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Daily Digest 12/23 - 2015 Gold Outlook, Chevron Puts Arctic Drilling Plans On Hold

Tuesday, December 23, 2014, 11:00 AM

Economy

U.S. Growth Rate at 5%, Strongest in a Decade (jdargis)

GDP growth has now been revised up by a total of 1.5 percentage points since the first estimate was published in October. Big revisions are not unusual as the government does not have full information when it makes its initial estimates.

U.S. stocks rallied on the data, with the Dow Jones Industrials breaking through 18,000 points for the first time. Prices for U.S. Treasury debt fell, while the dollar rose to a fresh eight-year high against a basket of currencies.

The World Is Not Falling Apart (jdargis)

The only sound way to appraise the state of the world is to count. How many violent acts has the world seen compared with the number of opportunities? And is that number going up or down? As Bill Clinton likes to say, “Follow the trend lines, not the headlines.” We will see that the trend lines are more encouraging than a news junkie would guess.

What would America gain from a Cuban friendship? (jp)

The shift in policy will give the United States an opportunity to reinvigorate some of its relationships across Latin America. Cuba has a strong network of allies across the Caribbean and throughout Central and South America, and has been influential in the development of regional groupings and institutions which explicitly exclude the United States. Even though Cuban and American interests are likely to remain at odds on regional trade and security policies for the foreseeable future, the establishment of direct diplomatic ties will create space for discussion and even collaboration on areas of common concern, such as humanitarian and counter-narcotics efforts.

Ronald Stoeferle: Gold Outlook For 2015 (Taki T.)

This year was cleary a mixed bag for the precious metals. On the one hand, gold stabilized and confirmed its trading range which was formed after last year’s price crash. Another positive fact is the relative strength of the price of gold in most major currencies non-U.S. Dollar, as evidenced by comparing the first two charts below (the first chart, Euro gold, looks relatively more solid than Dollar gold). On the other hand, silver and the miners went lower and broke below their trading range. That is clearly disinflationary, and disfinlation has been the main message that the precious metals complex has signaled in the past year. That is also the baseline for gold’s outlook for 2015.

Nicaragua starts work on $50bn canal between two oceans (Arthur Robey)

...The project’s implementation is sparking protests among local environmentalists who say it will cause significant damage. The possible pollution of Lake Nicaragua, the largest reservoir of fresh water in Central America, raises much concern.

Local residents have been protesting against the destruction, as around 30,000 farmers are expected to be forced off their land due to the construction, according to AFP agency.

Natural Gas: Abundance of Supply and Debate (jdargis)

Since 2005, carbon emissions from electricity generation dropped to 2.05 billion metric tons a year in 2013 from 2.5 billion. (They rose slightly this year because of the unusually cold months in early 2014.) But continuing to expand the use of natural gas instead of lower-carbon alternatives could wipe out any gains, said Haewon C. McJeon, a researcher with Pacific Northwest National Laboratory who participated in a recent study on natural gas.

Chevron puts Arctic drilling plans on hold indefinitely (jdargis)

Imperial Oil and BP bid substantially more than Chevron to explore parcels of their own in the Beaufort Sea — $585 million and $1.2 billion, respectively. The companies have since decided to collaborate on drilling. The earliest that could happen is the summer of 2020, according to Imperial Oil.

Crisis Summit To Save North Sea Oil Industry (Evan K.)

Aberdeen’s City Council is calling for a summit of government, business and labor leaders to search for ways to ease the severe challenges that low prices are posing to Britain’s North Sea oil industry. Jenny Lang, the leader of the City Council, said her city must coordinate efforts by both the Scottish and British governments, as well as labor and industry to protect the oil-related businesses and jobs in Aberdeen. “I have today instructed Angela Scott, our chief executive, to arrange a summit between senior politicians, [central] government officials, industry representatives, trade unions and local politicians - to develop a strategic plan to ensure job losses are either avoided or kept to a minimum,” Lang said Dec. 21 in Aberdeen.

Gold & Silver

Click to read the PM Daily Market Commentary: 12/22/14

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."

