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Before the Industrial Revolution, people adjusted their energy demand to a variable energy supply. Our global trade and transport system — which relied on sail boats — operated only when the wind blew, as did the mills that supplied our food and powered many manufacturing processes.

The same approach could be very useful today, especially when improved by modern technology. In particular, factories and cargo transportation — such as ships and even trains — could be operated only when renewable energy is available. Adjusting energy demand to supply would make switching to renewable energy much more realistic than it is today.

Renewable Energy in Pre-Industrial Times

Before the Industrial Revolution, both industry and transportation were largely dependent on intermittent renewable energy sources. Water mills, windmills and sailing boats have been in use since Antiquity, but the Europeans brought these technologies to full development from the 1400s onwards.

At their peak, right before the Industrial Revolution took off, there were an estimated 200,000 wind powered mills and 500,000 water powered mills in Europe. Initially, water mills and windmills were mainly used for grinding grain, a laborious task that had been done by hand for many centuries, first with the aid of stones and later with a rotary hand mill.

785px-Jan_van_Os_-_Een_zomers_landschap

“Een zomers landschap” (“A summer landscape”), a painting by Jan van Os.

However, soon water and wind powered mills were adapted to industrial processes like sawing wood, polishing glass, making paper, boring pipes, cutting marble, slitting metal, sharpening knives, crushing chalk, grinding mortar, making gunpowder, minting coins, and so on. [1-3] Wind- and water mills also processed a host of agricultural products. They were pressing olives, hulling barley and rice, grinding spices and tobacco, and crushing linseed, rapeseed and hempseed for cooking and lighting.

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

TTIP—American Economic Imperialism

May 4, 2016

TTIP—American Economic Imperialism

Greenpeace has done that part of the world whose representatives are so corrupt or so stupid as to sign on to the Trans-Pacific and Trans-Atlantic “partnerships” a great service. Greenpeace secured and leaked the secret TTIP documents that Washington and global corporations are pushing on Europe. The official documents prove that my description of these “partnerships” when they first appeared in the news is totally correct.

These so-called “free trade agreements” are not trade agreements. The purpose of the “partnerships,” which were drafted by global corporations, is to make corporations immune to the laws of soverign countries in which they do business. Any country’s sovereign law whether social, environmental, food safety, labor protections—any law or regulation—that impacts a corporation’s profits is labeled a “restraint on trade.” The “partnerships” permit corporations to file a suit that overturns the law or regulation and also awards the corporation damages paid by the taxpayers of the country that tried to protect its environment or the safety of its food and workers.

The law suit is not heard in the courts of the country or in any court. It is heard in a corporate tribunal in which corporations serve as judge, jury, and prosecutor.

In other words, the “partnerships” give global corporations the power to overturn democratic outcomes. Allegedly, Europe consists of democracies. Democracies pass laws protecting the environment and the safety of food and labor, but these laws democratically enacted reduce profits. Anything less than a sweatshop, with starvation wages, no environmental protection, no safety legislation for food or worker, can be overturned at will by global corporations under the terms of the “partnerships.”

Only a traitor, a well paid one, could sign such a pact.

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

China Ocean Freight Indices Plunge to Record Lows

March 14, 2016

China Ocean Freight Indices Plunge to Record Lows

There’s simply no respite.

Money is leaving China in myriad ways, chasing after overseas assets in near-panic mode. So Anbang Insurance Group, after having already acquired the Waldorf Astoria in Manhattan a year ago for a record $1.95 billion from Hilton Worldwide Holdings, at the time majority-owned by Blackstone, and after having acquired office buildings in New York and Canada, has struck out again.

It agreed to acquire Strategic Hotels & Resorts from Blackstone for a $6.5 billion. The trick? According to Bloomberg’s “people with knowledge of the matter,” Anbang paid $450 million more than Blackstone had paid for it three months ago!

