Steve Bull's Blog, page 221
June 7, 2022
June 5, 2022
What People Don’t Get about This Inflation Spike
Rising costs signal the ‘long emergency’ we face after glutting on cheap energy. Part one of two.
Volatile energy prices are no mere brief glitch in the global economy. They are now a feature because we’ve met the end of easily extracted, cheap fossil fuels. Image via Shutterstock.If you are sitting around the kitchen table contemplating the escalating cost of your grocery bills (and just about everything else), then welcome to what U.S. writer James Kunstler calls “the long emergency.”
In 2005 Kunstler, famous for his critique of suburbia, noted that civilization’s energy appetites were unsustainable given the declining quality of fossil fuels left in the world.
“We can be certain that the price and supplies of fossil fuels will suffer disruptions in the period ahead that I am calling the Long Emergency,” advised Kunstler. “No combination of alternative energies will permit us to continue living the way we do, or even close to it.”
The inflation we are facing today is a manifestation of that long emergency intensifying. The elephant in the room is the rising cost of all fossil fuels.
That’s not of course what we are hearing from those either trying to calm our nerves or inflame populist emotions.
The experts mostly blame the pandemic, unsettled supply chains and great surges in demand. Don’t worry, the authorities tell us, all of this is temporary and transient.
At the same time political insurrectionists, who now proliferate like rodents in our whack-a-mole culture, have blamed everything from government deficits to carbon taxes for inflation. They do so even though inflation has appeared in jurisdictions with no deficits and no carbon taxes.
…click on the above link to read the rest of the article…
Bilderberg does China
When Davos and Bilderberg messenger boys look at The Grand Chessboard, they realize that their era of perpetual free lunch is over .
Discreetly, as under the radar as a looming virus, the 68th Bilderberg meeting is currently underway in Washington, D.C. Nothing to see here. No conspiracy theories about a “secret cabal”, please. This is just a docile, “diverse group of political leaders and experts” having a chat, a laugh, and a bubbly.
Still, one cannot but notice that the choice of venue speaks more volumes than the entire – burned to the ground – Library of Alexandria. In the year heralding the explosion of a much-awaited NATO vs. Russia proxy war, discussing its myriad ramifications does suit the capital of the Empire of Lies, much more than Davos a few weeks ago, where one Henry Kissinger sent them into a frenzy by advancing the necessity of a toxic compromise named “diplomacy”.
The list of Bilderberg 2022 participants is a joy to peruse. Here are just some of the stalwarts:
James Baker, Consigliere extraordinaire, now a mere Director of the Office of Net Assessment at the Pentagon.
José Manuel Barroso, former head of the European Commission, later the recipient of a golden parachute in the form of Chairman of Goldman Sachs International.
Albert Bourla, the Pfizer Big Guy.
William Burns, CIA director.
Kurt Campbell, the guy who invented the Obama/Hillary “pivot to Asia”, now White House Coordinator for Indo-Pacific.
Mark Carney, former Bank of England, one of the designers of the Great Reset, now Vice Chair of Brookfield Asset Management.
Henry Kissinger, The Establishment’s Voice (or a war criminal: take your pick).
Charles Michel, President of the European Council.
Minton Beddoes, Editor-in-Chief of The Economist, which will duly relay all major Bilderberg directives in the magazine’s upcoming cover stories.
David Petraeus, certified loser of endless surges and Chairman of KKR Global Institute.
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June 4, 2022
Potential Dockworker Strike Could Unleash “Super Meltdown” At German Port Of Hamburg
Dozens of container ships are piling up outside Germany’s largest seaport by volume, known as the Port of Hamburg. It’s the third busiest port in Europe and the 15th largest globally and could be plunged into chaos next week as dockworkers may strike.
German newspaper Die Welt reports congestion at Hamburg is worsening, and container ships have to wait two weeks before entering the port.
“The waiting times are unsatisfactory,” a spokesman for shipping company Hapag-Lloyd said, referring to Hamburg.
Hamburger Hafen und Logistik AG (HHLA), a top European port and transport logistics company, said the reason for increasing congestion is a slowdown in the processing of containers, especially imports from the Far East not being transported fast enough by truck and train.
Besides congestion, Kiel Institute for Economic Research estimates that around 2% of the global container load is stuck at the port. There are also mounting concerns dockworkers could be ready to strike.
