Gold, Bitcoin rallies signal a big dollar problem

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Japan- It’s no accident that the price of platinum has never been higher when the US dollar is in the greatest danger. An Asia region that is all too aware of how abrupt changes in the global reserve currency is sway economic outcomes is experiencing fresh rounds of PTSD as a result.

Even Bitcoin’s return to the fray, topping US$ 43 000 this year, wo n’t do much to ease tensions in the trading pits between Tokyo and Mumbai and the halls of power between Beijing and Jakarta.

Basically, the US Federal Reserve is thought to have stopped raising interest rates to control inflation, which is why the dollar is falling. The real issue, however, is a combination of issues that are taking center stage and preparing Asia for an uncertain 2024.

One is the combined consequences from the US Fed’s aggressive tightening since the middle of the 1990s. Concerns about America’s governmental path being a coach disaster are number two. And third, political fragmentation in Washington that is endangering the final AAA credit rating of the largest economy in the world.

When viewed from one angle, the dollar’s optimum is somewhat of a relief. Given the$ 46 billion in rated dollar-denominated debt that is due next year, excluding China, Alexandra Dimitrijevic, the global head of research at S&amp, P Global, notes that the strength of the dollar “is compounding the pressures on many” emerging markets.

Extremely strong dollar periods do n’t typically favor Asia’s export-reliant economies. Strong dollar rallies like the ones the world has experienced over the past few years have accumulated significant amounts of money, depriving Asia of the investment it desperately needs.

The 2013 Fed “taper anger” serves as one example of this happening. However, the 1994–1995 period—the next time the Fed tightened as violently as it has over the past two years—is where Asia really came to a head.

The Fed at the time doubled short-term attention costs in just a year. By 1997, it was impossible to maintain dollar pegs due to a multi-year dollar rally and rising US yields.

Thailand’s chaotic weakening in July 1997 was the first. Then South Korea and Indonesia removed their money bolts. The Philippines and Malaysia were on the verge of imposing capital settings as a result of the unrest.

International investors soon started to worry that Japan and China might also fall. The concern at the time was that China may devalue the yuan, causing a new wave of man turmoil in your neighboring market. Thankfully, Beijing did n’t flinch.

Photo: Reuters / Jason Lee
Compared to before, China is less eager to hold onto US debts. Jason Lee, Reuters, and Asia Times Files

In the meantime, the collapse of Yamaichi Securities in November 1997 resulted in significant world drama in Japan. A then-100-year-old Japan Inc. icon’s loss shook industry all over the world. Punters were concerned that Japan was n’t too big to fail but also too large to save. Fortunately, Tokyo officials prevented the collapse from spreading like a global systemic shock.

Asia is currently dealing with a huge impact coming from the opposite direction. An even greater structural risk—and one that is more immediate—is for areas to lose trust in the money.

Midway through November, when Moody’s Investors Service threatened to drop the US, the security of the dollar was once again shaken. Washington’s most recent Premium rating may be lost as a result, which would probably cause US 10 year bond yields to soar.

Of course, the fact that Moody’s changed its forecast for Chinese sovereign bonds from” stable” to “negative” on Tuesday ( December 5 ) hardly helps. It was at the very least a sign of growing international worries about the bill amounts on the continent.

However, the persistent threat of a US drop in many ways could overshadow any pleasure from the Fed’s decision to resume rate hikes.

According to Moody’s analysts,” the US fiscal deficits will be very large, considerably weakening loan affordability, in the framework of higher interest rates, without effective governmental policy measures to reduce state investing or increase revenues.”

That has resulted in Washington’s vehement opposition. Wally Adeyemo, the assistant secretary of the Treasury, stated last month that” we disagree with the switch to a bad outlook.” The nation’s top safe and liquid asset is Treasury Securities, and the American market is still powerful.

If international northern banks decide then, no. More than$ 3.2 trillion in US Treasuries are held by Asia’s top 10 currency reserve-hoarding institutions. Tokyo is the largest, and the Bank of Japan must be having trouble sleeping due to its contact of$ 1.1 trillion.

Beijing, the second-largest bank in Washington, has been attempting to lessen its money coverage. China’s US government debt holdings had decreased by about 40 % over the previous ten years as of early November. China’s growing dislike of the money is raising eyebrows in government buildings and buying pits all over the world, with just over$ 860 billion in Treasuries.

The same is true of a brand-new, potent metal rally that has for the first time raised spot prices above$ 2,100. There are a few widely accepted explanations for the economy’s decline, with the majority focusing on speculations that the Fed will cut interest rates or that geopolitical tensions did extremely rise in 2024.

According to Daria Efanova, head of research at dealer Sucden Financial,” the objectives of the close of a tightening cycle have been priced in, pushing longer-term provides lower.” ” This has improved the conditions for gold as a non-yielding asset.”

However, if the dollar’s stumble develops in a chaotic manner, things might not be so positive for Asia. In fact, more investors may turn against the dollar if the intense sense of unease around the world does n’t help.

The global market is currently navigating the most hazardous fixed of risks in several years, according to major US financiers like JPMorgan Chase CEO Jamie Dimon.

Dimon is not the only person with that perspective. According to John Reade, a planner for the World Gold Council,” the geopolitical risk environment appears to have changed.” Not just because of Russia’s invasion of Ukraine, not just the sad events taking place in Israel and Gaza, but also due to trade hostilities between the US and China, worries about what will transpire in the South China Sea, and worries regarding what China will do in Taiwan.

The areas are declining as a result of the Israel-Hamas conflict. NDTV Screengrab picture

Buyer demand for safe-haven assets like gold has been fueled, according to Victoria Scholar, mind of investment at Interactive Investor, who also notes that concerns about the unstable world economic environment and the Israel-Hamas conflict. Additionally, anticipations of Fed price reductions next year have put upward pressure on the US dollar, increasing the allure of gold.

Fed expectations, however, do n’t provide a complete picture. For instance, Goldman Sachs economics describe the current amount of US monetary easing as “excessive” because it is being priced in by financial industry.