Other Chinese companies have pursued targets in the US, Canada, Europe, and elsewhere with similar disregard for price, after seven years of central-bank driven asset price inflation [read… Desperate “Dumb Money” from China Arrives in the US].

As exports of money from China is flourishing at a stunning pace, exports of goods are deteriorating at an equally stunning pace. February’s 25% plunge in exports was the 11th month of year-over-year declines in 12 months, as global demand for Chinese goods is waning.

And ocean freight rates – the amount it costs to ship containers from China to ports around the world – have plunged to historic lows.

The China Containerized Freight Index (CCFI), published weekly, tracks contractual and spot-market rates for shipping containers from major ports in China to 14 regions around the world. Unlike most Chinese government data, this index reflects the unvarnished reality of the shipping industry in a languishing global economy. For the latest reporting week, the index dropped 4.1% to 705.6, its lowest level ever.

It has plunged 34.4% from the already low levels in February last year and nearly 30% since its inception in 1998 when it was set at 1,000. This is what the ongoing collapse in shipping rates looks like:

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

Do Any of the Current Rallies Pass “The Sniff Test”? No.

March 10, 2016

Do Any of the Current Rallies Pass “The Sniff Test”? No.

But you can’t tame the monster of speculative, legalized looting and financialization.

Everything from iron ore to copper to the Baltic Dry Index to stocks to bat guano is rallying. The problem is not a single rally passes “the sniff test:” is the rally the result of changing fundamentals, or is it merely short-covering and/or speculative hot money leaping from one rally to the next?

Every one of these rallies is bogus, a travesty of a mockery of a sham of price discovery, supposedly the core function of markets. What shift in fundamentals drove this rally? Higher profits? No, profits are declining, especially once the phony adjustments are stripped away. Is the global economy strengthening? Don’t make us laugh!

As Chris Martenson and many others have noted, “price discovery” is a joke now, as markets are either propped up by central bank “we got your back” guarantees or outright asset purchases, or driven up and down by speculative hot money flows.

Even the recent (and overdue) run-up in gold has a speculative-fever feel. Whatever the market, the game is the same: traders goose the markets higher with futures purchases, pile on with buying that attracts latecomers, who are then sold the rally at the top and left holding the bag when the rally inevitably deflates, once the speculative hot money exits.

This is not capitalism, or a functioning market: this is the end-game of legalized looting and financialization. What’s the value of real estate? If interest rates are pushed negative, then that gooses housing demand, as the cost of interest on a mortgage declines to near-zero in real terms.

What would the value be at 5% mortgage rates? What would the interest rate be in a truly private mortgage market, one that wasn’t dominated by government agencies and central banks? Nobody knows.

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

Are You Kidding Me? Chinese Exports Plunge 25.4 Percent Compared To Last Year

March 9, 2016

Are You Kidding Me? Chinese Exports Plunge 25.4 Percent Compared To Last Year

We just got more evidence that global trade is absolutely imploding. Chinese exports dropped 25.4 percent during the month of February compared to a year ago, and Chinese imports fell 13.8 percent compared to a year ago. For Chinese exports, that was the worst decline that we have seen since 2009, and Chinese imports have now fallen for 16 months in a row on a year over year basis. The last time we saw numbers like this, we were in the depths of the worst economic downturn since the Great Depression of the 1930s. China accounts for more global trade than any other nation (including the United States), and so this is a major red flag. Anyone that is saying that the global economy is in “good shape” is clearly not paying attention.

If someone would have told me a year ago that Chinese exports would be 25 percent lower next February, I would not have believed it. This is not just a slowdown – this is a historic implosion. The following comes from Zero Hedge…

Things are not getting better in China as Exports crashed 25.4% YoY (the 3rd largest drop in history), almost double the 14.5% expectation and Imports tumbled 13.8%, the 16th month of YoY decline – the longest ever.Altogether this sent the trade surplus down to $32.6bn (missing expectations of $51bn) to 11-month lows.

