The Power of Reliable Data

Can Vaccines from Russia and China Be a Game Changer?

China and Russia have been exporting their vaccines for months, despite a lack of data on safety and efficacy. On Tuesday, though, it was announced that Sputnik V from Russia is both. If the Chinese vaccines likewise stand up to rigorous examination, it would be a huge step forward in the fight against COVID-19.

By Jörg Blech

A man in Brazil being vaccinated. Foto: Buda Mendes / Getty Images


A huge number of people in Germany and other European countries can hardly wait to get vaccinated against COVID-19. 

In Serbia, by contrast, it has sometimes appeared difficult to find someone willing to accept the jab. 

The syringes in the country, after all, were not filled with a product from Western pharmaceutical companies, but with a vaccine developed by the Chinese company Sinopharm. 

Nevertheless, Serbian Health Minister Zlatibor Lončar elected to become the first person in his country to receive the vaccine.

"I was guided by two basic facts. 

First, that the vaccine meets all the safety criteria. 

And second, that it is effective," says Lončar, a medical doctor. 

He received his injection in January. 

"When I was convinced of all the above, I was able to stand up before the citizens of Serbia and suggest that they start mass vaccination."

Similar conclusions have been reached in Turkey, the United Arab Emirates, Indonesia, Paraguay and a growing list of other countries. 

Residents of those countries are to receive vaccine from China or Russia because the elixir from pharmaceutical companies in the West is in short supply. 

Indeed, the vaccines from BioNTech and Moderna, both of which have proven to be highly effective in clinical studies, are essentially sold out, while the product developed by AstraZeneca has been shown to be less effective.

Russia, though, hopes to deliver its vaccine to 50 countries and is planning to open production sites in India, Brazil and South Korea. 

The Chinese producers Sinopharm and Sinovac, meanwhile, have signed contracts with at least 24 countries and have already begun exporting their vaccines to a number of them.

Serbia is in the unique position of pulling from whatever vaccine source is available. 

"I can say that all these vaccines used in our country – Chinese, Russian, German-American – are the only way and means to defeat the coronavirus and put it under control," says Lončar. 

"One should not look at where the vaccines come from, but at their quality, safety and efficacy."


But the vaccines from China and Russia haven't yet been granted such seals of approval. 

They may already be on the market, but they have not been subject to the kind of clinical trials that are standard in the West. 

They were likely tested on people under questionable conditions – just hoping they would work.

The state-run Gamaleya Research Institute of Epidemiology and Microbiology in Russia presented its vaccine way back in August. 

It is called Sputnik V, after the satellite that the Soviet Union fired into orbit 60 years ago – with mice, rats and two dogs on board.

Vaccine development was funded by the Russian Direct Investment Fund (RDIF), the state-run investment fund that is now responsible for marketing the drug. 

"We understood that there would be lots of skepticism and resistance to the Russian vaccine for competitive reasons," RDIF CEO Kirill Dmitriev told the journal The Lancet Infectious Diseases. 

"Therefore, there was a decision to call it a Russian recognizable international name."

In contrast to the highly effective yet extremely delicate products from BioNTech and Moderna, the Sputnik vaccine does not have to be stored at extremely low temperatures, remaining viable at 2 to 8 degrees Celsius, which makes it much easier to transport. 

It has already been administered to 1.5 million people in Russia.

The RDIF insists that it is effective. 

"The Sputnik V vaccine’s efficacy is confirmed at 91.4% based on data analysis of the final control point of clinical trials. 

The Sputnik V vaccine efficacy against severe cases of coronavirus is 100%," reads the website set up for the vaccine. 

For quite some time, no source was provided for the claim. 

In the current edition of The Lancet, however, researchers have published interim results from a randomized, controlled Phase III trial in Russia showing 91.6 percent efficacy against COVID-19.

"The Sputnik COVID-19 vaccine candidate appears safe and effective," reads an accompanying commentary in the medical journal. 

"The development of the Sputnik V vaccine has been criticized for unseemly haste, corner cutting and an absence of transparency. 

But the outcome reported here is clear and the scientific principle of vaccination is demonstrated, which means another vaccine can now join the fight to reduce the incidence of COVID-19."

The Russian vaccine relies on a specialized delivery vehicle, a harmless adenovirus. 

It is a well-tested technology, known as a vector vaccine, but the body can become immune to the delivery virus, particularly in cases where additional doses are necessary. 

That could render the Russian vaccine ineffective over time.

In January, the Gamaleya Research Institute discussed that and other concerns about the Sputnik V vaccine with experts from the European Medicines Agency (EMA), which is responsible for evaluating drugs for use in the European Union. 

The confidential meeting focused on the documentation necessary for a proper scientific evaluation. According to an EMA spokesperson, it remains unclear if the Russians intend to apply for EU approval for the vaccine.

