Tuesday, 1 December 2015

Yuan Gets Official Reserve Status.



Baltic Dry Index. 584 +03        Brent Crude 44.79

LIR Gold Target in 2019: $30,000.  Revised due to QE programs.

"Gold was not selected arbitrarily by governments to be the monetary standard. Gold had developed for many centuries on the free market as the best money; as the commodity providing the most stable and desirable monetary medium."

Murray N. Rothbard

In the Great Nixonian Error of fiat money, communist money, yesterday opened another chapter in our comedy of errors. The IMF bestowed reserve status on China’s fiat currency the Yuan. With China’s economy on the ropes, its economic statistics scripted like Washington’s, and the nation still a one party brutal communist dictatorship, mired in the worst global pollution on the planet, it must have seemed a no brainer for the French run IMF in Washington. The IMF also awarded the Yuan a higher weighting than Japan and Great Britain, though the big loser was mainly the snake bit euro. Stay long some fully paid up gold and silver held outside of the financial system.

In central banking as in diplomacy, style, conservative tailoring, and an easy association with the affluent count greatly and results far much less.

J. K. Galbraith.

Euro to Bear Brunt of Yuan's Inclusion in Reserve-Currency Club

December 1, 2015 — 4:03 AM GMT
The euro’s worst year in a decade is looking even grimmer after the Chinese yuan’s inclusion in the International Monetary Fund’s basket of reserve currencies.

The 19-nation currency’s weighting in the IMF’s Special Drawing Rights basket will drop to 30.93 percent, from 37.4 percent, the organization said Monday. The yuan will join the dollar, euro, pound and yen in the SDR allocation from Oct. 1, 2016, at a 10.92 percent weighting.

The euro has tumbled 13 percent against the dollar this year, the most in a decade, and central banks have reduced the proportion of the currency in their reserves to the lowest since 2002. European Central Bank President Mario Draghi signaled on Oct. 22 that policy makers are open to boosting stimulus, after embarking on a 1.1 trillion-euro ($1.2 trillion) asset-purchase program in March.

“The euro will get the most impact from this weight adjustment,” said Douglas Borthwick, head of foreign exchange at New York-based brokerage Chapdelaine & Co. “The IMF is taking from euro to give to China; the other rebalancing amounts are largely negligible.”

China’s currency will exceed yen and sterling in the new basket. The levels will be 41.73 percent for the dollar, 8.33 percent for the yen and 8.09 percent for the British pound, the IMF said. The dollar currently accounts for 41.9 percent of the basket, while the pound accounts for 11.3 percent and the yen 9.4 percent.

It’s the first change in the SDR’s currency composition since 1999, when the euro replaced the Deutsche mark and French franc. It’s also a milestone in the yuan’s decades-long ascent toward international credibility.

----“The more likely impact is on euro holdings as the yuan, over time, is seen as the main alternative reserve currency to the dollar, replacing the euro in that role,” said Mansoor Mohi-uddin, senior markets strategist at Royal Bank of Scotland Group Plc. in Singapore. “Further, in 1999 when the euro was introduced, it still took reserve managers four years before they started diversifying into the single currency. So, we shouldn’t expect strong inflows into the yuan in the near term from risk-averse reserve managers.”
More
http://www.bloomberg.com/news/articles/2015-12-01/euro-to-bear-brunt-of-yuan-s-inclusion-in-reserve-currency-club

Up next, what California does today, the rest of America does tomorrow, and the rest of the world the day after. Just don’t tell the loons gathered in Paris busy trying to come up with new taxes, subsidies, and wealth transfers. It’s a hard life junketing in Paris, but someone’s got to do it at taxpayer expense, I suppose.

Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof.

John Kenneth Galbraith

The Silicon Valley Idea That's Driving Solar Use Worldwide

November 30, 2015 — 10:15 PM GMT Updated on December 1, 2015 — 12:00 AM GMT
Silicon Valley has something to offer the world in the drive toward a clean energy economy. And it’s not technology.

It’s a financing formula. In a region that spawned tech giants Apple Inc. and Google and is famous for innovators and entrepreneurs like Steve Jobs, a handful of startups began offering to install solar panels on the homes of middle-class families in return for no-money down and monthly payments cheaper than a utility bill. This third-party leasing method -- which made expensive clean energy gear affordable -- ignited a rooftop solar revolution with annual U.S. home installations increasing 16-fold since 2008, according to the 
Solar Energy Industries Association and GTM Research.

The world is taking notice. Businesses in China, the biggest greenhouse-gas polluter, are so keen on replicating California’s success that Trina Solar Ltd.’s Head of Global Marketing Jing Tian said she had to come up with a rough Chinese translation for “third-party leasing.” Similar models are spreading to countries like Mexico and Japan and are being employed to sell other emerging clean energy technologies such as batteries and onsite waste-water treatment gear.

