Wednesday 19 April 2023

Global Food Crisis Looms.

Baltic Dry Index. 1368  -44          Brent Crude 84.54

Spot Gold 2004                US 2 Year Yield 4.19 +0.01

Coronavirus Cases 01/04/20 World 1,000,000

Deaths 53,103

Coronavirus Cases 19/04/23 World 685,806,155

Deaths 6,843,505

"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

Ludwig von Mises.

Normally the LIR opens with the Asian stock casinos, but today, only April 19th we open with a terrible heatwave affecting much of India and a large part of Asia, What it means for global food production and global food price inflation it’s to early to know, but with summer still to come it’s unlikely to be helpful and the world should be planning accordingly.

1 big thing: Sprawling heat wave envelops large swath of Asia

April 18, 2023

An intense and large-scale heat wave has enveloped large parts of Asia during the past two weeks, breaking longstanding records, Andrew writes.

The big picture: From India to southern China to Thailand, stifling heat has set in unusually early this year.

By the numbers: The heat in India has brought temperatures exceeding 40°C (104°F) to numerous locations.

Threat level: Herrera called this event the "worst heat wave in Asian history" given its footprint, severity and timing, encompassing at least a dozen countries.

----Between the lines: Though India and Pakistan saw a more severe April heat wave last year, the current system is affecting a much wider area.

  • India was also hit by unusual heat during March of this year, too, making 2023 stand out even more.
  • China also saw an unparalleled heat wave last year, but it occurred later in the summer.

More

 Heat records set (axios.com)

 

Global rice shortage is set to be the biggest in 20 years

From China to the U.S. to the European Union, rice production is falling and driving up prices for more than 3.5 billion people across the globe, particularly in Asia-Pacific – which consumes 90% of the world’s rice.

The global rice market is set to log its largest shortfall in two decades in 2023, according to Fitch Solutions.

And a deficit of this magnitude for one of the world’s most cultivated grains will hurt major importers, analysts told CNBC.

“At the global level, the most evident impact of the global rice deficit has been, and still is, decade-high rice prices,” Fitch Solutions’ commodities analyst Charles Hart said.

Rice prices are expected to remain notched around current highs until 2024, stated a report by Fitch Solutions Country Risk & Industry Research dated April 4.

The price of rice averaged $17.30 per cwt through 2023 year-to-date, and will only ease to $14.50 per cwt in 2024, according to the report. Cwt is a unit of measurement for certain commodities such as rice.

[Cwt is 100 pounds weight]

“Given that rice is the staple food commodity across multiple markets in Asia, prices are a major determinant of food price inflation and food security, particularly for the poorest households,” Hart said.

The global shortfall for 2022/2023 would come in at 8.7 million tonnes, the report forecast.

That would mar the largest global rice deficit since 2003/2004, when the global rice markets generated a deficit of 18.6 million tonnes, said Hart.

Strained rice supplies

There’s a short supply of rice as a result of the ongoing war in Ukraine, as well as bad weather in rice-producing economies like China and Pakistan.

In the second half of last year, swaths of farmland in the world’s largest rice producer China were plagued by heavy summer monsoon rains and floods. 

More

Global rice shortage is set to be the biggest in 20 years (cnbc.com)

Now back to the central bank funded and approved daily gambling in  the stock casinos.

 

Asia markets trade mixed as Fed officials seem divided on rate hikes ahead

UPDATED WED, APR 19 2023 12:21 AM EDT

Asia-Pacific markets traded mixed on Wednesday as Wall Street’s earnings season continued and U.S. Federal Reserve officials delivered mixed signals on future rate hikes.

Atlanta Federal Reserve President Raphael Bostic told CNBC that he sees one more rate hike of 25 basis points, before pausing to see its impact on the economy. This would take the U.S. Federal Funds rate to 5% to 5.25%.

Bostic’s words come as St. Louis Federal Reserve President James Bullard told Reuters that he favors a higher terminal rate of between 5.50% and 5.75%.

Australia’s S&P/ASX 200 was 0.14% up, while Japan’s Nikkei 225 dipped 0.43% and the Topix fell 0.37%. South Korea’s Kospi rose 0.16%, while the Kosdaq was also up 0.38%.

Mainland Chinese markets were all lower, with the Shanghai Composite 0.14% lower and the Shenzhen Component shedding 0.35%. Hong Kong’s Hang Seng index was 0.37% lower, and the Hang Seng Tech index lost 0.61%.

