Daily Digest

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Daily Digest 7/14 - Shale Beats Deepwater, The Rise And Fall of the Petrodollar System

Thursday, July 14, 2016, 9:50 AM

Economy

IntraGovernmental Holdings: What Are They, Where They Come From, & Is IG The New QE? (Chris H.)

For the twelve month calendar year just finished, the Treasury issued $1.23 trillion in new debt...more than double the previous twelve months issuance of $520 billion. Despite this large jump in new supply, yields fell even absent the Fed's QE and nearly without a single net new purchase by "foreigners".

J.P. Morgan profit falls but beats estimates (lambertad)

So far in 2016, J.P. Morgan's shares are down 4.4% compared with a 9.5% decrease in the KBW Nasdaq Bank index. Big-bank stocks have been hit hard this year, first by fears around China's economic growth and the oil-price slide and then by Brexit. Still, large U.S. banks have fared much better than their European counterparts.

The Most Dangerous Stock Market Game (Tiffany D.)

You may not have heard the term melt-up before. But if you’ve strapped yourself to the bull at more than one market rodeo (or if you’ve tried to keep yourself planted in your bearish spectator’s seat during the same period), then you certainly know what the ride feels and looks like.

End of an Era: The Rise and Fall of the Petrodollar system (Taki T.)

Former U.S. Congressman Ron Paul explains that “understanding the Petrodollar system and the forces affecting it, is the best way to predict when the U.S. Dollar will collapse.” The origins of the petrodollar system go back to the Bretton Woods system, the 1944 post-war agreement, which made the U.S. Dollar the sole reserve currency. From then on, only the U.S. Dollar would be convertible into gold at a fixed rate of USD35 per ounce. This also meant that only the U.S. was able to change the price of gold and, in turn, it committed to maintaining the value of the Dollar by buying and selling unlimited quantities of gold, at the agreed upon rate of USD35 per ounce. In 1945, the U.S. Treasury had 17’848 metric tons of fine gold, which at the time represented around 63% of the official gold reserves. The gold-backed Dollar offered the world a reliable and stable reserve currency. However, cracks in the Bretton Woods system began to emerge, as the export surpluses of the U.S. began to drop after 1960.

In World Of $50 Oil, Shale Beats Deepwater

Intriguingly, the report finds that conventional oil drillers have not had as much success in reducing costs. Non-shale drilling projects only achieved cost reductions on the order of 10 to 12 percent, Wood Mackenzie found. That means that a lot of large oil projects are not economical with oil prices at $60 per barrel.

Half of all US food produce is thrown away, new research suggests (jdargis)

But that is just a “downstream” measure. In more than two dozen interviews, farmers, packers, wholesalers, truckers, food academics and campaigners described the waste that occurs “upstream”: scarred vegetables regularly abandoned in the field to save the expense and labour involved in harvest. Or left to rot in a warehouse because of minor blemishes that do not necessarily affect freshness or quality.

What phony op-eds about climate change have in common (jdargis)

Another common flag was that virtually every author or outlet that ran one of the pieces was a persistent climate denier. Examples include that constant industry voice, the Wall Street Journal editorial page; columnist George Will; the Heartland Institute, which has infamously compared people who “believe in Global Warming” to the Unabomber; the voluble Hans von Spakovsky from the Exxon and Koch-funded Heritage Foundation; and a torrent of lesser-known (but often more vitriolic) tagalongs. Many participants were repeat performers: Spakovsky, for instance, wrote three separate op-eds, published in over a dozen different outlets over three weeks in April of this year. He recently fired off yet another. One might wonder where he finds the time.

Fossil Fuel Industry Risks Losing $33 Trillion to Climate Change (jdargis)

The meeting Monday was organized by the Task Force on Climate Related Disclosures, a group established last year by Bank of England Governor Mark Carney. It seeks to bring transparency and consistency to how companies warn investors about dangers they face from climate change. The group, led by Bloomberg LP founder and majority owner Michael Bloomberg, is drafting voluntary guidelines for companies to disclose risks related to coastal flooding, carbon-dioxide emissions and shifting global energy policies.

Gold & Silver

Click to read the PM Daily Market Commentary: 7/13/16

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."

4 Comments

pyranablade's picture
pyranablade
Status: Silver Member (Offline)
Joined: Nov 8 2010
Posts: 205
End of an Era

If you want to better understand how the dollar has maintained its value after going off the gold standard - and then how it can quickly lose much of what value it still has - this is a good article to read.

http://goldandliberty.com/money-markets/end-era-rise-fall-petrodollar-system/

newsbuoy's picture
newsbuoy
Status: Silver Member (Offline)
Joined: Dec 10 2013
Posts: 228
Crash Flag

Articles about DOW 50,000 are now appearing.

Crash must be near.

Or they're opening more gulags. Those industrial/prison stocks are a sure thing. Buy Nike! [sic]

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4066
Corporate defaults reach 100 — a 50% jump from this time last ye

Corporate defaults reach 100 — a 50% jump from this time last year

Tall's picture
Tall
Status: Platinum Member (Offline)
Joined: Feb 18 2010
Posts: 564
Diversity of life across much of Earth below ‘safe’ levels

The concern is that species-anemic ecosystems will struggle or fail, and so become unable to provide us what we actually need in the form of stored carbon, filtered water, fertile soils and much else. Animals need these ecosystem “services,” to be sure, but so do humans.

“Biodiversity supports a number of functions within ecosystems, things like pollination, nutrient cycling, soil erosion control, maintenance of water quality,” Newbold said. “And there’s evidence that if you lose biodiversity, that these functions don’t happen as well as they would have done in the past.”

https://www.washingtonpost.com/news/energy-environment/wp/2016/07/14/the-diversity-of-life-across-much-of-earth-has-plunged-below-safe-levels-scientists-say

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