Baltic
Dry Index. 1877 -12
Brent Crude 61.95
Spot Gold 4389 Spot Silver 74.31
US 2 Year Yield 3.45 -0.01
US Federal Debt. 38.472 trillion US GDP 31.674 trillion.
I am favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible.
Milton Friedman
As we come to the end of 2025, an uncertain, volatile 2026 lies ahead.
The increasing demise of the dollar reserve standard?
An increasingly global belligerent President Trump?
Will China invade Taiwan?
Germany to drag the rest of the EU into recession?
US tariffs cause a global recession?
An increasingly electrified world drives copper and silver prices to all time highs?
Asia-Pacific markets mostly fall on penultimate
day of the year
Published Mon, Dec 29 2025 6:45 PM EST
Asia-Pacific markets mostly fell Tuesday,
after the tech sell-down on Wall Street continued on AI bubble fears.
Nvidia shares
dropped more than 1% Monday stateside, giving back some of its more than 5%
gain in last week’s period. Palantir
Technologies and Meta
Platforms also suffered losses, as did Oracle.
Japan’s Nikkei 225 was down 0.26%,
while the broad-based Topix was 0.27% lower.
Shares of Softbank Group Corp slipped
over 2% before paring some losses, after the company announced a deal late
Monday to buy data center investment firm DigitalBridge for $4 billion as
part of its artificial intelligence push.
SoftBank CEO and Chairman Masayoshi Son
said the acquisition “will strengthen the foundation for next-generation AI
data centers” and advance the firm’s vision to become a leading “Artificial
Super Intelligence” platform provider. Shares of DigitalBridge jumped about 10%
after the announcement.
South Korea’s Kospi was flat, while the
small-cap Kosdaq declined 0.99%, leading losses in Asia.
Hong Kong’s Hang Seng index bucked the
trend and rose 0.41%, while the CSI 300 in mainland China was flat.
Investors will be focused on China’s
military exercises around Taiwan, after the world’s second-largest economy
announced new drills surrounding the island Monday.
Taiwan’s President Lai Ching-te said that Taiwan will “act responsibly
and not escalate conflict,” but also said that the “frequent escalation of
military pressure” by China was not something a responsible power should do.
The Taiwan Weighted Index fell
0.1%, with major tech names like Taiwan Semiconductor Manufacturing
Company and Hon
Hai down about 1%.
Australia’s S&P/ASX 200 was flat,
after registering gains earlier in the day.
U.S. futures were little changed in early
Asian hours.
Overnight in the U.S., the S&P 500 dropped 0.35%,
while the Nasdaq Composite shed
0.50%. The Dow Jones
Industrial Average pulled back by 0.51%.
Traders will be looking for home price
data due Tuesday stateside at 9 a.m. ET, and the Federal Reserve’s December
meeting minutes at 2 p.m. ET.
Asia-Pacific
markets mostly fall on penultimate day of the year
Wall Street Sees Only Good Times Ahead
December 29, 2025 at 10:58 PM GMT
Given the near-continuous breaking of
records these past few years, it’s probably unsurprising to most that big banks
and boutique investment shops are predicting the US stock market will
rally in 2026. If it does, it would be the fourth straight year for such
gains and mark the longest winning streak in nearly two decades.
Rising unemployment, sticky inflation,
trade wars, the affordability crisis and fears about Fed
independence, government data and an AI bubble notwithstanding, Wall Street’s
denizens are telling each other only good times lay ahead.
And why not? “The pessimists have
just been wrong for so long that people are kind of tired of that schtick,”
said veteran market strategist and longtime bull Ed Yardeni. After all,
the S&P 500 Index is up some 90% since its October 2022 low. In
fact, if forecasters are correct about next year, stocks are heading for their
longest stretch of annual gains since the
lead-up to the global financial crisis. —David
E. Rovella
Wall
Street Sees Only Good Times Ahead: Evening Briefing Americas - Bloomberg
But….
The Dollar Is Facing an End to Its Dominance
Questions around the reliability of the US
greenback are dulling the luster of what was the world’s currency of trade.
New, global alternatives are emerging.
Dec 28, 2025 5:00 AM
2026 will be the year
when US dollar dilution—the quiet erosion of its global dominance as countries
trade and pay in alternatives—starts to build momentum. The more Washington
uses the dollar as a weapon, the more the world builds ways to circumvent it.