So much for that whole “devalue yourself to export growth” idea…

I don’t know how anyone can possibly dismiss the importance of these numbers. As you can see, this is not just a one month aberration. Chinese trade numbers have been declining for months, and that decline appears to be accelerating.

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

The End of Globalization?

March 8, 2016

The End of Globalization?

BRUSSELS – China has just announced that last year, for the first time since it began opening up its economy to the world at the end of the 1970s, exports declined on an annual basis. And that is not all; in value terms, global trade declined in 2015. The obvious question is why.

While global trade also fell in 2009, the explanation was obvious: The world was experiencing a sharp contraction in GDP at the time. Last year, however, the world economy grew by a respectable 3%. Moreover, trade barriers have not risen significantly anywhere, and transport costs are falling, owing to the sharp decline in oil prices.

Tellingly, the so-called Baltic Dry Index, which measures the cost of chartering the large ships that carry most long-distance trade, has fallen to an all-time low. This indicates that markets do not expect a recovery, meaning that the data from 2015 could herald a new age of slowing trade. The obvious conclusion is that the once-irresistible forces of globalization are losing steam.

The situation in China is telling. In recent decades, as it became the world’s leading trading economy, China transformed the global trading system. Now the value of both imports and exports have fallen, though the former have declined more, owing to the collapse of global commodity prices.

In fact, commodity prices are the key to understanding trade trends over the last few decades. When they were high, they drove increased trade – to the point that the share of trade to GDP rose – fueling hype about the inevitable progress of globalization. But in 2012, commodity prices began to fall, soon bringing trade down with them.

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

Always Watched, Always Monitored, Always Recorded

March 2, 2016

Always Watched, Always Monitored, Always Recorded

Trade Slump

BALTIMORE – When we left you yesterday, we were discussing the War on Cash – the push by governments to abolish physical currency. It is a fraud. The idea is not to fight crime or boost the economy, as its proponents claim. It is part of a bigger campaign by the Deep State to take more control over your money… and your life.

We’ll return to our theme in a moment. But first… an update on the markets and the economy. It came out last week that world trade did indeed fall in 2015. It was the first time this had happened since 2009.

CAT The decline in sales of “yellow machines” has turned out to be a meaningful signal… Photo credit: Caterpillar Tractor Company

Starting at the end of last year, we began following the trains, trucks, ships, and sales of “yellow machines” – backhoes, loaders, bulldozers, etc. – and watching them all slow down.

Sure enough, they were telling us something important. Reports the Financial Times:

“The value of goods that crossed international borders last year fell 14% in dollar terms.”

Most notably, a decline in world trade means China is not exporting as much merchandise as before. This, we guessed, would mean a greater outflow of foreign exchange reserves from China’s central bank… and make it more difficult for it to prop up the exchange value of the renminbi.

The dollar value of global trade has slumped to the depths of the 2008/9 crisis low

A country accumulates foreign exchange reserves when it exports more than it imports. In the case of China, dollars, euro, etc… flow into the country in exchange for Chinese-made goods. This foreign currency builds up as reserves at the central bank. It can then dip into this stash to buy its own currency and prop up its value.

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

21 New Numbers That Show That The Global Economy Is Absolutely Imploding

February 17, 2016

21 New Numbers That Show That The Global Economy Is Absolutely Imploding

After a series of stunning declines through the month of January and the first half of February, global financial markets seem to have found a patch of relative stability at least for the moment. But that does not mean that the crisis is over. On the contrary, all of the hard economic numbers that are coming in from around the world tell us that the global economy is coming apart at the seams. This is especially true when you look at global trade numbers. The amount of stuff that is being bought, sold and shipped around the planet is falling precipitously. So don’t be fooled if stocks go up one day or down the next. The truth is that we are in the early chapters of a brand new economic meltdown, and I believe that all of the signs indicate that it will continue to get worse in the months ahead. The following are 21 new numbers that show that the global economy is absolutely imploding…

#1 Chinese exports fell by 11.2 percent year over year in January.

