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Daily Digest 3/8 - Russian Dollar Dump Could Crash Financial System-John Williams, Ukraine is about oil. So was World War I

Saturday, March 8, 2014, 12:03 PM

Economy

2014 – The Year of Commodities

Charts are telling me that 2014 should be a great year for Commodities and Miners and I expect a period of financial market turmoil for the US Market. I believe that we are very close to an important corrective move as the Market is due to top in March 2014. The Rhythm of the Dow Jones Index is telling me that a major top could already have been printed.

Resilient Intentional Communities : Twin Oaks. (Jim Reynolds)

The most important lesson that two oaks has to offer, is that we can live better with less. The policy to spend only $75 every three weeks shows how much a community can make itself for those within the community.

If we desire, iPhones, Wide Screen TVs and advanced medical techniques than TwinOaks is not a good model to supply these technology advances. There are other models of alternative value driven finance which can provide tech advancement in sustainable technologies.

Palladium Near Its Highest Level in Almost a Year

One of the few commentaries this week came from Frank Holmes, who detected two global events affecting the palladium and platinum market. He believes that “the situation in Ukraine and Russia along with six-week-long strikes in South Africa began raising concerns that these palladium-rich countries may not be able to continue supplying the commodity at normal levels. Currently South Africa supplies around 37 percent of the world’s palladium; Russia supplies close to 40 percent of the world’s palladium.”

Obama And Putin Are Trapped In A Macho Game Of “Chicken” And The Whole World Could Pay The Price

The U.S. government and the Russian government have both been forced into positions where neither one of them can afford to back down.  If Barack Obama backs down, he will be greatly criticized for being "weak" and for having been beaten by Vladimir Putin once again. If Putin backs down, he will be greatly criticized for being "weak" and for abandoning the Russians that live in Crimea.  In essence, Obama and Putin find themselves trapped in a macho game of "chicken" and critics on both sides stand ready to pounce on the one who backs down.  But this is not just an innocent game of "chicken" from a fifties movie. This is the real deal, and if nobody backs down the entire world will pay the price.

Russian Dollar Dump Could Crash Financial System-John Williams

Economist John Williams says if Russia sells its U.S. dollar holdings, it could trigger hyperinflation.  Could it collapse the financial system?  Williams contends, “Yes, it certainly has a potential to do that.  Looking outside the United States, there is something over $16 trillion in cash, or near cash.  That’s about the same size as our GDP.  . . Nobody has wanted to hold the dollar for some time.  The dollar, fundamentally, is weak.  It couldn’t be weaker.  All the major factors are against it.  It’s just a matter of what would trigger the massive selling.  Nobody wants to hold it.  The Russians start selling, and you have China indicating a general alliance here in terms of what’s transpiring.  If the rest of the world believes this is what’s going to happen, people who have been wanting to get out of the dollar for some time very easily could front-run the Russians.  The scare is on.  People will try to get out of it as rapidly as they can.

Energy

Canada’s Oil Sands Exports to U.S. Hampered by Infrastructure

The volume of exports to the U.S. Gulf in 2013 coming from Canada’s oil sands fell far short of original estimates. The oil industry projected that about 200,000 barrels per day (bpd) of oil from Canada’s oil sands provinces would reach Gulf Coast refiners by the end of 2013. But, data from December – expected to be the year’s peak – show that deliveries were below 40,000 bpd, according to Reuters. Data from Canada’s National Energy Board show higher numbers – about 57,000 bpd – but still far short of the industry’s original projections.

Ukraine is about oil. So was World War I

Ukraine is a lot more portentous than it appears. It is fundamentally about the play for Persian Gulf oil. So was World War I. The danger lies in the chance of runaway escalation, just like World War I.

Let’s put Ukraine into a global strategic context.

The oil is running out. God isn’t making any more dinosaurs and melting them into the earth’s crust. Instead, as developing world countries aspire to first-world living standards, the draw-down on the world’s finite supply of oil is accelerating. The rate at which known reserves are being depleted is four times that at which new oil is being discovered. That’s why oil cost $26 a barrel in 2001, but $105 today. It’s supply and demand.

New Bionic Leaf Could Solve Solar Energy Storage Problem

Researchers from Lawrence Berkeley National Laboratory are developing a new bionic leaf that can convert energy from sunlight into an energy-dense fuel, imitating the photosynthetic process of plants. We’ve covered the artificial leaf concept before but aside from using a cool new name (bionic leaf sounds much cooler than artificial leaf, right?) the Berkeley project represents a new twist on the technology that could lead to far greater efficiencies.

Environment

Huge tract of Australia in 'biggest ever drought'

The Australian state of Queensland is in the grip of its most widespread drought ever, with close to 80 percent of its territory parched after a failed wet season, officials said Friday.

Read more at: http://phys.org/news/2014-03-huge-tract-australia-biggest-drought.html#jCp

The Australian state of Queensland is in the grip of its most widespread drought ever, with close to 80 percent of its territory parched after a failed wet season, officials said Friday. 

Australia is famous for its droughts and flooding rains, and Queensland was hit by devastating floods in 2010-11 which left much of the state a disaster zone and brought the state capital Brisbane to a standstill.

5 Comments

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Roosters.

Its the Oil again.

Is the USA going to defend Big Oil? If they do they will be agin the whole world. Why? Because the petrodollar has lost its use as a stabilizing reserve currency and that was the only reason that exporting nations would accept it as payment for their toil.

Let us assume that we are all jolly sporting and don't use Nukes- then the desperation of war will uncover the usefulness or otherwise of cold fusion. (Can't run them killer droids on batteries.) If Cold Fusion has substance then it will kill the petrodollar stone dead.

Checkmate.

 Still, It is all about the Ego. Who is the biggest Rooster, Putin or Obama?

Hardly seems worth the effort.

Nervous Nelly's picture
Nervous Nelly
Status: Silver Member (Offline)
Joined: Nov 23 2011
Posts: 209
Inequality for All

Moyers & Co. discussion with Robert Reich's film  "Inequality for All"

pinecarr's picture
pinecarr
Status: Diamond Member (Offline)
Joined: Apr 13 2008
Posts: 2259
No gov't rescue as first Chinese co. defaults on domestic bonds

http://www.theguardian.com/business/2014/mar/07/chinese-company-default-bonds-shanghai-chaori-solar

Analysts say Shanghai Chaori Solar default shows China is beginning to let market decide fate of weak borrowers

Doug's picture
Doug
Status: Diamond Member (Offline)
Joined: Oct 1 2008
Posts: 3200
pinecarr
pinecarr wrote:

http://www.theguardian.com/business/2014/mar/07/chinese-company-default-bonds-shanghai-chaori-solar

Analysts say Shanghai Chaori Solar default shows China is beginning to let market decide fate of weak borrowers

China and the rest of us could be reaping the whirlwind if they let the markets decide on their monumental debt bubble.

http://www.zerohedge.com/contributed/2014-03-07/china-crashing-%E2%80%A6...

This was a real eye opener for me.

Doug

thc0655's picture
thc0655
Status: Diamond Member (Offline)
Joined: Apr 27 2010
Posts: 1714

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