Another 4 Trillion. Inflation Set To Roar.

 Baltic Dry Index. 2319 +38 Brent Crude 63.83

Spot Gold 1738

Coronavirus Cases 02/04/20 World 1,000,000

Deaths 53,100

Coronavirus Cases 23/03/21 World 124,300,248

Deaths 2,735,346

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value.

Alan Greenspan.

Later today more soapy words from Fed Chairman Powell about no risks from inflation. But who are you going to believe, Fed Chairman Powell’s words or what we can see already happening to commodity prices?

Worse, President Biden and his team are now talking up a new summer infrastructure Magic Money Tree package of a whopping 3 to 4 trillion dollars.

At 4 trillion dollars, that will be 8+ trillion newly created fiat dollars in 2020-2021. 

I’ll take my chances hedging against a return to 1970s type of inflation. Just look at shipping costs alone.

Asian stocks shed gains as China worries grow

March 22, 2021  11:52 PM  By Alun John, Chris Prentice

HONG KONG/WASHINGTON (Reuters) - Asian stocks reversed earlier gains on Tuesday, weighed by Chinese markets as investors took profit on a recent rally in some mainland firms, although ebbing inflation fears helped shore up broader sentiment in the region.

Investors now await a closely watched Congressional appearance by U.S. Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen later in the day.

MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.57%, hurt by a 1.5% fall in Chinese blue chips.

Gary Ng, economist at Natixis, said Chinese shares had run ahead of other Asian markets recently, which meant they were due for some kind of correction.

Overnight announcements of new sanctions also did not help Chinese stocks, even though analysts said markets had become fairly accustomed to such developments.

The United States and others including the European Union sanctioned Chinese officials on Monday for human rights abuses in Xinjiang, and Beijing hit back with punitive measures against European lawmakers, diplomats, institutes and families.

Jin Jing, an analyst with China Fortune Securities, said sanctions hurt risk appetite, in particular for foreign investors, who sold shares via the Stock Connect.

---- Beyond China, Asian shares were mixed after Wall Street’s gains on Monday as investors cheered a break in the recent run-up of bond yields.

The Dow Jones Industrial Average rose 0.32%, the S&P 500 gained 0.70% and the Nasdaq Composite added 1.23%.

---- Benchmark 10-year notes ticked up slightly, last yielding 1.6857%, but down from 1.732% late on Friday.

“U.S. risk assets were aided by a dip in Treasury yields to start the week. Movements in yields will continue to be closely watched this week amid a series of U.S. Treasury auctions and testimony by Treasury Secretary Yellen and Fed Chair Powell,” ANZ Research said in a daily note.

Fed Chair Powell said in remarks prepared for a congressional hearing on Tuesday that the U.S. recovery had progressed “more quickly than generally expected and looks to be strengthening”.

More

https://www.reuters.com/article/us-global-markets/asian-stocks-shed-gains-as-china-worries-grow-idUSKBN2BE36F

Analysis: Investors seek out 'back to the future' trades to beat inflation as bond yields rise

March 23, 2021  5:05 AM  By David Randall, Kate Duguid

NEW YORK (Reuters) - Widespread expectations of a coming U.S. economic boom are forcing bond fund managers to dust off their playbooks to combat a nemesis they have not had to worry about for more than a decade: inflation.

The tepid recovery from the Great Financial Crisis elongated the long bull market in bonds reaching back to the early 1980s, pushing yields to historically low levels. Yet continued accommodation by the Federal Reserve and the anticipated effects of the Biden administration’s $1.9-trillion stimulus plan have pushed up benchmark 10-year Treasury yields to last week touch their highest levels since January 2020.

Inflation is anathema to bond investors, eroding earnings over time, but it has not posed a significant threat since well before the 2008-2009 financial crisis. Now, though, the recovery from the coronavirus pandemic is forcing inflation back into the consciousness of fixed-income markets.

“We are going to see some really high inflation numbers in the next two or three quarters,” said Matt Freund, co-chief investment officer at Calamos Investments, who is overweight in shorter duration bonds in anticipation that inflation could reach as high as 3% this year.

“Why would you buy a 10-year bond and lock in a negative real yield for the entire 10-year period?” Freund said.

