Thursday, 26 May 2016

The Top.

Baltic Dry Index. 605 -13      Brent Crude 50.09

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

Brexit odds checker.

Brexit Quote of the Day.

Dodgy Dave Cameron: He was distinguished for ignorance; for he had only one idea, and that was wrong.
With apologies to Benjamin Disraeli.

We open today as we head into the first summer holiday weekend of the northern hemisphere, with crude oil news. Brent crude, the international benchmark for oil pricing, just crossed 50 dollars a barrel for the first time since last November. Can an upward change in the wests inflation numbers be long delayed? I suspect that unless oil prices plunge again and soon, food and energy price inflation is about to become the next big story.  Like Rip Van Winkle, Mr. Inflation seems to be awakening from his long slumber.
Forget Brexit. Whether or not Dodgy Dave’s Project Fear surrender story wins or loses, a return of inflation will blow the Bilderberger EUSSR project clean out of the water. A fragile EU that’s never really recovered from the Great Recession of 2007-2009, is in no way prepared, politically or financially, to weather a hurricane of inflation. ZIRP and NIRP will fast be replaced by positive interest rates. A multi-decade long bull market in global treasuries will end and reverse. America, the EUSSR and Japan are all horribly positioned for such a development. An Everest of debt will implode faster than an avalanche in the Alps. Crude oil is ringing a bell at what looks likely to be the top.

True, governments can reduce the rate of interest in the short run, issue additional paper currency, open the way to credit expansion by the banks. They can thus create an artificial boom and the appearance of prosperity. But such a boom is bound to collapse soon or late and to bring about a depression. 

Ludwig von Mises.

Oil prices top $50, Asian shares struggle on China worries

Wed May 25, 2016 11:14pm EDT
Brent crude oil rose above $50 a barrel for the first time in nearly seven months on Thursday but Asian shares struggled to gain traction, with worries about U.S. interest rates and China's slowing economy keeping many investors on the sidelines.

While energy stocks outperformed, a slump in mainland China stocks to 2-1/2 month lows dampened any broader interest in riskier assets in Asia, offsetting overnight gains on Wall Street.

"The market environment is not bad overall. Oil prices are rising, which would benefit oil producing countries. But Asia may be hurt by concerns about the Chinese economy," said Shuji Shirota, associate director at HSBC in Tokyo.

"The market's focus is returning to the Fed, given rising expectations that they could hike rates much earlier than expected. That is weighing on many emerging markets as well," he said.

Japan's Nikkei rose 0.3 percent but MSCI's broadest index of Asia-Pacific shares outside Japan was almost flat, struggling to extend its rebound from Tuesday's 12-week low. It had gained 1.2 percent on Wednesday.

Shanghai shares fell more than 1 percent, with sentiment frail after a series of disappointing economic data earlier this month and fears that policymakers may be taking a more cautious stance on further stimulus as debt levels grow.

Brent crude tops $50 a barrel for first time since November

Published: May 25, 2016 10:51 p.m. ET
Supply disruptions pushing prices higher
HONG KONG — International oil prices rose to their highest levels in six months on Thursday, as the recent decline in U.S. crude stocks raised expectations for a tightening in the market amid lower global supply.

Brent LCON6, +0.74%  , the international benchmark for oil, rose 30 cents to $50.04 a barrel in morning Asian trade, its highest point since the beginning of November. U.S. oil prices traded on the New York Mercantile Exchange CLN6, +0.71%   rose 29 cents to $49.85 a barrel.

Persistent oversupply has kept prices well below highs of $100 a barrel reached two years ago. The price collapse has prompted energy companies to withhold investment — especially in the upstream sector — resulting in a slowdown in global output growth. Ongoing supply disruptions in North America and Africa, as well as dwindling output from Latin America, have also pushed prices higher.

“The fundamentals of the U.S. are changing and the declining production rate in the U.S. is a welcoming sign that adds to the belief the glut is dwindling,” said Vyanne Lai, energy analyst at National Australia Bank.

The U.S. Energy Information Administration said U.S. crude stockpiles fell 4.2 million barrels last week. Analysts polled by The Wall Street Journal had expected a decrease of 2.5 million barrels.
U.S. output also fell for the 11th straight week to 8.8 million barrels a day from a peak of 9.7 million barrels a day in April 2015.

