Category: Oil & Gas

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Jericho Energy Ventures’ Hydrogen Technologies Secures U.S. Department of Energy Funding for California-Based Project

PHILADELPHIA, PA and VANCOUVER, BC / ACCESSWIRE / November 19, 2024 / Jericho Energy Ventures Inc. (TSXV:JEV)(OTC:JROOF)(FRA:JLM) (“Jericho”, “JEV” or the “Company”) is pleased to announce that a California-based project co-developed by its wholly owned subsidiary, Hydrogen Technologies (“HT“), has been awarded USD$1 million in funding from the U.S. Department of Energy’s Hydrogen and Fuel Cell Technologies Office (HTFO).

The project, Hydrogen Permitting Issues and Improvements (HPII), was developed by HT and three partners: Sandia National Laboratories, GHD (a global professional services company with expertise in hydrogen infrastructure), and the University of California at Riverside. The team will identify and address challenges with the deployment of hydrogen-powered equipment (e.g., steam/hot water boilers, fuel cells and fork-lifts) at locations where hydrogen is likely to play a role but is currently an unfamiliar fuel, such as at manufacturing facilities or district heating systems.

HT will receive a share of the total funding for its part in engaging current and potential users of hydrogen-fueled boilers, their permitting authorities, community and environmental organizations.

The HPII project will identify and address technological and administrative barriers to permitting hydrogen projects. The project focuses on providing state-of-the-art safety and risk analysis for select use-cases and real-world data on at-scale issues and concerns to improve integration into existing industrial infrastructure. The project includes a strong community engagement strategy where local representatives from disadvantaged communities are engaged early in the process to identify challenges and mitigation measures to ensure success.

Brian Williamson, CEO of Jericho Energy Ventures, commented: “We are proud to be part of this important DOE-funded project with our esteemed partners. We see the independent launch of our Hydrogen Solution Platform accelerating our access to future collaborations and partnerships with groups pushing full steam ahead with lower emissions industrial and commercial solutions. Beyond delivering our patented, zero-emission hydrogen DCC boiler technology, we are increasingly being recognized as a trusted, innovative hydrogen solutions partner to industry and government.”

HT is collaborating with several multi-national corporations and universities to complete feasibility studies for the utilization of our zero-emission hydrogen boiler technology. HT is presently working with its manufacturing partner, Superior Boiler, to deploy its boiler technology at a prominent Western US university while providing decarbonized district heat for its campus.

Hydrogen Technologies’ GHG-free hydrogen-fueled boilers offer a highly efficient and sustainable alternative to conventional fossil fuel-based boilers. DCC™ boilers eliminate greenhouse gas emissions, providing a clean and eco-friendly source of steam and hot water for various industries and applications. HT’s DCC™ system is a recipient of the Solar Impulse Foundation’s prestigious “Solar Impulse Efficient Solution” award recognizing profitable solutions to protect the environment.

JEV recently announced plans to spinout its hydrogen platform from its traditional energy assets as a separate, pure-play H2 solutions company to maximize shareholder value.

The Company also announces that it has arranged a shares for debt transaction to settle an aggregate of $376,071 in interest accrued on convertible debentures outstanding up to November 12, 2024 and disclosed in the Company’s financial statements and in the Company’s news releases dated January 7, 2022 and April 5, 2024. The shares for debt settlement is subject to approval from the TSX Venture Exchange (“TSXV“), pursuant to TSXV Policy 4.3 – Shares for Debt, which will be followed by the Company issuing an aggregate of 2,892,846 common shares (the “Settlement Shares“) at a deemed price of $0.13 to 14 of the holders of the debentures of which two are non-arm’s length parties to the Company. The Settlement Shares will be issued subject to prospectus exemptions available pursuant to Canadian securities laws and will be subject to a four month and one day hold period.

The shares for debt transaction was approved by the Company’s board of directors and did not require a formal valuation nor minority shareholder approval pursuant to Multilateral Instrument 61-101.

About Hydrogen Technologies

Hydrogen Technologies (HT) offers its award-winning CLEAN, ZERO-EMISSION ENERGY SOLUTION for the Commercial and Industrial Boiler Market. There are a wide range of applications for our cleanH2steam DCC™ boiler, which works much like traditional commercial heat, hot water and industrial steam boilers. Whether the application is district heating, food processing, chemical refining, pharmaceuticals, pulp and paper mills, or any other industrial process, HT has a reliable, efficient and clean solution for your GHG and ESG goals.

Website: www.hydrogentechnologiesllc.com
X: https://x.com/h2_technologies
LinkedIn: https://www.linkedin.com/company/hydrogen-technologies-inc/

HT CONTACT:
Dean Moretton, Chief Commercial Officer
Hydrogen Technologies
Email: sales@hydrogentechnologiesllc.com

About Jericho Energy Ventures

Jericho is an energy company positioned for the current energy transitions; owning, operating and developing both traditional hydrocarbon JV assets and advancing the low-carbon energy transition, with active investments in hydrogen. Our wholly owned subsidiary, Hydrogen Technologies, delivers breakthrough, patented, zero-emission boiler technology to the Commercial & Industrial heat and steam industry. We also hold strategic investments and board positions in California Catalysts (formerly H2U Technologies), a leading developer of advanced materials for electrolysis, and Supercritical Solutions, developing the world’s first, high pressure, ultra-efficient electrolyzer. Jericho also owns and operates long-held producing oil and gas JV assets in Oklahoma which it is currently developing from cash flows in an effort to further increase production.