#2 Chinese imports were even worse in January. On a year over year basis, they declined a whopping 18.8 percent.

#3 It may be hard to believe, but Chinese imports have now plunged for 15 months in a row.

#4 In India, exports were down 13.6 percent on a year over year basis in January.

#5 In Japan, exports declined 8 percent in December on a year over year basis, while imports plummeted 18 percent.

#6 For the sixth time in six years, Japanese GDP growth has gone negative.

#7 In the United States, exports were down 7 percent on a year over year basis in December.

#8 U.S. factory orders have fallen for 14 months in a row.

#9 The Restaurant Performance Index in the United States has dropped to the lowest level that we have seen since 2008.

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

I’m in Awe at Just How Fast Global Trade is Unraveling

February 16, 2016

I’m in Awe at Just How Fast Global Trade is Unraveling

It simply doesn’t let up. Global trade is skidding south at a breath-taking speed.

China produced a doozie:

The General Administration of Customs reported on Monday that in yuan terms, exports dropped 6.6% in January from a year ago while imports plunged 14.4%. In dollar terms, it was even worse due to the depreciation of the yuan since August: exports plunged 11.2% and imports 18.8%, far worse than economists had expected.

And so the trade surplus, powered by those plunging imports, jumped 12.2% to a record $63.3 billion.

This came on top of China’s deteriorating trade numbers last year, when exports had fallen 1.8% in yuan terms while imports had plunged 13.2%. Imports have now declined for 15 months in a row. That’s tough for the world economy.

OK, Chinese trade data can be heavily distorted by fake invoicing of “imports” from Hong Kong, a practice used to maneuver around capital controls and send money out of China. Imports from Hong Kong in January soared 108% from a year ago, even as shipments from other major trading partners declined. Bloomberg:

China has acknowledged a problem with fake invoicing in the past. In 2013, the government said export and import figures were overstated due to the phony trade to bring money into the mainland. Trade data for December suggested the practice had flared up again, this time to get money out.

In January, we have the additional fudge factor of the Lunar New Year. Chinese companies were closed all last week. It caused all kinds of front-loading in December and early January followed by a wind-down in late January and early February.

Oh, and India:

On Monday, the Ministry of Commerce and Industry in Asia’s third largest economy reported that exports of goods plunged 13.6% in January year-over-year, the 14th month in a row of declines.

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

637 Rate Cuts And $12.3 Trillion In Global QE Later, World Shocked To Find “Quantitative Failure”

February 12, 2016

637 Rate Cuts And $12.3 Trillion In Global QE Later, World Shocked To Find “Quantitative Failure”

2016 is shaping up to be the year that everyone finally comes to terms with the fact that the monetary emperors truly have no clothes.

To be sure, it’s been a long time coming. For nearly 8 years, market participants and economists convinced themselves that the answer was always “more Keynes.” Global trade still stagnant? Cut rates. Economic growth still stuck in neutral? Buy more assets.

It was almost as if everyone lost sight of the fact that if printing fiat scrip and tinkering with the cost of money were the answers, there would never be any problems. That is, policy makers can always hit ctrl+P and/or move rates around. But in order to resuscitate anemic aggregate demand and revive inflation, you need to tackle the core problems facing the global economy – not paper over them (and we mean “paper over them” in the most literal sense of the term).

Well late last month, central banks officially lost control of the narrative. Kuroda’s move into negative territory reeked of desperation and given the surging JPY and tumbling Japanese stocks, it’s pretty clear that the half-life on central bank easing has fallen dramatically.

And so, as the market wakes up from the punchbowl party with a massive hangover, everyone is suddenly left to contemplate “quantitative failure.” Below, courtesy of BofA’s Michael Hartnett is a bullet point summary of 8 years spent chasing the dragon… and a list of the disappointing results.

