Baltic Dry Index. 5206 -172 Brent Crude 83.77
Spot Gold 1789
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 14/10/21 World 239,944,477
Deaths 4,889,440
All rational action is in the first place individual action. Only the individual thinks. Only the individual reasons. Only the individual acts.
Ludwig von Mises.
With the Federal Reserve, the BOE, the ECB, BOJ, PBOC all still drinking in the departure lounge, the Great Global Inflation liner has already departed and is already disappearing over the horizon.
Soon, the sozzled central banksters must face up to the reality that they’ve all missed the boat.
What they face now is a game of financial Russian roulette.
Do nothing and keep passing the revolver from one to another waiting for one of the G-7 central banksters to finally pull the trigger, if nothing happens then it’s on to the next central bankster to also pull the trigger.
But reversing global inflation is far easier said than done.
Fed Chairman Volker had to push interest rates up to 20 percent to stop the 1970s bout of inflation, and he didn’t face trillions upon trillions of Magic Money Tree fiat money created out of nothing since March 2020.
One expert yesterday posited that 40 percent of all dollars ever created have been created since March 2020.
Our sozzled central banksters now face a choice of blowing up the global economy or letting inflation rip on heading towards massive social upheaval.
There are no good outcomes from here.
Time to be out of stocks and long gold.
The Fed is proposing to do too little, too late.
Stocks up, dollar squeezed as inflation pulls forward rate hike bets
Federal Reserve officials could begin reducing the extraordinary help they’ve been providing to the economy by as soon as mid-November, according to minutes from the central bank’s September meeting released Wednesday.
The meeting summary indicated members feel the Fed has come close to reaching its economic goals and soon could begin normalizing policy by reducing the pace of its monthly asset purchases.
In a process known as tapering, the Fed would reduce the $120 billion a month in bond buys slowly. The minutes indicated the central bank probably would start by cutting $10 billion a month in Treasurys and $5 billion a month in mortgage-backed securities. The Fed is currently buying at least $80 billion in Treasurys and $40 billion in MBS.
The target date to end the purchases should there be no disruptions would be mid-2022.
More
China property shares pummelled as Evergrande impact widens
October 14, 2021 4:56 AM BST
SHANGHAI, Oct 14 (Reuters) - Shares of Chinese real estate firms slid on Thursday as investors fretted about a debt crisis rippling through developers including China Evergrande Group (3333.HK), a day after the sector was hit with fresh rating downgrades.
Evergrande, which has more than $300 billion in liabilities and 1,300 real estate projects in over 280 cities, missed a third round of interest payments on its international bonds this week, and some other firms have warned they could default.
Growing risks in the sector led rating agency S&P Global to deliver fresh downgrades to two of the sector's bigger firms, Greenland Holdings (600606.SS) - which has built some of the world's tallest residential towers - and E-house (2048.HK), and warn it could cut their ratings further. read more
Adding to the concerns of investors who have increasingly been hoping for policy easing to stabilise a wobbly recovery in the world's second-largest economy, new data on Thursday showed China's annual factory gate prices rising at the fastest pace on record in September due to soaring raw material prices. read more
Zhiwei Zhang, chief economist at Pinpoint Asset Management, said that persistent inflationary pressure would limit the scope of any monetary policy easing.
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Winter heating bills set to jump as inflation hits home
NEW YORK (AP) — Get ready to pay sharply higher bills for heating this winter, along with seemingly everything else.
With prices surging worldwide for heating oil, natural gas and other fuels, the U.S. government said Wednesday it expects households to see their heating bills jump as much as 54% compared to last winter.
Nearly half the homes in the U.S. use natural gas for heat, and they could pay an average $746 this winter, 30% more than a year ago. Those in the Midwest could get particularly pinched, with bills up an estimated 49%, and this could be the most expensive winter for natural-gas heated homes since 2008-2009.
