Wednesday, 17 August 2016

Currency Wars Heat Up.

Baltic Dry Index. 687   +06    Brent Crude 48.83

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

“The problem with fiat money is that it rewards the minority that can handle money, but fools the generation that has worked and saved money.”

“Adam Smith” aka George Goodman.

Following Brexit and the decline in the Pound Sterling, the currency wars have turned red hot again. Suddenly everyone is attempting to match Sterling’s decline, especially against the Japanese Yen. Despite all his lectures to the Chinese about currency manipulation, even Uncle Scam has joined in the race to the bottom. Early indications seem to show that falling Sterling has set off a tourist and shopping boom in London. To be followed later by falling imports, as import prices rise helping the BOE get closer to its inflation target of two percent. It’s a funny old world here in the final act of the Great Nixonian Error of fiat money, communist money.

Though deflation still stalks the planet from all the fiat currency inspired, central bankster fuelled, massive malinvestment bubbles unwinding, all the voodoo economics of QE forever, ZIRP, and NIRP, will ultimately result in hyperinflation, as eventually all the trillions of new “money” created out of nothing flees the stock and bond market bubbles, once the central bankster get forced by events into having to normalise interest rates, and in the ensuing global panic, money rushes back into buying up commodities and tangible assets. Bad money drives out good, says Gresham’s Law, and Nixon’s communist money is about as bad as money gets. Our formerly orderly capitalist world has descended into today’s anarchic world of central bankster crony casino capitalism, with taxpayer bailouts for the crony insiders.

Eventually, fiat money revulsion lies ahead, and a great reform and reset of global capitalism will occur, but not before the central banksters and their clueless captured politicians, plunge deeper and deeper into the quicksands of Keynesian voodoo economics.

Below, the widening gap between the central bank fuelled stock market bubbles and reality.

"Increasingly, the wealth of the modern world has come to be represented by financial assets rather than real assets, and this to me is a very unhealthy situation, because financial assets are inherently unstable. Financial assets (currencies, bonds, mortgages, stocks, bank credit, etc.) can be quickly and violently reduced in value, or destroyed completely by either inflation or deflation."

Donald J. Hoppe

Dollar slumps to new post-Brexit low

Published: Aug 16, 2016 10:14 a.m. ET
A gauge of the dollar’s strength against its main rivals slipped on Tuesday to its lowest level since Britain’s late June Brexit vote as data showed inflation was flat in July, underscoring the Federal Reserve’s case for leaving interest rates on hold for the foreseeable future.

The ICE U.S. Dollar index DXY, +0.18%  briefly slumped to 94.43, its weakest level since the U.K. voted to leave the European Union on June 23, before trimming its drop to 94.9410 in recent trade.

The dollar USDJPY, +0.73%  bought ¥100.38 in recent trade, sharply below the ¥101.25 level seen late Monday in New York. The dollar had briefly traded below the psychologically significant ¥100 level earlier in the session.

Traders said thin trading volume and stop-loss orders exaggerated the gain in the Japanese currency, with many players in financial markets taking the week off for summer holidays. Meanwhile, the euro EURUSD, -0.1419%  recently traded at $1.1281, compared with $1.1183 late Monday.

Consumer-goods prices were unchanged in July, rising 0.8% compared with a year ago, down from a 1% rise in June.

Hawkish comments from New York Fed President William Dudley helped break the dollar’s fall around the beginning of trading in New York, as the influential Fed official reminded investors that a September rate increase is still on the table. Housing starts rose at their second-highest rate since the recession, which helped comfort nervous investors.

The dollar has weakened in recent weeks as a string of disappointing data suggested the U.S. economic recovery has slowed in 2016, even as the jobs market remains strong. Second-quarter economic growth was much weaker than expected, coming in at 1.2%, about half the level analysts and economists had expected.