Website: www.jerichoenergyventures.com
X: https://x.com/JerichoEV
LinkedIn: www.linkedin.com/company/jericho-energy-ventures
YouTube: www.youtube.com/c/JerichoEnergyVentures

JEV CONTACT:
Allen Wilson, Director, or
Adam Rabiner, Dir. of Investor Relations
Jericho Energy Ventures Inc.
Tel. 604.343.4534
Email: investorrelations@jerichoenergyventures.com

This news release contains certain “forward-looking information” and “forward-looking ‎statements” (collectively, “forward-looking statements“) within the meaning of applicable ‎securities laws. Such forward-looking statements are not representative of historical facts or ‎information or current condition, but instead represent only Jericho’s beliefs regarding future ‎events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of ‎Jericho’s control. Forward-looking statements are frequently characterized by words such as ‎‎”plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate” and other similar words, ‎or statements that certain events or conditions “may”, “will” or “may not” occur.‎ Specifically, this ‎news release contains forward-looking statements relating to, among others, the successful specific grant funding application and approvals by the DOE. Selection for award negotiations is not a commitment by DOE to issue an award or provide funding.

Forward-looking statements are subject to a variety of risks and uncertainties and other factors ‎that could cause actual events or results to differ materially from those anticipated in the forward-‎looking statements, which include, but are not limited to: regulatory changes; changes to the ‎definition of, or interpretation of, foreign private issuer status; the impacts of COVID-19 and other ‎infectious diseases; general economic conditions; industry conditions; current and future ‎commodity prices and price volatility; significant and ongoing stock market volatility; currency and ‎interest rate fluctuation; governmental regulation of the energy industry, including environmental ‎regulation; geological, technical and drilling problems; unanticipated operating events; the ‎availability of capital on acceptable terms; the need to obtain required approvals from regulatory ‎authorities; liabilities and risks inherent in oil and gas exploration, development and production ‎operations; liabilities and risks inherent in early stage hydrogen technology projects, energy ‎storage, carbon capture and new energy systems; changes in government environmental ‎objectives or plans; and the other factors described in Jericho’s public filings available at ‎www.sedarplus.ca.

The forward-looking statements contained herein are based on certain key expectations and ‎‎assumptions ‎of Jericho ‎concerning anticipated financial performance, business prospects, ‎strategies, ‎regulatory regimes, the ‎‎sufficiency of budgeted capital expenditures in carrying out ‎planned activities, the ability to obtain financing on ‎acceptable terms, expansion of consumer ‎adoption of the Company’s (or its subsidiaries’) technologies and products, results of DCC™ feasibility studies and the success of ‎investments, all of which are ‎subject to change based on ‎market conditions, ‎potential timing delays ‎and other risk factors. Although Jericho believes that these assumptions and the expectations ‎are ‎reasonable based on information currently available to management, such ‎statements are not ‎guarantees of future performance and actual results or developments may differ materially from ‎‎those in the forward-looking statements. Investors should not place undue reliance on forward-‎looking ‎statements.‎

Readers are cautioned that the foregoing lists are not exhaustive. The forward-looking statements ‎contained in this news release are made as of the date of this news release, and Jericho does not ‎undertake to update any forward-looking statements that are contained or referenced herein, ‎except as required by applicable securities laws‎.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in ‎the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of ‎this release.

SOURCE: Jericho Energy Ventures, Inc.

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Jericho Energy Ventures Announces Plan to Separate Hydrogen Platform from Traditional Energy Assets to Maximize Shareholder Value

TULSA, OK and VANCOUVER, BC / ACCESSWIRE / November 4, 2024 / Jericho Energy Ventures Inc. (TSXV:JEV)(OTC PINK:JROOF)(FRA:JLM) (“Jericho”, “JEV” or the “Company”) is pleased to announce that its Board of Directors has approved Management’s plan to separate Jericho’s hydrogen solutions platform (the “Spinout Transaction”) into a new entity to be named Hydrogen Technologies Corporation (“HTC”), subject to certain conditions including receipt of necessary regulatory and shareholder approvals.

Assuming completion of the Spinout Transaction on the terms contemplated by management, each JEV shareholder will retain their shares of Jericho and, in consideration of the transfer of JEV’s hydrogen assets to HTC, will receive shares of HTC (a newly formed BC-based reporting issuer) on a pro rata basis. The definitive terms of the Spinout Transaction are expected to be contained in a management information circular delivered to shareholders in connection with the meeting to approve the Spinout Transaction.

The purpose of the proposed Spinout Transaction is to create two independent specialized energy companies, with a clear focus on leadership in their respective markets. This move will allow both businesses to operate with distinct strategies, tailored capital structures, and focused investment plans, aiming to deliver superior outcomes for stakeholders.

While management intends to move forward with implementation of the Spinout Transaction on a priority basis, definitive terms of the Spinout Transaction, including the final determination to submit a proposal to shareholders, is subject to ongoing review by management and the Board of Directors. The Spinout Transaction is also subject to approval of the TSX Venture Exchange (“TSXV”), approval of the Jericho shareholders and will be subject to approval of the British Columbia courts if effected by way of plan of arrangement. Shareholder approval may be sought at the Company’s Annual General Meeting (“AGM”), scheduled for January 15, 2025 or at a subsequent meeting held for the purpose of such approval.

After the separation, Jericho Energy Ventures would continue to trade on the TSX Venture Exchange under the symbol JEV, representing its oil and gas business.

Brian Williamson, CEO of Jericho Energy Ventures, stated, “By separating our hydrogen platform, we can create two agile, focused companies. This will allow each to pursue its strategic objectives independently and position them for long-term growth and success. We believe JEV shareholders will benefit from the distinct growth opportunities in both the hydrogen and oil & gas sectors, with each company committed to maximizing value within its industry.”

