Tuesday, 18 October 2016

Is Italy Next To Leave the EU, If Lucky?

Baltic Dry Index. 894 +02   Brent Crude 51.80

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

"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.

We open today with capital flight out of Italy suggesting that Italy might be the next country to leave the wealth and jobs destroying failing German currency union. Smart money doesn’t stay smart by getting behind on the learning curve. Below, watch what Italians do, not what they say.

According to Bloomberg below, many smart Italians think it’s time to get their money out of Italy. As usual, in the delusional asylum of the EU, the fix is in to rig the coming Italian referendum.  We all know how the EUSSR ends, just not when, though my money’s on 2017 as the year everything on both sides of the Atlantic starts to fall apart.

“I wonder what Juncker is doing," thought Italian P.M. Renzi.  "I wish I were there doing it to the Italian people, too.”

Poor Mario Renzi, with apologies to A.A. Milne, and Winnie-the-Pooh

Will Italy Leave the Euro? Follow the Money

Oct 17, 2016 1:31 AM EDT
Will Italy follow the U.K.'s example and leave the European Union? Far-fetched as it may seem, capital flows suggest that some people aren’t waiting to find out.

To keep the euro area's accounts in balance, Europe's central banks track flows of money among the members of the currency union. If, for example, a depositor moves 100 euros from Italy to Germany, the Bank of Italy records a liability to the Eurosystem and the Bundesbank records a credit. If a central bank starts building up liabilities rapidly, that tends to be a sign of capital flight.

Lately, Italy's central bank has been building up a lot of liabilities to the Eurosystem. As of the end of September, they stood at about 354 billion euros, up 118 billion from a year earlier -- and up 78 billion since the end of May, before the U.K. voted to leave the EU. The outflow isn't quite as large as during the sovereign-debt crisis of 2012, but it's still significant. The main beneficiary seems to be Germany, which has seen its credits to the Eurosystem increase by 160 billion over the past year. Here's a chart showing the cumulative six-month flows between Italy and Germany and the rest of the euro area:

----Why the accelerating outflows from Italy? One explanation is that people are worried about the state of the country's banks, which are suffering the consequences of bad lending, poor governance and a new euro-area oversight system that makes rescues difficult. Another is political: Italian Prime Minister Matteo Renzi has staked his fate on a December government-reform referendum that, if it goes against him, could strengthen opponents who want to force a vote on whether Italy should remain in the common currency, a key element of the broader union. In that context, it's not surprising that some depositors prefer not to hold Italian euros, given the chance that they might eventually be converted into lira.

EU to assess Italy budget, wishes Renzi well in referendum

Mon Oct 17, 2016 | 2:48pm EDT
The European Commission reserved judgment on Monday on Italian Prime Minister Matteo Renzi's weekend speech setting out only a minimal reduction in his country's budget deficit next year, saying it would wait for formal fiscal documents.

The EU executive must rule on whether Rome's plans for 2017 meet euro zone rules, however, before an Italian referendum on Dec. 4 that may determine whether Renzi stays in office. Officials insist the fiscal verdict is unrelated to the campaign, but EU diplomats believe the Commission will do what it can to avoid damaging Renzi.

Key European allies, including German Chancellor Angela Merkel and French President Francois Hollande, have been keen to bolster Renzi and fear he may lose the referendum he called on constitutional reform, raising the possibility of new elections that could benefit the eurosceptic 5-Star movement.

Commission President Jean-Claude Juncker has been making clear to officials he shares that view, telling one internal meeting: "If we give up on Renzi, we give up on Europe."

An aggressive demand from Brussels in the coming weeks for Italy to cut its budget could make it harder for the socialist premier to win over voters tempted to vote against his reforms by a powerful coalition of interests, including 5-Star, which has long campaigned against euro zone austerity policies.

Next, another unintended consequence of the Great Nixonian Error of fiat money, 1971. Bad money drives out good. Bad practice drives out good. On the never ending spigot of central bankster free money, the future gets looted from the next generation into this generation. We are simply trashing the planet for fiat money rent-seeking. On fiat money, the price rationing under pinning’s of the system no longer function very well, if at all.  Still let’s all pretend the problem is man-made global warming.

