Baltic Dry Index. 1082 -41 Brent Crude 101.89
Spot Gold 1724 US 2 Year Yield 3.37 +0.02
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 29/08/22 World 606,016,759
Deaths 6,488,391
Because gold is honest money, it is disliked by dishonest men.
Ron Paul.
In the Asian stock casinos a selloff following Fed Chairman Powell’s speech of Friday pulling the Fed’s stock market put.
In US stock index futures Monday in early trading, yet more selling pressure.
But today’s big story is about our world heading towards a period of major foodstuffs shortage and sharply higher prices.
Which,
of course, is a food catastrophe for the poorest in the third world, without
some coordinated global planning, which given western polarised politics and
the never ending western proxy war in Ukraine, seems highly unlikely.
Japan’s Nikkei
leads losses as Asia markets drop after Powell’s Jackson Hole speech
UPDATED MON, AUG 29 2022 12:12 AM EDT
Shares in the Asia-Pacific traded lower on
Monday following Fed Chairman Jerome Powell’s speech at Jackson Hole on Friday.
He warned that rising
interest rates will cause “some pain” to the U.S. economy, saying
higher interest rates likely will persist “for some time.”
The in
Japan slipped 2.6% and the Topix index declined 1.11%. South Korea’s fell 2.25%
and the Kosdaq index dropped 2.68%.
In Australia, the fell
1.89%.
Mainland China’s dipped
0.14% after recovering slightly, and the lost
0.38%.
Hong Kong’s shed
0.7% and the Hang Seng Tech index dropped 0.91%.
MSCI’s broadest index of
Asia-Pacific shares outside Japan dropped 1.91%, while the traded
at 138.58 per dollar.
On Friday in the
U.S., the Dow Jones Industrial Average plunged 1,008 points, or 3.03% to
32,283.40. The S&P 500 fell 3.37% to 4,057.66 and the Nasdaq Composite
dropped 3.94% to 12,141.71.
“While higher
interest rates, slower growth, and softer labor market conditions will bring
down inflation, they will also bring some pain to households and businesses,”
Powell said. “These are the unfortunate costs of reducing inflation. But a
failure to restore price stability would mean far greater pain.”
He said the Fed’s
decision in September “will depend on the totality of the incoming data and the
evolving outlook.”
Goldman Sachs expects
China’s factory activity to contract in August
Goldman Sachs
expects China’s official manufacturing Purchasing Managers’ Index (PMI) in
August to decline to 48.8 from 49.0 in July, analysts said in a note on Monday.
The note also
mentioned it expects the Caixin manufacturing PMI to decline to 49.8 in August
from 50.4 in July, citing recent measures taken by regional governments to
suspend industrial production to ensure electricity supply.
“Tighter Covid
related restrictions in August vs July, and hot weather might have also
negatively affected construction activity,” the analysts wrote.
Goldman’s
predictions are more pessimistic than the average forecast in Reuters polls.
Analysts predict that the official manufacturing PMI will come in at 49.2 and
the Caixin manufacturing PMI will have a reading of 50.2, according to Eikon
data.
Japan,
South Korea, Australia stocks down 2% after Powell's speech (cnbc.com)
Dow futures sink around 200 points as Friday’s
rout on Wall Street looks set to continue
UPDATED MON, AUG 29 2022 12:21 AM
EDT
Stock
futures fell on Monday morning as investors tried to shake off a sharp decline
in stocks at the end of last week.
Futures for the Dow Jones
Industrial Average slid 223 points, or about 0.69%. Those for the S&P 500
and the Nasdaq 100 dropped 0.86% and 1.27%, respectively.
The moves in futures come after a brutal
sell-off for Wall Street on Friday, when Federal Reserve Chairman
Jerome Powell’s short and blunt remarks in Jackson Hole, Wyoming, appeared to
extinguish hopes of the central bank changing its aggressive course of rate
hikes in the months ahead.
The Dow fell 1,008 points, or
just over 3%, for its worst day since May. The S&P 500 and Nasdaq Composite
fell 3.4% and 3.9%, respectively, for their worst days since June. The drop
erased the August gains for all three averages.
“Investors again cut back on
their recent Risk-On positioning, supporting our view that it is way too soon
to call their recent risk appetite a more permanent stance, and now one more
likely to have cost them badly,” Rick Bensignor of Bensignor Investment
Strategies said in a note to clients.