In a subsequent report, Deutsche Bank described six instances over the previous two years in which businesses determined the Fed’s cycle of rate hikes was coming to an end.

These occurrences include the Omicron variant fear of November 2021, Russia’s invasion of Ukraine in February 2022, the fallout from the Chinese pandemic lockdowns, worries about a global recession in July 20, the collapse of Silicon Valley Bank in March 2023.

These anticipated changes turned out to be incorrect each day because Fed Chairman Jerome Powell’s team kept raising rates.

According to Deutsche Bank, as inflation starts to decline, the discussion shifts more and more to the possibility of over-tightening and whether plan risks are being overly restrictive. Since economic plan operates with a lag, it is challenging to know the answer in real-time. Therefore, given that markets are pricing a pivot for the sixth time, it is important to think about whether the circumstances are right for that to occur.

According to Deutsche Bank planner Henry Allen,” Obviously, it’s probable that this time may be unique, and the rise in unemployment and fall in inflation is putting us closer to a place where the Fed has started to cut rates in past processes.” However, 2023 has demonstrated how breaks have been frequently pushed into the future.

Could the Israel-Hamas crisis and nbsp spark a larger issue in the Middle East that drives up oil prices? Had Saudi Arabia’s efforts to lower OPEC production gain grip? What if Vladimir Putin, the president of Russia, stepped up his defense efforts in Ukraine, raising food and energy prices?

Additionally, there is a chance that US-China business tensions will increase in ways that will fuel inflation. Hobbling China’s financial growth may be the only issue on which the Democratic Party of US President Joe Biden and the Republicans who support former President Donald Trump concur.

Social disputes that arise before the November 2024 vote may result in new sanctions against China that disrupt supply chains and raise global prices.

Elsa Lignos, RBC Capital Markets ‘ head of money strategy, says,” Our base case is for a treatment in the penny into year-end.” The money continues to be the highest yielder in the G-10 region and is higher giving than a number of emerging markets.

We therefore anticipate that the Fed, while encouraged by new inflation improvements, may continue to follow a hardline policy approach, according to analysts at ANZ Bank.

However, the bull run of gold and the recent surge in cryptocurrencies point to the fact that America’s finances and severe social tribalism in Washington are the greater concern.

Washington’s federal loan is racing past the$ 33 trillion level, which is a controversial 2023 step. The prices of this growing fiscal imbalance are rapidly increasing.

The US president’s estimated annualized loan interest payments exceeded$ 1 trillion at the end of October. Over the past 19 months, Washington’s payment burden has doubled, accounting for roughly 16 % of the national budget for the fiscal year 2022.

This high percentage of interest payment as a share of national spending has law, as the piece before 2000 was over 14 % in most years, according to researchers from Bloomberg Intelligence. The state faces a challenge in controlling necessary spending and attempting to lessen the need to issue more debt. Because of this, despite our predictions of lower Treasury yields, attention repayments are increasing.

The days of the dollar as the country’s reserve currency are numbered. Image: Screengrab / Online

Governmental forces will resonate throughout Washington’s halls of power if yields keep rising. Every day the Treasury Department holds a bill auction in the hopes that bidders will show up, this would also make for intense drama. The main banks and finance departments of Asia are particularly affected by this.

Here, US political fragmentation creates very the 2024 tiebreaker. The 11 price increases by the Powell Fed over the past 18 months have undoubtedly increased America’s saving costs. However, worries about how political disputes might undermine confidence in the penny will then take center stage.

Following Fitch Ratings ‘ August 1 decision to upgrade the US from AAA to AA , like worries reached a fever pitch. As politicians played around with the debt ceiling and threatened to shut down the government, Fitch cited both a “deterioration” in US funds and the “erosion of management” at the time.

Global markets are “focusing on the deficit problem” more than ever as a result of Fitch’s activity, according to Ed Yardeni, leader of Yardni Research. He points out that the US Treasury Department might be dealing with a “bond vigilantes” issue if inflation continues to be” sticky.” That, he continues, might encourage politicians to take” something more important” toward long-term deficit reduction.

But given Washington’s serious polarization, that is highly improbable. The Biden-Trump scuffles will be similar in the future. Currency traders have already objected to some of Biden’s policies, including extravagant paying, restricting access to essential systems, and “weaponizing” the dollar in the conflict between Washington and Moscow over Ukraine.

A Trump 2.0 president carries its own challenges, such as the possibility of escalating trade war with China and other nations. Notably, Trump’s team considered canceling some US debts that Beijing held during his first term. Additionally, he pressured the Fed into making improper concessions in 2019, damaging Powell’s standing for freedom.

There is plenty of evidence to suggest that the economy’s credibility issues have only just started, as shown by the current rallies in gold and Bitcoin, when you take into account Chinese efforts to export the yuan during the Chinese Xi era.

William Pesek can be reached at @WilliamPesak on X, originally Online.

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Chinese stocks slump after Moody’s outlook cut

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Following Moody’s Tuesday downgrading of its assessment of the credit ratings for the Chinese government from” stable” to “negative,” stock markets in Hong Kong and mainland China experienced a decline.

The Hang Seng Index, a standard for Hong Kong’s stock market, dropped 1.9 % to close on Tuesday at 16, 327, the lowest level since November 2022. Since October of this year, the Shanghai Composite Index has dropped 1.7 % to 2,972, breaking its emotional support of 3,000 once more. &nbsp,

Investors ‘ concerns about the slowing Asian economy caused Japan’s Nikkei 225 to fall 1.37 % on Tuesday, but the index has risen 27.5 % so far this year. In 2023, the Shanghai Composite Index dropped 4.63 percent while the Hang Seng Index fell 19 %.

China’s A1 long-term local and foreign currency issuer ratings were upheld by Moody’S on Tuesday, but the company downgraded its outlook on the country to bad, citing its slower medium-to-long economic growth and continued property sector downsizing.

According to Moody’s, the shift “reflects rising data that financial aid will be provided by the government and wider public sector to economically stressed regional and local institutions and state-owned companies.”

