Consumers In Surprising Places Are Borrowing Like Crazy

By John Rubino – Re-Blogged From Dollar Collapse

The Money Bubble is inflating at different speeds in different places. But apparently no culture is immune:

Household Debt Sees Quiet Boom Across the Globe

(Wall Street Journal) – A decade after the global financial crisis, household debts are considered by many to be a problem of the past after having come down in the U.S., U.K. and many parts of the euro area.

Continue reading

Advertisements

Gold Corridor From Dubai To China Sought By China

By Mark O’Byrne – Re-Blogged From http://www.Gold-Eagle.com

Gold corridor from Dubai to China sought by Chinese Gold & Silver Exchange Society
– New Asian gold trading corridor could boost demand for 1 kg gold bars
– Should increase turnover for yuan-denominated gold coins and bars – President
– Secure supplies of physical gold from Middle East and Asia for China
– China positioning itself as leading gold trading and owning nation

Continue reading

Globalism in the Eyes of Two Beholders

By Rodger Baker – Re-Blogged From https://worldview.stratfor.com

The relative peace and prosperity in Europe may have shaped an idealistic approach to globalism.

The world over, the topic of globalism rarely fails to elicit a strongly held opinion. At its extreme in Europe, the march of globalization is accepted as a near-inevitability: In that view, it is no longer merely a path that should be taken, but the inexorable destination of humanity. As such, there is little room for assessing, much less understanding, alternative perceptions about the structure of the world, either internationally or domestically. Whether talking with a German economist, a British investor or an expatriate businessman in Spain, there is a near-bewilderment as to why anyone would want to pursue nationalism over globalism. As such, the bump in popularity for the Alternative for Germany party, the independence referendum in Catalonia and the Brexit are all seen as anti-historical trends. To them, the European Union remains the moral and political compass for the world, the guiding principle upon which the nation-state will be subsumed and a new global society will emerge.

In Asia, globalization is seen as a potential path, but not an inevitable one, and is viewed more often in economic than political terms. The nation-state firmly remains the unit of political and social organization, and while there are numerous initiatives to enhance cooperation among national entities, there is little movement toward the creation of a pan-national umbrella along the lines of the European Union. The Association of Southeast Asian Nations (ASEAN), one of the most aggressive Asian attempts at pan-national cooperation, explicitly promotes a policy of noninterference in national politics, recognizing the very different systems in each member country, rather than seeking to replace them with a regionwide political and economic structure.

Over the past 12 months, I have engaged with business leaders, government officials, researchers and members of the media in London, Berlin, Paris, Rome, Barcelona and The Hague, and in Auckland, Seoul, Beijing, Hong Kong and Singapore. Over the course of those discussions, a distinct difference in worldview between the “elites” of Europe and those of Asia became apparent. I use the word elite loosely here to describe the thin layer of society with the economic and social freedom to observe and assess the world in a manner disconnected from daily life. These are the economists, political scientists and bankers, the pundits, heads of major corporations, politicians and journalists. Their views shape much of the popular narrative, but one that often misses the underlying realities and beliefs held by a large portion of the societies in which they reside.

Now, all such broad-brush assessments are, by their nature, simplistic and superficial. There are certainly those in Asia who subscribe to the ideals of extreme globalism, and some among the European elite who recognize clearly that the Continental vision is just that — a vision and not an inevitability. But nonetheless, I noted the striking difference in tone between those I met in Europe and those in Asia. In part, the geopolitical developments in each region over the past several decades could explain this dichotomy.

 

Whereas Europe views the United States in ideological terms, Asia sees it in transactional terms.

Following the end of the Cold War, with the exception of the breakup of Yugoslavia, Europe has experienced perhaps its most stable multidecadal period in centuries. The European experiment appeared to be working. The peace and prosperity that spread across the continent allowed for the European Union to spread in kind, absorbing elements of the former Soviet bloc and even parts of the former Soviet Union itself. In guiding the economic and political directions of individual European nations, the European Union sought to erase the underlying nationalism that had riven Europe for millennia. But that noble goal failed to take into account the realities that remained below the surface. These were exposed dramatically with the global financial crisis in 2008, which forced the differences between the economic, social and political predilections underlying its systems to the surface once again, leaving the Europeans struggling with the growing gap between the globalized ideal and the national realities.

In Asia, no substantial periods of post-Cold War peace and cooperation ever really materialized. Even as it emerged as the region’s dominant economic regional power, China’s attention focused inward as it sought to manage internal social upheavalJapan fell into economic malaise. The two Koreas (despite a brief moment of sunshine) continued to spar. Extra-constitutional political change swept across Southeast Asia. The financial contagion that spread throughout the Asia-Pacific in 1997 sharpened many of these trends, leaving simply no long space of regional economic prosperity and political integration. Moves toward regional economic cooperation never went so far as seeking a common currency or centralized economic authority, and they certainly avoided linkage of economics and domestic politics.