The coming week brings more Fed
speeches, including Vice Chair Lael Brainard on Tuesday, before August’s
nonfarm payrolls report on Friday.
CNBC Pro: Goldman
says the world is at an ‘inflection point’ and it’s time for new investing
playbooks
The world is at an
“inflection point” — and that means there will be “profound changes” to the way
we invest, Goldman Sachs Asset Management said in a recent report.
The firm pointed to
rising interest rates as a result of persistent inflation, disrupted supply
chains, “elevated sensitivity” to climate issues, geopolitical instability and
deglobalization.
“In this new
environment, the portfolio construction playbook that worked so well in recent
decades may be less effective going forward, forcing a rethink in approach,”
they added.
Here’s
how investors can respond, according to Goldman.
Dow futures sink around 200 points as Friday's rout on Wall Street looks set to continue (cnbc.com)
Finally, yet more bad news on the global food production front. Massive monsoon flooding in Pakistan is not just a human tragedy, it threatens to turn into yet another major food production setback in 2022.
A record breaking drought in China threatens the same.
Pakistan
flooding deaths pass 1,000 in ‘climate catastrophe’
August
28, 2022
ISLAMABAD (AP) — Deaths from widespread flooding in
Pakistan topped 1,000 since mid-June, officials said Sunday, as the country’s
climate minister called the deadly monsoon season “a serious climate
catastrophe.”
Flash flooding from the heavy
rains has washed away villages and crops as soldiers and rescue workers
evacuated stranded residents to the safety of relief camps and provided food to
thousands of displaced Pakistanis.
Pakistan’s National Disaster
Management Authority reported the death toll since the monsoon season began
earlier than normal this year — in mid- June — reached 1,061 people after new
fatalities were reported across different provinces.
Sherry Rehman, a Pakistani
senator and the country’s top climate official, said in a video posted on Twitter
that Pakistan is experiencing a “serious climate catastrophe, one of the
hardest in the decade.”
“We are at the moment at the
ground zero of the front line of extreme weather events, in an unrelenting
cascade of heatwaves, forest fires, flash floods, multiple glacial lake
outbursts, flood events and now the monster monsoon of the decade is wreaking
non-stop havoc throughout the country,” she said. The on-camera statement was
retweeted by the country’s ambassador to the European Union.
The
unprecedented monsoon season has affected all four of the country’s provinces.
Nearly 300,000 homes have been destroyed, numerous roads rendered impassable
and electricity outages have been widespread, affecting millions of people.
----Rehman
told Turkish news outlet TRT World that by the time the rains recede, “we could
well have one fourth or one third of Pakistan under water.”
“This is something that is a
global crisis and of course we will need better planning and sustainable
development on the ground. ... We’ll need to have climate resilient crops as
well as structures,” she said.
More
Pakistan
flooding deaths pass 1,000 in 'climate catastrophe' | AP News
Agriculture in Pakistan
Agriculture is
considered the backbone of Pakistan's economy, which relies heavily on its
major crops.[1] Pakistan's
principal natural resources are arable land and
water. Agriculture accounts for about 18.9% [2] of Pakistan's GDP
and employs about 42.3% of the labour force. The most agricultural province is
Punjab where wheat & cotton are the most grown. Mango orchards are mostly
found in Sindh and Punjab provinces, making it the world's fourth largest
producer of mangoes.[3][4]
----Production[edit]
Pakistan production (2018):
·
67.1 million tons of sugarcane (5th
largest global producer, behind Brazil, India, China & Thailand);
·
25.0 million tons of wheat (7th
largest producer);
·
10.8 million tons of rice (10th
largest producer);
·
6.3 million tons of maize (20th
largest producer);
·
4.8 million tons of cotton (5th
largest producer);
·
4.6 million tonnes of potato (18th
largest producer);
·
2.3 million tonnes of mango (including mangosteen & guava) (5th largest global
producer, just behind India, China, Thailand & Indonesia);
·
2.1 million tons of onion (6th
largest producer);
·
1.6 million tons of orange (12th
largest producer);
·
593 thousand tons of tangerine;
·
1,601 thousand tons of tomatoes;
·
545 thousand tons of apple;
·
540 thousand tons of watermelon;
·
501 thousand tons of carrot;
·
471 thousand tons of date (6th
largest global producer);
In addition, smaller
production of other agricultural products.[9]
----Pakistan is a net food exporter, except in occasional years,
when its harvest is adversely affected by droughts. Pakistan exports rice,
cotton, fish, fruits (especially Oranges and Mangoes), and vegetables and
imports vegetable oil, wheat, pulses and consumer foods. The country is Asia's
largest camel market,
2nd-largest apricot & ghee market & 3rd-largest cotton, onion and milk market.
