Baltic Dry Index. 1242 +58 Brent Crude 8.894
Spot Gold 1756 US 2 Year Yield 4.46 -0.01
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 25/11/22 World 644,897,727
Deaths 6,632,761
"I
see you don't understand, and I must explain it to you. Well, very long ago, on
the spot where the Wild Wood waves now, before ever it had planted itself and
grown up to what it now is, there was a city--a city of people, you know. Here,
where we are standing, they lived, and walked, and talked, and slept, and
carried on their business. Here they stabled their horses and feasted, from
here they rode out to fight or drove out to trade. They were a powerful people,
and rich, and great builders. They built to last, for they thought their city
would last for ever."
Kenneth
Grahame. The Wind in the Willows.
Be
it ever so slowly, the global debt fuelled economy as we knew it 1971 to 2019 is
forever changing. The Great Nixonian Error of Fiat Money is drawing to a
probably calamitous end.
The
Magic Money Tree Forest economy of 2020 to present has broken the Great
Nixonian Error with a Giant Global Inflation. Putting the toothpaste back in
the tube is a fiat money delusion.
Like
it or not we have entered into a period of unstable monetary transition.
Imperfect as a hedge though it is, everyone now needs a little ballast from
owning gold and silver. Crypto-fraud? A massive bust lies ahead.
Asia-Pacific
stocks mostly lower, Tokyo inflation at highest in 40 years; U.S. markets
closed
UPDATED THU, NOV 24 2022 11:54 PM
EST
Shares in the Asia-Pacific were mostly lower as
markets in the U.S. were closed for the Thanksgiving holiday and slated to end
its session early on Friday.
In Japan, the Nikkei 225 fell
0.34% and the Topix was flat as the nation’s capital city saw the highest core
consumer price index reading since 1982. In South Korea, the Kospi fell 0.12%
and the S&P/ASX 200 in
Australia rose 0.2%.
Hong
Kong’s Hang Seng index traded
0.86% lower, while the Hang Seng Tech index lost more than 2%. In mainland
China, the Shanghai Composite gained
0.4% and the Shenzhen Component lost
0.35%.
China’s reported Covid cases continued to rise Thursday.
Zhengzhou, where protests took place at Apple supplier Foxconn’s
iPhone factory, said it would conduct mass testing.
Top economist Mohamed El-Erian
says we’re not just headed for another recession, but a ‘profound economic and
financial shift’
Wed, November 23, 2022 at 7:32 PM
Investors and economists have
been sounding the recession alarm. But one major economist who has seen warning
signs mounting for many months says this potential recession is unlike what
we’re used to.
That economist is Mohamed
El-Erian, previously the chief executive officer of the massively influential
bond-market player PIMCO. He also chaired former President Barack Obama’s
Global Development Council and has written several economic best-sellers.
Simply put, he’s one of the best Fed and markets watchers alive, and he hasn't
liked what he's seen for some time now.
There’s a tendency to see economic
challenges as “temporary and quickly reversible,” El-Erian wrote in a commentary for Foreign Affairs, citing the
Federal Reserve’s initial thought that high inflation would be transitory or
the consensus that a recession could be short.
“The world isn’t just teetering
on the brink of another recession,” he continued. “It is in the midst of a
profound economic and financial shift.”
He referenced economic theory
that a recession occurs when a business cycle reaches its natural endpoint and
before the next cycle really takes flight, but he said this time won’t be one
more turn of the “economic wheel,” as he sees the world experiencing major
changes that “will outlast the current business cycle.” He highlighted three
trends that suggest a transformation in the global economy is under way.
Three major trends
transforming the world economy
The first transformational trend,
El-Erian says, is the shift from insufficient demand to insufficient supply.
The second is the end of boundless liquidity from central banks. And the third
is the growing fragility of financial markets.
These help to explain “many of
the unusual economic developments of the last few years,” he wrote, and looking
forward he sees even more uncertainty as economic shocks “grow more frequent
and more violent.” Analysts aren’t waking up to this yet, he added.