Sustained inflation will likely depress total returns in the U.S. fixed income market over the next three to four years, bond analysts say. As a result, some investors say they are holding assets that will benefit if inflation rises without taking on the risk of equities, which have stalled as investors price in higher debt costs for consumers and companies.

---- The big question for bond fund managers is how long above-average inflation will last.

“Is inflation going to rise in the next couple months? Absolutely,” said Gregory Peters, head of PGIM Fixed Income’s multi-sector and strategy. “But the gravitational pull is for inflation to go lower not higher.”

The Fed sees core inflation - which strips out the more volatile costs like food and energy - rising between a median of 2.0% and 2.2% a year through 2023, while projecting that long-term GDP - one of the main drivers of inflation - will return to 1.8% a year after spiking to 6.5% in 2021.

---- Commodities will likely be a winner from inflation regardless of whether it matches or exceeds the Fed’s assumptions, said Brian Jacobsen, senior investment strategist for the Multi-Asset Solutions team at Wells Fargo Asset Management.

The S&P GSCI commodity index is up 15.1% for the year to date.

“This is a sort of the back to the future play that hasn’t been in vogue for a while because we haven’t had to worry about inflation,” Jacobsen said.

https://www.reuters.com/article/us-usa-investment-inflation-analysis/analysis-investors-seek-out-back-to-the-future-trades-to-beat-inflation-as-bond-yields-rise-idUSKBN2BF0DC

U.S. air travelers top 1.5 million for first time since March 2020

March 22, 2021  12:40 PM

WASHINGTON (Reuters) - The number of U.S. air passengers screened topped 1.5 million Sunday for the first time since March 2020, as air travel continues to rebound from a pandemic-related drop, the U.S. Transportation Security Administration (TSA) said Monday.

COVID-19 devastated air travel demand, with U.S. airline passengers down 60% in 2020. But with a growing number of Americans getting vaccinated, demand and advanced bookings have started to rise in recent weeks. TSA said it screened 1.54 million people Sunday, the highest single day since March 13, 2020 and the 11th consecutive day screening volume exceeding 1 million per day.

https://www.reuters.com/article/us-health-coronavirus-usa-airlines/u-s-air-travelers-top-1-5-million-for-first-time-since-march-2020-idUSKBN2BE1L3

Biden infrastructure, jobs spending push could hit $4 trillion: source

March 22, 2021 7:02 PM  By Steve Holland, Jarrett Renshaw

WASHINGTON (Reuters) - President Joe Biden will be briefed by advisers this week on infrastructure, climate and jobs proposals being considered by the White House that could collectively cost as much as $4 trillion, according to people familiar with discussions.

Biden advisers are weighing a price tag of between $3 trillion and $4 trillion for new legislative action, including repairing the country’s crumbling infrastructure and tackling climate change, one source said.

A second source said Biden advisers have a package of proposals totaling up to $3 trillion for infrastructure and other priorities they are discussing with the president this week.

White House spokeswoman Jen Psaki said on Twitter on Monday that Biden would not unveil a proposal this week but that the “focus will be on jobs and making life better for Americans.

“He is considering a range of options, scopes and sizes of plans and will discuss with his policy team in days ahead, but speculation is premature,” she added.

The price range does not include separate proposals to make child tax credits and other benefits to lower-income Americans in the latest stimulus act permanent, the second source said.

The New York Times reported earlier on Monday that Biden advisers were preparing to recommend he spend as much as $3 trillion on boosting the economy, reducing carbon emissions and narrowing economic inequality, beginning with a giant infrastructure plan.

More

https://www.reuters.com/article/us-usa-biden-spending/biden-infrastructure-jobs-spending-push-could-hit-4-trillion-source-idUSKBN2BE2QR

Soy, sugar traders fight for space in Latam's largest port; costs jump

March 23, 2021 5:06 AM  By Ana Mano, Marcelo Teixeira

SAO PAULO/NEW YORK (Reuters) - Soy and sugar traders are fighting for room in Latin America’s largest port, rushing to secure loading slots as the slowest Brazilian soy harvest in 10 years pushes the grains export window into the sugar season.

