A safe, healthy, happy,
and more prosperous 2021 to all.
Will 2021 be the year dollar supremacy
dies? Will the Fed get forced into negative interest rates? Will the
Biden-Harris socialist government get forced into Universal Basic Income for
all?
What new self-inflicted calamity can
Euroland think up for itself in 2021?
What if all the new SARS vaccines don’t
prevent transmission?
Stick around for 2021. We are about to
find out, and how!
For every complex problem there is an answer that is clear,
simple, and wrong.
H. L. Mencken
More weakness seen as dollar
posts worst year since 2017
Karen BrettellThu., December 31, 2020, 1:01 a.m. GMT
NEW YORK
(Reuters) -The dollar posted its biggest yearly loss since 2017 on Thursday,
capping off a manic year that saw the currency serve as a safe haven in March
when panic over the spread of COVID-19 in the United States peaked, before
dropping on unprecedented Federal Reserve stimulus.
The
greenback soared to a three-year high of 102.99 against a basket of currencies
in March, before ending the year at 89.96, down 6.77% on the year and 12.65%
from its March high.
An improving
global economic outlook as COVID-19 vaccines are rolled out, rock-bottom U.S.
interest rates and ongoing Fed bond purchases have dented the dollar's appeal.
Expectations
of additional fiscal stimulus and rising fiscal and current account deficits
are additional headwinds that are likely to hurt the U.S. currency over the
coming year.
"I
expect the dollar to depreciate further over the next few years as the Fed
keeps rates at zero whilst maintaining its bloated balance sheet," Kevin
Boscher, chief investment officer at asset manager Ravenscroft, told clients.
"The
magnitude of the twin deficits dwarfs any other major economy," he said.
Major crises can effect rapid changes in public opinion
that otherwise would have required years or even decades to develop. Among the
permanent opinion shifts of the COVID-19 pandemic, I expect to see a new — and
perhaps even bipartisan — move toward universal basic income (UBI) or something
like it, an evolution influenced by Americans' experience with pandemic relief
checks, both the fact of them and the drawn-out political fights surrounding
their passage.
UBI is exactly what it
sounds like: a government income program which is not tied to recipients'
employment (like unemployment insurance), age (like Social Security), income
(like TANF),
medical care (like Medicare or Medicaid), or food purchases (like SNAP).
It's simply a monthly cash stipend that goes to everyone. The stipend could be
big enough to cover all basic expenses (this is called a full UBI) or it could
merely supplement other income (former Democratic presidential candidate Andrew
Yang's proposal of a $1,000 per month "Freedom
Dividend" is an example of this sort of partial UBI).
A year ago, when Yang was promoting his dividend, he
was a clear outlier in mainstream politics — maybe not entirely outside the Overton
Window, but perched precariously on the sill. Surveys in 2017
and 2019
showed a consistent minority of 43 percent were supportive of the idea.
This year, the polling picture is
revealingly messy. An August
poll by Pew Research Center showed 45 percent support for UBI,
statistically identical to the prior year's 43 percent. But Pew asked about
"$1,000 per month for all adult citizens, whether or not they work,"
a phrasing I'm guessing raised concerns about mass UBI-induced indolence. A Hill-HarrisX
poll published the same month described UBI as a way to "help Americans
whose jobs are threatened by automation." With that framing, 55 percent
were in favor of UBI. When UBI is linked to COVID-19, support moves even
higher. A Data for Progress survey
in April found 66 percent of Americans — including 52 percent of
Republicans — were supportive of a $1,000 monthly payment for the duration of
the pandemic.
David Rosenberg: Two big problems with the 'pent-up demand'
everybody is counting on
Here's
why the boost could be disappointing
Dec 31, 2020
You can’t go
anywhere these days and not hear about the pent-up demand “V-shaped” recovery
that awaits us once we all get vaccinated (or enough of us). This is premised
on the assumption that we will all be going out to eat, fly and do everything
that is fun and has been restricted, from movies to the theatre to the theme
park to the casino and the nearest hotel.
But there
are two issues here. First, these candidates for “pent-up demand release” come
to the grand total of 8.5 per cent of total consumer spending. That’s all we’re
talking about. The really big spending items in the services area are rents,
utilities and health care, which make up nearly 40 per cent of the aggregate
spending pie, and outlays here are actually up fractionally over the past year.
Of course,
there are other areas of service-sector spending that took it on the chin —
from housekeepers to day care to dental services — but they don’t trade on the
major stock market exchanges.
