Friday, June 14, 2024

French Development Banks Pulls Bond Sale As Macron Sparks EU Market Meltdown

  Where will the first black swan strike? It is of course impossible to guess. A little like trying to know which grain of sand will break the pile. But statistically, just as for earthquakes, we can pinpoint rather accurately when it will show up and unfortunately the time is just about now!

  The Western world has just reached the edge of the financial precipice and consequently what breaks the camel's back is irrelevant as it is just about to break. 

  This is why each and every conflict in Ukraine, Israel or the China Sea is about to take a life of its own. Facing economic defeat, it will suddenly look like a good idea to someone, somewhere to upturn the economic game board. 

  Expect the unexpected and prepare for the worst. We're about to enter choppy waters.

Sacre bleu!!

The implications of French President Macron's shock announcement of snap legislative elections after sustaining a hammering from the far-right Rassemblement National in European elections are starting to show up in some much more worrying systemic signals for the EU overall.

The OATS Spread (the gap between the yields of 10-year bonds issued by France, known as OATS for obligations assimilables du Trésor, and German bunds) is back at the center of discussion ...

Complicating the situation further is the news that left-leaning political parties in France sealed an alliance to join forces in the upcoming legislative election, with polls showing it can win the second-biggest bloc behind Marine Le Pen’s National Rally.

The FT warns that Macron’s centrist alliance could be facing a wipeout in snap parliamentary elections after France’s leftwing parties struck a unity pact.

New projections suggested only around 40 of Macron’s MPs would qualify for the second round vote on July 7, in run-off races that would predominantly be fought between candidates fielded by the far right or the leftwing bloc for the 589-strong assembly.

The market's response should not be a surprise as the prospect of the far-left getting a sway over policy has rattled investors in the past.

When polls in 2017 showed the presidential election could end up as a head-to-head between Le Pen and Melenchon, French debt sold off sharply, quadrupling its premium over safer German peers in a matter of months.

France’s CAC 40 index erased its gains for the year, with banking shares such as BNP Paribas SA and Societe Generale SA among the biggest losers.

“It’s hard to ignore the parallels between our current situation and the time of the sovereign debt crisis, as there’s that familiar focus on election results, sovereign bond spreads and debt sustainability,” said Jim Reid, an analyst at Deutsche Bank AG.

That’s “coupled with no obvious sign about where things are headed next.”

Of course, as we noted on X, what Macron's decision has done is merely pull back the curtain on the reality that nothing is fixed in Europe...

“It’s a risk-off tone with concerns over France driving the markets,” said Mohit Kumar, chief economist for Europe at Jefferies International. “Particularly going into the weekend, investors would be taking some positions off the table.”

And today, as Bloomberg reports, we see further implications as funding markets freeze up, as a French public development bank has delayed the sale of a green bond...

SFIL SA postponed the offering of a green bond on Friday, without giving a specific reason, according to a person familiar with the matter.

The delay was due to volatility in the French market, said another person with knowledge of the offering, asking not to be identified as the matter was private.

A day earlier, SFIL had mandated six banks to arrange the sale of a five-year note, with the aim of raising at least €500 million ($535 million).

The question of whether he was crazy to call a snap election was posed to him directly by Le Figaro earlier this week.

His response: “Not at all, I can confirm.”

When he was asked about it again by reporters at the G-7, he said that other leaders had described his actions as “courageous.”

Merde alors...

The Confiscation Of Reality

  An interesting philosophical article which can be resumed by: "Who are you going to believe? Me or your own eyes?

  And in most case people indeed and especially since Covid choose to believe what they are being told. 

  Case in point, "The hottest May ever" in the UK under a cold pouring rain. Same in Japan, "Earliest 30C in Tokyo" yesterday although we're having a superb and amazingly cool Spring with temperatures often 5C to 10C below normal. But then again, who decides what normal is these days?

  Slowly, step by step people are detaching from reality. 

  Previous generations used to know what reality was. They would go outside, see and experience the weather. Go to the countryside or live there, talk to farmers, see and enjoy animals, understand their needs and requirements. More generally understand that life is a complex balance between conflicting realities and necessities. They would argue with other people, confront ideas and slowly form their own.

  Not anymore. Now, most people are hooked on screens most of the time. Their computers at home and at work. Their mobile phones everywhere else, monitoring and adapting to their needs. But more fundamentally "shaping" their opinions like never before by locking people in a "reality" bubble from which it is quasi impossible to escape. 

  Worse, most people crave this artificial and reassuring "reality" and more and more reject dissenting opinions and conflicting ideas. You just need to nudge them a little more everyday in the right direction and slowly you end up shaping public opinion like never before. 

  I find this very tragic but what do I know? Isn't it what an iconoclast dissident, a person we would have called a heretic not so long ago and who are now dismissed as conspiracy theorist, would say? And soon enough they switch off returning to their screens and reassuring artificial reality. A tragedy, certainly, but for whom? The lone non conforming individual asking forbidden questions, or the sheep walking swiftly towards the slaughterhouse reassured by the sheer numbers surrounding them?

Authored by Sinead Murphy via The Brownstone Institute,

The UK Meteorological Office has just reported that we have enjoyed the hottest May on record. 

Meanwhile, those of us who have lived in the UK during May have endured unseasonal cold and rain, and have complained to one another constantly about it. 

Welcome to the age of abstraction, when lived experience is irrelevant and theoretical constructions carry the day – when what is deemed right and true is unmoored from what is actually happening here and now. 

Over four years ago, Covid lockdowns staged a dramatic confiscation of present reality. The question is, did we ever get it back?

When the UK government ordered its first lockdown at the end of March 2020, the present reality was put on hold – businesses were shut, schools closed, social activities banned, and human interactions restricted. 

Chaos and suffering inevitably ensued. But in the midst of the misery, there arose a new possibility. 

With present reality in abeyance, we were freed of its reality check. And we began to indulge in a new and joyous expectancy, of a wonderful future to revive a glorious past.

‘We’ll meet again,’ Queen Elizabeth assured us, reprising in her words and presence a fondly recalled togetherness of the last world war and promising its restoration as if it had only just been paused – as if the decades-long decimation of community and family and individual had never happened, as if only a temporary order to Stay Home stood between us and a lost world. 

This new possibility was tantalizing and quickly took hold of Middle England, the BBC-believing bastion of British Values, bent ever more implausibly on keeping calm and carrying on. 

By 2020, this beleaguered demographic had been all but spent from spotting certainties and consolations on the horizon of Left and Right, to forestall a looming vertigo at elite interests dashing its hopes from above and state-reliant deplorables whose fate beckoned from below.     

