Friday 31 August 2018

My Way Or The Highway – Trump.

Baltic Dry Index. 1614 -47   Brent Crude 77.70

"The paper standard is self-destructive."

Hans F. Sennholz

It is the end of the media “silly season,” but yesterday’s news from America was anything but silly. In a final attempt to breakout of the Stalingrad disaster of his own making, President Trump went all-in in attempting to show that America can’t be trusted on treaties of any kind, let alone trade treaties it itself promoted and utilised effectively.

After renewing his trade threats to impose more punitive tariffs on China next week, President Trump set about trying to bully the World Trade Organisation the USA promoted and helped develop. 

As a policy to drive the rest of the world into a financial and trade system that excludes the USA in the decades ahead, it is all too likely to be an outstanding success. How that improves global prosperity and raising the incomes and living standards in the way we have come to expect in recent decades, is far from clear.

Below, bunker time, the first stage phony trade war is ending. From here on out, this trade war has nothing but bad consequences for all. As the Great Nixonian Error of fiat money increasingly fails, especially in the USA, an increasingly baffled Trump trade team keep irrationally making things worse. Sadly there is no sign of sanity returning in the District of Crooks anytime soon.

Nothing is so admirable in politics as a short memory.

John Kenneth Galbraith.

Trump Threatens to Pull U.S. Out of WTO If It Doesn’t ‘Shape Up’

Aug 30 2018, 9:23 PM
(Bloomberg) -- President Donald Trump said he would pull out of the World Trade Organization if it doesn’t treat the U.S. better, targeting a cornerstone of the international trading system.

“If they don’t shape up, I would withdraw from the WTO,” Trump said Thursday in an Oval Office interview with Bloomberg News. Trump said the agreement establishing the body “was the single worst trade deal ever made.”

A U.S. withdrawal from the WTO potentially would be far more significant for the global economy than even Trump’s growing trade war with China, undermining the post-World War II system that the U.S. helped build.

Trump said last month that the U.S. is at a big disadvantage from being treated “very badly” by the WTO for many years and that the Geneva-based body needs to “change their ways.”

 EU Offer for No Auto Tariffs Is ‘Not Good Enough,’ Trump Say

U.S. Trade Representative Robert Lighthizer has said allowing China into the WTO in 2001 was a mistake. He has long called for the U.S. to take a more aggressive approach to the WTO, arguing that it was incapable of dealing with a non-market economy such as China.

Lighthizer has accused the WTO dispute-settlement system of interfering with U.S. sovereignty, particularly on anti-dumping cases. The U.S. has been blocking the appointment of judges to the WTO’s appeals body, raising the possibility that it could cease to function in the coming years.

In the Oval Office interview, Trump said at the WTO “we rarely won a lawsuit except for last year.”

“In the last year, we’re starting to win a lot,” he added. “You know why? Because they know if we don’t, I’m out of there.”

----Countries that bring complaints to the WTO tend to prevail and defendants in trade disputes lose.

But WTO data also shows that the U.S. does slightly better than the WTO average in both cases it brings and that are brought against it, said Simon Lester, a trade analyst at the Cato Institute, a Washington policy group that favors more open international trade.

Of the 54 cases brought by the U.S. over the life of the WTO, Washington won at least one finding in its favor in 49, or 91 percent, Lester said. Of the 80 cases brought against it, a WTO panel had ruled against it in at least one aspect in 69 cases, or 86 percent of the time.

August 30, 2018 / 7:43 PM

Trump ready to ratchet up China trade war with more tariffs - report

WASHINGTON (Reuters) - U.S. President Donald Trump is prepared to quickly ramp up a trade war with China and has told aides he is ready to impose tariffs on $200 billion (153.76 billion pounds)more in Chinese imports as soon as a public comment period on the plan ends next week, Bloomberg News reported on Thursday.

The White House declined comment on the Bloomberg report, which cited six unidentified sources, and deflated markets. The S&P hit session lows, and the U.S. dollar, Chinese yuan and U.S. Treasury yields also fell.

Trump has credited his electoral success to his hard line on trade, which he has argued hurts U.S. workers and favors foreign competitors. Washington is demanding Beijing improve market access and intellectual property protections for U.S. companies, cut industrial subsidies and slash a $375 billion trade gap.

