(Crazy) economy news

[Rockstar]

I got this uneasy feeling a violent market correction is right around the corner.

Should be fun. Good luck.👍

[Rockstar]

Is The Fed Quietly Preparing For An Evergrande Tsunami?

https://www.rickackerman.com/2021/09...rande-tsunami/

[… the world’s biggest financial institutions are in Evergrande muck up to their eyeballs, even if they claim that their exposure is small in relation to their respective assets. The trouble is, the supposed assets are as ethereal as Evergrande’s grotesquely inflated real estate holdings. In the guest commentary below, Shawn Brown, a San Francisco friend from the hedge fund world, raises the possibility that behind-the-scenes maneuvering by the Fed is attempting to shore up the financial system ahead of potentially massive Evergrande shock-waves that have yet to be felt. RA ]

[Rockstar]

How many heard our Vice President last August warn people to start buying Christmas presents now because of shortages. Anyone noticing your grocery store shelves having less yet? Heck at auto store I work at tools, parts, cleaners are just not being replenished.

I just noticed on the radio yesterday they are now starting to play Christmas music to put you in the mood to buy.

[Skybird]

Will this become a winter of truth?

If not this year, then next year or second next. The problems are cooking over.

https://translate.google.com/transla...om-abgestellt/

[Otto Harkaman]

China's Communist Party orders a crackdown to "hide" a financial crisis

[Skybird]

Malice thy name is central banks.

Mind you, the eCB has a clear mandate. Fioghting inflation and by that protecting currency stability. Only this, not more. But it now does business cycle polcies (no mandate to do that), illegal state financing (forbidden by Eurpopean treaties), it claims to get engaged in climate poltiics (no mandate for that), and it prepares the further wekaneing of freedom and private proerty by enforcing digiutal currency whicb i see as the by far biggets threat to our all freedom, wealth and wellbeing becasue it enables the state to tyrannise, persecute, suppress and gag unwanted opinion and their speakers unhindered. Is dictatorship what gets rolled out here by the EeU and ECB and the ecofascists and the left. They now paint a treasure map where people ahve to mark with little corsses where their belonging sare hidden and can be plundered. You cannot protect yourself against that because these thigns are of no value to you if the state prohibits everybody to accept these as bartering/trading objects or payment. And he can enforce that prohibition if the currency system is purely digital.

Only fools shrug their shoulders on this and say they do not care because they have little themselves.

The Ggerman L.V.Mises Institute writes this:

------------

The central banks create and manipulate the fiat currencies. This fact is well known and represents a great danger (already highlighted in various ways on the Mises platform) for investors, consumers and entrepreneurs. Negative interest rates and inflation as well as all associated undesirable developments make this destructive work of the central banks obvious.

Now one could assume that this would be the only - if hardly to be underestimated - risk that emanates from the central banks. But unfortunately this is not the case. The former President of the European Central Bank (ECB) Mario Draghi described the ECB's “liquidity offensive” in 2012 as “Big Bertha”, using the metaphor of a cannon that was developed to combat fortifications. And as if this “Big Bertha” hadn't been enough to put investors, consumers and entrepreneurs in trouble, the central banks are working - sometimes more and sometimes less obviously - on further financial policy “bombardment”, which one can use to refer to the word “offensive” ”And“ guns ”- could speak of a monetary“ Stalin organ ”, that is, a multiple rocket launcher that causes damage over a large area.

The monetary policy "missiles" are already on their way and it is unlikely that it will be possible to stop these fiscal policy "explosive devices" and the "impact" and the associated economic destruction. Nonetheless, it makes sense to look at the additional economic destruction potential of central banks in the hope that the worst can be avoided or "covered up".
The end of cash

On the one hand, not all money is the same. Fiat money influenced by central banks is not identical to money that has proven itself over the millennia (e.g. gold) or money that is created in competition between different private providers.

On the other hand, it also makes a difference with fiat money whether it is available in coins and notes or exclusively digitally. The fact that people are (still) sensitive here is shown by the choice of the headline for an interview on the digital euro on the website of the Bundesbank, which is integrated into the ECB's system: “Cash is freedom, and we don't give it up”.

In fact, as the public consultation document shows, preparations for the introduction of a digital euro are well advanced. It can be doubted that a digital euro would not mean the end of cash, as was heard in a speech by a member of the ECB Executive Board.

