Baltic Dry Index. 1440 +14 Brent
Crude 63.85 Spot Gold 1457
Never ending Brexit now January 31, or maybe sooner.
Trump’s Nuclear China Tariffs Now in effect.
The USA v EU trade war started October 18. Now in effect.
A happy Thanksgiving to all, whether celebrating or not.
Most of us still have so much in our lives, to be giving thanks to God for.
“Nothing
so undermines your financial judgement as the sight of your neighbour getting
rich.”
J. P.
Morgan.
Today as America
celebrates its Thanksgiving Day holiday, all attention is on President Xi in
Beijing.
After President Trump
signed into law two bills that, rightly or wrongly, directly interfere in Hong
Kong and China’s relationship to Hong Kong, how will China respond?
And respond they must,
after backing themselves into a corner with bellicose rhetoric. To roll-over
now, would likely set off a power struggle to replace President Xi in Beijing.
So now we await the
next shoe to fall from Beijing.
It’s probably just a
co-incidence, but someone yesterday place a massive bet on gold rising to
$4,000 per troy ounce. For more scroll down to Crooks Corner.
“Around noon in New York Wednesday, 5,000 lots of a gold option giving the holder the right to buy the precious metal at $4,000 an ounce in June 2021 changed hands. The bets were sold at $3.50 an ounce.”
Asian shares waver as Hong Kong tensions spoil festive mood
November 28, 2019
/ 1:04 AM
SINGAPORE
(Reuters) - Asian share markets wobbled on Thursday as concerns that tensions
over Hong Kong may stymie a U.S.-China trade deal cast a pall over Thanksgiving
cheer from positive U.S. economic data.
U.S. President Donald Trump on Wednesday signed into law legislation backing pro-democracy protesters in Hong Kong. China’s Foreign Ministry promptly warned of unspecified “firm counter measures” in response.
That put a lid on a week of gains for MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS. The benchmark fell almost 0.1%.
Japan's Nikkei .N225, Hong Kong's Hang Seng .HSI and Shanghai blue chips .CSI200 flitted in and out of positive territory, as momentum ebbed.
E-Mini futures for the S&P 500 ESc1 fell 0.3%, while EUROSTOXX 50 futures STXEc1 fell 0.1%.
The news was shrugged off in the Antipodes, though, with Australia's S&P/ASX 200 and New Zealand's NZ50 .NZ50 following Wall Street's march to record highs.
“I think it could easily get a lot worse,” said Kay Van-Petersen, global macro strategist at Saxo Capital Markets in Singapore, as investors await more details on China’s response.
“We could potentially see a greater chance of a move downwards based on what happens in the next 24-48 hours.”
The next round of U.S. tariffs on Chinese goods is due to take effect on Dec. 15.
Wall Street indexes hit fresh record highs overnight, buoyed by trade deal hopes and data showing U.S. economic growth picked up slightly in the third quarter, rather than slowing as first reported.
More
China summons U.S. ambassador, says Hong Kong rights law is 'strong interference'
November 28,
2019 / 5:41 AM
BEIJING (Reuters) - China summoned U.S. Ambassador Terry Branstad on
Thursday to demand that the United States immediately stop interfering in its
internal affairs and stop causing further damage to bilateral relations, its
foreign ministry said.
Vice foreign minister Le Yucheng summoned Branstad a day after U.S.
President Donald Trump signed into law congressional legislation which
supported anti-governments protesters in Hong Kong, despite angry objections
from Beijing.
China warns U.S. of retaliation over Hong Kong law as police enter ruined university
November 28, 2019
/ 2:27 AM
HONG
KONG (Reuters) - China warned the United States on Thursday it would take “firm
counter measures” in response to U.S. legislation backing anti-government
protesters in Hong Kong, and said attempts to interfere in the Chinese-ruled
city were doomed to fail.
U.S. President Donald Trump on Wednesday signed into law congressional
legislation which supported the protesters despite angry objections from
Beijing, with which he is seeking a deal to end a damaging trade war.
The legislation requires the State Department to certify, at least
annually, that Hong Kong is autonomous enough to justify favourable U.S.
trading terms that have helped the territory grow as a world financial centre.
It also threatens sanctions for human rights violations.
Beijing warned that the United States would shoulder the consequences of
China’s counter measures if it continued to “act arbitrarily” in regards to
Hong Kong, according to a foreign ministry statement.
Hong Kong’s Beijing-backed government said the legislation sent the
wrong signal to demonstrators and “clearly interfered” with the city’s internal
affairs.
Anti-government protests have roiled the former British colony for six
months, at times forcing businesses, government, schools and even the
international airport to close.
---- More than 5,800 people have been arrested since the unrest broke out in June over a proposal to allow extraditions to mainland China, the numbers increasing exponentially in October and November as violence escalated.
Demonstrators are angry at police violence and what they see as Chinese
meddling in the freedoms promised to the former British colony when it returned
to Chinese rule in 1997, such as an independent judiciary.