Cheapest gas pump prices in over a decade this Memorial Day weekend

Published: May 23, 2016 9:56 a.m. ET
High demand for gas to soak up some crude’s supply glut: analyst
Drivers are expected to pay the lowest Memorial Day weekend prices for gasoline since 2005 thanks to the plunge in crude-oil prices over the past two years.
“As an army of motorists descend onto the nation’s thoroughfares for the coming holiday, gasoline prices are the lowest they’ve been this time of year since 2005,” said Patrick DeHaan, senior petroleum analyst at, a retail fuel-pricing information and data provider.

More than 38 million Americans—the most since 2005—are expected to travel during this year’s Memorial Day holiday period, defined as Thursday, May 26 to Monday, May 30, according to report released Thursday from AAA, a leisure travel and motorist group, and IHS, an information and analysis provider.
Of that figure, 33.9 million travelers, or 89%, will drive to their destinations, up 2.1% from a year earlier.

----The national average price for a gallon of gasoline stood at $2.26 on Thursday, according to AAA’s Daily Fuel Gauge Report.

The last time prices were this low for a Memorial Day holiday was in 2005, when prices averaged $2.10, AAA said. Prices are also down from $2.705 a year ago. Gasoline futures, meanwhile, traded sharply lower Thursday, pressured by strength in the U.S. dollar DXY, -0.28% Reformulated gasoline for June delivery RBM6, +0.48% fell 2.3% to $1.449 a gallon.

Gasoline demand is likely to “break all-time record highs set in 2007 due to the combination of relatively low prices and a healthy economy, a situation we haven’t seen in just as long,” DeHaan said.

For Tanker Owners, Shrinking Oil Glut Is Least of Their Worries

May 26, 2016 — 12:00 AM BST
Tanker owners hauling the world’s crude were among the few big winners from an oil-price crash that started in mid-2014. Now for the flip side.

The slump was caused by most enduring oil glut in a generation, flooding shipping companies with more cargoes than they could handle and driving down fuel costs that are the industry’s biggest expense. Rates got so high that owners embarked on the biggest fleet expansion spree in half a decade. Now, just as that wave of new orders swells the fleet, the glut of crude that lifted rates in the first place is starting to dissipate.

There will still be lots more oil shipped. About 445 million more barrels will be pumped out of the ground by the world’s producers in 2017 compared with last year, of which about two-fifths moves by sea. The trouble is that, by then, the enlarged fleet will be able to deliver at least an extra 1.5 billion barrels annually.

"Shipowners rushed to order new tankers to benefit from the surging rates in mid-2014 and 2015,” said Burak Cetinok, senior consultant at Hartland Shipping Services Ltd. in London. “But the market dynamics have changed since then and this huge amount of ships may not have enough crude to carry around. This will of course soften their daily rates.”

Rates for the three main types of crude tanker will all be lower in 2017 than this year, according to the medians of 12 analyst estimates compiled by Bloomberg for each vessel. The industry’s biggest ships, so-called very large crude carriers or VLCCs, will earn $37,750 a day next year, which would be the least since 2014.

The fleet of the world’s three biggest tanker types is projected to grow by about 11 percent in the two years through 2017, according to data from Clarkson Research Services Ltd., a unit of the world’s biggest shipbroker. Production of oil will expand by about 1.3 percent over the same period, according to the U.S. Energy Information Administration.

Hartland estimates 137 crude oil tankers, including 64 VLCCs and 38 Suezmaxes will be delivered this year, Cetinok said. Next year’s deliveries are estimated to be 148, including 47 VLCCs and 63 Suezmaxes, he said.
We close with yet more reason to Brexit the EUSSR. Does anyone watch these continental films, even on the continent ,often filmed in black and white, especially black? Though I suppose they are must rent viewing at the anti-American, anti-British, anti-Christian, anti-Israel, pro-Remainiac, pro-homosexual, pro-moslem, pro-Corbny, pro-Clinton, BBC.