Restrictions on the use of cash, e.g. when buying gold, are already "familiar". The future proof of origin for cash transactions of 10,000 euros or more is also sensitive. But money is only becoming digital, not only transparent citizens are possible, but also barely imaginable restrictions on personal freedom. For example, a meat consumption budget could be specified. If this were exceeded when shopping (e.g. buying a few slices of cooked ham), the transaction would not be possible.

Political do's and don'ts of any kind can be easily implemented with exclusively digital money. The citizen could not prevent a monthly meltdown of savings, just as little as the restriction of the availability of money to only those goods and services that are politically wanted or specified.

It would also be possible to break political resistance. Uncomfortable contemporaries could easily turn off the money tap. The work of the ECB on the digital euro is therefore a danger that in its “explosive power” probably goes beyond the fiat money consequences.
Green Deal

The European Green Deal is also leaving its mark on the ECB. This can be read on their website (translation in the footnotes):

Climate change can affect price stability through extreme weather events and uncertainties related to the transition to a low-carbon economy. We at the ECB are committed to taking the impact of climate change into consideration in our monetary policy framework.

In this context, a link was also made with the Corona reconstruction fund.

With this self-authorization, the ECB is also expanding its mandate to include environmental issues. The ECB Action Plan addresses the issue in a number of ways. The targeted purchase of “green corporate bonds” inevitably leads to distortions of competition, market neutrality looks different. For the investor, this “political subsidization” changes the assessment of opportunities and risks in various markets.

But such central bank interventions also have consequences for consumers and entrepreneurs. This form of subsidizing certain industries and products leads to (indirectly disadvantaged) providers and their products disappearing. The entrepreneurs have little chance of asserting themselves against the power of the central banks. The consumer is confronted with less choice of products and providers, which opens up price leeway for them.

How far such effects go and deeply affect personal decisions is made clear by a thought experiment: The Green Deal, flanked by the central banks, has swept large cattle breeders out of the market (because of the climate effects). Artificial meat producers as an (allegedly) better alternative have benefited and are now dominating the market with products whose long-term effects on health are still unknown.

Whether this example is a large or a rather small financial policy “bomb” is left to the individual assessment. It should be remembered, however, that this is only one example of many effects that are actually possible and occurring when the central banks act in addition to other political interventions in connection with the Green Deal. This combined effect increases the "explosive power".

[Skybird]

I admit I am no longer jjust worried in an abstract kind of menaing, or concerned, or engage din debate. I have started to feel really afraid and personally threatened due to latest exhcnages I had with a bank over the latest changes in legislation that the ECB has comanded (!) Germany to carry out and which mean real threatening problems for me and my completely legal financial behaviour.


It is clar before all our eyes: they build a dictatorship around us, with digital walls and fiscal whips, they enforce compliance with their convictions terror, and they make us al ever more helpfless and defenceless.

Compare: https://www.subsim.com/radioroom/sho...91&postcount=1
I am deeply, deeply worried, and yes, I have started to feel personally threatend, and being afraid. Very. Thats not just talking.

Its pure malice at work around us. Malice in disguise, but still: malice. Already today we are not as free anymore than we were five years ago. ten years, 20 years, at our youth. We did not notice maybe how it was taken from us, because of the long timeframe, but now that they have laid and solidified the fundaments, they are speeding up their charge against our freedom and our wealth. Its scaring.

[Catfish]

^ just read Kling's "QualityLand"

[Skybird]

Originally Posted by mapuc

I live on a little island where we are 110 % self-sufficient.

We have three types of power who deliver electricity to us. Ca 6000 habitants.

Markus

If you ever hear news about a continental blackout looming, grab an axe, and cut that powerline from your island to the onshore. And make sure your tanks with diesel or gasoline or whatever you use to run your generators always are filled up .

[Skybird]

The workers who keep global supply chains moving are warning of a 'system collapse'.

https://edition.cnn.com/2021/09/29/b...ers/index.html

[Skybird]

It is the fifth biggest slump in post-war history: The automotive industry, still Germany's industrial key sector, is expecting 18 percent fewer new cars than last year. It thus falls back to the state of 1975.

[3catcircus]

It's *all* coming to a head. All of the terrible decisions made by "the smartest guys in the room" to benefit themselves and their buddies; all of the unnatural acts that the average blue collar worker could see was a bad economic decision, all of the "nobody has tried socialism the right way" stupidity - everything over the past 75 years is going to come to fruition.

