Wednesday 26 April 2017

Europe, One Gigantic Lie. Creative Destruction.



Baltic Dry Index. 1154 -16     Brent Crude 52.03

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

"If the EU cannot resolve a small problem the size of Greece, what is the point of Europe?"

Romano Prodi, former President of the European Commission, former Italy Prime Minister.

For more on Schumpeter’s “creative destruction,” scroll down to “Technology Update,” and no it has nothing to do with President Trump’s unorthodox economic policies, nor in levelling North and South Korea. Today’s Technology Update, is probably today’s most important section.

Up first, more of the crooked insane asylum, aka the EUSSR. Why would anyone want to stay in a car crash waiting to happen like this, let alone join? Brexit now before crazy Europeans take down the even crazier Europeans, with or without Macron or Le Pen. The fiat euro, or is it the euro-peso, is living on borrowed time.

Below, when Spain boldly followed Greece. In the wealth and jobs destroying, dying, EUSSR, reform makes Spain’s Manana timetable, look like greased lightening.

“When it becomes serious, you have to lie.”

Jean-Claude Juncker. Failed former Luxembourg P.M., serial liar, president of the European Commission.

‘GIGANTIC LIE!’ Spanish government embroiled in ‘scandalous manipulation’ of debt figures

THE European Commission has been accused of failing to meet its legal obligations in an astonishing letter sent to the Eurogroup President by Spanish financial experts.

By PUBLISHED: 11:18, Tue, Apr 25, 2017
Campaigners including a leading Madrid based economist have called on Jeroen Dijsselbloem, the Dutch finance chief who leads the eurozone’s ministers, to intervene immediately to probe the Spanish National Accounts.

They say the people of the country have become "victims of the greatest wave of political profligacy and corruption ever known in Spain’s recent history”.

The men have asked for a meeting with Mr Dijsselbloem who recently became angered over a 'drinks and women' row raging at the European Union.

And the experts are demanding the European Union's flagship Eurostat organisation is hauled over the coals for its alleged inability to probe and produce accurate figures.

They say the Spanish people are being forced to pay for the "scandalous manipulation" of the economic data which might lead to the destruction of the Eurozone.

The letter seen by Express.co.uk was sent to Mr Dijsselbloem who has yet to respond to it.

The document is signed by economists Juan Laborda, Juan Carlos Barbas, Juan Carlos Bermejo, and Roberto Centeno, Professor Emeritus of Economy at the Technical University of Madrid, compares the country's misfortune to Greece.

It says they felt compelled to flag the false figures because the entire system is flawed.

The letter states: "Mr President, you assert that Eurostat checks Spain’s economic figures on the basis of ‘appropriate quality measures’. 

"However, until now Eurostat has taken for good the most false and incongruent public accounts of the Eurozone. 

"In addition the European Commission has looked elsewhere to the repeated non-compliance with the macroeconomic objectives, ignoring Spain’s obligation to comply with the Stability and Growth Pact, which makes them necessary accomplices in the generation of a gigantic bubble of debt already impossible to pay back, and that will ruin the next generations of Spaniards for not less than 50 years."  (Emphasis added.)

Mr Dijsselbloem responded to the first letter sent to him last November just a month ago and he has confirmed he will look at the figures.

However, the economists are determined to ensure that the truth, which they see as the EU agency refusing to acknowledge huge debt in order to protect the Eurozone, is exposed.

The letter adds: “We believe it is essential to dismantle the gigantic lie of a supposed Eurostat's control of the macroeconomic figures associated to the Stability Pact, something that, if not corrected immediately, might end the Eurozone as we know it. 

"What happened to Greece, which between 1999 and 2004 systematically manipulated its national accounts, is a precedent that we all remember.

"We illustrate this with a very representative example of how Eurostat does not verify anything in depth. 
"The official growth in 2012 was -1.7 per cent, a figure validated by Eurostat although it was manifestly false – a fact that the undersigned denounced in the Spanish media at the time. 

"Three years later, in 2016, the Spanish National Statistical Office (INE) reduced the 2012 growth figure to -2.9 per cent, an ‘error’ of 70 per cent that Eurostat could not or did not want to detect. 

"In 2013 again the Eurostat Government validated as usual the figure supplied by the Spanish Government, which was subsequently corrected by the INE in 2016 by 40 per cent.
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Latest Turn in Greek Debt Crisis Is Kafkaesque: QuickTake Q&A

by Viktoria Dendrinou and Sotiris Nikas
25 April 2017, 00:00 GMT+1
Greece’s next dollop of bailout money is caught in an international dispute with no clear resolution. The heavily indebted Mediterranean nation needs the next installment of about 7 billion euros ($7.6 billion) to repay lenders in a few months, but some euro-area governments, notably Germany, refuse to supply more money until the International Monetary Fund comes on board. The IMF, in turn, is refusing to join the creditors’ club until Greece’s debt burden is eased -- which Germany refuses to do. Franz Kafka would appreciate the absurdity of the latest twist in the Greek debt crisis, though investors aren’t amused.

