Baltic Dry Index. 1727 Mon. Brent Crude 72.88
“Under
the gold standard, a free banking system stands as the protector of an
economy's stability and balanced growth... The abandonment of the gold standard
made it possible for the welfare statists to use the banking system as a means
to an unlimited expansion of credit... In the absence of the gold standard,
there is no way to protect savings from confiscation through inflation”
Alan
Greenspan.
Today, while we await
the China – USA low level trade talks to get underway in Washington, and the Federal
Reserve Chairman’s keynote speech on Friday at the Fed’s annual banksters and
cronies mutual admiration society meeting in Jackson Hole Wyoming, some other greatly
ignored news in our fast changing, much more dangerous, but complacent world.
We open with US
overreach. The world’s largest debtor by far, has forgotten that the debtor is
the slave to his master, the creditor, and is risking all attempting to boss
around China. To this far away market watcher from London, Uncle Scam left it
at least a decade too late. The US economy is now far to integrated and
dependent on a successful, thriving China to support the rest of the world economy,
and America’s overreach is pretty much on display wherever one looks.
Does America really
want to close itself off from China?
August 22, 2018 / 4:56 AM
China expects Taiwan's last Africa ally will switch to Beijing soon
BEIJING/TAIPEI
(Reuters) - China expects self-ruled Taiwan’s last diplomatic ally in Africa,
the Kingdom of eSwatini, will switch to Beijing soon, a senior Chinese diplomat
said on Wednesday, a day after China won over the third Taipei ally in a year.
Taiwan, which China claims as a wayward province with no right to state-to-state
relations, now has formal ties with only 17 countries, many of them small, less
developed nations in Central America and the Pacific, including Belize and
Nauru.
Taiwan President Tsai Ing-wen, who has vowed not to bow to Chinese
pressure, came under opposition criticism on Wednesday amid calls for a more
friendlier policy towards Beijing.
Taiwan vowed on Tuesday to fight China’s “increasingly out of control”
behaviour after Taipei lost another ally to Beijing when El Salvador became the
third country to switch allegiances to China this year.
More
August 21, 2018 / 10:46 PM
Two U.S. airlines cut China routes as state-backed rivals turn up heat
DENVER/SHANGHAI
(Reuters) - Two U.S. airlines on Tuesday cut routes between China and the
United States, underscoring increasingly tough competition from state-backed
Chinese rivals as they aggressively expand their fleets with cut-price tickets.
American
Airlines (AAL.O), the largest U.S. carrier by
passengers, said it would drop a route between Chicago and Shanghai, canceling
the second direct flight from the U.S. city to China in four months. It had
canceled a flight to Beijing in May, although it still operates daily flights
to the capital from Los Angeles and Dallas-Fort Worth, Texas.
“The
two China routes ... have been colossal loss makers for us,” said Vasu Raja,
vice president of network and schedule planning, adding that high fuel costs
had also made the route unsustainable.
Hawaiian Airlines [HAII.UL] said it would from October suspend its
thrice-weekly nonstop service between Honolulu and Beijing, which it opened in
2014, citing slower-than-expected growth in demand.
Competition from Chinese airlines is expected to grow with the
anticipated easing of China’s near-decade-old “one route, one airline” policy,
which would allow more local airlines to fly long-haul international routes.
“U.S. airlines are at a severe disadvantage,” said Mike Boyd, president
of aviation forecaster Boyd Group. “The majority of demand is China-generated,
and that gives Chinese carriers the advantage.”
Chinese passengers arriving at U.S. airports are expected to nearly
triple to 12.8 million in 2024 from 4.3 million this year, and the profile is
shifting from groups to independent travelers, according to Boyd Group.
More
Elsewhere
US overreach is also on display. But will an under pressure US president play the
foreign escapade, get out of jail card?
August 21, 2018 / 3:45 PM
U.S. lawmakers seek to impose more sanctions on 'menace' Russia
WASHINGTON
(Reuters) - U.S. lawmakers pushed for more aggressive steps to counteract the
Russian “menace” on Tuesday, despite Trump administration officials insisting
current sanctions were having an effect and vowing to impose more economic pain
if Moscow does not change its behaviour.
