Baltic Dry Index. 618
-06 Brent Crude 49.19
Brexit odds checker.
http://www.oddschecker.com/politics/british-politics/eu-referendum/referendum-on-eu-membership-result
Brexit Quote of the Day.
In a
time of universal deceit, telling the truth is a revolutionary act.
George
Orwell.
With the G-7 and “friends,” excluding China, about to
meet in Japan, it looks from faraway London that someone is promoting a conspiracy
against China, and attempting to put in place an isolation and containment
policy, similar to that in place against Russia. Uncle Scam looks set to rearm China’s
neighbour Vietnam next year, while the US Navy is on course to rebase at Cam
Ranh Bay in Vietnam. Japan is even trying to get China’s neighbour Laos into
play.
If we didn’t know better, of course, someone might
conclude that the American War Party is preparing for war against the members
of the Shanghai Cooperation Organisation, and is prepositioning the arena. Stay
long fully paid up gold and silver, in case they are. It might explain the
desperation underway in America to coronate Mrs. Clinton.
On the Agenda But Off Guest List, China Eyes G-7 in Japan
May 24, 2016 — 11:00 PM BST Updated on May 25, 2016 — 3:21 AM BST
World leaders meet in Japan this week for talks that will encompass the
slowing Chinese economy and China’s reclamation of land in the disputed South
China Sea -- without any representatives from Asia’s largest economy at the
table.Prime Minister Shinzo Abe will host U.S. President Barack Obama and other Group of Seven leaders from Thursday at a secluded resort on Kashiko Island, 300 kilometers (190 miles) southwest of Tokyo. That puts the summit not far from China itself, and brings to focus several points of tension with the Communist regime.
The meeting is being held against a backdrop of slowing growth as China’s engine cools, with a debate among major developed nations on how much -- or whether -- governments should take fiscal action to boost their economies. It also comes before an international court ruling on a case brought by the Philippines over territory in the South China Sea, which could affect China’s behavior in waters through which more than $5 trillion of trade passes each year.
China reacted with anger to an April statement by G-7 foreign ministers expressing opposition to any "intimidating, coercive or provocative" actions in the East China Sea and South China Sea, and calling on all parties to act in accordance with international law. That’s even as the statement did not mention the country by name.
A similar declaration by the leaders this week would further irritate China, a key trading partner for all the G-7 members.
"Basically Japan and the U.S. are trying to get the Europeans on board to express concern about China’s actions," said Robert Dujarric, director of the Institute of Contemporary Asian Studies at Temple University in Japan. "Even a veiled statement would be a victory for Tokyo and Washington. It puts Beijing on notice that even countries which first and foremost care about making money in China are worried."
----China summoned diplomats from the Beijing embassies of the G-7 nations several days ahead of the foreign ministers’ meeting in Hiroshima to try and convince them not to play up the South China Sea disputes or other China-related issues during the summit, according to a Chinese official familiar with the situation who asked not to be identified, citing policy.
In what appeared to be a fresh sign of displeasure, the U.S. said last week that two Chinese military jets carried out an "unsafe" intercept of a U.S. maritime patrol aircraft over the South China Sea, approaching within 50 feet. China said its planes had kept a safe distance from the U.S. reconnaissance aircraft.
Chinese Foreign Minister Wang Yi warned this week against the "exploitation" of territorial matters after meeting with the foreign ministers of Russia and central Asian nations in Uzbekistan, according to the ministry’s website.
"Any country that ignores the basic facts, draws territorial lines for allies, or deliberately exploits the South China Sea issue for political purposes will gain no benefit or support but only destroy its own reputation," Wang said.
----Japan has invited the heads of several non G-7 nations to come to the country during the summit, for sideline chats. That includes the leaders of Vietnam and Indonesia, plus Laos, which this year holds the rotating chair of the Association of Southeast Asian Nations and thus has some sway over the wording of any Asean statements on the South China Sea. Bangladesh and Sri Lanka are also on the list.
More
Obama lifts US embargo on lethal arms sales to Vietnam
23 May 2016
President Barack Obama has announced the US is fully lifting its embargo
on sales of lethal weapons to Vietnam, its one-time enemy.