America’s share of global trade has fallen from one-third in 2000 to just one-quarter
today. As emerging economies trade more with each other, the dollar is less
central to the flow of goods. Indian and Russian trade now settles in rupees,
dirhams, and yuan. More than half of China’s trade now moves through CIPS,
China’s own cross-border payment system, instead of SWIFT—the global messaging
network long dominated by Western banks. Other trading partnerships like
Brazil-Argentina, UAE-India, and Indonesia-Malaysia are also piloting local currency
settlements.
At the same time, central banks around the
world are starting to accumulate currencies other than the dollar as reserves.
The dollar made up 72 percent of global reserves in 1999. Today, it’s
down to 58 percent—and falling. A currency is safe only if
it’s perceived to be safe. But perceptions are shifting.
Ballooning US fiscal deficits—projected
at $1.9 trillion in 2025—together with a widening
current-account gap, estimated at 6 percent of GDP, are adding pressure to the dollar.
On top of this is the overuse of the “printing press,” meaning the creation of
large amounts of new money to finance spending. Once cushioned by the dollar’s
“exorbitant privilege” as the world’s dominant reserve currency, these trends
now raise questions about global confidence in the greenback.
Even the US Treasury market, once assumed
to be infinitely liquid and universally acceptable as pristine collateral, has
lost its luster. As of now, there is over $27 trillion in US Treasury bonds—loans from investors
to the government, backed by the full faith and credit of the United
States—circulating in the global financial system. That means more bonds to
trade, more to settle, more to repo, and more to absorb on dealer balance
sheets. But large financial institutions like JPMorgan, Citi, and Goldman that
have been primary dealers providing liquidity, haven’t scaled accordingly.
Currently, if everyone wants to sell, there are not enough balance sheets to
absorb the selling—unless the Fed steps in. This has been the case since the
March 2020 Treasury market meltdown, which marked a historic failure of the
world’s most liquid and trusted market—US Treasuries—to function in a moment of
stress without central bank intervention.
In 2026, the real threat to the dollar may
not come from a single rival currency. Instead, it will come from alternative
payment and settlement systems built to bypass dollar-based channels—especially
in emerging markets that never fully enjoyed the security of dollar liquidity
or reliable access to dollar networks.
More
The Dollar Is Facing
an End to Its Dominance | WIRED
China's digital yuan to become interest-bearing
next year, state broadcaster says
By Reuters December 29, 2025 12:41 PM GMT
BEIJING/SHANGHAI, Dec 29 - Holdings of
China's digital yuan, or e-CNY, will start generating interest income next year
under a new framework, state broadcaster CCTV said on Monday, as China steps up
efforts to promote the use of its central bank digital currency.
Starting January 1, e-CNY stored in
wallets will earn interest based on demand deposit rates, becoming the world's
first interest-bearing central bank digital currency, according to CCTV. It
means e-CNY is advancing into an era of "digital deposits", from
"digital cash", CCTV said.
"This will help increase users'
willingness to adopt the digital yuan, expand its usage scenarios, and further
solidify China's leading position in the global exploration of central bank
digital currencies," the state broadcaster said.
The use of China's digital yuan is
currently limited to some government agencies and state companies. Most
transactions via China's ubiquitous digital payment platforms Alipay and WeChat
Pay do not involve e-CNY.
The People's Bank of China (PBOC) last
month reaffirmed its tough stance on cryptocurrencies and vowed to crack
down on illegal activities involving stablecoins.
Meanwhile, the PBOC is stepping up efforts
to promote the use of its own digital currency.
The central bank has set up a global
operation centre in Shanghai to promote international use of the digital yuan,
and has said it would support more commercial banks to operate e-CNY
businesses.
Earlier on Monday, Financial News, a
publication run by the PBOC, said the central bank will issue an action plan on
digital yuan management.
A new framework for digital yuan
measurement, management, operation and ecosystem will take effect on January 1,
the newspaper said.
China's digital
yuan to become interest-bearing next year, state broadcaster says |
Reuters
Gold bounces back from two-week low, silver
recovers
By Ishaan Arora December 30, 2025 4:48 AM GMT
Dec 30 (Reuters) - Gold rose on Tuesday to
recover from a two-week low hit in the previous session on year-end
profit-taking that sparked a broad pullback in precious metals from earlier
peaks.
Spot gold was up 0.7% at $4,363.79 per
ounce, as of 0322 GMT, after hitting a record high of $4,549.71 on Friday. It
fell to its lowest since December 17 on Monday, also its sharpest daily loss
since October 21.
"The earlier run was overextended in
the last one week or so, which makes (the precious metals) much more vulnerable
for the leveraged long positions being squeezed on the downside," said
Kelvin Wong, senior market analyst at OANDA.
The relative strength indices (RSI) for
both gold and silver fell from overbought territory on Monday.
