Baltic Dry Index. 692
+04 Brent Crude 47.78
"Gold would have value if for no other reason than that it enables a citizen to fashion his financial escape from the state."
William F. Rickenbacker
We open with under reported rising belligerency in South East Asia. One misstep here will dwarf all the hysteria in the media over Brexit. Beijing is now conditioning its people for a military clash!
Chinese paper says should prepare for South China Sea armed clash
China should prepare itself for military confrontation in the South
China Sea, an influential Chinese paper said on Tuesday, a week ahead of a
decision by an international court on a dispute there between China and the Philippines.
Tensions have been rising ahead of a July 12 ruling by an arbitration
court hearing the argument between China and the Philippines over the South
China Sea in the Dutch city of The Hague.
In joint editorials in its Chinese and English editions, the state-run
Global Times said the dispute, having already been complicated by U.S.
intervention, now faces further escalation due to the threat posed by the
tribunal to China's sovereignty.
"Washington has deployed two carrier battle groups around the South
China Sea, and it wants to send a signal by flexing its muscles: As the biggest
powerhouse in the region, it awaits China's obedience," it said.
China should speed up developing its military deterrence abilities, the
paper added.
"Even though China cannot keep up with the U.S. militarily in the
short-term, it should be able to let the U.S. pay a cost it cannot stand if it
intervenes in the South China Sea dispute by force," it said.
"China hopes disputes can be resolved by talks, but it must be
prepared for any military confrontation. This is common sense in international
relations."
The newspaper is published by the ruling Communist Party's official
People's Daily, and while it is widely read in policy-making circles it does
not have the same mouthpiece function as its parent and its editorials cannot
be viewed as representing government policy.
It is also well-known for its extreme nationalist views.
China, which has been angered by U.S. patrols in the South China Sea,
will be holding military drills in the waters there starting from Wednesday.
China's Defence Ministry said the drills are routine, the official China
Daily reported.
More
Chinese, Japanese warplanes in close encounter
Posted 05 Jul 2016 19:06
BEIJING: Beijing and Tokyo were at loggerheads on Tuesday (Jul 5) over
accusations Japanese warplanes locked their fire control radar onto Chinese
aircraft, as state-run Chinese media said the country needed to be ready for
"military confrontation" elsewhere.
Beijing has long been embroiled in fierce territorial disputes with
Tokyo over Japanese-controlled islands in the East China Sea, and with a host
of littoral states over the South China Sea, which it claims almost in its
entirety.
Chinese vessels and planes regularly enter waters and airspace near the
East China Sea islands, called Senkaku in Japan and Diaoyu in China.
China's defence ministry late on Monday accused Japanese fighter jets of
using their fire control radar to lock onto two Chinese aircraft on
"routine patrol" in the Air Defence Identification Zone (ADIZ) it
declared unilaterally in 2013.
The aggressive move generally means an attacker is ready to fire weapons
at a target.
Japan's deputy chief cabinet secretary Koichi Hagiuda denied the
accusation on Tuesday, telling reporters that Tokyo's Self-Defence Forces had
scrambled F15 jets to monitor Chinese aircraft.
"There are no facts showing that we took provocative action against
Chinese military planes," he said.
In 2013, Tokyo demanded Beijing apologise when it said a Chinese frigate
had locked its fire-control radar onto a Japanese destroyer in international
waters.
The row over the islands has seen relations between the world's second-
and third-largest economies plunge in recent years, before recovering slightly,
although they remain poor.
More
In other less warlike news, the banksters and great vampire squids are
still in a deep tantrum after betting wrong on Brexit. We demand a do-over they
scream. The central banksters and markets know that’s not going to happen. Now there are fears over Italy’s referendum,
still over a long wobbly summer away. Sell in May go away was probably the
right course for 2016.
Asian Stocks Sink With Pound as Haven Demand Boosts Bonds, Gold
July 6, 2016 — 12:19 AM BST Updated on July 6, 2016 — 5:22 AM BST
Risk aversion took hold in markets amid concern the U.K. and European
economies are taking a turn for the worse. Asian equities dropped with the
pound and oil, while haven demand boosted the yen, gold and sovereign bonds.
The MSCI Asia Pacific Index fell for a second day, sterling slumped
to its lowest in more than three decades and crude sank toward $46 a barrel
after Bank of England chief Mark Carney said risks from the U.K.’s vote to
leave the European Union had started to crystallize. The yen climbed to its
strongest level since June 24, when the results of the British referendum first
roiled global markets. U.S. and Australian bond yields plumbed new lows as
Japan’s 20-year rate hit zero for the first time. Gold rose to a two-year high.