About Jericho Energy Ventures

Jericho is an energy company positioned for the current energy transitions; owning, operating and developing both traditional hydrocarbon JV assets and advancing the low-carbon energy transition, with active investments in hydrogen. Our wholly owned subsidiary, Hydrogen Technologies, delivers breakthrough, patented, zero-emission boiler technology to the Commercial & Industrial heat and steam industry. We also hold strategic investments and board positions in H2U Technologies (a breakthrough electrocatalyst and low-cost electrolyzer platform) and Supercritical Solutions (developing the world’s first, high pressure, ultra-efficient electrolyzer). Jericho also owns and operates long-held producing oil and gas JV assets in Oklahoma which it is currently developing from cash flows in an effort to further increase production.

Website: www.jerichoenergyventures.com
X: https://x.com/JerichoEV
LinkedIn: www.linkedin.com/company/jericho-energy-ventures
YouTube: www.youtube.com/c/JerichoEnergyVentures

JEV CONTACT:
Allen Wilson, Director, or
Adam Rabiner, Dir. of Investor Relations
Jericho Energy Ventures Inc.
Tel. 604.343.4534
Email: investorrelations@jerichoenergyventures.com

This news release contains certain “forward-looking information” and “forward-looking ‎statements” (collectively, “forward-looking statements“) within the meaning of applicable ‎securities laws. Such forward-looking statements are not representative of historical facts or ‎information or current condition, but instead represent only Jericho’s beliefs regarding future ‎events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of ‎Jericho’s control. Forward-looking statements are frequently characterized by words such as ‎‎”plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate” and other similar words, ‎or statements that certain events or conditions “may”, “will” or “may not” occur.‎ Specifically, this ‎news release contains forward-looking statements relating to implementation of the Spinout Transaction and receipt of necessary approvals.

Forward-looking statements are subject to a variety of risks and uncertainties and other factors ‎that could cause actual events or results to differ materially from those anticipated in the forward-‎looking statements, which include, but are not limited to: regulatory changes; changes to the ‎definition of, or interpretation of, foreign private issuer status; the impacts of COVID-19 and other ‎infectious diseases; general economic conditions; industry conditions; current and future ‎commodity prices and price volatility; significant and ongoing stock market volatility; currency and ‎interest rate fluctuation; governmental regulation of the energy industry, including environmental ‎regulation; geological, technical and drilling problems; unanticipated operating events; the ‎availability of capital on acceptable terms; the need to obtain required approvals from regulatory ‎authorities; liabilities and risks inherent in oil and gas exploration, development and production ‎operations; liabilities and risks inherent in early stage hydrogen technology projects, energy ‎storage, carbon capture and new energy systems; changes in government environmental ‎objectives or plans; and the other factors described in Jericho’s public filings available at ‎www.sedarplus.ca.

The forward-looking statements contained herein are based on certain key expectations and ‎‎assumptions ‎of Jericho ‎concerning anticipated financial performance, business prospects, ‎strategies, ‎regulatory regimes, the ‎‎sufficiency of budgeted capital expenditures in carrying out ‎planned activities, the ability to obtain financing on ‎acceptable terms, expansion of consumer ‎adoption of the Company’s (or its subsidiaries’) technologies and products, results of DCC™ feasibility studies and the success of ‎investments, all of which are ‎subject to change based on ‎market conditions, ‎potential timing delays ‎and other risk factors. Although Jericho believes that these assumptions and the expectations ‎are ‎reasonable based on information currently available to management, such ‎statements are not ‎guarantees of future performance and actual results or developments may differ materially from ‎‎those in the forward-looking statements. Investors should not place undue reliance on forward-‎looking ‎statements.‎

Readers are cautioned that the foregoing lists are not exhaustive. The forward-looking statements ‎contained in this news release are made as of the date of this news release, and Jericho does not ‎undertake to update any forward-looking statements that are contained or referenced herein, ‎except as required by applicable securities laws‎.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in ‎the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of ‎this release.

SOURCE: Jericho Energy Ventures, Inc.



View the original press release on accesswire.com

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Trump Chooses Oil Fracking Boss Wright as Energy Secretary

Trump Chooses Oil Fracking Boss Wright as Energy Secretary

(Bloomberg) — President-elect Donald Trump nominated Chris Wright, who runs a Colorado-based oil and natural gas fracking services company, to lead the Energy Department.

Most Read from Bloomberg

Wright, the chief executive officer of Liberty Energy Inc., has no previous Washington experience. He’s made a name for himself as a vocal proponent of oil and gas, saying fossil fuels are crucial for spreading prosperity and lifting people from poverty. The threat of global warming, he has said, is exaggerated.

“Chris has been a leading technologist and entrepreneur in Energy,” Trump said in a statement Saturday. “He has worked in Nuclear, Solar, Geothermal, and Oil and Gas. Most significantly, Chris was one of the pioneers who helped launch the American Shale Revolution that fueled American Energy Independence, and transformed the Global Energy Markets and Geopolitics.”

Trump said Wright, if confirmed, would also sit on the newly formed Council of National Energy that will be chaired by Doug Burgum, Trump’s nominee to lead the Interior Department.

The Energy Department has a disparate mission that includes helping to maintain the nation’s nuclear warheads, studying supercomputers and maintaining the US’s several hundred million-barrel stockpile of crude oil.

It also plays a key role in approving projects to export liquefied natural gas, something that was paused during Biden’s administration. Trump has vowed to undo the pause.

While the department has little authority over oil and gas development, Wright will play a leading role in helping Trump carry out his energy priorities.

Trump’s selection of Wright, whose company is among the largest providers of fracking services globally, is a show of support for the hot-button oil and gas extraction method that Trump frequently touted during the campaign to attack his Democratic opponent Kamala Harris.

Harris said she’d consider banning the technique during her 2020 primary run and reversed course in her 2024 campaign.

