Baltic Dry Index. 809 -08 Brent Crude 53.02
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people."
F. A. von Hayek
Last week we called Russia’s cruise missile strike on Syria a “game
changer.” Russia has followed it up with a flurry of Arab diplomacy leading up
to yesterday’s Sochi Formula One Grand Prix. A relaxed President Putin handed
out the victor’s trophy. The Saudis seem to be willing to give Russia some room
and time to take on ISIS. Israel also seems content to let Russia have more
time and room. America and Europe seem
to have been completely blindsided. Europe’s “migrant” problem continues
generating political problems across Europe.
Putin Says Russia's Campaign in Syria More Effective Than U.S.
October 11, 2015 — 2:22 PM BST Updated on October 11, 2015 — 6:55 PM BST
Russian President Vladimir Putin defended his air and cruise-missile strikes
on terror targets in Syria as two Saudi Arabian officials softened their
government’s position on the fate of Bashar al-Assad.Putin discussed his Syria campaign on Sunday with Saudi Arabia’s Defense Minister Mohammed Bin Salman, who signaled a willingness to let al-Assad remain in power longer, while the foreign ministers of both nations also met to consider the situation in Syria.
Putin’s bombing campaign to support his ally Assad took the U.S. and NATO by surprise and overshadowed a flurry of diplomacy over how to tackle the conflict. As Russia builds up its military presence in Assad’s stronghold on the eastern Mediterranean Sea, U.S. President Barack Obama dismissed any notion that his leadership on the world stage was being challenged.
Now Russia is leading the diplomatic charge, with Putin in bilateral meetings with Abu Dhabi crown prince Sheikh Mohammed bin Zayed Al Nahyan and Saudi Arabia’s Prince Mohammed, who were in Sochi in southern Russia, site of a Formula 1 auto race. Putin again called for a political resolution emanating from Assad’s government.
Later in the day, Russian Foreign Minister Sergei Lavrov met with his Saudi counterpart, Adel Al-Jubeir, who said through a translator that Assad must depart after a political transition. Previously, the kingdom’s position was that Assad’s departure was a precondition to any settlement.
----The Obama administration last week abandoned its attempt to build and train a rebel force in Syria to take on Islamic State. The U.S. will instead focus on equipping selected leaders and providing air support to their units, including Arab and Kurdish groups in Syria.
Putin said the Russian air campaign was already more effective than discontinued U.S. efforts to support some militant groups.
“It would have been better to give us $500 million,” Putin said of the aborted U.S. program to fund the Free Syrian Army. “At least we would have used it more effectively from the point of view of fighting international terrorism.”
Speaking in an interview with state-run television channel Rossiya 1 broadcast on Sunday, Putin said Russia’s involvement was legal and reasonable because it followed a Syrian request for assistance. He questioned whether the U.S. had lived up to either of those standards.
“The simplest solution for them would be to join us and, in that way, legalize their actions on Syrian territory,” Putin said of the U.S.
More
In other economic news, the Greatest Disconnect between the real world
and our casino stock markets, continues widening again. China warned the Fed
not to raise its key interest rate, called on America to act responsibly, due
to the global reserve role of the dollar. Ex-ECB boss Trichet said that the
central banks can’t ride to the rescue again as in 2008, should another
financial crisis hit. Stay long fully paid up physical gold and silver, we are
living on borrowed time.
We open with it all going wrong in Japan.
Japan Inc sounds alarm on consumer spending
If you go by the larger-than-expected 2.9 percent gain in household spending in August - the first year-on-year rise in three months - then consumption looks like it is finally alive and well again, after a sales tax hike last year stifled the economy.
But profits of retailers suggest the spending data, which has a small sample size, has not captured the full picture. Restrained household consumption raises the stakes for a central bank policy meeting on Oct. 30, and for the government's plan to flesh out new economic policies before the year-end.
"Consumer spending has ground to a halt," said Noritoshi Murata, president of Seven & i Holdings (3382.T). "There are a lot of concerns about the global economy and not many positives for consumption.
Weak spending could continue into the second half of the fiscal year."
Seven & i, which operates Japan's ubiquitous 7-Eleven convenience stores, on Oct. 8 trimmed its full-year profit forecast by 1.6 percent to 367 billion yen ($3.05 billion) and cut its revenue forecast by 3.9 percent to 6.15 trillion yen, triggering a fall in its shares in Tokyo.
The main problem is wages are not rising fast enough to keep pace with rising food prices, and consumers are starting to cut back on other goods.
Real wages, adjusted for inflation, rose 0.5 percent in July from a year earlier. That was the first gain in 27 months. But wage growth subsequently slowed to 0.2 percent in August, and summer bonuses fell from last year, government data shows.
