Chevron’s Answer to Climate Change: Drill, Baby, Drill!

By David Middleton – Re-Blogged From WUWT

Chevron’s Answer to Climate Change Is to Keep Drilling for Oil
The energy giant believes it can still wring years of profits from fossil fuels while its European rivals embrace renewables.

By Kevin Crowley and Bryan Gruley for Bloomberg Green

Speaking to the Texas Oil & Gas Association in July, Chevron Corp. Chief Executive Officer Mike Wirth assured his audience that the global clamor for clean energy “doesn’t mean the end of oil and gas.” On the contrary, Wirth said, the energy business is simply undergoing another of its natural transitions. “We’ll find ways to make oil and gas more efficient, more environmentally benign,” he said. “And it will be a part of the mix, just as biomass and coal are still enormous parts of the mix today.”

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The Gold And Silver Markets Have Changed

By David Smith – Re-Blogged From Gold Eagle

We tend to spend a lot of time looking into the rearview mirror, especially when under duress.

Connected to this is something psychologists call “recency bias.” This simply means that what has happened in the near to intermediate past tends to inform and influence us as to how we should behave in the future.

The 2011 to early 2019 precious metals bear saga was broken only by a six-month bull hiatus in early 2016 – which then gave most of the rise back over the next two years!

Now, in spite of some very powerful evidence to the contrary, the general investing public still questions both the validity and upside potential of physical precious metals and the share prices of producing miners.

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Aussie Clean Energy Investment Falling as Political Support Falters

By Eric Worrall – Re-Blogged From WUWT

The Solar Duck Curve
The Duck curve. By ArnoldReinholdOwn work based on data from caiso.org, CC BY-SA 4.0, Link

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Obvious Capital Consumption

By Keith Weiner – Re-Blogged From Gold Eagle

We have spilled many electrons on the topic of capital consumption. Still, this is a very abstract topic and we think many people still struggle to picture what it means. Thus, the inspiration for this week’s essay.

Enterprise Car Service

Suppose a young man, Early Enterprise, inherits a car from his grandfather. Early decides to drive for Uber to earn a living. Being enterprising, he is up at dawn and drives all day. He finds that he makes a comfortable living. He grosses $250 a day, minus $50 in gas, or $200 net. He works the standard 220 days a year, so he takes home $44,000. Not a bad living.

One day, the transmission breaks. It costs $1,000 to repair. Early has no choice but to pay. He arranges with the shop to get his car back and work it off that week. He does not eat for that week, but he pays and is back to normal.

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The Cost Of Government Debt Is Immediate

By Steve Saville – Re-Blogged From Gold Eagle

Most warnings about large increases in government indebtedness revolve around future repayment obligations. For example, there is the concern that greatly increasing the government debt in the present will necessitate much higher taxes in the future. For another example, there is the concern that if the debt load is cumbersome at a time of very low interest rates, then as interest rates rise the interest expense will come to dominate the budget and lead to an upward debt spiral as more money is borrowed to pay the interest on earlier debt. Although these concerns are valid they miss two critical points, including the main problem with government borrowing.

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Drowning in Cash, Big Oil’s Biggest Challenge Is How to Spend It

By Bloomberg – Re-Blogged From Newsmax

Big Oil’s big payday has finally arrived. The question now is how to spend the extra cash.

Investors will be reading the third-quarter tea leaves to discern whether executives plan to boost dividends and buybacks, hike spending on shiny new mega projects, or perhaps even do both.

What they do know is that fresh sources of oil and gas are needed over coming decades to meet the world’s insatiable demand for energy. Spending too much would defy the new-found commitment to financial discipline, while spending too little could choke new supplies and raise crude prices. Higher prices, in turn, may brighten the appeal of green technologies that would hasten the industry’s demise.

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Qatar to Invest $20 Billion Into US Energy Sector

By Bloomberg – Re-Blogged From Newsmax

Qatar Petroleum, the world’s biggest seller of liquefied natural gas, is looking to get even larger, investing $20 billion in America’s oil and gas fields at a time when rival U.S. exporters are expanding.