Netflix, Amazon Face Minimum EU Quota for European Films, Shows

May 25, 2016 — 11:11 AM BST
Video-on-demand providers such as Netflix Inc., Inc. and Apple Inc.’s iTunes would be forced to dedicate at least a fifth of their catalogs to European content, under proposals published Wednesday.
The European Commission is seeking to bolster the EU’s film and TV industry with the 20 percent quota as part of a wider overhaul of the EU’s broadcasting rules presented in Brussels on Wednesday. Netflix and Apple’s iTunes currently teeter just above the proposed level, the commission said.
The regulator also came forward with proposals for geo-blocking rules to eliminate obstacles to online shopping across the EU. The draft law wouldn’t force traders to physically deliver products to specific regions. Additionally, the commission said it’s weighing initiatives for so-called online platforms such as Google and Amazon.
Facebook Inc.’s WhatsApp and other online telecommunications services may face the same data-protection requirements for traditional operators in rules to be announced later this year.
Alphabet Inc.’s Google and other Internet services may also see new rules on their liability for content under an overhaul of copyright rules. The EU said it will assess whether Internet companies need guidance for handling illegal content and for takedown procedures. Regulators and the industry are currently discussing a code of conduct for tackling hate speech online.
The broadcasting and geo-blocking rules still need the backing of EU lawmakers and national governments.

Europe’s Troubles Pile Up at Home as Leaders Cross Globe for G-7

May 25, 2016 — 11:00 PM BST
When Germany hosted last year’s Group of Seven summit, European leaders assured President Barack Obama they were up to dealing with the crises on their doorstep.

Twelve months on, Europe’s challenges have multiplied to an extent that questions the wisdom of making the 6,000-mile trip to Japan for the G-7. From Brexit to migration, home-grown terrorism to the destabilizing impact of surging populism, Europe has seldom looked in more need of political leadership at home.

Global summits usually provide an opportunity for heads of government to play the role of international dealmakers. But right now Prime Ministers David Cameron and Matteo Renzi, Chancellor Angela Merkel and President Francois Hollande are faced with coalescing crises -- and restive electorates -- that demand attention in their own countries.

“This is a group of leaders who collectively and individually are losing their authority and losing their chance to command their domestic political structures,” said Fredrik Erixon, director of Brussels-based European Centre for International Political Economy. “They’re not looking at the G-7 as a chance to achieve larger things.”

Take Cameron, whose Conservative Party is facing ever deeper splits as Britain enters the final month of campaigning before a vote on membership of the European Union that the premier has said is bigger than any election.

Renzi’s political fate is bound to a referendum of his own as he tries to stabilize Italy’s government in the midst of persistently weak economic growth. In Germany, Merkel is desperate to keep a lid on the refugee influx that has prompted a life-threatening plunge in her party’s support. Hollande meanwhile just can’t seem to escape the downward spiral of bad news that’s made him the most unpopular president in French history -- with an election to fight within the year.
----For Merkel, it’s the refugee crisis and its impact on her government going into an election year. Her woes are centered on Turkey, where President Recep Tayyip Erdogan has threatened to tear up an accord with the EU that is curbing the flow of migrants from the Middle East. She’s bracing for the likelihood that the German parliament will further rile Erdogan next week with a vote to recognize Turkey’s Ottoman-era killings of ethnic Armenians as genocide
There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.

Ludwig von Mises.
At the Comex silver depositories Wednesday final figures were: Registered 30.11 Moz, Eligible 123.54 Moz, Total 153.65 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
No crooks or bent politicians today.  And since we haven’t found an honest politician or central bankster, none of them either. Today an update of a coming change next month to global shipping.

Panama Canal Fever Sweeps Globe Again as New Era in Trade Nears

May 25, 2016 — 2:00 AM BST Updated on May 25, 2016 — 8:15 AM BST
A century after transforming global markets, the Panama Canal is about to redraw world trade once again.
Nine years of construction work, at a cost of more than $5 billion, have equipped the canal with a third set of locks and deeper navigation channels, crucial improvements that will double the isthmus’s capacity for carrying cargo between the Atlantic and Pacific oceans.

