Baltic Dry Index. 1086 -16 Brent Crude 54.47
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"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
Global commodities are signalling a new recession arriving at best. At worst, a new depression from industrial commodity over production, to meet an illusionary one off global demand generated by fallen former guru Greenspan’s final serial bubble in US real estate, that was sliced and diced into hundreds of billions of bogus “triple-A” securities, 2000-2008. Since the Lehman bust of 2008, our world has lived in a central bankster driven command economy, in a desperate attempt to stave off a 21st century version on the 1930s. Industrial commodities are signalling that that attempt has failed. China’s wobble has finally caught out the rest of the world as the Chinese economy now comes to terms with the aftermath of a June stock market implosion, that in just two weeks wiped out 3-4 trillion USD of Chinese “wealth.”
Below, our world at a turning point. Unfortunately for all of us, a turning down turning point. The Great Nixonian Error of fiat money is now breaking down, not just fraying at the edges. It’s not just unrepayable Greek debt that needs writing off any more. In the next 12 months vast amounts of corporate and sovereign debt will prove to be unpayable, and we haven’t even started normalising interest rates.
Commodity Collapse Isn’t Slowing Down Amid Worst Week of 2015
July 24,
2015
The commodity collapse that sent gold to a five-year low and pulled crude
oil into a bear market isn’t showing any signs of slowing down.The Bloomberg Commodity Index fell 4.3 percent this week, the most since November, and extended a drop to a 13-year low. Shares of Freeport-McMoRan Inc., the biggest publicly traded copper producer, are poised for the worst week since 2011 as the metal dropped to a six-year low in New York. Brent oil is on its way to the longest run of weekly declines since January.
Fresh evidence of the slowdown in China, the world’s top consumer of metals, grains and energy, helped prices extend losses on Friday. The Bloomberg commodity measure has tumbled about 28 percent over the past year amid expanding gluts. Investors are still holding a net-long position, or bets on a price gain, across raw materials. They increased those wagers in each of the past four weeks, leaving bulls vulnerable to suffering through July’s rout.
“This is about the deceleration of the demand,” Chad Morganlander, a money manager at Stifel, Nicolaus & Co. in Florham Park, New Jersey, which oversees about $170 billion, said in a telephone interview. “The oversupply is prevalent, and will continue to be the theme over the next several quarters.”
Signs of weakening economic growth are piling up. In China, a private gauge of the nation’s manufacturing fell to a 15-month low. In the U.S., sales of new homes unexpectedly fell to a seven-month low in June, usually the industry’s busiest time of the year. In Germany, factory-output growth unexpectedly cooled in July.
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http://www.bloomberg.com/news/articles/2015-07-24/commodity-collapse-isn-t-slowing-down-amid-worst-week-of-2015
China factory survey dents hopes of early economic recovery
China's factory sector contracted by the most in 15 months in July as
shrinking orders depressed output, a preliminary private survey showed on
Friday, a worse-than-expected result that comes on the heels of a stock market
crash which began in June.
The flash Caixin/Markit China Manufacturing Purchasing Managers' Index
(PMI) dropped to 48.2, the lowest reading since April last year and a fifth
straight month below 50, the level which separates contraction from expansion.
Economists polled by Reuters had forecast a reading of 49.7, slightly
stronger than June's final reading of 49.4.
Output in July was 47.3, its lowest since March 2014. New orders and new
export orders, both of which expanded in June, fell this month, according to
the survey, while prices of outputs and inputs tumbled.
"Today's PMI reading suggests that recent improvements in economic
momentum may have been derailed this month by weaker foreign demand,"
Julian Evans-Pritchard, China Economist for Capital Economics in Singapore,
wrote in a note.
In fact, all the major survey indicators were downbeat except for
employment, which was slightly stronger than in June but still showed a
contraction.
More
U.S. stocks sell off, book hefty weekly losses
Published: July 24, 2015 4:43 p.m. ET
U.S. stocks fell for the fourth straight session on Friday, leaving indexes
with the biggest weekly losses in months. Over the past week, investors sold stocks as disappointing earnings results from companies such as Apple Inc. AAPL, -0.53% Caterpillar CAT, -1.01% and IBM IBM, -1.22% as well as a dramatic selloff in commodities, brought back concerns over a slowing growth in global economy.
The S&P 500 SPX, -1.07% closed 22.50 points, or 1.1%, lower at 2,079.65, booking a 2.2% weekly loss. The weekly decline for the benchmark was the steepest since March.
Among the S&P 500 sectors, materials stocks were hit the hardest, with the sector falling 5.5% over the week, while the energy sector booked a 4.1% loss.
----What strategists are saying: Maris Ogg, president of Tower Bridge Advisors, said markets are wrestling with the change in global growth story.
“Corporate earnings are showing that China is no longer growing at a 7%
rate, and no longer fueling commodities demand. So, companies that were
dependent on that growth, such as materials and industrials, are suffering.
Meanwhile, the positive impact of lower oil prices has not materialized.
Markets will need to adjust those expectations,” Ogg said.
