Baltic Dry Index. 4717 +73 Brent Crude 80.20
Spot Gold 1750
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 28/09/21 World 233,099,451
Deaths 4,769,820
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.
Have we already hit “as goes China so goes the world?”
Hopefully not, though we will short of a Thucydides war. But this morning we seem to be uncomfortably close to swapping out the USA for China, in the old stock market adage.
Apart from the China Evergrande slow motion car crash, China’s economy is increasingly running out of electric power and suffering from a shortage of coal. More supply chain distortion follows like night follows day.
Add in near universal fuel shortages and sky high prices for natural gas, and energy price inflation is anything but “transitory” no matter how many times Chairman Powell and the central bankster ilk try spinning the Big Lie.
Below, more sign of stagflation taking over.
Asia-Pacific stocks slip as economists cut China’s GDP forecasts
Published Mon, Sep 27 2021 7:40 PM EDT Updated 3 Hours Ago
SINGAPORE — Stocks in Asia-Pacific largely declined in Tuesday morning trade, as various firms downgraded China’s GDP forecasts.
Goldman Sachs on Tuesday slashed its China GDP growth expectations to 7.8%, down from the 8.2% previously forecast.
Nomura also expected China’s GDP to grow by 7.7% this year, down from a previous forecast of 8.2%.
Mainland Chinese stocks declined, with the Shanghai composite down 0.2% while the Shenzhen component fell 0.55%. Hong Kong’s Hang Seng index outperformed regionally as it gained 0.68%.
South Korea’s Kospi slipped 0.81%. SK Innovation shares jumped nearly 2% after the firm announced a plan with Ford Motor to invest more than $11 billion in new U.S. facilities to produce electric vehicles and batteries.
In Japan, the Nikkei 225 fell 0.72% while the Topix index shed 0.99%. The S&P/ASX 200 in Australia dipped 0.28%.
Australia’s retail sales fell 1.7% on a seasonally adjusted basis in August, data from the country’s Bureau of Statistics showed Tuesday. That was higher than market forecasts for a 2.5% decline, according to Reuters.
MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.29% lower.
Overnight stateside, the Dow Jones Industrial Average climbed 71.37 points to 34,869.37 while the S&P 500 shed 0.28% to 4,443.11. The Nasdaq Composite dipped 0.52% to 14,969.97.
The mixed moves on Wall Street came as the 10-year Treasury yield briefly crossed 1.5% on Monday, its highest since June. It later retreated from those levels and last sat at 1.4802%. Yields move inversely to prices.
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Asian markets grapple with Evergrande fallout, eye China power crunch
September 28, 20213:28 AM BST
HONG KONG, Sept 28 (Reuters) - Asian shares mainly drifted lower Tuesday as investors continued to fret over China Evergrande Group's (3333.HK) unsolved debt crisis and eyed the potential impact of a widening power shortage in China.
----The future of Evergrande, the world's most indebted property developer, is being forensically scrutinised by investors after the company last Friday did not meet a deadline to make an interest payment to offshore bond holders. read more
Evergrande has 30 days to make the payment before it falls into default and Shenzen authorities are now investigating the company's wealth management unit.
Without making reference to Evergrande, the People's Bank of China (PBOC) said Monday in a statement posted to its website that it would "safeguard the legitimate rights of housing consumers".
Widening power shortages in China, meanwhile, halted production at a number of factories including suppliers to Apple Inc (AAPL.O) and Tesla Inc (TSLA.O) and are expected to hit the country's manufacturing sector and associated supply chains.
Analysts cautioned the ongoing blackouts could affect the country's listed industrial stocks.
"What we see in China with the developers and the blackouts is going to be a negative weight on the Asian markets," Tai Hui, JPMorgan Asset Management's Asian chief market strategist told Reuters.
"Most people are trying to work out the potential contagion effect with Evergrande and how far and wide it could go. We keep monitoring the policy response and we have started to see some shift towards supporting homebuyers which is what we have been expecting."
More
https://www.reuters.com/business/global-markets-wrapup-1-2021-09-28/
China provincial governor urges more coal imports to resolve power shortages
China should work to import more coal from Russia, Indonesia and Mongolia in order to resolve supply shortages now crippling large sections of industry, said Han Jun, governor of the northeastern province of Jilin, one of the worst-hit regions.
Speaking to local power firms on Monday, Han said “multiple channels” needed to be set up to guarantee coal supplies, according to the province’s official WeChat social media account. He said the province would also dispatch special teams to secure supply contracts in the neighboring region of Inner Mongolia.
Jilin is one of more than 10 provinces that have been forced to ration power in order to cope with supply constraints. Power generators are also facing soaring coal prices, but are unable to pass them on to consumers.
Han urged companies to fulfil their “social responsibilities” and “overcome the difficulties” caused by coal price rises.