Business, after all, is doing well without it. 

Argentina, Bolivia, Brazil, Paraguay, Venezuela and Algeria intend to deploy the vaccine or have already begun. 

Hungary was the first EU country to place an order with Russia – for 2 million doses. 

In late January, a national agency in the country granted the vaccine emergency approval. 

If the bureaucrats in Brussels are too slow in acquiring vaccines, Hungarian Foreign Minister Péter Szijjártó told Euronews, "then we have to secure additional supply to the Hungarian people."

A vaccine delivery from China at the Belgrade airport. Foto: Predrag Milosavljevic / Xinhua / eyevine / laif


State-run media outlets in China are currently busying themselves with casting doubt on the safety of Western vaccines. 

Journalists have claimed that officials refused to investigate the deaths of people injected with the BioNTech/Pfizer vaccine. 

But the Paul Ehrlich Institute, Germany's medical regulatory body, did look into the cases and found no cause for suspicion. 

It noted that with the vaccine being administered to tens of thousands of elderly people and individuals already suffering from an illness, it is hardly surprising that some of them will coincidentally pass away around the time of receiving their injection.

The campaign is clearly an attempt by China to distract from the discrepancies in its own vaccine development. 

By November, almost a million people in China had been vaccinated – without waiting for the results of large-scale, Phase III trial. 

From a Western perspective, such an approach smacks of an uncontrolled experiment involving huge numbers of people.

Chinese producers had launched studies outside of China. 

A Sinopharm trial was undertaken in the United Arab Emirates in July involving 31,000 participants, while a similar study in Bahrain started a short time later. 

But no data from those studies was published. Still, Persian Gulf health officials claimed that the Chinese vaccine demonstrated 86 percent efficacy and granted it approval.

As in Serbia, the UAE health minister had himself vaccinated in an attempt to demonstrate its safety. 

Plus, as the Economist noted, "it helps to be a police state with little tolerance for dissent." 

According to the piece, UAE security officials go after people in the country who spread rumors about alleged dangers associated with the vaccine. 

Local newspapers published stories about long lines of people waiting to be vaccinated. 

And the campaign has had the desired effect: As a percentage, more UAE residents have been vaccinated than in any other country in the world except for Israel.

The second Chinese vaccine, produced by Sinovac, has also been the subject of numerous trials. 

According to a study in Turkey, it proved to be 91 percent effective. 

Another study in Indonesia, though, revealed a far lower efficacy of 65 percent, while a test with 10,000 participants in Brazil produced two different numbers. 

Initially, researchers announced an efficacy of 78 percent, only to revise it downward to 50.38 percent a short time later.

Vaccines from all countries will be needed – as long as the data provided transparently prove their safety.

Still, Brazilian officials intend to approve the vaccine. 

After all, even a weak vaccine is better than none at all. 

"For countries with a rampant epidemic, even a vaccine with 50 percent efficacy will reduce pressure on health services, allowing them to cope," says Adrian Esterman, a biostatistician at the University of South Australia. 

And perhaps the vaccine is actually more effective than the numbers show.

The World Health Organization (WHO) is now hoping to gain a better insight into the vaccine situation in China. 

A WHO team has already arrived in the country to tour the production facilities operated by Sinovac and Sinopharm. 

The companies have submitted trial data and are apparently hoping for emergency WHO approval for their vaccines. 

A decision isn't likely to come before mid-March, but a positive evaluation would have far-reaching consequences. 

The Chinese would finally be credible and could start delivering their product to COVAX, the international aid organization set up to buy vaccine and distribute it to poorer countries.

According to estimates, between 10 and 11 billion vaccine doses must be administered worldwide to stop the coronavirus.

Producers will need until 2023 or 2024 to produce that high a volume. 

And to reach that target, vaccines from all countries will be needed – as long as the data provided transparently prove their safety.

The American republic’s near-death experience

Donald Trump was just a symptom and the US is still in danger from those who peddle lies in place of truth

Martin Wolf 

© James Ferguson


Here is what has happened. US president Donald Trump asserted for months, without evidence, that he could not be defeated in a fair election. 

He duly attributed his defeat to a rigged election. Four in five Republicans still agree. 

The president pressured officials to overturn their states’ votes. Having failed, he sought to bully his vice-president and Congress into rejecting the electoral votes submitted by the states. 

He incited an assault on the Capitol, in order to pressure Congress into doing so. Some 147 members of Congress, including eight senators, voted to reject the states’ votes.

In brief, Mr Trump attempted a coup. Worse, the great majority of Republicans agree with his reasons for doing so. A huge number of federal legislators went along. 

The coup failed, because courts rejected evidence-free cases, and state officials did their jobs. 