More
Agriculture in Pakistan - Wikipedia
AP
PHOTOS: Drought changes landscape in southwest China
By MARK SCHIEFELBEIN
CHONGQING, China (AP) — River bottoms partially exposed
by drought create a rare sight that becomes an urban beach at dusk to escape
the withering heat. Farmlands baked by
the sun leave rice stalks yellowed, the famed hot pepper plants
all but bereft of fruit, the reservoirs reduced to a puddle of water and
cracked earth.
The very landscape of Chongqing, a megacity
that also takes in surrounding farmland and steep and picturesque mountains,
has been transformed by an unusually long and intense heat wave and an accompanying drought.
Chinese meteorologists are calling it the
nation’s strongest
heat wave since record keeping began in 1961, based on its
intensity, geographic area and duration. Now into its third month, it has
surpassed the previous record of 61 days in 2013. Temperatures are topping 40
degrees Celsius (104 degrees Fahrenheit) in cities and villages across southern
China. Chongqing in the southwest has been hit particularly
hard
More
AP
PHOTOS: Drought changes landscape in southwest China | AP News
At the heart of capitalism is creative destruction.
Joseph A. Schumpeter.
Global Inflation/Stagflation/Recession
Watch.
Given
our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its
own.
Today,
how abandoning gold and adopting fiat currency and dollar hegemony led to the
mess every nation is in today.
Money Does Matter: The End of the Gold
Standard Led to a Lower Standard of Living
08/24/2022 André Marques
On August
15, 1971, Richard Nixon announced that
the US dollar (USD) would no longer be redeemable in gold. This was supposed to
be temporary. And yet, fifty-one years later, here we are. The gold standard
was gradually destroyed in the twentieth century. Now people are
experiencing the consequences: less purchasing power, more economic cycles, and
a weaker economy.
In the
chapter 4 of his book What Has
Government Done to Our Money?, Murray Rothbard goes over the
steps the government took to end the gold standard over the
twentieth century, from the end of the classical gold standard to the
closing of the gold window in 1971.
The Classical Gold Standard (1815–1914)
The
classical gold standard tended to prevent the government from running budget
deficits and going into debt, as it could not easily create inflation. In 1913,
the Federal Reserve (Fed) was born. When the US entered the World War I, US
dollars were printed at an excess of the gold reserves. At this point, the US
got off the classical gold standard and this money printing contributed to
the depression of 1920–21.
The Gold Exchange Standard (1926–31)
In this
regime, the USD and the pound sterling (GBP) were the two currencies of
reference (“key currencies”). The US went back to the classical gold standard
(converting USD into gold). GBP and other currencies were not convertible into
gold (except for large bars). The Great Britain converted GBP to USD and the
other European countries converted their currencies to GBP. So, the Great
Britain inflated GBP and the other European countries did the same with their
respective currencies (a “pyramiding” of GBP on USD and of other European
currencies on GBP). Consequently, as Rothbard stated:
Britain and Europe were permitted to inflate unchecked, and British
deficits could pile up unrestrained by the market discipline of the gold standard….
Britain was able to induce the United States to inflate dollars so as not to
lose many dollar reserves or gold to the United States. As sterling balances
piled up in France, the United States, and elsewhere, the slightest loss of
confidence in the … inflationary structure was bound to lead to general
collapse. This is precisely what happened in 1931; the failure of inflated
banks throughout Europe, and the attempt of “hard money” France to cash in its
sterling balances for gold, led Britain to go off the gold standard completely.
Britain was soon followed by the other countries of Europe.
