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The Cook Islands go solar

The Cook Islands go solar

Like a number of other remote island communities, The Cook Islands have decided to get rid of expensive diesel power and go to 100% solar within the next few years. To do this they are constructing solar arrays backed up with small amounts of Li-ion battery storage which they believe will overcome the solar intermittency problem. Once again, however, the planners have failed to recognize the prohibitive amounts of battery storage that will be required, and their plans are doomed to fail as a result. The only approach that has any chance of succeeding is to minimize storage requirements by installing far more solar capacity than is needed to meet demand (“overgeneration”), but this approach has problems of its own. (Inset- Rarotonga, the largest and most populous of the Cook Islands).

The Cook Islands consist of 15 widely-separated islands, some inhabited, some not, located 3,000-4000 km northeast of New Zealand and divided into northern and southern groups (see map below). The Islands’ economic exclusion zone covers 1.8 million sq km but the islands themselves only 236 sq km:

According to the UN the population of the Cook Islands was 17,389 in 2017 and according to the World Bank its nominal GDP in 2016 was $US 311 million, giving it a per capita GDP of around $17,900, about the same as Slovakia. The unit of currency is the New Zealand dollar (The Cook Islands are self-governing but Cook Islanders have New Zealand citizenship). Tourism is the main industry.

The Cook Islands are effectively 100% grid-connected, with generation coming dominantly from 6.5MW of diesel plants (photo below). An unspecified amount of solar PV has also been installed, with the largest single installation being the 0.96 MW plant at the Rarotonga airport. Annual electricity consumption was 30.0 GWh in 2013 and peak load in 2011 was 4.83 MW. Because of the cost of imported diesel, however, electricity rates exceed those in either Denmark or South Australia.

…click on the above link to read the rest of the article…

The 8.6-Year Frequency is Within Nature

QUESTION: You have noticed that the 8.6-year frequency even allowed you to see that volcanic eruptions would begin in 2018. Are there other examples from history where you have found this to also be true or was Hawaii just unique?

PK

ANSWER: Oh, there are plenty of examples. Let’s take one of the most famous volcanic eruptions in history – Vesusius. Everybody has heard of Pompeii which was destroyed by the eruption of August 24th, 79AD. That eruption was so violent, it hurled stone and ash 20,000 meters (65,000+ feet) into the sky which then came down and buried Pompeii and Herculaneum. There is even a current song out on the destruction of Pompeii by Bastille.

However, there was a major earthquake 17.2 years before (2 x 8.6) that took place in 62AD which was devastating and also produced a tsunami. On February 5th, 62 AD a powerful earthquake that was probably a 7.5+ in magnitude occurred, with the epicenter at Pompeii the prelude to the eruption. The Latin adviser to Emperor Nero (54-68AD) Seneca the Younger wrote a description of the event. Sheep died from falling rocks and statues were toppled. He even said some people lost their minds and wandered around in their madness.

This earthquake was as significant and 1906 San Francisco earthquake which destroyed much of the city. Like the 1906 San Francisco Earthquake led to the Financial Panic of 1907, which inspired the creation of the Federal Reserve by 1913 almost 8 years following that disaster, we see similar reforms in Rome which also included a monetary system reform.

Pompeii at the time had a population of at least 20,000 and was a tightly packed city which was not particularly favorable for surviving earthquakes. Much of the city was constructed from bricks which tend to crumble easily. Seneca reported that while Pompeii was severely damaged, Herculaneum had far less damage while Naples was barely touched. He described the earthquake in vivid terms:

…click on the above link to read the rest of the article…

 

Congressional Democrats Demand Answers About Amazon’s Facial Recognition Technology

DIGITIZED FACIAL RECOGNITION USING GRID WITH SPECIFIC FEMALE POINTS. (M)
Photo illustration: Getty Images

CONGRESSIONAL DEMOCRATS DEMAND ANSWERS ABOUT AMAZON’S FACIAL RECOGNITION TECHNOLOGY

REPS. KEITH ELLISON, D-Minn., and Emanuel Cleaver, D-Mo., sent a letter to Amazon CEO Jeff Bezos on Friday morning, demanding answers about how the tech giant’s facial recognition technology is being used by law enforcement agencies around the country.

