Baltic
Dry Index. 1762 -06 Brent
Crude 79.02
Spot
Gold 2513 U S 2 Year Yield 3.90 -0.09
US Federal Debt 22/8/24 35.069 Trillion.
US Federal Debt 24/8/24 35.254 Trillion.
It
is time to get out of US dollars.
I
never thought I would ever write that, but with US Federal debt now surging
hundreds of billions in a day, the US Democrat candidate for president
advocating wage and price controls, plus taxes on “unrealised profits,” a US
economic disaster lies directly ahead if Vice President Harris becomes the next
US President.
Not
that I have much confidence in the economic policies of a second term President Trump, should he win in November, but a US
economic decline under Trump will just be significantly slower.
As
if to confirm that he thinks the US economy has slumped into recession, Fed
Chairman Powell endorsed interest rate cuts starting next month. That alone
probably tilts the US election in favour of the Democrats.
If
the polls start showing a likely Democrat win, I think a great race to get out
of dollars and out of US “unrealised profits” before taxation, will get
underway before January 2025.
Fed
Chair Powell indicates interest rate cuts ahead: ‘The time has come for policy
to adjust’
Published
Fri, Aug 23 2024 10:00 AM EDT
Federal
Reserve Chair Jerome Powell laid
the groundwork Friday for interest rate cuts ahead, though he declined to
provide exact indications on timing or extent.
“The
time has come for policy to adjust,” the central bank leader said in his
much-awaited keynote address at the Fed’s annual retreat in Jackson Hole,
Wyoming. “The direction of travel is clear, and the timing and pace of rate
cuts will depend on incoming data, the evolving outlook, and the balance of
risks.”
With markets
awaiting direction on where monetary policy is headed, Powell focused
as much on a look back at what caused the inflation that led to an aggressive
series of 11 rate hikes from March 2022 through July 2023.
However,
he did note the progress on inflation and said the Fed can now turn its focus
equally to the other side of its dual mandate, namely to make sure the economy
stays around full employment.
“Inflation
has declined significantly. The labor market is no longer overheated, and
conditions are now less tight than those that prevailed before the pandemic,”
Powell said. “Supply constraints have normalized. And the balance of the risks
to our two mandates has changed.”
He
vowed that “we will do everything we can” to make sure the labor market says
strong and progress on inflation continues.
Stocks
added to gains as Powell began to speak while Treasury yields dropped
sharply . Traders maintained a 100% chance of at least a quarter percentage
point rate cut in September and raised the odds of a potential half-point
reduction to about 1-in-3, according to the CME Group’s FedWatch.
“This
was a valedictory of essentially Chair Powell turning the page, saying the
mission, which has been focused on inflation for the last two years, has been
successful,” economist Paul McCulley, a former Pimco managing director, said on
CNBC’s “Squawk on the
Street.”
Sees
progress toward goals
The
speech comes with the inflation rate consistently drifting back to the Fed’s 2%
target though still not there yet. A gauge the Fed prefers to measure inflation
most recently showed
the rate at 2.5%, down from 3.2% a year ago and well off its peak above 7%
in June 2022.
At
the same time, the unemployment rate has slowly but consistently climbed
higher, most
recently at 4.3% and in an area that otherwise would trigger a
time-tested indicator of a recession. However, Powell attributed the rise in
unemployment to more individuals entering the workforce and a slower pace of
hiring, rather than a rise in layoffs or a general deterioration in the labor
market.
----Markets
are expecting the Fed to start cutting in September, though Powell made no
mention of when he thinks policy easing will begin. Minutes from the July open
market committee meeting, released Wednesday, noted that a “vast majority”
of officials believe a September cut will be appropriate so long as there are
no data surprises.
“He’s
pretty dovish. He bought the option to do whatever he needs to do next month,
which is clearly an ease,” said Joseph LaVorgna, chief economist at SMBC Nikko
Securities. “I don’t think the bar for 50 [basis points] is particularly high.”
More
EU
panic as country scrambles to stockpile 19 tonnes of gold
23
August, 2024
The
President of the National Bank of Poland, Adam
Glapinski, has revealed that the country will stockpile gold so that the metal
will make up 20 percent of its reserves.
Poland's
National Bank became the joint biggest gold buyer in the second quarter of 2024
along with India.
During
this time, the price of gold reached $2,500 (£1,892) per ounce.
Grzegorv
Dród, market analyst at Conotoxia, said: "At the end of the second quarter
of this year, Poland's gold reserves rose to 377.4 tonnes, and the pace of
purchases of the bullion, held mainly at the Bank of England, since April this
year has surpassed even the world's largest economies."
Central
banks are buying up gold to diversify their reserves, protecting against big
economic shocks like we have seen with Covid and the war in Ukraine.
Gold
is seen as a safe bet by banks as its price fluctuates less than other assets.
Other
countries invest in gold to make them less dependent on bigger countries like
the US.
World
Gold Council figures show that gold demand was up 183 tonnes in Q2, a 6 percent
increase compared to this time last year. It was, however, a 39 percent drop
quarter-on-quarter.
