Daily Digest

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Daily Digest 7/24 - Cities Get Creative About Recycling Water, Should Markets Be Discounting Conflict?

Thursday, July 24, 2014, 9:16 AM


China signs currency swap worth 150 billion yuan with Switzerland (pinecarr)

Competition is fierce among Europe's major financial centers to trade in China's currency. Frankfurt and Luxembourg are vying with London, the favorite of many analysts, and Switzerland is trying to muscle into the competition.

Analysts say London looks best placed to become Europe's main offshore yuan CNH= center, given its role as the world's biggest foreign-exchange hub.

Recovery? Real Average Hourly & Weekly Earnings YoY Goes Negative (KathyP)

In fact, there hasn’t been YoY growth in real hourly earnings above 2% since October 2009.

It is hard to mount a vibrant economic and housing recovery when real average hourly wage earnings are consistently below 1%.

First Digital Currency Backed By Physical Gold – Independence Coin (Chris F.)

Right now, the INNcoin is in its early stages as an experimental currency. Nevertheless, this new digital coin could set a precedent on how precious metal bullion can be used to back cryptocurrencies in the future. This could potentially also solve the biggest problem of digital currencies: its store of value. By combining blockchain technology with the world’s oldest form of “real money,” a gold-backed digital currency could become a fully-fledged global commerce solution and asset class that can facilitate the ownership, storage, and transfer of precious metals. It also has the potential, interestingly enough, to bring in a new monetary and financial system from a currently broken one. Instead of a form exchange that is worth less every year because it is printed to oblivion by government and politicians around the world, we could use these types of coins to preserve our sweat and labor for immediate and future use.

Some small thoughts before I go (KathyP)

The other half of the power the dollar gives America is that settlement of contracts in dollars means every nation has large dollar accounts which it uses to settle accounts and pay debts. These accounts are held in the small number of global Custodial banks. I think, from memory there are about 4 majors and they are all American: Citi, JPMorgan Chase, Bank of NY Mellon, State Street. These banks house trillions and are one of the choke points used by international lawyers.

Should Markets Be Discounting Conflict? (KathyP)

Think about this: Everything you did this morning involved energy consumption: Waking up to your smart phone (charging overnight), putting on the coffee, pouring the cold milk from the fridge, taking a shower, driving the car to work and walking into your air-conditioned office. Likewise, the rest of your day will be one big consumption of energy. The world’s energy resources are primarily extracted from “volatile” or underdeveloped regions, creating a real risk of disruption of supply. Herein lies a clear and quantifiable risk.

Bulls Take Notice - Caution Suggested as Credit Markets and Equity Markets Diverge (Adam)

When I see the credit markets not confirming the equity markets I take notice as the credit markets tend to lead the stock market at major turning points. The best example of this is the last two major turning points which were the 2007 top and the 2009 bottom. The Bloomberg Financial Conditions Index, which is a composite of credit spreads from the money market, bond market, and equity markets peaked well before the S&P 500 peaked in October of 2007 and also bottomed well before the S&P 500 bottomed in March of 2009. As seen below, the Bloomberg US Financial Conditions index peaked in early 2007 and put in a series of lower highs while the S&P 500 kept marching higher. Similarly, the credit markets put in a “V-spike” bottom in October 2008 while the equity markets didn’t bottom until nearly half a year later.

States, Cities Get Creative About Recycling Water (Alan W.)

As drought spread over 80 percent of the state, Oklahoma cities expressed interest in reusing water but lacked clear guidance from the Department of Environmental Quality on how to do it. A bill signed by Republican Gov. Mary Fallin at the end of May directs the state agency to design a process for creating water reuse projects and to establish rules and permitting requirements.

Energy From Biofuels Can Match Crude Oil Levels (James S.)

The beauty of biofuels is that they don’t pollute. After that things can get ugly.
First, biofuel, an oil made from plant tissues, doesn’t generate as much energy as an equal amount of crude oil. And the oil is difficult to refine because it contains too much water and is acidic. That’s about to change. Researchers at the University of Twente in the Netherlands report that they’ve developed a way to improve the quality of the oil even before it reaches a refinery. As a result, they say, biofuels can pack even more punch than crude oil and rivals the energy found in diesel fuel.

The Turning Point: New Hope For The Climate (Denny J.)

The principal trade group representing U.S. electric utilities, the Edison Electric Institute, has identified distributed generation as the "largest near-term threat to the utility model." Last May, Barclays downgraded the entirety of the U.S. electric sector, warning that "a confluence of declining cost trends in distributed solar­photovoltaic-power generation and residential­scale power storage is likely to disrupt the status quo" and make utility investments less attractive.

Climate Change Creates New Farming Risks (Richard B.)

"You all know that the climate is changing, and you all know that it impacts agriculture. More intense weather patterns, longer droughts, more severe storms, more pests and diseases—this really does have an impact on agriculture. If we don’t get serious about adapting and mitigating, it will just continue."

Howard W. Buffett, only in his fourth year of farming, picked a difficult time to enter the business. In his first year, flooding of the Mississippi came within a mile of his Nebraska farm. The next year he was hit by drought, which he mitigated with center-pivot irrigation. Buffett reasoned that if he could survive and prosper through this extreme weather, he could stay in business for long-term.

Gold & Silver

Click to read the PM Daily Market Commentary: 7/23/14

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."


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Record Student-Loan Debt - Treasury Push to Stem Defaults

Default rates on student debt increased to 14.7 percent for students required to start repayment in 2010, the most recent data available, according to Education Department figures. That’s up from 13.4 percent a year before. http://www.bloomberg.com/news/2014-07-24/record-student-loan-debt-prompt...

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Two Realities

Our contemporary world is host to two coexisting but fundamentally different—and, in at least one crucial respect, contradictory—realities. One of these might be termed Political Reality, though it extends far beyond formal politics and pervades conventional economic thinking. It is the bounded universe of what is acceptable in public economic-social-political discourse. The other is Physical Reality: i.e., what exists in terms of energy and materials, and what is possible given the laws of thermodynamics. http://www.postcarbon.org/article/2322907-two-realities

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First Digital Currency Backed By Physical Gold - LOL

I'd bet the founders of egold and goldmoney would dispute that. And people who understand why we need crypto-currencies laugh at the folks trying to "back" digital currencies with precious metal. Just say no to improper use of the tech, and keep digital digital.

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a dollop of joy amongst the doom and gloom...

Found on Jesse's site, a gem to give inspiration that all is not lost amidst the wars, war mongering, terrorism, humans behaving badly, and general economic shit..........

enjoy 5 minutes of bliss...


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Stan Robertson
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Thanks, Jan.

That was nice!

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Arthur Robey
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Thanks Jan.

We are beautiful.

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California Water Prices Soar for Farmers as Drought Grows

(News story found at zerohedge)


"Farmers in California’s Central Valley, the world’s most productive agricultural region, are paying as much as 10 times more for water than they did before the state’s record drought cut supply.

Costs have soared to $1,100 per acre-foot from about $140 a year ago in the Fresno-based Westlands Water District, which represents 700 farms, said Gayle Holman, a spokeswoman."

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Re: Energy From Biofuels Can Match Crude Oil Levels

No way to "beat" Mother Nature.  This news is dead on arrival.  The only viable solution to keep modern life going is nuke and grid and better batteries.  Not going to happen; call Craig Venter.

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Colorado River Groundwater Disappearing at 'Shocking' Rate

Colorado River Groundwater Disappearing at 'Shocking' Rate

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Another Link

I'm not sure if this link appeared in the related articles that hit the web recently regarding groundwater depletion, so, just FYI:




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