World’s Biggest Cocoa Grower Is Wiping Out Its Rainforests

October 16, 2016 — 11:01 PM BST Updated on October 17, 2016 — 11:51 AM BST
After disease ravaged his cocoa farm, Philippe Zongo walked into one of West Africa’s last remaining rainforests to hack out new acreage.
Like thousands of young men from Ivory Coast and more arid neighboring countries, Zongo set out to find the best soil to plant new cocoa trees. He found it in the western Cavally forest, an area bigger than Chicago where chimpanzees live under the canopy of trees 100 feet tall.
“When I arrived in the forest, the first thing I did was clear the land,” said 23-year-old Zongo. “I burnt down what I could, and I cut off what I couldn’t burn.”

It’s a scenario that has defined the modern history of Ivory Coast, the world’s largest cocoa producer: trees are logged for timber, land is cleared for crops and gradually the soil becomes barren. The Forestry Ministry estimates that about 80 percent of the country’s forests have disappeared since the 1970s. Replanting was considered unnecessary: cocoa doesn’t need shade to thrive.

Cocoa, coffee and palm-oil have fueled Ivory Coast’s growth since before independence from France in 1960, making the country a model of economic stability in Africa. Ivory Coast shipped 1.8 million metric tons of cocoa beans in the harvesting season that ended last year, a historic peak that industry analysts a decade ago said wasn’t reachable. But growth has come at a high price: the country faces lower rainfall and increasingly nutrient-poor soils, the U.S. Agency for International Development said in a 2012 environmental report.

For decades, the government encouraged and even helped Ivorians and foreign migrants get access to land, a policy cemented by the 1963 dictum of the country’s longtime ruler Felix Houphouet-Boigny that “the land belongs to those who develop it.”

Today the message has changed. President Alassane Ouattara’s government has pledged to evict people from its protected parks and forests and double the remaining forest cover by 2020, Water and Forests Minister Louis-Andre Dacoury-Tabley said in an interview in Abidjan, the commercial capital.

“We’ve realized we’re heading toward desertification,” he said. “We need our forests to get rains, to be able to breathe.” Park rangers began razing illegal settlements and hacking down unauthorized cocoa plantations in the nearby Mont Peko National Park in July.

We end for today with the long arm of Hillary Clinton’s Uncle Scam.  We have more than one way of winning an election.

Voting is the most precious right of every citizen, and we have a moral obligation to ensure the integrity of our voting process.

Hillary Clinton.

WikiLeaks Says Ecuador Cut Internet Access of Julian Assange

October 18, 2016 — 1:03 AM BST
Ecuador has cut off WikiLeaks founder Julian Assange’s internet access within the South American country’s London embassy, WikiLeaks said in a statement on its website Monday.

“We can confirm Ecuador cut Assange’s Internet access Saturday, 5 p.m. GMT,” the group said on its Twitter account. WikiLeaks’ subsequently posted a series of e-mails purported by WikiLeaks to be from personal accounts of U.S. presidential candidate Hilary Clinton’s campaign chief, John Podesta. Ecuador’s Foreign Ministry declined to comment on Assange’s internet access.

Assange has lived and worked at Ecuador’s Embassy since 2012 under a grant of diplomatic asylum as he faces extradition to Sweden where he is wanted for questioning about an alleged sexual offense. Former Ecuadorian Ambassador Mauricio Gandara said that President Rafael Correa’s government is under pressure for allowing Assange to use the embassy to distribute material that may interfere with the U.S. campaign.

U.S. officials have accused Russia of hacking Democratic Party e-mails and then providing WikiLeaks with sensitive documents aimed at undermining Clinton’s bid for the White House. Clinton’s campaign has declined to discuss the hacked e-mails.

“To cut off Assange’s internet provides a means to de-authorize his activities,” Gandara said in a telephone interview from Quito. Ecuador’s Foreign Ministry on Monday affirmed Assange’s asylum status, saying in a statement that “the protection of the Ecuadorean state will continue as long as the circumstances that motivated the concession of said asylum remain.”

Freedom is the right to tell people what they do not want to hear.

George Orwell.

At the Comex silver depositories Monday final figures were: Registered 29.28 Moz, Eligible 144.10 Moz, Total 173.38 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Britain carries on booming. Blame it on Brexit, I suppose. The fifth column anti-Brexit UK media led by the loony left BBC, plus Bloomberg, usually does.