As China's bad debt unfolds, so too will every other corrupt government tied to them. The saber-rattling in Taiwan is a distraction from Evergrande and the revelation that COVID has been in the wild since early 2019 (if not earlier than that) based upon a huge order by China for pcr tests in May 2019.

And it isn't like this is caused by one big bad decision.
It's death by 1000 cuts. Coming off the gold standard. Allowing banking and wall street to get mixed up in real estate. Trade treaties that benefit no one except their architects. Pandora Papers. Solyndra. And the list goes on...

[mapuc]

If I understand the economical news from China.
It is not only Evergrande who is behind they payment, other real estate business in China are in economical problems.

Markus

[Arlo]

Originally Posted by 3catcircus

... all of the "nobody has tried socialism the right way" stupidity ...

Actually, several nations have (even the U.S. a mere eighty years back).

[Skybird]

Stefan Frank writes for AdG:


The energy crisis eats its way into the economy

Europe's energy crisis is drawing wider circles. On October 13th, Nyrstar, Europe's largest producer of fine zinc, announced that it would reduce production in its three European smelters by up to 50 percent in view of rising energy prices. "Significant increases in electricity prices in recent weeks and the cost burden of CO2 emissions in the electricity sector, which are passed on to industrial and household customers, make full utilization of the system no longer economically feasible," says a press release. Nyrstar explains that this is not because the company has shown too little ambition to reduce CO2 emissions:

"Nyrstar plants are fully electrified and the operations in the Netherlands and Belgium use electricity that is mostly generated from renewable energy sources, which means that they operate with very little or no CO2 emissions."

At the Nyrstar locations there are "also wind turbines and solar panels". Obviously, that was of little use. One day later, the global raw materials company and trader Glencore also cut zinc production in three of its European locations. Glencore justified the move with the sharp rise in electricity prices.

After the two announcements, the price of zinc on the commodity exchanges rose by more than 25 percent to a 14-year high. The Bloomberg news agency wrote of a "panic" in a market that had been "caught on the wrong foot". “China's electricity-related zinc supply problems were factored in. It wasn't Europe. "

The Economic Association Metals (WVMetalle) called on the European Commission to take "effective measures for energy-intensive industries":

"The currently high energy prices are a massive problem for the energy-intensive industry and also affect companies in the non-ferrous metal industry to a large extent."

The non-ferrous metal industry is in a "particularly precarious situation". “Energy prices and raw material supply bottlenecks, such as with magnesium, have the industry firmly in a stranglehold. Both of these have a significant impact on the raw materials market, ”says WVMetalle's managing director Franziska Erdle.

The wind power and solar industries are also affected

Eurometaux, the European association of the metal industry, warns in a letter to the EU commissioner for energy, Kadri Simson, that companies could move out of the EU due to the high electricity prices. The association also fears that "if electricity remains too expensive, it will weaken industrial electrification as a way of decarbonization and undermine the goals of the EU's Green Deal". Non-ferrous metals such as aluminum, copper, nickel, zinc and silicon are "at the front of the industries that are affected by the high electricity prices in Europe" because their production is more electricity-intensive than that of any other material, according to the association.

The recent price hikes for aluminum, copper and zinc are of a very different kind than those that were known from the past. Rising raw material prices are usually a sign of increasing demand in a robust economy. Raw material companies then react to this by increasing production. Then prices usually go down again, because the best remedy for high prices is high prices. Currently, however, the prices of copper wire or zinc bars are rising because the manufacturers can no longer operate the smelter profitably due to the high electricity prices. The price increases in mid-October were therefore not a symptom of rising demand, but a shrinking supply. Less is produced, and society as a whole becomes poorer as a result.

The industrial buyers of the metals are the first to notice this - but certainly not the last, because they will pass on rising prices to their customers. Ironically, this also affects the wind power and solar industries: Zinc, for example, is a protection against corrosion in wind power plants. The manufacturers of solar systems complain that modules are currently "expensive and hardly available" because the manufacturers, who usually come from China, are badly affected by the energy crisis. Industrial silicon, aluminum and soda - an important material for solar glass - have meanwhile "reached the highest price level in the past ten years", say industry circles.

The beginning of a food crisis?