Congestion was hitting Brazil’s Santos port just as consumers worldwide have been turning to top exporter Brazil for sugar and soybean supplies. The glut of shipments waiting to leave is boosting transport costs and will likely delay arrivals at destinations.

Sugar prices hit a four-year high late last month, boosted by supply tightness. Soybean prices, already near seven-year highs, could rise further at a time when Brazil is effectively the world’s main supplier.

“It is a perfect storm, a combination of factors that are leading to soy and sugar to compete for logistics,” said Tiago Medeiros, Brazil head and executive director for Czarnikow Group, a food trader and supply chain services provider.

Brazil usually starts soybean exports in January, with volumes increasing in later months. This season, planting was delayed, as was the harvest, pushing that window further out.

Shipments from the new sugar crop usually start around April, but companies are still shipping stocks from a bumper crop in 2020. Brazil’s Agriculture Ministry saw sugar stocks at 7.3 million tonnes in mid-February, the highest for the last three years.

Market players expect growing delays in coming months, with ships likely waiting several weeks before being able to dock in Santos.

Medeiros noted that spot prices for both sugar and soybean futures are higher than deferred ones. This inverted chart position signals near-term supply tightness, he said, which could mean financial losses for sellers if they fail to deliver on time.

---- Traders said shipowners sharply raised demurrage, the daily fee charged for port delays, from around $18,000 per day to $30,000 per day on trips to Brazil.

Because of long vessel waiting times, French trader Sucden said India might be an alternate sugar supplier, but traders said its supply is constrained for several reasons.

“Brazil mainly exports raws, while India has surplus of whites. So direct substitution is limited,” said a source at a large sugar trader in India.

More

https://www.reuters.com/article/us-transportation-soybeans-sugar/soy-sugar-traders-fight-for-space-in-latams-largest-port-costs-jump-idUSKBN2BF0DL

But back in the rump-EUSSR, things are verging on a slump. Europe’s paymaster is going off the rails and it’s likely to get much worse in a hurry too.

German economy is slumping on anti-virus curbs, Bundesbank says

March 22, 2021  11:05 AM

FRANKFURT (Reuters) - The German economy is likely to shrink sharply this quarter as pandemic-fighting curbs hit the services sector and even the booming construction industry slows, the Bundesbank said on Monday.

In its latest monthly report, the German central bank seemed to abandon its expectations of a rebound in the spring and dropped references to the vaccination campaign, which has been plagued by delivery delays and news reports of possible side-effects, as a catalyst.

“The measures to contain the pandemic are more stringent on average in the current quarter than in the previous one,” the Bundesbank said. “Therefore, the economic output in the first quarter of 2021 is likely to decline sharply ... particularly in the contact-intensive service sectors.”

It added that an increase in sales tax, which had been temporarily cut last year, had probably contributed to a substantial decline in construction in January.

Industrial production also eased in the first month of the year but order intake was strong and exports of goods increased, the Bundesbank added.

Exports of goods to Britain were the exception, however, falling by almost a quarter in January, the first month after it left the European Union single market.

The Bundesbank had said in last month’s report that the economy would recover in the spring as coronavirus infections fell and vaccines were distributed.

https://www.reuters.com/article/us-germany-economy-bundesbank/german-economy-is-slumping-on-anti-virus-curbs-bundesbank-says-idUSKBN2BE1BR

Germany's Merkel banks on Easter circuit-breaker to combat 'new pandemic'

March 23, 2021 1:49 AM 

BERLIN (Reuters) - Germany is extending its lockdown until April 18 and calling on citizens to stay at home for five days over the Easter holidays to try to break a third wave of the COVID-19 pandemic, Chancellor Angela Merkel said early on Tuesday.

In talks that ran deep into the night, Merkel pushed the leaders of Germany’s 16 states to take a tougher stance to fight the pandemic, reversing plans for a gradual re-opening of the economy agreed earlier this month after a sharp rise in the infection rate.

“We are now basically in a new pandemic. The British mutation has become dominant,” Merkel told a news conference.

“Fundamentally, we face a new virus of the same kind but with very different characteristics. More deadly, more infectious, and infectious for longer.”

