Baltic Dry Index. 754 -12 Brent Crude 50.25
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"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 the week with China’s scripted official GDP figures. Unsurprisingly
no one in Beijing or anywhere else, pays much attention to them. Many outside
observers think the real number is closer to half the official figures, with a
few even suggesting that China’s slowdown has reached the point of stagnation.
In a nation as big as China the underground economy is probably large and under
accounted for, but something has gone seriously wrong in China’s economy in
2015. This year China’s biggest export seems to be deflation, particularly
commodities deflation.
In our continuing “bad news is good news,” great disconnect between
reality and the bubble casino stock markets, it is already being spun as a good
news event.
China economy grows 6.9 percent in third quarter, weakest since 2009
Chinese leaders have been trying to reassure jittery global markets for months that the economy is under control after a shock devaluation of the yuan CNY=CFXS and a summer stock market plunge fanned fears of a hard landing.
The world's second-largest economy grew 6.9 percent in the July-September quarter from a year ago, slightly better than analysts' estimate of 6.8 percent, but down from 7 percent in the second quarter.
That is the weakest reading since the first quarter of 2009, when growth tumbled to 6.2 percent. However, analysts still mostly believe China's slowdown will be gradual rather than more calamitous.
"Continued downward pressures from real estate and exports caused gross domestic product (GDP) growth to drop to 6.9 percent," said Louis Kuijs from Oxford Economics in Hong Kong.
---- Other September figures also released on Monday pointed to stubborn weakness in the Chinese economy.
Factory output rose 5.7 percent in September from a year ago, missing
forecasts for a 6 percent rise, and fixed-asset investment (FAI), a key driver
of the economy, climbed 10.3 percent in the first nine months of the year,
below estimates of 10.8 percent.
Retail spending alone bucked the trend, growing at an annual rate of
10.9 percent, slightly better than forecasts for 10.8 percent growth.
----
"The GDP beat is surprising, given that the monthly FAI and industrial
production figures slowed considerably, and much faster than expected,"
said Oliver Barron, a China policy researcher at NSBO in Beijing.
-----
There is also widespread scepticism about the reliability of official Chinese
data. Some market watchers believe current growth is much weaker than
government readings, though officials deny allegations that the numbers are
inflated.
More
But in a sign that it’s far from a good news near miss event, as China
slows, crude oil stockpiles in Saudi Arabia have hit a record high. Unless someone somewhere cuts production by a
sizable amount, crude oil prices will soon begin falling again in expectation
of an Iranian oil production increase in 2016.
Saudi Crude Stockpiles at Record High Amid Quest to Keep Share
October 18, 2015 — 7:58 AM BST Updated on October 18, 2015 — 10:00 PM
BST
Saudi Arabia, the world’s largest oil exporter, is storing record
amounts of crude in its quest to maintain market share as it cut shipments.
Commercial crude stockpiles in August rose to 326.6 million barrels, the
highest since at least 2002, from 320.2 million barrels in July, according to
data posted on the website of the Riyadh-based Joint Organisations Data
Initiative. Exports dropped to 7 million barrels a day from 7.28 million.
“The fall in Saudi crude exports reflects the market
reality,” Mohammed Ramady, an independent London-based analyst, said
Sunday by phone. “It’s normal to see this fall knowing that the market is
becoming highly competitive, with many countries in OPEC selling at discounts
and under-pricing the Saudi crude.”
Crude inventories have been at record highs since May, a month before
Saudi Arabia’s production hit an all-time high of 10.56 million barrels a day.
The nation has led the Organization of Petroleum Exporting Countries in
boosting production to defend market share, abandoning its previous role of
cutting output to boost prices.
----Saudi Arabia cut back oil production in August to 10.27 million barrels a day from 10.36 million in July, according to the JODI data. The kingdom told OPEC that it produced 10.23 million barrels daily in September. It pumped at an all-time high of 10.56 million barrels a day in June, exceeding a previous record from 1980.
“The rise in Saudi crude stocks is part of the market share strategy,”
Ramady said. “Saudi Arabia will not lower it’s production below 10.2 million
barrels a day, so any extra crude is going to stocks. We’ve seen this trend for
a couple of months now, and we expect it to continue as long as Riyadh wants to
preserve its share in this highly competitive market.”
