Baltic Dry Index. 785 +20 Brent Crude 76.67
Spot
Gold 2798 U S 2 Year Yield 4.22 +0.04
US
Federal Debt. 36.423 trillion.
"I would not like to be a Russian leader. They never know
when they're being taped."
President Richard Nixon.
It looks like Trump Tariff Day has arrived.
If so, day one of our new international tariff war is underway.
Who will be winners and who will be losers is
hard to guess at the onset, but economists think there’s a high probability
that all will end up losers.
Trump World is in danger of bringing in a
repeat of 1929-1935.
Trump tariffs on Canada, Mexico and China
begin Saturday, White House says
Published Fri, Jan 31 2025 1:31 PM EST Updated
Fri, Jan 31 2025 3:50 PM EST
In an apparent ending to weeks of intense
speculation, the White House confirmed Friday that President Donald Trump will be
leveling aggressive tariffs this weekend on major U.S. trading partners.
Karoline Leavitt, the White House press
secretary, said Trump will be implementing 25% tariffs on Mexico and Canada as
well as a 10% duty on China, in retaliation for “the illegal fentanyl that they
have sourced and allowed to distribute into our country.”
The White House provided few details on
exactly how the levies will be meted out, saying that they will be available
for public inspection at some point Saturday.
The news sent the Dow Jones Industrial Average down
more than 300 points, or about 0.7%. The S&P 500 and Nasdaq Composite both turned
in losses as well. All three major benchmarks were up solidly earlier in the
day.
“These are promises made and promises kept by
the president,” Leavitt said.
There was no word on potential exemptions to
the tariffs; the White House denied an earlier Reuters report that there would
be at least some exclusions rather than simply blanket measures covering all
products, and that the tariffs would be delayed until March 1.
Together, the U.S. does about $1.6 trillion
in annual business with the three countries. Trump is seeking to use the
tariffs as both bargaining chips and methods to effect foreign policy changes,
specifically the immigration and drug trade issues.
“We’ve got the Super Bowl coming up, and
eerily, the amount of people that fit in the [New Orleans] Superdome are almost
exactly equal to the number of people dying every year here in America from
fentanyl, and that comes from China and Mexico,” Trump trade advisor Peter
Navarro told CNBC in an interview earlier Friday. “This is why we have these
kind of discussions.”
Economists worry that the tariffs could
reignite inflation at a time when it appears price pressures are beginning to
abate. The Commerce Department reported Friday that an inflation reading
closely watched by the Federal Reserve rose to 2.6% in December, but the
details in the report appeared more positive.
However, Fed officials have said they are
monitoring the impact of fiscal policy.
More
Trump
tariffs on Canada, Mexico and China begin Saturday, White House says
Why Trump tariffs will be ‘very bad for
America and for the world’
If enacted tariffs will increase inflation,
slow economic growth, and result in US consumers footing the bill
As Donald Trump threatens
to slap steep tariffs on many countries, he is boasting that his taxes
on imports will be a boon to the US economy, but most economists strongly
disagree – many say Trump’s tariffs will increase inflation, slow economic
growth, hurt US workers and result in American consumers footing the bill for
his tariffs.
“Virtually all economists think that the
impact of the tariffs will be very bad for America and for the world,” said
Joseph Stiglitz, an economics professor at Columbia University and a winner of
the Nobel prize in economic sciences. “They will almost surely be
inflationary.”
On inauguration day, Trump threatened to
impose a
25% across-the-board tariff on all imports from Canada and Mexico on 1
February “because”, he said, “they’re allowing vast numbers of people” to “come
in, and fentanyl to come in”. Trump also threatened China
with a 10% tariff unless its stops fentanyl shipments, while he
maintained his longer-term threat of a 60% tariff on Chinese goods.
“It’s inconceivable that other countries
won’t retaliate,” said Stiglitz, who was chairman of Bill Clinton’s council of
economic advisers. “Even if some of the governments might not want to
retaliate, their citizens will demand that you can’t allow yourself to be
beaten up. When you make like a gorilla thumping on his chest, are countries
just going to say, ‘Are we chopped liver?’ Their politics will demand that they
do something.”
The tariffs, tensions and fears of
retaliation and a trade war will probably cause many businesses to reduce their
planned investments, and that, economists say, will hurt economies worldwide.
Marcus Noland, executive vice-president of
the Peterson Institute for International Economics, said: “The
impact of imposing these tariffs,” will “have the effect of depressing US
economic growth, contributing to a higher rate of inflation, and those effects
will be worse if the other countries retaliate in kind”.
