Tuesday, 15 March 2016

Modern Money Theory.

Baltic Dry Index. 393 +05        Brent Crude 39.04

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

Brexit odds checker. http://www.oddschecker.com/politics/british-politics/eu-referendum/referendum-on-eu-membership-result

Brexit Quote of the Day.
Cameron: Little things affect little minds.

With apologies to Benjamin Disraeli.

Get long some fully paid up physical gold and silver held outside of the financial system. In the war on cash, as we follow voodoo, crankster economics, towards destruction of the global financial system, our central banksters seem to be getting ready for the nuclear option of modern monetary theory.  In short, deficits don’t matter, so ramp up the deficits with helicopter drops of money to the consumers, and start building infrastructure to everywhere, like China did last decade.

No matter that China is in the midst of a crash landing from all of the communist directed malinvestment bubble, nor that the central bankster 21st century fiat money bubble has collapsed shipping and sent commodities into a depression. Our electronic money printers think that they failed, because they didn’t think big enough, or print up and distribute enough fiat money. We are all about to try the Japan Cool Aid.

Madness: doing the same thing over and over again and expecting a different result.

Albert Einstein.

Ignored for Years, a Radical Economic Theory Is Gaining Converts

March 13, 2016 — 11:30 PM GMT
In an American election season that’s turned into a bonfire of the orthodoxies, one taboo survives pretty much intact: Budget deficits are dangerous.

A school of dissident economists wants to toss that one onto the flames, too.

It’s a propitious time to make the case, and not just in the U.S. Whether it’s negative interest rates, or helicopter money that delivers freshly minted cash direct to consumers, central banks are peering into their toolboxes to see what’s left. Despite all their innovations, economic recovery remains below par across the industrial world.

Calls for governments to take over the relief effort are growing louder. Plenty of economists have joined in, and so have top money managers. Bridgewater’s Ray Dalio, head of the world’s biggest hedge fund, and Janus Capital’s Bill Gross say policy makers are cornered and will have to resort to bigger deficits.

“There’s an acknowledgment, even in the investor community, that monetary policy is kind of running out of ammo,” said Thomas Costerg, economist at Standard Chartered Bank in New York. “The focus is now shifting to fiscal policy.”

Currency Monopoly

That’s where it should have been all along, according to Modern Money Theory. The 20-something-year-old doctrine, on the fringes of economic thought, is getting a hearing with an unconventional take on government spending in nations with their own currency.

Such countries, the MMTers argue, face no risk of fiscal crisis. They may owe debts in, say, dollars or yen -- but they’re also the monopoly creators of dollars or yen, so can always meet their obligations. For the same reason, they don’t need to finance spending by collecting taxes, or even selling bonds.

The long-run implication of that approach has many economists worried.

“I have no problem with deficit spending,” said Aneta Markowska, chief U.S. economist at Societe Generale in New York. “But this idea of the government printing money -- unlimited amounts of money -- and running unlimited, infinite deficits, that could become unhinged pretty quickly.”

To which MMT replies: No one’s saying there are no limits. Real resources can be a constraint -- how much labor is available to build that road? Taxes are an essential tool, to ensure demand for the currency and cool the economy if it overheats. But the MMTers argue there’s plenty of room to spend without triggering inflation.

Asian markets fall ahead of Bank of Japan meeting

Published: Mar 14, 2016 11:16 p.m. ET

Central bank expected to maintain negative interest rate

Shares in Asia fell Tuesday before an interest-rate decision by Japan’s central bank.
Japan’s Nikkei Stock Average NIK, -0.58%   lost 0.1%, and Australia’s S&P/ASX 200 XJO, -1.43%   was down 1.2%. Korea’s Kospi SEU, -0.17%   was about flat.

In China, the Shanghai Composite Index SHCOMP, -1.09%   was down 0.2%. Hong Kong’s Hang Seng Index HSI, -0.65%   fell 0.5%.

Investors were waiting for the Bank of Japan to reveal whether it would adjust the minus-0.1% interest rate. Analysts largely expect the central bank to keep the rate unchanged. Gov. Haruhiko Kuroda is scheduled to speak later Tuesday at a press conference, which could offer investors hints to the path of future monetary policy decisions.

Japanese stocks have dropped slightly since negative interest rates were adopted on Jan. 29.