The letter, provided to The Intercept ahead of its public release, lists a total of 12 requests for information regarding Amazon’s facial recognition service, branded as “Rekognition,” including the names of any law enforcement or government agencies that use the system and data on how the service could enable, or itself engage in, discrimination, including racial and gender bias.

“The disproportionally high arrest rates for members of the black community make the use of facial recognition technology by law enforcement problematic,” the letter reads, “because it could serve to reinforce this trend.”

According to an Ellison aide, the letter is an attempt to enact at least a baseline level of congressional oversight for the tech giant — an attempt that comes less than two months after congressional hearings that tried to do the same for Facebook.

Ellison Cleaver Letter to Jeff Bezos 3 pages

Amazon came under fire earlier this week after the American Civil Liberties Union and its affiliates, as well as 35 other civil liberties organizations, released a public letter expressing concerns about how Amazon markets its technology to law enforcement agencies. The ACLU letter coincided with the release of a trove of documents, which the organization obtained through public records requests and after a six-month investigation, that shed light on the company’s relationship and correspondence with law enforcement agencies in Oregon and Florida.

…click on the above link to read the rest of the article…

Edward Snowden on Privacy in the Age of Trump and Facebook

NAHAL OZ, ISRAEL - APRIL 13: (ISRAEL OUT) Israeli soldiers take positions as Palestinian gathered for a protest on the Israel-Gaza border on April 13, 2018 in Netivot, Israel. Thousands of Gaza residents assembled on Friday at the border with Israel to stage another protest as part of their "March of Return" for a third consecutive week.  (Photo by Lior Mizrahi/Getty Images)
Photo: Kayana Szymczak/The New York Times/Redux

EDWARD SNOWDEN ON PRIVACY IN THE AGE OF TRUMP AND FACEBOOK

EXACTLY FIVE YEARS ago this week, Edward Snowden absconded to Hong Kong with a trove of documents detailing the extent of the U.S. government’s global and domestic surveillance programs. He soon found himself in exile in Russia and dubbed “the most wanted man in the world.” The Snowden leaks started a new conversation about digital privacy and online security, and even led to changes in the law. But more recently we’ve discovered it isn’t just Big Government that poses a massive threat to our privacy, but also Big Tech. Facebook, for example, exposed data on up to 87 million Facebook users to a researcher who worked at Cambridge Analytica, a political consultancy employed by the Trump campaign. The issues of surveillance and privacy and mass data collection, not just by the government but by Big Tech firms like Facebook, are still as live and and as contentious as ever. On this week’s episode of Deconstructed, Edward Snowden joins Mehdi Hasan from Moscow to discuss surveillance, tools that can help protect people’s privacy, and the likelihood of a Trump-Putin deal to extradite him.

Transcript coming soon.

Austrian Economics Is Essential to Understand Booms, Busts, and Money Itself

Austrian Economics Is Essential to Understand Booms, Busts, and Money Itself

The boom-and-bust business cycle is a natural result of free-market capitalism, but rather of government intervention.

Looking to the next few years, will America and the world continue to ride a wave of economic growth, improved living standards, and technological changes that raise the quality of life? Or will this turn out to be, at least partly, an artificial economic boom that ends in another economic bust?

Reading the economic tea leaves is never an easy task. But the Austrian theory of the business cycle offers clues of what may be in store. In 1928, the famous Austrian economist Ludwig von Mises published a monograph called Monetary Stabilization and Cyclical Policy. It was an extension of his earlier work, The Theory of Money and Credit (1912).

Many things have happened, of course, over the last nine decades—the Great Depression, the Second World War, the Cold War, the end of the Soviet Union, roller coasters of inflations and recessions, replacement of gold with paper monies, the dramatic expansion of the welfare state, and an era of government debt fed by deficit spending to cover the costs of political largesse.

Then, as today, many governments were busy manipulating the supply of money and credit.