More
Why
Trump tariffs will be ‘very bad for America and for the world’ | US economy |
The Guardian
Here’s how tariffs on Canada, China and
Mexico may impact U.S. consumers
Published Fri, Jan 31 2025 3:57 PM EST Updated
Fri, Jan 31 2025 6:17 PM EST
President Donald Trump has repeatedly
discussed imposing tariffs, both during the campaign and since taking office,
and the first tranche, on goods from Canada, China and Mexico will
take effect Feb. 1, the White House confirmed Friday.
While there are still some unknowns, one
thing is clear, economists said: U.S. consumers should
brace for a negative financial impact.
It’s “hard to find positives” from tariffs,
said Mary Lovely, a senior fellow at the Peterson Institute for International
Economics, whose research specializes in trade with China and global supply
chains.
Trump plans to put 25% tariffs on Mexico and
Canada, and a 10% duty on China, Karoline Leavitt, the White House press
secretary, said Friday.
China, Mexico and Canada are the three largest trading partners with the U.S., as measured by
imported goods. They supplied about $536 billion, $455 billion, and $437
billion of goods, respectively, to the U.S. in 2022, according to the Office of
the U.S. Trade Representative.
Tariffs are a tax on foreign imports. U.S.
businesses that import goods pay that tax to the federal government.
Many businesses will funnel those extra costs
to customers — either directly or indirectly — which is why tariffs generally
trigger higher prices for consumers, economists said.
“Part of these tariffs will be passed on to
consumers,” Lovely said.
Americans could also find they have fewer
choices for brands and products stocked on store shelves, she said.
Exemptions may ‘limit the damage’ to
consumers
There are still many question marks over the
looming tariffs on Canada, China and Mexico.
For example, it’s unclear if any imports will
be exempt. Trump suggested Thursday night, for example, that Canadian oil
might be exempt. The White House said the tariffs will be open for public
inspection on Saturday.
Discussions around such specifics are
“ongoing,” a White House official told CNBC on Friday morning.
“There are always exemptions and carve-outs,”
said Mark Zandi, chief economist at Moody’s.
Trump might try to “limit the damage to the
U.S. consumer” via those exemptions, Zandi said. For example, he could choose
not to impose duties on apparel from China, avocados from Mexico or cheese from
Quebec, he said.
Economic impact
The White House said tariffs and Trump’s
broader economic agenda will benefit the U.S. economy.
White House spokesman Kush Desai said tariffs
Trump imposed in his first term — along with tax cuts, deregulation and energy
policy — “resulted in historic job, wage, and investment growth with no
inflation,” and that in his second term Trump will use tariffs to “usher in a
new era of growth and prosperity for American industry and workers.”
Economists, however, disagree.
A 25% Canada-Mexico tariff and 10% China
tariff would raise about $1.3 trillion in revenue through 2035 on a net basis,
the Committee for a Responsible Federal Budget estimated. That revenue may be used to partially offset the
cost of tax cuts, a package that might cost more than $5 trillion over 10 years.
However, a 10% additional tariff on China
would shrink the U.S. economy by $55 billion during the Trump administration’s
second term, assuming China retaliates with its own tariffs, according to
an analysis by Warwick McKibbin and Marcus Noland,
economists at the Peterson Institute for International Economics.
A 25% tariff on Mexico and Canada would cause
a $200 billion reduction in U.S. gross domestic product, they found.
More
How
tariffs on Canada, China and Mexico may impact U.S. consumers
JPMorgan Plans $4 Billion US Gold Delivery
Amid Tariff Fears
By Jack Ryan and Jack Farchy
January 31, 2025 at 6:12 PM GMT Updated on January 31, 2025 at 10:44 PM
GMT
JPMorgan Chase
& Co. will deliver gold bullion valued at more than $4 billion
against futures contracts in New York in February, at a time when surging
prices and the threat of import tariffs are fueling a worldwide dash to ship
metal to the US.
The bank, which is by far the world’s biggest
bullion dealer, was one of several institutions to declare plans on Thursday to
deliver bullion against contracts traded on CME Group’s
Comex that will expire in February. The delivery notices — which total 30
million troy ounces of gold — were the second largest ever in bourse
data going back to 1994.
Fears of imminent tariffs on imports
following the election of US President Donald Trump have caused prices for gold
futures on Comex to surge over spot prices in London. Spot prices shot to
record highs this week, but the additional premium on Comex has created a
lucrative arbitrage opportunity for the handful of banks that can quickly fly
bullion between key trading hubs.
imilar pricing dynamics have emerged in other
Comex contracts too, and the disparity has become so large that traders have
started flying silver into the country. The precious metal is usually too cheap
and bulky to justify the cost of airfreight, and one industry veteran says it’s
the first time they’ve seen it happen.