Middle England, front and centre of policy and institution, had long been demoralized by its present reality: 

Consigned to jobs made ever more bullshit by the erosion of ambition and discipline; flip-flopping between debt and the dregs of old desires; addled by precarity and the virtuosity that survives it; overseeing the retreat of human sympathy everywhere and applying for relief to anxiously awaited festivals that never failed to disappoint.

Lockdowns’ suspension of this reality was in itself a great boon. 

But greater still was what followed: unimpeded anticipation, of a happy tomorrow to follow a happy yesterday, in which all we would do because all we had done was Hug Granny and Play Whist and Toast Marshmallows and Sing Carols.

This was not nostalgia. It was infinitely more potent. 

In nostalgia, the past is glorified as what is dead, as what is ‘vintage’ or ‘retro,’ as what can therefore only be remembered, however wistfully. 

In lockdown, the past was reanimated, suddenly reframed as what would be again once universal cocooning came to an end.

Lockdowns relieved us of the one thing that had stood between us and fantastic recollections of Digging For Victory and Winning At Cribbage: present reality. 

We were free now to regret the past, not hopelessly as what was lost and gone, but hopefully as what had just been put on hold and would soon resume once things got back to normal.

Yes, we still went through the present realities of 2020 and 2021. We ate food and washed clothes and logged on, and drank too much and fought too hard and lost our sense of purpose. But suddenly, all of that was in parentheses – not real at all, just for now.  

Lockdowns achieved a transfer of the reality-effect from an inglorious present, sodden with disappointment, to a host of abstract ideas plundered from an invented past and projected to an inflated future. 

Over four years on, we are no longer supported in our exemption from present reality by government orders to Shelter In Place. Present reality is returned to us, after a fashion.

It appears, however, that we do not want it back, that the lockdown mode continues to tantalize. 

The reluctance with which many have relinquished their facemask has surely warned of this. As has the ongoing normalization of work-from-home.

But there is another and more insidious aspect to our cleaving to lockdowns’ suspension of present reality: our growing enthusiasm for theoretical constructions for which present reality is irrelevant.

During lockdowns, we plundered the almost-dead stock of yesteryear for content for the new mode of fond expectancy – abstract ideas of Dunkirk Spirit and Oh! What A Lovely War were hastily put abroad, adorned with Union Jack bunting, mugs of builders’ tea, allotment lemonade, and royal memorabilia.  

But already before lockdowns ended, the stock of abstract ideas began updating. 

The widely disseminated death of George Floyd launched a Black Lives Matter theme complete with its cartoon fist, and the rainbow of Gender was a seamless segway from the I Heart NHS refrain that had played ad nauseam for Covid. 

As lockdowns receded, we were encouraged to extend our exemption from present reality by a growing fund of available abstractions: Climate, Health, Equity, Security, Safety, Identity…

These abstractions come with ready-made, insertable symbols: Black Lives Matter fists and Gender rainbows have been joined by Ukraine flags, Greta hastags, syringe icons, and wildfire emojis. 

We trade these ideas as if they are old friends – unobjectionable, universally liked. We pin their cutesy signals to our messages and our lapels.

But these ideas are not our friends. They are quite the opposite. Because these ideas are not only theoretical, they are necessarily theoretical – by definition inapplicable to our lives and therefore indifferent to our flourishing. 

The idea of ‘Environment’ is no more relevant to the rubbish blowing around our street than the idea of ‘Climate’ refers to the weather outside or the idea of ‘Health’ is concerned about how we feel or the idea of ‘Gender’ maps onto our biology.

Nothing about these ideas touches down in present reality. By trading them between ourselves – by posting them and tweeting them and dropping them into our casual conversations – we perform a contempt for present reality and a will to exempt ourselves from it, perpetuating the effect of lockdowns long after the lockdowns have ended. 

Early Covid scepticism often argued that they invented Covid so they could have lockdowns. In retrospect, this was wrong. They invented lockdowns so they could have Covid. Not the disease of course, which was a concoction. The idea. Or rather, the kind of idea.  

Covid is not just an abstract idea. It is an essentially abstract idea. It refers to something never heard of before – an asymptomatic disease, a disease for which present reality is necessarily irrelevant. 

The Vaccine, which followed fast upon Covid and with great eclat, is another essentially abstract idea. With no significant effect on either transmission or infection, it is among us only as scorn for lived experience. 

But Lockdown too is such an idea, describing a degree of distancing of people from one another and of cessation of the activities of life that could never be achieved in reality.

It is in this sense that lockdowns have defined our societies, escorting us from a time when present reality was relevant and required to be manipulated to a time when present reality is irrelevant and can be vetoed at will. 

Lockdowns both launched an assault upon present reality by physically removing us from it and piloted, through the impossible idea of Lockdown, the cycle of abstraction that continues to transfer the reality effect from lived experiences to theoretical constructions.  

In the end of it all, perhaps they invented lockdowns just to get Lockdown, imposing abstention from present reality to kickstart abstraction from present reality. 

Of course, we still live out the realities obscured by their abstractions – beneath the pristine idea of Lockdown, there arose material conditions from which millions continue to suffer, not to mention the physical devastation unfolding under the idea of the Vaccine. 

But somehow, all of that is in parentheses. The fallout from lockdowns is revealed in public inquiries and injuries from vaccines are reported in the media. Yet, it produces little effect – as if none of reality is real, but only a series of aberrations. 

Exemption from present reality, begun so theatrically by lockdowns, continues unabated. What counts as vital circulates in the abstract, and lived experiences are sidelined as mere happenstance, hardly worth our notice at all. 

Foucault’s most important insight is that you do not need to enslave people first in order then to exploit them. There are ways of exploiting people that also enslave them. 

The disciplinary techniques of industrial production, with their unerring distribution of people in spaces and times, made people at once docile and useful.

In 1990, Deleuze updated Foucault’s insight to explain that you do not need to pacify people first in order to steal from them. There are ways of pacifying people by stealing from them.  

The debt-based consumerism of post-industrial societies at once made people complacent with gratification and transferred their wealth to elite corporations.  

By 2020, we had moved beyond the paradigms of production and consumption, even reproaching ourselves for overproducing and overconsuming. 

By 2020, it was the age abstraction.  

Lockdowns officially launched this new age in spectacular style. But quickly, lockdowns became unnecessary. 

For, it emerged that you do not need to lock people away from present reality first in order to circulate unbelievable ideas. 

If reality is sufficiently hostile and the ideas are sufficiently abstract, you can lock people away from present reality by the circulation of unbelievable ideas. 

When we shake our heads to one another about Climate, or submit to screening for the good of our Health, or question our Identity, we exempt ourselves from present reality as effectively as if we were under orders to Stay Home. 

