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THIS WEEK’S EDITORIAL
CHINA LECTURES THE US: The Chinese Ambassador to the US lectured the Americans at the Aspen Security Forum in Colorado last week. He said the ongoing conflict in Ukraine was “spilling over” and causing economic downturns, a migrant crisis plus energy and food shortages.
He called for an immediate ceasefire and a resumption of peace talks. He suggested that each participant “sit down, calm down to find a way out of the dilemma”. “Only by doing so can we achieve peace and can we restore the security in Europe which should be stable, should be comprehensive, should be balanced, effective and sustainable,” he said.
TESLA DUMPS BITCOIN HOLDINGS: Tesla has sold 75% of its holdings in Bitcoin. They have thus increased the Cash on their Balance Sheet by almost a Billion Dollars — US$936 Million. They had invested $1.5 Billion into Bitcoin in early 2021. This liquidation suggests that they lost up to half a $ Billion on the investment and maybe more. This is a perfect example of why a car maker should avoid becoming a market speculator. Stick to the knitting is the phrase that springs to mind. Bitcoin has fallen from $67,566 on 11th August last year to $18,763 on the 1st of July, a fall of 72% in price.
VACLAV SMIL — NET ZERO CARBON AN IMPOSSIBLE TASK: Professor Vaclav Smil was recently interviewed on YouTube. He is a super expert in energy systems, having written over 40 books on the subject. He said that 83% of our global primary energy supply is now based on Fossil Fuels/Hydrocarbons. This is changing very slowly. In the last 20 years, the world has reduced its dependence on Fossil Fuels by only 5%. Germany has been more determined to transition away from Fossil Fuels but has only reduced its overall dependence on that source of energy by 8% in that time frame.
Smil states boldly that we cannot achieve Zero Hydrocarbons by 2050. It is an impossible task. 2050 is just 30 more years away. It is clear that we cannot possibly move from 83% to Zero in such a relatively short time frame. So he then addresses the “target” of Net Zero Carbon Dioxide Emissions by 2050. To achieve that goal, effective sequestration of huge amounts of carbon dioxide deep below the Earth’s surface would be needed. But, so far, we have managed to sequester only 0.1% of carbon dioxide emissions underground. That is an incredibly small amount. He cannot see how that number can be increased significantly over the next 30 years.
He advises people to use less energy. However, consumption spending uses 70% of the energy supply. And who wants to consume less?
Our political leaders talk a great deal about Net Zero Emissions but the facts show that they are not serious about their “targets”. They lie about it. That is obvious. Liars abound in politics, unfortunately. 196 nations have signed the Paris Agreement on limiting global warming to less than 1.5 degrees Celsius, adopted in 2015. All of those nations cannot possibly achieve the goals they have agreed to in regard to Net Zero. Politicians tell lies for a living. That is the lesson here.
RUSSIA BUILDS NUCLEAR POWER IN EGYPT: Last week, BOOM pointed out that Egypt is considering an application to join the BRICS organization of nations which includes Brazil, Russia, India, China and South Africa. A recent report confirms
Egypt’s intentions to have a long and cooperative relationship with Russia. It concerns the Russian state-owned energy giant Rosatom which has begun construction of the El Dabaa nuclear power plant in the North West of Egypt. The Russian Government is providing 8% of the finance as a loan — which will clearly not be denominated in US Dollars. Rosatom will also be supplying nuclear fuel for the plant for its entire 60-year design lifetime and providing maintenance and repairs for ten years after the launch of each reactor. There are four reactors being built. The cost is US $30 Billion.
RUSSIA UKRAINE DEAL ON GRAINS
On the war front, there is good news at last. Russia and Ukraine have signed a deal in Turkey which will allow Ukrainian grain exports to travel through the Black Sea safely. BOOM sees this deal as the beginning of the end of the war. The United Nations was involved in arranging the deal and Turkey was a major proponent. The Secretary-General of the UN, Antonio Guterres was present at the signing ceremony and said “the deal will help avoid a food shortage catastrophe for millions worldwide.”
