Baltic Dry Index. 1728 +58 Brent Crude 79.97
Spot Gold 2454 US 2 Year Yield 3.94 +0.01
August 15, 1971, President Nixon abandons the dollar convertibility into gold. The Great Nixonian Error of Fiat Money starts.
US Federal Debt 1971, $398 billion.
US Federal debt today $35.049 trillion.
A man
who is a pessimist before forty-eight knows too much, if he is an optimist
after it, he knows too little.
Mark
Twain.
On this day in 1971, the greatest monetary policy error of modern times began. President Nixon, without consulting any allies, abruptly mover the world from capitalism to banksterism, from metallic money onto communist fiat money, generating the monetary chaos of today.
Asia-Pacific markets rise as Japan’s GDP growth
beats expectations; China reports mixed economic data
Published Wed, Aug 14 2024 7:51 PM EDT
Asia-Pacific markets largely rose on
Thursday after Japan’s GDP growth beat expectations, while traders also
digested China retail sales, industrial output and urban unemployment data for
July.
China’s retail sales grew 2.7% year on
year, beating expectations for a 2.6% growth from economists polled by Reuters.
Industrial output on the other hand, grew 5.1% compared to forecasts of 5.2%.
The urban unemployment rate climbed slightly to 5.2% from 5% in June.
Japan’s second-quarter gross domestic product beat
market expectations on a quarter-on-quarter basis, climbing 0.8% compared to
forecasts of a 0.5% rise from economists polled by Reuters.
This was also a reversal from the revised
0.6% fall seen in the first quarter.
However, on a year-on-year basis, the
country’s GDP fell for a second straight quarter, down 0.8% and extending from
the first quarter’s contraction of 0.9%.
Japan’s Nikkei 225 as well as the
broader Topix rose over 1%.
Australia’s S&P/ASX 200 rose 0.3%,
after its unemployment rate for July ticked up 0.1 percentage point to 4.2%. The
country’s participation rate also climbed to 67.1%, beating the 66.9% expected
by economists polled by Reuters.
Hong Kong’s Hang Seng index rose 0.51%,
while mainland China’s CSI 300 gained 1.15%.
South Korea’s and India’s markets are
closed for a public holiday.
Wall Street stocks rose overnight after
U.S. inflation data met market expectations.
U.S.
consumer prices increased 2.9% year over year, down from 3% in June
and the lowest reading since March 2021, the Bureau of Labor Statistics said on
Wednesday. Month-over-month, prices ticked up 0.2%.
Economists polled by Dow Jones expected a
0.2% increase from the prior month and a 3% gain year-over-year.
The Dow Jones Industrial Average gained
0.61%. The S&P 500 rose
0.38% and marked its fifth straight winning day, while the Nasdaq Composite reversed
earlier losses to close 0.03% higher.
Asia stock markets live: US CPI, Japan GDP, China unemployment (cnbc.com)
In other news, increasing trouble and
instability in the Great Nixonian Error of Fiat Money.
See: London Irvine Report: CBDCs
Japan second-quarter GDP beats expectations,
expands 0.8% from previous quarter
Published Wed, Aug 14 2024
Japan’s second-quarter gross domestic product beat
analysts’ expectations on Thursday, both on a quarter-on-quarter as well as an
annualized basis.
GDP rose 0.8% quarter on quarter compared
to Reuters poll estimates of a 0.5% rise. This was also a reversal from the
revised 0.6% fall seen in the first quarter.
It expanded 3.1% on an annualized basis,
also beating estimates of a 2.1% growth.
On a year-on-year basis, however, the
country’s GDP fell for a second straight quarter, down 0.8% after have declined
0.9% in the first quarter.
Following the GDP data release, the
benchmark Nikkei 225 rose 0.16%, while the broad-based Topix climbed 0.44%.
The Japanese yen strengthened marginally
against the U.S. dollar, trading at 147.18.
Speaking to CNBC’s “Squawk Box Asia,” Jun
Saito, senior research fellow at the Japan Center for Economic Research,
described the GDP result as “very positive,” and will encourage the Bank of
Japan to continue raising interest rates.
However, Saito said that the Japanese
economy will only grow “modestly” for the whole of 2024, due to the contraction
seen in the first quarter of the year.
With a narrowing interest rate
differential between Japan and the U.S. — where Japan raises rates and the U.S.
cuts rates — the yen is likely to strengthen against the dollar which will
affect the country’s export value, Saito added.
More
Japan second quarter GDP beats expectations, up 0.8% from previous quarter (cnbc.com)
China’s bond market intervention reveals financial
stability worries
Published Wed, Aug 14 2024 10:08 PM EDT
BEIJING — China’s latest efforts to stem a
bond market rally reveals wider worries among authorities about financial
stability, analysts said.