“There is a reason why California is a tech Mecca for the world because the infrastructure is here to attract that talent," said SolarCity Corp.’s Chief Executive Officer Lyndon Rive, whose company popularized third-party solar leases for homeowners starting in 2008. “All the major innovation is going to occur in California. One of the innovations is the financing of solar assets.” 

---- Under a solar lease, a homeowner can have a rooftop solar power system installed for little or no money. Instead, they pay the developer for the output that the panels produce over 15 or 20 years, at a price that’s usually lower than what the local utility charges.

SolarCity took the leasing model that SunEdison Inc. first developed for the solar industry by a graduate student named Jigar Shah. He founded the company and sold its first power purchase agreement with Whole Foods Market Inc. in 2003, according to his book, Creating Climate Wealth.

SolarCity adapted that model for residential consumers in 2008 and many more offered similar arrangements including Sunrun Inc. and Vivint Solar Inc. In August, SolarCity bought a developer in Mexico that was offering the first leases to businesses in that country and plans to expand it to homes there.

And now the idea is spreading to other industries trying to sell expensive capital equipment that reduce pollution and fossil fuel consumption.
More
http://www.bloomberg.com/news/articles/2015-11-30/the-silicon-valley-idea-that-s-driving-solar-use-worldwide

We end for the day with sign of rising tension in Saudi Arabia. Lower for longer in crude oil prices is raising the interest rate on Saudi bank borrowing. I thought that they weren’t supposed to charge interest.

Saudi Borrowing Rate Soars in November as Bank Deposits Drop

November 30, 2015 — 10:46 AM GMT Updated on November 30, 2015 — 12:38 PM GMT
The rate at which banks in the biggest Arab economy lend to each other jumped the most in seven years in November following a slump in deposits the previous month.

"The drop in deposits in October, in absolute amount, is probably the biggest since the 1990s," Murad Ansari, a bank analyst at EFG-Hermes Holding SAE, said by phone from Riyadh on Monday. "There are payment delays from the government to contractors, which is one of the reasons for the decline in private sector deposits, and public sector deposits are shrinking as the government is running a deficit."

The rising cost of overnight lending is further evidence of the impact oil’s 37 percent price drop in the past 12 months is having on the desert kingdom. Traders are already boosting bets the Saudi riyal may be devalued and Standard & poor’s has lowered the country’s credit rating. Now liquidity in the banking system is being squeezed, with demand deposits dropping 4.7 percent in October as businesses, individuals and government entities withdrew cash.
The three-month Saudi Interbank Offered Rate, which is used to price some loans, climbed 13 basis points this month to 1.11625 percent on Monday, according to data from the Saudi Arabian Monetary Agency on Bloomberg. That’s the biggest gain since October 2008 and the rate is at its highest since April 2009.
S&P lowered the country’s credit rating in October, citing a budget deficit that it forecasts will increase to 16 percent of gross domestic product this year. Saudi riyal 12-month forward points climbed to 650 last week, the highest in more than 16 years, as investors bet the government would abandon its fixed exchange rate amid oil’s decline.
---- The government has borrowed at least 55 billion riyals from local banks and institutions through bond issues this year to bridge a fiscal deficit, which the International Monetary Fund expects to climb to more than 20 percent of economic output in 2015 from 2.3 percent last year. Saudi Arabian banks’ loans-to-deposits ratio worsened to 83.8 percent in October from 82.5 percent a year earlier, indicating tightening liquidity.
More

"As fewer and fewer people have confidence in paper as a store of value, the price of gold will continue to rise. The history of fiat money is little more than a register of monetary follies and inflations. Our present age merely affords another entry in this dismal register."

Hans F. Sennholz

At the Comex silver depositories Monday final figures were: Registered 43.65 Moz, Eligible 115.30 Moz, Total 158.95 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today, is this the high tide of the climate change nutters, all expensively embedded in unfortunate Paris? For the next two weeks the intellectual lights have gone out in the City of Light. While the preening, preposterous, poseurs, all struggle to outdo each other in solving the 21st century version of how many angels can dance on the head of a pin, the rest of the world gets on with life just wondering what all this unnecessary do-gooding is going to cost us.

The end is nigh for climate-change activists

Many formerly backward countries will not sacrifice their new-found prosperity on the altar of eco-virtue

Poor Paris. Less than three weeks ago, the scene of carnage; this week, the venue for saving the planet.
Because of security after the Isil atrocities, the City of Light was spared a planned climate change march, but London had one on Sunday, attended by what the ever-Green BBC optimistically described as “tens of thousands”. One of the march’s leaders, the fashion designer Dame Vivienne Westwood, said: “Global warming is at a tipping point. If we go past it we can’t stop it. We are there right now.”