Germany started cautiously easing restrictions earlier this month. But the spread of more infectious variants of the virus has pushed up cases, prompting concerns that hospitals could soon be overstretched without further curbs.

The number of cases per 100,000 people over a week stood at 107 on Monday, above the level at which intensive care units will be overwhelmed. More than 3,000 people with COVID-19 are in intensive care.

---- After falling far behind post-Brexit Britain and the United States in rolling out vaccines, EU leaders are due to discuss a possible ban on vaccine exports to Britain at a summit on Thursday.

“We have a problem - that was known - with AstraZeneca,” Merkel said, adding that she supported the European Commission. “We will decide responsibly.”

For five days from April 1, Germans are to stay at home and reduce contacts as much as possible. But the late-night agreement did not include a closing of all stores, including essential shops like supermarkets, which Merkel had called for.

Big family gatherings will be banned over the holidays, with no more than two households, or up to five people, being allowed to meet. The government will ask churches to hold any Easter services online to avoid gatherings.

Economists said the extension of Germany’s lockdown measures would delay a much hoped-for recovery in Europe’s largest economy from spring until early summer.

More

https://www.reuters.com/article/us-health-coronavirus-germany/germanys-merkel-banks-on-easter-circuit-breaker-to-combat-new-pandemic-idUSKBN2BF05L

"The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost."

Fed Chairman Ben Bernanke, November 21, 2002

Covid-19 Corner                       

This section will continue until it becomes unneeded.

AstraZeneca vaccine safe and effective in new trial data

March 22, 2021  7:50 AM  By Reuters Staff

FRANKFURT/LONDON (Reuters) - AstraZeneca’s COVID-19 vaccine developed with Oxford University was 79% effective in preventing symptomatic illness in a large trial in Chile, Peru and the United States, the company said on Monday, paving the way for it to apply for U.S. approval.

The vaccine was also 100% effective against severe or critical disease and hospitalisation, and was safe, the partners said on Monday, releasing results of the late-stage human trial study of more than 32,000 volunteers across all age groups.

The data will give credence to the British shot after results from earlier, separate late-stage studies raised questions about the robustness of the data.

It will also help to allay safety concerns that have disrupted its use in the European Union after a small number of reports of rare blood clots in people who received the vaccine.

After briefly halting its use, many European countries have resumed using the shot in their inoculation programmes after a regional regulator said it was safe, while several country leaders are also taking the vaccine to boost confidence.

AstraZeneca said an independent safety committee conducted a specific review of the blood clots in the U.S. trial, as well as cerebral venous sinus thrombosis (CVST), which is an extremely rare blood clot in the brain, with the help of an independent neurologist.

The London-listed company said the panel found “no increased risk of thrombosis or events characterised by thrombosis among the 21,583 participants receiving at least one dose of the vaccine. The specific search for CVST found no events in this trial.”

---- AstraZeneca said it was preparing to submit the data to the U.S. Food and Drug Administration and for a launch in the United States should it win Emergency Use Authorization.

More

https://www.reuters.com/article/uk-health-coronavirus-astrazeneca-usa/astrazeneca-vaccine-79-effective-in-u-s-trial-panel-finds-no-higher-risk-of-clots-idUSKBN2BE0NN?feedType=mktg&feedName=&WT.mc_id=Newsletter-UK&utm_source=Sailthru&utm_medium=email&utm_campaign=2018%20Template:%20UK%20MORNING%20DIGEST%202021-03-22&utm_term=NEW:%20UK%20Morning%20Digest

Oxford says AstraZeneca trials in U.S, Chile, Peru shows COVID vaccine safe

March 22, 2021  7:25 AM

LONDON (Reuters) - Phase three trials involving more than 32,000 volunteers across all age groups, conducted in the U.S., Chile and Peru have shown that COVID-19 AstraZeneca vaccine is safe and highly effective, the University of Oxford said on Monday.

