Baltic Dry Index. 856 +50 Brent Crude 56.61
"The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine, and to process; and that it cannot be created by political fiat or caprice."
Henry Hazlitt
We open with Asian markets fretting
that President Trump’s on-again, off-again, trade war with China, is back on
again. Trumpmania is skating on ever thinner ice.
Asian shares slip from 1-1/2-year high, Trump's yuan remarks in focus
Asian shares took a breather on Friday, slipping from 1-1/2-year highs as material shares were hit by sudden falls in copper and other commodity prices while investors assessed Washington's stance on tax and currency policies.U.S. President Donald Trump called China "grand champions" of currency manipulation, doing little to raise confidence on trade relations between the world's two biggest economies.
Markets appeared to take his comments in stride, as they were made just hours after his new Treasury secretary pledged a more methodical approach to analyzing Beijing's foreign exchange practices.
"With Mnuchin officially sworn in, from now on, I suspect most comments on foreign exchange policies come from him. And he has said a strong dollar is in U.S. interests," said Shuji Shirota, head of macroeconomic strategy group in Tokyo at HSBC Securities.
The offshore yuan stood little changed at 6.8545 per dollar CNH=D4. The yuan was emerging Asia's worst performer last year, even as Beijing tried to stem its fall, sliding around 6.6 percent in its biggest drop in over 20 years onshore.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.5 percent, giving back part of this week's gains, though it is likely to log its fifth straight week of gains.
Australian material shares were the biggest drag as they were spooked by big falls in the price of copper CMCU3, iron ore DCIOv1 and other commodities.
Hong Kong's Hang Seng .HSI dropped 0.5 percent while China's mainland shares .SSEC fell 0.4 percent.
More
Exclusive: Trump says Republican border tax could boost U.S. jobs
U.S. President Donald Trump on Thursday spoke positively about a border
adjustment tax being pushed by Republicans in Congress as a way to boost
exports, but he did not specifically endorse the proposal.
Trump, who has lashed out at U.S. companies for moving operations and
jobs to countries such as Mexico, had previously sent mixed signals on the
proposal at the heart of a sweeping Republican plan to overhaul the tax code.
"It could lead to a lot more jobs in the United States," Trump
told Reuters in an interview, using his most approving language to date on the
proposal.
Trump sent conflicting signals about his position on the border
adjustment tax in separate media interviews in January, saying in one interview
that it was "too complicated" and in another that it was still on the
table.
The proposal has divided American businesses. Critics say the planned 20
percent tax on imports could be passed along in higher prices to consumers,
including manufacturers that rely on imported goods to make their products.
Some critics have warned of a potential global trade war which would
sharply curtail U.S. and world economic growth.
More
In
EUSSR news, now even Germany has a reason to leave the EUSSR. Still after
Brexit, Germany might still want to retain access to John Bull’s 86 billion
German export market. I wonder how much they’re willing to pay GB for access?
China overtakes U.S., France as Germany's most important trading partner
China for the first time became Germany's
most important trading partner in 2016, overtaking the United States, which
fell back to third place behind France, data showed on Friday.
German imports from and exports to China rose to 170 billion euros ($180
billion) last year, Federal Statistics Office
figures reviewed by Reuters showed.
The development is likely to be welcomed by the German government, which
has made it a goal to safeguard global free trade after U.S. President Donald
Trump threatened to impose tariffs on imports and his top adviser on trade
accused Germany of exploiting a weak euro to boost exports.
German Vice Chancellor Sigmar Gabriel has even suggested that the
European Union should refocus its economic policy toward Asia, should the Trump
administration pursue protectionism.
"Given the protectionist plans of the new U.S. president one would
expect that the trade ties between Germany and China will be further
strengthened," Germany's BGA trade association said in response to the
shift.
Neighboring France remained the second-most important business partner
with a combined trade volume of 167 billion euros. The United States came in
third with 165 billion euros.
In 2015, the United States became the top trading partner for Germany,
overtaking France for the first time since 1961 thanks to an upturn in the U.S.
economy and a weaker euro.
Looking at exports alone, the United States remained the biggest client
for products "Made in Germany" in 2016, importing goods from Europe's
biggest economy worth some 107 billion euros.
France remained the second-most important single export destination for
German goods with a sum of 101 billion euros, the data showed. Britain came in
third, importing German goods worth 86 billion euros.