RUSSIA SLASHES KEY INTEREST RATE — CPI INFLATION FALLING FAST: Meanwhile, Russia slashed its key interest rate by 1.5% as CPI inflation is now falling. The central bank indicated that further rate reductions may follow in the second half of the year. They dramatically increased the interest rate to 20% in February. The key rate is now at just 8%.
COVID CASES SURGE IN HIGHLY VACCINATED NATIONS: New Zealand and Australia have extremely high Covid vaccination numbers. However, they now have the highest rates of Covid Cases per Million on the planet. They also have the highest Deaths per Million numbers from Covid. New Zealand’s Covid death numbers are twice those of Australia. Jacinda Ardern’s reign of terror is over. She cannot possibly survive another general election. Many New Zealanders will be happy to see her gone. BOOM predicts that her next role will be a WEF appointment.
CPI INFLATION PEAK: The US prices of Wheat, Corn, Sugar, Gasoline, West Texas Crude Oil, Lumber and Copper on the US commodities markets continue to demonstrate technical weakness after falling dramatically from mid-June. This can only mean that demand is rapidly declining in the US economy. Thus, we can expect CPI inflation in the US will soon follow and collapse as the American economy slows or contracts in the last 6 months of the year.
US stock prices and bond prices are responding positively. The Dow Jones Industrial Index is up over 6% since mid-June. The Nasdaq Index has risen by 13 % in the same time frame and the S & P 500 Index is up by 8%.
In the Bond markets, Munis have continued rising after hitting a double bottom in mid-May and mid-June. Investment grade corporate bonds are rising steadily also since mid-June. So called Junk Bonds are rising in price after bottoming out in mid and late June. Long dated Sovereign Treasuries are rising in price while Treasuries in the 1 – 3 year range are following the exact same pattern. Even emerging market bonds are showing some signs of buying interest.
Inverse ETFs on the US Bond market are all looking very weak technically and heading towards critical support levels. If those levels are broken, look out below (!). Some Inverse ETF’s that cover the Junk market are already in a state of collapse.
It is looking like Mr Powell listened to BOOM last week and has quietly let the market know that significant interest rate rises are now off the table. Thanks, Jay. The European Central Bank got the message and made a token key interest rate rise from zero to 0.5%. BOOM expects that to be perhaps the last of their “inflation taming” effort. Now, the next job is for Jay to inform the White House and the State Department that the war in Ukraine is over.
RUSSIA AND SAUDI ARABIA TALKING: Saudi Crown Prince Mohammed bin Salman and Russian President Vladimir Putin spoke to each other last Thursday. Apparently, they had a discussion about their friendly relations and their cooperation in regard to oil production targets.
They also discussed the situation in the Ukraine and in Syria where the US continues to maintain a military presence in order to harvest oil from the oil fields in the East of Syria. It looks like Uncle Joe did not make a big impression when he visited Saudi Arabia on the previous Friday. Rumors of Saudi Arabia joining the BRICS group of nations continue.