China says it is committed to the “one country, two systems” formula put
in place at the handover and has blamed foreign forces for fomenting the
unrest, an allegation repeated on Thursday in response to the U.S. law.
“This so-called legislation will only strengthen the resolve of the
Chinese people, including the Hong Kong people, and raise awareness of the
sinister intentions and hegemonic nature of the U.S. The U.S. plot is doomed,”
the Chinese foreign ministry statement said.Some analysts say any move to end
Hong Kong’s special treatment could prove self-defeating for the United States,
which has benefited from the business-friendly conditions in the territory of
7.4 million residents.
Trade between Hong Kong and the United
States was estimated to be worth $67.3 billion in 2018, with the United States
running a $33.8 billion surplus - its biggest with any country or territory,
according to the Office of the U.S. Trade Representative.
More
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled
over.
Today, gold. In our out of control debt fuelled world, where total
global debt is estimated to close out 2019 at 255 Trillion, but total global
GDP is estimated to close out 2019 at only 89 Trillion, (both estimates in
current US dollars,) gold is being seen more and more as an insurance policy,
against another crash of the dollar led, financialised, leveraged, debt driven, global
financial system.
Someone yesterday placed a gold bet on gold $4,000. Spot gold is
currently trading about $1,458 a troy
ounce.
Gold is money. Everything else is
credit.
J. P. Morgan
European Central Banks Are Slowly Preparing For Plan B: Gold
Wed, 11/27/2019 - 05:00
Written by Jan Nieuwenhuijs of Voima,
It was long believed in the gold space that Western central banks are against
gold, but things have changed, for quite some years now. Instead of
discouraging people from buying gold, or convincing them that gold is an
irrelevant asset, many of these central banks are increasingly honest about the
true properties of this monetary metal. Stating that gold is the ultimate store
of value, that it preserves its purchasing power through time and is a global
means of payment. Such statements, combined with actions that will be
discussed below, reveal that more and more central banks are preparing for plan
B.
The Bundesbank (the German central bank) published a book last year
named Germany’s Gold. In the introduction, written by
the President of the Bundesbank Jens Weidmann, the view of this bank leaves no
room for interpretation. Weidmann writes (emphasis mine):
Ask anyone in Germany what they associate with gold and, more often than
not, they will say that it is synonymous with enduring value and
economic prosperity.
Ask us at the Bundesbank what our gold holdings mean for us and we will
tell you that, first and foremost, they make up a very large share of Germany’s
reserve assets ... [and they] are a major anchor underpinning confidence in
the intrinsic value of the Bundesbank’s balance sheet.
The Bundesbank produced this publication to give a detailed account, the
first of its kind, of how gold has grown in importance over the course of
history, first as medium of payment, later as the bedrock of stability for
the international monetary system.
----Central Banks and Exter’s Pyramid
What springs to mind when reading Weidmann’s statement is Exter’s
Inverse Pyramid. John Exter was an American economist that in the 1960s
conceived an upended pyramid of financial assets. Underneath the pyramid is
gold that forms the base of most reliable value; all asset classes within
the pyramid on progressively higher levels involve more risk. Exter would
sometimes refer to his model as the debt pyramid; hence, he positioned gold
outside of it as it’s the only asset that has no liability against it.
Tellingly, when Exter addressed the Economic Society of South Africa in Johannesburg on November 16, 1966, he said (source):
Gold is the hard core of our international monetary system.
“Bedrock” (Weidmann) and “hard core” (Exter) are similar, and both point to gold’s strength and what it can carry. An essential element of capitalism is investing—directly, indirectly, through bonds or equity—that involves risk. The higher the risk, the higher the return. The lower the risk, the lower the return. What falls outside of the investment realm has zero risk and no return, but provides the base that carries the debt system. This safe haven is gold, the only asset refuge that has no counterparty risk.
In the Balance of Payments and International Investment Position Manual (BPM6) drafted by the International Monetary Fund (IMF), we read:
Financial assets are economic assets that are financial instruments. Financial assets include financial claims and monetary gold held in the form of gold bullion … A financial claim is a financial instrument that has a counterpart liability. Gold bullion is not a claim and does not have a corresponding liability. It is treated as a financial asset, however, because of its special role as a means of financial exchange in international payments by monetary authorities and as a reserve asset held by monetary authorities.
The IMF considers all financial assets to have counterparty risk, except gold.
On page 112 of BPM6 the IMF lists all international reserve assets by descending order. Crowning the lineup is physical gold, followed by cash, debt securities, equity, and finally derivatives. Nearly an exact copy of Exter’s Pyramid.
----Another appearance of the pyramid can be found on the website of the Dutch central bank, De Nederlandsche Bank (DNB). Since April 2019 DNB’s gold information page reads:
A bar of gold always retains its value, crisis or no crisis. This creates a sense of security.
Shares, bonds and other securities are not without risk, and prices can go down. But a bar of gold retains its value, even in times of crisis. That is why central banks, including DNB, have traditionally held considerable amounts of gold. Gold is the perfect piggy bank—it’s the anchor of trust for the financial system. If the system collapses, the gold stock can serve as a basis to build it up again. Gold bolsters confidence in the stability of the central bank’s balance sheet and creates a sense of security.
