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Archive for the ‘economics’ Category


Commenting on today’s sheer market chaos as the US and UK return from holiday, Bloomberg writes that “fixed-income markets have descended into panic amid mounting concern over the risk of Italy leaving the euro or leading to its break-up” and while Italy is suffering the biggest losses in peripheral debt, core bonds and Treasuries are spiking higher.

For those who stayed away from market news over the holiday weekend, this is what happened and why we are here today: Italy PM-designate Conte gave up on efforts of forming a government after Italian President Mattarella rejected Eurosceptic Paolo Savona for the Economy Minister position because the appointment would have “alarmed markets and investors, Italians and foreigners” (yes, very ironic in retrospect, although just as we predicted would happen). Mattarella then summoned former-IMF senior director Cottarelli to meet in a move viewed by some as laying the groundwork for a technocratic government. Forza Italia said they would not support this government, and 5SM and League set their sights on the now highly likely new elections (touted from September 9th). Both 5SM and League saying they will evaluate their coalition in these new elections.

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The Pentagon reportedly plans to spend more than $1 billion over the next few years developing advanced robots for military applications that are expected to complement soldiers on the battlefield, and potentially even replace some of them. As the US government uses $1,000,000,000 of your tax dollars to build killer robots, a new report just showed that forty percent of adults in America would have had to borrow money or sell something to pay an emergency expense of just $400.

The government’s war spending has reached epic proportions and all Americans have to show for it is poverty, less freedom, and now, a potential Terminator-esque future in which to look forward.

Army Project Manager Bryan McVeigh told Bloomberg that over 800 robots have already entered the ranks in the past two years.

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“When you can lie about money, you can lie about anything.” ~David Morgan

We can argue about the definition(s) of inflation until the cows come home – some economists spend a career trying to nail it down.

But for clarity’s sake, we’ll use the definition of the Austrian School (Mises.org) as an increase in the money supply. This is really the correct one, regardless of any bias of dogma, “schooling” or the mainstream media. Although most everyone defines inflation as an increase in the price of goods and services, this is actually a result.

Most of us have been taught that inflation is all right as long as it doesn’t get out of control. In the short term, it can benefit those able to manage cash flow in business or with real estate for which they can service loan interest and taxes.

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China has opened a railway link with Iran as a response to the sanctions set on the Middle Eastern country by President Donald Trump’s administration after Trump recently ended the Iran deal.

Meanwhile, the U.S. and Israel are working to spin the narrative about the protest in Gaza after Israel massacred 58 Palestinians and injured scores of others by blaming Hamas. This sets the stage to blame Iran, which is known to fund Hamas, according to the group’s new leader Yehiyeh Sinwar, who stated last year they repaired relations with Iran after a five-year rift. Other countries are choosing to work with the Middle Eastern country.

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Shale oil rig

International regulations on the fuels used in shipping could tighten the oil market and push prices up to $90 per barrel in the next two years.

The International Maritime Organization (IMO) has new rules coming into effect at the start of 2020 requiring shipowners to dramatically lower the concentration of sulfur used in their fuels.

Ships plying the world’s oceans tend to use heavy fuel oil, a bottom-of-the-barrel fuel that is especially dirty. The IMO regulations are targeting this fuel because of its high sulfur content. Current rules allow sulfur concentrations of 3.5 percent, but by 2020 ships must slash that to just 0.5 percent. “Effectively, bunker fuel is the last refuge for sulphur, which has been driven out of most other oil products,” the IEA wrote earlier this year in its Oil 2018 report.

Shipowners have several options to achieve this goal, and there probably won’t be a single approach. They could install scrubbers to remove sulfur from the fuel, switch to low-sulfur fuels, or switch to LNG. Scrubbers are thought to be costly, although some shipowners see the payback period as worth it. LNG is also an expensive route.

But a lot of shipowners will switch over to lower-sulfur fuels such as gasoil, a distillate similar to diesel. The IEA says that by 2020, demand for gasoil will shoot up to 1.74 million barrels per day (mb/d), an increase of over 1 mb/d relative to 2018. That will displace the heavy fuel oil that is currently widespread. The IEA says that high-sulfur fuel oil demand will crater from 3.2 mb/d in 2019 to just 1.3 mb/d in 2020.

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Normally, I don’t step out and make such bold statements as gold mining supply IS collapsing; however, in this case it seems appropriate. We have reported on several occasions just in the past week, here, here and here how some of the largest mining companies in the world are seeing massive reductions in gold production. While funding continues to flow into mining companies, new discoveries, with few exceptions, are smaller and have much shorter production lifespans.

