Thursday, 17 November 2016

China, Japan, Spar With Trump.

Baltic Dry Index. 1145 +61   Brent Crude 46.55

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

Eurasian Snow cover. (How bad will winter be?)

On two occasions I have been asked, 'Pray, Mr. Babbage, if you put into the machine wrong figures, will the right answers come out?' I am not able rightly to apprehend the kind of confusion of ideas that could provoke such a question.

Charles Babbage

We open today with China and Japan trying to come to terms with President Elect Trump. Like the politicians of the dying EUSSR, few in Asia expected a Donald Trump victory, and as with Brexit in Europe, no one seems to have prepared for a Donald Trump presidency. Unlike Brexit, which has turned into a snail’s pace car crash, the Donald Trump presidency is like preparing for an asteroid hit on January 20, 2017. So much to do and so little time.

China, U.S. must avoid excessive mutual suspicion: Chinese envoy

Wed Nov 16, 2016 | 11:44pm EST
China and the United States must avoid being overly suspicious of each other's strategic intentions, China's ambassador to the United States said on Wednesday while looking ahead to the Presidency of Donald Trump.

Trump lambasted China throughout the U.S. election campaign, drumming up headlines with his pledges to slap 45 percent tariffs on imported Chinese goods and to label the country a currency manipulator on his first day in office.

He has also vowed to build up the U.S. Navy in what advisers say will be a strategy to reassure countries in the Asia-Pacific worried about China's assertive pursuit of territorial claims.

China's Washington envoy, Cui Tiankai, told a film screening to commemorate the 1979 normalization of U.S.-China ties that after “a most unusual political season,” it was important to build consensus and identify common ground.

He said both countries were already cooperating on many issues, but added:

"We have to make greater efforts to promote better mutual understanding and we should be careful not to be overly suspicious about each other’s strategic intentions.

"There are people here in the United States who believe that everything that China does is aimed at challenging the United States' s global dominance, and there are people who believe that everything the U.S. is doing is aimed at containing China.

"I think both views are wrong."

There would inevitably be problems and challenges in the next four years, Cui said, "but ... I am quite confident that, on the whole, the relationship will move forward on a stable and right track."

Cui said the countries had a shared responsibility to cooperate on issues such as terrorism and proliferation of weapons of mass destruction.

"We both want stability in the world. We both strive for a stronger global economy, and we both need a better natural environment. Common goals call for a close partnership."

Trump and Chinese President Xi Jinping spoke by phone on Monday and Xi told the U.S. President-elect cooperation was the only choice for the world's two largest economies, while Trump said they had established a "clear sense of mutual respect."

Nevertheless, Trump's election has created uncertainty when Beijing hopes for stability as it faces daunting reform challenges at home, slowing growth and a leadership reshuffle that will assemble a new party elite around Xi in late 2017.

China Tells Trump That Climate Change Is No Hoax It Invented

November 16, 2016 — 3:38 PM GMT Updated on November 16, 2016 — 8:29 PM GMT
China couldn’t have invented global warming as a hoax to harm U.S. competitiveness because it was Donald Trump’s Republican predecessors who started climate negotiations in the 1980s, China’s Vice Foreign Minister Liu Zhenmin said.

U.S. Presidents Ronald Reagan and George H.W. Bush supported the Intergovernmental Panel on Climate Change in initiating global warming talks even before China knew that negotiations to cut pollution were starting, Liu told reporters at United Nations talks on Wednesday in Marrakech, Morocco.

Ministers and government officials from almost 200 countries gathered in Marrakech this week are awaiting a decision by President-elect Trump on whether he’ll pull the U.S. out of the Paris Agreement to tackle climate change. The tycoon tweeted in 2012 that the concept of global warming “was created by and for the Chinese in order to make U.S. manufacturing non-competitive.” China’s envoy rejected that view.

“If you look at the history of climate change negotiations, actually it was initiated by the IPCC with the support of the Republicans during the Reagan and senior Bush administration during the late 1980s,” Liu told reporters during an hour-long briefing.

Japan PM Abe seeks to build trust with Trump, stresses alliance vital

Wed Nov 16, 2016 | 11:51pm EST
Japanese Prime Minister Shinzo Abe said on Thursday that he wants to build a relationship of trust when he meets U.S. President-elect Donald Trump this week, stressing that the two-way alliance is the core of Tokyo's diplomacy and security.

Abe, set to meet Trump later on Thursday in New York, is expected to be the first foreign leader to do so since the U.S. billionaire real estate magnate's election on Nov. 8.