* * *

From BofA

Whether the recent tipping point was the Fed hike, negative rates in Europe & Japan, or simply the growing market dislocations and macro misallocation of resources and wealth, the deflationary theme of “Quantitative Failure” is stalking the financial markets. A multi-year period of major policy intervention & “financial repression” is ending with weak economic growth & investors rebelling against QE.

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

“Worse than 2008”: World’s Largest Container Carrier on the Slowdown in Global Trade

February 12, 2016

“Worse than 2008”: World’s Largest Container Carrier on the Slowdown in Global Trade

“Massive Deterioration,” the CEO called the phenomenon.

“Bellwether for global trade,” that’s how the Financial Times described Maersk Lines, the world’s largest container shipping company. It’s owned by Danish conglomerate AP Møller-Maersk, which also owns, among other divisions, Maersk Oil. The conglomerate reported fourth quarter earnings today. And they were a doozie.

Maersk B shares plunged over 9% to 7,395 Danish kroner, before bouncing off and closing at 7,875, down 3.6% for the day and down a breath-taking 52% from their peak on March 30 last year.

Global economic slowdown — or worse? That’s the question. This is what CEO Nils Andersen told the Financial Times in an interview after the earnings release:

“It is worse than in 2008. The oil price is as low as its lowest point in 2008-09 and has stayed there for a long time and doesn’t look like going up soon. Freight rates are lower. The external conditions are much worse, but we are better prepared.”

“Better prepared,” that is, than the Group had been in 2008.

He called global trade conditions “abnormal.” Containerized imports to Europe, Brazil, Russia, and West Africa all fell – in Europe and Brazil due to various economic reasons; in oil exporters Russia and West Africa due to the collapse in the price of oil.

The earnings report reflected it: in terms of seaborne container freight, the year had started out with some room for optimism and hopes for growth, but in the second half, and particularly in the fourth quarter, those hopes got hammered by an increasingly gloomy reality.

“Massive deterioration,” Andersen called this phenomenon in the interview.

“Acceptable full-year result in challenging times,” is what the Group called the phenomenon in its earnings report.

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

“It’s Worse Than 2008”: CEO Of World’s Largest Shipping Company Delivers Dire Assessment Of Global Economy

February 10, 2016

“It’s Worse Than 2008”: CEO Of World’s Largest Shipping Company Delivers Dire Assessment Of Global Economy

Earlier today, we highlighted the rather abysmal results reported by Maersk, the world’s largest shipping company.

To the extent the conglomerate is a bellwether for global growth and trade, things are looking pretty grim. Maersk Line – the company’s golden goose and the world’s largest container operator – racked up $182 million in red ink last quarter and the outlook for 2016 isn’t pretty either. The company now sees demand for seaborne container transportation rising a meager 1-3% for the year.

“The demand for transportation of goods was significantly lower than expected, especially in the emerging markets as well as the Group’s key Europe trades, where the impact was further accelerated by de-stocking of the high inventory levels,” the company said, in its annual report.

Just how bad have things gotten amid the global deflationary supply glut you ask?

Worse than 2008 according to CEO Nils Andersen who last November warned that “the world’s economy is growing at a slower pace than the International Monetary Fund and other large forecasters are predicting.” Here’s what Andersen told FT:

“It is worse than in 2008. The oil price is as low as its lowest point in 2008-09 and has stayed there for a long time and doesn’t look like going up soon. Freight rates are lower. The external conditions are much worse but we are better prepared.”
As FT goes on to note, “capacity in the container shipping industry increased 8 per cent in 2015” despite the fact that Maersk only sees global trade growing at between 1% and 3% in 2016.

Imports to Brazil, Europe, Russia, and Africa are all falling, Andersen warned. The company’s business, Andersen says, is suffering from a “massive deterioration.” That, you can bet, will likely lead to a “massive deterioration” in Maersk’s shares, which took a substantial hit on Wednesday in the wake of the quarterly and annual results.