Traders Load US-Bound Planes With Gold and Silver in Tariff Bet
While millions of ounces of gold trade on
Comex every day, typically only a small fraction of that goes to physical
delivery, with most long positions being rolled over or closed out before they
expire.
The exchange is often used to hedge positions
in London, the largest trading hub, with banks offsetting longs with paper
short positions in New York. Since the day of the US election though, physical
inventories in the exchange’s depositories have swelled by 13 million ounces,
around $38 billion of gold.
It is unclear whether JPMorgan or the other
banks were delivering bullion physically to take advantage of an arbitrage
opportunity, or were simply using the deliveries to exit existing short
positions. JPMorgan and exchange owner CME Group Inc. declined to comment.
JPMorgan issued delivery notices for 1.485
million ounces of gold to meet physical delivery for the February gold
100-ounce contract, with deliveries on Feb 3. That accounted for roughly half
the total to be delivered, with Deutsche Bank AG, Morgan Stanley and Goldman Sachs
Group Inc making up the bulk of the rest.
Deutsche Bank, Morgan Stanley and Goldman
declined to comment.
JPMorgan
Plans $4 Billion US Gold Delivery Amid Tariff Fears - Bloomberg
In other news, US Q4 GDP misses, Is Germany’s
DB the new Credit Swiss?
GDP: US economy grows at slower-than-expected
pace in fourth quarter
January 30, 2025
The US economy grew at a slower-than-expected
pace in the fourth quarter.
The Bureau of Economic Analysis's advance
estimate of fourth quarter US gross domestic product (GDP) showed the economy grew at an annualized pace of
2.3% during the period, below the 2.6% growth expected by economists surveyed
by Bloomberg. The reading came in lower than the 3.1% growth seen in the third
quarter.
Increases in consumer spending and government
spending drove economic growth in the quarter while decreases in investment
offset some gains. For the year, the US economy grew at 2.8% pace, slightly
below the 2.9% number seen in 2023 but above the 2.5% growth seen in 2022.
“The U.S. consumer continued to power overall
economic growth as employment and wage gains remain firm and massive wealth
effects from sharp increases in equity and home values turbo charge spending
especially among upper-income households,” Nationwide chief economist Kathy
Bostjancic wrote of this morning’s Q4 GDP report. “Holding back growth was a
decline in business investment, flat reading in net exports, and sharp decline
in inventories … The drawdown in inventories, especially at the wholesale level
indicates that retailers also scurried to stock up before possible tariffs.
This could continue into early 2025.”
Meanwhile, the "core" Personal
Consumption Expenditures index, which excludes the volatile food and energy
categories, grew by 2.5% in the fourth quarter, in line with estimates and
above the 2.2% seen in the prior quarter.
The data's release comes as investors try to
gauge if the Federal Reserve will start cutting interest rates again in 2025
after holding them steady on Wednesday. Federal Reserve Chair Jerome Powell
said in a press conference that the economy "remains strong" while
inflation "remains somewhat elevated."
"We don’t need to be in a hurry to
adjust our policy stance," Fed Chair Powell said.
Following Wednesday's Fed meeting, markets
see less than a 50% chance that the Fed cuts rates before its June
meeting, per
the CME FedWatch Tool.
GDP: US economy
grows at slower-than-expected pace in fourth quarter
Deutsche Bank profits collapse as German
economy reels
Country’s largest lender vows to slash jobs
after suffering 92pc slump
30 January 2025 3:20pm GMT
Deutsche Bank has suffered a 92pc slump in
its profits amid a major downturn in the German economy.
Germany’s largest lender on Thursday vowed to
slash jobs after its profits attributable to shareholders dropped to €106m
(£89m) in the final three months of 2024, down from €1.26bn in the fourth
quarter of 2023.
Shares in the bank fell by as much as 6pc on
the update.
The slump comes after Germany’s economy
contract for a second year
in a row in 2024. Higher energy prices as a result of the war
in Ukraine have undermined the competitiveness of German industry at a time
when the country’s car manufacturers are also facing intense competition from
rivals in China.
More, subscription required.
Deutsche Bank
profits collapse as German economy reels
"I was under medication when I made the decision to burn
the tapes.''
President Richard Nixon.
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.
Even
Progressives Now Worry About the Federal Debt
The 119th Congress began, as it so often has in
recent years, with calls from Republican politicians for
wrestling down the national debt, which is near a record level relative to the
size of the economy.