The U.S.-Japan alliance "is the cornerstone of Japan's diplomacy and security. Only when there is trust does an alliance come alive," Abe told reporters before leaving Tokyo, Kyodo news agency reported.

However details about the meeting remain unclear, with Trump's transition team not responding to requests for comment on the meeting.

On Wednesday, Japanese officials said they had not finalised when or where in New York it would take place, who would be invited, or in some cases whom to call for answers.

U.S. panel urges ban on China state firms buying U.S. companies

Wed Nov 16, 2016 | 2:10pm EST
U.S. lawmakers should take action to ban China's state-owned firms from acquiring U.S. companies, a congressional panel charged with monitoring security and trade links between Washington and Beijing said on Wednesday.

In its annual report to Congress, the U.S.-China Economic and Security Review Commission said the Chinese Communist Party has used state-backed enterprises as the primary economic tool to advance and achieve its national security objectives.

The report recommended Congress prohibit U.S. acquisitions by such entities by changing the mandate of CFIUS, the U.S. government body that conducts security reviews of proposed acquisitions by foreign firms.

"The Commission recommends Congress amend the statute authorizing the Committee on Foreign Investment in the United States (CFIUS) to bar Chinese state-owned enterprises from acquiring or otherwise gaining effective control of U.S. companies," the report said.

CFIUS, led by the U.S. Treasury and with representatives from eight other agencies, including the departments of Defense, State and Homeland Security, now has veto power over acquisitions from foreign private and state-controlled firms if it finds that a deal would threaten U.S. national security or critical infrastructure.

If enacted, the panel's recommendation would essentially create a blanket ban on U.S. purchases by Chinese state-owned enterprises.

We close for the day with good/bad news for oil. As we reported a couple of months ago with Pioneer’s West Texas oil discovery, oil may be heading much, much lower, for far longer. Short tar sands, short Saudi Arabia, short Scotland, short OPEC.

Shale oil in Permian’s Wolfcamp formation biggest in U.S.

November 15, 2016 2:26 PM
In a troubled oil world, the Permian Basin is the gift that keeps on giving.
One portion of the giant field, known as the Wolfcamp formation, was found to hold 20 billion barrels of oil trapped in four layers of shale beneath West Texas. That’s almost three times larger than North Dakota’s Bakken play and the single largest U.S. unconventional crude accumulation ever assessed, according to the U.S. Geological Survey. At current prices, that oil is worth almost $900 billion.
The estimate lends credence to the assertion from Pioneer Natural Resources Chief Executive Officer Scott Sheffield that the Permian’s shale could hold as much as 75 billion barrels, making it second only to Saudi Arabia’s Ghawar field. Irving-based Pioneer has been increasing its production targets all year as drilling in the Wolfcamp produced bigger gushers than the company’s engineers and geologists forecast.
 “The fact that this is the largest assessment of continuous oil we have ever done just goes to show that, even in areas that have produced billions of barrels of oil, there is still the potential to find billions more,” Walter Guidroz, coordinator for the geological survey’s energy resources program, said in the statement.
Oil explorers have been flocking to the Permian Basin in West Texas and New Mexico to tap deposits so rich that they can generate profits even at lower oil prices. A race to grab land in the Permian has been the main driver of a surge of deals in the energy patch and the industry’s main source of good news.
Although the Permian has been gushing crude since the 1920s, its multiple layers of oil-soaked shale remained largely untapped until the last several years, when intensive drilling and fracturing techniques perfected in other U.S. regions were adopted. The Wolfcamp, which is as much as a mile thick in some places, has been one of the primary targets.
ConocoPhillips, the world’s largest independent oil producer by market value, increased its estimate for the size of its Wolfcamp holdings on Nov. 10 to 1.8 billion barrels from 1 billion last year. A day earlier, Concho Resources CEO Timothy Leach told investors and analysts that two recent wells it drilled in the Wolfcamp were pumping an average of 2,000 barrels a day each.

Truth is ever to be found in simplicity, and not in the multiplicity and confusion of things.

Isaac Newton

At the Comex silver depositories Wednesday final figures were: Registered 30.90 Moz, Eligible 146.34 Moz, Total 177.24 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today, so why does America have an Electoral College? Mad King George’s revenge?

Blame the British Empire for the Electoral College

Nov 15, 2016 9:42 AM EST
There are two truths about the Electoral College: It ought to be abolished, and it never will be. Calls for changing the constitutional election system abound now that Hillary Clinton has won the popular vote and lost the electoral vote, as Al Gore did in 2000. But it turns out that the same Constitution that enshrines the Electoral College effectively protects the small states from an amendment they don’t want. The problem goes back to the nation's founding -- and short of abolishing the states as effective sovereigns, it basically can’t be fixed.