9 Comments

KugsCheese's picture
KugsCheese
Status: Diamond Member (Offline)
Joined: Jan 2 2010
Posts: 1429
5.0% Really?

I have visited many cities recently and driven through small towns.  Sure doesn't feel like 5% to me or those I talk to.

rjs's picture
rjs
Status: Gold Member (Offline)
Joined: Aug 8 2009
Posts: 445
natural gas

Natural Gas: Abundance of Supply could be moot...last i looked, gas was at $3.13 mmBTU, down from $4.65 a couple months ago....breakeven in the Marcellus averages $3.73..

rjs's picture
rjs
Status: Gold Member (Offline)
Joined: Aug 8 2009
Posts: 445
on that 5.0%
KugsCheese wrote:

I have visited many cities recently and driven through small towns.  Sure doesn't feel like 5% to me or those I talk to.

remember that's quarterly at an annual rate, so actual growth was around 1 1/4%, and some of that may be an odd seasonal adjustment, based on the previous 5 years of 3rd quarters...the revisions show larger non-residential investment and health care spending than previously reported...and defense spending grew at a 16% rate..

http://www.bea.gov/national/pdf/revision_information/rev1_3q14_3rd.pdf

 

rjs's picture
rjs
Status: Gold Member (Offline)
Joined: Aug 8 2009
Posts: 445
more on the GDP revisions...

ok, i broke down the details...most of the change came from a change in PCE & investment, so herewith they are:

real personal consumption expenditures, the largest component of GDP, were revised to show growth at a 3.2% annual rate rather than the 2.2% growth rate reported last month, and hence they contributed 2.21% to the quarter's growth rate, not the 1.51% previously estimated...real consumption of durable goods grew at a 9.2% rate, revised from the 8.7% growth rate reported in the second estimate, and added .67% to the final GDP figure; major contributors to that were a 15.7% real growth rate in consumption of recreational goods and vehicles and a 11.2% real growth rate in motor vehicle and parts consumption, while real consumption of furnishings and durable household equipment rose slightly and consumption of other durable goods fell, even as all durables consumption benefited from a negative 2.1% deflator...meanwhile, real personal consumption of non-durable goods rose at a 2.5% rate and added 0.39% to GDP, revised from the previous estimate of a 2.2% growth rate, even though inflation adjusted outlays for food and beverages, clothing, and energy goods were virtually unchanged....in addition, real consumption of services grew at an 2.5% rate and added 1.15% to the quarter's growth, revised from the 1.2% growth rate and 0.53% addition reported in the second estimate last month, as real consumption of financial services and insurance grew at a 7.0% annual rate, real consumption of food and lodging services grew at a 4.9% rate, and real outlays for health care services rose at a 4.6% rate, offsetting a small decrease in real outlays for housing and utilities and while outlays for recreation and other services were flat.. 

 

seasonally adjusted real gross private domestic investment grew at a 7.2% annual rate in the 3rd quarter, revised from 5.1% estimate last month and the 1.0% growth that was first estimated, as the growth rate of private fixed investment was revised to 7.7% from the 6.2% estimate of last month and thus added 1.21% to the 3rd quarter's growth rate...real non-residential fixed investment grew at a 8.9% rate, rather than the 7.1% previously estimated, as investment in non-residential structures was revised up from growth at a 1.1% rate to growth at a 4.8% rate, investment in equipment grew at a 11.0% rate, not the 10.7% rate previously reported, and the quarter's investment in intellectual property products was revised from a growth rate of 6.4% to a 8.8% growth rate, while growth in residential investment was revised from 2.7% to 3.2%…after these revisions, investment in non-residential structures added 0.14% to the quarter's growth rate, investment in equipment added 0.63%, investment in intellectual property added 0.34%, while growth in residential investment added 1.0% to 3rd quarter GDP...