1. Isn’t it the IMF’s job to help countries in distress?

Yes, but having come to Greece’s rescue twice in the past, this time it’s hesitating. The IMF says two conditions must be met before it co-finances the country’s ongoing third bailout. First, Athens must agree to a set of credible reforms, particularly of its pension and tax systems. Second, the IMF insists that the euro area ease Greece’s debt burden. While neither condition has been fully met, talks have advanced on the fiscal policies Greece needs to implement to get fresh bailout loans.

2. Why is the IMF so concerned about the debt burden?

Like all creditors, the IMF wants to be repaid. More importantly, the fund’s own credibility is on the line. Its rules don’t allow it to finance countries with unsustainable debt loads. Having to answer to 189 member-states, the IMF doesn’t want to be seen giving Greece special treatment. Doing so could tarnish its reputation, which has already suffered from its seven-year involvement with the country.
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Le Pen on the Attack as Macron Lies Low After First Round

by Gregory Viscusi
Presidential candidate Marine Le Pen and her lieutenants pounded her rival Emmanuel Macron, as the front-runner in the race for the French presidency remained quiet for a second day.

Thirty-six hours after they took the top spots in the first round of the presidential election and progressed to the May 7 run-off, Le Pen, 48, has been interviewed on one of the main evening news shows and visited Paris’s wholesale food market, while 39-year-old Macron has barely been seen. Polls suggest Macron should win the runoff by at least 20 percentage points, the latest one Tuesday from OpinionWay showed Macron would get 61 percent.

“His project is to deregulate everything: labor, trade, borders, immigration,” Florian Philippot, vice-president of Le Pen’s National Front, said on France Info radio Tuesday. “He’d be in a better position to lecture if he had a good record at the economy ministry, but he destroyed jobs, increased debt, and contributed to the de-industrialization of France.”

After years of economic under-performance and a wave of terrorist attacks, the final phase of the French election has become a struggle over two radically different visions of the country’s future.
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Meanwhile in Bonnie Scotland, the Scots have finally sobered up, or have they?

Mon Apr 24, 2017 | 7:04pm EDT

Scots don't want another independence vote: Kantar poll

Most Scottish voters do not want another referendum on independence from the United Kingdom and support for secession itself appears to have weakened, according to a Kantar survey.
Scots voted by a wide margin to stick with the European Union in last June's referendum, clashing with the UK as a whole which voted to leave.
Scotland's devolved government, run by the Scottish National Party (SNP), says this means the country should be given a new chance to decide whether it wants to split from the UK. The central government in London opposes this.
The Brexit issue does not appear to have given wings to the independence movement, according to Kantar's survey of 1,060 adults carried out after Scotland's First Minister Nicola Sturgeon called for a referendum to be held in autumn 2018 or spring 2019.
Of those interviewed, only 26 percent thought an independence vote should be held on either of those dates, while 18 percent thought it should take place later. But 46 percent thought there should be no referendum at all.
The issue is center-stage in Scotland ahead of a UK-wide election on June 8.
Kantar found that of those who said they would be certain to vote in any independence referendum, 55 percent would vote against it, while 37 percent would vote in favor and another 8 percent were undecided.
In a 2014 referendum, Scots voted against independence by 55-45 percent.
More

Elsewhere, Canada became the first (of many to come,) victim of President Trump’s new trade wars.

Tue Apr 25, 2017 | 6:20pm EDT

Canada's options limited as it faces prospect of U.S. trade war

From cherries to wine and oil, Canada has a range of tools to retaliate against any Trump administration trade attacks but they are either too limited or too painful to invoke.

Ottawa is keen to avoid a costly trade war with the United States as NAFTA renegotiations loom, given the U.S. economy is ten times larger than Canada's.

Cutting off energy exports is an option so fraught with risks - Canada is the largest supplier of energy to the United States - that Ottawa has never discussed it seriously. Meanwhile, hitting back on U.S. imports of goods like cherries and office chairs may have too little impact, leaving Canada with limited leverage.

U.S. President Donald Trump's administration has suddenly ramped up its attacks on Canada, imposing tariffs on softwood lumber and vowing to take action against what it calls unfair practices by Canadian dairy farmers.

Trump last week also said Canadian energy was another example of a bad trade deal for the United States, but gave no specifics or evidence.

Canadian officials played down the tariffs as disappointing, just one part of an otherwise successful trade relationship, even though Canadian government ministers have fanned across the United States selling the virtues of bilateral trade.