We recently interviewed (MUST LISTEN) the President/CEO of First Mining Gold, Jeff Swinoga, and his company is on the verge of bringing online one of the largest discoveries in some time. The Springpole project has an inferred 5 million ounces of gold in the ground. While 5 million ounces is a very impressive, and large, discovery the gold market needs about 10-15 more of these to keep pace with the current trend of gold acquisitions by central banks, the top government bullion mints and private bullion mints around the world. The gold discoveries are not manifesting.

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Oil Industry

After two months of an almost uninterrupted increase, crude oil is set for even more volatility on a string of political events that could see it either touch US$80 or even higher by the end of June or, conversely, slump to deep lows again.

President Donald Trump will start unwinding the string today as he announced his decision on the Iran deal. The prevailing analyst opinion is that economic sanctions will be reinstated within the next couple of months.

While this would be naturally bullish for oil prices, some analysts note that the effect of the sanctions has already been factored into prices, so any immediate impact will be limited. What’s more, CNBC reported recently, that the effect of U.S. sanctions against Iran on the country’s international shipments of crude will also be limited: China and India are unlikely to reduce their intake of Iranian crude as are other buyers, who were previously on the U.S.’ side with regard to the sanctions.

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Sad but true – the CFL and LED “Energy Efficient” light bulbs we’ve all been told were good for the planet aren’t good for it at all. Additionally, they can also make people and animals very sick. Extensive research has already proven this.

Regardless, many utility companies have been giving customers free CFL and LED light bulbs for many years anyway. Many cities are replacing incandescent light bulbs with LED ones for street lights to save money. There have been many reported problems:

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By John Vibes

Earlier this week, The Free Thought Project reported that Pink Floyd frontman Roger Waters stopped a concert in Barcelona to warn the crowd about pro-war propaganda that is coming from a group in Syria known as the White Helmets.

Waters’ first encounter with the White Helmets was actually long before his April 13 concert, back in October 2016 when Saudi-British billionaire Hani Farsi invited him to a lavish fundraiser that he was holding on behalf of the White Helmet affiliated group “The Syria Campaign.”

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The University of California system voted in March to raise tuition for out-of-state students by nearly $1,000, a hike that will not apply to illegal alien students.

The system’s board of regents approved the proposal to increase out-of-state tuition by $978 by a 12-3 vote, reported The College Fix, but California law allows illegal alien students to evade this charge by enrolling as in-state students.

“All students — regardless of immigration status — are subject to the same tuition and fee structures, based on their residency status,” UC spokeswoman Clair Doan told the Fix.

California assembly bill 540 mandates that illegal alien students can obtain in-state tuition if they attend high school in the state for a minimum of three years and earn a California high school diploma.

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Vermont is headed towards blockchain recording of real estate transactions. Other states will follow.

Stories have been circulating about Vermont testing blockchain for recording real estate transactions.

A contact at Propy informs me that the city of South Burlington, Vermont, just became a global blockchain leader by locking in the first US real estate deed completely on blockchain.

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Banks like to pretend that they’re so much more established and secure than the world of cryptocurrencies, but as anybody who pays close attention to the headlines would know…that’s just not the case…

Setting aside all of their rhetoric about embracing the blockchain, banks have mostly avoided or opposed cryptos (Goldman Sachs, sensing the opportunity for profit, is one notable exception), often citing their volatility and the ease with which they can be used to launder money as qualities that disqualify them from being taken seriously (though, as we recently witnessed with the US dollar, perhaps banks need to rework this volatility argument a bit).  Even yesterday’s announcement of the first criminal charges against a cryptocurrency trader pales in comparison to the many, many crimes that banks (or even one bank) have settled allegations of. The real answer to why the banks’ dislike cryptocurrencies is probably because they feel threatened. The recent selloff notwithstanding, the rise of cryptocurrencies has continued unabated, despite the efforts of some of the most powerful governments on Earth, while the concept is still very young, it does have potential to shake up the aging fiat system. In order to understand the race between the banks and cryptocurrencies, we developed a visual to see just how “David” is comparing to “Goliath.”

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Speaking to the Senate Foreign Relations Committee, Assistant Secretary of Defense Randall Schriver on Tuesday revealed that the Pentagon expects the cost of the Afghan War in 2018 to come to $45 billion.

Assistant Secretary of Defense Randall Schriver and Deputy Secretary of Defense John Sullivan

This obviously is subject to change, in the face of more probable escalations. The cost includes $13 billion in direct cost for US troops already committed, $5 billion to prop up Afghanistan’s own struggling military, and other funding for logistics, aid projects, and other assorted expenses.

That’s a lot of money to throw at the war in its 16th year, and there is a lot of questioning of the merits among senators of both parties, concerned that yet another doubling down on a war long since lost may not be the most prudent of courses.

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