President Donald Trump has repeatedly said he would like better ties
with Moscow, but although he met Russian President Vladimir Putin last month,
relations between the two countries have been further strained.
Members of Congress, where both chambers are controlled by Trump’s
fellow Republicans, have called for more action, including introducing new
sanctions legislation “from hell,” to punish Russia for its annexation of
Crimea, involvement in Syria’s civil war and cyber attacks seeking to influence
U.S. elections.
They held three hearings related to Russia on Tuesday, in the Banking
and Foreign Relations committees and a Judiciary counter-terrorism
subcommittee. Lawmakers chastised administration officials for doing too little
to change Russian behaviour.
Both Republicans and Democrats have criticized Trump, particularly after
his Helsinki summit with Putin last month, for failing to stand up to Moscow
and not fully enacting a sweeping sanctions law passed nearly unanimously a
year ago.
More
August 22, 2018 / 5:21 AM
U.S.-Turkey crisis could end 'instantly' if pastor freed - Bolton
JERUSALEM
(Reuters) - Turkey could end its lira-battering crisis with the United States
“instantly” by freeing a detained American pastor, President Donald Trump’s
national security adviser said, adding that a Qatari cash infusion would not
help Ankara’s economy.
The
Turkish currency has been in freefall since Washington ordered tariffs in
retaliation for the detention of Pastor Andrew Brunson on charges of complicity
in a failed 2016 coup.
Brunson
denies wrongdoing, and Ankara has in the past suggested his fate could be
linked to that of a U.S.-based Turkish cleric whom President Tayyip Erdogan
accuses of orchestrating the attempted putsch.
“Look, the Turkish government made a big mistake in not releasing Pastor
Brunson,” Bolton told Reuters in an interview during a visit to Israel.
“Every day that goes by that mistake continues, this crisis could be
over instantly if they did the right thing as a NATO ally, part of the West,
and release pastor Brunson without condition.”
Asked if the United States questioned Turkey’s membership in NATO given
the stand-off, Bolton said: “That’s not an issue at the moment.
More
In under reported commodities news, is a wheat crisis
building in the world? Hopefully not, but in addition to watching copper, we
now have to closely follow what happens next in global wheat. If President Trump triggers and oil price
spike in his soon to be war on Iran, will 150 dollar a barrel crude oil, set
off global economic turmoil? My best guess is yes.
August 22, 2018 / 6:23 AM
Global wheat supply to crisis levels; big China stocks won't provide relief
LONDON (Reuters) - A scorching hot, dry summer has ended five
years of plenty in many wheat producing countries and drawn down the reserves
of major exporters to their lowest level since 2007/08, when low grain stocks
contributed to food riots across Africa and Asia.
Although global stocks are expected to hit an all-time high of 273
million tonnes at the start of the 2018/19 grain marketing season, according to
U.S. Department of Agriculture estimates, the problem is nearly half of it is
in China, which is not likely to release any onto global markets.
Experts predict that by the end of the season, the eight major exporters
will be left with 20 percent of world stocks - just 26 days of cover - down
from one-third a decade ago.
The USDA estimates that China, which consumes 16 percent of the world’s
wheat, will hold 46 percent of its stocks at the beginning of the season, which
starts around now, and more than half by the end.
The 126.8 million tonnes China is estimated to hold is up 135 percent
from 54 million five years earlier.
“People need to get rid of China stocks (in their calculations) ... if
you do that, it’s just exceptionally tight,” said Dan Basse, president of
AgResource Co in Chicago.
---- China started stockpiling wheat in 2006, setting a guaranteed floor price to ensure food security and stability.
At around $9.75 a bushel as of last week, Chinese prices are now so high
that they cannot sell internationally without incurring a major loss.
Rabobank analyst Charles Clack said he expected China to continue to
build stocks into next year but in the long-term it would look to reduce
reserves by curbing domestic production, reducing imports or conducting
internal auctions.
“It will be a slow process ... I wouldn’t expect exports to come flying
out anytime soon,” he said.
More
Finally, yet another
indicator saying US stocks are too expensive and a crash lies ahead.
Unfortunately, its timing can be months or up to two years early. S&P 500
at 1500 likely at some point ahead.