But this time, the G.O.P. had company: Progressive
economists and budget wonks, who have often dismissed finger-wagging about debt
levels as a pretext for slashing spending on programs for the poor, are
starting to ring alarm bells as well.
What’s changed? In large part, long-term interest
rates look unlikely to recede as quickly as had been hoped, forcing the federal
government to make larger interest payments. And the Trump administration has
promised to extend and expand its 2017 tax cuts, which will cost trillions if
not matched by spending reductions.
“I find it easier to stay calm about this threat
when I think the interest rate is low and steady, and I think in the past year
or so that steadiness has been dented,” said Jared Bernstein, who led the
Council of Economic Advisers in the Biden administration. “If one party refuses
to raise revenues, and the Democrats go along more than is fiscally healthy,
that’s also a big part of the problem.”
To be clear, conservative warnings on the debt have
generally been met with little action over the past two decades. A paper by two
political scientists and an economist recently concluded that
after at least trying to constrain borrowing in the 1980s and 1990s,
Republicans have “given up the pretense” of meaningful deficit reduction.
Democrats and Republicans alike tend to express more concerns about fiscal
responsibility when their party is out of power.
Historically, the stock of debt as a share of the
economy has risen sharply during wars and recessions. It peaked during World
War II. In the 21st century, Congress has not managed to bring the debt back down during times of
peace and economic growth.
Deficit-financed tax cuts under President George W.
Bush decreased revenues by
trillions of dollars and were only partly repealed under President Barack
Obama, who also oversaw hundreds of billions in stimulus spending after the
financial crisis. Major benefit expansions like Medicare Part D, which funded
more prescription drugs for seniors, added to entitlement spending.
At the same time, the issue of debt had receded in
the public consciousness, according to polling by Gallup. And in the depths of
the Covid-19 crisis, members of both parties agreed: Debt was a far-off concern
relative to rescuing the American economy.
---- But now, with the debt having tripled as a
share of economic output over the past 25 years and interest rates on the
10-year Treasury yield at 4.5 percent, there’s not much “fiscal space” — a
nebulous term that basically equates to Washington’s willingness to spend money
without courting disaster — in the event of another downturn.
“Everybody wants to make sure that we can re-enact
this recovery the next time we have a recession,” Mr. Madowitz said. “We don’t
want to be in a position where we are too worried about fiscal space and don’t
do enough again.”
More
Even Progressives Now Worry About the Federal Debt – DNyuz
Gloom deepens among UK businesses, Lloyds
survey shows
31 January 2025
LONDON (Reuters) - British businesses
turned more pessimistic in January, extending a run of falling corporate
confidence to five months, but there were some more hopeful views about trading
prospects for the coming year, according to a survey published on Friday.
In the latest sign of gloom among
businesses who were hit by the announcement of a 25 billion-pound ($31 billion)
tax increase in October, the Lloyds Bank Business Barometer fell by two points
to 37%, its lowest in a year.
Finance minister Rachel Reeves sought this
week to lift business morale by confirming her support for an expansion of
London's Heathrow Airport and other development projects.
The Lloyds survey - which has been running
since 2002 - remains above its long-run average of 29%, but has been dragged
down for four of the last five months by businesses' ebbing optimism about the
economy.
"Changes in confidence can sometimes
be sudden and sharp, but what we have seen recently has been a more gradual and
measured decrease," Hann-Ju Ho, senior economist at Lloyds Bank Commercial
Banking, said.
However, an improvement in the survey's
measure of trading prospects suggested companies were becoming more confident
about their ability to cope with the economic slowdown, he added.
The survey included details likely to be
noted by the Bank of England which is expected to cut interest rates next week
on signs of loss of momentum in the economy.
A gauge of hiring plans weakened slightly
to its lowest since June last year and the share of firms planning to increase
their prices was its lowest in five months.
The survey was based on responses from
1,200 companies between Jan. 3 and Jan. 17.
Gloom deepens
among UK businesses, Lloyds survey shows
Covid-19
Corner
This section will
continue until it becomes unneeded.
TRUMP'S FIRST COVID MISTAKE
Despite early human intelligence about the virus in Wuhan, the president
was slow to act
Seymour Hersh Jan
30, 2025
This is a story about the
very early days of what would become a worldwide pandemic that led to more than
7 million deaths and put the United States, and the entire world, on hold for
months. It was a crisis that was mismanaged by President Donald Trump in ways
not known at the time because the president and his senior aides chose not to
listen to the unwanted facts that the American health and intelligence
communities had obtained.
