E Ben Franklin And Pope Francis

A factoid for today: British author Andrea Wulf, in her book Founding Gardeners,reveals that Ben Franklin was responsible for exporting Scottish seeds so kale could be grown in America. Not just Poor Richard's Almanac, the lightening rod and the Franklin stove, but also kale! The Environmental Protection Agency is under frequent attack by a publisher of something called Poor Richard's.

Actually, Ben Franklin would have like the Pope's environmental encyclical of today against climate change, since the Franklin stove burns wood very efficiently and helps prevent global warming. We have to save God's creation for our children and their children, said the (I think) childless Holy Father who worked as a chemist before becoming a priest.

Pope Francis's global warming encyclical says “the earth, our home, is beginning to look more and more like an immense pile of filth.”

To overcome that, he added: “Nobody is suggesting a return to the Stone Age, bu we do need to slow down and look at reality in a different way, to appropriate the positive and sustainable progress which has been made, but also to recover the values and the great goals swept away by our unrestrained delusions of grandeur.”

Despite having been raised by a consummate diplomat, George H. W. Bush, Jeb Bush, the most prominent Catholic convert in the Republican field, has just put his foot in his mouth, telling Pope Francis to focus on ethics and leave the politicking to pols.

The European Community will hold a meeting of 11 countries to try to determine which transactions will be taxed by which entities to bring on a Financial Transaction Tax, AKA a Tobin tax. The cat comes back.

This is one of the key measures up with which Britain will not put if it is to remain in the European Union.

My newsletter was approached to place an ad for bit gold, which uses gold to make payments, a sort of yellow-metal paypal alternative to bitcoin. I opted not to sign up, despite the charm of the concept, mainly because we already have a gold-linked advertiser, www.bullionvault.com, and I don't want to become type cast as a gold bug. Bitgold's soaring stock trades in Vancouver as V-XAU, another reason I hesitated, as they proposed to pay me in Bitgold if any of you signed up to buy gold or pay my subscription fees in precious metal. It is promoted by Stockhouse which is another factor.

Today we have news from Finland, Holland, Taiwan, Hong Kong, Israel, China, Brazil, Colombia, Britain, Belgium, Australia, Germany, and a few other places.

Down Under and Far East News

*T​he​ Financial Times has a complex analysis by commodities editor Neil Hume who says he is “simply” explaining why iron ore prices have risen about 30% since April, to ~$65/metric tonne.

Hume cites analysis that despite weak demand, Chinese steelmakers went on a late buying spree to replenish their stocks. What with tight credit and an uncertain outlook for demand, “they waited until the last moment” to restock for the summer.

That in turn triggered low inventories at Australian mines and export ports. So when the orders suddenly picked up Chinese hedge funds (who knew China has hedge funds?) had to scramble to cover their short positions in derivatives on iron ore. This supported iron ore price levels.

However supplies are now likely to increase as exports pick up, just in time for steel production in China to drop for the winter. Moreover new Australian mines are coming on stream. So the current price level will not stick perhaps creating new problems for companies like Vale.

On the other hand, in London trading after everyone had read the FT Vale rose over 2.5%.

*A factor which Mr Hume did not cite, discussed in our Aberdeen Asia-Pacific Income Fund quarterly report, may also have had a role: the sinking A$ against our US one. The Reserve Bank of Australia, their CB, kept revising downward its exchange-rate target for the level at which its impact on the domestic economy would balance, as the Aussie fell and fell some more last year. Despite falling commodity prices and moderating Chinese growth, the A$ stayed up above the CB's comfort zone. So it chopped interest rates some more to push down the currency. That gave its competitors an edge against VALE, which despite producing its iron ore more cheaply in Brazil, also has to repay its debt denominated in US$s. FAX predicts that “US dollar tailwinds are likely to prevail for longr as monetary policing settings between the two nations diverge.” More cheap A$s is what FAX expects.

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