The large Tokyo Stock Price Index known as Topix is down 3.5% from the close of Jan. 29 to this morning. Bank shares have fared worse on worries that low rates would pressure banks’ net interest margins. A Topix subindex for banks fell 9.7% over the last month a a half.

Investors have also been piling into longer-term Japanese government debt to chase their positive yields. The yield on Japan’s benchmark 10-year government bond last week fell to a record low in negative territory. The benchmark’s yield was last trading at minus-0.02%. Bond yields move inversely to prices.

Stocks across the Asia region were also falling ahead of a U.S. Federal Reserve decision due Wednesday. Economists largely expect the central bank to hold rates.

Brent Oil Extends Drop as Iran Spurns Production Freeze Accord

March 14, 2016 — 11:05 PM GMT Updated on March 15, 2016 — 5:25 AM GMT
Brent dropped for a second day as Russia signaled Iran won’t join major producers in freezing output to manage a global glut.

Futures lost as much as 1 percent in London after falling 2.1 percent Monday. Iran has “reasonable arguments” for not joining an alliance to cap production now, Russian Energy Minister Alexander Novak said after meeting with his Iranian counterpart. Talks on the freeze are most likely to occur in Qatar’s capital Doha next month, according to Gulf OPEC delegates. U.S. stockpiles probably expanded last week, keeping supplies at the most since 1930.

“Supply is still the key factor for the market,” David Lennox, an analyst at Fat Prophets in Sydney, said by phone. “If there is a meeting and it does result in a decision on definitive action, that will be positive for prices, but history is against anything happening,”

Oil has rebounded after slumping to a 12-year low this year on speculation stronger demand and falling U.S. output will ease a surplus. Iranian production increased last month by the most in almost two decades following the end of international sanctions, the Organization of Petroleum Exporting Countries said in its monthly report Monday. Supply from Saudi Arabia was mostly unchanged.

We close for the day with China. There will be plenty of time for Trumpmania tomorrow. China is about to greatly extend its anti-corruption war. My guess is that it’s intended to deflect attention away from all the rising labour unrest as China starts downsizing iron, steel and cement plants.

China anti-graft campaign to tackle poverty relief funds misuse

Mon Mar 14, 2016 11:00pm EDT
China's anti-graft campaign will take on a new dimension by targeting officials who misuse or embezzle poverty relief funds, the country's top prosecutor told state media in an interview published on Tuesday.

Cao Jianming told the official China Daily graft probes will become "more aggressive" by going after grassroots officials to stamp out abuse of finances for rural living allowances, education and medical insurance, as well as ecological protection.

Officials overseeing traffic management in rural areas, hydropower and electric power infrastructure, in addition to rural home renovations will also come under scrutiny, Cao said.

"We will step up efforts to combat such crimes to let more people at the grassroots level share the fruits of the anti-graft campaign," he added.

The Chinese government allocated 43.3 billion yuan ($6.66 billion) for poverty relief in 2014, double the amount in 2010. In October, it set a goal of lifting everyone in rural areas out of poverty by 2020.

The number of corrupt officials who have misused and embezzled poverty relief funds has sharply risen due to "loopholes in the supervision mechanism, and the high number of anti-poverty projects and funds involved", Cao said.

Since 2012, Chinese President Xi Jinping has launched a sweeping campaign against deep-rooted graft, vowing to go after powerful "tigers" as well as lowly "flies", warning the problem could cripple the party's decades-long hold on power.

China Strikes Map.

Cameron: Has no one considered my feelings in all this?
Juncker: What percentage do you want?
Cameron: I don't want money. I'm an honest man.
Juncker: You'll have to mend your ways then. This is the EUSSR!
With apologies to Joe Orton and Loot.
At the Comex silver depositories Monday final figures were: Registered 29.30 Moz, Eligible 126.00 Moz, Total 155.30 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
With Modern Money Theory now about to come into play, at least one central bankster wants a rewrite of the rules. The Fedster’s would collapse if it ever happened. Governor Rajan needs to be very wary near cement trucks.

