Sunday, December 23, 2018

CANADA NEEDS TO DEVELOP ITS OIL AND POST-CARBON TECHNOLOGIES CONCURRENTLY --- OIL IS A TRANSITIONAL TECHNOLOGY

23 December 2018

Carbon emissions rose 3 per cent in 2018 and look set to keep rising in 2019. The amount of renewable energy we produce is growing quickly, but global demand for energy is growing faster. Just a quarter of the rise in energy demand in 2017 was met by renewables, according to the International Energy Agency, the body predicting an upcoming 100 million barrels per day oil-consumption milestone.

Image result for canada oil pipeline map

That is, we're going to use more oil before we use less. This is applicable to Canada, as we're doing it backwards here. In fact, Canada officially views oil as a sunset industry, and is trying to rein in oil production now, without doing very much at all to develop post-carbon alternatives.

I propose an entirely different path. We should instead view oil as a transitional technology, still in increasing use. Those are the facts. Thus, Canada should continue to develop its oil industry, especially to get oil from Alberta to the east and to export more of it.

My plan (1) makes Canada more energy independent (why are we importing Saudi oil to Eastern Canada, rather than developing Alberta oil and shipping it eastwards by the safest possible method --- pipeline?); and (2) greatly increases tax revenues and Canadian jobs, and thus Canadian wealth.

Related image

WIth more money and more jobs, we can then afford to invest much more in post-carbon technologies, meaning that (1) Canada can be a more important oil-producing nation (why leave this to the Saudis?); and (2) Canada can be a more important post-carbon nation, developing more post-carbon energy technologies, putting them into use sooner, and selling them to the world as an innovation leader.

How about a serious fusion power initiative in Canada, funded by increased oil revenues?
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Sunday, July 29, 2018

Russia's "Can't Lose" Financial Strategy

17 February 2014 - updated 22 August & 22 December 2014; 30 January 2015; 21 April 2015; 2 January; 20 September 2016; & 22 March 2018; 29 July 2018

This is a legacy article, dating back to February 2014. I have been adding updates as they come available. Russian gold reserves have almost doubled since I first published this article, and now stand at fifth in the world. 

Here's a strategy I've thought about for a while now. This is only possible because we have abandoned the gold standard (and with it, sound money - you can talk to Ben Bernanke and Janet Yellen about that). 


Let's just say a government decided to print money out of thin air and use it to buy gold. You start with something that is an entirely artificial construct (any national currency in today's world meets this criterion) and use it to buy something that is real, scarce and irreplaceable (gold still meets THOSE criteria!). Voila, you have a "can't-lose" strategy for getting leaps and bounds ahead of everyone else. 

And... I think one country may actually be doing this (I originally commented on this a couple of years ago). Check out these two Russian charts.... 


(1) They are buying-up gold hand over fist; and 


(2) They are printing funny money like crazy (it's virtually without cost for any nation to increase their "money supply" like this today, for as long as the current insanity lasts). 


Vladimir Putin is NOT a nice guy. We all know that. But is he a smart guy? Yeah. And a wise guy, too. Perhaps a few of the rest of us should clue in... and catch up. 


Russia's gold reserves are up 150% in 7 years:




Russia's money supply is up 33% in 2 years:




I have said earlier that the Federal Reserve should have just put $10,000 in the mailbox of every US citizen (yes, they HAVE spent that much "new" money to "rescue" the still-staggering economy). This would have done MUCH more for the economy than bailing out BOTH political parties, GM, Countrywide Financial and Bank of America. 


But a better scheme even that that would have been to take the $3 trillion printed dollars (yes, they did print $3 trillion to bail out the government and the banks) and to quietly, discreetly, buy gold with it. 


Well, have no fear. Ben Bernanke gave all his money to Citibank, Fannie Mae, General Motors, and the US Congress. It's gone. 


But Vlad Putin bought gold with his "printed money." In my world, Mr. Putin is BY FAR the wiser man.

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22 August 2014: While some reports show slow periods and even temporary reversals in Russia's accumulation of gold, the most recent figures from the World Gold Council show that Russia has (again) reported an increase in its official reserves since February 2014, moving its place in global national gold rankings up two additional slots. What can I say? Print money, buy gold. It's legal. Just what I don't really get is why only the Russians are doing it.... (Believe me, some day, this will no longer be allowed!)


Russia (#5 globally):
Official gold holdings:
1,094.7 tonnes

Percent of foreign reserves in gold:
9.7%

Russia has increased its gold holding since February 2014 and has eclipsed both Switzerland and China. In August 2014, Russia's central bank decided to buy up even more gold and diversify away from the dollar and the euro as a result of economic sanctions imposed by the West.

Russia's central bank gold holdings crossed the 1,000-tonne mark for the first time in Q3 2013.

Source: World Gold Council

22 December 2014: While I disagree with Mr. Putin on many points, in particular, the suppression of diversity at home and my belief that Ukraine should shape its own future, the Russians continue to be cleverer than we in many respects. Despite rumours that they have been selling gold, in fact, it is US dollars that they are unloading, while (wisely) buying ever more gold.






For more information, click here.

30 January 2015: Russia's gold purchases were up 123% during the first 11 months of 2014, including the period during which the Ruble began to collapse. The Financial Times reports:

"Russia’s central bank purchased 152 tonnes of gold worth $6.1bn at today’s prices, according to GFMS estimates. Analysts also said Russia’s purchases might have been due to the buying of domestically produced gold that could not be easily sold overseas due to sanctions.