MARTY MACLARY FED UP: Last week, BOOM mentioned that Professor Marty Maclary, Professor of Public Health at Johns Hopkins University had spoken out strongly against US Government Covid vaccine policies. Readers should watch him in this short video. He says — “It’s like a horror movie” https://rumble.com/v1cl62f-dr.-marty-makary-says-cdc-and-nih-employees-are-leaving-in-droves.html?mref=6zof&mrefc=4
In economics, things work until they don’t. Until next week. Make your own conclusions, do your own research. BOOM does not offer investment advice. SUBSCRIBE – FREE AT BOOM: http://boomfinanceandeconomics.com/#/
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BANKS DON’T TAKE DEPOSITS, THEY BORROW YOUR MONEY: LOANS CREATE DEPOSITS — that is how almost all new money is created in the economy (by commercial banks making loans). https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy
Watch this short 15 minutes video and learn as Professor Richard Werner brilliantly explains how global banking systems really work. https://www.youtube.com/watch?v=EnC1UlnFLyI
AND Watch for 4 minutes, this Bank of England explanation: Money is essential to the workings of a modern economy, but its nature has varied substantially over time. This video describes what money is today. https://www.youtube.com/watch?v=ziTE32hiWdk
Most economists are unaware of this and even ignore the banking & finance sectors in their econometric models. EMAIL: gerry {at} boomfinanceandeconomics.com
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Peter,
Any comments on Gold you’d like to make? With failing economies, currencies and tanking stock and bond markets how do they keep people out of gold? I understand how pricing is controlled through paper contracts but it seems past time that even moderately informed people would be piling in to purchase gold for wealth preservation, inflation protection, etc.
Through all of this bad economic news and global insecurity, gold is somehow on sale and not much buying by the public is occurring. I’m stumped!
If you have extra cash lying around and have no idea what to do with it, then I would suggest going for gold, silver, or lead, whichever you fancy.
Yes, Steve Z – gold is an excellent buy now and I have always loved the shiny metal for all sorts of reasons not least of which is preservation of your assets. The masses have no clue what is going on – they are just watching the theatre. Make it bullion under the bed in small ingots and add as much silver as you can. The fiat world is imploding and there is no way back.
But, as the pundits opine, you can’t eat gold; so water, food, shelter and natural health are my priorities within our supportive local community. Our main risk is WW3 with Yeovilton Air Base just 10 miles away, Bath Mod at 20 miles and Hinkley Point Nuke Power station at 30 miles – down wind. So our bunker will come in handy! Plan B:
https://austrianpeter.substack.com/p/as-ukraine-unfolds-no-nuclear-war?utm_source=twitter&s=w
The best way to control “carbon dioxide emissions” is to get humans and other animal life to stop breathing.
Which is the ultimate endgame of this “green” bullshit.
In my book, the ultimate endgame is to declare oxygen a harmful substance.
Too much oxygen can kill you even faster than not breathing. Back to the topic, I think the end game is to create an ultimate slave class who are willing to submit and eager to serve, even at the cost of everything. The human dogs who call themselves police, doctors, and journalists are very close to that description.
Iain Davis has a great explanation:
Yep – O2 is very good for burning up things.
And after 50 years of failed forecasts, they still haven’t learned:
https://www.aei.org/carpe-diem/50-years-of-failed-doomsday-eco-pocalyptic-predictions-the-so-called-experts-are-0-50/
They don’t have to learn anything, Peter. They know that “climate change” is bullshit, the true purpose of which is to seize power and natural resources and enslave whatever is left of the population after the culling.
Now they’re just bullying it through.
Quite so, KJ, I’m just hoping that the masses will wake up in time.
Very Nice graph.
Very nice Ken 31 thank you – says it all.
Maybe it’s just me, but I don’t expect the Ukraine – Russia grain “deal” to really fly.
The UA side will find thousand reasons not to ship large amounts of grain, and try to blame the Russian for every one of them.
But I’m pretty sure Russia has contingency plans up the wazoo, to not let anyone in the South die of hunger.
Agreed – From April 2022 – clarifies where the Africans’ loyalties lie:
My understanding is that most of Africa is a Chinese colony now.
You have that right. The globalist’s mouthpiece should know:
https://www.economist.com/special-report/2022/05/20/how-chinese-firms-have-changed-africa
That linked article has exactly one mention of ‘colony’ that I can find, and not in the way you hinted at:
Economist: “Viewed as a whole, China’s business links reflect patterns of globalisation, not a new colonialism.”
They would say this – they are the enemy.
Which is much worse than being a “Western” colony?