Speaking during a visit to communist Vietnam and talks with its leaders,
Mr Obama said the move removed a "lingering vestige of the Cold War".
The US is trying to bolster its relationship with its Pacific allies, as
China asserts territorial claims.
But Mr Obama said the embargo decision was not related to US policy on
China.
"It's based on our desire to complete what has been a lengthy
process of moving towards normalisation with Vietnam," he said in Hanoi.
Vietnam is one of several countries in the region involved in maritime
disputes with China. The US insists on the right to freedom of navigation in
the South China Sea.
In 2014, a row over a Chinese oil rig near the Paracel islands led to
clashes between Chinese and Vietnamese vessels and anti-China riots in Vietnam.
White
House officials had indicated the arms ban, in force since 1984, would be
lifted only if human rights in Vietnam improved.
"Sales
will need to still meet strict requirements, including those related to human
rights, but this change will ensure that Vietnam has access to the equipment it
needs to defend itself," Mr Obama said after talks with President Tran Dai
Quang.
----Up to now, Vietnam has relied on Russia to supply most of its defence equipment, a legacy of the Cold War, when they were allies. The government would certainly like to diversify its sources, and is looking at a number of potential alternative suppliers. But it won't be rushing into the arms of US manufacturers just yet.
One reason is that a lot of US technology may be too sophisticated and
expensive for Vietnam's needs. And while Vietnam's defence spending, which has
doubled over the past decade, is driven by the rivalry with its giant neighbour
China, it will not want to antagonise China by seeking state-of-the-art US
weapons that might alter the military balance.
More
U.S. deepens military ties with former foe Vietnam
When it comes to the hotly contested South China Sea region, the U.S. is seeking allies in unexpected places, even among erstwhile enemies.With President Obama’s landmark announcement of the lifting of a half-century ban on lethal weapons sales to Vietnam, the stage is set for even deeper ties with America’s one-time adversary — and more port visits for sailors.
The Navy brass have long sought to improve ties with Vietnam because of its location in the South China Sea — the communist nation shares a border with China and the Gulf of Tonkin is created by its northeastern coastline and China’s Hainan Island. In fact, the deepening military-to-military ties were the impetus for lifting the ban completely, Obama said.
“One of the things that has happened through this comprehensive partnership is a dialogue between the U.S. and Vietnamese military that we hadn't seen in a very long time,” Obama said Monday in a press conference in Hanoi. “And we already have U.S. vessels that have come here to port, we expect that there will be deepening cooperation between our militaries, often times around, 'How do we respond to humanitarian disasters in this region?'”
Obama said more port visits are likely in the future as the countries work together on humanitarian assistance missions, but the U.S. was going to tread lightly.
“There may be occasions in which that means more U.S. vessels might visit but I want to emphasize that we will do so only at the invitation and with the full cooperation of the Vietnamese government, fully respecting their sovereignty and their sensitivities,” he said.
-----The Navy conducted four port visits in Vietnam in 2015, a U.S. Pacific Fleet spokesman said. The destroyer Fitzgerald and the littoral combat ship Fort Worth, along with the expeditionary fast transport ship Millinocket and the hospital ship Mercy, all made visits to Da Nang, Vietnam, last year Lt. Cmdr. Matt Knight said in an email.
These deepening ties will lead to more port visits in the future,
the head of the Pacific Fleet said.
“I just finished a visit to Vietnam and they are very receptive,” Adm.
Scott Swift said in a May 6 interview, referring to a March trip. “As Adm.
Harris said, we are looking forward to increasing that spectrum of engagement.”
----One of the features that excites Navy planners is more access to port facilities in Vietnam’s Cam Ranh Bay, widely held as one of the finest deep-water ports in Southeast Asia. A new international port that opened in March will yieldopportunities for more engagement with Vietnam, Swift told Navy Times.
The bay, which has a relatively narrow inlet that leads to the South China Sea, can be easily defended. The U.S. used it during the Vietnam War until about 1972 and the Soviet Union had a large base there for decades before Russia left in 2002.
But while Russia has officially departed, it still has a cozy relationship with Vietnam’s communist leaders, which makes the U.S. uncomfortable. Vietnam is building their submarine fleet with six Kilo-class diesel electric boats that it bought from Russia in 2009. It is patrolling the South China Sea with its new boats.