‘No Climate Crisis’

Wright’s company published a 180-page paper this year that concluded climate change “is far from the world’s greatest threat to human life,” and that “hydrocarbons are essential to improving the wealth, health, and life opportunities for the less energized.”

“There is no climate crisis. And we are not in the midst of an energy transition either,” Wright said in a video posted on his LinkedIn page. “Humans, and all complex life on earth, is simply impossible without carbon dioxide — hence the term carbon pollution is outrageous.”

Wright holds engineering degrees from the Massachusetts Institute of Technology and the University of California at Berkeley. He describes himself on his Denver-based company’s website as a “tech nerd turned entrepreneur and a dedicated humanitarian.”

While Wright has warned that subsidies for wind and solar drive up power prices and increase grid instability, he does support alternative energy. He serves on the board of small modular reactor developer Oklo Inc., and his company is an investor in geothermal energy and sodium-ion battery technology.

“I’m not here to protect market share for oil gas,” he said during a 2022 interview with Bloomberg Television. “We should do credible things, mostly driven by market forces. But shoveling subsidies at wind and solar, which are 3% of global energy, that’s not meaningfully going to change greenhouse gas emissions. But it is going to drive electricity prices up.”

Wright is also on the board EMX Royalty Corp., a global mining royalties firm, according to his company bio.

Trump named Wright with backing from Continental Resources Chairman Harold Hamm, a Trump energy adviser and donor. Hamm said in an interview with the Houston-based trade publication Hart Energy that Wright was his choice for the job.

If confirmed by Congress, Wright would play a leading role in Trump carrying out his campaign pledge to declare a national emergency on energy. Trump has cast such a declaration as helping increase domestic energy production — including for electricity — which he says is needed to help meet booming power needs for artificial intelligence.

Under the first Trump administration, the Energy Department played a critical role in the president-elect’s efforts to revive US coal power, an initiative he’s hinted he may attempt again.

Wright would also oversee Trump’s promise to refill the nation’s emergency cache of crude oil. The Strategic Petroleum Reserve, which has a capacity of more than 700 million barrels, reached lows not seen since the 1980s following the Biden administration’s unprecedented drawdown of a record 180 million barrels in the wake of Russia’s invasion of Ukraine.

Trump’s first energy secretary, former Texas Governor Rick Perry, called for eliminating the agency entirely during a run for president in the 2012 cycle. He later apologized and vowed to defend the agency “after being briefed on so many of the vital functions” it plays.

–With assistance from David Wethe.

Source: https://finance.yahoo.com/news/trump-chooses-oil-fracking-boss-214648842.html

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Base Metals Energy Junior Mining Oil & Gas Precious Metals

BOB MORIARTY | Expert Says Secondary Metals Will Star in New Bull Market

Major periods of rising gold prices since 1971 have included the 1970s and the 2000s. Many experts believe we’ve started a new period of such expansion now.

Spot prices touched a new record of US$2,769.02 per ounce on Tuesday “as the run-up to the 2024 presidential election and uncertainty prior to upcoming economic data kept safe haven demand in play,” Investing.com reported.

Bob Moriarty of 321gold sat down with Francis Hunt of The Market Sniper recently to discuss the state of the commodities markets and the recent meeting of the BRICS nations in Russia.

He told Hunt that the most important mechanism in determining their prices is not the textbook answer you’ve always been given.

“Ignore demand, ignore supply, ignore the value of the dollar, ignore the geopolitical, none of those make any difference whatsoever,” Moriarty said in the interview, posted on YouTube. “The only thing that moves the price of anything is sentiment.”

Sentiment Changing Soon

The Investing.com article reported by Scott Kanowsky said the rise is coming from safe haven demand and a string of expected economic readings expected soon, “which are likely to factor into in the Federal Reserve’s plans for interest rates.”

However, Moriarty said the overall price of gold miners has devalued vs. the price of gold and is “at the bottom now.”

“From a relative position of sentiment, everybody hates the miners,” he said of environmental and ESG concerns that have affected the industry. “You can go to Canada, and there’s probably 1,500 stocks, and the number of stocks under 10 cents is absolutely staggering. I own probably 50 different stocks, and I would guess 40 of them are under 10 centers per share . . . You don’t have to know anything about investing if you understand the sentiment.”

And Moriarty expects that sentiment to change soon.

“We’re going to be in a bull market probably for the next 10 or 20 years,” he said. “It has just started the real bull face. You’re going to see it in the other metals, and you’re absolutely going to see it in the miners. And I believe there are a lot of stocks that are going to go up 100-fold.”

But Moriarty said it won’t be just gold; other metals like silver, rhodium, palladium, and platinum will benefit, sometimes even more.

“Gold is going to continue to go up, but just like with dancing, sometimes you lead, sometimes you follow,” he said. “And I think it’s the secondary metals that are going to lead now.”

Most Valuable Precious Metal on the Planet?

Like gold, silver has had a good year so far and is up 42.17%, according to USA Today. It was trading at US$34.02 per ounce on Tuesday, an increase of 1.26% in the previous 24 hours.  Platinum, which was US$1,025.65 per ounce on Monday, is up 3.84% on the year.

But in addition to gold, silver and platinum, the platinum group contains lesser-known metals like osmium, ruthenium, iridium, palladium, and rhodium.

The metals are all very rare and have high corrosion resistance, catalytic properties, and high melting points, according to How Stuff Works.

But Mack Hayden wrote for the site that rhodium, a silver-white metal, is “the most valuable precious metal on the planet.” The automotive industry uses nearly 80% of the world’s supply to make catalytic converters that help reduce toxic gas emissions. South Africa is the leading producer, contributing about 80% of the global supply. It is often found mixed with other platinum group metals and requires extensive processing to extract.