And the powers that should not be can tell us anything they like, even that it’s sunny outside.

Wednesday, June 12, 2024

Powell Admits The Biden Admin Is "Overstating" Jobs

  When the people in charge start telling you things like these, you know the end is near. In fact national statistics such as inflation, jobs and employment have been cooked for over 30 years. It is important to understand that there are no "real" numbers for these economic variables which are complex by nature and difficult to represent accurately. And so there is naturally room for interpretation. Then you add hedonistic adjustments for inflation or birth/death adjustment for employment and your numbers take a life of their own, guaranteed to never exceed fixed limits. 

 It's little bit like genetic engineering but in a far more abstract way. Basic technologies were developed in the 1980s and 1990s and have been refined since with smothering and adjustments. It is not just Hollywood which is merging facts, reality and dreams skillfully!

Powell Admits The Biden Admin Is "Overstating" Jobs

Every first Friday of this year (here, here and here) we have spent hours deconstructing the glaring propaganda peddled by Biden's Labor Department, meant to show just one thing - how "strong" the economy is under the current administration - and exposing just how ugly the underlying labor data truly is. Last Friday's nonfarm payrolls was the most recent case in point: for those who didn't read our extended analysis titled "Inside The Most Ridiculous Jobs Report In Years", which dissected the laughable claim that the US added 272K payrolls (more than the highest estimate), here is what we found.

While the Establishment Survey did indeed report that 272K "jobs" were added, this number also included multiple job holders; stripping those out, we get that the actual number of "employed" workers plunged by 408K...

... which is also why the unemployment rate actually went up to 4.0% for the first time in over three years, despite this marvelous "increase" in payrolls. More importantly, it means that gap between the always upward sloping (and market moving) Establishment Survey - which counts the number of payrolls - and the flatlined Household Survey - which counts the number of actually employed workers - which hasn't made a new high since late 2023 and is back to where it was last summer, is now a stunning 9 million, the biggest on record.

But how is it possible that payrolls rose nearly 300K while overall employment tumbled by more than 400K? Well, this is where another propaganda gimmick so frequently abused by the BLS comes into play: the birth death adjustment, a statistical fudge factor that imputes job growth for any given month based on the entirely subjective assumption made by a group of pro-Biden bureaucrats of how many new businesses were created (or destroyed) in the US economy any given moment. Well, in May, the Birth/Death adjustment - recently exposed by none other than Bloomberg - "added" 231K payrolls to the pre-seasonally adjustment number; more astounding is that the Birth-Death imputation has resulted in 56% of all "payroll growth", or 1.9 million statistical "payrolls" in the past year, when according to the BLS a total of 3.4 million "payrolls" were crated.

There's more. While one can debate the quantitative aspects of the jobs report, there is no debating the qualitative: there it's one giant disaster: as we learned in May, whatever the actual number of payrolls (again, not jobs) added, what we know is that the trend of full-time to part-time worker conversions continues, with 625K full-time jobs lost in May, offset by 286K part-time jobs....

... which is hardly a new trend: in fact, over the past year, the US has lost 1.2 million full-time jobs, replaced with 1.5 million part-time jobs.

Finally, there is the data point which we first highlighted more than a year ago, and which has since emerged as the biggest political talking point involving the labor market: the fact that since 2018, the US has created exactly zero native-born jobs, and all the job growth has gone to foreign-born workers...

... and which as Standard Chartered confirmed last week, means almost entirely illegal aliens.

There is much more in our full discussion of the latest jobs report, but you get the idea: every so-called "strong" jobs report has been a disaster if one puts in even a little work to dig below the pristine, if fake, surface. And while we expected this charade to continue indefinitely, and certainly at least until the November election, at which point suddenly all the truth about the ugly labor market would be revealed to usher in the new president amid an economic crisis, we were shocked when none other than the Fed chair admitted today that the Biden admin was rigging jobs data.

In response to a question from a Bloomberg journalist during the post-FOMC presser, asking the Fed chair to comment on the state of the labor market, the Fed Chair said that two years ago the labor market was "overheated" and has since gotten back to "normal", largely thanks to "supply from to immigration" - translation: illegal aliens have been the main reasons for the increase in employment and the drop in wages and thus, overall inflation, which as we discussed recently, is the narrative that is being pushed out to mitigate demands by most Americans to halt illegal immigration.

Where things got very interesting, however, is when Powell was discussing the demand-side of the labor market: here, he addressed the dropping quits level, the decline in job openings and wages, but more importantly, the rising unemployment rate - from 3.4% to 4.0% which clearly goes against the narrative of red hot payrolls -  all of which the Fed chair summarized as strong job creation, yet caveated by saying that "there is an argument that [payrolls] may be a bit overstated."

Note: he didn't say "understated" because the "-stating" always goes in just one direction: the one that makes the resident of the White House look good.

In other words, the jobs - like so many things about this Potemkin economy - are a lie, and while Powell immediately realized what he had said, and tried to couch it by adding that payrolls are "still strong", suddenly the entire narrative of a strong labor market imploded in front of our eyes, because if the Biden admin will lie about a "bit" of the jobs report, it will lie about any part of it.

And, as we have shown above and every month this year, lie is precisely what the Biden administration has been doing, month after month, year after year.

And the biggest stunner, as Edward Snowden put it so eloquently, is that he's "not sure I've ever seen the chairman of the Federal Reserve publicly accuse the White House of cooking the books on employment numbers, but here we are."

We couldn't have said it better ourselves.

The Achilles Heel Of The Fiat Money System

  This is one of the major points I have been making over the years: A fiat money system necessarily will destroy democracy. There is no other way possible.

Authored by Thorsten Polleit via The Mises Institute,

The fiat money system will not disappear just like that. Any expectations or hopes to that end should be tempered. Yes, the fiat money system could collapse; yet there is a significant likelihood it will persist longer than most people might think. This prolonged existence may come at a cost: a fascist state encroachment on the freedoms of citizens and entrepreneurs would be more profound than most people realize.

Much ink has been spilt about the impending collapse of the international fiat money system. It is a debate that naturally gains momentum in times of crisis—as witnessed in the aftermath of the 2008/9 global financial market debacle or the politically dictated global lockdown crash of 2020/21.

At the same time, however, it is entirely justified to harbor significant concerns regarding the fiat money system. After all, it is plagued by blatant economic and ethical defects.

Are you wondering about the essence of fiat money? Let’s break it down into three characteristics:

  • State-sponsored central banks wield a monopoly over the production of fiat central bank money. Upon obtaining fiat central bank money, commercial banks are allowed to generate their own money, known as fiat commercial bank money.

  • Fiat money is typically created through lending without the backing of real savings. It is essentially created out of thin air (or ex nihilo, as it is called in Latin).