After
rallying last week on bets central banks will work to limit the fallout from
the so-called Brexit, global equities are retreating again as the knock-on
effects of the vote become evident. Three asset managers froze
withdrawals from U.K. real-estate funds on Tuesday following a flurry of
redemptions and the Bank of England relaxed capital requirements for lenders to
encourage lending. A gauge of manufacturing and services in the euro area
pointed to lackluster growth in
June and the chance of a 2016 U.S. interest-rate hike has been all but killed
off in the futures market.
More
Brexit puts squeeze on central banks to fix financial jitters
Published: July 5, 2016 7:18 a.m. ET
Brexit seen as forcing Fed to keep rates on hold until December
Since the Brexit referendum, analysts have been busy assessing the impact
on economic and financial markets from the U.K.’s shock vote to leave the
European Union. Their conclusion? Eurozone and U.K. economic growth will be
hard hit in the next few years — and that will force central banks to take
action.
Under heavy pressure to react to the June 23 vote, both the Bank of
England and European Central Bank expected to provide more stimulus, and
analysts believe they’ll deliver.
“Given the uncertainty and likely economic downturn, we expect the BOE
to use its financial crises play book. That means ignoring sterling-driven
inflation, quickly taking interest rates to, or close to, zero and subsequently
restarting QE,” analysts at Bank of America Merrill Lynch said in a note
Monday.
BOE Governor Mark Carney signaled last week that rate cuts and other easing measures are likely to come this summer. Its key interest rate currently stands at a record low of 0.5% and hasn’t been cut since March 2009.
But after the uncertainty following the referendum, a rate cut now seems inevitable. Analysts expect the U.K. central bank to slash its rates as early as its July 14 meeting, and then again in August, when it will also give an updated outlook on economic growth and inflation in its closely watched quarterly inflation report.
On Tuesday, the central bank in its Financial Stability Report took steps to shore up the U.K. economy, cutting the countercyclical buffer for banks to 0% from 0.5%. The move should allow banks to lend an extra £150 billion ($199 billion) to U.K. businesses and households to keep the economy flush with credit, the bank said.
----But the fallout from Brexit is unlikely to be contained just to Britain, and the ECB will have to step up easing as well, according to economists.
“After the Brexit shock, Europe is one step closer to a persistent 1%
growth, 1% core-inflation economy,” the B. of A. analysts said.
The region can’t sustain those levels in the long run, either
politically or socially, given its high unemployment rate and poor productivity
development, they added.
----The B. of A. analysts expect the central bank to bring forward its stimulus actions, and they see policy makers using their July 21 meeting to deliver “serious” hints of hard moves in September.
Investors may get a hint of what’s coming when ECB President Mario
Draghi speaks in Frankfurt on Wednesday at 9 a.m. Central European Time, or 3
a.m. Eastern Time.
Further easing could come in the form of extending the ECB’s bond-buying
program beyond March 2017. Governor Mario Draghi and team could also abandon
the capital key, which determines how many bonds from each country it can buy
under the QE program, they said.
Other investment banks — including Citigroup, J.P. Morgan and Deutsche
Bank — agree that the ECB is likely to strike a more dovish tone at its July
meeting, prompted by the Brexit vote.
----The Brexit outcome is seen as also nudging monetary policy in the U.S. The Federal Reserve isn’t expected to cut rates or introduce more easing measures because of the vote, but its next rate hike is likely to be postponed because of the turmoil caused in financial markets.
Traders are currently not pricing in a rate increase this year, going by
the CME Fed Watch Tool. Before the U.K. referendum, the fed funds rate was
reflecting expectations for a rate hike in December.
“Questions about [U.S.] policy space and policy effectiveness are likely
to remain on investors’ minds, as the risk of a Chinese slowdown,
greater-than-expected fallout from Brexit and a number of others risks continue
to threaten in” the second half of 2016, economists at Citigroup said in a
note.
The Citi team expects one U.S. interest rate rise in 2016 and two in
2017. Minutes from the Fed’s meeting on June 14-15 are due on Wednesday at 2
p.m. Eastern Time. While the meeting took place ahead of the Brexit vote, it
may still provide clues to the Fed policy makers’ thinking.
More
A Prime Minister, a Referendum and Italy’s Turn to Get Worried
July 4, 2016 — 11:00 PM BST
It’s now a familiar refrain: A European prime minister calls a
referendum, his job could be on the line and markets are getting worried.
This time it’s not Britain’s David Cameron but Italy’s Matteo
Renzi, who has called a vote on an ambitious overhaul of the political system
aimed at ending the country’s unstable governments. If he loses, Renzi has
promised to quit, an outcome that Citigroup Inc. called probably the
biggest risk in European politics this year outside the U.K.
The vote is expected in October, though it is already spooking investors
and Italian bonds are once more under-performing their Spanish peers. The yield
on 10-year Italian securities overtook those on similar-maturity Spanish debt
for the first time in almost a year on June 27, a day after Spain’s Acting
Prime Minister Mariano Rajoy defied opinion polls to consolidate his position
in a general election.