Trading Economics said rhodium has increased US$250 per ounce or 5.65% since the beginning of 2024. While it was US$4,675 per ounce on Monday, it reached an all-time high of US$29,800 per ounce in 2021 — nearly 10 times gold’s current record price.

Hunt pointed out that two of the major producers of platinum, palladium, and rhodium are Russia and South Africa, two members of the BRICS group of nations that met earlier this month in Russia.

“They control price; that’s a big deal,” Moriarty agreed. “We’re going to see some real financial shocks with silver, with rhodium, with palladium, and with platinum.”

BRICS Group Expanding

BRICS is an intergovernmental organization that includes Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates. At its October meeting, it expanded to add 13 new “partner nations.”

At the meeting, China President Xi Jinping referred to BRICS as “a vanguard for advancing global governance reform” and “reform of the international financial architecture.”

Bolivian President Luis Arce said, “the shield of BRICS and multipolarity” can protect formerly colonized nations, helping them resist “Western unipolarity and the tyranny of the dollar.”

With gold hitting record highs and silver rising, the other platinum group metals are nowhere near their eventual highs, Moriarty said.

“The Russians understand this, and they’re going to start buying palladium, they’re going to start buying rhodium, and they’re going to start buying silver because those metals are going to move faster and higher than gold,” he said, predicting record highs for all three.

Source: https://www.streetwisereports.com/article/2024/10/30/expert-says-secondary-metals-will-star-in-new-bull-market.html

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Euro zone inflation picks up, bolstering case for caution in rate cuts

Reuters

Thu, October 31, 2024 

FRANKFURT (Reuters) – Euro zone inflation accelerated more than expected in October and could still pick up further in the coming months, bolstering the case for caution in European Central Bank interest rate cuts as price growth is not yet fully tamed.

Inflation in the 20 countries sharing the euro currency accelerated to 2.0% from 1.7% in September mostly on higher food and energy costs, coming above expectations for 1.9% in a Reuters poll of economists.

A more closely watched figure which strips out volatile food and energy prices meanwhile held steady at 2.7%, above forecasts for 2.6%, Eurostat said on Thursday.

Inflation has fallen quickly since hitting double digit territory two years ago and most economists see it back at the European Central Bank’s 2% target basis sometime in the first half of next year after some volatility in the final months of 2024.

This relatively quick return to target has also fuelled a debate in recent weeks, with some ECB officials arguing there was a growing risk that price growth will actually fall below target and the ECB will have to start stimulating growth to prevent excessively low inflation.

Such a dim outlook could even force the ECB to accelerate the pace of rate cuts and bolster the case for a bigger than usual step in December, some said.

This argument has yet to gain significant traction, however, and conservatives, or policy hawks in central bank-speak, have pushed back, arguing for measured, incremental steps because a long list of factors could still push prices higher.

A key concern is that inflation in services, the biggest single item in the consumer price basket remains way too fast, holding steady at 3.9%.

Wage growth is also faster than the 3% rate the ECB considers consistent with its target and households are sitting on ample savings, which could bolster consumer savings and overall growth.

The labour market also remains tight with the jobless rate holding steady at an all-time low of 6.3% in September, separate Eurostat data showed on Thursday.

The policy doves’ argument that overall growth is simply too weak to sustain 2% inflation was also dealt a blow this week when fresh data showed the economy expanding at 0.4% in the third quarter, twice as fast as expected, with Germany, France and Spain all showing surprising resilience.

But economists also appear to agree that no meaningful rebound in growth was likely and the euro zone will continue to grow at a lukewarm pace, below what is considered its potential.

That is why further ECB rate cuts are almost assured and no policymaker has challenged the need to move again on Dec. 12, suggesting that the step is largely a done deal, unless major data surprises alter the outlook.

Financial investors are now betting that the ECB’s 3.25% deposit rate could dip to 2% or possibly below that by the end of 2025.

The biggest uncertainty, however, is likely to be the U.S. election, policymakers say, since it could have far reaching implications for trade, growth and inflation which may require policy action further down the road.

(Reporting by Balazs Koranyi; Editing by Toby Chopra)

Source: https://finance.yahoo.com/news/euro-zone-inflation-picks-bolstering-100558761.html

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IMF chief says world economy at risk of low-growth malaise, rising dissatisfaction

International Monetary Fund (IMF) and the World Bank Group 2024 Fall Meeting in Washington · Reuters

David Lawder Thu, October 24, 2024 at 2:06 PM EDT 4 min read:

WASHINGTON (Reuters) – International Monetary Fund Managing Director Kristalina Georgieva warned on Thursday that the world is in danger of becoming mired in a low-growth, high-debt path that will leave governments with fewer resources to improve opportunities for their people and tackle climate change and other challenges.

The result is increasingly dissatisfied populations, Georgieva said during a press conference during the IMF and World Bank annual meetings in Washington.

The meetings are clouded by the looming Nov. 5 U.S. presidential election, which raises the specter that Americans, stung by high inflation during Democratic President Joe Biden’s administration, could return Republican candidate Donald Trump to the White House, ushering in a new era of protectionist trade policies and trillions of dollars in new U.S. debt.

Dissatisfaction is not unique to the U.S., Georgieva said, despite the global economy showing some resilience in the face of threats from wars, weak demand in China, and the lagged effects of tight monetary policy.

“For most of the world, a ‘soft landing’ is in sight, but people are not feeling good about their economic prospects,” Georgieva said, referring to a scenario in which high inflation is tamed without a painful recession or large job losses. “Everybody I ask here, how is your economy? The answer is good. How is the mood of your people? The answer is not so good. Families are still hurting from high prices and global growth is anemic.”

The IMF on Tuesday released new economic forecasts showing that global GDP growth will decline slightly by 2029 to 3.1% from 3.2% this year, well below its 2000-2019 average of 3.8%, as current U.S. strength fades.