The first shift was driven by the
effects of the pandemic, beginning with the entire system coming to a halt and
stimulus from the government, or what El-Erian called “enormous handouts,”
causing “demand surges well ahead of supply.”
But as time went on, El-Erian
said, it became clear that the issue of supply “stemmed from more than just the
pandemic.” It’s tied to Russia’s invasion of Ukraine that resulted in sanctions
and geopolitical tensions, along with a widespread labor shortage brought
forward by the pandemic. These disruptions in supply chains gave way to
“nearshoring,” a more permanent shift of companies moving their production
closer to home, rather than a reconstruction of the 2019-era supply chain. This
essentially reflects a change in the “nature of globalization.”
“Making matters worse, these
changes in the global economic landscape come at the same time that central
banks are fundamentally altering their approach,” El-Erian said. As he has been
for months now, El-Erian criticized the Federal Reserve in particular
for being too slow to recognize inflation entrenching itself into the economy,
and then for its steep rate hikes to make up for lost time.
More
Finally,
the Great Nixonian Error of fiat money is coming to its end. Fiat money works
fine for the gambling banksters, bent politicians, and other fraudsters, but cheats everyone else in the real economy
of producing farm goods, manufacturing, vital services, savers, pensioners, and
families.
Ever
so slowly, but at an increasing pace, fiat dollar hegemony is starting to fail.
But will the chaos that follows really be any better?
Ghana
plans to buy oil with gold instead of U.S. dollars
November 24, 2022 6:58
PM GMT
ACCRA, Nov 24
(Reuters) - Ghana's government is working on a new policy to buy oil products
with gold rather than U.S. dollar reserves, Vice-President Mahamudu Bawumia
said on Facebook on Thursday.
The
move is meant to tackle dwindling foreign currency reserves coupled with demand
for dollars by oil importers, which is weakening the local cedi and increasing
living costs.
Ghana's
Gross International Reserves stood at around $6.6 billion at the end of
September 2022, equating to less than three months of imports cover. That is
down from around $9.7 billion at the end of last year, according to the
government.
If implemented as
planned for the first quarter of 2023, the new policy "will fundamentally
change our balance of payments and significantly reduce the persistent
depreciation of our currency," Bawumia said.
Using
gold would prevent the exchange rate from directly impacting fuel or utility
prices as domestic sellers would no longer need foreign exchange to import oil
products, he explained.
"The
barter of gold for oil represents a major structural change," he added.
The
proposed policy is uncommon. While countries sometimes trade oil for other
goods or commodities, such deals typically involve an oil-producing nation
receiving non-oil goods rather than the opposite.
Ghana produces
crude oil but it has relied on imports for refined oil products since its only
refinery shut down after an explosion in 2017.
Bawumia's
announcement was posted as Finance Minister Ken Ofori-Atta announced measures to cut spending and
boost revenues in a bid to tackle a spiraling debt crisis.
More
Ghana plans to buy oil with gold instead of U.S. dollars | Reuters
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.
Consumer
inflation in Japan's capital rises at fastest pace in 40 years
November
25, 2022 3:19 AM GMT
TOKYO, Nov 25
(Reuters) - Core consumer prices in Japan's capital, a leading indicator of
nationwide trends, rose at their fastest annual pace in 40 years in November
and exceeded the central bank's 2% target for a sixth straight month,
signalling broadening inflationary pressure.
The
increase, driven mostly by food and fuel bills but spreading to a broader range
of goods, cast doubt on the view of the Bank of Japan (BOJ) that recent
cost-push inflation will prove transitory, some analysts said.
The Tokyo core
consumer price index (CPI), which excludes fresh food but includes fuel, was
3.6% higher in November than a year earlier, government data showed on Friday.
The rise exceeded a median market forecast of 3.5% and the 3.4% increase seen
in October
The
last time Tokyo inflation was faster was April 1982, when the core CPI was 4.2%
higher than a year before.
While
the rise was driven mostly by electricity bills and food prices, companies were
also charging more for durable goods as the weak yen pushed up the cost of
imports, the data showed.