“A negative outcome would herald a new phase of extremely high political
uncertainty, with a notable absence of major centrist leaders and a rising risk
of populist movements taking hold,” said Marco Protopapa, economist at JPMorgan
Chase & Co. in London.
At 1.25 percent, yields on Italy’s 10-year benchmark bonds were nine
basis points higher than Spain’s on Monday after the spread widened to 11
points on June 29.
Italians
will vote on Renzi’s proposal to reduce the number of senators to 100
from 315 and limit the upper chamber’s power to bring down governments.
Meanwhile, the anti-establishment Five Star Movement is poised to profit from a
defeat. An opinion poll by the Demos institute showed last week that Five Star
has overtaken Renzi’s Democratic Party to become the country’s most popular
group. Five Star wants to hold a referendum on Italian membership of the euro.
---- Renzi, 41, is already facing an
uphill battle to put the economy on a sound footing. The International Monetary
Fund predicts gross domestic product will expand only 1.1 percent this year,
trailing most other euro-area economies. Italian unemployment in May was stuck
at 11.5 percent, well above the 10.1 percent average for the 19-nation region
as a whole.
Echoing warnings in the U.K. before its vote to leave the European Union
last month, business lobby Confindustria forecast in a July 1 report that
Italy’s economy would fall back into recession in case of a “no’’ vote on the
Senate reform. Investments would decline 17 points over three years, it said.
More
At the Comex silver depositories Tuesday final figures were: Registered
24.66 Moz,
Eligible 127.01 Moz, Total 151.67 Moz. Comex was closed on Monday.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today the EUSSR. Having disastrously mishandled the
UK’s reform and remain negotiations earlier in the year, no one in Brussels
made a contingency plan for what if the Brits actually walk out. But where one
EU member can go, others can also follow. The EU and EC have one last chance to
reform.
EU authority fraying in reaction to Brexit vote
The European Union's authority is
fraying as governments and politicians in many members challenge EU policies
and take aim at "Brussels bureaucracy" in the aftermath of Britain's
vote to leave the 28-nation bloc.
The Czech president and some contenders for the French presidency have
called for their own referendums on continued membership of the pan-European
economic and political community, although no such plebiscite is on the cards
in the near future.
Verbal assaults on the role of the European Commission and the European
Parliament since the British shock almost two weeks ago look more like an
attempt to appease domestic public opinion than a concerted drive to strip
Brussels of its main powers.
But they could further undermine the legitimacy of the EU's common
institutions in the eyes of citizens.
France, facing a presidential election
next year, has threatened to stop obeying EU rules on workers posted from one
member state to another, which it says undercuts the jobs of native employees.
President Francois Hollande has also demanded a rewriting of EU merger control
rules and restrictions on state aid to industry to enable the creation of
"European champions".
Socialist Prime Minister Manuel Valls said on Sunday an EU regulation
allowing employers to pay seconded workers less than their local counterparts
must be changed soon or Paris would stop applying it.
Employers are not now obliged to pay posted workers more than the
minimum wage of the host country - often well below the average wage in the
sector - and they pay social contributions in their home country welfare
systems which are usually far lower than those in western Europe. Central and
east European governments oppose moves to reduce the gap.
"There must be equal treatment upwards to fight social
dumping," Valls said.
Spooked by a surge of support for anti-EU nationalist Marine Le Pen,
conservative candidate Alain Juppe called on Monday for a new balance of power
between Brussels and member states and a halt to further EU enlargement, ending
Turkey's membership bid. He called last week for a referendum on a "new
Europe".
Italy is demanding a loosening of recently adopted EU regulations that
make shareholders, bondholders and depositors liable for the losses of failed
banks before taxpayers.
Italian Prime Minister Matteo Renzi, who has fought to bend EU budget
deficit rules and now seeks to pump billions of euros into his country's ailing
banks if needed to shore them up, said on Monday the EU was run by "a
technocracy with no soul".
He also opposed sanctions against fellow southern members Spain and
Portugal for violating the EU's deficit limits last year - a step the
Commission is due to consider on Tuesday in a German-backed drive to uphold the
much-abused budget rules.
---- Dutch and German ministers have attacked a Commission decision that the
European Parliament can approve a trade pact with Canada without referring it
to national parliaments. The Dutch parliament was assured it would have a
chance to weigh in on the treaty.
But perhaps most worryingly for the EU, senior ministers in Germany, the
bloc's reluctant hegemon, are advocating shrinking the executive Commission,
trimming its powers, and bypassing common European institutions to take more
decisions by intergovernmental agreement.
