Steve Bull's Blog, page 152
December 13, 2022
US Set To Send Ukraine Patriot Missiles In Huge Escalation
CNN’s chief Pentagon correspondent is reporting the breaking news based on multiple anonymous US defense officials – including a senor Biden administration official – that the White House is currently finalizing plans to send Patriot missile defense systems to Ukraine.
“The Biden administration is finalizing plans to send the Patriot missile defense system to Ukraine that could be announced as soon as this week, according to two US officials and a senior administration official,” CNN writes. “The three officials told CNN that approval is expected.”
Patriot missile battery, DoD via AP.If approved, this could be a tipping point in the conflict leading to direct confrontation between nuclear-armed powers given transfer of Patriots would mark the longest-range missiles sent to Ukraine thus far.
Washington has so far been reluctant, despite Kiev officials since nearly the start of the invasion making repeat pleas for the US to help “close the sky” – as President Zelensky many months ago urged Congress.
As The Guardian reviewed of the dangers involved in sending the Patriot:
“Long sought by the Ukrainians, the missiles have a range of up to 300km, but so far the US and its allies, including the UK, have declined to supply them because they could be used to hit targets inside Russia. Supplying them would help “bring the war to an end as soon as possible”, Johnson said.
Patriots have long been deployed in neighboring Poland, but Ukrainian leaders have been persistent in requesting them on their own soil amid a major uptick in recent Russian aerial attacks. Former UK prime minister Boris Johnson this week urged in a Wall Street Journal op-ed for the West to get serious about supplying Patriots and other anti-air systems, even including military aircraft.
…click on the above link to read the rest…
First Big Freeze Puts “Heavy Strain” On European Power Grids
Europe’s cold blast is due to a weak, polar vortex split in the stratosphere, which allowed high pressure to build across Greenland last week. As a result, Arctic air poured over the energy-stricken continent, sending natural gas and power prices higher.
The unseasonably cold weather will continue through this week. North West and Central Europe are recording average temperatures well below normal, boosting residential and commercial heating demand.
In the North West region, temperatures are forecasted to average around 30 degrees Fahrenheit this week, about 10 degrees less than the 30-year mean.
A similar setup is for Central Europe.
The arrival of the cold snap has already sent UK electricity prices to record highs.
Bloomberg’s energy crisis index shows gas storage percentages full for top European countries have already flipped from injections to drawing season. Power prices in France, Germany, Italy, and the UK are elevated as the cost of producing electricity is surging.
Here’s a better view of the gas storage situation. Even though significant progress was made to refill storage in an unusually warm autumn, cold snaps will draw down supplies much quicker as supply gaps persist due to Russian flows to the continent severed at some key entry points.
“The first winter blast is placing a heavy strain on European power grids, after a mild autumn allowed utilities to replenish depleted natural gas reserves. The energy crunch has forced some countries to return to coal, with the UK’s National Grid asking two coal-fired units from its winter reserve to run on Monday,” Bloomberg reported.
In a separate report, Bloomberg outlined three reasons why Europe’s addiction to NatGas persists:
First, nuclear outages in France have resulted in the loss of a sizable chunk of electricity generation. .…click on the above link to read the rest…
December 12, 2022
The “Barbarous Relic” Helped Enable a World More Civilized than Today’s
One of history’s greatest ironies is that gold detractors refer to the metal as the barbarous relic. In fact, the abandonment of gold has put civilization as we know it at risk of extinction.
The gold coin standard that had served Western economies so brilliantly throughout most of the nineteenth century hit a brick wall in 1914 and was never able to recover, or so the story goes. As the Great War began, Europe turned from prosperity to destruction, or more precisely, toward prosperity for some and destruction for the rest. The gold coin standard had to be ditched for such a prodigious undertaking.
If gold was money, and wars cost money, how was this even possible?
First, people were already in the habit of using money substitutes instead of money itself—banknotes instead of the gold coins they represented. People found it more convenient to carry paper around in their pockets than gold coins. Over time the paper itself came to be regarded as money, while gold became a clunky inconvenience from the old days.
Second, banks had been in the habit of issuing more bank-notes and deposits than the value of the gold in their vaults. On occasion, this practice would arouse public suspicion that the notes were promises the banks could not keep. The courts sided with the banks and allowed them to suspend note redemption while staying in business, thus strengthening the government-bank alliance. Since the courts ruled that deposits belonged to the banks, bankers could not be accused of embezzlement. The occasional bank runs that erupted were interpreted as a self-fulfilling prophecy. If people lined up to withdraw their money because they believed their bank was insolvent, the bank soon would be…
…click on the above link to read the rest…
Pentagon Gives Tacit Support for Ukrainian Drone Attacks Deep Inside Russia
The Times reports that the US no longer has the same concerns about escalations and is likely to send longer-range weapons
The Pentagon has given its tacit endorsement of Ukrainian attacks inside Russian territory and no longer fears such operations could lead to a “dramatic” Russian escalation, The Times reported on Friday, citing unnamed US defense officials.