 

meanwhile, the real (inflation adjusted) change in private inventories was revised from $79.1 billion greater to $82.2 billion greater than the 2nd quarter, when inventories grew by $84.8 billion over the 1st quarter; hence the $2.6 billion negative change in inventory growth was smaller than $5.7 billion change reported last month or the originally reported $22.0 billion decrease, and thus it only subtracted 0.03% from 3rd quarter growth rather than the .14% subtraction applied in the second estimate last month.... 

rjs's picture
rjs
Status: Gold Member (Offline)
Joined: Aug 8 2009
Posts: 445
the rest of it...

there were also small revisions to our third quarter trade data...3rd quarter exports increased by $23.3 billion, or at a 4.5% annual rate, revised from the increase at a 4.9% rate reported last month, while imports decreased by $5.8 billion, or at a 0.9% rate, revised from the decrease at a 0.7% rate reported in the 2nd estimate...as you should recall, exports add to gross domestic product because they represent that part of our production that was not consumed or added to investment in our country, while imports subtract from GDP because they represent either consumption or investment that was not produced here...thus the smaller increase in real exports added 0.61% to 3rd quarter growth, revised from a 0.65% addition, while the smaller decrease in real imports added 0.16% from the 3rd quarters's GDP, rather than the 0.12% addition, meaning the overall impact of net trade was essentially unchanged...   

finally, there were only minor revisions to real government consumption and investment in this 3rd estimate...real federal government consumption and investment grew at a 9.9% rate vis a vis the 2nd quarter, which was unrevised, as real federal spending for defense grew at a 16.0% rate and added 0.66% to GDP, also unchanged from last month's estimate, while.all other federal consumption and investment grew at a 0.4% rate and added just 0.01% to GDP growth...real state and local outlays rose at a seasonally adjusted 1.1% rate and added 0.13% to GDP growth, rather than the 0.8% rate of increase previously reported, as real state and local investment rose at a 2.1% rate and added 0.08% to GDP while state and local consumption spending rose at a 0.9% rate and added 0.4% to the quarter's growth…

the links show my math...the numbers come from here: http://www.bea.gov/newsreleases/national/gdp/2014/pdf/gdp3q14_3rd.pdf

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Naughty Girls and Heavy Lifters.

Well, there goes the real criticism of Orbital Airships, their inability to make re-entry. They decelerated at 20 Gs, so they were really testing the system out.

Their estimated marginal costs for cargo are one dollar per ton per mile of altitude, as quoted to Dr. Jerry Pournelle at the 2004 Space Access Conference[11]

Wiki

"Is this all just a smokescreen cover for a secret space program using anti-gravity?" I ask, struggling to overcome my vitamin B12 induced psychosis.

But Catherine Austin Fitts knows what she saw in the desert sky that lonely night on the highway; craft from horizon to horizon. -Or is CAF just a naughty little girl?

Whatever. This is progress and a way out of our trap.

Fear, Hope, action and a lot of money may save us yet,  Mr Malthus.

(I just love this ability to load up a back history.)

 

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
A Good 'ol Rant.

Ken O'Keef lets rip. (ex ZH)

And if your blood pressure is still too low, watch this.

Michael_Rudmin's picture
Michael_Rudmin
Status: Platinum Member (Offline)
Joined: Jun 25 2014
Posts: 772
On orbital airships

So if the accelerating craft is a problem, why not make your lower altitude ship go up to a mid-altitude ship with geodesic dome design for maximum lift. If it is too heavy, make it bigger: it will become more effective.

On the Vitamin B12 psychosis, you do seem to be swinging a little more than before. Are you sure it is psychosis, and are you sure it is B12 doing it? Prednisone, for example, causes psychosis in 1/10 of those who take it, sometimes as a withdrawal symptom. But worry and fear can do it, too.

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
B 12

I keep bringing B12 levels up in the hope that others may take the hint and get their levels checked. The condition affects older people and vegans.

My doctor says that there is silent epidemic.

And so far there is absolutely no sign of improvement- the effects are irreversible.

Do you assume that you are sane? One should be very careful about assumptions. This is not a topic suitable for light hearted banter.

The problem with Orbital airships is not their rate of acceleration, but their rate of deceleration. They had a re-entry problem.

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