More
Iran deal closer to reality as U.S. prepares sanctions waivers
The United States approved conditional sanctions waivers for Iran on
Sunday, though it cautioned they would not take effect until Tehran has curbed
its nuclear program as required under a historic nuclear deal reached in Vienna
on July 14.
"Today marks an important milestone toward preventing Iran from
obtaining a nuclear weapon and ensuring its nuclear program is exclusively
peaceful going forward," U.S. President Barack Obama said in a White House
statement.
In a memo, he directed the secretaries of state, treasury, commerce and
energy "to take all necessary steps to give effect to the U.S. commitments
with respect to sanctions described in (the Iran deal)."
Several senior U.S. officials, who spoke to reporters on condition of
anonymity, said actual sanctions relief for Iran was at least two months away.
Sunday was "adoption day" for the deal, which came 90 days
after the U.N. Security Council endorsed the agreement reached by Iran, the
United States, Britain, France, Germany, Russia and China under which most
sanctions on Iran would be lifted in exchange for limits on Tehran's nuclear
activities.
Secretary of State John Kerry said Iran would now have to act to
restrain its nuclear program.
More
We close for the day with China. The UK and China are getting amazingly
close. Britain plays “good cop” to America’s “bad cop” regime. After Brexit, a
free trade deal with China?
Exclusive - China's Xi lauds Britain for 'visionary' openness, prods others to emulate
Chinese President Xi Jinping heaped praise on Britain for what he called
a "visionary and strategic choice" to strengthen commercial ties with
China, as he prepared for a state visit to the United Kingdom that's expected
to be richer in pomp and considerably warmer in tone than his recent trip to
the United States.
The trip comes at a time of global anxiety about China's slowing growth.
Xi himself acknowledged "concerns about the Chinese economy", but
sought to allay them in a written interview with Reuters.
China itself is worried about the slowing of the broader global economy,
Xi said, even while he expressed confidence that China would weather the
current downturn as it reshapes its economy to be more resilient in the future.
That confidence will be on display when Xi arrives in London on Monday
evening to kick off a four-day visit that is expected to cement ties between
Britain and China, including through a host of business deals.
"The UK has stated that it will be the Western country that is most
open to China. This is a visionary and strategic choice that fully meets
Britain's own long-term interest," Xi said in a written response to
questions from Reuters.
"China looks forward to engaging with the UK in a wider range, at a
higher level and in greater depth."
More
"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
At the Comex silver depositories Friday
final figures were: Registered 42.87 Moz, Eligible 120.13 Moz, Total 163.00
Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, Syria and Iraq,
confusing to say the least. Washington appears to be arming the Kurds against NATO
member Turkey. Below the implausible deniability, of last week. Other than
moving most Syrians to Germany via walking them up the Balkans at Merkel’s
request, does any member of NATO have a plan? Turkey Warns US, Russia on Arming Syria Kurds
October 14, 2015 11:16 AM
LONDON—
Turkey has warned both the United States and Russia against arming Kurdish
forces in Syria, saying they are connected to what Ankara calls Kurdish
terrorists within Turkey. Analysts say the West sees the Kurds as a vital ally
in countering the spread of the Islamic State terror group, also known as ISIS
or ISIL.
Backed by U.S.-led coalition airstrikes, Kurdish forces in Syria have
made territorial gains against Islamic State militants. The U.S. said this week
it has parachuted in ammunition — but did not specify which rebel groups it is
aiding.
Turkish Prime Minister Ahmet Davutoglu Wednesday warned against arming
Kurdish forces in Syria — which Turkey views as terrorists allied to PKK
Kurdish separatists.
Davutoglu said Turkey’s stance was communicated to the United States and
Russia. It means Turkey cannot accept any cooperation with groups waging a war
against Turkey, he added.
The alliance between the West and Kurdish authorities in Syria, known as the PYD, is likely to strengthen, said Middle East analyst Ranj Alaaldin.
The alliance between the West and Kurdish authorities in Syria, known as the PYD, is likely to strengthen, said Middle East analyst Ranj Alaaldin.
“They’ve constituted a very effective, pro-Western, secular force
fighting ISIS. At a time like this, with the Russians intervening, with the
conflict getting more and more complicated, I think the U.S. and the West in
general will keep the PYD onside,” he said.