“These results are great news as they show the remarkable efficacy of the vaccine in a new population and are consistent with the results from Oxford-led trials,” Andrew Pollard, who runs the Oxford Vaccine Group, said.

https://www.reuters.com/article/uk-health-coronavirus-britain-oxford/oxford-says-astrazenecatrials-in-u-s-chile-peru-shows-covid-vaccine-safe-idUSKBN2BE0OT?feedType=mktg&feedName=&WT.mc_id=Newsletter-UK&utm_source=Sailthru&utm_medium=email&utm_campaign=2018%20Template:%20UK%20MORNING%20DIGEST%202021-03-22&utm_term=NEW:%20UK%20Morning%20Digest

New York reports first case of Brazilian COVID-19 variant

March 21, 2021 / 4:56 PM / Updated March 21, 2021 at 10:12 PM

March 21 (UPI) -- New York reported its first case of the COVID-19 variant first discovered in Brazil as the United States seeks to continue its vaccine rollout.

Gov. Andrew Cuomo on Sunday announced a case of the P.1 variant was discovered by scientists at Mount Sinai hospital in New York City in a 90-year-old Brooklyn resident with no travel history.

"The detection of the Brazilian variant here in New York further underscores the importance of taking all the appropriate steps to continue to protect your health," Cuomo said. "While it's normal for a virus to mutate, the best way to protect yourself is to continue to wear a well-fitted mask, avoid large crowds, social distance, wash your hands and get vaccinated when it's your turn."

As of March 18, there were 48 cases of the P.1 variant in 15 states and territories throughout the United States, according to the Centers for Disease Control and Prevention. Other prominent variants include B.1.1.7, which was first discovered in Britain, and has been identified in 5,567 cases in 50 states and territories and B.1.351 -- first discovered in South Africa -- with 180 cases in 26 jurisdictions.

More

https://www.upi.com/Top_News/US/2021/03/21/New-York-reports-first-case-of-Brazilian-COVID-19-variant/5801616353045/

Evidence growing COVID-19 can trigger onset of diabetes

By Rich Haridy  March 21, 2021

An international team of scientists is investigating the curious bi-directional relationship between COVID-19 and diabetes. The researchers suggest SARS-CoV-2 infection may actively be triggering the onset of diabetes and a global registry has been set up to track this growing phenomenon.

Early on in the pandemic it quickly became clear people with pre-existing medical conditions were hit harder with COVID-19. Those with diabetes or heart disease were known to suffer more severely from COVID-19 but some clinicians were beginning to see cases with the direction of the relationship switched around. Subjects who were healthy before COVID-19 were subsequently developing diabetic symptoms during, or following, their acute coronavirus infection.

Early in 2020, Francesco Rubino, a metabolic and bariatric surgeon from King’s College London, began to notice a growing number of anecdotal reports of new-onset diabetes diagnoses following COVID-19 infection. By the middle of the year Rubino had joined forces with colleagues around the world to form the CoviDiab project.

The project is an online global registry calling for doctors around the world to contribute reports of cases of new-onset diabetes linked to COVID-19. A New England Journal of Medicine correspondence from Rubino in August last year, and co-signed by 16 other researchers, announced the registry suggesting there are plausible mechanisms by which COVID-19 could trigger the onset of diabetes.

“The goal of the registry is to establish the extent and phenotype of new-onset diabetes that is defined by hyperglycemia, confirmed Covid-19, a negative history of diabetes, and a history of a normal glycated hemoglobin level,” the researchers explained in their correspondence. “The registry, which will be expanded to include patients with preexisting diabetes who present with severe acute metabolic disturbance, may also be used to investigate the epidemiologic features and pathogenesis of Covid-19–related diabetes and to gain clues regarding appropriate care for patients during and after the course of Covid-19.”

Since the CoviDiab registry was launched a small but growing body of evidence has been building suggesting some kind of relationship between new-onset diabetes and COVID-19. A systematic review and meta-analysis published in late 2020 pooled data from eight studies encompassing 3,711 COVID-19 patients and detected 492 newly diagnosed cases of diabetes.

A more recent long-COVID study tracked nearly 50,000 patients post-discharge for up to five months. The paper, not yet peer-reviewed or published, found 4.9 percent of hospitalized patients were subsequently diagnosed with diabetes in the months following discharge.

“Over the last few months, we’ve seen more cases of patients that had either developed diabetes during the Covid-19 experience, or shortly after that,” Rubino recently told The Guardian. “We are now starting to think the link is probably true – there is an ability of the virus to cause a malfunctioning of sugar metabolism.”