Overnight in the US, all three major indexes traded close to the flatline as investors digested earnings reports, including from Goldman Sachs and Bank of America. The S&P 500 was up 0.09%, the Dow Jones Industrial Average dipped 0.03%, and the Nasdaq Composite down 0.04%.

Asia markets trade mixed as Fed officials seem divided on rate hikes ahead (cnbc.com)

European markets set for flat open as investors digest comments by Fed officials

UPDATED WED, APR 19 2023 12:22 AM EDT

European markets are heading for a flat open Wednesday as earnings season continues and investors digest mixed signals from U.S. Federal Reserve officials on the trajectory of interest rate hikes.

Atlanta Federal Reserve President Raphael Bostic told CNBC that he sees one more rate hike of 25 basis points, before pausing to see its impact on the economy. That would take the U.S. Federal Funds rate to 5% to 5.25%.

Bostic’s words come as St. Louis Federal Reserve President James Bullard told Reuters that he favors a higher terminal rate of between 5.50% and 5.75%.

U.S. stock futures ticked downward Tuesday night as traders weighed the latest round of earnings. Asia-Pacific markets traded mixed overnight.

European markets live updates: stocks, news, data and earnings (cnbc.com)

In other news.

 

Big Japanese manufacturers remain gloomy as external demand ebbs - survey

April 19, 2023 4:14 AM GMT+1

TOKYO, April 19 (Reuters) - Big Japanese manufacturers remained pessimistic in April for a fourth straight month as jitters over Western banks added to slowing global growth, the monthly Reuters Tankan survey showed on Wednesday, dimming prospects for an export-led recovery.

However, it also showed the service sector mood improved for a second straight month to a four-month high, signalling a post-COVID economic recovery led by inbound tourism, which has boosted restaurants and retailers.

"The survey confirmed the economy is on track for a post-coronavirus recovery backed by service-sector firms, although manufacturers are affected by a slowdown in global demand," said Yoshimasa Maruyama, chief economist at SMBC Nikko Securities.

The Reuters Tankan, which closely tracks the Bank of Japan's (BOA) quarterly key tankan survey, canvassed 493 big non-financial firms. About 240 firms responded during the April 5-14 period on condition of anonymity.

The survey results chimed with the BOJ tankan published on April 3, which showed the big manufacturers sentiment index worsened for a fifth consecutive quarter, hurt by elevated costs of raw and other materials, energy and mixed feed, while the service sector mood slightly improved after easing COVID curbs.

More

Big Japanese manufacturers remain gloomy as external demand ebbs - survey | Reuters

Major drop in lithium prices could mean cheaper electric vehicles

Key ingredient in batteries down more than 65 per cent after two-year rally

Posted: Apr 17, 2023 6:00 AM EDT | Last Updated: April 17

The significant drop in lithium prices since the beginning of the year could mean cheaper electric vehicles (EVs) down the road. 

After soaring for two years, the price of lithium carbonate — a key ingredient in EV batteries — sank by more than 65 per cent since January, according to Benchmark Mineral Intelligence. 

"Prices peaked at over $85,000 US in November," mining industry analyst Jean-Charles Cachon said, a level he deemed "unsustainable." Today, one metric tonne of the battery-grade lithium salt sells for less than $30,000 US.

He points to China removing its subsidies for electric cars, which led to sluggish sales and reduced appetite for that greener alternative.

"Chinese demand crashed in January of this year, which caused that kind of panic where prices that were more than tenfold the cost of production fell dramatically," Cachon said.

And it's not just lithium: other metals that go into batteries, such as cobalt and nickel, are also seeing their prices slide. 

Daniel Breton, CEO of Electric Mobility Canada, an organization that aims to speed up EV adoption across the country, says this downturn could be good news for consumers.

"We'll see more and more electric vehicles selling for $25,000 to $40,000 as the cost of critical minerals falls, but also as battery production becomes more ingrained in the industry," he said.

----Trevor Walker, chief executive of Sudbury-based junior miner Frontier Lithium, says it's "nothing that has us too concerned at this point in time."

He says production of lithium salts only costs around $9,000 to $10,000 US per metric tonne, far below current market prices.

"There's some fear in the market, and softening in prices. The reality is it remains very profitable for current producers," he said.

More

Major drop in lithium prices could mean cheaper electric vehicles | CBC News

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.

Global financial crash on brink as BoE warned it's just days away from sparking recession

April 18, 2023

A global financial crash is on the cards if interest rates continue to rise, an expert has said. It comes as the Bank of England is warned another interest rate hike will tip the UK into recession. Experts have lined up to advise the Bank not to raise the current rate of 4.25 percent over fears it will have a further chilling effect on business investment and push already struggling households over the edge.