Slow economic growth and tight capital
controls have concentrated domestic funds in China’s government bond market,
one of the largest in the world. Bloomberg reported Monday, citing sources,
that regulators told commercial banks in Jiangxi province not
to settle their purchases of government bonds.
Futures showed prices for the 10-year
Chinese government bond tumbled to their lowest in nearly a month on Monday,
before recovering modestly, according to Wind Information data. Prices move
inversely to yields.
“The sovereign bond market is the backbone
of the financial sector, even if you run a bank-driven sector like China [or]
Europe,” said Alicia Garcia-Herrero, chief economist for Asia-Pacific at
Natixis.
She pointed out that in contrast to
electronic trading of the bonds by retail investors or asset managers in
Europe, banks and insurers tend to hold the government bonds, which implies
nominal losses if prices fluctuate significantly.
The 10-year Chinese government bond yield
has abruptly turned higher in recent days, after falling all year to a record
low in early August, according to Wind Information data going back to 2010.
At around 2.2%, the Chinese 10-year yield
remains far lower than the U.S. 10-year Treasury yield of nearly 4% or higher.
The gap reflects how the U.S. Federal Reserve has kept interest rates high,
while the People’s
Bank of China has been lowering rates in the face of tepid domestic
demand.
“The problem is not what it shows [about a
weak economy],” Garcia-Herrero said, but “what it means for financial
stability.”
“They have [Silicon Valley Bank] in mind,
so what that means, corrections in sovereign bond yields having a big impact on
your sovereign balance sheet,” she continued, adding that “the potential
problem is worse than SVB and that’s why they’re very worried.”
More
China's bond market intervention reveals financial stability worries (cnbc.com)
Finally, in EV news, yet more bad news.
Leasing model behind Europe's EV drive at risk of
breakdown
13 August, 2024
LONDON (Reuters) - Low resale values for
electric cars have pushed the leasing firms that drive Europe's auto market to
double prices over the last three years and some are threatening to quit the
business altogether if regulators force them to go electric too fast, industry
executives say.
The jump in prices for electric car leases
comes as cuts in subsidies for new EVs in key markets such as Germany are
hitting sales and risks stalling Europe's electric transition, just when
Brussels wants to step on the accelerator, the executives say.
"If we were pushed very, very hard,
that everything has to be electric too soon ... my shareholders will say 'we
don't want to take the risk' and we'd be out of the market," said Tim
Albertsen, CEO of Ayvens, one of Europe's largest auto leasing firms.
"Let's be honest, without us, who will take the risk?"
Ayvens, which is majority owned by French
bank Societe Generale, has a fleet of 3.4 million cars, of which about 10% are
EVs.
Leasing companies play a pivotal role in
Europe as 60% of new cars of all fuel types are leased, according to
calculations by environmental group Transport & Environment based on data
from market research firm Dataforce.
When it comes to EVs, the proportion is
estimated to be as high as 80%.
According to data provided to Reuters by
Dataforce, in the 16 European markets where it can identify fleet registrations
- including Germany, Britain, France and Spain - 60% of new EVs go to corporate
fleets and commercial buyers. Experts say those buyers almost exclusively use
leases and about half of the remaining sales to private buyers are also leases.
In markets with no EV subsidies for
private buyers, the dominance of corporates is even more pronounced. In Britain
and Belgium, for example, individuals accounted for just 23% and 8% of new EV
purchases respectively in 2023, Dataforce said.
The price of a lease is designed to
account for the depreciation of a vehicle over the typical three-year lease
period, based on estimated resale prices, or residual values.
But if second-hand prices end up being
lower than anticipated when the lease ends, leasing firms take a financial hit
when they get the vehicle back.
For various reasons - from Tesla's price
cuts to concerns about charging infrastructure and battery life to the influx
of more affordable Chinese EVs - second-hand electric car prices have been
sliding in Europe since hitting a peak in October 2022.
According to figures provided to Reuters
by data firm Autovista, resale values for EVs in Germany in early July were 24%
below pre-pandemic levels and 30% lower in Britain.
That's in stark contrast to second-hand
petrol models, which remained about 15% more expensive in both markets.
"People have become more accepting of
used EVs, but they've got to be cheap," said Gary Cambridge, a partner at
used car dealer Cambridge Motors in London. "If they're expensive, people
don't want them."
More
Leasing model behind Europe's EV drive at risk of breakdown (msn.com)
If you can’t convince them, confuse them.
Harry Truman.
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.