David Fishman, China energy policy researcher and manager at the Lantau Group, an economic consultancy, said flaws in China’s pricing system were ultimately to blame for the current round of shortages.
“This is about coal generators unable to operate their plants profitably, in most cases,” he said.
“In the short term, the only relief policies that make sense are digging more coal out of the ground, which is bound to be an unpopular idea, or make end-users pay more for their power,” he added.
What Thucydides Teaches Us About War, Politics, and the Human Condition
Eric W. Robinson August 9, 2017
Thucydides is on a roll these days.
The ancient Greek historian of the Peloponnesian War, who lived almost 2,500 years ago, makes the title of Graham Allison’s prominent new volume, Destined for War: Can America and China Escape Thucydides’s Trap?
The great historian merits this because his analysis of the causes of the ancient war between the Athenians and the Spartans provides the essential dilemma of Allison’s book: Can states avoid catastrophic war when a rising power begins to challenge a dominant state’s control? Thucydides’ pessimistic answer seems to be “No”: War was inevitable, we are told, when emergent power Athens contested Sparta’s supremacy 2,500 years ago. Allison offers only a slightly more optimistic take (“War is more likely than not”) in analyzing China’s growing challenge to America’s dominating position globally.
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The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.
Ernest Hemingway.
Global Inflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Oil extends rally into 6th day on tight supply, Brent hitting 3-yr high
September 28, 20214:04 AM BST
TOKYO, Sept 28 (Reuters) - Oil markets rose on Tuesday, reversing earlier losses and extending their rally into a sixth session, amid continued concerns over tight supply at a time when demand is picking up with the easing of COVID-19 pandemic restrictions.
Brent crude futures gained 42 cents, or 0.5%, to $79.95 a barrel at 0248 GMT, reaching its highest since October 2018. It surged 1.8% on Monday.
U.S. West Texas Intermediate (WTI) crude futures climbed 41 cents, or 0.5%, to $75.86 a barrel, hitting its highest since July. It jumped 2% the previous day.
"The market sentiment remained strong with tighter supply and recovering demand in many parts of the world," said Toshitaka Tazawa, an analyst at Fujitomi Securities Co Ltd.
The Japanese government will seek advisers' approval to lift the state of emergency in all regions on Oct. 1 as the number of new coronavirus cases falls and the strain on the medical system eases, Economy Minister Yasutoshi Nishimura said on Tuesday. read more
Meanwhile, top African oil exporters Nigeria and Angola will struggle to boost output to their OPEC quota levels until at least next year as underinvestment and nagging maintenance problems continue to hobble output, sources at their respective oil firms warn. read more
Their battle mirrors that of several other members of the OPEC+ group who curbed production in the past year to support prices when COVID-19 hit demand, but are now failing to ramp up output to meet soaring global fuel needs as economies recover. read more
Boosting investors' risk appetite, Goldman Sachs raised by $10 its year-end forecast for Brent crude to $90 per barrel. Global supplies have tightened due to the fast recovery of fuel demand from the outbreak of the Delta variant of the coronavirus and Hurricane Ida's hit to U.S. production. read more
Analysts say climbing prices of spot liquefied natural gas (LNG) and coal may also bolster oil prices further.
----China is in the grip of a power crunch as a shortage of coal supplies, tougher emissions standards and strong demand from manufacturers and industry have pushed coal prices to record highs and triggered widespread curbs on usage. read more
Some Apple, Tesla suppliers suspend production in China amid power pinch
September 27, 202111:49 AM BST
Sept 27 (Reuters) - Several Apple Inc (AAPL.O) and Tesla Inc (TSLA.O) suppliers have suspended production at some Chinese factories for a number of days to comply with tighter energy consumption policies, putting supply chains at risk in the peak season for electronics goods.
Two major Taiwanese chipmakers, however, said their China facilities are operating as normal.
The development comes as tight coal supplies in China and toughening emissions standards have triggered a contraction in heavy industry in several regions, dragging on the country's economic growth rate, analysts have said. read more
Apple supplier Unimicron Technology Corp (3037.TW) late on Sunday said three of its China subsidiaries stopped production from midday on Sept. 26 until midnight on Sept. 30 to "comply with the local governments' electricity limiting policy".
The Taiwanese maker of printed circuit boards said it did not expect significant impact as other plants would make up production.
Eson Precision Ind Co Ltd (5243.TW), an affiliate of Taiwan's Hon Hai Precision Industry Co Ltd (Foxconn) (2317.TW), in a statement said it suspended production from Sunday until Friday at facilities in the Chinese city of Kunshan.