Central banks around the world have been fighting rising inflation for more than a year now by slowly increasing their benchmark policy rates.

It came as the impact of China's zero-Covid policy on supply chains and Russia's war on Ukraine sent inflation soaring with energy prices rocketing and the flow of goods slowing.

The Bank of England (BoE) is due to announce any further change to its Bank Rate on May 11. The US Federal Reserve is to make its own rates decision on May 2 with the European Central Bank confirming its rate two days later.

Dr George Hulene, Finance Associate Professor at Coventry University's Faculty of Business and Law, told Express.co.uk there is a high risk hiking Britain's interest rate will slow down business investment even further.

He said: "We have seen evidence since around last November that businesses and corporations significantly slowed down investments because of the high-interest rate and if this continues for much longer, we risk economic output not showing improvements this year which could lead to a recession.

"Data shows clearly that as a country we sit on a very narrow fence between a recession and very small economic growth."

Although it has sidestepped recession so far, Britain's economy has stagnated over the last year.

Professor Emilios Avgouleas, International Banking Law and Finance Chair at the University of Edinburgh, told Express.co.uk if central banks increase interest rates, a global recession is on the cards.

He added: "The outlook for Western economies is very bleak. If interest rates continue to rise, a recession is just around the corner. If Western consumers are not spending, then there is a global recession because exporting countries won't have anywhere to sell their products."

It comes after the IMF warned the global economy is facing a "perilous" period, in its most recent forecast.

---- Dr Nikolaos Papanikolaou, Senior Lecturer in Finance at Newcastle University Business School, told Express.co.uk higher rates have led to large losses in banks' securities portfolios, triggering recent banking turmoil and posing a threat to financial stability.

He cautioned: "While the probabilities of an economic recession are now higher, the depth of a likely recession is expected to be modest."

Dr Hulene advised the Bank of England's rate-setters not to change the UK's interest rate, saying in his view they should keep them as they are.

More

Global financial crash on brink as BoE warned it's just days away from sparking recession (msn.com)

No break for Brits as inflation pushes the cost of kitchen staples by 80 per cent

TUESDAY 18 APRIL 2023 7:22 AM

Brits are yet to receive a break from soaring food prices as the price of cheddar cheese, sliced white bread and porridge oats are up to 80 per cent more expensive than a year ago. 

As inflation reached record highs due to the war in Ukraine, consumers were forced to fork out more for kitchen staples such as cheddar cheese which has increased by an average of 28.3 per cent over the past year, according to data from consumer choice platform Which? 

The company cited Dragon Welsh Mature Cheddar 180g at Asda, as one of the most expensive price hikes as it rose from £1 to £1.80 year on year. 

The analysis covered the average price of the products in the three months to the end of March 2023 compared to the same time period last year. 

Moreover the ‘Big Four’ grocer also increased the cost of its own brand mature cheddar sticks by 78 per cent over the course of a year. 

The price of the breakfast favourite staple porridge oats also shot up by an average of 35.5 per cent across supermarkets – with Ocado increasing the price of a single Quaker Oat So Simple Protein Porridge Pot Original by 65.5 per cent, jumping up from 94p to £1.56. 

As rising transport and packaging costs made imports more expensive, the price of sliced white bread rose an average of 22.8 per cent over the last year. Potatoes were up 14 per cent. 

‘A bleak picture’ 

Head of food policy at Which? Sue Davies said that the latest figures painted a “bleak picture” for households across the UK with the poorest once again feeling the “brunt of the cost of living crisis”.

The annual food inflation rate in February was 18.2 per cent, up from 16.8 per cent in the year to January 2023.

More

No break for Brits as inflation pushes the cost of kitchen staples by 80 per cent Brits get no break from soaring food costs as price of kitchen staples up 80 per cent this year (cityam.com)

 

Covid-19 Corner

This section will continue until it becomes unneeded.

No one believed the Covid Wuhan lab leak theory – then the world changed its tune

April 18, 2023

Claims that Covid leaked from a lab were once roundly dismissed as Trumped-up charges - the ravings of a US president who seemed maliciously hellbent on blaming China for the pandemic. 

Now after 18 months of extensive research and analysis, a US Senate Committee has published its full 304 report into the matter - and it makes for compelling reading.

The committee concludes that: “The preponderance of circumstantial evidence supports an unintentional research-related incident.”

It even appears that China had begun making vaccines before it had admitted to the world there was a dangerous virus running rampant through the country. 

