Tuesday, 10 January 2017

China Reverts To Communism.

Baltic Dry Index. 949 -14   Brent Crude 54.93

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.

We open with news from China. As President Trump nears assuming office and a trade war with China, China reverts to communist type. Not a good sign for the future.

Chinese professor sacked after criticizing Mao online

Tue Jan 10, 2017 | 12:29am EST
A Chinese professor has been sacked after he criticized Chairman Mao Zedong on his 123rd birthday in an commentary he posted online that enraged leftists.

Mao, who died on Dec. 9, 1976, is still officially venerated by the ruling Communist Party as the founder of modern China and his face appears on every yuan banknote.

But he is particularly respected by leftists who believe the country has become too capitalist and unequal over three decades of market-based reforms, and attitudes towards Mao and his legacy mirror differences between reformers and traditionalists.

Deng Xiaochao, 62, an art professor at Shandong Jianzhu University in central China, posted a commentary on his Weibo social media site, dated Dec. 26, Mao's birthday, suggesting Mao was responsible for a famine that led to 3 million deaths and the Cultural Revolution in which 2 million died.

The post was deleted but an image of it has been shared online and seen by Reuters.

Such public criticism of is rare in China and Mao's supporters took to the streets to protest against Deng shortly after he made the comments.

Some held banners saying "Whoever opposes Mao is an enemy of the people", according to videos and photos widely shared on Weibo.

The state-owned tabloid the Global Times reported late on Monday that Deng was dismissed from his post as counselor of the provincial government last Thursday, while the university's party committee posted a statement saying Deng would no longer teach or be allowed to organize social events on campus.

The Global Times did not give a reason for Deng's dismissal.

The Shandong government said on its website Deng had been dismissed for breaking provincial and national rules on government work, without providing details, and that local discipline bodies had been informed.

With just 10 days to go before America’s new broom takes office to “drain the swamp,” JPMorgan’s CEO thinks that US interest rates are headed higher than the market currently thinks. A doom and gloom Remainiac nutter on Brexit, he couldn’t have been more wrong, but is he right on US interest rates under President Trump? A four decade long bull market in the US bond market is over. If Mr. Dimon’s right a new multi-year bear market is just starting.

Dimon Predicts Rising Interest Rates Based on U.S. Growth

by Jared S Hopkins  
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon predicted that interest rates will rise along with a growing U.S. economy.

“I believe America is doing better than people think and therefore interest rates are probably going to be stronger than people think,” Dimon said, addressing health investors and executives at the J.P. Morgan Healthcare Conference in San Francisco.

In further developments in the Volkswagen dirty diesel scandal, it looks like the US authorities finally want to put some of the criminals in jail. But will any German VW execs get extradicted?

F.B.I. Arrests Volkswagen Executive on Conspiracy Charges in Emissions Scandal

The Federal Bureau of Investigation has arrested a Volkswagen executive who faces charges of conspiracy to defraud the United States, two people with knowledge of the arrest said on Sunday, marking an escalation of the criminal investigation into the automaker’s diesel emissions cheating scandal.

Oliver Schmidt, who led Volkswagen’s regulatory compliance office in the United States from 2014 to March 2015, was arrested on Saturday by investigators in Florida and is expected to be arraigned on Monday in Detroit, said the two people, a law enforcement official and someone familiar with the case.

After a study by West Virginia University first raised questions over Volkswagen’s diesel motors in early 2014, Mr. Schmidt played a central role in trying to convince regulators that excess emissions were caused by technical problems rather than by deliberate cheating. Much of the data presented to regulators was fabricated, officials of the California Air Resources Board have said.

Mr. Schmidt continued to represent Volkswagen after the company admitted in September that cars were programmed to dupe regulators. He appeared before a committee of the British Parliament in January, telling legislators that Volkswagen’s behavior was not illegal in Europe.

Lawyers representing Mr. Schmidt did not respond to requests for comment late Sunday. Officials at the Justice Department also declined to comment, as did an F.B.I. spokesman in Detroit.