This trend, according to the statement, “poses large downside risks to China’s governmental, economic, and institutional strength.”

It continued,” The perspective change also reflects the increased risks associated with architecturally and persistently lower medium-term economic development and the ongoing property market downsizing.” &nbsp,

effect that is controllable

The Ministry of Finance of China stated in a speech that it is “disappointed” by Moody’s downward rating view.

It stated that Moody’s worries about the prospects for economic development in China, governmental sustainability, and other issues are superfluous.

It stated that” when our land revenue declines, our charges in transfer payment will also decrease.” Although our property-related tax revenue has decreased in recent years, its proportion to our public money has no substantially decreased.

According to the report, the effect of the property market downturn on local general public and governmental costs is controllable and architectural.

It stated that “in recent years, our nation has established an administrative system to stop and resolve regional government debt risks.”

According to the statement, the initial spread and expansion of improper and chaotic borrowing by local governments has been stopped, and the disposal of local authorities debts has yielded positive results.

The outstanding local debt at the end of last year was 62 trillion yuan ( US$ 8.68 trillion ), which included the debts of the local governments, which totaled 35.1 trillion and 25.9 trillion, respectively. &nbsp,

China’s local debt to GDP ratio, according to the finance ministry, was only about 50.4 %, which is lower than the major economies ‘ and emerging market nations’ internationally recognized 60 % warning line. &nbsp,

The local government financing vehicle ( LGFV ) debt, which analysts estimated at about 60 trillion yuan at the end of 2022, was not included in the official local debt figure. &nbsp,

China’s debt-to-GDP ratio, if the LGFV debt is taken into account, should be 99 %, as opposed to the 263.9 % for Japan and the 12 % for the US.

slowing of the business

According to Moody’s, the nation will experience 4 % annual GDP growth in 2024 and 2025, and an average of 3.8 % from 2026 to 2030.

The Economic Daily, a state-owned news, declared on Tuesday that Moody’s “unwarranted and flawed” decision to cut off the credit outlook for China.

In the statement, Feng Qiaobin, assistant director of economic analysis at the Development Research Center of the State Council, was quoted as saying that Moody’s did not fully understand the Chinese economy and failed to take into account the most recent plan support for the home business and the results to be delivered. &nbsp,

China set a 5 % economic growth goal for 2023 in March. &nbsp,

China’s GDP increased 5.2 % in the first three quarters of this year from a year ago, according to the National Bureau of Statistics ( NBS ) on October 18. &nbsp,

Consumption increased 6.8 %, external trade in US dollars decreased 6.4 %, and fixed-asset investment increased 3.1 % for the same period as the” three horses” of the Chinese economy. &nbsp,

A 7.2 % increase in investment made by state-owned businesses contributed to the 3.1 % growth in fixed-asset investment. Private investment decreased by 0.6 % over the first nine months. &nbsp,

The finance ministry stated on Tuesday that” the input of local consumption to China’s socioeconomic development continues to increase.” &nbsp,

It stated that GDP growth was driven by consumption and investment by 4.4 and 1.6 percent items, both. Additional trade, yet, slowed GDP growth by 0.8 percent points. &nbsp,

Read: The house loan program in China might or might not be successful.

@jeffpao3 Following Jeff Pao on Twitterat&nbsp.

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Philippines chases four suspects in Catholic mass bombing

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MANILA: Authorities said Tuesday ( Dec 5 ) that police in the Philippines are pursuing four men, including two who are connected to a local militant group, in connection with the deadly bombing of sacramental Catholic mass there. The country’s largest Muslim area, Marawi, which was besieged by radical militantsContinue Reading

Why the EU-China Summit is bound to disappoint

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In April 2022, the final mountain between the European Union and China was contentious. Shortly after Russia’s war of Ukraine, toward which China has taken a liberal approach, it took place via videoconference. Although business may be the main topic at the next conference, which will take place in Beijing from December 7 to 8, it is unlikely to be any simpler. &nbsp,

After three decades of zero-Covid- 19 laws in China, the anticipated advantages of a reopened China for Europe have never materialized. Instead, with a €400 billion diplomatic deficit with the EU, business relations, which were balanced prior to the pandemic, are now largely in China’s pursuit.

The EU, a significant online exporter, is hardly comparable to any other significant economy in terms of trade imbalance. With many industries also closed to foreign competition, this, in the opinion of EU officials, is proof of limited access to the Chinese market.

It also signals China’s extreme industrial policy, which the European Commission views as unjust competition given the significant subsidies it provides to important industries that compete with those of Europe, not just in China but also extremely in the EU and next markets.

Despite the economy being reopened, China’s imports have been growing negatively for several months, which makes the lack of industry access even more obvious. Beijing’s localisation requirements, which make it extremely challenging for foreign corporations to continue relying on their physical manufacturers, are a major factor in the decline in EU exports to China.

An important factor in the decline in Chinese imports is their substitution with Chinese local suppliers, which is a key goal of Beijing’s historic professional policy” Made in China 2025″ in an effort to achieve self-reliance. &nbsp,

environmentally friendly technology

Meanwhile, a significant increase in EU imports from China has been attributed to China’s dominance of green technology, particularly solar panels and electric vehicles ( EVs ). China exports 90 % of the world’s solar panel, while the EU economy has been destroyed since subsidies were lifted following the 2010–12 EU sovereign problems.

However, it is much more difficult to accept Chinese EV imports because the car industry, which employs more than 14 million people, continues to be one of the major industries in the EU. This is likely the reason the EU has contacted the World Trade Organization to conduct an anti-subsidy research into Vehicles made in China and exported to the European Union.

Chinese officials will undoubtedly complain about this investigation during this week’s summit, but it does n’t seem likely that the EU delegation will show any signs of backing down. &nbsp,

The Taiwanese, who are accustomed to the union easing its positions in prior investigations, such as the 2014 anti-dumping spacecraft into solar panels, may not yet completely understand the EU’s tougher stance. Given the much greater significance of the car industry for Europe this time and the probable lack of counteroffers from the Chinese side, it is anticipated that the European Commission will maintain its position.