Yet, the laws of economics have not been overturned. As a result, like causes still bring about like effects. Minimum wage laws still price some workers out of the labor market whose value added to the employer is less than what the government dictates he must be paid. Rent controls and restrictive zoning laws create housing shortages when government interferes with market-based pricing.

Mises’ Monetary and Business Cycle Analysis Still Relevant Today

This is no less the case in the area of money and banking. When Mises published Monetary Stabilization and Cyclical Policy in 1928, most of the major countries of the world where still on some version of the gold standard.

…click on the above link to read the rest of the article…

Is US Bellicosity Backfiring?

Is US Bellicosity Backfiring?

Is US Bellicosity Backfiring?

U.S. threats to crush Iran and North Korea may yet work, but as of now neither Tehran nor Pyongyang appears to be intimidated.

Repeated references by NSC adviser John Bolton and Vice President Mike Pence to the “Libya model” for denuclearization of North Korea just helped sink the Singapore summit of President Trump and Kim Jong Un. To North Korea, the Libya model means the overthrow and murder of Libya strongman Col. Gadhafi, after he surrendered his WMD.

Wednesday, North Korean Vice Foreign Minister Choe Son Hui exploded at Pence’s invocation of Libya: “Vice-President Pence has made unbridled and impudent remarks that North Korea might end like Libya … I cannot suppress my surprise at such ignorant and stupid remarks.

“Whether the U.S. will meet us at a meeting room or encounter us at nuclear-to-nuclear showdown is entirely dependent upon the decision and behavior of the United States.”

Yesterday, Trump canceled the Singapore summit.

Earlier this week at the Heritage Foundation, Secretary of State Mike Pompeo laid out our Plan B for Iran in a speech that called to mind Prussian Field Marshal Karl Von Moltke.

Among Pompeo’s demands: Iran must end all support for Hezbollah in Lebanon, the Houthi rebels in Yemen, and Hamas in Gaza, withdraw all forces under Iranian command in Syria, and disarm its Shiite militia in Iraq.

Iran must confess its past lies about a nuclear weapons program, and account publicly for all such activity back into the 20th century.

Iran must halt all enrichment of uranium, swear never to produce plutonium, shut down its heavy water reactor, open up its military bases to inspection to prove it has no secret nuclear program, and stop testing ballistic missiles.

And unless Iran submits, she will be strangled economically.

…click on the above link to read the rest of the article…

Western Grid Regionalization

Western Grid Regionalization

California and 12 other US states, plus parts of Canada and Mexico, are considering whether to expand the California wholesale grid and balancing area to include the entire region, in order to increase the flow of reliable, affordable, and renewable power across the West. This shift to a regional independent system operator, or ISO, would also expand resource flexibility, improve transmission planning and grid reliability, and enable a far larger share of renewable energy across the system. But it’s not without risk: Would a unified Western market kill the market for power projects sold under virtual PPAs outside its borders? Would it give project developers—or even coal plants—operating within the Western grid but outside California a competitive edge over California’s own renewable project developers? Would it become a loophole through which coal power starts being imported into California, after many years of effort trying to get rid of coal in the Golden State? Would California or any of the other Western states lose control over their own power production and consumption? And what about the five states that could join the Southwest Power Pool instead—what will they do?

These are complex questions with no easy answers, but our guest in this episode is an expert on the subject and ably walks us through all the pros and cons…and points the way to a potentially very different future for power markets in the American West.

…click on the above link to listen to the podcast…

Relocalising the food chain: Why it matters and how to do it

It’s hard to escape the growing interest in local food over the past few decades. Whether it’s restaurants boasting fresh, local produce on their menus, the rise in farmers’ markets and farm shops or the growth of box schemes such as Riverford, it’s clear that people value food that comes with a story. Even supermarkets have noticed, as Morrisons credits soaring demand for regional produce for its healthy profits last year. In order to understand the movement better, and to see where it might be headed, it is worth exploring the motivations behind it.

For there is more to ‘local’ than meets the eye. After all, nobody gets excited about eating bacon from the local intensive pig unit or white sliced bread from the in-store bakery at the supermarket. Instead the term is shorthand for a vision of food characterized by small-scale farming and growing, heritage breeds, artisan processing, family businesses and traditional skills.