Agriculture is also a very energy-intensive industry. Yara, one of the world's largest fertilizer manufacturers, has cut its production in Europe by 40 percent because of the high natural gas prices. Natural gas is the starting product in the manufacture of nitrogen fertilizers. Hydrogen is extracted from it, which then reacts with nitrogen from the air to form ammonia (Haber-Bosch process). At present, Yara can still import enough ammonia from its sites on other continents to Europe to keep fertilizer production going. But that cannot go on forever, warns CEO Svein Tore Holsether - in the end there may be hunger:

“It's important to get the message across that the current energy crisis could be the beginning of a food crisis. We must pay special attention to all those affected by higher utility and food prices, but for some it is a matter of survival. This is about scenarios of famine and food shortages. "

All over the world, farmers have to pay “significantly” higher prices for the nutrients they need because the production of fertilizers has become more expensive, according to Holsether. "That has immediate effects."

EU Agriculture Commissioner Janusz Wojciechowski confirms this: “Of course” there is a risk that rising energy prices will have an impact on food prices. According to Politico, the agriculture ministers of the 27 EU countries discussed a paper in early October in which the Polish government warns of “social unrest” as a result of rising natural gas prices.

Jais Valeur, the CEO of Danish Crown, the largest meat processing company in Europe, expects that the EU's climate policy will make beef a “luxury product like champagne” as it will never be “super climate friendly”. "It will be a luxury product that we treat ourselves to when we want to do something good for ourselves."


Von der Leyen: "Only dirty energies are more expensive"

Marie-Antoinette is credited with a statement that is supposed to show how removed she was from reality and the worries of the people: "If you have no bread, you should eat cake." She probably never said that. However, it is historically proven that Uschi von der Leyen, President of the European Commission, recently said that if natural gas becomes more and more expensive, wind and sun should be used instead:

"Energy prices are rising because the dirty energies coal, oil and gas in particular are becoming more expensive, while renewable energies, the clean ones, the good ones, have remained stable in prices and prices have fallen in recent years."

Von der Leyen intends to make her interpretation of the energy market the basis of EU policy. In an address given in English, she said that “renewables are the solution to rising electricity prices”. While “wholesale gas prices” “almost doubled compared to a year ago”, “the prices of renewable energies have remained constant. They have even fallen in recent years. ”That is why the“ European Green Deal ”is the solution:

“Every euro spent on renewables helps our planet and consumers alike. But it is also an investment in the resilience of our economies. That is why we have to accelerate our work on the European Green Deal in order to become more energy-independent. "

It is like a king who has ordered that tulips should be grown predominantly on the agricultural land of the kingdom. When the people then go hungry because there is a lack of grain, the king turns to the subjects and says: “The prices of grain have almost doubled compared to a year ago, while the prices of tulips keep falling. That is why we have to grow more tulips in order to become more independent of grain. ”Von Leyen's obsession with the idea that“ renewables ”should be expanded will do nothing but exacerbate the crisis. After all: In a tweet from October 22nd, Ursula von der Leyen wrote: "We also need a stable source, nuclear energy."

Perhaps the insight matures after all? In the UK, the government has announced the construction of new nuclear power plants in response to the energy crisis.

Coal is Germany's most important energy source

Governments in many countries around the world have underestimated the importance of reliable energy sources. Many have overestimated the ability of wind power and photovoltaics to deliver the electricity the world needs.

An example: Although it was beautifully sunny in Germany at 1 p.m. on October 18 and a lot of solar power was being produced, conventional power plants supplied two thirds of the electricity. The wind was largely out, once again the energetic energies could not be relied upon. This is not an outlier. As reported by the Federal Statistical Office (Destatis), electricity generation from conventional energy increased by 20.9 percent in the first half of 2021 compared to the same period in the previous year and accounted for 56.0 percent of total electricity generation.

“Due to the lack of wind in spring, the most important energy source was coal, after wind power had been the most important energy source in the first half of 2020. ... With an increase of 35.5%, the electricity from coal-fired power plants recorded the highest increase compared to the same period of the previous year. Coal thus made up 27.1% of the total amount of electricity fed into the grid. In contrast, the feed-in from renewable energies fell by 11.7%. In particular, the electricity feed-in from wind power, with a decline of 21.0%, was significantly lower than in the first half of 2020. As a result, the share of the total amount of electricity fed in fell from 29.1% to 22.1%. "

It takes revenge that, with the elimination of nuclear energy, Germany no longer has a balanced electricity mix to spread supply and price risks. An increase in the price of natural gas now leads directly to an increase in the price of electricity. In addition, high electricity consumption in summer (when the air conditioning is hot) leads to insufficiently filled gas stores before the heating season in autumn and winter.