“Cam Ranh Bay is a crucial port in the region that strategic planners have missed since the day we left,” said Jerry Hendrix a retired Navy captain and expert at the Center for a New American Security.
More
Azerbaijan-Georgia-Turkey Alliance Progressing, Slowly
The defense ministers of the three countries met Sunday in Gabala, Azerbaijan, and afterwards they announced a variety of cooperation measures including joint military exercises, cooperation on cyber security, and "further improvement of trilateral exercises on the protection of oil and gas pipelines," in the words of Azerbaijan Defense Minister Zakir Hasanov. While some of this already has been going on, Hasanov added that the three sides are preparing a memorandum to "to enter a new stage" of the cooperation. Hasanov's Georgian counterpart, Tinatin Khidasheli, said Georgia would host the new joint exercises next year.
This nascent alliance was formalized in 2012, but of course much has changed in the region since then, like Russia's growing assertiveness and the collapse of Russia-Turkey relations. So it now includes one country that is a longtime Russian enemy (Georgia), another new but fervent enemy (Turkey) and one country strenuously keeping its options open (Azerbaijan).
More
NATO is planning its largest military build-up in eastern Europe since the Cold War
Feb. 6, 2016, 8:22 PM
BRUSSELS (Reuters) — Backed by an increase in US military spending, NATO
is planning its biggest build-up in eastern Europe since the Cold War to deter
Russia but will reject Polish demands for permanent bases.
Worried since Russia's seizure of Crimea that Moscow could rapidly
invade Poland or the Baltic states, the Western military alliance wants to
bolster defenses on its eastern flank without provoking the Kremlin by
stationing large forces permanently.
More
Pentagon Readies More Robust U.S. Military Presence in Eastern Europe
Move aims to reassure NATO allies and send message to Russia
Updated March 30, 2016 6:56 a.m.
ET
The Pentagon has drawn up plans to position American troops, tanks and other
armored vehicles full time along NATO’s eastern borders to deter Russian
aggression, in what would be the first such deployment since the end of the
Cold War.The Pentagon intends the plans as an escalation of a proposal it announced last year, when it said it was looking at ways to increase U.S. military deterrence in Eastern Europe, such as prepositioning older materiel in the region.
Some countries on the North Atlantic Treaty Organization’s eastern flank have expressed concern about the depth of the U.S. commitment to their defense—especially in the wake of Russian President Vladimir Putin’s intervention in Ukraine.
Deputy
Secretary of Defense Robert Work said the new plan should allay such worries
because it would position more of the U.S. Army’s best and most-modern
equipment in the area, while rotating in a brigade’s worth of U.S. Army troops.
The new gear includes 250 tanks, Bradley Fighting Vehicles and Paladin
self-propelled howitzers as well as more than 1,700 additional wheeled vehicles
and trucks.
Combined with equipment already in Europe, “there will be a division’s
worth of stuff to fight if something happens,” Mr. Work told The Wall Street
Journal. “If push came to shove, they’d be able to come together as a cohesive
unit that has trained together, with all their organic equipment, and fight.
That’s a lot better than what we have right now.”
More
Shanghai Cooperation Organisation
Meanwhile back in G-7
excluded China, a massive bailout of trillions of dollars of bad debt is needed
to restart China’s wobbly economy.
‘Massive Bailout’ Needed in China, Banking Analyst Chu Says
May 23, 2016
— 10:00 PM BST Updated on May 24, 2016 — 8:47 AM BST
Charlene Chu, a banking analyst who made her name warning of the risks
from China’s credit binge, said a bailout in the trillions of dollars is needed
to tackle the bad-debt burden dragging down the nation’s economy.
Speaking eight days after a Communist Party newspaper highlighted
dangers from the build-up of debt, Chu, a partner at Autonomous Research, said
she was yet to be convinced the government is serious about deleveraging and
eliminating industry overcapacity.
She also argued that lenders’ off-balance-sheet portfolios of
wealth-management products are the biggest immediate threat to the nation’s
financial system, with similarities to Western bank exposures in 2008 that
helped to trigger a global meltdown.The former Fitch Ratings analyst uses a top-down approach to calculating China’s bad-debt levels as the credit to gross domestic product ratio worsens, requiring more credit to generate each unit of GDP.
