Wednesday, 13 July 2022

Recession v The Magic Money Tree Forests.

 Baltic Dry Index. 2013 -68   Brent Crude 99.38

Spot Gold 1727          US 2 Year Yield 3.03 -0.04

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

Deaths 53,100

Coronavirus Cases 13/07/22 World 563,063,015

Deaths 6,376,925

-----But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.

https://www.federalreserve.gov/boarddocs/Speeches/2002/20021121/default.htm

In the stock casinos this morning, hopium that June saw the top for global inflation.

Well maybe, but probably not the top in food price inflation.

However, with yet more Covid lockdowns happening in China plus rising interest rates nearly everywhere, commodity markets from “Dr. Copper” to crude oil are now signalling that a recession is/or will soon be underway.

If they’re right and they probably are, big trouble for the casinos and G-7 governments lies directly ahead.  Back to the Magic Money Tree forests and PDQ?

If the central banksters do, back up the trucks for gold still in the teens.


Tianqi Lithium plunges in market debut as Asia stocks mostly rise; two central banks raise rates

SINGAPORE — Shares in the Asia-Pacific were higher on Wednesday as China releases trade data, and the Bank of Korea and Reserve Bank of New Zealand hike rates.

Hong Kong’s Hang Seng index rose 0.62%, and the Hang Seng Tech index was 1.75% higher. Airline stocks jumped after a report said quarantine-free travel may be allowed by November under some conditions.

Cathay Pacific was up 1.9% and China Southern Airlines jumped 4.28%.

Tianqi Lithium plunged around 10% at its market debut in Hong Kong from its offer price of 82 Hong Kong dollars ($10.45). It was last down around 3.5%.

Miniso shares also dropped in its debut on the Hong Kong market.

Japan’s Nikkei 225 rose 0.34%, and the Topix index gained 0.16%.

In South Korea, the Kospi advanced 0.61% and the Kosdaq was 1.29% higher.

Taiwan’s benchmark Taiex jumped more than 3% in morning trade after the finance ministry said it would use its stock stabilization fund to intervene in the market, according to Reuters. The index was last up 2.76%.

The S&P/ASX 200 in Australia was about flat.

Mainland China markets struggled for direction but last traded higher. The Shanghai Composite gained 0.36% and the Shenzhen Component rose 0.57%.

Chinese trade data released Wednesday showed a 13.2% increase in yuan-denominated exports for the first half of 2022, while imports rose 4.8%, Reuters reported.

MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.77% higher.

Investors will also be looking ahead to the U.S. inflation report for June.

The Bank of Korea raised rates by 50 basis points for the first time, bringing the rate to 2.25%, Reuters reported. That’s in line with analyst expectations in a Reuters poll. The Korean won stood at 1,304.78 against the greenback.

The Reserve Bank of New Zealand also increased rates by 50 basis points to 2.5%. The currency was at $0.6125.

Major indexes in the U.S. see-sawed during the trading day before closing lower.

The Dow Jones Industrial Average dipped 192.51 points or 0.62% to 30,981.33, while the S&P 500 dropped 0.92% to 3,818.80. The Nasdaq Composite slid 0.95% to close at 11,264.73.

The U.S. will report consumer price index data later Wednesday, and markets are expecting hot inflation, which would keep the Fed firmly on its hiking path.

“Sharp weakness in oil prices in July suggests that June may mark a peak,” ANZ Research said in a note Wednesday. That could mean the most dynamic phase of Fed tightening could end after the central bank raises rates on July 27.

“However, our expectation is that underlying strength in core inflation and still deeply negative real policy rates means 50bps rate rises will still be appropriate after the summer,” the note said.

Asia markets: China exports, imports, central banks, interest rates (cnbc.com) 

In northern hemisphere grain news, good and bad news this morning.  Ukraine says it can now export some grain via some disused grain ports in the Romanian Danube river delta. Well, if they say so I suppose.

More seriously, Europe will be adding to the global grain supply problem this year rather than helping. Over to the USA and Canada.

