Friday 30 Aug 2024
Every recession governments have kept the economy going by creating an even bigger debt bubble, as can for example be seen in US federal debt growth (blue left) during and after recessions (grey). In the process government debt to gross domestic product (red right) has climbed higher and higher. The question for the stock market is whether this can be repeated one more time, like the song Do That To Me One More Time, since workers will end up paying for it, whilst the wealthy benefit from the inflation caused.
The UK stock market (blue) increased with nominal GDP (red), whilst debt shot up (green).
The price of minerals like iron ore (red) and nickel (grey) has risen along a support line. The stock market is already expecting another up cycle. If debt reaches saturation, and inflation catches up with demand, the minerals can fall through the support.
Thursday 29 Aug 2024
"A top court justice has blocked SpaceX’s Starlink bank accounts in Brazil in a bid to force Elon Musk to pay for fines imposed on another of his companies, the social media platform X." - X was Twitter.
"The largest dollar store chain in the United States is warning that US consumers are running out of money" - X was Twitter.
"Switzerland should deepen military cooperation with NATO and the European Union, increase arms spending and rethink its non-aligned status, an independent panel has recommended" - X was Twitter. Swiss home owners have bomb shelters. War mongers are trying to get more countries involved instead of resolving the underlying problem, such as the lack of democracy.
"Brazil’s top judge threatened to block Elon Musk’s X if the social media platform doesn’t appoint a legal representative in the country within 24 hours" - X was Twitter. The song title Wooly Bully describes the government of Brazil, and politicians everywhere.
"Coffee jumps to highest closing price in history" - X was Twitter. The price of coffee (blue) is cheap relative to US wages (green) and extremely cheap to wealthy Americans (red). Technology is worth a lot more than coffee, thus the high value of the dollar.
Australia's average house price (yellow) at A$959,300 in March, compared to the iron ore price in A$ (grey), which makes up 20% of exports (Dep. Foreign Affairs and Trade).
There are claims that Canada's property prices are too expensive, due to higher demand from immigration and insufficient supply coming onto the market. Canada's average house price at C$698,530 in March (blue) follows 2x total debt of Canada per working age population from 25 to 54 years (red), which is the total debt per couple. Everything went up, not just house prices. House prices contributed to the inflation, and government didn't stop the inflation.
Wednesday 28 Aug 2024
'Cerebras claims its solution is 20x faster than Nvidia's Hopper chips at AI inference, at a fraction of the price. "The way you beat the 800lb gorilla is by bringing a vastly better product to market. We've taken meaningful customers from Nvidia."' - X was Twitter.
Mathematicians debunk GPS assumptions to offer improvements - Phys.org.
"Steel Slump in China Looks Set to Worsen as Heavyweights Flag Concerns" - X was Twitter. Steel production has doubled the last two decades (Worldsteel.org).
"Countries with the Highest Wealth Per Person" - X was Twitter.
The US household net worth divided by the estimated number of households was $1.16 million per household in Q1 (blue). The total net worth of the bottom 50% of the population divided by half the households was $57,700 per household (red):
Tuesday 27 Aug 2024
"From the FRED Blog: In the 1970s, pensions were a greater share of household net worth than stocks. But since 2018, stock holdings have surpassed pensions, likely thanks in part to lower trading costs and better trading technology" - X was Twitter.
Tesla squeezes victory in court, exposes collusion to keep direct sales out of Louisiana - Electrek.
Europe experiences widespread flooding and severe heatwaves in 2023 - World Meterological Organization. A temperature chart show how Europe became hotter despite all the wind turbines, solar power, and coal substituted with natural gas. Whatever the cause of the heat, the campaign against CO2 has been a failure. What happened after 1990? It could be the development of China.
.... "1991 - Wind power takes off in the UK", "1994 - First climate change legislation comes into force" - UK Research and Innovation.
.... The EU had solar power capacity of 257 gigawatt in 2023. The amount of heat generated by the panels is about 80%/15% more, which is energy of 1371 GW x 7 hours x say 250 days sunshine = 2400 TWh per year. EU electricity demand was 2,696 TWh in 2023. The heat from solar panels is as big as all the electricity used. Heat from power generation is not unusual. The issue is the low efficiency, and additional cost of the backup power.