The second
issue is that spending growth in the goods sector actually benefited from the
pandemic, and the trend this past year doubled the historical norm. Because of
the pandemic, spending on goods in the United States rose US$180 billion more
than would have been the case had the crisis never happened. No doubt, the
plunge in cyclical services came to a larger US$325 billion. But that gap is
$145 billion, or less than one per cent of consumer spending.
That’s what
we are getting excited about? A one-per-cent lift?
When
pundits talk about pent-up demand, what other assumptions are they making? Are
they assuming that there will be no reversal or even levelling-off in the
booming goods sector?
US imposes new tariffs on
wines, other EU imports over Airbus-Boeing spat
Issued on: 31/12/2020 - 01:37
The United States announced Wednesday that it will impose
additional tariffs on French and German products as part of a long-running
dispute over subsidies for aircraft manufacturers Airbus and Boeing.
The tariffs are on “aircraft manufacturing parts from France and Germany,
certain non-sparkling wine from France and Germany, and certain cognac and
other grape brandies from France and Germany,” which will be added to the list
of products taxed since 2019, according to a statement from the US Trade Representative.
It said the move was in retaliation to tariffs imposed by
the European
Union which it considers unfair.
The decision is the latest twist in the 16-year trade
battle over aircraft subsidies that turned increasingly sour under the
protectionist instincts of US President Donald Trump,
and comes despite hopes for a trade truce following Joe Biden’s
election.
But Washington believes it has been penalized by the method
of calculation chosen, which, according to the Trump administration, has led to
an excessive amount of customs duties levied on American products.
“In implementing its tariffs... the EU used trade data from
a period in which trade volumes had been drastically reduced due to the
horrific effects on the global economy from the Covid-19
virus,” the USTR statement said.
“The result of this choice was that Europe imposed tariffs
on substantially more products than would have been covered if it had utilized
a normal period. Although the United States explained to the EU the distortive
effect of its selected time period, the EU refused to change its approach,” the
statement said.
As a result the US “is forced to change its reference
period to the same period used by the European Union,” it continued.
The US also deplored an EU decision to exclude the UK from
its calculations, which it argued unfairly increased the tariffs.
Brexit: United Kingdom exits
EU's orbit after 48 years
December 31, 2020
LONDON
(Reuters) - The United Kingdom left the European Union’s orbit on Thursday,
turning its back on a tempestuous 48-year liaison with the European project for
an uncertain post-Brexit future in its most significant geopolitical shift
since the loss of empire.
At 2300 GMT,
the Brexit transition period - which preserved de-facto EU membership after the
UK formally left the EU on Jan. 31 - expired.
The United
Kingdom joined the precursor to the EU on Jan. 1, 1973.
The whole aim of practical politics is to keep the populace
alarmed (and hence clamorous to be led to safety) by menacing it with an
endless series of hobgoblins, all of them imaginary.
H. L. Mencken
Covid-19 Corner
This
section will continue until it becomes unneeded.
WHO chief scientist not
confident vaccines prevent transmission
Even people who have received the vaccine could
infect others, Dr. Soumya Swaminathan warns
Dec 29,
2020 • Last Updated 1 day ago
Officials at the World Health Organization warned that the
COVID-19 pandemic that has ravaged every corner of the world “is not
necessarily the big one” — and that the novel coronavirus may never truly go
away.
What’s more, chief scientist Dr. Soumya Swaminathan said
the WHO hasn’t yet determined whether the approved vaccines being administered
in Canada, the U.S. and Europe are effective at preventing transmission, the
Guardian reported.
“I don’t
believe we have the evidence on any of the vaccines to be confident that it’s
going to prevent people from actually getting the infection and therefore being
able to pass it on,” Swaminathan said.
The top
three vaccines — Moderna, Pfizer-BioNTech and AstraZeneca — have been found in
large trials to prevent recipients from becoming sick or seriously ill, but
researchers are still trying to determine whether the vaccines prevent the
virus from spreading from the recipient to others.
Even if people have received the vaccine, countries still
need to assume that they should adhere to public health measures such as social
distancing. If a vaccine recipient wants to travel, he should still be required
to quarantine.
Moderna’s chief medical officer said last month he believes his company’s vaccine would
prevent transmission of the virus but there is not yet “sufficient evidence” of
that yet.
“When we start the deployment of this vaccine we will not
have sufficient concrete data to prove that this vaccine reduces transmission,”
Tal Zaks told Axios.
The first
goal of the vaccine was meant to prevent symptomatic disease, severe disease
and deaths, Swaminathan said.
