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O' Canada & Oh! Bihar

Can someone forward this to Nitish Kumar and other Chief Ministers of our country.

 

O Canada.....What a cabinet:

Minister of Health is a doctor.

Minister of Transport is an astronaut.

Minister of National Defense is a Sikh Veteran.

Minister of Youth is under the age of 45.

Minister of Agriculture and Agri-Food is a former farmer.

Minister of Public Safety and Emergency Preparedness was a Scout.

Minister of Innovation, Science and Economic Development was a financial analyst.

Minister of Finance is a successful businessman.

Minister of Justice was a crown prosecutor and is a First Nations leader.

Minister of Sport, and Persons with Disabilities is a visually impaired Paralympian.

Minister of Fisheries and Oceans, and Canadian Coastguard is Inuit.

Minister of Science is a medical geographer with a PhD.

New titles include

Minister of Immigration, Citizenship and Refugees was an Immigration critic.

There are scientists in the cabinet, and it is made up of 50% women.

A Look at the Bihar Cabinet and the Educational Qualifications of the ministers

1) Nitish Kumar - Chief Minister, Home, General Administration - (Bachelor Of Engineering)

2) Tejaswi Yadav - Deputy Chief Minister - Roads, Buildings, Backwards class Welfare - (Ninth std Fail)

3) Tej Pratap Yadav - Health, Irrigation, Transport - (Twelfth Fail)

4) Abdul Bari Siddiqui - Finance - (Twelfth)

5) Vijendra Prasad Yadav - Electricity - (Tenth Fail)

6) Lalan Singh - Drinking water - ( Eighth Std)

7) Manju Varma - Social Welfare - (Twelfth)

8) Manmohan Jha - Land development - (Seventh)

9) Madan sahini - Fertilizers - (Tenth Std)

10) Ashok Choudhary - Education & IT (Tenth Std)

11) Vijay Prakash - Labour - (Fifth Standard)

12) Ram Vichar Rai - (Agriculture)

13) Kapildev Kamath - Panchayati Raj - (Third Std)

14) Santosh Nirala - SC/ST Welfare - (Twelfth)

15) Abdul Jaleel Masthaan - Programme Implementation - (Eighth Std)

16) Abdul Gafoor - Minority Welfare - (Tenth Std)

17) Chandrika rai - Transport

18) Maheswar Hajari - Urban Development - (Twelfth)

19) Chandrashekar - Disaster Management - (Fourth std)

20) Jaykumar singh - Industries And Science and Technology - (Tenth Std)

21) Anitha Devi - tourism - (Twelfth Failed)

22) Awadesh Singh - Animal Husbandry - (Fifth Standard)

23) Muneshwar Choudhary - Mines and Geology - (Twelfth)

24) Krishnanandan Verma - Law - (Eleventh)

25) Khurshid Feroz Ahmed - Sugarcane Industry - (Fifth std)

26) Shailesh Kumar - Village Administration - (Second Standard)

27) Alok Mehta - Co-operatives - (Third standard)

28) Shravan Kumar - Village Development - (Twelfth Standard)

29) Shivachandra Ram - Arts and Culture - (ILLITERATE)"

A Decade Of 'Tech'tonic Shifts.

How times have changed for the top 20 biggest companies in the world by market capitalization...


The question now is, will 'old' become 'new' again?

CHRISTMAS GIFT FOR YOU!!!!

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ON THIS FESTIVAL GIFT FROM SANTA IS HERE!!!!!

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BRITAIN'S LONG TRANSITION FROM COAL HOLDS LESSONS FOR CHINA

Britain’s last deep coal mine closed on last Friday, bringing the curtain down on an industry that once employed more than 1 million miners at over 3,000 collieries.

    Coal helped Britain become the first modern industrial power, fuelling her factories, steel works, ships and railways in the 19th century, when the country became famous as the workshop of the world (“Energy transitions”, Smil, 2010).

    Contemporary observers believed Britain’s imperial might was bound up with the future of her mines, and their inevitable depletion worried them as much for its political as its business implications.

    “Coal is almost the sole necessary basis of our material power (and) gives efficiency to our moral and intellectual capabilities,” British economist William Stanley Jevons warned (“The Coal Question: An Inquiry Concerning the Progress of the Nation and the Probable Exhaustion of Our Coal Mines” Jevons, 1866).

