BOOM as at 24th January 2021

OIL PRICE SURGE — OIL PRICE STAGNATION — ENERGY SCENARIOS — SELLERS SELL BITCOIN — XRP COLLAPSES — PROFESSOR TESTED POSITIVE NOT WORRIED — A SUMMARY OF VACCINES IN DEVELOPMENT — ADJUVANT SAFETY —   
 

ENERGY SCENARIOSOIL PRICE SURGE — OIL PRICE STAGNATION

BOOM is very worried about the possibility of a military confrontation happening in the Persian Gulf especially in the Strait of Hormuz. Such an event could trigger a sudden, huge surge in the price of oil globally. And that could trigger a financial market panic due to the possibility of rapidly rising CPI inflation. In such a scenario, the price of all bonds could drop sharply as expectations rise for both higher short term interest rates and higher long term interest rates. This would create a massive shock to all of the globe’s financial markets.

In such a scenario, equity markets may also fall or they may rally initially due to a flood of investment funds out of bonds. But if the military situation were to persist for any significant period of time, the potential for more serious economic damage could rise and equities could then weaken as nervous investors rushed to the safety of cash.

This scenario is probably the most worrying threat of all to the world’s financial markets. It could unfold very rapidly indeed and would be totally unpredictable. It hinges on a sudden, unexpected rise in the price of oil.

Gail Tverberg has written a paper on the opposite scenario where oil prices continue to be too low for economies to function as previously.  The article is called “More Troubles Likely”. She expects world energy consumption to fall, paradoxically because prices are too low to reward producers. Less oil production means less oil consumption — it’s as simple as that. But she expects other consequences. She predicts that lower prices leading to lower production and lower consumption will affect everyone but in a different way.  She states that “with lower energy consumption, many things tend to go wrong at once. A huge drop in energy consumption is likely to mean disruption in the world economy of  varying types for many years to come”.

She predicts more political upheavals, debt defaults, supply chain disruptions and more conflict.  According to Gail, all of this will come as energy consumption plummets.

Both scenarios show that the production of energy and its consumption hinge on the price. The trick here is to determine the optimum price. In conventional economics, that is supposed to be determined by supply and demand in a free market. But in the real world, there are other variables to consider — the speed and unpredictability of change, the availability of credit money (or not) which is necessary for the purchase of energy and the special, secret deals that occur outside of the so-called “free market” for oil.

In scenario one, the consumption of energy would be expected to fall because of the much higher price.  In scenario two, the consumption of energy would be expected to fall because of lack of supply. Both result in economic hardship and chaos. The Goldilocks price of oil (whatever that is) is the price that will keep economies stable with low unemployment levels.

More Troubles Likely:  https://ourfiniteworld.com/2021/01/12/2021-more-troubles-likely/

By the way, in BOOM’s opinion, the term hyperinflation is used incorrectly in the article. Hyperinflation is actually currency collapse, not just very high levels of CPI inflation.

SELLERS SELL BITCOIN

According to the website Coinmarketcap, Bitcoin reached a recent high price of US$ 41,151 on Sunday January 10th. Just 12 days later, on Friday, 22nd January, it had fallen to $ 30,688.  This represents a fall of 25 % from the top price.

To regain that top price, it will now have to appreciate by 34 %. Commodity price dynamics are like that. Rising is harder work than falling.

XRP COLLAPSES

The Securities and Exchange Commission in the USA has decided that the XRP “crypto-coin” is a security. The SEC alleges that Ripple’s XRP is a security within the meaning of the Securities Act of 1933 and that Ripple has issued millions of dollars of this security without the proper registration. The price of the “crypto-coin” as reported by Coinmarketcap has collapsed from a  high of US$ 0.72 in November to a recent low of $ 0.19 cents. That is a drop of 73 % from the high. It is (apparently) still being actively traded on online crypto exchanges.

Link:  https://www.aier.org/article/the-sec-cryptocurrencies-and-securities/

STATISTICS OF COVID

In this short video, the statistics of Covid 19’s impact are clearly explained and compared to the dreadful Spanish Flu epidemic that occurred globally in the 1920’s. The death numbers from the Spanish Flu were far, far greater than Covid 19. The effectiveness of masks and lockdowns is also analyzed. The 2019 World Health Organization recommendations on Pandemic influenza clearly stated “Home quarantine of exposed individuals to reduce transmission is not recommended”.