More
U.S. Airdrop in Syria Ends Up Arming the Kurds
Oct 15, 2015
Last weekend, the White House announced that the U.S. had dropped 50 tons of
ammunition to Syrian Arabs fighting the Islamic State. Some officials now say
that the new Arab coalition was a front and that Kurdish groups received most
of the weapons -- as the U.S. intended.American and Kurdish officials and Syrian Arab opposition leaders told us this week that ammunition said to have been for the Syrian Arab Coalition, a newly announced group of Sunni Arab brigades in northeastern Syria, had largely ended up arming the Kurdish Democratic Union Party and its associated military forces, known as the People's Protection Units or YPG. That will aid the Kurds in fighting the Islamic State and cementing their control of Kurdish territory.
One senior administration official who works on the issue told us that the White House knew that the coalition was likely to pass on most if not all of the weapons to the Kurds. The official, who called the Syrian Arab Coalition a "ploy" to arm the Kurds, said the White House knew they would receive the shipments because they controlled the area where the weapons were dropped. The U.S. did not ask the Arab coalition for any guarantees the weapons would stay in Arab hands, the official said.
The Obama administration has not said that the arms are going to the Kurds. “Our successful airdrop provided ammunition to Arab fighters fighting in Northern Syria against ISIL,” Commander Kyle Raines, of U.S. Central Command, told us in a statement. If the U.S. were seen openly arming the Kurds, that could alienate Turkey and some Syrian Arab groups outside Kurdish territory.
A local Kurdish official told the Associated Press this week that the U.S. had provided 120 tons of weapons and ammunition to the YPG. The Washington Post reported Thursday that Turkey summoned the U.S. ambassador in Ankara to complain about the weapons drops.
----In addition, the YPG itself has acknowledged that it is participating in a new alliance with Sunni Arab and Syrian Christian groups known as the Democratic Forces of Syria. That group held its first meeting Thursday in the Syrian city of Al Hasakah to discuss how to divide up the new U.S.-provided ammunition between Kurdish, Arab and Christian rebel brigades, a representative of the group said.
It was just last week when the Obama administration began referring to the Syrian Arab Coalition, on background to news outlets. As the New York Times noted, Arab rebel groups fighting in the area freely admitted they had never heard of such an organization, although they were excited about the prospect of getting the weapons.
More
Cuba denies it has sent troops to Syria to help Assad
17/10/2015
HAVANA (Reuters) - The Cuban government on Saturday denied what it
called an "irresponsible and unfounded" report that it had sent
troops to Syria in support of Syrian President Bashar al-Assad.
Foreign ministry official Gerardo Penalver "categorically denies
and refutes the irresponsible and unfounded information regarding the supposed
presence of Cuban troops in the Syrian Arab Republic," a government
statement said.
The University of Miami's Institute for Cuban and Cuban-American Studies
on Tuesday issued what it called an unconfirmed report from an unspecified
source that Cuban troops had been spotted in Syria "in support of Syria’s
dictator Assad and Russian involvement in that country."
Fox News echoed the institute's report on Wednesday, citing an unnamed
U.S. official who "confirmed" it. The story then circulated in social
media.
White House spokesman Josh Earnest said on Thursday the U.S. government
had seen no evidence to indicate the reports were true.
More
We end on the subject with more on Merkel’s folly, and buyer’s remorse. Since it was the CIA that armed and created ISIS under the misimpression that these were good Sunnis willing to oust Assad, Germany should just bus the refugees round to the nearest US bases and tell them to get the CIA to sort out their bungled mess. Reports this morning on the BBC suggest another 100,000 refugees are streaming towards Turkey from the renewed fighting around Aleppo. Munich by Christmas.
As winter looms, Germany struggles to find homes for refugees
At a sprawling camp in the German town of Celle, refugees wearing thick
sweaters sit around a heater smoking cigarettes as rain beats down on the
cramped white tent that has become their home. Some of them are ill and worried
it will snow.
"The weather is so cold that I can't even leave the tent,"
said Taher, a 25-year-old Syrian farmer. Sitting on his camp bed surrounded by
wet washing that hangs limply from tent poles, he reaches for a box of cough
medicine.
With the approach of winter, authorities are scrambling to find warm
places to stay for the thousands of refugees streaming into Germany every day.
