Baltic Dry Index. 3216 -56 Brent Crude 74.25
Spot Gold 1787
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 14/12/21 World 271,103,431
Deaths 5,328,601
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.
In our non capitalist, financialized, central bankster rigged markets modern world, banksterism now rules, ok or not.
And so this week, unelected, the wannabe “Gods” of the financialized global economy get to decide the economic fate of almost seven and a half billion people, their livelihood, prosperity, wretchedness, and for some, whether they can eat or heat themselves and family.
After a modest career betting in commodity futures on ten percent leverage, called gearing in British English, I’m willing to place one more bet in my closing career before having to turn up before God to explain my time here on God’s planet Earth; this Greenspan banksterism system on the Great Nixonian Error of fiat currency will not last much longer.
If it doesn’t end in catastrophic war, it will end, crushed under the coming Great Inflation of all the trillions and trillions of Magic Money Tree money poured out since the discovery of all the Magic Money Tree forests back in March 2020.
Asian stocks dip as Omicron spreads, Fed decision looms
December 14, 2021 5:22 AM GMT
SYDNEY, Dec 14 (Reuters) - Asian stocks were mostly down and oil prices slipped on Tuesday as the spread of the Omicron coronavirus variant rattled investors who were already on edge ahead of a slew of central bank decisions this week, including a key Federal Reserve meeting.
MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was down 0.77%, as the Asian Development Bank (ADB) trimmed its growth forecast for developing Asia, reflecting risks brought on by the new virus variant. read more
China's CSI300 index (.CSI300) was 0.39% lower, after health authorities in Tianjin detected the country's first Omicron case, while Britain reported the first death from the variant. read more
Hong Kong's Hang Seng Index (.HSI) was down 1.2%, also dragged down by persistent concerns over the health of China's property sector.
The combination of economic risks from the Omicron variant and a potentially more hawkish tone from the Fed on Wednesday dampened risk appetite in Asia.
Still, stocks in the northern hemisphere could catch a breather, with E-mini futures for the S&P 500 index up 0.13% and FTSE futures 0.29% higher, pointing to a potential positive start for European markets.
"I think there are reasons why you might expect to see money go back into cash for a bit, in expectation that the start of 2022 is going to be a volatile period," said John Milroy, an adviser at Ord Minnett in Sydney, citing "challenges, such as China's slowdown and uncertainty around monetary policy, which we think will impact earnings and valuation multiples."
Major Chinese manufacturing province Zhejiang is fighting its first COVID-19 cluster this year, with tens of thousands of citizens in quarantine and virus-hit areas suspending business operations. read more
More
https://www.reuters.com/markets/europe/global-markets-wrapup-2-2021-12-14/
Wall Street ends down; investors eye Omicron and Fed meeting
December 14, 2021 1:30 AM GMT
Dec 13 (Reuters) - Wall Street ended lower on Monday, with shares of Carnival Corp and several airlines tumbling as investors worried about the Omicron coronavirus variant ahead of a Federal Reserve meeting later this week.
Travel-related stocks fell, with the fast-spreading variant accounting for around 40% of COVID-19 infections in London and at least one death in the United Kingdom. read more
Norwegian Cruise Line Holdings (NCLH.N), Carnival Corp (CCL.N) and Royal Caribbean Cruises (RCL.N) all slumped, while the S&P 1500 airlines index (.SPCOMAIR) shed more than 2%.
"It's transportation, restaurants, all the things that if it got bad enough that we started putting new restrictions on people, it would not be good for them," said Tom Martin, senior portfolio manager at Globalt Investments in Atlanta. "They have all been bid over the past several months by the idea that we were going to get back to business as usual."
Most of the 11 major S&P 500 sector indexes fell, with only defensive sectors, including consumer staples (.SPLRCS), utilities (.SPLRCU) and real estate (.SPLRCR) gaining.