At the same time, the IMF’s Fiscal Monitor showed global government debt is set to top $100 trillion for the first time this year and continue rising as political sentiment increasingly favors more government spending and is resistant to tax increases. It also predicts that government debt as a share of GDP, now 93%, is set to reach 100% by 2030, exceeding its peak during the COVID pandemic.

“So here is the bottom line: the global economy is in danger of getting stuck on a low-growth, high-debt path,” Georgieva said. “That means lower incomes and fewer jobs. It also means lower government revenues, so less resources for families and to fight long-term challenges like climate change. These are anxious times with these problems in mind.”

Finance chiefs from G20 major economies separately expressed optimism for a soft landing, and urged resistance to protectionism.

“We observe good prospects of a soft landing of the global economy, although multiple challenges remain,” the G20 finance ministers and central bank governors said in a joint statement issued after a meeting on the sidelines of the meetings in Washington.

The communique did not mention Russia’s invasion of Ukraine, long a point of division for the G20, or Israel’s military conflicts with the Palestinian militant group Hamas in Gaza and the Iran-backed Hezbollah organization in Lebanon.

A separate statement issued by Brazil, which currently holds the G20 presidency, said members disagreed on whether the conflicts should be discussed within the group, but added that it would continue such talks among lower-level officials ahead of a G20 leaders summit in Rio de Janeiro in November.

CHINA’S PATH

Georgieva said that China’s growth could slow to “way below 4%” unless its government takes decisive action to shift its economic model towards consumer demand from exports and manufacturing investment.

After long maintaining Chinese growth forecasts at or above Beijing’s 5% target, the IMF this week cut China’s 2024 growth outlook to 4.8%, with a projection slowdown to 4.5% in 2025. China’s GDP grew at a 7.4% rate in 2014.

Georgieva said more details on China’s stimulus plans were needed to assess whether they would improve its outlook. The IMF’s chief economist, Pierre-Olivier Gourinchas, and U.S. Treasury Secretary Janet Yellen said on Tuesday they have not seen anything from Beijing that would materially raise China’s domestic demand.

The IMF and World Bank meetings also have been marked by new worries about an escalation of the war in the Middle East, which was triggered a year ago by Hamas’ surprise attack on Israel.

A wider escalation of the conflict could increase spillovers to economies in the region, Georgieva said, including Egypt, which earlier this year won a $3 billion increase to its IMF loan program.

Georgieva said she will travel to Egypt in the next 10 days to assess economic conditions for possible further changes to the program amid a severe drop in the country’s Suez Canal revenues.

Jihad Azour, the director of the IMF’s Middle East and Central Asia Department, told a briefing that the size of the program was still appropriate, but Georgieva would assess the effectiveness of the country’s social protection programs in the current environment.

(Reporting by David Lawder; Editing by Paul Simao)

Source: https://finance.yahoo.com/news/imf-chief-says-world-economy-180635326.html

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Jayant Bhandari | Understanding India

Last month, I spoke at Dr. Hans-Hermann Hoppe’s Property and Freedom Society conference in Bodrum, Turkey. My speech was titled ‘Understanding India,’ and I elaborated on the underlying mindset that drives the Indian psyche, its amorality, and its tendency toward irrational and magical thinking. I discussed how this mindset contributes to an inability to distinguish between right and wrong and between the depraved and the virtuous:

Here is a discussion that followed:

On Investments

I recently returned from a site visit in Japan with Irving Resources (IRV; $0.34). The company has signed a joint venture agreement with Newmont and Sumitomo. Despite the legal complexities across several jurisdictions, these companies’ commitment to establishing a JV underscores the significance they place on the Yamagano project. They are already drilling the third of a planned five-hole program, with each hole reaching a depth of 700 meters. Additionally, the company is preparing to begin drilling at the Omu project, which is set to start early next month, with the permit expected imminently.

I briefly discussed IRV in a recent interview (at the 10:27 minute mark):

I recently read an excellent book, THINK: Observations of a Generalist by Rodney Choate. In this book, Choate examines the common errors in people’s thinking that contribute to stubbornness and an unwillingness to change their opinions, even when faced with new information. His insights delve into the cognitive biases and mental blocks that lead to such rigid thinking. What makes the book particularly compelling is that some of Choate’s thoughts are refreshingly unique, offering perspectives I hadn’t encountered in other works on critical thinking.

Jayant Bhandari

Disclaimer: All information found here, including any ideas, opinions, views, predictions, forecasts, commentaries, suggestions, or stock picks, expressed or implied herein, are for informational, entertainment, or educational purposes only and should not be construed as personal investment advice. While the information provided is believed to be accurate, it may include errors or inaccuracies. The sole purpose of these musings is to show my thinking process when analyzing a stock, not to provide any recommendations. I will not and cannot be held liable for any actions you take resulting from anything you read here. Conduct your due diligence or consult a licensed financial advisor or broker before making any investment decisions. Any investments, trades, speculations, or decisions made based on any information found on this site, expressed or implied herein, are committed at your own risk, financial or otherwise.

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The US retirement system gets a C+ in global study

Janna Herron · Senior Columnist

Updated Sun, October 20, 2024 at 4:14 PM EDT 6 min read

So much for American exceptionalism when it comes to retirement.

The US earned just a C+ for its retirement system in the 16th annual Mercer CFA Institute Global Pension Index, coming in 29th out of 48 countries. Since the index’s inception in 2009, the US retirement system has never surpassed a C+.

The big anchors on the American grade include concerns over pension funding and shortfalls in private retirement savings. Like most countries across the globe, the US retirement system must withstand the double whammy of dropping fertility rates and increasing life expectancy.