    “England’s manufacturing and commercial greatness ... is at stake in this question, nor can we be sure that material decay may not involve us in moral and intellectual retrogression.”

Jevons wrote starkly.

    For Jevons and many of his contemporaries, abundant, cheap and high-quality coal was what made Britain more powerful than her rivals in continental Europe and the United States.

    But the 20th century has seen a steadily move away from coal. Britain’s pits could not compete with lower cost rivals overseas and coal has been gradually replaced by gas, oil,

nuclear and now wind in the energy mix.

    Domestic production peaked at 292 million tonnes in 1913 but in the years after the Second World War it had had fallen to around 220-230 million tonnes.

    On the eve of the year-long miners’ strike in 1984/85 output had dropped to less than 130 million tonnes, and by last year, production had shrivelled to just 12 million tonnes.

    The number of deep mines fell from more than 3,000 in 1913 and 1,500 in 1947 to just 170 before the miners’ strike and now zero. Fewer than 25 open cast sites remained open at the end of 2014.

    Coal consumption peaked in 1956 at 221 million tonnes, and then declined steadily to just 120 million tonnes on the eve of the miners’ strike.

    Consumption was just 49 million tonnes in 2014, three quarters of it burned in power stations. Most of the remaining consumption will disappear over the next decade as coal-fired power plants are phased out.

   

    WHO KILLED KING COAL?

    In the last decade, coal has been demonised as the dirtiest and most polluting fossil fuel. Eliminating coal as an energy source is the top objective for climate campaigners and public

health professionals.

    Coal combustion has been identified as one of the biggest contributors to climate change because it releases more carbon dioxide than oil or natural gas into the atmosphere.

    Coal burning is also a significant source of toxic substances such as mercury as well as tiny airborne particles all of which can cause cancer and other diseases and a significant increase in mortality.

    Coal has been blamed for regular smogs in Beijing and other cities across northern China that have reduced life expectancy by more than five years compared with cities in the south

(“Winter heating or clean air?” Almond, 2009).

    Britain is on the verge of becoming a post-coal economy, to the celebration of environmentalists, but in truth the

transition away from coal has little to do with climate change.

    Coal burning in factories and homes, on the railways, and in manufacturing town gas, was responsible for the choking smogs which regularly blanketed London and Britain’s other major cities in the 19th century.

    As recently as December 1952, coal contributed to a terrible five-day smog over London that is estimated to have killed 4000 people (“The Big Smoke” Brimblecombe, 1987).

    The Great Smog prompted the passage of the Clean Air Act of 1956, which tightened pollution controls for factories and extended them to homes for the first time.

    The 1950s marked the high-point of coal consumption, which halved over the next 20 years, according to government statistics.

    Coal consumption was progressively eliminated from the railways, gas manufacturing and the collieries themselves by the late 1960s, and from most homes and industrial users by the late 1970s.

    The transition away from coal coincided with and was facilitated by the discovery of enormous natural gas deposits in the North Sea in 1959 and then oil in 1969.

   Suddenly Britain had alternatives that were cleaner and cheaper, which led to the end of the manufactured gas industry as well as coal’s rapid displacement as a home heating fuel and on the railroads.

    Between the 1950s and the 1990s, the country constructed 19 large nuclear reactors able to supply plentiful amounts of electricity, accelerating the shift away from coal in domestic

and industrial use.

    But even as coal consumption was declining in other sectors, its use for electricity generation continued to rise and did not peak until the late 1970s and early 1980s.

    Coal consumption by electricity generators increased from 46 million tonnes at the time the Clean Air Act was passed in 1956 to 90 million tonnes in 1980.

    Consumption in the power sector was still over 80 million tonnes per year in the early 1990s and almost 40 million tonnes in 2014.

    Coal in the electricity sector was eventually displaced by nuclear and especially natural gas and more recently by wind farms.

   

    ENERGY TRANSITION LESSONS

    Britain’s transition away from coal holds important lessons for policymakers contemplating a global shift away from coal to cleaner fuels to reduce the risks of climate change.

    The problem of air pollution was an important catalyst but would not have been sufficient to stimulate the transition if there had not been other cleaner, cheaper alternatives available, notably gas.

