Baltic Dry Index. 925 +15 Brent Crude
55.52
People of the same trade seldom meet together, even for
merriment and diversion, but the conversation ends in a conspiracy against the
public, or in some contrivance to raise prices….
Adam Smith. The Wealth of Nations, 1776.
Later today, at the World Economic
Forum in Davos Switzerland, the great in their own minds, and the not so good,
gather to socialise, pontificate, network, social climb, and flatter each
other. At a minimum of $50,000 a shot,
the Davos local economy gains 100 million plus, in the space of just 4 days.
Nice work for Davos. A disaster for everyone else. In 46 years of elitist meetings, no one can point to anything helpful
to mankind.
Davos elite promise global solutions, but they’re part of the problem
By Satyajit Das Published:
Jan 13, 2017 5:52 p.m. ET
Missed opportunities at this annual gathering of the rich, powerful, and disconnected
Each year in late January, global leaders — politicians, bureaucrats,
corporate executives, and public intellectuals — make a pilgrimage to the Swiss
town of Davos for the World Economic Forum. Demand is so great, and growing,
available accommodations soon may not be sufficient.
These 2,000 or so elites (0.00003% of the world’s population) are the
Davos Men (and comparatively few women), a term coined by political scientist
Samuel P. Huntington. The average age of the participants is a bit over 50.
They are predominately male, with only one in five being female. They represent
around 1,000 organizations from 100 countries, although the largest proportion
are from Western Europe and North America. Over the course of several days,
their views, strategies, and policies will be captured by the paparazzi and an
adoring media.
In recent years, the World
Economic Forum (WEF) has focused on economic matters and the new global
context, encompassing conflicts, instability, and political, economic, and
technological changes. But in truth, little of consequence happens at Davos.
The real genius of Davos is the concept itself. Founded in 1971 by economist
Klaus Schwab, it taps into the world’s voyeurism and innate shallowness.
For 2016, the WEF’s theme was “Mastering the Fourth Industrial
Revolution,” designed to prepare leaders for a future shaped by technological
change. Yet participants ignored the fact that much of what passes for new
technology destroys jobs and wages, and exacerbates
income inequality, as owners of the technology benefit at the expense of others. It was also unclear
where this future technological wonderland fits into a world of unsustainable
debt levels, the intractable trajectory of climate change, the slowdown in
Europe, Japan and emerging markets, conflict-driven immigration and
geopolitical risk.
This year, the focus,
ironically, is on “Responsive and Responsible Leadership” — code for
confronting the rise of populism that threatens attendees’ control of their
societies and economies. Over canapés and mineral water, WEF participants will
discuss concepts such as geostrategic competition, new antagonists, global
solidarity, exponentially disruptive change, a shared sense of uncertainty, the
transformation of human identity, and the shift from traditional hierarchies to
networked hierarchies.
The conference agenda shows how disconnected attendees are from real
life. It is difficult for those who live in a cocoon of wealth or power,
generally paid for by others, to understand the concerns of ordinary denizens
of the planet. Discussions on economic inequality take place with scant
participation from employee representatives or workers.
In reality, Davos is a
networking opportunity. Participants hope to build up their Rolodex and book
face time with clients, regulators, politicians, and peers over a few,
hyper-efficient days. Firms can promote views beneficial to their business and
financial interests in a seemingly benign environment. For some, Davos is an
antidote to the insecurity of leadership. Financial Times columnist Gillian
Tett once quipped that Davos was “a self-help group for the global elite”.
Morehttp://www.marketwatch.com/story/davos-elite-promise-global-solutions-but-theyre-part-of-the-problem-2017-01-05
In other less elite news.
IMF sees Trump spending aiding U.S. growth, some emerging markets weaker
The International Monetary Fund on Monday lifted its forecast for U.S.
economic growth in 2017 and 2018 based on President-elect Donald Trump's tax
cut and spending plans, but said this would largely be offset by weaker growth
in several key emerging markets.
Updating its World Economic Outlook, the IMF kept its overall global
growth forecasts unchanged from October at 3.4 percent for 2017 and 3.6 percent
for 2018, up from 3.1 percent growth in 2016, the weakest year since the
2008-2009 financial crisis.
The United States will see a slight 0.1 percentage-point improvement in
2017 gross domestic product and a stronger 0.4 percentage-point gain in 2018 as
Trump lays plans for expansionary fiscal measures including tax cuts and
infrastructure spending.