More than 1,000 tips were made by the EU Chamber of Commerce in China in September to reduce barriers to promote access for EU businesses. China might benefit from these, but there are two reasons why this is implausible.

Second, despite declining consumption and expense, the Chinese market continues to perform poorly. A significant business deficit has grown in significance as a source of growth as well as to prevent the negative effects of huge capital outflows on the balance of payments, which in turn affects the value of the rmb and public confidence in the economy.

Next, China has seen the Biden-Xi conference in California on November 15 as a victory in restoring US relationships. Chinese officials will be less inclined to provide Europeans with industry access that the US may not have had once they have regained confidence in China’s relations with the most significant country in the world.

After the Biden- Xi mountain, China’s self-confidence is bound to fight with the EU side making exceedingly anxious requests to balance its relationship with China. However, given China’s weak economy and the requirement for a trade surplus, there is also much room for it to increase goods. Therefore, the EU-China summit will undoubtedly upset once more.

Senior research fellow at Bruegel and chief economist for Asia-Pacific at Natixis, Alicia Garcia Herrero.

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Raimondo calls out Nvidia for China shipments

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United States Commerce Secretary Gina Raimondo has criticized Nvidia Corp., the largest producer of artificial intelligence ( AI ) chips in the world, for its plans to introduce downgraded products for China in an effort to circumvent US chip export restrictions. &nbsp,

Raimondo told an audience at the Reagan National Defense Forum in California on December 2 that” China wakes up trying to figure out how to accomplish an end run around our trade settings… which means every second of every day, we have to wake up tightening those settings and being more severe about police with our friends.”

She warned Nvidia, which had attempted to deliver the A800 and H800 chips to China after the US outlawed the export of the faster A100and H100 chips in October 2022, that she would take control of a device the very next day if it was redesigned to have an AI-enabled cut line. &nbsp,

She claimed that in order to improve the enforcement of the US’s device export controls, her division needs additional resources in addition to the latest US$ 200 million budget. China is” the biggest risk we’ve always had,” she emphasized, while” China is no our friend.”

State advertising in China criticized Raimondo for her remarks. They claimed that the US’s desire to do business with China and its perception of the nation as a menace rather than ally or companion are incompatible.

YouTube video

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According to a Beijing-based columnist using the pen name” Haishangke” in an article published on Monday, Raimondo stated at the Reagan National Defense Forum that the US wants to further develop business relations with China while also stressing that China is not the United States ‘ friend. ” In order to get the US Congress to give her a larger budget, she promoted the device trade controls against China.”

She” confirmed the creation of a China-US working group on the lieutenant governmental level and agreed to allow business members to participate in it when Raimondo visited China in August.” Is n’t there a close trade relationship between the two nations? Says Haishangke. Why does n’t China support the US? Is China the US’s foe or possible foe?

He claims that the US has never given much thought to the errors it has made in Sino-US trade. ” It has shifted its commitments to China but has not proposed any sensible measures to improve the diplomatic relations between the two countries.”

He claims that the US is concerned as China approaches it in terms of overall regional power, including economy. According to him, Beijing will keep expanding its AI businesses until they are sufficiently large one time for the US to no longer be able to resist.

Do business with everyone, please.

The US loosened trade restrictions in October 2022 to forbid the sale of Nvidia’s A100 and H100 cards to China. In order to satisfy the demand from China, Nvidia next unveiled the A800 and H800 cards. &nbsp,

Chinese internet tycoons Baidu, Alibaba, Tencent, and TikTok owner ByteDance reportedly ordered 100,000 A800 processors and other graphics processing units ( GPUs ) from Nvidia for US$ 5 billion in August of this year.

However, due to the US’s stricter import restrictions on October 17, Nvidia was unable to continue shipping its A800, H800s, L40S, and RTX 4090 chips to China. For China’s marketplaces, the corporation attempted to introduce the H20 cards, a slower version of H100, but it later postponed the release until the first third of 2024.

At an event in New York, Nvidia’s Chief Executive Jensen Huang stated to the media,” We’re a company that was built for business, so we try to do business with everyone we can.” ” On the other hand, our federal profitability and safety are important.

Huang claimed that the Biden administration’s attempt to cut off China from the US chip offer was a crucial one for the safety of the United States. &nbsp,

A” complete freedom of the supply chain is not really useful factor for a decade or two,” he continued.

He claimed that although China does not have access to the most cutting-edge Nvidia chips, the nation can also find a way to acquire it or find home chipmakers, such as Huawei Technologies, to match it.

collaborate with friends

At the Reagan National Defense Forum on Saturday, Raimondo reminded a crowd that it’s critical to safeguard the country ‘ armed forces’ national security.

I am aware that some of the CEOs of device companies in this crowd were irritated with me when I said that because you were losing money. Because of the way living is, protecting our national safety is more important than making quick money, she said.

” Republic benefits your firms.” Legislation is good for your businesses both locally and globally, she said.

She stated that the US will utilize its import restrictions on chips in collaboration with its supporters, including Japan, the Netherlands, and Europe.

The China Society for World Trade Organization Studies ‘ vice president, Huo Jianguo, stated that it is difficult for the US to persuade other nations to impose its device restrictions on China. He claimed that in order to implement its chip export controls, the US will have to pay higher prices. &nbsp,

According to Zhou Mi, a scientist at the Chinese Ministry of Commerce,” the ongoing conflict between US federal agencies and businesses demonstrates that unnatural trade controls are against the regulations of the business.”

According to Zhou,” US high tech firms are well aware that losing the chance to expand their businesses in China will hurt their profits and future growth, and that their technological progress may be hampered by the United States ‘ self-imposed restrictions.”

Due to the high demand for its items worldwide, Nvidia has not yet experienced any negative effects. The company’s profit increased by 206 % year over year in the quarter ending October 29, and its gross income rose to US$ 9.24 billion from US$ 680 million.

Read: China will use localized chips to satisfy AI market demand.