It is also about self-reliance and ‘taking back control’, in the sense of using what grows locally with a minimum of inputs and rejecting globalization. It is about a sense of connection, which we have traded in for the convenience of the modern food industry, but with mixed feelings, as the Food Standards Authority’s report Good Food for All notes.

…click on the above link to read the rest of the article…

Extreme Weather Causes Production Outages In Libya

Extreme Weather Causes Production Outages In Libya

Rig

A Libyan oil company has had to significantly reduce oil production at its fields because the hot weather has caused several turbines to stop working. The company is Agoco, a unit of the national Oil Corporation, and the decline in production amounted to some 120,000 bpd, sources wishing to remain unnamed told Bloomberg.

This is only the latest production outage in the troubled North African country that has made exemplary efforts to revive its oil production after the NOC regained control over the export terminals and the fields, and settled its disputes with the Petroleum Facilities Guard. It is also the least significant one, as according to the sources, production in Agoco’s fields will return to normal in a few days.

The outage does, however, highlight the uncertainty of Libyan supply, which has been hovering around 1 million barrels daily for over a year, but has failed to move above this level—and not because Libyan is an OPEC member and as such is constrained by a production quota. It is because the political situation in the country is still so unstable that virtually any group with a grudge against the government—or another group—can block a pipeline or attack any piece of infrastructure and cause a production outage.

A few days ago, for example, protesters blocked the entrance to the Ragouba field, which produces around 5,000 bpd, so tanker trucks could not load crude. These particular protesters demanded social and health care benefits and lifted the blockade when the operator of the field promised to grant these.

Last month, a militant group attacked the pipeline feeding crude from the Waha oil field to the Es Sider export terminal, costing the field operators around 80,000 bpd in lost production. This was the second attack on this pipeline in five months. Waha produces 300,000 bpd, on par with Libya’s largest field, El Sharara, which has also been the target of several attacks.

…click on the above link to read the rest of the article…

Who’s To Blame For High Gasoline Prices?

Who’s To Blame For High Gasoline Prices?

Fuel Pump

As retail gasoline prices rise to $3 per gallon across the United States, gas prices are a hot political topic in Washington once again, with the Democrats hoping to slam Donald Trump for causing pain at the pump and Republicans trying to shift blame back on their opponents.

High gasoline prices have long presented dangers for politicians, particularly for those in power when prices rise. The debates often make for great political theater, although they typically fall far short on the substance.

The spike in crude oil prices in 2008, during the heat of the presidential election, popularized the “drill, baby, drill” slogan and also led to calls from both Senators John McCain and Hillary Clinton for a “gas tax holiday” – a temporary suspension in federal gas taxes.

During the Arab Spring in 2011, and the outage of oil supply in Libya, prices spiked again. Republicans blamed former President Obama for high prices, charging that his refusal to allow more drilling caused prices to rise. His release of oil from the strategic petroleum reserve also came under criticism. Years later, when prices crashed because of the oil market downturn, Obama took credit for low gasoline prices.

We haven’t heard much about gas prices since 2014, but with WTI over $70 and gasoline back to $3 per gallon, suddenly it is a hot topic again.

The Democrats held a press conference on Wednesday in front of an ExxonMobil gas station in Washington to blast the Trump administration for high gasoline prices. “It’s time for this president to stand up to OPEC,” Senate minority leader Chuck Schumer said. That was accompanied by a letter by several top Democratic Senators asking Trump to “pressure” OPEC to “increase world oil supplies in order to lower prices at the pump during the upcoming summer driving season.” They noted that the run up in gas prices could cancel out the benefits of the tax cuts from last year.

…click on the above link to read the rest of the article…

Fed’s Dilemma: Debt-to-GDP Ratios Dramatically Understate the Debt Problem

Reader Lars writes Debt-to-GDP ratios understate the true nature of the problem. He uses Greece as an example.

Reader Lars from Oslo, the capital of Norway, and a long-time reader of this blog, questions the widespread use of debt-to-GDP as the true measure of the debt problems of a country.