“It’s not just Americans, it’s a global problem,” Holly Verdeyen, Mercer’s US defined contribution leader, told Yahoo Finance. “The imbalance between retired and working people continues to grow…coupled with increasing lifespans.”

Only four countries — the Netherlands, Iceland, Denmark, and Israel — earned an A ranking for their retirement systems, providing key lessons on how to shore up our system. India came in last. Provisions from Secure 2.0 that go into effect next year could also address some of our shortcomings.

The problems in the US

The index examined more than 50 indicators to rank each country’s retirement system by adequacy, sustainability, and integrity. Overall, the researchers considered what benefits retirees receive now, if the system could last amid demographic changes, and if private retirement plans are regulated to encourage long-term confidence.

This year, the index score for the US decreased to 60.4 from 63.0, putting it in the same grade tier as the United Arab Emirates, Kazakhstan, Hong Kong, Spain, Colombia, and Saudi Arabia, though each of those countries had a higher overall score. The United States earned a C+ for adequacy and a C each for the sustainability and integrity of its retirement system.

Drilling down, the largest dilemmas for the US come from pensions and private retirement savings accounts, major sources of income for American retirees.

Let’s start with pensions, which are not nearly as prevalent as they were a generation ago. Still, 21% of workers have one through their employer.

A pension pays out a benefit for a certain amount of time, such as through the end of a person’s life, or, in some cases, even longer if a surviving spouse qualifies for continued benefits. Because people are living longer, those receiving benefits will be getting that money “for significantly longer than initially forecast today,” Verdeyen said. “That’s one thing.”

On top of that, pensions depend on workers to fund benefits to retirees. But thanks to declining birth rates, there are fewer workers contributing to these pension systems, leading to funding shortfalls that largely affect public-sector employees and workers in the few industries that still offer these retirement benefits.

The US earned a C+ for its retirement system in the 16th annual Mercer CFA Institute Global Pension Index, coming in 29th out of 48 countries. (Photo: Getty Creative)
The US earned a C+ for its retirement system in the 16th annual Mercer CFA Institute Global Pension Index, coming in 29th out of 48 countries. (Photo: Getty Creative) · Steve Smith via Getty Images

What’s left in Americans’ retirement arsenal is savings in private retirement plans, primarily employer-sponsored plans like 401(k)s. But based on the most recent research, Americans are expected to outlive those savings by about 10 years, Verdeyen said.

So, people need to either save more or work longer, or both, she said. And they are working longer, on average, by two years. But they are also projected to live 4.4 years longer too.

“So life expectancy increases are more than double the average rise in retirement ages,” she said. “So this gap between how much people have saved and how much they need to fund an adequate retirement is going to continue to grow.”

Social Security, the federal program that all workers pay into throughout their working life, is the third pillar that supports Americans in retirement. Similar to pensions, Social Security is facing a funding problem because of the worker-to-retiree imbalance. Its reserve fund is projected to run out in 2033, at which point the social welfare program will only be able to pay out 79% of benefits, a costly cut for many seniors.

“This trend [of longer lifespans and lower birth rates] puts pressure on both the private retirement system and the publicly funded Social Security safety net,” Verdeyen said.

Read more: Retirement planning: A step-by-step guide

The Netherlands offer a model

The Mercer report offers some straightforward ways to buttress the US retirement system. Americans could also take some best practices from the No. 1 retirement system in the world — the Netherlands.

To start, all US employers should incorporate the best features of a private retirement system, Verdeyen said, which include automatic enrollment, automatic escalation of a worker’s savings rate that would provide adequate income at retirement, and better education.

In the Netherlands, for example, it’s “quasi-mandatory” for employers to provide retirement plans. While the government doesn’t mandate it, industry unions do through collective bargaining agreements. All companies in an industry must abide by those agreements.

“The bigger point is that once an employer-sponsored retirement program is offered, employees in the Netherlands are automatically enrolled,” Verdeyen said. “So that makes participation in the Netherlands pretty much mandatory for a very large part of the workforce.”

Only four countries — the Netherlands, Iceland, Denmark, and Israel — earned an A ranking for their retirement systems. (Photo: Getty Creative)
Only four countries — the Netherlands, Iceland, Denmark, and Israel — earned an A ranking for their retirement systems. (Photo: Getty Creative) · Alexander Spatari via Getty Images

However, in the US, a third of private industry workers don’t have access to an employer-sponsored retirement plan.

The Secure 2.0 Act, legislation President Joe Biden signed into law in 2023, aims to boost participation in the US by requiring employers with new 401(k) and 403(b) plans to automatically enroll their workers, starting in 2025. The legislation also includes auto-escalation of contributions.

“In that way, automatic enrollment is going to become mandatory for a large part of our new retirement plans, which over time, I think should improve our rating in the index in the US,” Verdeyen said.

The final fix is for employers to provide easy-to-implement ways to turn worker savings into a reliable stream of income. That could be as simple as embedding a payment feature into a retirement plan that pays out a monthly sum starting at a certain age to help people delay taking Social Security.

“If people delayed their Social Security benefit from age 67 to 70, it would be about a 24% increase in the Social Security retirement annuity payment that they would get,” Verdeyen said.

Read more: What is the retirement age for Social Security, 401(k), and IRA withdrawals?

Employers could also offer lifetime income features in target-date funds, which is the default investment for most retirement plan participants. That would also alleviate concerns over outliving one’s retirement savings.

“The defined contribution system has really only focused on getting workers through to their point of retirement,” Verdeyen said. “But it has fallen short in helping workers get all the way through retirement.”