Monday 26 Aug 2024
"Trump wants Bitcoin to be "Made in the USA." That could be a problem for Chinese giant Bitmain" - X was Twitter. Like printing money, any new currency just creates inflation. If the government wants to introduce Bitcoins, they need to trade it for dollars, and then remove those dollars permanently from circulation.
The gold price has shot up to $2512.18 (Gold Price), but gold mining shares have gone nowhere for decades, such as the VanEck Gold Miners ETF (GDX) (Bigcharts). It shows the high rate of inflation, at least for gold miners. The gold price has also collapsed in the past, after such a sharp rise. Gold demand has grown enormously since 1900, whilst mining costs increased. It is worth accumulating gold during the valleys.
The gold price shot up in 1980 with very high US interest rates, and then declined for 2 decades as interest rates declined. Investors found other assets more attractive. Gold was no hedge against the inflation caused by lower interest rates. It shot up 2011 (yellow) with other minerals (copper, nickel, lead, zinc = orange, and iron = grey), then collapsed in 2016 with other minerals. When main asset classes stop growing, speculators push up the price of everything else.
Sunday 25 Aug 2024
Telegram messaging app CEO Durov arrested in France - Reuters. "TF1 and BFM both said the investigation was focused on a lack of moderators on Telegram, and that police considered that this situation allowed criminal activity to go on undeterred on the messaging app". It is the duty of government to prosecute the app users, not the service provider. By government logic then: Criminals travel by road, therefore the road authority is guilty of not controlling who uses the roads. Criminals use telephones, therefore the telephone operators are guilty of not moderating telephone use. Politicians are already wasting the time of billions of bank clients with financial regulations, which have also made it impossible for homeless people to have a bank account.
"Top five coffee producers" - X was Twitter.
Friday 23 Aug 2024
The money in circulation could either grow due to money printed by the government or debt growth (multiplier effect). The biggest US figure found so far is Households and Nonprofit Organizations; Total Liabilities and Net Worth (IMA) (blue), Level which was $181.4 trillion in Q1. Not sure what it measures, but it was still shooting higher. The growth rate was 6.5% per year over ten years, compared to 6.9% per year for Households and Nonprofit Organizations; Net Worth, Level (green), and 5.2% per year for total debt (red). The growth in net worth could be a temporary bubble not supported by the money in circulation (overall inflation).
Thursday 22 Aug 2024
The iron ore price has fallen to US$98.1/ton in Aug (Trading Economics). The last two sharp increases in the iron price (blue) followed an increase in US Federal Government debt (red). Federal debt rises during recessions (grey bands).
Strength of the Australian dollar against US dollar exchange rate (blue higher), compared to iron and steel prices relative to total US debt as nominal inflation rate (red):
Wednesday 21 Aug 2024
From 3 weeks ago: Use These 6 Foods Hacks To Heal The Body, Starve Cancer & Burn Fat | Dr. William Li - Yotube.
Germany's GDP in $ (red) has surpassed Japan's (green). California (blue) could pass both.
Tuesday 20 Aug 2024
The Top 15 Sources of U.S. Immigrants - Votonoi.
"Power prices in several European markets fell below zero for Wednesday as wind and solar output is poised to jump and flood the grid with green electricity" - X was Twitter. Dysfunctional electricity supply. European customers need a dam on a hill which they can use as pumped storage when electricity is free.
"The overwhelming case for a land tax has been known for centuries and made by many of the most prominent economists" - X was Twitter. Some one is confusing a tax on the value of land with "a tax on the returns from land ownership". Any product or asset which is in limited supply could be taxed, but the tax will be passed on to customers as higher prices. The tax collected should only be used to increase the supply, like making land use more efficient, or lower demand with alternatives.
There is much talk about US housing being unaffordable. According to presidential candidate Kamala Harris: "As the price of housing has gone up, the size of down payments have gone up as well." - X was Twitter. Mortgage debt service payments as percentage of disposable personal income (red) is only 4%, and has not increased with rising interest rates. Total mortgage debt has not increase since the 2009 Great Recession, and the average mortgage debt per household has declined from around 35% to 19% of the average house price (blue).
