Wednesday, 28 September 2016

The Calm Before The Storm?



Baltic Dry Index. 930 -04    Brent Crude 46.20

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

The big icebergs that drift into warmer water melt much more rapidly under water than on the surface, and sometimes a sharp, low reef extending two or three hundred feet beneath the sea is formed. If a vessel should run on one of these reefs half her bottom might be torn away.

Captain Edward John Smith, Commander of Titanic.

Nothing in the central bankster Armada is working as intended. When Yellen, Draghi and Kuroda, say “Hard to Port,” nothing happens. When the central bankster Admirals order “full speed ahead,” nothing happens. When they order “Stop Engines,” nothing happens.  Up on the casino deck of Yellen’s lead Good Ship Lollipop, the casinos are flush with cash all betting on the FANG, (Facebook, Alphabet, Netflix, and Google.)  Yet down in steerage, the peons of Main Street are antsy, mutinous, and flirting with voting in The Donald as Grand Admiral. Nothing seems to work as before anymore. Now the central bankster Admirals have lost the confidence of First Class. We appear to be in the calm before the storm.
Below, when First Class starts to panic.

Aberdeen CEO Says Bond Market Approaching ‘Dangerous Situation’

September 27, 2016 — 12:24 PM BST
A bubble in the bond market is nearing a “dangerous situation” as asset-buying programs by central banks keep pushing up prices, Aberdeen Asset Management Plc Chief Executive Officer Martin Gilbert said.

“Bond prices are just at all-time highs,” the CEO said in a interview with Bloomberg Television’s Francine Lacqua. “The Bank of England buying even more is just going to push the price up even more. We’re getting into a dangerous situation.”

Gilbert, who last year arranged $500 million in credit lines to help fund redemptions in the event of a bond sell off, said he and the regulators had expected the shock from Britain’s vote to leave the European Union to affect fixed income. Asset managers, including Aberdeen, were instead forced to temporarily suspend trading in property funds after a surge in redemption requests after the referendum.
Gilbert’s concerns echo those of Allianz SE’s Chief Investment Officer Andreas Gruber, who said in June that German government bonds are in bubble territory, and Swiss Re AG’s CIO Guido Fuerer, who said that the European Central Bank had turned sovereign debt into one of the riskiest asset classes. Janus Capital Group’s Bill Gross has also said that central banks have created “a supernova that will explode one day.”
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U.S. Bond Market’s Biggest Buyers Are Selling Like Never Before

September 26, 2016 — 12:00 AM BST Updated on September 26, 2016 — 1:00 PM BST
They’ve long been one of the most reliable sources of demand for U.S. government debt.

But these days, foreign central banks have become yet another worry for investors in the world’s most important bond market.

Holders like China and Japan have culled their stakes in Treasuries for three consecutive quarters, the most sustained pullback on record, based on the Federal Reserve’s official custodial holdings. The decline has accelerated in the past three months, coinciding with the recent backup in U.S. bond yields.

For Jim Leaviss at M&G Investments in London, that’s cause for concern. A continued retreat could lead to painful losses in a market that some say is already too expensive. But perhaps more important are the consequences for America’s finances. With the U.S. facing deficits that are poised to swell the public debt burden by $10 trillion over the next decade, foreign demand will be crucial in keeping a lid on borrowing costs, especially as the Fed continues to suggest higher interest rates are on the horizon.
----Overseas creditors have played a key role in financing America’s debt as the U.S. borrowed heavily in the aftermath of the financial crisis to revive the economy. Since 2008, foreigners have more than doubled their investments in Treasuries and now own about $6.25 trillion.
Central banks have led the way. China, the biggest foreign holder of Treasuries, funneled hundreds of billions of dollars back into the U.S. as its export-based economy boomed.

Now, that’s all starting to change. The amount of U.S. government debt held in custody at the Fed has decreased by $78 billion this quarter, following a decline of almost $100 billion over the first six months of the year. The drop is the biggest on a year-to-date basis since at least 2002 and quadruple the amount of any full year on record, Fed data show.