The second-most used heating source for homes is electricity, making up 41% of the country, and those households could see a more modest 6% increase to $1,268. Homes using heating oil, which make up 4% of the country, could see a 43% increase — more than $500 — to $1,734. The sharpest increases are likely for homes that use propane, which account for 5% of U.S. households.
This winter is forecast to be slightly colder across the country than last year. That means people will likely be burning more fuel to keep warm, on top of paying more for each bit of it. If the winter ends up being even colder than forecast, heating bills could be higher than estimated, and vice-versa.
The forecast from the U.S. Energy Information Administration is the latest reminder of the higher inflation ripping across the global economy. Earlier Wednesday, the government released a separate report showing that prices were 5.4% higher for U.S. consumers in September than a year ago. That matches the hottest inflation rate since 2008, as a reawakening economy and snarled supply chains push up prices for everything from cars to groceries.
The higher prices hit everyone, with pay raises for most workers so far failing to keep up with inflation. But they hurt low-income households in particular.
“After the beating that people have taken in the pandemic, it’s like: What’s next?” said Carol Hardison, chief executive officer at Crisis Assistance Ministry, which helps people in Charlotte, North Carolina, who are facing financial hardship.
She said households coming in for assistance recently have had unpaid bills that are roughly twice as big as they were before the pandemic. They’re contending with more expensive housing, higher medical bills and sometimes a reduction in their hours worked.
More
https://apnews.com/article/business-prices-inflation-28e1231bdb445d482bb2d2e25dff1983
In life after Brexit, who needs the E-You, says Italy?
UK starts talks with Italy on £38bn export and investment deal in post-Brexit trade push
Wednesday 13 October 2021 8:15 am
The UK has started talks with Italy on a new export and investment deal which should expand trade between the two European countries.
Speaking alongside Italian minister of foreign affairs and international cooperation Luigi Di Maio in Sorrento, Italy, the new International Trade Secretary, Anne-Marie Trevelyan, said that “enhancing our bilateral relationship with Italy is a win-win, which will boost export opportunities and investment promotion for our businesses.”
Italy is the world’s eighth-largest economy and trade between Rome and London was worth £38bn last year.
“Italy is our ninth-largest trading partner, while the UK is Italy’s fifth-largest export market – I am delighted we are kicking off this discussion,” she said.
“The UK and Italy are also working side-by-side to deliver a successful Cop26 summit. The next 18 months are critical for our planet and together we will lead by example to accelerate progress towards a green, resilient and inclusive recovery.”
The two ministers met after a G20 meeting in Sorrento.
Export
The talks will seek to boost exports for companies in both countries, including in high-performing sectors such as life sciences, defence and security, as well as growth sectors of the future such as digital and tech.
They will also aim to promote inward investment, including in low-carbon industries such as onshore and offshore wind, hydrogen, and carbon capture storage, plus the food and drink industry and tech sector – where the UK’s research and development strengths can help support Italian scale-ups.
London and Rome will also try to boost collaboration and sharing of best practice between the two countries’ export credit organisations – UK Export Finance and the Italian Export Credit Agency – helping SMEs and companies looking to grow.
The dialogue is expected to lead to annual ministerial talks, as well as innovative commercial partnerships and stronger ties between UK and Italian CEOs.
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Finally, more on our series, so you really, really really want to drive an electric vehicle. Perhaps not a GM “lightning” Bolt, but another, safer make.
Rocking down to Electric Avenue? Good luck charging your car
October 13, 20217:28 AM BST
LONDON, Oct 13 (Reuters) - European and U.S. cities planning to phase out combustion engines over the next 15 years first need to plug a charging gap for millions of residents who park their cars on the street.
For while electric vehicle (EVs) sales are soaring in Europe and the United States, a lag in installing charging infrastructure is causing a roadblock.
Often cash-strapped local authorities have other priorities than a kerbside network of charging points which would allow owners to ensure their EVs are always topped up.