The small states, which benefit from candidates’ attention, would never consent to being marginalized through a proportional system that favors the interests of densely populated states. But replacing the Electoral College would take a constitutional amendment approved by two-thirds of both houses of Congress and three-quarters of the state legislatures. Even if the first bar could be cleared -- which is wildly unlikely -- overcoming the second is unimaginable.

The Catch-22 is no accident. It goes back to the Philadelphia Constitutional Convention and the summer of 1787. The most enlightened Founders, including James Madison, pressed hard for a proportional Senate alongside the proportional House. The small states blocked it. And along the way, the small states also entrenched an amendment process that makes it essentially impossible to overcome their will.

The story of the small states' stand is fascinating and deeply consequential, but let me clarify that the Electoral College itself was not primarily a concession to the small states. Rather, the Electoral College was a compromise between selection of the president by state legislatures or election by popular vote.

Madison and other centralizers, such as James Wilson of Pennsylvania, didn’t want the state legislatures to have too much power. They feared the states would pull the country apart, as seemed to be happening under the Articles of Confederation. But direct election, which Wilson strongly favored, had its own risks, including a splintered election if the populace hadn’t heard of the candidates -- or the election of an (ahem) unsuitable candidate by the untutored people.

The Electoral College is, however, almost proportional to population -- unlike the Senate, which was the small states’ main accomplishment.

---- So why did the Articles of Confederation give all states an equal say in Congress? Because on July 4, 1776, the United States came together in part as a union of 13 states that had been British colonies until that day. Acting as separate states, the new states gave each other equal weight -- like nations in the general assembly of the United Nations.
In other words, the accident of British colonial charters gave rise to the system we now have -- and the great difficulty of amending it. This made no sense in 1787, and it makes no sense now. But short of abolishing the states as sovereign entities -- which plenty of reasonable people (from big states) preferred at the founding -- there was no choice but to let the small states get away with it.
The upshot? When it comes to the difficulty of amending the Constitution to get rid of the Electoral College, you can blame it on the British Empire.

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?

Trump cannot stop the clean energy revolution

Published: 15 Nov 2016, 14:58
It was some bitter irony the election of Donald Trump as US president came during climate change talks in Marrakech.
Just as we heard 2016 could be the hottest year on record, just as sentiment around the renewable energy sector was mounting new heights, a political hand grenade was thrown into the ring from mid-West America.
Trump has had only contemptuous words for global warming memorably insisting it was a Chinese hoax to undermine America.
On the campaign trail he vowed to scrap the Paris climate change agreement ratified by Barack Obama barely two months ago.
One of the former game show host’s first acts since he beat Hillary Clinton to the White House last week was to appoint another climate sceptic, Myron Ebell, to head up the Environmental Protection Agency.
Trump has promised to bring back coal and get America drilling for oil again at full speed while disdaining Clinton’s message to build the US into a world number one renewable powerhouse.
So is it all doom and gloom for clean tech in a world which also threatens to become increasingly protectionist too? Will Trump influence negatively impact already fragile green business confidence in post-Brexit Britain?
It would clearly be foolish to think that Trump’s accession can be positive, even if over the past week he has pedaled a slightly softer line on issues such as the Obamacare health programme and that infamous pledge to build a concrete wall with Mexico.
He may yet realize that threats to send cheap Chinese solar panels packing back to Shanghai might be counterproductive.
Even if he did try to unpick the Paris climate agreement it is expected to take years to complete. And he may have other priorities.
But the real reason why renewable power should not be devastated by governments run by Trump - or even Theresa May – is that it is on a roll. The price of clean power is falling all the time and even if politicians are unwilling to act on that, many businesses are taking matters into their own hands anyway.
New estimates from the Department for Business, Energy and Industrial Strategy released last week showed government expects the costs of large-scale solar PV built in Britain to fall to £67 per megawatt hour by 2020. That compares to the £92 figure used just three years ago and the £92.50 subsidy used for Hinkley Point C nuclear power station running for 35 years.

The solar figure for 2030 assessed by BEIS is £60, cheaper than onshore wind and combined cycle gas turbine plants.

The monthly Coppock Indicators finished October

DJIA: 18142  +32 Up NASDAQ:  5189 +31 Up. SP500: 2126 +46 Up.

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