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China’s Electricity Crunch Is World’s Latest Supply-Chain Threat
Bloomberg News27 September 2021, 22:00 BST
· Manufacturers’ supply lines already slammed by soaring costs
· Producers warn the disruption will impact delivery times
China’s energy crisis is shaping up as the latest shock to global supply chains as factories in the world’s biggest exporter are forced to conserve energy by curbing production.
The disruption comes as producers and shippers race to meet demand for everything from clothing to toys for the year-end holiday shopping season, grappling with supply lines that have been upended by soaring raw material costs, long delays at ports and shortages of shipping containers.
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Europe’s Energy Crisis Is Coming for the Rest of the World, Too
More stories by Stephen Stapczynski September 27, 2021, 12:01 AM EDT
This winter, the world will be fighting over something that’s invisible, yet rarely so vital—and in alarmingly shorter supply.
Nations are more reliant than ever on natural gas to heat homes and power industries amid efforts to quit coal and increase the use of cleaner energy sources. But there isn’t enough gas to fuel the post-pandemic recovery and refill depleted stocks before the cold months. Countries are trying to outbid one another for supplies as exporters such as Russia move to keep more natural gas home. The crunch will get a lot worse when temperatures drop.
The crisis in Europe presages trouble for the rest of the planet as the continent’s energy shortage has governments warning of blackouts and factories being forced to shut.
Inventories at European storage facilities are at historically low levels for this time of year. Pipeline flows from Russia and Norway have been limited. That’s worrying as calmer weather has reduced output from wind turbines while Europe’s aging nuclear plants are being phased out or are more prone to outages—making gas even more necessary. No wonder European gas prices surged by almost 500% in the past year and are trading near record.
The spike has forced some fertilizer producers in Europe to reduce output, with more expected to follow, threatening to increase costs for farmers and potentially adding to global food inflation. In the U.K., high energy prices have forced several suppliers out of business.
Even a normally cold winter in the Northern Hemisphere is expected to drive up natural gas prices further across much of the world. In China, industrial users including makers of ceramics, glass, and cement may respond by raising prices; households in Brazil will face expensive power bills. Economies that can’t afford the fuel—such as Pakistan or Bangladesh—could simply grind to a halt.
Utilities and policymakers are praying for mild temperatures because it’s already too late to boost supplies. The prospect of accelerating energy costs, in conjunction with squeezed supply chains and food prices at decade highs, could make more central bankers question whether the jump in inflation is as transitory as they’d hoped. Traders will be carefully dissecting every weather forecast published from now to December.
----In Asia, importers of liquefied natural gas are paying record prices for this time of year to secure supplies, with some starting to snap up dirtier fuels such as coal and heating oil in case they don’t obtain enough. This may undermine efforts by governments to hit ambitious green goals: Gas emits about half as much carbon dioxide as coal when burned.
China, the world’s biggest buyer of natural gas, hasn’t filled stockpiles fast enough, even though imports are almost double what they were last year, according to customs data. Several Chinese provinces are already rationing electricity to industries to meet President Xi Jinping’s targets for energy efficiency and pollution reduction. A power crisis could exacerbate shutdowns if authorities divert gas to light and heat households.
If Chinese factories have to contend with widespread power shortages, global prices for steel and aluminum will jump. To make matters worse, the country is also grappling with a coal shortage.
More.
I do not think it is an exaggeration to say history is largely a history of inflation, usually inflations engineered by governments for the gain of governments.
Friedrich
August von Hayek.
Covid-19 Corner
This section will continue until it becomes unneeded.
Could DNA vaccines be the next tool in the world’s battle against COVID-19?
By MAAYAN JAFFE-HOFFMAN SEPTEMBER 26, 2021 21:24
India last month began boasting that it has created – and its regulatory body approved – the world’s first DNA vaccine, ZyCoV-D.
The vaccine, developed by a company called Zydus Cadila, expects to have it available for use as early as next month, giving hope to a country that has suffered more than 447,000 deaths at the hand of the virus.
What is a DNA vaccine and could this new class of vaccination become the next tool in the world’s fight against COVID-19?
A DNA vaccine is a form of a software vaccine, explained Tel Aviv University’s Prof. Jonathan Gershoni.
A software vaccine is one in which scientists vaccinate with the blueprint of the virus – just the DNA or the RNA corresponding to the genes that code for the spike protein – injecting it in a palatable and effective way into the body. The cells then synthesize the viral protein, which leads to the production of antibodies against the viral spike.
This is as opposed to a hardware vaccine, which actually contains hardware, that is physical bits and pieces of the virus protein.
“You can have a hardware vaccine that consists of a killed virus, for example, or an attenuated virus,” Gershoni explained. “Or you can have a subunit vaccine as well, such as the vaccine for Hepatitis B, which is just purified spike protein.
“The immune system identifies the presence of the viral protein… and that stimulates the immune system to respond and make highly specific targeted antibodies that inactivate the virus.”