    Coal was phased out from specific applications such as railroads, gas manufacturing and home heating over a relatively short time frame of 20-30 years, but it has taken more than 60 years so far to phase out consumption on a whole-economy basis.

    Coal consumption actually increased in some sectors (electricity generation) even as it was being phased out from others (railroads and space heating).

    Concerns about pollution, health and the general dirt associated with coal combustion all of which tend to be highly local, proved far more important in Britain than climate change in catalysing controls on coal.

    Centralised combustion in power plants is generally cleaner and can be more socially acceptable than combustion in small sources like homes and factories.

    Larger coal-fired boilers can more be fitted easily and economically with equipment to capture fly ash and emissions such as sulphur and mercury and can produce less visible pollution in urban areas.

    For the most part, coal-fired power plants have been phased out because they could not compete with cheaper sources of power, especially natural gas, rather than as a result of government action.

    Commercial power generators have not built new coal-fired power plants since the 1970s preferring much cheaper gas-fired generators.

    The main impact of government policy has been to force the retirement of power plants constructed during the 1960s and 1970s, which would otherwise have continued operating.

    Britain’s transition away from coal over the last 60 years holds important lessons for other countries, notably China and India.

    The local problem of smog, rather than global problem of climate change, is already forcing a re-evaluation of coal-fired power generation in China. 

    Britain shows that countries can transition away from coal. China has already done that on the railroads. But the transition takes a long time. And the transition only works if cheaper and cleaner alternatives are available at large scale.

    It may be possible to transition directly from a coal-based energy system to one based around electricity sources like wind and solar, but Britain suggests a more phased approach may be more realistic.

    The first stage may be shifting from small source coal combustion to coal burning in central power plants, and then gradually phasing out coal in the electricity system in favour

of gas and renewables.

    Much of China’s terrible smog comes from domestic and industrial sources rather than power plants. Ending coal consumption in homes, district heating systems, steel mills and factories is the top priority, then increasing the efficiency of coal-fired power plants and greening the power sector itself.

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All of the World’s Money and Markets in One Visualization

http://money.visualcapitalist.com/all-of-the-worlds-money-and-markets-in-one-visualization/

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Every day our figures touch and we book profits!!!!

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Slumping commodities

Mining firms and oil producers reel from another downward lurch in prices.

COMMODITY busts have left more of a mark on the barren mining region of northern Chile than the booms that preceded them. On the road to Sierra Gorda, a ramshackle copper-mining village in the middle of the Atacama Desert, dusty adobe cemeteries hold the remains of hundreds who died in penury after exports of potassium nitrate, or saltpetre, collapsed in the decade after the first world war.

Sierra Gorda itself looks like it is heading toward a similar decrepitude, despite huge copper mines carved into the hills around it. Chile, the world’s biggest copper producer, was a big beneficiary of the China-led commodities boom, yet the only hints of the past decade of high copper prices are newly installed streetlights. The sole open business on a recent afternoon was a woman selling empañadas from a tatty tent

From Chile to China the sense that another once-in-a-generation raw-materials boom has come to a definitive end is haunting global commodities markets. On December 9th shares of mining and oil companies took a fresh battering as iron-ore prices sank below $40 a tonne for the first time in a decade, and Brent crude, the global benchmark, briefly dipped below $40 a barrel, its lowest level since early 2009. On the same day Anglo-American, a mining conglomerate, said it would shed up to 85,000 jobs, almost two-thirds of its global workforce; shrink its business by 60%; and suspend the dividend at least until the end of 2016.

The biggest question hanging over the commodities markets is when, or indeed whether, Chinese demand will recover. This week a report showing a slump in China’s imports and exports in November was read differently by bulls and bears; though the value of imports of commodities fell year on year, the volumes of copper, iron ore and oil rose slightly compared with the previous month, according to Capital Economics, a consultancy. But with stocks of most commodities at unusually high levels, even a mixed message from China is mostly a reason to fret.

The supply situation is more clear-cut, but no less worrying. OPEC, the oil producers’ group, helped trigger the latest sell-off of crude by scrapping its already generous production quotas altogether at its annual meeting, which ended on December 4th. Likewise the world’s biggest miners, BHP Billiton and Rio Tinto, have stuck to plans to dig up more iron ore and other metals, shovelling more pain onto weaker rivals such as Anglo.