And while that leaves a potential gap for the private sector, it is one that few EV charging startups, who have been early adopters in other locations, are focused on.
"It's really difficult to tackle on-street residential charging, so there's really not many companies that have," Hugh Mackenzie, chief operating officer at Trojan Energy, said.
Trojan has developed a charger, which is being tested on residential streets in two London boroughs, where EV owners insert a short pole into sockets sunk into the pavement and then plug in their car.
Tim Win, an Uber driver who charges his Nissan Leaf every day, is using the system in Brent, north London.
"After I've been driving all day I just want to come home and plug in," said Win, 39, who previously used a nearby EV fast charger to charge up in 20 minutes but sometimes had to wait in line for nearly an hour.
A "cabbie" using one of London's new electric black taxis told Reuters he often has to drive between charging points, losing valuable custom as he does, only to find they are either already in use or malfunctioning.
COST CURB
Like the roll out of fibre optic cable for ultra-fast broadband, urban on-street charging using solutions which include lamp post chargers or even wireless, will cost billions.
Solutions like Trojan's are expensive because they require grid connections. And because there are not yet enough EV owners to ensure a quick return, they are 75% subsidized by Britain's government.
Trojan's chargers cost around 7,000 pounds ($9,520) to make and install, but Mackenzie says that if that can be cut to 4,500 pounds it will work for private investors.
But it still requires local authority buy-in.
"The biggest factor in whether kerbside charging is successful is whether you have an interested and engaged municipality," said Travis Allan, vice president for public affairs at Quebec City-based FLO, which has installed at least 7,000 kerbside chargers in Canadian and U.S. cities.
Yet even engaged local authorities like Brent, which is trying lamp post chargers and other solutions, simply lack cash.
Tim Martin, Brent council's transportation planning manager, says lamp post chargers cost around 2,000 pounds and rapid chargers around 15,000 pounds, so subsidies are the only option.
"The prospect of being able to fund them ourselves out of our own budgets is practically zero," Martin said.
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The issue is always the same: the government or the market. There is no third solution.
Ludwig von Mises.
Global Inflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
China coal prices hit record high as floods add to supply constraints
Published Wed, Oct 13 2021 1:34 AM EDT
China’s thermal coal prices surged to fresh record highs on Wednesday as recent floods in key coal producing province Shanxi worsened a supply crunch, just as new efforts by Beijing to liberalize power prices boosted demand from power generators.
China, the world’s largest coal consumer, has been grappling with a growing energy crisis brought on by shortages and record high prices for the fuel. The government has taken a range of steps to boost coal production and manage electricity demand at industrial plants, while power producers and other coal users have been ramping up imports.
Local governments in top coal producers Shanxi and Inner Mongolia have ordered some 200 mines to boost output, but incessant rain flooded 60 mines in Shanxi. Four mines with a combined annual output capacity of 4.8 million tons remained shut, a Shanxi official told a press conference on Tuesday.
The most-active January Zhengzhou thermal coal futures touched a record high of 1,640 yuan ($254.44) per ton earlier in Wednesday trade, having surged almost three-fold year-to-date.
Data released on Wednesday also showed coal imports rose to their highest this year last month as users scrambled to overcome supply constraints.
China brought in 32.88 million tons of coal in September, up 76% from a year earlier, data from the General Administration of Customs showed on Wednesday. The monthly total was the fifth largest on record, according to Reuters calculations.
Reuters reported last week that China has been releasing Australian coal from bonded storage but hasn’t lifted an almost year-long, unofficial import ban on the fuel.
Exports from other key suppliers, such as Russia and Mongolia, have been curtailed by limited rail capacity, while shipments from Indonesia have been hindered by rainy weather, traders said.
More
Sharp surge in energy prices threatens economic recovery and is already slowing growth
Published Tue, Oct 12 2021 12:18 PM EDT Updated Tue, Oct 12 2021 6:57 PM EDT
Energy prices are surging, and the economy is already feeling the pinch of higher fuel costs though it is far from stalling out.
