Baltic Dry Index. 1698 -72 Brent Crude 63.85
Spot Gold 1789
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 22/02/21 World 111,962,912
Deaths 2,478,165
“When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.” [Citigroup CEO.]
Now the prospect of Chuck Prince dancing is in itself unsettling. But his account amounts to quite an elegant explanation of why financial bubbles persist. Even if Citigroup’s executives were worried that private equity valuations have gotten too frothy and loan terms too loose, it would make little sense for them to pull back. Because they can never know for sure when the music’s going to stop, and they’d be crazy to forego all those underwriting fees for the year or two or three before it does. So they keep dancing.
http://business.time.com/2007/07/10/citigroups_chuck_prince_wants/
Today, our overly complex world, heavily distorted by central bankster crony socialist capitalism, seems on the cusp of a bolt from stock mania into a commodity super-cycle.
The cause, too much money now chasing too few disrupted goods and foodstuffs, now aggravated by the Great Texas, Global Warming Freeze.
While the Fedsters assure us of low interest rates forever, with more oily Fedster words to come in testimony this week, Mr Market, led by Dr Copper, seem to disagree.
Inflation, says Dr Copper is fast approaching and will likely be with us later this year rather than next. Sentiment seems to be turning against stocks.
Will the Fedsters really ignore it 1970s style, as the say and pretend, or will they double cross the punters in the stock casinos?
Still to come, just how bad a hit to food price inflation did the Great Texas, Global Warming Freeze cause.
Shares turn cautious as bond yields, commodities surge
Speculative manias are in the air, as evidenced by the recent price surges for bitcoin, a digital asset with a fundamental value of zero, and GameStop, a declining retailer. Along with the other economic trends—a strong recovery, surging commodity prices and an uptick in inflation—those asset bubbles have a clear cause: the massive expansion of money and credit.
Yet America’s fiscal and monetary masters are turning a blind eye. They are focused solely on mending the labor market. With the fervor of messiahs, Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen tell us the only way to save the labor market and reach full employment is to continue to pour fiscal and monetary fuel on the fire. But their prescriptions and prophecies, modeled on the playbook of the 2008 financial crisis, are not valid today.
After that crisis, the Fed began quantitative easing, which massively expanded its balance sheet. At the same time, commercial banks were busy shrinking their loan books and writing off losses from mortgage debt and securities, which meant the Fed’s injections did little more than offset the contraction of commercial bank balance sheets. As a result, money growth from 2010-19, as measured by the Fed’s broadest money measure, M2, averaged only 5.8% a year.
While money on the Fed’s books grew rapidly, money in the hands of the public grew slowly. Spending and inflation were restrained, and the postcrisis recovery was anemic with inflation persistently below the Fed’s target. In contrast, China’s money-supply growth exploded in 2009 and 2010, averaging 23% a year. China achieved a strong recovery as a result, but also a jump in inflation, which moved from minus 1.8% in July 2009 to 6.5% by July 2011. Money matters.
Fast-forward to February 2020. Since then, the quantity of money in the U.S. economy, measured by M2, has increased by an astonishing $4 trillion. That’s a one-year increase of 26%—the largest annual percentage increase since 1943.
The looming danger for the economy isn’t only that the monetary printing presses have been in overdrive since the pandemic began, but also that they are already set for the same in 2021. A monetary surge for this year is locked in.
It’s worth tallying the list of policy measures that got us where we are.
More
https://www.wsj.com/articles/the-money-boom-is-already-here-11613944730?mod=mhp
In other commodities news.
USDA Says 2021 Farm Exports to China Will Touch Record High
Feb 19, 2021 02:23 PM
(Bloomberg) — The value of U.S. farm exports to China will touch $31.5 billion in the federal fiscal year ending Sept. 30, the highest ever, the U.S. Agriculture Department said Thursday in a report.
The department raised its estimate 17% from November, citing a surge in shipments and sales in the quarter from October through December, most notably in corn.
