In this article on the new energy crisis, the Washington Post points out that some power plants in India are about to run out of coal, so we can add demand in India to that in china and Europe. They also report that in Asia, the spot price for natural gas jumped from $5 for one million BTUs in September 2020 to $56 this month. That’s a helluva jump.
Grocery Shopping Will Never Return to Normal
According to CNN, the pre-pandemic days of full shelves at the grocery store and plenty of food are gone for good. The y even used the phrase “Before Times” with the initial capitalization, like we are in the “End Times.” I kind of like “Before Times.” It sounds like something the survivors would say in a dystopian future. Hey, wait a minute….
China has Taiwan on its mind and in its sights. it’s not a question of if they will invade, but when and how high a price they are willing to pay.
Are You Prepared for War in the Pacific?
I was a child during the cold war, but I remember the air-raid siren that was tested once a month in our neighborhood. My elementary school had an air raid shelter under it, with a sign on the door. It was a reminder that the Soviet Union might bomb us all into smithereens at any time.
My mother was a young child during World War II, and her father worked for the Navy. They had blackout curtains on their home in San Diego and she remembers being scared that Japan would bomb them. Then she lived through the Cuban Missile Crisis. She told me there was a run on groceries but that people were generally calm.
My guess is that people in Taiwan are feeling the same kind of tension we felt back in those years, knowing that they could wake up in the middle of the night to the sound of explosions and know that the war had started.
Capitalism practiced by communists has lead to the expected default of Evergrande, one of China’s largest companies that makes up 2 percent of its GDP.
I have previously described the United States as the engine that drives the global economy, and when the U.S. has a financial crisis, the world has a financial crisis.
While things are not looking great in the U.S. markets, it is China and the expected default of Evergrande that is hurting markets across Asia and around the world. To give you an idea of its scale, Evergrande is often called “China’s Lehman Brothers,” a reference to the collapse of Lehman Brothers that kicked off the 2007/8 Great Recession in the U.S.
China has pumped up its economy by encouraging banks to lend money very low rates to businesses that build buildings and create jobs and economic activity. The problem is many of these buildings sit empty, collecting no rent, and leaving their developers dependent upon more loans to prop them up. Known as ghost cities, they are assets that have little value because no one wants to buy them or pay rent to live there. Described by some as a giant Ponzi scheme, this behavior was encouraged by the government and regulators.
Second, China reacted very negatively to the news, stating that it would create an arms race in the Pacific. Ha! China’s aggressive actions in the South China Sea have already created an arms race. Australia, Taiwan, and Japan are already stocking up on missiles, rockets, fighter jets, and other weapons systems. China is rushing to build more nuclear weapons. Adding nuclear-powered submarines to the Australian fleet is hardly an escalation. It’s barely a warning shot fired across China’s bow.
As food prices rise in the U.S., its worse in countries that import the majority of their food. Expect shortages and much higher prices to cause disruption in Europe, Asia, Africa and the Middle East.
The world is heading into some troubled times. It’s going to be worse in third-world countries, but it will affect developed countries, up to and including members of the G7. It’s going to be especially tough in Asia, the Middle East and Africa.
The chief driver of this trouble is going to be a shortage of food leading to rapidly rising prices. Those hit the worst will be countries with lower standards of living, where food costs can consume half of a family’s income or where the government subsidizes food. The more population in poverty or close to the line, the worse the problem will be.
If you live in the U.S., you should get prepared by setting aside some food storage. If you are an American living abroad, consider returning home in the next six months or make plans to bug out when things get bad. Citizens of other countries should also prepare; prepping is not exclusive to the United States.
he CCP’s crackdown on corporations, starting with the disappearance of Jack Ma, is unlike anything seen since the revolution.
Jack Ma, the founder of Alibaba, was the richest and arguably most successful man in China. Then he gave a speech that offended the Chinese Communist Party (CCP) by criticizing state-owned banks and their regulators. He was immediately summoned to Beijing and has not been seen in public since.
China would have you believe Jack is painting, playing golf, and devoting his life to charitable works, but the short videos they released are about as believable as when the emaciated and battered hostage reads a letter telling the world his captors are treating him well.
Imagine if Donald Trump had summoned Jeff Bezos, the founder of Amazon, to Washington and Bezos was never seen again. Think of the uproar that would ensue. (There was little or no uproar in China.) That’s the equivalent of what we are talking about with Jack Ma. That demonstrates the power that China wields over its population. It also tells you something about their government.