There is an unusual coincidence of much higher oil, natural gas and coal prices, combined with other rising commodities and supply chain disruptions. That perfect storm of shortages and higher prices begs the question of whether the economy could go into a serious tailspin or even a recession.
Economists say, for now, the jump in prices is not the type of oil shock that will turn U.S. growth negative, but there will be economic consequences of higher energy costs, particularly in places like Europe where natural gas prices have skyrocketed.
“Periods of trending oil prices tend not to be a problem,” JPMorgan chief economist Bruce Kasman said. “The periods of spiking oil prices tend to be what gets you into trouble. They tend to be largely supply driven, and they tend to have disruptive elements that are more broad in terms of their potential drags on growth.”
“We do have a rise in energy that will be a drag on fourth quarter growth,” he added. “It’s not at a point where we’re warning about recession, but it’s at the point where you have to worry about it hurting growth in a material way.”
American consumers have already been paying up for gasoline, and heating and electricity costs could rise more this winter. Oil prices are up more than 65% this year so far, while natural gas prices have jumped more than 112% since January.
“We’re looking at GDP growth in the 4% to 6% range ... We would have to see massive doubling and tripling of oil prices for it to have such a bad effect that we go ... to negative growth,” said Anwiti Bahuguna, head of multi-asset strategy at Columbia Threadneedle.
---- Citigroup forecasts a winter price shock that could see natural gas prices in Europe average over $30 per one million British thermal unit in the fourth quarter and over $32 in Asia. But Citi energy analysts also say if there is a very cold winter that could spike as high as $100 mmBtus, the equivalent of about a $580 barrel of oil. By comparison, U.S. natural gas futures are currently trading at $5.25 per mmBtu.
Coal prices have also been rising and supplies are short, creating a power supply crunch in China. The country burns coal to generate electricity, but the inventory at its power plants faced a 10-year low in August. That has also increased the demand for natural gas.
More
Gas prices hit $5 in Manhattan
By FOX 5 NY Staff October 12, 2021
NEW YORK - Gas prices are on the rise and they have hit nearly $5 for regular and are now about $5.40 a gallon for supreme in Manhattan.
A Mobil station on 11th Ave. on the West Side had the eye-popping prices on Monday evening.
Gas prices have jumped across the nation as oil prices reach a 7-year high.
The average price of gas across the country is about $3.25 per gallon, according to GasBuddy, and $3.31, according to the Lundberg Survey.
Average prices are up more than $1 from a year ago, according to GasBuddy data compiled from more than 150,000 gas stations across the country.
Just eight states have average prices under $3 per gallon — Oklahoma, Mississippi, Texas, Arkansas, Louisiana, Kansas, Alabama, and Missouri, according to GasBuddy.
More
https://www.fox5ny.com/news/gas-prices-hit-5-in-manhattan
Logjam at busiest UK commercial port adds to Christmas fears
LONDON (AP) — A logjam at the U.K.’s busiest commercial port ratcheted up concerns Wednesday that the country could see an array of shortages in the crucial Christmas trading period, including of toys and food.
Worries have mounted over recent weeks that the U.K.’s economic recovery is being hobbled by widespread shortages, which have been most clearly seen in the long lines that have been seen at gas stations in recent weeks and the empty shelves at supermarkets.
The disruption is clearly visible at the east England port of Felixstowe, the U.K.’s largest commercial port. A bottleneck of containers at the port, which deals with 36% of U.K. freight container volumes, has been blamed on a shortage of drivers and prompted shipping company Maersk to divert some of its biggest vessels.
Peter Wilson, managing director at Cory Brothers shipping agency, said the U.K. has a “significant pinch point” around truck drivers and the demand on them to move goods from ports.
“That’s a really significant issue for us here in the U.K.,” he told BBC radio.