Exter’s pyramid all over. Kindly note the similarity between DNB’s and BuBa’s comments on gold providing essential confidence in their balance sheets. It goes to show these two central banks have a long history of cooperating.
Let’s continue with another quote, this time from the Bank of Finland (BOF):
Gold – The basis of a monetary system
Gold is called the eternal payment instrument and has been used as a medium of exchange for thousands of years. Gold is a genuinely global means of payment that has maintained its value throughout history.
One more, from the Banque de France (BDF):
Key facts
Gold is a highly sought-after precious metal, considered to be the ultimate store of value.
All central banks quoted agree gold preserves its purchasing power through time.
More
https://www.zerohedge.com/markets/european-central-banks-are-slowly-preparing-plan-b-gold
Bold Bets That Gold Could Triple to $4,000 Trade in New York
By Yvonne Yue Li
Updated on November 28, 2019, 12:00 AM GMT
The gold options market saw $1.75 million in block trades
betting the precious metal could almost triple in more than a year, surpassing
the record.Around noon in New York Wednesday, 5,000 lots of a gold option giving the holder the right to buy the precious metal at $4,000 an ounce in June 2021 changed hands. The bets were sold at $3.50 an ounce.
“It’s like 18-month term life insurance; what will the world look like if gold is at $4,000,” Tai Wong, the head of metals derivatives trading at BMO Capital Markets, said in an email. “They are hoping for a quick violent move,” he said, referring to the people who bought the call options.
Gold futures climbed to a record $1,923.70 an ounce in 2011 as the Federal Reserve bought more than $2 trillion of debt to stimulate the U.S. economy. While bullion has rallied 14% this year, the precious metal is still 24% below the current all-time high.
Bullion for delivery in February settled at $1,460.80 an ounce at 1:33 p.m. in New York. Futures for June 2021 delivery, which settled at $1,494.40 on Wednesday, will need to almost triple before expiration to make the call options profitable for its holder.
— With assistance by Michael Roschnotti
https://www.bloomberg.com/news/articles/2019-11-27/huge-bets-that-gold-could-triple-to-4-000-trade-in-new-york
We have gold because we cannot trust governments.
Herbert Hoover
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?
Solid state battery breakthrough could double the density of lithium-ion cells
Loz Blain November 26, 2019
Researchers
at Australia's Deakin University say they've managed to use common industrial
polymers to create solid electrolytes, opening the door to double-density solid
state lithium batteries that won't explode or catch fire if they overheat.
Dr. Fangfang Chen and Dr. Xiaoen Wang from Deakin's Institute for Frontier Materials claim to have made a breakthrough with "the first clear and useful example of liquid-free and efficient transportation of lithium-ion in the scientific community."
The new technology uses a solid polymer material, weakly bonded to the lithium-ion, to replace the volatile liquid solvents typically used as electrolytes in current battery cells. The liquid electrolyte is the part of the system that becomes flammable during the kinds of infamous battery fires Samsung would rather forget. "If industry implements our findings I see a future where battery reliant devices can be safely packed in airplane baggage, for example, or where electric cars don’t pose a fire risk for occupants or emergency services like they currently do," Dr Chen said in a press release.
In addition to making batteries safer, the team believes this solid polymer electrolyte will finally allow batteries to work with a lithium metal anode. That would be big news in the battery world, where the lithium anode has been recently described in Trends in Chemistry as "critical to break the energy-density bottleneck of current Li-ion chemistry" – the bottleneck that's stopping electric vehicles, aircraft and portable electronics from developing at the pace they should be.
Dr. Wang says this could be a way to double the energy density of lithium batteries, which, in commercial settings, are currently peaking at around 250 Wh/kg (in Tesla's Model 3 battery pack). Getting that up toward 500 Wh/kg would allow massively extended ranges, or smaller, cheaper and vastly lighter battery packs. It's not the 10X jump everyone seems to believe is coming down the pipeline, but it would be very significant.
The Deakin team says it has only used existing commercial polymers in the new process, meaning that industrial production should proceed with "little difficulty." At this stage, it's been tested in a coin cell battery, about the size of a watch battery, but the team is now moving on to building the kind of pouch cell that would be used in a mobile phone, and once that's up and running, they'll be looking for commercial partners to get these solid state cells out onto the market.
The full study is available in the peer-reviewed Joule journal.
There
can be no other criterion, no other standard than gold. Yes, gold which never changes,
which can be shaped into ingots, bars, coins, which has no nationality and
which is eternally and universally accepted as the unalterable fiduciary value
par excellence.
Charles de Gaulle
The monthly Coppock Indicators finished October
DJIA: 27,046 +59 Up. NASDAQ: 8,292 +67 Up. SP500: 3,038 +67 Up.
Another inconclusive month,
but all three continued to move up weakly. A buy signal. But, like the Fed, I
would await more data.
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