But 10 former defence secretaries felt the need to warn the military to stay out.

In March 2016, before Mr Trump had even won the GOP nomination, I argued he was a grave threat. It was evident he lacked any of the qualities required in the leader of a great republic. 

But, it turned out, he had the redeeming flaw of gross incompetence.


How would you respond if told the following story about a democracy: the “big lie” about the rigged election that the incumbent clearly lost; the partisan media that spread this lie; the voters who believed it; the assault on the legislature by an insurrectionist mob; and the legislators who claimed that the election must be halted in response to doubt these lies had created? 

You would conclude that it was in mortal danger.

The US is not a majoritarian polity. Small states have disproportionate voting power, and some states have a history of racist vote suppression. But elections are supposed to decide who holds power. 

How can that work if most voters for one of the two main parties believe lost elections are stolen elections? 

How can power be gained peacefully and held legitimately? 

What is left as the decider, but violence?

As Yale’s Timothy Snyder asserts: “Post-truth is pre-fascism, and Trump has been our post-truth president.” 

If truth is subjective, force must decide. 

There can then be no true democracy, only gangs of rival thugs or the boss’s dominant gang.


Optimists would have to agree that this has been a very bad moment for the worldwide credibility of the US republic, to the delight of despots everywhere. 

But, they may assert, it has come through its trial of fire and is now, once again, about to renew its promise, at home and abroad, as it did in the 1930s, under Franklin Roosevelt, at a time even more dangerous than today.

Alas, I do not believe this. The Republican party is rotten through with sedition. As soon as I write this, I know people will start complaining about the violence and socialists on the left. 

But absolutely no equivalent to Mr Trump is to be found among leading Democrats. 

Those pre-fascists are on the right.

Worse, Mr Trump is not himself the disease, but a symptom. 

James Murdoch recently declared that: “The sacking of the Capitol is proof positive that what we thought was dangerous is indeed very, very much so. 

Those outlets that propagate lies to their audience have unleashed insidious and uncontrollable forces that will be with us for years.” 

Was he referring to Fox News, his father Rupert’s poisonous creation?


The role of the rightwing media bubble in creating the post-truth world of Trumpism is evident. 

So, too, is the plutocrat-funded long march through the institutions. 

The judiciary this has created has delivered the armed citizenry, the invisible political contributions and the soaring inequality that now endanger democratic stability. 

Most troubling is how the Republican elite has weaponised the politics of racial division, so dreadful a part of US history, in order to attract the voter support they need for tax cuts and deregulation. 

White people without university degrees have been experiencing premature “deaths of despair”. But liberals and ethnic minorities are the right’s true foes.

So long as the politics of the right remain as they are, the danger revealed since the election will not evaporate. Congressional Republicans will seek to ensure that new president Joe Biden fails. 

The fanatics and careerists will continue to combine. Lunatic rightwing propaganda will continue to pour forth. 

What sort of person does one imagine such a movement will choose as its next presidential candidate? A traditional conservative like Mitt Romney?

Mr Trump has shown the way. Many will try to follow. 

So long as the aim of so many Republicans is to make the federal government fail and the rich richer, this is how its politics must work.

We have come to a hinge moment in history. The US is the world’s most powerful and influential democratic republic. For all its mistakes and flaws, it was the global model and protector of democratic values. 

Under Mr Trump, this vanished. He was a consistent opponent of the values and aspirations embodied in a republican ideal.

Mr Trump failed. Moreover, after his attempted coup, nobody can deny his threat was real. But this is not enough. If US politics unfolds as seems likely, there will be more Trumps. 

One of them, more competent and ruthless, may succeed. If that is to be prevented, US politics must now shift to respect for truth and an inclusive version of patriotism.

Rome was arguably the last republican superpower. But the rich and powerful destroyed that republic, bringing forth a military dictatorship, 1,800 years before the US was born. 

The US republic has survived the test of Trump. 

But it still needs to be saved from death.

How to defuse a bomb

Can China’s long property boom hold?

The country is building five times as many houses as America and Europe combined


LOTTERY WINNERS normally win money. In China the big prize is being allowed to spend it. 

Demand for new homes in good locations is so high, and supply so limited, that several cities use lotteries to allocate them, some with odds as low as 1 in 60. 

When his number was chosen, John Chen, an engineer in Shanghai, had three minutes to decide whether to drop 10m yuan ($1.5m) on a house. “It emptied my bank account. But I did not hesitate,” he says. 

Yang Yang, a 38-year-old businessman in Hangzhou, lost out in three draws before finally winning one last spring. “It was even more nerve-wracking than my university entrance exams,” he jokes.

Even being able to enter the housing lotteries is a matter of good luck, because entrants must be registered as residents of the booming cities, which places them on the right side of China’s wealth gap. 