Japan official threatens action if yen rises too sharply

Published: Aug 16, 2016 11:14 p.m. ET
TOKYO — Japan’s top currency bureaucrat issued a fresh warning Wednesday over the soaring yen, saying the government would have to act should it rise too sharply.

“If there are excessively sharp movements, we will have to take action,” Vice Finance Minister for International Affairs Masatsugu Asakawa told reporters at the ministry’s headquarters.

The comment was likely a veiled threat of direct intervention in the currency market to force lower the yen — a step increasingly seen as undesirable manipulation among wealthy economies. The remark followed the yen’s surge Tuesday beyond the 100 mark against the dollar. A higher yen reduces Japanese manufacturers’ repatriated profits and undermines a positive growth cycle sought by Prime Minister Shinzo Abe.

The dollar rose against the yen following Asakawa’s remark. Japan last intervened to undercut the yen in 2011.

Traders Brace for More Turmoil in World’s Worst Equity Market

August 17, 2016 — 12:00 AM BST
While most western-European markets have recovered from the Brexit shock, Italy still has a long way to go. With a looming referendum and an ongoing banking crisis, traders are paying up to hedge against more stock turbulence.

Investors in the Mediterranean nation, already suffering the world’s biggest losses this year, are bracing for a vote on political reform expected in November that could decide the fate of Prime Minister Matteo Renzi. They have pushed the price of options protecting against volatility in Italian equities for the next three months to the highest since 2013 versus shorter-term contracts, according to data compiled by Bloomberg.

Citigroup Inc. has branded the plebiscite the largest risk in European politics this year outside the U.K. Italian banks are also suffering as they scramble to shore up capital in the face of 360 billion euros ($406 billion) of bad debt. For Kevin Lilley, a manager of euro-area equities at Old Mutual Global Investors in London, the danger is so high he cut his Italian holdings to just one company -- defense firm Leonardo-Finmeccanica SpA -- after selling shares including Banca Popolare di Milano Scarl and Mediobanca SpA.

“Italy has been so oversold in the last year because of the political uncertainty,” said Lilley, whose firm manages about $34 billion. “The referendum is a completely binary event, it’s a very good thing for Italy if it’s passed because it simplifies the decision-making process. But unfortunately the prime minister has tied his future to the result and banking problems are still in the background.”


While this week the price of crude oil has been rallying on talk of the Saudis and the Russians looking to make a reduced output deal next month to raise the price of crude oil, in the competing market of natural gas, everyone is preparing for lower prices. I think it unlikely any crude oil production cut would succeed in raising crude prices for long. American Frackers, Iran and Iraq would be the oil winners, while natural gas would take market share from crude oil.

Gas Glut Upends Global Trade Flows as Buyers Find Leverage

August 16, 2016 — 12:01 AM BST Updated on August 16, 2016 — 11:09 AM BST
The market for liquefied natural gas is about to attract more players and more trading as new supply from the U.S. and Australia strengthens buyers’ bargaining power.

Historically, LNG has been sold on long-term contracts that guaranteed buyers supply and helped producers finance liquefaction plants at a time when less of the product was shipped. Now, a gas glut is causing LNG importing countries to support renegotiating existing deals that can run 20 years or more while suppliers offer more flexible terms to lock up customers spoiled for choice.

India already is encouraging importers to rework long-term accords to better align costs with spot market prices. Japan, the world’s largest LNG importer, may soon join them. That country’s Fair Trade Commission is in the process of probing resale restrictions in longer deals in an effort that could mean the renegotiation of more than $600 billion in contracts and boost the number of shorter-term agreements.

“There will be 40 million to 50 million tons of homeless LNG by 2020, which can go anywhere or doesn’t have any fixed customers,” said Hiroki Sato, a senior executive vice president with Jera Co., a fuel buyer that plans to increase spot and short-term LNG deals. “Homeless LNG will provide a great opportunity to improve liquidity in Asian and global markets.”