The annual increase in total mortgage debt (blue) shows a sharp rise in debt as mortgage interest rates (red) decline. The demand falls away when interest rates increase. The last increase in mortgage debt compared to the number of houses typically sold annually is small, like $70,000 per house sold. It could be because most home buyers just move from one house to another without taking on extra debt. They can afford the higher prices because they sell their existing house at a higher price.
.... "Still, first-time purchasers made up 32% of all homebuyers in the past 12 months — a share that’s remained mostly consistent over the past 10 years" - First-time homebuyers in today’s market are older, wealthier and often need help from family - Consumer Affairs. The lack of total mortgage debt growth suggests the new generation does not take on as much debt. They are losing out on the benefits of leveraging inflation with debt.
Monday 19 Aug 2024
"If you want to know the difference between Milton Friedman and Joseph Stiglitz, I present to you 4 countries with a GDP per capita of about $15,000 in 1998" - Xwas Twitter.
Improving access to heart-failure screening with a low-cost saliva test - Medical Xpress.
"Australia warns of $2bn budget hole as iron ore slumps on China woes" - X was Twitter.
From 19 May 2024: "The Yen Carry trade is massive as seen from Japanese foreign portfolios around $4 trillion. The unwind of this could be violent" - X was Twitter.
If Japan keeps interest rates too low, it makes sense to borrow money in Japan, or for Japanese savers to take their money out, and invest in other currencies. The capital outflow could weaken the Japanese Yen, which would lower the value of the debt, to make the transaction profitable. Many countries do not offer their citizens a real return on their savings, which leads to capital outflow. The foreign investments by locals are usually never unwound, because government policy never changes. If the population wants to save rather than borrow, then interest rates would be low. This could happen with an aging population.
The interest rate differential between US and Japanese bonds (red) is tiny compared to the annual change in the exchange rate (blue). The carry trade is more about speculating that the Yen will weaken (blue above zero). The speculation can be seen in the extreme volatility of the exchange rate.
Exchange rates are typically determined by trade, not capital flow. The gap between Japan's exports (red) and imports (blue) is sometimes significant relative to trade. From 1994 to 2008 exports exceeded imports, and the Yen/$ exchange rate (green) mostly went sideways. After 2008, a weaker Yen (green up) corresponded with a trade deficit (red above blue).
There is a big gap between Japan's balance of payments (red) and trade balance (blue), if the scales are correct. According to the interwebs this could be salaries, investment income like dividends, and transfers. For such a low yield country, it seemingly generates a lot of income from other countries, whilst having a constant capital outflow (inverse flow to balance of payments).
Friday 16 Aug 2024
"49 Ways to Increase U.S. Home Ownership, Household Wealth, and Economic Growth" - X was Twitter.
In major policy speech, Kamala Harris promises to ‘bring down costs’ - Aljazeera. Another Inflation Reduction Act incoming. The first one didn't work.
At least Japan reports an M3 money supply (red) close to total debt (blue), unlike the corrupt politicians in other countries. Debt by definition is owed to a counterparty who owns it as part of the money supply.
US Advance Retail Sales relative to total wages was falling to recessionary levels in Q2:
US retail employees are declining as percentage of the total, probably the shift to online retail:
Thursday 15 Aug 2024
NASA Shares Update on Astronauts Stuck Indefinitely in Space - Eonline.
‘We should have better answers by now’: climate scientists baffled by unexpected pace of heating - The Guardian.
.... June 2024 Temperature Update - Berkeley Earth. "Globally, June 2024 was the warmest June since records began in 1850. .... This is a direct consequence of the accumulation of additional greenhouse gases in the atmosphere, especially carbon dioxide". Historical charts show that temperatures rise and fall first, which is then followed by higher and lower CO2 levels, for which there are clear reasons.
.... Australia's changing climate - CSIRO. "Rainfall varies from year to year, but in the south-east of Australia, April to October rainfall has decreased due to climate change from the 1960s onwards". It is the decline in rainfall that has resulted in higher temperatures, not the other way around.
.... From 23 Jun: AUDIO: Coldest start to winter in Australia in a decade - ABC. It is near impossible to find an up to date winter temperature chart for the southern hermisphere. The northern hemisphere is doing something to increase global temperatures, including the US and Europe with their campaigns against global warming.