Volkswagen Executives in Germany to Face U.S. Charges in Diesel Case

by Tom Schoenberg, Andrew M Harris, and David McLaughlin
9 January 2017, 14:41 GMT 9 January 2017, 15:08 GMT
U.S. prosecutors are planning to charge high-level Volkswagen AG executives based in Germany over the automaker’s diesel-cheating scandal, according to a person familiar with the matter, after arresting a manager in the U.S. for allegedly misleading regulators.
Volkswagen executive Oliver Schmidt was arrested in Florida, according to the U.S. Attorney’s Office in Detroit. He was charged with conspiracy to defraud the U.S., according to a complaint made public on Monday in Detroit. 
The person familiar with the situation declined to specify when charges against more senior-level executives may be filed or whether the executives to be charged are still employed by the automaker.
Schmidt is accused of participating in a conspiracy to defraud the U.S. government and Volkswagen customers and to violate the federal Clean Air Act, according to court papers.
Schmidt began working for the automaker in 1997 and served as general manager in charge of its Environmental and Engineering Office from 2012 to 2015, according to the complaint. That agency was primarily responsible for communicating and coordinating with U.S. regulatory agencies, according to prosecutors. In March 2015, Schmidt was promoted to a more senior management position within Volkswagen.
Later that year, after emissions testing discrepancies became known to the U.S. government, he allegedly misled federal regulators about reasons for the differing test results, “offering reasons for the discrepancy other than the fact that VW was intentionally cheating on U.S. emissions test in order to allow VW to continue to sell diesel vehicles in the United States,” according to an affidavit filed by the FBI.
Volkswagen is a nearing a multibillion-dollar settlement with the Justice Department to resolve a criminal investigation into the diesel-cheating allegations, which could be announced as soon as this week, Bloomberg reported Friday.
The case is U.S. v. Oliver Schmidt, 16-mj-30588, U.S. District Court for the Eastern District of Michigan

In emerging market news, Paraguay is eating Brazil’s lunch. Sort of “big fleas have lesser fleas upon their backs to bite them…”

Brazil Worries the ‘China of South America’ Is Eating Its Lunch

by Bruce Douglas and Matthew Malinowski
9 January 2017, 10:00 GMT
Brazilians are starting to have second thoughts about the business El Dorado next door.

Low taxes, low wages and low overheads are driving the Paraguayan government’s ambition to become the "China of South America": a low-cost manufacturing hub that attracts investment from across the region.

As Brazil struggles through its worst recession on record, dozens of businesses have set up operations across the border, creating thousands of jobs. Broadly welcomed by the Brazilian government at first, the migration of investment is now facing increasing scrutiny as unemployment rises to unprecedented levels.

"It used to be a joke," said Murillo Onesti of Sao Paulo law firm OLN Advogados, referring to Paraguay’s past reputation in Brazil as a source of cheap knock-offs. "China faced the same resistance at first. But people are seeing now that you can produce better quality goods at a lower price."

In effect since 2000, Paraguay’s "maquila law" aims to replicate the success of Mexico’s maquiladora -- or manufacturing plant -- operations. Goods can be imported tax-free for assembly, then sold locally or exported with only the value-added part taxed at a rate of just 1 percent.
Since 2013 Brazilian companies have started to invest in earnest, encouraged initially by the vigorous salesmanship of Paraguayan President Horacio Cartes, and subsequently by the need to cut costs in Brazil’s dramatically deteriorating business environment.
"The crisis has helped," said Onesti, who offers legal and strategic advice to Brazilian businesses. "Executives are looking to reduce costs and increase productivity. Paraguay offers this solution."
Of the 126 businesses currently operating under the maquila law, 80 have opened since the start of Cartes’s mandate in August 2013, according to Paraguayan government figures. These companies have created over 11,000 jobs, with 6,700 coming in the last three years.
Around 80 percent of the foreign businesses set up under Paraguay’s maquila law are Brazilian-owned, according to Brazil’s National Industry Confederation, or CNI.

"Gold would have value if for no other reason than that it enables a citizen to fashion his financial escape from the state."

William F. Rickenbacker

At the Comex silver depositories Monday final figures were: Registered 28.58 Moz, Eligible 152.10 Moz, Total 180.68 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today, a safe is only as safe as those who know the combination.

It’s Right in the Name: Safes Are Safe. Except for Two on New Year’s Eve.

By JAN. 8, 2017
They read like descriptions of props from the script of a Hollywood heist caper, with promises to ward off “attacks” on all six sides from the usual suspects: hammer, crowbar, drill, blowtorch, nitroglycerin. That is the language of the brochures and websites of the city’s safe dealers, a small but longstanding industry that manages fears in and around the diamond district not only of disasters like fires or explosions, but also of hypothetical supervillains.