Global LNG trade rose 2.5 percent to a record 245.2 million tons in 2015, according to the International Group of Liquefied Natural Gas Importers. A million tons of the supercooled fuel is equivalent to about 48 billion cubic feet of natural gas, which is enough to heat about 690,000 homes for winter in the U.S. Northeast.

Twenty-eight percent of LNG traded in 2015 was on a spot or short-term basis, according to the importers’ group. That’s up from 18.9 percent in 2010, according to the group.

“The share will continue to increase,” Kazuhiko Inomata, a deputy director with Itochu Corp., Japan’s third-largest trading house, said in an interview. Spot and short-term deals may account for half of global trading in the future, Inomata said.

Asian spot prices for LNG have already slumped by about 60 percent since September 2014 amid new supplies. They fell to $5.413 per million British thermal units Monday, according to the Singapore Exchange Ltd. Additional projects like Inpex Corp.’s Ichthys project in Australia and the Cove Point export terminal on the U.S. East Coast that are expected to begin operation in 2017 may weaken prices by almost a fifth over the next two years, according to BMI Research.
Japanese traders are getting ready for the opportunities that would arise if that nation’s Fair Trade Commission determines destination clauses in long-term contracts, which prevent resale of the fuel, violate competition laws. U.S. shale gas already has shaken up markets as American producers write contracts that allow buyers to resell LNG wherever they want.
As the oversupply intensifies next year to the point Asian buyers can’t absorb the surplus, new trading flows may emerge from Asia to Europe, according to Itochu’s Inomata.

“If we went back on the gold standard and we adhered to the actual structure of the gold standard as it existed prior to 1913, we’d be fine. Remember that the period 1870 to 1913 was one of the most aggressive periods economically that we’ve had in the United States, and that was a golden period of the gold standard. I’m known as a gold bug and everyone laughs at me, but why do central banks own gold now?” 

Alan Greenspan. June 28, 2016.
At the Comex silver depositories Tuesday final figures were: Registered 26.45 Moz, Eligible 129.90 Moz, Total 156.35 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today, news of Migrant Mad Merkel’s under reported, violent, disintegrating Europe. Brexit is all too likely to be followed by Frexit. But don’t expect much coverage from the BBC nor main stream media.

Calais Locals Warned to Stay Away from Main Roads As Migrants Smash Vehicles

15 Aug 2016
Migrants wielding bats and knives have been smashing up vehicles on roads near Calais as their owners sit in traffic, reportedly “just for fun”. Local residents are warning others to avoid the area, saying that the migrants are not even checking to see whether children are in the vehicles before they set upon them.

One resident has posted pictures to Facebook of her brother-in-law’s car, which sustained more than €500 worth of damage when over a dozen migrants set about it with bats, completely smashing a side mirror and the rear window, and shattering the windscreen.

“You’re leaving work and then you’re attacked by migrant shits just for fun – it disgusts me!” commented Maëva Mayla, in a post which has been shared by more than 6,000 people.

“Tell your relatives so that they can avoid it happening to them,” she advises, before appealing for others who have experienced similar attacks to come forward so that they could mount a joint compensation claim.

---- The damage comes just weeks after lorry drivers using the route warned yet again that it is only a matter of time before someone is killed by a migrant. In early August a driver was threatened by a migrant wielding a chainsaw during a night of violence which also saw lorries burned out.

Despite French politicians repeatedly promising to cap the population of the nearby Jungle migrant camp at 2,000 people, including around 400 children, the camp has now spiralled to a population of nearly 9,000 migrants, making the encampment the third largest ‘town’ in the region. Thousands more are camped at nearby Dunkirk in a bid to make the crossing into England without falling foul of local authorities.

As the population has grown, tensions within the camp have also risen. Sami, an Eritrean migrant who has been living in The Jungle for six months, told local paper Nord Littoral: “There are people who come from different countries who do not speak the same language. That creates tensions, particularly in the queues for food. I have seen conflicts start there; you’re more likely to get meal if you’re big and strong.”