“We see new opportunities around the globe, and we expect better sales almost everywhere we turn,” Jason Hafemeister, a USDA trade official, said in a presentation Thursday. “Look at China just blowing off the chart.”
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North Texas ranchers fight freezing temps to keep animals alive, supply chains open
By Kevin Cummings – NTX Inno Staff Writer
With winter storms pushing wind chill temperatures into the negatives, anything left outside is at-risk from the freezing cold.
Across North Texas, ranchers have been working tirelessly to keep their animals alive, fighting conditions that haven’t been seen in decades. While the struggle right now is for survival, as the snow thaws the full extent of the damage will be revealed and could have near-term impacts on the food supply chain, as well as long-term ones on how ranchers operate.
---- Due to the expected impact of the storm, Texas Agriculture Commissioner Sid Miller has issued a “red alert,” warning of the storm’s impact on the state’s food supply chain. In a statement, he said other agriculture industries like dairy have also been impacted, with some operations dumping millions of dollars’ worth of milk due to lack of power.
And, across North Texas and elsewhere spring crops, like ones that will help feed livestock, are also being frozen or are going to waste due to supply chain issues.
“We’re coming out of the winter. We’re only a couple weeks from… where spring grasses green up, so these cattle are in probably their most weakened condition,” Price said. “This came at a really bad time.”
Overall, the full-extent of the damage done to the Texas livestock industry has yet to be seen.
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Arctic Conditions Deliver Frigid Blow To Texas Agriculture
Texas A&M AgriLife Extension Service experts say the full extent of the damage won't be realized for weeks.
By Adam Russell, Texas A&M AgriLife Communications February 19, 2021
Arctic weather conditions that blanketed the state with snow, ice and frigid temperatures is damaging Texas agriculture crops in a historic way, according to Texas A&M AgriLife Extension Service experts.
The extent of the damage to Texas agriculture won’t be fully realized for weeks, but farmers, their crops and animals are facing tough conditions.
Juan Anciso, AgriLife Extension horticulturist, Weslaco, said the winter conditions rival a historic hit to Texas farmers in December 1989. There were notable freezes that damaged South Texas crops in 2004 and 2011, and a few in prior decades going back to the 1950s, but December 1989 caused severe damage to Texas winter crops, including citrus.
“We’ll know if it ranks with ’89 in a few weeks, but temperatures are well below the threshold for crops and for long periods,” he said. “That’s not a good combination for growers.”
Anciso said the temperature low in Weslaco was 21 degrees. Some crops can tolerate temperatures around 26 degrees for four to five hours, but temperatures were below that for 10-12 hours. A second night of temperatures below the threshold was in the forecast.
The temperatures will affect citrus and cold-season vegetables like leafy greens, onions, beets, parsley and watermelons, Anciso said.
Oranges were frozen solid, and some grapefruits were nearly frozen through, he said.
The good news is that around 80% of the orange crop and two-thirds of the grapefruit crop were harvested before the winter storm, he said. The crop losses will be significant for producers, but the lasting damage could be tree losses.
“A lot of citrus guys are running their sprinklers to insulate their trees,” Anciso said. “They can take the death of limbs up to one inch in diameter, but you get into losing four-inch limbs, you’re effectively crowning the tree. That’s not good.”
Some warm-season crops like potatoes and watermelons and early planted corn and sorghum will also be affected, he said.
Texas’ fruit tree and vine crops could also face notable losses.
Larry Stein, AgriLife Extension horticulturist, Uvalde, said temperatures hadn’t reached 1989 levels yet, but that it was 8-10 degrees Monday night in the Winter Garden area with f0ur to six inches of snowfall on the ground. The temperatures likely mean losses for crops like peaches, strawberries, wine grapes and berries.
Fruit trees and grapevines that had emerged from dormancy would be susceptible to damage, and any active buds or fruit are likely lost, he said.
