Steve Bull's Blog, page 166
November 14, 2022
Europe May See Forced De-Industrialization As Result Of Energy Crisis
The European Union has been quietly celebrating a consistent decline in gas and electricity consumption this year amid record-breaking prices, a cutoff of much of the Russian gas supply, and a liquidity crisis in the energy market.
Yet the cause for celebration is dubious: businesses are not just curbing their energy use and continuing on a business-as-usual basis. They are shutting down factories, downsizing, or relocating. Europe may well be on the way to deindustrialization.
That the European Union is heading for a recession is now quite clear to anyone watching the indicators. The latest there—eurozone manufacturing activity—fell to the lowest since May 2020.
The October reading for S&P Global’s PMI also signaled a looming recession, falling on the month and being the fourth monthly reading below 50—an indication of an economic contraction.
In perhaps worse news, however, German conglomerate BASF said last month it would permanently downside in its home country and expand in China. The announcement served as a blow to a government trying to juggle energy shortages with climate goals without extending the lives of nuclear power plants.
“The European chemical market has been growing only weakly for about a decade [and] the significant increase in natural gas and power prices over the course of this year is putting pressure on chemical value chains,” said BASF’s chief executive, Martin Brudermueller, as quoted by the FT, in late October.
…click on the above link to read the rest…
It Isn’t Cognitive Dissonance. It’s Doublethink
Certum est, quia impossibile.
Cognitive dissonance is when people feel discomfort due to discrepancies in their own thoughts or beliefs. As an example, someone who takes pride in being honest, feels such discomfort when he tells a lie.
Another example of cognitive dissonance is the discomfort felt by members of a cult when they seek to explain how the end of the world was postponed, as their apocalyptic prophecy did not come true. The term was in fact coined by psychologist Leon Festinger in his studies of such cults in the 1950s.
The opposite of cognitive dissonance is doublethink, a word that first appeared in George Orwell’s 1984. Doublethink is the ability to accept two contradictory beliefs at the same time, while being totally unaware of the contradiction. In Orwell’s own words:
To know and not to know, to be conscious of complete truthfulness while telling carefully constructed lies, to hold simultaneously two opinions which cancelled out, knowing them to be contradictory and believing in both of them, to use logic against logic, to repudiate morality while laying claim to it, to believe that democracy was impossible and that the Party was the guardian of democracy, to forget whatever it was necessary to forget, then to draw it back into memory again at the moment when it was needed, and then promptly to forget it again, and above all, to apply the same process to the process itself—that was the ultimate subtlety: consciously to induce unconsciousness, and then, once again, to become unconscious of the act of hypnosis you had just performed. Even to understand the word—doublethink—involved the use of doublethink.
This morning I saw an excellent example of this on someone’s Facebook wall (translated by FB from the Icelandic, so not perfect):
…click on the above link to read the rest…
November 13, 2022
The Decline of the West: Spengler in Today’s World
Timelessness of thought and vision in world politics is a rare mark of grandeur. Oswald Spengler’s The Decline of the West, written a century ago, deserves this distinction as it reads like it was done yesterday.
The German historian-philosopher wrote in 1922 that the centuries old West-European-American civilization was in permanent and irretrievable decline in all manifestations of life including religion, art, politics, social life, economy and science. For him, the political, social and ideological dimensions of this decline were evident in the failings of the Western political class in both sides of the Atlantic. He saw politicians, mostly based in large cities, consumed by ideology and contempt towards silent majorities and described them as “a new sort of nomad, cohering unstably in fluid masses, the parasitical city dweller, traditionless, utterly matter-of-fact, religionless, clever, unfruitful, and deeply contemptuous of the countryman.” Nowadays the Brussels-based European Union (EU) leadership, through their recurring disdain for nation sovereignty, fully befits this definition.
Spengler believed that decadence in politics means predominance of ideology over action. “Men of theory commit a huge mistake in believing that their place is at the head and not in the train of great events” he wrote, unaware about how true this is today as we just saw the fall of UK Prime Minister Truss who sacrificed economics in the altar of ideology. Dogma destroying social cohesion and prosperity is also present in the wrecking of Europe’s manufacturing competitiveness as their politicians forcibly deny cheap Russian energy or when Lilliputian Lithuania picks a fight with China in defence of Taiwan’s “sovereignty.” On the face of these events the German thinker would have repeated his assertion that “the political doctrinaire … always knows what should be done, and yet his activity, once it ceases to be limited to paper, is the least successful and therefore the least valuable in history.”