Fluctuating Fiat Currencies (1931–45)
In 1933–34
the US abandoned the classical gold standard once again. The USD was defined as
1/35 of an ounce of gold and only foreign governments and central banks could
convert it into gold. So, there was a certain link to gold, but the US was in a
floating exchange rate regime. As Rothbard stated,
by cutting the ties to gold, this regime
leave[s] the absolute control of each national currency in the
hands of its … government [which can] allow its currency to fluctuate freely
with respect to all other fiat currencies … [The flaw] is to hand total control
of the money supply to [the government], and then to … expect that it will
refrain from using that power.
the
disastrous experience of … the 1930s world of fiat paper and economic warfare,
led the United States authorities to [aim] the restoration of a viable
international monetary order
Bretton Woods and the New Gold Exchange Standard
(1945–68)
Thus,
enter the Bretton Woods system (conceived and implemented by the US at a
conference in Bretton Woods, New Hampshire in 1944, and ratified by the US
Congress in 1945). It was similar to the gold exchange standard, but with the
USD being the only “key currency,” priced at $35 an ounce of gold and being
redeemable in gold only by foreign governments and central banks.
However,
this system eventually met its end. The US inflated the USD (“pyramided” it on
its gold reserves), and other governments held USD as their reserves and
“pyramided” their currencies on those dollars. And throughout the 1960s, the US
constantly inflated the dollar in absolute terms and relative to Europe and
Japan. This decade was marked by the “War on Poverty,” the Vietnam War, and
space programs.
To finance
all this, the US started running large budget deficits, with the Fed monetizing
the debt (expanding the money supply). However, the Western European countries
that had adopted more solid monetary policies (Western Germany, Switzerland,
France and Italy), started to oppose the obligation to accumulate dollars.
Europe began to redeem dollars in gold, and the Bretton Woods system began to
collapse in 1968 (ending in 1971, when Nixon suspended the redemption of the
USD in gold).
The Closing of the Gold Window and the Rise of the
Floating Exchange Rate Regime (1971–?)
In order
to keep the redemption of the USD in gold, the US government had two options:
- Cut spending and taxes to reduce the budget
deficit. The supply of money would decrease, and the USD would appreciate,
which would allow prices to fall to levels that would be consistent with
an ounce of gold at $35 and restore demand for the currency.
- Dollar devaluation. This would mean that the
price of an ounce of gold would have to rise to a level that would be
consistent with the supply of USD and the higher prices for goods and
services. But this would require the government to reduce the budget
deficit to prevent future devaluations.
Both
options were inconvenient for the government. Thus, in February 1973, after two
devaluations of the USD that raised the price of an ounce of gold to $42.22,
the closing of the gold window became permanent. Therefore, the USD returned to
the floating exchange rate regime (as in 1931–45, but with no link to gold).
As a
result, the USD devalued and the 1970s were marked by stagflation. In 1980, the price of an ounce of
gold was $850. The price of oil rose from just under $3 a barrel in 1970 to
just under $40 in 1980. The Consumer Price Index (CPI) was over 14
percent in 1980 (chart 1). It was only in the early 1980s that the CPI began to
decline, when Paul Volcker, Fed chairman at the time, raised the federal funds
rate to almost 20 percent (chart 2).
More
Money Does Matter:
The End of the Gold Standard Led to a Lower Standard of Living | Mises Wire
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
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.
"The Virus Continues to
Mutate at a High Speed"
We were fortunate that Omicron turned out to be as mild as it has
been, says BioNTech co-founder Uğur Şahin. In an interview, he says he expects
that his company's adapted vaccine will be available in September, just in time
for the first Oktoberfest to take place in Germany since the pandemic.
Interview
Conducted by Thomas
Schulz 26.08.2022,
19.42 Uhr
DER
SPIEGEL: Mr. Şahin, at the beginning of the year, you worked as fast as possible
to develop an adapted vaccine for the Omicron variant of the coronavirus and
produced many millions of doses. This special booster, though, still hasn’t
been approved. Should you have saved yourself the trouble?
Şahin: I still think that
adapted vaccines make a lot of sense. The target structure of the vaccine, the
spike protein, differs significantly in the Omicron variant from the wild type.
On the one hand, our data has shown that a booster with an adapted vaccine
produces significantly more antibodies against Omicron than the wild-type
vaccine. The immune system is thus better able to ward off the variant. On the
other, we must not forget that Omicron is already a partial escape variant. At
some point, we could have a variant that doesn’t react at all to the antibodies
in the original vaccine. We need to get ahead of it now.
DER
SPIEGEL: How does an Omicron booster help?