Wednesday 14 Aug 2024
Low level of common nutrient linked to disease-causing DNA damage - New Atlas. "Our study showed a direct correlation between low magnesium levels in blood (less than 18mg/L) and increased DNA damage".
"Polymarket, the world’s largest prediction market, now shows VP Harris pulling ahead in the US presidential race. Harris now has a 53% chance of victory, while former Pres. Trump lags at 45%." - X was Twitter.
US Personal Consumption Expenditure (blue) is apparently a combination of total wages (green) and the annual increase in household net worth (red). The household net worth (red) is mostly held by the wealthiest, and was still rising in Q1. The big increase in net worth (red) in 2021 is not yet reflected in the PCE (blue). Interest rates are too low. It is not over until the fat lady sings, or the fat cats spend their profits.
Tuesday 13 Aug 2024
Gold to Oil Ratio - Historical Chart - Macrotrends. Gold to oil is at the same level as in 1946. Both could represent the actual inflation rate. Many times oil was more expensive relative to gold than the present ratio. To let governments report the inflation they cause is ridiculous.
"There appears to be a massive DDOS attack on X." - Elon Musk, X was Twitter. It was probably a pre-emptive strike by Martians trying to protect their planet from human invasion. Apparently it was not a DDOS attack, but just too many viewers for the server to handle.
Monday 12 Aug 2024
"OMG! Europe has completely lost it. ... To send a threatening letter to @elonmusk, compelling him to censor(!) his meeting with #Trump, is another example of how the aging, declining, and weakening European ‘power’ unrightfully believes it can force its subjective moral standard onto others. " - X was Twitter.
...."The select subcommittee has received testimony about how officials from other governments, including you and other officials at the European Union, have sought to censor speech -including political speech- online" U.S. Congress." - X was Twitter.
UK total debt per person (green) has outgrown M4 money supply or M3 money supply per person (red) and residential property prices (blue). It does not make sense for debt to be more than money supply. Debt must have a counterparty, the lender who owns the money as an asset.
Like many countries UK total debt in billions of pounds (blue) has grown much faster than the economy (red), due to interest rates falling. Government 10 year bond yields fell from about 12% in 1990 to 0.21% in 2020. The inverse means economic output declined relative to the total debt or money in circulation.
The annual increase in UK total debt (blue) compared to economic output (red).
The increase in debt (red) did officially not create inflation (green). The borrowers must have spent the money on something, which in the absence of extra economic output, must have caused inflation somewhere.
UK property prices (red) compared to official inflation (blue). People without property have been impoverished with false inflation figures.
Sunday 11 Aug 2024
"Kamala Harris declines an opportunity to weigh in on Fed policy decisions: "I would never interfere in the decisions the Fed makes... " - X was Twitter.
Saturday 10 Aug 2024
"Former Twitter Chairman Omid Kordestani sued the social media company, claiming that billionaire owner Elon Musk is refusing to cash out more than $20 million worth of shares he is owed" - X was Twitter.
Friday 9 Aug 2024
"China’s autonomous vehicle startup WeRide prepares for a US IPO" - X was Twitter. A long time ago it looked like Teslas offered a unique benefit.
"China files WTO complaint against EU over tariffs on EVs" - X was Twitter. China will have to reveal the size of government subsidies.
Thursday 8 Aug 2024
Autism in boys linked to common plastic exposure in the womb - New Atlas. "BPA stands for bisphenol A, an industrial chemical that has been used to make certain plastics and resins since the 1950s. BPA is found in polycarbonate plastics and epoxy resins" (Mayoclinic).
Turmeric and green tea (extract) among health supplements putting people in hospital - New Atlas. "Those supplements were turmeric, green tea, ashwagandha, G. cambogia, black cohosh and red yeast rice".
EVs and PHEVs outsell gas cars in China for the first time - Electrek. "So in order to boost car sales, in late July, the Chinese government doubled cash incentives for EVs to 20,000 yuan ($2,785) ... Plus, NEVs are exempt from sales tax up to 30,000 yuan ($4,175) in 2024 and 2025". The public are basically forced to cut back on other expenses, by taxation or inflation.
.... Impressive AC Motor Prices Electric Vehicle Electric Classic Car - Made in China. "YATIAN electric golf cart inherits the design concept of Ford model T and traditional technology".