I learned this week that
a US intelligence asset at the Wuhan Institute of Virology in China, where the
Covid virus was first observed, is safe and out of danger. The asset, highly
regarded within the CIA, was recruited while in graduate school in the United
States and provided early warning of a laboratory accident at Wuhan that led to
a series of infections that was quickly spreading and initially seemed immune
to treatment. As is the case today, many senior US officials were reluctant to
tell the president what he did not want to hear. But early studies dealing with
how to mitigate the oncoming plague, based on information from the Chinese
health ministry about the lethal new virus, were completed late in 2019 by
experts from America’s National Institutes of Health and other research
agencies. Despite their warnings, a series of preventative actions were not
taken until the United States was flooded with cases of the virus. All of these
studies, I have been told, have been expunged from the official internal
records in Washington, including any mention of the CIA's source inside the
Chinese laboratory. It was a cover-up to protect a president who did not do the
right thing.
More, subscription
required.
TRUMP'S FIRST COVID MISTAKE - Seymour Hersh
Technology
Update.
With events happening
fast in the development of solar power and graphene, I’ve added this section.
Exclusive:
Images show China building huge fusion research facility, analysts say
By Gerry
Doyle
January 28, 2025 12:06 PM GMT
SINGAPORE, Jan 28 (Reuters) - China
appears to be building a large laser-ignited fusion research centre in the
southwestern city of Mianyang, experts at two analytical organisations say, a
development that could aid nuclear weapons design and work exploring power
generation.
Satellite photos show four outlying
"arms" that will house laser bays, and a central experiment bay that
will hold a target chamber containing hydrogen isotopes the powerful lasers
will fuse together, producing energy, said Decker Eveleth, a researcher at
U.S.-based independent research organisation CNA Corp.
It is a similar layout to the $3.5
billion U.S. National Ignition Facility (NIF) in Northern California, which in
2022 generated more energy from a fusion reaction than the lasers pumped into
the target - "scientific breakeven".
Eveleth, who is working with analysts at
the James Martin Center for Nonproliferation Studies (CNS), estimates the
experiment bay at the Chinese facility is about 50% bigger than the one at NIF,
currently the world's largest.
The development has not been previously
reported.
"Any country with an NIF-type
facility can and probably will be increasing their confidence and improving
existing weapons designs, and facilitating the design of future bomb designs
without testing" the weapons themselves, said William Alberque, a nuclear
policy analyst at the Henry L. Stimson Centre.
China's foreign ministry referred
Reuters questions to the "competent authority". China's Science and
Technology Ministry did not respond to a request for comment.
The U.S. Office of the Director of
National Intelligence declined to comment.
In November 2020, U.S. arms control
envoy Marshall Billingslea released satellite images he said showed China's
buildup of nuclear weapons support facilities. It included images of Mianyang
showing a cleared plot of land labeled "new research or production areas
since 2010".
That plot is the site of the fusion
research centre, called the Laser Fusion Major Device Laboratory, according to
construction documents that Eveleth shared with Reuters.
NUCLEAR
TESTING
Igniting fusion fuel allows researchers
to study how such reactions work and how they might one day create a clean
power source using the universe's most plentiful resource, hydrogen. It also
enables them to examine nuances of detonation that would otherwise require an
explosive test.
The Comprehensive Nuclear Test Ban
Treaty, of which both China and the United States are signatories, prohibits
nuclear explosions in all environments.
Countries are allowed
"subcritical" explosive tests, which do not create nuclear reactions.
Laser fusion research, known as inertial confinement fusion, is also allowed.
More
Exclusive: Images show China building huge fusion research facility,
analysts say | Reuters
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt Clocks (usdebtclock.org)
This
weekend’s music diversion. More von
Suppe again. I had the privilege to hear this played on Paddington Station
forecourt by the British Rail, Western Region orchestra, complete with rail
announcements. They got a standing ovation and not just because in those terrible
BR days, there were few seats on the forecourt.
Approx. 7 minutes.
Franz
von Suppé - Leichte Kavallerie - Franz Welser-Möst
Franz von Suppé -
Leichte Kavallerie - Franz Welser-Möst
This
weekend’s chess diversion Approx 11
minutes.
"Surprising
the Surpriser!" || Warmerdam vs Gukesh || Tata Steel (2025)
"Surprising
the Surpriser!" || Warmerdam vs Gukesh || Tata Steel (2025) - YouTube
This
weekend’s final diversion. That Washington plane crash. Approx 14 minutes. Great comments section.
Analyzing
the Mid-Air Collision Over the Potomac: A Detailed Examination of ATC
Communications
"I would have made a good Pope."
President Richard Nixon.
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