Morehttp://www.reuters.com/article/us-britain-eu-fraying-analysis-idUSKCN0ZL0FC
Italy's biggest Chinese community clashes with police near Florence
Violent clashes broke out this week between police and the Chinese community
in a suburb of Prato, near Florence, in central Italy, home to one of the
largest concentrations of Chinese-run industry in Europe.
Tensions had been rising in the town, Italy's textile capital, where
people began emigrating from China in the mid-1990s. Some 50,000 Chinese work
in the area, making clothes and handbags with the prized "Made in
Italy" label.
Many of the area's textile businesses depend on the labor of illegal
immigrants, ignoring safety rules and evading taxes. The area is also the focus
of an investigation into alleged illicit transfers of some 4.5 billion euros ($5.01 billion) to China from Italy between
2006 and 2010.
The trouble in Prato began on Wednesday, when state health officials,
who stepped up checks after seven people died in a fire at a garment workshop
in 2013, went to inspect a factory.
The owner reacted angrily after an inspector noted minor violations of
health and safety rules, shoving the
inspector and the police accompanying him, according to a police source.
Chinese workers then barricaded themselves inside the factory, and
hundreds more gathered outside. They threw stones and bottles at the police
carrying truncheons and shields sent in to disperse the crowd. Two Chinese
citizens and a policeman were injured.
Regional President Enrico Rossi vowed to tackle crime in the area, where
he said half of all economic activity is illegal, 1 billion euros in taxes go
unpaid every year, and money is laundered through international transfers. He
said on Friday he had discussed the Prato incident with Foreign Minister Paolo
Gentiloni.
"The situation is unacceptable," Rossi told Reuters. "We
need the Chinese community to respect the law and integrate. We cannot have
'free zones'. We will keep up inspections to clean up this immense production
system."
Chinese officials in Florence went to the site of the clashes and
Chinese Foreign Ministry spokesman Hong Lei told a news conference on Friday
that the situation was under control.
China had asked Italy "to enforce the law in a civilized way,
conduct fair investigation and protect the security and lawful rights and
interests of Chinese citizens in Italy".
More"Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood. For these few gold has been the asset of last resort."
Antony C. Sutton
Solar & Related Update.
With events
happening fast in the development of solar power and graphene, I’ve added this
section. Updates as they get reported. Is converting sunlight to usable cheap
AC or DC energy mankind’s future from the 21st century onwards? DC?
A quantum computer next?
Rechargeable batteries that last longer and re-charge more rapidly
Date:
July 4, 2016
Source:
Paul Scherrer Institut (PSI)
Summary:
Materials researchers have developed a very simple and cost-effective procedure
for significantly enhancing the performance of conventional Li-ion rechargeable
batteries. The procedure is scalable in size, so the use of rechargeable
batteries will be optimized in all areas of application-whether in
wristwatches, smartphones, laptops or cars, explain scientists. Battery storage
capacity will be significantly extended, and charging times reduced, they say.
Materials researchers at the Swiss Paul Scherrer Institute PSI in
Villigen and the ETH Zurich have developed a very simple and cost-effective
procedure for significantly enhancing the performance of conventional Li-ion
rechargeable batteries. The procedure is scalable in size, so the use of
rechargeable batteries will be optimized in all areas of application-whether in
wristwatches, smartphones, laptops or cars. Battery storage capacity will be
significantly extended, and charging times reduced. The researchers reported on
their results in the latest issue of the research journal Nature Energy.
It's not necessary to re-invent the rechargeable battery in order to
improve its performance. As Claire Villevieille, head of the battery materials
research group at the Paul Scherrer Institute PSI says: "In the context of
this competitive field, most researchers concentrate on the development of new
materials." In cooperation with colleagues at the ETH in Zurich,
Villevieille and co-researcher Juliette Billaud took a different approach:
"We checked existing components with a view to fully exploiting their
potential." Simply by optimizing the graphite anode -- or negative
electrode -- on a conventional Li-ion battery, researchers were able to boost
battery performance. "Under laboratory conditions, we were able to enhance
storage capacity by a factor of up to 3. Owing to their complex construction,
commercial batteries will not be able to fully replicate these results. But
performance will definitely be enhanced, perhaps by as much as 30 -- 50
percent: further experiments should yield more accurate prognoses."
Researchers point out that in terms of industrial implementation,
improving existing components has the great advantage of requiring less
developmental input than a new battery design using new materials. As
Villevieille says: "We already have everything we need. If a manufacturer
were willing to take on production, enhanced batteries could be ready for the
market within one or two years." The procedure is simple, cost-effective
and scalable for use on rechargeable batteries in all areas of application,
from wristwatch to smartphone, from laptop to car. And it has the additional
bonus of being transferable to other anode-cathode batteries such as those
based on sodium.
More
The monthly Coppock Indicators finished June
DJIA: 17930
-14 Up NASDAQ: 4843 -08 Down. SP500: 2099 -10 Up.
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