By contrast, large swathes of the country have the opposite problem: overbuilt apartment blocks, sputtering economies and few people buying property. Hegang, a town near the border with Russia, briefly found itself in the spotlight after homes there were advertised for just 20,000 yuan ($3,000), less than the cost of a square metre in Shanghai. It was an extreme example of the glut of empty homes in many small towns.

Similar splits are common around the world, with prices high in large cities and low in small towns. But the degree of the divergence in China, multiplied by the sheer size and growth of its market, means that understanding property is essential if you want to get to grips with what is happening in the economy. 

Every year China starts building about 15m new homes, more than quintuple the amount in America and Europe combined. The property sector—both the direct impact of all the construction and its indirect effect on everything from concrete to curtains—accounts for a quarter of China’s GDP. 

The financial implications are profound, too. 

In 2021 Chinese real-estate developers are on the hook for more than $100bn in bond repayments, according to Moody’s, a credit-rating agency. 

For the world as a whole, roughly a tenth of outstanding bank loans to non-financial clients has gone to China’s property sector, whether as financing for developers or mortgages for homebuyers.

One commonly heard view is that all this adds up to a ticking time-bomb. Some of the basic facts are alarming indeed. Fully one-fifth of Chinese homes are vacant, according to a widely cited survey. 

Housing investment equates to about a tenth of GDP annually, higher than the prodigious levels reached in Japan before its property bubble popped three decades ago. 

Debt has soared for homebuyers and builders alike. 

Evergrande, China’s biggest developer, has borrowed a cool $120bn, a 56-fold increase in the past decade alone.

Yet it is only fair to note that such concerns are nothing new. As far back as 2009 Jim Chanos, a hedge-fund manager, said China was “Dubai on steroids”, predicting that its property sector would implode in spectacular fashion. 

Since then prices have doubled, and enough new homes have been built for 250m people. The longevity of the boom suggests that the market is more complex than its depictions as a bubble suggest.

Making the market

The main explanation for its success—or, put differently, its failure to collapse—is the skein of regulations aimed at forestalling the prophesies of doom. 

Some have long been in place, such as the rule that down-payments for mortgages must be at least 30% of the purchase price for a home. 

With so much equity in their houses, homeowners are strongly incentivised to make their monthly mortgage payments, limiting the risk of a vicious cycle of defaults, forced sales and collapsing prices. 

In many of the most populous cities demand is also tightly restricted, because a hukou—a local residency permit—is a prerequisite for buying a home.

As the property sector has swollen to mammoth proportions, the government has pledged to develop what it calls “a long-term mechanism” for stabilising prices and investment. 

The property market is, in its view, too important to be left to the market alone. In practice this has meant layering on ever more rules. 

Cities such as Shanghai and Hangzhou started requiring developers to run lotteries for new flats, with priority given to people who do not yet own homes. Many others have introduced restrictions that all but bar people from buying second homes. These often make for cat-and-mouse games. 

Since the second-home ban applies to families, not just individuals, some couples have obtained fake divorces in order to buy another house. On January 21st Shanghai ruled that divorcees must wait three years to count as first-time buyers if they had owned a home when married.

The government is also now reining in the most indebted real-estate firms. Late last year the central bank and the housing ministry said they would start assessing developers’ leverage on the basis of “three red lines”—one, for example, is that their liabilities should not exceed 70% of their assets. 

Only 11 of the biggest 100 developers would be given a passing grade on all three measures, according to Plenum, a consultancy. The others need to find a way to get inside the lines; if not, they will face strict caps on future financing.

The resulting dynamic offers a case study in how regulation changes the shape of the market. Some developers are working to pare their leverage by attracting new investors or by spinning off subsidiaries, such as their property-management arms. For many, though, the obvious first step is to boost cashflow by selling more houses more quickly, leading them to cut prices.

R&F is one of the big developers feeling the pinch. At one of its new developments in Jiangmen, a city in the southern province of Guangdong, it has cut prices by 20% in recent months. 

Sales, once slow, have soared—averaging about 15 homes per day. Even on a weekday afternoon a steady flow of prospective customers walks gingerly around construction debris to check out the flats still being built. 

One agent, his hair coiffed like a South Korean pop idol, boasts that he alone sold 18m yuan worth of units in December, though that was only enough to rank third among his colleagues.

Viewed narrowly, the many interventions have worked. In the biggest cities prices have basically been flat in inflation-adjusted terms over the past four years. Annual property sales nationwide have remained at the same level during that time, while new starts have broadly been in line with sales. 

A scheme to demolish old rickety homes and give their owners cash to buy new ones helped mop up some unsold units in small towns. It would take just about ten months to clear all existing inventory at the current sales rate. 