Hello Mish

As we approach the next debt crisis it’s time to ask some questions.

The widespread measurement of the debt problems of a country is DEBT as a percentage of GDP.

Few analysts question this ratio. But this is how I see things.

GDP = Consumption + Investment + Government Spending + Net Exports.

In simpler terms, GDP is the sum of the private sector plus the public sector plus the net trade balance.

However, only the Private Sector pays taxes and that is what enables debt service. In fact, the private sector must service its own debt as well as that of the public sector.

Thus, a better metric to measure debt levels is private sector GDP as reflected in tax income. This tells us the true brutal story of the debt problem.

Using Greece as an example, the real public debt is over 300% of GDP. Given that Greece’s private sector is less than 50% of GDP, the brutal reality is that Greece has a debt level which is over 600% of Private Sector GDP.

The Greek state takes in around €65 billions in tax. This is approximately 10% of total debts.

During the previous Greek debt crisis, economists noted that Greek debt was less than 2% of global debt.

The problem is that the rest of the world is not going to service the Greek debt. The Greek taxpayer will service the Greek debt, and for him the bill is insurmountable.

…click on the above link to read the rest of the article…

Escaped Ebola Patients Risked Spreading Virus At Packed Prayer Meeting

Two Ebola patients who escaped from a quarantine in the Democratic Republic of Congo attended a prayer meeting with 50 other people, raising the possibility that those exposed could reignite the Ebola epidemic that was on the edge of spreading throughout the world back in 2014.

According to the Daily Star, health agencies confirmed that two of the three fugitives from the quarantine may have spread the virus before dying. Government officials are now worried that the deadly and highly infectious disease could spread as victims fail to grasp the seriousness of being infected.

Ebola

The virus appears to be spreading despite 7,540 vaccines being distributed in the DRC by the World Health Organization. Another 8,000 doses are due to be provided in the coming days.

One doctor said the world is “on the knife’s edge” of another outbreak.

“We are on the epidemiological knife edge,” Dr. Peter Salama, the World Health Organization’s deputy director.

“The next few weeks will really tell if this outbreak is going to expand to urban areas or if we are going to be able to keep it under control.”

So far, seven of the confirmed Ebola cases have been found in urban settings. Doctors say the outbreak has “potential to expand.” Following a meeting with reporters, Dr. Peter Salama said the outbreak “could go either way in the coming weeks.” At last count, 27 people have died and at least 58 cases have been reported in the DRC since May 8.

“We are working around the clock to make sure it [goes] in the right direction,” he said.

According to Al Jazeera, the fatality rate for those infected with Ebola is roughly 50%.  The DRC’s present Ebola outbreak – its ninth since the virus was identified in 1976 – initially appeared confined to a remote village in the country’s northwestern province, but no more.

Ebola

One case was confirmed last week in the city of Mbandaka, home to 1.2 million people.

Virus

…click on the above link to read the rest of the article…

Italian Bonds Tumble, Triggering Goldman “Contagion” Level As Political Crisis Erupts In Spain

When it comes to the latest rout in Italian bonds, which has continued this morning sending the 10Y BTP yield beyond 2.40%, a level above which Morgan Stanley had predicted fresh BTP selling would emerge as a break would leave many bondholders, including domestic lenders with non-carry-adjusted losses…

… there has been just one question: when does the Italian turmoil spread to the rest of Europe?

One answer was presented yesterday by Goldman Sachs which explicitly defined the “worst-case” contagion threshold level, and said to keep a close eye on the BTP-Bund spread and specifically whether it moves beyond 200 bps.

Should spreads convincingly move above 200bp, systemic spill-overs into EMU assets and beyond would likely increase. Italian sovereign risk has stayed for the most part local so far. Indeed, the 10-year German Bund has failed to break below 50bp, and Spanish bonds have increased a meager 10bp from their lows. This is consistent with our long-standing expectation that Italy would not become a systemic event. That said, should BTP 10-year spreads head above 200bp, the spill-over effects onto other EMU sovereigns would likely intensify.