The custodial data add to evidence that the retreat isn’t simply a one-off. Separate figures from the Treasury Department showed that China pared its stake to $1.22 trillion in July, the lowest level in more than three years. Others, like Japan and Saudi Arabia, have also reduced their holdings this year.
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WTO cuts 2016 world trade growth forecast to 1.7 percent, cites wake-up call

Tue Sep 27, 2016 | 9:45am EDT
The World Trade Organization cut its forecast for global trade growth this year by more than a third on Tuesday, reflecting a slowdown in China and falling levels of imports into the United States.
The new figure of 1.7 percent, down from the WTO's previous estimate of 2.8 percent in April, marked the first time in 15 years that international commerce was expected to lag the growth of the world economy, the trade body said.
The figures should be a wake-up call for governments, WTO Director-General Roberto Azevedo said in the six-monthly trade outlook report.
"We need to make sure that this does not translate into misguided policies that could make the situation much worse, not only from the perspective of trade but also for job creation and economic growth and development which are so closely linked to an open trading system," the report quoted him as saying.
The data underlined concerns that, after a long period of growth through globalization and reliance on global trade, governments are increasingly seeking to protect their own industries and promote domestic producers at the expense of foreign competitors.
Although all governments deny protectionism, trade is no longer outpacing economic growth as it used to. Trade has grown 1.5 times faster than gross domestic product over the long term, and twice as fast when globalization picked up in the 1990s.
This year trade will grow only 80 percent as fast as the global economy, the WTO said, the first reversal of globalization since 2001 and only the second since 1982.
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Political support for 'dinosaur' banks must end: Bundesbank's Dombret

Tue Sep 27, 2016 | 1:06pm EDT
Political support for Europe's oversized banking sector must stop, a top official at Germany's central bank said on Tuesday, comparing banks to dinosaurs facing a threat of extinction.

Concerns about German banks are mounting, with top lender Deutsche Bank (DBKGn.DE) forced to reassure investors this week that it did not need government support to cover a possible U.S. fine and about low interest rates eating into its profits.

Andreas Dombret, the Bundesbank board member in charge of supervision, said banks' deficiencies should be tackled and the sector should be allowed to shrink further.

"Political support for the banking sector must finally come to an end - something that unfortunately I've only seen to a limited extent," he told an audience in Vienna.

"Crucially, we cannot discuss away the structural deficiencies of the banking sector."

Comparing banks to dinosaurs, Dombret said they should not hope size would save them from extinction due to threats such as a reduction in the overall amount of debt in the economy, competition from financial technology companies, an aging population and low interest rates.
More
http://www.reuters.com/article/us-germany-banks-bundesbank-idUSKCN11X1TO

In better news for America’s hoi polloi, aka voters, food deflation with a vengeance has taken hold.  It’s a world turned upside down, and there’s not a thing any central bankster can do about it. Our Great Nixonian Error of fiat money, communist money, is now misfiring on all cylinders. Time to put on the life belts and head up to the boat deck.

Grocery Prices Are Plunging

September 27, 2016 — 10:01 AM BST
Call it the Great Grocery-Store Giveaway of 2016.

In Austin, Texas, Randalls slashed prices for boneless beef ribs by 40 percent, to $3.99 a pound. Not to be outdone, the H-E-B grocer down the street charged $1 a pound less. Not long ago, Albertsons advertised a deal you don’t normally see on your finer cuts of meat: “buy 1 get 1 free” specials on “USDA Choice Petite Sirloin Steak.”

And what does $1 buy these days? In North Bergen, New Jersey, you could pick up a dozen eggs at Wal-Mart. OK, the price was actually $1.14. A mile away, check out Aldi, the German supermarket discounter, which can actually break the buck -- 12 eggs for 99 cents. A year ago, you would have paid, on average, three times that price.

In a startling development, almost unheard of outside a recession, food prices have fallen for nine straight months in the U.S. It’s the longest streak of food deflation since 1960 -- with the exception of 2009, when the financial crisis was winding down. Analysts credit low oil and grain prices, as well as cutthroat competition from discounters. Consumers are winning out; grocery chains, not so much. Their margins and, in some cases, their stock prices, are taking a hit.

Eggs and beef have have grown especially inexpensive, and it isn’t only an American phenomenon: In England, Aldi recently offered its prized 8-ounce wagyu steaks from New Zealand for about $6.50 -- a little more than the price of a pint of beer.

“The severity of what we’re seeing is completely unprecedented,” said Scott Mushkin, an analyst at Wolfe Research who has studied grocery prices around the country for more than ten years. “We’ve never seen deflation this sharp.”
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Aldi US.

Titanic sinks in REAL TIME - 2 HOURS 40 MINUTES


It hardly bears thinking about that if there had been sufficient boats that night...every soul aboard could have been saved, since it was two-and-a-half hours after she struck that she tilted her massive stern into the heavens and sank by the head, taking with her all that were unprovided for.
Arthur Rostron, Captain of the rescue vessel Carpathia ('Home From The Sea' 1931)
At the Comex silver depositories Tuesday final figures were: Registered 31.44 Moz, Eligible 140.77 Moz, Total 172.21 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Below, 26 incredible facts about the US economy that nobody knew, and never came up in the Great Debate.
Nothing is so admirable in politics as a short memory.