“The property sector really is healthier than it used to be. The government has so many levers now,” says Zhang Sisi of Jinan University in Guangzhou.

Beneath the placid surface

But this calm engenders a different kind of concern. The many rules and restrictions have not just made for a healthier market; they have made the market. Take the price stability. 

When developers win land auctions in big cities, they must set prices within a narrow range prescribed by the government. 

A perverse outcome is that new homes can be a third cheaper than second-hand ones in the same neighbourhoods. Hence yet another rule: to stop people flipping their new homes for a tidy profit, several major cities have slapped a penalty on owners who sell within five years of buying. 

The lotteries, meanwhile, act as quotas to dictate the size of the market. Prices may be under control, but much demand is simply going unmet.

From this vantage, the becalmed market begins to look less like a success story and more like a pressure cooker. 

So in yet another intervention, officials are trying to take steam out of the biggest cities by guiding people to live in smaller ones—specifically, in the clusters of satellite towns being built up just outside China’s metropolises. 

These towns are linked to the big cities by high-speed trains but have much lower thresholds for newcomers wanting a hukou. To make them attractive, the government is also investing more in their hospitals and schools. 

“Sometimes it takes the education ministry, not the housing ministry, to fix problems in the housing market,” says Ms Zhang.

There is tentative evidence that developers are responding to this policy push. The most fertile ground for the city clusters are four prosperous coastal provinces (Guangdong, Fujian, Zhejiang and Jiangsu). Last year these made up 34% of all property investment in China, compared with 26% a decade ago. 

“Developers have adjusted. They are no longer buying up big parcels of land anywhere in the country. Now they are focusing on smaller plots in prime areas,” says Xiao Wenxiao of CRIC Research, a consultancy. 

The flow of new homes in China, in other words, appears to be better situated than the stock.

A key question, then, is just how much scope there still is for China’s stock of housing to grow. A 22% vacancy rate—the result of a well-respected survey by the Southwestern University of Finance and Economics in 2017—would suggest that the market is more than saturated. 

China’s demographics also point to weakening demand. The working-age population, the cohort that buys the most homes, is already shrinking. And the pace of rural-to-urban migration, another big source of demand in cities, has started to slow, too.

Nothing about the Chinese housing market is ever so straightforward, though. The 22% vacancy rates largely reflects the overbuilding of small towns. 

In and around big cities vacancy rates may be less than 10%, low by international standards, according to China International Capital Corp, an investment bank. 

Much of the housing stock is still shabby. A tenth of flats in cities do not include their own toilet. 

And many among the growing middle class, having spent a good portion of the past year locked down, are deciding that they want slightly larger homes. 

“To speak frankly, people with money care more and more about the quality of their house,” says Mr Yang in Hangzhou.

Totting this all up, the baseline forecast of China Index Academy, the country’s largest property-research organisation, is that housing sales will fall by 4% or so annually in the coming half-decade, going from roughly 15m units sold in 2020 to 13m in 2025. 

That would be a challenge for China; long a pillar of growth, the property sector would become a drag. 

At the same time, it would be a gradual slope down, not a collapse, for the once-vertiginous market. 

If you listen closely enough, the ticking of the time-bomb sounds a little fainter.

Gold: Déjà Vu 2020 All Over Again?


Summary

- The upsides for gold and silver are not over.

- New technology is allowing the little guy to make a dent in the hedge funds' positions.

- Gold and silver have tremendous shortages.

- You can't get physical supply without paying a big premium.


Fundamentals

The upsides for gold and silver are not over. 

The past few weeks, a new energy has entered the market. 

New technology is allowing the little guy to make a dent in the hedge funds' positions. 

Gold and silver have tremendous shortages. 

You can't get physical supply without paying a big premium. 

The physical price is not reflected yet in the paper markets, because the hedge funds and central banks are using the paper markets to sell short up to 10 times more supply annually than is available. 

Thereby, they have been depressing the price of gold and silver by manipulating the price in the paper market by creating artificial supply that does not exist. 

You can't manipulate the physical market as much as the paper markets. 

Traditionally the physical market price has been set based on the futures market price, but that level has been set at a price that suits the short sellers. 

The Reddit crowd discovered that GameStop was 130% short, they wondered how you could sell more than 100% of the stock short, unless you want to manipulate the price. 

A similar thing was happening in gold and silver. 

Across several markets, central banks and hedge funds have eliminated price discovery by manipulating the price of stocks and precious metals.

Gold's price does not reflect the fundamentals, which continue to worsen. 

The economy still requires large stimulus packages. 

Every time the Fed and government delay, the deeper the economic damage is going to be. 

With the amount of stimulus that they are discussing coming into the market, it is difficult not to see how it can't cause the US dollar to lose even more value and for inflation to increase significantly. 