Yes, CCP are not using the old colonial model, they are using economic warfare by all means possible included bio-warfare, cyber, a space station, 6G social credit systems etc. including their BRI. We are definitely at WAR:
If you really believe that just halfway, there is no hope for you…
It’s a bad case of projection: they can only be even badder than we are; there is no other way. [to win]
I’ve been lied to so much in/from “the West”, so I’m not going to believe that projection anymore, either. If I turn out wrong (after I made it, to emigrate to Russia), so be it – I wasted (morally speaking) half my life inside the Western tower of lies, then I can accept -in the worst case- to live my remainder in an Eastern version.
(Didn’t watch the video.)
I don’t think any of us really know what’s really going on ‘m’. We can only sift the evidence; be alert to PsyOp techniques and hope that the White Hat Big Daddy saves us.
On the Ukraine deal, Yves Smith at Naked Capitalism is not so optimistic….
Since the battlefield action in Ukraine has slowed down a tad as Russia has been rotating troops and allegedly moving in more materiel, the big news story has been the UN success in consummating two deals. The one much talked about is coming up with a process for getting grain supposedly stuck in the Ukraine ports shipped out. The text for “Initiative for the Safe Transportation of Grain and Food Products from Ukrainian Ports” is embedded at the end of this post.
The second agreement, which has gotten very little attention, is that of the UN committing to “facilitate the unimpeded exports to world markets of Russian food and fertilizer.” This goes well beyond the process established for transport of grain out of Ukraine. To work, several elements of the current sanctions against Russia and Belarus would need to be unwound. Since as we will explain, we doubt this will happen to the degree needed. If so, Russia will have succeeded in firmly establishing that blame for hunger resulting from reduced shipments of its fertilizer and food will lay squarely with the so-called Collective West…
In the meantime, what does the grain deal mean for the future of the war? I suspect less than many assume. First, Ukraine may be itching for an excuse to cancel the deal and not have the Odessa port demined. So despite Russia so far sticking to the letter of the deal, it making clear that it won’t allow Ukraine war operations to hide behind it may be more than the US will countenance.
Second, some speculated that Russia will wait until after the 120 days of the grain deal before it attacks Odessa. It looks instead like Russia will make its assault when Russia is ready. Russia first has to clear Donbass. Most commentators think it will take a big push to clear first the Izyum-Bahmut areas, and then Slaviansk and Kramatorsk. Russia will also need to rout the areas where the Ukraine operations that are shelling Donetsk (the city) are located, if they are still in place after Donetsk (the oblast) is cleared…
So this blockade was Ukrainian blockade. Ukraine kept insisting it didn’t want the ports demined since Russia could then attack Odessa by sea.
However, as Putin repeatedly pointed out, the Ukraine grain could easily have been shipped out by rail (Putin listed the avenues) and in any event, it was not a hugely consequential amount in world terms. However, and predictably, the New York Times told a bunch of howlers, such as greatly exaggerating the amount of grain at issue, as Moon of Alabama described in a post over the weekend.
So if Ukraine wanted to feed the world and keep the Odessa port mined, it should have arranged to transport the wheat by rail. But Ukraine preferred to keep harping on about the phony Russian blockade.
Excellent analysis B_MC as usual thank you. It’s quite clear to me that Ukraine is using every angle possible to ratchet up the ante so they keep getting weapons. Russia has already declared its expanded strategic plans and they will continue to strangle the dumb EU.
AP- Somewhere I left you a message that I was betting on Liz Truss for PM, I’ll be surprised if the wog is installed. Thoughts?
China is in complete chaos and I feel there is little hope of the commies getting a handle on things, stick a fork in that place….it’s done. If they are blaming the US in hopes of pointing the finger in another direction, that is beyond lame.
Could not agree more with the prof that COVID is like a “Horror Movie” if you play along with the narrative. Smart people are prepared for disruptions in supplies, I am baffled that people are so slow to catch on to the vax thing. What do you see across the pond? Are people getting a clue, do they equate the sudden deaths to the shit shots?
