The growth in global production of greenhouse gases

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The growth in global production of greenhouse gases has decelerated over the past few years, with 2015 seeing the first actual reduction, of 0.1% compared to 2014 levels, according to a European Union report published 6 December.

A “structural shift away from carbon-intensive activities” such as coal consumption in China and the US has been a key factor in curbing the emissions, the report said.

Meanwhile, US developers installed solar PV systems at the fastest pace on record in the third quarter – adding as much as a megawatt every 32 minutes, according to the Solar Energy Industries ; of the EPA, Pruitt could put his weight behind diluting the Clean Power Plan, which was halted by the US Supreme Court in February, pending a decision on its legality.

In other US news, former Texas Governor Rick Perry is rumoured to be the leading candidate for the position of energy secretary within the incoming administration. Perry is a board member of Energy Transfer Partners – the company whose North Dakota crude oil pipeline project is opposed by local residents and environmentalists.

Meanwhile, heavyweight investors including Bill Gates and Richard Branson are plowing capital into a $1 billion investment fund to power clean energy production. The aim of the 20-year fund, dubbed Breakthrough Energy Ventures, is to pump money into risky, long-term energy technology with the potential significantly to reduce greenhouse gas emissions, according to a statement by the fund.

Royal Dutch Shell is also participating to the trend towards low-carbon investment, with its biggest step yet into the offshore wind industry. The oil giant won a tender to provide power at 5.45 eurocents (5.8 US cents) per kWh from 680MW of offshore wind farms in the Netherlands. The contract is the second cheapest price seen yet for the technology. Sweden’s Vattenfall holds the current offshore wind record at 4.99 eurocents/kWh, the winning bid in Denmark’s 600MW Krieger’s Flak tender last month and discussed further in this BNEF.

Faced with a profound electricity shortage and large infrastructure deficit, Nigeria is stepping into the green bond market with plans to raise NGN 20bn ($63m) by March to fund renewable energy projects. Selling the sustainably-aligned notes to the international community will help West Africa’s biggest economy fund off-grid solar projects, an electric vehicle commuter project and a clean-up of oil spills in the southern Niger River delta.

Also in West Africa, Senegal’s second utility-scale solar project is on the cards, following news that Paris-based investor Meridiam is planning to build a 30MW solar plant east of Dakar. The Ten Merina project will cost about EUR 43m ($46m) and will be financed by an 18-year loan of EUR 34.5m from France’s Proparco and BIO, a Belgian development investor.

In other solar news, India plans to tender as much as 1GW of solar rooftop capacity this month in a bid to accelerate the installation of panels on government buildings, and to meet Prime Minister Narendra Modi’s goal of generating 100GW from the sun by 2022. Unlike a previous auction of 500MW in November, the winners of December’s competitive bidding process won’t receive full payments up front but instead will receive incentives in a step-by-step process as they meet completion timelines, according to Solar Energy Corporation of India.

Elsewhere in Asia, Japan is transitioning from feed-in tariffs for large-scale solar to a competitive auction system. In September, the Ministry of Economy, Trade and Industry will invite developers to submit bids to build a total of 500MW of solar power in projects of 2MW or larger, according to a ministry document. It is hoped that the plan will rejuvenate Japan’s lacklustre solar industry and give greater clarity to developers regarding the tariffs they can expect to receive.

From July 2012 to July 2016, Japan commissioned almost 30GW of solar PV plants, while the amount of yet-to-be-commissioned capacity – still eligible to receive feed-in tariffs -- exceeded 50GW in the period, according to this BNEF.


China to ramp up its offshore wind installations by 2020 (GW of capacity)

BNEF 12.2016 

Source: Bloomberg New Energy Finance

By the end of 2016, a total of 13.8GW of offshore wind capacity will have been installed worldwide, with more than $24bn invested in building new plants this year, according to BNEF. And by the end of the decade almost 40GW of offshore wind turbines will be installed in waters globally, the research organisation forecasts. 

