Tuesday 23 November 2021

More Powell. More Inflation. More Oil?

 Baltic Dry Index. 2645 +93 Brent Crude 79.31

Spot Gold 1808

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

Deaths 53,100

Coronavirus Cases 23/11/21 World 258,441,357

Deaths 5,174,857

"The first requisite of a sound monetary system is that it put the least possible power over the quantity or quality of money in the hands of the politicians."

Henry Hazlitt.

Not exactly murder Monday, although the stock casinos seemed under impressed by President Biden’s belated reappointment of Fed Chairman Powell to a second term as Chairman. 

News of a coming coordinated release of crude oil from global strategic reserves, was also underwhelming in the crude oil market. Traders want to see the details and are waiting on the next OPEC+ meeting coming up on December 2nd.

Only the bond market and gold market both took Chairman Powell’s reappointment seriously, with both anticipating a faster tapering and the gold market anticipating faster interest rate increases.

But US gold futures are repeatedly subject to US downside manipulation and my best guess is that yesterday’s selloff was probably more of an orchestrated bear raid in an otherwise quiet trading week. Inflation’s going nowhere but up for the rest of this decade given the push to de-carbonise the global economy, plus trillions more newly created cash pouring into commodities next year.

Asia stocks down, dollar holds firm after Powell's renomination

HONG KONG, Nov 23 (Reuters) - Asia stocks were mostly lower on Tuesday, tracking a retreat on Wall Street after President Joe Biden picked Federal Reserve Chair Jerome Powell to lead the central bank for a second term, reinforcing expectations the U.S. will taper its stimulus soon.

MSCI's gauge of Asia Pacific stocks outside Japan (.MIAPJ0000PUS) fell 0.49%, while Hong Kong's Hang Seng Index (.HSI) and China's benchmark CSI300 Index (.CSI300) opened 1.1% and 0.2% lower, respectively.

Australia's S&P/ASX 200 (.AXJO) outperformed with a 0.55% gain, boosted by miners and energy stocks. read more Japanese markets were closed for a public holiday.

Riskier assets have been shaken up again over recent sessions amid surging COVID-19 cases in Europe and renewed curbs, dousing investor hopes of a quicker recovery in consumption and growth worldwide.

Germany’s outgoing Chancellor Merkel said the latest surge is the worst experienced by the country so far, while Austria went into a fresh lockdown on Monday.

Overnight on Wall Street, the S&P 500 (.SPX) and Nasdaq Composite (.IXIC) retreated from all-time highs after President Biden tapped Powell to continue as Fed chair, and Lael Brainard, the other top candidate for the job, as vice chair. read more

"The USD looks poised to hold onto its gains post-Powell renomination as it leaves room for markets to flirt with the idea of a faster taper," said analysts at TD Securities in a note.

ANZ bank analysts concurred, saying in a note to clients that the Powell news stoked "expectations that tapering will accelerate and rates will begin to lift from June 2022."

More

https://www.reuters.com/markets/us/global-markets-wrapup-1-2021-11-23/

U.S. set to unveil emergency oil release in bid to fight high prices

Nov 23 (Reuters) - The United States is expected to announce a loan of crude oil from its emergency stockpile on Tuesday as part of a plan it hashed out with major Asian energy consumers to lower energy prices, a Biden administration source familiar with the situation said.

The move is designed to tame soaring energy prices after the OPEC producer group and its allies rebuffed repeated requests from Washington and other consumer nations to pump more quickly to match rising demand.

U.S. President Joe Biden is facing low approval ratings due to high prices for gasoline and other consumer items in the recovery from the coronavirus pandemic, posing a threat to him and his Democratic party ahead of next year's congressional elections.

A so-called "swap" from the U.S. Strategic Petroleum Reserve (SPR) will be announced on Tuesday in a move coordinated with several countries, the source said. The source did not specify how much oil would be released from the stockpiles.

Biden has already asked China, India, South Korea and Japan to release strategic oil stocks in concert with the United States. Japanese and Indian officials are working on ways to do that, Reuters reported. read more

The unprecedented effort by Washington to team up with major Asian economies to lower energy prices is intended as a warning to major producers that they should pump more oil to address concerns of high fuel prices in powerhouse economies.

OPEC+, which groups the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, plans to meet on Dec. 2 to discuss output policy.

The impact of a coordinated oil release would depend on the timeframe and quantity, but a release of more than about 60 million barrels in around 30 days would be seen by the market as "very negative for pricing", said Commonwealth Bank of Australia analyst Vivek Dhar.

