip side of this is what happened when mortgages had no bearing on valuation and therefore prices fell.  Using the same example, someone desperate to get out may sell for a $10,000 discount to the last trade.  In that case, all of a sudden, $990,000 just disappeared.  No one benefited, it’s as if it just vaporized.

 Real estate happens to be an easy way to illustrate this, but the same scenario holds true for stocks, bonds and corporate and government obligations as well.  The leverage impacted by movement in only a small portion of an interlinked and co-dependant pricing model is quite amazing.   It is technically quite conceiveable that a nationstate can be unable to pay its debts outstanding and default.  As most know, in that case, that nation’s fiat paper currency plummets bringing down with it all of the linked wealth value.  In this scenario, melting down the coins of the realm would be better than an electronic bank statement showing how much cash you have.   My opinion is that if western countries ever got this dire,  such that paper currency is worthless, society will be in pretty rough shape.  The only metal really worth having then is lead.  Let’s not even go there.

The scenario described in the linked article is not directly addressing this issue,  it only describes a developing  market dynamic. In the real world, as the Hunt Brothers found out in the 70’s in their attempt to corner and squeeze silver, they’ll just change the rules once the pain gets too great.  Lots of pennies will drop then.