While Chu is on the bearish side of the debate about the outlook for China, she’s not alone. In a report on Monday, Societe Generale SA analysts said that Chinese banks may ultimately face 8 trillion yuan ($1.2 trillion) in losses and a bailout from the government, citing the scale of soured credit within state-owned enterprises.
Interviewed in Hong Kong last week, Chu estimated as much as 22 percent of all China’s outstanding credit may be nonperforming by the end of this year, compared with an official bad-loan number for banks in March of 1.75 percent.
Question
What do you see as the biggest risk in the financial system?Answer
“China’s debt problems are large and severe, but in some respects a slow burn. Over the near term, we think the biggest risk is banks’ WMP portfolios. The stock of Chinese banks’ off-balance-sheet WMPs grew 73 percent last year. There is nothing in the Chinese economy that supports a 73 percent growth rate of anything at the moment. Regardless of all of the headlines and announcements about the authorities cracking down on WMPs, they have done very little, really, and issuance continues to accelerate.“We call off-balance-sheet WMPs a hidden second balance sheet because that’s really what it is -- it’s a hidden pool of liabilities and assets. In this way, it’s similar to the Special Investment Vehicles and conduits that the Western banks had in 2008, which nobody paid attention to until everything fell apart and they had to be incorporated on-balance-sheet.
“The mid-tier lenders is where these second balance sheets are very large. China Merchants Bank is a good example. Their second balance sheet is close to 40 percent of their on-balance-sheet liabilities. Enormous.”
More. Much more.
We
await the G-7’s final statement with great interest.
"Those
entrapped by the herd instinct are drowned in the deluges of history. But there
are always the few who observe, reason, and take precautions, and thus escape
the flood. For these few gold has been the asset of last resort."
Antony C. Sutton
At
the Comex silver depositories Tuesday final figures were: Registered 30.09 Moz, Eligible 123.57 Moz, Total 153.66 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, the wealth and jobs destroying EUSSR. “The
promise of Europe looks to be over,” says Reuters. From semi-detached GB, the EUSSR looks to be
one crisis away from breakup, and it matters little whether Project Fear scares
GB’s pensioners, holiday makers, welfare recipients into becoming Remainiacs,
leaving John Bull still mired in the EUSSR.
The EUSSR isn’t even able to solve a problem like tiny Greece, just wait
until the problem becomes, Spain, Italy or France. What happen to Germany when
Deutsche Bank blows up? I think we all know the answer, though few will admit
it. Politics is changing from Pax Americana 1945-2005. What replaces it looks
to be far more conservative if not in parts of the EUSSR, the hard right wing.
The
promise of Europe looks to be over. Liberal democracy -- even in England, its
home -- looks weak and flabby. German hubris carries a good deal
of the blame.Commentary: For Europe, the party's over. It’s not clear what comes next.
As the European Union grew over the past 20 years, it looked like a party that was never going to end.
Practically all the continent’s nations were invited. Those left out got rain checks.
The euphoria didn’t last. The 2008 financial crash and ensuing Greek debt crisis were the first harbingers of doom. Then Russia’s 2014 attack on Ukraine became the clearest sign that the party was over. Ukrainians had occupied central Kiev for months, to demand their government sign an association agreement with the European Union. When the protests turned violent and the president absconded to Russia, the Kremlin started tearing off pieces of Ukraine to wreck any chances for European integration.
Ukraine’s new pro-Western government signed the association treaty, anyway. It’s no longer certain, however, that Europe still wants Ukraine. In April, 61 percent of Dutch voters rejected the association agreement with Kiev, in a clear-cut, if nonbinding, national referendum.
The Dutch “no” vote is emblematic of the continent’s malaise. In Western Europe, perceptions of freeloading foreigners and an unaccountable EU leadership are fueling nationalist tendencies. Britain’s coming referendum on Brexit – whether or not to leave the European Union -- is the most drastic example. The rise of far-right parties in France and Germany, which both hold general elections next year, stems from a similar unhappiness with the status quo. Hard-line nationalists already hold ministerial posts in Finland and Norway, and Austria just came close to electing its first far-right president since World War Two.