Bullion has staged a stellar run in 2025,
climbing 66% so far.
Interest rate cuts and bets of further
easing by the U.S. Federal Reserve, geopolitical conflicts, robust demand from
central banks, and rising holdings in exchange-traded funds have fueled gold's
rally this year.
Traders expect at least two interest rate
cuts next year. Non-yielding assets tend to do well in a low-interest-rate
environment.
Spot silver was up 3% at $74.41 per ounce,
after hitting an all-time high of $83.62 in the previous session. Silver
registered its biggest daily loss since August 11, 2020, on Monday.
Silver has gained 154% year-to-date, far
outpacing gold, propelled by its designation on the critical U.S. minerals
list, supply constraints, and low inventories amid rising industrial and
investment demand.
"I'm expecting the longer-term rally
to continue for both gold and silver with price targets in the next six months
at $5,010/oz for gold, and $90.90 for silver," Wong said.
Spot Platinum rose 1.1% to $2,132.86 per
ounce. On Monday, it dropped the most in a day ever recorded after having
touched an all-time high of $2,478.50.
Palladium added 1.1% to $1,634.29 per
ounce, after its value dropped by 16% on Monday.
Gold
bounces back from two-week low, silver recovers | Reuters
In other news.
Amazon halts plans for drone delivery in Italy
By Reuters December 28, 2025 10:30 AM GMT
ROME, Dec 28 (Reuters) - Amazon (AMZN.O), opens
new tab said
on Sunday it has decided not to pursue plans to deliver goods by drone in
Italy, saying that while it had made good progress with aerospace regulators,
broader business regulatory issues did not support the project.
The Italian civil aviation ENAC called the
decision unexpected, saying in a statement on Saturday the move was motivated
by company policy, linked to "recent financial events involving the
Group".
The company had announced in December 2024
the successful completion of initial tests of delivery
drones in San Salvo, a town in the central Abruzzo region.
In a statement to Reuters on Sunday,
Amazon said:
"Following a strategic review, we
have decided to stop our commercial drone delivery plans in Italy".
"Despite positive engagement and
progress with Italian aerospace regulators, the broader business regulatory
framework in the country does not, at this time, support our longer-term
objectives for this program," Amazon added.
Amazon halts plans
for drone delivery in Italy | Reuters
Waymo's San Francisco outage raises doubts over
robotaxi readiness during crises
December 27, 2025 2:01 PM GMT
SAN FRANCISCO, Dec 27 (Reuters) - A
widespread power outage in San Francisco that led to Waymo robotaxis stalling
and snarling traffic earlier this month has raised concerns about the readiness
of autonomous vehicle operators to tackle major emergencies like earthquakes
and floods.
Driverless taxis from Alphabet (GOOGL.O), opens
new tab unit
Waymo, a ubiquitous feature on the city's streets, were stuck at intersections
with their hazard lights turned on as traffic lights stopped working following
a fire at a PG&E substation that knocked out power to roughly one-third of
the city on December 20, videos posted on social media showed. Waymo halted
operations, resuming a day later.
The incident has renewed calls for
stricter regulation of the nascent but fast-growing industry as other companies
including Tesla (TSLA.O), opens
new tab and
Amazon's (AMZN.O),
opens new tab Zoox
race to expand robotaxi services in several cities.
"If you get a response to a blackout
wrong, regulators are derelict if they do not respond to that by requiring some
sort of proof that the earthquake scenario will be handled properly," said
Philip Koopman, a Carnegie Mellon University computer-engineering professor and
autonomous-technology expert.
In a statement on Tuesday, Waymo said that
while its robotaxis are designed to handle non-operational traffic signals as
four-way stops, they occasionally request a confirmation check. Though the
vehicles successfully traversed more than 7,000 darkened signals on Saturday,
"the outage created a concentrated spike" in confirmation requests
that "led to response delays contributing to congestion on
already-overwhelmed streets," Waymo said.
Robotaxi operators around the globe use
remote access by humans - known in the industry as "teleoperation" -
in varying degrees to monitor and control vehicles. Waymo, for example, has a
team of human "fleet response" agents who respond to questions from
the Waymo Driver, its bot, when it encounters a particular situation.
But such remote assistance has its
limitations, and the Waymo outage highlights the need to regulate how robotaxi
operators use the technology, said Missy Cummings, director of the George Mason
University Autonomy and Robotics Center and former adviser to the U.S. road
safety regulator.
"The whole point of having remote
operations is for humans to be there when the system is not responsive in the
way it should be," she said. "The federal government needs to
regulate remote operations," Cummings said. "They need to make sure
that there's backup remote operations when there's some kind of catastrophic
failure."