The US position appears to only be based on the fact that up to this point, Russia hasn’t responded to attacks on its territory with nuclear weapons or by attacking NATO countries.
The Times report reads: “Moscow’s revenge attacks have to date all involved conventional missile strikes against civilian targets. Previously, the Pentagon was warier of Ukraine attacking Russia because it feared the Kremlin would retaliate either with tactical nuclear weapons or by targeting neighboring NATO nations.”
The report came after Ukrainian drone attacks hit Russian air bases deep inside Russian territory, including one that killed three Russian soldiers and damaged two Russian bombers. Following the attacks, Russian missiles pounded Ukrainian energy infrastructure, worsening the already dire situation for millions of Ukrainian civilians who are without power and heat in freezing temperatures.
Russia didn’t start launching large-scale attacks on Ukrainian energy infrastructure until October, after the truck bombing of the Kerch Bridge, which connects Crimea to the Russian mainland. US officials previously said that they support Ukrainian attacks on Crimea.
The Times report said that the US doesn’t want to publicly give Ukraine the greenlight to attack targets inside Russia. In public comments, US officials have said they are not “encouraging” or “enabling” Ukrainian strikes inside Russian territory. But a US defense official said that it’s up to Ukraine where they attack and that they have limited restrictions on using US-provided weapons.
…click on the above link to read the rest…
Who Is Purposely Sabotaging Power Plants All Over America?
Someone has been attacking power plants all over the country, and federal authorities are trying to determine who it is. In recent days, we have seen significant sabotage on both the east and west coasts, and so it can’t just be one individual that is responsible. During the first eight months of this year, there were a total of 106 attacks on the electrical grid in the United States, and that represents the highest number ever recorded in a single year. Hopefully authorities will be able to get to the bottom of this mystery, because winter will soon officially begin. If power goes out in your neck of the woods for an extended period of time during the months ahead, what will you do?
Nobody is trying to claim that the string of attacks that we have been witnessing is “accidental”, and ABC News is reporting that “federal authorities are investigating” this very disturbing trend…
Federal authorities are investigating a number of recent reported acts of sabotage on utility companies, a senior law enforcement source told ABC News.
The move comes in the wake of substations being riddled with bullets in North Carolina, leaving tens of thousands without power for days.
After the incident, the utility companies reached out to federal authorities in recent days to investigate, the source said.
The recent incident in North Carolina was particularly alarming.
At approximately 7 PM on Saturday night, gunfire erupted at two electrical substations in Moore County. Officials are calling this “an intentional and coordinated attack”…
…click on the above link to read the rest…
What Does the Fed’s Jerome Powell Have Up His Sleeve?
The Real Goal of Fed Policy: Breaking Inflation, the Middle Class or the Bubble Economy?
“There is no sense that inflation is coming down,” said Federal Reserve Chairman Jerome Powell at a November 2 press conference, — this despite eight months of aggressive interest rate hikes and “quantitative tightening.” On November 30, the stock market rallied when he said smaller interest rate increases are likely ahead and could start in December. But rates will still be increased, not cut. “By any standard, inflation remains much too high,” Powell said. “We will stay the course until the job is done.”
The Fed is doubling down on what appears to be a failed policy, driving the economy to the brink of recession without bringing prices down appreciably. Inflation results from “too much money chasing too few goods,” and the Fed has control over only the money – the “demand” side of the equation. Energy and food are the key inflation drivers, and they are on the supply side. As noted by Bloomberg columnist Ramesh Ponnuru in the Washington Post in March:
Fixing supply chains is of course beyond any central bank’s power. What the Fed can do is reduce spending levels, which would in turn exert downward pressure on prices. But this would be a mistaken response to shortages. It would answer a scarcity of goods by bringing about a scarcity of money. The effect would be to compound the hit to living standards that supply shocks already caused.
So why is the Fed forging ahead? Some pundits think Chairman Powell has something else up his sleeve.
The Problem with “Demand Destruction”
…click on the above link to read the rest…
Coast-To-Coast Winter Storm Sends US NatGas Surging
In what’s forecasted to be the first coast-to-coast major winter storm of the season across the Lower 48, traders have furiously panic bid US natural gas futures due to the prospects of increased heating demand.
On Sunday, wintery precipitation, powerful winds, and heavy rains battered Intermountain West as a powerful storm was set to traverse the rest of the country in the new week. The next stop for the storm is the Plains, South, and Northeast, according to The Weather Channel.
Heavy mountain snow has already blanketed parts of California’s Sierra. Snow will spread across the high country of Colorado and northern New Mexico today. Then this evening, the system moves into the Northern Plains. By night into Tuesday, heavy snow and strong winds could spark blizzard conditions across eastern Montana, eastern Wyoming, western Nebraska, the Dakotas, and Minnesota.
Later in the week, moisture from the storm and cold air will be in place in the East. However, it’s still early to forecast where snow will fall in the Northeast.