John Kenneth Galbraith.

26 Incredible Facts About The Economy That Every American Should Know For The Trump-Clinton Debate

by Michael Snyder • September 26, 2016
---- The mainstream media would have us believe that the U.S. economy is in pretty good shape, and if that was true that would seem to favor Clinton.  But is it actually true?  The following are 26 incredible facts about the economy that every American should know for the Trump-Clinton debate…

#1 When Barack Obama entered the White House, the U.S. government was 10.6 trillion dollars in debt.  Today, the U.S. government is 19.5 trillion dollars in debt, and Obama still has several months to go until the end of his second term.  That means that an average of more than 1.1 trillion dollars will be added to the national debt during his presidency.  We are stealing a tremendous amount of consumption from the future to make the economy look much, much better than it otherwise would be, and we are systematically destroying the future in the process.
#2 As Obama prepares to leave office, the rate at which we are adding to the national debt is actually increasing.  During the fiscal year that is just ending, the U.S. government has added another 1.36 trillion dollars to the national debt.
#3 It isn’t just the federal government that is on a massive debt binge.  Total U.S. corporate debt has nearly doubled since the end of 2007.
#4 Default rates on U.S. corporate debt are the highest that they have been since the last financial crisis.
#5 Corporate profits have fallen for five quarters in a row, and it is being projected that it will be six in a row once the final numbers for the third quarter come in.
#6 During the month of August, commercial bankruptcy filings were up 29 percentcompared to the same period a year ago.
#7 The rate of new business formation in the United States dropped dramatically during the last recession and has hovered at that new lower level ever since.
#8 The Wall Street Journal says that this is the weakest “economic recovery” since 1949.
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In central banking as in diplomacy, style, conservative tailoring, and an easy association with the affluent count greatly, and results far much less.

John Kenneth Galbraith

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?

Single photon light emitting diodes for on-chip integration

Date: September 26, 2016

Source: Graphene Flagship

Summary: Researchers have used layered materials to create an all-electrical quantum light emitting diodes (LED) with single-photon emission. These LEDs have potential as on-chip photon sources in quantum information applications.
Researchers from the Graphene Flagship use layered materials to create an all-electrical quantum light emitting diodes (LED) with single-photon emission. These LEDs have potential as on-chip photon sources in quantum information applications.
Atomically thin LEDs emitting one photon at a time have been developed by researchers from the Graphene Flagship. Constructed of layers of atomically thin materials, including transition metal dichalcogenides (TMDs), graphene, and boron nitride, the ultra-thin LEDs showing all-electrical single photon generation could be excellent on-chip quantum light sources for a wide range of photonics applications for quantum communications and networks. The research, reported in Nature Communications, was led by the University of Cambridge, UK.
The ultra-thin devices reported in the paper are constructed of thin layers of different layered materials, stacked together to form a heterostructure. Electrical current is injected into the device, tunnelling from single-layer graphene, through few-layer boron nitride acting as a tunnel barrier, and into the mono- or bi-layer TMD material, such as tungsten diselenide (WSe2), where electrons recombine with holes to emit single photons. At high currents, this recombination occurs across the whole surface of the device, while at low currents, the quantum behaviour is apparent and the recombination is concentrated in highly localised quantum emitters.
All-electrical single photon emission is a key priority for integrated quantum optoelectronics. Typically, single photon generation relies on optical excitation and requires large-scale optical set-ups with lasers and precise alignment of optical components. This research brings on-chip single photon emission for quantum communication a step closer. Prof Mete Atatüre (Cavendish Laboratory, University of Cambridge, UK), co-author of the research, explains "Ultimately, in a scalable circuit, we need fully integrated devices that we can control by electrical impulses, instead of a laser that focuses on different segments of an integrated circuit. For quantum communication with single photons, and quantum networks between different nodes -- for example, to couple qubits -- we want to be able to just drive current, and get light out. There are many emitters that are optically excitable, but only a handful are electrically driven" In their devices, a modest current of less than 1 µA ensures that the single-photon behaviour dominates the emission characteristics.
---- This research is a fantastic example of the possibilities that can be opened up with new discoveries about materials. Quantum dots were discovered to exist in layered TMDs only very recently, with research published simultaneously in early 2015 by several different research groups including groups currently working within the Graphene Flagship. Dr Marek Potemski and co-workers working at CNRS (France) in collaboration with researchers at the University of Warsaw (Poland) discovered stable quantum emitters at the edges of WSe2 monolayers, displaying highly localised photoluminescence with single-photon emission characteristics.
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The monthly Coppock Indicators finished August.

DJIA: 18401  +18 Up NASDAQ:  5213 +16 Up. SP500: 2171 +18 Up.

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