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

World’s Biggest Containership “Hard Aground” As Baltic Dry Crashes Below 300 For First Time Ever

February 4, 2016

World’s Biggest Containership “Hard Aground” As Baltic Dry Crashes Below 300 For First Time Ever

Before this year the lowest level The Baltic Dry Index had reached was 556 in August of 1986 and the highest was in June 2008 at a stunning 11,612. Today saw the freight index hit a new milestone however, crashing through the 300 barrier for the first time ever – at 298, this is almost 50% below the previous record low.

Commodities obviously are saying something very different from “the market”…

And as Dana Lyons notes, of course much of the input into the BDI comes from the price of raw materials. Considering the deflationary spiral in commodities, the drop in the BDI to all-time lows shouldn’t be a shock.

However, the depths that the index is now plumbing is quite alarming and suggests trouble in the global trade picture.

It would also suggest perhaps that the deflationary pressure is not just a supply issue. Consider every prior drop in the Baltic Dry Index down to the 500-600 level. Each time, the index immediately jumped as if latent demand was just waiting for those lower prices. That development has not yet occurred this time around, even as prices are reaching 45% below the previous record low.

The Baltic Dry Index has become a trendy thing to mention in recent years when discussing global market and economic conditions. The truth is, nobody really ever knows for sure what the broader message is behind the index’s behavior.That said, this recent plunge is making it quite difficult to conceive that it means anything positive in terms of the global economy and deflationary pressures.

And finally it’s not just commodities and the Baltic Dry that stalled, as gCaptain reports, one of the world’s biggest containerships is hard aground in Germany’s Elbe River leading to the port of Hamburg.

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

Global Trade Collapsed In January: Bellwether South Korea Exports Crash “Most Since Lehman”

January 31, 2016

Global Trade Collapsed In January: Bellwether South Korea Exports Crash “Most Since Lehman”

As the first major exporting nation to report each month, all eyes and hopeful speculative capital was glued to tonight’s South Korean trade data. After a brief respite in November, December’s drop was worrisome, but January’s just reported 18.5% crash – the most since the financial crisis – has only been seen during a US economic recession. Worse still, South Korean imports plunged over 20% in January as it appears crashing crude and cliff-diving freight indices are less about supply and more about demand (there is none) after all.

Annother red flag in the US recession looming camp…

Furthermore, with China accounting for around one quarter of South Korean exports – and following a 16.5% YoY plunge in December – tonight’s headline data suggests January was a total disaster for the Chinese economy also… though later we will get the PMI data to explain everything.

Economic Activity Is Slowing Down Much Faster Than The Experts Anticipated

January 26, 2016

Economic Activity Is Slowing Down Much Faster Than The Experts Anticipated

We have not seen global economic activity fall off this rapidly since the great recession of 2008. Manufacturing activity is imploding all over the planet, global trade is slowing down at a pace that is extremely alarming, and the Baltic Dry Index just hit another brand new all-time record low. If the “real economy” consists of people making, selling and shipping stuff, then it is in incredibly bad shape. Here in the United States, the dismal economic numbers continue to stun all of the experts. For example, on Monday we learned that the Texas general business activity index just hit a six year low…

Economic activity in Texas keeps getting worse.

The general business activity index out Monday from the Dallas Federal Reserve for January was -34.6, a six-year low and much worse than economists had expected.

The forecast for the monthly index was -14, following a December reading of -21.6 (revised from -20.1) that was also worse than expected.

One could perhaps argue that this is to be expected in Texas because of the collapse in the price of oil.

But what about the very unusual things that we are seeing in other areas of the country? In Erwin, Tennessee, a rail terminal that had been continuously operating for 135 years was just permanently shut down, and hundreds of workers now find themselves without a job…

The last coal train to leave Erwin rolled slowly out of town just after at 3 p.m. Thursday, less than eight hours after CSX Transportation employees heard the news that rocked all of Unicoi County.

“Its a hard pill to swallow,” county Mayor Greg Lynch said. “Of course, we heard rumors that something was coming down. But never in my wildest dreams did I imagine they would just shut down and leave town.”

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

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