The world’s two largest economies have already applied tariffs to $50 billion of each other’s goods in a tit-for-tat trade war. Talks aimed at easing tensions ended last week without major breakthroughs.

The new proposed 25 percent tariffs would affect consumer products including home building supplies, technology products, bicycles and apparel.

A public comment period on the proposal is set to end on Sept. 6, and Trump plans to impose the tariffs after that deadline, Bloomberg said.

Some sources said Trump had not made his final decision, the Bloomberg report said. Trump administration officials have been divided over how hard to push Beijing.

Trump, who has threatened to impose duties on virtually all of the more than $500 billion of Chinese goods exported to the United States each year, told Reuters in an interview earlier this month that resolving the trade war with China would “take time” and that he had “no time frame” for ending it.

August 31, 2018 / 2:11 AM

Trump tweets are 'messages from some alternative universe' - China Daily

SHANGHAI (Reuters) - Twitter comments by U.S. President Donald Trump accusing China of hacking former presidential candidate Hillary Clinton’s email server are an attempt to cast China as a “scapegoat”, the official China Daily said in an editorial Friday.

The strongly worded editorial also took aim at Trump directly, commenting: “To the thinking person, there are few things more disconcerting than a tweet by the U.S. president as they initially seem to accord to reality but then quickly turn into messages from some alternative universe.”

Trump said on Twitter on Wednesday that China hacked the emails of 2016 Democratic presidential candidate Hillary Clinton but did not offer any evidence or further information.

China’s foreign ministry has denied Trump’s allegation and the editorial accused him of “smearing China’s image as he desperately needs a scapegoat in the run-up to the midterm elections, so he can divert public attention from the troubles the White House has become mired in”.

Trump faces potentially difficult mid-term elections in November as his Republican party fights to retain control of both houses of Congress.

Asian markets fall as Trump pushes more tariffs against China

Published: Aug 30, 2018 11:02 p.m. ET
Asian stocks were broadly lower in early trading Friday, after a report that President Donald Trump was pushing ahead with his plan for tariffs on an additional $200 billion worth of Chinese goods and threatened to withdraw the U.S. from the World Trade Organization.

Trump’s WTO criticism helped push the yen USDJPY, +0.03%   higher overnight, pushing Japan’s Nikkei NIK, -0.17%   down 0.2%. The index has risen for eight straight days, and is up 1.4% in August coming into the final trading day of the month. Export-reliant companies fell, with Honda Motor 7267, -1.55%   down 1.5% and Kobe Steel 5406, -1.27%   off 1.4%
Hong Kong stocks were sharply lower, with the Hang Seng Index HSI, -0.91%   down 1.4%. China’s announcement that it would limit the number of new online games kicked Tencent 0700, -4.53%   lower. Meanwhile, oil giant PetroChina 0857, -3.79%   was down 3.8% following its after-the-bell earnings report. Embattled telecom-equipment maker ZTE 0763, +0.93%   rose 2% after showing first-half revenue growth.

Chinese stocks dropped at the prospects of further U.S. import tariffs. The Shanghai Composite SHCOMP, -0.08%   was down 0.9% and the Shenzhen Composite 399106, -0.54%   was off 1.2%, even as PMI data for August held up.

Korea’s Kospi SEU, +0.25%  , which Thursday barely saw its nine-day run of gains come to an end, was off a further 0.1%. Steelmaker Posco 005490, -1.95%   fell more than 2%, while Samsung 005930, +0.94%   was down about 0.1%. Down Under, markets retreated slightly, with Australia’s ASX 200 XJO, -0.31%   down 0.2% and New Zealand’s NZX-50 NZ50GR, -0.16%   seeing a 0.4% decline.

Singapore’s stock benchmark STI, -0.18%   was down only a fraction, while Taiwan Y9999, -0.70%  , Malaysia FBMKLCI, -0.05%   and Indonesia JAKIDX, -0.76%   were down almost 1%.

Trump Makes Clear EU Won't Escape His Ire Over Trade for Long

By Shawn Donnan

President says EU ‘almost as bad as China, just smaller’ 
 Rejects EU zero tariffs offer for cars as ‘not enough’

August 30, 2018 / 1:02 PM

EU deeply disagrees with U.S. on trade despite detente

BRUSSELS (Reuters) - The European Union’s detente on tariffs with the United States has not put to rest “profound disagreements” on trade policy, the European commissioner in charge of trade said on Thursday.