The FDA has found that the effectiveness of Pfizer’s COVID-19 vaccine drops by about 19 percent to 84 percent over six months. That’s far better than the Chinese vaccine, which apparently drops below 50 percent after six months. The news may worry the vaccinated, but Pfizer’s shareholders are probably celebrating. This news could mean they get to sell booster shots. According to the wall Street Journal, Pfizer expects to make $33.5 billion selling the vaccine this year.
The Best Places for Survival
A study published in the journal Sustainability rated the top places to survive the collapse of society are island nations in this order: New Zealand, Iceland, the UK, Tasmania, and Ireland. These countries were chosen for their ability to grow food, protect their borders from mass migration, and maintain their electrical grid. My guess is that the U.S. failed on the second point, but that doesn’t mean you can’t make your retreat a “collapse lifeboat” within the U.S.
The article is an interesting read for the serious prepper while the actual journal article goes into detail on the problems of a complex society and says it has determined “human civilisation that is in a perilous state, with large and growing risks developing in multiple spheres of the human endeavour.” While I do not agree with many of the assumptions and predictions of the paper, it is still worth reading and provides many ideas worth considering.
Flashpoints and Future Wars
We’ve talked previously about rising tensions between China and Taiwan and its allies, and how this could result in a war. Here’s an interesting article on flashpoints for World War Three, and Taiwan ranks at the top.
One fifth of all workers in the UK are supposed to be self-isolating due to potential COVID-19 exposure. The UK might have to start closing factories again, causing a second wave of economic damage. The country just passed the 50,000 cases per day mark in its fourth wave of the pandemic.
Wildfires Spread in the West
The Bootleg Fire in Oregon just north of the California border continues to grow, spreading over 476 square miles. There are currently some 70,000 wildfires across the western states.
Video of the Day: China Bad
This video about China’s enmity towards the U.S. is both thought provoking and concerning.
Perhaps people would take the Delta variant of COVID-19 more seriously if they called it COVID-21. Its causing another wave in much of the world.
The good news is that COVID-19 cases, hospitalizations, and deaths in the U.S. continue to drop, even as the Delta variant is becoming the dominant strain in the U.S. For those that haven’t been following the news, the COVID-19 mutation known as Delta caused the surge of cases and so much death in India and is far more transmissible. More good news is that both the Moderna and Pfizer vaccines appear to be quite effective against Delta.
The bad news is that the Delta variant of COVID-19 is marching across the world, and Chinese vaccines appear to be less effective against this mutation. Multiple countries are experiencing surges as this article reports “examples from several countries suggest that the Chinese vaccines may not be very effective at preventing the spread of the virus, particularly the new variants.”
A slowdown in the production of new cars due to a lack of microchips may be just a taste of what the future holds. Chips are a huge potential weakpoint in the global supply chain.
The Wall Street Journal just published the article “The World Relies on One Chip Maker in Taiwan, Leaving Everyone Vulnerable” about how Taiwan Semiconductor Manufacturing Company (TSMC) makes most of the chips in use today, and 92 percent of the world’s most sophisticate chips. They frequently manufacture chis for other companies, including Apple, Qualcomm and others.
This quote from the article gets to the cusp of the matter:
“Its dominance leaves the world in a vulnerable position, however. As more technologies require chips of mind-boggling complexity, more are coming from this one company, on an island that’s a focal point of tensions between the U.S. and China, which claims Taiwan as its own.
Analysts say it will be difficult for other manufacturers to catch up in an industry that requires hefty capital investments. And TSMC can’t make enough chips to satisfy everyone—a fact that has become even clearer amid a global shortage, adding to the chaos of supply bottlenecks, higher prices for consumers and furloughed workers, especially in the auto industry.
The situation is similar in some ways to the world’s past reliance on Middle Eastern oil, with any instability on the island threatening to echo across industries. Companies in Taiwan, including smaller makers, generated about 65% of global revenues for outsourced chip manufacturing during the first quarter of this year, according to Taiwan-based semiconductor research firm TrendForce. TSMC generated 56% of the global revenues.
Being dependent on Taiwanese chips “poses a threat to the global economy,” research firm Capital Economics recently wrote.”
In other words, TSMC is potentially a weak point in the supply chain for millions of products we rely on every day.