"Price
hikes are broadening and suggests the weak yen could keep inflation elevated
well into next year," said Mari Iwashita, chief market economist at Daiwa
Securities.
"Core
consumer inflation may stay around the BOJ's 2% target for much of next year,
which would make it hard for the bank to keep arguing that the price rises are
temporary."
The
Tokyo core-core CPI index, which excludes fuel as well as fresh food, was 2.5%
higher in November than a year earlier, picking up from the 2.2% annual gain
seen in October.
More
Consumer
inflation in Japan's capital rises at fastest pace in 40 years | Reuters
World's Most-Crucial
Fuel Heads for Shortage Touching Everything
Tue, 22 November
2022 at 5:01 am
(Bloomberg) -- No fuel is more essential to the
global economy than diesel. It powers trucks, buses, ships and trains. It
drives machinery for construction, manufacturing and farming. It’s burned for
heating homes. And with the high price of natural gas, in some places it’s also
being used to generate power.
Within the next few months, almost
every region on the planet will face the danger of a diesel shortage at a time
when supply crunches in nearly all the world’s energy markets have worsened
inflation and stifled growth.
The toll could be enormous, feeding
through into everything from the price of a Thanksgiving turkey to consumer
bills for heating homes this winter. In the US alone, the surging diesel cost
will mean a $100 billion hit to the economy, according to Mark Finley, an
energy fellow at Rice University's Baker Institute of Public Policy.
“Anything and everything that gets
moved in our economy, diesel is there,” Finley said. “Moving stuff around is
one thing. People potentially freezing to death is another.”
In the US, stockpiles of diesel and
heating oil are at their lowest point ever for this time of year in data going
back four decades. Northwest Europe is also facing a low buffer — inventories
are forecast to hit a low this month and then tumble even more by March,
shortly after sanctions come into play that will cut the region off from
Russian seaborne supplies. Global export markets have gotten so tight that
poorer countries like Pakistan are getting shut out, with suppliers failing to book
enough cargoes to meet the nation’s domestic needs.
“It’s certainly the biggest diesel
crisis that I have ever seen,” said Dario Scaffardi, the former chief executive
officer of the Italian oil refiner Saras SpA who’s spent almost 40 years in the
industry.
Diesel in the spot market of New York
harbor, a key benchmark, is up roughly 50% this year. The price reached $4.90 a
gallon in early November, about double year-ago levels.
Even more telling is the premium that
diesel is commanding. Spreads for the fuel are widening both against crude oil,
a sign of how tight refining capacity is, and in relation to supplies that are
for later delivery, underscoring that traders are desperate to get their hands
on the stuff now. In northwest Europe, diesel futures cost about $40 a barrel
more than Brent, versus a five-year seasonal norm of just $12. New York diesel
futures for December delivery are trading about 12 cents higher than those for
January. That compares with a premium of less than a cent at this time last year.
What’s Causing the Shortage?
There are major constraints globally
on refining capacity. Supplies of crude oil are already fairly tight. But the
bottleneck is much more acute when it comes to turning that raw commodity into
fuels like diesel and gasoline. That’s partly a function of the pandemic, after
lockdowns destroyed demand and forced refiners to close some of their least
profitable plants. But the looming transition away from fossil fuels has also
dented investments in the sector. Since 2020, US refining capacity has shrunk
by more than 1 million barrels per day. Meanwhile in Europe, shipping
disruptions and worker strikes have also eaten into refinery production.
Things could get much more dramatic
with the European Union’s looming pivot away from Russian supply. Europe relies
more heavily on diesel than any other region in the world. Roughly 500 million
barrels a year get delivered by ship, with around half of that typically loaded
at Russian ports, according to data from Vortexa Ltd. The US also has halted
imports from Russia, which was a big supplier to the East Coast last winter.
More
World's
Most-Crucial Fuel Heads for Shortage Touching Everything (yahoo.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
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.
China
expands lockdowns as Covid-19 cases hit daily record
Officials
in the government of Zhengzhou have declared a ‘war of annihilation’ against
the virus.