“We are in a period of transition, but the process could take months or
even years,” Ogg added
More
World’s Top Iron-Ore Miner Swells Output Even as Prices Drop
July 23,
2015 — 1:20 PM BST Updated on July 23, 2015 — 10:19 PM BST
Vale SA boosted iron-ore production last quarter to the second-highest ever
for the company, exceeding analysts’ estimates and worsening a supply glut that
saw prices of the steelmaking ingredient collapse.Iron-ore output rose 7.4 percent to 85.3 million metric tons in the quarter through June 30, compared with 79.4 million tons a year ago, the company said in a statement Thursday. The result, which excludes third-party purchases and operations at a venture with BHP Billiton Ltd., topped the 82.5 million-ton average of eight estimates compiled by Bloomberg.
The Rio de Janeiro-based company, the world’s top iron-ore producer, is expanding supply to a record 340 million tons this year while seeking to replace low-quality ore with premium products to improve profits. The expansion by Vale and its main rivals BHP and Rio Tinto Group coincides with an unexpected decline in demand from China, the biggest iron-ore buyer, prompting Goldman Sachs Group Inc. to forecast weaker prices in coming quarters.
---- Vale’s higher iron-ore production
follows a similar strategy of BHP and Rio Tinto, which also increased output in
the past quarter amid capacity expansions. Benchmark iron ore prices returned
to a bear market this month and touched the lowest since at least 2009. Iron
ore with 62 percent content delivered to Qingdao slid 0.1 percent to $51.72 a
dry ton on Thursday, according to Metal Bulletin Ltd.
---- While the Brazilian company is pressing ahead with output expansion, Australia’s Fortescue Metals Group Ltd. said that it’s capping iron-ore shipments, becoming the first of the top exporters to quit the race to funnel fresh supplies into the oversupplied market.
Vale, also the world’s largest nickel producer, said output of the industrial metal rose more than 8 percent to 67,100 tons, compared with a 73,900-ton average forecast by seven analysts surveyed by Bloomberg. Copper production advanced 30 percent to 104,900 tons in the quarter, compared with a 107,100-ton average estimate. Coal production declined 8.9 percent to 2 million tons, while output of potash rose 16 to 111,000 tons.
More
In dying, wealth and jobs destroying, European Monetary
Union news, Poland opts out of the Greeks fate.
"When paper money systems begin to crack at the seams, the run to gold could be explosive."
Harry Browne
Poland will never join a 'burning' eurozone, says central bank governor
Marek Belka says country remains reluctant to join the euro, as he warns that world is running out of ammunition to fight the next financial crisis
Poland will not join the euro while the bloc remains in danger of “burning”, its central bank governor said.Marek Belka, who has also served as the country’s prime minister, said the turmoil in Greece had weakened confidence in the single currency.
“You shouldn’t rush when there is still smoke coming from a house that was burning. It is simply not safe to do so. As long as the eurozone has problems with some of its own members, don’t expect us to be enthusiastic about joining,” he said.
In a stark warning, Mr Belka also said the world was running out of ammunition to fight the next financial crisis.
“We don’t have the option of decreasing interest rates. Much fewer countries have fiscal space to intervene so we are less prepared,” he said.
The governor suggested that Poland, which is obliged to join the euro as part of its EU membership, would not become a member for many years. He said interest would wane further if the political environment continued to shift to the Right.
Mr Belka, a former head of the International Monetary Fund’s European division, said the eurozone was at risk of becoming trapped in a “vicious circle” where closer fiscal integration became more difficult because of splits over structural reforms and austerity.
“As long as there is divergence or as long as we have problems in some countries, it’s more difficult to build up a solid foundation for the real fiscal union in the eurozone. So this is a little bit of a vicious circle,” he said.
He said closer union was needed within “a generation” to prevent the bloc from lurching from crisis to crisis.
Mr Belka also said it was crucial that Greece, like Poland in the Nineties, received debt relief from its creditors, as he appeared to urge the bloc to do more to boost growth in the country.
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“The problem with fiat money is that it rewards the minority that can handle money, but fools the generation that has worked and saved money.”
“Adam Smith” aka George Goodman.
At the Comex silver depositories Friday
final figures were: Registered 58.14 Moz, Eligible 119.69 Moz, Total 177.83
Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Below, what passes for grown up policy making in
the 21st century in the Temple of Mammon in Washington D.C. On the
dying Great Nixonian Error of fiat money, the talking chair and the rest of the
furniture, simply torture the data to get to the right political spin. Stay
long or add fully paid up physical precious metals held outside of the banking
and financial system. We are back to
sailing full steam at the iceberg. According to the D. C. Muppets busy spinning
away for the Fedster’s, the Fed-funds target rate is expected to be 3.34% by
the end 2020. The Volker bull market for bonds has ended.
Get
your facts first, then you can distort them as you please.
Mark
Twain.