Dr. Mark
Ryan, the head of the WHO emergencies program, said after that first goal has
been tackled, “we will deal with the moonshot of potentially being able to
eliminate or eradicate the virus.”
Ryan said,
“The existence of a vaccine, even at high efficacy, is no guarantee of
eliminating or eradicating an infectious disease. That is a very high bar for
us to be able to get over.”
Pandemic Exits 2020 With
Record Cases Across Globe: Virus Update
Bloomberg News
Updated on January 1, 2021, 8:00 AM GMT
One year after a mysterious pathogen first revealed itself
in Wuhan, China, the Covid-19 pandemic enters 2021 with no signs of slowing
down. Global daily deaths reached record highs this week, while U.S. infections
approached 20 million, almost twice as many as second-worst hit country India.
Countries from Japan to
South Africa ended 2020 with record daily cases. In the U.S., New York state
and Florida shattered their previous case records, while Texas saw a new high
for hospitalizations. The U.S. added 227,616 cases on Dec. 31. China and Brazil
became the latest to report infections of the new, highly
transmissible virus strain.
Vaccines remained the best hope for 2021. The World Health
Organization issued an emergency-use designation for Pfizer Inc.’s shot, a move
that could allow more countries to import and distribute the vaccine. Singapore
tightened restrictions on travelers from South Africa.
Key
Developments:
Global Tracker: Cases pass 83.4 million; deaths
exceed 1.8 million
The routine
things in Chris Long’s life used to include biking 30 miles three times a week
and taking courses toward a Ph.D. in eight-week sessions.
But since
getting sick with the coronavirus in March, Mr. Long, 54, has fallen into a
distressing new cycle — one that so far has landed him in the hospital seven
times.
Periodically since his initial five-day hospitalization,
his lungs begin filling again; he starts coughing uncontrollably and runs a low
fever. Roughly 18 days later, he spews up greenish-yellow fluid, signaling yet
another bout of pneumonia.
Soon, his oxygen levels drop and his heart rate accelerates
to compensate, sending him to a hospital near his home in Clarkston, Mich., for
several days, sometimes in intensive care.
“This will never go away,” he said, describing his worst
fear. “This will be my going-forward for the foreseeable future.”
Nearly a year into the pandemic, it’s clear that recovering from Covid-19’s initial onslaught can be an arduous,
uneven journey. Now, studies reveal that a significant subset of patients
are having to return to hospitals, sometimes repeatedly, with complications
triggered by the disease or by the body’s efforts to defeat the virus.
Even as vaccines give hope for stopping the spread of the
virus, the surge of new cases portends repeated hospitalizations for more
patients, taxing medical resources and turning some people’s path to recovery
into a Sisyphean odyssey that upends their lives.
“It’s an urgent medical and public health question,” said
Dr. Girish Nadkarni, an assistant professor of medicine at Mount Sinai Hospital
in New York, who, with another assistant professor, Dr. Anuradha Lala, is
studying readmissions of Covid-19 patients.
Data on rehospitalizations of coronavirus patients are
incomplete, but early studies suggest that in the United States alone, tens of
thousands or even hundreds of thousands could ultimately return to the
hospital.
A study by the Centers for Disease Control and Prevention of 106,543
coronavirus patients initially hospitalized between March and July found that
one in 11 was readmitted within two months of being discharged, with 1.6
percent of patients readmitted more than once.
In another study of 1,775 coronavirus patients discharged
from 132 V.A. hospitals in the pandemic’s early months, nearly a fifth were
rehospitalized within 60 days. More than 22 percent of them needed intensive
care, and 7 percent required ventilators.
And in a report on 1,250 patients discharged from 38 Michigan
hospitals from mid-March to July, 15 percent were rehospitalized within 60
days.
Next, some very useful vaccine
links kindly sent along from a LIR reader in Canada. The links come from a most
informative update from Stanford Hospital in California.
With events happening fast in the development of solar power and graphene,
I’ve added this section. Updates as they get reported. Is converting sunlight
to usable cheap AC or DC energy mankind’s future from the 21st
century onwards.
Finally, all you need to know about wind
turbines, but were afraid to ask.
Following the markets on both sides of the Atlantic since 1968. A dinosaur, who evolved with the financial system as it was perverted from capitalism to banksterism after the great Nixonian error of abandoning the dollar's link to gold instead of simply revaluing gold. Our money is too important to be left to probity challenged central banksters and crooked politicians.
