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Wednesday 06th of July 2022
 
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The number of Britons who want Boris Johnson to resign has reached a new high, at 69%. @YouGov
Law & Politics


The number of Britons who want Boris Johnson to resign has reached a new high, at 69%. @YouGov

The majority of 2019 Conservative voters (54%) also want to see the PM go, the first time this has been higher than the number who want him to stay (33%)

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Jul 3 Today the Russian Ruble is the best performing currency in the World.
Law & Politics


Jul 3 Today the Russian Ruble is the best performing currency in the World. 

There are plenty of Armchair Generals and Commentators on Twitter who will dismiss the Ruble rally but they are like the Armchair Generals who told us Zelensky was going to take his Army to Moscow and the Russians were going to strew rose petals at his Feet.

By sanctioning the Russians, we created a reverse '' Petro Dollar'' We created a ''Petro Ruble'' a currency backed by commodities. 

It is a straightforward calculation now between a Money Printer and a currency backed by hard and soft commodities. Its a No Brainer and a seismic macro development. 

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Jul 3 The Flaws in this Strategy are in plain sight but apparently invisible to the Architects of the Strategy
Law & Politics


Jul 3 The Flaws in this Strategy are in plain sight but apparently invisible to the Architects of the Strategy

Therefore, it is clear Western Policy Makers are going to double down on the failing sanction warfare strategy.


The Flaws in this Strategy are in plain sight but apparently invisible to the Architects of the Strategy [who by the way would have been stopped out an eternity ago if this was a Trading Floor] 

Western markets are turbo finiancialized and for an eternity, Western banks and Central Banks have been able to distort the commodity price complex with little difficulty. 

Take the Gold market for example where derivatives are 100x the underlying. One can create inorganic cascade like price moves in the derivatives market and thereby control the physical commodity. 

There are plenty of examples of these inorganic price moves. In essence, the Tail wags the dog. 

The challenge is where the Supply/Demand balance is precarious and a small adjustment [reduce Supply or increase Demand] tips the situation into disequilibrium. 

The Tail will no longer wag the Dog and the Dog will simply run amok.


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Natural Gas Soars 700%, Becoming Driving Force in the New Cold War @business @YahooNews
Commodities


Natural Gas Soars 700%, Becoming Driving Force in the New Cold War @business @YahooNews 

(Bloomberg) -- One morning in early June, a fire broke out at an obscure facility in Texas that takes natural gas from US shale basins, chills it into a liquid and ships it overseas. It was extinguished in 40 minutes or so. No one was injured.

It sounds like a story for the local press, at most — except that more than three weeks later, financial and political shockwaves are still reverberating across Europe, Asia and beyond.
That’s because natural gas is the hottest commodity in the world right now. It’s a key driver of global inflation, posting price jumps that are extreme even by the standards of today’s turbulent markets — some 700% in Europe since the start of last year, pushing the continent to the brink of recession. 

It’s at the heart of a dawning era of confrontation between the great powers, one so intense that in capitals across the West, plans to fight climate change are getting relegated to the back-burner.
In short, natural gas now rivals oil as the fuel that shapes geopolitics. And there isn’t enough of it to go around.
It’s the war in Ukraine that catalyzed the gas crisis to a new level, by taking out a crucial chunk of supply. 

Russia is cutting back on pipeline deliveries to Europe — which says it wants to stop buying from Moscow anyway, if not quite yet. 

The scramble to fill that gap is turning into a worldwide stampede, as countries race to secure scarce cargoes of liquefied natural gas ahead of the northern-hemisphere winter.
The New Oil?
Germany says gas shortfalls could trigger a Lehman Brothers-like collapse, as Europe’s economic powerhouse faces the unprecedented prospect of businesses and consumers running out of power. 

The main Nord Stream pipeline that carries Russian gas to Germany is due to shut down on July 11 for ten days of maintenance, and there’s growing fear that Moscow may not reopen it. 

Group of Seven leaders are seeking ways to curb Russia’s gas earnings, which help finance the invasion of Ukraine — and backing new LNG investments. 

And poorer countries that built energy systems around cheap gas are now struggling to afford it.
“This is the 1970s for natural gas,” says Kevin Book, managing director at ClearView Energy Partners LLC, a Washington-based research firm. 

“The world is now thinking about gas as it once thought about oil, and the essential role that gas plays in modern economies and the need for secure and diverse supply have become very visible.”
Natural gas used to be a sleepy commodity that changed hands in fragmented regional markets. 

Now, even though globalization appears to be in retreat across much of the world economy, the gas trade is headed in the opposite direction. It’s globalizing fast — but maybe not fast enough.
Many countries have turned to natural gas as part of a transition to cleaner energy, as they seek to phase out use of dirtier fossil fuels like coal and in some cases nuclear power too. 