More

https://www.reuters.com/markets/commodities/us-set-unveil-emergency-oil-release-bid-fight-high-prices-2021-11-23/

Finally, how aluminium went from glut to scarcity. The boom bust world of global commodities. And this is before President Biden starts spending his new trillions on “infrastructure.”

The $5 Billion Hoard of Metal the World Wants But Can’t Have

Sun, November 21, 2021, 5:00 AM

(Bloomberg) -- On an industrial park about an hour’s drive toward the South China Sea coast from Ho Chi Minh City sit giant mounds of raw metal shrouded in black tarpaulin. Stretching a kilometer in length, the much-coveted hoard could be worth about $5 billion at current prices.

In the esoteric world of aluminum, those in the know say the stockpile in Vietnam is the biggest they have ever seen — and that’s in an industry that spends a lot of time building stockpiles while analysts spend a lot of time trying to locate them. But as far as the increasingly under-supplied market is concerned, it’s one that may never be seen again.

Why it’s unlikely to move anytime soon involves Vietnam’s customs authorities. How its existence has become so significant, meanwhile, opens a window on a ubiquitous, yet erratic commodity at a time when makers of everything from car parts to beer cans are competing for more of it as they emerge from the coronavirus pandemic and China throttles supply.

While there used to be millions of tons of aluminum at ports from Detroit and New Orleans in the U.S. to Rotterdam in Europe and Malaysia’s Port Klang, market watchers say the stockpile 50 kilometers (31 miles) from Vietnam’s biggest city is likely the only notable one left.

To put it in perspective, it’s equivalent to the entire annual consumption of India, the world's second-most populous country, said Duncan Hobbs, a London-based analyst at commodities trader Concord Resources who has been covering metals markets for 25 years.

“We’re seeing the deepest deficit in the world market in at least 20 years, and this stockpile would not only fill that deficit, but it would leave you with something left over as well,” he said.

The hoard was seized as part of a U.S.-led anti-dumping investigation in 2019 focusing on a Chinese billionaire. The Vietnamese authorities say it was accumulated from China by Global Vietnam Aluminium Ltd., known as GVA. They haven’t concluded their investigation, though the initial probe into GVA was dropped because of a lack of evidence.

The 1.8 million tons of aluminum remains in storage under the watchful eye of security guards, with only tiny amounts released to GVA for its production line, according to an official in Vietnam’s general customs department. The company couldn’t be reached for comment. Part of the region has been in strict lockdown because of Covid-19.

The blistering rally in prices means the value of the metal has risen more than 50% since it was impounded. If the stockpile ever started moving, the impact could be seismic. It would be more than enough to erase a global deficit that has emerged in the aluminum market this year, and a fire sale could send prices crashing.

Yet CRU, one of the key consultancies that the industry relies on to keep track of stockpiles in the world’s biggest base-metal market, has now removed the Vietnamese stockpile from its inventory estimates. The London-based firm reckons some of the metal is more than 10 years old and would likely have to be sold as scrap anyway.

---- Now, with demand roaring and China curbing supply, the consensus view is that the outlook has never looked brighter for prices while the mountains of aluminum are vanishing just when manufacturers need them most.

“Stocks have been drawn down at a very fast pace, in a way that no-one was prepared for,” said Kamil Wlazly, a senior metals analyst at Wood Mackenzie in London.

Away from Vietnam, the industry’s passage into scarcity is plain to see at other major industrial ports around the world. Satellite imagery shows a massive stash in New Orleans owned by Castleton Commodities has been drawn down, shipped into consumers in the U.S who have had to cough up more for their aluminum since President Donald Trump imposed tariffs on imports from China and elsewhere.

A sizable stockpile in Malaysia’s Port Klang also vanished in 2019, at around the same time as customs data showed a spike in shipments from the country to Vietnam.

Despite Malaysia’s relatively modest standing as an aluminum consumer, Port Klang has also become the largest storage point in the London Metal Exchange’s warehouse network, but those reserves are declining fast as well.

LME depots in Detroit and the Dutch port of Vlissingen are now virtually empty, having held more than 3.5 million tons at the peak of the warehousing by banks and traders. It’s a similar story in Rotterdam, which used to hold millions of tons of metal in LME depots and private warehouses.

But the situation is arguably most severe in China, where total inventories across the entire country now stand at about 1.2 million tons, equating to two weeks worth of demand, according to estimates from research group AZ China.