We may be looking at a situation like we saw in the 1970s, with inflation rising and interest rates hitting 14 percent or more. 

Precious metals are a traditional safe haven during such times. 

You can convert your fiat currencies into gold and protect its value. 

If you buy gold, you are in effect selling dollars. 

Precious metals are volatile, but we recommend having one-third of your net worth in precious metals to give you the protection you need against the coming inflation and devaluation of the US dollar. 

The value of gold today does not reflect its intrinsic value in relation to all the other markets.

Silver VCPMI Signals



Silver has activated a buy signal. Silver has reverted from the Variable Changing Price Momentum Indicator (VC PMI) Buy 2 level of $26.20. Silver is moving fast. 

We recommended this morning in our private trading room to cover any short positions. 

We expect a reversion to occur. 

We appear to have found buyers. 

By trading above $26.20, silver has activated a buy signal.

Silver went from $24 to $30 during the news about shorting various markets, and has now come down to around $26 again. 

If Reddit traders came into silver, they probably got hurt. 

Silver is a contrarian indicator, because central banks and big banks hold large amounts of silver. 

JP Morgan has a huge amount of silver, so they can come into the market whenever they want to cash in, which is what happened. 

We had a $4 move in just a few days. 

Now silver is testing the extreme levels below the mean. 

We did fill the gap, which happens before big moves. 

We are looking to add to our long term position all the way down to $26. 

This was a bull trap. 

$26.20 is the buy trigger.

We expect that buyers who did not buy in the physical market at a reasonable price are going to jump into the futures market. 

It is the only place left to get into the silver and gold markets. 

These moves offer incredible opportunities. 

The fact that silver has not reacted as everyone expected, does not mean that it isn't going to move up fast.

Gold VCPMI Signals




We have a fast market to the downside in gold, down about $48. 

Gold almost came down to the monthly Buy 1 level of $1781. 

We are now getting on the long side of gold. 

These levels have been expected since the beginning of the month. 

$1810 is the annual average price. 

$1881 is the monthly Buy 1 level and the low so far is $1884.60. 

We will see if we are going to find buyers before that Buy 1 level or if we are going to find buyers before then.

The market appears to have found buyers before the expected monthly low of $1781. 

If this low holds, then it could be the completion of this correction. 

Gold has come down and tested the daily, which is neutral because it traded below the daily numbers. 

It then integrates into the weekly and monthly levels. 

The monthly level of $1781 is the next target. 

If we get back above $1807, it will be a very strong signal since it is a harmonic relationship with the annual signal of $1810 and the Buy 2 weekly of $1807. 

A move up would complete the daily, weekly, monthly and annual VC PMI buy trigger points. 

Closing above $1810 would validate the completion of the correction with higher levels or more buyers coming into the market at higher levels. 

Closing above it would be a strong signal that the $1854 to $1874 targets would be activated.

The monthly VC PMI mean is $1874. On January 29, gold reached $1878, which was the monthly target we had been working with. 

Gold had been trading between the yearly and monthly average prices. 

The range is between $1874 and $1810, and the Buy 1 monthly level is $1781, so we have a clear picture of what to expect. 

Now we are waiting for the market to confirm it. 

For trading, one of the keys to learn is when to wait and to learn patience. 

You have to manage your emotions. 

Rely on your system - the VC PMI in this case. 

Trust it.

Gold and silver are in pockets of support. 

They are both likely to move up from these levels. 

At these levels, central banks and hedge funds are coming in to cover their shorts, which leads to these short-covering rallies. 

Central banks have increased their short positions and they are carrying $35 or $38 billion in short positions in silver (COT Reports). 

They have to protect their positions with all they have. 

If we have another run in the physical market, where you can't get physical gold or silver, then the short sellers are going to have to go into the futures market to meet their short obligations, which could devastate the central banks and hedge funds as the price shoots up. 

We highly recommend buying gold and silver at these extreme below the mean levels.

A Global Pandemic Alarm Bell

The appearance of mutant versions of the coronavirus in the United Kingdom, South Africa, and Brazil has given the world no choice but to design and implement a comprehensive global strategy. So, what's stopping that from happening?

Jean Pisani-Ferry



PARIS – Seen from Europe, Asia, or even North America, Manaus, the capital of the Brazilian state of Amazonas, is as remote as can be. 

Yet the 501Y.V3 variant of the coronavirus recently detected there has already been identified as a global threat, because its emergence in a city where two-thirds of the population was already infected in the spring of 2020 suggests that acquired immunity does not protect against it.

Scientists speculate whether 501Y.V3 may also thwart some of the existing vaccines. Even if the RNA-based vaccines can be quickly modified, the risk of ineffectiveness just when mass vaccination is being rolled out is extremely scary.