Those differences in fortune play into the way each region views and reacts to both the perceived changes in U.S. policy direction and to rising nationalist sentiment around the world. In Europe, U.S. President Donald Trump is seen as globalization’s greatest threat, caricatured as the dangerous buffoon — a mirror image of the U.S. perception of North Korean leader Kim Jong Un. European nations have found it difficult to manage relations with the United States because they cannot accept that it may be sliding away from the extreme vision of globalization. In Asia, there are concerns about the direction of U.S. policy, but less in regards to globalization and more in terms of its direct economic and security effects. Whereas Europe views the United States in ideological terms, Asia sees it in transactional terms. Thus Asian leaders like Japan’s Shinzo Abe and even China’s Xi Jinping have been more adept at interpreting and engaging with Trump.

The geopolitical currents that have brought the continental neighbors to these dichotomous viewpoints will continue to shape the perceptions of their thought leaders, who in turn influence the political, economic and social directions of their societies. It’s clear that globalism will continue to evolve, both as an ideal and as a reality. Where it ends up may be a matter of perspective.

 

Rodger Baker leads Stratfor’s analysis of Asia Pacific and South Asia and guides the company’s forecasting process. A Stratfor analyst since 1997, he has played a pivotal role in developing and refining the company’s analytical process, internal training programs and geopolitical framework.

CONTINUE READING –>

Global EV and Related Climate Alarmist Colossal Messes

By Larry Hamlin  Re-Blogged From http://www.WattsUpWithThat.com

EVs have been hyped by the climate alarmist renewable energy activist crowd as an effective approach for reducing greenhouse gas emissions regarding transportation energy consumption, which for many nations is a large portion of their total energy use.

EVs are fundamentally energy handicapped due to the low energy density of batteries versus the high energy density available in fossil fueled vehicles which results in significantly reduced mileage capabilities for EVs compared to fossil fueled vehicles.

These EV mileage limitations versus fossil fueled vehicles become even more exaggerated when additional energy demands are needed to support vehicle air conditioning and heating loads, hill climbing requirements and operation in cold temperatures that decrease battery stored energy capabilities.

Continue reading

Moody’s Slashes Hong Kong Rating After China Downgrade

Re-Blogged From http://www.newsmax.com
.
Hong Kong saw its debt rating cut by Moody’s Investors Service hours after China’s downgrade, highlighting potential risks from a tightening economic integration.

The former British colony has seen not only its property and stock markets increasingly entwined with the world’s second-largest economy, but its government as well. Moody’s cut the rating on local- and foreign-currency issuances to Aa2 from Aa1, and changed the outlook to stable from negative.

Continue reading

A Bankruptcy of Nuclear Proportions

Re-Blogged From Stratfor

In any given year, a handful of companies file for Chapter 11 bankruptcy in the United States. Rarely, however, does one of these filings reverberate beyond the boardroom and into the realm of geopolitics. Those that do — Lehman Brothers in 2008, or the “Big Three” U.S. automakers in 2008-10 — usually involve hundreds of billions of dollars. But the next big geopolitically relevant bankruptcy may be on the horizon, and the amount of money involved is tiny next to the collapses of the past decade.

Analysis

On March 29, Westinghouse Electric Co., a subsidiary of Japanese conglomerate Toshiba, filed for bankruptcy. The U.S.-based nuclear power company has been building two state-of-the-art nuclear power plants in Georgia and South Carolina, but it has been plagued by delays and cost overruns. The filing sent Toshiba scrambling to cut its losses by March 31, the end of Japan’s fiscal year. The Japanese conglomerate ended up writing down over $6 billion on its nuclear reactor business. But Toshiba’s troubles don’t end there; the firm is also working to sell off a portion of its chip manufacturing holdings.

The U.S. government is worried about what the sale of Westinghouse could mean for the future of traditional nuclear power in the United States and for nuclear power in China, which is keen to learn the secrets of a Western firm such as Westinghouse. The Japanese government, meanwhile, is wary of how Beijing could benefit in the long term, should a Chinese firm acquire Toshiba’s semiconductor unit.

A Setback for the Nuclear Renaissance

Even though the current and previous U.S. administrations have supported nuclear energy — and the first new reactor in the United States in two decades started last October — the future of traditional American nuclear power is not bright. High capital costs, climbing operating costs, sustained low natural gas prices and unfavorable electricity markets all limit its expansion. And with the failure of Westinghouse — one of the two major nuclear power firms in the country (the other, GE, is also scaling back its plans) — the picture looks even bleaker.