UK
inflation comes in below expectations in July
Wednesday
14 August 2024 7:13 am | Updated: Wednesday 14
August 2024 7:31 am
UK
inflation jumped back above the Bank of England’s two per cent target in July,
but came in below City estimates for the period.
According
to figures released this morning by the Office for National Statistics (ONS),
prices rose 2.2 per cent in July.
Meanwhile,
core inflation, or price rises excluding volatile food and energy costs,
dropped to 3.3 per cent during last month, down from 3.5 per cent in June.
This
was the first jump in the consumer price index since December 2023, as
inflation has steadily fallen over the last couple of years.
Economists
had expected inflation to rise to 2.3 per cent in July, partly due to
fast-rising prices in airline flights, package holidays, and hotels.
The
ONS said that the largest upward contributions came from housing and household
services, as the prices of gas and electricity remained at elevated levels,
falling less than last year.
In
a surprise move, the largest downward contribution actually came from
restaurants and hotels after strong growth in June.
Crucially,
domestic inflationary pressures are continuing to ease, the ONS data revealed,
with service price inflation falling for a second month in a row to 5.2 per
cent, down from 5.7 per cent in June.
“Despite
the pick-up in headline inflation, this report represents welcome news for the
Bank of England,” said Luke Bartholomew, deputy chief economist at Abrdn.
He
explained that since the move back above the two per cent target was always
expected from energy cuts falling out of the annualised figure, “measures of
underlying inflation pressure look to be softening”.
“After
yesterday’s solid labour market report, the Bank will not be in any hurry to
cut rates again immediately, but the ongoing slowing in inflation pressure
means there is certainly scope for at least one more rate cut this year,” he
added.
More
UK inflation comes
in below expectations in July (cityam.com)
Germany's
economic sentiment crashes in August, dragging Eurozone down
13 August, 2024
The
ZEW Economic Sentiment Index, a key indicator that gauges the expectations of
financial experts, fell dramatically from 41.8 points in July to just 19.2
points in August.
The
falling sentiment reflects growing pessimism about the country's outlook and
highlights broader concerns for the eurozone.
The
decline not only undershot market expectations of a more moderate drop to 32
points but also marked the most significant monthly deterioration since July
2022.
Similarly,
the eurozone's broader economic sentiment also deteriorated, with the
corresponding index dropping from 43.7 to 17.9 points, the lowest since
February and well below the expected 35.4. The drop of 25.8 points represented
the most severe monthly deterioration in the bloc's economic morale since April
2020.
The
assessment of Germany's current economic situation also worsened, with the
relevant indicator falling by 8.4 points to minus 77.3 points. However, the
eurozone's situation indicator showed a slight improvement, rising by 3.7
points to minus 32.4 points.
The
eurozone's economic powerhouse has been facing a series of economic challenges
that have shaken its already shallow recovery in 2024.
A
slowdown in global trade, exacerbated by weakening demand in key markets like
China, has weighed heavily on Germany’s export-driven economy.
"The
economic outlook for Germany is breaking down. In the current survey, we
observe the strongest decline of the economic expectations over the past two
years," said ZEW President Professor Achim Wambach, PhD on the
survey results.
Wambach
highlighted that ongoing uncertainty, driven by ambiguous monetary policy,
disappointing US business data, and escalating tensions in the Middle East, has
contributed to the decline in sentiment.
"Most
recently, this uncertainty expressed itself in a turmoil on international stock
markets," he added.
The
survey indicated worsening sentiment across key stock market indices, with
experts' morale in the DAX and STOXX 50 declining by 6.5 and 4.6 points,
respectively.
Financial
market analysts also turned bearish on the US dollar, anticipating that
economic weakness and potential Federal Reserve interest rate cuts would weigh
on the greenback. The sentiment gauge for the dollar's strength against the
euro fell by 24.2 points month-over-month to minus 7.9 points.
More
Germany's economic sentiment crashes in August, dragging Eurozone down (msn.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
As students head back to class, are schools ready to handle COVID-19?
Sun, 11 August 2024 at
10:01 am BST
As summer begins to wind
down, most children and teenagers across the U.S. are getting ready to head back to school.
Not far behind the start
of the school year is the typical start of the season for respiratory viruses,
including flu, RSV and COVID-19.
Since early May, COVID-19
test positivity and emergency department visits that are diagnosed as COVID-19
infections have steadily increased, although hospitalizations and deaths
continue to remain at historically low levels, according to data from the Centers for Disease Control and Prevention (CDC).
MORE: COVID was 10th leading cause of death in
2023, down from 4th in 2022: CDC
Despite these upward
trends, school officials from various districts told ABC News that they feel
prepared to handle cases of any respiratory viruses that may emerge, and to try
and prevent classroom disruptions because of them as much as possible.