  • Fiat money predominantly exists in dematerialized form. While it may manifest as colorful printed pieces of paper, its primary existence resides in digital entries on computer systems, represented by bits and bytes.

Whether we’re talking about the United States dollar, euro, Chinese renminbi, Japanese yen, British pound, or Swiss franc, they are all fiat money. We know from monetary theory that fiat money is not “natural” or “innocent.” Unlike moneys emerging from voluntary agreements in the free marketplace, fiat money was introduced through state intervention—involving coercion and violence—leading to many negative effects.

Fiat money is inherently inflationary, gradually losing its purchasing power over time. This phenomenon disproportionately benefits a select few at the expense of the broader population.

Moreover, fiat money causes economic instability by perpetuating cycles of boom and bust that disrupt market equilibria and create societal inequalities. It drives excessive indebtedness within economies and fuels the unchecked expansion of the state, often at the expense of citizens’ and companies’ freedoms.

Last, but not least, fiat money is dishonest money, and engaging with fiat money daily erodes the morals and values of the people involved in its circulation. However, despite these considerable drawbacks, once fiat money has been put into circulation, it is here to stay; it won’t disappear just like that. Why?

Fiat money fosters what I have previously described as “collective corruption,” wherein many people become proverbially ensnared by the structures that fiat money establishes, fostering dependency and entrenching its influence. Consider this: fiat money acts as a catalyst for the expansion of the state, making it bigger and more powerful. Companies receive new orders from the state, prompting adjustments in production and employment to meet artificial demand.

Or consider: people keep their life savings in fiat money. They invest, directly or indirectly, in government bonds and bank debentures and maintain time and savings deposits.

Gradually, people become profoundly reliant on the perpetuation of the fiat money system, consenting to nearly any measure proposed by the state (and the special interest groups taking advantage of it) to keep the fiat money system going.

Yet, akin to Achilles’ heel in Greek mythology, fiat money has a crucial vulnerability. In Homer’s epic Iliad, Hector meets his demise at the hands of Achilles. In retaliation, Hector’s brother Paris strikes Achilles with a poisoned arrow, targeting his vulnerable heel and ultimately leading to the downfall of the seemingly invincible warrior.

The Achilles’ heel of the fiat money system lies in its dependence on the demand for money. However, what does this demand for money signify? Essentially, it reflects people’s desire to hold money, influenced by a multitude of factors.

For instance, people tend to maintain money balances relative to their income. As income rises, so does the desire to hold money. The demand for money typically diminishes when interest rates rise. This is because holding onto money entails opportunity costs when higher returns could be earned through, say, bank deposits and bonds.

History demonstrates that the demand for money remains relatively steady when there is a high level of trust in the currency, meaning people are not worried that the purchasing power of their money will decline or be destroyed. Given this insight, it’s clear how states and their central banks seek to handle the fiat money system in their favor. Their primary strategy involves creating illusions and deceiving the populace to maintain control and influence.

For instance, people are often fed the narrative that inflation of 2 percent equates to “stable money”—a claim that is, of course, inherently false. In reality, a 2-percent inflation rate destroys the purchasing power of money by 2 percent every year. Furthermore, statistical goods price indices are often cobbled together to present a lower inflation rate than experienced in the market. This manipulation serves to downplay the true extent of monetary debasement.

Additionally, central bank officials and mainstream economists frequently attribute inflation to various external factors, such as alleged price gouging by greedy businesses or supply disruptions by oil-producing nations, while vehemently rejecting the notion that inflation is a monetary phenomenon resulting from the central banks’ fiat money printing. In fact, central banks are determined to avert a permanent drop in the demand for money at all costs. When the demand for money falls, people tend to exchange their money for alternative assets, such as stocks, real estate, precious metals, etc.

Consequently, the prices of these goods surge—further exacerbating the decline in the demand for money. In extreme scenarios, this can trigger a widespread flight from money, predicting a collapse of the financial and economic system. To maintain the fiat money system, central banks meticulously adjust the level of inflation to, firstly, ensure a gradual and ongoing erosion of the value of money, subtle enough to either go unnoticed or be reluctantly accepted.

Secondly, this controlled inflationary pressure acts as a defense against episodes of goods price deflation, which have the potential to make the fiat money system come crashing down. Lastly, central banks aim to prevent situations where inflation spirals out of control, where hyperinflation destroys people’s demand of fiat money entirely.

Is this delicate balancing act sustainable? Recent decades seem to suggest so. Despite numerous crises and the chronic erosion of purchasing power, the demand for money in many economies have remained relatively stable. However, can the balancing act succeed in the long-term? Probably not. The primary concern is the enormous accumulation of debt within the fiat money system, eventually reaching a tipping point of unsustainability.

At that juncture, people will be confronted with the question: Should the fiat money system collapse under the weight of deflationary pressures, or should the outstanding debt be financed by creating new money? Unfortunately, history suggests that in a time of “existential crises,” people consider expanding the money supply as the lesser of two evils.

Once initiated, a deliberate inflation policy becomes incredibly challenging to contain, let alone reverse. It has the propensity to spiral out of control, potentially culminating in high inflation or even hyperinflation, thereby precipitating a collapse in the demand for money and eroding the very foundations of the fiat money system.

However, in such a dire scenario, one must reckon with the state’s determination to avert the demise of its fiat money regime at all costs. The state (as we know it today) can be expected to exhaust all available measures to safeguard the continuity of its monetary system.

Consider this: in response to a crisis, the state resorts to drastic measures, such as imposing price and capital controls and even nationalizing banks and large corporations, transforming the economy into a highly regulated command economy.

Under such circumstances, the state assumes unprecedented control over production, dictating what goods will be produced, how much, when, and by whom, even regulating who will be allowed to consume how much and when.

In other words, the economies end in a form of fascism. A bleak outcome indeed. However, it doesn’t have to be this way. There are ways out. Much like Achilles had a vulnerable heel in Homer’s Iliad, the fiat money system also possesses vulnerabilities that can be addressed.

To mitigate the damage caused by the fiat money system, or even dismantle it altogether, the first step must be targeting its Achilles’ heel, weakening the demand for fiat money. The less fiat money people demand, the smaller the damage inflicted by the fiat money system will be. However, how can this objective be accomplished?

First and foremost, it can be accomplished by educating the populace about all the significant harm perpetuated by the continued existence of fiat money and the consequences it has. This entails, as a first step, highlighting the adverse impacts it has on individuals and their communities and encouraging people to use fiat money for transactions rather than for savings.

In other words, this can be through discouraging investments in government bonds or time or savings deposits in banks while encouraging investments in tangible assets such as stocks, precious metals, land, and property. Further actions can include ceasing the support for governments or politicians who endorse the fiat money system and fail to take actions to dismantle it.