More.

https://www.yahoo.com/news/5-billion-hoard-metal-world-050031430.html

The only difference between death and taxes is that death doesn't get worse every time Congress meets.

Will Rogers.

Global Inflation/Stagflation Watch.

Given our Magic Money Tree central banksters and our spendthrift politicians,  inflation now needs an entire section of its own.

Wheat inches lower from 9-year high, USDA report caps losses

CANBERRA, Nov 23 (Reuters) - U.S. wheat futures edged lower on Tuesday, though concerns about global supplies kept the grain near a nine-year high.

Corn edged lower as the United States moved to tap emergency supplies, while soybeans firmed.

The most-active wheat futures on the Chicago Board Of Trade were down 0.1% at $8.56-1/2 a bushel, as of 0500 GMT, after gaining 2.8% on Monday when prices hit a December 2012 high of $8.59-1/2 a bushel.

Traders said wheat was under pressure from corn, but market fundamentals remained bullish.

"There are concerns about supplies all over the world, and the U.S. Department of Agriculture condition report has added to those," said a Melbourne-based grains trader who declined to be named as he is not authorised to talk to the media.

The USDA said 44% of the U.S. winter wheat crop is in a good to excellent condition. Analysts on average had expected the USDA to rate 46% of the crop in good to excellent condition, unchanged from a week earlier.

Shipments from Russia, the world's largest exporter, are down 34% this season due to a smaller crop and rising export taxes.

Heavy rains, meanwhile, stalled harvesting in Australia and threatened crop quality, while flooding in western Canada has disrupted exports when global demand for wheat has risen.

The most-active soybean futures were up 0.2% at $12.76-1/4 a bushel, having closed 0.9% higher on Monday.

Both corn and soybean harvests were 95% complete as of Nov. 21, 1 percentage point below the average of estimates given in a Reuters poll of 11 market analysts.

https://www.reuters.com/markets/commodities/wheat-inches-lower-9-year-high-usda-report-caps-losses-2021-11-23/

Germany's economy is taking a breather but inflation isn't, Bundesbank warns

FRANKFURT, Nov 22 (Reuters) - The German economy is taking "a breather" as a lack of goods and labour as well as new restrictions designed to fight the coronavirus pandemic put an end to its recent boom, the country's central bank said on Monday.

The Bundesbank also warned that inflation in Europe's largest economy was likely to stay well above 3% for some time and upcoming wage negotiations should deliver large increases.

Germany's economy boomed in the first half of the year as services reopened for business. But it has since slowed as its industry was hit by supply disruptions and builders found it increasingly hard to find workers, the Bundesbank said.

This could be an ominous sign for the global economy given Germany's crucial position in global supply chains and its role as Europe's growth engine.

"The economic recovery will likely take a breather," the Bundesbank said in its monthly report. "From today's standpoint, GDP could tread water in the autumn quarter of 2021."

The Bundesbank added inflation in Germany could come in just below 6% this month before easing next year as a 2020 VAT cut and other temporary factors fall out of the calculation.

Still, the German central bank saw consumer prices growing by well more than 3% for a long time, with core inflation -- which strips out energy and food -- substantially above 2%.

More

https://www.reuters.com/markets/rates-bonds/germanys-economy-is-taking-breather-inflation-isnt-bundesbank-warns-2021-11-22/

Last year we said, 'Things can't go on like this', and they didn't, they got worse.

Will Rogers.

Covid-19 Corner

This section will continue until it becomes unneeded.

New documents back theory that Covid outbreak started in Wuhan lab

Sat, November 20, 2021, 3:26 PM

Wuhan scientists were studying viral samples of high-risk bat species living in Laos - the country where the closest relative to Covid-19 has been found, leaked documents show.

In September, researchers discovered a viral strain called Banal-52 in Laos, which shares 96.8 per cent of its genome with Sars-CoV-2 - boosting claims that the pandemic was caused by a natural spillover event, rather than a laboratory leak.

Now, leaked emails between EcoHealth Alliance and US government funders show viral samples were being collected from bats in Laos and sent back to the Wuhan Institute of Virology for study.

The emails, uncovered in a Freedom of Information Request by the US-based White Coat Waste Project, suggest that viral DNA from “bats and other high-risk species” were sent to Wuhan between June 2017 to May 2019.

Before Banal-52 was found, the closest relative to Covid-19 was discovered in cave bats in Yunnan, China, where EcoHealth Alliance had also been looking for viruses and sending samples back to the Wuhan Institute of Virology.