Westinghouse’s plants in Georgia and South Carolina are supposed to feature its new AP1000 pressurized water reactors, which were designed to be both safer and easier to build. The projects, however, have been hamstrung by setbacks and cost overruns totaling some $3 billion for each project. Westinghouse’s bankruptcy filing now puts them in limbo. Though there’s still a chance the projects will be completed, it’s hard to envision Westinghouse, even if it is sold, fulfilling its one-time plan of building perhaps dozens of plants in the United States.

But all hope is not lost for growth in the U.S. nuclear sector. The difference is that growth, if it is to occur, may come not from traditional nuclear powerhouses, which are expensive and inflexible, but from a new technology: small modular reactors (SMRs). SMRs are reactors smaller than 300 megawatts that are, as the name suggests, built in a modular fashion. In theory, they can be manufactured offsite and then assembled where needed, significantly lowering initial capital costs, one of nuclear power’s biggest constraints. Installation can also be done as needed, avoiding potential underutilization of capacity and, again, large capital costs, enabling nuclear energy to serve markets that would otherwise be unreachable.

The U.S. Department of Energy has supported the development of SMRs in the past. Two companies, Babcock & Wilcox and NuScale Power, have received federal funding to develop SMRs in recent years. Babcock & Wilcox has since scaled back its operations, but NuScale is forging ahead. The company recently filed plans with the Nuclear Regulatory Commission to deploy SMRs at the Idaho National Laboratory.

SMRs are promising, but the first pilot plants won’t be operational until at least the mid-2020s. And as with any unproven technology, the costs and benefits aren’t yet known and won’t be for some time. Supporters have proposed public-private partnerships to aid in the commercialization of SMR technology. But given the uncertainty surrounding the U.S. federal budget and the administration’s specific plans for infrastructure, it remains to be seen whether SMR technology will be able to get off the ground. Traditional nuclear power plants would be helpful to bridge the gap, and that is where Westinghouse’s bankruptcy will be felt the most in the United States. SMRs may provide the clearest path to a future of nuclear power in the country, but it won’t be an easy one.

A Motivated Buyer

The shedding of Westinghouse is not the only part of Toshiba’s financial restructuring that has been causing waves. As Toshiba’s board approved Westinghouse’s filing for Chapter 11 bankruptcy, U.S. officials raised concerns about national security. Chinese corporate espionage has targeted Westinghouse in the past, and U.S. officials are worried that a Chinese firm could simply buy access to the secrets it has tried before to steal.

Japan has concerns as well, though they are centered not on Westinghouse but on the sale of Toshiba’s semiconductor unit. On March 30, Toshiba’s shareholders voted to split off its NAND flash memory unit. Apple, Amazon, Google and several other U.S. firms expressed interest in acquiring it, as did Asian bidders from South Korea. Toshiba said April 7 that it had narrowed the list of bidders down to 10. But the group still includes Taiwan’s Hon Hai Precision (otherwise known as Foxconn), with a bid of $27 billion, which could set the stage for a dispute down the road. Should a Chinese company — or even a Taiwanese company with extensive operations on the mainland — acquire the semiconductor business, it would undermine the competitiveness of Japan’s tech sector relative to China’s in the long run.

The timing couldn’t be much better for Beijing, which is making semiconductor mergers and acquisitions the focal point of its overseas mergers and acquisitions strategy in much the same way it focused on oil and natural gas in the mid-2000s. On March 28, Tsinghua Unigroup, China’s largest chipmaker, finalized $22 billion in funding from the China Development Bank and the National Integrated Circuit Industry Investment Fund to build up the country’s semiconductor sector and push for global mergers and acquisitions. Tsinghua Unigroup is serious about growth; in January, it announced plans to build a $30 billion fabrication plant in Nanjing. Such growth would pose an existential threat to the semiconductor industries of Japan and South Korea, and the sale of Toshiba’s semiconductor business to a Chinese company would only make such a scenario more likely.

None of these potential concerns about the fallout from Toshiba’s corruption, mismanagement and financial problems is surprising. The United States has always had an interest in the sale of nuclear-related technology, and Japan’s tech sector has long been one of its most important and most competitive industries. But the struggles of Toshiba and the demise of Westinghouse are a rare instance in which a corporate breakdown has important geopolitical consequences.

CONTINUE READING –>

Bitcoin Worth $72 Million Stolen From Bitfinex Exchange in Hong Kong

By Clare Baldwin – Re-Blogged From Yahoo!

HONG KONG (Reuters) – Nearly 120,000 units of digital currency bitcoin worth about US$72 million was stolen from the exchange platform Bitfinex in Hong Kong, rattling the global bitcoin community in the second-biggest security breach ever of such an exchange.

Bitfinex is the world’s largest dollar-based exchange for bitcoin, and is known in the digital currency community for having deep liquidity in the U.S. dollar/bitcoin currency pair.

Continue reading