This glut is apparent throughout the supply chain. The steelmaking industry provides a striking example. Analysts at UBS, a Swiss bank, estimate the world has roughly a third more capacity than it needs. China produces roughly half of the global annual output of 1.6 billion tonnes a year. On one estimate, its hundred biggest steel firms lost some $11 billion during the first ten months of this year, an amount roughly double the profits earned last year. Unwanted products are finding their way onto global markets, even at a loss. Official data released this week confirm that China has, in the year through November, exported over 100m tonnes of steel for the first time. That is more than the total steel production of any country save Japan.

Excess supply on this scale will not disappear overnight. For places like Sierra Gorda and the firms that operate in them, the dust has not yet settled.

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Five Charts That Show American Exceptionalism Is a Myth.

Jeremy Grantham, chief investment strategist at GMO, has some bad news for Americans.

From health care, to politics, to education, to the economy, the U.S. is far from a standout, he says.

And before the nation can resolve its challenges, Americans must first acknowledge them.

"We are dealing today with important issues, one so important that it may affect the long-term viability of our global society and perhaps our species," the strategist writes in his latest quarterly letter. "It may well be necessary to our survival that we become more realistic, more willing to process the unpleasant, and, above all, less easily manipulated through our need for good news."

In the letter, Grantham presents a dozen exhibits that cast doubt on the notion of American exceptionalism. We've highlighted five that jumped out:

Stagnant wages

Other advanced economies—especially France—are crushing the U.S. when it comes to real wage growth, Grantham says:

"For the 50 years I have been in America, Business Week and The Wall Street Journalhave been telling us how incompetent at business the French are and how persistently we have been kicking their bottoms," he writes.

Inefficient health care

"And watch out for when the Turks, Poles, and Czechs cut back on smoking, for then we may find our way to the bottom of the list," quips Grantham.

Plutocratic politics

"The probability of a bill passing through Congress is affected by the general public’s enthusiasm or horror. In a nutshell, not at all!" he writes. "The financial elite, on the other hand, can double the chance of a bill passing or, much more disturbingly, can completely block passage."

Are our children learning?

The U.S. doesn't crack the top 10 in two segments of the STEM educational grouping.

Illusions of foreign aid grandeur

"Now, I do not think I have met a single American who does not believe that the U.S. government is generous in its foreign aid," writes Grantham. "Yet, it just ain’t so, and by a remarkable degree."

However, there's one area in which the U.S. has been exceptional: corporate profitability. And that enduring dynamic has been crimping GMO's returns, as Ben Inker, co-head of asset allocation, readily admits. 

"As a firm that has consistently underweighted the U.S. versus non-U.S. markets for the last couple of decades, what we at GMO seem to have gotten wrong is continually fading U.S. profitability back toward that of the rest of the world and its own longer history, while U.S. profitability has instead moved higher," he wrote.

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This Could Be The End For Big Oil

A stunning breakthrough in chemical engineering has unleashed a massive supply of fuel...

Enough fuel, in fact, to power the entire globe for over 36,000 years.

This fuel is so revolutionary, it's poised to decimate Big Oil's obscene profits, make OPEC obsolete, and hand the United States 100% energy independence.

In fact, the U.S. Department of Defense just invested $7 billion in a single day...

Apple, Google, and Facebook are spending billions racing to implement this technology.

And billionaires like Bill Gates and Warren Buffett are going all in.

The International Energy Agency predicts $48 trillion could soon flow into this sector, making it the #1 source of energy on the planet.

The incredible thing is, it all starts with a tiny grain of sand...

Click the button below to see the full story...

Opt-in To See This Exclusive Report

Commodities: Material Revolution.

When Douglas Caster was 13 his father marched him to the Teeside steelworks in the north-east of England where he worked. It was meant as a warning.

“I was scared to death. The heat, the noise, the danger of the place and the message was as clear as a brick through a plate-glass window: ‘you have an opportunity to do well with education — otherwise this is where you end up’,” Mr Caster says. “This is a dying industry.”

He moved away from the north of England after university. But now, as the UK’s steel industry seems set to fulfil his father’s warning of its demise, he hopes to make a contribution as chairman of a small company on the site of an old coal mine that shut down in the late 1980s. Though there are no furnaces, the plant still produces metal.