Well, as of this morning, the 200bps Bund-BTP level has been officially breached. So, if Goldman is right, it may be time to start panicking.

Ironically, almost as if on cue, just as the Italy-Germany spread was blowing out, a flashing red Bloomberg headline hit, confirming the market’s worst fears:

  • SPANISH SOCIALISTS REGISTER NO-CONFIDENCE MOTION AGAINST RAJOY.

This confirmed reports overnight that Spain’s biggest opposition party, the PSOE or Socialist Party, was pushing for a no-confidence motion again Spain’s unpopular prime minister. The no-confidence call follows the National Court ruling on Thursday that former Popular Party officials had operated an illegal slush fund, as a result of which nearly 30 people were sentenced to a total of 351 years in prison.

…click on the above link to read the rest of the article…

Canadian Banks See Mortgage Growth Stall As Interest Rates Rise

As anybody who was around for the housing collapse will remember, nothing bursts a bubble in home prices faster than rising mortgage rates. And while US home prices have surpassed their pre-crisis peak, Canadian home prices have risen much more quickly than home prices in the US, and what’s more, they didn’t see nearly as large of a pullback during the crisis.

Housing

Instead, they’ve ridden a wave of hot foreign money to all time highs…

Canada

…in the process, leaving housing and construction as one of the focal points of the Canadian economy.

But in the latest sign that home prices could be due for a pullback, Royal Bank of Canada and Toronto-Dominion Bank reported that mortgage lending fell sharply during the fiscal second quarter, compared with a year earlier.

However, a spike in business lending has helped soften the blow to the bank’s bottom line.

But yields on 10-year Canadian bonds have moved higher since the end of last quarter, meaning mortgages would be more expensive now than then.

Business

One analyst said it’s good that the banks are finding more business customers, because with the Bank of Canada and the Federal Reserve raising interest rates, Canadian banks shouldn’t rely on growth from the consumer end.

“It’s really a favorable macro-economic environment in Canada and the U.S. right now that’s driving really healthy business demand,” Shannon Stemm, an analyst with Edward Jones & Co., said in a phone interview.

“It’s a smart pivot for some of these banks to really focus in on their efforts on the business side when you think about the looming risks and the fact that they’re potentially not getting credit for the growth on the consumer side.”

…click on the above link to read the rest of the article…

Petroyuan is Only the Beginning, Pop Goes the Metals Market

Petroyuan is Only the Beginning, Pop Goes the Metals Market

No boom today.  Boom tomorrow.  There’s always a boom tomorrow”

— Susan Ivanova “Babylon 5”

When Hong Kong Exchanges and Clearing (HKEX) bought the London Metals exchange in 2012 all the speculation about about the effects on gold trading.  The primary reason for buying the LME was to obtain its warehouses and ensure a free flow of metals to points east.

What it also did was give them control over what type and kind of futures contracts could be traded on their exchanges.  No longer would the west control this very important part of the precious and industrial metal supply chain.

Now we’re seeing the next evolution of the power of owning the exchange.   After successfully launching a yuan-denominated gold futures contract last year, the LME is now preparing to issue a range of yuan-denominated metals futures.

In other words… Boom.

First Rule: Do No Harm

When China bought the LME the usual suspects in the contrarian investing community talked about the coming apocalypse for the bullion banks.  It never happened. In fact, China was in a position to help them cap the price of gold and extend the gold bear market for the past six years while it and its strategic partners, namely Russia, accumulated vast quantities of the world’s most important metal.

The Chinese were smart. Take over the LME and, for a while, change nothing. Don’t upset the apple cart and allow markets to operate mostly normally.  Now their ownership of the LME is not an issue.

Until now.  First gold trading in Yuan. Now the rest of the metals.

We’ve all been breathlessly focused on how strong the so-called ‘petroyuan’ oil futures contract has been for the Shanghai Exchange.  It has captured more than 12% of the total oil futures market in just under two months.  That’s incredible.

…click on the above link to read the rest of the article…

Olduvai II: Exodus
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Olduvai
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Olduvai II: Exodus
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Olduvai III: Cataclysm
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