"We're always
preparing, and I feel very confident that we're going to have a great school
year, and we'll get through this respiratory season with no problem," Kim
Baumann, lead county nurse for Gwinnett County Public Schools (GCPS) in Georgia,
told ABC News.
More
As students head back to class, are schools ready to handle COVID-19?
(yahoo.com)
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.
Tiny
graphene-based magnetic devices could lead to much smaller — and way more
powerful — processors in the future
August
13, 2024
Researchers
have developed a technique that could enable the extreme miniaturization of
computing components, paving the way for compact and high-performance devices.
The
smaller the transistors and logic gates in a processor, the more computing
power can be packed into a smaller area. But the physical constraints of
silicon mean we are reaching the limits of how small these components can be.
However,
a new technique, involving ultrafast switching between spin states in 2D
magnets — to represent the switching between the binary states of 1 and 0 — can
lead to much denser and more power-efficient components.
This
technique is enabled by a new type of magnetic tunnel junction (MTJ) — a
material structure that acts as a data storage device in a computing system.
The scientists sandwiched chromium triiodide (a 2D insulating magnet) between
layers of graphene and sent an electrical current through it to dictate the
magnet's orientation within the individual chromium triiodide layers.
Harnessing
these MTJs could mean packing more computing power into a chip than was
previously deemed possible — while consuming much less energy during the
switching process. The researchers published their findings in a new study
published May 1 in the journal Nature
Communications.
In the
paper, the scientists demonstrated that 2D magnets can be polarized to
represent binary states — the 1s and 0s of computing data — paving the way for
highly energy-efficient computing.
Precisely
controlling the magnetic phase of 2D materials is a crucial step in spintronics
(controlling an electron’s spin and the associated magnetic moment). By
precisely controlling the current, the new technique can change the spin states
in chromium triiodide using the current's polarity and amplitude. This is
possible because the compound is ferromagnetic (it is magnetic and can attract
magnets in a similar way to iron). This compound is also a semiconductor — a
material that has a conductivity that falls between a metal and an insulator.
---- "This paper is about the fact that you can have two possible
states of the tunneling current; spin-parallel and anti-parallel," Adelina Ilie, a
reader in physics at the University of Bath in the U.K. specializing in 2D
magnets, told LiveScience. "If there are two defined states, they can be
used as logic gates in a computer."
---- The
two states, which can be used as logic gates, enable operation at a much
smaller scale than was previously possible. Using this technology,
manufacturers could create computer chips with greater processing power. But
the need for near absolute-zero operating temperatures means implementing
futuristic devices practically would be challenging.
"What
makes this kind of work different is that it looks like the energy needed to go
from one state to another is a magnitude lower than in conventional magnetic
tunnel junctions," concluded Ilie. "With new technologies like
generative AI, which increase power consumption tremendously, it won't be
possible to keep up, so you need devices that are energy efficient."
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
The Nixon
shock was the effect of a series of economic measures, including wage and price freezes,
surcharges on imports, and the unilateral cancellation of the direct
international convertibility of the United States
dollar to gold, taken by United States President Richard Nixon on
15th August 1971 in response to increasing inflation
-----At
the time, the U.S. also had an unemployment rate of 6.1% (August 1971)[13][notes 1] and
an inflation rate of 5.84% (1971).[14] To
combat these problems, Nixon consulted Federal Reserve chairman Arthur Burns,
incoming Treasury Secretary John Connally,
and Paul Volcker, then Undersecretary for
International Monetary Affairs and future Federal Reserve Chairman.
On the
afternoon of Friday, August 13, 1971, Burns, Connally, and Volcker, along with
twelve other high-ranking White House and Treasury advisors, met secretly with
Nixon at Camp David. There was great debate about what Nixon should do,
but ultimately Nixon, relying heavily on the advice of the self-confident
Connally, decided to break up Bretton Woods by announcing the following actions
on August 15:[15][16][17]
- Nixon
directed Treasury Secretary Connally to
suspend, with certain exceptions, the convertibility of the dollar into
gold or other reserve assets, ordering the gold window to
be closed such that foreign governments could no longer exchange their
dollars for gold.
- Nixon
issued Executive Order 11615 (pursuant to the Economic Stabilization Act of
1970), imposing a 90-day freeze on wages and prices in order to
counter inflation. This was the first time the U.S. government had enacted
wage and price controls since World War II.
- An import
surcharge of 10 percent was set to ensure that American products would not
be at a disadvantage because of the expected fluctuation in exchange
rates.
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