More
https://today.tamu.edu/2021/02/19/arctic-conditions-deliver-frigid-blow-to-texas-agriculture/
In longer term news, the Great Texas Freeze just gave the world a reality check.
Weak Grids Expose Risks for the Electrification of Everything
By Rachel Morison21 February 2021, 05:00 GMT
· Blackouts are growing as extreme weather events increase
· Global investment in grids will reach $28.7 trillion by 2050
Home heating systems shutting down. Hospitals facing water shortages. Oil refineries going offline.
The freezing, snowy weather in Texas exposed how quickly an energy system can be brought down and how widespread the chaos can be. That raises questions about the vulnerability of power grids around the world just as more parts of our everyday lives electrify.
Grid operators model the reliability of their systems to handle harsh weather, and climate change is triggering more of those events at both ends of the thermometer. Electrifying sectors such as transportation and heating is considered vital for reducing the emissions contributing to global warming, yet the grids may not be able to handle the load.
“The risks for power consumers are rising as the typical home electrifies an increasing share of its energy consumption,” said Sanjeet Sanghera, a London-based energy analyst with BloombergNEF. “You are putting all your eggs in one basket.”
Global demand for electrons is set to surge 60% by 2050, according to BNEF, as electric vehicles, smart devices and the Internet of Things become more commonplace. BNEF estimates that global investment in grid infrastructure could increase to $28.7 trillion during that time to support a tripling in renewable capacity. That amount is larger than the U.S. gross domestic product.
The challenge facing policy makers is how to make that spending palatable to customers.
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Restarting Texas’s Frozen Energy Heartland Will Be a Climate Mess
Turning petrochemical plants off and on again requires flaring and other large sources of pollution
Sun, 21 February 2021, 12:51 pmLike a cold-blooded animal—a lizard or a snake—the petrochemical hub that is the state of Texas went dormant during the deep freeze. Eventually it’ll wake up again, and when it does the damage will be worse than if it never went to sleep.
Filings submitted in recent days to the Texas Commission on Environmental Quality, or TCEQ, already show significant emissions related to stopping and restarting fossil fuel infrastructure. It’s an indication of what’s to come in a state that’s home to a quarter of U.S. natural gas production as well as half the oil production.
An Exxon Mobil Corp. ethylene plant in Baytown, one of the world's biggest, reported the release of nearly a ton of the carcinogen benzene and 34 tons of carbon monoxide, which contributes to air pollution. Shutting off Valero Energy Corp.’s Port Arthur Refinery resulted in the release of more than 28 tons of sulfur dioxide, another pollutant. Events at two facilities belonging to Pioneer Natural Resources Co. led to the escape of more than 12 tons of natural gas; methane, main component of natural gas, has many times the global warming potential of carbon dioxide.
“This is an environmental disaster on top of a public safety and human health disaster,” said Luke Metzger, executive director of Environment Texas, an advocacy group.
Refineries must flare off or otherwise release trapped pockets of gas when starting up or shutting down. While weather-based shutdowns are often unavoidable and done in the interest of safety, they can result in emissions that go far above allowable levels. “These events are not exempt from pollution laws,” Metzger said. “It’s likely the events at these facilities could have been avoided.”
---- This is the second time in less than six months the Texas oil industry has dealt with mass shutdowns due to extreme weather. The 12 hours after Hurricane Laura hit Port Arthur in August saw the release of more than 2,000 tons of emissions.
“I expect the oil industry is going to have numerous problems restarting, similar to what they encounter after a hurricane, such as damaged cooling towers and other equipment,” said Andy Lipow, president of Lipow Oil Associates in Houston. “The industry also has to be wary of water freezing and cracking pipes, which could release hydrocarbons into the atmosphere and cause an explosion and fires.”
More
https://uk.finance.yahoo.com/news/restarting-texas-frozen-energy-heartland-125159666.html
Finally, the electric snowmobile from Ian in Canada. Because some daft ideas are too good not to share.