The genetic sequences collected from both Yunnan and Laos were kept in an online database at the Wuhan institute. However, that was removed in September 2019, leaving experts unsure of exactly what strains were studied at the lab.

Viscount Ridley, co-author of Viral: The Search for the Origin of Covid-19, said the emails added more weight to the theory that the virus leaked from a lab in Wuhan.

Speaking at the Institute of Economic Affairs in London, the peer said: “Banal-52 is not close enough to be the progenitor, it's still not the smoking gun, but it's pretty good. So maybe this virus started in Laos, not China. Interesting possibility.

“But we got a leak of a document showing that the EcoHealth Alliance was sampling bats in Laos.

“They say in the document that because it would be complicated to come back and ask the US Government for permission to give some of the grant to a Laotian lab, they’d like to send all these samples to a lab that can analyse it for them. It was in a place called Wuhan.

“So the outbreak happened in a city with the world’s largest research programme on bat-borne coronaviruses, whose scientists had gone to at least two places where these Sars-CoV-2-like viruses live.”

Advocates of the lab leak theory said that emails give “plausible” explanations for how Covid-19 could have emerged.

Gilles Demaneuf, a researcher and member of the web pandemic origins group Drastic, wrote in a recent blog: “Now we have a very plausible direct route from Laos to Wuhan, a route with two options.

More

https://www.yahoo.com/news/bat-virus-shipped-wuhan-laboratory-152601470.html

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 vaccineshttps://www.who.int/publications/m/item/draft-landscape-of-covid-19-candidate-vaccines

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

Regulatory Focus COVID-19 vaccine trackerhttps://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.

World's first electric autonomous cargo ship takes to the water

Nick Lavars  November 21, 2021

A future-focused ship designed as the world's first all-electric, autonomous cargo vessel has debuted in Norway, where it is intended to replace 40,000 diesel-powered truck journeys every year. The Yara Birkeland made a short, crewed trip to the capital of Oslo as part of its unveiling, with work to now begin on certifying it as an autonomous container vessel ahead of commencing commercial operations.

As a joint venture between chemical production firm Yara and maritime technology company Kongsberg, the Yara Birkeland was announced back in 2017 as the world's first all-electric and autonomous container ship. The plan is to use the ship to ferry chemicals and fertilizer from Yara's production plant in Prosgrunn to nearby towns, making significant reductions in NOx and CO2 emissions by negating the need for diesel-powered truck transport.

The 80-meter-long (262-ft) vessel is powered by a 6.8-mWh battery pack and can carry up to 3,200 tons at a maximum speed of 15 knots (28 km/h, 17 mph). Alongside production of the ship itself, Yara is tapping into its own stocks of ammonia used in its fertilizer production to develop a zero-carbon fuel source for eventual use aboard the Yara Birkeland. There is considerable and growing interest in ammonia as an alternative to diesel for long-haul shipping, though there are many kinks to iron out in terms of its production and how it can best be used.

“Renewable energy was our starting point in 1905, now, ammonia can bring us back to our roots," says Magnus Krogh Ankarstrand, CEO of Yara Clean Ammonia, as the initiative is called. "Our large shipping network and existing infrastructure means that ammonia has the potential to become the leading fuel for long-distance shipping globally,”

The Yara Birkeland's maiden voyage saw it travel from the town of Horten to Oslo, around 70 km (43 miles) away on November 18. The visit to the capital was arranged for partners on the project to experience the ship up close, and for government officials including Prime Minister Jonas Gahr Støre to receive a tour from Yara CEO Svein Tore Holsether.

“We are proud to be able to showcase the world's first fully electric and self-propelled container ship," says Svein Tore Holsether, CEO of Yara. "It will cut 1,000 tonnes of CO2 and replace 40,000 trips by diesel-powered trucks a year."

With its first voyage behind it, the Yara Birkeland will commence commercial operations in 2022, while a two-year testing period will take place alongside designed to certify it as an autonomous vehicle. Technology company Kongsberg will be responsible for integrating the sensors and other systems for autonomous navigation, with the pathway to full autonomy to also include a phase of remote operation.

More

https://newatlas.com/marine/worlds-first-electric-autonomous-cargo-ship-yara-birkeland-debut/?utm_source=New+Atlas+Subscribers&utm_campaign=1f260bee81-EMAIL_CAMPAIGN_2021_11_22_09_08&utm_medium=email&utm_term=0_65b67362bd-1f260bee81-90625829

Advertising is the art of convincing people to spend money they don't have for something they don't need.

 Will Rogers.

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