China: superpower in wind power and solar energy

The People's Republic of China has a different kind of command economy than in the EU. At the end of September, the government ordered the country's electricity companies to buy enough coal "at any price" to avoid blackouts. When the coal futures on the Zhengzhou futures exchange constantly climbed to new highs, they intervened again and announced in mid-October that they wanted to take action against “speculators” and bring prices back to a “reasonable level”. In response, coal companies have publicly vowed to cut their prices. The prices on the futures exchange dropped by over 30 percent in four days - but will that mean there will be more coal? The experience of 4,000 years of state price controls speak against it. Price caps - whether for wheat, rent or coal - always lead to a shortage of supply. However, at the same time, China's state economic control agency, the National Development and Reform Commission, ordered that disused mines be restarted. Now there is a race against winter.

The People's Republic of China is the world's largest manufacturer of photovoltaic and wind power systems and the largest producer of the electricity obtained from them. From an August 2020 report in the journal Nature:

“China is the world's most capable producer of wind energy, with a capacity more than twice that of the second largest generator, the United States. It also has around a third of the world's solar capacity and installed more systems last year than any other country. "

According to the National Energy Agency, “10.8 ​​gigawatts of new wind power capacity” was added in China in the first half of 2021 (the reader can decide for himself how trustworthy data come from communists is). The Olympic Winter Games, which will take place in Beijing and Zhangjiakou from February 4th to 20th, 2022, have been declared a "green game" by the Chinese government. All sports facilities are to be operated with "green" energy. Local public transport in both cities should be 85 percent electric, with natural gas, with fuel cells or with hybrid drives. The People's Republic of China has also embarked on the path of “renewables”. “But, woe, woe, woe! When I look to the end “: Toyota, Apple, companies in the textile industry and also the manufacturers of cardboard boxes warn of delivery problems due to the Chinese energy crisis. Do similar strategies in Europe and China lead to similar consequences in the end?

Resistance from Africa

Meanwhile, resistance to climate colonialism is growing on the African continent. "Africa cannot sacrifice its future prosperity for the sake of Western climate goals," writes Uganda's President Yoweri K. Museveni in a guest article for the Wall Street Journal. "The continent should balance its energy mix, not rush straight towards renewables - even if that will probably frustrate some of those who meet next week at the climate conference in Glasgow."

South Africa's energy minister Gwede Mantashe also warns of a “hurry to use renewable energy sources” at the expense of coal. This could have "harmful consequences", as the power outages in China, India and Great Britain showed.

“If we swing from one extreme to the other like a pendulum, we will find ourselves in the same position. We have to have a clear program. We have to manage the transition carefully, in an organized way. "

As reported by the Bloomberg news agency, Mantashe decided not to take part in a meeting with the US, EU, UK, France and Germany climate emissaries at the end of September (but in which the South African Environment Minister took part) and instead gave the closing speech at the Limpopo Conference for mining investments. In his speech, Mantashe demanded that South Africa's mining industry should become more attractive for foreign investment and also cited the Mpumalanga coal region as an example. In Mpumalanga a not inconsiderable part of the coal is mined, which ensures that billions of people in countries like China, India, Pakistan, Vietnam, Sri Lanka and Bangladesh do not go out of light.

Around a billion people worldwide - most of them in Africa - have no electricity whatsoever. They sit in the dark at night or light up their huts with unhealthy and dangerous open fires, which can lead to chronic respiratory diseases, eye infections and severe burns. Meanwhile, the German climate protection activist Luisa Neubauer suggests that everyone should produce their own electricity. In an interview with a solar lobbyist, Neubauer said it was about

"That things are taken into their own hands, that you get started, that you use cooperative resources, that you generate your own energy, that you start with village communities and communities and solidarity communities to generate energy yourself, to initiate the climate change."

This “climate change” will be one “that enriches, strengthens people and societies, that not only protects the climate, but also brings with it a kind of prosperity or well-being.”

For Germany, she demands: "This legislative period has to be the most climate-friendly of all time, we don't know what a 1.5-degree government looks like, we will have to invent it, we will have to demand that for anything in the world."

So a 1.5 degree government wants to invent it so that we then have some kind of prosperity or prosperity. Aha. Why can't someone like Mr. Mantashe be Energy Minister in Germany or EU Commission President? That would be better than if people dominate the discourse who don't produce anything other than CO2 when they talk.



https://www.achgut.com/artikel/die_energiekrise_frisst_sich_in_die_wirtschaft