…click on the above link to read the rest…
November 10, 2022
#242. The dynamics of global re-pricing
IN SEARCH OF EXPLANATIONS
SUMMARY
There is a growing acknowledgement that the World economy has entered a new era. We know that the cost of capital is trending upwards, with adverse consequences for asset prices. But there’s been remarkably little inclination to examine the underlying processes that are causing this to happen. Neither is there much in the way of recognition that entire sectors could be crushed, or even eliminated altogether, as re-pricing becomes more selective.
We need to dismiss any idea that this is temporary. There are some linkages connecting the resurgence of inflation with pandemic-era QE, and with the war in Ukraine, but these are little more than symptoms.
The underlying dynamic is that the economic driver of the industrial era – the supply of low-cost energy from oil, natural gas and coal – is winding down, and there is no assured replacement at hand. Transition to renewables is imperative, but there’s no guarantee that an economy based on wind-turbines, solar panels and batteries can be as large as the fossil-based economy of today. The probabilities are that it will be smaller.
Had we been prepared to do so, we could have seen this coming. The chain of causation starts in the 1990s, when the authorities responded to “secular stagnation” with deregulation programmes that made credit easier to obtain. The subsequent financial crisis forced the adoption of QE, initially to prop up the banking system, and latterly as a self-standing form of stimulus. We were assured, quite wrongly, that QE would not be inflationary, but it has created a systemically-dangerous “everything bubble” in assets.
…click on the above link to read the rest…
UK Food Inflation Hits Record High As Discretionary Income Evaporates Ahead Of Dark Winter
Brits have watched double-digit inflation wipe out any wage gains in one of the worst cost-of-living crises in a generation. Many have gone into debt, paying for things such as food, energy, and shelter. Others have been left with little or no discretionary income ahead of a very dark and cold winter.
Research company Kantar published a new survey Tuesday that revealed startling food inflation numbers for October that soared at the fastest pace in 14 years.
Kantar said annual grocery prices rose to 14.7% last month, the fastest since the research firm began tracking prices.
Consumers are expected to pay an additional £682 in their annual grocery bill if they continue buying the same items.
The survey found that 27% of all households are “struggling financially,” double the amount from last November. Nine in ten respondents said food inflation is a top concern, while energy bills were second.
“So it’s clear just how much grocery inflation is hitting people’s wallets and adding to their domestic worries,” Kantar said.
Kantar revealed consumers are switching from name-brand items to cheap private-label store brands to save money:
Own label sales have jumped again by 10.3% over the latest four weeks, as shoppers adopt different strategies to manage their budgets. The branded goods market grew far slower at 0.4%.
In a separate study, the Joseph Rowntree Foundation found a whopping 7 million families have given up on heating, showers, and toiletries this year due to the cost-of-living crisis squeezing discretionary income.
The Centre for Economics and Business Research, which publishes the Asda tracker, found that after paying taxes for housing, heating, and food, 20% of earners in the second lowest income have nothing left to spend, according to Bloomberg.
…click on the above link to read the rest…
Energy Bills In Europe Are 90% Higher Than Last Year
Electricity and gas prices are soaring across Europe, with bills close to double from last year in most European capitals, according to new data from the Household Energy Price Index—a monthly tracker of energy prices for households across 33 European capitals, including the 27 EU member states and several non-members.
According to the data collected for the HEPI, natural gas bills in Europe have gone up by as much as 111 percent over the past year, with electricity prices up by an average of 69 percent. Taken together, Euronews calculates these two make for a total 90-percent increase in household energy bills over the past year.
“Significantly higher [energy prices] compared to one year ago … can be attributed to a combination of factors, such as increased demand connected to post-pandemic economic recovery and extraordinary weather conditions, the record-high prices for natural gas, and high CO2 emissions allowances,” the authors of the latest HEPI report noted.
The high energy bills are creating headaches for European governments: strikes and protests are multiplying and disgruntlement with energy policies is growing. The cost of living in most of Europe is already exorbitant because of the energy crisis and this crisis is only going to get worse after the EU embargoes on Russian oil and then fuels come into effect.
In some parts of Europe, according to the latest HEPI report, energy prices have reached record highs but in others, prices have actually fallen, at least in October. The news is not as good as it looks at first glance: the decline was a result of government intervention, i.e. energy subsidies.
There have been a lot of subsidies as European governments try to alleviate the financial pain on households and businesses to avoid further disgruntlement. Germany alone will be spending some $200 billion on such coping measures, including a cap on energy prices up to a certain level of consumption.
November 9, 2022
Regardless of Who’s Elected, Imperial Corruption Rules the Nation
But in the meantime, enjoy the political theatrics down on the sand-strewn floor of the Coliseum.