Link:  https://www.youtube.com/watch?v=p_vAQyVlXzU

TESTED POSITIVE — NOT WORRIED

QUOTE:
“I am a Professor at Colombia University”
“Recently, I tested Positive for SARS CoV2”  
“I am not worried”
“My first test had a Ct value of 34.7”
“A few days later, I had another test. The result was Negative”.
“So ……. I had a False Positive result”
“Random testing of people only works if it is done often”
“One PCR Test on its own is not informative”   UNQUOTE

The number of Amplification Cycles done on a PCR is critical. High numbers can cause False Positives. The abbreviation used to indicate the number of cycles used is Ct. Any Ct above 30 is regarded by many experts as being possibly too many and resulting in high frequency of false positive tests.

Link:  https://www.bitchute.com/video/dn59BobhNnx8/

Vincent R. Racaniello is Higgins Professor in the Department of Microbiology and Immunology at Columbia University’s College of Physicians and Surgeons. He is a co-author of a textbook on virology, Principles of Virology. He also served as the 2015 president of the American Society for Virology and keynote speaker for their 2017 annual meeting.  He is the host of the podcast, This Week in Virology.

A SUMMARY OF VACCINES IN DEVELOPMENT

170 Covid vaccines are under development.

A critical statement on the GAVI website says —  “we still don’t know if the current batch of approved COVID vaccines stops transmission.”

And we have no idea of any possible long term consequences especially from the new genetic material based mRNA technologies being introduced.

Link:  https://www.gavi.org/vaccineswork/covid-19-vaccine-race

THE FOUR TYPES OF COVID VACCINES

Candidates in Clinical Trial Phases I-III

Whole virus vaccines 8
Protein subunit vaccines 13
Nucleic Acid Messenger vaccines (RNA and DNA) 14
Viral vector vaccines 16

PROTEIN BASED VACCINES

Many people are concerned about the new Covid vaccines that use genetic material which commands a response from the immune system. They are called mRNA vaccines or messenger vaccines. This concern is understandable as this technology has never been used on human beings previously in mass immunization programs.

However, there are vaccine alternatives under development that do not use this genetically based messenger vaccine technology. They mostly use well established conventional vaccine technology whereby a whole virus particle or a protein from the virus coat or part of such a protein molecule simply challenges the immune system to create antibodies. Unlike messenger vaccines, such conventional vaccines do not use genetic material to issue commands to the immune system.

It must be noted however that some of the new protein based vaccines are using new adjuvants in the mix. An adjuvant is an ingredient used in some vaccines that helps create a stronger immune response in people receiving the vaccine. In other words, adjuvants help vaccines work better. They carry their own risk and benefit profiles, separate from the protein being used.

So protein based vaccines (such as the Novavax vaccine and the Covax-19 vaccine from the company Vaxine in Australia) are NOT mRNA messenger vaccines (as are the Pfizer and Moderna vaccines);  they are NOT Adenovirus vector vaccines (e.g. Astra Zeneca Oxford); they are NOT Human Adenovirus vector vaccines (e.g. the Russian Gamaleya Institute vaccine plus one of the Chinese vaccines).

This article is worth reading on one of the protein based vaccines —

Link: https://www.smh.com.au/national/is-novavax-the-dark-horse-of-australia-s-covid-19-vaccines-20210119-p56vbb.html

As previously stated, BOOM is a supporter of conventional vaccines using conventional antigen technology that have been proven to be safe and effective over many years of intense development and use.

This article explains clearly what a protein based vaccine is —

https://www.chemistryworld.com/news/protein-based-covid-19-vaccines-could-overshadow-rivals/4012450.article

ADJUVANT SAFETY

Quote:  “Use of highly pure antigens to improve vaccine safety has led to reduced vaccine immunogenicity and efficacy. This has led to the need to use adjuvants to improve vaccine immunogenicity. The ideal adjuvant should maximize vaccine immunogenicity without compromising tolerability or safety. Unfortunately, adjuvant research has lagged behind other vaccine areas such as antigen discovery, with the consequence that only a very limited number of adjuvants based on aluminium salts, monophosphoryl lipid A and oil emulsions are currently approved for human use. Recent strategic initiatives to support adjuvant development by the National Institutes of Health should translate into greater adjuvant choices in the future. Mechanistic studies have been valuable for better understanding of adjuvant action, but mechanisms of adjuvant toxicity are less well understood. The inflammatory or danger-signal model of adjuvant action implies that increased vaccine reactogenicity is the inevitable price for improved immunogenicity. Hence, adjuvant reactogenicity may be avoidable only if it is possible to separate inflammation from adjuvant action. The biggest remaining challenge in the adjuvant field is to decipher the potential relationship between adjuvants and rare vaccine adverse reactions, such as narcolepsy, macrophagic myofasciitis or Alzheimer’s disease. While existing adjuvants based on aluminium salts have a strong safety record, there are ongoing needs for new adjuvants and more intensive research into adjuvants and their effects.”