According to preliminary data, the S&P 500 (.SPX) lost 43.56 points, or 0.92%, to end at 4,668.46 points, while the Nasdaq Composite (.IXIC) lost 220.88 points, or 1.41%, to 15,409.72. The Dow Jones Industrial Average (.DJI) fell 313.98 points, or 0.87%, to 35,657.01.
Apple Inc (AAPL.O) dipped, even after J.P. Morgan raised its price target on the iPhone maker to the highest on Wall Street. The company is close to becoming the first in the world to hit $3 trillion in market value.
Investors expect an increasingly hawkish tone out of the Federal Reserve's two-day meeting that wraps up on Wednesday. The U.S. central bank is expected to signal a faster wind-down of asset purchases, which could also usher closer a start to interest rate hikes.
"Everyone is focused on the Fed this week and what guidance we get in terms of bond purchases and interest rates. There's an expectation that there will be an acceleration of tapering, and there's a little anxiety leading up to that," said Ryan Jacob, chief portfolio manager at Jacob Internet Fund.
More
In year-end meetings, top central banks may diverge over inflation, Omicron
December 14, 2021 6:06 AM GMT
Dec 14 (Reuters) - Major central banks meet this week to assess risks from the new Omicron variant of the coronavirus even as they consider reducing emergency measures put in place nearly two years ago to fight the pandemic's economic toll.
The global balancing act begins Tuesday when the Federal Reserve convenes for its latest two-day meeting, and includes new monetary policy statements by the U.S. central bank on Wednesday, the European Central Bank and the Bank of England on Thursday, and the Bank of Japan on Friday.
All are facing some version of the same dilemma - whether the need to guard against inflation and end the current era of low interest rates and central bank asset purchases is more urgent than the economic threatposed by the new variant - but their different approaches could make for a tumultuous year.
Inflation, labor markets, and the link between the virus and economic performance are behaving differently across the major economies, setting up a potentially sharp divide over how central banks manage the coming stage of the pandemic. That stands in contrast to the synchronized and massive wave of support approved at the outset of the health crisis in the spring of 2020.
The Bank of England had seemed recently on the verge of raising interest rates in a nod to high inflation, but policymakers have been set off course by Omicron's fast spread and the imposition of new restrictions in the country. They are now expected to hold the line on borrowing costs at their meeting this week in a reminder of the pandemic's still determinative role.
Michael Saunders, one of the two Bank of England policymakers who voted for a rate hike in November, said earlier this month that "there could be particular advantages in waiting to see more evidence on (Omicron's) possible effects on public health outcomes and hence on the economy." Since then, the variant's risks to the U.K. economy have intensified.
The ECB is likely to continue, and the Bank of Japan perhaps to commence, reducing some pandemic bond purchases at the margin, tentative steps reflecting the lower inflation and less fulsome economic rebounds in the euro zone and Japan. Interest rate increases for both are likely far off.
In the ECB's case, it must also be mindful of the major differences inside the bloc for which it sets policy. Any big retreat from crisis support could deliver unwanted consequences, say, for the sustainability of the high debt loads in economies such as Italy.
For Japan, the inflation that is tearing through other parts of the globe remains largely absent. As such, only a marginal reduction in corporate asset purchases is under discussion.
The Fed, meanwhile, is likely to intensify a policy shift that could grow even sharper over the coming year and that arguably poses the biggest risk of a disruptive surprise.
The U.S. central bank is coping with inflation already running at more than twice its formal 2% target and persistent enough that policymakers have discarded their description of it as "transitory." While the U.S. labor market remains several million jobs short of its pre-pandemic peak, a low unemployment rate and rising wages may signal that full employment is near.
More
El-Erian says ‘transitory’ was the ‘worst inflation call in the history’ of the Fed
Calling inflation “transitory” was a historically bad move for the Federal Reserve, according to Allianz Chief Economic Advisor Mohamed El-Erian.