The disappointment is mutual among the newer eastern EU members. They signed up for a white, Christian Europe -- and got a meddling, multicultural bureaucracy instead. Hungary and Poland, once the wunderkinder of the region’s democratic transformation, are led by politicians braying 1930s-style chauvinism. In the Czech Republic, home of the 1989 Velvet Revolution, there is talk of a “Czexit.” In Germany, the Islamophobic Alternative for Germany party is strongest among former East German citizens who never found their voice in reunified Germany.
---- The promise of Europe looks to be over. Liberal democracy -- even in England, its home -- looks weak and flabby. German hubris carries a good deal
of the blame.
The political class of post-reunification Germany pursued European
integration with a curious mix of economic imperialism, cultural arrogance and
heartfelt contrition for Nazi crimes against Eastern Europe. This kinder,
gentler Germany has lost none of its ambition. But rather than dominate Europe
through military might, it invoked the laws of the market and democratic bona
fides earned over two generations.
Demanding that new member states share its democratic values was the
European Union’s right. It was also a smart way to persuade former communist
dictatorships to overhaul their political and legal systems. Yet, values cannot
simply be passed into law.
The refugee crisis put those values to the test. Eastern Europeans were
almost unanimous in rejecting the newcomers. But there were plenty of people in
Denmark, Germany and France who felt the same.
More
The whole history
of civilization is strewn with creeds and institutions which were invaluable at
first, and deadly afterwards.
Walter Bagehot.
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?
Wind Power Giant Gamesa Combines Solar, Diesel and Storage for Off-Grid Prototype
Gamesa sees growth potential in hybrid systems for off-grid applications around the world.
by Mike
Stone May 20, 2016
The global wind manufacturer and developer Gamesa is inaugurating an
innovative prototype project in the city of La Muela, in its home country of
Spain.For the first time, the company will be adding solar, storage and diesel to a wind project in order to test the viability of combining renewables and storage to minimize fossil-fuel backup for off-grid applications.
The pilot system currently features a G52 850-kilowatt wind turbine, 245 kilowatts of PV solar, and three 222-kilowatt diesel generators.
Gamesa plans to add lithium-ion batteries capable of storing 500 kilowatts by the summer, and will also be testing some form of flow battery technology. In the longer term the company could expand its use of storage technology, depending on the specific needs of an installation, and would consider using ultracapacitors and flywheels.
The project, which has a total installed capacity of over 2 megawatts, will use custom-designed software to optimize the combination of energy sources.
Once proven, the system could be rolled out to different off-grid situations, including mines, cement works and isolated communities such as islands and remote villages, with varying combinations of wind, solar, diesel and storage, depending on the needs.
Gamesa says the off-grid system will reduce diesel dependence by between 15 percent and 35 percent, or perhaps even more.
Off-grid systems will also allow the company to reap higher margins with a fairly low investment commitment.
The company admitted that its proposed combination of renewables, storage and diesel would not come cheap. Spokesperson Veronica Diaz Lopez said the long-term benefits would more than make up for the hefty upfront costs, however. "Including a turbine makes sense on the megawatt projects with sufficiently good wind resource, where the [levelized cost of energy] of wind will be much lower than diesel,” she said.
"Of course, this comes with an upfront capex, but the gains in the opex for lifetime of the project are enormous. The opex during the lifecycle due to diesel consumption is around 80 percent in projects without renewable energy," said Diaz Lopez.
The company already employs remote-control facilities in Spain, the U.S. and India, which enable operators to view turbine parameters in real time and take steps to maximize availability.
Despite these assurances, Gamesa is very open about the fact that the turbine component will be the trickiest to make ready for the paying public. As a result, says Diaz: "We expect first orders [to come] from the PV-plus-diesel solutions."
Nevertheless, the company is already "actively marketing the solution, and is analyzing dozens of projects in off-grid areas, mostly in Asia-Pacific, Africa and Latin America."
Brett Simon, an analyst specializing in energy storage with GTM Research, thinks Gamesa could be onto a winning strategy, but cautions: "Lack of prior projects of this type [could result] in early-mover costs and challenges for developers."
He also considers niche industries like mining as potentially worth targeting. Mining companies have already proved to be open to hybrid systems.
More
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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