Ultimately, of course, it is crucial to inform people that sound money is indeed possible. This involves advocating for people’s freedom to choose their preferred money, whether it be gold, silver, bitcoin, or any other alternative.

The concept of a free market in money is easy to understand and, from a technical standpoint, quite easy to implement. By allowing individuals the autonomy to select their preferred currency, we effectively target the Achilles’ heel of the fiat money system, ultimately benefiting the vast majority of people.

The Imminent Collapse of the EU and Misinformation

  Yes the EU is heading for a wall, and then what if midnight rings much sooner as discussed in the previous article?

  Likewise, I haven't discussed much recently the tsunami of news concerning the ineffectiveness of the fight against Covid or the danger of the vaccines. Understanding the problems early was important, getting a late confirmation that we were right not so much.  

  In any case, the war for control will move quickly to another subject as this is indeed the rule of the game: change the game while it's being played, keep the enemy (us) destabilized by moving fast, use the shock doctrine to immobilize your opponent. Yes people are waking up as we saw recently with the EU elections, but they are too slow and uncoordinated and therefore ineffective. 

  The financial instabilities are heading for a climax during this second part of the year 2024. We can therefore expect "events" to take place and preempt consequences before they happen. Let's see. 

THE COLLAPSE OF THE EU

That’s in our view not only probable, but now imminent.

Take a look at this chart of unfunded pension entitlements in major European countries between 300% and 500% of GDP.

Mix this in with collapsing demographics and you’ve a recipe for debt disaster.

As the entire system collapses, those in power look to consolidate and hang onto power, choosing to ensure that dissenting views are censored.

Speaking of dissenting views being censored…

MISINFORMATION

I don’t know if you saw the news, but…

AstraZeneca withdraws Covid-19 vaccine worldwide, citing surplus of newer vaccines

With the formal withdrawal of the AstraZeneca vaccine, it’s appropriate to remind people of this double page spread in The Times from March 2021 that hailed the AstraZeneca vaccine as 100% effective.

But note the article highlighted bottom right.

"Academics back "BIZARRE" claim that jabs may kill"

Here it is:

The murderers behind it, including AstraZeneca CEO, Sarah Gilbert, receiving a standing ovation at Wimbledon as the sheeple clap their own poisoning. You can't make this up!

By the way, this is the same Wimbledon where social distancing was required and adhered to while lining up buying tickets and then of course everyone sat down next to each other. Mindless fools.

It can all be a tad depressing, but there’s always a bright side.

Certainly, if you’d been reading these missives back in the WuFlu hysteria, then you may well have steered clear of the… ahem… safe and effective “treatment,” and if that is the case, then whenever you’re feeling down just remember that over a trillion dollars (with a capital T) worth of propaganda never worked on you. Ain’t that something?

Serbia's President Vucic: “We are heading for a MAJOR CATASTROPHE"

   Beyond freedom, control of the Internet, Covid and the usual subjects we discuss on this blog, the one I mention almost every day recently is the risk of a nuclear war.

  Canadian Preper may be well informed but he is a "preper" so probably not the most reliable person on the subject. But here is the President of Serbia saying exactly the same thing in a far more moderate tone but with the same urgency. (The video in the link below is only 5 mn and well worth listening.)

  In a nutshell, the West and Russia are in a trap of their own making. If Russia loses the war, the country is dismantled and this is of course unthinkable for the Russian leadership. Conversely, if the West loses the war, it loses its prestige and the whole world financial system comes crashing down. (Not that it wouldn't otherwise, just a little faster.) This is also unthinkable to the Western elites, reason why they double down their bet every six months. 

  Where does this lead us? Unfortunately, there is absolutely nothing new about this. There is even an official name: Thucydides Trap (see Wikipedia) It has happened many times in the past. The only difference this time is that we're going to play the game with nuclear weapons. A game made famous for this one rule: The only way to win is not to play!

  We are playing and the countdown has therefore started...

https://www.theb2024/06/12/ the-train-has-left-the-station 


Tuesday, June 11, 2024

France and Russia Are Closer Than Ever to Open War (Video - 28mn)

  The reality is that France is being kicked out of Africa and there is a clear risk concerning the colonies. No wonder Macron is panicking. France is at the forefront and will be one of the first "victim" of BRICS. But then again what can the country do? Send soldiers it doesn't have to tame the natives, 19th Century's style? Difficult obviously. So the easy solution is to up the ante in Ukraine and join the Baltic micro nations in pushing NATO to war. The risk is that the strategy could succeed. But then what? Send the whole French army (Competent, deployable soldiers are estimated at 20,000!) to Ukraine? Madness! 

  The video below is well worth watching, especially the second part to understand what's going on in New Caledonia and the area around the South Pacific.


 

Monday, June 10, 2024

Dave Rubin Notices Something About the Trump Verdict No One Noticed (Video - 13mn)

  Some powerful ideas from Dave Rubin talking to Russell Brand. Great analysis although I find it personally painful to see the demise of the US in real time.


 

France Seeks 'Direct' Entry Into Ukraine War: Kremlin

  The weakness of France makes the country extremely dangerous with just the wrong mix of insufficient power and remembrance of past "grandeur" to be preserved at all costs, just like the UK.

  Fortunately in both cases, the electorate is saying NO to delusional politicians. 

  Unfortunately the risk of a wider conflict will not fade away. The fundamental cause of economic decline and risk of financial collapse remains and will eventually oblige Europe to do "something". We are entering a high stakes period.

France Seeks 'Direct' Entry Into Ukraine War: Kremlin

The Kremlin says that NATO member France is fast becoming a 'direct' participant in the Ukraine war, which threatens to drastically inflame tensions and escalate the conflict further, possibly beyond Ukraine's borders.

French President Emmanuel Macron on Friday committed to transferring Mirage fighter jets to Kiev, as well as set up a French training program for Ukrainian pilots. He said this while Zelensky and Biden were in France commemorating and attending D-Day 80th anniversary events. Macron went so far as to repeat his call for Western countries to be willing to send troops directly into Ukraine.

Kremlin spokesman Dmitry Peskov reacted as follows: "Macron demonstrates absolute support for the Kyiv regime and declares readiness for France's direct participation in the military conflict."

Via Reuters

"We consider these statements to be very, very provocative, inflaming tensions on the continent and not conducive to anything positive," Peskov said Friday on the sidelines of the Saint Petersburg International Economic Forum.

Macron has pressed ahead undeterred despite repeat Moscow warnings, as The Washington Post observed

The comment, made in a news conference with Ukrainian President Volodymyr Zelensky, is the latest sign that France and other allies may now be willing to put NATO country troops on Ukrainian soil — an idea that some allies, including the United States, have long considered potentially escalatory.