 Thales picks UK for new plant to build revolutionary satellite engines

Alan Tovey17 October 2016 • 6:00am
Advanced electric engines to power satellites will be built in the UK, with Thales announcing its backing for Britain’s space industry.
The French company is investing in producing the engines at its base in Belfast, opening a new manufacturing facility in the city.
On Tuesday astronaut Tim Peake will officially open the new centre where Thales is recruiting 150 engineers, with plans to take staffing levels up to 350 within two years.
Thales shrugged off any Brexit worries when picking Belfast, having selected the site over other European venues for the investment which is understood to be worth tens of millions of pounds. The company will also bolster staffing at its sites in Bristol and Harwell, Oxfordshire.
Victor Chavez, chief executive of Thales UK, said: “Britain is an attractive pace for us to invest in our space business - there is a lot of encouragement from the government to invest in the industry.”
The company is leveraging skills of staff at its Belfast plant which makes missiles for the international aerospace and defence business, retraining weapons engineers to produce the engines. The manufacturing is highly technical, working to an accuracy measured in tolerances of microns - about 90 times smaller than the width of a human hair.
The engines use electric power collected from satellites’ solar panels to accelerate fuel supplies of xenon gas to speeds of up to 100 times the speed of sound.
Because the gas is moving much faster than conventional chemical rocket engines, they use less about a fifth of the amount fuel to achieve the same effect, making them more efficient.
Mr Chavez said the engines have huge potential to transform powering satellites because of the efficiency they offer.
“These are not experimental designs - they are already in use - and are likely to bring radical change to satellites as they enter wider use,” he said.
“Using less fuel means satellites can have much longer service lives: about half of the mass of most geostationary satellites is fuel so the advantages are clear.”
The engines also offer the chance to cut the cost of putting satellites into high orbit. Their efficiency means spacecraft can be launched into a low orbit - which is cheaper - and then use their engines to slowly boost them into a high orbit, without them having exhausted all their fuel to get there, meaning they cannot manoeuvre once at the desired altitude.

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?

What OPEC’s Oil U-Turn Missed: Peak Demand Keeps Getting Closer

October 17, 2016 — 12:01 AM BST Updated on October 17, 2016 — 6:51 AM BST
OPEC’s decision last month to reverse its policy of unfettered production and cut oil output to boost prices may be at odds with the industry’s most important long-term trend: demand for what they produce could start falling within 15 years.

If rapid improvements continue in renewable energy, electric vehicles and other disruptive technologies, petroleum consumption will peak in 2030 and decline thereafter, according to a report from the The World Energy Council. As the globe’s largest producers gather in London this week for the Oil and Money conference, they might want to check their assumption that the market will grow for decades to come.

The plunging cost of renewable energy -- with solar module costs falling 50 percent since 2009 -- is already upending the business model of utilities. Disruption could spread to the oil industry as electric vehicles become more economic than gasoline or diesel cars, potentially displacing millions of barrels of daily fuel use by the late 2020s. Projections for decades of demand growth that underpin investments in oil projects could be misplaced.

“The longer term outlook, beyond 10 years, is certainly less rosy,” said Alex Blein, London-based energy portfolio manager at Amundi, which holds more than $1 trillion of assets. “Given the advances in battery technology, by 2030 carbon-powered vehicles will be the exception rather than the norm. This will inevitably impact on oil demand.”

When the Organization of Petroleum Exporting Countries last cut production to support prices in 2008, the decision made economic sense. At that time, the phrase “peak oil” described the growing fear that the world was running out of petroleum, so the group’s 1 trillion barrels of reserves would be guaranteed to fetch a higher price in the future. That calculation may be changing, with a growing risk that some resources might not be needed.

This is evident in demand estimates from the International Energy Agency, which have been revised down over the past 20 years, just as projections for renewable energy increased, said Michael Liebreich, founder of Bloomberg New Energy Finance. He predicts the growth of electric vehicles and improvements in fuel efficiency mean oil demand will peak around 2025 and decline in the 2030s.

The monthly Coppock Indicators finished September

DJIA: 18308  +28 Up NASDAQ:  5312 +21 Up. SP500: 2168 +32 Up.

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