These would push U.S. growth to 2.3 percent in 2017 and to 2.5 percent
in 2018, the IMF said, noting that they could also stoke inflation in an
economy already nearing full employment.
"If a fiscally-driven demand increase collides with more rigid
capacity constraints, a steeper path for interest rates will be necessary to
contain inflation, the dollar will appreciate sharply, real growth will be
lower, budget pressure will increase, and the U.S. current account deficit will
widen," IMF chief economist Maurice Obstfeld said in a statement.
He added that such a scenario could raise the specter of more
protectionist measures and retaliatory responses.
But the new IMF outlook does not include any assumptions regarding
Trump's proposed trade policies such as potential tariffs on Mexican and
Chinese goods or a renegotiation of the U.S.-Canada-Mexico North American Free
Trade Agreement (NAFTA).
The IMF does assume a stronger dollar, a firming in oil prices and
"more inflationary pressure and a less-gradual normalization of U.S.
monetary policy."
While stronger oil and commodity prices have improved the picture for
oil exporters including Nigeria, the steeper U.S. yield curve and tighter
financial conditions will negatively affect some big emerging market economies,
including Mexico.
The IMF has cut Mexico's growth forecasts by 0.6 percentage points in
both 2017 and 2018, also citing investment uncertainty related to U.S. policy.
The IMF revised its 2017 growth forecast for China to 6.5 percent, up
0.3 percentage point from the October forecast, based on expectations for
continued stimulative government policies, but left unchanged its 2018 forecast
for a slowdown to 6.0 percent growth.
More
Germany hits back at Trump criticism of refugee policy and BMW tariff threat
Deputy chancellor blames America’s ‘flawed interventionist policy’ for refugee crisis and warns of ‘bad awakening’ for US carmakers
Monday 16 January 2017 12.46 GMT
Berlin has mounted a staunch defence of its policies after Donald Trump
criticised the German chancellor, Angela Merkel, for
her stance during the refugee crisis and threatened a 35% tariff on BMW cars
imported into the US.Germany’s deputy chancellor and minister for the economy, Sigmar Gabriel, said on Monday morning that a tax on German imports would lead to a “bad awakening” among US carmakers since they were reliant on transatlantic supply chains.
“The US car industry would have a bad awakening if all the supply parts that aren’t being built in the US were to suddenly come with a 35% tariff. I believe it would make the US car industry weaker, worse and above all more expensive. I would wait and see what the Congress has to say about that, which is mostly full of people who want the opposite of Trump.”
In an interview with Bild and the Times, the US president-elect had indicated that he would aim to realign the “out of balance” car trade between Germany and the US. “If you go down Fifth Avenue everyone has a Mercedes Benz in front of his house, isn’t that the case?” he said. “How many Chevrolets do you see in Germany? Not very many, maybe none at all … it’s a one-way street.”
Asked what Trump could do to make sure German customers bought more American cars, Gabriel said: “Build better cars.”
---- Responding to Trump’s comments that Merkel had made an “utterly catastrophic mistake by letting all these illegals into the country”, Gabriel said that the increase in the number of people fleeing the Middle East to seek asylum in Europe had partially been a result of US-led wars destabilising the region.
More
Central-Bank Bashing Has Gold Only Asset Safe From Meddling
by Natasha Doff and Eddie Van Der Walt
13 January 2017, 00:01 GMT 13 January 2017, 11:56 GMT
Baring Asset Management’s Christopher Mahon has one major conviction
about 2017: it will be the year in which central-bank bashing by politicians
becomes the new normal, so he’s seeking shelter in gold.
“This year is the turning point,” Mahon said in an interview on Monday.
“For seven years or so, central banks have largely escaped critique even though
one could argue that their policies have been pretty inadequate in many senses.
It’s very plausible now that politicians stand up and throw stones at central
bankers.”
For the first time in more than two
decades, politicians are encroaching on the autonomy
central bankers expect to manage growth efficiently. Donald Trump has
criticized the Federal Reserve for creating a “big, fat, ugly
bubble”
in the market by holding interest rates near zero. U.K. Prime Minister Theresa
May said in October that a change has to come to Bank of England monetary
policy. German Finance Minister Wolfgang Schaeuble has suggested that the European
Central Bank share the blame for the rise of populism in Europe.