Macron on Friday called Ukraine’s request for in-country training “legitimate” and said several partners have “already given their agreement.”

“We are going to use the coming days to finalize a coalition, as broad as possible,” he said.

Some reports have claimed President Biden has talked Macron out of putting Western boots on the ground in Ukraine; however, Biden's message appears to more simply be that this action can't be taken without consensus withing NATO.

Indeed such a plan would run the risk of triggering NATO's Article 5 common defense treaty, and see nuclear-armed confrontation between Russia and the Western alliance.

The below recent analysis by Responsible Statecraft shows why Macron's plan to get allies on board at this sensitive moment politically are likely doomed to failure [emphasis ZH]...

* * *

Macron stated that Russia must not “win” the war; but, like all the other leaders of NATO, he has never defined what he means by this. Perhaps he means fighting Russia to a standstill followed by a compromise peace. In private conversations, however, French officials simply echo the U.S. line that only the Ukrainians can make peace — and the Ukrainian terms for peace require not a stalemate, but the complete military defeat of Russia.

The need for Europe to develop a capacity for self-defense should be obvious. Having nailed themselves to the Biden administration, European governments have very belatedly woken up to the realization that the next president may well be Donald Trump, and that the U.S. commitment to Europe may radically diminish. Indeed, given U.S. problems at home and in the Middle East, plus growing tension with China, this commitment is likely to diminish in future whether or not Trump is elected.

However, Macron’s hope that the supposed threat from Russia will prompt Europe to unite militarily behind French leadership vastly exaggerates both French military power and European willingness to follow France’s lead. After years of budget cuts, the French army is far too weak to intervene in Ukraine without full U.S. support. When in 2011 President Nicolas Sarkozy of France tried to take the lead in the “humanitarian intervention” in Libya, within a very few weeks he was begging an unwilling President Obama to take over the operation on behalf of NATO, for fear of a humiliating Anglo-French failure.

In terms of appealing to other European countries, Macron’s hawkish stance on Ukraine is targeting East European partners. These governments, however, are precisely the countries with the most deeply-rooted determination to oppose European strategic autonomy and maintain until the bitter end the closest possible alliance with the United States.

Saturday, June 8, 2024

A Substantial Chance Of A Major Financial Collapse & The End Of Offshored Industrialization

  This article reminds me of a funny Canadian joke of a decade ago where for the weather forecast they predict -10C for the next 9 days and +1C for the 10th day to keep hope alive! 

  Here, it's the exact opposite, they predict "A Substantial Chance Of A Major Financial Collapse" (in the future) whereas the numbers show that it's already happening in slow motion. Declining energy consumption cannot be interpreted any other way: The West is past its peak and energy is now too expensive to be used effectively. (Declining return on investment) Cheap imports from China mostly, have been hiding this fact for almost a decade but no longer now that the decline is accelerating in absolute terms.       

  I can still remember British historians highlighting in the 1980s the incontrovertible fact that the West was already in decline then, something which was still far from obvious at the time. Later understanding that social and economic decline are tightly intertwined and seeing in Japan the ever so slow slide downward post bubble, the process became clearer. 

  A financial collapse WILL happen. It is the unavoidable consequence of excess money printing and more generally, fiat currency, meaning based on no assets whatsoever. The money is creating liabilities but not enough assets to cancel the debt which will therefore have to be forfeited. Monetary authorities understand this perfectly and will therefore push toward a conflict to avoid taking responsibility for the crash. With this in mind, the tensions with Russia, Iran and China are easier to understand. No compromise will be accepted. Surrender and be quartered the Iraq way or accept a conflict which the West needs to justify restructuring of their financial system. There is simply no viable alternative to this dark scenario.

Authored by Gail Tverberg via Our Finite World,

Moving industrialization offshore can look like a good idea at first. But as fossil fuel energy supplies deplete, this strategy works less well. Countries doing the mining and manufacturing may be less interested in trading. Also, the broken supply lines of 2020 and 2021 showed that transferring major industries offshore could lead to empty shelves in stores, plus unhappy customers.

The United States started moving industry offshore in 1974 (Figure 1) in response to spiking oil prices in 1973-1974 (Figure 2).

Figure 1. US industrial energy consumption per capita, divided among fossil fuels, biomass, and electricity, based on data from the US Energy Information Administration (EIA). All energy types, including electricity, are measured their capacity to generate heat. This is the approach used by the EIA, the IEA, and most researchers.

Industry is based on the use of fossil fuels. Electricity also plays a role, but it is more like the icing on the cake than the basis of industrial production. Industry is polluting in many ways, so it was an “easy sell” to move industry offshore. But now the United States is realizing that it needs to re-industrialize. At the same time, we are being told about the need to transition the entire economy to electricity to prevent climate change.

In this post, I will try to explain the situation–how fossil fuel prices have spiked many times, including 1973-1974 (oil) and more recently (coal in 2022). I will also discuss the key role fossil fuels play. Because of the key role of fossil fuels, a reduction in per-capita fossil fuel consumption likely leads to a transition to fewer goods and services, on average, per person. A transition to all electricity does not seem to be feasible. Instead, we seem to be headed for increased geopolitical conflict and the possibility of a financial crash seems greater.

[1] When fossil fuel supplies become constrained, prices tend to spike to high levels, and then fall back again.

Economists and energy analysts have tended to assume that fossil fuel prices would rise to very high levels, allowing extraction of huge amounts of difficult-to-extract fossil fuels. For example, the International Energy Agency (IEA) in the past has shown forecasts of future oil production assuming that inflation-adjusted oil prices will rise to $300 per barrel.

Instead of rising to a very high level, fossil fuel prices tend to spike because there is a two-way contest between the price the consumers can afford and the price the sellers need to keep reinvesting in new fields to keep fossil fuel supplies increasing. Prices oscillate back and forth, with neither buyers nor sellers finding themselves very happy with the situation. The current price of the benchmark, Brent oil, is $81.

[2] Historical data shows spiking oil and coal prices.

Figure 2. World oil prices, adjusted to the US 2022 price level, based on data of the 2023 Statistical Review of World Energy, prepared by the Energy Institute.

When world oil prices started to spike in the 1973-1974 period, the US started to move its industrial production offshore (Figure 1). The very low inflation-adjusted prices that prevailed up until 1972 no longer held. Manufacturing costs climbed higher. Consumers wanted smaller, more fuel-efficient vehicles, and such cars were already being manufactured both in Europe and in Japan. Importing these cars made sense.

More recently, coal prices have begun to spike. Coal prices vary by location, but the general patterns are similar for the types of coal shown.