French Heat and Drought Shrinks Wheat Harvest in Key EU Exporter

·         The country’s soft-wheat harvest is seen falling 7% this year

·         A smaller harvest risks adding to global supply strain

By Megan Durisin

12 July 2022 at 10:40 BST

Heat, drought and storms have shrunk the wheat harvest in France, the European Union’s top exporter, further straining global supplies.

The country’s soft-wheat output will drop about 7% to 32.9 million tons this year, coming in below the five-year average, the agriculture ministry said Tuesday in its first forecast for the season. One of France’s driest and warmest springs on record hurt yields during a crucial development period.

That’s threatening to reduce the surplus grain available to ship abroad that many importers may need to turn to. Russia’s invasion has hampered harvests and exports from the breadbasket nation of Ukraine, tightening world supplies. While benchmark wheat futures have slid from a record set in March, they remain historically high.

EU wheat exports are expected to surge in the wake of the war, as buyers seek alternatives to Ukrainian supplies. The bloc projects soft-wheat shipments in the season that began this month to rise 27% to 38 million tons, curtailing the region’s stockpiles. 

May temperatures were the highest ever for the month in France and rainfall was extremely low, according to Meteo France. The country is now being gripped by another heatwave and while that could accelerate wheat harvesting, it risks hurting yields for later-planted crops like corn.

More

https://www.bloomberg.com/news/articles/2022-07-12/french-heat-and-drought-shrinks-wheat-harvest-in-key-eu-exporter?srnd=premium-europe

Global Inflation/Stagflation Watch.

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

Jamie Dimon, the world’s most powerful banker: ‘Things can get much worse. We are facing very serious problems’

David Fernández Díaz July 11 2022

----Jamie Dimon, 66, is a legend in the world of finance. He runs the biggest bank in the world (not counting the opaque Chinese firms), a giant with total assets of $3.74 trillion at the end of last year, $1 trillion in loans and $2.46 trillion in deposits. This privileged position makes his words reverberate with a special echo in all the centers of power. In early June he changed his economic forecast at a conference and the markets began to shake: Dimon’s weather report went from “cloudy” to warnings about an upcoming economic “hurricane.”

Question. What makes you so pessimistic about the economic future?

Answer. In my country the situation is relatively good. The job market is very strong and consumers have money to spend. When I said there were dark clouds on the horizon, I think people underestimated my warning. They thought that these economic problems were temporary, and this is not the case. Things can get much worse. We are facing very serious problems such as high inflation, particularly in energy and food prices, and increases in interest rates.

Q. Do you think the US could enter a recession before the end of the year?

A. I don’t like to make predictions, but yes, it’s a possibility. We don’t know yet how much interest rates will go up.

Q. Will inflation remain at current levels much longer?

A. I think we are nearing the top and then prices could start to drop. But again I insist that it is difficult to make forecasts. In recent years we’ve had the largest monetary and fiscal stimuli injections the world has seen in its entire history. It is complex to guess the short-term consequences of these policies. What does seem to be clearer is that inflation is not transitory. Wages are going up, house prices too...

More, much, much more.

Jamie Dimon, the world’s most powerful banker: ‘Things can get much worse. We are facing very serious problems’ (msn.com)

Below, why a “green energy” economy may not be possible, and if it is, it won’t be quick and it will be very inflationary, setting off a new long-term commodity Supercycle. Probably the largest seen so far.

The “New Energy Economy”: An Exercise in Magical Thinking

https://media4.manhattan-institute.org/sites/default/files/R-0319-MM.pdf

Mines, Minerals, and "Green" Energy: A Reality Check

https://www.manhattan-institute.org/mines-minerals-and-green-energy-reality-check

"An Environmental Disaster": An EV Battery Metals Crunch Is On The Horizon As The Industry Races To Recycle

by Tyler Durden Monday, Aug 02, 2021 - 08:40 PM

https://www.zerohedge.com/markets/environmental-disaster-ev-battery-metals-crunch-horizon-industry-races-recycle

Covid-19 Corner

This section will continue until it becomes unneeded.

With Covid-19 starting to become only endemic, this section is close to coming to its end.

Stealthy’ new Covid variant can reinfect you every month

‘Even having had Omicron, we’re not well protected from further infections,’ id

12 July 2022

Health experts across the globe are signalling alarm as they begin reporting that Omicron BA.5, the coronavirus strain that is currently outpacing other variants in infection and has become the dominant strain in the US and abroad, has the ability to reinfect people within weeks of contracting the virus.