Britain accounted also for the biggest bi-lateral trade surplus: Exports
surpassed imports from Britain by more than 50 billion euros, the figures
showed.
The United States came in second with a bi-lateral trade deficit: German
exports to the U.S. surpassed imports from there by 49 billion euros.
More
The whole history
of civilization is strewn with creeds and institutions which were invaluable at
first, and deadly afterwards.
Walter Bagehot.
At the Comex silver depositories Thursday final figures were: Registered 31.24 Moz, Eligible 152.80 Moz, Total 184.04 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Below, the Gospel of Oil, according to BP PLC.
Why oil prices will never return to $100 a barrel, in one chart
Demand is never going to outstrip the world’s oil resources, BP expert says
A persistent global glut of
oil that has dogged markets for around two years may never truly subside, says
one industry expert.
According to Spencer Dale, chief economist at oil giant BP PLC BP., +0.20% BP, -1.24% the global oil market
suffers from an abundance of oil that’s going to add pressure on the industry
for decades. As this chart shows, BP estimates that there are about 2.5
trillion barrels of technically recoverable oil resources left in the world,
enough to cover the world's entire oil demand out to 2050—twice.
“This is my killer chart. It’s very simple, very straight forward, but it makes a very powerful point,” Dale said, when presenting BP’s 2017 Energy Outlook to delegates at the International Petroleum Week in London on Wednesday.
“It
seems to me increasingly likely that some barrels of technically recoverable
oil will never be extracted, there’s just so much oil. Why does that matter?
This matters because it could profoundly change the nature of oil markets,” he
added.
According
to Dale the crude market could see more significant action from major oil
players as the industry comes to terms with the daunting supply outlook. He
explained that one of the biggest risks to the oil market is how low-cost
producers respond to this abundance. In the current market, these low-cost
producers can “ration” their supplies because they don’t have large expenses to
immediately cover. That means they may be able to wait a day or month to
produce more oil if it fits better into the trading environment. That means, if
prices, which have hovered firmly above $50 a barrel, rise to sufficiently
attractive levels.
On the
contrary, higher-cost producers are more sensitive to generating revenue here
and now and are less likely to postpone their oil extraction. In a world of oil
abundance that means the low-cost producers are likely to be beaten on
production, unless they change their tactics, Dale explained.
“I would expect the
low-cost producers to gradually use their competitive advantage to increase
their market share relative to high-cost producers,” he said.
More
All the best
stories in the world are but one story in reality - the story of escape. It is
the only thing which interests us all and at all times, how to escape.
Walter Bagehot.
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?
New York Has Grown Its Solar Power By Almost 800% In Only Five Years
The big apple goes green 🍏
So in a time where there isn’t always a lot of good news about climate change, we’re pleased to hear that New York has been making strides in renewable energy.
In fact, the east-coast US state has seen an almost 800% growth (well 795% to be exact) in solar power in the last five years, with the most being in Long Island and Central New York.
By the end of 2016, the state had 64,926 solar panel installations – enough to meet the requirements of 121,000 average homes - and a massive leap from the 9,079 that were around in December 2011.
In an official statement, Governor Andrew M. Cuomo, who has been instrumental in the state supported take-up, announced on Tuesday that almost $1.5 billion had also been leveraged in private investment for the eco-friendly projects.
And that’s not all, there is a load more solar plans in the pipeline, with more than 886 MW of additional capacity in development coming in 2017, which equates to more than 150,000 homes.
More
Another weekend,
and the new American civil war continues. The American War Party under Mad Dog
McCain seems to be conducting its own foreign policy. The Clintonistas and
Obamaite holdovers, as seen from London anyway, seem to be obstructing the new
Trumpian administration at every turn. The Fake News mainstream media are all
firmly in the anti-Trump camp. An orchestrated international campaign against
President Trump also seems to be underway. It will be interesting to find out
just who is financing it. A house divided cannot stand. Is America now so divided
it cannot stand? Time will tell. Have a great weekend
everyone.
Since love and fear can
hardly coexist together, if we must choose between them, it is far safer to be
feared than loved.
Niccolo Machiavelli.
The monthly Coppock Indicators finished January
DJIA: 19864
+92 Up. NASDAQ: 5615 +95 Up. SP500: 2279 +95 Up.
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