Three weeks ago an Eritrean man was hacked to death and six others badly wounded as migrants ran riot throughout the camp, staging running battles fought with knives and bats between gangs of Afghans and Africans throughout the night.

"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

Solar  & Related Update.

With events happening fast in the development of solar power and graphene, I’ve added this 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?

Nanoribbons in solutions mimic nature

Scientists test graphene ribbons' abilities to integrate with biological systems

Date: August 15, 2016

Source: Rice University

Summary: Graphene nanoribbons twist and bend like DNA or proteins in a solution and their rigidity can be tuned, making them potentially useful for biomimetic applications, according to scientists.
Graphene nanoribbons (GNRs) bend and twist easily in solution, making them adaptable for biological uses like DNA analysis, drug delivery and biomimetic applications, according to scientists at Rice University.
Knowing the details of how GNRs behave in a solution will help make them suitable for wide use in biomimetics, according to Rice physicist Ching-Hwa Kiang, whose lab employed its unique capabilities to probe nanoscale materials like cells and proteins in wet environments. Biomimetic materials are those that imitate the forms and properties of natural materials.
The research led by recent Rice graduate Sithara Wijeratne, now a postdoctoral researcher at Harvard University, appears in the Nature journal Scientific Reports.
Graphene nanoribbons can be thousands of times longer than they are wide. They can be produced in bulk by chemically "unzipping" carbon nanotubes, a process invented by Rice chemist and co-author James Tour and his lab.
Their size means they can operate on the scale of biological components like proteins and DNA, Kiang said. "We study the mechanical properties of all different kinds of materials, from proteins to cells, but a little different from the way other people do," she said. "We like to see how materials behave in solution, because that's where biological things are." Kiang is a pioneer in developing methods to probe the energy states of proteins as they fold and unfold.
She said Tour suggested her lab have a look at the mechanical properties of GNRs. "It's a little extra work to study these things in solution rather than dry, but that's our specialty," she said.
Nanoribbons are known for adding strength but not weight to solid-state composites, like bicycle frames and tennis rackets, and forming an electrically active matrix. A recent Rice project infused them into an efficient de-icer coating for aircraft.
But in a squishier environment, their ability to conform to surfaces, carry current and strengthen composites could also be valuable.
"It turns out that graphene behaves reasonably well, somewhat similar to other biological materials. But the interesting part is that it behaves differently in a solution than it does in air," she said. The researchers found that like DNA and proteins, nanoribbons in solution naturally form folds and loops, but can also form helicoids, wrinkles and spirals.
Kiang, Wijeratne and Jingqiang Li, a co-author and student in the Kiang lab, used atomic force microscopy to test their properties. Atomic force microscopy can not only gather high-resolution images but also take sensitive force measurements of nanomaterials by pulling on them. The researchers probed GNRs and their precursors, graphene oxide nanoribbons.
The researchers discovered that all nanoribbons become rigid under stress, but their rigidity increases as oxide molecules are removed to turn graphene oxide nanoribbons into GNRs. They suggested this ability to tune their rigidity should help with the design and fabrication of GNR-biomimetic interfaces.
"Graphene and graphene oxide materials can be functionalized (or modified) to integrate with various biological systems, such as DNA, protein and even cells," Kiang said. "These have been realized in biological devices, biomolecule detection and molecular medicine. The sensitivity of graphene bio-devices can be improved by using narrow graphene materials like nanoribbons."
Wijeratne noted graphene nanoribbons are already being tested for use in DNA sequencing, in which strands of DNA are pulled through a nanopore in an electrified material. The base components of DNA affect the electric field, which can be read to identify the bases.

"The gold standard, in one form or another, will prevail long after the present rash of national fiats is forgotten or remembered only in currency museums."

Hans F. Sennholz

The monthly Coppock Indicators finished July

DJIA: 18432  +03 Up NASDAQ:  5162 +10 Up. SP500: 2173 +01 Up.

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