“There could be additional problems from next Tuesday. Many reckon that dockers could then go on strike in order to increase the pressure on the ongoing wage negotiations. The next round of negotiations is scheduled for June 10, but the peace obligation has already expired,” Die Welt said.
According to the Verdi services union, the strike could begin next Tuesday. The last time strikes hit Hamburg was in the late 1970s, a period when the world suffered from disastrous stagflation, similar to the economic climate today.
A shipowner told the German newspaper Hamburger Abendblatt: “If it comes to that, we’ll have a super meltdown in Hamburg.”
The timing of the proposed strike by dockworkers comes as consumer prices in Europe’s largest economy surged 8.7% YoY last month (the highest since the start of the monthly statistics in 1963).
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Nuclear waste from small modular reactors
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Why did gas prices go from $10 a gigajoule to $800 a gigajoule? An expert on the energy crisis engulfing Australia
Australia’s east coast has been plunged into an energy crisis just as winter takes hold, which will see many people struggle to heat their homes due to soaring gas bills.
Meanwhile, Origin Energy this week confirmed it could not source enough black coal to power Australia’s largest coal plant at full capacity, deepening shocks to the energy market.
The electricity price surge is so dire, small energy retailers such as ReAmped Energy are advising customers to switch energy providers or be hit with much higher bills.
So what on Earth is going on? It has a lot to do with Russia’s war on Ukraine, which has disrupted the global energy market. Sanctions on Russian coal and gas exports mean there’s simply not enough supply to meet demand. As a consequence, the global price of gas and coal has soared.
Why are energy prices are getting so high?
Australia is a net exporter of gas and coal. This means we export most of our fossil fuels overseas. As the global price of coal increases, the cost of generating domestic electricity from coal is increasing.
What’s more, many of Australia’s coal generators are ageing, which means they fail more often. At present, nearly 30% of our coal generation is offline.
The price spike comes as coal plant owners look for the exit. Australia’s largest coal plant, Eraring, has been operating for 35 years. In February, Origin announced it would shut Eraring seven years ahead of schedule in 2025 because renewable energy was impacting profitability.
Origin’s new challenge is securing enough coal to run Eraring at its full 2.8 gigawatt capacity. The problem is set to persist into 2023.
…click on the above link to read the rest of the article…
Wide Awake
“Extinction is the rule. Survival is the exception.” – Carl Sagan
Carl Sagan was a brilliant scientist, gifted orator, skilled teacher, and effective advocate for his strongly held beliefs. It is no exaggeration to say that Sagan is likely responsible for inspiring more people to pursue a career in the sciences than any other person in history. His 13-part television documentary Cosmos: A Personal Journey – which first premiered on PBS in 1980 and is still stunningly well-worth watching to this day – is widely regarded as one of the best science-themed series ever produced. Sagan knew how to turn a phrase to enchant an audience and routinely did so with a level of passion and charisma that cannot be faked.
In the climactic final episode of Cosmos titled Who Speaks for Earth? Sagan makes an impassioned plea for nuclear de-escalation. The first nine minutes of the piece are particularly spellbinding, and the introduction draws to a close with Sagan walking along a rocky shoreline where he delivers a historic monologue (emphasis added throughout):
“The civilization now in jeopardy is all humanity. As the ancient myth makers knew, we are children equally of the earth and sky. In our tenure on this planet, we have accumulated dangerous, evolutionary baggage – propensities for aggression and ritual, submission to leaders, hostility to outsiders, all of which puts our survival in some doubt. We have also acquired compassion for others, love for our children, a desire to learn from history and experience, and a great, soaring passionate intelligence – the clear tools for our continued survival and prosperity.
Which aspects of our nature will prevail is uncertain, particularly when our visions and prospects are bound to one small part of the small planet earth. But up and in the cosmos, an inescapable perspective awaits. National boundaries are not evidenced when we view the earth from space…
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June 3, 2022
Putin Says US Decision To Print Money Is Behind Soaring Food Prices
Earlier, we reported on the deranged, confused, false ramblings of a senile old man who is so out of his depth in running the world’s biggest economy, the catastrophic results will soon be obvious to even his most die-hard fans. Now, it’s time for his nemesis on the world scene, Russia’s Vladimir Putin to respond.
Speaking in a TV interview on Friday evening, following a meeting with African leaders in Sochi, Putin accused Western leaders of trying “to shift the responsibility for what is happening in the world food market” and said that “restrictions imposed by the US and its allies against Russia and Belarus will only exacerbate the looming global food crisis by affecting fertilizer trade and sending the food prices further up.”