In this view, Dame Vivienne accords with the Prince of Wales, who predicted in Rio de Janeiro in March 2009, that there were “less than 100 months to act” to prevent “catastrophic climate change”. In other words, it’s all over by July 2017.
So there is a very real hope that the 21st UN Climate Change Conference (COP 21), which starts on Monday, will be the last. Either Prince Charles and Dame Vivienne will prevail, and COP 21 will rescue Mother Earth from destruction by agreeing worldwide legally binding carbon emission restraints; or they won’t, and then, by their own logic, it will be too late for any international conference to do anything ever again, so they might as well shut up. For those of a more sceptical cast of mind, there is a third possibility, which is that the Prince and the dressmaker will fail, no legally binding targets will be agreed, and the world will go on very much as before. I would bet His Royal Highness an enormous amount of money on this last outcome, secure in the knowledge that, if I am wrong, I will not be around to pay out, but if he is wrong, he will be.
The reason that there will not be a legally binding agreement (or at least not a genuinely enforceable one) is the growth of something which the Left has always called for, but doesn’t quite like when it gets it – the power of the developing world. India, for example, sees it as “carbon imperialism” for the West to deny it the fossil-fuelled industrialisation which gave us a more than 100 years’ start on the rest of the world. A great many formerly backward countries are at last getting rich and they will not sacrifice their new prosperity on the altar of eco-virtue. Nearly seven years ago, at COP 15 in Copenhagen, Barack Obama, bearing his Nobel Prize and at the height of his moral prestige, pleaded with them, to no avail. What will make them listen to him now, in the twilight of his presidency?

http://www.telegraph.co.uk/news/earth/environment/climatechange/12023819/The-end-is-nigh-for-climate-change-activists.html

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 or DC energy mankind’s future from the 21st century onwards? DC? A quantum computer next?

Coming to a monitor near you: A defect-free, molecule-thick film

Date: November 26, 2015

Source: University of California - Berkeley

Summary: A research team has found a simple way to fix defects in atomically thin monolayer semiconductors. The development could open doors to transparent LED displays, ultra-high efficiency solar cells, photo detectors and nanoscale transistors.

An emerging class of atomically thin materials known as monolayer semiconductors has generated a great deal of buzz in the world of materials science. Monolayers hold promise in the development of transparent LED displays, ultra-high efficiency solar cells, photo detectors and nanoscale transistors. Their downside? The films are notoriously riddled with defects, killing their performance.
But now a research team, led by engineers at the University of California, Berkeley, and Lawrence Berkeley National Laboratory, has found a simple way to fix these defects through the use of an organic superacid. The chemical treatment led to a dramatic 100-fold increase in the material's photoluminescence quantum yield, a ratio describing the amount of light generated by the material versus the amount of energy put in. The greater the emission of light, the higher the quantum yield and the better the material quality.
The researchers enhanced the quantum yield for molybdenum disulfide, or MoS2, from less than 1 percent up to 100 percent by dipping the material into a superacid called bistriflimide, or TFSI.
Their findings, to be published in the Nov. 27 issue of Science, opens the door to the practical application of monolayer materials, such as MoS2, in optoelectronic devices and high-performance transistors. MoS2 is a mere seven-tenths of a nanometer thick. For comparison, a strand of human DNA is 2.5 nanometers in diameter.
"Traditionally, the thinner the material, the more sensitive it is to defects," said principal investigator Ali Javey, UC Berkeley professor of electrical engineering and computer sciences and a faculty scientist at Berkeley Lab. "This study presents the first demonstration of an optoelectronically perfect monolayer, which previously had been unheard of in a material this thin."
The researchers looked to superacids because, by definition, they are solutions with a propensity to "give" protons, often in the form of hydrogen atoms, to other substances. This chemical reaction, called protonation, has the effect of filling in for the missing atoms at the site of defects as well as removing unwanted contaminants stuck on the surface, the researchers said.
Co-lead authors of the paper are UC Berkeley Ph.D. student Matin Amani, visiting Ph.D. student Der-Hsien Lien and postdoctoral fellow Daisuke Kiriya.
They noted that scientists have been pursuing monolayer semiconductors because of their low absorption of light and their ability to withstand twists, bends and other extreme forms of mechanical deformation, which can enable their use in transparent or flexible devices.
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The monthly Coppock Indicators finished November

DJIA: +25 Down. NASDAQ: +121 Down. SP500: +45 Down. 

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