More
Waymo's San
Francisco outage raises doubts over robotaxi readiness during crises | 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.
Payment
giants are preparing for a world where AI agents book flights and shop for you
Published
Mon, Dec 29 2025 1:03 AM EST
Major
payment and tech companies are racing to build the infrastructure for what they
see as the next evolution of global commerce: artificial intelligence agents
that can perform searches, compare prices, and make purchases on behalf of
consumers.
The
trend is referred to as “agentic commerce,” and reflects consumers’ growing
reliance on chatbots for everyday tasks, including searching for products and
deals online.
However,
until recently, those tools have lacked a critical function. Shoppers could
search and compare inside a chatbot, but still had to leave the interface to
complete a purchase.
Payment
giants like Visa and Mastercard say that is changing. Over the past year,
both companies have been racing to forge the systems and partnerships
needed for this next step in commerce, with early pilots of the technology
already underway.
Payment
executives told CNBC that the technology will become a reality in 2026 and
could be more transformative than the rise of e-commerce platforms such
as Amazon.
“A
big shift in commerce happened when payments moved from a mostly
brick-and-mortar world to an e-commerce world,” said Sandeep Malhotra, Mastercard’s EVP for Core
Payments in Asia Pacific.
“Now,
we are seeing the next shift, which is moving from the e-commerce world to an
agentic commerce world,” he said. “We have gone from cash to digital, now we’re
going from digital to intelligent.”
How
it will work
While
many of the finer details of how and where agentic commerce will function are
still being worked out, the term generally refers to AI systems that act on
behalf of users to discover products, compare deals and complete payments
within the chatbot.
This
could make shopping more seamless by curating options based on specific
requests, instead of navigating multiple websites or apps in traditional
e-commerce.
Payment
executives say one of the obvious early use cases could be flight and vacation
bookings. For instance, a user might ask an AI commerce agent: “Find me the
cheapest red-eye flight from Singapore to Tokyo under $500 with no
stops.”
The
agent will then be able to scan, provide options, book tickets and pay using
the user’s stored payment credentials — all within the chat interface.
Mastercard’s
Malhotra said the technology could also allow shoppers to authorize agents to
make purchases even when they are offline, such as automatically
buying a product if its price drops below a preset
threshold.
Early
pilots
Visa and
Mastercard have been rolling out their initial frameworks to secure bot-driven
transactions, and have already completed pilot programs with selected users and
merchants.
T.R.
Ramachandran, Visa’s APAC Head of Products and Solutions, told CNBC that the
commercial use of personalized, secure agent transactions could come as early
as the first quarter of 2026.
With
over half of Visa’s overall volume already through e-commerce and data showing
demand for AI to assist with shopping, the ground is fertile for agentic
commerce, Ramachandran said.
More
An AI agent could
soon compare deals, book flights and pay the bills
Covid-19
Corner
This
section will continue only occasionally when something of interest occurs.
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.
China mandates ‘No fire, no explosion’ safety rule for EV
batteries
December 28, 2025 | 08:00 pm PT
China has made its electric-vehicle
battery safety requirements compulsory for the first time, introducing a strict
“no fire, no explosion” rule as part of a sweeping update to national
standards, state broadcaster CCTV reported.
The updated EV battery safety
requirements are part of a revised set of national standards across 13 key
sectors, issued under an action plan by seven government departments. These new
regulations will take effect on July 1, 2026, with a transition period for
existing EVs approved under previous standards, extending to July 1,
2027, CarNewsChina reported.
The updated framework targets three main
areas: tighter energy-efficiency and emissions benchmarks, stronger
requirements for product safety and quality, and expanded rules on battery
recycling and circular use.
Under the new standards, power batteries
used in electric vehicles must not ignite or explode—criteria that are now
mandatory technical requirements at the national level for the first time.
Liu Hongsheng of China’s State
Administration for Market Regulation said the move marks a significant advance
in EV safety oversight. He noted that the compulsory standards will push
automakers to improve battery design and thermal-management systems, resulting
in safer new-energy vehicles, Interesting Engineering reported.
China mandates ‘No fire, no explosion’ safety rule for EV batteries -
VnExpress International
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt Clocks
(usdebtclock.org)
The key insight of Adam Smith's Wealth of Nations is
misleadingly simple: if an exchange between two parties is voluntary, it will
not take place unless both believe they will benefit from it. Most economic
fallacies derive from the neglect of this simple insight, from the tendency to
assume that there is a fixed pie, that one party can gain only at the expense
of another.
Milton Friedman
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