2020 Vision

By USAGOLD – Re-Blogged From Gold Eagle

Five charts to contemplate as we prepare for the New Year

 1. Gold’s annual returns 2000 to present

In the February edition of this newsletter, we ran an article under the headline:  Will 2019 be the year of the big breakout for gold? Though we would not characterize gold’s move to the upside so far this year as ‘the big breakout,’ 2019 has been the best year for gold since 2010 even with the recent correction taken into account.  Back in September when the price gold reached $1550 per ounce – up almost 22% on the year – 2019 was looking more like a breakout year. Now with the move back to the $1460 level, the market mood has become more restrained. As it is, gold is up 15 of the last 19 years and still up 14.45% so far this year.

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Germany’s Giant Windmills Are Wildly Unpopular

 
Local politics are a bigger problem for renewable energy growth than competition from fossil fuels.

Despite their surging popularity in Germany and elsewhere in Europe, the Greens did badly in last Sunday’s election in the German state of Thuringia, and the nationalists from the Alternative for Germany Party (AfD) did very well. An important reason is that the Greens support wind energy and the AfD militates against wind turbines. The giant windmills have grown so unpopular in neighboring communities that their construction in Germany has all but ground to a halt.

Cloudy skies, busy windmills.
Cloudy skies, busy windmills.

Photographer: Maurizio Gambarini/AFP/Getty Images

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The Monetary Lessons From Germany

By Alasdair Macleod – Re-Blogged From GoldMoney

Germany suffered two currency collapses in the last century, in 1920-23 and1945-48. The architect of the recovery from the former, Hjalmar Schacht, chose to cooperate with the Nazi successors to the Weimar Republic, and failed. In that of the second, Ludwig Erhard remained true to his free market credentials and succeeded. While they were in different circumstances, comparisons between the two events might give some guidance to politicians faced with similar destructions of their state currencies, which is a growing possibility.

Introduction

Let us assume the next credit crisis is on its way. Given enhanced levels of government debt, it is likely to be more serious than the last one in 2008. Let us also note that it is happening despite the supposed stimulus of low and negative interest rates, when we would expect them to be at their maximum in the credit cycle, and that some $17 trillion of bonds are negative yielding, an unnatural distortion of markets. Let us further assume that McKinsey in their annual banking survey of 2019 are correct when they effectively say that 60% of the world’s banks are consuming their capital before a credit crisis. Add to this a developing recession in Germany that will almost certainly lead to both Deutsche Bank and Commerzbank having to be rescued by the German government. And note the IMF recently warned that $19 trillion in corporate debt is a systemic timebomb, and that collateralised loan obligations and direct exposure to junk held by the US commercial banks is approximately equal to the sum of their equity.

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Sour Milk, Sourer Grapes and the Unnatural Greenhouse Effect

By Christopher Monckton of Brenchley – Re-Blogged From WUWT

I am most grateful to Bob Irvine, in a recent column here, for repeating a point that I have tried to make many times, to squeaks of futile protest from assorted busybodies and concern trolls: the total feedback response until 1850 should not, as at present, be allocated solely to the directly-forced reference warming from the naturally-occurring, noncondensing greenhouse gases.

It must be distributed in some fashion between that natural reference sensitivity, on the one hand, and, on the other, the emission temperature that would obtain at the Earth’s surface in the absence of any greenhouse gases.

As things now stand, official climatology describes the 32 K difference between the 255 K emission temperature and the 287 K observed global mean surface temperature in 1850 as the “natural greenhouse effect”.

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French Gold In World War II

By Larry LaBorde – Re-Blogged From Gold Eagle

This story is about one of the world’s largest gold hoards stored in one of the largest most secure vaults ever built. The French stored their 2,500 tons of gold in their secure underground vault in Paris. When the Germans began their offensive, the French started to remove its gold as a precaution. When the Maginot Line was breached and it was clear Paris would be overrun the remaining gold was rushed out of France. The gold traveled over thousands of miles in different directions by ship, train, truck, and airplane during WWII. So grab your Indiana Jones fedora and a globe so you can follow along.

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The Ghost of Failed Banks Returns

By Alasdair Macleod – Re-Blogged From Gold Money

Last week’s failure in the US repo market might have had something to do with Deutsche Bank’s disposal of its prime brokerage to BNP, bringing an unwelcome spotlight to the troubled bank and other foreign banks with prime brokerages in America. There are also worrying similarities between Germany’s Deutsche Bank today and Austria’s Credit-Anstalt in 1931, only the scale is far larger and additionally includes derivatives with a gross value of $50 trillion.

If the repo problem spreads, it could also raise questions over the synthetic ETF industry, whose cash and deposits may face escalating counterparty risks in some of the large banks and their prime brokerages. Managers of synthetic ETFs should be urgently re-evaluating their contractual relationships.

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Why Today’s Renewables Cannot Power Modern Civilization

By Dr. Lars Schernikau – Re-Blogged From WUWT

Dr. Lars Schernikau has founded, worked, and advised many organizations in the energy, raw material, and coal sectors in Asia, Europe, Africa and the Americas. Lars finished his PhD on the economics of energy, commodities, and the global coal business and published two industry trade books (Springer, available on Amazon) in 2010 and 2017.

Summary

· Costs for renewable power generation have dropped fast, but they will not improve 10-fold anymore… physical limits will be reached

· Common comparisons of renewables vs. conventional power generation are misleading. One cannot compare marginal costs for intermittent power with costs for base power

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