At&nbsp, @jeffpao3 is Jeff Pao’s Twitter account.

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Kerry’s COP28 fusion address will change the world

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On November 20, US Special Presidential Envoy for Climate John Kerry announced that he would present a new global strategy for fusion energy at the now-ongoing COP28 conference in Dubai.    

In a high-profile visit to the headquarters of Commonwealth Fusion, one of the world’s leading private fusion companies, Kerry declared:

“Fusion energy is no longer just a science experiment. Benefitting from decades of investment from the [US] Department of Energy’s world-leading Fusion Energy Sciences programs, it is now also an emerging climate solution. I will have much more to say on the United States’ vision for international partnerships for an inclusive fusion energy future at COP28, during an event on December 5.”

Kerry also spoke of “The first ever modern strategy — fusion strategy — for the United States.”

Whatever the details of Kerry’s address, we have good reason to expect that it will be substantive and not simply a political gesture. It could literally change the world.

Kerry will be the first top-level US government figure to thrust fusion into the center of the global stage in this way. As former secretary of state under the Obama administration, Kerry is quite aware that his fusion initiative is de facto a foreign policy move. To us, it constitutes one of the few unambiguously positive such moves in a long time.   

In narrow terms, Kerry’s forthcoming speech will signal the aim of the US to restore its leadership position in international fusion research – a position which has eroded progressively since the late 1980s.

At the same time, it will reflect the fact that realizing fusion as an economically viable energy source will require enormous resources, more effective cooperation between states and a new form of public-private partnership involving diverse technological approaches.

We expect Kerry’s proposal will extend the new “philosophy” of fusion research and development which has emerged in the US as well as the UK in the last decade, to the entire global fusion effort.

The implications go even beyond that. Whether he intends it directly or not, Kerry’s forthcoming announcement promises to redefine the entire issue of reducing human CO2 emissions, which is the central focus of COP28. In a sense, it amounts to turning the global warming campaign upside down.

In our view, fusion is far more than an unlimited energy source; it embodies the upward vector of human civilization, which has increasingly been lost over the last 50 years.

The specter of a global warming “doomsday” has fed dangerously into the environmentalist ideology, which sees human beings first and foremost as destroyers of the planet. Although many environmental problems have to be solved, human civilization cannot survive without upper and outward development. That is what fusion is all about.  

Without nuclear energy – fission today, fusion tomorrow – the global anti-CO2 campaign translates into brutal economic austerity, especially for developing nations.

In the meantime, amid deep economic crises in many of these nations, we witness the farcical spectacle of the COP28 conference, with 80 000 representatives traveling from all over the world on a thousand CO2-spouting planes to one of the world’s largest oil producers in order discuss how to reduce CO2 emissions!

If Kerry succeeds in making the realization of fusion power a top global priority as an answer to the “climate crisis”, that alone could make this latest United Nations extravaganza worthwhile.    

Background of Kerry’s initiative

What is the background of Kerry’s forthcoming move? Where is this coming from? I and my co-author have a pretty good idea about that.

I have followed developments in fusion since 1977, promoted fusion research through countless articles, presentations and at one point even played a role in off-the-record “fusion diplomacy” between the US and the USSR.

My co-author is an active participant in the growing private fusion “ecosystem” in the US and has worked with Scott Hsu, now senior advisor to the US Under Secretary of Energy for Science and Innovation and Lead Fusion Coordinator for the Department of Energy.  

Hsu is a central figure in the ongoing transformation of US fusion strategy and no doubt one of the main sources of the concepts Kerry will present in his forthcoming speech.

Co-author Florian Metzler with Scott Hsu. Photo: Florian Metzler

As readers of my Asia Times articles know, efforts to realize fusion as an energy source are moving forward at an accelerating pace, propelled by technological breakthroughs, powerful national commitments of nations such as the UK, Japan and China and not least of all by the skyrocketing growth of private investment into fusion companies.

Although the US has been the leading breeding ground for private fusion companies, there has been no decisive national commitment to fusion.

The US used to be the main fusion “superpower”, with the largest and most comprehensive fusion effort in the world. Not surprisingly, US fusion capability was centered on national labs with close military connections.

But starting in the 1980s the US fusion sector suffered from massive budget cuts, from which it has still not fully recovered. I experienced this firsthand. Participation in the International Thermonuclear Experimental Reactor (ITER) project served as a pretext for failure to pursue a serious national fusion effort.  

Kerry has long been a strong supporter of fusion, going back at least to his term as senator of Massachusetts. In 2012-2013, for example, then-Senator Kerry mounted a major effort to prevent the shutdown of the Alcator-C-Mod reactor at MIT – one of the most promising innovative fusion projects in the US.

I remember meeting the mastermind of the Alcator program, the brilliant Italian physicist Bruno Coppi. Although Kerry’s effort succeeded in prolonging the life of the Alcator-C-Mod, the reactor was prematurely shut down in 2016.

Just two years later, however, the results and know-how of the Alcator provided the basis for the start-up company Commonwealth Fusion Systems, now one of the largest and most successful private fusion companies aiming to commercialize fusion.

It is no accident that Kerry chose his November 30 visit to Commonwealth Systems as the occasion to announce his forthcoming fusion initiative at COP28.

The process of “spinning off” a 100% government-funded research program into a private fusion company – with continued government support – has no doubt played an important role in forming Kerry’s vision for the future of fusion.

From fusion monopolies to ecosystems

There is more to this tale, however. The last two decades have witnessed a momentous transformation in the philosophy and organization of fusion-related research and development in the United States.

In former times, fusion research was practically a monopoly of giant US national laboratories, specifically the Lawrence Livermore National Laboratories, Los Alamos National Laboratory, Oak Ridge National Laboratory, Sandia National Laboratory and the Naval Research Laboratory. Not by accident, all of these have a strong military background.

The US national labs’ contribution to the worldwide fusion effort cannot be overestimated. Without that and the work of a few analogous institutions in other countries, fusion would be nowhere today.