In the graph above, 'other' includes Finland, France, Ireland, Italy, Japan, Korea, Taiwan, US, Norway, Portugal and Sweden.

Article from Bloomberg published on Dec. 13th, 2016

BRICS have closed the gap with European economies

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The data show that the EB 5 economies (Germany, the UK, France, Italy and Spain) have lost considerable ground in their share of world economic presence. Nonetheless, when we desegregate the data, we discover a number of peculiarities. The BRICS (Brazil, Russia, India, China and South Africa) have closed the gap with the EB5 much more than the N11 (Bangladesh, Egypt, Indonesia, Iran, South Korea, Mexico, Nigeria, Pakistan, Philippines, Turkey and Vietnam) have done, making the BRICS more interesting to analyse. Furthermore, within the BRICS, the out-performer (and hence outlier) is China; thus it could be argued that the rise of the rest might be better described as the rise of China. Interestingly, in recent years India has also performed well, and it could potentially become the new star of the BRICS. Russia, by contrast, has reached a plateau and might even reverse its gains. (Art. « The rise of Chemany »)


Article written by Miguel Otero-Iglesias, Senior Analyst in International Political Economy at the Elcano Royal Institute and published in the Eurasia Review.

The whole article is available hereunder :

December 13th, 2016

US inflation is low, but highly variable

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Inflation Is Going to Rise; Here's How to Protect Youself

Something ugly is set to make a comeback: inflation.

It won't be like that seen in the 1970s when lava lamps and polyester suits only added to the hideous economic malaise. This time it will be subdued in comparison, but still higher than it has been in recent years.

The consumer price index, which is a measure of consumer inflation, has remained less than 2 percent for most of the last four years, according to government figures. But that period of historically low level of price rises is set to end soon. Here's why and what you can do to protect the purchasing power of your assets.

Commodity prices. "Inflation is rising – the easiest way to recognize it is in the price of commodities," says David Ranson, director of research at HCWE & Co. Commodities prices are rising. The price of crude oil hit a recent low of $26 a barrel in February before rebounding the mid-$40s. Similarly, the Thomson Reuters/CoreCommodity CRB Commodity index, which tracks a broad basket of commodity prices, hit a low of 155 in February before rebounding to 183 lately. "When commodities are rising you get strong inflation," Ranson says. "It won't show up very quickly but there is a lot of data, based on history, to verify that it will show up." It might not be apparent, but the price of gasoline goes into a lot of things we consume, such as bread, which needs to be trucked from where it is baked to where it is sold. So higher gasoline prices, which moves up and down with oil prices, will mean higher food costs. Bond prices. The market for fixed-income securities gives us some clues as well. Government bonds have sold off following the general election in anticipation of higher growth in the U.S. under a Trump administration. Yields move inversely with bond prices. The 10-year Treasury note offered an interest rate of 2.12 percent a few days after the election, versus 1.78 before the election. "Potentially, investors see a significant fiscal boost, which could be very, very good," says Sinead Colton, head of investment strategy at Mellon Capital in San Francisco. "The other thing that is playing in is higher growth and how that feeds through to inflation." Inflation is low, but highly variable. Another important factor is that the headline inflation rate will belie bigger moves in individual components of the consumer price index. "Thanks to a cyclical upturn in non-tradable services inflation, year-on-year core CPI services inflation – boosted by shelter and health care inflation – is hovering around an eight-year high," says Lakshman Achuthan, co-founder of the New York-based Economic Cycle Research Institute. In simpler terms, health care insurance premiums are jumping, as are rents, and that's boosting the overall price level. On the other hand, gadgets and consumer technology items are sometimes falling in price. "Yet they (the falls in some prices and rises in others) don't offset one another, any more than having one foot in ice water and the other in scalding water feels comfortable, on average," Achuthan says. That image of the boiling water and the ice gives some idea of the likely financial discomfort coming. You need a place to live, so you can't do much about rising rents. Plus, the law says you need to purchase health insurance or else pay a penalty. It's likely those additional costs will take a bite out of discretionary spending on things such as dining outside the home. It may not be the right time to invest in restaurant stocks.