U.S. President Donald Trump agreed in July to refrain from imposing car tariffs while the two sides sought to cut other trade barriers, in a move described then by the European Commission chief as major concession. 

Speaking to the trade committee of the European Parliament on Thursday, European Trade Commissioner Cecilia Malmstrom discussed a group that she and U.S. Trade Representative Robert Lighthizer will lead to determine how tariffs might be removed on industrial goods.

“We are not negotiating anything, we have a working group. We have profound disagreements with the United States on trade policy,” Malmstrom told EU lawmakers.

A number of those lawmakers were fierce critics of a planned EU-U.S. Transatlantic Trade and Investment Partnership (TTIP), negotiations on which ended after Trump’s election victory in 2016.
“We are not restarting TTIP ... This could be a more limited trade agreement, focused on tariffs on goods only,” Malmstrom said.

She also said the European Union would be willing to reduce its car tariffs to zero, if the United States did the same, going beyond the provisional agreement struck in July which referred only to “non-auto industrial goods”.

“We would do it if they do it. That remains to be seen,” she said, adding she hoped a deal could be finalised by the end of the Commission’s five-year term running until October 31, 2019.

The European Union remains at odds with the United States over U.S. blocking of the appointment of judges at the World Trade Organization, over tariffs set for reasons of national security and over Washington’s tough stance towards China.

August 30, 2018 / 10:29 AM

It's time for realism in EU-Russia ties - France's Macron

HELSINKI (Reuters) - French President Emmanuel Macron urged the European Union on Thursday to modernise its post-Cold War ties with Russia and pursue “strategic relations” with Turkey as well as other close neighbours, including in defence matters.

Macron strongly advocates Europe’s ability to defend its strategic interests and assert its financial independence in response to the new global economic and defence situation brought on by Donald Trump’s presidency in the United States. 

The French leader said Europe had long relied on U.S. protection and that while the NATO defence alliance remained important, the EU needed to bolster its own defence capacities.

“It is in our interest for the EU to have a strategic relationship with Turkey as well as with Russia that brings stability, that will in the long term and bring more strength and coherency,” he told a news conference on a visit to Helsinki.

Trump’s questioning of the United States’ future role in NATO, the mainstay of post-war European defence policy, if European members do not increase their financial contributions has worried some members about how they might deal with Russia.

Since coming to office in May last year, Macron has tried to improve relations with Russian President Vladimir Putin.

----“It’s not about forgetting the last few years, that wouldn’t be right, but simply a realistic means ... to cooperate more deeply,” Macron said, adding that Russia would need to signal advances on issues including the Ukrainian peace process.

The EU’s relations with Russia needed to be “brought up to date”, he added.

“On matters like cybersecurity, defence, strategic relationships, we could envisage the outlines of a new relationship between Russia and the EU which is coherent with the direction Europe is headed in,” Macron said. “Stability in the whole region is in our interest.”

Finland, a member of the EU but not of NATO, has had a difficult relationship with Moscow since it declared independence from Russia in 1917.

However, Finnish President Sauli Niinisto, who joined Macron at the news conference, has been credited at home for forging a constructive relationship with Putin.

"With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people."

F. A. von Hayek

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

Below, where the fiat currency USA is headed. President Trump merely wants to get there in a hurry.

"The fate of the nation and the fate of the currency are one and the same."

Dr. Franz Pick

Argentina's central bank hikes rates to 60% as the currency collapses

  • Investors are increasingly concerned Latin America's third-largest economy could soon default as it struggles to repay heavy government borrowing.
  • The peso is down more than 45 percent against the greenback this year, exacerbating pre-existing fears over the country's weakening economy and inflation running at 25.4 percent this year.
  • "I know that these tumultuous situations generate anxiety among many of you ... I understand this, and I want you to know I am making all decisions necessary to protect you," Macri said.
Published  30 August 2018
Argentina is struggling to cope with yet another financial crisis.

Investors are increasingly concerned Latin America's third-largest economy could soon default as it struggles to repay heavy government borrowing. This comes after Argentina's government unexpectedly asked for the early release of a $50 billion loan from the International Monetary Fund (IMF) on Wednesday.