In desperation, they have turned to sports halls, youth hostels and empty
office buildings.
But as these options dry up, tent cities have become the fall-back plan:
despite falling temperatures, a survey by German newspaper Die Welt showed at
least 42,000 refugees were still living in tents.
The challenge of finding adequate housing is turning into one of the
biggest tests for the government of Angela Merkel, who has stuck doggedly to
her mantra "Wir schaffen das" ("we can do this") in the face
of rising public scepticism.
Struggling to cope with a record influx of migrants that could exceed a
million this year alone, her aides say the winter may prove decisive in
determining whether Germans take the view that the crisis is manageable -- or not.
More
German union boss warns of downward pressure on wages from migrant inflow
A record inflow of refugees to Germany should not be used as an excuse
for driving down wages, the head of the powerful trade union IG Metall said on
Sunday.
Detlef Wetzel said there had already been a push by employers to pay
migrants with low qualifications less than the rates set out in collective wage
agreements.
"There is no scope here to manage downwards. Everyone has the right
to the minimum wage or the collective wage agreement," Wetzel said in an
opening address to the four-yearly congress of Germany's biggest trade union.
Earlier this year, IG Metall secured a 3.4 percent wage increase for 15
months from April plus a one-off payment of 150 euros ($170) - its biggest wage
increase for years.
Concerns about the ability of the government to handle up to a million
refugees who are expected to arrive this year have pushed support for
Chancellor Angela Merkel's conservatives to its lowest since May 2013, a poll
showed on Sunday.
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, more
deflation from China, this time in solar panels..
China rules India's solar power market; preference for foreign-made panels has firms struggling
By Jayashree Nandi, TNN | 16 Oct, 2015,
10.51AM IST
NEW
DELHI: As soon as a solar developer gets an order to set up a solar rooftop
system in the city , they dial a Chinese company for the panels to be shipped
to India. Despite the distance and logistics, the panels are far cheaper--with
a difference of Rs 5 to Rs 6 per panel--than what a manufacturer in Noida or
any other part of the country would quote. It takes about 30 to 45 days for the
consignment to be delivered, but there are still no takers for locally-made ones.
So, while cities like Delhi are gearing up for ambitious solar rooftop projects, the solar panel and cell manufacturing industry is dying a slow death. The manufacturers have recently petitioned the government to impose an "anti-dumping duty" on the cells and panels imported from China, US, Taiwan and elsewhere as they have flooded the market.
So, while cities like Delhi are gearing up for ambitious solar rooftop projects, the solar panel and cell manufacturing industry is dying a slow death. The manufacturers have recently petitioned the government to impose an "anti-dumping duty" on the cells and panels imported from China, US, Taiwan and elsewhere as they have flooded the market.
So, while cities like Delhi are gearing up for ambitious solar rooftop projects, the solar panel and cell manufacturing industry is dying a slow death. The manufacturers have recently petitioned the government to impose an "anti-dumping duty" on the cells and panels imported from China, US, Taiwan and elsewhere as they have flooded the market.
So, while cities like Delhi are gearing up for ambitious solar rooftop projects, the solar panel and cell manufacturing industry is dying a slow death. The manufacturers have recently petitioned the government to impose an "anti-dumping duty" on the cells and panels imported from China, US, Taiwan and elsewhere as they have flooded the market.
A
solar cell manufacturing company based out of Delhi that has its factory in
Andhra Pradesh has stopped making cells altogether. "We have the same
technology. In fact, our products are of superior quality but the government
has put no checks on imports. I read with great interest Delhi's draft solar
policy --of installing 2 GW by 2025--but will it all be with imported panels?
We have mailed the Delhi government our concerns," said Arun Mishra,
member of the Solar Energy Society of India and vice-president of a solar
products manufacturing company. Delhi's solar policy mandates all Delhi
government buildings to install solar rooftop systems within three years of its
notification. "We, as developers, and even state governments will opt for
the lowest bidder. Indian manufacturers are expensive. It will take a long time
to bridge this gap," said a manufacturer currently developing
rooftop projects on government buildings in Delhi.
more
The monthly Coppock Indicators finished September
DJIA: +41 Down. NASDAQ:
+138 Down. SP500: +65 Down.
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