Figure 3. Coal prices per ton, at a few sample locations, based on data shown in the 2023 Statistical Review of World Energy prepared by the Energy Institute. Prices have not been adjusted for inflation.

Before China joined the World Trade Organization (WTO) in 2001, coal prices tended to be below $50 per ton (figure 3). At that price, coal was a very inexpensive fuel for making steel and concrete, and for many other industrial uses.

Figure 4. World coal consumption per capita, based on data of the 2023 Statistical Review of World Energy prepared by the Energy Institute, except for 2023, which is based on an estimate by the IEA.

After China joined the WTO, China’s coal consumption soared (Figure 4), allowing it to industrialize. Figure 3 shows that the extra demand initially pushed coal prices up a little. By 2022, coal prices had soared. At present, coal prices are part-way back down, perhaps partly because higher interest rates are dampening world demand for coal.

Natural gas prices also soared in 2022, at the same time as coal prices. Both coal and natural gas are fuels that are burned to produce electricity. When the coal supply is constrained, utilities will try to purchase more electricity produced by burning natural gas. However, it is difficult to store much natural gas for future use. Thus, a shortage of internationally traded coal can simultaneously lead to a shortage of internationally traded natural gas.

Having oil, coal, and natural gas prices spiking at the same time leads to inflation and to many unhappy citizens.

[3] The 1997 Kyoto Protocol encouraged the trend toward moving industry to lower-cost countries.

In Figure 1, I show a dotted line at 1997. At that time, an international treaty stating that the participating countries would limit their own CO2 emissions attracted a lot of attention. An easy way to limit CO2 emissions was by moving industry overseas. Even though the US did not sign the treaty until later, the treaty gave the US a reason to move industry overseas. We can see from Figure 1 that US industrialization, as measured by the energy per capita required to industrialize, began to fall even more rapidly after 1997.

[4] There were many reasons besides the Kyoto Protocol why Advanced Economies would want to move industry overseas.

There were many reasons to move industry overseas besides spiking oil prices and concern over CO2 levels. With such a change, customers in the US (and European countries making a similar change) gained access to lower-cost goods and services. With the money the customers could save, they were able to buy more discretionary goods and services, which helped to ramp up local economies.

Also, industry tends to be polluting. Smog tends to be problem if coal is burned, or if diesel with high sulfur content is burned. Mining tends to produce a lot of toxic waste. Moving this pollution offshore to poorer countries would solve the pollution problem without the high cost of attempting to capture this pollution and properly store it.

Furthermore, business-owners in the United States could sense the opportunity to grow to be truly international in size if they moved much of their industry overseas.

[5] All the globalization and moving of industry overseas had a downside: more wage and wealth disparity.

In a matter of a few years, the economy changed to provide fewer high-paying factory jobs in the United States. Increasingly, those without advanced education found it difficult to provide an adequate living for their families. The high incomes were disproportionately going to highly educated workers and the owners of capital goods (Figure 5).

Figure 5. U. S. Income Shares of Top 1% and Top 0.1%, Wikipedia exhibit by Piketty and Saez.

[6] Part of what caused the growing wage and wealth disparities in Figure 5 was the growing industrialization of China (Figure 6).

China, with its growing industrialization, could outcompete whole industries, such as furniture-making and garment-making, leaving US workers to find lower-paid jobs in the service sector. Similar outcomes unfolded in the EU and Japan, as industrialization started moving to different parts of the world.

Figure 6. Industrial production in 2015 US$, for the United States, the EU, Japan, and China, based on World Bank Industrial Production (including construction) data. These amounts are not per capita.

[7] The indirect impact of the Kyoto Protocol was to move CO2 emissions slightly away from the Advanced Nations. Overall, CO2 emissions rose.

Figure 7. Carbon dioxide emissions from energy utilization, based on data of the 2023 Statistical Review of World Energy, prepared by the Energy Institute. These amounts are not per capita.

Anyone who expected that the 1997 Kyoto Protocol would reduce world CO2 emissions would have been disappointed.

[8] The direct use of fossil fuels plays a far more important role in the economy than we have ever been taught.

Thanks to the direct use of fossil fuels, the world can have paved roads, bridges made of steel, and electricity transmission lines. It can have concrete. It can have pharmaceutical products, herbicides, and insecticides. Many of these benefits come from the chemical properties of fossil fuels. Electricity, by itself, could never provide these products since it has been stripped of the chemical benefits of fossil fuels. Electricity is also difficult to store.

With the benefit of fossil fuels, the world can also have high-quality steel, with precisely the composition desired by those making it. With only electricity, it is possible to use electric arc furnaces to recycle used steel, but such steel is limited both in quantity and quality. US production of steel amounts to 5% of world supply (primarily using electric arc furnaces), while China’s production (mostly using coal) amounts to 50% of world supply.

I highly recommend reading the article, Trapped in the Iron Age, by Kris De Decker. He explains that the world uses an enormous amount of steel, but most of it is hidden in places we can’t see. Today, with the US’s limited steel-making capability, the US needs to import most of its steel, including steel pipes from China to drill its oil wells. We cannot see how dependent we have become on other countries for our basic steel needs.

China and India have both based their recent growth primarily on rising coal consumption. This is what has kept world CO2 emissions high. The US is now exporting coal to these countries.

[9] Citizens of Advanced Economies are easily confused about the importance of fossil fuel use because they have never been taught about the subject and because their worldview is distorted by the narrow view they see from within their homes and offices.

Figure 8. Electricity consumption as a percentage of total energy consumption by US sector, based on the data of the US EIA. Amounts are through 2023.

Figure 8 shows that the sector with the highest share of electricity use is the commercial sector. This includes uses such as stores, offices, and hospitals. The most visible energy use is lighting and operating computers, which gives the perception that electricity is the greatest energy use. But these businesses also need to be heated, and heat is often produced by burning natural gas directly. Businesses also need back-up for their electrical systems. Such back-up is typically provided by diesel-powered generators.

Residential usage is similar. It is easy to see the use of electricity, but heat is generally needed during winter. This is often provided by natural gas or propane. Natural gas is also often used in hot water heaters, stoves, and clothes dryers. Occasionally, wood is used to heat homes; this would go into the non-electricity portion, as well.

The thing that most people do not realize is that industrial use and transportation use are extremely large sectors of the economy (Figure 9), and these sectors are very low consumers of electricity (Figure 8). Also, if the US and Europe were to re-industrialize to produce more of our manufactured goods, our industrial sectors would need to be much larger than they are today.

Figure 9. US Energy Consumption per capita by sector based on data of the US EIA. Amounts are through 2023.