The Argentine peso crashed to record lows on the news. It saw steep losses in the previous session and collapsed another 15 percent to hit $39 on Thursday morning.

The peso is down more than 45 percent against the greenback this year, exacerbating pre-existing fears over the country's weakening economy while inflation is running at 25.4 percent this year.

On Thursday, the central bank said it was increasing the amount of reserves that banks have to hold, in a bid to tighten fiscal policy and shore up the currency. It hiked rates by 15 percentage points to 60 percent from 45 percent

The IMF said in a statement Wednesday that it would look to "revise the government's economic plan with a focus on better insulating Argentina from recent shifts in global financial markets."

The Washington D.C.-based institute also added that its plan included "stronger monetary and fiscal policies and a deepening of efforts to support the most vulnerable in society."

"It is now unclear if that will be enough to stabilize the government's finances amid (a) persistent reserve drain," Deutsche Bank's Jim Reid said in a research note published Thursday.

----But the world's highest interest rate levels as well as backing from the IMF have both failed to significantly improve market sentiment.

"Real rates are not tight enough to encourage capital inflows (so) the economy is likely to contract this year," Reid said.

A number of emerging market countries, including Argentina, Turkey and Brazil, are feeling the impact as tighter monetary policy from the U.S. Federal Reserve has boosted the dollar.

"The history of paper money is an account of abuse, mismanagement, and financial disaster."

Richard M. Ebeling

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?

Watching two-dimensional materials grow

Date: August 29, 2018

Source: Vienna University of Technology

Summary: The production of ultra-thin 2D crystals is difficult. In the past, different techniques have yielded quite diverse results, but the reasons for this could not be accurately explained. Thanks to a new method it is now possible to observe the crystallization process directly under the electron microscope. 

They are among the thinnest structures on earth: "two dimensional materials" are crystals which consist of only one or a few layers of atoms. They often display unusual properties, promising many new applications in opto-electronics and energy technology. One of these materials is 2D-molybdenum sulphide, an atomically thin layer of molybdenum and sulphur atoms.

The production of such ultra-thin crystals is difficult. The crystallisation process depends on many different factors. In the past, different techniques have yielded quite diverse results, but the reasons for this could not be accurately explained. Thanks to a new method developed by research teams at TU Wien, the University of Vienna and Joanneum Research in Styria, for the first time ever it is now possible to observe the crystallisation process directly under the electron microscope. The method has now been presented in the scientific journal ACS Nano.

From gas to crystal

"Molybdenum sulphide can be used in transparent and flexible solar cells or for sustainably generating hydrogen for energy storage," says the lead author of the study, Bernhard C. Bayer from the Institute of Materials Chemistry at TU Wien. "In order to do this, however, high-quality crystals must be grown under controlled conditions."

Usually this is done by starting out with atoms in gaseous form and then condensing them on a surface in a random and unstructured way. In a second step, the atoms are arranged in regular crystal form -- through heating, for example. "The diverse chemical reactions during the crystallisation process are, however, still unclear, which makes it very difficult to develop better production methods for 2D materials of this kind," Bayer states.

Thanks to a new method, however, it should now be possible to accurately study the details of the crystallisation process. "This means it is no longer necessary to experiment through trial and error, but thanks to a deeper understanding of the processes, we can say for certain how to obtain the desired product," Bayer adds.

----The new findings will help to adapt the structure of the 2D materials more precisely to application requirements in future by interfering with the rearrangement processes in a targeted manner.

Another weekend and the last day of August to dress up the stock markets month-end closes. But it’s also the Labor Day long weekend holiday in America, so it’s anyone’s guess what happens in the extra thin conditions today.

It’s also anyone’s guess if President Trump’s tweets over Labour Day will be positive or negative. So far he’s done a great job of forcing the rest of the world to back away from America. How that plays out in the decades ahead, no one yet knows, but I suspect that it’s not a positive development for America. Have a great weekend everyone.

"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

The monthly Coppock Indicators finished July.

DJIA: 25,415 +213 Down. NASDAQ: 7,672 +259 Down. SP500: 2,816 +166 Down.
All three slow indicators moved down in March and have continued down ever since. For some a new bear signal, for others a take profits and get back to cash signal