Viruses, of course, mutate all the time. While many mutations are innocuous, dangerous ones regularly appear. 

The larger the population that is infected at any time, the higher the probability that a hazardous variant, or possibly a new strain, will appear. Each person is a potential lab for these mutations. 

With some 600,000 new coronavirus infections identified daily, there are currently several million such labs in operation around the world. So it is a certainty that more mutations will occur.

This threat confronts the international community with a stark choice: either design and implement a comprehensive global strategy, or seal borders and let countries fight it out with the virus one by one. 

There is no effective middle way. The prevailing combination of vaccine nationalism and half-open borders is a losing strategy. 

In an open world where rich countries would attempt to protect their populations while poorer countries could not, contamination would repeatedly cross borders and defeat the most sophisticated health policies. 

Already, the South African and Manaus variants have been found in Germany.

On paper, the choice between acting globally and closing borders is a no-brainer. 

The total population of countries categorized by the World Bank as low-income and lower-middle income is about four billion. 

Assuming a $10 unit price, vaccinating 75% of this population would cost $30 billion, a mere two-hundredth of the crisis-induced fiscal loss already incurred by advanced economies. 

Even from a narrow economic standpoint, and even if ten times more expensive, investment by rich countries in curbing the pandemic in poor countries would be hugely profitable. 

The alternative of closing borders altogether to contain contamination would send a terrible signal and destroy prosperity on a massive scale.

Conscious of the challenge, rich countries actually support a program of this sort, though on a much smaller scale. The COVAX initiative, launched in April 2020 by the World Health Organization, the European Commission, and France, is meant to help participating states jointly negotiate procurement with vaccine producers, and to donate to poor countries enough free doses to vaccinate 20% of their population. 

Although this is insufficient to control the virus’s spread, it would be good enough to protect the elderly and health-care workers, and it would represent a significant stepping-stone to further action.

By the end of 2020, COVAX had raised $2.4 billion and pre-ordered enough doses to vaccinate a billion people in 2021, but it was still at pains to raise the additional $5 billion needed to finance its rather unambitious program. 

Under President Donald Trump, the US had refused to provide support. Moreover, vaccine manufacturers favor more profitable rich-country markets, where governments are willing to pay a premium to accelerate the supply of doses.

Not surprisingly, WHO Chief Tedros Adhanom Ghebreyesus recently warned that the world was “on the brink of a catastrophic moral failure.” 

But, alongside the moral failure, what is puzzling is the collective action failure this behavior represents. Self-interest, not just a sense of duty, dictates that rich countries should do more. Why aren’t they?

The first reason is short-sightedness. At home, too, governments are not doing enough. In Europe, investment in vaccine research and development has fallen short of the $18 billion the US has devoted to Operation Warp Speed. 

Oddly, the European Union’s €390 billion ($473 billion) in grant-making resources administered by the bloc’s Recovery and Resilience Facility does not include joint funding for vaccine research.

The second reason is the traditional temptation to free-ride on others’ efforts. Rich-country governments have strong incentives to protect their citizens, but support to poor states is vulnerable to free-riding, as each player’s interest is to let others pay for the common good. 

For example, Trump announced that he was withdrawing the US from the WHO at the very moment when joint action was urgently needed. Add to that China’s shirking of its global responsibilities, and international leadership has been dramatically absent since last spring.

The third reason is messy governance. The global health field is complex, scattered, and characterized by institutional overlap. 

Because the WHO is widely regarded as an ineffective and politicized institution, initiatives have developed on the side, with private donors such as the Bill & Melinda Gates Foundation, governments, and public agencies cooperating ad hoc to develop a flurry of initiatives. 

The resulting funding map defies imagination. 

This was fine as long as tackling emerging challenges required limited mobilization and resources, but the pandemic calls for acting on an entirely different scale.

Can the world change tack? 

Fortunately, US President Joe Biden’s administration has already announced its intention to join COVAX. Until recently, it was assumed that the repair of international trade and renewed engagement in climate action would be its first external priorities. 

Events may well turn the coordination of pandemic efforts into a litmus test of Biden’s global leadership. But if US commitment is clearly needed, much broader joint action is called for to prevent a moral, medical, and economic disaster.


Jean Pisani-Ferry, a Senior Fellow at Brussels-based think tank Bruegel and a Senior Non-Resident Fellow at the Peterson Institute for International Economics, holds the Tommaso Padoa-Schioppa chair at the European University Institute

 Biden's 'Reversals'

By: George Friedman


Just about every U.S. president promises a new era of U.S. foreign policy. 

George W. Bush promised to abolish nation building as a goal. 

Barack Obama promised to make the world, and particularly the Muslim world, like America more. 