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What are rapid antigen COVID tests and why aren't we using them more?
Rich Haridy September 21, 2021
As part of President Biden’s recent "Path out of the Pandemic" plan, increased testing was flagged as an important part of containing the spread of COVID-19. The plan indicates nearly US$2 billion will be spent procuring 280 million rapid COVID-19 tests. Plus, major retailers will be required to sell these tests at cost, approximately 35 percent less than current prices.
These numbers certainly sound big – 280 million tests is a lot. But what is the best way to use these rapid tests? How accurate are they? And is the government underestimating how many tests will actually be needed to make a difference?
What is a rapid antigen test?
The gold-standard test for SARS-CoV-2 is known as a reverse transcriptase-polymerase chain reaction (PCR) test. This test, involving the infamously fun experience of having a swab inserted deep into one’s nasal cavity, looks for viral RNA.
PCR tests are incredibly accurate. So much so they can pick up minute traces of viral RNA that may only result in innocuous asymptomatic infections, or even offer positive diagnoses weeks after a person has passed their infectious phase.
But PCR testing is also time and energy intensive, requiring samples to be sent to diagnostic laboratories. At best, the results of a PCR test can take several hours. And at worst, when labs are overwhelmed, it can be days before a result comes back.
Rapid COVID-19 tests, on the other hand, sacrifice a degree of accuracy for speed and simplicity. These tests look for proteins on the surface of viruses called antigens, or antibody generators.
A rapid test contains a panel of antibodies designed to respond to SARS-CoV-2 antigens, and they can return a positive or negative result within around 15 minutes.
How accurate are they?
Rapid antigen tests are without a doubt not as accurate as PCR tests. However, rapid antigen tests are incredibly accurate at catching cases at their most infectious point.
Rapid tests require substantial volumes of virus to be present in any given swab. This means these tests can’t confirm someone is not currently infected with SAR-CoV-2 but instead can confirm whether a person may be infectious at the time of taking the test.
“Rapid tests are designed to identify cases with a high enough viral load in the nasal passage to be transmissible – not to diagnose all COVID-19 cases,” explains public health expert Zoe McLaren, from the University of Maryland. “The Abbott BinaxNOW rapid antigen test may only detect 85 percent of the positive cases detected by PCR tests. But the key is that published studies found that they detect over 93 percent of cases that pose a transmission risk, which is what matters most for getting the pandemic under control. Ellume correctly identifies 95 percent of all positive cases, and Quidel QuickVue accurately identifies 85 percent. All three tests correctly identify upwards of 97 percent of all negative cases, regardless of symptoms.”
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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
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
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.
UK awards contracts to field test laser weapons on sea and land
David Szondy September 21, 2021
The British Ministry of Defence (MOD) has given three four-year contracts worth £72.5 million (US$99 million) to consortia led by Thales and Raytheon UK to develop laser and radio frequency demonstrator weapons to be mounted on Royal Navy ships and British Army vehicles.
It wasn't so long ago that lasers and other Directed Energy Weapons (DEW) were little more than cumbersome and unreliable bench experiments often so large that they could only be installed in Jumbo Jets. With the development of increasingly powerful solid-state lasers based on coils of fiber optic cables doped with rare earth elements and other advances, these weapons have not only jumped up in firepower, they have also shrunk to the point where they can be mounted on increasingly smaller platforms.
The upshot is that many countries like Britain are becoming interested in lasers – not as potential weapons, but as practical ones that can be deployed in the field. This is not surprising because of the advantages that laser weapons have. Not only do lasers travel at the speed of light, meaning they could even take out hypersonic missiles, they only cost about a dollar a round to fire and their "ammunition" is inexhaustible as long as the electricity holds out.
In the case of the new MOD contracts, which are part of the UK Novel Weapons Programme (NWP), the objective is to produce a trio of weapons that can be installed on ships, armored vehicles, and trucks without the need for heavy modifications to the vehicle.
The first goal is to mount a laser on a Royal Navy Type 23 frigate, where it will demonstrate its ability to detect, track, engage, and neutralize Unmanned Aerial Vehicles (UAV). Meanwhile, a second demonstrator laser will be fitted to an Army Wolfhound tactical support armored vehicle to counter drones and other air threats, and an Army MAN SV truck will show how a radio frequency system can detect, track and air, land, and sea targets.
The field tests will be conducted from 2023 to 2025 and will not only deal with how the DEWs perform, but also how to maintain them as well as gathering general knowledge and experience with the technology.
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I can tell you what happens to countries that go bankrupt. I've been to Argentina. I'm familiar with the history of Mexico and Great Britain. We'll see the same things here shortly: inflation, huge tax increases, capital flight and, eventually, capital controls.
Porter
Stansberry.
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