Şahin: Omicron has a lot of
mutations in the spike protein, so only some areas are still recognized by the
antibodies of someone vaccinated with the wild-type vaccine. The virus
continues to mutate at a high speed. It is difficult to predict when all the
relevant positions will be mutated and thus no longer recognized by the
wild-type vaccine. But it is likely to be sooner rather than later. It is thus
important to show the immune system as many of these mutated positions as
possible now, so that it learns and also recognizes subsequent variants.
More
BioNTech Founder
Uğur Şahin: "The Virus Continues To Mutate at a High Speed" - DER
SPIEGEL
Next, some vaccine links
kindly sent along from a LIR reader in Canada.
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
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.
Rechargeable
aluminum: The cheap solution to seasonal energy storage?
Loz Blain August 24, 2022
Aluminum
has an energy density more than 50 times higher than lithium ion, if you treat
it as an energy storage medium in a redox cycle battery. Swiss scientists are
developing the technology as a renewable energy stash for the European winter.
The problem
is simple enough: as countries worldwide plan their moves toward zero-emissions
energy, they need to deal with the intermittent nature of cheap renewable
energy. On a daily basis, solar harvests most of its energy in the middle of
the day, and this necessitates some kind of short-term storage solution that
can park that energy in some form of battery, then release it again in the
evening when everyone gets home and starts running TVs and dishwashers. These
kinds of big battery projects are already installed in many areas and proving
their worth.
But
intermittency is a much bigger issue on a seasonal level. The further you move
from the equator, the less Sun you get in the winter months. Parts of
Scandinavia famously get no Sun at all for months on end – resulting in some
pretty epic springtime parties, I'm told – but a much broader area is going to
find itself very short on solar, every year, right when everyone's starting to
crank up their heaters. The zero-carbon world needs a way to store
absolutely massive amounts of excess renewable energy
generated in the warmer months, then release it through the long winters. And
it'll need to be affordable, or else it's not going to happen.
Researchers
from Switzerland's SPF Institute for Solar Technology have been studying aluminum
redox cycles for many years now, and with funding from the EU's Horizon Europe
program and the Swiss government, they've just kicked off a research project
called Reveal, drawing in nine different partners from seven European
countries, to develop what looks like a very promising idea.
As a 2020 report from the SPF team states, a single, one cubic meter (35.3 cu ft) block of aluminum
can chemically store a remarkable amount of energy – some 23.5 megawatt-hours,
more than 50 times what a good lithium-ion setup can do, or roughly enough to
power the average US home for 2.2 years, on 2020
figures. That's by volume – going by
weight, aluminum holds a specific energy of 8.7 kWh per kilogram, or about 33
times more than the batteries Tesla uses in its Model 3.
Big fat blocks like that
aren't exactly practical to work with, though, so the Reveal team proposes
using 1-mm (0.04 in)-diameter balls of aluminum instead. Naturally, you lose
some volumetric density here, but you're still coming out over 15 MWh per cubic
meter.
Getting that energy
in and out is, of course, a lot more involved. During the "charging
process," excess renewable energy would be used to convert aluminum oxide,
or aluminum hydroxide, into pure, elemental aluminum. This is an industrial
electrolysis process, requiring temperatures around 800 °C (1,472 °F), as well
as novel inert electrodes, if you want to avoid the carbon dioxide emissions
that accompany today's conventional aluminum smelting processes.
The team estimates
it'll be possible to "charge" an aluminum redox system like this at
an efficiency around 65%. All the raw materials here are relatively cheap and
abundant, some of them indeed being scrap, with the added benefits of being
very simple to store and transport. Yes, aluminum oxidizes on contact with
ambient air, but it's only a surface layer, less than half a nanometer thick,
representing a chemical energy loss of "far less than 1%" when those
tiny 1-mm balls are stored in air.
To discharge the
aluminum, you simply convert it back again. This can be done at low
temperatures, using aluminum-water reactions at less than 100 °C (212 °F),
generating aluminum hydroxide, along with pure hydrogen, which can be run
straight into a PEM fuel cell stack for conversion to electricity. The process
and the fuel cell also generate heat, which can be recovered at temperatures
relevant for space heating or domestic hot water.
More
Rechargeable
aluminum: The cheap solution to seasonal energy storage? (newatlas.com)
The modern mind dislikes gold because it blurts out
unpleasant truths.
Joseph Schumpeter.
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