Economic Cycle Research Institute, November 15th, 2016

Dow to Gold ratio - 100 year historical chart

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Among the services provided by Swiss ProfilInvest through specific Partners, precious metals remains one source of assets diversification and of real value.

The chart herebelow demonstrates the current value of the famous index of US companies, the Dow Jones Industrials, compared to gold in US dollars and not repriced for inflation. Higher the ratio, cheaper the gold price will be. Naturally, for a Swiss, a European or a Chinese, resident, parameters should be updated.

Please feel free to contact This email address is being protected from spambots. You need JavaScript enabled to view it. whether you need advices.

Article published on December 1st, 2016,

This interactive chart tracks the ratio of the Dow Jones Industrial Average to the price of gold. The number tells you how many ounces of gold it would take to buy the Dow on any given month. Previous cycle lows have been 1.94 ounces in February of 1933 and 1.29 ounces in January of 1980. (From

dow to gold ratio 100 year historical chart 2016 12 07 macrotrends

Recent geo-political developments may have economic benefits in the sort-term but in the longer term...

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Many commentators have hasted in concluding that the recent geo-political developments will have, after all, economic benefits. This may be the case in the short-term but the real negative effects of heightened uncertainty can come later. We should be cautious in drawing hasty, positive conclusions from those market developments because they may not necessarily indicate that the world economy will have an accelerating recovery with higher growth. So far, those developments point to a U.S. rise in economic growth, but in the context of an "America first" policy. Three factors may contribute to mitigate or even reverse its international spillovers.

The first is the possibility of rising protectionism - hard or soft - that can substantially reduce the effect of higher growth into higher U.S. imports. World trade, already quite weak, may continue to collapse, hurting all open economies dependent on exports.

The second are the negative effects that we are already witnessing in emerging market economies (EMEs). In fact, significant capital outflows and exchange rate depreciations already underway can hinder future growth. Protectionist measures directed particularly against large emerging economies may further decelerate world economic growth and create instability in foreign exchange markets.

The third factor concerns Europe. In this first wave, Europe apparently benefited from positive contagion with some increase in equity prices and a steepening of the yield curve, favouring financial institutions. As concerns equities, the low starting point seems favourable for European markets. Share price levels are relatively subdued in Europe with, for instance, a Cyclically Adjusted Price Earnings (CAPE) Shiller index of just 14 against 27 in the U.S. This means that European shares, including those of banks, are undervalued with respect to other parts of the world and could thus attract investors. However, we already observed a slight drop in European share prices last Friday. According to market analysts, this was explained by fears concerning protectionism and EMEs' growth prospects as well as the possible resulting decline in global trade.

Besides these external concerns, Europe's internal problems may deter it from fully reaping the benefits from the expected expansion in the U.S. Indeed, a range of political risks may induce economic shocks. To face heightened world uncertainty, Europe would need to deepen its unity and integration, relying more on its domestic market to underpin higher growth. In turn, this implies that Europe needs more expansionary macroeconomic policies and more reforms in the regulatory and competition policy fields, in order to improve the economy's supply side. Without higher real and nominal economic growth, Europe will have greater difficulty in overcoming its challenges.

Speech by Mr Vítor Constâncio, Vice-President of the European Central Bank, at the 19th Euro Finance Week: Opening conference, Frankfurt am Main, 14 November 2016.

Preventing the Next Eurozone Crisis Starts Now

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This article gives a rare up-to-date and in-depth situation of the Euro zone instability and a few constructive solutions to pass through future crisis.  Please feel free to send your comments onto : This email address is being protected from spambots. You need JavaScript enabled to view it.