While the much-touted differences between America’s political parties get obsessive, hysterical attention, the sameness of Imperial corruption, waste and squalor regardless of who’s in power gets little notice. Scrape away the differences–mostly in domestic issues–and we see the dead hand of Imperial Corruption is on the tiller.
The core of Imperial Corruption is the disconnect between the nation’s ideals of representational democracy and open markets and the sordid reality: elites serve their interests by corrupting both democracy and open markets.
Unfettered democracy and markets cannot be controlled by a tiny, self-serving elite. Stripped of corruption, democracy and markets are free-for-alls that are constantly evolving, as highly adaptive islands of coherence coalesce that influence the quasi-chaos, competing with other islands of coherence but never gaining dominance due to the open-ended dynamism of collaboration-competition that is the beating heart of both democracy and open markets.
The only way to control democracy and markets to serve the interests of the few at the expense of the many is to corrupt them completely by destroying the dynamism of collaboration-competition. Democracy is replaced by an auction of political power to the highest bidder that rewards cronies and devotes all its resources not to solving the nation’s problems but to whipping up conflagrations of divisiveness and partisan hysteria that wash away the middle ground where problems can actually be addressed.
This crippling of the nation’s ability to actually solve difficult problems serves the interests of self-serving elites whose sole interest is accumulating personal wealth and power…
…click on the above link to read the rest…
11 Signs That Economic Activity Is Plunging Off A Cliff
Have you noticed it too? There has been a dramatic shift in the economy in recent days. It has been sudden and it has been severe. All over the country, sales are falling like a rock, inventories are piling up to alarming levels, and large companies are beginning to conduct mass layoffs. Perhaps it was inevitable that such a downturn would arrive, but the Federal Reserve has made things far worse by rapidly hiking interest rates. Every other time the Fed has engaged in such a rate hiking binge it has resulted in a recession, and there is no way that we are going to escape unscathed this time around. The following are 11 signs that economic activity is plunging off a cliff…
#1 This year, only 74 percent of Americans will celebrate Thanksgiving because so many people are skipping the holiday in order to save money…
In 2021, researchers note that an IPSOS survey found that nine in 10 Americans planned to celebrate Thanksgiving. This year, the new poll of 1,000 people found that number has fallen to just 74 percent. In fact, 47 percent say they’re celebrating “Friendsgiving” because of its more budget-friendly menu. Specifically, just 24 percent of Friendsgiving celebrations will even have a turkey on the table, with 33 percent opting for a pizza instead!
#2 Used vehicle prices have just plunged at the fastest pace that we have seen since 2008.
#3 A Dollar General assistant manager named Travis Bennett recently posted a video on TikTok that showed unsold inventory at his store literally piling up to the roof…
In a video with over 380,000 views addressed to “anyone inside this company that actually cares,” TikTok user Travis Bennett shows the conditions of his Dollar General. This includes boxes filling the aisles and numerous crates that have not been unpacked. Bennett says this is typical for “most Dollar General stores across the country.”
…click on the above link to read the rest…
The UN Reveals Plan To BAN All Fossil Fuels
I want to go over and address this climate change summit. The cop37 or whatever it’s called in Egypt has allegedly produced some extremely inflammatory rhetoric. Absolutely insane.
The scary reality is that if this rhetoric continues, it could kill hundreds of millions of people. I’m not being melodramatic, this is the cold hard truth.
I want to show you how these people are void of any cost-benefit analysis.
I’ll leave it up to you to decide whether this is intentional, or they intentionally avoid a cost-benefit analysis, or they’re just too stupid. They’re just too emotional.
There’s a complete absence of any type of critical thinking whatsoever.
So a sinking Pacific Island nation issues a historic call for a treaty to phase out fossil fuels. And they did this at this COP27 convention, which we’ll get into later in the above video, where this UN chief comes out and basically calls for the end of all fossil fuels.
Let that sink in for a moment.
Not just gas, oil, diesel, and natural gas. And it’s not just about energy destruction. But also the death and destruction that comes with it. You’re talking about something that would likely eradicate the human race.
Without fertilizer, there would be no food. Buying necessities would be impossible.
How do you build a house that requires fossil fuels?
A tiny population, no greater than a couple of million people maximum, would know how to go back to living in caves and the Stone Age. They’d have to scrape by and find food for themselves where they could. These people would survive. Everyone else. You’re pretty much gone. And that’s not exaggerating.
It is clear that fossil fuels are not only essential to the economy, but to the continuation of civilization itself. These are just facts. Bottom line.
…click on the above link to read the rest…