But it has taken a long time to reach this point. 

When Covid-19 first emerged in Wuhan in December 2019, many pointed out that the outbreak was close to the Wuhan Institute of Virology (WIV).

Of all the cities in the world, a deadly coronavirus had popped up just eight miles from laboratories where scientists were importing and tinkering with deadly bat coronaviruses. 

Even Wuhan scientists themselves were concerned. Dr Shi Zhengli, WIV virologist, told Scientific American that she remembered thinking if coronaviruses were behind the outbreak “could they have come from our lab?”

It should not have been so controversial. Laboratory leaks are fairly common, with smallpox, swine flu, anthrax, and foot and mouth disease all known to have escaped from facilities in recent decades. 

In 2004, the Sars virus leaked from a high-containment research laboratory in Beijing at least three times, causing local outbreaks - so such a scenario was far from unprecedented. 

Behind the scenes, international scientists were also worried. The virus had come out of nowhere, seemingly pre-adapted to infect humans, and no intermediary host could be found.

An email from Sir Jeremy Farrar, director of the Wellcome Trust, in February 2020 said that “a likely explanation” was that Covid had rapidly evolved from a Sars-like virus inside human tissue in a low-security laboratory.

The email, to Dr Anthony Fauci and Dr Francis Collins, of the US National Institutes of Health, said that such evolution may have “accidentally created a virus primed for rapid transmission between humans”.

Sir Jeremy warned that research in Wuhan was like the “Wild West”, with experiments carried out at worrying biosecurity levels. 

But Dr Collins, the former director of the US National Institutes of Health, argued that further debate on the subject could damage “international harmony”. The comment would come to typify why it has been so difficult to get to the bottom of the origins of Covid.

More

No one believed the Covid Wuhan lab leak theory – then the world changed its tune (msn.com)

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.

Fourteen years late and three times over budget, Europe’s latest nuclear power plant is officially working.

Europe’s most powerful nuclear reactor kicks off in Finland

April 16, 2023

HELSINKI (AP) — Finland’s much-delayed and costly new nuclear reactor, Europe’s most powerful by production capacity, has completed a test phase lasting more than a year and started regular output, boosting the Nordic country’s electricity self-sufficiency significantly.

The Olkiluoto 3 reactor, which has 1,600-megawatt capacity, was connected into the Finnish national power grid in March 2022 and kicked off regular production on Sunday. Operator Teollisuuden Voima, or TVO, tweeted that “Olkiluoto 3 is now ready” after a delay of 14 years from the original plan.

It will help Finland to achieve its carbon neutrality targets and increase energy security at a time when European countries have cut oil, gas and other power supplies from Russia, Finland’s neighbor.

“The production of Olkiluoto 3 stabilizes the price of electricity and plays an important role in the Finnish green transition,” TVO President and CEO Jarmo Tanhua said in a statement. The company added that “the electricity production volume of Europe’s largest nuclear power plant unit is a significant addition to clean, domestic production.”

Construction of Olkiluoto 3 began in 2005 and was due to be completed four years later. However, the project was plagued by several technological problems that led to lawsuits. The last time a new nuclear reactor was commissioned in Finland was more than four decades ago.

The Olkiluoto 3 is Western Europe’s first new reactor in more than 15 years. It is the first new-generation EPR, or European Pressurized Reactor, plant to have gone online in Europe. It was developed in a joint venture between France’s Areva and Germany’s Siemens.

Primarily because of safety concerns, nuclear power remains a controversial issue in Europe. The launch of the Finnish reactor coincides with Germany’s move to shut down its last remaining three nuclear plants on Saturday.

Experts have put Olkiluoto 3’s final price tag at around 11 billion euros ($12 billion) — almost three times what was initially estimated. Finland now has five nuclear reactors in two power plants located on the shores of the Baltic Sea. Combined, they cover more than 40% of the nation’s electricity demand.

The conservative National Coalition Party, or NCP, which won Finland’s April 2 general election, wants to increase the share of energy that the country of 5.5 million gets from nuclear power still further.

NCP leader Petteri Orpo, Finland’s likely new prime minister, said during the election campaign that the new Cabinet should make nuclear power “the cornerstone of the government’s energy policy.”

Europe's most powerful nuclear reactor kicks off in Finland | AP News

Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some.

The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the existing distribution of wealth.

Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become ‘profiteers’, who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat.

As the inflation proceeds and the value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.

Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose.

J. M. Keynes.

 

 

 

 

Posted by Graeme Irvine at 06:28

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