The storm is coupled with a cold blast pouring across the Lower 48 starting Friday. Temperatures are forecasted to dive between Friday and next Wednesday.
Most of the Lower 48 could be well under average temperatures.
Which means heating demand erupts.
And why energy traders are bidding NatGas prices higher this morning. At one point, prices were up 12% to $7.010/mmbtu.
Cold season is in — drawing down on inventories began on Nov. 10 (read: “US Flips Into Withdrawal Season” As NatGas Prices Surge).
Also, Freeport LNG is expected to ramp up exports out of its Texas facility soon, along with cold weather; this could keep a bid under NatGas prices this heating season.
What “longtermism” gets wrong about climate change
Corn affected by 2013 drought in Texas. Global warming is making summer droughts in Texas longer and more severe. USDA photo by Bob Nichols
In his new book What We Owe the Future, William MacAskill outlines the case for what he calls “longtermism.” That’s not just another word for long-term thinking. It’s an ideology and movement founded on some highly controversial ideas in ethics.
Longtermism calls for policies that most people, including those who advocate for long-term thinking, would find implausible or even repugnant. For example, longtermists like MacAskill argue that the more “happy people” who exist in the universe, the better the universe will become. “Bigger is better,” as MacAskill puts it in his book. Longtermism suggests we should not only have more children right now to improve the world, but ultimately colonize the accessible universe, even creating planet-size computers in space in which astronomically large populations of digital people live in virtual-reality simulations.
Backed by an enormous promotional budget of roughly $10 million that helped make What We Owe the Future a bestseller, MacAskill’s book aims to make the case for longtermism. Major media outlets like The New Yorker and The Guardian have reported on the movement, and MacAskill recently appeared on The Daily Show with Trevor Noah. Longtermism’s ideology is gaining visibility among the general public and has already infiltrated the tech industry, governments, and universities. Tech billionaires like Elon Musk, who described longtermism as “a close match for my own philosophy,” have touted the book, and a recent article in the UN Dispatch noted that “the foreign policy community in general and the United Nations in particular are beginning to embrace longtermism.” So it’s important to understand what this ideology is, what its priorities are, and how it could be dangerous.
…click on the above link to read the rest…
How Things Fall Apart
That’s how things fall apart: insiders know but keep their mouths shut, outsiders are clueless, and the decay that started slowly gathers momentum as the last of the experienced and competent workforce burns out, quits or retires.
Outsiders are shocked when things fall apart. Insiders are amazed the duct-tape held this long. The erosion of critical skills and institutional knowledge is invisible to outsiders, while everyone inside who saw the unstoppable decay either left or burned out.
Those who remain are the ambitious who lack the experience to reverse the decline and the self-awareness to realize they’re way over their head. They’re ambitious enough to want the managerial title and power but don’t have the necessary experience and competence to lead a brutally difficult and painful turnaround.
So they either “stay the course” doing more of what’s failed or they flail around, trying one reorganization-fad-of-the-day after another, pushing the few remaining competent staffers to leave and thus steepening the decline.
Everyone who cared and was competent in the support staff either left or burned out trying to doing three jobs at once. The most prescient and experienced staffers noted the decline in managerial competence and the decay of the operational skills needed to keep the ship afloat, and so they found a better position elsewhere or retired early.
The less prescient but competent then tried to compensate for failing management and poorly trained staff by doing more of the work themselves. First they do the work of one-and-half less competent employees, then of two and after that, three for a brief time until their health is destroyed and they burn out. They either go on medical leave, retire or quit as the sole means of retaining whatever health they still possess.
…click on the above link to read the rest…
December 10, 2022
EU’s Oil Price Cap Creates a Price Cap… on Stupidity
MOSCOW, RUSSIA DECEMBER 1, 2021: Russia’s Foreign Ministry Spokesperson Maria Zakharova gives a weekly press briefing. Russian Foreign Ministry/TASS
The EU and the US went forward with their long-debated, long-telegraphed move to put a price cap on Russian oil at $60 per barrel.
By believing they can pressure suppliers into not hauling Russian oil lest they run afoul of the sanctions that support the price cap, they believe they can take only Russian oil off the market for the long run.
Because of the way oil is actually traded in the real world, versus the way it trades in Janet Yellen’s head, this policy is actually much harder to implement than it actually looks. You don’t buy oil at the crude oil counter at Target or Wal-Mart.
There isn’t a price tag you can look at and say yes or no too. As Tsvetana Paraskova at Oilprice points out, crude contracts are written based on a discount or premium to a benchmark price at a particular moment in time.
“Physical traders rarely trade on a fixed price,” John Driscoll, chief strategist at JTD Energy Services Pte Ltd, told Bloomberg.
“It’s a much more complex space where they trade on formulas and spot differentials to a benchmark crude for the trading of actual cargoes as well as for hedging that follows,” said Driscoll, who has more than 30 years of trading oil in Singapore.
…click on the above link to read the rest…