“The characterization of inflation as transitory is probably the worst inflation call in the history of the Federal Reserve, and it results in a high probability of a policy mistake,” the former Pimco CEO and current Queens’ College president said Sunday on CBS’ “Face the Nation.”
“So, the Fed must quickly, starting this week, regain control of the inflation narrative and regain its own credibility,” he added. “Otherwise, it will become a driver of higher inflation expectations that feed onto themselves.”
El-Erian’s comments came just after the Labor Department reported that the consumer price index, a broad-based measure of inflation, rose 6.8% from a year ago in November.
Though the number was only slightly ahead of Wall Street expectations, it still marked the biggest 12-month move since 1982, back when the U.S. was battling the worst inflation it had ever seen. Even stripping out food and energy prices, the CPI rose 4.9%, which was its biggest gain in about 30 years.
Fed officials long had said they expected the inflation surge to be “transitory,” as it is being driven by supply chain and demand factors largely associated with the pandemic. However, Fed Chairman Jerome Powell recently said it’s time to retire the word as it tends to cause confusion among the public.
El-Erian said the Fed’s recognition that price pressures aren’t going away is essential to making the proper policy decisions.
“If they catch up now, if they’re honest about their mistake and take steps now, they can still regain control of it,” he said.
Changes are coming
The Federal Open Market Committee, which sets interest rates for the central bank, meets this week amid expectations that it will begin tapping the brakes further on its ultra-easy monetary policy. One important step is the likely decision to increase the pace at which it is cutting its monthly bond purchases, which had been aimed at bolstering the economy and keeping interest rates low.
However, markets expect that interest rate hikes are still months away and won’t be implemented at least until the bond purchases come to a complete halt, probably around March.
More
Finally, after a virtual summit of the deaf between Presidents Biden and Putin, a virtual summit of the listening between Presidents Putin and Xi. Something suggests that this virtual summit will be more productive than the virtual summit of the deaf. But is it more of the repeat of 1914?
China’s Xi is set to meet Russia’s Putin virtually on Wednesday
Published Mon, Dec 13 2021 3:11 AM EST
BEIJING — Chinese President Xi Jinping is set to meet virtually with Russian President Vladimir Putin on Wednesday, China’s Ministry of Foreign Affairs said Monday.
The two leaders last met in late June, also via video link. The meeting comes as rising tensions on the Russia-Ukraine border have caught international attention.
The U.S. and other Group of 7 leaders on Sunday issued a statement condemning “Russia’s military build-up and aggressive rhetoric towards Ukraine.” Canada, France, Germany, Italy, Japan and the United Kingdom are part of the bloc of major economies.
China is not part of the G-7, but the Asian giant was a focus of the group’s discussions at a meeting over the weekend, Reuters reported, citing officials.
China, which shares a long border with Russia, has focused much of their bilateral relationship on trade, especially in energy. Amid a coal shortage this year, China bought significant amounts of coal and other fuel this year from its northern neighbor.
It is less clear what Beijing’s position on Ukraine is. Xi spoke over the phone with Ukrainian President Volodymyr Zelensky in July, according to China’s foreign ministry.
In a virtual meeting with U.S. President Joe Biden last week, Putin said Washington should not allow Ukraine to join the North Atlantic Treaty Organization in return for assurances that Russian troops would not carry out an attack.
Biden said Washington would not accept such a demand.
An attack on one member of NATO — a powerful military alliance — is considered an attack on all member countries. Ukraine has wanted to join the alliance since 2002, but Russia objected on grounds that such a move would be a direct threat to its borders.
In June, NATO members vowed to address threats from China in addition to Russia.
Since taking office in January, Biden has only met virtually with Xi once, in November.
https://www.cnbc.com/2021/12/13/chinas-xi-is-set-to-meet-russias-putin-virtually-on-wednesday.html
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.