His company, Metalysis, is one of a number seeking to produce the commodities that will underpin an increasingly high-tech society. Founded in 2001, it manufactures titanium powder — designed to be used in 3D printing for medical and industrial parts — and is working with GKN Aerospace to use the technology to supply aeroplane parts.

As the prices for traditional commodities such as oil, steel and coal languish at multiyear lows, the raw materials used in smartphones, electric cars and 3D printers — among them lithium, graphite and cobalt for use in batteries — are set to experience increased demand. That is prompting some analysts to declare the advent of a new resource era driven by technology.

Goldman Sachs describes lithium as potentially the “new gasoline”. It forecasts that demand for its use in electric vehicles could grow 11-fold to more than 300,000 tonnes by 2025. The opportunity is clear — hybrid and electric car batteries contain between 40kg and 80kg of lithium.

But the speed of discovery also makes it an uncertain bet: scientists are constantly working to lower the cost and boost the power of electric batteries by mixing new materials or producing man-made ones. As a result, it is not clear what the electric car battery will look like in 10 years or which commodities it will use.

Dion Vaughan, Metalysis’ chief executive, argues that traditional mining companies — which have slashed billions of dollars in spending on projects in 2015 — are facing a “left-field” change from technology. 

“We are at the start of a revolution,” he confidently states at the company’s plant in the Yorkshire town of Wath upon Dearne. “It doesn’t mean that aluminium is about to disappear but the order of things is about to change. There will be new winners and losers.”

Key to the success of these commodities will be lowering their cost of production, a problem that has bedevilled the titanium market.

First used extensively by the US military for spy planes during the cold war, the metal has for decades been made using energy-intensive processes. Metalysis says it can now produce titanium from naturally occurring ores and cut energy costs by at least 50 per cent.

Technology drives change

Similarly, 3D printing is lowering the cost of producing titanium parts on an industrial scale by significantly reducing waste.

Norway’s Norsk Titanium plans to build a 200,000 sq ft 3D metal printing factory in the US next year to produce 2,000 tonnes a year of components. It forecasts commercial demand from the aerospace industry will grow by 25 per cent from its current value of $4.5bn over the next five to seven years, gradually displacing aluminium.

Changes in the battery market are no less dramatic, with costs set to halve over the next decade, according to Goldman Sachs. It forecasts that electric vehicles will account for 25 per cent of car sales by 2025 from under 3 per cent today.

The technology is changing so quickly that it is difficult to predict which materials will be required and which will be discarded. High prices for any single metal are likely to spur a market for substitutes. For example, growing battery demand is expected to boost prices of cobalt, which is already expensive. That could result in its replacement in batteries by other materials after 2025, according to consultancy CRU.

“You’re going to need a lot more of these metals and minerals,” says Chris Berry, the founder of House Mountain Partners, a consultancy. “The real wild card is how fast the technology can advance. It could be good or it could be devastating [for a commodity].”

The major factor in the growth in demand for these raw materials is the same one that boosted the prices of copper, iron ore and others over the past 15 years: China. Beijing’s support for electric cars and buses is driving lithium demand, which has seen prices in the country rise by more than 60 per cent in the past year. If all the lithium used by electric carmaker Tesla in its batteries was purchased by the company today, its share of the global market would still be less than 2 per cent, according to Joe Lowry, a market expert who has worked for FMC Lithium, one of the big producers. In contrast, the Chinese market will consume almost 20 per cent of the lithium produced globally this year.

“Tesla’s a big deal no question,” he says. “But China has the most growth. It is extremely worried about a shortage. Capacity that was supposed to come online [outside the country] didn’t, and demand is at a tipping point.”

Traditional miners are keen to exploit the potential of lithium. Rio Tinto is looking at developing a mine in Serbia that, it says, has the potential to supply a “significant portion” of global demand.

“We’re pretty sure that the route to electric cars is through the lithium battery,” says Alan Davies, Rio’s head of diamonds and minerals. “And as the technology to manufacture them [improves] . . . then there will be more acceptance, and you bring the price point down.”

But the company also believes that established commodities such as copper — which has seen prices fall by 50 per cent since 2011 — still have a future. There is a much bigger market for the red metal than lithium, graphite or cobalt, worth about $124bn last year. In contrast total annual sales from the big three lithium producers are currently worth less than $1bn.