The association between newly diagnosed diabetes and COVID-19 may certainly be growing but big questions regarding causation remain. There are certainly plausible mechanisms by which SARS-CoV-2 could, at the very least, speed up the progression of diabetes in individuals already prone to the disease.

More

https://newatlas.com/health-wellbeing/coronavirus-diabetes-pandemic-trigger-metabolism-covidiab/

 

Next, some vaccine links kindly sent along from a LIR reader in Canada. The links come from a most informative update from Stanford Hospital in California.

World Health Organization - Landscape of COVID-19 candidate vaccines. https://www.who.int/publications/m/item/draft-landscape-of-covid-19-candidate-vaccines

NY Times Coronavirus Vaccine Tracker. https://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html

Stanford Website. https://racetoacure.stanford.edu/clinical-trials/132

Regulatory Focus COVID-19 vaccine tracker. https://www.raps.org/news-and-articles/news-articles/2020/3/covid-19-vaccine-tracker

Some other useful Covid links.

Johns Hopkins Coronavirus resource centre

https://coronavirus.jhu.edu/map.html

Rt Covid-19

https://rt.live/

Centers for Disease Control Coronavirus

https://www.cdc.gov/coronavirus/2019-ncov/index.html

The Spectator Covid-19 data tracker (UK)

https://data.spectator.co.uk/city/national

 

Technology Update.

With events happening fast in the development of solar power and graphene, I’ve added this section. Updates as they get reported.

Today, so you really, really, really want a self-driving Tesla. Check your life and medical insurance is up to date first. Click on the link for the amusing/scary video.

Tesla 'Full Self-Driving' Beta video shows it has a long way to go

Multiple close calls have us thinking it shouldn't be in the hands of the public yet

Joel Stocksdale  Mar 19th 2021 at 3:21PM

Tesla's "Full Self-Driving" Beta (which we have in quotes because, despite the name, it is not fully self-driving, as it still requires the attention of the driver) software is on public streets, and it has been since at least October. The company has been expanding the roll-out of the prototype software to small groups of Tesla owners, as stated on Twitter by the company's CEO Elon Musk, with further expansion coming in April. We're not so sure that rapid expansion of the program is such a good idea after seeing how badly the feature performed in the above video, which was also reported on by Road & Track and Jalopnik.

Throughout the sunny drive that YouTube user AI Addict takes, the car shows many signs that the advanced driving assist has a long, long way to go before it's ready for prime time. Among some of the more minor issues include some hesitancy and confusion when trying to pick a lane, stopping way short of the line and getting stuck behind parked cars. Far more concerning are a couple of near collisions, once when crossing an intersection with no stop sign for cross traffic, and then a moment where it seemed as though it wanted to drive through a fence. In many of these situations, the driver had to manually take over to continue the drive or to avoid a crash. In another video taken a few days prior to the one above, AI Addict had many of the same issues on an evening drive.

Of course, no one expects a beta version of anything to be perfect, and having people test it is a way to find and iron out the issues. As shown in the video, users of the "Full Self-Driving" Beta report when things go wrong so that Tesla has that information and can work to correct it. But self-driving-car beta is unlike most in that it could do serious harm if something goes wrong the driver fails to catch it in time. It seems to us that this software needs to spend more time in the hands of Tesla employees, rather than being unleashed on the public, even in the currently limited numbers. If something goes wrong with what are effectively amateur testers behind the wheel, it could have very serious consequences from killing or seriously injuring someone to simply setting back the cause of automated driving.

Click for Video approx.. 13 minutes.

https://www.autoblog.com/2021/03/19/tesla-full-self-driving-video-shows-erratic-behavior/?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAADdMkmf42dbMg4qKumZ22iV9a4hXCMYniup_tUKk7Y4nUSuclzUFWcL7jYhTmrFq85TSvpBO_aer3CYPqKAwcUwUXWaSv23jdYqKp467CYeB1StWguRR2kCs7d9LxYtoKe-ZlUPif7VrCUSMDnRc0dN9OHv6x-6EOIY2NwLLI89P

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