Mr
Dród added: "In Q2 2024, global gold demand, excluding over-the-counter
(OTC) investments, fell by 6 percent year-on-year to 929 tonnes. The decline is
mainly due to a 19 percent reduction in jewellery consumption, in response to
record high prices for the king of metals.
"However,
including OTC investments, total gold demand increased by 4 percent
year-on-year to reach 1,258 tonnes, the highest level since 2000. Much of this
demand was generated by central banks, which increased their purchases by 6
percent, adding 183 tonnes, mainly to protect and diversify their
portfolios."
Turkey,
Jordan, Qatar, Russia, Uzbekistan, Kyrgyzstan, Iraq and the Czech Republic's
central banks all boosted their purchases of gold in Q2.
Mr
Dród explained what factors can cause fluctuation in the gold market.
He
said: "The gold market, like many others, is driven by two forces: demand
and supply. In the past few quarters, an increase in demand has been
particularly evident.
"Moreover,
the continued weakening of the dollar may indicate that gold could outperform
other key assets in the near term. Conotoxia's baseline scenario assumes that
gold price momentum could slow down by the end of the year, with a possible
correction, but is likely to remain above the $2,500 (£1,892) per ounce
level."
EU
panic as country scrambles to stockpile 19 tonnes of gold (msn.com)
Europe
stocks close higher, euro and sterling climb as Powell says ‘time has come’ for
lower rates
Published
Fri, Aug 23 2024 1:53 AM EDT
LONDON
— European stocks closed higher Friday after Federal Reserve Chair Jerome Powell firmly signaled
interest rate cuts ahead.
The Stoxx 600 index closed 0.5%
higher, pulling further away from its level at the start of the month despite
early-August volatility. The British pound gained 0.8% against the U.S. dollar
to trade above $1.319 — its highest level since March 2022 — while the euro
strengthened 0.58% to $1.118.
In
his highly anticipated keynote address at the Fed’s annual retreat in Jackson
Hole, Wyoming, Powell said: “The time has come for policy to adjust... The
direction of travel is clear, and the timing and pace of rate cuts will depend
on incoming data, the evolving outlook, and the balance of risks.”
Powell
said inflation had “declined significantly” and that the central bank can now
equally focus on supporting a strong labor market.
Markets
had already fully priced in a September rate cut from the Fed, and put the
probability of a 25 basis point rather than 50 basis point reduction at 67.5%
after Powell’s comments.
U.S. stocks rallied
Friday morning in reaction to the speech.
Bank
of England Governor Andrew Bailey is also due to speak at Jackson Hole on
Friday.
Bailey
will flag progress on U.K. inflation and the effectiveness of tighter monetary
policy, saying that risks to the outlook from so-called “second-round effects”
such as wage growth and price-setting are lower than was expected a year ago.
However,
he will also caution that less “benign” scenarios remain possible that will
require the Bank of England to “maintain restriction for longer.”
These
“would suggest that there are structural changes in product and labor markets
going on which are causing the supply side of the economy to change as a
lasting legacy of the major shocks we have experienced,” he is expected to say.
More
Europe
stocks open to close: Powell speech on interest rates (cnbc.com)
Global Inflation/Stagflation/Recession
Watch.
Given our Magic Money
Tree central banksters and our spendthrift politicians, inflation/recession now needs an entire
section of its own.
What To
Expect From August’s CPI Inflation Release
Updated Aug 22,
2024, 03:34pm EDT
The next
Consumer Price Index release for August is expected to show further disinflation.
That may support a cut in interest rates, with markets now debating the size of any cut rather than whether it will happen. With
recent softness in jobs data and negative revisions to prior reports, the risks
to unemployment may be gaining more of the Federal Open Market Committee’s
attention than inflation risks.
August CPI Release Timing And
Forecasts
The August CPI
release is scheduled for 8:30 am E.T. on September 11. The prior release for
July showed a 0.2% monthly increase with a 2.9% annual increase. That compares
to the FOMC’s 2% inflation target. Nowcast forecasts from the Federal Reserve Bank of Cleveland suggest that August CPI will come in at 0.23% for August or at
0.26% for core inflation, removing food and energy price moves. That would translate
to an annual inflation rate of 2.6% and core inflation running higher at 3.2%.
Forecasting site Kalshi is currently estimating headline inflation at 2.5%.
PCE Inflation Release
In addition,
the Personal Consumption Expenditures Price Index will be updated for July on August 30. The FOMC appears to prefer
this metric and although on a slower release timetable, it is expected to show
a similar trend of disinflation with nowcasts suggesting a 2.6% annual rate for
PCE inflation to July 2024. Hence the CPI and PCE inflation metrics may provide
very similar readings.
Likely Reaction From The FOMC
Cooling
inflation would be welcomed by the FOMC as inflation appears to be returning to
its 2% annual goal. In the early months of 2024 there was a step up inflation,
which concerned policymakers and delayed a potential rate cut. However, now a
run of cooling inflation figures appears to be sustained. The Atlanta Fed’s Wage Growth Tracker signals that wages are cooling, contributing to disinflation. A
primary driver of inflation currently is housing costs, which rose at a 5.1% annual
rate for July and carry a large weight in the CPI index.