“The key thing is whether they [new metals] are going to be used in a big industry — most of the commodities of today are driven by steel and everything that’s related to steel ,” says Simon Moores, managing director of Benchmark Mineral Intelligence “These niche minerals don’t really have a huge industry yet. But we believe batteries are on the way to being that industry.”

The metals and minerals in demand

It powers modern life. Almost all electronic devices use lithium-ion batteries — technology first pioneered by Sony in the 1980s — and around 30 per cent of the metal produced is used as cathodes in batteries. It is also used in glass, ceramics and lubricants. Silver in colour, it has high energy density and in its pure form will react violently to water, so needs to be chemically extracted from brine and hard rock. Around 70 per cent of the world’s supply lies in the salt flats of Argentina, Bolivia and Chile.

Lithium-ion batteries already account for 75 per cent of electric vehicle demand, according to Bloomberg New Energy Finance. But analysts expect that demand to increase over the next five to 10 years, as battery costs drop to a point where electric vehicles and storage for grid power become more economically attractive. To meet that demand a host of new factories are being built, including Tesla’s Gigafactory in Nevada as well as plants in China by the likes of LG Chem .

London-based consultancy Roskill predicts that demand for lithium carbonate — one of the two types used in batteries — will this year reach 175,000 tonnes, which could rise to 231,000 tonnes by 2020 and has the potential to reach 266,000 tonnes if electric cars hit the mass market. Lithium has escaped the recent fall off in commodities, with prices rising about 15 per cent to around $7,500 tonne this year.

Known as a “wonder metal”, it has been used since the cold war in military aerospace and spy planes. Titanium is stronger than steel, 45 per cent lighter and also resistant to corrosion. That makes it “strong and tough enough to survive in space or at the bottom of the ocean”, according to the Royal Society of Chemistry. But its high cost of production has so far limited wider use. 3D printing could change that, as it cuts down on the waste produced for each block of titanium material used. Companies such as UK-based Metalysis have begun to produce titanium powder for use in 3D printers through electrolysis, without the high heat and energy needed for conventional titanium.

Cheaper titanium could attract the automotive industry, as it seeks to reduce the weight of cars to meet emissions legislation. “What really has held it back is the cost of production, the metal could easily be a commodity tomorrow because of its widespread appeal and the fact that the original source of titanium is available all over the globe,” says Kartik Rao, director of business development at Metalysis.

“It’s one of the most abundant elements in the earth’s crust so there’s no shortage of supply.”

A shiny grey metal widely used as a compound with lithium in the cathode of lithium-ion batteries as well as in high-strength metal alloys for gas turbines. Cobalt derives its name from the German word kobold, which means goblin. Produced mostly as a byproduct of copper, more than 50 per cent of the world’s cobalt came from the Democratic Republic of Congo last year. That is mostly sold to China, where it is made into refined cobalt. Tesla’s Gigafactory, which is under construction in Nevada, could increase demand for battery-grade cobalt by 20 per cent, according to London-based consultancy Benchmark Mineral Intelligence. Meanwhile, Macquarie forecasts that overall battery demand for cobalt could more than double by 2020.

But the metal is often the most expensive component of a battery so it is likely to be substituted for other materials as manufacturers seek to drive down costs, according to analysts. Scientists are also working on using fewer materials for the cathode in lithium-ion batteries.

One of the purest forms of carbon found in rocks, graphite is used in electric batteries for its conductivity and steel furnaces for its ability to withstand high temperatures. Electric vehicles, utility storage devices and mobile technology are all powered by batteries that use graphite as the anode material, according to Benchmark Mineral Intelligence. Graphite will be the largest input material into Tesla’s Gigafactory, the company predicts.

Around 60 per cent of the material in batteries comes from natural flake graphite and the rest from synthetic man-made sources. China produces more than 60 per cent of the world’s supplies of natural graphite, but Tesla has not said where it will source its graphite from. Benchmark says that if Tesla uses natural graphite for its lithium-ion battery production, the world will need significant new sources of supply. Global battery- grade graphite production is 80,000 tonnes a year but Benchmark forecasts this will exceed 250,000 t/y by 2020.

Battery developers are also working on replacing graphite with other materials such as silicon, which could be capable of storing more energy.