The investments will be made over five years, Chief Executive Officer Saad Sherida al-Kaabi said in an interview with Bloomberg News in Washington. Some of that will likely go toward lining up gas supplies for the Golden Pass LNG export project in Texas, being developed with Exxon Mobil Corp.

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The Relevance Of Hayek’s Triangle Today

By Alasdair Macleod – Re-Blogged From Gold Money

Most of us are aware of the inflationary pressures in the major economies, which so far are proving somewhat latent in the non-financial sector. But some central banks are on the alert as well, notably the Federal Reserve Board, which has taken the lead in trying to normalise interest rates. Others, such as the European Central Bank, the Bank of Japan and the Bank of England are yet to be convinced that price inflation is a potential problem.

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It’s Not Stagflation, But Inflationary Impoverishment

By Alasdair Macleod – Re-Blogged From http://www.Gold-Eagle.com

It is a matter of personal interest that it was my uncle, Iain Macleod, who invented the term stagflation shortly before he was appointed shadow chancellor in 1965. It is no longer used in its original context. From Hansard (the official record of parliamentary debates) 17 November that year:

We now have the worst of both worlds —not just inflation on the one side or stagnation on the other, but both of them together. We have a sort of “stagflation” situation and history in modern terms is indeed being made.

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2018’s ‘Short’ Of The Year

By Michael Bllanger – Re-Blogged From http://www.Gold-Eagle.com

There is a famous quote about short-selling that comes from Olde English business folklore that goes something like this:

“He who sells what isn’t his’n.
Must deliver or goes to prison!”

That old horse chestnut was used to frighten the Rothchildian short-sellers that used to hang out on the old New York “curb” back before governments and influence- peddling lobbyists conspired to change the rules. I used to love to find overvalued stocks or commodities and get our trading desk to call over to the loan post to see what it would cost to borrow a few thousand shares of some pumped up bowser of a stock and then attempt to catch it on an uptick in order to sell it. The entire concept was rather civilized because everyone would know that there was a highly visible bear out there trying to get short something and invariably, the principals like the CEO or CFO would find out and then the ancient game of cat-and-mouse would begin.

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Chinese Invade Oil Realm

By Jim Willie – Re-Blogged From http://www.Gold-Eagle.com

China is working a strategy with the Saudis. Since the last months of 2017, the Jackass has been firm that the ARAMCO deal for IPO stock introduction might never occur. And if it did, then Hong Kong might be the only location for the IPO launch. It seems that disclosure and transparency is non-existent to this Arab kingdom. Now the stock listing might be in Riyadh and nowhere else. Imagine the risk to brokerage houses if the truth comes out, that the Saudi oil reserves are only 20% to 40% of the disclosed amount, a grand lie and deep fraud. Such will not stop China from investing privately in ARAMCO, since it would serve two purposes. It would enable huge diverse participation in the Saudi Economy, which contains a second treasure trove of minerals. It would enable the Chinese to purchase Saudi oil in RMB terms for payment. In the last month, the Russians confirmed an equally sized investment stake in ARAMCO. If the Chinese sit on the ARAMCO board of directors, they will surely convince the Saudis to alter the payment method in approval. It could be a primary part of the deal.

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The Shape of U.S. Restrictions on Chinese FDI

Re-Blogged From Stratfor

Highlights

  • In hopes of forcing China to open further, the United States is considering investment restrictions that would mirror those imposed by China.
  • China’s investment goals are to cement its position in the stable, developed U.S. economy and fuel growth in sectors key to its economic transition.
  • As such, China has two concerns: Sectors where its own restrictions will mean harsh U.S. measures and those sectors of high priority to Beijing.

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What Everyone Is Missing About The US Tax Cuts

By Steve Saville – Re-Blogged From http://www.Silver-Phoenix500.com

The changes to US taxes that were approved late last year have drawn acclaim and criticism, but in most cases both those who view the tax changes positively and those who view the tax changes negatively are missing two important points.