24
November, 2022
Pandemic lockdowns
are expanding across China as the number of Covid-19 cases hits a daily record.
Residents of eight
districts of Zhengzhou, home to 6.6 million people, have been told to stay at
home for five days beginning on Thursday except to buy food or get medical
treatment.
Daily mass testing
was ordered in what the city government called a “war of annihilation” against
the virus.
During clashes on
Tuesday and Wednesday, Zhengzhou police beat workers protesting over a pay
dispute at the biggest factory for Apple’s iPhone, located in an industrial
zone near the city.
In the previous 24
hours, the number of new Covid cases rose by 31,444, the National Health
Commission said. This marks the highest daily figure since the coronavirus was
first detected in the central Chinese city of Wuhan in late 2019.
The daily caseload
has been steadily increasing. This week, authorities reported China’s first
Covid-19 deaths in six months, bringing the total to 5,232.
While the number of
cases and deaths is relatively low compared to the US and other countries,
China’s ruling Communist Party remains committed to a “zero-Covid” strategy
that aims to isolate every case and eliminate the virus entirely.
Most other
governments have ended anti-virus controls and now rely on vaccinations and immunity
from past infections to help prevent deaths and serious illness.
Businesses and
residential communities from the manufacturing centre of Guangzhou in the south
to Beijing in the north are in various forms of lockdowns, measures that particularly
affect blue-collar migrant workers.
In many cases,
residents say the restrictions go beyond what the national government allows.
Guangzhou suspended
access on Monday to its Baiyun district of 3.7 million residents, while
residents of some areas of Shijiazhuang, a city of 11 million people south-west
of Beijing, were told to stay at home while mass testing is conducted.
Beijing has opened
a hospital in an exhibition centre. City officials suspended access to the
Beijing International Studies University after a virus case was found there,
while some shopping malls, and office buildings were closed and access was
blocked to some apartment compounds.
More
China expands
lockdowns as Covid-19 cases hit daily record - BelfastTelegraph.co.uk
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.
Graphene Offers 10X
Performance Of Silicon Chips
23 Nov 2022
Graphene is one of
those allotropes with a potential to create the next generation of electronics
in sci-fi movies and scientists may have found a new application for it: CPU
and GPU chips.
The current CPU chips
are made of silicon, but it comes with a number of limitations. So, researchers
were trying to find a way around to scale performance without reducing power
efficiency.
Graphene could
potentially offer 10 times the performance of silicon while maintaining low
power consumption.
The only downside? It
is really expensive to make.
Although silicon is
popular today due to its high yields and bearable production costs, graphene
could fare better. It is way stronger than silicon: reportedly 200 times
stronger than steel despite its lightweight nature.
A square meter of
graphene weighs less than a milligram. It is also a million times thinner than
human hair!
It’s also highly
conducive, both in terms of thermals and electricity, and could replace copper
in these futuristic chips.
In fact, several
companies are already talking about using graphene as a replacement for the
silicon-based chips we know today. The China Graphene Copper Innovation was
created during the China International Graphene Innovation Conference, and it
seems that for the first time in years, something might come of these graphene-related
plans.
While we might be
nearing the limits of what silicon-based chips can do, at least they’re widely
available and much cheaper to make.
Graphene-based chips
are much more complex to produce, so it’s hard to say if, and when, they will
enter mass production on a scale that could make an impact. But once they do,
they might pave the way for sweeping change.
Graphene Offers
10X Performance Of Silicon Chips – channelnews
Modern money is inherently worthless,
but everybody accepts it as real.
Paul Seabright, a professor of
economics, identified two traits that underpin
systems of trust including money: the
capacity to weigh up the costs and
benefits of trusting others and the
instinct to return favors in kind or seek
revenge when trust is betrayed. When
it is working well, the system enables
strangers to deal with each other
safely. When the fragile trust fails, people
withdraw their money from banks, and
they seek the refuge of cash. Ironi-
cally, in times of crisis, people
seek paper money that has no intrinsic worth,
illustrating the power of the monetary illusion.
Satyajit Das. Extreme Money. Masters of the Universe and the Cult of Risk.
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