Original Source: https://finance.yahoo.com/news/the-us-retirement-system-gets-a-c-in-global-study-230119976.html

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Fears of ‘False Start’ for Fed Leave Emerging Markets in Limbo

In This Article:

Srinivasan Sivabalan

Sun, October 20, 2024 at 8:00 AM EDT 6 min read

(Bloomberg) — Price action in some of the world’s most risk-sensitive assets is signaling concern that the Federal Reserve’s decision to begin lowering interest rates may have been premature — or may not be sustainable.

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Since the Fed kicked off its long-anticipated loosening cycle on Sept. 18 with a cut of 50 basis points, double the median forecast, emerging-market assets have traded as if borrowing costs in the world’s largest economy will remain high. That’s left developing world assets in limbo, headed for another span of underperformance.

In little over a month, the Fed rate cut has been eclipsed by fresh risks that are keeping global investors shy on the asset class, overshadowing the gains that Fed easing cycles might usually be expected to bring. While the threats have taken different forms — higher Treasury yields, a stronger dollar, greater volatility in currency options — the underlying themes have been just two: the potential return of Donald Trump as US president and China’s inadequate stimulus measures.

That means that once again, traders in emerging markets are positioning defensively for an inflationary US economy and a deflationary Chinese one.

“We remain in a world with two potentially existential threats to EM – China weakness and Trump,” said Paul McNamara, investment director at Gam UK Ltd. in London. “A strong US economy without inflation is good for EM, but persistent inflation will not only postpone further cuts, but weigh on all risk assets into the medium term.”

Though there was an initial boost to emerging markets from the Fed move, it was first interrupted by strong US data that revived fears of resurgent inflation, and later comments by presidential candidate Trump that exacerbated them. The Republican nominee has put tariffs and protectionism at the center of his agenda. If implemented, that’s likely to raise consumer prices in the US and undermine demand for exports from the developing world, according to many economists.

“We’re just weeks away from a US election that might lead to a Trump economic assault on the biggest EM out there, China,” said Charlie Robertson, head of macro strategy at FIM Partners. “It’s close to a coin flip as to who wins the US election, and equally makes it hard to choose a local markets trade to like.”

Disappointed Again

Hedge funds have also been ramping up positions speculating on dollar gains against developing economies vulnerable to higher tariffs.

EM stocks, which briefly rebounded from a record low relative to US equities after the Fed decision, are heading back to that dubious honor. Local currencies and local-currency bonds are on course for their worst month since February 2023. Segments of the dollar-bond market, like long-duration and investment-grade, also continue to trail.

Bond investors have seen their returns stagnate in the month since the Fed decision. Their expectations for the developing world to follow the Fed are now being upended by central-bank caution, as policymakers from Indonesia to Hungary and Turkey decide to pause interest-rate cuts.

“Eventually EM local-currency bonds should benefit from global easing,” said Anders Faergemann, a senior portfolio manager at Pinebridge Investments. “However, from a total return perspective, the relief rally in the US dollar and domestic delays to monetary-policy easing may have triggered some profit-taking.”

The average yield on EM sovereign dollar bonds has edged higher by 9 basis points since Sept. 18, while the rate on local-currency bonds has also risen 9 basis points, according to data compiled by Bloomberg. Between the two groups, the latter is underperforming in dollar returns, with currency declines acting as an additional drag.

“Rising geopolitical tensions, uncertainty over China’s efforts to rescue domestic consumption, and event risk leading up to the US presidential election will also spark increased demands for a higher risk premium into year end,” Faergemann said.

Yield Curves

Strong US economic data have not only disrupted Fed monetary-policy bets but are also reshaping emerging-market yield curves. Within the dollar-bond market, investors are favoring short-duration bonds to long-duration bonds — an unlikely preference in an environment where falling rates are a consensus expectation. Bonds with a duration of more than 10 years have handed investors a loss of 3.6% since the Fed cut, while those of less than three years have given marginal gains.

As of Friday, swap traders were penciling in further reductions to their bets on Fed cuts in the remaining two meetings of the year. Citigroup Inc.’s Akshay Singal, global head of short-term interest-rate trading, told Bloomberg TV that the Fed is likely to cut rates by just 25 basis points, or even stay put, over the next few meetings. He said he doubted the Fed would have opted for a 50-basis-point cut in September if it had seen the strong jobs data before the meeting.

“The combination of US Treasury yields above 4% and a pickup in economic activity in the US have called into question the idea of the beginning of a Fed cutting cycle,” said Martin Bercetche, a hedge-fund manager at UK-based Frontier Road Ltd. “We might have had a false start last month.”

China Factor

For emerging-market stocks, the turbulence coming from the US economic and political landscape was just one of the problems. The wildest volatility in nine years has meanwhile gripped China as successive stimulus measures initially sparked a sharp equity rally, then ultimately failed to convince investors that they were enough to turn around the economy.

The EM equity benchmark, where China holds the biggest weighting, is once again trailing the S&P 500 Index, belying expectations that it would pull itself out of a seventh successive year of underperformance when the Fed started to cut rates.

The bruises of the past month have forced investors to reassess their exposure, and many are avoiding the sweeping EM-wide bets they’d recommended for the post-Fed era.

For the moment, the focus is on weathering the US election. With polls showing Trump is neck-and-neck with his Democratic rival Kamala Harris, a firmer view on EM has to wait. For Gam’s McNamara, there’s one scenario where the Fed-cut trades in emerging markets can begin to make money.

“A Harris win,” he said.

What to Watch

  • In Brazil, the mid-October inflation print could fuel bets on faster monetary tightening at November’s central-bank meeting
  • Russia’s central bank set to lift interest rates by 100 basis points, according to a Bloomberg survey
  • China’s banks are set to lower their loan prime rates, tracking the People’s Bank of China’s cuts to key rates near the end of September
  • South Korea’s GDP data will likely have rebounded in the third quarter

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Original Source: https://finance.yahoo.com/news/fears-false-start-fed-leave-120000866.html