Asked if it will affect Christmas, he said it has the “potential,” but stressed that the supply chain “will not fail in the U.K.”
However, he said there is potential that some items may not be available nearer to Christmas, including toys and food.
Credit expansion can bring about a temporary boom. But such a fictitious prosperity must end in a general depression of trade, a slump.
Ludwig von Mises.
Covid-19 Corner
This section will continue until it becomes unneeded.
U.S. FDA staff says Moderna did not meet all criteria for COVID-19 boosters
October 13, 202110:50 AM BST
Oct 12 (Reuters) - Scientists at the U.S. Food and Drug Administration said on Tuesday that Moderna Inc (MRNA.O) had not met all of the agency's criteria to support use of booster doses of its COVID-19 vaccine, possibly because the efficacy of the shot's first two doses has remained strong.
FDA staff said in documents that data for Moderna's vaccine showed that a booster does increase protective antibodies, but the difference in antibody levels before and after the shot was not wide enough, particularly in those whose levels had remained high.
The documents were released ahead of a meeting later this week of the FDA's outside expert advisers to discuss booster doses of the vaccine.
The FDA typically follows the advice of its experts, but is not bound to do so. A panel of advisers to the U.S. Centers for Disease Control and Prevention (CDC) will meet next week to discuss specific recommendations on who can receive the boosters, if the FDA authorizes them.
"There was boosting, sure. Was it enough boosting? Who knows? There’s no standard amount of boosting that is known to be needed, and nor is it clear how much boosting happened in the study,” John Moore, a professor of microbiology and immunology at Weill Cornell Medical College in New York, said in an email.
Moderna is seeking authorization for a 50-microgram booster dose, half the strength of the original vaccine given in two shots about four weeks apart.
The company has asked regulators to clear a third round of shots for adults aged 65 and over, as well as for high-risk individuals, similar to the authorization gained by rivals Pfizer Inc (PFE.N) and German partner BioNTech for their mRNA vaccine.
More
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.
Then the sun stopped shining. The future wasn’t bright. The workers all stopped working. And the trustee turned out the light.
Chinese solar panel affiliate in California files bankruptcy, begins liquidating 400-MW plant
Sunergy California LLC, the company manufacturing CSUN solar panels in a 400-MW factory outside Sacramento, filed for bankruptcy earlier this year and is now in the process of liquidating its assets.
The American manufacturing arm of China Sunergy Co., Sunergy California filed chapter 11 bankruptcy in January 2021, listing more than $10 million in estimated assets and $17.2 million in liabilities. In addition to numerous breaches of contract, Sunergy was in a lengthy debt battle with DEPCOM Solar, owing the utility-scale solar construction firm almost $4 million.
The expectation was for Sunergy to reorganize while continuing to operate at its 140,000-sq.-ft manufacturing building in McClellan Park in Sacramento County, but later court reports found that the facility had not been operating since late April. An August 2021 site visit by the bankruptcy trustee found that manufacturing equipment, raw materials and finished solar panels were still located within the plant.
More than 3,000 leftover solar panels were eventually sold to Coldwell Solar, a large-scale California solar installer. There are also approximately “10 containers of prepaid goods being held at the Port of Oakland by U.S. Customs.”
Solar Power World reached out to Sunergy California and its bankruptcy trustee for comment and did not receive a reply.
Chinese solar cell and module manufacturer China Sunergy Co. opened the American factory in 2017 as a way to “efficiently serve customers across the United States.” The facility made 72-cell CSUN/ASUN-branded solar panels mostly used on utility-scale solar projects. Sunergy was listed on this summer’s anonymous petition to the Dept. of Commerce as potentially one of the Chinese solar panel manufacturers circumventing antidumping tariffs by setting up manufacturing outlets in other countries.
A society that chooses between capitalism and socialism does not choose between two social systems; it chooses between social cooperation and the disintegration of society.
Ludwig von Mises.
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