I did reply on the Truss thing B_MC – yes she is ahead at present and expected to win. I think your bet is good! I am writing about it this week – but it’s Hobson’s choice – either outcome will not save Britain. My replies to Stucky should fill you in until Saturday:
China has a different financial system to US. It has not yet proven to be more resilient – we can only wait and see. My Chinese contacts are optimistic.
Only 50% of the Brits are fully Vaxxed – they have learned over time and I think HMG have mainly given up on its promotions although there remain a few mad stalwarts at SAGE and Imperial College mumbling on. The other half are a lost cause so at least we can look forward to losing them in the next few years which means we will have more living space at last. These are mainly contained in cities which is even better news. Us informed ones are hunkering down in the rural counties – Plan B https://austrianpeter.substack.com/p/the-financial-jigsaw-part-2-localisation?s=w
Thanks Peter, continue to hunker down and live a (normal) life. 🙂
May I point to a micro-problem (that could become another national macro-problem). My tractor’s 20 years old and the ball joints fall out so it doesn’t go where I steer it anymore; gave it to the dealer a month ago and he’s still waiting for parts. I need to be planting Fall-Winter stuff now. Farmers and Ranchers can’t produce food even if they have fuel, fertilizer, rain and labor but they don’t have working machines. Will we have to go back 4000 years to mules and plows feeding a couple million people or 8,000 years to hand tools when the Earth’s population was less than a million? Why doesn’t FJB get the Military to unload the ships and move stuff inland; once the ports are cleared out, maybe the longshoremen and Transportation can keep up. Do the democrats want America to fall apart, starve, and have Chaos? Vote Republican 8Nov2022 and hopefully start to put an end to this communist FJB Coup insanity. They really want to Impeach the Usurper SOB. PS Peter: What happened to Nigel; isn’t he English and and doesn’t he have good sense or is that the curse of death in Englandstan now?
RHS – My Kubota is a ’92 model and the dealer has told me they do not make parts for a tractor that old. If what breaks is used on another tractor, then I’m in luck, but my leaking plastic fuel tank is not available. Guess I will have to put it in a fiberglass cocoon.
John Deere used to have a plant that would make obsolete parts by hand and promised that if they had the prints, they could make the part. They did not gouge for the parts, but used it as a marketing gimmick to let people know parts would always be available. I have not been to that plant in 30 years and do not know if it still exists, but it was a great idea.
That sucks, yours is only 30 years old. Tractors are NOT junk at 50 years old; hell, B-52s are 70 years old. Some semi-truck tractors are still running from the 50s. Obviously there is a business opportunity there for a young man: buy/trade 30 year old tractors (and small aircraft, boats, RVs etc) and overhaul them.
My D.B. Case is a 1974. Still runs fantastic. Have not needed parts but from the David Brown forum, all available still.
Have you considered a plastic welding repair? Interesting use of a soldering iron, zip ties and steel wool….
Thanks for the tip I will give it a try, but am worried the entire tank may be brittle, thus my idea to “cast” a fiberglass covering over the whole tank, giving me a plastic lined fiberglass tank.
Yes, rhs jr, Nigel is alive and well and living at GB News who are the only TV giving us the true picture (for how long I don’t know) and Neil Oliver I quote often in my Letters is a star and really calls out the shit:
Follow them here:
https://www.gbnews.uk/shows/farage we love the team here. BC is a crap disaster and only watch to laugh at them
As far as spare parts are concerned, you might take a lesson from Malta when I visited in 2001 before they joined the EU. They were running 1950s buses and cars and had built an engineering infrastructure of small specialised teams to manufacture all the parts needed – it was a thriving sub-culture and I was suitably impressed. I understand that Cuba does similar but I haven’t yet been there to examine how it works – it’s on my bucket list!
I think you might perhaps start such a network in US as we enter a new localised economy?
https://austrianpeter.substack.com/p/the-financial-jigsaw-part-2-localisation?s=w