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Experts count coffee trees in Brazil as prices hit 10-year highs
December 13, 2021 6:31 AM GMT
NEW YORK/SAO PAULO, Dec 13 (Reuters) - Coffee experts working for commodity trading houses are taking to the narrow, winding roads in Brazil's Minas Gerais state as they tour the coffee belt checking 2022 crop prospects just as prices approach the highest levels in 10 years.
This has been a difficult year for coffee farming in Brazil, the world's largest producer. Prices surged after a drought and later frosts ruined as much as 20% of coffee trees, hitting future production. So far, those studying crops have produced wide estimates for the 2022 harvest, though traders for now are still betting on a less fruitful crop.
The people walking the fields will find the truth of that between now and the end of January, the optimal time for crop assessment.
"The rains that followed the frosts and drought produced a nice flowering, but now we have to see how many of those will grow into cherries," said Ryan Delany, chief analyst at U.S.-based Coffee Trading Academy LLC.
Arabica coffee futures on ICE gained more than 90% this year after the drought, frosts, and then a global container shortage that hampered shipping. The price surge led farmers in Brazil, Colombia and elsewhere to default on deliveries of pre-sold coffee. read more
During the tours, experts try to count pinhead cherries in the branches to come up with more detailed projections. So far, estimates released vary wildly.
Soft commodities analyst Judy Ganes, who was recently in Brazil with fellow analyst Shawn Hackett, estimated Brazil's arabica production at around 36 million bags, one of the smallest projections in the market.
Ganes says the vegetative health of the trees was damaged by drought and frosts, something others are not fully accounting for. She expects Brazil's total crop (including the robusta variety) to come in at 55 million bags, far from the record 2020 crop, the previous "on-year" crop in the biennial production cycle, that reached around 70 million bags.
More
Germany approves billions for climate, modernization fund
BERLIN (AP) — The German government on Monday approved 60 billion euros ($68 billion) in funding to be used for combating climate change and modernizing the country, a move that the new finance minister described as a “booster” for Europe’s biggest economy.
The supplementary budget approved by Chancellor Olaf Scholz’s Cabinet entails putting the money into a government fund that is being redesigned as a “climate and transformation fund.” It will be used to finance projects aimed at fighting climate change and improving Germany’s infrastructure.
Finance Minister Christian Lindner said in a statement that “60 billion euros for investments in the future are a booster for the economy,” which is still recovering from the coronavirus pandemic.
Lindner said new borrowing this year will remain at the 240.2 billion euros the previous government already planned.
----Lindner and his pro-business Free Democrats, the smallest of three parties in the center-left Scholz’s coalition, have ruled out tax hikes and insist on continuing to observe rules that limit new debt in the future. Those have been suspended during the pandemic.
At the same time, the coalition has ambitious plans to ramp up the use of renewable energy and invest in modernizing digital and other infrastructure in Germany.
Covid-19 Corner
This section will continue until it becomes unneeded.
Norway to tighten COVID-19 restrictions, PM says
December 13, 2021 11:50 AM GMT
OSLO, Dec 13 (Reuters) - Norway will further tighten restrictions this week in order to limit the spread of the coronavirus, Prime Minister Jonas Gahr Stoere told news agency NTB on Monday.
"The situation is serious. The spread of infection is too high and we have to take action to limit this development," he said.
The prime minister's office was not immediately available for comment.
Norway is setting record highs both in terms of new COVID-19 infections and hospitalisations, partly due to the spread of the Omicron variant of the virus.
In a risk assessment released on Monday, the Norwegian Institute of Public Health (FHI) recommended the government moved quickly.
"A lack of action now could lead to large negative consequences for society, not just for health services and municipalities," the FHI said.
Unless effective measures are established, the nation of 5.4 million people risks having between 90,000 and 300,000 new COVID-19 cases on a daily basis from early January onwards, the FHI added.
https://www.reuters.com/world/europe/norway-tighten-covid-restrictions-pm-says-2021-12-13/
Hospitalizations, Mortality Cut In Half After Brazilian City Offered Ivermectin To Everyone Pre-Vaccine
Sunday, Dec 12, 2021 - 06:00 PM
Early on in the pandemic, before the vaccines were available, the Southern Brazilian city of Itajai offered Ivermectin as a prophylaxis against the disease.