When a safe is breached, word travels quickly. What happened? Whose safe was it? How did they get in?
Those were the sorts of questions raised last week after a team of burglars broke into a jeweler’s office on West 36th Street on New Year’s Eve. The crime was widely reported for its scope — the thieves made off with $6 million in diamonds and other gems — and its brazen timing, occurring as the ball dropped six blocks away in a neighborhood teeming with police officers. Surveillance video showing two people hitting a sixth-floor door with hammers was taken immediately after midnight, the police said, when the sound of cheers would have most likely drowned out any banging.

But what happened next is, to many in the safe industry, more important than the forced entry. The two safes that held the valuables, the police said, showed no sign of forced entry.

The police have not provided further details on the safes. News reports have suggested investigators are looking into whether someone working for the dealer who provided the safes gave the thieves the combinations. A man answering the telephone at the office of the dealer, Lacka Safe in New Jersey, said on Friday that the owners declined to comment.

As that investigation unfolds, the burglary — or “attack,” in high-end security parlance — draws attention to the last line of defense for the city’s many jewelers, an object that, for all the advances in technology over the years, remains a box with three sides, a top, a bottom and a door. High-end safes evoke exciting scenes from the movies, with steely safecrackers listening for clicks or drilling into dense steel with lasers.

In reality, though, making safes is a hushed trade built on discretion and trust.

“I get calls all the time, ‘Are your people O.K.?’” said Richard Krasilovsky of Empire Safe in Midtown. “How safe is it — all puns intended — for your people to do the work? The people know where the safe is going. I say it’s a legitimate question to ask.”

Dealers carry an array of safes and locks, including digital locks with keypads and time locks that prevent anyone from opening the door, with or without the combination, while they’re activated. The jewelers of Manhattan historically prefer more traditional designs for their safes, dealers said last week, with mechanical combination locks.

“It’s an older industry,” said Dov Israeli of Precision Lock and Safe in Floral Park, N.Y. “They’re focused on price and less on what’s new.”

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?

Volkswagen resurrects the Kombi as an AWD, autonomous electric minibus

Loz Blain 4 hours ago
Electric is the big focus for Volkswagen right now, as it gears up for a serious push into EVs beginning in 2020. This I.D. Buzz minibus shows us what we might be in for - including a modular, convertible cabin, augmented reality HUD, removable dash and speakers and laser-guided self driving.
Volkswagen is all-in on electric starting in 2020, with a new platform in the works, a full range of "fully connected, all-electric" vehicles on the drawing board and rumors circulating that it might even build its own gigafactory-style battery plant to supply the million-plus electrics it wants to sell per year by 2025. We can't think of a better way to shake off the company's unfortunate reputation after the dieselgate scandal.
invented by Teads
After showing the I.D compact concept in Paris, VW has wheeled out a nifty modular electric van concept at this year's Detroit NAIAS auto show that harks back to the famous Kombi (Type 2) vans that came to symbolize the hippie and surfie lifestyles from the 1950s through to the 1980s.
The I.D. Buzz concept puts a modern twist on that familiar shape, with a more aerodynamically friendly front profile and a clever converting interior that reflects VW's intentions for this multi-function vehicle.
The back and middle seats can fold down to take cargo, or up to take up to six passengers. Well, seven, really, because the driver can choose to take the wheel, or let the car self-drive and spin the front seats around to create a moving lounge room experience.

Pushing the steering wheel in (it's more of a steering panel, with a touchscreen on it) makes it retract and merge into the dash, switching the I.D. Buzz into an autonomous I.D. Pilot mode the company says we should see active by 2025. As well as radars, ultrasonic sensors and cameras, Volkswagen says it'll use laser scanners to more precisely map the terrain and other road users in self-driving mode.
The main dash is a large touchscreen unit that sits on the front console, but can also snap off so you can pass it around the car or take it out with you.

---- If you do bother to drive yourself, navigation directions are shown via an augmented reality HUD that projects images to look as if they're 23-49 feet in front of the vehicle and overlaid on the scenery. You'll note there are no mirrors poking out the sides either, these are replaced by an e-mirror that shows images from rear and side cameras.

Power and performance was never really the Kombi's selling point, but an 111 kilowatt-hour battery and all-wheel-drive electric motors form the 369-horsepower drivetrain platform of the vehicle, and that'll bring a fair bit of pep to the party. Volkswagen would be just as happy to build one with a smaller 83 kWh battery and rear wheel drive for a lower price point.
More + pics

The monthly Coppock Indicators finished December

DJIA: 19763  +74 Up NASDAQ:  5383 +70 Up. SP500: 2239 +75 Up

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