Mahon is betting that gold will rise if
political intervention causes central banks to miss inflation and growth
targets. In the past few months he’s built up a 4 percent allocation to bullion
in his 1.7 billion pound ($2.1 billion) Dynamic Asset Allocation Fund, which
outperformed 80 percent of peers last year. Jim Rickards, author of New York
Times best seller Currency Wars:
The Making of the Next Global Crisis, is even more bullish: he recommends
putting 10 percent into gold.
More
At the Comex silver depositories Friday
final figures were: Registered 29.20 Moz, Eligible 151.61 Moz,
Total 180.81 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, wind power goes wrong in polluted China.
It Can Power a Small Nation. But This Wind Farm in China Is Mostly Idle.
JIUQUAN, China — On the edge of the Gobi Desert, the
Jiuquan Wind Power Base stands as a symbol of China’s quest to dominate
the world’s renewable energy market. With more than 7,000 turbines arranged in
rows that stretch along the sandy horizon, it is one of the world’s largest wind farms, capable of generating
enough electricity to power a small country.
But these days, the windmills loom like scarecrows,
idle and inert. The wind howls outside, but many turbines in Jiuquan, a city of
vast deserts and farms in the northwest province of Gansu, have been shut off
because of weak demand. Workers while away the hours calculating how much power
the turbines could have generated if there were more buyers, and wondering if
and when they will ever make a profit.
“There’s not much we can do right now,” said Zhou
Shenggang, a manager at a state-owned energy company who oversees 134 turbines
here; about 60 percent of their capacity goes unused each year. “Only the state
can intervene.”
China, the world’s largest emitter of greenhouse
gases, has pointed to its embrace of wind and solar power and other alternatives
to coal to position itself at the forefront of the global effort to combat climate change.
More than 92,000 wind turbines have been built across
the country, capable of generating 145 gigawatts of electricity, nearly double
the capacity of wind farms in the United States. One out of every three
turbines in the world is now in China, and the government is adding them at a
rate of more than one per hour.
But some of its most ambitious wind projects are underused.
Many are grappling with a nationwide economic slowdown that has dampened demand
for electricity. Others are stymied by persistent favoritism toward the coal
industry by local officials and a dearth of transmission lines to carry
electricity from rural areas in the north and west to China’s fastest-growing
cities.
That has left China unable to generate enough
renewable energy to make a serious dent in air pollution and carbon emissions,
despite the state-driven building spree. Even with its unmatched arsenal of
turbines, China still lags the United States. Wind power now accounts for 3.3
percent of electricity generation in China, according to the nation’s National
Energy Administration, compared with 4.7 percent in the United States.
Chinese officials have described the challenges facing
the wind sector as growing pains, and they say the investments in renewable
energy will pay off in the long term. The costs of wind projects are falling
rapidly with advances in technology and more efficient construction, making
them more competitive with plants powered by fossil fuels like coal and natural
gas.
And the government has vowed to continue investing
heavily in renewable energy. It said this month that it intended to spend at
least
$360 billion through 2020 on developing renewable energy sources.
Analysts said that China’s success would depend on its
ability to overcome both political and practical obstacles, including
resistance to renewable energy from local governments and a lack of turbines
near major cities.
More
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?
We
close with a growing trend in the 21st century. The old carbon
based, electric power generation economic model is so last century.
German power battery storage to grow three-fold this year: study
Germany's power grid industry will expand big electricity battery
capacity more than three-fold this year to 200 megawatts (MW) from 60 MW,
German advisory group Team Consult said in a study of the new business area.
Battery storage is a significant new development in the transformation
of the power sector as it will eventually allow harnessing of fluctuating wind
and solar power for use by transport grids, solar-producing householders, and
the car industry.
Germany is on a course to derive 80 percent of its power supply from
renewables by 2050, having achieved a share of 30 percent in 2016, while the
expansion of networks to transport the weather-driven production lags far
behind targets.
This is where batteries come in, to supply super fast balancing services,
in order to ensure that the system runs efficiently.
"We observe a rising trend for storage batteries to be used to
stabilize grids," said author Christoph Hankeln.
Through the batteries, grids will receive short-term boosts to cope with
varying green power output.
The allocation of volumes is set via weekly auctions in the primary
balancing market, which is organized by grid operators.
In this market, would-be providers compete to supply or absorb power
within seconds, in return for service fees.
Team Consult estimates that this market has a 800 MW capacity, meaning
batteries could account for 25 percent by the end of this year, displacing some
of the currently active thermal energy plants.
More
The monthly Coppock Indicators finished December
DJIA: 19763
+74 Up NASDAQ: 5383 +70 Up. SP500: 2239 +75 Up
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