“It is currently not clear what types of preclinical testing might be undertaken to prove that an adjuvant is immunologically safe or not.”  Unquote

This article is an excellent overview about the local and systemic risks associated with vaccine adjuvants.

SOURCE: Comparative Safety of Vaccine Adjuvants: A Summary of Current Evidence and Future Needs

LINK:  https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4615573/

Published 2015 — Professor Nikolai Petrovsky, Flinders University, Australia

In economics, things work until they don’t. Until next week …………  Make your own conclusions, do your own research.  BOOM does not offer investment advice.

CLICK HERE FOR PODCASTS:   OUR BRAVE NEW ECONOMIC WORLD

EMAIL: gerry {at} boomfinanceandeconomics.com

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HOW MOST MONEY IS CREATED

BANKS CREATE FRESH NEW MONEY OUT OF THIN AIR (but they always need a Borrower to do so)THERE IS NO SUCH THING AS A DEPOSIT
BANKS PURCHASE SECURITIES, THEY DON’T MAKE LOANS
BANKS DON’T TAKE DEPOSITS, THEY BORROW YOUR MONEY

Watch this short 15 minutes video and learn as Professor Richard Werner brilliantly explains how the banking system and financial sector really work. 

https://www.youtube.com/watch?v=EC0G7pY4wREhttp://
How is Most New Money Created ?

LOANS CREATE DEPOSITS — that is how almost all new money is created in the economy (by commercial banks making loans).

From the Bank of England Quarterly Bulletin Q1 2014    —
“Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.

“Most money in the modern economy is in the form of bank deposits, which are created by commercial banks themselves”.

Youtube Video —  https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-in-the-modern-economy-an-introduction

and

https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy

Paper:  Money in the Modern Economy  PDF —  CLICK HERE

Quarterly Bulletins Index

http://www.bankofengland.co.uk/publications/Pages/quarterlybulletin/2014/qb14q1.aspx

Most economists are unaware of this and even ignore the banking & finance sectors in their econometric models.

On 25th April 2017, the central bank of Germany, the Bundesbank, released a statement on this matter —

“In terms of volume, the majority of the money supply is made up of book money, which is created through transactions between banks and domestic customers. Sight deposits are an example of book money: sight deposits are created when a bank settles transactions with a customer, ie it grants a credit, say, or purchases an asset and credits the corresponding amount to the customer’s bank account in return. This means that banks can create book money just by making an accounting entry: according to the Bundesbank’s economists, “this refutes a popular misconception that banks act simply as intermediaries at the time of lending – i.e. that banks can only grant credit using funds placed with them previously as deposits by other customers”. By the same token, excess central bank reserves are not a necessary precondition for a bank to grant credit (and thus create money).”

Reference: https://www.bundesbank.de/Redaktion/EN/Topics/2017/2017_04_25_how_money_is_created.html
The Reserve Bank of Australia (Australia’s central bank) has also contributed to the issue in a speech by Christopher Kent, the Assistant Governor on September 19th 2018.
“…… the vast bulk of broad money consists of bank deposits”
“Money can be created …….. when financial intermediaries make loans
“In the first instance, the process of money creation requires a willing borrower.” 
“It’s also worth emphasizing that the process of money creation is not the result of the actions of any single bank – rather, the banking system as a whole acts to create money.”

Disclaimer:   All content is presented for educational and/or entertainment purposes only. Under no circumstances should it be mistaken for professional investment advice, nor is it at all intended to be taken as such. The commentary and other contents simply reflect the opinion of the authors alone on the current and future status of the markets and various economies. It is subject to error and change without notice.The presence of a link to a website does not indicate approval or endorsement of that web site or any services, products, or opinions that may be offered by them.

Neither the information nor any opinion expressed constitutes a solicitation to buy or sell any securities nor investments. Do NOT ever purchase any security or investment without doing your own and sufficient research.  Neither BOOM Finance and Economics.com nor any of its principals or contributors are under any obligation to update or keep current the information contained herein. The principals and related parties may at times have positions in the securities or investments referred to and may make purchases or sales of these securities and investments while this site is live. The analysis contained is based on both technical and fundamental research.

Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

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MOLS Denmark

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