Opinion: The stock market’s latest sell signal has happened only 5 other times since 1895
By Mark Hulbert Published: Aug 21, 2018 5:20 a.m. ET
Would you be interested in an indicator with more 100 years of history, an
excellent record at calling multi-generational tops in the U.S. stock market,
and which has just flashed only its sixth sell signal since 1895?Of course you would. That’s because most of the indicators with solid long-term records — such as the Cyclically-Adjusted Price Earnings Ratio, or CAPE, made famous by Yale University professor and Nobel laureate Robert Shiller — have been in “sell” mode for so long that many have stopped paying attention.
The “Sound Advice Risk Indicator” is a different story. This indicator, the brainchild of Gray Cardiff, editor of the Sound Advice newsletter, is derived from the ratio of the S&P 500 SPX, +0.24% to the median price of a new U.S. house. For the first time since the late 1990s, and for only the sixth time since 1895, this indicator has risen above the 2.0 level that represents a major sell signal for equities. (See accompanying chart.)
Investors should pay attention to Cardiff’s indicator because he is one of the few advisers to have beaten the stock market over the long term. Over the 20 years through July 31, for example, according to Hulbert Financial Digest calculations, Cardiff’s model portfolio has beaten the S&P 500’s total return by 2.4 annualized percentage points.
It’s also worth emphasizing that Cardiff’s indicator does not represent an after-the-fact retrofitting of the data to coincide with past major stock market peaks. On the contrary, he has made this indicator a centerpiece of his newsletter at least since the early 1990s, which is when the Hulbert Financial Digest began monitoring its performance.
The
investment rationale underlying this indicator, according to Cardiff, is that
it “measures the struggle for capital” between the two major asset classes that
compete for capital at the riskier end of the spectrum — stocks and real
estate. When the indicator rises above 2.0, he argues, it means that the stock
market has absorbed “a larger proportion of available investment capital than
economic conditions can justify” and, therefore, it is in “imminent danger of
falling.”
To be sure, Cardiff is quick to emphasize, his risk indicator is not a
short-term market timing tool. In the wake of past occasions when it rose above
2.0, for example, equities stayed high or even continued rising “for many
months, sometimes even a couple of years.” However, he continues, “in all
cases, a major decline or crash followed, pulling down stock prices by 50% or
more.”
This is certainly what happened the last time the indicator rose above
the 2.0 level, which was in 1998, during the go-go dot-com years. That market
bubble didn’t burst until March 2000.
More
"Deficit spending is simply a scheme for the 'hidden' confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights."
Alan Greenspan
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
In US v China trade war news,
the dialog of the deaf. Car crash, train wreck, Hindenburg landing imminent.
A major hurdle in trade talks: US and China ‘play by different economic rules’
A veteran observer of US-Sino relations fears the stark differences between the nations’ economic systems will lead to a long trade deadlock
PUBLISHED : Tuesday, 21 August, 2018, 8:30pm UPDATED : Tuesday, 21 August, 2018, 11:13pm
This
week’s trade talks between China and the United States are unlikely to result
in a substantial breakthrough because their economic systems are incompatible
with each other, a former US trade official said.
“Economic interaction between China and the US is like a football game
being played between the winner of the US Super Bowl and the winner of the
World Cup,” Timothy Stratford, managing partner of Covington & Burling’s
Beijing office and a former assistant US trade representative, said in an
interview.
“The two teams have very different ideas about how to play the game, and
each is showcasing different approaches and skills for moving the ball down the
field,” he said.
“Arguing about who is following the rules and who is breaking them would
not accomplish anything. But if neither team wants to change the rules it’s
playing by, then you either have to stop playing with each other or you have to
come up with new rules to reduce the harm that each team inflicts on the
other.”
Multinational
companies with Chinese or US operations have been caught in the crossfire of
the trade war, which officially began on July 6 when the two countries imposed
25 per cent tariffs on US$34 billion of each other’s goods.
As a result, some companies have started adjusting their supply chains
or investment plans, despite the costs and the unknown factor of how long the
trade war will last.
“What’s happening now is that the current deadlock is causing companies
from both countries to rethink their sourcing and investment plans in order to
reduce risks,” Stratford said. “The result is that a gradual process of
decoupling the two economies has begun.”