At the same time, problems inherent to such giant entities such as the tendency to fixate on a few large projects at the expense of smaller ones and conflicts of interests in the struggle for government funding have had a crippling effect. That applies especially to the post-1986 period when fusion research in the US was chronically underfunded.

Meanwhile, throughout the 2010s, the face of fusion research in the US has been radically transformed from insular research activities pursued by decades-old entrenched lab groups toward the cultivation of a topically and organizationally diverse research “ecosystem.”

The change reflects a new philosophy of fusion research, one that acknowledges that, in the absence of a single frontrunner among reactor concepts, a diversity of physical and technological approaches as well as a diversity of organizational forms is prudent.

National labs, universities and startups should not be seen as living in their own separate spheres, but can and should be brought together in complementary ways.

The key driver of this transformation has been the innovation agency of the US Department of Energy,  ARPA-E, created in 2009. While ARPA-E’s budget for fusion is extremely limited, the agency’s influence goes far beyond just injecting funds into projects. 

In fact, ARPA-E has played a critical role in coordinating across different fusion actors, providing a stage to present ideas and have them subjected to scrutiny and peer validation.

My co-author has participated in such discussions and witnessed how the role of ARPA-E has had a signaling effect and often led to investor commitments that far exceeded ARPA-E’s public funding amounts.

The creation and rise of ARPA-E coincided with another key development: the rise of the fusion startup and the growth of a private fusion industry –  a process fueled by massive investor interest.

During the 2010s, the saturation of internet markets along with growing public concerns about climate change turned investor attention to new markets and fusion in many ways fit the bill. 

A flagship among fusion startups is Commonwealth Fusion Systems (CFS), the Massachusetts-based startup that was spun out of MIT’s Plasma Science and Fusion Center in 2017.

CFS’s December 2021 announcement that it had raised US$1.8 billion in capital from private investors served as a signal for a wave of investment into new-founded fusion companies.

Commonwealth Fusion’s SPARK reactor, now under construction Image: Creative Commons

The Fusion Industry Association (FIA) was founded in 2018 as a lobby for the burgeoning private fusion sector. (Readers can learn more from the interview I conducted in December 2021 with the FIA’s CEO Andrew Holland.)

The latest 2023 survey of the Fusion Industry Association reported that private fusion companies had raised a total of $5.9 billion in private funds.

Member companies of the Fusion Industry Association. Image:  FIA

The contrast between fusion startups and traditional fusion players has created a clearly defined task for ARPA-E. Some degree of “sensemaking” was required to reconcile the two separate universes of fusion approaches and claims. 

The emergence of the private fusion industry in parallel to the old incumbents created paradoxical situations. While there were groups that claimed net energy production could not be achieved until at least the 2040s, several private companies claimed to have already achieved it.

Companies like Helion, for instance, signed a power purchase agreement this year with Microsoft, claiming it would deliver fusion energy as early as 2025. 

All of this screamed for some sort of independent referee who maintains an overview of the full range of activities in the fusion space and who keeps actors honest through rigorous and independent assessment of their claims. Such a process can then also help inform the distribution of resources with the goal of yielding the greatest societal returns. 

That kind of referee emerged with the person of Dr Scott Hsu, who is today a high-level government employee with the Department of Energy but who is also a highly decorated physicist with a research history at Los Alamos National Laboratories. 

Hsu has transitioned out of his research job to become a program director at ARPA-E, which served as a stepping stone to his current role in the DOE executive suite.

Hsu is known and respected across the US fusion community. He’s widely seen as an embodiment of ARPA-E’s core principles: deep technical as well as managerial and strategic acumen; understanding of policy and economic issues; curiosity and openness towards new approaches alongside rigor in their assessment and evaluation.

The significance of Hsu’s transition from affiliate of a research lab to a government position cannot be overemphasized. While many countries occupy their expert commissions with acting scientists laden with conflict of interests, the US provides a track for high-level government employees who can put deep technical expertise to bear in the interest of the general public.

In Hsu’s role today as lead fusion coordinator he acts as a central node connecting political decision-makers to those who devise and conduct fusion research at the lab level. 

Educating and pulling along political decision-makers has become more and more critical. This relates to the size of the annual funding pool for fusion research as well as regulatory concerns. 

A key worry was that a future fusion industry may face a similar fate as the fission industry, which has been burdened by inflated regulatory requirements.

 To the great relief of many in the industry, the Nuclear Regulatory Commission decided in April this year to regulate future fusion reactors not like fission reactors but like particle accelerator facilities, greatly simplifying regulatory requirements, 

To summarize, much momentum has been building in the US fusion space in recent years Many drivers have come together fortuitously – from investor interest to the creation of ARPA-E and the commitment to create a coordinated ecosystem. The resulting dynamics have turned basic research efforts into a mission-driven ecosystem. 

The extension of this process on the international scale that we are seeing now represents a logical next step. Other countries have taken notice and are likewise aiming to support and align their fusion-related actors.

While the intention is clear, often such countries are overwhelmed on how to engage with difficult technical and strategic questions. A global strategy may provide guidance to them to coordinate and exchange information on an international level and to create an even vaster and more diverse ecosystem that identifies and exploits synergies and complementarities among different actors. 

Kerry’s fusion initiative: a selective chronology

Whoever wants to fully appreciate the force behind Kerry’s fusion initiative should take a glance at some of the highlights of the process that went into it. The following chronology contains only some highlights but should be enough to get a sense of how the process builds up more and more.

2005: In a report for Congress, entitled “Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future” the US National Academies called for decisive action, warning policymakers that US advantages in science and technology ­­– which made the country a world leader for decades – had already begun to erode. The report recommended that Congress establish the Advanced Research Projects Agency (ARPA) within the US Department of Energy (DOE) modeled after the successful Defense Advanced Research Projects Agency (DARPA), the agency credited with key innovations such as GPS, the stealth fighter and computer networking. 

2007: Congress passes “The America COMPETES Act” which officially authorized ARPA-E’s creation. In 2009, ARPA-E received its first appropriation of $400 million, which funded ARPA-E’s first projects.