Here are the staff forecasts that the Fed accidentally leaked
Published: July 24, 2015 8:06 p.m. ET
WASHINGTON (MarketWatch) — In gleeful news for ardent Federal Reserve
observers (and an embarrassment for officials), the central bank accidentally
published internal staff forecasts for interest rates, unemployment and other
key indicators, the Fed revealed Friday.Normally, the Fed would have published those forecast details in five years from now. But, thanks to a slip-up, the staff forecasts were added to the Fed’s public site on June 29, and markets are getting an early look at estimates provided to officials in preparation for their meeting last month.
In an additional complication, the Fed said late Friday that some of the projections posted online in late June differed from the actual staff projections prepared ahead of the June policy meeting. The Fed released the actual staff projections and said it was looking into the source of the incorrect information.
A summary table of the Fed staff’’s projections. This chart
is based on projections included in the Fed materials initially released on the
central bank’s website. Later Friday, a Fed official said the actual staff
projections for the June FOMC meeting for gross domestic product and inflation
differed from the estimates included in the initial release and provided
corrected projections. The corrected version didn’t make any changes to the
projections of the federal-funds rate and the unemployment rate.
Some economists weren’t favorably impressed by the staff’s work. “As I look at the forecast, I can’t help but conclude that all of these Ph.D. economists on the board staff are wasting a lot of time running these models,” wrote Stephen Stanley, chief economist at Amherst Pierpont Securities, in a research note. “How can real growth exceed potential by over half a percent for the next three years, but the unemployment rate magically stabilizes at exactly the full employment level?”
Details show that the staff is forcing the model to “spit out” forecasts that show upcoming inflation under 2%, Stanley wrote.
“Do you get the impression, as I do, that the staff gathers in a room and decides what the results should be, and then tortures the model (or just uses fudge factors) until they get to the results that they were determined to achieve? Why bother with extensive, complicated models if you are just going to manipulate the results,” Stanley wrote. “Because the model provides at least the illusion of rigor and objectivity.”
Robert Brusca, chief economist with FAO Economics, echoed those sentiments.
“Core inflation homes in on 2% — perfect!” Brusca wrote. “These are interesting policy assumptions by the Fed.”
He added that the leaked information shows that forecasting is a farce: “It’s an important farce, but a farce nonetheless,” Brusca said. “In this case the Fed seems to wind up assuming that it achieves what it wants to achieve. Good job.”
Fed staff expected the federal-funds rate to reach 0.35% at the end of this year, signalling that officials could raise rates once in 2015. Rates are seen reaching 1.26% at the end of 2016, and then climbing to 2.12% at the end of 2017. At the end of 2020, the rate is expected to reach 3.34%.
More
Apparently
there is nothing that cannot happen today.
Mark
Twain.
Solar & Related Update.
With events
happening fast in the development of solar power, I’ve added this new section.
Updates as they get reported. Is converting sunlight to usable cheap AC energy
mankind’s future from the 21st century onwards? A quantum computer
next?
An easy, scalable and direct method for synthesizing graphene in silicon microelectronics
Date: July 21, 2015
Source: American Institute of Physics (AIP)
Summary: In the last decade, graphene has been intensively
studied for its unique optical, mechanical, electrical and structural
properties. The one-atom-thick carbon sheets could revolutionize the way
electronic devices are manufactured and lead to faster transistors, cheaper
solar cells, new types of sensors and more efficient bioelectric sensory
devices. As a potential contact electrode and interconnection material,
wafer-scale graphene could be an essential component in microelectronic
circuits, but most graphene fabrication methods are not compatible with silicon
microelectronics, thus blocking graphene's leap from potential wonder material
to actual profit-maker.
Now researchers from Korea University, in Seoul, have developed an easy
and microelectronics-compatible method to grow graphene and have successfully
synthesized wafer-scale (four inches in diameter), high-quality, multi-layer
graphene on silicon substrates. The method is based on an ion implantation
technique, a process in which ions are accelerated under an electrical field
and smashed into a semiconductor. The impacting ions change the physical,
chemical or electrical properties of the semiconductor.
In a paper published this week in the journal Applied Physics Letters,
from AIP Publishing, the researchers describe their work, which takes graphene
a step closer to commercial applications in silicon microelectronics.
"For integrating graphene into advanced silicon microelectronics,
large-area graphene free of wrinkles, tears and residues must be deposited on
silicon wafers at low temperatures, which cannot be achieved with conventional
graphene synthesis techniques as they often require high temperatures,"
said Jihyun Kim, the team leader and a professor in the Department of Chemical
and Biological Engineering at Korea University. "Our work shows that the
carbon ion implantation technique has great potential for the direct synthesis
of wafer-scale graphene for integrated circuit technologies."
----According to Kim, the ion implantation
technique also offers finer control on the final structure of the product than
other fabrication methods, as the graphene layer thickness can be precisely
determined by controlling the dose of carbon ion implantation.
"Our synthesis method is controllable and scalable, allowing us to
obtain graphene as large as the size of the silicon wafer [over 300 millimeters
in diameter]," Kim said.
The researchers' next step is to further lower the temperature in the
synthesis process and to control the thickness of the graphene for
manufacturing production.
More
The monthly Coppock Indicators finished June
DJIA: +98 Down. NASDAQ:
+192 Down. SP500: +127 Down.
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