"There are no victors in a trade war," Scott Brison, a senior Canadian cabinet member, said by phone from Detroit.

A senior Canadian political source said Ottawa would not for now be changing its approach despite Trump's harsher tone.

"This is a classic pre-negotiating tactic. It's in his book," said the source, who requested anonymity because of the sensitivity of the situation.

Both softwood lumber and Canada's system of protections for its dairy industry were kept out of the initial North American Free Trade Agreement in 1994, making it easier for the United States to raise them now without having to wait for formal negotiations.

Top officials, noting that international trade authorities have always ruled in Canada's favor in the long dispute over softwood lumber, say Ottawa will fight back against the tariffs and win again.

Ottawa will consider all options, including a World Trade Organization or NAFTA challenge, and help companies and workers who lose their jobs because of the U.S. move.

In a sign of where the United States might strike next, international trade lawyer Mark Warner said Washington had asked to be granted observer status in a case Brazil opened in February against Canada at the WTO, over allegations of unfair subsidies to planemaker Bombardier Inc.
More

At the Comex silver depositories Tuesday final figures were: Registered 29.21 Moz, Eligible 167.68 Moz, Total 196.89 Moz.

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today, a malaria development that holds great promise but requires more research. Mr & Mrs Gates are you a New Atlas or LIR reader?

Plant powder snatches malaria victims from death's door

Michael Franco April 24, 2017
When 18 malaria patients in the Congo failed to respond to conventional treatments and instead continued to head toward terminal status, doctors knew they had to act fast – and try something different. So instead of turning to more synthetic drugs, they turned instead to nature and found a solution that delivered remarkable results.

The patients were first treated with the regimen described by the World Health Organization (WHO): artemisinin-based combination therapy (ACT). This drug combines an extract from a plant known as Artemisia annua, with other drugs that launch a multi-pronged attack on the malaria parasite. But just as is the case with antibiotic-resistant bacteria, the malaria parasite is evolving to resist the drugs designed to kill it. In fact, according to the WHO, three of the five malarial parasites that infect humans have shown drug resistance.

As the patients continued to decline, with one five-year-old even entering into a coma, the doctors administered a drug called artesunate intravenously, which is the preferred course of action when treating severe malaria. The treatment didn't work.

Finally, doctors turned to the Artemisia annua plant itself. Also called sweet wormwood or sweet Annie, the plant is the source of the chemical artemisinin, which is used in ACT therapy. The plant has been used since ancient times in Chinese medicine to treat fevers, although this bit of knowledge was lost until 1970 when the Chinese Handbook of Prescriptions for Emergency Treatments (340 AD) was rediscovered. In 1971 it was found that extracts from the plant could fight malaria in primates.

Pamela Weathers, professor of biology and biotechnology at Worcester Polytechnic Institute began researching Artemisia annua over 25 years ago. Along with postdoctoral fellow Melissa Towler, Weathers created a pill made from nothing more than the dried and powdered leaves of the plant. When the pills were given to the 18 dying patients over the course of five days, all of them completely recovered, with no trace of the malaria parasite remaining in their blood.

"These 18 patients were dying," Weathers said. "So to see 100 percent recover, even the child who had lapsed into a coma, was just amazing. It's a small study, but the results are powerful."

Weathers had previously shown that the dried leaves of the Artemisia annua plant (DLA) could deliver 40 times more Artemisia annua to the blood than extracts of the plant alone. In a later experiment, she showed that not only could the leaves beat drug-resistant bacteria in mice, but that after passing the malaria parasite through 49 generations of mice, the parasite still showed no resistance to the plant.

While the exact mechanism through which DLA operates is unclear, Weathers says it's likely due to the intricate chemical dance that occurs between the phytochemicals in the leaves.
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Technology 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?

Today batteries. Germany joins in pay to play.

Mercedes energy storage units headed for UK homes

Scott Collie April 23, 2017
Car manufacturers are racing to get their electric cars onto the market, but that's not the only battery-powered battle being played out: they're also keen to get their batteries into family homes. Tesla has made its Powerwall plans clear, and Mercedes-Benz Energy has been talking a big game with its energy storage systems, which will soon be finding their way into homes in the UK.

Although they'll be slotting into homes, the Mercedes-Benz batteries have their roots in the automotive world. Developed by ACCUmotive, the Daimler subsidiary responsible for the batteries in production Mercedes hybrids, the lithium-ion cells can be used to store energy generated by home solar systems or wind turbines.

Each battery pack can store 2.5 kWh, and the modular nature of the system means up to eight can be combined for a total capacity of 20 kWh. Each individual unit is a compact block, and the batteries can be integrated and wall-mounted in one neat unit for a clean look. That's a different approach to the Tesla Powerwall, which comes in 7.5 kWh and 10 kWh capacities, and can be scaled to 58 kWh using multiple units.