PARIS – European leaders have devoted scant attention to the future of the eurozone since July 2012, when Mario Draghi, the European Central Bank’s president, famously committed to do “whatever it takes” to save the common currency. For more than four years, they have essentially subcontracted the eurozone’s stability and integrity to the central bankers. But, while the ECB has performed the job skillfully, this quiet, convenient arrangement is coming to an end, because no central bank can solve political or constitutional conundrums. Europe’s heads of state and government would be wise to start over and consider options for the eurozone’s future, rather than letting circumstances decide for them.

So far, Europe’s leaders have had little appetite for such a discussion. In June 2015, they only paid lip service to a report on the euro’s future by the presidents of the various European institutions. A few weeks later, the issue briefly returned to the agenda when eurozone leaders spent a long late-July night arguing about whether to kick out Greece; but their stated intention to follow up and address underlying problems was short-lived. Finally, plans to respond to the Brexit shock by strengthening the eurozone were quickly ditched, owing to fear that reform would prove too divisive.

gratte ciel 2016

The issue, however, has not gone away. Although the monetary anesthetics administered by the ECB have reduced market tensions, nervousness has reemerged in the run-up to the Italian constitutional referendum on December 4. By end-November spreads between Italian and German ten-year bunds reached 200 basis points, a level not seen since 2014.

The worrying state of several Italian banks is one reason for the mounting concern. Brexit, and the election of a US president who advocates Americanism instead of globalism and dismisses the EU, adds the risk that voters, rather than markets, will call into question European monetary integration. Anti-euro political parties are on the rise in all major eurozone countries except Spain. In Italy, they may well command a majority.

On the economic front, the eurozone has much unfinished business. The banking union, launched in June 2012 to sever the interdependence of banks and states, has made good progress but is not yet complete. Competitiveness gaps between eurozone members have diminished, and external imbalances within it have abated, but largely thanks to the compression of domestic demand in Southern Europe; saving flows from North to South have not resumed. Unemployment gaps remain wide.

The eurozone still lacks a common fiscal mechanism as well, and Germany has flatly rejected the European Commission’s recent attempt to promote a “positive stance” in countries with room to boost spending. Of course, when the next recession hits, fiscal stability is likely to be in dangerously short supply.

Finally, the governance of the eurozone remains excessively cumbersome and technocratic. Most ministers, not to mention legislators, appear to have become lost in a procedural morass.

This unsatisfactory equilibrium may or may not last, depending on political or financial risks – or, most likely, the interaction between them. So the question now is how to hold a fruitful discussion to map out possible responses. The obstacles are twofold: First, there is no longer any momentum toward “more Europe”; on the contrary, a combination of skepticism about Europe and reluctance concerning potential transfers constitutes a major stumbling block. And, second, views about the nature and root causes of the euro crisis differ across countries. Given the dearth of political capital to spend on European responses, and disagreement on what the problem is and how to solve it, governments’ excess of caution is hardly surprising.

Both obstacles can be overcome. For starters, discussion of the eurozone’s future should not be framed as necessarily leading to further integration. The goal should be to make the eurozone work, which may imply giving more powers to the center in some fields, but also less in others. Fiscal responsibility, for example, should not be reduced to centralized enforcement of a common regime. It is possible to design a policy framework that embodies a more decentralized approach, empowering national institutions to monitor budgetary behavior and overall fiscal sustainability.

In fact, some steps in this direction have already been taken. Going further would imply making governments individually responsible for their misconduct – in other words, making partial debt restructuring possible within the eurozone. Such an approach would raise significant difficulties, if only because transiting to such a regime would be a hazardous journey; but options of this sort should be part of the discussion.

To overcome the second obstacle, the discussion should not start by addressing the legacy problems. Distributing a burden between creditors and debtors is inevitably acrimonious, because it is a purely zero-sum game. The history of international financial relations demonstrates that such discussions are inevitably delayed and necessarily adversarial when they take place. So the issue should not be addressed first. The seemingly realistic option of starting with immediate problems before addressing longer-term issues is only superficially attractive. In reality, discussions should start with the features of the permanent regime to be established in the longer run. Participants should explore logically coherent options until they determine if they can agree on a blueprint. It is only when agreement on a blueprint for the future has been reached that the path toward realizing it should be discussed.