Major producers — like the US, which has quickly risen up the ranks of LNG exporters to rival Qatar as the world’s biggest — are seeing surging demand for their output. 

Forty-four countries imported LNG last year, almost twice as many as a decade ago. 

But the fuel is much harder to shift around the planet than oil, because it has to be liquefied at places like the Freeport plant in Texas.
And that’s why a minor explosion at a facility seen as nothing special by industry insiders — it’s not the biggest or most sophisticated of the seven terminals that send LNG from American shores – had such an outsized impact.
‘The Current Crisis’
Gas prices in Europe and Asia surged more than 60% in the weeks since Freeport was forced to temporarily shut down, a period that’s also seen further supply cuts by Russia. 

In the US, by contrast, prices for the fuel plunged almost 40% — because the outage means more of the gas will remain available for domestic use.
There were already plenty of signs of extreme tightness in the market. War and Covid may be roiling every commodity from wheat to aluminum and zinc, but little compares to the stomach-churning volatility of global gas prices. 

In Asia, the fuel is now about three times as expensive as a year ago. In Europe, it’s one of the main reasons why inflation just hit a fresh record.
Natural gas remains cheaper in the US — but even there, futures had more than doubled this year before the Freeport shutdown. 

With key political allies from Germany to Ukraine desperate to buy American gas, US manufacturers warn that more sales abroad will mean higher costs at home. 

The market reaction to the Freeport fire illustrates a “clear connection between LNG exports and the inflationary impacts to domestic prices for natural gas and electricity,” says Paul Cicio, president of the Industrial Energy Consumers of America.

To meet all the new demand will require a massive wave of investment in supply. 

That’s already under way, and it got a boost at last week’s meeting of the Western world’s biggest economies, where G-7 leaders vowed to back public investments in gas projects — saying they’re “necessary in response to the current crisis.”

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.02443 
Dollar Index 105.112
Japan Yen 135.2725
Swiss Franc 0.96804
Pound 1.192495
Aussie 0.678645 
India Rupee 79.33605 
South Korea Won 1307.440 
Brazil Real 5.3870
Egypt Pound 18.862700
South Africa Rand 16.592800 

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Jul 3 One can create inorganic cascade like price moves in the derivatives market and thereby control the physical commodity.
Commodities


Jul 3 One can create inorganic cascade like price moves in the derivatives market and thereby control the physical commodity.

One can create inorganic cascade like price moves in the derivatives market and thereby control the physical commodity. 

There are plenty of examples of these inorganic price moves. In essence, the Tail wags the dog. 

The challenge is where the Supply/Demand balance is precarious and a small adjustment [reduce Supply or increase Demand] tips the situation into disequilibrium. 

The Tail will no longer wag the Dog and the Dog will simply run amok.

read more




The Phenomenon is spreading like wildfire in large part because of the tinder dry conditions underfoot.
Emerging Markets

The Phenomenon is spreading like wildfire in large part because of the tinder dry conditions underfoot.
Prolonged stand-offs eviscerate economies, reducing opportunities and accelerate the negative feed- back loop.
Antonio Gramsci wrote, “The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum, a great variety of morbid symptoms appear. now is the time of monsters.”
Ryszard Kapucinski also said: “If the crowd disperses, goes home, does not reassemble, we say the revolution is over.”
It is not over. More and more people are gathering in the Streets.

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Ugandan central bank increased its key interest rate to the highest in more than two years on concerns over mounting price pressures after holding a special monetary policy meeting. @BNNBloomberg
Africa


Ugandan central bank increased its key interest rate to the highest in more than two years on concerns over mounting price pressures after holding a special monetary policy meeting. @BNNBloomberg

The monetary policy committee raised the benchmark rate to 8.5% from 7.5%, Deputy Governor Michael Atingi-Ego said in a virtual briefing on Tuesday in the capital, Kampala. 

That adds to a 100 basis point increase a month ago and brings the benchmark to the highest level since early April 2020.
Uganda’s central bank was the first in Africa to call a special MPC meeting since the start of the war in Ukraine. 

Since February, central banks including Russia, Kazakhstan and India have held special meetings to curb portfolio outflows, currency sell-offs, inflation or all three and attract investors lured by rising interest rates in the US and Europe.
Annual core inflation, which excludes food and energy, exceeded the central bank’s 5% medium-term target for a second straight month, accelerating to 5.5% in June, from 5.1% the previous month. Headline price growth quickened to 6.8% from 6.3% in May.

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by Aly Khan Satchu (www.rich.co.ke)
 
 
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July 2022
 
 
 
 
 
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