Donald Trump promised a foreign policy that benefited the United States. Joe Biden is promising a foreign policy that reverses the damage Trump did to all of America's foreign relationships. 

The operant principle is that the past was bad and the future will be good. And to be good, the bad must be reversed.

But policy represents only the wishes of leaders, not reality. Bush spent his two terms trying to build nations in Afghanistan, Iraq and elsewhere. 

Jihadism failed to succumb to Obama’s charms. Trump pursued U.S. interests but rarely defined what those interests were. All their intentions were real; the world is just not that compliant.

As an example of one of his first policy moves, Biden announced last week that he would cancel the Keystone XL pipeline, a $50 billion project running from Canada to the United States. 

Trump approved the pipeline, which Canadians reasonably understood to be a done deal. 

The cancellation has left oil-rich Alberta province enraged, and even Canadian Prime Minister Justin Trudeau, with whom Alberta is often at odds, condemned the decision.

From Biden’s perspective, the move makes sense. He says he is committed to environmental causes, and he sees the pipeline as a threat to the environment. 

Yet, it’s curious insofar as he promised to roll back Trump’s invocations of “America first.” His first significant action, in other words, was to unilaterally abandon an agreement that is seen as critical to Canada, arguably one of Washington’s closest allies. 

Canada has little recourse, other than to perhaps revise the U.S.-Mexico-Canada Agreement on issues that are dear to the United States.

Another example is Biden’s commitment to reopening talks with Iran and resurrecting the nuclear agreement. Trump shelved the agreement, arguing that it did not provide either safeguards or guarantees against other Iranian actions such as special operations against Israel and the Persian Gulf states. 

Taking a much firmer stance, he imposed massive sanctions that have crippled Iran’s economy.

It will be extremely difficult for Biden to revert to the previous agreement. Under Trump, the U.S. fostered the Abraham Accords, whereby Sunni Arab states formally recognized Israel by establishing diplomatic ties. The driving force behind this agreement was a common fear of Iran. 

The Sunni Arab states around the Gulf were particularly vulnerable to Iranian machinations; Israel was fighting Iranian proxies directly in Syria and Lebanon. They did not trust Iran to live up to any nuclear agreement, even as they faced non-nuclear threats from Tehran. 

The return of the prior treaty without agreement on a cessation of hostile Iranian actions would run counter to the new alliance.

The Israeli-Sunni alliance has radically reshaped the Middle East. It was made possible by Israel and the UAE, but the U.S., which could have blocked it, strongly supported it. 

Any attempt to renew the Iran nuclear deal and abandon sanctions against Tehran without verifiable commitments by Iran to dial back the behavior its opponents object to is antithetical to this alliance. 

Iran will not agree to surrender its regional interests, and the alliance members will not agree to any treaty that ends sanctions and doesn’t dramatically increase controls on Iran’s nuclear program. 

Put simply, the agreement the Obama administration enacted was possible then. It isn’t now.

Then there is Biden’s commitment to repair the relationship between Europe and the United States. It is not clear what he means by this beyond ending boorish behavior at meetings. 

The only significant trans-Atlantic institution in existence is NATO. The U.S. has an agreement with other NATO members that each would maintain defense budgets equaling 2 percent of their gross domestic product. 

The U.S. has done this historically; most European nations have not. Does a better relationship include capitulating to Europe on this issue?

More important is the question of what exactly Europe and the U.S. are reconciling with. The United Kingdom is no longer part of the European Union and is asking for a free trade agreement with the United States. 

Does Biden’s commitment to Europe include this key U.S. ally? Doing so could alienate other members of the EU. Do better relations include agreeing to Europe’s position on digital taxes? 

Maybe, maybe not. 

Brussels is threatening Poland (and Hungary) with sanctions for what it regards as violations of the rule of law. 

How will that affect U.S. troops stationed there?

The United States and Europe have had intimate relations since the end of World War II. 

The coalition was built in part on the Soviet threat. In the 30 years since the fall of the Soviet Union, Europe has changed, becoming more insular, managing its economic system, and regarding military matters as secondary. 

If those are its priorities, then what does it mean to resurrect relations with Europe? 

What does the United States want from Europe, and what will Europe give in return? 

And what exactly is Europe without the U.K., or if Poland (and Hungary) are under threat from the bloc they voluntarily joined?

Biden has promised new and cooperative relations with the rest of the world. 

It is easy for a candidate to promise to do only the things everybody likes, but much harder for a president to actually do so. 

Biden is surrounded by officials with strong ties to old policies that no longer comport to the current world order, to ideologues who want actions regardless of cost, and to shifting realities that do not jibe with either. 

Presidents have honeymoons that end quickly. 

Biden is no different. 

He has made many promises he won’t be able to keep, and he will be condemned for those promises he keeps and those that he doesn’t.