2010s: the US switched to an ecosystem approach. Commercial nuclear fusion start-ups that first appeared in the 2000s – Commonwealth Fusion, TAE Technologies, General Fusion, Tokamak Energy and others attracted more and more private investment and development of major capabilities in fusion technology.

March 19, 2012:  US Senator John Kerry visits MIT’s Plasma Science and Fusion Center (PSFC) to tour the Alcator C-Mod tokamak and see first-hand how the experiment operated. The C-Mod fusion project was at risk of being terminated due to proposed cuts in the domestic fusion program in the fiscal year 2013 presidential budget. Kerry was already working to restore the project’s funding, writing a letter to the Senate Appropriations Committee strongly arguing against cuts to domestic fusion research.

2014: The American Security Project, a bipartisan think tank founded by John Kerry and Chuck Hagel in 2006, publishes a White Paper entitled “Fusion Power – a 10-year Plan to Energy Security”, declaring: “It is a national security imperative that America makes a dedicated commitment to fusion energy”, and calling for an investment of $30 billion over 10 years, “with the goal of producing demonstration levels of electric power within a decade.”

2018: Commonwealth Fusion Systems is founded as a spin-off from the MIT Plasma Science and Fusion Center with initial funding of $50 million in 2018 from the Italian multinational Eni. Not surprisingly, the CEO of Eni joined Kerry on his latest visit to CFS.

2018: Founding of the Fusion Industry Association (FIA) as a Washington-based lobby for private fusion companies.

2020: Creation of the Milestone-Based Development Program for Fusion of the US Department of Energy via the 2020 Energy Bill and the CHIPS and Science Act. 

2021: US Representative Don Beyer founds the bipartisan Congressional Fusion Caucus, which has since grown to 50 members.

March 30, 2021:  The first annual policy conference of the Fusion Industry Association in Washington, DC is held.

October 1, 2021: Publication of the UK government’s official Fusion strategy, a comprehensive program with emphasis on building up a domestic fusion industry capable of building fusion power plants.

March 17, 2022: White House summit meeting devoted to “Developing a Bold Decadal Vision for Commercial Fusion Energy.” The US Department of Energy launches an agency-wide initiative to accelerate the viability of commercial fusion energy in coordination with the private sector. Hsu, head of the fusion program at ARPA-E, is named new DOE Lead Fusion Energy Coordinator, joining the Office of the Under Secretary for Science and Innovation.

September 22, 2022: the US Department of Energy (DOE) launches the Milestone-Based Fusion Development Program to support the development and commercialization of a fusion pilot plant

March 9, 2023: President Joe Biden’s proposed Budget for the Fiscal Year 2024 contains a historic $1 billion request for increased government funding for fusion.

April 14, 2023: The Nuclear Regulatory Commission voted to regulate fusion under a different framework than fission, making it possible for fusion to avoid the licensing morass that has long plagued conventional nuclear reactors. 

April 14, 2023: Japan’s Cabinet announces a full-scale national Fusion Energy Innovation Strategy.

August 18, 2023: Bipartisan consensus in the US Congress on the Nuclear Regulatory Commission’s decision to regulate fusion under the byproduct materials framework and amend the Atomic Energy Act of 1954 to include fusion.

November 8, 2023: US-UK Joint Statement between the UK Department for Energy Security and Net and the US Department of Energy, announces a strategic partnership to accelerate fusion energy demonstration and commercialization.

(I was not surprised to see this agreement. During my visit to UK fusion facilities in August 2023, I was struck by the particularly close connections between the national fusion laboratories of the two nations, which no doubt reflects the long-standing special relationship between the two countries in defense-related areas.)

November 20, 2023: US Special Presidential Envoy for Climate Kerry visited Commonwealth Fusion Systems (CFS) headquarters in Devens, Massachusetts, near Boston, along with CFS CEO Bob Mumgaard and Eni CEO Claudio Descalzi.

John Kerry, left, talks with Commonwealth Fusion Systems CEO Bob Mumgaard and Eni CEO Claudio Descalzi. Photo: CFS

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Hewlett Packard Enterprise appoints new managing director for Singapore to spearhead country operations, drive region’s long-term growth strategy

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Loh may continue to lead SEA as managing director and vice president of HPE.tasked with increasing HPE’s collection, managing accounts, and improving employee effectivenessLoh Khai Peng&nbsp, ( pic ), was appointed managing director of Singapore effective 1 November 2023 by Hewlett Packard Enterprise ( HPE). He may continue to hold the…Continue Reading

Sales of 75 tonnes of rotting beef alleged

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PUBLISHED: 13 :20 on December 4, 2023.

Sales of 75 tonnes of rotting beef alleged
Atchariya Ruangratanapong, an advocate, addresses reporters on Monday at the Central Investigation Bureau. ( Photo provided )

If high-level authorities had approved the sale of up to 75 kilograms of rotting meat at markets, police have been asked to look into the matter.

Atchariya Ruangratanapong, an activist, requested on Monday that the Central Investigation Bureau take legal action against two transport companies and five top Livestock Development Department representatives.

He claimed that they were thought to have sold about 75 tonnes of rotting meat to areas.

Three containers containing the meat were impounded for inspection at Laem Chabang slot in the province of Chon Buri in 2018.

The authorities gave two importing companies permission to grab the meat for sale at nearby markets in 2020.

The majority of the meat, according to Mr. Atchariya, was now rotten.

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Nvidia’s automotive chip sales still riding high in China

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The US Commerce Department has all but shut down Nvidia’s AI processor business in China, but its DRIVE Orin system-on-a-chip ( SoC ) for electric autonomous vehicles is still very popular. &nbsp,

Nvidia’s mechanical revenues, which are currently running at a rate of over US$ 1 billion per month, are boosted by more than 12 corporate users in China. &nbsp,

At the 21st Guangzhou International Automobile Exhibition, which took place from November 17 to 26, a number of Nvidia’s Chinese clients displayed their brand-new electric vehicles ( EVs ), including Denza, Human Horizons, Ji Yue, NIO, XPeng, Zeekr, and BYD. &nbsp,

A key system for clever vehicles called the Nvidia DRIVE Orin SoC can perform 254 trillion procedures per minute. DRIVE Orin enables instantaneous and redundant processing of data from exterior and interior cameras, radar, lidar, and ultrasonic sensors. It can be scaled from Level 2 advanced driving assistance systems ( ADAS ) to Level 5 fully autonomous vehicles.