More on “green” hydrogen.
Rex Murphy: The electric snowmobile will save us all. The Liberals have said so
Is it possible that announcements like this one could be intended as a distraction from other matters? Like vaccine procurement?
Feb 20, 2021
Good to see Canada’s Minister of Natural Resources, Seamus O’Regan, is back in his office after his sojourn to dear Newfoundland, on behalf of Premier Furey, in the botched provincial election.
----But as said he’s back now, and back at what remains his prime minister’s absolutely No. 1 fixation, trimming Canada’s carbon-dioxide emissions. Adorning Twitter Thursday was the minister’s message that — Hallelujah — “Electric snowmobiles will get us to net-zero.” How sweet it is to know after a full year of COVID and lockdowns, businesses failing from one coast to the other, people almost driven numb by anxiety and loss of normal socialization, that someone is keeping, as they say, their eye on the ball, and tending to the important things, namely, exhaust from winter recreational vehicles. And to think some complain they don’t have their priorities straight.
I’m not sure of this but it could well be that, next alone to bovine flatulence, snowmobiles powered by gasoline might be one of the great triggers of global warming. Now with a plan to build a mighty fleet, battery-powered, we have Mr. O’Regan’s pledge that Canada will edge ever closer to a non-carbon, net-zero economy. (That is, with this proviso, that the perpetual shutdown won’t absolutely and completely destroy the Canadian economy first.)
Electric snowmobiles is an idea whose time has come. Purring along over the frozen tundra, or out in the wild barrens of Newfoundland, skirting the magnificent hills and valleys in Alberta, the electric snowmobile will be Canada’s all-time signal, that regardless of China and its coal mines, the oil-gushing Middle East, or India’s push for industry, the Paris Accords are safe and Canada is back.
The tweet didn’t expand with any detail on accompanying developments. In my own province for example, if a band of merry snowmobilers are roving the long- abandoned railway line, or even more daringly out on the dread Witless Bay Barrens, in temperatures even colder than, say, Texas yesterday, and the batteries fail, what do they do?
Where’s the charging station?
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Hydrogen projects worth $300 billion are dropping green H2 prices fast
Loz Blain February 19, 2021
A new Hydrogen Council report sheds some light on Hydrogen's rise as a green fuel source. More than 30 countries now have a national H2 strategy and budget in place, and there are 228 projects in the pipeline on both the production and usage sides.
Europe is leading the way, with 126 projects announced to date, followed by Asia with 46, Oceania with 24 and North America with 19. In terms of gigawatt-scale H2 production projects, there are 17 projects planned, with the largest in Europe, Australia, the Middle East and Chile.
Overall, projects seem fairly well balanced between hydrogen production and end-use applications, with a smaller number focusing on distribution. European projects are balanced between production and usage initiatives, while Korea and Japan are developing much more on the usage side, for both transport and industrial applications. Australia and the Middle East are more active on the supply side, working to position themselves as hydrogen exporters.
The majority of these projects – some 75 percent, it should be noted – have been announced but do not yet have funding committed. This figure includes budgets committed by governments for spending, for which no project has yet been identified. Only US$45 billion worth of projects are at the "mature" stage, having reached the feasibility study or engineering and design stage, and $38 billion are at the "realized" stage, with a final investment decision made, construction started, or already operational.
Hydrogen production projections for 2030 have leapt up in the last year. The previous report estimated that 2.3 million tons will be produced annually by 2030, and this report revises that figure up to 6.7 million tons. To put that another way, two-thirds of the global hydrogen production expected to be operational in 2030 has been announced in the last year.
More
https://newatlas.com/energy/hydrogen-council-insights/
Covid-19 Corner
This section will continue until it becomes unneeded.
U.S. Deaths Near 500,000; Philippines Clears Shot: Virus Update
Bloomberg NewsUpdated on 22 February 2021, 04:42 GMT
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