“'This is a clear positive for the gold price,' said Matthew Turner, analyst at Macquarie. 'If central banks had not purchased that gold it would have been bought by private investors or jewellery consumers, and this would likely have required a lower gold price.'

"While Russia was a strong buyer this year, analysts say purchases could slow and the country could become a seller if it continues to liquidate its reserves to support the domestic currency."

For the full story, click here.

21 April 2015: Kitco News reports that Russia has resumed gold buying following a 2-month hiatus (click here):

"After a two-month hiatus the Central Bank of the Russian Federation jump back into the gold market, demonstrating that official demand remains strong, say analysts.

"According to media reports, the Russian central bank bought 28 tonnes of gold in March, the biggest one-month purchase since September. In January the central bank sold 0.5 tonnes of gold and didn’t purchase anything in February.

"The report noted, as of April 1, Russia’s official gold reserves stood at 1,128.3 tonnes, compared to the previous level of 1,207.7 tonnes. According to data from the World Gold Council, Russia has the fifth largest gold reserves in the world (not including reserves held by the International Monetary Fund).

2 January 2016, The world's smartest gold buyers have done it again. As of November 2015, we have these figures:

- Russia adds another 700,000 ounces (22 tonnes) to gold reserves in November
- Russian ally Kazakhstan increased gold reserves for 38th month – 7 Mil ounces
- Russia has added 197.1 tonnes in 2015 – Compared with 172 tonnes in all 2014
- November gold buying is Russia’s ninth straight month of increase
- Russia now has sixth largest gold reserves in the world
- Central bank buys all Russian gold production
- Other Russian gold demand imported
- Russia views gold bullion as “100% guarantee from legal and political risks”

RussiaReservesst20151219

Russia continues to add to its gold reserves and added another 700,000 ounces in November or another 22 metric tonnes, and analysts believe this buying will continue and may intensify in the coming months.
Russian ally Kazakhstan increased its gold reserves for a 38th month to 7.03 million ounces in November from 6.96 million ounces a month earlier.
The latest large increase in Russia’s gold reserves – a “buying spree” as reported on Reuters Africa has again gone largely unnoticed by most analysts. Indeed, the important monetary and geopolitical ramifications continue to be largely ignored in western media.
Russia’s total gold reserves have now increased to 44.8 million ounces or around 1,392.8 metric tonnes (up 40% from February 2014, when this article was originally published), with a current value of just $48.3 billion. Russia’s total FX reserves are $371.2 billion and their gold allocation remains just 13% of their total reserves.
The share of gold in Russian foreign exchange reserves is much lower than in many other countries such as the U.S., Italy and France. Russian diversification into gold is likely to continue and could intensify if relations with the U.S. and NATO powers further deteriorate.
Russia still has less than a fifth of the gold reserves of the U.S. which are believed to be over 8,400 metric tonnes of gold. However, the U.S. has no foreign exchange reserves and is the largest debtor in the world – indeed it is one of the largest debtors the world has ever seen.
Russia now has the sixth highest gold reserves in the world – behind the U.S., Germany, Italy, France and China.
In 2014, Russia bought more gold in than in any year since the break-up of the Soviet Union. The country acquired over 173 metric tonnes according to World Gold Council figures. Reserve diversification intensified after April — averaging about 20 tonnes per month....
Click here for the full story from GoldCore....

Meanwhile, Russian money supply has grown another 7% since the end of 2014, an increase of about 2.2 trillion roubles. 

As I've been commenting, why not print money and buy gold with it? The Russians have got it figured out.... 20 September 2016. The Russians have outdone themselves again. Russia, which has defaulted 5 times and has been in that state for 10 of the last 26 years, just sold a stack of bonds to a collection of hedge funds, pensions and "smart" buyers. Some if not all the proceeds at the government level apparently went to buy yet another 700,000 ounces (21.77 metric tons) of gold in a single month! The Russians are truly unequaled at the level of long-term financial strategy. Click here for more information. 

There is more information here, regarding Russia's fast-rising store of gold. 

Clearly the Russians know something we don't!

22 March 2018. When bars of gold came flying out of a cargo plane taking off from a Siberian airport earlier this month, littering the run-way with precious metal, it was more than symbolic: Russia is hoarding gold, and it’s apparently got so much it can’t keep it contained.

Russia’s been hoarding gold for a while—but it’s going for a new record in 2018, dumping U.S. treasuries for gold at a rate not seen in years as it overtakes China for fifth place among the world’s sovereign holders of the precious metal....



29 July 2018. Russia added 500,000 ounces of gold (15.55174 tons) to reserves in June and bought some 106 tons of gold since the start of the year, with total reserves now approaching the 2,000-metric-ton mark. Last year, Russia added a record 224 tons of gold to the reserves. 

Image result for russian gold holdings chart 2018

Notably, the Bank of Russia has been buying gold every month since March 2015, overtaking China as the fifth-largest sovereign holder of gold. Russia‘s U.S. dollar reserves have also shrunk from $96.1 billion in March to just $14.9 billion in May, according to the Russian Central Bank. Its governor, Elvira Nabiullina, says the decision will help protect the Russian economy and diversify the bank’s reserves.

It's striking that while other central banks have gotten rid of gold and accumulated US dollars, the Russians have been far smarter, getting rid of US dollars and accumulating gold. 

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