Another problem is more and more workers are getting stuck in jobs with low pay. Part-time and irregular workers comprised a record 37.4 percent of the workforce last year, according to the National Tax Bureau.
Irregular workers earn on average less than half of what regular full-time workers earn, tax data show.
----"Shoppers are tightening their purse strings," said Masaaki Yoshizawa, senior managing director at apparel maker Onward Holdings (8016.T).
"There is a lot of uncertainty about consumer spending, and another sales tax hike is on the way. Women are cutting back on clothes."
More
Central bank cavalry can no longer save the world
A report by the Group of Thirty, an international body led by former European Central Bank chief Jean-Claude Trichet, warned on Saturday that zero rates and money printing were not sufficient to revive economic growth and risked becoming semi-permanent measures.
"Central banks have described their actions as 'buying time' for governments to finally resolve the crisis... But time is wearing on, and (bond) purchases have had their price," the report said.
In the United States, the Federal Reserve ended its bond purchase program in 2014, and had been expected to raise interest rates from zero as early as June 2015.
But it may struggle to implement its first hike in almost 10 years by the end of the year. Market pricing in interest rate futures puts a hike in March 2016.
The Bank of England has also delayed, while the European Central Bank looks set to implement another round of quantitative easing, as does the Bank of Japan which has been stuck in some form of quantitative easing since 2001.
Reuters calculates that central banks in those four countries alone have spent around $7 trillion in bond purchases.
The flow of easy money has inflated asset prices like stocks and housing in many countries even as they failed to stimulate economic growth. With growth estimates trending lower and easy money increasing company leverage, the specter of a debt trap is now haunting advanced economies, the Group of Thirty said.
More
Fed should not raise interest rates just yet: China Finmin
Now is not the right time for the United States to raise interest rates,
given the global economic situation, China's Finance Minister Lou Jiwei said in
an interview published in the China Business News on Monday.
Speaking on the sidelines of the annual meeting of the World Bank and
International Monetary Fund in Lima, Lou said developed economies were to blame
for the global economic malaise because their slow recoveries were not creating
enough demand.
"The United States isn't at the point of raising interest rates yet
and under its global responsibilities it can't raise rates," Lou was
quoted as saying.
The finance minister said the United States "should assume global
responsibilities" because of the dollar's status as a global currency.
Lou's comments were published hours after U.S. Federal Reserve Vice
Chairman Stanley Fischer said policymakers were likely to raise interest rates
this year, but that that was "an expectation, not a commitment".
More
We end for the day with commodities. More deflation to come thinks Citigroup.
Bond fund PIMCO disagrees.
Citigroup’s Morse Says Commodities Drop Hasn’t Hit Bottom
October 10, 2015 — 3:16 PM BST Updated on October 10, 2015 — 11:35 PM
BST
Ed Morse, Citigroup Inc.’s global head of commodities research, said the
worst slump in commodities prices in a generation isn’t over.“I think we are not at the bottom because we are still seeing consistent cost deflation,” Morse said Saturday at a meeting of the Institute of International Finance in Lima, Peru.
The Bloomberg Commodity Index on Sept. 30 capped its worst quarterly loss since the depths of the recession in 2008. The economy in China, the biggest consumer of grains, energy and metals, is expanding at the slowest pace in two decades just as producers struggle to ease surpluses. Alcoa Inc., once a symbol of American industrial might, plans to split itself in two, while Chesapeake Energy Corp. cut its workforce by 15 percent.
Morse’s view contrasts with forecasts by Pacific Investment Management Co., which said Friday that the rout is probably over. Pimco, which manages about $1.52 trillion, said oil is poised to gain over the next 12 months and other commodities producers are shelving projects and scaling back output.
More
"The history of paper money is an account of abuse, mismanagement, and financial disaster."
Richard M. Ebeling
At the Comex silver depositories Friday
final figures were: Registered 42.93 Moz, Eligible 119.84 Moz, Total 162.77
Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, the former chief economist at the IMF, says
“ever closer union,” won’t save the EUSSR.
"When people talk
about the Spanish miracle, I react. When you have 23pc unemployment and 3pc
growth, I don't call this a miracle yet."
Olivier Blanchard.
Fiscal union will never fix a dysfunctional eurozone, warns ex-IMF chief
Deeper integration and EU superstate will be no "panacea" for ills of the eurozone says Olivier Blanchard
The euro will be consigned to a permanent state of malaise as deeper
integration will bring no prosperity to the crisis-hit bloc, according to the
former chief economist of the International Monetary Fund.
In a stark warning, Olivier Blanchard - who spent eight years
firefighting the worst global financial crisis in history - said transferring
sovereignty from member states to Brussels would be no “panacea” for the ills
of the euro.