Jobs Data Is Becoming More
Important
As inflation
data generally improves, so jobs data is becoming more of a concern.
Unemployment has moved up from relatively low levels over the past year and is
now at the point where the Sahm rule suggests
the increase in unemployment could be sufficient to trigger a recession. The
Sahm rule suggests a recession is probable when the a smoothed version of
unemployment rate rises by 0.5% of more over a 12-month window in absolute
terms. That recession indicator was triggered with July’s jobs report.
More
What To Expect From August’s CPI Inflation Release (forbes.com)
Covid-19
Corner
This section will
continue until it becomes unneeded.
This weekend something different, lecanemab.
Medicines regulator set to give Alzheimer’s drug
green light
22 August, 2024
The UK’s medicines
regulator is set to approve a drug that has been shown to slow the progression
of Alzheimer’s disease.
Lecanemab, developed by
pharmaceutical company Eisai, is a targeted antibody treatment that binds
to amyloid, a protein which builds up in the brains of people living with
Alzheimer’s disease.
It is designed to help
clear the build-up and slow down cognitive decline in people with the condition
and is given to patients via an intravenous drip fortnightly.
The decision from the
Medicines and Healthcare products Regulatory Agency (MHRA) is set to be
announced shortly, but it is understood to have approved the treatment.
It will also need the
green light from health service spending watchdog the National Institute for
Health and Care Excellence (Nice)
before it is rolled out on the NHS in England.
Alzheimer's
treatments" data-source="NHS England">
Lecanemab is already
licensed in the US, where it costs about £20,000 per patient per year, although
it was rejected by the European Medicines Agency (EMA) in late July.
The EMA said the benefits of lecanemab did not counterbalance the risk of
people suffering serious side-effects such as bleeding and swelling in the
brain.
It also said the effects
of the drug on delaying cognitive decline were small.
A similar drug called
donanemab, which is developed by Eli Lilly, is also being assessed for approval
in the UK by medicine regulators.
NHS England estimates
between 50,000 and 280,000 patients might be eligible for the new treatments.
Prior to being given the
drugs, they will need to have a baseline MRI scan and then either a Pet-CT scan
or lumbar puncture to confirm Alzheimer’s.
Medicines regulator set to give Alzheimer’s
drug green light (msn.com)
Technology Update.
With events happening
fast in the development of solar power and graphene, I’ve added this section.
Jupiter Power launches 400MWh battery storage in Houston, Texas
August 21, 2024
Jupiter Power has announced the
commencement of commercial operations for its 400 megawatt hours (MWh)
dispatchable power facility in Houston, Texas.
The Callisto I battery energy storage
system (BESS), which is expected to bolster Houston's supply of reliable
zero-emissions power, marks a significant step in the city's efforts to meet
rising demand.
The Callisto I Energy Center is
strategically located in central Houston, close to the Medical Center and the
Houston ship channel.
It stands on the grounds of the former
HL&P H O Clarke fossil fuel power plant and can accommodate an additional
400MW/800MWh of battery storage generation.
Callisto I is part of Jupiter's broader
strategy to expand its large-scale operational battery energy storage projects
beyond West Texas and into Houston.
Callisto I facility is Jupiter's ninth
project within the ERCOT [Electrical Reliability Council of Texas] grid,
increasing its total fleet in the region to 1,375MWh.
In December 2023, Jupiter Power secured
a $65.2m financing agreement with First Citizens Bank for the construction of
the Callisto I project.
Jupiter Power CEO Andy Bowman stated:
“Jupiter couldn't be prouder about bringing the Callisto I project online.
“This project responds to lawmakers'
calls to increase affordable and dispatchable new generation in an area where
people need more power.
“Callisto I is the first energy storage
project at this scale in the city of Houston and will help meet Houston's
growing power needs while also increasing resiliency from extreme weather
events.”
In November 2022, EnCap
Investments reached an agreement to transfer Jupiter Power to BlackRock
Alternatives.
BlackRock acquired Jupiter Power from
EnCap Energy Transition Fund I, along with co-investment partners Yorktown
Partners and Mercuria Energy.
Jupiter Power launches 400MWh battery storage in Houston, Texas (msn.com)
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt Clocks (usdebtclock.org)
This
weekend’s music diversion. Berio’s Boccherini at his best. Approx. 6 minutes.
Luigi
Boccherini / Luciano Berio: Ritirata notturna di Madrid (1975)
Luigi Boccherini / Luciano Berio: Ritirata notturna di Madrid (1975) - YouTube
This
weekend’s chess update. Approx.10 minutes.
He's
Just on Another Level! || Nepo vs Anish || Sinquefield Cup(2024)
He's Just on Another Level! || Nepo vs Anish || Sinquefield Cup(2024) - YouTube
This
weekend’s final diversion. The White
House. Approx. 6 minutes.
What's
Inside of the White House?
What's Inside of
the White House? (youtube.com)
The theory of Communism may be summed up in one sentence:
Abolish all private property.
Karl Marx.
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