There are no quick fixes to the eurozone’s problems. But one thing is clear: the lack of genuine discussion on possible futures is a serious cause for concern. Silence is not always golden; for the sake of Europe’s future, the hush surrounding the common currency should be broken as soon as possible.

December 1st, 2016

Jean Pisani-Ferry is a professor at the Hertie School of Governance in Berlin, and currently serves as Commissioner-General of France Stratégie, a policy advisory institution in Paris.

US third quarter GDP recovered promptly

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Recession or not ?

 Croissance PIB US depuis janvier 2015

Deceleration of the US GDP since Q1 2015.

Question : are we going into recession in the USA in 2017 ?

According to the last quarterly GDP report published a few days ago, USA recovered promptly with a 3.2 % growth in the 3rd quarter ending in September 2016. It ends a long period of weakness.

November 30th, 2016 / Jean-Pierre Riepe

Blockchain and Bitcoin new technology

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Inefficiencies are often perpetuated not by a lack of technology, but by (historical) structures. Blockchain technology is therefore not a patent solution for change, but it does provide an opportunity to make change.

Disruptive technologies require time to develop, mature and unfurl their full potential. Not every innovation succeeds, though, and it remains to be seen how the application of blockchain technology will develop.

Following the revolutionary beginnings with bitcoin, the prevailing view now seems to be that blockchain applications will spread rather more gradually. One might therefore speak of evolution rather than revolution. Before we can even ask questions about the broader use of this technology, we must first be sure that using this new technology is at least as secure, efficient and cost-effective in financial transactions as conventional technology.

Blockchain technology could become a game changer, in the financial industry and, perhaps in particular, beyond. The potential of blockchain technology is often compared to that of the internet. It should be remembered that it took some time before the truly beneficial applications of the internet emerged. With blockchain, we are only at the very beginning of a potential development of this kind.

Innovations are the lifeblood of a continually developing economy. Moreover, evolution processes are never linear. The first great wave of euphoria, which was also seen in the media, is being followed by a phase of checking, weighing-up and consolidation, before new offers and technologies are rolled out on a broad scale.

Ladies and gentlemen, Goethe once said: "We know accurately only when we know little; with knowledge doubt increases."

My impression is that with the increasing efforts being devoted to blockchain technology, doubts will also increase as to whether this technology can meet the expectations being placed on it, which in some cases are extremely high. The question that we want to examine in more detail in this workshop is what specific doubts we have and whether the technology can overcome them.

Carl-Ludwig Thiele Member of the Executive Board of the Deutsche Bundesbank, at the 6th Central Banking Workshop 2016, Eltville, 21 November 2016.

Is Geneva really the world's first sustainable finance center?

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Bas du formulaire

 Swiss ProfilInvest photos docs"Geneva is the world’s first sustainable finance center”, said Federal Councillor Doris Leuthard during a recent speech at the Graduate Institute of International and Development Studies, where she defended the Swiss government’s opposition to the popular initiative for a green economy (Geneva is the only canton having voted yes). Sustainable finance, usually defined as the integration of Environment, Social, and Governance (ESG) factors into financial decisions, has indeed been gaining importance in Geneva over the last years. For instance, the law establishing the pension fund of the canton (CPEG) indicates that it shall operate in line with the principles of sustainable development and responsible investment. In its economic strategy 2030, the canton intends to promote the development of Geneva as an international crossroads of sustainable finance. This vision is at the heart of Sustainable Finance Geneva (SFG), an association founded in 2008 by a group of professionals convinced by the opportunity to connect the financial center with the locally-based international and non-governmental organisations, this “research laboratory on global issues”, in the words of Ivan Pictet, former managing partner of the Pictet Group.

Source: Antoine Mach, Covalence SA, Gencom newsletter October 2016