Denza displayed its energy N7 SUV, which sits in the middle of the Model X and Y models made by Tesla. Denza’s custom Commuter Smart Driving system, which enables high-speed navigation, speed-limit and lane-keeping control, automatic emergency braking, top cross-traffic alert, and parking assistance, is controlled by DRIVE Orin. A joint venture between BYD and Mercedes-Benz is called Denza.

The HiPhi Y SUV from Human Horizons Technology was displayed. It has touch-free electricity doors, night vision, and street analysis. Human Horizons, with its headquarters in Shanghai, creates Batteries and autonomous driving systems. &nbsp,

It has activities facilities in Munich and Oslo in addition to an R&amp, D facility in Tokyo. Top executives of the company have experience working for automakers in China, the United States, Japan, and Europe.

Ji Yue, a collaboration between automaker Geely and Baidu, an expert in internet and artificial intelligence ( AI), unveiled its brand-new Robocar JiYue 1. It combines Geely technology with Baidu’s application technologies, including an engaging vocal help system called SIMO, and was introduced in late October. &nbsp,

The Robocar JiYue 01’s interior. Ji Yue is an picture

Its ROBO Drive Max assisted and autonomous driving features, which are offered as a monthly subscription services to facilitate technology upgrades, include street changing and cross-lane turns, on and off corridor moving, obstacle avoidance, identification of pedestrians, and voice-activated automatic parking.

Eight types with Banyan, NIO’s Smart Digital System, and Adam, a machine system with four Nvidia DRIVE Orin SoCs, were included in the show. NIO also provides technology upgrades. &nbsp,

The company’s headquarters are in Shanghai, but Nanjing, Munich, Oxford, and San Jose are home to its innovative engineering R&amp, D center, as well as its worldwide design center.

The brand-new X9 energy minivan, electric G6 car, P7i sedan, and G9 four-door were all displayed by xPeng. With its headquarters in Guangzhou, XPeng has R&amp, D locations, companies, and transportation and other support facilities in China as well as in California and California. &nbsp,

Zeekr unveiled the 007 as its first electrical coupe. Zeekr, with its headquarters in Zhejiang, also produces an electric SUV, car, and station wagon for” shooting brakes.” &nbsp,

In November, it unveiled its first European store in Stockholm. Geely Automotive Holdings, which likewise owns Volvo, is the owner of Zeeker. It was established in 2021 to rival Tesla and NIO. &nbsp,

BYD displayed its entire line-up of fresh energy vehicles, but its attention was drawn to the introduction of its e4 system, off-road SUV Yangwang U8, and” supercar,” which has a two-second acceleration time of 0 to 100 km/h. &nbsp,

A fresh advanced BYD brand is called Yangwang. The e4 Program is the first system for four-motor separate drive technology that has been mass-produced in China.

The Nvidia DRIVE Orin centralized system system may be extended by BYD to new designs in its Dynasty and Ocean electronic car line, the company announced in March. &nbsp,

The two businesses stated at the time that they” reveal the belief that coming vehicles will be customizable, evolving from being based on numerous integrated controllers to high-performance consolidated computers- with functionalities delivered and enhanced through program updates over the life of the vehicle.”

DeepRoute, a Nvidia DRIVE habitat partner. Ai was likewise present at the exhibition, showcasing its DeepRoute- Drivers 3.0 computerized driving solution for Level 4 automatic driving in challenging urban settings, inclement weather, and other conditions. Most of the time, Level 4 cars run on their own, but the vehicle can still be in charge. &nbsp,

DeepRoute- Driver 3.0 is not typically restricted to a particular operational area ( geofenced ). DeepRoute. Robotaxis and cosmopolitan logistics are ai’s areas of expertise. Its two offices are in Shenzhen and Fremont, California, respectively.

In Guangzhou, there were more than 400 electronic, hybrid, and other new energy vehicles on display, of which about 60 were initially displayed to the general public. &nbsp,

According to Canalys technology market research, China is currently the world’s top auto market and is about 50 % larger than the US market in terms of the adoption of advanced technology. In the first half of 2023, 55 % of all electric vehicles sold worldwide were sold in China. &nbsp,

In international markets, BYD’s electric cars are gaining ground. Photo: Online

At the Shanghai International Automobile Industry Exhibition next April, another Nvidia DRIVE users, such as SAIC, GAC Aion, Li Auto, IM Motors, Baidu, Desay SV, Momenta, Volvo, and Lotus, displayed their Batteries and related items. &nbsp,

SAIC, Alibaba, and the Zhangjiang Group formed the cooperative venture known as IM Motors. The Zhangjiang Group, which is situated in Shanghai’s Pudong New Area, is in charge of overseeing the development of the Shanghai Science City. &nbsp,

It serves as a hub for R&amp, D schools, facilities, colleges, and private businesses with an area of 95 square km. &nbsp,

Momenta is a Beijing-based ADAS program developer that is funded by SAIC, GM, Toyota, Bosch, Mercedes-Benz, and another Chinese and overseas investors. It was founded by CEO Cao Xudong, who was formerly an employee of Microsoft Research. With its main office in Huizhou, Guangdong, Saya SV manufactures in-vehicle devices.

The Arm Hercules CPU cores, heavy studying, and computer vision accelerators are all combined in the Nvidia DRIVE OrinSoC. It has grown to be an essential component of the Chinese EV industry’s assisted and intelligent driving systems. &nbsp,

It has not yet been the target of US punishment, in contrast to Nvidia’s AI chips for data centres, which were initially the A100 and H100 before being followed by an A800 and an H800. &nbsp,

Following this author on Twitter at @ScottFo83517667.

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