When the new locks slide open to receive traffic for the first time in late June, the reverberations will be felt from Asian gas terminals to Great Plains farms and ports from Miami to Long Beach to Santiago.
The debut coincides, fortuitously, with a surge in U.S. natural-gas production that has shale outfits suddenly seeking out new export markets. The deeper channels will be able to accommodate the kind of massive tankers that transport liquefied natural gas, shaving eleven days and a third of the cost off the typical round trip to the Far East. Markets from Chile to China will also become more accessible for oil drillers across the Americas while millions of tons of container shipments originating from Asia could start bypassing western U.S. ports and opt to dock instead along the Gulf Coast or Eastern seaboard.
The anticipated growth has triggered a multibillion-dollar dredging and building binge at ports in the U.S., Caribbean and South America, all seeking to win a share of the traffic boom. Panama is also bidding to become a distribution hub for global manufacturers, with plans to add space for more than 5 million additional cargo containers.
“There are going to be a lot of feeder services that develop around it," Moses Kopmar, a Moody’s Investors Service analyst in New York, said in a telephone interview. “What it will do is basically unlock a huge amount of the global fleet in terms of being able to transit the canal."
The expansion won’t solve all the canal’s challenges. While tripling the size of cargo vessels it can receive, Panama still won’t be able to take the biggest container ships or crude tankers. What’s more, its traffic will depend on the health of the global economy more than its dimensions, according to Kopmar.
But expansion was critical, industry experts say, for a country that risked seeing its shipping route lose relevance if it didn’t grow to handle the increasingly large vessels favored nowadays. The canal, which carried some 340 million tons of cargo in the fiscal year that ended last September, accounts for about 6 percent of total world trade.

Brexit The Animated Movie.

Brexit Quote of the week.

“We hold these truths to be self evident: that all men are created equal; that they are endowed by their Creator with certain inalienable rights; that among these are life, liberty, and the pursuit of happiness outside of the EUSSR.”

With grateful thanks to the writers of the US Declaration of Independence.

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?

New de-icer gains anti-icing properties

Dual-function, graphene-based material good for aircraft, extreme environments

Date: May 23, 2016

Source: Rice University

Summary: Scientists have modified their graphene-based de-icer to resist the formation of ice well below the freezing point and added superhydrophobic capabilities. The robust film is intended for use in extreme environments as well as on aircraft, power lines and ships.
Rice University scientists have advanced their graphene-based de-icer to serve a dual purpose. The new material still melts ice from wings and wires when conditions get too cold. But if the air is above 7 degrees Fahrenheit, ice won't form at all.
The Rice lab of chemist James Tour gave its de-icer superhydrophobic (water-repelling) capabilities that passively prevent water from freezing above 7 degrees. The tough film that forms when the de-icer is sprayed on a surface is made of atom-thin graphene nanoribbons that are conductive, so the material can also be heated with electricity to melt ice and snow in colder conditions.
The material can be spray-coated, making it suitable for large applications like aircraft, power lines, radar domes and ships, according to the researchers. The study was published this month in the American Chemical Society journal ACS Applied Materials and Interfaces.
"We've learned to make an ice-resistant material for milder conditions in which heating isn't even necessary, but having the option is useful," Tour said. "What we now have is a very thin, robust coating that can keep large areas free of ice and snow in a wide range of conditions."
Tour, lead authors Tuo Wang, a Rice graduate student, and Yonghao Zheng, a Rice postdoctoral researcher, and their colleagues tested the film on glass and plastic.
Materials are superhydrophobic if they have a water-contact angle larger than 150 degrees. The term refers to the angle at which the surface of the water meets the surface of the material. The greater the beading, the higher the angle. An angle of 0 degrees is basically a puddle, while a maximum angle of 180 degrees defines a sphere just touching the surface.
The Rice films use graphene nanoribbons modified with a fluorine compound to enhance their hydrophobicity. They found that nanoribbons modified with longer perfluorinated chains resulted in films with a higher contact angle, suggesting that the films are tunable for particular conditions, Tour said.
Warming test surfaces to room temperature and cooling again had no effect on the film's properties, he said.
The researchers discovered that below 7 degrees, water would condense within the structure's pores, causing the surface to lose both its superhydrophobic and ice-phobic properties. At that point, applying at least 12 volts of electricity warmed them enough to retain its repellant properties.
Applying 40 volts to the film brought it to room temperature, even if the ambient temperature was 25 degrees below zero. Ice allowed to form at that temperature melted after 90 seconds of resistive heating.
The researchers found that while effective, the de-icing mode did not remove water completely, as some remained trapped in the pores between linked nanoribbon bundles. Adding a lubricant with a low melting point (minus 61 degrees F) to the film made the surface slippery, sped de-icing and saved energy.

The monthly Coppock Indicators finished April

DJIA: 17773.64-19 Down. NASDAQ:  4775.36 +11 Down. SP500: 2065.30 -21 Down. 

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