Canary in the Coal Mine

[Kevin_Kennedy]

Like a battering ram in a medieval siege, gold keeps hammering away at the gate. For the third time in less than twelve months, the yellow metal is once again crashing into the $1,000 per ounce level. As of press time, it looks like gold will close above that level today and will set a new record in the process. Even if the breach is fleeting, who can doubt that it will mount another assault soon? In the meantime, there is no shortage of market analysts who are not buying gold while questioning the motives of those who are. Although they offer a variety of strained reasons, they nearly all agree that it has nothing to do with inflation, which is nearly universally considered dead and buried. As a self-confessed gold bug, I can assure all that inflation is the only reason I buy gold. And recently, I'm buying a lot.

When individuals choose to accumulate savings in the form of gold rather than interest-bearing paper deposits in government-insured accounts, there is only one reason for doing so: they fear that the interest will not be enough to compensate for their expected loss of purchasing power through inflation. This fear reflects both current inflation and the expectation for future inflation. While there are those who buy gold to speculate on its appreciation, the underlying factor that drives that appreciation in the first place will always be inflation. If governments were not creating inflation, there would be little investment advantage to owning gold.

Canary in the Coal Mine by Peter Schiff

 

[hjmick]

[ame=http://www.youtube.com/watch?v=dQEIYjS1ePY]YouTube - The Police-Canary in a Coalmine[/ame]

 

[waltky]

Natural gas is replacing coal...

Utilities plan to ignore Trump’s end to ‘war on coal’
Thu, Apr 06, 2017 - When US President Donald Trump signed an executive order last week to sweep away climate change regulations installed by former US president Barack Obama, he said it would end the US’ “war on coal,” usher in a new era of energy production and put miners back to work.

However, the biggest consumers of US coal — power generating companies — remain unconvinced. Reuters surveyed 32 utilities with operations in the 26 states that sued Obama’s administration to block its Clean Power Plan, the main target of Trump’s executive order. The bulk of them have no plans to alter their multibillion US dollar, years-long shift away from coal, suggesting that demand for the fuel will keep falling, despite Trump’s efforts. The utilities gave many reasons, mainly economic: Natural gas — coal’s top competitor — is cheap and abundant; solar and wind power costs are falling; state environmental laws remain in place; and Trump’s regulatory rollback might not survive legal challenges.

Meanwhile, big investors aligned with the climate change agenda — such as the Norwegian Sovereign Wealth Fund — have been pressuring US utilities in which they own stakes to cut coal use. “I’m not going to build new coal plants in today’s environment,” said Ben Fowke, chief executive officer of Xcel Energy, which operates in eight US states and uses coal for about 36 percent of its electricity production. “And if I’m not going to build new ones, eventually there won’t be any.” Of the 32 utilities contacted by Reuters, 20 said Trump’s order would have no effect on their investment plans; five said they were reviewing the implications of the order; six gave no response. Just one said it would prolong the life of some of its older coal-fired power units.

A truck hauls coal and sediment on Tuesday at the Black Butte coal mine outside Rock Springs, Wyoming.​

North Dakota’s Basin Electric Power Cooperative identified a positive effect of Trump’s order on the outlook for coal. “We’re in the situation where the executive order takes a lot of pressure off the decisions we had to make in the near term, such as whether to retrofit and retire older coal plants, but Trump can be a one-termer, so the reprieve out there is short,” Basin Electric spokesman Dale Niezwaag said. Trump’s executive order triggered a review aimed at killing the Clean Power Plan. The Obama-era law would have required states, by 2030, to collectively cut carbon emissions from existing power plants by 30 percent from 2005 levels. It was designed as a primary strategy in US efforts to fight global warming. The US coal industry, without increases in domestic demand, would need to rely on export markets for growth. Shipments of US metallurgical coal, used in the production of steel, have shown up in China following a two-year hiatus — in part to offset banned shipments from North Korea and temporary delays from cyclone-hit Australian producers.

Coal had been the primary fuel source for US power plants for the past century, but its use has fallen more than one-third since 2008 after advancements in drilling technology unlocked new reserves of natural gas. Hundreds of aging coal-fired power plants have been retired or retrofitted. Huge coal mining companies such as Peabody Energy Corp and Arch Coal fell into bankruptcy, while production last year hit its lowest point since 1978. The slide appears likely to continue: US power companies now expect to retire or convert more than 8,000 megawatts of coal-fired plants this year after shutting almost 13,000 megawatts last year, according to US Energy Information Administration and Thomson Reuters data.

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[DGS49]

The most promising markets for coal are overseas. And they are increasing, as China, India, and Africa seek to bring cheap electricity to the rural masses. Only rich western countries can pursue the folly of "renewables" like wind and solar.

 

[EdwardBaiamonte]

Like a battering ram in a medieval siege, gold keeps hammering away at the gate. For the third time in less than twelve months, the yellow metal is once again crashing into the $1,000 per ounce level. As of press time, it looks like gold will close above that level today and will set a new record in the process. Even if the breach is fleeting, who can doubt that it will mount another assault soon? In the meantime, there is no shortage of market analysts who are not buying gold while questioning the motives of those who are. Although they offer a variety of strained reasons, they nearly all agree that it has nothing to do with inflation, which is nearly universally considered dead and buried. As a self-confessed gold bug, I can assure all that inflation is the only reason I buy gold. And recently, I'm buying a lot.

When individuals choose to accumulate savings in the form of gold rather than interest-bearing paper deposits in government-insured accounts, there is only one reason for doing so: they fear that the interest will not be enough to compensate for their expected loss of purchasing power through inflation. This fear reflects both current inflation and the expectation for future inflation. While there are those who buy gold to speculate on its appreciation, the underlying factor that drives that appreciation in the first place will always be inflation. If governments were not creating inflation, there would be little investment advantage to owning gold.

Canary in the Coal Mine by Peter Schiff

deflation is actually more of a worry than inflation. Sorry to rock your world.

 

[Kevin_Kennedy]

Like a battering ram in a medieval siege, gold keeps hammering away at the gate. For the third time in less than twelve months, the yellow metal is once again crashing into the $1,000 per ounce level. As of press time, it looks like gold will close above that level today and will set a new record in the process. Even if the breach is fleeting, who can doubt that it will mount another assault soon? In the meantime, there is no shortage of market analysts who are not buying gold while questioning the motives of those who are. Although they offer a variety of strained reasons, they nearly all agree that it has nothing to do with inflation, which is nearly universally considered dead and buried. As a self-confessed gold bug, I can assure all that inflation is the only reason I buy gold. And recently, I'm buying a lot.

When individuals choose to accumulate savings in the form of gold rather than interest-bearing paper deposits in government-insured accounts, there is only one reason for doing so: they fear that the interest will not be enough to compensate for their expected loss of purchasing power through inflation. This fear reflects both current inflation and the expectation for future inflation. While there are those who buy gold to speculate on its appreciation, the underlying factor that drives that appreciation in the first place will always be inflation. If governments were not creating inflation, there would be little investment advantage to owning gold.

Canary in the Coal Mine by Peter Schiff

deflation is actually more of a worry than inflation. Sorry to rock your world.

Lower prices are good. Sorry you don't like free markets.