Most criticism of the tax changes boils down to one of three issues. The first is that the tax cuts favour the rich. This is true, but any meaningful tax cut will have to favour the people who pay most of the tax. Furthermore, contrary to the Keynesian belief system a tax cut will bring about the greatest long-term benefit to the overall economy if it favours people who are more likely to save/invest the additional income over people who are more likely to immediately spend the additional income on consumer items.

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Is A House Really A Retirement Asset?

By Trevor Gerszt – Re-Blogged From Newsmax

Many American households have their wealth tied up in their houses. For many Americans across all different income levels, the value of their houses exceeds the value of all their other financial assets. There is also a history in the United States of home ownership being recommended as a sure way of becoming wealthy, or at least financially comfortable. But in this day and age, should you really rely on a house as a retirement asset?

Jobs and Inflation: Gradually and Then Suddenly

By Ben Hunt – Re-Blogged From Wolf Street

If you’ve been reading my notes immediately before and after the June Fed meeting (“Tell My Horse” and “Post-Fed Follow-up”), you know that I think we now have a sea change in what the Fed is focused on and what their default course of action is going to be. Rather than looking for reasons to ease up on monetary policy and be more accommodative, the Fed and the ECB (and even the BOJ in their own weird way) are now looking for reasons to tighten up on monetary policy and be more restrictive. As Jamie Dimon said the other day, the tide that’s been coming in for eight years is now starting to go out. Caveat emptor.

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Crisis Investing in Brazil

By Doug Casey – Re-Blogged From International Man

Editor’s Note: Brazil is in crisis once again.

This time, Brazil’s president, Michel Temer, has been accused of corruption, bribery, and obstruction of justice.

When news of this scandal broke, it triggered a huge selloff in Brazilian stocks. The iShares MSCI Brazil Capped ETF (EWZ), which tracks Brazil’s stock market, plummeted 18% in one day. It was the fund’s worst day since the 2008 financial crisis.

Most investors now want nothing to do with Brazilian stocks. But we’re not like most investors. We understand crises can actually lead to huge moneymaking opportunities.

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China Makes a Power Play in Brazil and Argentina

The last two years have been hard on Argentina and Brazil. A sweeping corruption investigation and the impeachment of President Dilma Rousseff have sent Brazil’s currency tumbling. The country’s economy contracted by 3.8 percent in 2015 and by another 3.6 percent the following year. The Argentine peso, meanwhile, fell 40 percent against the U.S. dollar after the government lifted currency controls in late 2015. But for foreign investors, the two South American nations’ economic hardship presents an opportunity. The depreciated currencies in both countries, combined with their governments’ need for investment, has enabled Chinese companies to buy up cheap assets and launch major infrastructure projects in Argentina and Brazil alike. The electricity sector in particular has been a focus of their activities.

(YASUYOSHI CHIBA/AFP/Getty Images)

Can Trump Get 3 Percent Growth?

By Peter Morici – Re-Blogged From Newsmax

President Donald Trump’s economic team paints a rosier picture about what his policies could accomplish than the economics profession is willing to endorse.

His team is formulating budget and tax proposals that project 3 percent annual growth, while the number crunchers at the Congressional Budget Office estimate only 1.9 percent.

How fast the economy can grow comes down to the simple sum of likely worker productivity and labor force growth. Since the financial crisis, productivity has advanced about 1 percent a year, as compared to the 2 percent in prior decades.

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The Commodity Cycle: What It Means for Precious Metals Prices

By Stefan Gleason – Re-Blogged From https://www.moneymetals.com

The cycle for any commodity follows the same basic pattern…

When prices are low, production falls. As new supplies diminish, the market tightens and prices move higher. The higher prices incentivize producers to invest in production capacity and increase output. Eventually, the market becomes oversupplied, prices fall, and the cycle starts all over again.

Of course, this is a simplified model of what drives commodity cycles. Booms and busts can be amplified and extended by speculators, by unexpected shifts in demand, or even by interventions from central banks and governments.

Regardless of the causes, commodity markets will always be cyclical in nature. Commodities as a group can be pressured upward or downward by extrinsic forces such as monetary inflation or credit contraction.