The comments - from one of the foremost western economists of the last
decade - pour cold water on grandiose visions for an “EU
superstate” being hailed as the next step towards integration in the
currency bloc. Following this summer's turmoil in Greece, leaders from France's Francois Hollande, the European Commission's Jean-Claude Juncker, and European Central Bank chief Mario Draghi, have spearheaded the drive to create new supra-national institutions such as a eurozone treasury and parliament.
The plans are seen as essential in finally "completing" economic and monetary union 15 years after its inception.
But Mr Blanchard, who departed the IMF two weeks ago, said radical visions for a full-blown "fiscal union" would not solve fundamental tensions at the heart of the euro.
"[Fiscal union] is not a panacea", Mr Blanchard told The Telegraph. "It should be done, but we should not think once it is done, the euro will work perfectly, and things will be forever fine."
Although pooling common funds, giving Brussels tax and spending powers, and creating a banking union were "essential" reforms, they would still not make the "euro function smoothly even in the best of cases", said the Frenchman.
Any mechanism to transfer funds from strong to weak nations - which has been fiercely resisted by Germany - would only mask the fundamental competitiveness problems that will always plague struggling member states, he said.
"Fiscal transfers will help you go through the tough spot, but at the same time, it will decrease the urge to do the required competitiveness adjustment."
The creation of a "United States of Europe" has been seen as a necessary step to insulate the eurozone from the financial contagion that bought it to its knees after 2010.
It is a view shared by Mr Blanchard's successor at the IMF, American Maurice Obstfeld, who has championed deeper eurozone integration as the best way to plug the institutional gaps in EMU.
Mr Blanchard, however, said no institutional fixes would bring back prosperity back to the single currency.
Without the power to devalue their currency, peripheral economies would forever be forced to endure "tough adjustment", such as slashing their wages, to keep up with stronger member states, he said.
More
Solar & Related Update.
With events happening fast in the development of solar power and graphene, 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? DC? A quantum computer next?
Below, will there still be a market for Tesla’s Li-ion batteries when
Elon Musk’s giant battery factory eventually opens?
Discovery about new battery overturns decades of false assumptions
Date: October 6, 2015
Source: Oregon State University
Summary: New findings have overturned a scientific dogma
that stood for decades, by showing that potassium can work with graphite in a
potassium-ion battery -- a discovery that could pose a challenge and more
sustainable, less costly alternative to the widely used lithium-ion battery.
Lithium-ion batteries are ubiquitous in devices all over the world,
ranging from cell phones to laptop computers and electric cars. But there may
soon be a new type of battery based on materials that are far more abundant and
less costly.
A potassium-ion battery has been shown to be possible. And the last time
this possibility was explored was when Herbert Hoover was president, the Great
Depression was in full swing and the Charles Lindbergh baby kidnapping was the
big news story of the year -- 1932.
"For decades, people have assumed that potassium couldn't work with
graphite or other bulk carbon anodes in a battery," said Xiulei (David)
Ji, the lead author of the study and an assistant professor of chemistry in the
College of Science at Oregon State University.
"That assumption is incorrect," Ji said. "It's really
shocking that no one ever reported on this issue for 83 years."
The Journal of the American Chemical Society published the
findings from this discovery, which was supported by the U.S. Department of
Energy and done in collaboration with OSU researchers Zelang Jian and Wei Luo.
A patent is also pending on the new technology.
The findings are of considerable importance, researchers say, because
they open some new alternatives to batteries that can work with
well-established and inexpensive graphite as the anode, or high-energy
reservoir of electrons. Lithium can do that, as the charge carrier whose ions
migrate into the graphite and create an electrical current.
Aside from its ability to work well with a carbon anode, however,
lithium is quite rare, found in only 0.0017 percent, by weight, of the Earth's
crust. Because of that it's comparatively expensive, and it's difficult to
recycle. Researchers have yet to duplicate its performance with less costly and
more readily available materials, such as sodium, magnesium, or potassium.
"The cost-related problems with lithium are sufficient that you
won't really gain much with economies of scale," Ji said. "With most
products, as you make more of them, the cost goes down. With lithium the
reverse may be true in the near future. So we have to find alternatives."
That alternative, he said, may be potassium, which is 880 times more
abundant in the Earth's crust than lithium. The new findings show that it can
work effectively with graphite or soft carbon in the anode of an
electrochemical battery. Right now, batteries based on this approach don't have
performance that equals those of lithium-ion batteries, but improvements in
technology should narrow the gap, he said.
MoreThe monthly Coppock Indicators finished September
DJIA: +41 Down. NASDAQ:
+138 Down. SP500: +65 Down.
No comments:
Post a Comment