In recent years, electrical consumption as a percentage of total energy consumption for the industrial sector has averaged about 13% of the total (Figure 9). Industries typically need high heat levels; such heat can usually be achieved at lowest cost by burning fossil fuels directly. Wikipedia claims, “Electric arc steelmaking is only economical where there is plentiful, reliable electricity, with a well-developed electrical grid.” An electric grid, powered only by intermittent electricity from wind turbines and solar panels, would not qualify.

In Figure 8, electricity consumption as a percentage of total energy consumption for the US transportation sector rounds to 0%, for every year. Even the amount of biomass (ethanol and biodiesel) used by the transportation sector doesn’t have much of an impact, as shown in Figure 10.

Figure 10. US transportation energy by type through 2023, based on data of the US EIA. Biomass includes ethanol and any biofuels made to substitute for diesel.

A major issue is that transportation is a broad sector, including trucks, trains, planes, and boats, in addition to private passenger autos. Also, I expect that the only electricity that would be considered in the transportation energy calculation would be electricity purchased from an away-from-home charging facility. Electricity used when charging at home would likely be part of residential electricity consumption.

[10] The narrative saying that we can transition to an electricity-only economy, powered by intermittent wind and solar electricity, has major holes in it.

One major issue is that the pricing of wind and solar tends to drive out other electricity providers, particularly nuclear. Intermittent wind and solar are given “priority” when they are available. This leads to very low or negative prices for other electricity providers. Nuclear is particularly affected because it cannot ramp up and down, in response to prices that are far below its cost of production.

Nuclear is a far more stable source of electricity than either wind or solar, and it is also a low-carbon source. As a result, economies end up worse off, in terms of electricity supply per capita, and in stability of available supply, when wind and solar are added.

Figure 11. US per capita electricity generation based on data of the US Energy Information Administration. (Amounts are through 2023.)
Figure 12. Electricity generation per capita for the European Union based on data of the 2023 Statistical Review of World Energy, prepared by the Energy Institute. Amounts are through 2022.

Another issue is that wind turbines and solar panels are made with fossil fuels and repaired using fossil fuels. Without fossil fuels, we cannot maintain electricity transmission lines and roads. Thus, wind turbines and solar panels are as much a part of the fossil fuel system as hydroelectric electricity and electricity made from coal or natural gas.

Also, as discussed above, only a small share of the economy is today operated using electricity. The IEA says that 20% of 2023 world energy supply comes from electricity. The amounts I calculated as “Overall” in Figure 8 indicate an electricity share of 18%, which is a bit less than the IEA is indicating for the world. Figure 8 shows an early upward trend in this ratio, but no upward trend since 2012. Fossil fuels are being used today because they have chemical characteristics that are needed or because they provide the energy services required in a less expensive manner than electricity.

Even in the early days of the Industrial Revolution, wind and waterpower provided only a small portion of the total energy supply. Coal provided the heat energy that both industry and residences needed, inexpensively. Wind and waterpower were not well adapted to providing heat energy when needed.

Figure 13. Annual energy consumption per head (megajoules) in England and Wales 1561-70 to 1850-9 and in Italy 1861-70. Figure by Wrigley, in Energy and the English Industrial Revolution.

If we are short of inexpensive-to-extract fossil fuels, relative to today’s large population, we certainly could use some new inexpensive source of stable electricity supply. But this would not solve all our energy problems–we would still need a substantial amount of fossil fuel supplies to grow our food and keep our roads repaired. But if a new type of electricity production could reduce the demand for fossil fuels, it would make a larger quantity of fossil fuels available for other purposes.

[11] Practically everyone would like a happily-ever-after ending, so it is easy for politicians, educators, and the news media to put together overly optimistic versions of the future.

The narrative that CO2 is the world’s biggest enemy, so we need to move quickly away from fossil fuels, has received a great deal of publicity recently, but it is problematic from two different points of view:

(a) The feasibility of moving away from fossil fuels without killing off a very major portion of the world’s population seems to be virtually zero. The world economy is a dissipative structure in physics terms. It needs energy of the right kinds to “dissipate,” just as humans are dissipative structures and need food to dissipate (digest). Humans cannot live on lettuce alone, or practically any other foodstuff by itself. We need a “portfolio” of foods, adapted to our bodies’ needs. The economy is similar. It cannot operate only on electricity, any more than humans can live only on high-priced icing for cakes.

(b) The narrative about the importance of CO2 emissions with respect to climate change is quite possibly exaggerated. There are many other things that would seem to be at least as likely to cause short-term shifts in temperatures:

  • Lack of global dimming caused by less coal dust and reduced sulfur compounds in the atmosphere; in other words, reducing smog tends to raise temperatures.
  • Small changes in the Earth’s orbit
  • Changes in solar activity
  • Changes related to volcanic eruptions
  • Changes related to shifts in the magnetic north and south poles

Politicians, educators, and the news media would all like a narrative that can explain the need for moving away from fossil fuels, rather than admit that “our easy to extract fossil fuel supply is running out.” The climate change narrative has been an easy approach to highlight, since clearly the climate is changing. It also provides the view that somehow we will be able to fix the problem if we take it seriously enough.

[12] Today, we are in a period of conflict among nations, indirectly related to not having access to enough fossil fuels for a world population of 8 billion. There is also a significant chance of financial collapse.

In my opinion, today’s world is a little like the “Roaring 20s” that came shortly before a major stock market crash in 1929 and the Great Depression of the 1930s. After the Great Depression, the world entered World War II. There is huge wage and wealth disparity; energy supplies per capita are stretched.

Today, NATO and Russia are fighting a proxy war in Ukraine. Russia is a major fossil fuel producer; it would like to be paid more for the energy products it sells. Russia could perhaps get better prices by selling oil and other energy products to Asian customers instead of its current customer mix. At the same time, the US claims primary leadership (hegemony) in the world but, in fact, it needs to import many goods from overseas. It even needs supply lines from around the world for weapons being sent to Ukraine. The Ukraine conflict is not going well for the US.

I do not know how this will work out. I am hoping that there will not be a World War III, in the same way that there was a World War II. All countries are terribly dependent on each other, even though there are not enough fossil fuels to go around. Perhaps countries will try to sabotage one another, using modern techniques, such as cyber warfare.

I think that there is a substantial chance of a major financial collapse in the next few years. The level of debt is very high now. A major recession, with lots of collapsing debt, seems to be a strong possibility.

[13] A presentation I recently gave to a group of actuaries that touches on several of these issues, plus others.

My presentation can be found at this link: Beware: The Economy Is Beginning to Shrink

OpenAI o3 Might Just Break the Internet (Video - 8mn)

  A catchy tittle but in fact just a translation of the previous video without the jargon. In other words: AGI is here!