India RBI Governor Rajan wants global rules of conduct for central banks

Sat Mar 12, 2016 9:13am EST
Reserve Bank of India governor Raghuram Rajan called on Saturday for global central banks to adopt a system for assessing the wider impact of their actions, including unconventional monetary policies now in use.
Rajan proposed that a group of academics should measure and analyze the "spillover" effects of monetary policies and indicate which should be used and which avoided. He suggested a traffic light systemhttp://images.intellitxt.com/ast/adTypes/icon1.png, grading policies green, orange or red.
The monitoring system could be implemented through an international agreement along the lines of the Bretton Woods currency accord or via the International Monetary Fund.
Rajan's speech was the highlight of a three-day International Monetary Fund event in New Delhi, attended by IMF chief Christine Lagarde and Indian Prime Minister Narendra Modi, at which worries about the global economy were front and center.
"The international community has a choice," Rajan said. "We can pretend all is well with the global financial non-system and hope that nothing goes spectacularly wrong. Or we can start building a system for the integrated world of the 21st century."
Rajan's speech came days after the European Central Bank eased monetary policy further by cutting all its main interest rates, expanding asset purchases and launching a loan program which could see it pay banks to lend to firms and households.
The Bank of Japan has also taken interest rates into negative territory for the first time while the U.S. Federal Reserve is expected to tighten monetary policy only gradually after years of near-zero rates and quantitative easing.
Rajan has been a vocal critic of such policies, saying central banks seeking to fulfill domestically focused mandates are ignoring the impact of their actions on the global economy.
Saturday's speech was the most comprehensive given on the subject by Rajan, who is widely credited with having predicted the global financial crisis that began in 2007.
The former IMF economist, tipped by local media as a potential successor to Lagarde, also called on the Fund to take a lead role in ensuring policies adopted by its members do not have "beggar-thy-neighbor" consequences.
"We need new rules of the game, enforced impartially by multilateral organizations, to ensure countries adhere to international responsibilities," he said.

Brexit Quote of the week.

The world is weary of statesmen whom democracy has degraded into politicians.

Benjamin Disraeli.

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?

World's thinnest lens to revolutionize cameras

Date: March 11, 2016

Source: Australian National University

Summary: Scientists have created the world's thinnest lens, one two-thousandth the thickness of a human hair, opening the door to flexible computer displays and a revolution in miniature cameras. Researchers have said the discovery hinged on the remarkable potential of the molybdenum disulphide crystal.
Scientists have created the world's thinnest lens, one two-thousandth the thickness of a human hair, opening the door to flexible computer displays and a revolution in miniature cameras.
Lead researcher Dr Yuerui (Larry) Lu from The Australian National University (ANU) said the discovery hinged on the remarkable potential of the molybdenum disulphide crystal.
"This type of material is the perfect candidate for future flexible displays," said Dr Lu, leader of Nano-Electro-Mechanical System (NEMS) Laboratory in the ANU Research School of Engineering.
"We will also be able to use arrays of micro lenses to mimic the compound eyes of insects."
The 6.3-nanometre lens outshines previous ultra-thin flat lenses, made from 50-nanometre thick gold nano-bar arrays, known as a metamaterial.
"Molybdenum disulphide is an amazing crystal," said Dr Lu
"It survives at high temperatures, is a lubricant, a good semiconductor and can emit photons too.
"The capability of manipulating the flow of light in atomic scale opens an exciting avenue towards unprecedented miniaturisation of optical components and the integration of advanced optical functionalities."
Molybdenum disulphide is in a class of materials known as chalcogenide glasses that have flexible electronic characteristics that have made them popular for high-technology components.
Dr Lu's team created their lens from a crystal 6.3-nanometres thick -- 9 atomic layers -- which they had peeled off a larger piece of molybdenum disulphide with sticky tape.
They then created a 10-micron radius lens, using a focussed ion beam to shave off the layers atom by atom, until they had the dome shape of the lens.
The team discovered that single layers of molybdenum disulphide, 0.7 nanometres thick, had remarkable optical properties, appearing to a light beam to be 50 times thicker, at 38 nanometres. This property, known as optical path length, determines the phase of the light and governs interference and diffraction of light as it propagates.
"At the beginning we couldn't imagine why molybdenum disulphide had such surprising properties," said Dr Lu.
Collaborator Assistant Professor Zongfu Yu at the University of Wisconsin, Madison, developed a simulation and showed that light was bouncing back and forth many times inside the high refractive index crystal layers before passing through.

The monthly Coppock Indicators finished February

DJIA: 16517 -23 Down. NASDAQ:  4558 +45 Down. SP500: 1932 -17 Down. 

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