Andrew Roberston, the chief health officer in Western Australia, told News.com.au that though previously the wisdom held that most people would retain a certain level of protection against reinfection if they were vaccinated or had retained some level of natural immunity due to a recent contraction of the virus, this hasn’t been the case with the most recent strain.

“What we are seeing is an increasing number of people who have been infected with BA.2 and then becoming infected after four weeks,” the doctor explained during an interview with the Australian news outlet. “So maybe six to eight weeks they are developing a second infection, and that’s almost certainly BA.4 or BA.5.”

The ability for strains BA.4 and BA.5 to reinfect individuals who would in previous waves of Covid-19 had stronger immunity has led some experts to start calling this latest strain the most transmissible yet.

“They’re taking over, so clearly they’re more contagious than earlier variants of omicron,” said David Montefiori, a professor at the Human Vaccine Institute at Duke University Medical Center, in an interview with NBC News.

Federal estimates released by the Center for Diseases Control and Prevention on Tuesday show that BA.5 has now overtaken as the dominant strain in the US, accounting for approximately 54 per cent of cases for the week ending on 2 July 2022.

More

Omicron BA.5 variant: ‘Stealthy’ new Covid variant can reinfect you every month | The Independent

Next, some vaccine links kindly sent along from a LIR reader in Canada.

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

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, among other things, I’ve added this section. Updates as they get reported.

Flashing creates hard-to-get 2D boron nitride

Chemists adapt instant process to make more valuable nanomaterials

Date:  July 11, 2022

Source:  Rice University

Summary:  Chemists use their flash Joule heating process to synthesize 2D flakes of boron nitride and boron carbon nitride, highly valued for lending thermal and chemical stability to compounds.

Rice University scientists who "flash" materials to synthesize substances like graphene have turned their attention to boron nitride, highly valued for its thermal and chemical stability.

The process by the Rice lab of chemist James Tour exposes a precursor to rapid heating and cooling to produce two-dimensional materials, in this case pure boron nitride and boron carbon nitride. Both have until now been hard to create in bulk, and nearly impossible to produce in easily soluble form.

The lab's report in Advanced Materials details how flash Joule heating, a technique introduced by the Tour lab in 2020, can be tuned to prepare purified, microscopic flakes of boron nitride with varying degrees of carbon.

Experiments with the material showed boron nitride flakes can be used as part of a powerful anticorrosive coating.

"Boron nitride is a highly sought 2D material," Tour said. "To be able to make it in bulk, and now with mixed amounts of carbon, makes it even more versatile."

At the nanoscale, boron nitride comes in several forms, including a hexagonal configuration that looks like graphene but with alternating boron and nitrogen atoms instead of carbon. Boron nitride is soft, so it's often used as a lubricant and as an additive to cosmetics, and is also found in ceramics and metal compounds to improve their ability to handle high heat.

Rice chemical engineer Michael Wong recently reported that boron nitride is an effective catalyst in helping to destroy PFAS, a dangerous "forever chemical" found in the environment and in humans.

Flash Joule heating involves stuffing source materials between two electrodes in a tube and sending a quick jolt of electricity through them. For graphene, the materials can be just about anything containing carbon, food waste and used plastic car parts being just two examples. The process has also successfully isolated rare earth elements from coal fly ash and other feedstocks.

In experiments led by Rice graduate student Weiyin Chen, the lab fed ammonia borane (BH3NH3) into the flash chamber with varying amounts of carbon black, depending on the desired product. The sample was then flashed twice, first with 200 volts to degas the sample of extraneous elements and again with 150 volts to complete the process, with a total flashing time of less than a second.

Microscope images showed the flakes are turbostratic -- that is, misaligned like badly stacked plates -- with weakened interactions between them. That makes the flakes easy to separate.

More

Flashing creates hard-to-get 2D boron nitride: Chemists adapt instant process to make more valuable nanomaterials -- ScienceDaily

"In economics, hope and faith coexist with great scientific pretension."

John Kenneth Galbraith.

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