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Stalling Engines: The Outlook for U.S. Economic Growth

By John P Hussman – Re-Blogged From Hussman Funds

Imagine driving a car moving down the road at 20 miles an hour. You hold a rope out the window. At the other end of that rope is a skateboard. If the skateboard is behind the car, yanking the rope pulls the skateboard forward, so the skateboard might temporarily speed ahead until it gets way ahead of the car and the rope tightens again. At that point, yanking the rope will pull the skateboard back, so even while the car continues down the road at 20 miles an hour, the skateboard actually loses ground for a while. Over the long-term, the car and the skateboard move ahead at the same speed, but the speed of the skateboard over shorter horizons depends on its position relative to the underlying trend.

The same proposition applies to the trajectory of numerous economic and financial variables. We have to be attentive to at least two things: 1) the central tendency of growth in underlying fundamentals, and 2) our current position, relative to that central tendency. The difference between the two is what separates longer-term growth from cyclical fluctuations.

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What is the Opportunity Cost of Climate Waste?

By Eric Worrall – Re-Blogged From http://www.WattsUpWithThat.com

What do we miss out on because the world wastes so much money and attention on climate? Imagine if some of that squandered money was spent on other fields such as medical research, such as the following accidental discovery, which if developed offers the possibility of longer life and superhuman athletic prowess.

Mouse

Mouse. By George Shuklin (Own work) [CC BY-SA 1.0], via Wikimedia Commons

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Brexit & Gold

By Kal Kotecha – Re-Blogged From http://www.Gold-Eagle.com

Since its discovery many centuries ago, gold has managed to maintain its relevance and stature to this day. Used to make royal crowns and other valuable items, the value of gold has been high as from its discovery days. The Greek scientist Archimedes (287-212BC), the inventor of the Archimedes Principle was the first person to find a way to measure the density of gold and other metals without deforming them.

This tale begins when King Hieron II of Syracuse suspected the goldsmith, whom he had commissioned to manufacture the royal crown, and suspected the  gold given to him was replaced with an equal weight of silver. The king therefore asked Archimedes to determine the purity of the gold crown. Being a holy object dedicated to the gods, the crown had to be examined without deformation of any kind. While in a bath, Archimedes noticed that his body displaced more water the more he sank into the tub. He immediately got out and ran home naked shouting “Eureka! Eureka!” which is Greek for “I have found it!”

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Really Measuring Real GDP

cropped-bob-shapiro.jpg   By Bob Shapiro

Consider two families. Both have a weekly income of $1000, and both spend it all.

Next year, one family gets a $30 raise (3%) and again spends it all ($1030). The second family does not get a raise, but it borrows $30 and spends all $1030.

Question: Are both families doing just as well, or is one doing better than the other?

My guess is that you can see that it is earnings which are important, rather than spending. I expect that you will agree that family one is 3% better off than family two, which borrowed 3% to match the spending of family one.

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The bad and the bad of US corporate income taxes

There are many good reasons to undertake corporate tax reform this year. Politicians from both sides of the aisle have declared support for cutting the headline corporate tax rate and recouping the lost revenue through a broadening of the tax base. President Obama’s budget for fiscal year 2016 calls for a cut in the corporate tax rate from 35 to 28 percent (with a special rate of 25 percent for manufacturing). Former Ways and Means Chairman David Camp’s tax reform proposal from last year called for a cut in the rate to 25 percent. The recent Rubio-Lee proposal would similarly cut the rate to 25 percent. There is even speculation that Paul Ryan and President Obama may be working on a deal to cut headline rates this year. Here’s why we need to get this done.

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China Just Crossed A Landmark Threshold

By Frank Holmes – Re-Blogged From http://www.silver-phoenix500.com

Back in July 2013, the think tank Heritage Foundation predicted that China’s outbound investment “could very well exceed $80 billion [by the end of the year] and is on course to breach $100 billion by about 2016.”

With all due respect to the Heritage Foundation, China just beat the forecast by a couple of years, exceeding the $100 billion mark at the end of 2014. For the first time, in fact, China invested more capital outside its own borders than it did inside. As legendary Major League Baseball player and coach Yogi Berra once quipped: “It’s tough to make predictions, especially about the future.”

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