Ignoring for a moment the validity of inflation statistics provided by government, for whom reporting real economic growth is crucial for survival, real US wages (blue) was lower in 1995 than the preceding 30 years, which went through the 1971 scrapping of the gold standard. After 1995 real wages (blue) rose, and so did the Chinese economy (red). It is possible that worker wages improved by moving from manufacturing to sales and services. This is not confirmed by total debt growth per person, suggesting wages continued to decline relative to the wealthy asset owners, and overall inflation.
Wednesday 7 Aug 2024
Triathletes hospitalised after swimming in Seine River in Paris - FISM.
"The director of public prosecutions of England and Wales warns that sharing online material of riots could be an offence" - X was Twitter. The UK has never had a true democracy.
UK slams Elon Musk for 'civil war' comments on far-right riots - France24. All civilizations rise and fall. Now people can see it happen in real time.
Researchers show that pesticide contamination is more than apple-skin deep - Phys.org.
Tuesday 6 Aug 2024
Google Loses US Antitrust Case—Now What? - ExtremeTech.
China takes on SpaceX with its own version of Starlink satellites - SiliconeRepublic. There is already Eutelsat OneWeb.
When the Federal Funds Effective Rate (red) is high, total worker wages as share of Gross Domestic Product (blue) typically improves, but it ends in recessions (grey bands). Higher interest rate is a response to higher wages. Then interest rates fall, and the share of wages decline to lower levels than before.
If workers get a smaller share of the economy (blue), then other parties have a larger share, such as government (red). Government spending weakens the economy, because government beneficiaries do not have to produce, and taxpayers lose money they could have spent to create work. The change in government spending (red) is relatively small, typically somewhere between 18% and 27%.
The apparent contribution to Personal Consumption Expenditure (PCE) from the capital gains of the wealthy also increases during and after recessions (grey bands). This is the PCE minus total wages, as a share of Gross Domestic Product (GDP), which has risen from a low of 8% in 1969, to a high of 26% in 2010.
Monday 5 Aug 2024
BREAKTHRUGH Nanonuclear CEO Reveals Safe Nuclear Reactor on Wheels - NextBigFuture.
The Japanese stock market index Nikkei 225 (blue) is down -17.7% over 5 days, but the fall is small compared to the 4.8x rise since 2012. The stock market peaked in Mar 2024 at a similar level to the peak of Dec 1989. Relative to M3 money supply (red) investors lost a lot of money inbetween.
Friday 2 Aug 2024
"Absolute chaos in Japan as stocks plummetted more than 6%, the largest decline since June 24, 2016, and experienced 2 circuit breakers during the session." - X was Twitter.
US corporate profits (blue) show close correlation to exports (red), driven by the profit margin between US branded goods and low cost manufacturing elsewhere.
US corporate profits (blue) also show close correlation to 1/32 of the net worth of the wealthiest 10% (green). Profits increase in proportion to total debt, and that is mainly held by the wealthiest 10%. Luxury goods have higher profit margins, and would dominate total corporate profits. This could be a self-perpetuating bubble, if the wealthy spend the money they make from asset appreciation, which increases corporate profits, which increases asset prices, etc. Because of the high growth ratio, the valuation of the stock market rises. The S&P 500 is on a price/earnings ratio of 28.9, or earnings yield of 3.5%.
FOMC (Federal Open Market Committee) interest rates should target the supply and demand for credit, that is the credit growth rate. Instead they target the secondary effect on the economy of the poor majority, leading to a growing wealth gap.
The asset appreciation does not involve production, so workers pay for the wealth created by their wages (blue) not keeping up with the inflation caused, represented here by total debt (red). The best part of the scam is that every election the majority votes for more of the same.
Thursday 1 Aug 2024
Adherence to the Mediterranean diet and its protective effects against colorectal cancer: a meta-analysis of 26 studies with 2,217,404 participants - Springer.
After the hype, the lithium price has fallen back to 2021 levels (Trading Economics).
During his reign as supreme leader from 20 Jan 2017 to 20 Jan 2021, Trump did not lower the Current Account Balance from the 1.8% at the start, and then it increased to 3.4% at the end of his term. The balance did fall under George W. Bush, ending in the Great Recession of 2009. A deficit means a capital inflow. If the deficit declines it means the US is less attractive to foreign investors.
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