Instead of looking toward Russian, Putin said that the root causes of the crisis lie with the US decision to print record amounts of money which led to an increase in global food prices, as well as Europe’s over-reliance on renewables and short-term gas contracts, which have led to price hikes and rising inflation.
“It began to take shape as early as February 2020 in the process of combating the consequences of the coronavirus pandemic,” he added.
High gas prices, the direct result of Europe’s catastrophic green/ESG policies which as we warned one year ago would spawn energy hyperinflation, resulting in under-investment in the traditional energy sector, have forced many fertilizer producers to shut down their businesses because of unprofitability; such developments have shrunk the fertilizer supply, which, in turn, has sent the food prices up, he added. This is another topic we have discussed extensively in the past (see our Oct 2021 article “Fertilizer Prices Hit Record Highs, May Pressure Food Inflation Even Higher“), and yes, Putin is correct again.
…click on the above link to read the rest of the article…
The Handbook for Debt-Soaked Nations: Lie, Print, Inflate & Finger-Point
Below we consider the classic (and oh-so predictable) tactics of debt-soaked nations facing a showdown (corner) between tanking markets and ripping inflation.
Ultimately, I see a stagflationary end-game in which both occur, but for the near-term, prepare for more inflation, as it’s the option all debt-soaked sovereigns are eternally forced to take.
The Cruelest Month
T.S. Elliot famously described April as the cruelest month, but the recent (and ever-unfolding) events of May seem far crueler.
As we have warned from the very onset of this otherwise avoidable war in Ukraine, the backfiring of Western sanctions against Putin (de-dollarization, inflationary tailwinds and increasingly discredited central banks) were not only plain to foresee, but placed the West in an almost comical (yet tragic) scenario in which nations like Germany find themselves sending weapons to the Ukraine while simultaneously sending Rubles to Putin.
How did the world become so hypocritical, dishonest, cornered and silly?
(Cold) Economic Realism vs. (Empty) Moral Posturing
As George Washington observed in a 1770’s moment of Realpolitik candor: “Nations have no permanent friends nor permanent enemies, just permanent interests.”
Turning to 2022, the self-interested reality of Western reliance on Russian energy has made their front-page virtue signaling a bit less virtuous…
Such cold realism explains why Italian Prime Minster Draghi realistically confessed as early as May 11 that EU companies could pay for Russian gas in Rubles in the very same week German Chancellor Olaf Scholz realistically opposed any immediate halting of oil imports from Russia.
Meanwhile, by May 12, the headlines revealed that Russian oil revenues had increased YoY by 50% despite the Western “boycott.”
An equally realistic Japan, like Germany, will take its time to phase-out its dependence on Russian energy, as it, like Germany, recognizes that an immediate G-7 boycott of Russian oil and gas amounts to little more than an energy suicide pact.
…click on the above link to read the rest of the article…
June 2, 2022
40,000 Factories At Risk Of Closing In Pakistan’s Commercial Capital Amid Fuel Crisis
Pakistan faces potential economic collapse as inflation jumps and widespread civil unrest could be nearing. The latest sign the South Asian country is spiraling into the abyss is rising electricity costs that threaten to close tens of thousands of businesses.
Bloomberg reports that as many as 40,000 factories in Karachi, the country’s commercial capital, are being slapped with high power costs that make operating near impossible.
Rising power costs are so severe that nine business groups in Karachi told the government that an immediate plan needs to be formulated to lower power costs or face economic disaster.
Any shuttering of factories and mass layoffs could trigger social unrest in the commercial capital, home to more than 16 million people.
Discontent among businesses and households is already soaring with an official inflation rate of over 13.37% (double the official CPI to get a more accurate picture of true price inflation), the 2nd fastest-rising rate in Asia.
On top of high power costs, Karachi’s power utility — K-Electric Ltd. — warned customers of widespread power cuts for the first time in over a decade if power generation continues to struggle because of high fuel costs and supply shortages.
“These current conditions are severely hindering KE’s ability to procure fuel, causing a permanent curtailment of power generation” that translates to as much as 10 hours of planned blackouts for some parts of the city, said Sadia Dada, a spokesperson for K-Electric.
Pakistan is also a nuclear power — political elites may stoke a conflict with neighboring India to distract public anger from domestic financial pain.