According to Mercedes-Benz, installing a home battery pack can boost self-consumption of generated energy by up to 65 percent, and being able to store energy generated with personal solar panels does make them a more attractive option. Rather than feeding excess energy back into the grid, the batteries are able to store it, allowing home owners to use it themselves during expensive peak-rate times.
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Eneco and Mitsubishi Plan Europe’s Largest Battery, Pitching Storage Against Coal and Gas

After considering the project for two years, lithium-ion battery costs finally hit the right price point.
by Jason Deign April 24, 2017
Dutch developer Eneco and Japanese conglomerate Mitsubishi are developing a record-breaking battery designed for Germany’s primary reserve market, which will compete against coal and gas units.
The two companies have formed a German joint venture, Enspire ME, to develop what will be Europe’s largest battery plant, with 48 megawatts and 50 megawatt-hours of capacity, in Jardelund, Schleswig-Holstein, close to Germany’s border with Denmark.
The location is a nexus for offshore wind farm energy transmission. Enspire ME has already been granted a permit for the project and expects to start construction at the beginning of June. The plant is due to be up and running by December.
Enspire ME hopes to store surplus wind production at the battery plant so it can outdo coal and gas plants on the primary reserve market, where transmission network operators purchase capacity to keep the grid running at 50 Hertz.
The joint venture companies, which only have limited grid-scale energy storage experience, will be relying on NEC for the battery system. NEC is offering a 15-year warranty on its lithium-ion batteries, according to Marc Wegman, director of industrial assets at Eneco.   
Eneco and Mitsubishi have equal stakes in Enspire ME and will be investing “tens of millions” in the battery system, said Wegman. The project will be financed via bank loans, with “a small part” coming through German subsidies, Wegman said.
Part of the rationale for developing the project in Germany was the availability of energy storage subsidies, he said. 
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Continental Boosts Electric-Car Spend as Combustion Era Peaks

by Christoph Rauwald  25 April 2017, 07:37 GMT+1
Continental AG will scale back investments in traditional motor components and allocate more funds for hybrid and electric powertrains as the auto-parts maker prepares for the eventual decline of combustion engines.

Europe’s second-largest component supplier will invest an additional 300 million euros ($326 million) to develop and expand its offering of electric- and hybrid-car technologies by 2021, the Hanover, Germany-based company said Tuesday in a statement. While Continental won’t entirely abandon fine-tuning traditional motors, it sees electric and hybrid vehicles accounting for 40 percent of the car market by 2025.

“We have to expect gradually falling demand for newly developed mechanic and hydraulic engine components,” Jose Avila, head of Continental’s powertrain unit, said in the statement. “This is why we will reduce our expenses into these technologies step by step.”

Global automakers and their components suppliers are investing heavily to develop electric-car technology to comply with tightening emission rules across the globe. Balancing these investments is key to mitigate the financial burden of having to pour money into both electric and combustion engines for years to come as the tipping point at which battery-powered cars overtake gasoline and diesel engines remains difficult to predict.

“Large chunks of today’s powertrain revenue streams are simply obsolete in battery-electric vehicles,” Victoria Greer, an analyst with Morgan Stanley said in a note to clients. “We continue to struggle with the companies’ message that electric vehicles will be a content multiplier.”
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Jack Ma Sees Decades of Pain as Internet Upends Old Economy

23 April 2017, 22:00 GMT+1 24 April 2017, 07:03 GMT+1
Alibaba Group Holding Ltd. Chairman Jack Ma said society should prepare for decades of pain as the internet disrupts the economy.

The world must change education systems and establish how to work with robots to help soften the blow caused by automation and the internet economy, Ma said in a speech to an entrepreneurship conference in Zhengzhou, China.

“In the next 30 years, the world will see much more pain than happiness,” Ma said of job disruptions caused by the internet. “Social conflicts in the next three decades will have an impact on all sorts of industries and walks of life.”

It was an unusual speech for the Alibaba co-founder, who tends to embrace his role as visionary and extol the promise of the future. He explained at the event that he had tried to warn people in the early days of e-commerce it would disrupt traditional retailers and the like, but few listened. This time, he wants to warn against the impact of new technologies so no one will be surprised.
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Creative destruction, a term coined by Joseph Schumpeter in "Capitalism, Socialism and Democracy" in 1942, describes the "process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one." This occurs when innovation deconstructs long-standing arrangements and frees resources to be deployed elsewhere.

The monthly Coppock Indicators finished March

DJIA: 20,663  +131 Up. NASDAQ:  5,912 +165 Up. SP500: 2,363 +135 Up.

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