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Fed Ends Zero-Rate Era; Signals 4 Quarter-Point Increases in 2016

The Federal Reserve raised interest rates for the first time in almost a decade, a widely telegraphed move that Chair Janet Yellen said would be followed by “gradual” tightening as officials watch for evidence of higher inflation.

The Federal Open Market Committee unanimously voted to set the new target range for the federal funds rate at 0.25 percent to 0.5 percent, up from zero to 0.25 percent. Policy makers separately forecast an appropriate rate of 1.375 percent at the end of 2016, the same as September, implying four quarter-point increases in the target range next year, based on the median number from 17 officials.

“The economic recovery has clearly come a long way, although it is not yet complete,” Yellen told a press conference following the conclusion of the FOMC’s two-day meeting in Washington. “The committee currently expects that, with gradual adjustments in the stance of monetary policy, economic activity will continue to expand at a moderate pace and labor market indicators will continue to strengthen.”

The increase draws to a close an unprecedented period of record-low rates that were part of extraordinary and controversial Fed policies designed to stimulate the U.S. economy in the wake of the most devastating financial crisis since the Great Depression. The FOMC lowered its benchmark rate to near zero in December 2008, three months after the collapse of investment bank Lehman Brothers Holdings Inc. and 10 months before unemployment in the U.S. peaked at 10 percent.

Inflation Outlook

"The one phrase that I think is notable is that the committee is confident that inflation will rise, and that was the key criterion that changed," said Guy LeBas, managing director and chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. 

The Standard & Poor’s 500 Index of U.S. stocks jumped 1.5 percent to 2,073.07 in New York, rising for three consecutive days for the first time since October while erasing losses for the year. The dollar fluctuated against the euro after the decision, falling as much as 0.7 percent. It later recouped losses, climbing 0.3 percent to $1.0902 per euro as of 4:14 p.m. in New York. 

While the vote was unanimous, the rate forecasts show that two officials among the full group of voters and non-voters saw no rate increases as appropriate in 2015, without identifying them.

“The committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate,” the FOMC said. “The actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.”

Balance Sheet

The FOMC said it expects to maintain the size of its balance sheet “until normalization of the level of the federal funds rate is well under way.”

The quarter-point increase in the target fed funds rate, the overnight interbank lending rate that influences other borrowing costs in the economy, was forecast by 102 of 105 analysts surveyed by Bloomberg News.

The Fed gave a largely positive assessment of the U.S. economy, saying that expansion continued at a “moderate pace” and that a “range” of job-market indicators “confirms that underutilization of labor resources has diminished appreciably since early this year.”

The central bank also said that the risks to the outlook for economic activity and the labor market are now “balanced,” changing from a previous reference to being “nearly balanced.”

Sustainable Improvement

“Americans should realize that the Fed’s decision today reflects our confidence in the U.S. economy,” Yellen said. “While things may be uneven across regions of the country and different industrial sectors, we see an economy that is on a path of sustainable improvement.”

Still, the recovery has been disappointing for many. Household incomes remain lower than they were a decade ago when adjusted for inflation, and wages have climbed only sluggishly even as firms hired back workers. Hourly earnings have risen by about an average 2.2 percent annual pace over the past seven years, compared with 3.3 percent in the 20 years through 2008.

The Fed said monetary policy is still “accommodative after this increase, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation.”

The central bank acknowledged the state of low inflation, saying that it plans to “carefully monitor actual and expected progress toward” its 2 percent target.

As part of the decision, the Fed increased the interest it pays on overnight reverse repos to 0.25 percent from 0.05 percent to put a floor at the lower end of the range. It also raised the interest it pays on excess reserves held at the Fed to 0.5 percent from 0.25 percent to mark the upper end of the range.

In a related move, the Fed’s Board of Governors unanimously voted to raise the discount rate, which covers direct loans to banks, by a quarter point to 1 percent.

In addition to setting rock-bottom short-term interest rates during the crisis, the Fed engaged in three rounds of bond purchases aimed at suppressing long-term rates to stimulate borrowing and spending. Officials also provided unusually explicit guidance, assuring investors for years they intended to keep rates low well into the future.

Prior to 2008, the effective fed funds rate had never dropped below 0.63 percent, according to data compiled by the St. Louis Fed dating back to 1954.