Between July and December of 2020, roughly 220,000 people were offered a dose of 0.2mg/kg/day (roughly 18mg for a 200lb person) as an optional treatment for 2 days, once every two weeks.
133,051 people took them up on it, while 87,466 did not.
After analyzing the data, a team of researchers spanning several Brazilian institutes, the University of Toronto, and Columbia's EAFIT concluded in a December pre-print study that hospitalization and mortality rates were cut in half over the seven month period among the Ivermectin group.
The authors adjusted for relevant confounding variables, including age, sex, medical history, previous diseases, and other conditions.
The analysis contradicts an October report by Business Insider which claims, based on a Brazilian ICU doctor's anecdotal evidence, that the experiment was a failure.
Study limitations:
The authors note, "Being a retrospective observational analysis, it is uncertain whether results would be reproducible in a randomized, placebo-controlled, double-blind clinical trial, but likely, since groups of ivermectin users and non-users had similar demographic characteristics, and rates were adjusted for the relevant confounding variables."
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.
U.S. solar industry will grow 25% less than expected during 2022 thanks to supply chain issues and rising costs, new report says
The U.S. solar industry will grow 25% less than previously forecast during 2022 thanks to supply chain constraints and rising raw material costs, according to a report released Tuesday by the Solar Energy Industries Association and Wood Mackenzie.
The quarterly update showed that prices continue to rise as the industry grapples with the same cost pressures impacting every corner of the economy. Additionally, trade uncertainty has also weighed on the solar industry.
During the third quarter costs rose across the utility, commercial and residential solar segments for a second-straight quarter. In the utility and commercial segments, the year-over-year price increases were the highest since Wood Mackenzie began tracking the data in 2014.
Utility-scale projects are especially sensitive to these price increases. Costs had declined by 12% between Q1 2019 and Q1 2021, but with the recent spike in price for materials like steel, the prior two years of cost declines have now been erased.
In addition to general supply chain issues, solar shipments have been disrupted for months after an anonymous group filed a petition with the U.S. Department of Commerce asking tariffs to be extended to Thailand, Malaysia and Vietnam. The petition was dismissed in November.
Still, U.S. installed capacity jumped 33% year over year to 5.4 gigawatts, marking the most additions on record for the three-month stretch between July and September. All told, the U.S. has a total generating capability of about 1,200 gigawatts, according to the Public Power Association.
Residential solar installations topped 1 GW during the third quarter, with more than 130,000 systems installed during a single quarter for the first time on record.
Utility-scale also set a record, with 3.8 GW installed during the quarter. Not all solar segments registered growth during the period, however. Commercial and community solar deployments declined 10% and 21%, respectively, quarter over quarter due to interconnection issues and equipment delivery delays.
While the industry is expected to grow less than previously forecast during 2022, the Build Back Better plan’s passage could fuel growth looking forward.
“The U.S. solar market has never experienced this many opposing dynamics,” said Michelle Davis, principal analyst at Wood Mackenzie. “On the one hand, supply chain constraints continue to escalate, putting gigawatts of projects at risk. On the other, the Build Back Better Act would be a major market stimulant for this industry, establishing long-term certainty of continued growth.”
Should the bill be signed into law, Wood Mackenzie forecasts that the U.S. will install an additional 43.5 GW of solar capacity over the baseline forecast between 2022 and 2026.
“This would bring cumulative solar capacity in the United States to over 300 gigawatts, which is triple the amount of solar deployed today,” the report said.
The bill includes an extension of the Investment Tax Credit, which has been instrumental to the U.S. solar industry’s growth.
There are only three ways to meet the unpaid bills of a nation. The first is taxation. The second is repudiation. The third is inflation.
Herbert
Hoover.
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