“It doesn’t mean that US and Chinese companies will stop doing business
completely, but it does mean that continued business will only make sense if
the advantages outweigh a 25 per cent tariff and other risks,” he said.
But Stratford is concerned there is a “strong” chance the deadlock will
be long-lasting since the countries are deeply divided in their economic and
trade positions, and because of a lack of readiness or meaningful discussions
to address the gaps.
China has defied the US requirement to overhaul the state-supported
economic model, especially in its technology catch-up plan “Made in China
2025”, saying it is defending its development sovereignty and accusing the US
of using the trade war as a new containment tactic.
On the other hand, the US has voiced discontent about market distortion
and unfair competition in favour of domestic champions under China’s
state-sponsored economic structure, concerns that are widely shared by other
trading partners of China.
“It
doesn’t seem that China will be willing any time soon to change fundamental
elements of its economy that seem to have been working well from a Chinese
perspective,” Stratford said. “This suggests that the deadlock will continue
and that further tariffs and other sanctions may be imposed by both sides.”
More
Alan Greenspan. June 28, 2016.
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?
Link between magnetic field strength and temperature
Date:
August 20, 2018
Source:
American Institute of Physics
Summary:
Researchers recently discovered that the strength of the magnetic field
required to elicit a particular quantum mechanical process corresponds to the
temperature of the material. Based on this finding, scientists can determine a
sample's temperature to a resolution of one cubic micron by measuring the field
strength at which this effect occurs. Temperature sensing is integral in most
industrial, electronic and chemical processes, so greater spatial resolution
could benefit commercial and scientific pursuits.
Researchers recently discovered that the strength of the magnetic field
required to elicit a particular quantum mechanical process, such as
photoluminescence and the ability to control spin states with electromagnetic
(EM) fields, corresponds to the temperature of the material. Based on this
finding, scientists can determine a sample's temperature to a resolution of one
cubic micron by measuring the field strength at which this effect occurs.
Temperature sensing is integral in most industrial, electronic and chemical
processes, so greater spatial resolution could benefit commercial and
scientific pursuits. The team reports their findings in AIP Advances,
from AIP Publishing.
In diamonds, nitrogen atoms can replace carbon atoms; when this occurs
next to vacancies in the crystal lattice, it produces useful quantum
properties. These vacancies can have a negative or neutral charge. Negatively
charged vacancy centers are also photoluminescent and produce a detectable glow
when exposed to certain wavelengths of light. Researchers can use a magnetic
field to manipulate the spins of the electrons in the vacancies, which alters
the intensity of the photoluminescence.
A team of Russian and German researchers created a system that can
measure temperatures and magnetic fields at very small resolutions. The
scientists produced crystals of silicon carbide with vacancies similar to the
nitrogen-vacancy centers in diamonds. Then, they exposed the silicon carbide to
infrared laser light in the presence of a constant magnetic field and recorded
the resulting photoluminescence.
Stronger magnetic fields make it easier for electrons in these vacancies
to transfer between energy spin states. At a specific field strength, the
proportion of electrons with spin 3/2 quickly changes, in a process called
anticrossing. The brightness of the photoluminescence depends on the proportion
of electrons in various spin states, so the researchers could gauge the
strength of the magnetic field by monitoring the change in brightness.
Additionally, the luminescence abruptly changes when electrons in these
vacancies undergo cross-relaxation, a process where one excited quantum system
shares energy with another system in its ground state, bringing both to an
intermediate state. The strength of the field needed to induce cross-relaxation
is directly tied to the temperature of the material. By varying the strength of
the field, and recording when photoluminescence suddenly changed, the
scientists could calculate the temperature of the region of the crystal under
investigation. The team was surprised to discover that the quantum effects
remained even at room temperature.
"This study allows us to create temperature and magnetic field
sensors in one device," said Andrey Anisimov, of the Ioffe
Physical-Technical Institute of the Russian Academy of Sciences and one of the
authors of the paper. Moreover, sensors can be miniaturized to 100 nanometers,
which would enable their use in the space industry, geophysical observations
and even biological systems. "In contrast to diamond, silicon carbide is
already an available semiconductor material, and diodes and transistors are
already made from it," Anisimov said.
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.
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